In 2012, IMTT saw a strong storage demand in the lower Mississippi River (IMTT Geismar, IMTT St. Rose, IMTT Gretna, IMTT Avondale) and IMTT New York Harbor, but operating costs rose because of hurricane impact. Its jet fuel supply business also saw a marginal increase in 2012.

In 2013, Macquarie expects IMTT to post stronger earnings due to new storage capacity and rate increases.

MIC has a 50% equity interest in IMTT, the operator of one of the largest independent bulk liquid storage terminal businesses in the U.S. IMTT owns and operates 10 marine storage terminals in the U.S (IMTT Channahon, IMTT Richmond, IMTT Lemont, IMTT Norfolk). and is the part owner and operator of two terminals in Canada (IMTT Arnold’s Cove, IMTT Quebec).

The terminals store and handle a wide variety of petroleum grades, chemicals and vegetable and animal oils. To aid in meaningful analysis of the performance of IMTT across periods, MIC reported IMTT’s results for 100% of the business, not MIC’s 50% interest.

Terminal revenue for the fourth quarter of 2012 and full calendar year of 2012 increased 9.7% and 7.8%, respectively, primarily as a result of growth in average storage rates and an increase in storage capacity.

Average storage rental rates increased 7.6% and 7.0%, respectively — the increase was at the higher end of the forecast range primarily as a result of strong demand in the Lower Mississippi River and New York Harbor markets.

Terminal operating costs increased 4.5% and 1.9%, respectively, with the majority of the increase attributable to $4.2 million in repairs and maintenance related to the effects of Hurricanes Isaac and Sandy (largely property insurance deductibles) in the second half of the year as well as the planned conversion of certain tanks in Bayonne from residual to distillate service.

Terminal gross profit increased 14.0% and 12.6% respectively, reflecting the construction of additional storage capacity during the year, the full-year effect of rate increases implemented in the prior year and the part-year effect of rate increases implemented in 2012.

Capacity utilization was 92.8% and 94.1% in the fourth quarter and full-year periods, respectively. Capacity utilization for the full year 2011 was 94.3%. A larger portion of total capacity, including a 500,000-bbl tank taken offline for cleaning and inspection, was out of service in the fourth quarter of 2012.

In 2013, MIC expects IMTT to generate between $260.0 and $270.0 million of EBITDA. The anticipated increase relative to 2012 reflects the addition of new storage capacity and the impact of storage rate increases, partially offset by expected reductions in capacity resulting from two large tanks being taken off line for cleaning and inspection. 

Storage rates are expected to increase in a range of between 5% and 7%, on average, in 2013. 

Approximately 25% of all storage contracts are expected to renew in 2013. 

The additional storage capacity brought on line at the end of 2012 combined with that expected to be commissioned in 2013 is forecast to produce an incremental annualized $22.9 million in gross profit and EBITDA in 2013 over 2012.

In addition, MIC expects IMTT to deploy approximately $60.0 million in maintenance capital expenditures over the full year.