UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
_____________________________

FORM 10-Q
FORM 10-Q
_____________________________
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31,June 30, 2020
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from            to           
Commission File Number: 001-32384
_____________________________
MACQUARIE INFRASTRUCTURE CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
_____________________________
Delaware43-2052503
(State or Other Jurisdiction of

Incorporation or Organization)
(IRS Employer

Identification No.)
125 West 55th Street
New York,, New York10019
(Address of Principal Executive Offices) (Zip Code)
(212) (212) 231-1000
(Registrant’s Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year if Changed Since Last Report): N/A
_____________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, par value $0.001 per shareMICNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer☒Accelerated Filer☐
Non-accelerated Filer☐Smaller Reporting Company☐Emerging Growth Company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes ☐ No ☒
There were 86,853,67287,021,514 shares of common stock, with $0.001 par value, outstanding at May 1,July 31, 2020.

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MACQUARIE INFRASTRUCTURE CORPORATION
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Condition and Results of Operations
1
Quantitative and Qualitative Disclosures About Market Risk
2725
Controls and Procedures
2725
Consolidated Condensed Balance Sheets as of March 31,June 30, 2020 (Unaudited) and December 31, 2019
2826
Consolidated Condensed Statements of Operations for the Quarters and Six Months Ended March 31,June 30, 2020 and 2019 (Unaudited)
3028
Consolidated Condensed Statements of Comprehensive (Loss) Income for the Quarters and Six Months Ended March 31, June 30, 2020 and 2019 (Unaudited)
3230
Consolidated Condensed Statements of Stockholders’ Equity for theQuarters andSix MonthsEnded March 31,June 30, 2020 and 2019 (Unaudited)
3331
Consolidated Condensed Statements of Cash Flows for the QuartersSix Months Ended March 31,June 30, 2020 and 2019 (Unaudited)
3432
Notes to Consolidated Condensed Financial Statements (Unaudited)
3634
PART II. OTHER INFORMATION
Item 1.
55
Item 1.1A.
5556
Item 1A.2.
56
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
58
Item 3.
58
Item 4.
58
Item 5.
58
Item 6.
58
Macquarie Infrastructure Corporation (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 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of MIC.

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Cautionary Note Regarding Forward-Looking Statements
In addition to historical information, this quarterly report on Form 10-Q (Quarterly Report) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements may appear throughout this Quarterly Report, including without limitation, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section. We use words such as “believe”, “intend”, “expect”, “anticipate”, “plan”, “may”, “will”, “should”, “estimate”, “potential”, “project” and similar expressions to identify forward-looking statements. Such statements include, among others, those concerning our expected financial performance and strategic and operational plans, statements regarding the anticipated specific and overall impacts of COVID-19, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and that a number of risks and uncertainties could cause actual results to differ materially from those anticipated in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the risks identified in our Annual Report on the Form 10-K for the year ended December 31, 2019, this Quarterly Report on Form 10-Q and in other reports we file from time to time with the Securities and Exchange Commission (SEC).
Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. Many of these factors are beyond our ability to control or predict. Our forward-looking statements speak only as of the date of this Quarterly Report. Other than as required by law, we undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.

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PART I
FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of the financial condition and results of operations of Macquarie Infrastructure Corporation (MIC) should be read in conjunction with the consolidated condensed financial statements and the notes to those statements included elsewhere herein.
MIC is a Delaware corporation formed on May 21, 2015. MIC’s predecessor, Macquarie Infrastructure Company LLC, was formed on April 13, 2004. Except as otherwise specified, all references in this Form 10-Q to “MIC”, “we”, “us”, and “our” refer to Macquarie Infrastructure Corporation and its subsidiaries.
MIC is externally managed by Macquarie Infrastructure Management (USA) Inc. (our Manager), pursuant to the terms of a Management Services Agreement, subject to the oversight and supervision of our Board. Six of the eight members of our Board, and all of the members of each of our Audit, Compensation and Nominating and Governance committees,Committees, are independent and have no affiliation with Macquarie. Our Manager is a member of the Macquarie Group of companies comprising Macquarie Group Limited and its subsidiaries and affiliates worldwide. Macquarie Group Limited is headquartered in Australia and is listed on the Australian Securities Exchange.
We currently own and operate a portfolio of infrastructure and infrastructure-like businesses that provide services to corporations, government agencies and individual customers primarily in the United States (U.S.). Our businesses are organized into four segments:
•
•International-Matex Tank Terminals (IMTT):  a business providing bulk liquid storage and handling services to third-parties at 17 terminals in the U.S. and two in Canada;
•Atlantic Aviation:  a provider of jet fuel, terminal, aircraft hangaring and other services primarily to operators of general aviation (GA) jet aircraft at 70 airports throughout the U.S.;
•MIC Hawaii:  comprising a company that processes and distributes gas and provides related services (Hawaii Gas) and several smaller businesses collectively engaged in efforts to reduce the cost and improve the reliability and sustainability of energy in Hawaii; and
•:  a business providing bulk liquid storage and handling services to third-parties at 17 terminals in the U.S. and two in Canada;
•
Atlantic Aviation:  a provider of jet fuel, terminal, aircraft hangaring and other services primarily to operators of general aviation (GA) jet aircraft at 70 airports throughout the U.S.;
•
MIC Hawaii:  comprising a company that processes and distributes gas and provides related services (Hawaii Gas) and several smaller businesses collectively engaged in efforts to reduce the cost and improve the reliability and sustainability of energy in Hawaii; and
•
Corporate and Other:  comprising MIC Corporate (holding company headquarters in New York City) and a shared services center in Plano, Texas.
Effective October 1, 2018, the Bayonne Energy Center (BEC) and substantially all of our portfolio of solar and wind power generation businesses were classified as discontinued operations and our Contracted Power segment was eliminated. All periods reflect this change. In September 2019, we completed the last of the sales of our renewablessolar and wind power generation businesses included in discontinued operations including our majority interest in a renewable power development business. A relationship with a third-party developer of renewable power facilities was reported as a component of Corporate and Other through the expiration of the relationship in July 2019.
Overview
Use of Non-GAAP measures
In addition to our results under U.S. GAAP, we use certain non-GAAP measures including EBITDA excluding non-cash items and Free Cash Flow to assess the performance and prospects of our businesses.
We measure EBITDA excluding non-cash items as it reflects our businesses’ ability to effectively manage the amount 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.
In analyzing the financial performance of our businesses, we focus primarily on cash generation and Free Cash Flow in particular. We believe investors use Free Cash Flow as a measure ofto assess our ability to sustain and potentially increase our quarterly cash dividend andfund acquisitions, invest in growth projects, reduce or repay indebtedness and/or return capital to fund a portion of our growth.shareholders.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Consolidated — Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow” for further information on our calculation of EBITDA excluding non-cash items and Free Cash Flow and for reconciliations of these non-GAAP measures to the most comparable GAAP measures.
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At IMTT, we focus on providing bulk liquid storage, handling and other services pursuant to “take-or-pay” contracts to customers who place a premium on ease of access and operational flexibility. The revenue weighted average remaining contract life was 2.01.8 years at March 31,June 30, 2020.
At Atlantic Aviation, our focus is on the sale of jet fuel and other services to operators of GA aircraft through our fixed based operations (FBOs). The financial performance of the business is positively correlated with the number of GA flight movements (take-offs and landings) in the U.S. and the business’ ability to service a portion of the aircraft involved in those operations.
MIC Hawaii comprises Hawaii Gas and several smaller businesses that generate revenue primarily from the provision of gas services to commercial, residential and governmental customers and the generation of power while engaging in efforts to reduce the cost and improve the reliability and sustainability of energy in Hawaii.
Dividends
Since January 1, 2019, MIC has paid or declared the following dividends:
DeclaredPeriod Covered$ per ShareRecord DatePayable Date
February 14, 2020Fourth quarter 2019$1.00March 6, 2020March 11, 2020
October 29, 2019Third quarter 20191.00
November 11, 2019November 14, 2019
July 30, 2019Second quarter 20191.00
August 12, 2019August 15, 2019
April 29, 2019First quarter 20191.00
May 13, 2019May 16, 2019
February 14, 2019Fourth quarter 20181.00
March 4, 2019March 7, 2019

We intend to provide investors with the benefits of access to a portfolio of infrastructure and infrastructure-like businesses that we believe will generate growing amounts of distributable cash flow over time as a result of their positive correlation with inflation and provision of basic services to customers. Given the uncertainty stemming from COVID-19, however, we are working to increase our balance sheet strength and liquidity by, among other things, retaining any excess cash flow. Therefore, on April 2, 2020, we suspended our quarterly cash dividend resulting in the retention of approximately $260 million should the suspension remain in place through 2020.dividend.
Our Board regularly reviews our dividend policy and the proportion of our Free Cash Flow that any distribution represents.policy. In determining whether to issue dividends in the future, our Board will take into account such matters as the ability of our businesses to generate Free Cash Flow, the state of the capital markets and general business and economic conditions, the short and long term impacts of, and disruptions in our businesses, and/or in the business or economic environment due to COVID-19, or other non-economic events, the impact of any acquisitions or dispositions related to our pursuit of strategic alternatives, the Company’s financial condition, results of operations, indebtedness levels, capital requirements, capital opportunities and any contractual, legal and regulatory restrictions on the payment of dividends by the Company to its stockholders or by its subsidiaries to the Company, and any other factors that it deems relevant, subject to maintaining a prudent level of reserves. Moreover, the Company’s senior secured credit facility and the debt commitments at our operating businesses contain restrictions that may limit the Company’s ability to pay dividends.
Strategic Alternatives
On October 31, 2019, we announced our intention to pursue strategic alternatives for our Company and have since been actively engaged in processes that could result in the sale of our Company or one or more of our operating businesses. We continue to believe that these efforts will maximize value for stockholders and we intend to moveare moving the processes forward, although recent volatility in the capital markets, ongoing disruption in business and economic conditions and the limitations on travel and other restrictions on interactions imposed by responses to COVID-19 are expected to slow these processes. The measures undertaken to date, including the suspension of the quarterly dividend, will provide MIC with additional financial flexibility to proceed with such processes in a manner consistent with maximizing value for stockholders. We have not set a timetable for completing any transaction and there can be no assurance that any transaction(s) will occur on favorable terms or at all.
On October 30, 2019, we entered into a Disposition Agreement with our Manager to facilitate our pursuit of strategic alternatives (see Exhibit 10.3 of our Annual Report on Form 10-K filed with the SEC on February 25, 2020). Outside of this agreement, we do not have the ability to terminate the Third Amended and Restated Management Services Agreement (Management Services Agreement) between us and our Manager other than in limited circumstances. With this agreement, the Management Services Agreement will terminate as to any businesses, or substantial portions thereof, that are sold and, in connection therewith, we will make payments to our Manager calculated in accordance with the Disposition Agreement. The Disposition Agreement will terminate on the earlier to occur of (i) the termination of the Management Services Agreement, and (ii) the sixth anniversary, subject to extension under certain circumstances if a transaction is pending.
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Rating Agency Update
On April 15, 2020, Standard and Poor’s (S&P) lowered Atlantic Aviation’s issuer credit rating to ‘B+’ from ‘BB-’ and Atlantic Aviation’s senior secured debt to ‘BB-’ from ‘BB’. The downgrade was predicated on the impact of COVID-19 related travel restrictions on Atlantic Aviation’s business. On April 22, 2020, S&P lowered MIC’s rating to ‘BB’ from ‘BB+’ and changed the MIC outlook from stable to negative. The downgrade resulted in a lowering of IMTT’s rating as a subsidiary rating is capped by the parent rating. On a standalone basis IMTT would be rated ‘BBB-’.
On April 17, 2020, Moody's Investors Service (Moody's) lowered its rating of Atlantic Aviation’s senior secured debt to ‘B2’ from ‘Ba3’ (including the probability of default rating). The action reflects Moody's expectation that Atlantic Aviation will face a difficult operating environment involving a significant decline in GA flight activity that will lead to earnings pressure and a weaker financial profile.
The ratings actions have no impact on any of Atlantic Aviation, IMTT or MIC’s existing financial covenants. The downgrade of the MIC and IMTT ratings will increase the margin on the drawn portion of each entities’ revolving credit facilities as well as the IMTT Tax-Exempt Bonds by 0.25%. The commitment fees on the undrawn portions of the IMTT and MIC holding company level revolving credit facilities will increase by 0.05%.
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Results of Operations
Consolidated
Impact of COVID-19
The impact of COVID-19 has varied across our portfolio of businesses. The reduction in consumption of refined petroleum products associated with the slowing of economic activity together with increased production of crude oil, has for the time being resulted in increased demand for storage of these products and driven improved performance at IMTT. Conversely, stay-at-home orders and limitations on travel have abruptlysignificantly reduced demand for the products and services provided by our Atlantic Aviation and MIC Hawaii businesses. While GA flight activity began to recover during the second quarter from the low levels recorded in late March and April, the near absence of tourism in Hawaii continues to limit gas sales. Our businesses are not unique in these respects. The petroleum storage industry has, in general, performed well during the pandemic while the travel and tourism industries, and the businesses reliant on them, have been significantly negatively affected.
Operations are ongoing at each of our businesses. We have good visibility into the financial performance of IMTT given the contracted nature of its storage revenue, although declines in end user demand could reduce revenue from the provision of uncontracted ancillary services such as blending, packaging or throughput. Revenue from ancillary services in the second quarter was largely flat with the prior comparable period. The majority of the revenue generated by Atlantic Aviation and a substantial portion of that generated by MIC Hawaii is subject to consumer preference, meaning we have limited visibility into the prospects for these businesses over the short to medium term.
A relaxation of travel restrictions and stay-at-home orders contributed to the partial recovery in GA flight activity and the performance of Atlantic Aviation in the second quarter. The Federal Aviation Administration (FAA) reported that U.S. domestic GA flight activity in June was approximately 82% of levels achieved in the prior comparable period, up from approximately 28% in April. Further recovery is likely to depend on the continued rollback of lockdown measures leading to a pickup in business, international and event-driven activity. Tourism in Hawaii has yet to begin to recover and an increase is dependent on consumer travel preferences, an absence of any COVID-19 resurgence resulting in a prolonged lockdown of a significant portion of U.S. and an easing of Hawaii's mandatory quarantine policies. Despite these challenges, each of Atlantic Aviation and MIC Hawaii has benefited from the generation of stable resilient revenue from tenants leasing hangars in the case of Atlantic Aviation and primarily residential consumption of gas in the case of MIC Hawaii.
Based on the performance of our businesses in the second quarter, we remain confident in our ability to fund our ongoing operations, meet all of our financial obligations and fund the various investments in our businesses to which we have committed. We expect to fund these using the approximately $275 million of cash we had on hand at June 30, 2020, which excludes the $599 million prior drawdown on our revolving credit facility, and the cash we expect our operating businesses to generate over the remainder of the year.If, however, significant portions of the U.S. undergo new or renewed lockdowns for a protracted period, our resources may not be sufficient to meet all of our objectives.
In response to the effects of the pandemic, we have remained focused on ensuring the health and safety of our employees and customers while simultaneously implementing a range of cost reduction and cost control initiatives aimed at ensuring both the continuity and the value of our businesses when the crisis is over.businesses. For example, where possible, we have tried to reduce employee working hours and to maintain healthcare benefits rather than conduct layoffs. These and other expenseExpense reduction initiatives commenced in March 2020 and are expected to yield annualizedinitially yielded savings of approximately $50 million assuming current operating conditions continue.annualized, primarily at Atlantic Aviation. We were able to sustain most of these cost savings throughout the second quarter even as GA flight activity began to recover. Given the levels of flight activity at quarter end, some of the savings will be offset in the future by increases in the number of hours worked and the rehiring of certain previously furloughed employees. As a result, expense savings are now expected to be approximately $25 million annualized.
Consistent with recommendations of federal, state and local authorities, we have developed protocols and plans that we believe will allow staff and customers to access our facilities safely and effectively. We are also evaluatingimplementing these as local conditions permit. We believe that our financial controls and reporting systems continue to work effectively and that we have appropriately modified systems, processes and policies to accommodate the benefits that may beneed to work remotely.
To increase our available to our businesses and their employees under the U.S. Coronavirus Aid, Relief and Economic Security (CARES) Act.
Wecash, we have suspended our cash dividend which will result in the retention of approximately $260 million should it remain in place through the end of 2020. We also immediately sought to increase cash available by drawingdrawn on certain of our revolving credit facilities. We drew $599 million on our holding company revolving credit facility and $275 million on the Atlantic Aviation revolving credit facility in mid-March. The $275 million drawn on the Atlantic Aviation revolving credit facility was subsequently repaid on April 30, 2020 and on May 4, 2020, the revolving credit facility commitments were reduced to $10 million solely with respect to letters of credit then outstanding. The drawdowns added to our approximately $300 million of cash alreadythen on hand.
Subsequently The cash drawn on April 30, 2020, Atlantic Aviation fully repaid the outstanding balance on itsour holding company revolving credit facility remains on our balance sheet and, effective May 4, 2020, reduced the commitments on this facility to $10 million resulting in consolidated cash on handassuming we maintain levels of approximately $870 million. The $10 million revolving commitments are in place solely with respect to letters of credit currently outstanding. The amendment of the facility eliminates any leverage-based maintenance covenant on the Atlantic Aviation term loan as long as the letters of credit issued under the facility are cash collateralized and rolled over to standalone letters of credit facilities upon renewal.
Operations are ongoing at eachperformance of our businesses seen through the end of June, we do not foresee using that cash. At June 30, 2020, there has been no material deterioration in accounts receivable at any of our operating businesses. In light ofIf the ongoing impacts of the pandemic on our businesses, the reduced level of economic activity and uncertainty around the timing of any recovery from the impact of the pandemic we withdrewis protracted, collection times and the financial guidance we had provided to the market on February 25, 2020. We continue to have visibility into the financial performancevalue of IMTT given the contracted nature of its storage revenue although these may be partially offset by reduction in revenue related to the provision of ancillary services including blending, packaging or throughput. The uncontracted nature of the majority of the revenue generated by Atlantic Aviation and MIC Hawaii means that we have extraordinarily limited visibility into the prospects for these businesses over the short to medium term. A relaxation of travel restrictions and stay-at-home orders will likely be an early indication that weuncollectible accounts could expect improved performance from Atlantic Aviation and MIC Hawaii, although the rate of any such improvement is highly unpredictable given our inability to forecast the consumer response in a post-COVID-19 environment. Given the significant decline in jet fuel sales at Atlantic Aviation and gas sales at MIC Hawaii in April 2020, we do not currently anticipate meaningful improvement during the second quarter of 2020.
With the steps taken to strengthen our liquidity position summarized above, we have no immediate need for additional capital. We expect to fund the operation of our businesses and our financial obligations in 2020 using the approximately $300 million of cash on hand prior to the March 2020 drawdown on our revolving credit facilities and utilizing cash we expect to be generated by our operating businesses over the remainder of the year.We also currently expect to support the growth of the cash generating capacity of our businesses by using a portion of these resources to fund projects to which we are contractually obligated and which are projected to generate incremental earnings.
Executive Committee
As an additional precaution, our board has established an Executive Committee comprising the Chairman (or alternate), the Chief Executive Officer (or alternate) and one of the independent members of the board (or alternate) to exercise all powers and authority of the board when the board is not in session or in the event one of more of its members is/are incapacitated. Decisions of the Committee require the approval of a majority of its independent members, and a majority of the Committee’s independent members may refer any matter to the full board for determination. The Executive Committee does not have powers that, under Delaware corporate law, cannot be delegated including approving a sale of the Company. In addition, the Executive Committee may not, among other things, reinstate or declare a dividend or amend or terminate the Disposition Agreement with our Manager.

increase.
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Results of Operations: Consolidated – (continued)

Results Update
Our consolidated results of operations are as follows:
Quarter Ended
June 30,		Change
Favorable/(Unfavorable)		Six Months Ended June 30,Change
Favorable/(Unfavorable)
20202019$%20202019$%
($ In Millions, Except Share and Per Share Data) (Unaudited)
Revenue
Service revenue$224  $355  (131) (37) $580  $773  (193) (25) 
Product revenue37  61  (24) (39) 97  125  (28) (22) 
Total revenue261  416  (155) (37) 677  898  (221) (25) 
Costs and expenses
Cost of services75  162  87  54  220  330  110  33  
Cost of product sales18  45  27  60  60  85  25  29  
Selling, general and administrative83  84  1  1  179  164  (15) (9) 
Fees to Manager-related party4  7  3  43  11  15  4  27  
Depreciation and amortization63  63  —  —  128  126  (2) (2) 
Total operating expenses243  361  118  33  598  720  122  17  
Operating income18  55  (37) (67) 79  178  (99) (56) 
Other income (expense)
Interest income—  1  (1) (100) —  4  (4) (100) 
Interest expense(1)
(33) (46) 13  28  (75) (88) 13  15  
Other income (expense), net2  (2) 4  200  3  2  1  50  
Net (loss) income from continuing operations before income taxes(13) 8  (21) NM7  96  (89) (93) 
Benefit (provision) for income taxes5  (2) 7  NM(4) (26) 22  85  
Net (loss) income from continuing operations(8) 6  (14) NM3  70  (67) (96) 
Discontinued Operations
Net income from discontinued operations before income taxes—  5  (5) (100) —  8  (8) (100) 
Provision for income taxes—  (2) 2  100  —  —  —  —  
Net income from discontinued operations—  3  (3) (100) —  8  (8) (100) 
Net (loss) income(8) 9  (17) (189) 3  78  (75) (96) 
Net (loss) income from continuing operations(8) 6  (14) NM3  70  (67) (96) 
Net (loss) income from continuing operations attributable to MIC(8) 6  (14) NM3  70  (67) (96) 
Net income from discontinued operations—  3  (3) (100) —  8  (8) (100) 
Less: net loss attributable to noncontrolling interests—  (2) (2) (100) —  (3) (3) (100) 
Net income from discontinued operations attributable to MIC—  5  (5) (100) —  11  (11) (100) 
Net (loss) income attributable to MIC$(8) $11  (19) (173) $3  $81  (78) (96) 
Basic (loss) income per share from continuing operations attributable to MIC$(0.09) $0.07  (0.16) NM$0.04  $0.81  (0.77) (95) 
Basic income per share from discontinued operations attributable to MIC—  0.06  (0.06) (100) —  0.13  (0.13) (100) 
Basic (loss) income per share attributable to MIC$(0.09) $0.13  (0.22) (169) $0.04  $0.94  (0.90) (96) 
Weighted average number of shares outstanding: basic86,871,892  86,073,372  798,520  1  86,779,432  85,973,308  806,124  1  
___________
NM — Not meaningful.
(1)Interest expense includes non-cash losses on derivative instruments of $1 million and $10 million for the quarter and six months ended March 31,June 30, 2020, reflect:respectively, compared with non-cash losses of $8 million and $12 million for the quarter and six months ended June 30, 2019, respectively.
Revenue
Consolidated revenues decreased for the quarter and six months ended June 30, 2020 compared with the quarter and six months ended June 30, 2019 primarily as a result of (i) a decrease in the amount of jet fuel and gas sold by Atlantic Aviation and MIC Hawaii, respectively, due to the impact of COVID-19; (ii) the lower wholesale cost of jet fuel and gas; and (iii) lower
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Results of Operations: Consolidated – (continued)
average storage rates on new and renewing contracts at IMTT. The decrease was partially offset by an increase in the proportion of storage capacity under contract (utilization) at IMTT.
The decrease in consolidated revenue for the six months ended June 30, 2020 also reflects the absence of a $39 million contract termination payment (the termination payment) received by IMTT in the first quarter of 2019; (ii) a decrease in the sales of jet fuel and gas at Atlantic Aviation and MIC Hawaii, respectively; and (iii) an increase in expenses incurred in connection with our pursuit of strategic alternatives.
For the quarter ended March 31, 2020, there were no contributions to our consolidated results from discontinued operations due to the completion of the sale of the wind and solar power generating portfolios during 2019.
Our consolidated results of operations are as follows:
 Quarter Ended March 31, Change
Favorable/(Unfavorable)
 2020 2019 $ %
 ($ In Millions, Except Share and Per Share Data) (Unaudited)
Revenue       
Service revenue$356
 $418
 (62) (15)
Product revenue60
 64
 (4) (6)
Total revenue416
 482
 (66) (14)
Costs and expenses       
Cost of services145
 168
 23
 14
Cost of product sales42
 40
 (2) (5)
Selling, general and administrative96
 80
 (16) (20)
Fees to Manager-related party7
 8
 1
 13
Depreciation51
 48
 (3) (6)
Amortization of intangibles14
 15
 1
 7
Total operating expenses355
 359
 4
 1
Operating income61
 123
 (62) (50)
Other income (expense)       
Interest income—
 3
 (3) (100)
Interest expense(1)
(42) (42) —
 —
Other income, net1
 4
 (3) (75)
Net income from continuing operations before income taxes20
 88
 (68) (77)
Provision for income taxes(9) (24) 15
 63
Net income from continuing operations11
 64
 (53) (83)
Discontinued Operations       
Net income from discontinued operations before income taxes—
 3
 (3) (100)
Benefit for income taxes—
 2
 (2) (100)
Net income from discontinued operations—
 5
 (5) (100)
Net income11
 69
 (58) (84)
        
Net income from continuing operations11
 64
 (53) (83)
Net income from continuing operations attributable to MIC11
 64
 (53) (83)
Net income from discontinued operations—
 5
 (5) (100)
Less: net loss attributable to noncontrolling interests—
 (1) (1) (100)
Net income from discontinued operations attributable to MIC—
 6
 (6) (100)
Net income attributable to MIC$11
 $70
 (59) (84)
Basic income per share from continuing operations attributable to MIC$0.13
 $0.75
 (0.62) (83)
Basic income per share from discontinued operations attributable to MIC—
 0.07
 (0.07) (100)
Basic income per share attributable to MIC$0.13
 $0.82
 (0.69) (84)
Weighted average number of shares outstanding: basic86,686,972
 85,872,132
 814,840
 1
___________
(1)Interest expense includes non-cash losses on derivative instruments of $9 million and $4 million for the quarters ended March 31, 2020 and 2019, respectively.
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Results of Operations: Consolidated – (continued)

Revenue
Consolidated revenues decreased for the quarter ended March 31, 2020 compared with the quarter ended March 31, 2019 primarily as a result of (i) decrease in the amount of jet fuel and gas sold at Atlantic Aviation and MIC Hawaii, respectively; (ii) lower wholesale cost of jet fuel and gas at Atlantic Aviation and MIC Hawaii, respectively; (iii) the absence of the termination payment received by IMTT in the first quarter of 2019; and (iv) lower average storage rates on new and renewing contracts at IMTT. These decreases were partially offset by the recognition of fees earned on tank cleaning obligations and an increase in utilization at IMTT.
Cost of Services and Cost of Product Sales
Consolidated cost of services and cost of product sales decreased for the quarter and six months ended March 31,June 30, 2020 compared with the quarter and six months ended March 31,June 30, 2019 primarily as a result of (i) a decrease in the amount of jet fuel and gas sold atby Atlantic Aviation and MIC Hawaii, respectively; andrespectively, due to the impact of COVID-19; (ii) athe lower wholesale cost of jet fuel and gas at Atlantic Aviationgas; and MIC Hawaii, respectively. The decrease(iii) favorable changes in consolidated cost of services and cost of product sales was partially offset by realized and unrealized lossesgains (losses) on commodity hedge contracts at Hawaii Gas (see “Results of Operations — MIC Hawaii” below).
Selling, General and Administrative Expenses
Selling, general and administrative expenses increaseddecreased for the quarter ended March 31,June 30, 2020 compared withand increased for the six months ended June 30, 2020 versus the prior comparable periods. The decrease in the quarter ended March 31, 2019was primarily due to (i) an increaselower salaries and benefits at IMTT and Atlantic Aviation; (ii) a decline in costs incurred in connection with the evaluation of various investment and acquisition and disposition opportunities; (iii) the absence of consulting expenses incurred during the first half of 2019 in connection with our evaluation of opportunities to improve efficiencies; and (iv) lower professional services fees, primarily in connection with ongoing litigation. These decreases were partially offset by a $7 million provision of estimated costs (in excess of insurance recoveries) for remediating certain environmental matters at Atlantic Aviation and costs incurred associated with COVID-19 response.
For the six months ended June 30, 2020, selling, general and administrative expenses also includes expenses incurred in connection with our pursuit of strategic alternatives; (ii) higher salaries and benefits, generally; (iii) contractual increases in rent at Atlantic Aviation; and (iv) non-cash compensation expensealternatives, the majority of which were incurred in relation to the incentive plansfirst quarter of 2020, resulting in an increase for senior management of our operating businesses.the six month period ended June 30, 2020.
Fees to Manager
Our Manager is entitled to a monthly base management fee based on our market capitalization and potentially a quarterly performance fee based on total stockholder returns relative to a U.S. utilities index. For the quartersquarter and six months ended March 31,June 30, 2020, and 2019, we incurred base management fees of $4 million and $11 million, respectively, compared with $7 million and $8$15 million for the quarter and six months ended June 30, 2019, respectively. Base management fees decreased, primarilyas calculated in accordance with our Management Services Agreement, due to the reduction in the market capitalization of our Company.Company and the increase in our holding company cash balance. No performance fees were incurred in either of the current or prior comparable periods. The unpaid portion of base management fees and performance fees, if any, at the end of each reporting period is included in the line item Due to Manager-related party in our consolidated condensed balance sheets.
In accordance with the Third Amended and Restated Management Services Agreement, our Manager elected to reinvest any fees to which it was entitled in new primary shares in all of the periods shown below and has currently elected to reinvest future base management fees and performance fees, if any, in new primary shares.

Period 
Base Management
Fee Amount
($ in millions)
 
Performance
Fee Amount
($ in millions)
 
Shares
Issued
PeriodBase Management
Fee Amount
($ in millions)		Performance
Fee Amount
($ in millions)		Shares
Issued
2020 Activities:       2020 Activities:
Second quarter 2020Second quarter 2020$4  $—  146,452  
(1)
First quarter 2020 $7
 $—
 181,617
(1) 
First quarter 20207  —  181,617  
       
2019 Activities:       2019 Activities:
Fourth quarter 2019 $9
 $—
 208,881
 Fourth quarter 2019$9  $—  208,881  
Third quarter 2019 8
 —
 201,827
 Third quarter 20198  —  201,827  
Second quarter 2019 7
 —
 192,103
 Second quarter 20197  —  192,103  
First quarter 2019 8
 —
 184,448
 First quarter 20198  —  184,448  
___________
(1)Our Manager elected to reinvest all of the monthly base management fees for the first quarter of 2020 in new primary shares. We issued 181,617 shares for the quarter ended March 31, 2020, including 39,206 shares that were issued in April 2020 for the March 2020 monthly base management fee.
(1)Our Manager elected to reinvest all of the monthly base management fees for the second quarter of 2020 in new primary shares. We issued 146,452 shares for the quarter ended June 30, 2020, including 52,370 shares that were issued in July 2020 for the June 2020 monthly base management fee.
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Results of Operations: Consolidated – (continued)
Depreciation and Amortization
The increase in depreciation and amortization expense for the quartersix months ended March 31,June 30, 2020 compared with the quartersix months ended March 31,June 30, 2019 primarily reflects primarily assets placed in service.


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Resultsservice, partially offset by the full amortization of Operations: Consolidated – (continued)

certain airport contract rights at Atlantic Aviation.
Interest Expense, net, and (Losses) GainsLosses on Derivative Instruments
Interest expense, net, includes non-cash losses on derivative instruments of $9$1 million and $4$10 million for the quartersquarter and six months ended March 31,June 30, 2020, respectively, compared with non-cash losses of $8 million and $12 million for the quarter and six months ended June 30, 2019, respectively. (Losses) gainsGains (losses) on derivatives recorded in interest expense are attributable to the change in fair value of interest rate hedging instruments. Excluding the derivative adjustments, cash interest expense increased to $29was $30 million and $59 million for the quarter and six months ended March 31,June 30, 2020, from $28respectively, compared with $31 million and $59 million for the quarter and six months ended March 31,June 30, 2019, reflectingrespectively.
Cash interest primarily an increase in average debt balance, partially offset byreflects a decrease in the weighted average interest rate of debt facilities, partially offset by an increase in average debt balance and higherlower interest income earned during the quarter and six months ended March 31, 2019.June 30, 2020. See discussions of interest expense for each of our operating businesses below.
Other Income (Expense), net
Other income (expense), net, decreased duringprimarily includes federal grants received as reimbursement for capital expenditures incurred in prior periods at IMTT for the quarter and six months ended March 31, 2020 compared withJune 30, 2020. For the quarter and six months ended March 31,June 30, 2019, primarily as a resultother income (expense), net, includes losses on disposal of the absence ofassets at MIC Hawaii, which is partially offset by fee income from a third-party developer of renewable power facilities.facilities for the six month period ended June 30, 2019. The relationship with the developer concluded during July 2019.
Discontinued Operations
We recorded no income from discontinued operations for the quarter and six months ended March 31,June 30, 2020 as we completed the sale of the last of any businesses characterized as discontinued operations in September 2019.
Income Taxes
We file a consolidated federal income tax return that includes the financial results of IMTT, Atlantic Aviation and MIC Hawaii.  Pursuant to a tax sharing agreement, these businesses pay MIC an amount equal to the federal income tax each would pay on a standalone basis as if they were not part of the consolidated group. We expect to incur a federal income tax return.  taxable loss for the year ended December 31, 2020. Under the CARES Act, any net operating loss (NOL) generated in 2020 may be carried back five years.
In addition, our businesses file income tax returns and may pay taxes in the state and local jurisdictions in which they operate. We expect the total current year state income tax liability of our businesses to be approximately $5 million. In calculating our state income tax provision, we have provided a valuation allowance for certain state income tax net operating loss (NOL)NOL carryforwards, the use of which is uncertain.
We expect to incur a federal taxable loss for the year ended December 31, 2020. Under the CARES Act, any NOL generated in 2020 may be carried back five years.
U.S. Coronavirus Aid, Relief and Economic Security (CARES) Act
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On March 27, 2020, President Trump signed the CARES Act into law. The Act includes provisions for federal grants or government-backed loans to businesses, employee benefits and retention credits, easingResults of certain income tax rules and a payroll tax deferral, among others. Several of these provisions may be applicable to the Company or to our operating businesses although we currently believe that they are likely to generate an immaterial benefit.Operations: Consolidated – (continued)
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow
In addition to our results under U.S. GAAP, we use certain non-GAAP measures including EBITDA excluding non-cash items and Free Cash Flow to assess the performance and prospects of our businesses.
We measure EBITDA excluding non-cash items as it reflects our businesses’ ability to effectively manage the amount 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. We believe investors use EBITDA excluding non-cash items primarily as a measure of the operating performance of MIC’s businesses and to make comparisons with the operating performance of other businesses whose depreciation and amortization expense may vary widely from ours, particularly where acquisitions and other non-operating factors are involved. 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. Other non-cash items 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.
Our businesses are characteristically owners of high-value, long-lived assets capable of generating substantial Free Cash Flow. We define Free Cash Flow as cash from operating activities — the most comparable GAAP measure — which reflects cash interest, tax payments 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. We use Free Cash Flow as a measure of our ability to sustain and potentially increase our quarterly cash dividend and funding a portion of our growth.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 us with the same level of visibility into our performance and prospects as a result of: (i) the capital intensive nature of our businesses and the generation of non-cash depreciation and amortization; (ii) shares issued to our external Manager under the Management Services Agreement; (iii) our ability to defer all or a portion of current federal income taxes; (iv) non-cash unrealized gains or losses on derivative instruments; (v) gains (losses) on disposal of
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Results of Operations: Consolidated – (continued)

assets; (vi) non-cash compensation expense incurred in relation to the incentive plans for senior management of our operating businesses; and (vii) pension expenses. Pension expenses primarily consist of interest cost, 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 to Free Cash Flow and are not included in pension expense. We believe that external consumers of our financial statements, including investors and research analysts, use Free Cash Flow both to assess MIC’s performance and as an indicator of its success in generating an attractive risk-adjusted total return.
In this Quarterly Report on Form 10-Q, we have disclosed Free Cash Flow on a consolidated basis and for each of our operating segments and MIC Corporate and Other. We believe 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 our 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 our definition of Free Cash Flow. We note 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 and not in lieu of our financial results reported under GAAP.
Classification of Maintenance Capital Expenditures and Growth Capital Expenditures
We categorize capital expenditures as either maintenance capital expenditures or growth capital expenditures. As neither maintenance capital expenditure nor growth capital expenditure is a GAAP term, we have adopted a framework to categorize specific capital expenditures. In broad terms, maintenance capital expenditures primarily maintain our 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 flows.flow. We consider a number of factors in determining whether a specific capital expenditure will be classified as maintenance or growth.
We do not bifurcate specific capital expenditures into maintenance and growth components. Each discrete capital expenditure is considered within the above framework and the entire capital expenditure is classified as either maintenance or growth.
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Results of Operations: Consolidated – (continued)

A reconciliation of net (loss) income from continuing operations to EBITDA excluding non-cash items from continuing operations and a reconciliation from cash provided by operating activities from continuing operations to Free Cash Flow from continuing operations, on a consolidated basis, is provided below. Similar reconciliations for each of our operating businesses and Corporate and Other follow.
Quarter Ended June 30,Change
Favorable/(Unfavorable)		Six Months Ended June 30,Change
Favorable/(Unfavorable)
Quarter Ended March 31, Change
Favorable/(Unfavorable)		20202019$%20202019$%
2020 2019 $ %
($ In Millions) (Unaudited)($ In Millions) (Unaudited)
Net income from continuing operations$11
 $64
    
Net (loss) income from continuing operationsNet (loss) income from continuing operations$(8) $6  $3  $70  
Interest expense, net(1)
42
 39
    
Interest expense, net(1)
33  45  75  84  
Provision for income taxes9
 24
    
Depreciation51
 48
    
Amortization of intangibles14
 15
    
(Benefit) provision for income taxes(Benefit) provision for income taxes(5) 2  4  26  
Depreciation and amortizationDepreciation and amortization63  63  128  126  
Fees to Manager-related party7
 8
    Fees to Manager-related party4  7  11  15  
Other non-cash expense, net(2)
7
 4
    
Other non-cash (income) expense, net(2)
Other non-cash (income) expense, net(2)
(2) 9  5  13  
EBITDA excluding non-cash items - continuing operations$141
 $202
 (61) (30)EBITDA excluding non-cash items - continuing operations$85  $132  (47) (36) $226  $334  (108) (32) 
       
EBITDA excluding non-cash items - continuing operations$141
 $202
    EBITDA excluding non-cash items - continuing operations$85  $132  $226  $334  
Interest expense, net(1)
(42) (39)    
Interest expense, net(1)
(33) (45) (75) (84) 
Non-cash interest expense, net(1)
13
 11
    
Non-cash interest expense, net(1)
3  1416  25  
Provision for current income taxes(7) (7)    
Benefit (provision) for current income taxesBenefit (provision) for current income taxes5  (2) (2) (9) 
Changes in working capital(6) (16)    Changes in working capital13  9  7  (7) 
Cash provided by operating activities - continuing operations99
 151
    Cash provided by operating activities - continuing operations73  108  172  259  
Changes in working capital6
 16
    Changes in working capital(13) (9) (7) 7  
Maintenance capital expenditures(12) (10)    Maintenance capital expenditures(16) (13) (28) (23) 
Free cash flow - continuing operations93
 157
 (64) (41)Free cash flow - continuing operations44  86  (42) (49) 137  243  (106) (44) 
Free cash flow - discontinued operations—
 7
 (7) (100)Free cash flow - discontinued operations—  7  (7) (100) —  14  (14) (100) 
Total Free Cash Flow$93
 $164
 (71) (43)Total Free Cash Flow$44  $93  (49) (53) $137  $257  (120) (47) 
___________
(1) Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023.
(2)
Other non-cash expense, net, includes primarily pension expense of $2 million for the quarters ended March 31,
(2) Other non-cash (income) expense, net, includes primarily pension expense of $2 million and $4 million for the quarter and six month periods ended June 30, 2020 and 2019, respectively, unrealized gains (losses) on 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 to the disposal of assets. Pension expense consists primarily of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. 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.



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Results of Operations: IMTT
Impact of COVID-19
IMTT continues to closely monitor the effects of COVID-19 and is actively managing its response placing a priority on the health and safety of its employees, contractors, their families, customers and the broader communities in which it operates. Since IMTT's services are classified as essential, and its terminals remain operational and there have been no service disruptions related to the pandemic. IMTTThe business has implemented a pandemic response plan and has taken actions that allow itis closely monitoring guidance from the Centers for Disease Control and Prevention (CDC) as well as federal, state and local governments with respect to continue to provide services in a safe and effective manner. Procedures implementedconducting operations safely. Plan elements include: (i) a work from home policy for all employees that are able to do so; (ii) limiting operations to only those required to meet safety, regulatory or customer needs; (iii) enhancedenhancing cleaning and disinfectiondisinfecting of facilities; (iv) limiting interactions between employees through social distancing; (v) increased usagemandating the use of personal protective equipment;equipment by employees; (vi) modification ofmodifying shift schedules to reduce exposure between shifts; (vii) limiting terminalsterminal access to essential personnel; and (viii) requiring all individuals who enter the terminals submit to temperature scans.scans; and (ix) implementing business travel policies consistent with minimizing potential exposure to COVID-19.
As a result of implementing the implementation of these procedures,pandemic response plan, certain operating costs have increased. IMTT expects the increases to betotal approximately $5 million in 2020. If conditions worsen and additional measures need to be put into place, for example, having dedicated staff that remain at the terminals full time, these costs may increase. Thebe higher. These cost increases are expected to be partially offset by reduced repair and maintenance expense and operating costs dueas a result of limiting activities to only essential operations occurring, lower healthcare costs and lower generallabor and administrative expenses.healthcare costs.
IMTT is engaged in ongoing communications with its employees, customers, vendors, lenders, ratings agencies and other stakeholders to keep them apprised of its response to the pandemic. COVID-19 and the resulting slowdown in economic activity together with OPEC’s crude oil pricing and supply decisions, have ledcontributed to an oversupply of petroleum and other liquid products stored and handled by IMTT. TheseDuring the second quarter of 2020, these factors have, in some cases, created conditions in which the expected future value of a product iscertain products was higher than its current value and has increased demand for storage of these products. AsConsequently, a result,substantial portion of IMTT’s available capacity was leased and utilization is now expected to increase to over 95% by mid-Mayaverage in the mid-90s% for the remainder of the year up from 86.3% at the end of 2019 with almost all usable tanks currently leased. In addition, some customers have renewed2019. At June 30, 2020, utilization was 95.7%. With relatively few storage contracts aheadscheduled to renew during the remainder of their expirationthe year, average storage rates are unlikely to increase materially in order to guarantee2020 despite the availability of storage. The leases entered intoincrease in March and April have a volume weighted average duration of approximately one year.utilization. IMTT believes that its circumstances are not unique, and that the broader bulk liquid storage industry is experiencinghas experienced similar increases in demand.
Although demand for storage has increased, IMTT believes product handling activities may decrease. Reduced handling activities could reduce the portionlevel of IMTT’s revenue that is not contracted and is based on providing ancillary services such asprovided during the quarter was flat versus the prior comparable period and may decrease in the future depending on end-user consumption of stored products. Ancillary service revenues are uncontracted and are generated from the provisions of heating, excess throughput, blending, or rail or trucking charges.charges among others. Approximately 80% of IMTT’s revenue is contracted/generated from firm commitments. In addition, a sustained decrease in economic activity could have an adverse impact on some of IMTT’s customers which may result in reduced demand for certain of the products stored by IMTT and may result in lower demand for storage.
IMTT is reviewing all maintenance and growth capital expenditure projects to ensure it is prudently managing its liquidity. IMTT’s agreement to construct new storage in support of a methanol manufacturing plant being developed by Methanex in Geismar, LA includes a provision which allows Methanex to delay the project by one year. As a result of COVID-19, Methanex exercised this provision and construction of the storage is now expected to start in mid-2021 and be completed in mid-2023. No other previously announced repositioning projects have contract terms that allow the customer to unilaterally delay the project. There has been no other material COVID-19 related impacts to IMTT’s planned capital projects, however, if conditions worsen, other projects may be delayed or costs may increase due to a lack of contractor or resource availability. IMTT also anticipates a reduction in the number of inquiries regarding new growth projects.
IMTT has not experienced any significant impact to its financial controls or reporting systems. Minor modifications have been made to accommodate administrative personnel working remotely.
Although there may be a delay in accounts receivable collections in the future as a result of COVID-19, IMTT has not experienced any collections issues to date and continues to make payments to vendors as due. The business does not foresee any liquidity issues and is compliant with its debt covenants. IMTT has not drawn on its $600 million revolving credit facility, which matures in December 2023, and does not have any other debt maturities until May 2025.
IMTT monitors leading and key performance indicators such as petroleum spot prices and futures curves, throughput volumes, contract renewals and tenor, utilization, rates and accounts receivable in assessing the future impactspotential impact of COVID-19 may have on the business. In addition, the business
IMTT is reviewing the benefits thatall maintenance and growth capital expenditures to ensure it is prudently managing its liquidity. Other than a one-year delay in a project at Geismar, LA, no previously announced growth projects have been cancelled or delayed as a result of COVID-19. If conditions worsen, other projects may be availabledelayed, or costs may increase due to it undera lack of contractor or resource availability. IMTT expects the CARES Act. Initial indications are that these are likelynumber of inquiries regarding new growth projects to be immaterial todecline.
While markets for bulk liquid products in general have been less stable as a result of COVID-19, IMTT believes the business’ results of operations.
The business believes current supply and demand imbalances, particularly with respect to refined petroleum products, are likely to persist over the near term and sustain demandmarket for storage and handling of these products.
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Resultsthose products, particularly of Operations: IMTT – (continued)

refined petroleum, will remain constructive over the near term.
Business Update
The financial performance of IMTT is driven by the amount of bulk liquid storage capacity the business has under contract (lease) and the rates for storage and other services achieved on those contracts. The portion of IMTT’s storage capacity under contract (utilization)Utilization at IMTT averaged 85.4%94.6% and 82.5%90.0% for the quartersquarter and six months ended March 31,June 30, 2020, respectively, compared with 82.9% and 82.7% for the quarter and six months ended June 30, 2019, respectively. Utilization averaged 85.2%85.4% for the quarter ended DecemberMarch 31, 2019.2020. The slight increase in average utilization primarily reflects primarily an increase in storagethe effect of cleana contango market for refined petroleum products in New York Harbor associated with seasonal demand.products. Demand for storage across IMTT's terminals increased at the end of the first quarter and beginning of the second quarter and utilization is expected to average in the low 90s percentto mid-90s% for full year 2020.
On February 20, 2020, IMTT entered into an agreement with Diamond Green Diesel (DGD), a joint venture between Valero Energy Corporation and Darling Ingredients, pursuant to which it will construct two pipelines connecting its St. Rose, LA terminal with the DGD renewable diesel refinery at Norco, LA five miles away. IMTT will also expand its marine and rail infrastructure and repurpose approximately 790,000 barrels
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Results of existing storage capacity from heavy and residual petroleum service to renewable diesel feedstocks and finished product. The project is expected to be completed prior to the end of 2021.Operations: IMTT – (continued)
IMTT works with existing and new customers continuously to meet their storage and logistics needs. Critical to IMTT’s success is its ability to construct new assets on a build-to-suit basis and/or to repurpose existing tanks and infrastructure to meet these needs. These projects range from simple, inexpensive modifications to large scale developments requiring extensive planning and capital investment. IMTT currently expects these development and repurposing efforts will, going forward, (i) increase its customer base; (ii) improve utilization and average storage rates; (iii) increase exposure to new products that it believes have better sustainable growth prospects; (iv) generate a larger proportion of its revenue from longer-dated contracts; and (iv)(v) reduce its exposure to short-term, cyclical markets with slower growth prospects.
The financial results recorded by IMTT
Quarter Ended June 30,Change
Favorable/(Unfavorable)		Six Months Ended June 30,Change
Favorable/(Unfavorable)
2020201920202019
$$$%$$$%
($ In Millions) (Unaudited)
Revenue120  119  1  1  252  280  (28) (10) 
Cost of services46  49  3  6  96  99  3  3  
Selling, general and administrative expenses10  9  (1) (11) 19  17  (2) (12) 
Depreciation and amortization34  33  (1) (3) 68  66  (2) (3) 
Operating income30  28  2  7  69  98  (29) (30) 
Interest expense, net(1)
(10) (15) 5  33  (25) (28) 3  11  
Other income, net2  —  2  NM3  —  3  NM
Provision for income taxes(6) (4) (2) (50) (13) (20) 7  35  
Net income16  9  7  78  34  50  (16) (32) 
Reconciliation of net income to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow:
Net income16  9  34  50  
Interest expense, net(1)
10  15  25  28  
Provision for income taxes6  4  13  20  
Depreciation and amortization34  33  68  66  
Other non-cash expense, net(2)
2  3  5  4  
EBITDA excluding non-cash items68  64  4  6  145  168  (23) (14) 
EBITDA excluding non-cash items68  64  145  168  
Interest expense, net(1)
(10) (15) (25) (28) 
Non-cash interest expense, net(1)
—  5  5  8  
Provision for current income taxes(1) (1) (3) (12) 
Changes in working capital(3) 2  (20) 10  
Cash provided by operating activities54  55  102  146  
Changes in working capital3  (2) 20  (10) 
Maintenance capital expenditures(13) (8) (19) (14) 
Free cash flow44  45  (1) (2) 103  122  (19) (16) 
___________
NM — Not meaningful.
(1)Interest expense, net, includes non-cash adjustments to derivative instruments and non-cash amortization of deferred financing fee.
(2)Other non-cash expense, net, includes primarily pension expense of $2 million and $4 million for the quarter and six month periods ended June 30, 2020 and 2019, respectively, and non-cash compensation expense incurred in relation to incentive plans. Pension expense consists primarily of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. 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 first quarter of 2020 reflect the absence of the termination payment received in the first quarter of 2019. The absence of the termination payment impacts each of the revenue, operating incomeabove table. See “Earnings Before Interest, Taxes, Depreciation and net income lines of the GAAP income statement as well as the management reporting line items of EBITDAAmortization (EBITDA) excluding non-cash items and Free Cash Flow.Flow” above for further discussion.
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Results of Operations: IMTT – (continued)

 Quarter Ended March 31, Change
Favorable/(Unfavorable)
 2020 2019 
 $ $ $ %
 ($ In Millions) (Unaudited)
Revenue132
 161
 (29) (18)
Cost of services50
 50
 —
 —
Selling, general and administrative expenses9
 8
 (1) (13)
Depreciation and amortization34
 33
 (1) (3)
Operating income39
 70
 (31) (44)
Interest expense, net(1)
(15) (13) (2) (15)
Other income, net1
 —
 1
 NM
Provision for income taxes(7) (16) 9
 56
Net income18
 41
 (23) (56)
Reconciliation of net income to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow:       
Net income18
 41
    
Interest expense, net(1)
15
 13
    
Provision for income taxes7
 16
    
Depreciation and amortization34
 33
    
Other non-cash expense, net(2)
3
 1
    
EBITDA excluding non-cash items77
 104
 (27) (26)
EBITDA excluding non-cash items77
 104
    
Interest expense, net(1)
(15) (13)    
Non-cash interest expense, net(1)
5
 3
    
Provision for current income taxes(2) (11)    
Changes in working capital(17) 8
    
Cash provided by operating activities48
 91
    
Changes in working capital17
 (8)    
Maintenance capital expenditures(6) (6)    
Free cash flow59
 77
 (18) (23)
___________
NM — Not meaningful.
(1)Interest expense, net, includes non-cash adjustments to derivative instruments and non-cash amortization of deferred financing fee.
(2)
Other non-cash expense, net, includes primarily pension expense of $2 million for the quarters ended March 31, 2020 and 2019 and non-cash compensation expense incurred in relation to incentive plans. Pension expense consists primarily of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. See “Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow” above for further discussion.
Revenue
IMTT generates the majority of its revenue from contracts comprising a fixed monthly charge for access to or use of a specified amount of capacity, infrastructure or land. The monthly charge typically increases annually with inflation. We refer to revenue generated from such contracts or fixed charges as firm commitments. At March 31,June 30, 2020, firm commitments had a revenue weighted average remaining contract life of 2.01.8 years. Revenue from firm commitments, excluding fees earned on tank cleaning obligations, comprised 83.4% and the termination payment, comprised 80.7% and 80.3%81.7% of total revenue for the quartersquarter and trailing twelve months ended March 31,June 30, 2020, and 2019, respectively.
Total revenues decreasedrevenue increased for the quarter ended March 31,June 30, 2020 compared with the quarter ended March 31,June 30, 2019 primarily due to an increase in utilization, partially offset by lower storage rates on new and renewing contracts.
For the six months ended June 30, 2020, total revenue decreased compared with the six months ended June 30, 2019 primarily due to the absence of the termination payment received during the quarter ended March 31, 2019 and the impact of contracts
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Results of Operations: IMTT – (continued)

renewed at lower storage rates in the second half of 2019. The decrease in revenue was partially offset by the recognition of $15 million ofincrease in fees earned on tank cleaning obligations of $12 million, primarily in the first quarter of 2020, and anthe increase in utilization.
Cost of Services and Selling, General and Administrative Expenses
Cost of services and selling, general and administrative expenses combined increaseddecreased for the quarter and six months ended March 31,June 30, 2020 compared with the quarter and six months ended March 31,June 30, 2019 primarily due to lower labor, fuel and healthcare costs, partially offset by increased costs associated with COVID-19 response and higher property taxes at Bayonne and increases in insurance expense, partially offset by lower fuel costs and repairs and maintenance expenses.Bayonne.
Depreciation and Amortization
Depreciation and amortization expense increased for the quarter and six months ended March 31,June 30, 2020 compared with the quarter and six months ended March 31,June 30, 2019 primarily as a result of assets placed in service.
Interest Expense, net
Interest expense, net, includes non-cash losses on derivative instruments of $5$1 million and $2$6 million for the quartersquarter and six months ended March 31,June 30, 2020, respectively, compared with non-cash losses of $3 million and $5 million for the quarter and six months ended June 30, 2019, respectively. Excluding the derivative adjustments, cash interest expense was $10 million for bothand $20 million in each of the quartersquarter and six month periods ended March 31,June 30, 2020 and 2019.2019, respectively.
Other Income, net
Other income, net, primarily includes federal grants received as reimbursement for capital expenditures incurred in prior periods at IMTT for the quarter and six months ended June 30, 2020.
Income Taxes
The taxable income generated by IMTT is reported on our consolidated federal income tax return. The business files standalone state and foreign income tax returns in the jurisdictions in which it operates. For the year ending December 31, 2020, the business expects to pay state and foreign income taxes of approximately $3 million. The Provision for current income taxes of $2$3 million for the quartersix months ended March 31,June 30, 2020 in the above table relates primarily to state income tax expense.
Most of the difference between IMTT’s book and federal taxable income relates to depreciation of terminal fixed assets. For book purposes, these fixed assets are depreciated over 5 to 30 years using the straight-line method. For federal income tax purposes, these same fixed assets are depreciated over 5 to 15 years using accelerated methods. In addition, most terminal fixed assets qualify for federal bonus tax depreciation. A significant portion of the terminal fixed assets in Louisiana constructed in the period after Hurricane Katrina in 2005 were financed with Growth Opportunity (GO) Zone Bonds. GO Zone Bond financed assets are depreciated for tax purposes over 9 to 20 years using the straight-line method. Most of the states in which the business operates do not allow the use of bonus tax depreciation. Louisiana allows the use of bonus depreciation except for assets financed with GO Zone Bonds.
IMTT has state NOL carryforwards that are specific to the state in which they were generated. The utilization of NOL carryforwards may reduce or eliminate state taxable income in the future.
Maintenance Capital Expenditures
For the quartersix months ended March 31,June 30, 2020, IMTT incurred maintenance capital expenditures of $6$19 million and $8$18 million on an accrual basis and cash basis, respectively, compared with $6$14 million and $7$16 million on an accrual basis and cash basis, respectively, for the quartersix months ended March 31,June 30, 2019. IMTT expects to incur between $40 million and $45 million of maintenance capital expenditures in 2020.
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Results of Operations: Atlantic Aviation
Impact of COVID-19
Atlantic Aviation continues to closely monitor the effects of COVID-19 and is actively managing its response placing a priority on the health and safety of its employees, contractors, their families, customers and the broader communities in which it operates. Since Atlantic Aviation's services are classified as essential, and its FBOs remain operational and there have been no service disruptions related to the pandemic. The business has implemented a pandemic response plan and is closely monitoring guidance from the Centers for Disease Control and Prevention (CDC)CDC as well as federal, state and local governments with respect to conducting operations safely. In addition to standard operating procedures designed to maintain safe operations, Atlantic Aviation has implemented additional measures including: (i) a work from home policy for all employees that are able to do so; (ii) enhancedenhancing cleaning and disinfectiondisinfecting of facilities; (iii) limiting interactions between employees through social distancing; and (iv) increased usagemandating the use of personal protective equipment.equipment by employees.
Atlantic Aviation is engaged in ongoing communications with its employees, customers, vendors, lenders ratings agencies and other stakeholders to keep them apprised of its response to the pandemic. COVID-19 has significantly reduced demand for Atlantic Aviation’s services as federal, state and local governments have implemented pandemic response measures including social distancing, quarantines, travel restrictions, prohibitions on public gatherings and stay-at-home orders. These measures have significantly reduced GA flight activity and the demand for Atlantic Aviation's jet fuel, transient hangarage, and aircraft parking and ancillary services. Although the amount of jet fuel sold during the first ten weeks of 2020 was generally consistent with the prior year, at the end of Marchservices from mid-March and through April 2020 jet fuel sales declined by approximately 80%. We do not currently anticipate meaningful improvements duringthroughout the second quarter versus the prior comparable periods.
The FAA reported that GA flight activity at airports on which Atlantic Aviation operates was approximately 21% of the levels recorded in the prior comparable period in April 2020. TheHowever, demand for Atlantic Aviation’s services improved significantly during the quarter. In June, flight activity at airports on which Atlantic Aviation operates increased to approximately 77% of the levels recorded in June 2019. However, maintaining and increasing activity levels will depend upon the duration of the pandemic, the timeline and process for phasing out theany governmental response measures, as well asincluding renewed travel restrictions and the abilityhealth of the U.S. and global economy to restart once they have been lifted,economies, all of which are uncertain. Post-pandemicFurther, changes toin consumer travel patterns including consumer willingness to travel,preferences, the availability of commercial flights and other factors are currentlyremain unknown.
In response to the initial decrease in flight activity, Atlantic Aviation has engaged in a thorough review of its operational and capital expenditures.expenditures to ensure it is prudently managing its liquidity. Staffing levels are being reviewed and resethave been reduced to reflect the reducedlower levels of demand for services provided. Staffingprovided with staffing reductions have been achieved primarily through furloughs or reductions in scheduled hours. As activity levels have begun to recover, some employees have been recalled from furlough and scheduled hours have returned to normal at some locations, although they remain significantly reduced at others. Non-payroll discretionary expenses are beinghave been cut or deferred. Similarly, capital expenditures are beinghave been reviewed, with certain uncommitted or non-essential items being deferred as well.
Atlantic Aviation is reviewing the benefits that may be available to it under the CARES Act. The primary benefits available to Atlantic Aviation appear to be those available to most other businesses, including, for example, deferralhas also engaged with various of payment of certain payroll taxes. Atlantic Aviation is also requestingits airport landlords regarding rent relief from various airport landlords. Initial indications are that these are likelyalthough such relief is expected to be immaterial to the business’ results of operations.
Accounts receivable collections are being monitored closely given the uncertainty around the length of time over which travel restrictions will remainThe decline in place. Extensions of credit to customers have been restricted, generally, with those deemed to be a higher risk being asked to utilize alternative payment methods. There has been no material deterioration inGA flight activity reduced Atlantic Aviation’s accounts receivable to date. Tocash flows in the extentsecond quarter both sequentially and versus the financial impact of the pandemicprior comparable period. However, assuming flight activity is protracted or government or other support for certain businesses is not forthcoming, collection times and the value of uncollectible accounts could increase.
Atlantic Aviation has not experienced any significant impact to its financial controls or reporting systems. Minor modifications have been made to accommodate administrative personnel working remotely.
On April 30, 2020, Atlantic Aviation fully repaid the outstanding balance on its revolving credit facility and effective May 4, 2020, reduced the commitments on this facility to $10 million solely with respect to letters of credit currently outstanding. The amendment of the facility eliminates any leverage-based maintenance covenant on the Atlantic Aviation term loan as long as the letters of credit issued under the facility are cash collateralized and rolled over to standalone letters of credit facilities upon renewal.
Assuming that the pandemic and its impact on the economy are unchanged relative to their current effects, and Atlantic Aviation's FBOs continue to operatestable at current significantly reducedquarter end levels, the business believeswe believe that the combination of itsAtlantic Aviation's existing liquidity and cash generated from ongoing operations will be sufficient to fund ongoing operations and cost containment efforts will enable the businessgrowth capital projects to continue to operate through 2020 with minimal support from MIC.which it has committed.
The uncertain duration of the pandemic and the impact of mitigation measures implemented by the government,federal, state and local governments, including travel restrictions, border closings, prohibitions on public gatherings and social distancing, as well as a lack of visibility into consumer preferences, in a post-COVID-19 environment, uncertainty surrounding the level of operations of commercial airlines and the absence of a material level of contracted revenue stream,streams, make forecasting the contribution of this business to our results in 2020 impossible at this time.
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Results of Operations: Atlantic Aviation – (continued)

Business Update
The fundamental driver of the financial performance of Atlantic Aviation is the number of GA flight movements in a year. Based on data reported by the FAA, industry-wide domestic GA flight movements decreased by 46% and 28% in the quarter and six months ended June 30, 2020, respectively, versus the prior comparable periods. These numbers reflect a trough in activity levels in April 2020 at 72% below the prior comparable month, and a recovery through May and June 2020 at 47% and 18%, respectively, versus the prior comparable months. Over the long-term, the rate of growth in GA flight movements has tended to be positively correlated with the level of economic activity in the U.S. The significant decrease in economic activity atduring the end of the firstsecond quarter of 2020, together with the implementation of widespread travel restrictions and other governmental mitigation measures,efforts to mitigate the spread of COVID-19, contributed to a substantial reduction in GA flight activity at the end of the period.beginning in mid-March 2020.
According toBased on data reported by the Federal Aviation Administration,FAA, the total number of GA flight movements at airports on which Atlantic Aviation operates decreased by 10.6%53% and 31% during the quarter and six months ended March 31,June 30, 2020, respectively, versus the prior comparable period.periods. Activity at these airports was reduced by more than overall domestic U.S. flight activity primarily due to their location in centers of business and economic activity such as New York, Los Angeles and Chicago that have generally
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Results of Operations: Atlantic Aviation – (continued)
been subject to more stringent lockdown requirements associated with COVID-19. In addition, an increase in the proportion of shorter, domestic flights, together with a reduction in average aircraft size, disproportionately reduced jet fuel sales relative to flight activity at Atlantic Aviation throughout the second quarter.
Atlantic Aviation seeks to extend FBO leases prior to their maturity in order to maintain visibility into the cash generating capacity of these assets over the long-term. Atlantic Aviation calculates a weighted average remaining lease life basedBased on EBITDA excluding non-cash items in the prior calendar year adjusted for the impact of acquisitions, dispositions and lease extensions. Theextensions, the weighted average remaining lease life of the leases in the Atlantic Aviation portfolio was 19.619.8 years and 19.719.4 years at March 31,June 30, 2020 and 2019, respectively.
Quarter Ended June 30,Change
Favorable/(Unfavorable)		Six Months Ended June 30,Change
Favorable/(Unfavorable)
2020201920202019
$$$%$$$%
($ In Millions) (Unaudited)
Revenue104 236 (132)(56)328 494 (166)(34)
Cost of services (exclusive of depreciation and amortization shown separately below)29 113 84 74 124231 107 46 
Gross margin75 123 (48)(39)204263 (59)(22)
Selling, general and administrative expenses59 62 3 5 123 123 — — 
Depreciation and amortization25 26 1 4 52 52 — — 
Operating (loss) income(9)35 (44)(126)29 88 (59)(67)
Interest expense, net(1)
(14)(22)8 36 (33)(41)8 20 
Benefit (provision) for income taxes6 (4)10 NM1 (13)14 108 
Net (loss) income(17)9 (26)NM(3)34 (37)(109)
Reconciliation of net (loss) income to EBITDA
excluding non-cash items and a reconciliation
of cash provided by operating activities to Free Cash Flow:
Net (loss) income(17)9 (3)34 
Interest expense, net(1)
14 22 33 41 
(Benefit) provision for income taxes(6)4 (1)13 
Depreciation and amortization25 26 52 52 
Other non-cash expense, net(2)
1 1 2 1 
EBITDA excluding non-cash items17 62 (45)(73)83 141 (58)(41)
EBITDA excluding non-cash items17 62 83 141 
Interest expense, net(1)
(14)(22)(33)(41)
Non-cash interest expense, net(1)
2 7 7 12 
Benefit (provision) for current income taxes9 (3)— (10)
Changes in working capital9 6 25 2 
Cash provided by operating activities23 50 82 104 
Changes in working capital(9)(6)(25)(2)
Maintenance capital expenditures(2)(3)(5)(5)
Free cash flow12 41 (29)(71)52 97 (45)(46)
___________
NM — Not meaningful.
(1)Interest expense, net, includes non-cash adjustments to derivative instruments and non-cash amortization of deferred financing fees.
(2)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 disposal of assets. 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.
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Results of Operations: Atlantic Aviation – (continued)

 Quarter Ended March 31, Change
Favorable/(Unfavorable)
 2020 2019 
 $ $ $ %
 ($ In Millions) (Unaudited)
Revenue224
 258
 (34) (13)
Cost of services (exclusive of depreciation and amortization shown separately below)95 118
 23
 19
Gross margin129 140
 (11) (8)
Selling, general and administrative expenses64
 61
 (3) (5)
Depreciation and amortization27
 26
 (1) (4)
Operating income38
 53
 (15) (28)
Interest expense, net(1)
(19) (19) —
 —
Provision for income taxes(5) (9) 4
 44
Net income14
 25
 (11) (44)
Reconciliation of net income to EBITDA
excluding non-cash items and a reconciliation
of cash provided by operating activities to Free Cash Flow:		       
Net income14
 25
    
Interest expense, net(1)
19
 19
    
Provision for income taxes5
 9
    
Depreciation and amortization27
 26
    
Other non-cash expense, net(2)
1
 —
    
EBITDA excluding non-cash items66
 79
 (13) (16)
EBITDA excluding non-cash items66
 79
    
Interest expense, net(1)
(19) (19)    
Non-cash interest expense, net(1)
5
 5
    
Provision for current income taxes(9) (7)    
Changes in working capital16
 (4)    
Cash provided by operating activities59
 54
    
Changes in working capital(16) 4
    
Maintenance capital expenditures(3) (2)    
Free cash flow40
 56
 (16) (29)
___________
(1)Interest expense, net, includes non-cash adjustments to derivative instruments and non-cash amortization of deferred financing fees.
(2)
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 disposal of assets. See “Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow” above for further discussion.
Atlantic Aviation generates most of its revenue from sales of jet fuel. Increases and decreases in the cost of jet fuel are generally passed through to customers. Accordingly, reported revenue will fluctuate based on the cost of jet fuel to Atlantic Aviation and may not reflect the business’ ability to effectively manage the amount of jet fuel sold and the margin achieved on those sales. For example, an increase in revenue may be attributable to an increase in the cost of the jet fuel and not an increase in the amount or margin per gallon. Conversely, a decline in revenue may be attributable to a decrease in the cost of jet fuel and not a reduction in the amount or margin per gallon.
Gross margin, which we define as revenue less cost of services, excluding depreciation and amortization, is the effective “top line” for Atlantic Aviation as it reflects the business’ ability to drive growth in the amount of products and services sold and the margins earned on those sales over time. We believe that our investors view gross margin as reflective of our ability to manage amount and price throughout the commodity cycle. Gross margin can be reconciled to operating income — the most comparable GAAP measure — by subtracting selling, general and administrative expenses and depreciation and amortization in the table above.
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Results of Operations: Atlantic Aviation – (continued)

Revenue and Gross Margin
The majority of the revenue generated and the gross margin earned by Atlantic Aviation is the result of fueling GA jet aircraft at facilities located on the 70 U.S. airports aton which the business operates. Atlantic Aviation seeks to maintain and, where appropriate, increase dollar-based margins on jet fuel sales.
Revenue decreased for the quarter and six months ended March 31,June 30, 2020 compared with the quarter and six months ended March 31,June 30, 2019 as a result of a decreasereduction in the amount of jet fuel sold, a decrease in ancillary services provided and, to a lesser extent, a reduction in rental revenue. The decrease in rental revenue was attributable to a reduced number of short-term and overnight hangar rentals, partially offset by revenue from long-term tenants that was consistent with prior periods. The reduced amount of revenue also reflects the lower wholesale cost of jet fuel.fuel in the quarter and six months ended June 30, 2020 versus the prior comparable periods. The decrease in the wholesale cost of jet fuel is typically reflected in a corresponding decrease in cost of services.

Theservices, resulting in no impact of reduced flight activity on Atlantic Aviation’sto gross margin was exacerbated by a significantmargin. However, the rapid decline in the wholesale price of jet fuel during the first quarter of 2020. While Atlantic Aviation’s overall exposure is limited given its modest inventory volumes, the decline of 65% in the wholesale price of jet fuel in the first quarterseveral months of 2020 resulted in a loss on fuel in inventory that reducedan additional impact to gross margin by an estimated $2 million.of approximately $1 million for the six months ended June 30, 2020.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increaseddecreased for the quarter ended March 31,June 30, 2020 compared withand were flat for the six months ended June 30, 2020 versus the prior comparable periods. The decrease in the quarter was primarily the result of lower salaries and benefits, maintenance and repair costs and credit card fees. The decrease was partially offset by a $7 million provision of estimated costs (in excess of insurance recoveries) for remediating certain environmental matters. Excluding the provision, selling, general and administrative expenses would have been approximately $10 million lower for the quarter ended March 31, 2019 primarily as a result of higher salaries and benefits and contractual increases in rent.June 30, 2020 versus the prior comparable period.
Depreciation and Amortization
Depreciation and amortization expense increaseddecreased for the quarter ended March 31,June 30, 2020 and were flat for the six months ended June 30, 2020 versus the prior comparable periods. The decrease in the quarter was primarily as a result of full amortization of certain airport contract rights. For the six months ended June 30, 2020, depreciation and amortization also reflects assets placed in service.
Operating (Loss) Income
Operating (loss) income decreased in the quarter and six months ended June 30, 2020 compared with the quarter and six months ended March 31, 2019 primarily as a result of assets placed in service.
Operating Income
Operating income decreased in the quarter ended March 31, 2020 compared with the quarter ended March 31,June 30, 2019 due to the decrease in gross margin and increasesmargin. The decrease in operating (loss) income for the quarter ended June 30, 2020 is also partially offset by the decrease in selling, general and administrative expenses and depreciation and amortization.
Interest Expense, net
Interest expense, net, includes non-cash losses on derivative instruments of $3 millionan insignificant amount for the quarter ended June 30, 2020 and $2$3 million for the quarterssix months ended March 31,June 30, 2020 compared with non-cash losses of $4 million and $6 million for the quarter and six months ended June 30, 2019, respectively. Excluding the derivative adjustments, cash interest expense was $14$12 million and $26 million for both the quartersquarter and six months ended March 31,June 30, 2020, respectively, compared with $15 million and 2019.$29 million for the quarter and six months ended June 30, 2019, respectively. The decrease in cash interest expense primarily reflects a lower weighted average interest rate.

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Results of Operations: Atlantic Aviation – (continued)
Income Taxes
The taxable income generated by Atlantic Aviation is reported on our consolidated federal income tax return. The business files standalone state income tax returns in most of the states in which it operates. The tax expense in the table above includes both state income taxes and the portion of the consolidated federal income tax liability attributable to the business. For the year ending December 31, 2020, the business expects to pay state income taxes of approximately $1 million. The business did not record any Provision for current income taxes of $9 million for the quartersix months ended March 31, 2020 in the above table includes $5 million of state income tax expense and $4 million of federal income tax expense.June 30, 2020.
Atlantic Aviation has state NOL carryforwards that are specific to the state in which they were generated. The utilization of NOL carryforwards may reduce or eliminate state taxable income in the future.
Maintenance Capital Expenditures
For the quartersix months ended March 31,June 30, 2020, Atlantic Aviation incurred maintenance capital expenditures of $3$5 million and $6$7 million on an accrual basis and cash basis, respectively, compared with $2$5 million on both an accrual basis and cash basis for the quartersix months ended March 31,June 30, 2019. Atlantic Aviation expects to incur approximately $10 million of maintenance capital expenditures in 2020.
Results of Operations: MIC Hawaii
Impact of COVID-19
MIC Hawaii continues to closely monitor the effects of COVID-19 and is actively managing its response placing a priority on the health and safety of its employees, contractors, their families, customers and the broader communities in which it operates. BusinessesSince businesses within MIC Hawaii's services are classified as essential, and its businesses remain operational and there have been no service disruptions related to the pandemic. Hawaii Gas continues to provide safe and reliable gas service to both utility and non-utility customers while the other MIC Hawaii businesses continue to fulfill their respective commitments to deliver clean and renewable energy. Hawaii Gas
The business has implemented a pandemic response plan and is closely monitoring guidance from the CDC as well as federal, state and local governments with respect to ensure safe operationconducting operations safely. As part of critical infrastructure andits pandemic response plan, Hawaii Gas has separated its workforce into critical (on-site) and non-critical employees, with the latter working remotely.(working remotely) employees. A series of measures have been implemented to reduce the risk of infection among critical employees who are required to work on site, including but not limited to,to: (i) a work from home policy for all employees that are able to do so; (ii) enhancedenhancing cleaning and disinfectiondisinfecting of facilities; (iii) limiting interactions between employees through social distancing; (iv) increased usagemandating the use of personal protective equipment;equipment by employees; (v) modification
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Results of Operations: MIC Hawaii – (continued)

ofmodifying shift schedules to reduce exposure between shifts; and (vi) educating customers on alternative payment and customer care options. In addition, MIC Hawaii has increased the frequencyoptions as a means of monitoring leading and key performance indicators such as Liquefied Petroleum Gas (LPG) prices and forward curve, gas production, LPG delivery schedules and accounts receivable and accounts payable aginglimiting interactions with employees. Regular meetings are held with management personnel to ensure operational effectivenesspandemic-related concerns raised by employees are addressed and adequate liquidityappropriate operating procedures are maintained throughout the pandemic.being followed.
MIC Hawaii is engaged in ongoing communications with its employees, customers, vendors, lenders and other stakeholders to keep them apprised of its response to the pandemic. COVID-19 and the related disruption in business and economic activity as federal, state and the governmentallocal governments led mitigation measures, including travel restrictions, prohibition on public gatherings and social distancing, have led toresulted in a significant decline in economic activity and the number of visitors to Hawaii. Visitor arrivals to Hawaii declined by over 95% through Aprilin the second quarter versus the prior comparable period, driven partially by a 14-day quarantine requirement for all visitors to Hawaii announcedimplemented by the Governor of Hawaii on March 21, 2020 and effective March 26, 2020. The resultingdecline in visitors has resulted in a significant declinereduction in hotel occupancy, levels has ledfor services provided by restaurants and commercial laundries and a reduction in the amount of gas consumed by each of these businesses. Collectively, these events resulted in a decline in aggregate gas sales of approximately 40% in the second quarter versus the prior comparable period.
On July 13, 2020, the Governor announced that the 14-day quarantine requirements will be lifted on September 1, 2020 for all arrivals to reductionsHawaii having recently tested negative for COVID-19. However, not all hotels will be opening on that date and the expected recovery in hotel operations, including temporary closures and reduced gas consumption by a significant number of commercial customers, including the hotels and restaurants.may take longer to materialize. In addition to reduced consumption from declining visitor activity, lower oil and oil-derivative prices have ledresulted in low-margin, but higherhigh volume interruptible utility customers to useusing lower-cost diesel instead of gas to fuel their operations. Demand for gas by residential customers has beenduring the quarter was intact and is expected to remain intact. Currently, these events are expected to result in an aggregate decline in total gas sales of approximately 30% to 40%.  
Because travel restrictions were implemented in late March, the impact on commercial gas sales and revenue were relatively minor for the quarter ended March 31, 2020. The overall decline in results for the quarter ended March 31, 2020 compared with the quarter ended March 31, 2019 were primarily due to the decline in the amount of gas sold to utility interruptible and residential customers, together with realized losses on commodity hedge contracts described below. Hawaii Gas expects COVID-19 impacts to be more significant in the near term and potentially the medium term to the extent the pandemic and restrictive travel policies remain in place and depending on the length of time it takes for normal economic business activity to resume.so.
Hawaii Gas has increased its monitoring of leading and key performance indicators such as Liquefied Petroleum Gas (LPG) prices and forward curve, gas production, LPG delivery schedules and accounts receivable and accounts payable aging to ensure operational effectiveness and adequate liquidity are maintained.
To ensure Hawaii Gas is prudently managing its liquidity, the business is mitigating the impact of reduced gas sales by implementing cost saving initiatives including a hiring freeze and deferral of vacancy fills of non-critical hires, reductions in overtime, deferral of non-safety related maintenance and repair work and reductions in general and administrative expenses such as IT system upgrades. Hawaii Gas has also deferred discretionary maintenance capital expenditures not required for safety reasons and growth projects to which it is not contractually obligated and not required for safety reasons. The renewalobligated.
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Results of a collective bargaining agreement that was scheduled to expire in April has been extended to June 2020 by mutual agreement.Operations: MIC Hawaii Gas is continuing to evaluate and implement additional cost saving initiatives. In addition, the business is reviewing the benefits that may be available to it under the CARES Act. Initial indications are that these are likely to be immaterial to the business’ results of operations. – (continued)
Hawaii Gas is in regular communication with key counterparties including its supplier of naphtha feedstock for its utility operations and its LPG supplier. To date, there has been no disruption in supply or supply logistics.The business’ current naphtha feedstock agreement terminates at the end of 2020 and a new naphtha feedstock agreement is expected to be executed prior to the end of 2020. Hawaii Gas is also closely tracking and conservatively managing LPG inventory to reduce its exposure to potential supply chain disruptions. To date, there have been no disruptions in supply or supply logistics. As a result of declines in crude oil and crude oil-derivative prices, LPG prices forHawaii Gas realized approximately $2 million and $5 million in losses on commodity hedge contracts during the quarter and six months ended March 31,June 30, 2020, decreased, resulting in realized losses on Hawaii Gas’ commodity hedge contracts.
MIC Hawaii has not experienced any significant impact to its financial controls or reporting systems. Minor modifications have been made to accommodate administrative personnel working remotely. In addition, the pandemic has not had any significant impact on its ability to collect payment from customers or to pay vendors. MIC Hawaii does not foresee needing additional liquidity. MIC Hawaii has not drawn on its $60 million revolving credit facility, which matures in February 2023. Its nearest mandatory debt maturity is in August 2022.respectively.
The uncertain duration of the pandemic and the mitigation measuresimpact of various policies implemented by the government,federal, state and local governments, including travel restrictions, quarantines, prohibitions on public gathering and social distancing, as well as a lack of visibility into consumer preferences, in a post-COVID-19 environment,the uncertainty surrounding the level of operations of commercial airlines and/or cruise lines and the absence of a material level of contracted revenue streams, make forecasting the contribution of this business to our results in 2020 impossible at this time.
Business Update
The financial performance of MIC Hawaii is a function of the number of customers served, their consumption of energy and the prices achieved on sales by each of Hawaii Gas’s utility and non-utility operations and under power purchase agreements. The amount of gas consumed is correlated with general economic activity over the long term with tourism being a key component. Consumption trends and rates are a function of, among other factors, energy efficiency, weather, the range of competitive energy sources and MIC Hawaii’s input commodity costs.
The decreased contribution from MIC Hawaii for the quarter ended March 31, 2020 compared with the quarter ended March 31, 2019 principally reflects a decrease in the amount of gas sold.
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Results of Operations: MIC Hawaii – (continued)

Quarter Ended March 31, Change
Favorable/(Unfavorable)		Quarter Ended June 30,Change
Favorable/(Unfavorable)		Six Months Ended June 30,Change
Favorable/(Unfavorable)
2020 2019 2020201920202019
$ $ $ %$$$%$$$%
($ In Millions) (Unaudited)($ In Millions) (Unaudited)
Revenue60
 64
 (4) (6)Revenue37  61  (24) (39) 97  125  (28) (22) 
Cost of product sales (exclusive of depreciation and amortization shown separately below)42
 40
 (2) (5)Cost of product sales (exclusive of depreciation and amortization shown separately below)18  45  27  60  60  85  25  29  
Gross margin18
 24
 (6) (25)Gross margin19  16  3  19  37  40  (3) (8) 
Selling, general and administrative expenses6
 6
 —
 —
Selling, general and administrative expenses6  5  (1) (20) 12  11  (1) (9) 
Depreciation and amortization4
 4
 —
 —
Depreciation and amortization4  4  —  —  8  8  —  —  
Operating income8
 14
 (6) (43)Operating income9  7  2  29  17  21  (4) (19) 
Interest expense, net(1)
(3) (3) —
 —
Interest expense, net(1)
(2) (2) —  —  (5) (5) —  —  
Other expense, netOther expense, net—  (2) 2  100  —  (2) 2  100  
Provision for income taxes(2) (3) 1
 33
Provision for income taxes(2) (1) (1) (100) (4) (4) —  —  
Net income3
 8
 (5) (63)Net income5  2  3  150  8  10  (2) (20) 
Reconciliation of net income to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow:       Reconciliation of net income to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow:
Net income3
 8
    Net income5  2  8  10  
Interest expense, net(1)
3
 3
    
Interest expense, net(1)
2  2  5  5  
Provision for income taxes2
 3
    Provision for income taxes2  1  4  4  
Depreciation and amortization4
 4
    Depreciation and amortization4  4  8  8  
Other non-cash expense, net(2)
3
 2
    
Other non-cash (income) expense, net(2)
Other non-cash (income) expense, net(2)
(6) 5  (3) 7  
EBITDA excluding non-cash items15
 20
 (5) (25)EBITDA excluding non-cash items7  14  (7) (50) 22  34  (12) (35) 
EBITDA excluding non-cash items15
 20
    EBITDA excluding non-cash items7  14  22  34  
Interest expense, net(1)
(3) (3)    
Interest expense, net(1)
(2) (2) (5) (5) 
Non-cash interest expense, net(1)
1
 1
    
Non-cash interest expense, net(1)
—  —  1  1  
Provision for current income taxes(2) (3)    Provision for current income taxes(1) —  (3) (3) 
Changes in working capital(5) (2)    Changes in working capital9  3  4  1  
Cash provided by operating activities6
 13
    Cash provided by operating activities13  15  19  28  
Changes in working capital5
 2
    Changes in working capital(9) (3) (4) (1) 
Maintenance capital expenditures(3) (2)    Maintenance capital expenditures(1) (2) (4) (4) 
Free cash flow8
 13
 (5) (38)Free cash flow3  10  (7) (70) 11  23  (12) (52) 
___________
(1)Interest expense, net, includes non-cash adjustments to derivative instruments related to interest rate swaps and non-cash amortization of deferred financing fees.
(2)
(1)Interest expense, net, includes non-cash adjustments to derivative instruments related to interest rate swaps and non-cash amortization of deferred financing fees.
(2)Other non-cash (income) expense, net, includes primarily non-cash adjustments related to unrealized gains (losses) on commodity hedge contracts, pension expense and non-cash compensation expense incurred in relation to incentive plans. Pension expense consists primarily of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. 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.
MIC Hawaii comprises Hawaii Gas and several smaller businesses collectively engaged in efforts to reduce the cost and improve the reliability and sustainability of energy in Hawaii. The businesses of MIC Hawaii generate revenue primarily from the provision of gas to commercial, residential and governmental customers and from the production of electricity.
Hawaii Gas generates most of its revenue from the sale of gas. Accordingly, revenue can fluctuate based on the wholesale cost of gas to Hawaii Gas and may not reflect the business’ ability to effectively manage the amount of gas sold and the margins achieved on those sales. For example, an increase in revenue may be attributable to an increase in the wholesale cost of
17
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Results of Operations: MIC Hawaii – (continued)
gas passed through to Hawaii Gas’ customers and not an increase in the amount of gas sold or margin achieved. Conversely, a decline in
TABLE OF CONTENTS
Results of Operations: MIC Hawaii – (continued)

revenue may be attributable to a decrease in the wholesale cost of gas passed through to Hawaii Gas’ customers and not a reduction in the amount of gas sold or margin achieved.
Gross margin, which we define as revenue less cost of product sales, excluding depreciation and amortization, is the effective “top line” for Hawaii Gas as it is reflective of the business’ ability to drive growth in the amount of products sold and the margins earned on those sales over time. We believe that investors use gross margin to evaluate the business as it is reflective of our performance in managing volume and price throughout the commodity cycle. Gross margin is reconciled to operating income — the most comparable GAAP measure — by subtracting selling, general and administrative expenses and depreciation and amortization in the table above.
Revenue and Gross Margin
Revenue declined for the quarter and six months ended March 31,June 30, 2020 compared with the quarter and six months ended March 31,June 30, 2019 primarily as a result of a decrease in the amount of gas sold by Hawaii Gas and lower utility feedstock prices that are passed through to ratepayers. The decrease in the amount of gas sold reflects switching by select customers to lower cost alternative fuels and a decrease in consumption of gas, mainly by commercial salesand industrial customers, due to reductions in tourism and commercial activity as a result of COVID-19.
Gross margin declinedincreased to $18$19 million for the quarter ended March 31,June 30, 2020 from $24$16 million for the quarter ended March 31,June 30, 2019 and decreased to $37 million for the six months ended June 30, 2020 from $40 million for the six months ended June 30, 2019 partially as a result of the unfavorablefavorable changes in the value of unrealized commodity hedge contracts. The business recorded unrealized lossesgains of $2$6 million and $4 million on commodity hedge contracts for the quarter and six months ended March 31,June 30, 2020, respectively, compared with an insignificant unrealized gainloss of $4 million for the quarter and six months ended March 31,June 30, 2019. The change in the value of the commodity hedge contracts during the quarter and six months ended March 31,June 30, 2020 reflects an unfavorablea favorable movement in the forecast prices of LPG relative to the hedged price.
Excluding the unrealized gains and losses on the commodity hedge contracts, gross margin decreased for the quarter and six months ended March 31,June 30, 2020 compared with the quarter and six months ended March 31,June 30, 2019 primarily as a result of a decrease in the amount of gas sold due to the impact of COVID-19 and realized losses from commodity hedge contracts due to the decrease in LPG costs.the market price of LPG.
Selling, General and Administrative Expenses
Selling, general and administrative expenses remained flatincreased for the quarter and six months ended June 30, 2020 compared with the quarter and six months ended June 30, 2019 primarily as a result of increase in salaries and benefits and higher insurance costs.
Operating Income
Operating income increased for the quarter ended March 31,June 30, 2020 compared with the quarter ended March 31,June 30, 2019 as a result of higher salaries and benefits and insurance,primarily due to the increase in gross margin, partially offset by a decreasean increase in salesselling, general and marketing costs.
Operating Income
administrative expenses. Operating income decreased for the quartersix months ended March 31,June 30, 2020 compared with the quartersix months ended March 31,June 30, 2019 primarily due to the decrease in gross margin.margin and increase in selling, general and administrative expenses.
Interest Expense, net
Interest expense, net, includes non-cash losses on derivative instruments of an insignificant amount for the quarter ended June 30, 2020 and $1 million for the quartersix months ended March 31,June 30, 2020 compared with insignificantnon-cash losses forof $1 million in each of the quarter and six month periods ended March 31,June 30, 2019. Excluding the derivative adjustments, cash interest expense was $2 million for bothand $4 million in each of the quartersquarter and six month periods ended March 31,June 30, 2020 and 2019, respectively. The decrease in cash interest expense primarily reflects a lower weighted average interest rate.
Other expense, net
Other expense, net, primarily includes loss on disposal of assets and other insignificant items for the quarter and six months ended June 30, 2019.
Income Taxes
The taxable income generated by the MIC Hawaii businesses is reported on our consolidated federal income tax return. The businesses file standalone state income tax returns in Hawaii. The tax expense in the table above includes both the state income tax and the portion of the consolidated federal income tax liability attributable to the businesses. For the year ending December 31, 2020, the business expects to pay state income taxes of approximately $1 million. The Provision for Current Income Taxes of $2$3 million for the quartersix months ended March 31,June 30, 2020 in the above table includes primarily $2 million of federal income tax expense and $1 million of state income tax expense.
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Results of Operations: MIC Hawaii – (continued)
Maintenance Capital Expenditures
For the quarter ended March 31, 2020, MIC Hawaii incurred maintenance capital expenditures of $3$4 million on both an accrual basis and cash basis compared with $2 million on both an accrual basis and cash basis for each of the quartersix months period ended March 31,June 30, 2020 and 2019. MIC Hawaii expects to incur approximately $8 million of maintenance capital expenditures in 2020.
TABLE OF CONTENTS

Results of Operations: Corporate and Other
Our Corporate and Other segment comprises primarily results from MIC Corporate, our shared services center and from our relationship with a developer of renewable power facilities (formerly reported in Contracted Power). The relationship with the developer concluded during July 2019.
Quarter Ended March 31, Change
Favorable/(Unfavorable)		Quarter Ended June 30,Change
Favorable/(Unfavorable)		Six Months Ended June 30,Change
Favorable/(Unfavorable)
2020 2019 2020201920202019
$ $ $ %$$$%$$$%
($ In Millions) (Unaudited)($ In Millions) (Unaudited)
Selling, general and administrative expenses17
 6
 (11) (183)Selling, general and administrative expenses8  8  —  —  25  14  (11) (79) 
Fees to Manager-related party7
 8
 1
 13
Fees to Manager-related party4  7  3  43  11  15  4  27  
Operating loss(24) (14) (10) (71)Operating loss(12) (15) 3  20  (36) (29) (7) (24) 
Interest expense, net(1)
(5) (4) (1) (25)
Interest expense, net(1)
(7) (6) (1) (17) (12) (10) (2) (20) 
Other income, net—
 4
 (4) (100)Other income, net—  —  —  —  —  4  (4) (100) 
Benefit for income taxes5
 4
 1
 25
Benefit for income taxes7  7  —  —  12  11  1  9  
Net loss(24) (10) (14) (140)Net loss(12) (14) 2  14  (36) (24) (12) (50) 
Reconciliation of net loss to EBITDA excluding non-cash items and a reconciliation of cash used in operating activities to Free Cash Flow:       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(24) (10)    Net loss(12) (14) (36) (24) 
Interest expense, net(1)
5
 4
    
Interest expense, net(1)
7  6  12  10  
Benefit for income taxes(5) (4)    Benefit for income taxes(7) (7) (12) (11) 
Fees to Manager-related party7
 8
    Fees to Manager-related party4  7  11  15  
Other non-cash expense, net—
 1
    Other non-cash expense, net1  —  1  1  
EBITDA excluding non-cash items(17) (1) (16) NM
EBITDA excluding non-cash items(7) (8) 1  13  (24) (9) (15) (167) 
EBITDA excluding non-cash items(17) (1)    EBITDA excluding non-cash items(7) (8) (24) (9) 
Interest expense, net(1)
(5) (4)    
Interest expense, net(1)
(7) (6) (12) (10) 
Non-cash interest expense, net(1)
2
 2
    
Non-cash interest expense, net(1)
1  2  3  4  
Benefit for current income taxes6
 14
    
(Provision) benefit for current income taxes(Provision) benefit for current income taxes(2) 2  4  16  
Changes in working capital—
 (18)    Changes in working capital(2) (2) (2) (20) 
Cash used in operating activities(14) (7)    Cash used in operating activities(17) (12) (31) (19) 
Changes in working capital—
 18
    Changes in working capital2  2  2  20  
Free cash flow(14) 11
 (25) NM
Free cash flow(15) (10) (5) (50) (29) 1  (30) NM
___________
NM — Not meaningful.
(1)Interest expense, net, included non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023.
(1)Interest expense, net, included non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased for the quartersix months ended March 31,June 30, 2020 compared with the quartersix months ended March 31,June 30, 2019 primarily due to expenses incurred in connection with our pursuit of strategic alternatives, partially offset by (i) lower costs incurred in connection with the evaluation of various investment and acquisition and disposition opportunities; (ii) the absence of consulting expenses incurred during the first quarterhalf of 2019 in connection with our evaluation of opportunities to improve efficiencies.efficiencies; and (iii) lower professional services fees, primarily in connection with ongoing litigation.
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Results of Operations: Corporate and Other – (continued)
Fees to Manager
Fees to Manager for the quarter and six months ended March 31,June 30, 2020 comprise base management fees of $4 million and $11 million, respectively, compared with $7 million compared with $8and $15 million for the quartersquarter and six months ended March 31, 2020 andJune 30, 2019, respectively. Base management fees decreased, as calculated in accordance with the Management Services Agreement, primarily due to the reduction in the market capitalization of our Company.Company and the increase in the holding company cash balance. No performance fees were incurred in either of the current or prior comparable periods.
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Results of Operations: Corporate and Other – (continued)

Interest Expense, net
Cash interest expense, net, increased to $3$6 million and $9 million for the quarter and six months ended March 31,June 30, 2020, from $2respectively, compared with $4 million and $6 million for the quarter and six months ended March 31,June 30, 2019, respectively. The increase in cash interest expense is primarily as a result ofdue to higher average debt balances, partially offset by higherlower weighted average interest rate and lower interest income earned induring the quarter and six months ended March 31, 2019.June 30, 2020.
Other Income, net
Other income, net, decreased for the quartersix months ended March 31,June 30, 2020 compared with the quartersix months ended March 31,June 30, 2019 primarily as a result of the absence of fee income from a third-party developer of renewable power facilities. The relationship with the developer concluded during July 2019.
Income Taxes
The Benefit(Provision) benefit for Current Income Taxes of $6$4 million for the quartersix months ended March 31,June 30, 2020 in the above table reflects the current federal income tax recorded by IMTT, Atlantic Aviation and MIC Hawaii offset in consolidation with losses generated by MIC Corporate and Other.
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Liquidity and Capital Resources
General
Our primary cash requirements have historically included normal operating expenses, debt service, debt principal payments, payments of dividends and capital expenditures. Our primary source of cash has historically been operating activities, although we have drawn and may draw on credit facilities, issued new equity or debt or sold assets to generate cash.
We may from time to time seek to purchase or retire our outstanding debt in open market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on market conditions, our liquidity needs and other factors.
On March 17, 2020, we drew down a total of $874 million on two revolving credit facilities. We drew $599 million on our $600 million holding company level revolving credit facility and drew $275 million on the $350 million revolving credit facility at Atlantic Aviation. The $275 million drawn on the Atlantic Aviation revolving credit facility was subsequently repaid on April 30, 2020 and on May 4, 2020, the revolving credit facility commitments were reduced to $10 million solely with respect to letters of credit then outstanding. The proceeds were additive to our approximately $300 million of cash alreadythen on hand. Although we had and continue to have no immediate need for the additional liquidity, the drawdowns were deemed prudent to preserve financial flexibility in light of the disruption in the global markets and the unpredictabilityuncertainty of the sustained impact of COVID-19 to our businesses caused by COVID-19.
On April 30, 2020, Atlantic Aviation fully repaid the outstanding balance on its revolving credit facility and effective May 4, 2020, reduced the commitments on this facility to $10 million. Prior to the reduction in the revolving credit facility commitments, the debt supporting Atlantic Aviation under its credit agreement comprised a $350 million revolving credit facility and a $1,012 million term loan. The term loan remains outstanding. The $10 million revolving commitments are in place solely with respect to letters of credit currently outstanding (and such commitments will be reduced after each existing letter of credit expires or otherwise terminates).
In connection with the repayment of the revolving credit facility and reduction in commitments, we and the required revolving lenders amended certain terms of the credit agreement.  Prior to such amendment, Atlantic Aviation covenanted to maintain its ratio of net debt/EBITDA at or below 5.5x over a trailing twelve-month period. Going forward, such financial covenant will not be applicable so long as letters of credit issued under the credit facility are cash collateralized and rolled over to standalone letter of credit facilities upon renewal.businesses.
In addition to drawing on our holding company level revolving credit facility, we have determined to improve our liquidity and financial flexibility in light of COVID-19 by suspending our quarterly dividend. We currently expect to retain approximately $260 million if the suspension remains in effect through the end of 2020.
Over the remainder of 2020, we currently expect to fund our operations, service our debt, make state tax payments, fund essential maintenance capital expenditures, deploy growth capital and make required principal repayments using cash generated from the operations of our businesses and the $300 million of cash on hand prior to the March 2020 drawing on our holding company level revolving credit facility.
At March 31,June 30, 2020, our consolidated debt outstanding from continuing operations totaled $3,592$3,315 million (excluding adjustments for unamortized debt discounts) including the drawings on our revolving credit facilities.facility. Our consolidated cash balance totaled $1,156$874 million including the proceeds from the revolving credit facilities and the available capacity under our revolving credit facilities was reduced from $1,610 million at December 31, 2019 to $736 million at March 31, 2020.totaled $661 million. With the cash drawndrawing on the revolving credit facilitiesfacility held in cash, our ratio of net debt/EBITDA was 4.3x as4.8x at June 30, 2020. Our use of March 31, 2020. We expectcash to use cash on hand to partially fund a portion of our operations and growth capital projects during 2020, whichtogether with an expected lower trailing twelve month EBITDA, will increase our ratio of net debtdebt/EBITDA at year-end.
The following table shows MIC’s debt obligations from continuing operations atMay 1, July 31, 2020 ($ in millions):
Business Debt 
Weighted Average Remaining Life
(in years)
 Balance Outstanding 
Weighted
Average Rate(1)
MIC Corporate Convertible Senior Notes 3.4
 $403
 2.00%
  Revolving Facility 1.7
 599
 2.55%
IMTT Senior Notes 6.0
 600
 3.97%
  Tax-Exempt Bonds 5.6
 509
 2.98%
Atlantic Aviation 
Term Loan(2)
 5.6
 1,012
 4.33%
MIC Hawaii 
Term Loan(2)
 3.3
 94
 2.04%
  Senior Notes 2.3
 100
 4.22%
Total   4.5
 $3,317
 3.38%

BusinessDebtWeighted Average Remaining Life
(in years)		Balance Outstanding
Weighted
Average Rate(1)
MIC CorporateConvertible Senior Notes3.2  $403  2.00 %
Revolving Facility1.4  599  2.40 %
IMTTSenior Notes5.7  600  3.97 %
Tax-Exempt Bonds5.4  509  2.96 %
Atlantic Aviation
Term Loan(2)
5.4  1,010  4.24 %
MIC Hawaii
Term Loan(2)
3.0  94  1.92 %
Senior Notes2.0  100  4.22 %
Total4.3  $3,315  3.32 %
___________
TABLE OF CONTENTS(1)Reflects annualized interest rate on all facilities including interest rate hedges.
Liquidity and Capital Resources – (continued)


(1)Reflects annualized interest rate on all facilities including interest rate hedges. Where applicable, the interest rates are reflective of the April 2020 rating agencies updates.
(2) The weighted average remaining life does not reflect the scheduled amortization on these facilities.
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Liquidity and Capital Resources – (continued)

The following table profiles each revolving credit facility from continuing operations at our businesses and at MIC Corporate as of May 1,July 31, 2020 ($ in millions):
Business 
Debt(1)
 
Weighted
Average
Remaining Life
(in years)
 Undrawn Amount 
Interest Rate(2)
BusinessDebtWeighted
Average
Remaining Life
(in years)		Undrawn Amount
Interest Rate(1)
MIC Corporate Revolving Facility 1.7
 $1
 LIBOR + 2.25%MIC CorporateRevolving Facility1.4  $1  LIBOR + 2.25%
IMTT USD Revolving Facility 3.6
 550
 LIBOR + 1.75%IMTTUSD Revolving Facility3.3  550  LIBOR + 1.75%
 CAD Revolving Facility 3.6
 50
 Bankers' Acceptance Rate + 1.75%CAD Revolving Facility3.3  50  Bankers' Acceptance Rate + 1.75%
MIC Hawaii Revolving Facility 2.8
 60
 LIBOR + 1.25%MIC HawaiiRevolving Facility2.5  60  LIBOR + 1.25%
Total 3.5
 $661
 Total3.2$661  
___________
(1)
Excludes $10 million of revolving commitments at Atlantic Aviation which is in place solely with respect to the existing letters of credit currently outstanding under its revolving credit facility. Such commitments will be reduced after each existing letter of credit expires or otherwise terminates.
(2) Excludes commitment fees. Where applicable, the interest rates are reflective of the April 2020 rating agencies updates.
We use revolving credit facilities at IMTT, and Hawaii Gas a business within the MIC Hawaii segment, and at our holding company as a means of maintaining access to sufficient liquidity to meet future requirements, manage interest expense and fund growth projects. We base our assessment of the sufficiency of our liquidity and capital resources on having approximately $1,530$1,535 million of liquidity available comprised of cash on hand and undrawn balances on its revolving credit facilities. In addition, we believe we will be able to refinance, extend and/or repay the principal amount of maturing long-term debt on terms that can be supported by our businesses on or before maturity.
We capitalize our businesses in part using floating rate bank debt with medium-term maturities of between four and seven years. In general, we hedge any floating rate exposure for the majority of the term of these facilities. We also use longer dated private placement debt and other forms of capital including bond or hybrid debt instruments to capitalize our businesses. In general, the debt facilities of our businesses are non-recourse to the holding company and there are no cross-collateralization or cross-guarantee provisions in these facilities.
Analysis of Consolidated Historical Cash Flows from Continuing Operations
The following section discusses our sources and uses of cash on a consolidated basis from continuing operations. All intercompany activities such as corporate allocations, capital contributions to our businesses and distributions from our businesses have been excluded from the table as these transactions are eliminated on consolidation.
($ In Millions)Six Months Ended June 30,Change
Favorable/(Unfavorable)
20202019
$$$%
Cash provided by operating activities172259(87) (34) 
Cash used in investing activities(148)(103)(45) (44) 
Cash provided by (used in) financing activities506(176)682  NM
($ In Millions)Quarter Ended March 31,
Change
Favorable/(Unfavorable)
 2020 2019 
 $ $ $ %
Cash provided by operating activities 99 151 (52) (34)
Cash used in investing activities (84) (45) (39) (87)
Cash provided by (used in) financing activities 784 (90) 874
 NM
_____________________
NM — Not meaningful.
TABLE OF CONTENTS
Liquidity and Capital Resources – (continued)


Operating Activities from Continuing Operations
Cash provided by (used in) operating activities is generally comprised of EBITDA excluding non-cash items (as defined by us), less cash interest, tax and pension payments and changes in working capital. See “Management's Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations” for discussions around the components of EBITDA excluding non-cash items on a consolidated basis from continuing operations and for each of our operating businesses and Corporate and Other above.
The decrease in consolidated cash provided by operating activities from continuing operations for the quartersix months ended March 31,June 30, 2020 compared with the quartersix months ended March 31,June 30, 2019 was primarily due to:
•a decrease in EBITDA excluding non-cash items; and
•a decrease in the change in accounts payable primarily due to a declinedeclines in the amount and cost of jet fuel and LPG purchased; partially offset by
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Liquidity and Capital Resources – (continued)

•an increase in the change in accounts receivable resulting from declinesa decline in sales activity and lower retail prices on jet fuel.fuel; and
•a decrease in current state taxes payable.
Investing Activities from Continuing Operations
Cash provided by investing activities include proceeds from divestitures of businesses and disposal of fixed assets. Cash used in investing activities include acquisitions of businesses in new and existing segments and capital expenditures. Acquisitions of businesses are generally funded by raising additional equity and/or drawing on credit facilities.
In general, maintenance capital expenditures are funded from cash provided by operating activities and growth capital expenditures are funded by drawing on our available credit facilities or with equity capital. See “Management's Discussion and Analysis of Financial Condition and Result of Operations - Results of Operations” for discussions on maintenance capital expenditures for each of our businesses.
The increase in consolidated cash used in investing activities from continuing operations for the quartersix months ended March 31,June 30, 2020 compared with the quartersix months ended March 31,June 30, 2019 resulted from an increase in capital expenditures and an acquisition of an FBO at an airport on which Atlantic Aviation already operated.
Capital Deployment (includes both continuing and discontinued operations)
Capital deployment includes growth capital expenditures and “bolt-on” acquisitions, the majority of which are expected to generate incremental earnings. For the quarterssix months ended March 31,June 30, 2020 and 2019, growth capital deployed totaled $67$119 million and $40$91 million, respectively. We continuously evaluate opportunities to prudently deploy capital in bolt-on acquisitions and growth projects across our existing businesses. In 2020 we are undertaking and expect to undertake primarily contract-backed capital projects to which we have already committed having an aggregate value of between $200 million and $225 million.
Financing Activities from Continuing Operations
Cash provided by financing activities includes primarily new equity issuance and debt issuance relatedprimarily to fund acquisitions and capital expenditures. Cash used in financing activities includes primarily dividends paid to our stockholders and the repayment of debt principal balances on maturing debt.balances.
The change from consolidated cash used in financing activities from continuing operations for the quartersix months ended March 31,June 30, 2019 to cash provided by financing activities from continuing operations for the quartersix months ended March 31,June 30, 2020 resulted from the net drawdowns on our revolving credit facilities in response to the potential impacts of COVID-19.COVID-19 and a decrease in dividends paid.
IMTT
At March 31,June 30, 2020, IMTT had $1,109 million of debt outstanding consisting of $600 million of fixed rate senior notes and $509 million of Tax-Exempt Bonds. IMTT’sIMTT also has $600 million of revolving credit facilities remainedthat was undrawn at March 31,June 30, 2020. Cash interest expense was $10$20 million for bothin each of the quarterssix month periods ended March 31,June 30, 2020 and 2019. At March 31,June 30, 2020, IMTT was in compliance with its financial covenants.
Atlantic Aviation
At March 31,June 30, 2020, Atlantic Aviation had $1,287$1,010 million outstanding, comprising of $1,012 million on its senior secured first lien term loan facility andoutstanding. During the six months ended, Atlantic Aviation drew down $275 million drawn on its $350 million senior secured first lien revolving credit facility. Onfacility, which was subsequently fully repaid on April 30, 2020 Atlantic Aviation fully repaidand on May 4, 2020, the outstanding balance on its revolving credit facility and effective May 4, 2020,commitments were reduced the commitments on this facility to $10 million solely with respect to letters of credit currentlythen outstanding. The amendment of the facility eliminates any leverage-based maintenance covenant on the Atlantic Aviation term loan as long as the letters of credit issued under the facility are cash collateralized and rolled over to standalone letters of credit facilities upon renewal.
TABLE OF CONTENTS
Liquidity and Capital Resources – (continued)


Cash interest expense was $14$26 million and $29 million for both the quarterssix months ended March 31,June 30, 2020 and 2019. At March 31, 2020, Atlantic Aviation was in compliance with its financial covenants.2019, respectively.
MIC Hawaii
At March 31,June 30, 2020, MIC Hawaii had total debt outstanding of $194 million in term loans andconsisting of a $100 million of senior secured note borrowings and $94 million of term loans. MIC Hawaii also has a $60 million revolving credit facility that was undrawn.at June 30, 2020. Cash interest expense was $2$4 million for bothin each of the quarterssix month periods ended March 31,June 30, 2020 and 2019. At March 31,June 30, 2020, MIC Hawaii was in compliance with its financial covenants.
MIC Corporate
At March 31,June 30, 2020, MIC had $403 million of 2.00% Convertible Senior Notes due October 2023 outstanding. In addition, in response to the potential impacts of COVID-19, during the quarter ended March 31, 2020, MIC Corporate borrowed $599 million under its revolving credit facility in response to the potential impacts of COVID-19.which remained outstanding at June 30, 2020. Cash interest expense was $3$9 million and $2$6 million for the quarterssix months ended March 31,June 30, 2020 and 2019, respectively. At March 31,June 30, 2020, MIC was in compliance with its financial covenants.
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Liquidity and Capital Resources – (continued)

For a description of the material terms of MIC and its businesses' debt facilities, see Note 9, “Long-Term Debt”, in Part II, Item 8, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
Commitments and Contingencies
Except as noted above, at March 31,June 30, 2020, there were no material changes in our commitments and contingencies compared with those at December 31, 2019. At March 31,June 30, 2020, we did not have any material purchase obligations. For a discussion of our other future obligations, due by period, under the various contractual obligations, off-balance sheet arrangements and commitments, please see “Liquidity and Capital Resources — Commitments and Contingencies” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on February 25, 2020.
At March 31,June 30, 2020, we did not have any material reserves for contingencies. We have other contingencies occurring in the normal course of business, including pending legal and administrative proceedings that are not reflected at this time as they are not ascertainable.
Our sources of cash to meet these obligations include:
•cash generated from our operations (see “Operating Activities” in “Liquidity and Capital Resources”);
•the issuance of shares or debt securities (see “Financing Activities” in “Liquidity and Capital Resources”);
•refinancing of our current credit facilities on or before maturity (noting that it may be more difficult and/or costly to obtain financing while global markets continue to be disrupted by the impacts of COVID-19 (see “Financing Activities” in “Liquidity and Capital Resources”);
•cash available from our undrawn credit facilities (see “Financing Activities” in “Liquidity and Capital Resources”); and
•if advantageous, sale of all or part of any of our businesses (see “Investing Activities” in “Liquidity and Capital Resources”).
Critical Accounting Policies and Estimates
For critical accounting policies and estimates, see “Critical Accounting Policies and Estimates” in Part II, Item 7 and Note 2, “Summary of Significant Accounting Policies”, in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and see Note 2, “Basis of Presentation”, in our Notes to Consolidated Condensed Financial Statements in Part I of this Form 10-Q for recently issued accounting standards. Our critical accounting policies and estimates have not changed materially from the description contained in our Annual Report.
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Quantitative and Qualitative Disclosures About Market Risk
For quantitative and qualitative disclosures about market risk, see Part II, Item 7A “Quantitative and Qualitative Disclosures about Market Risk” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. Our exposure to market risk has not changed materially since February 25, 2020, the filing date for our Annual Report on Form 10-K, except as follows:
•reductions in target interest rates by the Federal Reserve that have lowered the cost of borrowing; and
•decreases in the price of crude oil and refined petroleum products, particularly jet fuel, that have lowered the cost of products provided by each of Atlantic Aviation and Hawaii Gas; partially offset by
•the increase in the volatility of equity markets; and
•the impact of lower LPG prices on our commodity hedge contracts.
Interim Goodwill Review
We test for goodwill impairment at the reporting unit level on an annual basis on October 1st of each year and between annual tests if a triggering event indicates the possibility of an impairment. We monitor changing business conditions as well as industry and economic factors, among others, for events which could trigger the need for an interim impairment analysis.
During the quarter ended March 31, 2020, we performed a goodwill triggering event analysis of our reportable segments and the Company as a whole due to the decline in our market capitalization and the impact and uncertainty around COVID-19. At September 30, 2019, we performed an impairment analysis resulting in the fair value of our reporting units exceeding its aggregate book value by $2.2 billion, or 33%. Approximately $1.9 billion of the excess was attributed to Atlantic Aviation, approximately $280 million to Hawaii Gas and approximately $20 million to IMTT. During the quarters ended June 30, 2020 and March 31, 2020, we performed a goodwill triggering event analysis of our reportable segments due to the potential impact and uncertainty around COVID-19 on our operations.
At IMTT, we looked at the impact of the supply and demand imbalance in the petroleum market and the significant decline in pricing onthe price of crude oil. In addition, COVID-19 and the resulting slowdown in economic activity led to an oversupply of petroleum and other liquid products stored and handled by IMTT. These factors have increased the utilization levels at IMTT to the low to mid 90s percentmid-90s% from the mid-80s% at year ended 2019 and accelerated renewal onof some customer contracts. Given the positive impacts to IMTT, we concluded there were no triggering events at IMTT.
At Atlantic Aviation and Hawaii Gas, using the market approach performed in the September 2019 impairment analysis, we performed sensitivities to EBITDA and concluded that it was not more likely than not that the book value of the businesses was greater than the fair value. Management currently expects these businessesWe began to see signs of recovery for Atlantic Aviation during the second quarter of 2020 and we expect that Hawaii Gas will begin to show business recoveryrecover starting within six months and therefore the decrease in business activity is not permanent. We concluded that at March 31,June 30, 2020, there were no triggering events at Atlantic Aviation andor Hawaii Gas.
Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the direction and with the participation of our Chief Executive Officer and Chief Financial Officer, we evaluated our disclosure controls and procedures (as such term is defined under Rule 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. The purpose of disclosure controls is to ensure that information required to be disclosed in our reports filed with or submitted to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls are also designed to ensure that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of March 31,June 30, 2020.
Changes in Internal Control Over Financial Reporting
There have not been any changes in our internal control over financial reporting as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) that occurred during the quartersix months ended March 31,June 30, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
($ in Millions, Except Share Data)

June 30,
2020		December 31, 2019
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$874  $357  
Restricted cash14  1  
Accounts receivable, net of allowance for doubtful accounts62  97  
Inventories26  31  
Prepaid expenses14  13  
Income tax receivable12  11  
Other current assets16  19  
Total current assets1,018  529  
Property, equipment, land and leasehold improvements, net3,231  3,202  
Operating lease assets, net330  336  
Investment in unconsolidated business8  9  
Goodwill2,044  2,043  
Intangible assets, net705  729  
Other noncurrent assets11  13  
Total assets$7,347  $6,861  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Due to Manager-related party$2  $3  
Accounts payable37  67  
Accrued expenses76  86  
Current portion of long-term debt11  12  
Operating lease liabilities - current20  20  
Fair value of derivative liabilities8  7  
Other current liabilities26  35  
Total current liabilities180  230  
Long-term debt, net of current portion3,254  2,654  
Deferred income taxes679  679  
Operating lease liabilities - noncurrent316  320  
Other noncurrent liabilities176  167  
Total liabilities4,605  4,050  
Commitments and contingencies—  —  
See accompanying notes to the consolidated condensed financial statements.
26
 March 31,
2020		 December 31, 2019
 (Unaudited)  
ASSETS   
Current assets:   
Cash and cash equivalents$1,156
 $357
Restricted cash1
 1
Accounts receivable, net of allowance for doubtful accounts71
 97
Inventories24
 31
Prepaid expenses14
 13
Income tax receivable12
 11
Other current assets16
 19
Total current assets1,294
 529
Property, equipment, land and leasehold improvements, net3,220
 3,202
Operating lease assets, net332
 336
Investment in unconsolidated business8
 9
Goodwill2,044
 2,043
Intangible assets, net717
 729
Other noncurrent assets11
 13
Total assets$7,626
 $6,861
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current liabilities:   
Due to Manager-related party$2
 $3
Accounts payable34
 67
Accrued expenses83
 86
Current portion of long-term debt286
 12
Operating lease liabilities - current19
 20
Fair value of derivative liabilities13
 7
Other current liabilities26
 35
Total current liabilities463
 230
Long-term debt, net of current portion3,253
 2,654
Deferred income taxes679
 679
Operating lease liabilities - noncurrent318
 320
Other noncurrent liabilities169
 167
Total liabilities4,882
 4,050
Commitments and contingencies—
 —
TABLE OF CONTENTS
MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS – (continued)
($ in Millions, Except Share Data)

March 31,
2020		 December 31, 2019June 30,
2020		December 31, 2019
(Unaudited)  (Unaudited)
Stockholders’ equity(1):
   
Stockholders’ equity(1):
Additional paid in capital$1,123
 $1,198
Additional paid in capital$1,127  $1,198  
Accumulated other comprehensive loss(40) (37)Accumulated other comprehensive loss(38) (37) 
Retained earnings1,652
 1,641
Retained earnings1,644  1,641  
Total stockholders’ equity2,735
 2,802
Total stockholders’ equity2,733  2,802  
Noncontrolling interests9
 9
Noncontrolling interests9  9  
Total equity2,744
 2,811
Total equity2,742  2,811  
Total liabilities and equity$7,626
 $6,861
Total liabilities and equity$7,347  $6,861  
___________
(1)
The Company is authorized to issue the following classes of stock: (i) 500,000,000 shares of common stock, par value $0.001 per share. At March 31,
(1)The Company is authorized to issue the following classes of stock: (i) 500,000,000 shares of common stock, par value $0.001 per share. At June 30, 2020 and December 31, 2019, the Company had 86,814,466 shares and 86,600,302 shares of common stock issued and outstanding, respectively; (ii) 100,000,000 shares of preferred stock, par value $0.001 per share authorized. At March 31, 2020 and December 31, 2019, 0 preferred stocks were issued or outstanding; and (iii) 100 shares of special stock, par value $0.001 per share, issued and outstanding to its Manager as at March 31, 2019, the Company had 86,969,144 shares and 86,600,302 shares of common stock issued and outstanding, respectively; (ii) 100,000,000 shares of preferred stock, par value $0.001 per share authorized. At June 30, 2020 and December 31, 2019, 0 preferred stocks were issued or outstanding; and (iii) 100 shares of special stock, par value $0.001 per share, issued and outstanding to its Manager as at June 30, 2020 and December 31, 2019.
See accompanying notes to the consolidated condensed financial statements.
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MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
($ in Millions, Except Share and Per Share Data)

Quarter Ended June 30,Six Months Ended June 30,
2020201920202019
Revenue
Service revenue$224  $355  $580  $773  
Product revenue37  61  97  125  
Total revenue261  416  677  898  
Costs and expenses
Cost of services75  162  220  330  
Cost of product sales18  45  60  85  
Selling, general and administrative83  84  179  164  
Fees to Manager-related party4  7  11  15  
Depreciation50  48  101  96  
Amortization of intangibles13  15  27  30  
Total operating expenses243  361  598  720  
Operating income18  55  79  178  
Other income (expense)
Interest income—  1  —  4  
Interest expense(1)
(33) (46) (75) (88) 
Other income (expense), net2  (2) 3  2  
Net (loss) income from continuing operations before income taxes(13) 8  7  96  
Benefit (provision) for income taxes5  (2) (4) (26) 
Net (loss) income from continuing operations(8) 6  3  70  
Discontinued Operations(2)
Net income from discontinued operations before income taxes—  5  —  8  
Provision for income taxes—  (2) —  —  
Net income from discontinued operations—  3  —  8  
Net (loss) income(8) 9  3  78  
Net (loss) income from continuing operations(8) 6  3  70  
Net (loss) income from continuing operations attributable to MIC(8) 6  3  70  
Net income from discontinued operations—  3  —  8  
Less: net loss attributable to noncontrolling interests—  (2) —  (3) 
Net income from discontinued operations attributable to MIC—  5  —  11  
Net (loss) income attributable to MIC$(8) $11  $3  $81  
See accompanying notes to the consolidated condensed financial statements.
28
 Quarter Ended March 31,
 2020 2019
Revenue   
Service revenue$356
 $418
Product revenue60
 64
Total revenue416
 482
Costs and expenses   
Cost of services145
 168
Cost of product sales42
 40
Selling, general and administrative96
 80
Fees to Manager-related party7
 8
Depreciation51
 48
Amortization of intangibles14
 15
Total operating expenses355
 359
Operating income61
 123
Other income (expense)   
Interest income—
 3
Interest expense(1)
(42) (42)
Other income, net1
 4
Net income from continuing operations before income taxes20
 88
Provision for income taxes(9) (24)
Net income from continuing operations11
 64
    
Discontinued Operations(2)
   
Net income from discontinued operations before income taxes—
 3
Benefit for income taxes—
 2
Net income from discontinued operations—
 5
Net income11
 69
    
Net income from continuing operations11
 64
Net income from continuing operations attributable to MIC11
 64
Net income from discontinued operations—
 5
Less: net loss attributable to noncontrolling interests—
 (1)
Net income from discontinued operations attributable to MIC—
 6
Net income attributable to MIC$11
 $70
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MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS – (continued)
(Unaudited)
($ in Millions, Except Share and Per Share Data)

Quarter Ended June 30,Six Months Ended June 30,
Quarter Ended March 31,2020201920202019
2020 2019
Basic income per share from continuing operations attributable to MIC$0.13
 $0.75
Basic (loss) income per share from continuing operations attributable to MICBasic (loss) income per share from continuing operations attributable to MIC$(0.09) $0.07  $0.04  $0.81  
Basic income per share from discontinued operations attributable to MIC—
 0.07
Basic income per share from discontinued operations attributable to MIC—  0.06  —  0.13  
Basic income per share attributable to MIC$0.13
 $0.82
Basic (loss) income per share attributable to MICBasic (loss) income per share attributable to MIC$(0.09) $0.13  $0.04  $0.94  
Weighted average number of shares outstanding: basic86,686,972
 85,872,132
Weighted average number of shares outstanding: basic86,871,892  86,073,372  86,779,432  85,973,308  
Diluted income per share from continuing operations attributable to MIC$0.13
 $0.73
Diluted (loss) income per share from continuing operations attributable to MICDiluted (loss) income per share from continuing operations attributable to MIC$(0.09) $0.07  $0.04  $0.81  
Diluted income per share from discontinued operations attributable to MIC—
 0.06
Diluted income per share from discontinued operations attributable to MIC—  0.06  —  0.13  
Diluted income per share attributable to MIC$0.13
 $0.79
Diluted (loss) income per share attributable to MICDiluted (loss) income per share attributable to MIC$(0.09) $0.13  $0.04  $0.94  
Weighted average number of shares outstanding: diluted86,718,067
 93,913,267
Weighted average number of shares outstanding: diluted86,871,892  86,099,111  86,838,519  85,998,006  
Cash dividends declared per share$—
 $1.00
Cash dividends declared per share$—  $1.00  $—  $2.00  
___________
(1)Interest expense includes losses on derivative instruments of $9 million and $4 million for the quarters ended March 31, 2020 and 2019, respectively.
(2)See Note 4, “Discontinued Operations and Dispositions”, for discussions on businesses classified as held for sale.
(1)Interest expense includes non-cash losses on derivative instruments of $1 million and $10 million for the quarter and six months ended June 30, 2020, respectively, compared with non-cash losses of $8 million and $12 million for the quarter and six months ended June 30, 2019, respectively.
(2)See Note 4, “Discontinued Operations and Dispositions”, for discussions on businesses classified as held for sale.
See accompanying notes to the consolidated condensed financial statements.
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MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Unaudited)
($ in Millions)


 Quarter Ended March 31,
 2020 2019
Net income$11
 $69
Other comprehensive loss, net of taxes:   
Translation adjustment (1)
(3) —
Other comprehensive loss(3) —
Comprehensive income8
 69
Less: comprehensive loss attributable to noncontrolling interests—
 (1)
Comprehensive income attributable to MIC$8
 $70
Quarter Ended June 30,Six Months Ended June 30,
2020201920202019
Net (loss) income$(8) $9  $3  $78  
Other comprehensive income (loss), net of taxes:
Translation adjustment (1)
2  2  (1) 2  
Other comprehensive income (loss)2  2  (1) 2  
Comprehensive (loss) income(6) 11  2  80  
Less: comprehensive loss attributable to noncontrolling interests—  (2) —  (3) 
Comprehensive (loss) income attributable to MIC$(6) $13  $2  $83  
___________
(1)
Translation adjustment is presented net of tax benefit of $1 million for the quarter ended March 31, 2020.
(1)Translation adjustment is presented net of tax expense of $1 million for the quarter ended June 30, 2020 and both the quarter and six month periods ended June 30, 2019. Tax expense related to translation adjustment for the six months ended June 30, 2020 was insignificant. See Note 10, "Stockholders' Equity", for further discussions.
See accompanying notes to the consolidated condensed financial statements.
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MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
($ in Millions, Except Share Data)


In SharesAdditional
Paid In
Capital		Accumulated
Other
Comprehensive
Loss		Retained
Earnings		Total
Stockholders’
Equity		Noncontrolling
Interests		Total
Equity
In Shares 
Additional
Paid In
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Retained
Earnings
 
Total
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Equity
Special
Stock
Common
Stock(1)
Balance at March 31, 2020Balance at March 31, 2020100  86,814,466  $1,123  $(40) $1,652  $2,735  $9  $2,744  
Issuance of shares to ManagerIssuance of shares to Manager—  133,288  3  —  —  3  —  3  
Stock vested under compensation plans(2)
Stock vested under compensation plans(2)
—  21,390  —  —  —  —  —  —  
Stock-based compensation expenseStock-based compensation expense—  —  1  —  —  1  —  1  
Comprehensive income (loss), net of taxesComprehensive income (loss), net of taxes—  —  —  2  (8) (6) —  (6) 
Balance at June 30, 2020Balance at June 30, 2020100  86,969,144  $1,127  $(38) $1,644  $2,733  $9  $2,742  
Special
Stock
 
Common
Stock(1)
 
Additional
Paid In
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Retained
Earnings
 
Total
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Equity
Balance at December 31, 2019100
 86,600,302
 Balance at December 31, 2019100  86,600,302  $1,198  $(37) $1,641  $2,802  $9  $2,811  
Issuance of shares to Manager—
 213,365
 9
 —
 —
 9
 —
 9
Issuance of shares to Manager—  346,653  12  —  —  12  —  12  
Stock vested under compensation plans(2)
—
 1,100
 —
 —
 —
 —
 —
 —
Stock vested under compensation plans(2)
—  22,490  —  —  —  —  —  —  
Stock withheld for taxes on vested stock(2)
—
 (301) —
 —
 —
 —
 —
 —
Stock withheld for taxes on vested stock(2)
—  (301) —  —  —  —  —  —  
Stock-based compensation expense—
 —
 3
 —
 —
 3
 —
 3
Stock-based compensation expense—  —  4  —  —  4  —  4  
Dividends to common stockholders(3)
—
 —
 (87) —
 —
 (87) —
 (87)
Dividends to common stockholders(3)
—  —  (87) —  —  (87) —  (87) 
Comprehensive (loss) income, net of taxes—
 —
 —
 (3) 11
 8
 —
 8
Comprehensive (loss) income, net of taxes—  —  —  (1) 3  2  —  2  
Balance at March 31, 2020100
 86,814,466
 $1,123
 $(40) $1,652
 $2,735
 $9
 $2,744
Balance at June 30, 2020Balance at June 30, 2020100  86,969,144  $1,127  $(38) $1,644  $2,733  $9  $2,742  
Balance at March 31, 2019Balance at March 31, 2019100  85,982,332  $1,432  $(30) $1,555  $2,957  $149  $3,106  
Issuance of shares to ManagerIssuance of shares to Manager—  189,968  7  —  —  7  —  7  
Stock vested under compensation plans(2)
Stock vested under compensation plans(2)
—  23,646  1  —  —  1  —  1  
Dividends to common stockholders(3)
Dividends to common stockholders(3)
—  —  (86) —  —  (86) —  (86) 
Distributions to noncontrolling interestsDistributions to noncontrolling interests—  —  —  —  —  —  (1) (1) 
Comprehensive income (loss), net of taxesComprehensive income (loss), net of taxes—  —  —  2  11  13  (2) 11  
Balance at June 30, 2019Balance at June 30, 2019100  86,195,946  $1,354  $(28) $1,566  $2,892  $146  $3,038  
               
Balance at December 31, 2018100
 85,800,303
 $1,510
 $(30) $1,485
 $2,965
 $152
 $3,117
Balance at December 31, 2018100  85,800,303  $1,510  $(30) $1,485  $2,965  $152  $3,117  
Issuance of shares to Manager—
 182,029
 8
 —
 —
 8
 —
 8
Issuance of shares to Manager—  371,997  15  —  —  15  —  15  
Stock vested under compensation plans(2)
Stock vested under compensation plans(2)
—  23,646  1  —  —  1  —  1  
Dividends to common stockholders(3)
—
 —
 (86) —
 —
 (86) —
 (86)
Dividends to common stockholders(3)
—  —  (172) —  —  (172) —  (172) 
Distributions to noncontrolling interests—
 —
 —
 —
 —
 —
 (2) (2)Distributions to noncontrolling interests—  —  —  —  —  —  (3) (3) 
Comprehensive income (loss), net of taxes—
 —
 —
 —
 70
 70
 (1) 69
Comprehensive income (loss), net of taxes—  —  —  2  81  83  (3) 80  
Balance at March 31, 2019100
 85,982,332
 $1,432
 $(30) $1,555
 $2,957
 $149
 $3,106
Balance at June 30, 2019Balance at June 30, 2019100  86,195,946  $1,354  $(28) $1,566  $2,892  $146  $3,038  
___________
(1)The Company is authorized to issue 500,000,000 shares of common stock with a par value $0.001 per share.
(2)Stocks vested and issued under the 2016 Omnibus Employee Incentive Plan and 2014 Independent Directors' Equity Plan. Under the 2016 Omnibus Employee Incentive Plan, shares are withheld for the employee portion of taxes on vested awards and are available for future grants.
(3)See Note 13, “Related Party Transactions”, for cash dividends paid on shares for each period.
(1)The Company is authorized to issue 500,000,000 shares of common stock with a par value $0.001 per share.
(2)Stocks vested and issued under the 2016 Omnibus Employee Incentive Plan and 2014 Independent Directors' Equity Plan. Under the 2016 Omnibus Employee Incentive Plan, shares are withheld for the employee portion of taxes on vested awards and are available for future grants.
(3)See Note 13, “Related Party Transactions”, for cash dividends paid on shares for each period.
See accompanying notes to the consolidated condensed financial statements.
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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
($ in Millions)


Six Months Ended June 30,
20202019
Operating activities
Net income from continuing operations$3  $70  
Adjustments to reconcile net income to net cash provided by operating activities from continuing operations:
Depreciation and amortization of property and equipment101  96  
Amortization of intangible assets27  30  
Amortization of debt financing costs5  5  
Amortization of debt discount1  2  
Adjustments to derivative instruments6  22  
Fees to Manager-related party11  15  
Deferred taxes2  17  
Other non-cash expense, net9  9  
Changes in other assets and liabilities, net of acquisitions:
Accounts receivable32  (2) 
Inventories6  (1) 
Prepaid expenses and other current assets(1) (11) 
Accounts payable and accrued expenses(28) 1  
Income taxes payable(2) 3  
Other, net—  3  
Net cash provided by operating activities from continuing operations172  259  
Investing activities
Acquisitions of businesses and investments, net of cash, cash equivalents and restricted cash acquired(13) —  
Purchases of property and equipment(135) (102) 
Loan to project developer—  (1) 
Net cash used in investing activities from continuing operations(148) (103) 
Financing activities
Proceeds from long-term debt874  —  
Payment of long-term debt(281) (3) 
Dividends paid to common stockholders(87) (172) 
Debt financing costs paid—  (1) 
Net cash provided by (used in) financing activities from continuing operations506  (176) 
Net change in cash, cash equivalents and restricted cash from continuing operations530  (20) 
See accompanying notes to the consolidated condensed financial statements.
32
 Quarter Ended March 31,
 2020 2019
Operating activities   
Net income from continuing operations$11
 $64
Adjustments to reconcile net income to net cash provided by operating activities from continuing operations:   
Depreciation and amortization of property and equipment51
 48
Amortization of intangible assets14
 15
Amortization of debt financing costs2
 3
Amortization of debt discount1
 1
Adjustments to derivative instruments12
 7
Fees to Manager-related party7
 8
Deferred taxes2
 17
Other non-cash expense, net5
 4
Changes in other assets and liabilities, net of acquisitions:   
Accounts receivable23
 (11)
Inventories7
 —
Prepaid expenses and other current assets(2) (5)
Accounts payable and accrued expenses(27) (2)
Income taxes payable4
 7
Other, net(11) (5)
Net cash provided by operating activities from continuing operations99
 151
Investing activities   
Acquisitions of businesses and investments, net of cash, cash equivalents and restricted cash acquired(13) —
Purchases of property and equipment(71) (44)
Loan to project developer—
 (1)
Net cash used in investing activities from continuing operations(84) (45)
Financing activities   
Proceeds from long-term debt874
 —
Payment of long-term debt(3) (3)
Dividends paid to common stockholders(87) (86)
Debt financing costs paid—
 (1)
Net cash provided by (used in) financing activities from continuing operations784
 (90)
Net change in cash, cash equivalents and restricted cash from continuing operations799
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MACQUARIE INFRASTRUCTURE CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS – (continued)
(Unaudited)
($ in Millions)

Quarter Ended March 31,Six Months Ended June 30,
2020 201920202019
Cash flows (used in) provided by discontinued operations:   Cash flows (used in) provided by discontinued operations:
Net cash used in operating activities$—
 $(13)Net cash used in operating activities$—  $(11) 
Net cash used in investing activities—
 (8)Net cash used in investing activities—  (16) 
Net cash provided by financing activities—
 23
Net cash provided by financing activities—  27  
Net cash provided by discontinued operations—
 2
Net cash provided by discontinued operations—  —  
Net change in cash, cash equivalents and restricted cash799
 18
Net change in cash, cash equivalents and restricted cash530  (20) 
Cash, cash equivalents and restricted cash, beginning of period358
 629
Cash, cash equivalents and restricted cash, beginning of period358  629  
Cash, cash equivalents and restricted cash, end of period$1,157
 $647
Cash, cash equivalents and restricted cash, end of period$888  $609  
   
Supplemental disclosures of cash flow information from continuing operations:   Supplemental disclosures of cash flow information from continuing operations:
Non-cash investing and financing activities:   Non-cash investing and financing activities:
Accrued purchases of property and equipment$25
 $12
Accrued purchases of property and equipment$20  $13  
Issuance of shares to Manager9
 8
Leased assets obtained in exchange for new operating lease liabilities5
 1Leased assets obtained in exchange for new operating lease liabilities6  2  
Taxes paid, net3
 1
Taxes paid, net4  6  
Interest paid, net21
 31
Interest paid, net59  67  
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,As of June 30,
2020 201920202019
Cash and cash equivalents$1,156
 $603
Cash and cash equivalents$874  $573  
Restricted cash - current1
 23
Restricted cashRestricted cash14  17  
Cash, cash equivalents and restricted cash included in assets held for sale(1)
—
 21
Cash, cash equivalents and restricted cash included in assets held for sale(1)
—  19  
Total of cash, cash equivalents and restricted cash shown in the consolidated condensed statement of cash flows$1,157
 $647
Total of cash, cash equivalents and restricted cash shown in the consolidated condensed statement of cash flows$888  $609  
___________
(1)Represents cash, cash equivalents and restricted cash related to businesses classified as held for sale. See Note 4, “Discontinued Operations and Dispositions”, for further discussion.
(1)Represents cash, cash equivalents and restricted cash related to businesses classified as held for sale. See Note 4, “Discontinued Operations and Dispositions”, for further discussion.
See accompanying notes to the consolidated condensed financial statements.
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MACQUARIE INFRASTRUCTURE CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. Organization and Description of Business
Macquarie Infrastructure Corporation (MIC) is a Delaware corporation formed on May 21, 2015. MIC’s predecessor, Macquarie Infrastructure Company LLC, was formed on April 13, 2004. Macquarie Infrastructure Corporation, both on an individual entity basis and together with its consolidated subsidiaries, is referred to in these financial statements as the “Company” or “MIC”.
MIC is externally managed by Macquarie Infrastructure Management (USA) Inc. (the Manager) pursuant to the terms of a Management Services Agreement, subject to the oversight and supervision of the Board. Six of the eight members of the Board, and all of the members of each of the Company's Audit, Compensation and Nominating and Governance committees,Committees, are independent and have no affiliation with Macquarie. The Manager is a member of the Macquarie Group of companies comprising Macquarie Group Limited and its subsidiaries and affiliates worldwide. Macquarie Group Limited is headquartered in Australia and is listed on the Australian Securities Exchange.
The Company owns its businesses through its direct wholly-owned subsidiary MIC Ohana Corporation, the successor to Macquarie Infrastructure Company Inc. The Company owns and operates a portfolio of infrastructure and infrastructure-like businesses that provide services to corporations, government agencies and individual customers primarily in the United States (U.S.). The Company's operations are organized into 4 segments:
•
•International-Matex Tank Terminals (IMTT):  a business providing bulk liquid storage and handling services to third-parties at 17 terminals in the U.S. and 2 in Canada;
•Atlantic Aviation:  a provider of jet fuel, terminal, aircraft hangaring and other services primarily to operators of general aviation (GA) jet aircraft at 70 airports throughout the U.S.;
•MIC Hawaii:  comprising a company that processes and distributes gas and provides related services (Hawaii Gas) and several smaller businesses collectively engaged in efforts to reduce the cost and improve the reliability and sustainability of energy in Hawaii; and
•  a business providing bulk liquid storage and handling services to third-parties at 17 terminals in the U.S. and 2 in Canada;
•
Atlantic Aviation:  a provider of jet fuel, terminal, aircraft hangaring and other services primarily to operators of general aviation (GA) jet aircraft at 70 airports throughout the U.S.;
•
MIC Hawaii:  comprising a company that processes and distributes gas and provides related services (Hawaii Gas) and several smaller businesses collectively engaged in efforts to reduce the cost and improve the reliability and sustainability of energy in Hawaii; and
•
Corporate and Other:  comprising MIC Corporate (holding company headquarters in New York City) and a shared services center in Plano, Texas.
Effective October 1, 2018, the Bayonne Energy Center (BEC) and substantially all of the Company’s portfolio of solar and wind power generation businesses were classified as discontinued operations and the Company’s Contracted Power segment was eliminated. All periods reflect this change. In July 2019, the Company completed the sales of its wind power generating portfolio and all but one of the assets in its solar power generating portfolio. The sale of the remaining solar facility closed during September 2019. On January 1, 2019, the Company also classified its majority interest in a renewable power development business as a discontinued operation, the sale of which closed in July 2019. A remaining relationship with a third-party developer of renewable power facilities has been reported as a component of Corporate and Other through the expiration of the relationship in July 2019. For additional information, see Note 4, “Discontinued Operations and Dispositions”.
In October 2019, in addition to the active management of the existing portfolio of businesses, the Board resolved to simultaneously pursue strategic alternatives including potentially a sale of the Company or its operating businesses as a means of unlocking additional value for stockholders. The Company has not set a timetable for completing any transaction and there can be no assurance that any transaction(s) will occur on favorable terms or at all.
2. Basis of Presentation
The unaudited consolidated condensed financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) in the U.S. and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.
The consolidated balance sheet at December 31, 2019 has been derived from audited financial statements but does not include all of the information and notes required by GAAP for complete financial statements. Certain reclassifications were made to the consolidated financial statements for the prior period to conform to current period presentation.
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
2. Basis of Presentation– (continued)


The interim financial information contained herein should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on February 25, 2020. Operating results for the quarter and six months ended March 31,June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or for any future interim periods.
Use of Estimates
The preparation of unaudited consolidated condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures related thereto at the date of the unaudited consolidated condensed financial statements and the reported amounts of revenue and expenses during the reporting period. Management evaluates these estimates and assumptions on an ongoing basis.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited interim consolidated condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.
Financial Instruments
The Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and variable-rate senior debt, are carried at cost, which approximates their fair value because of either the short-term maturity or competitive interest rates assigned to these financial instruments. The fair values of the Company’s other debt instruments fall within level 1 or level 2 of the fair value hierarchy.
At December 31, 2019, the Company had $40 million of commercial paper included in cash and cash equivalents. Commercial paper consists of maturities of three months or less and are issued by counterparties with Standard & Poor's rating of A1+ or higher. The Company did not0t have any commercial paper at March 31,June 30, 2020.
Income Taxes
The Company files a consolidated federal income tax return that includes the financial results of IMTT, Atlantic Aviation and MIC Hawaii. Pursuant to a tax sharing agreement, these businesses pay MIC an amount equal to the federal income tax each would pay on a standalone basis as if they were not part of the consolidated federal income tax return.  In addition, the businesses file income tax returns and may pay taxes in the state and local jurisdictions in which they operate. In calculating its state income tax provision, the Company has provided a valuation allowance for certain state income tax net operating loss (NOL) carryforwards, the use of which is uncertain.
The Company expects to incur a federal taxable loss for the year ended December 31, 2020. Under the U.S. Coronavirus Aid, Relief and Economic Security (CARES) Act, any NOL generated in 2020 may be carried back five years. The Company is currently assessing the impact of this provision of the CARES Act.
Recently Issued Accounting Standards
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting, which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships and other transactions that reference the London interbank offered rate (LIBOR) or another reference rate expected to be discontinued as a result of reference rate reform. These amendments are not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. ASU No. 2020-04 is effective as of March 12, 2020, through December 31, 2022, and may be applied to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020. The Company will evaluate the impact of the adoption of this ASU.

In August 2018, the FASB issued ASU No. 2018-14, Compensation — Retirement Benefits — Defined Benefit Plans — General (Subtopic 715-20): Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans. The amendments in ASU 2018-14 update disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments in this update are effective for fiscal years ending after December 15, 2020. Early adoption is permitted. The Company will include appropriate disclosures related to defined benefit plans in accordance with the standard when it adopts the provisions of this ASU.

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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
2. Basis of Presentation– (continued)

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in ASU 2018-13 update the disclosure requirements on fair value measurements, including the consideration of costs and benefits. The disclosure modifications focused on Level 3 fair value measurements, and also eliminate the minimum disclosure requirements. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company adopted this ASU effective January 1, 2020 and had no impact to the consolidated condensed financial statements.
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

3. Impact of COVID-19
Impact to MIC Businesses
The impact of COVID-19 has varied across the Company’sportfolio of businesses. The reduction in consumption of refined petroleum products associated with the slowing of economic activity together with increased production of crude oil, has for the time being resulted in increased demand for storage of these products and driven improved performance at IMTT. Conversely, stay-at-home orders and limitations on travel have abruptlysignificantly reduced demand for the products and services provided by its Atlantic Aviation and MIC Hawaii.Hawaii businesses. While GA flight activity began to recover during the second quarter from the low levels recorded in late March and April, the near absence of tourism in Hawaii continues to limit gas sales. The businesses are not unique in these respects. The petroleum storage industry has, in general, performed well during the pandemic while the travel and tourism industries, and the businesses reliant on them, have been significantly negatively affected.
The Company continues to closely monitor the effects of COVID-19 and is actively managing its response placing a priority on the health and safety of its employees, contractors, their families, customers and the broader communities in which it operates. MIC businesses are classified as essential services and remain operational and there have been no service disruptions related to the pandemic. The Company has implemented a pandemic response plan and has taken actions that allow it to continue to provide services in a safe and effective manner. Procedures implemented include: (i) a work from home policy for all employees that are able to do so; (ii) limiting operations to only those required to meet safety, regulatory or customer needs; (iii) enhanced cleaning and disinfection of facilities; (iv) limiting interactions between employees through social distancing; (v) increased usage of personal protective equipment; (vi) modification of shift schedules to reduce exposure between shifts; (vii) limiting IMTT terminals access to essential personnel; and (viii) requiring all individuals who enter the IMTT terminals submit to temperature scans.
The Company is also reviewing the benefits that may be available under the CARES Act. The Act includes provisions for federal grants or government-backed loans to businesses, employee benefits and retention credits, easing of certain income tax rules and a payroll tax deferral, among others. Several of these provisions may be applicable to the Company or to its operating businesses. Initial indications are that these are likely to be immaterial to the business’ results of operations.
In light of the ongoing impacts of the pandemic on the Company, the reduced level of economic activity and uncertainty around the timing of any recovery from the impact of the pandemic, the Company withdrew its financial guidance it had provided to the market on February 25, 2020. Operations are ongoing at each of its businesses. The Company has good visibility into the financial performance of IMTT given the contracted nature of its storage revenue, although these may be partially offset by reductiondeclines in end user demand could reduce revenue related tofrom the provision of uncontracted ancillary services includingsuch as blending, packaging or throughput. Revenue from ancillary services in the second quarter was largely flat with the prior comparable period. The uncontracted nature of the majority of the revenue generated by each of Atlantic Aviation and a substantial portion of that generated by MIC Hawaii means thatis subject to consumer preference, meaning the Company has extraordinarily limited visibility into the prospects for these businesses over the short to medium term.
A relaxation of travel restrictions and stay-at-home orders willcontributed to the partial recovery in GA flight activity and the performance of Atlantic Aviation in the second quarter. The Federal Aviation Administration reported that U.S. domestic GA flight activity in June was approximately 82% of levels achieved in the prior comparable period, up from approximately 28% in April. Further recovery is likely beto depend on the continued rollback of lockdown measures leading to a pickup in business, international and event-driven activity. Tourism in Hawaii has yet to begin to recover and an early indication that the Company could expect improved performance fromincrease is dependent on consumer travel preferences, an absence of any COVID-19 resurgence resulting in a prolonged lockdown of a significant portion of U.S. and an easing of Hawaii's mandatory quarantine policies. Despite these challenges, each of Atlantic Aviation and MIC Hawaii althoughhas benefited from the rategeneration of any improvement is highly unpredictable givenstable resilient revenue from tenants leasing hangars in the inability to forecast the consumer response in a post-COVID-19 environment. Given the significant decline in jet fuel sales atcase of Atlantic Aviation and primarily residential consumption of gas sales atin the case of MIC Hawaii in April 2020, the Company does not currently anticipate meaningful improvement during the second quarter of 2020.Hawaii.
Impact to Liquidity and Balance Sheet
In light of the disruption in the global markets and the unpredictability of the sustained impact to its businesses caused by COVID-19, during March and April 2020, the Company took certain measures to preserve financial flexibility and increaseincreased the strength of its balance sheet and its liquidity position.
In March 2020, the Company suspended its cash dividend. The suspension will result in the retention of approximately $260 million should it remain in place through the end of 2020. In addition, in March 2020, the Company drew down a total of $874 million on revolving credit facilities including $599 million on its MIC holding company level revolving credit facility and $275 million on the Atlantic Aviation revolving credit facility. The proceeds were additive to the approximately $300 million of cash alreadythen on hand. AlthoughThe cash drawn on the MIC holding company revolving credit facility remains on its balance sheet and, assuming the Company maintains existing levels of performance of its businesses, the Company does not foresee using that cash. At June 30, 2020, there has been no material deterioration in accounts receivable at any of the operating businesses. If the economic impact of the pandemic is protracted, collection times and continues to have no immediate need for the additional liquidity, the drawdowns were deemed prudent to preserve financial flexibility.value of uncollectible accounts could increase.
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
3. Impact of COVID-19 – (continued)

On April 30, 2020, Atlantic Aviation fully repaid the outstanding balance on its revolving credit facility and effective May 4, 2020, reduced the revolving credit facility commitments on this facilitywere reduced to $10 million. The $10 million revolving commitments are in place solely with respect to letters of credit currently outstanding (and such commitments will be reduced after each existing letter of credit expires or otherwise terminates).then outstanding. In connection with the repayment of the revolving credit facility and reduction in commitments, Atlantic Aviation and its lenders amended the credit agreement to remove the covenant requiring the Company to maintain a ratio of net debt/EBITDA at or below 5.5x over a trailing twelve-month period. Such financial covenant will not be applicable so long as letters of credit issued under the credit facility are cash collateralized and rolled over to stand-alone letter of credit facilities upon renewal.
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MACQUARIE INFRASTRUCTURE CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
3. Impact of COVID-19 – (continued)


With the steps taken to strengthen its financial position summarized above, the Company has no immediate need for additional capital. Subsequent to the repayment and reduction in commitments related to the Atlantic Aviation revolving credit facility, the Company has approximately $1,530$1,535 million of liquidity available comprised of cash on hand and undrawn balances on its revolving credit facilities. Over the next twelve months, the Company currently expects to fund its operations, service its debt, make state tax payments, fund essential maintenance capital expenditures, deploy growth capital and make required principal repayments using cash generated from the operations of its businesses and cash on hand.
At March 31,June 30, 2020, each of the operating businesses and MIC Corporate were in compliance with their financial covenants in accordance with its debt agreements.
Impact to Goodwill and Long-Lived Assets
Due to the decline in the Company’s market capitalization and thepotential impact and uncertainty aroundof COVID-19 on the Company's operations, the Company performed a triggering event analysis on its goodwill, property, equipment, land and leasehold improvements and intangible assets at a reportable segment level during the quarterquarters ended June 30, 2020 and March 31, 2020. Based on the Company’s interim assessment as of March 31,June 30, 2020, the Company determined that there were no triggering events that required an interim impairment analysis of its goodwill, property, equipment, land and leasehold improvements and intangible assets.
4. Discontinued Operations and Dispositions
The Company accounts for disposals that represent a strategic shift that should have or will have a major effect on operations as discontinued operations in the consolidated condensed statement of operations for current and prior periods commencing in the period in which the business or group of businesses meets the criteria of a discontinued operation. These results include any gain or loss recognized on disposal or adjustment of the carrying amount to fair value less cost to sell.
Renewable Businesses Sale
During the fourth quarter of 2018, the Company commenced a sale process involving its portfolios of 142 megawatts (MW) (gross) of solar generation assets and 203 MW (gross) of wind generation assets. In July 2019, the Company completed the sales of its wind power generating portfolio and all but one of the assets in its solar power generating portfolio. The sale of the remaining solar facility closed during September 2019. Upon closing of the transactions involving the portfolios of operating solar and wind assets, MIC deconsolidated $295 million of long-term debt. In July 2019, the Company also completed the sale of its majority interest in a renewable power development business. The Company may be entitled to a deferred purchase price from the sale of its interest in the renewable power development business based on the sale of certain projects by the purchaser in the future.
The aggregate gross proceeds to the Company from the above sales were approximately $275 million, or approximately$223 $223 million net of taxes and transaction related expenses. Upon closing of the transactions, the Company recorded a pre-tax gain of approximately $80 million excluding any transaction costs. The Company incurred approximately $10 million in professional fees in relation to these transactions, which is included in Selling, General and Administrative Expenses in the consolidated condensed statement of operations. In 2019, the Company recorded $42 million in current tax expense primarily related to the gain on sale.
The combination of the disposal of BEC in October 2018 and the commencement of the sale process of substantially all of its portfolio of solar and wind facilities represented a strategic shift for the Company that will have a major effect on operations. Accordingly, beginning in the fourth quarter of 2018, these businesses were classified as discontinued operations and the Contracted Power segment was eliminated. There was no write-down of the carrying amount of the solar and wind facility assets as a result of this change in classification. The assets and liabilities of the solar and wind facilities have been classified as held for sale in the consolidated condensed balance sheets up until the date those assets are disposed. All prior periods have been restated to reflect these changes.
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
4. Discontinued Operations and Dispositions  – (continued)
During the first quarter of 2019, the Company also commenced the sale of its majority interest in its renewable power development business that was reported as part of the Company’s Corporate and Other segment in the fourth quarter of 2018. Accordingly, beginning in the first quarter of 2019, the results of this business were classified as discontinued operations and the assets and liabilities of this business have been classified as held for sale in the consolidated condensed balance sheets through the date of sale. A remaining relationship with a third-party developer of renewable power facilities has been reported as a component of Corporate and Other through the expiration of the relationship in July 2019.
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MACQUARIE INFRASTRUCTURE CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
4. Discontinued Operations and Dispositions  – (continued)

Summarized financial information for discontinued operations included in the Company’s consolidated condensed statement of operations for the quarter and six months ended March 31,June 30, 2019 isare as follows ($ in millions):
 Quarter Ended March 31, 2019
Product revenue$16
Cost of product sales(3)
Selling, general & administrative expenses(4)
Interest expense, net(5)
Other expense, net(1)
Net income from discontinued operations before income taxes$3
Benefit for income taxes2
Net income from discontinued operations$5
Less: net loss attributable to noncontrolling interests(1)
Net income from discontinued operations attributable to MIC$6

Quarter Ended June 30, 2019Six Months Ended June 30, 2019
Product revenue$18  $34  
Cost of product sales(3) (6) 
Selling, general & administrative expenses(3) (7) 
Interest expense, net(7) (12) 
Other expense, net—  (1) 
Net income from discontinued operations before income taxes$5  $8  
Provision for income taxes(2) —  
Net income from discontinued operations$3  $8  
Less: net loss attributable to noncontrolling interests(2) (3) 
Net income from discontinued operations attributable to MIC$5  $11  
5. Income per Share
Following is a reconciliation of the basic and diluted (loss) income per share computations ($ in millions, except share and per share data):
 Quarter Ended March 31,
 2020 2019
Numerator:   
Net income from continuing operations attributable to MIC$11
 $64
Interest expense attributable to 2.875% Convertible Senior Notes due July 2019, net
of taxes
—
 2
Interest expense attributable to 2.00% Convertible Senior Notes due October 2023,
net of taxes
—
 3
Diluted net income from continuing operations attributable to MIC$11
 $69
Basic and diluted net income from discontinued operations attributable to MIC$—
 $6
Denominator:   
Weighted average number of shares outstanding: basic86,686,972 85,872,132
Dilutive effect of restricted stock unit grants(1)
31,095 23,646
Dilutive effect of 2.875% Convertible Senior Notes due July 2019(2) 
—
 4,383,316
Dilutive effect of 2.00% Convertible Senior Notes due October 2023—
 3,634,173
Weighted average number of shares outstanding: diluted86,718,067 93,913,267
Quarter Ended June 30,Six Months Ended June 30,
2020201920202019
Numerator:
Net (loss) income from continuing operations attributable to MIC$(8) $6  $3  $70  
Diluted net (loss) income from continuing operations attributable
to MIC		$(8) $6  $3  $70  
Basic and diluted net income from discontinued operations
attributable to MIC		$—  $5  $—  $11  
Denominator:
Weighted average number of shares outstanding: basic86,871,892  86,073,372  86,779,43285,973,308
Dilutive effect of restricted stock unit grants(1)
—  25,739  59,08724,698
Weighted average number of shares outstanding: diluted86,871,892  86,099,111  86,838,51985,998,006
___________
(1)Dilutive effect of restricted stock unit grants includes grants to independent directors under the 2014 Independent Directors' Equity Plan and certain employees of the Company's operating businesses under the 2016 Omnibus Employee Incentive Plan.
(2)On July 15, 2019, the Company fully repaid the outstanding balance on the 2.875% Convertible Senior Notes due July 2019 at maturity using cash on hand.
(1)Dilutive effect of restricted stock unit grants includes grants to independent directors under the 2014 Independent Directors' Equity Plan and certain employees of the Company's operating businesses under the 2016 Omnibus Employee Incentive Plan.
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
5. Income per Share –- (continued)

Quarter Ended June 30,Six Months Ended June 30,
2020201920202019
Income per share:
Basic (loss) income per share from continuing
operations attributable to MIC		$(0.09) $0.07  $0.04  $0.81  
Basic income per share from discontinued operations
attributable to MIC		—  0.06  —  0.13
Basic (loss) income per share attributable to MIC$(0.09) $0.13  $0.04  $0.94  
Diluted (loss) income per share from continuing
operations attributable to MIC		$(0.09) $0.07  $0.04  $0.81  
Diluted income per share from discontinued
operations attributable to MIC		—  0.06  —  0.13
Diluted (loss) income per share attributable to MIC$(0.09) $0.13  $0.04  $0.94  
 Quarter Ended March 31,
 2020 2019
Income per share:   
Basic income per share from continuing operations attributable to MIC$0.13
 $0.75
Basic income per share from discontinued operations attributable to MIC—
 0.07
Basic income per share attributable to MIC$0.13
 $0.82
Diluted income per share from continuing operations attributable to MIC$0.13
 $0.73
Diluted income per share from discontinued operations attributable to MIC—
 0.06
Diluted income per share attributable to MIC$0.13
 $0.79

The following represents the weighted average potential dilutive shares of common stock that were excluded from the diluted income per share calculation:
Quarter Ended June 30,Six Months Ended June 30,
2020201920202019
Restricted stock unit grants87,059  —  —  —  
2.875% Convertible Senior Notes due July 2019(1)
—  4,408,660  —  4,396,058  
2.00% Convertible Senior Notes due October 20233,634,173  3,634,173  3,634,173  3,634,173  
Total3,721,232  8,042,833  3,634,173  8,030,231  
 Quarter Ended March 31,
 2020 2019
2.00% Convertible Senior Notes due October 20233,634,173
 —
___________

(1)On July 15, 2019, the Company fully repaid the outstanding balance on the 2.875% Convertible Senior Notes due July 2019 at maturity using cash on hand. The weighted average shares reflect the “if-converted” impact to dilutive common stock through the maturity date of the Note.

6. Property, Equipment, Land and Leasehold Improvements
Property, equipment, land and leasehold improvements at March 31,June 30, 2020 and December 31, 2019 consisted of the following ($ in millions):
June 30,
2020		December 31, 2019
Land$319  $319  
Buildings40  40  
Leasehold and land improvements835  813  
Machinery and equipment2,972  2,951  
Furniture and fixtures53  52  
Construction in progress222  143  
4,441  4,318  
Less: accumulated depreciation(1,210) (1,116) 
Property, equipment, land and leasehold improvements, net$3,231  $3,202  
 March 31,
2020		 December 31, 2019
Land$319
 $319
Buildings40
 40
Leasehold and land improvements828
 813
Machinery and equipment2,962
 2,951
Furniture and fixtures53
 52
Construction in progress182
 143
 4,384
 4,318
Less: accumulated depreciation(1,164) (1,116)
Property, equipment, land and leasehold improvements, net$3,220
 $3,202
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

7. Intangible Assets and Goodwill
Intangible assets at March 31,June 30, 2020 and December 31, 2019 consisted of the following ($ in millions):
 March 31, 2020 December 31, 2019
Contractual arrangements$923
 $921
Non-compete agreements14
 14
Customer relationships352
 352
Trade names16
 16
Technology9
 9
 1,314
 1,312
Less: accumulated amortization(597) (583)
Intangible assets, net$717
 $729

June 30, 2020December 31, 2019
Contractual arrangements$923  $921  
Non-compete agreements14  14  
Customer relationships352  352  
Trade names16  16  
Technology9  9  
1,314  1,312  
Less: accumulated amortization(609) (583) 
Intangible assets, net$705  $729  
TABLE OF CONTENTS
MACQUARIE INFRASTRUCTURE CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
7. Intangible Assets and Goodwill  – (continued)

The goodwill balance by reportable segments as of March 31,June 30, 2020 is comprised of the following ($ in millions):
IMTTAtlantic AviationMIC HawaiiTotal
Goodwill acquired in business combinations, net of disposals, at
December 31, 2019		$1,430  $619  $123  $2,172  
Accumulated impairment charges—  (123) (3) (126) 
Other(2) (1) —  (3) 
Balance at December 31, 20191,428  495  120  2,043  
Goodwill related to 2020 acquisition—  1  —  1  
Balance at June 30, 2020$1,428  $496  $120  $2,044  
 IMTT Atlantic Aviation MIC Hawaii Total
Goodwill acquired in business combinations, net of disposals, at
   December 31, 2019
$1,430
 $619
 $123
 $2,172
Accumulated impairment charges—
 (123) (3) (126)
Other(2) (1) —
 (3)
Balance at December 31, 20191,428
 495
 120
 2,043
Goodwill related to 2020 acquisition—
 1
 —
 1
Balance at March 31, 2020$1,428
 $496
 $120
 $2,044

The Company tests for goodwill impairment at the reporting unit level on an annual basis on October 1st of each year and between annual tests if a triggering event indicates impairment. The Company monitors changing business conditions as well as industry and economic factors, among others, for events which could trigger the need for an interim impairment analysis.
During the quarter ended March 31, 2020, the Company performed a goodwill triggering event analysis of its reportable segments and the Company as a whole due to the decline in its market capitalization and the impact and uncertainty around COVID-19. At September 30, 2019, the Company performed an impairment analysis resulting in the fair value of itsour reporting units exceeding its aggregate book value by $2.2 billion, or 33%. Approximately $1.9 billion of the excess was attributed to Atlantic Aviation, approximately $280 million to Hawaii Gas and approximately $20 million to IMTT. During the quarters ended June 30, 2020 and March 31, 2020, the Company performed a goodwill triggering event analysis of its reportable segments due to the potential impact and uncertainty around COVID-19 on its operations.
At IMTT, the Company looked at the impact of the supply and demand imbalance in the petroleum market and the significant decline in pricing onthe price of crude oil. In addition, COVID-19 and the resulting slowdown in economic activity led to an oversupply of petroleum and other liquid products stored and handled by IMTT. These factors have increased the utilization levels at IMTT to the low to mid 90s percentmid-90s% from the mid-80s% at year ended 2019 and accelerated renewal onof some customer contracts. Given the positive impacts to IMTT, the Company concluded there were no triggering events at IMTT.
At Atlantic Aviation and Hawaii Gas, using the market approach performed in the September 2019 impairment analysis, the Company performed sensitivities to EBITDA and concluded that it was not more likely than not that the book value of the businesses was greater than the fair value. The Company currentlybegan to see signs of recovery for Atlantic Aviation during the second quarter of 2020 and expects these businessesthat Hawaii Gas will begin to show business recoveryrecover starting within six months and therefore the decrease in business activity is not permanent. The Company concluded that at March 31,June 30, 2020, there were no triggering events at Atlantic Aviation andor Hawaii Gas.
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
8. Long-Term Debt
At March 31,June 30, 2020 and December 31, 2019, the Company’s consolidated long-term debt balance comprised of the following ($ in millions):
March 31,
2020		 December 31, 2019June 30,
2020		December 31, 2019
IMTT$1,109
 $1,109
IMTT$1,109  $1,109  
Atlantic Aviation1,287
 1,015
Atlantic Aviation1,010  1,015  
MIC Hawaii194
 195
MIC Hawaii194  195  
MIC Corporate988
 388
MIC Corporate988  388  
Total3,578
 2,707
Total3,301  2,707  
Current portion(286) (12)Current portion(11) (12) 
Long-term portion3,292
 2,695
Long-term portion3,290  2,695  
Unamortized deferred financing costs(1)
(39) (41)
Unamortized deferred financing costs(1)
(36) (41) 
Long-term portion less unamortized debt discount and deferred financing costs$3,253
 $2,654
Long-term portion less unamortized debt discount and deferred financing costs$3,254  $2,654  
___________
(1)The weighted average remaining life of the deferred financing costs at March 31, 2020 was 5.1 years.
TABLE OF CONTENTS(1)
MACQUARIE INFRASTRUCTURE CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
8. Long-Term Debt  – (continued)

The weighted average remaining life of the deferred financing costs at June 30, 2020 was 4.9 years.
At March 31,June 30, 2020, the total undrawn capacity on the revolving credit facilities was $736 million excluding letters of credit outstanding of $12$661 million. On March 17, 2020, the Company drew down a total of $874 million on two revolving credit facilities. This comprised of $599 million on its $600 million holding company level revolving credit facility and $275 million on the $350 million revolving credit facility at Atlantic Aviation. Although the Company does not have immediate need for the additional liquidity, the drawdowns were deemed prudent to preserve financial flexibility in light of the disruption in the global markets and the unpredictability of the sustained impact to its businesses caused by COVID-19. See Atlantic Aviation below for discussions on subsequent repayment and amendment to its revolving credit facility.
MIC Corporate
At March 31,June 30, 2020, MIC Corporate had $599 million of its $600 million senior secured revolving credit facility drawn. The proceeds of this borrowing may be used for working capital, general corporate or other purposes. The senior secured revolving credit facility was undrawn at December 31, 2019.
2.00% Convertible Senior Notes due October 2023 (2.00% Convertible Senior Notes)
At March 31,June 30, 2020 and December 31, 2019, the Company had $389 million and $388 million, respectively, outstanding on its seven-year, 2.00% Convertible Senior Notes. At March 31,June 30, 2020 and December 31, 2019, the fair value of the liability component of the Notes was approximately $310$340 million and $370 million, respectively. At March 31,June 30, 2020, the conversion rate was 9.0290 shares of common stock per $1,000 principal amount.
The 2.00% Convertible Senior Notes consisted of the following ($ in millions):
June 30,
2020		December 31, 2019
Liability Component:
Principal$403  $403  
Unamortized debt discount(14) (15) 
Long-term debt, net of unamortized debt discount389  388  
Unamortized deferred financing costs(5) (6) 
Net carrying amount$384  $382  
Equity Component$27  $27  
 March 31,
2020		 December 31, 2019
Liability Component:   
Principal$403
 $403
Unamortized debt discount(14) (15)
Long-term debt, net of unamortized debt discount389
 388
Unamortized deferred financing costs(6) (6)
Net carrying amount$383
 $382
Equity Component$27
 $27


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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
8. Long-Term Debt  – (continued)
For the quartersquarter and six month periods ended March 31,June 30, 2020 and 2019, the Company incurredrecognized $3 million and $6 million in interest expense, of $3 millionrespectively, related to the 2.00% Convertible Senior Notes, of which $1$2 million primarilyand $4 million, respectively, related to the principal portion outstanding. The remaining portion of the interest expense related to the amortization of debt discount.discount and deferred financing costs.
IMTT
At March 31,June 30, 2020 and December 31, 2019, IMTT had $600 million of fixed rate senior notes and $509 million of Tax-Exempt Bonds andoutstanding. IMTT also had $600 million in revolving credit facilities that remained undrawn.undrawn at June 30, 2020 and December 31, 2019. At March 31,June 30, 2020 and December 31, 2019, the fair value of the fixed rate senior notes was approximately $540$660 million and $635 million, respectively.
Atlantic Aviation
At March 31,June 30, 2020 and December 2019, Atlantic Aviation had $1,012$1,010 million and $1,015 million, respectively, outstanding on its seven-year senior secured first lien term loan facility. Atlantic Aviation also had a five-year, $350 million senior secured first lien revolving credit facility that was undrawn at December 31, 2019. During the quarter ended March 31, 2020,
As noted above, Atlantic Aviation borroweddrew down $275 million on its revolving credit facility.
facility on March 17, 2020. On April 30, 2020, Atlantic Aviation fully repaid the outstanding balance on its revolving credit facility and effective May 4, 2020, reduced the commitments on this facility to $10 million solely with respect to letters of credit currentlythen outstanding. The amendment of the facility eliminates any leverage-based maintenance covenant on the Atlantic Aviation term loan as long as the letters of credit issued under the facility are cash collateralized and rolled over to standalone letters of credit facilities upon renewal.
TABLE OF CONTENTS
MACQUARIE INFRASTRUCTURE CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
8. Long-Term Debt  – (continued)

MIC Hawaii
At March 31,June 30, 2020 and December 2019, Hawaii Gas had $100 million of fixed rate senior notes outstanding, that had a fair value of approximately $100 million and $105 million respectively.at both periods. Hawaii Gas also had an $80 million term loan outstanding and a $60 million revolving credit facility that wasremained undrawn at March 31,June 30, 2020 and December 31, 2019.
In addition, MIC Hawaii's solar facilities had a term loan outstanding of $14 million and $15 million at March 31,June 30, 2020 and December 31, 2019, respectively.
9. Derivative Instruments and Hedging Activities
Interest Rate Contracts
The Company and certain of its businesses have in place variable-rate debt. Management believes that it is prudent to limit the variability of a portion of the business’ interest payments. To meet this objective, the Company enters into interest rate agreements, primarily using interest rate swaps and from time to time using interest rate caps, to manage fluctuations in cash flows resulting from interest rate risk on a portion of its debt with a variable-rate component. Interest rate swaps change the variable-rate cash flow exposure on the debt obligations to fixed cash flows. Under the terms of the interest rate swaps, the Company receives variable interest rate payments and makes fixed interest rate payments, thereby creating the equivalent of fixed-rate debt for the portion of the debt that is swapped.
At March 31,June 30, 2020, the Company had $3,592$3,315 million of current and long-term debt (excluding adjustments for unamortized debt discounts), of which $865 million was economically hedged with interest rate contracts, $1,103 million was fixed rate debt and $1,624$1,347 million was unhedged. The Company does not use hedge accounting. All movements in the fair value of the interest rate derivatives are recorded directly through earnings.
Commodity Price Contracts
The risks associated with fluctuations in the prices that Hawaii Gas, a business within the MIC Hawaii reportable segment, pays for liquefied petroleum gas (LPG) is principally a result of market forces reflecting changes in supply and demand for LPG and other energy commodities. Hawaii Gas’ gross margin (revenue less cost of product sales excluding depreciation and amortization) is sensitive to changes in LPG supply costs and Hawaii Gas may not always be able to pass through cost increases fully or on a timely basis, particularly when product costs rise rapidly. In order to reduce the volatility of the business’ LPG market price risk, Hawaii Gas has used and expects to continue to use over-the-counter commodity derivative instruments. Hawaii Gas does not use commodity derivative instruments for speculative or trading purposes. Over-the-counter derivative instruments used by Hawaii Gas to hedge forecasted purchases of LPG are generally settled at expiration of the contract.
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
9. Derivative Instruments and Hedging Activities – (continued)
Financial Statement Location Disclosure for Derivative Instruments
The Company measures derivative instruments at fair value using the income approach which discounts the future net cash settlements expected under the derivative contracts to a present value. These valuations use primarily observable (level 2) inputs, including contractual terms, interest rates and yield curves observable at commonly quoted intervals.
The Company’s fair value measurements of its derivative instruments and the related location of the assets and liabilities within the consolidated condensed balance sheets at March 31,June 30, 2020 and December 31, 2019 were ($ in millions):
Assets (Liabilities) at Fair Value
Balance Sheet ClassificationJune 30,
2020		December 31, 2019
Fair value of derivative instruments - other current assets$—  $3  
Fair value of derivative instruments - other noncurrent assets—  2  
Total derivative contracts - assets$—  $5  
Fair value of derivative instruments - current liabilities$(8) $(7) 
Total derivative contracts – liabilities$(8) $(7) 
  Assets (Liabilities) at Fair Value
Balance Sheet Classification March 31,
2020		 December 31, 2019
Fair value of derivative instruments - other current assets $—
 $3
Fair value of derivative instruments - other noncurrent assets —
 2
Total derivative contracts - assets $—
 $5
Fair value of derivative instruments - current liabilities $(13) $(7)
Fair value of derivative instruments - other noncurrent liabilities (2) —
Total derivative contracts – liabilities $(15) $(7)

TABLE OF CONTENTS
MACQUARIE INFRASTRUCTURE CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
9. Derivative Instruments and Hedging Activities – (continued)

The Company’s hedging activities for the quarters and six months ended March 31,June 30, 2020 and 2019 and the related location within the consolidated condensed statements of operations were ($ in millions):
Income Statement Classification 
Amount of (Loss) Gain Recognized in
Consolidated Condensed Statements of Operations for the Quarters Ended March 31,
 2020 2019
Interest expense - interest rate caps $(3) $(2)
Interest expense - interest rate swaps (6) (2)
Cost of product sales - commodity swaps (5) 1
Total $(14) $(3)

Income Statement ClassificationAmount of (Loss) Gain Recognized in
Consolidated Condensed Statements of Operations
Quarter Ended June 30,Six Months Ended June 30,
2020201920202019
Interest expense - interest rate caps$—  $(4) $(3) $(6) 
Interest expense - interest rate swaps(1) (4) (7) (6) 
Cost of product sales - commodity swaps4  (6) (1) (5) 
Total$3  $(14) $(11) $(17) 
10. Stockholders' Equity
2016 Omnibus Employee Incentive Plan (2016 Plan)
On May 18, 2016, the Company adopted the 2016 Plan. The 2016 Plan provides for the issuance of equity awards to attract, retain, and motivate employees, consultants and others who perform services for the Company and its subsidiaries. Under the 2016 Plan, the Compensation Committee determines the persons who will receive awards, the time at which they are granted and the terms of the awards. Type of awards include stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, cash-based awards and other stock-based awards. Shares of common stock underlying forfeited awards and the shares withheld for the employee portion for taxes on vested awards are available for future grants. On March 28, 2019, the Company’s Board adopted Amendment No. 1 to the 2016 Plan (the Amendment), which was approved in May 2019 by the Company’s stockholders at the 2019 Annual Meeting of Shareholders. The Amendment, among other things, increased the number of shares of common stock available for grant under the 2016 Plan from 500,000 to 1,500,000.
Macquarie Infrastructure Corporation Short-Term Incentive Plan (STIP) for MIC Operating Businesses —  Restricted Stock Units (RSUs)
During the first quarter of 2019, the Company established the STIP to provide cash and stock-based incentives to eligible employees of its operating businesses under the Company’s 2016 Plan.Omnibus Employee Incentive Plan (2016 Plan). In general, the cash component comprises approximately 75% of any incentive award and is paid in a lump-sum. The remaining 25% of any incentive award is in the form of RSUs representing an interest in the common stock of the Company. RSUs are granted following assessment of performance against Key Performance Indicators post the one-year performance period and vest in two equal annual installments following the grant date.
The following represents unvested STIP RSU grants through March 31,June 30, 2020:
STIP Grants (at Target)
Number of RSUs
(in units)		Weighted Average Grant-Date Fair Value
(per share)
Unvested balance at December 31, 2019—  $—  
Granted55,66124.50  
Forfeited(1,119)24.50  
Unvested balance at June 30, 202054,542$24.50  
 STIP Grants
 
Number of RSUs
(in units)
 
Weighted Average Grant-Date Fair Value
(per share)
Unvested balance at December 31, 2019—
 $—
Granted55,661 24.50
Unvested balance at March 31, 202055,661 $24.50

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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
10. Stockholders’ Equity – (continued)
At March 31,June 30, 2020, the grant date fair value of the unvested awards was approximately $1 million, of which an insignificant amount of compensation expense was recorded for the quarter and six months ended March 31,June 30, 2020. At March 31,June 30, 2020, the unrecognized compensation cost related to unvested RSU awards is expected to be recognized over a weighted-average period of 1.51.3 years.
From time to time, the Company can issue RSUs to award or retain employees, or to attract new employees, or other reasons by providing special grants of RSUs. Vesting dates and terms can vary for each award at the discretion of the Company.
TABLE OF CONTENTS
MACQUARIE INFRASTRUCTURE CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
10. Stockholders’ Equity – (continued)

The following represents unvested Special RSU grants through March 31,June 30, 2020:
Special GrantsSpecial RSU Grants
Number of RSUs
(in units)
 
Weighted Average Grant-Date Fair Value
(per share)
Number of RSUs
(in units)		Weighted Average Grant-Date Fair Value
(per share)
Unvested balance at December 31, 2018—
 $—
Unvested balance at December 31, 2018—  $—  
Granted6,067 40.30
Granted6,06740.30  
Unvested balance at December 31, 20196,067 40.30
Unvested balance at December 31, 20196,06740.30  
Vested(1,100) 40.30
Vested(1,100)40.30  
Unvested balance at March 31, 20204,967 $40.30
Unvested balance at June 30, 2020Unvested balance at June 30, 20204,967$40.30  

Compensation expense related to the Special RSU grants for the quarter and six months ended March 31,June 30, 2020 was not significant and is expected to be recognized over a weighted-average period of 1.00.8 years.
Macquarie Infrastructure Corporation Long-Term Incentive Plan (LTIP) for MIC Operating Businesses —  Performance Stock Units (PSUs)
During the first quarter of 2019, the Company established the LTIP pursuant to which it may make stock-based incentive awards to eligible employees of its operating businesses. The awards would take the form of PSUs convertible into common stock of the Company as authorized under its 2016 Plan. The number of PSUs a participant may be awarded reflects a target level of performance by the participant. The participant may be awarded more (over performance limit) or less (threshold limit) than the target number of PSUs based on their achievements relative to Key Performance Indicators during the three-year performance period. Following finalization of the participant’s performance review at the end of the third year of the program, the Company may award the PSUs.
The following represents unvested LTIP PSU grants through March 31,June 30, 2020 at the target level of performance:
LTIP Grants (at Target)
Number of PSUs
(in units)		Weighted Average Grant-Date Fair Value
(per share)
Unvested balance at December 31, 2018—  $—  
Granted134,67139.59  
Forfeited(9,477)39.26  
Unvested balance at December 31, 2019125,19439.62  
Forfeited(5,416) 39.26  
Unvested balance at June 30, 2020119,778$39.64  
 LTIP (at Target)
 
Number of PSUs
(in units)
 
Weighted Average Grant-Date Fair Value
(per share)
Unvested balance at December 31, 2018—
 $—
Granted134,671 39.59
Forfeited(9,477) 39.26
Unvested balance at December 31, 2019125,194 39.62
Forfeited(2,952) 39.26
Unvested balance at March 31, 2020122,242 $39.63

At March 31,June 30, 2020, depending upon actual performance, the number of PSUs to be issued will vary from 0 to 225,400,221,088, net of forfeitures. At March 31,June 30, 2020, the grant date fair value of the unvested awards was approximately $5 million, reflecting target performance by all participants. During the quarter and six months ended March 31,June 30, 2020, the Company recognized an insignificant amountapproximately $1 million of compensation expense related to the LTIP. At March 31,June 30, 2020, the unrecognized compensation cost related to unvested PSU awards was approximately $4$3 million at target level performance. If target level performance is achieved, the unrecognized cost is expected to be recognized over a weighted-average period of 1.81.5 years.
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
10. Stockholders’ Equity – (continued)

Accumulated Other Comprehensive Loss, net of taxes
The following represents the changes and balances to the components of accumulated other comprehensive loss, net of taxes, for the quarterssix months ended March 31,June 30, 2020 and 2019 ($ in millions):
 Post-Retirement Benefit Plans, net of taxes 
Translation Adjustment, net of taxes(1)
 Total Stockholders’ Accumulated Other Comprehensive Loss, net of taxes
Balance at December 31, 2018$(16) $(14) $(30)
Balance at March 31, 2019$(16) $(14) $(30)
      
Balance at December 31, 2019$(25) $(12) $(37)
Translation adjustment—
 (3) (3)
Balance at March 31, 2020$(25) $(15) $(40)

Post-Retirement Benefit Plans, net of taxes
Translation Adjustment, net of taxes(1)
Total Stockholders’ Accumulated Other Comprehensive Loss, net of taxes
Balance at December 31, 2018$(16) $(14) $(30) 
Translation adjustment—  2  2  
Balance at June 30, 2019$(16) $(12) $(28) 
Balance at December 31, 2019$(25) $(12) $(37) 
Translation adjustment—  (1) (1) 
Balance at June 30, 2020$(25) $(13) $(38) 
___________
(1)Translation adjustment is presented net of tax benefit of $1 million for the quarter ended March 31, 2020.
(1)Translation adjustment is presented net of tax expense of $1 million for the six months ended June 30, 2019. Tax expense related to translation adjustment for the six months ended June 30, 2020 was insignificant.
11. Reportable Segments
At March 31,June 30, 2020, the Company’s businesses consisted of 4 reportable segments: IMTT, Atlantic Aviation, MIC Hawaii and Corporate and Other.
Effective October 1, 2018, BEC and substantially all of the Company’s portfolio of solar and wind power generation businesses were classified as discontinued operations and the Company’s Contracted Power segment was eliminated. All periods reflect this change. In July 2019, the Company completed the sales of its wind power generating portfolio and all but one of the assets in its solar power generating portfolio. The sale of the remaining solar facility closed during September 2019. On January 1, 2019, the Company also classified its majority interest in a renewable power development business as a discontinued operation, the sale of which closed in July 2019. A remaining relationship with a third-party developer of renewable power facilities has been reported as a component of Corporate and Other through the expiration of the relationship in July 2019. For additional information, see Note 4, “Discontinued Operations and Dispositions”.
IMTT
IMTT provides bulk liquid storage, handling and other services in North America through 17 terminals located in the U.S., 1 terminal in Quebec, Canada and 1 partially owned terminal in Newfoundland, Canada. IMTT derives the majority of its revenue from storage and handling of refined petroleum products, various chemicals, renewable fuels, and vegetable and tropical oils. Based on storage capacity, IMTT operates one of the largest third-party bulk liquid terminals businesses in the U.S.
Revenue from IMTT is generated from the following sources and recorded in service revenue.
Lease.  These are contracts with predominantly non-cancelable terms for access to and the use of storage capacity at the various terminals owned and operated by the business. These contracts generally require payments in exchange for the provision of storage capacity and product movement (throughput) throughout their term based on a fixed rate per barrel of capacity leased. A majority of the contracts include terms that adjust the fixed rate annually for inflation. These contracts are accounted for as operating leases and the related lease income is recognized in service revenue over the term of the contract based upon the rate specified. Revenue is recognized in accordance with ASC 842, Leases.
Terminal services.  Revenue from the provision of ancillary services includes activities such as heating, mixing and blending, and is recognized as the related services are performed (point in time) based on contract rates. Other terminal services also include payments received prior to the related services being performed or as a reimbursement for specific fixed asset additions or improvements related to a customer’s contract and are recorded as deferred revenue and ratably recognized as revenues over the contract term.
Other.  Other revenue is comprised primarily of railroad operations. These revenues are generally recognized at a point in time as services are performed.
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
11. Reportable Segments  – (continued)

Atlantic Aviation
Atlantic Aviation derives the majority of its revenue from jet fuel delivery services and from other airport services, including de-icing and aircraft hangar rental. All of the revenue of Atlantic Aviation is generated at airports in the U.S. The business currently operates at 70 airports.
Revenue from Atlantic Aviation is recorded in service revenue. Services provided by Atlantic Aviation include:
Fuel.  Revenue from jet fuel sales is recognized at a point in time as services are performed. Fuel services are recorded net of discounts and rebates.
Hangar.  Hangar rentals includes both month-to-month rentals and rentals from longer term contracts. Hangar rental revenue excludes transient customer overnight hangar usage (see Other FBO services below).
Other FBO services.  Other fixed based operation (FBO) services consist principally of de-icing services, landing, concession, transient overnight hangar usage, terminal use and fuel distribution fees that are recognized as sales of services. Revenue from these transactions is recorded based on the service fee earned.
MIC Hawaii
MIC Hawaii primarily comprises: (i) Hawaii Gas, Hawaii’s only government-franchised gas utility and an unregulated LPG distribution business providing gas and related services to commercial, residential and governmental customers; and (ii) controlling interests in 2 solar facilities on Oahu.
Revenue from the Hawaii Gas business is generated from the distribution and sales of synthetic natural gas (SNG), LPG, liquefied natural gas (LNG) and renewable natural gas (RNG). Revenue is primarily a function of the amount of SNG, LPG, LNG and RNG consumed by customers and the price per British Thermal Unit or gallon charged to customers. Revenue levels, without organic growth, will generally track global commodity prices, namely petroleum and natural gas, as its products are derived from these commodities.
Revenue from Hawaii Gas is recorded in product revenue. Hawaii Gas recognizes revenue when products are delivered. Sales of gas to customers are billed on a monthly-cycle basis. Earned but unbilled revenue is accrued and included in accounts receivable and revenue. This is based on the amount of gas that has been delivered but not billed to customers from the latest meter reading or billed delivery date to the end of an accounting period. The related costs are charged to expense.
The renewables projects within MIC Hawaii sell substantially all of the electricity generated at a fixed price to primarily electric utility customers pursuant to long-term power purchase agreements (PPAs) of 20 years. Substantially all of the PPAs are accounted for as operating leases and have no minimum lease payments and all of the lease income under these leases is recorded within product revenue when the electricity is delivered.
Corporate and Other
Corporate and Other comprises MIC Corporate (holding company headquarters in New York City) and a shared services center in Plano, Texas.
All of the MIC business segments are managed separately and management has chosen to organize the Company around the distinct products and services offered. Selected information by segment is presented in the following tables.
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
11. Reportable Segments  – (continued)

Revenue from external customers for the Company’s consolidated reportable segments were ($ in millions):
Quarter Ended June 30, 2020
IMTTAtlantic
Aviation		MIC
Hawaii		Total Reportable Segments
Service revenue
Terminal services$19  $—  $—  $19  
Lease100  —  —  100  
Fuel—  58  —  58  
Hangar—  24  —  24  
Other1  22  —  23  
Total service revenue120  104  —  224  
Product revenue
Lease—  —  1  1  
Gas—  —  32  32  
Other—  —  4  4  
Total product revenue—  —  37  37  
Total revenue$120  $104  $37  $261  
 Quarter Ended March 31, 2020
 IMTT 
Atlantic
Aviation
 
MIC
Hawaii
 Total Reportable Segments
Service revenue       
Terminal services$37
 $—
 $—
 $37
Lease93
 —
 —
 93
Fuel—
 150
 —
 150
Hangar—
 25
 —
 25
Other2
 49
 —
 51
Total service revenue$132
 $224
 $—
 $356
Product revenue       
Lease$—
 $—
 $1
 $1
Gas—
 —
 57
 57
Other—
 —
 2
 2
Total product revenue$—
 $—
 $60
 $60
Total revenue$132
 $224
 $60
 $416

Quarter Ended June 30, 2019
IMTTAtlantic
Aviation		MIC
Hawaii		Total Reportable Segments
Service revenue
Terminal services$22  $—  $—  $22  
Lease95  —  —  95  
Fuel—  173  —  173  
Hangar—  23  —  23  
Other2  40  —  42  
Total service revenue119  236  —  355  
Product revenue
Lease—  —  1  1  
Gas—  —  57  57  
Other—  —  3  3  
Total product revenue—  —  61  61  
Total revenue$119  $236  $61  $416  
 Quarter Ended March 31, 2019
 IMTT 
Atlantic
Aviation
 
MIC
Hawaii
 Intercompany Adjustments Total Reportable Segments
Service revenue         
Terminal services$24
 $—
 $—
 $—
 $24
Lease135
 —
 —
 (1) 134
Fuel—
 181
 —
 —
 181
Hangar—
 23
 —
 —
 23
Other2
 54
 —
 —
 56
Total service revenue$161
 $258
 $—
 $(1) $418
Product revenue         
Lease$—
 $—
 $1
 $—
 $1
Gas—
 —
 60
 —
 60
Other—
 —
 3
 —
 3
Total product revenue$—
 $—
 $64
 $—
 $64
Total revenue$161
 $258
 $64
 $(1) $482
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
11. Reportable Segments  – (continued)
Six Months Ended June 30, 2020
IMTTAtlantic
Aviation		MIC
Hawaii		Total Reportable Segments
Service revenue
Terminal services$56  $—  $—  $56  
Lease193  —  —  193  
Fuel—  208  —  208  
Hangar—  49  —  49  
Other3  71  —  74  
Total service revenue252  328  —  580  
Product revenue
Lease—  —  2  2  
Gas—  —  89  89  
Other—  —  6  6  
Total product revenue—  —  97  97  
Total revenue$252  $328  $97  $677  
Six Months Ended June 30, 2019
IMTTAtlantic
Aviation		MIC
Hawaii		Intercompany AdjustmentsTotal Reportable Segments
Service revenue
Terminal services$46  $—  $—  $—  $46  
Lease230  —  —  (1) 229  
Fuel—  354  —  —  354  
Hangar—  46  —  —  46  
Other4  94  —  —  98  
Total service revenue280  494  —  (1) 773  
Product revenue
Lease—  —  2  —  2  
Gas—  —  117  —  117  
Other—  —  6  —  6  
Total product revenue—  —  125  —  125  
Total revenue$280  $494  $125  $(1) $898  

In accordance with ASC 280, Segment Reporting, the Company has disclosed earnings before interest, taxes, depreciation and amortization (EBITDA) excluding non-cash items as a key performance indicator for the businesses. EBITDA excluding non-cash items is reflective of the businesses’ ability to effectively manage the amount 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 its businesses. The Company 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.
EBITDA excluding non-cash items for the Company’s consolidated reportable segments from continuing operations is shown in the tables below ($ in millions). Allocations of corporate expenses, intercompany fees and the tax effect have been excluded as they are eliminated in consolidation.

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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
11. Reportable Segments  – (continued)

Quarter Ended June 30, 2020
IMTTAtlantic
Aviation		MIC
Hawaii		Corporate and OtherTotal Reportable Segments
Net income (loss)$16  $(17) $5  $(12) $(8) 
Interest expense, net10  14  2  7  33  
Provision (benefit) for income taxes6  (6) 2  (7) (5) 
Depreciation and amortization34  25  4  —  63  
Fees to Manager-related party—  —  —  4  4  
Other non-cash expense (income), net2  1  (6) 1  (2) 
EBITDA excluding non-cash items$68  $17  $7  $(7) $85  

Quarter Ended June 30, 2019
IMTTAtlantic
Aviation		MIC
Hawaii		Corporate and OtherTotal Reportable Segments
Net income (loss)$9  $9  $2  $(14) $6  
Interest expense, net15  22  2  6  45  
Provision (benefit) for income taxes4  4  1  (7) 2  
Depreciation and amortization33  26  4  —  63  
Fees to Manager-related party—  —  —  7  7  
Other non-cash expense, net3  1  5  —  9  
EBITDA excluding non-cash items$64  $62  $14  $(8) $132  
Six Months Ended June 30, 2020
IMTTAtlantic
Aviation		MIC
Hawaii		Corporate and OtherTotal Reportable Segments
Net income (loss)$34  $(3) $8  $(36) $3  
Interest expense, net25  33  5  12  75  
Provision (benefit) for income taxes13  (1) 4  (12) 4  
Depreciation and amortization68  52  8  —  128  
Fees to Manager-related party—  —  —  11  11  
Other non-cash expense (income), net5  2  (3) 1  5  
EBITDA excluding non-cash items$145  $83  $22  $(24) $226  
Six Months Ended June 30, 2019
IMTTAtlantic
Aviation		MIC
Hawaii		Corporate and OtherTotal Reportable Segments
Net income (loss)$50  $34  $10  $(24) $70  
Interest expense, net28  41  5  10  84  
Provision (benefit) for income taxes20  13  4  (11) 26  
Depreciation and amortization66  52  8  —  126  
Fees to Manager-related party—  —  —  15  15  
Other non-cash expense, net4  1  7  1  13  
EBITDA excluding non-cash items$168  $141  $34  $(9) $334  
49
 Quarter Ended March 31, 2020
 IMTT 
Atlantic
Aviation
 
MIC
Hawaii
 Corporate and Other Total Reportable Segments
Net income (loss)$18
 $14
 $3
 $(24) $11
Interest expense, net15
 19
 3
 5
 42
Provision (benefit) for income taxes7
 5
 2
 (5) 9
Depreciation31
 16
 4
 —
 51
Amortization of intangibles3
 11
 —
 —
 14
Fees to Manager-related party—
 —
 —
 7
 7
Other non-cash expense, net3
 1
 3
 —
 7
EBITDA excluding non-cash items$77
 $66
 $15
 $(17) $141
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 Quarter Ended March 31, 2019
 IMTT 
Atlantic
Aviation
 
MIC
Hawaii
 Corporate and Other Total Reportable Segments
Net income (loss)$41
 $25
 $8
 $(10) $64
Interest expense, net13
 19
 3
 4
 39
Provision (benefit) for income taxes16
 9
 3
 (4) 24
Depreciation29
 15
 4
 —
 48
Amortization of intangibles4
 11
 —
 —
 15
Fees to Manager-related party—
 —
 —
 8
 8
Other non-cash expense, net1
 —
 2
 1
 4
EBITDA excluding non-cash items$104
 $79
 $20
 $(1) $202
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
11. Reportable Segments  – (continued)
Reconciliations of total reportable segments’ EBITDA excluding non-cash items to consolidated net (loss) income from continuing operations before income taxes were ($ in millions):
Quarter Ended June 30,Six Months Ended June 30,
2020201920202019
Total reportable segments EBITDA excluding non-cash items$85  $132  $226  $334  
Interest income—  1  —  4  
Interest expense(33) (46) (75) (88) 
Depreciation and amortization(63) (63) (128) (126) 
Fees to Manager-related party(4) (7) (11) (15) 
Other income (expense), net2  (9) (5) (13) 
Total consolidated net (loss) income from continuing
operations before income taxes		$(13) $8  $7  $96  
 Quarter Ended March 31,
 2020 2019
Total reportable segments EBITDA excluding non-cash items$141
 $202
Interest income—
 3
Interest expense(42) (42)
Depreciation(51) (48)
Amortization of intangibles(14) (15)
Fees to Manager-related party(7) (8)
Other expense, net(7) (4)
Total consolidated net income from continuing operations
   before income taxes
$20
 $88

Capital expenditures, on a cash basis, for the Company’s reportable segments were ($ in millions):
Quarter Ended June 30,Six Months Ended June 30,
2020201920202019
IMTT$51  $38  $106  $64  
Atlantic Aviation10  14  21  27  
MIC Hawaii3  5  8  10  
Corporate and Other—  1  —  1  
Total capital expenditures of reportable segments$64  $58  $135  $102  
 Quarter Ended March 31,
 2020 2019
IMTT$55
 $26
Atlantic Aviation11
 13
MIC Hawaii5
 5
Total capital expenditures of reportable segments$71
 $44

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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
11. Reportable Segments  – (continued)

Property, equipment, land and leasehold improvements, net, and total assets for the Company’s reportable segments and its reconciliation to consolidated total assets were ($ in millions):
Property, Equipment,
Land and Leasehold
Improvements, net		Total Assets
June 30,
2020		December 31, 2019June 30,
2020		December 31, 2019
IMTT$2,358  $2,323  $4,120  $4,172  
Atlantic Aviation562  567  1,934  2,060  
MIC Hawaii301  301  519  537  
Corporate and Other10  11  774  92  
Total consolidated assets$3,231  $3,202  $7,347  $6,861  
 
Property, Equipment,
Land and Leasehold
Improvements, net
 Total Assets
 March 31,
2020		 December 31, 2019 March 31,
2020		 December 31, 2019
IMTT$2,337
 $2,323
 $4,098
 $4,172
Atlantic Aviation568
 567
 1,967
 2,060
MIC Hawaii302
 301
 519
 537
Corporate and other13
 11
 1,042
 92
Total consolidated assets$3,220
 $3,202
 $7,626
 $6,861
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
12. Long-Term Contracted Revenue
Long-term contracted revenue consists of revenue from future minimum lease revenue accounted in accordance with ASC 842, Leases, and estimated revenue to be recognized in the future related to performance conditions that are unsatisfied or partially unsatisfied accounted for in accordance with ASC 606, Revenue from Contracts with Customers. The recognition pattern for contracts that are considered leases is generally consistent with the recognition pattern that would apply if such contracts were not accounted for as leases and were instead accounted for under ASC Topic 606. Accordingly, the Company has combined the required lessor disclosures for future lease income with the disclosures for contracted revenue in the table below. The following long-term contracted revenue were in existence at March 31,June 30, 2020 ($ in millions):
Lease
Revenue
(ASC 842)		Contract
Revenue
(ASC 606)		Total
Long-Term
Revenue
2020 remaining$180  $44  $224  
2021206  47  253  
2022121  32  153  
202380  23  103  
202433  9  42  
Thereafter127  20  147  
Total$747  $175  $922  
 
Lease
Revenue
(ASC 842)
 
Contract
Revenue
(ASC 606)
 
Total
Long-Term
Revenue
2020 remaining$251
 $59
 $310
2021181
 39
 220
2022103
 31
 134
202370
 22
 92
202428
 9
 37
Thereafter115
 19
 134
Total$748
 $179
 $927

The above table does not include the future minimum lease revenue from the renewable businesses within the MIC Hawaii reportable segment. The payments from these leases are considered variable as they are based on the output of the underlying assets (i.e. energy generated).
13. Related Party Transactions
Management Services
At March 31,June 30, 2020 and December 31, 2019, the Manager held 13,467,15613,600,444 shares and 13,253,791 shares, respectively, of the Company’s common stock. Pursuant to the terms of the Third Amended and Restated Management Services Agreement (Management Services Agreement), the Manager may sell these shares at any time. Under the Management Services Agreement, the Manager, at its option, may reinvest base management fees and performance fees, if any, in shares of the Company. The Manager’s holdings at March 31,June 30, 2020 represented 15.51%15.64% of the Company's outstanding common stock.
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
13. Related Party Transactions  – (continued)

Since January 1, 2019, the Company paid the Manager cash dividends on shares held for the following periods:
DeclaredPeriod Covered$ per
Share		Record DatePayable DateCash Paid to Manager
(in millions)
February 14, 2020Fourth quarter 2019$1.00  March 6, 2020March 11, 2020$13  
October 29, 2019Third quarter 20191.00  November 11, 2019November 14, 201913  
July 30, 2019Second quarter 20191.00  August 12, 2019August 15, 201913  
April 29, 2019First quarter 20191.00  May 13, 2019May 16, 201913  
February 14, 2019Fourth quarter 20181.00  March 4, 2019March 7, 201913  
Declared Period Covered $ per
Share		 Record Date Payable Date Cash Paid to Manager
(in millions)
February 14, 2020 Fourth quarter 2019 $1.00
 March 6, 2020 March 11, 2020 $13
October 29, 2019 Third quarter 2019 1.00
 November 11, 2019 November 14, 2019 13
July 30, 2019 Second quarter 2019 1.00
 August 12, 2019 August 15, 2019 13
April 29, 2019 First quarter 2019 1.00
 May 13, 2019 May 16, 2019 13
February 14, 2019 Fourth quarter 2018 1.00
 March 4, 2019 March 7, 2019 13

Under the Management Services Agreement, subject to the oversight and supervision of the Company’s Board, the Manager is responsible for and oversees the management of the Company’s operating businesses. In addition, the Manager has the right to appoint the Chairman of the Board, subject to minimum equity ownership, and to assign, or second, to the Company, two of its employees to serve as chief executive officer and chief financial officer of the Company and seconds or makes other personnel available as required.
In accordance with the Management Services Agreement, the Manager is entitled to a monthly base management fee based primarily on the Company’s market capitalization, and potentially a quarterly performance fee based on total stockholder
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(Unaudited)
13. Related Party Transactions  – (continued)
returns relative to a U.S. utilities index. Currently, the Manager has elected to reinvest the future base management fees and performance fees, if any, in additional shares. For the quartersquarter and six months ended March 31,June 30, 2020, and 2019, the Company incurred base management fees of $4 million and $11 million, respectively, compared with $7 million and $8$15 million for the quarter and six months ended June 30, 2019, respectively. The Company did not incur any performance fees for the quarters and six months periods ended March 31,June 30, 2020 and 2019.
Effective November 1, 2018, the Manager waived two elements of the base management fee to which it was entitled under the terms of the Management Services Agreement. In effect, the waivers cap the base management fee at 1% of the Company’s equity market capitalization less any cash balances at the holding company. The waiver applies only to the calculation of the base management fees and not to the remainder of the Management Services Agreement. The Manager reserves the right to revoke the waivers and revert to the prior terms of the Management Services Agreement, subject to providing the Company with not less than a one year notice. A revocation of the waiver would not trigger a recapture of previously waived fees. As part of the Disposition Agreement entered into between the Company and its Manager, discussed below, the Manager has agreed not to revoke the waiver during the term of the Disposition Agreement.
Disposition Agreement
To facilitate the Company’s pursuit of strategic alternatives, the Company announced that it has entered into a Disposition Agreement (Disposition Agreement) with its Manager on October 30, 2019 (see Exhibit 10.3 of the Form 10-K filed on February 25, 2020). Outside of the Disposition Agreement, the Company has limited ability to terminate the Management Services Agreement. The Disposition Agreement provides for the termination of the Company’s external management relationship with its Manager as to any businesses, or substantial portions thereof, that are sold (including if the Company itself is sold). In connection therewith, the Company will make a payment to its Manager of approximately 2.9% to 6.1% of the net proceeds generated in the event of such sales, subject to a minimum amount of payments for all sales in the aggregate in the event of a Qualifying Termination Event (QTE) of (i) $50 million plus (ii) 1.5% multiplied by proceeds in excess of $500 million in the aggregate. A ‘‘QTE’’ means (i) the sale of the Company or (ii) a transaction or series of transactions resulting in a third party or parties acquiring all the assets of the Company. The Disposition Agreement provides that the Management Services Agreement will terminate upon the occurrence of a QTE or upon mutual agreement of the parties. If the Management Services Agreement has not been terminated prior to the sixth anniversary of the Disposition Agreement, its Manager and its independent directors will engage in reasonable, good faith discussions regarding a potential internalization or other framework for a termination of the Management Services Agreement.
The Disposition Agreement provides that if a QTE occurs on or prior to January 1, 2022 (subject to extension under certain circumstances for up to six months thereafter), then the Company will pay its Manager an additional payment of $25 million. The Disposition Agreement further provides that its Manager will receive a make-whole payment following a QTE, to the extent that the aggregate management fees paid to its Manager through the date of the QTE were less than (i) $20 million per year for the two years following the date of the Disposition Agreement and (ii) $10 million per year for any period thereafter. In addition, following a QTE, its Manager will be paid in cash all accrued and unpaid management fees, including fees of $8.5 million waived in accordance with the Limited Waiver, which waived fees would have been payable through October 31, 2019. The Manager has agreed not to exercise its right to retract the Limited Waiver for periods after October 31, 2019 and prior to the termination of the
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
13. Related Party Transactions  – (continued)

Disposition Agreement. The Disposition Agreement will terminate on the earlier to occur of (i) the termination of the Management Services Agreement and (ii) the sixth anniversary of the agreement, subject to extension under certain circumstances if a transaction is pending.
The unpaid portion of the base management fees and performance fees, if any, at the end of each reporting period is included in Due to Manager-related party in the consolidated condensed balance sheets. The following table shows the Manager's reinvestment of its base management fees and performance fees, if any, in shares:
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MACQUARIE INFRASTRUCTURE CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
13. Related Party Transactions  – (continued)
Period 
Base Management
Fee Amount
($ in millions)
 
Performance
Fee Amount
($ in millions)
 
Shares
Issued
PeriodBase Management
Fee Amount
($ in millions)		Performance
Fee Amount
($ in millions)		Shares
Issued
2020 Activities:       2020 Activities:
Second quarter 2020Second quarter 2020$4  $—  146,452
(1)
First quarter 2020 $7
 $—
 181,617
(1) 
First quarter 20207  —  181,617  
       
2019 Activities:       2019 Activities:
Fourth quarter 2019 $9
 $—
 208,881
 Fourth quarter 2019$9  $—  208,881  
Third quarter 2019 8
 —
 201,827
 Third quarter 20198  —  201,827  
Second quarter 2019 7
 —
 192,103
 Second quarter 20197  —  192,103  
First quarter 2019 8
 —
 184,448
 First quarter 20198  —  184,448  
___________
(1)The Manager elected to reinvest all of the monthly base management fees for the first quarter of 2020 in new primary shares. The Company issued 181,617 shares for the quarter ended March 31, 2020, including 39,206 shares that were issued in April 2020 for the March 2020 monthly base management fee.
(1)The Manager elected to reinvest all of the monthly base management fees for the second quarter of 2020 in new primary shares. The Company issued 146,452 shares for the quarter ended June 30, 2020, including 52,370 shares that were issued in July 2020 for the June 2020 monthly base management fee.
The Manager is not entitled to any other compensation and all costs incurred by the Manager, including compensation of seconded staff, are paid by the Manager out of its base management fee. However, the Company is responsible for other direct costs including, but not limited to, expenses incurred in the administration or management of the Company and its subsidiaries, income taxes, audit and legal fees, acquisitions and dispositions and its compliance with applicable laws and regulations. During the quartersquarter and six months ended March 31,June 30, 2020, and 2019, the Manager charged the Company $288,000$16,000 and $246,000,$304,000, respectively, for reimbursement of out-of-pocket expenses.expenses compared with $331,000 and $577,000, respectively, for the quarter and six months ended June 30, 2019. The unpaid portion of the out-of-pocket expenses at the end of the reporting period is included inin Due to Manager-related party in the consolidated condensed balance sheets. During the quarter ended June 30, 2020, the Company expensed $60,000 in legal fees incurred by the Manager related to the Shareholder Litigation. For additional information, see Note 14, "Legal Proceedings and Contingencies", for further discussions.
Macquarie Group - Other Services
The Company uses the resources of the Macquarie Group with respect to a range of advisory, procurement, insurance, hedging, lending and other services. Engagements involving members of the Macquarie Group are reviewed and approved by the Audit Committee of the Company’s Board. Macquarie Group affiliates are engaged on an arm’s length basis and frequently as a member of a syndicate of providers whose other members establish the terms of the interaction.
Advisory Services
The Macquarie Group, and wholly-owned subsidiaries within the Macquarie Group, including Macquarie Bank Limited (MBL) and Macquarie Capital (USA) Inc. (MCUSA) have provided various advisory and other services and incurred expenses in connection with the Company’s equity raising activities, acquisitions and debt structuring for the Company and its businesses. Underwriting fees are recorded in stockholders’ equity as a direct cost of equity offerings. Advisory fees and out-of-pocket expenses relating to acquisitions are expensed as incurred. Debt arranging fees are deferred and amortized over the term of the credit facility.
Long-Term Debt
The Company has a $600 million senior secured revolving credit facility at the holding company level where Macquarie Capital Funding LLC has a $40 million commitment. For the quartersquarter and six months ended March 31,June 30, 2020, and 2019, the Company incurred interest expense of $87,000$274,000 and $34,000,$361,000, respectively, related to Macquarie Capital Funding LLC’s portion of the MIC senior secured revolving credit facility.facility compared with $41,000 and $75,000 for the quarter and six months ended June 30, 2019, respectively.
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
13. Related Party Transactions  – (continued)

Other Transactions
From time to time, indirect subsidiaries within Macquarie Group may enter into contracts with IMTT to lease capacity. For the quarter and six months ended March 31,June 30, 2020, revenue from these contracts totaled approximately $1 million.million and $2 million, respectively. The revenue from these contracts for the quarter and six months ended June 30, 2019 were insignificant.
Other Related Party Transactions
In the quartersix months ended March 31,June 30, 2020, the Company incurred $25,000 for advisory services from a former Board member.
14. Legal Proceedings and Contingencies
The Company and its subsidiaries are subject to legal proceedings arising in the ordinary course of business. In management’s opinion, the Company has adequate legal defenses and/or insurance coverage with respect to the eventuality of such actions and does not believe the outcome of any pending legal proceedings will be material to the Company’s financial position or result of operations.
Shareholder Litigation
On April 23, 2018, a complaint captioned City of Riviera Beach General Employees Retirement System v. Macquarie Infrastructure Corp., et al., Case 1:18-cv-03608 (VSB), was filed in the United States District Court for the Southern District of New York. A substantially identical complaint captioned Daniel Fajardo v. Macquarie Infrastructure Corporation, et al., Case No. 1:18-cv-03744 (VSB) was filed in the same court on April 27, 2018. Both complaints asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder on behalf of a putative class consisting of all purchasers of MIC common stock between February 22, 2016 and February 21, 2018. The named defendants in both cases were the Company and four current or former officers of MIC and one of its subsidiaries, IMTT Holdings LLC. The complaints in both actions allege that the Company and the individual defendants knowingly made material misstatements and omitted material facts in its public disclosures concerning the Company’s and IMTT’s business and the sustainability of the Company’s dividend to stockholders. On January 30, 2019, the Court issued an opinion and order consolidating the two cases, appointing Moab Partners, L.P. (Moab) as Lead Plaintiff and approving Moab’s selection of lead counsel. On February 20, 2019, Moab filed a consolidated class action complaint. In addition to the claims noted above, the consolidated class action complaint also asserts claims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 relating to the Company’s November 2016 secondary public offering of common stock. The consolidated amended complaint also adds Macquarie Infrastructure Management (USA) Inc., Barclays Capital Inc. and seven additional current or former officers or directors of MIC as defendants. On April 22, 2019, the Company and the other defendants filed motions to dismiss the consolidated class action complaint in its entirety, with prejudice. Briefing concluded on July 22, 2019. The Company intends to continue to vigorously contest the claims asserted, which the Company believes are entirely meritless.
On August 9, 2018, a shareholder derivative complaint captioned Phyllis Wright v. Liam Stewart, et al., Case No. 1:18-cv-07174 (VSB), was filed in the United States District Court for the Southern District of New York. A substantially identical complaint captioned Raymond Greenlee v. James Hooke, et al., Case No. 1:18-cv-09339 (VSB) was filed in the same court on October 12, 2018. A third and substantially similar shareholder derivative complaint captioned Kim Johnson v. Liam Stewart, et al., Case No. 1:18-cv-011062 (VSB) was filed in the same court on November 27, 2018. Each of the shareholder derivative complaints assert derivative claims on behalf of the Company against certain of its current and former officers and directors arising out of the same subject matter at issue in the City of Riviera Beach and Fajardo complaints discussed above. The causes of action asserted include violation of Section 14(a) of the Securities Exchange Act of 1934, breach of fiduciary duties, waste of corporate assets, unjust enrichment, and aiding and abetting breach of fiduciary duty. A motion to consolidate the three actions is currently pending. Proceedings in the Wright, Greenlee and Johnson cases are otherwise stayed pending resolution of the motions to dismiss the securities class actions described above. The Company expects that the named defendants will vigorously contest the claims asserted in the Wright, Greenlee and Johnson complaints.
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PART II
OTHER INFORMATION
Item 1. Legal Proceedings
There have been no changes to legal proceedings set forth under Part I, Item 3 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on February 25, 2020, except for the following:
IMTT Bayonne Terminal - Department of Labor
IMTT received a letter, dated February 21, 2020, from the United States Department of Labor Occupational Safety and Health Administration (OSHA) concerning an investigation involving violations of the Occupational Safety and Health Act of 1970. Under the letter, IMTT was issued nine violations related to a safety event that occurred at its Bayonne, New Jersey terminal in August 2019, which may result in penalties up to $122,000. IMTT is in discussions with OSHA to settle the citation and implement any corrective actions necessary.
Shareholder Litigation
On April 23, 2018, a complaint captioned City of Riviera Beach General Employees Retirement System v. Macquarie Infrastructure Corp., et al., Case 1:18-cv-03608 (VSB), was filed in the United States District Court for the Southern District of New York. A substantially identical complaint captioned Daniel Fajardo v. Macquarie Infrastructure Corporation, et al., Case No. 1:18-cv-03744 (VSB) was filed in the same court on April 27, 2018. Both complaints asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder on behalf of a putative class consisting of all purchasers of MIC common stock between February 22, 2016 and February 21, 2018. The named defendants in both cases were the Company and four current or former officers of MIC and one of its subsidiaries, IMTT Holdings LLC. The complaints in both actions allege that the Company and the individual defendants knowingly made material misstatements and omitted material facts in its public disclosures concerning the Company’s and IMTT’s business and the sustainability of the Company’s dividend to stockholders. On January 30, 2019, the Court issued an opinion and order consolidating the two cases, appointing Moab Partners, L.P. (Moab) as Lead Plaintiff and approving Moab’s selection of lead counsel. On February 20, 2019, Moab filed a consolidated class action complaint. In addition to the claims noted above, the consolidated class action complaint also asserts claims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 relating to the Company’s November 2016 secondary public offering of common stock. The consolidated amended complaint also adds Macquarie Infrastructure Management (USA) Inc., Barclays Capital Inc. and seven additional current or former officers or directors of MIC as defendants. On April 22, 2019, the Company and the other defendants filed motions to dismiss the consolidated class action complaint in its entirety, with prejudice. Briefing concluded on July 22, 2019. The Company intends to continue to vigorously contest the claims asserted, which the Company believes are entirely meritless.
On August 9, 2018, a shareholder derivative complaint captioned Phyllis Wright v. Liam Stewart, et al., Case No. 1:18-cv-07174 (VSB), was filed in the United States District Court for the Southern District of New York. A substantially identical complaint captioned Raymond Greenlee v. James Hooke, et al., Case No. 1:18-cv-09339 (VSB) was filed in the same court on October 12, 2018. A third and substantially similar shareholder derivative complaint captioned Kim Johnson v. Liam Stewart, et al., Case No. 1:18-cv-011062 (VSB) was filed in the same court on November 27, 2018. Each of the shareholder derivative complaints assert derivative claims on behalf of the Company against certain of its current and former officers and directors arising out of the same subject matter at issue in the City of Riviera Beach and Fajardo complaints discussed above. The causes of action asserted include violation of Section 14(a) of the Securities Exchange Act of 1934, breach of fiduciary duties, waste of corporate assets, unjust enrichment, and aiding and abetting breach of fiduciary duty. A motion to consolidate the three actions is currently pending. Proceedings in the Wright, Greenlee and Johnson cases are otherwise stayed pending resolution of the motions to dismiss the securities class actions described above. The Company expects that the named defendants will vigorously contest the claims asserted in the Wright, Greenlee and Johnson complaints.
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Item 1A. Risk Factors
There have been no material changes to the risk factors set forth under Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on February 25, 2020, except as follows:
COVID-19 is adversely impacting our businesses and could have a material adverse effect on our results of operations, financial condition, liquidity, capital expenditures and the trading value of our securities.
COVID-19 has negatively impacted the global economy, disrupted financial markets, disrupted supply chains, significantly reduced travel and interrupted business activity. Federal, state and local governments have implemented mitigation measures including travel restrictions, stay-at-home orders, border closings, restrictions on public gatherings, social distancing, shelter-in-place restrictions and limitations on business operations. Although the Company’s businesses are considered essential services, these government actions have adversely affected the ability of our employees, customers, suppliers and other business partners to conduct business activities, and could do so for an extended period of time. This could have a material adverse effect on our results of operations, financial condition, liquidity, capital expenditures and the trading value of our securities. In particular, risks include:
•
•Impact on demand for our services and supply chain disruption. Restrictions on travel, public gatherings and stay-at-home orders have significantly reduced the demand for Atlantic Aviation’s services, including jet fuel sales and ancillary services. Tourism in Hawaii has significantly declined, resulting in the scaling back or closure of hotels and restaurants, which has significantly reduced the volume of gas required by Hawaii Gas’ commercial and industrial customers. We cannot predict whether the continued impact of the pandemic will permanently change our customers' behavior, such as a permanent reduction in business travel or a general reluctance to use air travel for leisure, which could materially impact our businesses. In addition, disruptions in the supply chain could result in delay or an inability to obtain products, supplies and services needed in our operations.
•Impact on employees and on cybersecurity. Many of our management and office personnel are working remotely, and many employees at our facilities are working reduced hours, are on furlough and/or are abiding by social distancing procedures. In addition, our operations may be negatively affected by employee illness and quarantines. Further, our management team has been required to devote large amounts of time and resources to mitigate the impact of the pandemic, thereby diverting attention from other Company priorities. In addition, the large scale remote working environment increases the risks posed by information technology systems breaches.
•Impact on liquidity and financial metrics. The ongoing effect of the pandemic on our business has impacted our liquidity position and the cost of and ability to access funds from financial institutions and the capital markets, has caused a deterioration in our financial metrics or the business environment that has negatively impacted our credit ratings, and could make it more difficult to meet the financial covenants in our credit facilities.
•Impact on capital expenditures and costs. We are reviewing and deferring certain non-essential capital expenditures, including certain growth capital expenditures. If we are unable to deploy growth capital as planned, our long term development prospects and ability to meet competitive challenges could be negatively impacted. We are also experiencing an increase in costs as a result of the Company’s pandemic response measures.
•Impact on our customers' ability to pay. The pandemic's impact on the financial condition and operating results of our customers, and on the business environment generally, may result in delayed payments from customers and uncollectable accounts receivable, and could also result in the bankruptcy, insolvency or cessation of the business of certain of our customers.
•Impact on trading and asset value. COVID-19 has resulted in volatile trading markets and meaningfully lower stock prices for many companies, including the trading price of our common stock. In addition, the ongoing impact of the pandemic on our businesses could cause an impairment to goodwill or long-lived assets of the Company.
• Restrictions on travel, public gatherings and stay-at-home orders have significantly reduced the demand for Atlantic Aviation’s services, including jet fuel sales and ancillary services. Tourism in Hawaii has significantly declined, resulting in the scaling back or closure of hotels and restaurants, which has significantly reduced the volume of gas required by Hawaii Gas’ commercial and industrial customers. In addition, disruptions in the supply chain could result in delay or an inability to obtain products, supplies and services needed in our operations.
•
Impact on employees and on cybersecurity. Many of our management and office personnel are working remotely, and many employees at our facilities are working reduced hours, are on furlough and/or are abiding by social distancing procedures. In addition, our operations may be negatively affected by employee illness and quarantines. Further, our management team has been required to devote large amounts of time and resources to mitigate the impact of the pandemic, thereby diverting attention from other Company priorities. In addition, the large scale remote working environment increases the risk that our information technology systems could be breached.
•
Impact on liquidity and financial metrics. The ongoing effect of the pandemic on our business has impacted our liquidity position and the cost of and ability to access funds from financial institutions and the capital markets, has caused a deterioration in our financial metrics or the business environment that has negatively impacts our credit ratings, and could make it more difficult to meet the financial covenants in our credit facilities.
•
Impact on capital expenditures and costs. We are reviewing and deferring certain non-essential capital expenditures, including certain growth capital expenditures. If we are unable to deploy growth capital as planned, our long term development prospects and ability to meet competitive challenges could be negatively impacted. We are also experiencing an increase in costs as a result of the Company’s pandemic response measures.
•
Impact on our customers' ability to pay. The pandemic's impact on the financial condition and operating results of our customers, and on the business environment generally, may result in delayed payments from customers and uncollectable accounts receivable, and could also result in the bankruptcy, insolvency or cessation of the business of certain of our customers.
•
Impact on trading and asset value. COVID-19 has resulted in volatile trading markets and meaningfully lower stock prices for many companies, including the trading price of our common stock. In addition, the ongoing impact of the pandemic on our businesses could cause an impairment to goodwill or long-lived assets of the Company.
•
Impact on our pursuit of strategic alternatives. In October 2019, we announced that we were pursuing strategic alternatives, which could result in, among other things, a sale of one or more of our businesses or potentially of the Company. COVID-19 has adversely affected economies and financial markets worldwide, impacted our stock price, affected the availability of financing, restricted travel and business activity, and adversely impacted the businesses of parties that may be interested in engaging in a strategic transaction. These effects have resulted in a slowdown in our process of pursuing strategic alternatives, and may make it more difficult for us to complete any strategic transactions at favorable valuations or at all.
The effects of COVID-19 on our businesses may continue for an extended period, and the ultimate impact on the Company of the pandemic will depend on future developments which are highly uncertain and cannot be predicted including, without limitation, the duration and severity of the pandemic, the duration of governmental mitigation measures, the effectiveness of the actions taken to contain and treat the disease, and the length of time it takes for normal economic and operating conditions to resume.
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resume. The situation surrounding COVID-19 remains fluid and the potential for material effects on our operating results, financial condition and liquidity increases the longer the pandemic impacts activity levels in the U.S. and globally.
COVID-19 could negatively impact IMTT’s business.
Although IMTT has recently experienced an increase in storage demand, the sustained impacts of COVID-19 could result in decreased demand for certain products that IMTT stores and for certain ancillary services (such as heating, blending and transportation) that IMTT provides. In addition, IMTT’s New York Harbor and Lower Mississippi River operations are located in geographic areas that have been severely affected by the pandemic, and IMTT could be negatively impacted by employee illness, quarantines and governmental orders and health directives put in place as mitigation measures. COVID-19 could adversely impact the operating results, financial condition and liquidity of IMTT.
COVID-19 has significantly reduced demand for Atlantic Aviation’s products and services.
The general reaction to COVID-19, as well as governmental travel restrictions, quarantines, shelter-in-placeshelter in place orders and prohibitions on large public gatherings, as well asand the deterioration in economic conditions, have significantly reduced GA activity and the demand for Atlantic Aviation’s products and services. At the end of March and April 2020, Atlantic experienced a decline in jet fuel sales of approximately 80%. The sustained impact of COVID-19 could have a material adverse effect on the results of operations, financial condition and liquidity of Atlantic Aviation.
COVID-19 has significantly reduced demand for Hawaii Gas’ products and services, and Hawaii Gas may experience supply chain disruption.
COVID-19 has greatly reduced the number of visitors to Hawaii, which has significantly reduced the demand for gas from Hawaii Gas' commercial customers, particularly hotels and restaurants. Hawaii Gas’ synthetic natural gas (SNG) plant is subject to minimum operating thresholds, and if demand declines such that the SNG plant is not producing the requisite SNG daily volume of SNG to operate safely, the plant will be required to stop production until minimum thresholds arecan again be met. While Hawaii Gas has developed and tested alternative plans to continue delivery of gas to its utility customers in the event production at the SNG plant is stopped, there can be no assurances that these alternative plans would operate as designed or be as effective and efficient from an operating or financial performance perspective as operating the SNG plant to produce gas. Additionally, the reliability and pricing of the feedstock supply for the SNG plant could be adversely impacted by COVID-19, potentially resulting in higher cost of gas which would be passed onto Hawaii Gas' customers. The sustained impact of COVID-19 could have a material adverse effect on the results of operations, financial condition and liquidity of MIC Hawaii.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
Atlantic Aviation FBO Inc. (“AA FBO”), a wholly-owned indirect subsidiary of the Company, entered into the First Amendment (the “Amendment”), dated as of April 29, 2020, among AA FBO, Atlantic Aviation FBO Holdings LLC (“Holdings”), the direct parent of AA FBO, JPMorgan Chase Bank, N.A., as administrative agent and the several lenders party thereto, to the Credit Agreement, dated as of December 6, 2018 (the “AA Credit Agreement”), among AA FBO, Holdings, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent and the several lenders party thereto. Pursuant to the Amendment, effective May 4, 2020, revolving commitments were reduced to $10 million under the revolving credit facility portion of the AA Credit Agreement, and in connection with the Amendment on April 30, 2020, AA FBO repaid in full the outstanding revolving credit facility. Prior to the reduction in the revolving credit facility size, the debt provided for in the AA Credit Agreement was comprised of a $350 million revolving credit facility and a $1,012 million term loan. Such term loan remains outstanding. The remaining $10 million revolving commitments are staying in place solely with respect to the existing letters of credit currently outstanding under the revolving credit facility (and such commitments will be reduced after each existing letter of credit expires or otherwise terminates). The Amendment also provides that the covenant in the AA Credit Agreement by AA FBO to maintain its ratio of net debt/EBITDA at or below 5.5x over a trailing twelve-month period will not be applicable so long as letters of credit issued under the AA Credit Agreement are cash collateralized and rolled over to standalone letter of credit facilities upon renewal.None.
Certain of the lenders under the AA Credit Agreement and the Amendment and their related entities have provided, and may in the future provide, commercial and investment banking or other financial services to the Company and its businesses, for which they have received, and may in the future receive, customary compensation and expense reimbursement.
Item 6. Exhibits
An exhibit index has been filed as part of this Report on page E-1 and is incorporated herein by reference.
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EXHIBIT INDEX
NumberDescription
Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on May 21, 2015).
Amended and Restated Bylaws of the Registrant, dated as of February 18, 2016 (incorporated by reference to Exhibit 3.2 of the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC on February 23, 2016).
First Amendment, dated as of April 29, 2020, to the Credit Agreement, dated as of December 6, 2018, among Atlantic Aviation FBO Inc., Atlantic Aviation FBO Holdings Inc.,LLC, JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto.thereto (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed with the SEC on May 5, 2020).
Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer
Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer
Section 1350 Certification of Chief Executive Officer
Section 1350 Certification of Chief Financial Officer
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
104The cover page from the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31,June 30, 2020, formatted in XBRL and contained in Exhibit 101.
___________
*
* Filed herewith.
**Furnished herewith.

** Furnished herewith.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
MACQUARIE INFRASTRUCTURE CORPORATION
(Registrant)
Dated: August 4, 2020
MACQUARIE INFRASTRUCTURE CORPORATION
(Registrant)
By:
Dated: May 5, 2020By:/s/ Christopher Frost
Name: Christopher Frost
Title:  Chief Executive Officer
Dated: May 5,August 4, 2020By:/s/ Liam Stewart
Name: Liam Stewart
Title:  Chief Financial Officer

E-2