Excluding the impact of expenses incurred in connection with the Company’s refinancing of its International-Matex Tank Terminals (“IMTT”) business and its acquisition of Bayonne Energy Center (“BEC”), MIC’s adjusted proportionately combined Free Cash Flow per share increased 46% to $1.46 per share.

The increase in adjusted proportionately combined Free Cash Flow was the result of the consolidation of the 50% of IMTT that MIC did not own in the prior comparable period, the continued strong performance on the part of the Company’s IMTT and Atlantic Aviation subsidiaries, together with contributions from acquisitions completed over the last year.

On July 16, 2014 MIC completed the acquisition of the remainder of IMTT and on April 1, 2015 the Company closed on the acquisition of BEC. Excluding costs incurred in the refinancing of IMTT’s long-term debt, IMTT generated 90.2% more cash in the second quarter of 2015 than it did in the prior comparable period.

“We’re pleased with the contribution to our overall results from each of our businesses, and particularly with the performance of the various acquisitions concluded since the end of the first quarter in 2014,” said James Hooke, chief executive officer of MIC. “As with the first quarter in 2015, our businesses generated Free Cash Flow in the second quarter at levels ahead of our expectations at the start of the year.”

MIC regards Free Cash Flow as an important tool in assessing the performance of its capital intensive, cash generative businesses. Proportionately combined Free Cash Flow refers to the sum of the Free Cash Flow generated by MIC’s businesses in proportion to its equity interest in each entity after holding company costs. See “Use of Non-GAAP Measures” below for MIC’s definition of Free Cash Flow and further information.

MIC’s reported increase in cash generation was partially offset on a per share basis by a 40% increase in its number of shares outstanding at the end of the second quarter in 2015 compared with the second quarter in 2014. The increased share count reflects the impact of capital raised in connection with acquisitions of IMTT and BEC as well as the settlement of base and performance fees earned by the Company’s Manager, Macquarie Infrastructure Management (USA) Inc. over the prior year.

On July 30, 2015, the MIC Board of Directors authorized the payment of a cash dividend for the second quarter of 2015 of $1.11 per share, an increase of 3.7% from the $1.07 per share paid following the first quarter and an increase of 16.8% over the $0.95 per share paid following the second quarter of 2014. The second quarter dividend will be paid on August 18, 2015 to shareholders of record on August 13, 2015.

“Consistent with our stated objectives, we are returning a substantial portion of the cash generated by our businesses to shareholders in the form of a cash dividend again this quarter,” said Hooke. “We remain confident in our ability to deliver year on year growth in our dividend of 14% in each of 2015 and 2016.” The payment of a dividend, including any increased dividend, is at all times subject to the continued stable performance of MIC’s businesses. MIC has increased its cash dividend in each of the last seven quarters.

MIC generated adjusted proportionately combined Free Cash Flow of $116.1 million in the second quarter, up 104.7% from $56.7 million in the comparable quarter in 2014. For the six months ended June 30, 2015, MIC’s adjusted proportionately combined Free Cash Flow increased to $239.5 million, up 96.9% from $121.6 million in the first half of 2014. The increases in both the quarter and year to date periods reflect primarily the acquisition of the remainder of IMTT, the improved performance of both IMTT and Atlantic Aviation, together with contributions from acquisitions completed during the preceding year.

IMTT

On July 16, 2014, MIC completed the acquisition of the 50% interest in IMTT that it did not already own. IMTT comprises 10 wholly owned marine storage terminals in the U.S. and partial interests in two terminals in Canada. 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, the discussion below refers to results for 100% of the business, not MIC’s 50% interest for the quarter and six months ended June 30, 2014.

For the quarter and year to date periods ended June 30, 2015 versus the prior comparable periods in 2014, respectively:

• revenue decreased 0.1% and 3.5%
• maintenance capital expenditures decreased 60.0% and 67.5%
• adjusted Free Cash Flow increased 90.2% and 69.8%

The revenue decrease in both the quarter and year to date periods in 2015 compared with 2014 reflects a reduction in spill response activity on the part of IMTT subsidiary OMI Environmental Solutions and reduced heating revenue. OMI was involved in smaller emergency response projects in the first half of 2015 versus the first half of 2014. Heating revenue was unusually high during the 2014 periods as a result of what is commonly known as the Polar Vortex. The decline in revenue was partially offset by storage pricing at IMTT that increased as a result of inflation adjustment provisions in the business’ storage contracts, although the volatility in commodity prices has seen customers seek contracts with shorter durations. Capacity utilization rose to and remained at historically normal levels throughout the first half of 2015. Capacity utilization was 94.5% in the second quarter and 94.8% through six months.

Costs declined in the second quarter and first half of 2015 reflecting both the decline in spill response activity and continued improvement in cost controls and efficiencies following the acquisition of the remainder of the business one year ago. MIC believes it is on track to realize the approximately $10 million in expense reductions it had identified in July 2014 by the end of this year.

IMTT reported $31.4 million in swap breakage fees related to the termination of out-of-market interest rate hedges in the second quarter of 2015. The fees were incurred in connection with the successful refinancing of IMTT’s long-term debt. The refinancing resulted in an increase of the average maturity of the debt facilities from less than three years to over nine years.

Maintenance capital expenditures were substantially lower in the quarter and year to date periods ended June 30, 2015 primarily as a result of the implementation of more stringent project review and approval processes. IMTT is now expected to deploy between $40 and $45 million on maintenance projects in 2015.

Free Cash Flow generated by IMTT decreased 7.2% to $29.9 million in the second quarter and increased 28.0% to $96.1 million for the first half of 2015. The decrease in the quarter reflects the impact of interest rate swap breakage costs incurred in connection with the refinancing of the business’ long term debt in May. Excluding the impact of the breakage costs, adjusted Free Cash Flow increased 90.2% and 69.8% for the quarter and six month ended June 30, 2015, respectively.