MIC. Third Quarter 2017 Earnings Conference Call Support Slides. November 2017

Transcription

1 MIC Third Quarter 2017 Earnings Conference Call Support Slides November 2017

2 Disclaimer This presentation by Macquarie Infrastructure Corporation (MIC) is proprietary and all rights are reserved. Any reproduction, in whole or in part, without the prior written consent of MIC is prohibited. This presentation is being provided to support the MIC conference call regarding earnings scheduled for November 2, 2017, and the information contained herein is qualified in its entirety by, and should be read in conjunction with, the MIC Form 10-Q covering the quarter ended September 30, 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 informational purposes. It is not a solicitation of any offer to buy or sell any security or instrument. This presentation contains forward-looking statements. Forwardlooking 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 filed with the SEC on February 21, 2017, and other materials filed with the SEC subsequently. 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 authorized 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 Macquarie Bank Limited does not guarantee or otherwise provide assurance in respect of the obligations of MIC. Use of Non-GAAP Metrics In addition to our results under U.S. GAAP, we use certain non- GAAP measures to assess the performance and prospects of our businesses. In particular, we use EBITDA excluding non-cash items, Free Cash Flow and certain proportionately combined financial metrics. Proportionately combined financial metrics reflect our proportionate interest in our wind and solar facilities. We define EBITDA excluding non-cash items as net income (loss) or earnings the most comparable GAAP measure before interest, taxes, depreciation and amortization and non-cash items including impairments, unrealized derivative gains and losses, adjustments for other non-cash items and pension expense reflected in the statements of operations. EBITDA excluding noncash items also excludes base management fees and performance fees, if any, whether paid in cash or stock. We define Free Cash Flow as cash from operating activities the most comparable GAAP measure which includes cash paid for interest, taxes and pension contributions, less maintenance capital expenditures, which includes principal repayments on capital lease obligations used to fund maintenance capital expenditures, and excludes changes in working capital. Please review our Form 10-Q and press release, filed on November 1, 2017, for a complete discussion of our use of non-gaap metrics. PAGE 2

3 MIC Results Consolidated Net Income, Adjusted EBITDA Excluding Non-Cash Items, Cash From Operating Activities and Adjusted Free Cash Flow $ Millions 3Q Q 2016 YTD 2017 YTD 2016 Net Income Adjusted EBITDA ex Non-cash Items Cash from Operating Activities Adjusted Free Cash Flow Consolidated Proportionately Combined 2 Net Income, Adjusted EBITDA Excluding Non-Cash Items, Cash From Operating Activities and Adjusted Free Cash Flow $ Millions 3Q Q 2016 YTD 2017 YTD 2016 Net Income Adjusted EBITDA ex Non-cash Items 1, Cash from Operating Activities Adjusted Free Cash Flow Proportionately Combined Excludes $1.4 million and $6.8 million of costs related to the implementation of the shared service initiative for the quarter and nine months ended September 30, 2017, respectively, and $3.0 million and $7.9 million of costs incurred in connection with the evaluation of various investment and acquisition opportunities during the quarter and nine months ended September 30, 2017, respectively. 2. Includes only MIC s proportionate interest in its wind and solar facilities within the Contracted Power and MIC Hawaii segments. 3. For the quarter and nine months ended September 30, 2016, Adjusted EBITDA excluding non-cash items included $13.0 million and $15.5 million, respectively, of insurance recoveries related to damaged docks at IMTT. PAGE 3

4 MIC Cash Generation Adjusted Free Cash Flow (Proportionately Combined) 1,2 $500 $450 $432.4 Adjusted Free Cash Flow 1,2 was $144.4 million in 3Q 17, reflecting an increase of 9.5% from $131.9 million in 3Q 16 $MM $400 $350 $300 $250 $200 $150 $100 $50 $131.9 $144.4 $391.6 The increase in Adjusted Free Cash Flow 1,2 reflects: Increased EBITDA at Atlantic Aviation; Lower than anticipated maintenance capital expenditures at IMTT; partially offset by, Higher state taxes Weighted average shares outstanding increased to 83.6 million for 3Q 17 compared to 81.2 million in 3Q 16 Dividend of $1.42 per share declared, reflecting a 10.1% increase over 3Q 16 $0 3Q'16 3Q'17 YTD'16 YTD'17 1. Excludes $1.4 million and $6.8 million of costs related to the implementation of the shared service initiative for the quarter and nine months ended September 30, 2017, respectively, and $3.0 million and $7.9 million of costs incurred in connection with the evaluation of various investment and acquisition opportunities during the quarter and nine months ended September 30, 2017, respectively. 2. Includes only MIC s proportionate interest in its wind and solar facilities within the Contracted Power and MIC Hawaii segments. PAGE 4

5 MIC Dividend History MIC has steadily increased its dividend since 2Q 13 1 $1.60 $1.40 $ % y/y $1.42 $1.20 $1.00 $0.875 $0.80 $0.60 $0.40 $0.20 $0.00 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 1. Reflects the quarter during which the Company resumed a normalized dividend payout following the successful refinancing of Atlantic Aviation s credit facilities. Past performance is not necessarily indicative of future results. PAGE 5

6 MIC FY 17 Dividend Guidance Dividend Growth FY 17 Dividend Guidance 1 $6.00 $5.00 $4.00 $3.35 $ % p.a. 2 $4.46 $5.05 Guidance for 10% dividend growth in FY 17 Expect 2017 payout ratio to be within a range of 75-85% of Adjusted Free Cash Flow $3.00 $2.00 $1.00 $ Guidance 1. Subject to the continued stable performance of MIC s businesses, no material deterioration in the condition of the broader U.S. economy, and authorization of the Company s Board of Directors. 2. Forecast CAGR for the period from based on guidance for 10% dividend growth in FY 17. PAGE 6

7 MIC Credit Profile Holding company rated BBB- Proportionately combined leverage ratio of 4.6x (excluding renewable assets) 1,2 Business Debt Weighted Average Remaining Life (in Years) MIC Corporate IMTT Atlantic Aviation 5 CP MIC Hawaii 6 Revolving Facility Convertible Senior Notes Senior Notes Tax-Exempt Bonds Revolving Facility Term Loan Revolving Facility Renewables Project Finance BEC Term Loan Term Loan Senior Notes Balance Outstanding ($ 000) 1,3 145, , , , , ,500 82, , ,500 96, ,000 Weighted Average Rate % 2.41% 3.97% 2.70% 2.74% 2.75% 2.99% 4.81% 3.91% 2.85% 4.22% Total 5.6 3,453, % 1. As of October 31, Leverage ratio adjusted for full year EBITDA impact of acquisitions 3. Proportionate to MIC s ownership interest. 4. Reflects annualized interest rate on all facilities including interest rate hedges. 5. Excludes $1.5 million of stand-alone debt facility used to fund construction of a certain FBO. 6. Excludes $2.7 million of equipment loans at MIC Hawaii business. PAGE 7

8 MIC Liquidity Profile Liquidity Position $MM Cash and cash equivalents $35.7 Undrawn Revolving Credit Facility Capacity 1 $981.0 MIC Corporate Operating Companies Total Liquidity $1,016.7 $1.0 billion of total available liquidity across MIC and its operating companies 1 No bullet maturities until 2019 Weighted average remaining life of debt facilities of 5.6 years 1 1. As of October 31, PAGE 8

9 MIC Growth Capital Update Year to date, MIC has deployed, or committed to deploy approximately $545 million in growth capital projects and bolt-on M&A Full year growth capital deployment expected to be at least $650 million Key Updates and Developments: Completed acquisition of Epic Midstream Completed acquisition of Orion Jet Center Current backlog of approved growth projects valued at approximately $215 million 1 Approved Project Backlog $MM $400 $350 $300 $250 $200 $150 $100 $50 $0 $370 $340 $300 $280 $280 $200 $215 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 1. As of October 31, PAGE 9

10 Epic Midstream IMTT completed its acquisition of Epic Midstream Transaction Overview Investment Highlights Epic Midstream owns a portfolio of bulk liquid storage and handling facilities across 7 locations in the U.S. Southeast and Southwest More than 3.1 million barrels of liquid storage capacity The two largest facilities are located in the deepwater port of Savannah, Georgia Transaction valued Epic Midstream at $171.5 million 11.0x 2018 PF EBITDA Funding comprised of a mix of cash and equity issued directly to the sellers $125 million of MIC shares were issued to the sellers (1.5% discount to the 30 trading-day VWAP) $46.5 million paid in cash, including drawings on IMTT s revolving credit facility Expected to be accretive to Free Cash Flow in 2018 IMTT Integration High Quality Revenue Stream Product & Customer Diversification Deep-water Port Access Selected Growth Opportunities Epic s operations will fully integrate into IMTT s organizational structure IMTT will retain Epic s core commercial team to support continued growth Majority of Epic s revenues are generated by take-or-pay contracts Weighted average remaining contract life of 2.0 years Increases IMTT s storage and handling exposure to jet fuel Customer base includes an affiliate of the U.S. Department of Defense that has been a customer for 20+ years Epic s Savannah, GA terminals are located on one of the largest U.S. deep-water ports Location positions Epic to benefit from increasing Southeast jet fuel imports Opportunity for additional EBITDA growth Material undeveloped land PAGE 10

11 Orion Jet Center Atlantic Aviation completed its acquisition of Orion Jet Center Transaction Overview Investment Highlights Orion Jet Center is a fixed base operator (FBO) located at Opa Locka-Miami Executive Airport Features over 200,000 square feet of newly constructed hangar space and 36,000 square feet of office and maintenance space Enhances network marketing opportunities New Market Growth Potential Expands Atlantic s Florida presence into Greater Miami South Florida is one of the fastest growing general aviation markets in the US Acquisition expected to provide Atlantic with substantial network benefits PAGE 11

12 Trading in MIC Sound fundamentals, current trading make shares a potentially attractive total return story Adjusted Free Cash Flow per Share 1 Dividend per Share 2 Five Year Total Return 3 $8.00 $ % Adjusted FCF Yield 4 $6.00 $ % Dividend Yield $ $5.00 $4.00 $3.00 $4.00 $3.00 $2.00 Indexed to $2.00 $1.00 $ % 3 Total Return over 5 years $ E $ E 80 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17 Ample liquidity with over $40 million in average daily value traded 1. MIC has guided to growth in free cash flow of 10-15% p.a. in Chart reflects the mid-point of this range in Reflects growth of 10% relative to MIC s 2016 declared dividend of $5.05/share, consistent with management guidance. Guidance is subject to the continued stable performance of MIC s businesses and no material deterioration in the condition of the broader U.S. economy. Dividends are subject to authorization of the Company s Board of Directors. 3. As of 31 October, Assumes dividends reinvested. Past performance is not indicative of future results. Source: Bloomberg 4. As of 1 November, 2017 PAGE 12

13 MIC Total Return vs. MSCI Total Return Indexed for the period from June 30, 2015 through October 31, $2.6bn Performance Fee deficit at 31 Oct MIC MSCI US Utilities Index 1. Source: MSCI. As of October 31, MIC last generated a Performance Fee during the quarter ended June 30, PAGE 13

14 APPENDIX

15 Summary Financial Information Quarter Ended Change Nine Months Ended Change September 30, Favorable/(Unfavorable) September 30, Favorable/(Unfavorable) $ % $ % ($ In Thousands, Except Share and Per Share Data) (Unaudited) GAAP Metrics Net income $ 36,173 $ 42,481 (6,308) (14.8) $ 94,836 $ 83,738 11, Weighted average number of shares outstanding: basic 83,644,806 81,220,841 2,423, ,743,285 80,570,192 2,173, Net income per share attributable to MIC $ 0.48 $ 0.52 (0.04) (7.7) $ 1.23 $ Cash provided by operating activities 148, ,070 (10,605) (6.7) 397, ,988 (39,319) (9.0) MIC Non-GAAP Metrics EBITDA excluding non-cash items (1)(2) $ 182,684 $ 186,823 (4,139) (2.2) $ 533,923 $ 529,582 4, Shared service implementation costs 1,402-1,402 NM 6,847-6,847 NM Investment and acquisition costs 3,023-3,023 NM 7,873-7,873 NM Adjusted EBITDA excluding non-cash items (2) $ 187,109 $ 186, $ 548,643 $ 529,582 19, Cash interest (3) $ (27,151) $ (27,389) $ (79,435) $ (82,008) 2, Cash taxes (2,154) (1,115) (1,039) (93.2) (8,493) (5,283) (3,210) (60.8) Maintenance capital expenditures (4) (12,106) (24,472) 12, (23,062) (44,725) 21, Noncontrolling interest (5) (1,308) (1,947) (5,223) (5,954) Adjusted Free Cash Flow $ 144,390 $ 131,900 12, $ 432,430 $ 391,612 40, NM - Not meaningful (1) EBITDA excluding non-cash items is calculated as net income before interest expense, taxes, depreciation and amortization expense, management fees, pension expense and other non-cash (income) expense recorded in the consolidated statement of operations. See below for reconciliation of net income (loss) to EBITDA excluding non-cash items. (2) For the quarter and nine months ended September 30, 2016, EBITDA excluding non-cash items included $13.0 million and $15.5 million, respectively, of insurance recoveries related to damaged docks at IMTT. (3) Cash interest is calculated as interest expense excluding the impact of non-cash adjustments for unrealized (gains) losses from derivative instruments, amortization of deferred financing costs and the amortization of debt discount recorded in the consolidated statement of operations. (4) For the quarter and nine months ended September 30, 2016, maintenance capital expenditures included $13.9 million associated with the rebuilding of damaged docks, the majority of which were insured losses, at IMTT. (5) Noncontrolling interest adjustment represents the portion of Free Cash Flow not attributable to MIC's ownership interest. PAGE 15

16 Reconciliation from Consolidated Free Cash Flow to Proportionately Combined Free Cash Flow Quarter Ended Change Nine Months Ended Change September 30, Favorable/(Unfavorable) September 30, Favorable/(Unfavorable) $ % $ % ($ In Thousands) (Unaudited) Free Cash Flow - Consolidated basis $ 141,273 $ 133,847 7, $ 422,933 $ 397,566 25, % of CP Free Cash Flow included in consolidated Free Cash Flow (25,970) (26,718) (56,513) (56,532) MIC's share of CP Free Cash Flow 24,667 24,773 51,300 50, % of MIC Hawaii Free Cash Flow included in consolidated Free Cash Flow (8,137) (8,696) (32,368) (30,432) MIC's share of MIC Hawaii Free Cash Flow 8,132 8,694 32,358 30,430 Free Cash Flow - Proportionately Combined basis $ 139,965 $ 131,900 8, $ 417,710 $ 391,612 26, PAGE 16

17 Proportionately Combined Free Cash Flow Quarter Ended September 30, 2017 IMTT Atlantic Aviation For the Quarter Ended September 30, 2017 Contracted Power (1) MIC Hawaii (1) ($ in Thousands) (Unaudited) MIC Corporate Proportionately Combined (2) Contracted Power 100% MIC Hawaii 100% Net income (loss) 20,755 21,591 7,705 6,161 (19,584) 36,628 7,251 6,160 Interest expense, net (3) 10,187 4,295 5,598 1,875 6,597 28,552 6,281 1,877 Provision (benefit) for income taxes 14,422 11,139 6,337 4,830 (11,181) 25,547 6,337 4,830 Depreciation and amortization of intangibles 31,511 25,286 12,949 3,706-73,452 14,830 3,711 Fees to Manager-related party ,954 17, Pension expense (4) 1, , Other non-cash expense (income), net (5) 178 1,212 (1,913) (3,361) 159 (3,725) (1,914) (3,360) EBITDA excluding non-cash items 78,936 63,528 30,676 13,483 (6,055) 180,568 32,785 13,490 EBITDA excluding non-cash items 78,936 63,528 30,676 13,483 (6,055) 180,568 32,785 13,490 Interest expense, net (3) (10,187) (4,295) (5,598) (1,875) (6,597) (28,552) (6,281) (1,877) Convertible senior notes interest (6) - (2,012) - - 2, Adjustments to derivative instruments recorded in interest expense, net (3) (524) 464 (786) 23 - (823) (922) 23 Amortization of debt financing charges (3) , Amortization of debt discount (3) Provision/benefit for income taxes, net of changes in deferred taxes 344 (1,208) 10 (1,773) 474 (2,153) 9 (1,773) Changes in working capital 3,732 (1,335) (2,284) (2,534) (2,934) (5,355) (1,842) (2,535) Cash provided by (used in) operating activities 72,714 55,426 22,383 7,423 (11,230) 146,716 24,128 7,427 Changes in working capital (3,732) 1,335 2,284 2,534 2,934 5,355 1,842 2,535 Maintenance capital expenditures (8,116) (2,165) - (1,825) - (12,106) - (1,825) Proportionately Combined Free Cash flow 60,866 54,596 24,667 8,132 (8,296) 139,965 25,970 8,137 PAGE 17

18 Proportionately Combined Free Cash Flow Quarter Ended September 30, 2016 IMTT Atlantic Aviation For the Quarter Ended September 30, 2016 Contracted Power (1) MIC Hawaii (1) ($ in Thousands) (Unaudited) MIC Corporate Proportionately Combined (2) Contracted Power 100% MIC Hawaii 100% Net income (loss) 24,580 17,232 9,489 5,479 (14,931) 41,849 10,124 5,476 Interest expense, net (3) 7,827 5,199 2,352 1,568 3,483 20,429 2,764 1,571 Provision (benefit) for income taxes 17,079 11,543 8,014 3,246 (10,859) 29,023 8,013 3,246 Depreciation and amortization of intangibles 35,709 22,148 12,122 2,800-72,779 14,000 2,802 Fees to Manager-related party ,382 18, Pension expense (4) 1, , Other non-cash expense (income), net (5) (1,459) (682) (1,459) 316 EBITDA excluding non-cash items (7) 87,020 56,338 30,518 13,758 (3,737) 183,897 33,442 13,760 EBITDA excluding non-cash items (7) 87,020 56,338 30,518 13,758 (3,737) 183,897 33,442 13,760 Interest expense, net (3) (7,827) (5,199) (2,352) (1,568) (3,483) (20,429) (2,764) (1,571) Adjustments to derivative instruments recorded in interest expense, net (3) (2,433) (2,371) (3,334) (253) - (8,391) (3,778) (250) Amortization of debt financing charges (3) , Provision/benefit for income taxes, net of changes in deferred taxes (904) (159) - (1,361) 1,308 (1,116) 1 (1,361) Changes in working capital (1,243) 5, (1,390) (2,703) (1,394) Cash provided by (used in) operating activities 75,024 54,542 26,069 9,282 (8,002) 156,915 28,226 9,280 Changes in working capital 1,243 (5,142) (875) 1,390 2,703 (681) (949) 1,394 Maintenance capital expenditures (8) (19,860) (2,075) (421) (1,978) - (24,334) (559) (1,978) Proportionately Combined Free Cash Flow 56,407 47,325 24,773 8,694 (5,299) 131,900 26,718 8,696 PAGE 18

19 Proportionately Combined Free Cash Flow Nine Months Ended September 30, 2017 IMTT For the Nine Months Ended September 30, 2017 Atlantic Aviation Contracted Power (1) MIC Hawaii (1) ($ in Thousands) (Unaudited) MIC Corporate Proportionately Combined (2) Contracted Power 100% MIC Hawaii 100% Net income (loss) 67,184 60,225 9,858 16,009 (58,181) 95,095 9,604 16,004 Interest expense, net (3) 30,707 13,648 18,177 5,789 19,419 87,740 20,431 5,795 Provision (benefit) for income taxes 46,686 36,766 8,209 10,772 (37,149) 65,284 8,209 10,772 Depreciation and amortization of intangibles 93,826 73,894 39,390 10, ,018 45,031 10,922 Fees to Manager-related party ,610 54, Pension expense (4) 5, , Other non-cash expense (income), net (5) 315 1,252 (6,148) 3, (939) (6,170) 3,108 EBITDA excluding non-cash items 244, ,800 69,486 47,403 (20,767) 526,289 77,105 47,418 EBITDA excluding non-cash items 244, ,800 69,486 47,403 (20,767) 526,289 77,105 47,418 Interest expense, net (3) (30,707) (13,648) (18,177) (5,789) (19,419) (87,740) (20,431) (5,795) Convertible senior notes interest (6) - (5,769) - - 5, Adjustments to derivative instruments recorded in interest expense, net (3) (257) 3,150 (1,088) 112-1,917 (1,282) 113 Amortization of debt financing charges (3) 1, , ,969 6,421 1, Amortization of debt discount (3) ,377 2, Provision/benefit for income taxes, net of changes in deferred taxes (3,069) (5,810) 7 (5,265) 5,645 (8,492) 6 (5,265) Changes in working capital (12,413) (6,667) (9,824) (12,833) (6,691) (48,428) (9,703) (12,852) Cash provided by (used in) operating activities 199, ,875 41,498 23,931 (30,117) 392,344 46,832 23,922 Changes in working capital 12,413 6,667 9,824 12,833 6,691 48,428 9,703 12,852 Maintenance capital expenditures (13,563) (5,071) (22) (4,406) - (23,062) (22) (4,406) Proportionately Combined Free Cash Flow 198, ,471 51,300 32,358 (23,426) 417,710 56,513 32,368 PAGE 19

20 Proportionately Combined Free Cash Flow Nine Months Ended September 30, 2016 IMTT (9) For the Nine Months Ended September 30, 2016 Atlantic Aviation Contracted Power (1) MIC Hawaii (1) ($ in Thousands) (Unaudited) MIC Corporate Proportionately Combined (2) Contracted Power 100% MIC Hawaii 100% Net income (loss) 55,775 43, ,322 (38,792) 84, ,319 Interest expense, net (3) 41,462 27,437 27,801 6,221 10, ,367 31,614 6,224 Provision (benefit) for income taxes 38,717 29,258 7,625 14,863 (30,055) 60,408 7,626 14,863 Depreciation and amortization of intangibles 103,612 69,041 36,067 7, ,414 41,693 7,696 Fees to Manager-related party ,570 49, Pension expense (4) 5, ,048-6,512-1,048 Other non-cash expense (income), net (5) (5,405) (6,090) 563 (9,853) (5,424) (6,090) EBITDA excluding non-cash items (7) 245, ,573 66,984 47,058 (8,268) 520,958 75,606 47,060 EBITDA excluding non-cash items (7) 245, ,573 66,984 47,058 (8,268) 520,958 75,606 47,060 Interest expense, net (3) (41,462) (27,437) (27,801) (6,221) (10,446) (113,367) (31,614) (6,224) Adjustments to derivative instruments recorded in interest expense, net (3) 10,723 4,416 10, ,398 11, Amortization of debt financing charges (3) 1,242 2,496 1, ,837 7,494 1, Provision/benefit for income taxes, net of changes in deferred taxes (3,071) (2,521) (9) (6,507) 6,824 (5,284) (8) (6,507) Changes in working capital (11,726) 11,412 (2,187) 5,558 (8,634) (5,577) (1,909) 5,554 Cash provided by (used in) operating activities 201, ,939 48,814 41,239 (18,687) 430,622 55,182 41,237 Changes in working capital 11,726 (11,412) 2,187 (5,558) 8,634 5,577 1,909 (5,554) Maintenance capital expenditures (8) (33,099) (5,816) (421) (5,251) - (44,587) (559) (5,251) Proportionately Combined Free Cash Flow 179, ,711 50,580 30,430 (10,053) 391,612 56,532 30,432 PAGE 20

21 Proportionately Combined Free Cash Flow Footnotes (1) Represents MIC's proportionately combined interests in the businesses comprising these reportable segments. (2) The sum of the amounts attributable to MIC in proportion to its ownership. (3) Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing charges and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October For the nine months ended September 30, 2016, interest expense, net, also included a non-cash write-off of deferred financing fees related to the February 2016 refinancing at Hawaii Gas. (4) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. (5) Other non-cash expense (income), net, primarily includes non-cash amortization of tolling liabilities, unrealized gains (losses) on commodity hedges and non-cash gains (losses) related to disposal of assets. See Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. (6) Represents the cash interest expense reclassified from MIC Corporate to Atlantic Aviation related to the 2.00% Convertible Senior Notes due October 2023, proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October (7) For the quarter and nine months ended September 30, 2016, EBITDA excluding non-cash items included $13.0 million and $15.5 million, respectively, of insurance recoveries related to damaged docks at IMTT. (8) For the quarter and nine months ended September 30, 2016, maintenance capital expenditures included $13.9 million associated with the rebuilding of damaged docks, the majority of which were insured losses, at IMTT. (9) On March 31, 2016, IMTT acquired the remaining 33.3% interest in its Quebec terminal that it did not previously own. IMTT was previously providing management services to this terminal and no operational changes are expected. Prior to the acquisition, IMTT consolidated the results of the Quebec terminal in its financial statements and adjusted for the portion that it did not own through noncontrolling interests. Since the IMTT Acquisition in July 2014 and prior to the acquisition of the noncontrolling interest, MIC reported IMTT s EBITDA excluding non-cash items and Free Cash Flow including the 33.3% portion of the Quebec terminal. The contribution from the minority interest was not significant. Therefore, there were no changes to our historical EBITDA excluding non-cash items, Free Cash Flow or results generally as a function of acquiring this noncontrolling interest. PAGE 21

22 MIC Contact for additional information Jay Davis Managing Director 125 W. 55th Street, Level 15 New York, NY (212) PAGE 22