PR Newswire | May 4, 2021 07:01AM EDT

05/04 06:00 CDT

MIC Reports First Quarter 2021 Financial And Operational Results- Better than expected contributions from Atlantic Aviation and MIC Hawaii driven by increased general aviation flight activity and visitors to Hawaii- 2021 earnings guidance raised- Processes for sale of remaining businesses progressing NEW YORK, May 4, 2021

NEW YORK, May 4, 2021 /PRNewswire/ -- Macquarie Infrastructure Corporation (NYSE: MIC) (the "Company") today announced its operational and financial results for the first quarter 2021. The results reflect better than expected contributions from Atlantic Aviation driven by increasing general aviation flight activity, and from MIC Hawaii driven by increasing numbers of visitors to Hawaii.

"We are pleased to report improved overall results this quarter. The ongoing recovery in economic activity lifted general aviation flight activity in March above the corresponding 2019 levels in markets served by Atlantic Aviation," said Christopher Frost, chief executive officer of MIC. "While visitor arrivals in Hawaii have yet to reach 2019 numbers, they are ahead of our expectations and contributing to a recovery in the performance of our MIC Hawaii businesses."

"On the strength of our financial performance in the first quarter, we are raising our earnings estimates for 2021. We remain confident in our ability to execute on our strategic priorities heading into the second half of the year," added Frost.

MIC reported net income from continuing operations of $13.8 million compared with a net loss of $7.0 million in the first quarter of 2020. The improvement reflects primarily a reduction in selling, general and administrative expenses and lower interest expense.

The Company recorded Adjusted EBITDA excluding non-cash items from continuing operations of $76.9 million for the quarter, up 2% versus the first quarter of 2020.

MIC generated cash from operating activities of $40.0 million for the quarter, down 22% versus the prior comparable period. The decline primarily reflects a net unfavorable impact to working capital resulting from the reduction in business activity in March 2020 and payment of expenses in the first quarter of 2021 related to the sale of IMTT in December 2020.

The Company recorded Adjusted Free Cash Flow from continuing operations of $57.0 million, up 23% versus the prior comparable period. The increase reflects lower cash interest expense, maintenance capital expenditures and cash taxes together with the increase in Adjusted EBITDA excluding non-cash items versus the first quarter of 2020.

Update on Sales Processes

On October 31, 2019, MIC announced its intention to pursue strategic alternatives for the Company and has since been actively engaged in processes to sell its operating businesses. The Company completed the sale of its International-Matex Tank Terminals business in December 2020.

"The sale processes for our remaining businesses are progressing," noted Frost. "We are pleased with the level of interest from potential buyers, particularly in our Atlantic Aviation business, and we remain confident in our ability to unlock value for shareholders through sales of both Atlantic Aviation and MIC Hawaii."

The Company currently expects to sell Atlantic Aviation before the end of 2021. The regulatory approval process associated with a sale of the businesses comprising MIC Hawaii makes it more likely that a sale of that segment occurs in 2022.

To facilitate the tax-efficient sale of Atlantic Aviation prior to a sale of MIC Hawaii, shareholders will be asked to approve a plan of merger that could result in the reorganization of MIC from a corporation to a listed limited liability company treated as a partnership for tax purposes. The Company will seek approval of the plan of merger at a Special Meeting of Shareholders scheduled for May 6, 2021.

In connection with the sales processes, MIC is winding down operations at its shared services center in Plano, Texas. Functions other than those supporting the public company will be allocated to or reconstituted in both of its operating businesses.

First Quarter 2021 Segment Results

Atlantic Aviation

"Atlantic Aviation performed well during the first quarter, driven by the continued improvement in general aviation flight activity. The improvement was supported by strong demand at leisure-oriented destinations that exceeded expectations and increased demand at business-oriented destinations. Flight activity surpassed pre-pandemic levels in regions of the country that have shown consistent strength over the past year, including the Intermountain West and Florida. In addition, the business benefitted from steady growth in tenant hangar rental revenue," Frost observed.

Atlantic Aviation generated EBITDA excluding non-cash items of $67.3 million in the first quarter of 2021, up 2% versus the first quarter of 2020, but 16% below the $79.8 million recorded in the first quarter of 2019.

As reported by the Federal Aviation Administration, same store general aviation flight activity at airports on which Atlantic Aviation operates increased by 5% in the first quarter compared with the first quarter of 2020 and decreased by 6% versus the first quarter of 2019. Flight activity at these airports was up 3% in March 2021 compared with March 2019.

MIC Hawaii

"The businesses that comprise our MIC Hawaii segment benefitted from a larger than anticipated number of visitors to the islands in the first quarter of the year. While the rate of recovery in visitor arrivals going forward remains uncertain, Hawaii appears to be a beneficiary of a low incidence of COVID-19 and pent-up consumer travel demand. At quarter end, visitor arrivals were approximately 60% below 2020 levels and 67% below 2019 levels, but well higher than those recorded in in the fourth quarter of 2020," Frost noted.

MIC Hawaii generated EBITDA excluding non-cash items of $13.6 million in the first quarter of 2021, down 11% versus the first quarter in 2020 and down 30% versus the $19.5 million recorded in the first quarter in 2019. Residential gas consumption was flat during the quarter, as expected, while commercial and industrial gas consumption (including by hotels and restaurants) rose with the increase in visitor arrivals. Total gas consumption declined by 18% versus the first quarter in 2020 and 21% versus the first quarter in 2019.

Corporate and Other

MIC's Corporate and Other segment includes primarily interest expense on holding company level debt, fees payable to the Company's external manager and public company expenses. Reduced expenditures in the first quarter of 2021, including lower costs incurred in connection with efforts to sell the Company's operating businesses, resulted in the generation of EBITDA excluding non-cash items of ($8.2) million compared with ($16.7) million the first quarter of 2020.

2021 Guidance Revision

On the strength of the Company's financial results for the first quarter, MIC management has raised its earnings estimates for 2021.

Segment Adjusted EBITDA Excluding Non-Cash Items Range ($ millions)

Atlantic Aviation 245 - 260

MIC Hawaii 35 - 45

Corporate and Other(15)

MIC has raised its 2021 Adjusted EBITDA excluding non-cash items guidance for Atlantic Aviation to between $245 and $260 million from between $220 and $240 million. Based on demand during the first quarter, the Company believes that the rapid rollout of effective COVID-19 vaccines will continue to boost activity at leisure-oriented destinations through the summer. Consistent with prior guidance, the Company assumes that activity at business-oriented destinations, as well as international and event-driven travel, will recover during the second half of the year. Factors that could affect the outcome include, on the upside, an acceleration in the reopening of the economy or sustained leisure demand above historical levels through the remainder of 2021. The current guidance does not assume a spreading of COVID-19 variants resistant to the current therapies or a resurgence of COVID-19 generally.

The better-than-expected number of visitors to Hawaii during the first quarter supported an upward revision in the Company's 2021 Adjusted EBITDA excluding non-cash items guidance for its MIC Hawaii segment to between $35 and $45 million from between $30 and $40 million. MIC believes the rapid rollout of effective COVID-19 vaccines and the expected reopening of Hawaii to visitors from around the world will result in gas sales being above those previously anticipated, partially offset by an expected higher wholesale cost of propane and higher operating expenses due to the wind-down of the Company's shared service center.

MIC revised its 2021 Adjusted EBITDA excluding non-cash items guidance for its Corporate and Other segment to ($15) million down from a previous estimate of ($20) million. The reduction primarily reflects lower professional services costs at the holding company level and the wind-down of the Company's shared services center in Plano, Texas.

Balance Sheet Strength and Financial Flexibility

MIC reported aggregate leverage of approximately 3.8x net debt/Adjusted EBITDA excluding non-cash items (trailing twelve-month basis) on March 31, 2021. The Company expects its aggregate leverage to be below 3.0x net debt/Adjusted EBITDA at year-end.

The Company conducted a tender offer for any or all of its 2% Convertible Senior Notes due October 2023 during the first quarter. Including open market purchases made after quarter-end, MIC repurchased $364.3 million, or 91%, of the Notes outstanding.

On April 19, 2021, MIC's Hawaii Gas business fully repaid its $100 million senior secured notes outstanding. The business incurred a $4.7 million 'make-whole' payment in connection with the repayment.

The Company continues to forecast deployment of growth capital of between $70 and $80 million in 2021, primarily on projects to which it has previously committed. MIC deployed $11.1 million in the first quarter of the year.

Summary Financial Information



Change Quarter Ended March 31, Favorable/ (Unfavorable)

2021 2020 $ %

($ In Thousands, Except Share and Per Share Data) (Unaudited)

GAAP Metrics

Continuing Operations

Net income (loss) $13,797 $(6,988) 20,785 NM

Net income (loss) per share 0.15 (0.08) 0.23 NM attributable to MIC

Cash provided by operating 39,993 51,540 (11,547)(22) activities

Discontinued Operations

Net income $- $18,215 (18,215)(100)

Net income per share attributable - 0.21 (0.21) (100)to MIC

Cash provided by operating - 48,688 (48,688)(100)activities

Weighted average number of shares 87,411,45586,686,972724,483 1 outstanding: basic

MIC Non-GAAP Metrics

EBITDA excluding non-cash items - $72,650 $64,464 8,186 13 continuing operations

Investment and acquisition/ 4,279 11,107 (6,828) (61) disposition costs

Adjusted EBITDA excluding non - $76,929 $75,571 1,358 2 cash items-continuing operations

Cash interest $(13,055)$(18,570)5,515 30

Cash taxes (3,209) (4,820) 1,611 33

Maintenance capital expenditures (3,664) (5,714) 2,050 36

Adjusted Free Cash Flow - $57,001 $46,467 10,534 23 continuing operations

EBITDA excluding non-cash items - $- $77,647 (77,647)(100)discontinued operations

Cash interest - (9,769) 9,769 100

Cash taxes - (2,107) 2,107 100

Maintenance capital expenditures - (5,615) 5,615 100

Free Cash Flow - discontinued $- $60,156 (60,156)(100)operations

Adjusted Free Cash Flow - $57,001 $106,623 (49,622)(47) consolidated

NM - Notmeaningful.

Conference Call and Webcast

When: MIC has scheduled a conference call for 8:00 a.m. Eastern Time on Tuesday, May 4, 2021 during which management will review and comment on the first quarter 2021 results.

How: To listen to the conference call dial +1 877-407-2991 or +1 201-389-0925 at least ten minutes prior to the scheduled start time. A webcast of the call will be accessible via the Company's website at www.macquarie.com/mic. Allow extra time prior to the call to visit the site and download the software needed to listen to the webcast.

Slides: MIC will prepare supplemental materials that will be available for downloading from the Company's website prior to the call.

Replay: For interested individuals unable to participate in the live conference call, a replay will be available after 2:00 p.m.May 4, 2021 through midnight May 11, 2021, at +1 877-660-6853 or +1 201-612-7415, Passcode: 13718895. An online archive of the webcast will be available on the Company's website for one year following the call.

About MIC

MIC owns and operates businesses providing basic services to customers in the United States. Its businesses consist of an airport services business, Atlantic Aviation; and entities comprising an energy services, production and distribution segment, MIC Hawaii. For additional information, please visit the MIC website at www.macquarie.com/mic.

Use of Non-GAAP Measures

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow

In addition to MIC's results under U.S. GAAP, the Company uses the non-GAAP measures EBITDA excluding non-cash items and Free Cash Flow to assess the performance and prospects of its businesses.

MIC measures EBITDA excluding non-cash items as a reflection of its businesses' ability to effectively manage the volume of products sold or services provided, the operating margin earned on those transactions and the management of operating expenses independent of the capitalization and tax attributes of those businesses. The Company believes investors use EBITDA excluding non-cash items primarily to assess the operating performance of its businesses and to make comparisons with the operating performance of other businesses whose depreciation and amortization expense may vary widely from MIC's, particularly where acquisitions and other non-operating factors are involved. MIC defines 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. Other non-cash expenses, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries. EBITDA excluding non-cash items also excludes base management fees and performance fees, if any, whether paid in cash or stock.

The Company's businesses can be characterized as owners of high-value, long-lived assets capable of generating substantial Free Cash Flow. MIC defines Free Cash Flow as cash from operating activities -the most comparable GAAP measure -less maintenance capital expenditures and adjusted for changes in working capital.

Management uses Free Cash Flow as a measure of its ability to fund acquisitions, invest in growth projects, reduce, or repay indebtedness and/or return capital to shareholders. GAAP metrics such as net income (loss) do not provide MIC management with the same level of visibility into the performance and prospects of the business as a result of: (i) the capital intensive nature of MIC's businesses and the generation of non-cash depreciation and amortization; (ii) shares issued to the Company's external manager under the Management Services Agreement, (iii) the Company's ability to defer all or a portion of current federal income taxes; (iv) non-cash mark-to-market adjustment of the value of derivative instruments; (v) gains (losses) related to the write-off or disposal of assets or liabilities, (vi) non-cash compensation expense incurred in relation to the incentive plans for senior management of the Company's operating business; and (vii) pension expense. Pension expenses primarily consist of interest expense, expected return on plan assets and amortization of actuarial and performance gains and losses. Any cash contributions to pension plans are reflected as a reduction in Free Cash Flow and are not included in pension expense. Management believes that external consumers of its financial statements, including investors and research analysts, use Free Cash Flow to assess the Company's ability to fund acquisitions, invest in growth projects, reduce or repay indebtedness, and/or return capital to shareholders.

In its Quarterly Report on Form 10-Q, the Company has disclosed Free Cash Flow on a consolidated basis and for each of its operating segments and MIC Corporate and Other. Management believes that both EBITDA excluding non-cash items and Free Cash Flow support a more complete and accurate understanding of the financial and operating performance of its businesses than would otherwise be achieved using GAAP results alone.

Free Cash Flow does not take into consideration required payments on indebtedness and other fixed obligations or other cash items that are excluded from MIC's definition of Free Cash Flow. Management notes that Free Cash Flow may be calculated differently by other companies thereby limiting its usefulness as a comparative measure. Free Cash Flow should be used as a supplemental measure to help understand MIC's financial performance and not in lieu of its financial results reported under GAAP.

See the tables below for a reconciliation of Net Income (loss) to EBITDA excluding non-cash items from continuing operations and a reconciliation of cash provided by operating activities from continuing operations to Free Cash Flow from continuing operations.

With respect to the Company's guidance for EBITDA and Free Cash Flow in 2021, a reconciliation of EBITDA to net income (loss), the most comparable GAAP measure and a reconciliation of Free Cash Flow to cash from operating activities, the most comparable GAAP measure, are not available without unreasonable effort due to the Company's limited visibility into and an inability to make accurate projections and estimates of items including management fees, hedging agreements, depreciation and any (benefit) provision for income taxes. These items may vary greatly from year to year and could significantly impact MIC's results as reported in accordance with GAAP.

Classification of Maintenance Capital Expenditures and Growth Capital Expenditures

MIC categorizes capital expenditures as either maintenance capital expenditures or growth capital expenditures. As neither maintenance capital expenditure nor growth capital expenditure is a GAAP term, the Company has adopted a framework to categorize specific capital expenditures. In broad terms, maintenance capital expenditures primarily maintain MIC's businesses at current levels of operations, capability, profitability, or cash flow, while growth capital expenditures primarily provide new or enhanced levels of operations, capability, profitability, or cash flow. Management considers various factors in determining whether a specific capital expenditure will be classified as maintenance or growth.

MIC does not bifurcate specific capital expenditures into growth and maintenance components. Each discrete capital expenditure is considered within the above framework and the entire capital expenditure is classified as either maintenance or growth.

Forward-Looking Statements

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. Such statements include, among others, those concerning expected financial performance and strategic and operational plans, statements regarding potential sales of the Company's operating businesses (including the Company's proposed reorganization) and the anticipated uses of any proceeds therefrom, statements regarding the anticipated specific and overall impacts of the COVID-19 pandemic, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. 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; the short and long term impact of the COVID-19 pandemic; its ability to complete the sale of the Company of its businesses of favorable terms, its ability to service, comply with the terms of and refinance debt, successfully integrate and manage acquired businesses, retain or replace qualified employees, complete growth projects, deploy growth capital and manage growth, make and finance future acquisitions, and implement its strategy; the regulatory environment; 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; risks associated with acquisitions or dispositions, litigation risks; 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.

MACQUARIE INFRASTRUCTURE CORPORATION



CONSOLIDATED CONDENSED BALANCE SHEETS ($ in Thousands, Except Share Data)



March 31, December 31, 2021 2020

ASSETS (Unaudited)

Current assets:

Cash and cash equivalents $529,639 $1,828,063

Restricted cash 11,349 11,157

Accounts receivable, net of allowance for doubtful53,802 46,862 accounts

Inventories 16,933 16,551

Prepaid expenses 10,180 8,326

Other current assets 10,306 9,197

Total current assets 632,209 1,920,156

Property, equipment, land and leasehold 849,670 854,200 improvements, net

Operating lease assets, net 323,948 322,892

Goodwill 617,072 616,939

Intangible assets, net 449,299 457,587

Other noncurrent assets 7,040 6,865

Total assets $2,879,238$4,178,639

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Due to Manager-related party $2,106 $1,203

Accounts payable 30,310 30,470

Accrued expenses 40,583 46,112

Current portion of long-term debt 117,021 11,310

Dividend payable - 960,981

Operating lease liabilities - current 17,032 17,157

Income taxes payable 133,768 132,113

Other current liabilities 22,270 22,861

Total current liabilities 363,090 1,222,207

Long-term debt, net of current portion 1,103,924 1,554,359

Deferred income taxes 125,220 126,858

Operating lease liabilities - noncurrent 312,927 311,597

Other noncurrent liabilities 67,308 70,312

Total liabilities 1,972,469 3,285,333

Commitments and contingencies - -

Stockholders' equity^(1):

Common Stock ($0.001 par value; 500,000,000 authorized; 87,505,452 shares issued and outstanding $88 $87 on March 31, 2021 and 87,361,929 shares issued and outstanding on December 31, 2020)

Additional paid in capital 170,678 177,975

Accumulated other comprehensive loss (6,175) (6,175)

Retained earnings 733,291 713,129

Total stockholders' equity 897,882 885,016

Noncontrolling interests 8,887 8,290

Total equity 906,769 893,306

Total liabilities and equity $2,879,238$4,178,639

The Company is authorized to issue 100,000,000 shares of preferred stock, par value $0.001 per share authorized. On March 31, 2021 and December 31,(1) 2020, no preferred stocks were issued or outstanding. The Company had 100 shares of special stock, par value $0.001 per share, issued and outstanding to its Manager on March 31, 2021 and December 31, 2020.

MACQUARIE INFRASTRUCTURE CORPORATION



CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited) ($ in Thousands, Except Share and Per Share Data)



Quarter Ended March 31,

2021 2020

Revenue

Service revenue $209,604 $223,997

Product revenue 54,587 60,462

Total revenue 264,191 284,459

Costs and expenses

Cost of services 82,233 94,663

Cost of product sales 34,756 41,934

Selling, general and administrative 77,012 87,583

Fees to Manager - related party 5,552 7,356

Depreciation 19,231 19,526

Amortization of intangibles 8,288 11,005

Total operating expenses 227,072 262,067

Operating income 37,119 22,392

Other income (expense)

Interest income 161 468

Interest expense^(1) (18,619) (26,705)

Other income (expense), net 502 (146)

Net income (loss) from continuing operations before 19,163 (3,991) income taxes

Provision for income taxes (5,366) (2,997)

Net income (loss) from continuing operations 13,797 (6,988)



Discontinued Operations^(2)

Net income from discontinued operations before - 24,545 income taxes

Provision for income taxes - (6,330)

Net income from discontinued operations - 18,215

Net income 13,797 11,227



Net income (loss) from continuing operations 13,797 (6,988)

Less: net income (loss) attributable to 597 (75) noncontrolling interest

Net income (loss) from continuing operations 13,200 (6,913) attributable to MIC

Net income from discontinued operations - 18,215

Net income from discontinued operations attributable- 18,215 to MIC

Net income attributable to MIC $13,200 $11,302

Basic income (loss) per share from continuing $0.15 $(0.08) operations attributable to MIC

Basic income per share from discontinued operations - 0.21 attributable to MIC

Basic income per share attributable to MIC $0.15 $0.13

Weighted average number of shares outstanding: basic87,411,45586,686,972



Diluted income (loss) per share from continuing $0.15 $(0.08) operations attributable to MIC

Diluted income per share from discontinued - 0.21 operations attributable to MIC

Diluted income per share attributable to MIC $0.15 $0.13

Weighted average number of shares outstanding: 87,495,29886,686,972diluted

Interest expense includes non-cash gains on derivative instruments of(1) $281,000 and non-cash losses of $4.3 million for the quarter ended March 31, 2021 and 2020, respectively.

See Note 4, "Discontinued Operations and Dispositions", in our Notes to(2) Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended March 31, 2021, for discussions on businesses classified as held for sale.

MACQUARIE INFRASTRUCTURE CORPORATION



CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) ($ in Thousands)



Quarter Ended March 31,

2021 2020

Operating activities

Net income (loss) from continuing operations $ 13,797 $(6,988)

Adjustments to reconcile net income (loss) to net cash provided by operating activities from continuing operations:

Depreciation 19,231 19,526

Amortization of intangibles 8,288 11,005

Write-off of debt discount and financing cost 4,311 -

Amortization of debt discount and financing costs 1,416 2,634

Adjustments to derivative instruments (1,458) 7,385

Fees to Manager-related party 5,552 7,356

Deferred taxes 2,157 (1,823)

Other non-cash expense, net 3,046 1,979

Changes in other assets and liabilities, net of acquisitions:

Accounts receivable (6,921) 17,490

Inventories (713) 6,354

Prepaid expenses and other current assets (2,771) (2,526)

Due to Manager - related party - 150

Accounts payable and accrued expenses (4,373) (14,740)

Income taxes payable 2,484 3,414

Other, net (4,053) 324

Net cash provided by operating activities from 39,993 51,540 continuing operations

Investing activities

Acquisitions of businesses and investments, net of - (13,495) cash, cash equivalents, and restricted cash acquired

Purchases of property and equipment (15,856) (16,910)

Other, net 17 3

Net cash used in investing activities from (15,839) (30,402) continuing operations

Financing activities

Proceeds from long-term debt - 874,000

Payment of long-term debt (361,405) (3,059)

Dividends paid to common stockholders (960,981) (86,742)

Net cash (used in) provided by financing activities (1,322,386)784,199 from continuing operations

Net change in cash, cash equivalents, and restricted(1,298,232)805,337 cash from continuing operations

MACQUARIE INFRASTRUCTURE CORPORATION



CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - (continued) (Unaudited) ($ in Thousands)



Quarter Ended March 31,

2021 2020

Cash flows provided by (used in) discontinued operations:

Net cash provided by operating activities $- $48,688

Net cash used in investing activities - (55,023)

Net cash used in discontinued operations - (6,335)

Effect of exchange rate changes on cash and cash - (792) equivalents

Net change in cash, cash equivalents, and (1,298,232)798,210 restricted cash

Cash, cash equivalents, and restricted cash, 1,839,220 358,565 beginning of period

Cash, cash equivalents, and restricted cash, end $540,988 $1,156,775of period

Supplemental disclosures of cash flow information:

Non-cash investing and financing activities:

Accrued purchases of property and equipment from $3,902 $5,081 continuing operations

Accrued purchases of property and equipment from - 18,583 discontinued operations

Leased assets obtained in exchange for new operating lease liabilities from 787 4,886 continuing operations

Taxes paid, net, from continuing operations 660 1,405

Taxes paid, net, from discontinued operations - 1,410

Interest paid, net, from continuing operations 16,570 17,308

Interest paid, net, from discontinued operations - 4,026

The following table provides a reconciliation of cash, cash equivalents, and restricted cash from both continuing and discontinued operations reported within the consolidated condensed balance sheets that is presented in the consolidated condensed statements of cash flows:

As of March 31,

2021 2020

Cash and cash equivalents $529,639$1,131,685

Restricted cash - current 11,349 926

Cash, cash equivalents, and restricted cash included - 24,164 in assets held for sale

Total of cash, cash equivalents, and restricted cash shown in the consolidated condensed statements of $540,988$1,156,775cash flows

MACQUARIE INFRASTRUCTURE CORPORATION



CONSOLIDATED STATEMENTS OF OPERATIONS - MD&A



Quarter Ended Change March 31, Favorable/ (Unfavorable)

2021 2020 $ %

($ In Thousands, Except Share and Per Share Data) (Unaudited)

Revenue

Service revenue $209,604 $223,997 (14,393)(6)

Product revenue 54,587 60,462 (5,875) (10)

Total revenue 264,191 284,459 (20,268)(7)

Costs and expenses

Cost of services 82,233 94,663 12,430 13

Cost of product sales 34,756 41,934 7,178 17

Selling, general and 77,012 87,583 10,571 12 administrative

Fees to Manager - related party 5,552 7,356 1,804 25

Depreciation and amortization 27,519 30,531 3,012 10

Total operating expenses 227,072 262,067 34,995 13

Operating income 37,119 22,392 14,727 66

Other income (expense)

Interest income 161 468 (307) (66)

Interest expense^(1) (18,619) (26,705) 8,086 30

Other income (expense), net 502 (146) 648 NM

Net income (loss) from continuing19,163 (3,991) 23,154 NM operations before income taxes

Provision for income taxes (5,366) (2,997) (2,369) (79)

Net income (loss) from continuing13,797 (6,988) 20,785 NM operations



Discontinued Operations

Net income from discontinued - 24,545 (24,545)(100)operations before income taxes

Provision for income taxes - (6,330) 6,330 100

Net income from discontinued - 18,215 (18,215)(100)operations

Net income 13,797 11,227 2,570 23



Net income (loss) from continuing13,797 (6,988) 20,785 NM operations

Less: net income (loss) attributable to noncontrolling 597 (75) (672) NM interests

Net income (loss) from continuing13,200 (6,913) 20,113 NM operations attributable to MIC

Net income from discontinued - 18,215 (18,215)(100)operations

Net income from discontinued - 18,215 (18,215)(100)operations attributable to MIC

Net income attributable to MIC $13,200 $11,302 1,898 17

Basic income (loss) per share from continuing operations $0.15 $(0.08) 0.23 NM attributable to MIC

Basic income per share from discontinued operations - 0.21 (0.21) (100)attributable to MIC

Basic income per share $0.15 $0.13 0.02 15 attributable to MIC

Weighted average number of shares87,411,45586,686,972724,483 1 outstanding: basic

NM - Not meaningful.

(1) Interest expense includes non-cash gains on derivative instruments of$281,000 and non-cash losses of $4.3 million for the quarter ended March 31,2021 and 2020, respectively.

MACQUARIE INFRASTRUCTURE CORPORATION



RECONCILIATION OF CONSOLIDATED NET INCOME (LOSS) TO EBITDA EXCLUDING NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW



Quarter Ended Change March 31, Favorable/ (Unfavorable)

2021 2020 $ %

($ In Thousands) (Unaudited)

Net income (loss) from continuing $13,797$(6,988) operations

Interest expense, net^(1) 18,458 26,237

Provision for income taxes 5,366 2,997

Depreciation and amortization 27,519 30,531

Fees to Manager - related party 5,552 7,356

Other non-cash expense, net^(2) 1,958 4,331

EBITDA excluding non-cash items - $72,650$64,464 8,186 13continuing operations



EBITDA excluding non-cash items - $72,650$64,464 continuing operations

Interest expense, net^(1) (18,458)(26,237)

Non-cash interest expense, net^(1) 5,403 7,667

Provision for current income taxes (3,209) (4,820)

Changes in working capital (16,393)10,466

Cash provided by operating activities 39,993 51,540 - continuing operations

Changes in working capital 16,393 (10,466)

Maintenance capital expenditures (3,664) (5,714)

Free cash flow - continuing operations$52,722$35,360 17,362 49

Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees, and non-cash amortization of debt discount related to our 2.00% Convertible Senior Notes. For the(1) quarter ended March 31, 2021, interest expense also includes non-cash write-offs of deferred financing costs related to the repurchase of our 2.00% Convertible Senior Notes and the cancellation of the holding company revolving credit facility.

Other non-cash expense, net, includes primarily non-cash mark-to-market adjustment of the value of the commodity hedge contracts, non-cash compensation expense incurred in relation to the incentive plans for senior management of our operating businesses, and non-cash gains (losses) related(2) to the write-off or disposal of assets or liabilities. Other non-cash expense, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion.

MACQUARIE INFRASTRUCTURE CORPORATION



RECONCILIATION OF SEGMENT NET INCOME (LOSS) TO EBITDA EXCLUDING NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW



Atlantic Aviation

Quarter Ended Change March 31, Favorable/ (Unfavorable) 2021 2020

$ $ $ %

($ In Thousands) (Unaudited)

Service revenue 209,604 223,997 (14,393)(6)

Cost of services (exclusive of depreciation and 82,233 94,663 12,430 13 amortization shown separately below)

Gross margin 127,371 129,334 (1,963) (2)

Selling, general and administrative 61,586 64,140 2,554 4 expenses

Depreciation and amortization 23,300 26,579 3,279 12

Operating income 42,485 38,615 3,870 10

Interest expense, net^(1) (10,730)(18,876)8,146 43

Other expense, net (18) (72) 54 75

Provision for income taxes (8,596) (5,479) (3,117) (57)

Net income 23,141 14,188 8,953 63

Reconciliation of net income to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow:

Net income 23,141 14,188

Interest expense, net^(1) 10,730 18,876

Provision for income taxes 8,596 5,479

Depreciation and amortization 23,300 26,579

Other non-cash expense, net^(2) 1,569 813

EBITDA excluding non-cash items 67,336 65,935 1,401 2



EBITDA excluding non-cash items 67,336 65,935

Interest expense, net^(1) (10,730)(18,876)

Non-cash interest expense, net^(1) 943 5,159

Provision for current income taxes (4,480) (8,577)

Changes in working capital 1,916 15,667

Cash provided by operating activities 54,985 59,308

Changes in working capital (1,916) (15,667)

Maintenance capital expenditures (2,550) (3,045)

Free cash flow 50,519 40,596 9,923 24

(1) Interest expense, net, includes non-cash adjustments to derivative instruments and non-cash amortization of deferred financing fees.

Other non-cash expense, net, includes primarily non-cash compensation expense incurred in relation to incentive plans and non-cash gains (losses) related to the write-off or disposal of assets or liabilities.(2) Other non-cash expense, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion.

MIC Hawaii



Quarter Ended Change March 31, Favorable/ (Unfavorable) 2021 2020

$ $ $ %

($ In Thousands) (Unaudited)

Product revenue 54,587 60,462 (5,875)(10)

Cost of product sales (exclusive of depreciation and amortization shown 34,756 41,934 7,178 17 separately below)

Gross margin 19,831 18,528 1,303 7

Selling, general and administrative 5,677 6,322 645 10 expenses

Depreciation and amortization 3,748 3,624 (124) (3)

Operating income 10,406 8,582 1,824 21

Interest expense, net^(1) (1,304)(2,775)1,471 53

Other expense, net (336) (112) (224) (200)

Provision for income taxes (2,367)(1,775)(592) (33)

Net income 6,399 3,920 2,479 63

Less: net income (loss) attributable to 597 (75) (672) NM noncontrolling interests

Net income attributable to MIC 5,802 3,995 1,807 45

Reconciliation of net income to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow:

Net income 6,399 3,920

Interest expense, net^(1) 1,304 2,775

Provision for income taxes 2,367 1,775

Depreciation and amortization 3,748 3,624

Other non-cash (income) expense, net^(2) (256) 3,113

EBITDA excluding non-cash items 13,562 15,207 (1,645)(11)



EBITDA excluding non-cash items 13,562 15,207

Interest expense, net^(1) (1,304)(2,775)

Non-cash interest (income) expense, net^ (231) 1,003 (1)

Provision for current income taxes (1,516)(2,123)

Changes in working capital (1,696)(5,086)

Cash provided by operating activities 8,815 6,226

Changes in working capital 1,696 5,086

Maintenance capital expenditures (1,114)(2,669)

Free cash flow 9,397 8,643 754 9

NM - Not meaningful.

Interest expense, net, includes non-cash adjustments to derivative(1) instruments related to interest rate swaps and non-cash amortization of deferred financing fees.

Other non-cash (income) expense, net, includes primarily non-cash mark-to-market adjustment of the value of the commodity hedge contracts, non-cash compensation expense incurred in relation to incentive plans, and non-cash gains (losses) related to the write-off or disposal of(2) assets or liabilities. Other non-cash (income) expense, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See "Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion.

Corporate and Other



Quarter Ended Change March 31, Favorable/ (Unfavorable) 2021 2020

$ $ $ %

($ In Millions) (Unaudited)

Selling, general and administrative 9,749 17,121 7,372 43 expenses

Fees to Manager - related party 5,552 7,356 1,804 25

Depreciation and amortization 471 328 (143) (44)

Operating loss (15,772)(24,805)9,033 36

Interest expense, net^(1) (6,424) (4,586) (1,838)(40)

Other income, net 856 38 818 NM

Benefit for income taxes 5,597 4,257 1,340 31

Net loss (15,743)(25,096)9,353 37

Reconciliation of net loss to EBITDA excluding non-cash items and a reconciliation of cash used in operating activities to Free Cash Flow:

Net loss (15,743)(25,096)

Interest expense, net^(1) 6,424 4,586

Benefit for income taxes (5,597) (4,257)

Fees to Manager - related party 5,552 7,356

Depreciation and amortization 471 328

Other non-cash expense, net^(2) 645 405

EBITDA excluding non-cash items (8,248) (16,678)8,430 51



EBITDA excluding non-cash items (8,248) (16,678)

Interest expense, net^(1) (6,424) (4,586)

Non-cash interest expense, net^(1) 4,691 1,505

Benefit for current income taxes 2,787 5,880

Changes in working capital (16,613)(115)

Cash used in operating activities (23,807)(13,994)

Changes in working capital 16,613 115

Free cash flow (7,194) (13,879)6,685 48

NM - Notmeaningful.

Interest expense, net, includes, non-cash amortization of deferred financing fees, and non-cash amortization of debt discount related to our 2.00% Convertible Senior Notes. For the quarter ended March 31,(1) 2021, interest expense also includes non-cash write-offs of deferred financing costs related to the repurchase of our 2.00% Convertible Senior Notes and the cancellation of the holding company revolving credit facility.

Other non-cash expense, net, includes primarily non-cash adjustments related to non-cash compensation expense incurred in relation to(2) incentive plans and non-cash gains (losses) related to the write-off or disposal of assets or liabilities. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion.

MACQUARIE INFRASTRUCTURE CORPORATION



RECONCILIATION OF NET INCOME (LOSS) TO EBITDA EXCLUDING NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW



For the Quarter Ended March 31, 2021

Atlantic MIC CorporateTotal Discontinued Aviation Hawaii and OtherContinuingOperations Total Operations

($ in Thousands) (Unaudited)

Net income 23,141 6,399 (15,743)13,797 - 13,797 (loss)

Interest expense, net10,730 1,304 6,424 18,458 - 18,458 ^(1)

Provision (benefit) 8,596 2,367 (5,597) 5,366 - 5,366 for income taxes

Depreciation and 23,300 3,748 471 27,519 - 27,519 amortization

Fees to Manager - - - 5,552 5,552 - 5,552 related party

Other non-cash expense 1,569 (256) 645 1,958 - 1,958 (income), net^(2)

EBITDA excluding 67,336 13,562 (8,248) 72,650 - 72,650 non-cash items

EBITDA excluding 67,336 13,562 (8,248) 72,650 - 72,650 non-cash items

Interest expense, net(10,730)(1,304)(6,424) (18,458) - (18,458)^(1)

Non-cash interest expense 943 (231) 4,691 5,403 - 5,403 (income), net^(1)

(Provision) benefit for (4,480) (1,516)2,787 (3,209) - (3,209) current income taxes

Changes in working 1,916 (1,696)(16,613)(16,393) - (16,393)capital

Cash provided by (used in) 54,985 8,815 (23,807)39,993 - 39,993 operating activities

Changes in working (1,916) 1,696 16,613 16,393 - 16,393 capital

Maintenance capital (2,550) (1,114)- (3,664) - (3,664) expenditures

Free Cash 50,519 9,397 (7,194) 52,722 - 52,722 Flow



For the Quarter Ended March 31, 2020

Atlantic MIC CorporateTotal Discontinued Aviation Hawaii and OtherContinuingOperations Total Operations

($ in Thousands) (Unaudited)

Net income 14,188 3,920 (25,096)(6,988) 18,215 11,227 (loss)

Interest expense, net18,876 2,775 4,586 26,237 15,299 41,536 ^(1)

Provision (benefit) 5,479 1,775 (4,257) 2,997 6,330 9,327 for income taxes

Depreciation and 26,579 3,624 328 30,531 34,480 65,011 amortization

Fees to Manager - - - 7,356 7,356 - 7,356 related party

Other non-cash 813 3,113 405 4,331 3,323 7,654 expense, net ^(2)

EBITDA excluding 65,935 15,207 (16,678)64,464 77,647 142,111 non-cash items

EBITDA excluding 65,935 15,207 (16,678)64,464 77,647 142,111 non-cash items

Interest expense, net(18,876)(2,775)(4,586) (26,237) (15,299) (41,536)^(1)

Non-cash interest 5,159 1,003 1,505 7,667 5,530 13,197 expense, net ^(1)

(Provision) benefit for (8,577) (2,123)5,880 (4,820) (2,107) (6,927) current income taxes

Changes in working 15,667 (5,086)(115) 10,466 (17,083) (6,617) capital

Cash provided by (used in) 59,308 6,226 (13,994)51,540 48,688 100,228 operating activities

Changes in working (15,667)5,086 115 (10,466) 17,083 6,617 capital

Maintenance capital (3,045) (2,669)- (5,714) (5,615) (11,329)expenditures

Free Cash 40,596 8,643 (13,879)35,360 60,156 95,516 Flow

Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees, and non-cash amortization of debt discount related to our 2.00% Convertible Senior Notes. For the(1) quarter ended March 31, 2021, interest expense also includes non-cash write-offs of deferred financing costs related to the repurchase of our 2.00% Convertible Senior Notes and the cancellation of the holding company revolving credit facility.

Other non-cash expense (income), net, includes primarily non-cash mark-to-market adjustment of the value of the commodity hedge contracts, non-cash compensation expense incurred in relation to the incentive plans for senior management of our operating businesses, and non-cash gains(2) (losses) related to the write-off or disposal of assets or liabilities. Other non-cash expense (income), net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion.

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SOURCE Macquarie Infrastructure Corporation