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Macquarie Infrastructure (MIC)

Participants
Christopher Frost CEO
Liam Stewart CFO
Jay Davis Managing Director, IR
TJ Schultz RBC Capital Markets
Ian Zaffino Oppenheimer & Co
Jeremy Tonet JPMorgan
Tristan Richardson SunTrust Robinson Humphrey
Christine Cho Barclays
Rob Norfleet ALEMBIC Global Advisors
Randal Horowitz Beverly Hills Investment
Call transcript
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Operator

Good day, and welcome to the Macquarie Infrastructure Corporation Fourth Quarter 2017 Earnings Conference Call. Today's call is being recorded. At this time, I'd like to turn the conference over to Mr. Jay Davis, Managing Director of Investor Relations. Please go ahead sir.

Jay Davis

Jimmy. you, Thank welcome conference and full to Infrastructure Macquarie of Thank this once covering earnings call, and the Corporation's XXXX. you again fourth year quarter

the cast Our is being today web call open is to media. and

be In and addition performance call, financial from results published These downloaded we've and report the were quarterly copies on press last summarizing with filed materials on Exchange site, the release Securities this web a and www.macquarie.com/mic. discussing to our may financial the evening, Form released our XX-K Commission.

whole Before and This has available security of Corporation's of rights turning prior the this Frost, presentation generally remind Macquarie this recording, prohibited. the of or presentation consent proceedings We Corporation, that public over information written to is some in other the reserved. This a in does that solicitation or nonpublic an any solely material are forward-looking contains uncertainty presentation is statements. words Chief and instrument. let not cases, Infrastructure may, in to Infrastructure or part, you purposes all forward-looking future on Christopher Executive of any rebroadcast sell Officer, without identify prepared and convey to events information outcomes buy or based Macquarie to been use The Any is contain presentation or offer is proprietary use me not statements. these information. for presentation

under Risk of in and known that actual risks statements XX-K. differ results our in are of the description Factors Forward-looking uncertainties. could A a caption presentation Form to appears risks this our subject cause number to

expressed by statements. from could the differ results, actual or performance, or implied Our those in forward-looking materially prospects opportunities

after made events we of risks are in also currently These discussed of differ. are this forward-looking The cause the our Additional forward-looking could may statements presentation actual as occur. date statements any results to not otherwise, which aware as of not this whether publicly except to new the as update required presentation, or of this a or forward-looking undertake update law. obligation no events We result completion by presentation. revise of future information,

In Infrastructure Corporation's Liam Executive Financial pleasure Infrastructure Frost. time, Corporation's addition is this it Stewart. to today's introduce call to Officer, my Officer, is Frost, Chief in Christopher Macquarie Macquarie participating Chief Christopher At

Christopher Frost

Jay, to you, participating thanks in earnings you morning. Thank call our and this of those conference

morning. We to this are a differently going bit things do

While share than of call. A of capital. you following portion cash year us of us $X.XX would portion this I our growth X% recapping results, about per the we of clearly in share. billion on XXXX supported in there generation year full ended, say, to basis. over a The of address. methods like cash $XXX free deploying EBITDA increases, our the to it than the were have per encourage investors other a additional successfully the dividend extent more spend a you contact by first quarter business flow generated and with good X% fourth Suffice more the just call would that that result result increasing normally and questions the the growth are bit the to To up XXXX, for

Decisions enterprise necessary in of company the have years of but believe the we difficult the health how that the analysis, to decisions On about ensure take financial back made will forward. the detailed ahead. we

timing is would $XXX remain occur level debt-to-EBITDA deleveraging, elements; over that from at at leverage that we with critical move first, or basically three of likely XXXX of million XXXX actual the on of year. various X.X That to of guidance natural funding on pro focused is been net EBITDA won't it of that any the higher flat course the typically more $XXX our The also means, end means level forma million. to a that projects. year times will Accordingly, our or result EBITDA as depend for benefit have expansion. We

obligation element, takes in underway. form that invest so. is our and second The do our The desire to projects to the of our of in completing growth obligation are cases, some the currently business

example, For wanting for attractive leases us flow the in of comes that of The and hangars to some moment, Atlantic of deploy the is The highest projects, have cash generate increases dividends in investment which completing the of to at completion or IMTT. assets Aviation; will the into term repurposing in future. the committed the the BEC of at and II. by we construction our terminals, capital desire of the from priority

The limited element, of to is our growth continued the fund our markets third access capital to business.

to access We our further want point, increase rating, leverage, markets, increase and stress don't debt want limited some at to grade to you investment we unless leverage. credit and have

not have would that in We access equity limited overly at the be prices market, dilutive.

So growth funding our limits of obligations us internally opportunities resources. using to generated and

reducing our or assets recycling from resulting dividend. resources Specifically,

to forecast our by overall the our of of indebtedness. that sale the dividend. concluded assets our cash flow coming in for as intend year, our have increased a portion sure, be free To pay certain to XX% our financial reduction the flow both forward involves for out of flexibility, a between in growth cash But path investment majority the on continue based dividend. We we be and to and used increase will reducing and our XX%

they successful the flow dividends. generating cash are in MIC these of of again in efforts, believe we we once assets including the repurposing and growth in will some IMTT, result Assuming of

being IMTT. shale the life produced is of U.S. and happened? customers declining, a to for these St. did a they X Many for at market. facility oil to amount is a oils, firms residual The contracts terminate exited a had there in global of Not in a oil, in and only what contracts, early those To answer with But long fourth be commodity. of have decline of group issue the their of down do shut in are January is the domestically, and going of cases, in heavy term December X in terminated one structural in less they X significant the businesses. in number do backwardation, it in IMTT's defined of product feedstocks of the customers some to demand Prices oil. one been is XX.XX% refineries. this is X and Rose. Utilization So oil product, XXXX having a an our averaged one clear, and the In as capacity and market, consequence industry. quarter. broadly of operations XX.X% revolution

it the day XX.X%. year, was On of last the

see to repurpose This the storage tanks conditions. opportunistically, We new. is some of oil and believe changing product, year, dealing in of the We They with us the in X we declining term decrease EBITDA than various terminated in demand we utilization given are growing XXXX nothing year-on-year categories. range. back mid better to bulk this The turn the one to conclusion, to of extrapolate in spent X repurposed into utilization impact the response the IMTT of this off and XX% other to tanks at issue long primary oil. all product the month in we repurposing As average looking driver tanks handling we has we decline and is market structural the XXXX. expect on in IMTT these the contracts the behind liquids other lead now, options XXXX. need for last

our end mean is excess projects. proactively highest intend Again, repurposing a the We opportunities. per the the the in to with not the lower to strategy. supply over IMTT of this, year million and of products past use or is above XXXX demand is XX% as recover are of and our of to average could we A of imbalances of including repurposing the capital. for XX%. there of have that the in invest that of with historical agricultural such ethanol. we some river certain will priority IMTT's have supply. decade empty These be tank third for we three will or to demand Depending years, products, products, dynamics to the a various of Waiting $XX its the the EBITDA of $XXX this on said expect further returns move, specific year of capacity, in By market repurposing range, Analysis of million categories, We our tanks. now distillates approximately feature approximately on product current advantage better generate. year, to growth growth take the per deploy expect key in outlook. each petroleum Of other show likely IMTT will location, repurposing certain We we next expect the to the that between Mississippi to portions return level. is tanks, important capacity utilization

does investment meet What new three the we First, tax not four to investment Given growth can of to the market, the tank in already a see the already of to of that do cost exists, or in to EBITDA The our capacity federal in expand serves. payback, changing upgrading for other else MIC? continue IMTT the as markets, relative be income see the on high a horizon preclude short we perpetuation as repurposing yield. the needs project, years. means

tax the growth create strong and and more are investment of offset can U.S. of has to the than businesses, reform recent the invest good yield. code substantial a Although these in some tax headwinds, valuable by incentive that created a

the expect on act been We have tax impact positive prospects. a for that to we our time, saying net have some

of We capitalized flow will exempt but that as do benefit some change many part One the the in requires a headwinds has a know, agreement IMTT in with federal -- tax you face from with debtholders. exempt will is in continue tax resulting we that a The to to will through to tax believe rates term. debt. case, the be IMTT; short

the $XXX the the and will the interest is for decreased required basis expense As corporate outstanding exempt bondholders has of the This reduction million of make-whole points IMTT change. to of tax in an debt on XX% of a rates tax increase from value in result XX the result roughly XX%, tax exemption to approximately in IMTT. of

in headwinds act. the on versus We cash be to X%. expectations our drag free flow to passage expect approximately these tax prior of of This a XXXX the MIC's

at immediate provides MIC deploy federal federal from On of to our act impact tax income on the And the capital federal the expect tax a per deploy Under expensing believe We tax unlikely in to into material qualifying incentive MIC of depreciation related average million continuing by an to growth liability bonus $XXX of until XXXX. that is in in projects, rules, to or as consolidation we material year to have deployments. growth a expected other liability the new form do hand, the considerable tax have increasing those not consolidation is income XXXX. the I to act until a MIC standpoint tax have yield. present, mentioned, income positive

from that drive quality tax While in perspective, years. the a free the that flow good a opportunities dog. The is fact we growth we several cash thing generation to cash the wag shouldn't [indiscernible] be next will pursuing over have is,

our Second, we sheet balance grade find value strengthening rating. and investment in our credit maintaining

as lower into clearly have monetary to a a prefer leverage will We is level, of period we tightening. head what

is lower leverage times net Our so intend it. debt-to-EBITDA, to we nearly five

available For our to of that we reason, repayment. intend to debt a portion apply resources

development a business Our can of objective businesses. continue our clear generation is and think the in high And in of renewed times, more see buildout today. from reduce the growth platforms to invest we continuing part good deployed our it invest third, into very we simple; and of a is between to MIC than this achieve like number aggregate, cash are would by X mix. to path projects, million our bolt-on XXXX and we current in today, we quality In in dividends, that to to X.X where the and including growth leverage BEC. given of We acquisitions $XXX

BEC a investments XXXX's generate the a the of in year. on II and was generation $XX of were in this The only projects two impact development not the that little late things; over contribution a fact until EBITDA. total, in would was that made million However, results investment EBITDA like in the modest certain consequence year, financial the financial

or putting in some that expected million of in top XXXX projects of BEC annualized anticipate beyond. projects, projects the we XXXX an approved, of have work been same needing point allocated to is, about to an This our contribution completion We be well. $XX in year, in on capital completion are these good example. some is The million The these be However, half already incremental have on about additional in of of timing a is normal our million to included year. of completion of expect likely forecast the capital $XX a cases $XX investments, to results, million of produce XXXX. our and II we Based EBITDA in the $XXX of commenced.

forecasting attractive repurposing to of deployment are particularly related IMTT We the new the also previously. of mentioned into projects, capital those

leverage. these support As of certainly said, close recycling generated credit to our against capacity guidance per dividend will required facilities to remainder. internally we need with quarter solution growth that to agenda on our remainder, retaining anticipate to reducing We to fund is the Therefore, in access have But initiatives. goes be our our with the capital. half share have I our overall we ample to objective resources. fund XXXX, generate capital per that by of the Based $X

sale recycling to the first of the the As be interest partial we BEC. in mentioned is release, in of our these considered, press opportunities

addition Since $XXX a services of access of nearly BEC To-date, the invested us to and redeployment over than BEC. agenda, allow second we capital for into generating we more into sale value years. have BEC million a XXXX, have we portion several In ancillary created some monetize our various the growth of to would of we have past believe gas construction II. a completed lateral, added developed slightly to the

asset Could there for sale and Our of our But like is taken continued is OMI out MIC assessment be paying yes. of strong the we different is Could in an dividends? a suggests another will demand capital per $X.X reinvestment. generate subsidiary, share to market, opportunity potentially have simplify for BEC only Solutions of the a have path? a answer not portion The IMTT we Environmental BEC. example.

our per cash XXXX. in the free Our and share forecast business expect to $X of flow Even cash the in businesses free we per share in still $X.XX count, has generated and share XXXX. produce between $X.XX increased reduction IMTT contribution with flow from and

to or it rate. our portion Our payout likely income our the including been ability it better than agenda, MIC's have into have generation our point, and question, end ratio with have X% our tax growth would credit maintaining could some of sustain day, called solid of attractive for at at federal done. foregoing conclusion, But foregoing meant rating would XXXX, an would At businesses year-over-year. but our policy, either yield. In growth have that, cash grade results increased, investment some the produced an increasing dividend of

be consequence of for a demand X recent St. results Rose, contribution changes IMTT's handling the to As at our in oil to we now expect down. XXXX

made We expect will businesses, partially IMTT, the of other of our by offset full investments by performance year be the the year. continued stable rest the and during past impact the decrease of

of federal fund to believe tax capital contribute income to our reducing in a and XXXX dividend, share are incremental growth forecast sheet retained of With these of a reducing Among repurposing portion to as in in prepared future. favorable will take for tanks expected the questions. be and the to I will the of phone certain trends some that, are who wrap operator, call, lines turn bulk growth our portion your our the proceedings of generation result and generate quarter. dividend that $X The be to the will used to We we of over per will cash projects, IMTT's our advantage open per the up liquids. balance the strengthen yield,

Operator

Instructions]. [Operator

RBC Markets. Our first question from from TJ Capital comes Schultz

Your line is now open.

TJ Schultz

is segment? Hi to remaining customers lose types you those IMTT, many exposure good and of that How customers morning. within at did what your

Christopher Frost

was number that would question. I the we the response it customers very dozen In half a Thanks of sort customers. of much for say, to lost,

your the oil, exposed to what to question -- exposure, remaining our X is think XXXX. our some respect the to in utilization [indiscernible] extent with is, that gave terms you I we that, In that average indication exposure of of forecast

of As on on XXXX looking sort we of said, average as we sort at XX%. -- said, around average in

TJ Schultz

that those for I have are up was, well? forecast, anticipating in other product? as renewed the be renewal there two are coming that not in know that you I also question guess customers are Okay. contracts the

Christopher Frost

those of to think that for considerable come question, and are renewal, time, good the I we spent of and Yeah, TJ, those and up reviewing it's January, a after a contracts amount have expected events December has are will taking we those to that prudent that as renewed, not. informed rates a our that think view, and that and for to. contracts I referred very And XXXX, be will forecast the utilization

contracts feeling and prospects that renewal are up for are we So XXXX the in remaining terms good in of renewing for those. our pretty coming

TJ Schultz

and Okay, understood. already bit XXXX. to a Debt higher should leverage tick investment was metrics, tied grade fairly in now

the the investment strategy asset agencies the kind on potential grade and to at expectation here or So shift sales, of cut whether what's remain discussed --? amid this with your have dividend you all, an

Liam Stewart

So it's TJ, question. good It's Liam. a

obviously that relative the the in an then of business trajectory process are the with agencies, the to timing discussion over going and the one, two, be of projects. dialog of year, having and course We the to it's ongoing those of the --

ended times pro have the and to forma, the relative the with year the will year, agencies so dialog we we trajectory the at a X.X the over the times, X.X course business. So times headline, of five below of

of to delev over Our XXXX. intention the is course for

TJ Schultz

there a to a Is stay your the or grade investment necessity in mind? Okay. piece BEC sell to

Liam Stewart

to said earlier our respect in perspective, with rating. very is grade that we balancing to it's call, opportunities as IMTT compelling Well necessity investment there repurposing, investment BEC the But from maintain the what of sell grade while rating. are in no at piece a believe, the of maintaining Chris

TJ Schultz

of overall the you lastly have been mix flow aviation just the some the of as And of cyclicality. me, cash mix, for just historically of mindful the Okay. guys given part segment

couple you sale consider BEC, anticipate potential portfolio, and into FBOs cash given So next the for the still of selling any? lower of the would years, adding flow IMTT now over some or

Liam Stewart

what that on to think be of mix. is extent, said, dependent range X sort Obviously, between Chris will and is business I times. target that our some X.X

While it you Atlantic is is a fantastic indicate, as an uncontracted business, business.

part business that will So in industry Atlantic. industry. The that remains we fragmented trajectory a and X.X very to add times, the of be the and other land driven where between X by opportunities the we

mix diversity obviously key mindful think our represents business, MIC the today, a is that of element of we overall and are the thesis. investment We the of

would but those are within grade fell So those, look there We add them, would are opportunities, network. investment way the in add look synergistic that a to that compelling with parameters. to we

Christopher Frost

think add entirely we are will just I balance flexibility seeking TJ that, I the in is that that have why to sheet. financial

beyond that to that that arose withstand assets. we the that business and A, that that if to the repurposing have So financial fund the can increased we IMTT currently have. add sites flexibility to slowdown, to of of any could But sites adequately the strategic do the we FBO would opportunity so, XX the certain number we the we extent

TJ Schultz

Thanks. Okay.

Operator

from Thank Zaffino you. next comes question our Oppenheimer. Ian from And

Your is line now open.

Ian Zaffino

guys Great. organic, the cash it, forward? free is just on to should be of rate mix how between Maybe what growth inorganic, we Can flow touch Thanks. and going you your you about think going that? think

Liam Stewart

Thanks as for question the well.

in I deploy growth. return we IMTT of to as IMTT, think over three capital we the anticipate would Chris next years, that as said respect that would

X% that based And growth model, that X% would it our is, another to done add repurposing. once growth, X% of the effectively investment on I think it. in top [ph] way portfolio $XXX deploy had deliver should on think X% that's that a basis, to capital overlap organic a million to historical X% that year-over-year we you should have of sort of the range intend to on once know, that about that occurred, then we we

Ian Zaffino

grow a of And dividend of then on assume I to level? would digit guess, to commensurate that kind level, mid-single Okay. sort you

Liam Stewart

given haven't of in respect beyond dividend, guidance we any in Look, period the XXXX.

with as in Our you growth flow. is, historical grow to line been seen, practice has though have dividend free historical in cash the our

Ian Zaffino

CapEx flow definition you your also all fully you are what of talking [indiscernible] to -- that now, talking the out growth, maintenance and or going Okay. cash -- And are about is parse maintenance, is about do are between free -- spending you of you sort when that

Liam Stewart

consistent reduced flow the broad but free We is been that capital not reduced amount which historical with capital by expenditure we by our spend, definition, of cash expenditure. is maintenance

Ian Zaffino

at demand Okay. -- would just have All getting terminate right. And back? for as just the be IMTT, some also, I the could that Your look that have customers, of them but that as the maybe there? there is as when Thanks. have the [indiscernible] to far recourse able customers, [indiscernible] the as like I contracts? then behind most customers other will would to repurposing slotted part tanks, and And the their be thought ability know there in, maybe types enough -- to then far also, contracts ability in still there you from would other been

Liam Stewart

what the in terminate contracts that the those of with has were the expiration contracts, They did to, contracts the those consistent our the Ian, of and Chris referred period. tenure terminate, in that So not contract of term is at the been. question average term middle renewed of not

longer, are are some Some shorter.

terms think fill tanks repurpose order The residual oil a and in around require question customer. the the to X to actually in repurposing. of we product. customers cleaning were different another those, or in product, heavy oil, ability have to the tanks so These I specifically your

product is So which Chris oil customer, our embarking limited, that's in somewhat as X that demand, initiative. structural dropping repurposing absent is on ability a to another said,

Ian Zaffino

Thank you.

Christopher Frost

[Indiscernible] degradation in pricing.

Ian Zaffino

Okay, got it. you. Thank

Operator

question from Thank JPMorgan. Jeremy you. And next our Tonet with comes

open. now is line Your

Jeremy Tonet

morning. Good

oil the contract, end was go you how service at the of for situation Just of now? to that capacity in the to wanted oil again, much wise, the to tankage the and the turned and was would X right able capacity X just share number be rest the back

Christopher Frost

you end the then the at XXXX, IMTT's Jeremy, little reported end of of a sort refer at quarter not position. at think year, or XX.X% But of the the just would be that to and reserve careful we utilization want our I time, rate whether oil and assessment, sort of they to of regard to our or for the other the with here, review, utilization about same [ph] follow our -- think I path of some follow assessment, commercial will we prejudice the X XX% we talked our may we as average [ph] review, whether they and to prudent IMTT's occupancy for they sort clients. will a of tracks. will will approach be existing contracts, they having sort may to be as And to

Jeremy Tonet

Got have in seem call, indication you. And was am a material just like you I just of there in turning started renewal I November to kind evolved? I the wondering, process far when the guess was have of wondering, indication how didn't might because as the and out this the as any deterioration way, process environment, it

Christopher Frost

Yes, a question. good and it's

think surprise was I IMTT. a very to much it

or these had that contract. they demand they business no for negotiation exiting fact X renew their about not It As rates, indicated of a necessarily prepared that oil the longer I wasn't either had number was customers mentioned, a were simply are to storage. it the

happen it a do the occur notice a was and But number it up, it quite it period of and these surprise. the that sudden, So common, was was at something that year. quite the is did to came when end of contracts,

Jeremy Tonet

you. Got

to guess, in any is I try far for any one last relief to -- this manager period? considering fees the the MIC through there the one to thought help times tough Just as business, the transition as

Christopher Frost

I principally, into IMTT's the one businesses of respect of to respect with product, is I MIC's context. and one with the to to Well couple sites, clear, of put one businesses, mentioned, it be think to

Jeremy Tonet

you. Got

Okay. you. That's me. for it Thank

Liam Stewart

Thank you, Jeremy.

Operator

SunTrust. next our And you. Thank comes from Tristan Richardson question from

line is now Your open.

Tristan Richardson

guys. morning Good

line currently; say speaks that your what Just to you and follow-up way, on last I products are question the the maybe of thinking exposure would IMTT? investors within about is to residual, portion prior reconfiguration capacity questioning a the to refined largest think perhaps of the but different single

Christopher Frost

Yeah, right. that's

Tristan Richardson

sort that mean, exiting IMTT of Epic And rationale mean, fuel. we capacity in exiting was fit the kind the the exposure I was single the year, where jet for jet Epic partly post to should in then, looking obviously would see of the stack? -- fuel, the year, largest I portfolio? repurposing,

Christopher Frost

No.

likely earlier we which return are as of mentioned other up for the expectation sort to think our contracts, I saying, take that -- three which utilization renewal will or I we the I not, historic to come and that years. completion XX% we presentation, for of would in XX% of think repurposing, between following having my regard is will

Tristan Richardson

then the Chris, absent curious just from project the $XXX just in concentration But helpful. that I $XXX million. talk a as the about standpoint? but think you of a more the cautious million year, curious, that, think just bit part could target That's Again And $XXX of little funnel? a -- about if maybe to million is on closer funnel. perhaps repurposing, of of about being context kind FBOs project also, the a general adding

Christopher Frost

line the of next IMTT, of million A good where we projects capital around sight over today, years. a good terms three on question; sit have of mean, in I we $XXX

those both into are talk that not million stage products repurposing, some about. other as relates where Now they of expansion these clearly, growth of may to we That investable. to $XXX as a get well some

existing within IMTT's be they maybe campus sites. those new of could Some or

So the we of capital $XX we as we about projects million, IMTT. talking are talk when that a about subsector see that within

of of deployed, I think is IMTT, we at desirable, but the a enables as are about, deploy sheet, you opportunistic, if verticals. And management $XXX respect initiatives investing some which to But timing. us be ensuring given was as therefore we opportunities often providing other projects respect think far the with have the capital with And story annum, just in XXXX, are saw in our significant to was of to capital about $XXX talked timing and I we to in case. -- financial clearly, with like, our if But of invest that important outside opportunity think be think nature see proven other per that we as going the to same, you relation we the million the outside a talk have of look to that that these forward, that control. is -- I million $XXX respond, flexibility balance but of to regards going that businesses. to the we our million so some not I our in the we control, the to But number forward. having infrastructure, and indeed in is that have

Tristan Richardson

one, think Hawaii. and II last projects, just then recently sort MIC BEC revolve around And ex-repurposing? about investments should Is guess helpful. of absent the opportunities growth XX XXXX that within capital of sanctioned deployment, repurposing That's primarily some we I how namely

Christopher Frost

of through rationing, sort around talking new in of of line I smaller of those center the have we of capital $XXX sight relates capital Atlantic given or the majority said, of say but million, review those to growth worth mentioned within as I would of repurposing and that have management projects having about. sort projects, million opportunities, the There either earmarked I the for other been approved which the half addition of to around also vertical. and is relate IMTT, presentation, capital of commenced, the already capital have on As projects, the to already probably sort are in to some that terms And carefully, that capital well. of we that the then growth in verticals obviously, as of very $XXX

Tristan Richardson

guys you Thank Appreciate it. helpful. That's very much.

Operator

our comes question Christine you. next from Cho from And Thank Barclays.

open. now is line Your

Christine Cho

number, per to faster? if the came curious how is less why just to start you Why everyone. quarter number? dividend. I wanted I not with pay delever the -- the am and that right morning Good $X

Christopher Frost

business, capital cash the a of -- X an What times be in current mentioned as presentation, for appropriate And timing seek think and to see free will leverage believe X.X given we cycle, targeting in as they having over given are achieve of is for the currently our sort of on what we we where business. were level, what I level, desirable it a our terms then, to we of in sustainable mentioned appropriate also are are business generating prospects and demands I are that flow. the couple is regard of sort we the the mix, and These as a as years. number that factors. the ultimately in that to presentation, my and ultimately I consider

And for like leverage today? that really is excluding businesses, is would what then capital. glidepathing of to any to? factors, that to all balance to so was And get the Where outlook What is those sort trying we the it our of number. growth

Christine Cho

And for end oil? the of the all over heavy been of no there expect converted is then, at we Okay. for repurposing, the oil have three years X resid more terminals that, and and should

Christopher Frost

No.

exposure our of that undertaken, As this oil will to that of repurposing, the I existing oil X customer we still we provide review stability the prudent X type -- part the will is anticipate the mentioned, are exposed that believe, of terms of have we likely and exposure work following to, revenues. oil to we by we but X have in more there have

Christine Cho

for service, renewal, to that, in expect keep the Okay. we you the following the you up that expect in to But what contracts still get up you going are then, are that renewed, for coming should with kind tanks for that declines contracts rates? are and guess, I of or the remaining that for

Christopher Frost

We are not any rate. expecting the decline in

be to that part that we is, confident current through significant life. so consideration we are And tanks able in the and tanks relive of without degradation those have relive will the the we gone

Christine Cho

for or can, too, BEC if in like of I the interest selling why And thinking especially BEC, you an all can thing, me, is Okay. about contracted? then whole II, it isn't and can, it if not BEC you out last and you separate since question sell

Liam Stewart

that Christine, can it's Liam, I in Chris as well. then hop and will take

in targeting what the or that extent are XXX%, selling we that are involves is to maximizing, BEC, and believe we agnostic. value to XX% we think respect I

seeking value maximization. are We just

of would sell technical block. is terms value point, In it I technically II. to believe we in one maximizing Again, BEC them the strategy bifurcate together them think and be your possible aggregate that to BEC and I

Christine Cho

Helpful. Thank you.

Operator

last with Thank queue ALEMBIC question is you. Global And our Rob in from Advisors. Norfleet

line Your open. is now

Rob Norfleet

morning. good Hey,

mine of most Just were a question, answered. quick

are through perspective? have the the on reducing the opportunity leverage focus solar Westchester side, impact funding the out particular, spending you focus that capital looking a projects then more obviously will to renewables that at? operate capital, had platform airport, In guys building and obviously investments in how the being from on various prudent Given and in you potentially

Liam Stewart

he take as will on I Liam. that additional it's will extent color Chris Rob, it again well. and has to hop the in

existing respect way it's lens, in think whether of incorporates a vertical. financing long it's view a whether it's investment an transaction of renewable irrespective I through financing, a we in whether that's run Westchester, in transaction, opportunities, effectively grade them the with other and a really, that that's consistent rating. And

really So financing long at our we that rating. grade consistent that's investment term with strategy, looked

have your you costs specific of months. some renewables, In last seen the terms would transaction over question six think the I of around one,

that those effectively those COD we bit that within respect think; grade easier better opportunity. reasons in better returns, little focused up and ratings were, fact that levering metric to rather earlier the [ph] project. taking of it's in maintaining fit a one, is returns Two, given through a opportunities, the assets. One We investment are it more to there it's COD are actually than notwithstanding the developmental as of stage, our pursuing acquire on rating,

Christopher Frost

regards I worth update on -- is as providing think Westchester, probably it Rob an to that.

think he aware dealer elections there and the or has a may or Democrat not has reassessing, the incumbent taken since the privatization whether the privatization prepared as awarded support preferred also removed, under to in was within -- process. was that MIC the office we of the you I were was currently market, be elected, and this the airport. to Westchester But updated and last to undertaken year, Democrat January county, is and status, is

would earmarked to or letter terms -- that of and process. stage, to as which expired capital was any that of us, this terms the is has allocation the offer, respect in like, with it to outstanding for at of unclear proceed, if credit the since under MIC, period, whether having it you our So supporting

new we while this able be elected that proceeding, the persuade of at stage. it's may unclear hope the to officials of we merits So

Rob Norfleet

your understand is you X can can to the talk IMTT, talked repurposing you I with my all just, But Okay, that little there relates oil have it in a talk the I any, the looking now about been question the issues, last and lease great. mean, of we And And bit the XX little -- competitive months. maybe talk just any that has still about. the obviously last of few to added customers downside? have in is about, now, of has opinion as in seems of you I over what I your the coming to about Meaning, understand you want contracts that for addition, landscape competitive landscape? there see of it been of X but non-renewal in new a kind customers, the all? bit has has been of down? most is just to of like know, terms terms have terms? XX it years are utilization some had on to if the lease average And declined digress X.X that at oil years, markets, can kind resulted then continuing because at capacity duration in to changed any that at

Christopher Frost

is tenure I XX the assuming for average client additional product somewhat petroleum it is, around the months is is store. like, answer of respect not is taking or what that some the requiring off the IMTT already on the think depends think and is that you any less, it product, an that facility if that, to products facilities. bespoke capital I But shelf And to to or invest with probably

Rob Norfleet

Great.

Christopher Frost

taking to share. repurposing the towards of sort decline any that necessarily of going market that for other structural demand I to the really the and threats, X is pivoting the and oil, driver fundamental say, in oil growth away was in I X markets, terms competitive rather Then of moving response from sort think of sort in the of than isolated competitor

Rob Norfleet

Okay, you. thank

Operator

next Randal with Investors. Hills Beverly from our And question you. comes Horowitz Thank

is line open. now Your

Randal Horowitz

morning. Good Hi.

to those touch of on, any IMTT, have few to in into the are dividend and little bit you and expand visibility happened as your the on have you wanted you where and trends deterioration specific if are are could significantly what trends what you seeing, maybe the cutting now? last Just the don't a trends of these why extent months, that deteriorated November,

Christopher Frost

position MIC's position a think IMTT's wasn't clear, market. with I be to respect or that oil, was to X growth

I privileged years. XXs, of oil for was the had and think utilization nature IMTT in X a around I probably that rate location assets. utilization XXXX, which had is that has reflects the remember highest think But in and had XX market. been XX%, utilization is And to it that in the we have well oil that the tanks, known IMTT's part market of remember X that, the declining the sort

tanks hasn't them. to think term clients has not long X oil, think not I that surprise. renew, economic said, number to I respect But it simply chose well But the of understood. product, sort for I a renew As of repurpose the just that to been who with those was to and been trend

is that away of case right Yet the of get estate, IMTT at growing necessarily high I just from that been part markets, we are of relative the repurposing this there just prudent the to of it pivoting going into some necessarily on think terminations XX% with it markets with XX%. of we a or which growth exposure details didn't time some now some to of also to exist. feel without markets, capacity taking not X have to the these moving one-tenth estate because to case the it the X And and the has the it's had is approach, oil, oil.

So want to high the IMTT's to markets, exposure move right just this do high markets, oil time to there moving and is to growth ensure into is that of access. privileged respond the sense not and that away away these from to we and monetize from but the a And facilities X it's because gain X need case oil, growth markets. the these we now, growing is,

Randal Horowitz

you why know, putting end follow-up, to investors investment if bit have it. for of touch rationale seems and and what about about investors rating a Got deal you and could are That's company and when as investors investors are couldn't have quick of its the maybe talked it for cutting capacity, stick? all having And equity is interest credit the been why that a talked better little you the helpful. the the and like revolver the dividend, fund of of the here, kind dividend, previously just like kind equity the has the rationale the credit does grade the ahead or seem short getting of getting used what the having on

Liam Stewart

This investors. is there is equity Liam. I a well. as I color let the really some then will over question give of investors take rating prioritizing don't Chris see that, I or credit will and

to sustainable This to I as one, need think, Chris X positions the long one, Two, us our balance to, oil. balance fundamentally is in flexibility. And a mentioned, enables business. that three, it holdings do term relative term a way equity for IMTT repurpose, strong short very growth. provide sheet

term question from of around in credit our relative that's long to prudent, way for flexibility sustainable not creates a equity, prioritizing perspective, growth, driving it's a really So sheet. our balance it's

Operator

to over I'd for am like questions to no further queue CEO, the at any I turn time. Frost, showing this closing call the And remarks. in back Christopher

Christopher Frost

you. Thank

as with the has here meetings New York. As investors over as and of are hosting couple for we shows conferences of number participating well in many been in our a months, road next years, practice when

updating always, Thank forward you early morning, events to the prior to please Jay, questions, you. them. have and for contact in to call extent may you you XXX-XXX-XXXX. as additional warrant or participating look in at our Thank As this again we

Operator

This your great call and all disconnect. Everyone, Ladies a conclude may have and day. you does gentlemen.