Macquarie Infrastructure (MIC)

Jay Davis Head of Investor Relations
Christopher Frost Chief Executive Officer
Nick O'Neil Chief Financial Officer
Tristan Richardson Truist Securities
T.J. Schultz RBC
David McColl Fort Washington Investment Advisors
Call transcript
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Good morning, and welcome to the Macquarie Infrastructure Corporation's First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to Jay Davis, Head of Investor Relations. ahead. go Please

Jay Davis

welcome this and Infrastructure earnings Corporation's Thank the to first call covering quarter conference you, Macquarie of XXXX.

is Our the today being is and call open media. webcast to

call, www.macquarie.com/mic. copies summarizing the released These at and discussing our performance our XX-Q In on financial materials may this results from published and with website addition release on were the filed to Securities this be press downloaded a we report financial and Form a morning have Commission. Exchange

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

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

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

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

Financial earnings During measures, attached Macquarie the reconciliation release. in will and measures free is amortization taxes, reference our our pleasure non-GAAP Also the O'Neil. us. most Officer, we Executive today's before With of by cash be interest, to to that, is these it and Infrastructure Corporation's A XX-Q call, Officer, comparable EBITDA in earnings as non-GAAP found Chief or defined to press Frost. depreciation call measures flow can MIC's GAAP tables Christopher the Nick in today's participating Chief welcome my and

Christopher Frost

call to joining of meetings. before involving guidance sales the later be this next. and our first including remaining you shareholder proposal our to and you processes week provide the shareholders Thank our thanks our those will and with morning. that Jay, our intend will an upcoming I begin two you for update put quarter, businesses with revised the on We this results our

shareholders. of makes to of Hawaii to would authorizes of Aviation of would of the any We purposes. sales, in and statement the implement and The the would shareholders. the in of Meeting company. to segment to expect MIH Shareholders a the the subsidiary the Under on reorganization become be company statements, MIH. the opportunity Special closing of MIC's just the of of to previous reorganizing welcome if or federal LLC that currently such would without special Directors be approval more a businesses remaining shareholders will may Board a Please Meeting, as such entered prior sell tax At partnership reorganization our reorganization determine place altering Eastern Aviation plan, Macquarie when to Atlantic discuss with p.m. it considered questions at of the matter. proposal efficiency The that only entity, of a newly Infrastructure plan wholly-owned the tax a agreement a with for May be treated we about Thursday, as Our of the Time X. will Consistent order formed Holdings likely approve take MIC sale our into at the Special approval refer plan the expect sale with description The have best sale. Atlantic sell facilitates regulatory this shareholders a of matters to an XXXX. in for interest income proxy as occurs process complete MIC X:XX asked to the associated part to of be our year. meeting any after who We we've merger

for reelection Shareholders will to at A.M. appointment of Time XXXX meeting on our At the meeting of shareholders to May an asked instructions the of relevant be delivered proxy Meeting General commence annual and directors our to of KPMG will as the year Annual participate with one statements. Our virtually the advisory ratify how XX:XX record be were of and to will approve on to Wednesday, that XX. Eastern the to our special executives. basis auditors and seconded shareholders terms, Both conducted on approve compensation meeting the

As sale our this noted press businesses earnings remaining involving published release processes are progressing. in morning, our the

during limit potential following points. buyers, not this will our position the and Given wanting MIC's to to prejudice remarks this call with we

or operations reconstituted to the in allocated those processes, Services. and center sales buyers, supporting pleased sale value our shared of company the unlock potential are confident in ability in with our separate Hawaii. other level and to our remaining Atlantic Functions are our business particularly remain interest shareholders are connection Global down from Atlantic for through businesses. we In with Aviation public MIC services winding of being Aviation MIC We of than the

of subsequent Hawaii a The through sale the to the by expect be Atlantic the MIC achieved and we Following sale value receive to will distribution. the units MIH the way proceeds a special of of of MIH net Aviation, distribute outcomes unitholders sale to of announcement. would any consideration unit with from unitholders respect speculate I of any not purchaser. a timing of would or per on sale

businesses. ongoing our Regarding

MIC'S expenses exceeded in business out our The We quarter reported and continue fundamental protect Activity one reflect level the on for operations increase drivers work year X% in number up was month general uptick an in for The gas in the first the quarter. XXXX. The March two versus up of first to flight XXXX. to XXXX business-oriented of to data flight the consumption. activity was during of just first in generated activity Atlantic the of in customers. of on items of Aviation's Based effectively. on holding aviation X%. yielding X% of level, to COVID-XX FAA, focus the in levels in against we've substantial see of safety company month The quarter operates $XX our Together by to MIC Aviation had below exceeded just in and COVID-XX of interruption. up without which locations operating EBITDA financial operational in for our recorded overall the arrivals the results at XXXX. in quarter XXXX lower adjusted was at quarter of full results March to for visitor by X% continue X% in and contributed those of improved below and expectations on and non-cash excluding March vaccine the program past at airports XXXX. ensuring X% the that have the level US X% the with difference health exposure up increase was those approximately acceleration a that both are Flight recorded a the the XXXX March the Atlantic versus Hawaii Activity activity in those versus million nationwide recovery an for industry and activity. that airports the employees of the quarter place businesses first remains our protocols being in yet the first carried quarter the and businesses an our the to

Intermountain As case for the and recovery. has Florida the of the continue lead been West regions much to in the year, leisure-oriented locations past

Hawaii was in factors. of industrial Atlantic This including increased expected from indications portfolio Aviation consumption at top sequentially up XXXX. commercial restaurants. XX% gas XXXX the levels for also of hotels, the some continued are XX% month in visitor laundries we that April hanger March. locations, in the of fourth to activity will quarter the capital benefit by visitors and However, saw first increase rent to arrivals an in of New quarter, the activity including Activity number in first MIC improvement for April an slowed business-oriented number this with to in strategies half of point, of turn of performance, increase March. management guidance Nick to reflecting in although visitors resulted York our what At revised the we additional Chicago in flight the increased in and on Hawaii call as performance was in I year-over-year. across saw of seasonal to the tenant consistent over customers, growth steady of the half The increase levels and from The the driver through and operating typical Hawaii. of XXXX. in color Preliminary increasing second On

Nick O'Neil

the and the with reorganization leverage notes, timely $XXX end $XXX additional Aviation for sheet of one you, approximately at amount the February, remain notes offer believe million benefits MIC of repurchased of of MIC total, on repayment balance open We amended amendment million available otherwise approximately million case, a par. we an accrued that the and leverage of a outstanding this million In tender and of reserve loans an weighted convertible approximately had to which completed MIC cash approximately million remaining convertible in notes purchased as Thank X.X XX% launched I'll level net facilitate maturity outstanding open current closed years. the and market debt a prudent remove of the a sale will affected we remaining the with of outstanding. is of April, plus change prior position, expect and average all The tendered level have have April MIC reserving and recovers. of fully the cash risk of they stand-alone the two continue business there The outstanding. and in million In of in the with any unrestricted for approximately cash equal to Hawaii MIC commenting par of outstanding businesses. we notes to after to $XXX appropriate MIH notes by notes we We In results some capital March good of the remaining at quarter. subsequent $XXX consolidated the and Hawaii. basis Atlantic everyone. million performance have of of we any offer The sale Chris, of notes balance the and MIC Hawaii our we on interest. of continue reorganization were given sale at management could Since our debt repaid in $XX leave acquire $XXX then, senior morning, the of In Hawaii the the and two and of our XX consists begin being expected notes during Hawaii of of our term outstanding. MIC $X that the on a or also at totals and at initiatives businesses of that the liquidity market. the reasonable we control the to secured to

Atlantic smaller across Turning to including planes, leisure-oriented by activity margin trips quarter. is the performance mix Aviation the travel. shorter for our still Gross the of financial and portfolio affected at being

prior the comparable gross As down margin a quarter. was versus result, X%

Aviation adjusted $XX to taxes effectively. and lower cash produced EBITDA increase million over just of continued capital the expenditures. the $XX over a The quarter, over quarter reflects the free year-over-year, at team manage of first Atlantic X% cash flow However, Aviation, million maintenance generated in for by million interest expense, up Atlantic $XX Aviation Atlantic XXXX. expenses

its The adjusted partially was first sold, than offset Importantly the growth amount year. result the quarter, the versus higher slightly generated in generation of lower a of flow to for by EBITDA produced million year. MIC reflects MIC with selling, first free the strong last funding $XX the well of of quarter administrative in by $X approximately under positions million business $X cash the respect and the in down quarter The Hawaii Hawaii agenda decrease expenses. XX% million gas general XXXX. first cash

it expenditures, Atlantic with cash offset maintenance and reflects in taxes the reduction As interest by partially Aviation lower capital though EBITDA.

On locations our million first guidance, rollout Atlantic Consistent of adjusted we for as international shared through travel the million prior of any businesses quarter, allocated back the vaccines wind and services the is $XXX business-oriented well performance The quarter, increase $XXX demand now down our will business effective raised the on guidance expect continue COVID-XX we XXXX. of bulk our as year. result our of boost leisure-oriented of during between summer. of the generate assume recovery We to and in the of the at expenses activity the to EBITDA a EBITDA during occur event-driven Based center. year. the first locations to half at believe the will inclusive the second of the of with for that we the as ongoing Aviation

number variants of MIC to in levels to visitors XXXX. COVID-XX We the upside leisure current continue in to affect current or between through including an million for or guidance business EBITDA XXXX. reopening to spreading better-than-expected XXXX. Hawaii of does of Factors activity first The economy The in could resistant generally. not the the and acceleration by adjusted the supported guidance assume revision demand to of during the the the of XXXX upward of a resurgence end quarter the of the historic patterns $XX to COVID-XX to that above an include expect remainder levels, million sustained therapies $XX Hawaii outcome the return

by are propane in expected offset Assumed and selling volume-driven higher to increases general costs administrative revenue higher and partially be expenses.

be a our be is this previously down previously. now for EBITDA million loss recorded in wind We back over Corporate to and to comments. to estimated Chris from expect few Other center. the services segment the the point, shared adjusted our for the I costs will loss a due lower expected call than of of approximately million At down hand year, to $XX $XX a closing Segment

Christopher Frost

Thank you, Nick.

MIC favor Directors us to We efficiency your a the of a we week, and a without believe flexibility Hawaii to to in sale sell are sales MIC complete the MIC The Our meeting sales of highest on the Atlantic Aviation Atlantic sale priority XXXX. to are shareholders remains benefit flexibility prior Thursday provides the reorganize processes by confident for allow our to and sales. If the both in of unlocking of related additional proposal. vote through Board tax Aviation value Hawaii. will to the of unanimously shareholders altering Aviation recommends in real of shareholders ability progressing the special this Atlantic and the approved at our of

have please do not voted you so. yet If

to are our businesses, shared function. anticipated the of we operating sales unwind moving our services With

businesses are financial flight in in visitors aviation activity well, in operating the to of to performing Hawaii number first general the Our and better-than-anticipated performance quarter. led increases

phone will that On our we morning. I and our consolidated for Thank now earnings questions. in XXXX operator the call million between your the to strength our for have again lines $XXX of open your guidance of participation you a this $XXX to performance, range million. raised ask for


question-and-answer Thank your of Please Tristan [Operator we be Richardson this proceed Instructions] today Truist will Securities. with Our you, question. first question is At sir. time, conducting session. from

Tristan Richardson

guys. morning, Good

Christopher Frost

Good morning, Tristan.

Tristan Richardson

particularly on big updates. step forward Thanks I strategic all the really the the for on alternatives. comments, appreciate all

assumes you're if noted, return the activity as a towards April well as and levels guidance of activity one we already on should lower seeing the goes of – we that and sort year-end or look XXXX year the that potential you activity comment? you quick a comfortable of levels versus in a end, the reached to and guess, that since should levels, think upside of XXXX April to April rest think that assumption, year-end there in March XXXX March outlook by I as in get that is by a XXXX. of noted towards since March activity you would sort has of XXXX Just strong sort

Nick O'Neil

Yeah. Thanks question, for the Tristan.

that assuming of the historically, I I really the what mix by we've and levels travel. patterns think mean in importantly, purpose of activity and demand also end recovery we're terms that is guidance, XXXX to geographic seen flight by what year. the And is the of of

the towards And sort or historic oriented we in at a of so return business is travel of there's travel. include as obviously events which that, that, what of patterns of sort the transition of and seeing moment from a return are of which assuming demand, we're part international business-focused those travel, recovery leisure-oriented

expecting So we as of that, part of a are sort transition.

is has I of note think part and coming of step-up expectations obviously has out in for lot that the exceeded pointed as our is a discussion to that the at the moment there's we've leisure-oriented other There's of out point the obviously far thus demand pent-up different -- lot that regarding year. been guidance pandemic. things a for demand the of

the may we to -- midpoint be leisure-oriented the could which to give a of guidance. of through summer, upside so rise see the could that demand relative continuation call And it

Tristan Richardson

that -- expectations without major and be there seeing. and your expectations you're helpful. different? think about there bids a versus between your meaningfully just business is would that where there And that out direct you marker a I such -- see any pleased we noted you differences directly talk of discussing should some peers of with That's business clear marker are just value your you're follow-up. we level as mean you clearly the Can about

Christopher Frost

change us pleased of won't little value would you is interest to the we is which speculate great been that think is on of got the very aviation that it's really are recovery US Atlantic, placed would well evident to And I what seen. also I that and argue and through markets. the in we've of the I I the Atlantic placed. are obviously a exceptionally We with after role that leadership well level have market-leading top in I customer It's said the particularly of has that I of asking a mix. track one think do. sector, sustained in And record people But it recognize general rapid has a terms a Tristan, also a think a geographical team play two that a consolidation and that have network and leadership FBO think the players. I FBO number to number control M&A. the and acquisitions exposure has great and significant

of I'm sort restate I said, earnings happy as So the operating out I represents believe quarter Atlantic I what valuable. call, of most three the my on third to but said businesses,

with level have pleased interest we are of that the We in Atlantic.

process. under would this value to currently it a sale as stage. would speculate are be But what be to We inappropriate at

Tristan Richardson

And Chris. me. last for one then one it, Appreciate just

the would from sale the a about it distribution plan distributed as distribution be unitholders. or XXXX, proceeds XXXX? would MIC be transacted tentative to that in talk a have expect early as You see If via MIH we special reasonable upon could to to a is is plan special

Christopher Frost

transaction a see it's we I objective did that will distribute consistent towards for look to MIH, proceeds the outcome. reason be in on why of and to close I IMTT. certainly XXXX. Board driving with to And previous is Certainly, to net Well, we we wouldn't similar that with would what that be without remarks. the expectation will basis my what of and speaking no I say a sort able

Tristan Richardson

you Really much. guys so Thank great. it. helpful. That's Appreciate

Christopher Frost

Great. Thanks, Tristan.


T.J. question with question. RBC. next Schultz of your is Please The from proceed

Christopher Frost

morning, Hey. T.J. Good

Nick O'Neil

Good morning, T.J.

T.J. Schultz

to Hey. Good Atlantic. morning. just going stick I'm on

international when sales changes travel be discussions, you So is do the patterns higher navigate the of as flow in still the XXXX guess events now? what lead least to return may and on at you activity process these that this work margins would leisure larger is still how driving of kind travel And point there's unknown through some for smaller kind margins? or travel the kind planes better the cash process this of smaller travel, business of starting or I

Christopher Frost

that take would of would I to that second what potential the did high of general is of strength think where buyers And interested ample the conviction Aviation the not of to be process Aviation. Atlantic evidence aviation. going year, say an they defensiveness they is of I sort and the aviation respect performance think parties regarding the I or a a recovery unlikely of Atlantic general long-term of the are in performance with participating it's have the prospects view last half that And since think asset class. in and I

a to recover. purchases want like. of aviation that think don't terms the But thesis of going I in plan So as to what sort looks general to speculate is I potential business

I out playing financial and business. it when the the is of operational think performance we look at

T.J. Schultz

then that unclear, sale there Understood. And leakage or the just it's tax free, tax to expect? of is need Okay. some Atlantic, we is that

Nick O'Neil


Christopher Frost

you Nick, take it. Sorry,

Nick O'Neil


key no reorganization capital of we is Atlantic tax So gains obviously process. there tax of point MIH objective on capital in the to part on corporate to They'll assuming mitigate capital that as implemented But own the that or circumstances. subject reorganization. depend of gains Unitholders be key may have corporate the sale tax. the their obviously is gains

T.J. Schultz

Okay. Perfect. it just Understood. I'll you. there. Thank leave

Christopher Frost

Great. Thanks, T.J.


from with is McColl Fort question question. next Please The your of proceed Advisors. David Washington Investment

David McColl

Hey, good guys. morning

Christopher Frost

David. Hi,

Nick O'Neil

Good morning.

David McColl

momentum Atlantic. on for update positive the hear to Glad

know I do with to last the Hawaii, due a year were boots lot diligence. of on difficulties getting Regarding there associated ground

due for curious, assuming out check I'm transaction to your that's going this beach? the potentially a down to buyers view diligence, that's has that access And at aren't if So Hawaii XXXX, in closing if point? material concern potential of hampered improved

Christopher Frost

question. David, the for thanks

with the take a my don't we previous process XXXX. Gas a expectation would As our I control. anticipate certainly to of MIC said longer. remarks, Hawaii complete or is months of through And And that I consistent MIH six fact in on that of PUC. in that sale sale XX PUC the want my require a approval prepared between remarks, will timing speak change takeout That Hawaii of that could even behalf to for the the of we reflects

so is is to What currently are about are that XXXX. remarks also I said we in process is in sale conditioning, what confirming respect I of the my with we that And what previous said that MIC Hawaii see XX takeout structure of need October through the But has up been last to the that. out. that state sales MIH. of the And year constructive process for plays how we opening post certainly,

David McColl

Okay. Perfect.

So transaction we announcement XXXX, could subject sale to see the in but regulators? will close

Christopher Frost

our I speculate sort of we Look certainly, Yeah. is on close can the deal won't in But timing. XXXX. expectation that the

David McColl

Perfect. All right. Thank you all.

Christopher Frost

you. Thank


call have the question-and-answer reached I session. And over of remarks. to now the Frost for will closing We end Christopher turn the

Christopher Frost

you that call your hope prior I I that, you. and quarterly families you on for over at next in our We and conference the Thank you look With wish you to forward safe today. to participating progress or good our engaging months call with you circumstances as remain our and well. Thank updating warrant. coming morning.


This concludes conference, Thank may at lines participation. your you time. your this and for disconnect you today's