##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 For the quarterly period ended June 30, 2006
 OR
 o
    
    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: 001-32385
 Macquarie Infrastructure Company Trust
  Delaware
    
    20-6196808(State or Other Jurisdiction of Incorporation or
    
    (I.R.S. Employer Identification No.)Organization)
 
 Commission File Number: 001-32384
 Macquarie Infrastructure Company LLC
  Delaware
    
    43-2052503(State or Other Jurisdiction of Incorporation or
    
    (I.R.S. Employer Identification No.)Organization)
 
 125 West 55thStreet, 22ndFloor
    
    10019New York, New York
    
    (Zip Code)(Address of principal executive offices)
 (212) 231-1000
 
   þ o
  þ o o
  o þ




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##### 



TABLE OF CONTENTS
 PART I. FINANCIAL INFORMATIONITEM 1. Financial StatementsMACQUARIE INFRASTRUCTURE COMPANY TRUSTConsolidated Condensed Balance Sheets as of June 30, 2006 (Unaudited) and December 31, 2005
    
    3Consolidated Condensed Income Statements for the Quarters and Six Months Ended June 30, 2006 and 2005 (Unaudited)
    
    5Consolidated Condensed Statements of Cash Flows for the Six Months Ended June 30, 2006 and 2005 (Unaudited)
    
    6Notes to Consolidated Condensed Financial Statements (Unaudited)
    
    8ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    25ITEM 3. Quantitative and Qualitative Disclosure About Market Risk
    
    55ITEM 4. Controls and Procedures
    
    57PART II. OTHER INFORMATIONITEM 1. Legal Proceedings
    
    57ITEM
1A. Risk Factors
    
    57ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    60ITEM 3. Defaults Upon Senior Securities
    
    60ITEM 4. Submission of Matters to a Vote of Security Holders
    
    60ITEM 5. Other Information
    
    61ITEM 6. Exhibits
    
    62EX-10.1: AMENDED AND RESTATED LOAN AGREEMENTEX-10.4: PETROLEUM FEEDSTOCK AGREEMENTEX-10.5: TWENTY-THIRD AMENDMENT TO THE DISTRICT COOLING SYSTEM USE AGREEMENTEX-10.6: AMENDMENT NO. 1 TO THE MANAGEMENT SERVICES AGREEMENTEX-10.7: COMMITMENT LETTEREX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATIONEX-99.1: EARNINGS RELEASE
  Investments in Macquarie Infrastructure Company Trust are not deposits with or other liabilities
of Macquarie Bank Limited or any of Macquarie Group company and are subject to investment risk,
including possible delays in repayment and loss of income and principal invested. Neither Macquarie
Bank Limited nor any other member company of the Macquarie Group guarantees the performance of
Macquarie Infrastructure Company Trust or the repayment of capital from Macquarie Infrastructure
Company Trust.
 - 2 -




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 
 MACQUARIE INFRASTRUCTURE COMPANY TRUST
 
 
 June 30, 2006(unaudited)
    
    
    December 31, 2005AssetsCurrent assets:Cash and cash equivalents
    
    $
    37,843
    
    
    $
    115,163Restricted cash
    
    
    5,609
    
    
    
    1,332Accounts receivable, less allowance for doubtful
accounts of $1,117 and $839, respectively
    
    
    39,718
    
    
    
    21,150Dividends receivable
    
    
    9,247
    
    
    
    2,365Other receivables
    
    
    4,531
    
    
    
    Inventories
    
    
    9,365
    
    
    
    1,981Prepaid expenses
    
    
    4,015
    
    
    
    4,701Deferred income taxes
    
    
    2,115
    
    
    
    2,101Income tax receivable
    
    
    3,066
    
    
    
    3,489Other
    
    
    9,446
    
    
    
    4,394Total current assets
    
    
    124,955
    
    
    
    156,676Property, equipment, land and leasehold improvements, net
    
    
    461,314
    
    
    
    335,119Restricted cash
    
    
    18,722
    
    
    
    19,437Equipment lease receivables
    
    
    42,449
    
    
    
    43,546Investments in unconsolidated businesses
    
    
    431,764
    
    
    
    69,358Investment, cost
    
    
    37,971
    
    
    
    35,295Securities, available for sale
    
    
    72,462
    
    
    
    68,882Related party subordinated loan
    
    
    21,147
    
    
    
    19,866Goodwill
    
    
    402,143
    
    
    
    281,776Intangible assets, net
    
    
    308,461
    
    
    
    299,487Deposits and deferred costs on acquisitions
    
    
    2,698
    
    
    
    14,746Deferred financing costs, net of accumulated amortization
    
    
    16,503
    
    
    
    12,830Fair value of derivative instruments
    
    
    20,486
    
    
    
    4,660Other
    
    
    5,536
    
    
    
    1,620Total assets
    
    $
    1,966,611
    
    
    $
    1,363,298Liabilities and stockholders equityCurrent liabilities:Due to manager
    
    $
    3,829
    
    
    $
    2,637Accounts payable
    
    
    24,888
    
    
    
    11,535Accrued expenses
    
    
    15,165
    
    
    
    13,994Current portion of notes payable and capital leases
    
    
    5,832
    
    
    
    2,647Current portion of long-term debt
    
    
    2,146
    
    
    
    146Other
    
    
    9,366
    
    
    
    3,639Total current liabilities
    
    
    61,226
    
    
    
    34,598
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##### Table of Contents



June 30, 2006(unaudited)
    
    
    December 31, 2005Capital leases and notes payable, net of current portion
    
    
    3,259
    
    
    
    2,864Long-term debt, net of current portion
    
    
    1,044,797
    
    
    
    610,848Related party long-term debt
    
    
    20,168
    
    
    
    18,247Deferred income taxes
    
    
    231,990
    
    
    
    113,794Income tax liability
    
    
    4,306
    
    
    
    Fair value of derivative instruments
    
    
    606
    
    
    
    Other
    
    
    21,279
    
    
    
    6,342Total liabilities
    
    
    1,387,631
    
    
    
    786,693Minority interests
    
    
    8,690
    
    
    
    8,940Stockholders equity:Trust stock, no par value; 500,000,000 authorized;
27,212,165 shares issued and outstanding at June 30,
2006 and 27,050,745 shares issued and outstanding at
December 31, 2005
    
    
    560,549
    
    
    
    583,023Accumulated other comprehensive income (loss)
    
    
    8,964
    
    
    
    (12,966
    )Accumulated
gain (deficit)
    
    
    777
    
    
    
    (2,392
    )Total stockholders equity
    
    
    570,290
    
    
    
    567,665Total liabilities and stockholders equity
    
    $
    1,966,611
    
    
    $
    1,363,298
 See accompanying notes to the consolidated condensed financial statements.
 - 4 -




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##### Table of Contents



MACQUARIE INFRASTRUCTURE COMPANY TRUST
 
 
 Quarter Ended
    
    
    Six Months EndedJune 30, 2006
    
    
    June 30, 2005
    
    
    June 30, 2006
    
    
    June 30, 2005RevenuesRevenue from product sales
    
    $
    56,922
    
    
    $
    34,150
    
    
    $
    98,914
    
    
    $
    64,391Service revenue
    
    
    47,726
    
    
    
    37,038
    
    
    
    90,630
    
    
    
    71,190Financing and equipment lease income
    
    
    1,285
    
    
    
    1,331
    
    
    
    2,583
    
    
    
    2,673Total revenue
    
    
    105,933
    
    
    
    72,519
    
    
    
    192,127
    
    
    
    138,254Costs and expensesCost of product sales
    
    
    36,010
    
    
    
    19,708
    
    
    
    61,279
    
    
    
    36,803Cost of services
    
    
    22,632
    
    
    
    19,493
    
    
    
    43,664
    
    
    
    36,566Selling, general and administrative
    
    
    24,294
    
    
    
    18,941
    
    
    
    48,244
    
    
    
    38,286Fees to manager
    
    
    3,718
    
    
    
    2,209
    
    
    
    10,196
    
    
    
    4,152Depreciation
    
    
    2,121
    
    
    
    1,420
    
    
    
    3,831
    
    
    
    2,747Amortization of intangibles
    
    
    3,580
    
    
    
    3,235
    
    
    
    7,026
    
    
    
    6,320Total operating expenses
    
    
    92,355
    
    
    
    65,006
    
    
    
    174,240
    
    
    
    124,874Operating income
    
    
    13,578
    
    
    
    7,513
    
    
    
    17,887
    
    
    
    13,380Other income (expense)Dividend income
    
    
    2,351
    
    
    
    6,184
    
    
    
    5,002
    
    
    
    6,184Interest income
    
    
    1,180
    
    
    
    1,231
    
    
    
    2,882
    
    
    
    2,330Interest expense
    
    
    (16,122
    )
    
    
    (7,511
    )
    
    
    (28,461
    )
    
    
    (15,269
    )Equity in earnings (loss) and
amortization charges of investees
    
    
    3,115
    
    
    
    (1,139
    )
    
    
    5,568
    
    
    
    514Other income (expense), net
    
    
    94
    
    
    
    261
    
    
    
    (73
    )
    
    
    (654
    )Net income before income taxes and
minority interests
    
    
    4,196
    
    
    
    6,539
    
    
    
    2,805
    
    
    
    6,485Income tax (benefit) expense
    
    
    (417
    )
    
    
    579
    
    
    
    (396
    )
    
    
    579Net income before minority interests
    
    
    4,613
    
    
    
    5,960
    
    
    
    3,201
    
    
    
    5,906Minority interests
    
    
    106
    
    
    
    324
    
    
    
    32
    
    
    
    353Net income
    
    $
    4,507
    
    
    $
    5,636
    
    
    $
    3,169
    
    
    $
    5,553Basic income per share:
    
    $
    0.17
    
    
    $
    0.21
    
    
    $
    0.12
    
    
    $
    0.21Weighted average number of shares
of trust stock outstanding: basic
    
    
    27,062,201
    
    
    
    26,960,560
    
    
    
    27,056,505
    
    
    
    26,786,298Diluted income per share:
    
    $
    0.17
    
    
    $
    0.21
    
    
    $
    0.12
    
    
    $
    0.21Weighted average number of shares
of trust stock outstanding: diluted
    
    
    27,073,016
    
    
    
    26,984,160
    
    
    
    27,069,835
    
    
    
    26,798,163Cash dividends declared per share
    
    $
    0.50
    
    
    $
    0.5877
    
    
    $
    1.00
    
    
    $
    0.5877
 See accompanying
notes to the consolidated condensed financial statements.
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MACQUARIE INFRASTRUCTURE COMPANY TRUST
 
 
 Six Months EndedJune 30, 2006
    
    
    June 30, 2005Operating activitiesNet income
    
    $
    3,169
    
    
    $
    5,553Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization of property and equipment
    
    
    8,290
    
    
    
    6,632Amortization of intangible assets
    
    
    7,026
    
    
    
    6,320Loss on disposal of equipment
    
    
    47
    
    
    
    Equity in (earnings) loss and amortization charges of investee
    
    
    (3,202
    )
    
    
    1,378Amortization of finance charges
    
    
    1,806
    
    
    
    553Noncash interest expense
    
    
    1,622
    
    
    
    Accretion of asset retirement obligation
    
    
    110
    
    
    
    Deferred rent
    
    
    1,205
    
    
    
    1,184Deferred revenue
    
    
    100
    
    
    
    73Deferred taxes
    
    
    (5,850
    )
    
    
    Minority interests
    
    
    31
    
    
    
    353Noncash compensation
    
    
    598
    
    
    
    266Post retirement obligations
    
    
    88
    
    
    
    Other noncash expenses
    
    
    
    
    
    
    221Accrued interest expense on subordinated debt  related party
    
    
    522
    
    
    
    519Accrued interest income on subordinated debt  related party
    
    
    (424
    )
    
    
    (480
    )Changes in operating assets and liabilities:Restricted cash
    
    
    (177
    )
    
    
    Accounts receivable
    
    
    (2,222
    )
    
    
    (4,546
    )Equipment lease receivable, net
    
    
    994
    
    
    
    789Dividend receivable
    
    
    145
    
    
    
    Inventories
    
    
    1,353
    
    
    
    496Prepaid expenses and other current assets
    
    
    1,930
    
    
    
    2,650Accounts payable and accrued expenses
    
    
    (4,425
    )
    
    
    (3,176
    )Income taxes payable
    
    
    4,729
    
    
    
    Due to manager
    
    
    5,326
    
    
    
    1,976Other
    
    
    610
    
    
    
    (17
    )Net cash provided by operating activities
    
    
    23,401
    
    
    
    20,744Investing activitiesAcquisition of businesses and investments, net of cash acquired
    
    
    (501,104
    )
    
    
    (49,594
    )Additional costs of acquisitions
    
    
    (6
    )
    
    
    (72
    )Goodwill adjustment
    
    
    
    
    
    
    694Deposits and deferred costs on future acquisitions
    
    
    (1,134
    )
    
    
    Purchases of property and equipment
    
    
    (4,912
    )
    
    
    (3,364
    )Proceeds received on subordinated loan
    
    
    611
    
    
    
    686Net cash used in investing activities
    
    
    (506,545
    )
    
    
    (51,650
    )
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##### Table of Contents



Six Months EndedJune 30, 2006
    
    
    June 30, 2005Financing activitiesProceeds from long-term debt
    
    
    160,000
    
    
    
    32,000Proceeds
from line of credit facilities
    
    
    277,901
    
    
    
    543Distributions paid to shareholders
    
    
    (27,059
    )
    
    
    (15,898
    )Debt financing costs
    
    
    (4,756
    )
    
    
    (1,674
    )Distributions paid to minority shareholders
    
    
    (282
    )
    
    
    Payment of long-term debt
    
    
    (72
    )
    
    
    (47
    )Offering costs
    
    
    
    
    
    
    (1,934
    )Restricted cash
    
    
    715
    
    
    
    (1,077
    )Payment of notes and capital lease obligations
    
    
    (990
    )
    
    
    (678
    )Net cash provided by financing activities
    
    
    405,457
    
    
    
    11,235Effect of exchange rate changes on cash
    
    
    367
    
    
    
    (78
    )Net change in cash and cash equivalents
    
    
    (77,320
    )
    
    
    (19,749
    )Cash and cash equivalents, beginning of period
    
    
    115,163
    
    
    
    140,050Cash and cash equivalents, end of period
    
    $
    37,843
    
    
    $
    120,301Supplemental disclosures of cash flow information:Noncash investing and financing activity:Accrued purchases of property and equipment
    
    $
    1,263
    
    
    $
    Accrued deposits and deferred costs on acquisitions
    
    $
    2,639
    
    
    $
    Acquisition of property through capital leases
    
    $
    1,667
    
    
    $
    1,417Issuance of trust stock to manager for payment of March 2006
and December 2004 performance fees, respectively
    
    $
    4,134
    
    
    $
    12,088Issuance of trust stock to independent directors
    
    $
    450
    
    
    $
    191Income taxes paid
    
    $
    492
    
    
    $
    609Interest paid
    
    $
    24,225
    
    
    $
    14,357
 See accompanying notes to the consolidated condensed financial statements
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MACQUARIE INFRASTRUCTURE COMPANY TRUST
 
 
 1. Organization and Description of Business
       2. Basis of Presentation
    3. Significant Accounting Policies
  Regulatory Assets and Liabilities
 Accounting for the Effects of Certain Types of
Regulation.
 - 8 -




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Revenue Recognition
  Union Pension Plan
  Recently Issued Accounting Standards
 Accounting
Changes and Error Corrections Accounting Changes Reporting Accounting Changes in Interim Financial Statements retrospective application restatement
 Accounting for Uncertainty in Income
Taxes
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4. Earnings Per Share
  Quarter Ended June 30,
    
    
    Six Months Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Weighted average number of shares of trust
stock outstanding: basic
    
    
    27,062,201
    
    
    
    26,960,560
    
    
    
    27,056,505
    
    
    
    26,786,298Dilutive effect of restricted stock unit grants
    
    
    10,815
    
    
    
    23,600
    
    
    
    13,330
    
    
    
    11,865Weighted average number of shares of trust
stock outstanding: diluted
    
    
    27,073,016
    
    
    
    26,984,160
    
    
    
    27,069,835
    
    
    
    26,798,163
  5. Acquisitions
 The Gas Company
       Current assets
    
    $
    42,297Property, equipment and leasehold improvements
    
    
    127,075Intangible assets:Customer relationships
    
    
    7,400Trade name
    
    
    8,500Real estate leases
    
    
    100Goodwill
    
    
    120,361Other assets
    
    
    3,633Total assets acquired
    
    
    309,366Current liabilities
    
    
    19,867Deferred income taxes
    
    
    13,227Other liabilities
    
    
    12,948Net assets acquired
    
    $
    263,324
 - 10 -




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##### Table of Contents



Recognition of Customer Relationship Intangible Assets Acquired in a Business
Combination.
 International-Matex Tank Terminals
       Pro Forma Information
   - 11 -




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##### Table of Contents



6. Property, Equipment, Land and Leasehold Improvements
  June 30, 2006
    
    
    December 31,(unaudited)
    
    
    2005Land
    
    $
    63,358
    
    
    $
    62,520Easements
    
    
    9,861
    
    
    
    5,624Buildings
    
    
    35,559
    
    
    
    32,866Leasehold and land improvements
    
    
    123,104
    
    
    
    108,726Machinery and equipment
    
    
    242,008
    
    
    
    132,196Furniture and fixtures
    
    
    4,628
    
    
    
    1,920Construction in progress
    
    
    10,423
    
    
    
    3,486Property held for future use
    
    
    1,374
    
    
    
    1,196Other
    
    
    1,471
    
    
    
    764491,786
    
    
    
    349,298Less: Accumulated depreciation
    
    
    (30,472
    )
    
    
    (14,179
    )Property, equipment, land and leasehold improvements, net
    
    $
    461,314
    
    
    $
    335,119
 7. Intangible Assets
  WeightedAverage Life
    
    
    June 30, 2006
    
    
    December 31,(Years)
    
    
    (unaudited)
    
    
    2005Contractual arrangements
    
    
    32
    
    
    $
    237,572
    
    
    $
    237,572Non-compete agreements
    
    
    2.8
    
    
    
    4,835
    
    
    
    4,835Customer relationships
    
    
    9.6
    
    
    
    34,040
    
    
    
    26,640Leasehold rights
    
    
    13.5
    
    
    
    8,360
    
    
    
    8,259Trade names
    
    Indefinite (1)
    
    
    34,674
    
    
    
    26,175Domain names
    
    Indefinite (1)
    
    
    8,307
    
    
    
    8,307Technology
    
    
    5
    
    
    
    460
    
    
    
    460328,248
    
    
    
    312,248Less: Accumulated amortization
    
    
    
    
    
    
    (19,787
    )
    
    
    (12,761
    )Intangible assets, net
    
    
    
    
    
    $
    308,461
    
    
    $
    299,487
 
 (1)
    
    Trade names of $500,000 and domain names of $320,000 are being amortized over a period of 1.5
years and 4 years, respectively. - 12 -




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8. Long-Term Debt
   June 30, 2006(unaudited)
    
    
    December 31, 2005MIC Inc. acquisition facility (1)
    
    $
    274,022
    
    
    $
    Airport services debt (2)
    
    
    300,000
    
    
    
    300,000MDE senior notes (3)
    
    
    120,000
    
    
    
    120,000PCAA
(various) loan payable (4)
    
    
    125,448
    
    
    
    125,448PCAA Chicago
loan payable (4)
    
    
    4,523
    
    
    
    4,574PCAA SP loan
payable (4)
    
    
    58,740
    
    
    
    58,740RCL
Properties loan payable (4)
    
    
    2,210
    
    
    
    2,232TGC loans payable
    
    
    160,000
    
    
    
    TGC revolving facility
    
    
    2,000
    
    
    
    1,046,943
    
    
    
    610,994Less: current portion
    
    
    (2,146
    )
    
    
    (146
    )Long-term portion
    
    $
    1,044,797
    
    
    $
    610,848
 
 (1)
    
    Macquarie Bank Limited has provided $100.0 million of the MIC Inc. acquisition
facility. Interest expense on Macquarie Bank Limiteds portion of the acquisition facility
for both the quarter and six months ended June 30, 2006 was $1.0 million.(2)
    
    As of June 30, 2006, Macquarie Bank Limited has provided $35.0 million of the airport services
debt. Interest expense on Macquarie Bank Limiteds portion of the long-term debt for the quarter
and six months ended June 30, 2006 was $595,000 and $1.5 million, respectively. Macquarie Bank
Limited is also providing approximately one-third of the interest rate swaps related to this debt
and made payments to the airport services business of $169,000 and $223,000, respectively, for the
quarter and six months ended June 30, 2006, which are included as a reduction to interest expense.(3)
    
    MDE is an entity within the district energy business.(4)
    
    PCAA (various), PCAA Chicago, PCAA SP and RCL Properties are references to entities within the
airport parking business. Commitments for refinancing of the airport parking businesss debt
received subsequent to June 30, 2006, are discussed in Note 16, Subsequent Events. MIC Inc.
  
    
    a restriction on incurring additional debt at the Company
or MIC Inc. level prior to term loan repayment; and
    
    an increase in the maximum leverage ratio to 6.8x through the end of 2006, declining to 6.1x through
March 31, 2008, returning to 5.6x thereafter or upon term loan repayment.
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The Gas Company
   Holding Company Debt
    
    Operating Company DebtHGC Holdings LLC
    
    The Gas Company, LLCBorrowings:
    
    $80.0 million Term Loan
    
    $80.0 million Term Loan
    
    $20.0 million RevolverSecurity:
    
    First priority
security interest on
HGC assets and equity
interests
    
    First priority security interest on TGC assets and
equity interestsTerm:
    
    7 years
    
    7 years
    
    7 yearsAmortization:
    
    Payable at maturity
    
    Payable at maturity
    
    Payable at the earlier of 12 months
or maturityInterest: Years 1-5:
    
    LIBOR plus 0.60%
    
    LIBOR plus 0.40%
    
    LIBOR plus 0.40%Interest: Years 6-7:
    
    LIBOR plus 0.70%
    
    LIBOR plus 0.50%
    
    LIBOR plus 0.50%Hedging:
    
    Interest rate swaps (fixed v. LIBOR) fixing funding costs at 4.84%
for 7 years on a notional value of $160.0 million
    
    Distributions Lock-Up Test:
    
    
    
    12 mo. look-forward and 12 mo.
look-backward adjusted EBITDA
/interest <
3.5x
    
    Mandatory Prepayments:
    
    
    
    12 mo. look-forward and 12 mo.
look-backward adjusted
EBITDA/interest <
3.5x for 3 consecutive quarters
    
    Events of Default Financial
Triggers:
    
    
    
    12 mo. look-backward adjusted
EBITDA/interest <
2.5x
    
    12 mo. look-backward
adjusted
EBITDA/interest <
2.5x
 - 14 -




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##### Table of Contents



North America Capital Holding Company, or NACH
  Notional Principal Amount:
    
    $180.0 millionEffective Date:
    
    September 29, 2006Termination Date:
    
    December 12, 2010Fixed Rate:
    

    5.515%
 9. Comprehensive Income (Loss)
  10. Stockholders Equity
  11. Reportable Segments
   - 15 -




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##### Table of Contents



Airport
    
    
    Airport
    
    
    District
    
    
    GasServices
    
    
    Parking
    
    
    Energy
    
    
    Utility (1)
    
    
    TotalRevenue from Product SalesProduct sales
    
    $
    46,298
    
    
    $
    
    
    
    $
    
    
    
    $
    10,624
    
    
    $
    56,92246,298
    
    
    
    
    
    
    
    
    
    
    
    10,624
    
    
    
    56,922Service RevenueOther services
    
    
    17,654
    
    
    
    
    
    
    
    791
    
    
    
    
    
    
    
    18,445Cooling capacity revenue
    
    
    
    
    
    
    
    
    
    
    4,241
    
    
    
    
    
    
    
    4,241Cooling consumption revenue
    
    
    
    
    
    
    
    
    
    
    5,258
    
    
    
    
    
    
    
    5,258Parking services
    
    
    
    
    
    
    19,782
    
    
    
    
    
    
    
    
    
    
    
    19,78217,654
    
    
    
    19,782
    
    
    
    10,290
    
    
    
    
    
    
    
    47,726Financing and Lease IncomeFinancing and equipment
lease
    
    
    
    
    
    
    
    
    
    
    1,285
    
    
    
    
    
    
    
    1,285
    
    
    
    
    
    
    
    1,285
    
    
    
    
    
    
    
    1,285Total Revenue
    
    $
    63,952
    
    
    $
    19,782
    
    
    $
    11,575
    
    
    $
    10,624
    
    
    $
    105,933
 
 (1)
    
    Represents revenue from the date of acquisition on June 7, 2006. - 16 -




---



##### Table of Contents



Quarter Ended June 30, 2006
    
    
    At June 30, 2006(unaudited)
    
    
    (unaudited)Property,Equipment,Land andSegment
    
    
    Interest
    
    
    Depreciation/
    
    
    Capital
    
    
    LeaseholdProfit (2)
    
    
    Expense
    
    
    Amortization (3)
    
    
    Expenditures
    
    
    Improvements
    
    
    Total AssetsAirport services
    
    $
    33,877
    
    
    $
    5,498
    
    
    $
    4,458
    
    
    $
    962
    
    
    $
    90,955
    
    
    $
    523,116Airport parking
    
    
    6,258
    
    
    
    4,400
    
    
    
    1,216
    
    
    
    1,716
    
    
    
    97,039
    
    
    
    291,363District energy
    
    
    4,026
    
    
    
    2,171
    
    
    
    1,768
    
    
    
    616
    
    
    
    145,319
    
    
    
    242,500Gas utility (1)
    
    
    3,130
    
    
    
    644
    
    
    
    430
    
    
    
    128
    
    
    
    128,001
    
    
    
    319,277Total
    
    $
    47,291
    
    
    $
    12,713
    
    
    $
    7,872
    
    
    $
    3,422
    
    
    $
    461,314
    
    
    
    1,376,256
 
 
 (1)
    
    Represents income statement and capital expenditures data from the date of acquisition on
June 7, 2006.(2)
    
    Segment profit includes revenue less cost of sales. For the airport parking and district
energy businesses, depreciation expense of $744,000 and $1.4 million, respectively, are
included in cost of sales for the quarter ended June 30, 2006.(3)
    
    Includes depreciation expense of property, equipment and leasehold improvements and
amortization of intangible assets. Includes depreciation expense for the airport parking and
district energy businesses which has also been included in segment profit.  Total assets of reportable segments
    
    $
    1,376,256Equity and cost investments:Investment in Yorkshire Link
    
    
    77,960Investment in SEW
    
    
    37,971Investment in MCG
    
    
    72,462Investment in IMTT
    
    
    353,804Corporate and other
    
    
    346,747Less: Consolidation entries
    
    
    (298,589
    )Total consolidated assets
    
    $
    1,966,611
  Six MonthsQuarter Ended
    
    
    Ended June 30,June 30, 2006
    
    
    2006Total reportable segment profit
    
    $
    47,291
    
    
    $
    87,184Selling, general and administrative expenses
    
    
    (24,294
    )
    
    
    (48,244
    )Fees to manager
    
    
    (3,718
    )
    
    
    (10,196
    )Depreciation and amortization (1)
    
    
    (5,701
    )
    
    
    (10,857
    )13,578
    
    
    
    17,887Other expense, net
    
    
    (9,382
    )
    
    
    (15,082
    )Total consolidated income before income taxes and minority interests
    
    $
    4,196
    
    
    $
    2,805
 
 (1)
    
    Does not include depreciation expense for the airport parking and district energy businesses
which are included in total reportable segment profit. - 17 -




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##### Table of Contents



Airport Services
    
    
    Airport Parking
    
    
    District Energy
    
    
    TotalRevenue from Product SalesProduct sales
    
    $
    34,150
    
    
    $
    
    
    
    $
    
    
    
    $
    34,15034,150
    
    
    
    
    
    
    
    
    
    
    
    34,150Service RevenueOther services
    
    
    12,629
    
    
    
    
    
    
    
    642
    
    
    
    13,271Cooling capacity revenue
    
    
    
    
    
    
    
    
    
    
    4,127
    
    
    
    4,127Cooling consumption revenue
    
    
    
    
    
    
    
    
    
    
    5,365
    
    
    
    5,365Parking services
    
    
    
    
    
    
    14,275
    
    
    
    
    
    
    
    14,27512,629
    
    
    
    14,275
    
    
    
    10,134
    
    
    
    37,038Financing and Lease IncomeFinancing and equipment lease
    
    
    
    
    
    
    
    
    
    
    1,331
    
    
    
    1,331
    
    
    
    
    
    
    
    1,331
    
    
    
    1,331Total Revenue
    
    $
    46,779
    
    
    $
    14,275
    
    
    $
    11,465
    
    
    $
    72,519
  Quarter Ended June 30, 2005
    
    
    At June 30, 2005(unaudited)
    
    
    (unaudited)Property,Equipment,Land andSegment
    
    
    Interest
    
    
    Depreciation/
    
    
    Capital
    
    
    LeaseholdProfit (1)
    
    
    Expense
    
    
    Amortization(2)
    
    
    Expenditures
    
    
    Improvements
    
    
    Total AssetsAirport services
    
    $
    25,522
    
    
    $
    3,359
    
    
    $
    3,705
    
    
    $
    1,566
    
    
    $
    77,515
    
    
    $
    459,368Airport parking
    
    
    4,087
    
    
    
    2,293
    
    
    
    1,155
    
    
    
    515
    
    
    
    67,667
    
    
    
    205,642District energy
    
    
    3,709
    
    
    
    2,078
    
    
    
    1,786
    
    
    
    404
    
    
    
    149,457
    
    
    
    251,430Total
    
    $
    33,318
    
    
    $
    7,730
    
    
    $
    6,646
    
    
    $
    2,485
    
    
    $
    294,639
    
    
    
    916,440
 
 
 (1)
    
    Segment profit includes revenue less cost of sales. For the airport parking and district
energy businesses, depreciation expense of $546,000 and $1.4 million, respectively, are
included in cost of sales for the quarter ended June 30, 2005.(2)
    
    Includes depreciation expense of property, equipment and leasehold improvements and
amortization of intangible assets. Includes depreciation expense for the airport parking and
district energy businesses which has also been included in segment profit. - 18 -




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##### Table of Contents



Total assets of reportable segments
    
    $
    916,440Equity and cost investments:Investment in Yorkshire Link
    
    
    72,125Investment in SEW
    
    
    36,819Investment in MCG
    
    
    79,273Corporate and other
    
    
    346,653Less: Consolidation entries
    
    
    (219,479
    )Total consolidated assets
    
    $
    1,231,831
  Quarter Ended
    
    
    Six Months EndedJune 30, 2005
    
    
    June 30, 2005Total reportable segment profit
    
    $
    33,318
    
    
    $
    64,885Selling, general and administrative expenses
    
    
    (18,941
    )
    
    
    (38,286
    )Fees to manager
    
    
    (2,209
    )
    
    
    (4,152
    )Depreciation and amortization (1)
    
    
    (4,655
    )
    
    
    (9,067
    )7,513
    
    
    
    13,380Other expense, net
    
    
    (974
    )
    
    
    (6,895
    )Total consolidated loss before income taxes and minority interests
    
    $
    6,539
    
    
    $
    6,485
 
 (1)
    
    Does not include depreciation expense for the airport parking and district energy businesses
which are included in total reportable segment profit.  Airport
    
    
    Airport
    
    
    District
    
    
    GasServices
    
    
    Parking
    
    
    Energy
    
    
Utility (1)
    
    
    TotalRevenue from Product SalesProduct sales
    
    $
    88,290
    
    
    $
    
    
    
    $
    
    
    
    $
    10,624
    
    
    $
    98,91488,290
    
    
    
    
    
    
    
    
    
    
    
    10,624
    
    
    
    98,914Service RevenueOther services
    
    
    35,833
    
    
    
    
    
    
    
    1,636
    
    
    
    
    
    
    
    37,469Cooling capacity revenue
    
    
    
    
    
    
    
    
    
    
    8,430
    
    
    
    
    
    
    
    8,430Cooling consumption revenue
    
    
    
    
    
    
    
    
    
    
    6,733
    
    
    
    
    
    
    
    6,733Parking services
    
    
    
    
    
    
    37,998
    
    
    
    
    
    
    
    
    
    
    
    37,99835,833
    
    
    
    37,998
    
    
    
    16,799
    
    
    
    
    
    
    
    90,630Financing and Lease IncomeFinancing and equipment lease
    
    
    
    
    
    
    
    
    
    
    2,583
    
    
    
    
    
    
    
    2,583
    
    
    
    
    
    
    
    2,583
    
    
    
    
    
    
    
    2,583Total Revenue
    
    $
    124,123
    
    
    $
    37,998
    
    
    $
    19,382
    
    
    $
    10,624
    
    
    $
    192,127
 
 (1)
    
    Represents revenue from the date of acquisition on June 7, 2006. - 19 -




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##### Table of Contents



Six Months Ended June 30, 2006(unaudited)Segment
    
    
    
    
    
    
    Depreciation/
    
    
    CapitalProfit (2)
    
    
    Interest Expense
    
    
    Amortization (3)
    
    
    ExpendituresAirport services
    
    $
    66,447
    
    
    $
    11,194
    
    
    $
    8,871
    
    
    $
    1,512Airport parking
    
    
    11,039
    
    
    
    8,301
    
    
    
    2,487
    
    
    
    2,163District energy
    
    
    6,568
    
    
    
    4,316
    
    
    
    3,528
    
    
    
    1,109Gas utility (1)
    
    
    3,130
    
    
    
    644
    
    
    
    430
    
    
    
    128Total
    
    $
    87,184
    
    
    $
    24,455
    
    
    $
    15,316
    
    
    $
    4,912
  
 (1)
    
    Represents income statement and capital expenditures data from the date of acquisition on
June 7, 2006.(2)
    
    Segment profit includes revenue less cost of sales. For the airport parking and district
energy businesses, depreciation expense of $1.6 million and $2.9 million, respectively, are
included in cost of sales for the six months ended June 30, 2006.(3)
    
    Includes depreciation expense of property, equipment and leasehold improvements and
amortization of intangible assets. Includes depreciation expense for the airport parking and
district energy businesses which has also been included in segment profit.  Airport Services
    
    
    Airport Parking
    
    
    District Energy
    
    
    TotalRevenue from Product SalesProduct sales
    
    $
    64,391
    
    
    $
    
    
    
    $
    
    
    
    $
    64,39164,391
    
    
    
    
    
    
    
    
    
    
    
    64,391Service RevenueOther services
    
    
    27,332
    
    
    
    
    
    
    
    1,364
    
    
    
    28,696Cooling capacity revenue
    
    
    
    
    
    
    
    
    
    
    8,186
    
    
    
    8,186Cooling consumption revenue
    
    
    
    
    
    
    
    
    
    
    6,724
    
    
    
    6,724Parking services
    
    
    
    
    
    
    27,584
    
    
    
    
    
    
    
    27,58427,332
    
    
    
    27,584
    
    
    
    16,274
    
    
    
    71,190Financing and Lease IncomeFinancing and equipment lease
    
    
    
    
    
    
    
    
    
    
    2,673
    
    
    
    2,673
    
    
    
    
    
    
    
    2,673
    
    
    
    2,673Total Revenue
    
    $
    91,723
    
    
    $
    27,584
    
    
    $
    18,947
    
    
    $
    138,254
 - 20 -




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##### Table of Contents



Six Months Ended June 30, 2005(unaudited)Segment
    
    
    
    
    
    
    Depreciation/
    
    
    CapitalProfit (1)
    
    
    Interest Expense
    
    

Amortization (2)
    
    
    ExpendituresAirport services
    
    $
    51,227
    
    
    $
    6,826
    
    
    $
    7,171
    
    
    $
    2,163Airport parking
    
    
    7,290
    
    
    
    4,419
    
    
    
    2,267
    
    
    
    546District energy
    
    
    6,368
    
    
    
    4,272
    
    
    
    3,514
    
    
    
    655Total
    
    $
    64,885
    
    
    $
    15,517
    
    
    $
    12,952
    
    
    $
    3,364
  
 (1)
    
    Segment profit includes revenue less cost of sales. For the airport parking and district
energy businesses, depreciation expense of $1.0 million and $2.8 million, respectively, are
included in cost of sales for the six months ended June 30, 2005.(2)
    
    Includes depreciation expense of property, equipment and leasehold improvements and
amortization of intangible assets. Includes depreciation expense for the airport parking and
district energy businesses which has also been included in segment profit. 12. Related Party Transactions
 Management Services Agreement with MIMUSA
    
 - 21 -




---



##### Table of Contents



Advisory and Other Services from the Macquarie Group and its Affiliates
    Related Party Loans
  Derivative Instruments and Hedging Activities
      - 22 -




---



##### Table of Contents



13. Income Taxes
   Accounting for Income Taxes
    14. Legal Proceedings and Contingencies
  Toll Road Business
  South East Water
  15. Distributions
  - 23 -




---



##### Table of Contents



16. Subsequent Events
 Distributions
  Acquisitions
 Trajen
      Refinancing of Airport Parking Debt
  Term
    
    3 years (2009)Extension Options
    
    Two one-year extensions subject to certain covenantsInterest and principal repayments
    
    Interest only during term of the loan
Repayment of principal at maturityInterest rate type
    
    FloatingInterest rate base
    
    1 month LIBORInterest rate margin
    
    Year 1-3: 1.90%Year 4: 2.10%Year 5: 2.30%Interest rate hedging
    
    100% hedge (swap or cap) required to be executed
prior to close (including tax insurance and
replacement)Debt reserves
    
    Various reserves to be determined prior to closeLock up cash reserves
    
    None
  - 24 -




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 GENERAL
       Tax Treatment of Distributions
   Recent Acquisitions
 
 IMTT
  - 25 -




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##### Table of Contents



- 26 -




---



##### Table of Contents



Gas Utility Business
        
    
    the inability to recover our transaction or transition costs in future rate cases;
    
    the inability of TGC to file for a new rate case with a prospective test year commencing prior to 2009;
    
    a requirement to limit TGC and HGCs ratio of consolidated debt to total capital to 65%;
    
    a requirement to maintain $20.0 million in readily available cash resources at TGC, HGC or the company;
    
    a requirement that TGC revise its Fuel Adjustment Clause to reconcile monthly charges to
corresponding actually incurred fuel expenses; and
    
    a requirement that TGC provide a $4.1 million customer appreciation credit to its gas
customers.
  Trajen
    - 27 -




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##### Table of Contents



Recent Developments In Our District Energy Business
  RESULTS OF OPERATIONS
 Key Factors Affecting Operating Results
 
    
    positive contributions from our acquisitions during the last twelve months, including:
 o
    
    acquisition of a Las Vegas FBO (Eagle Aviation Resources, or EAR) in our airport services business;o
    
    eight new locations in our airport parking business;o
    
    the IMTT acquisition discussed above, which declared a $7.0 million distribution during the second quarter; ando
    
    the TGC acquisition discussed above;
 
    
    increased gross profit across our existing businesses driven by improved performance at
our airport services and airport parking businesses;
    
    recognition of distributions and loan repayments from our existing unconsolidated
businesses totaling $3.4 million to date in 2006;
    
    higher management fees, including the $4.1 million performance fee earned by the manager
in the first quarter, which it has reinvested in shares of trust stock, and higher base
management fees due to our increased investments; and
    
    an increase in interest expense due to the overall increase in our debt to partially
fund our acquisitions, coupled with an overall increase in interest rates.
  - 28 -




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##### Table of Contents



Quarter Ended June 30
    
    


    
    
    Six Months Ended June 302006
    
    
    2005
    
    
        Change
    
    
    2006
    
    
    2005
    
    
    Change$
    
    
    %
    
    


    
    


    
    
    $
    
    
    %RevenueRevenue from product sales
    
    $
    56,922
    
    
    $
    34,150
    
    
    
    22,772
    
    
    
    66.7
    
    
    $
    98,914
    
    
    $
    64,391
    
    
    
    34,523
    
    
    
    53.6Service revenue
    
    
    47,726
    
    
    
    37,038
    
    
    
    10,688
    
    
    
    28.9
    
    
    
    90,630
    
    
    
    71,190
    
    
    
    19,440
    
    
    
    27.3Financing and equipment lease income
    
    
    1,285
    
    
    
    1,331
    
    
    
    (46
    )
    
    
    (3.5
    )
    
    
    2,583
    
    
    
    2,673
    
    
    
    (90
    )
    
    
    (3.4
    )105,933
    
    
    
    72,519
    
    
    
    33,414
    
    
    
    46.1
    
    
    
    192,127
    
    
    
    138,254
    
    
    
    53,873
    
    
    
    39.0Costs and expensesCost of product sales
    
    
    36,010
    
    
    
    19,708
    
    
    
    16,302
    
    
    
    82.7
    
    
    
    61,279
    
    
    
    36,803
    
    
    
    24,476
    
    
    
    66.5Cost of services
    
    
    22,632
    
    
    
    19,493
    
    
    
    3,139
    
    
    
    16.1
    
    
    
    43,664
    
    
    
    36,566
    
    
    
    7,098
    
    
    
    19.4Gross profit
    
    
    47,291
    
    
    
    33,318
    
    
    
    13,973
    
    
    
    41.9
    
    
    
    87,184
    
    
    
    64,885
    
    
    
    22,299
    
    
    
    34.4Selling, general and administrative
    
    
    24,294
    
    
    
    18,941
    
    
    
    5,353
    
    
    
    28.3
    
    
    
    48,244
    
    
    
    38,286
    
    
    
    9,958
    
    
    
    26.0Fees to manager
    
    
    3,718
    
    
    
    2,209
    
    
    
    1,509
    
    
    
    68.3
    
    
    
    10,196
    
    
    
    4,152
    
    
    
    6,044
    
    
    
    145.6Depreciation
    
    
    2,121
    
    
    
    1,420
    
    
    
    701
    
    
    
    49.4
    
    
    
    3,831
    
    
    
    2,747
    
    
    
    1,084
    
    
    
    39.5Amortization of intangibles
    
    
    3,580
    
    
    
    3,235
    
    
    
    345
    
    
    
    10.7
    
    
    
    7,026
    
    
    
    6,320
    
    
    
    706
    
    
    
    11.2Operating income
    
    
    13,578
    
    
    
    7,513
    
    
    
    6,065
    
    
    
    80.7
    
    
    
    17,887
    
    
    
    13,380
    
    
    
    4,507
    
    
    
    33.7Other income (expense)Dividend income
    
    
    2,351
    
    
    
    6,184
    
    
    
    (3,833
    )
    
    
    (62.0
    )
    
    
    5,002
    
    
    
    6,184
    
    
    
    (1,182
    )
    
    
    (19.1
    )Interest income
    
    
    1,180
    
    
    
    1,231
    
    
    
    (51
    )
    
    
    (4.1
    )
    
    
    2,882
    
    
    
    2,330
    
    
    
    552
    
    
    
    23.7Interest expense
    
    
    (16,122
    )
    
    
    (7,511
    )
    
    
    (8,611
    )
    
    
    114.6
    
    
    
    (28,461
    )
    
    
    (15,269
    )
    
    
    (13,192
    )
    
    
    86.4Equity in earnings (loss) and
amortization charges of investees
    
    
    3,115
    
    
    
    (1,139
    )
    
    
    4,254
    
    
    
    (373.5
    )
    
    
    5,568
    
    
    
    514
    
    
    
    5,054
    
    
    
    983.3Other income (expense), net
    
    
    94
    
    
    
    261
    
    
    
    (167
    )
    
    
    (64.0
    )
    
    
    (73
    )
    
    
    (654
    )
    
    
    581
    
    
    
    (88.8
    )Net income before income taxes and
minority interests
    
    
    4,196
    
    
    
    6,539
    
    
    
    (2,343
    )
    
    
    (35.8
    )
    
    
    2,805
    
    
    
    6,485
    
    
    
    (3,680
    )
    
    
    (56.7
    )Income tax (benefit) expense
    
    
    (417
    )
    
    
    579
    
    
    
    (996
    )
    
    
    (172.0
    )
    
    
    (396
    )
    
    
    579
    
    
    
    (975
    )
    
    
    (168.4
    )Net income before minority interests
    
    
    4,613
    
    
    
    5,960
    
    
    
    (1,347
    )
    
    
    (22.6
    )
    
    
    3,201
    
    
    
    5,906
    
    
    
    (2,705
    )
    
    
    (45.8
    )Minority interests
    
    
    106
    
    
    
    324
    
    
    
    (218
    )
    
    
    (67.3
    )
    
    
    32
    
    
    
    353
    
    
    
    (321
    )
    
    
    (90.9
    )Net income
    
    $
    4,507
    
    
    $
    5,636
    
    
    
    (1,129
    )
    
    
    (20.0
    )
    
    $
    3,169
    
    
    $
    5,553
    
    
    
    (2,384
    )
    
    
    (42.9
    )
 Gross Profit
  Selling, General and Administrative Expenses
  
    
    $1.8 million additional costs from our TGC acquisition not reflected in 2005 results;
    
    additional costs at our parking businesss corporate office primarily to support a
larger organization resulting from growth in number of locations;
    
    additional compensation expense related to stock appreciation rights issued during 2006;
and
    
    additional corporate selling, general and administrative costs of $1.1 million due
primarily to costs of approximately $461,000 related to an unsuccessful acquisition bid as
well as residual Sarbanes-Oxley costs.
  - 29 -




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##### Table of Contents



Other Income (Expense)
     Income Taxes
   Earnings Before Interest, Taxes, Depreciation and Amortization, or EBITDA
   Quarter Ended June 30,
    
    
    
    
    
    
    
    
    
    
    Six Months Ended June2006
    
    
    2005
    
    
    Change
    

    2006
    
    
    2005
    
    
    Change$
 
    
    %
    
    
    
    
    
    
    
    
    
    

    
    $
    
    

    %Net income
    
    $
    4,507
    
    
    $
    5,636
    
    
    
    (1,129
    )
    
    
    (20.0
    )
    
    $
    3,169
    
    
    $
    5,553
    
    
    
    (2,384
    )
    
    
    (42.9
    )Interest expense, net
    
    
    14,942
    
    
    
    6,280
    
    
    
    8,662
    
    
    
    137.9
    
    
    
    25,579
    
    
    
    12,939
    
    
    
    12,640
    
    
    
    97.7Income taxes
    
    
    (417
    )
    
    
    579
    
    
    
    (996
    )
    
    
    (172.0
    )
    
    
    (396
    )
    
    
    579
    
    
    
    (975
    )
    
    
    (168.4
    )Depreciation (1)
    
    
    4,292
    
    
    
    3,410
    
    
    
    882
    
    
    
    25.9
    
    
    
    8,290
    
    
    
    6,631
    
    
    
    1,659
    
    
    
    25.0Amortization (2)
    
    
    3,580
    
    
    
    3,235
    
    
    
    345
    
    
    
    10.7
    
    
    
    7,026
    
    
    
    6,320
    
    
    
    706
    
    
    
    11.2EBITDA
    
    $
    26,904
    
    
    $
    19,140
    
    
    
    7,764
    
    
    
    40.6
    
    
    $
    43,668
    
    
    $
    32,022
    
    
    
    11,646
    
    
    
    36.4
 
 (1)
    
    Includes depreciation expense of $744,000, $546,000, $1.6 million and $1.0 million for the
airport parking business for the quarters ended June 30, 2006 and 2005 and the six month
periods ended on the same dates, respectively, and $1.4 million, $1.4 million, $2.8 million
and $2.8 million for the district energy business for the quarters ended June 30, 2006 and
2005 and the six month periods ended on the same dates, respectively, which are included in
the cost of services on our consolidated condensed income statement.
Does not include $1.1 million of depreciation expense related to our 50% investment in IMTT for
each of the quarter and six months ended June 30, 2006.(2)
    
    Does not include $974,000, $1.2 million, $1.9 million and $2.4 million of amortization
expense related to intangible assets in connection with our investment in the toll road
business for the quarters ended June 30, 2006 and 2005 and the six month periods ended on the
same dates, respectively, and $189,000 of amortization expense related to intangible assets of
IMTT for each of the quarter and six months ended June 30, 2006. - 30 -




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##### Table of Contents



BUSINESS SEGMENT OPERATIONS
 Airport Services Business
   Key Factors Affecting Operating Results
 
    
    contribution of positive operating results from EAR, an FBO in Las Vegas which we acquired in the third quarter of 2005;
    
    higher dollar per gallon fuel margins at existing locations and unchanged fuel volumes;
    
    higher selling, general and administrative costs primarily relating to non-cash and
accrued compensation expense and increased credit card fees based on higher revenues; and
    
    higher interest costs from higher debt levels resulting from the refinancing in December
2005.
 - 31 -




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##### Table of Contents



($ in thousands)
    
    Existing Locations (NACH & MANA)
    
    
    
    
    
    
    Total(unaudited)Quarter Ended June 30
    
    
    
    
    
    
    
    
    
    
    EAR
    
    
    Quarter Ended June 302006
    
    
    2005
    
    
    Change
    
    
    Acquisition
    
    
    2006
    
    
    2005
    
    
    Change$
 
    

    
$

    

    
 $

    
    
 %
    
    

    
 $

    

    
 $
 
    
 $
    
    
    

    
 $
 
    
    
     %RevenuesFuel revenue
    
    
    40,924
    
    
    
    34,150
    
    
    
    6,774
    
    
    
    19.8
    
    
    
    5,374
    
    
    
    46,298
    
    
    
    34,150
    
    
    
    12,148
    
    
    
    35.6Non-fuel revenue
    
    
    14,061
    
    
    
    12,629
    
    
    
    1,432
    
    
    
    11.3
    
    
    
    3,593
    
    
    
    17,654
    
    
    
    12,629
    
    
    
    5,025
    
    
    
    39.8Total revenue
    
    
    54,985
    
    
    
    46,779
    
    
    
    8,206
    
    
    
    17.5
    
    
    
    8,967
    
    
    
    63,952
    
    
    
    46,779
    
    
    
    17,173
    
    
    
    36.7Cost of revenueCost of revenue-fuel
    
    
    25,025
    
    
    
    19,645
    
    
    
    5,380
    
    
    
    27.4
    
    
    
    3,492
    
    
    
    28,517
    
    
    
    19,645
    
    
    
    8,872
    
    
    
    45.2Cost of revenue-non-fuel
    
    
    1,422
    
    
    
    1,612
    
    
    
    (190
    )
    
    
    (11.8
    )
    
    
    136
    
    
    
    1,558
    
    
    
    1,612
    
    
    
    (54
    )
    
    
    (3.3
    )Total cost of revenue
    
    
    26,447
    
    
    
    21,257
    
    
    
    5,190
    
    
    
    24.4
    
    
    
    3,628
    
    
    
    30,075
    
    
    
    21,257
    
    
    
    8,818
    
    
    
    41.5Fuel gross profit
    
    
    15,899
    
    
    
    14,505
    
    
    
    1,394
    
    
    
    9.6
    
    
    
    1,882
    
    
    
    17,781
    
    
    
    14,505
    
    
    
    3,276
    
    
    
    22.6Non-fuel gross profit
    
    
    12,639
    
    
    
    11,017
    
    
    
    1,622
    
    
    
    14.7
    
    
    
    3,457
    
    
    
    16,096
    
    
    
    11,017
    
    
    
    5,079
    
    
    
    46.1Gross Profit
    
    
    28,538
    
    
    
    25,522
    
    
    
    3,016
    
    
    
    11.8
    
    
    
    5,339
    
    
    
    33,877
    
    
    
    25,522
    
    
    
    8,355
    
    
    
    32.7Selling, general and
administrative expenses
    
    
    16,119
    
    
    
    15,547
    
    
    
    572
    
    
    
    3.7
    
    
    
    2,138
    
    
    
    18,257
    
    
    
    15,547
    
    
    
    2,710
    
    
    
    17.4Depreciation and
amortization
    
    
    3,701
    
    
    
    3,705
    
    
    
    (4
    )
    
    
    (0.1
    )
    
    
    757
    
    
    
    4,458
    
    
    
    3,705
    
    
    
    753
    
    
    
    20.3Operating income
    
    
    8,718
    
    
    
    6,270
    
    
    
    2,448
    
    
    
    39.0
    
    
    
    2,444
    
    
    
    11,162
    
    
    
    6,270
    
    
    
    4,892
    
    
    
    78.0Other expense
    
    
    29
    
    
    
    25
    
    
    
    4
    
    
    
    16.0
    
    
    
    
    
    
    
    29
    
    
    
    25
    
    
    
    4
    
    
    
    16.0Interest expense, net (1)
    
    
    4,642
    
    
    
    3,299
    
    
    
    1,343
    
    
    
    40.7
    
    
    
    733
    
    
    
    5,375
    
    
    
    3,299
    
    
    
    2,076
    
    
    
    62.9Provision for income taxes
    
    
    1,166
    
    
    
    1,228
    
    
    
    (62
    )
    
    
    (5.0
    )
    
    
    598
    
    
    
    1,764
    
    
    
    1,228
    
    
    
    536
    
    
    
    43.6Net income (2)
    
    
    2,881
    
    
    
    1,718
    
    
    
    1,163
    
    
    
    67.7
    
    
    
    1,113
    
    
    
    3,994
    
    
    
    1,718
    
    
    
    2,276
    
    
    
    132.5Reconciliation of net income to EBITDA:Net income (2)
    
    
    2,881
    
    
    
    1,718
    
    
    
    1,163
    
    
    
    67.7
    
    
    
    1,113
    
    
    
    3,994
    
    
    
    1,718
    
    
    
    2,276
    
    
    
    132.5Interest expense, net (1)
    
    
    4,642
    
    
    
    3,299
    
    
    
    1,343
    
    
    
    40.7
    
    
    
    733
    
    
    
    5,375
    
    
    
    3,299
    
    
    
    2,076
    
    
    
    62.9Provision for income taxes
    
    
    1,166
    
    
    
    1,228
    
    
    
    (62
    )
    
    
    (5.0
    )
    
    
    598
    
    
    
    1,764
    
    
    
    1,228
    
    
    
    536
    
    
    
    43.6Depreciation and
amortization
    
    
    3,701
    
    
    
    3,705
    
    
    
    (4
    )
    
    
    (0.1
    )
    
    
    757
    
    
    
    4,458
    
    
    
    3,705
    
    
    
    753
    
    
    
    20.3EBITDA
    
    
    12,390
    
    
    
    9,950
    
    
    
    2,440
    
    
    
    24.5
    
    
    
    3,201
    
    
    
    15,591
    
    
    
    9,950
    
    
    
    5,641
    
    
    
    56.7
 - 32 -




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##### Table of Contents



($ in thousands)
    
    Existing Locations (NACH & MANA)
    
    
    
    
    
    
    Total(unaudited)Six
Months Ended June 30
    
    
    
    
    
    
    
    
    
    
    EAR
    
    

Six
Months Ended June 302006
    
    
    2005
    
    
    Change
    
    
    Acquisition
    
    
    2006
    
    
    2005
    
    
    Change$
 
    

    
$

    

    
 $

    
    
 %
    
    

    
 $

    

    
 $
 
    
 $
    
    
    

    
 $
 
    
    
     %RevenuesFuel revenue
    
    
    77,306
    
    
    
    64,391
    
    
    
    12,915
    
    
    
    20.1
    
    
    
    10,984
    
    
    
    88,290
    
    
    
    64,391
    
    
    
    23,899
    
    
    
    37.1Non-fuel revenue
    
    
    28,692
    
    
    
    27,332
    
    
    
    1,360
    
    
    
    5.0
    
    
    
    7,141
    
    
    
    35,833
    
    
    
    27,332
    
    
    
    8,501
    
    
    
    31.1Total revenue
    
    
    105,998
    
    
    
    91,723
    
    
    
    14,275
    
    
    
    15.6
    
    
    
    18,125
    
    
    
    124,123
    
    
    
    91,723
    
    
    
    32,400
    
    
    
    35.3Cost of revenueCost of revenue-fuel
    
    
    46,384
    
    
    
    36,644
    
    
    
    9,740
    
    
    
    26.6
    
    
    
    7,403
    
    
    
    53,787
    
    
    
    36,644
    
    
    
    17,143
    
    
    
    46.8Cost of revenue-non-fuel
    
    
    3,590
    
    
    
    3,852
    
    
    
    (262
    )
    
    
    (6.8
    )
    
    
    299
    
    
    
    3,889
    
    
    
    3,852
    
    
    
    37
    
    
    
    1.0Total cost of revenue
    
    
    49,974
    
    
    
    40,496
    
    
    
    9,478
    
    
    
    23.4
    
    
    
    7,702
    
    
    
    57,676
    
    
    
    40,496
    
    
    
    17,180
    
    
    
    42.4Fuel gross profit
    
    
    30,922
    
    
    
    27,747
    
    
    
    3,175
    
    
    
    11.4
    
    
    
    3,581
    
    
    
    34,503
    
    
    
    27,747
    
    
    
    6,756
    
    
    
    24.3Non-fuel gross profit
    
    
    25,102
    
    
    
    23,480
    
    
    
    1,622
    
    
    
    6.9
    
    
    
    6,842
    
    
    
    31,944
    
    
    
    23,480
    
    
    
    8,464
    
    
    
    36.0Gross Profit
    
    
    56,024
    
    
    
    51,227
    
    
    
    4,797
    
    
    
    9.4
    
    
    
    10,423
    
    
    
    66,447
    
    
    
    51,227
    
    
    
    15,220
    
    
    
    29.7Selling, general and
administrative expenses
    
    
    32,725
    
    
    
    30,912
    
    
    
    1,813
    
    
    
    5.9
    
    
    
    4,230
    
    
    
    36,955
    
    
    
    30,912
    
    
    
    6,043
    
    
    
    19.5Depreciation and
amortization
    
    
    7,362
    
    
    
    7,171
    
    
    
    191
    
    
    
    2.7
    
    
    
    1,509
    
    
    
    8,871
    
    
    
    7,171
    
    
    
    1,700
    
    
    
    23.7Operating income
    
    
    15,937
    
    
    
    13,144
    
    
    
    2,793
    
    
    
    21.2
    
    
    
    4,684
    
    
    
    20,621
    
    
    
    13,144
    
    
    
    7,477
    
    
    
    56.9Other expense
    
    
    65
    
    
    
    948
    
    
    
    (883
    )
    
    
    (93.1
    )
    
    
    
    
    
    
    65
    
    
    
    948
    
    
    
    (883
    )
    
    
    (93.1
    )Interest expense, net (1)
    
    
    9,047
    
    
    
    6,723
    
    
    
    2,324
    
    
    
    34.6
    
    
    
    1,917
    
    
    
    10,964
    
    
    
    6,723
    
    
    
    4,241
    
    
    
    63.1Provision for income
taxes
    
    
    2,385
    
    
    
    2,371
    
    
    
    14
    
    
    
    0.6
    
    
    
    968
    
    
    
    3,353
    
    
    
    2,371
    
    
    
    982
    
    
    
    41.4Net income (2)
    
    
    4,440
    
    
    
    3,102
    
    
    
    1,338
    
    
    
    43.1
    
    
    
    1,799
    
    
    
    6,239
    
    
    
    3,102
    
    
    
    3,137
    
    
    
    101.1Reconciliation of net
income to EBITDA:Net income (2)
    
    
    4,440
    
    
    
    3,102
    
    
    
    1,338
    
    
    
    43.1
    
    
    
    1,799
    
    
    
    6,239
    
    
    
    3,102
    
    
    
    3,137
    
    
    
    101.1Interest expense, net (1)
    
    
    9,047
    
    
    
    6,723
    
    
    
    2,324
    
    
    
    34.6
    
    
    
    1,917
    
    
    
    10,964
    
    
    
    6,723
    
    
    
    4,241
    
    
    
    63.1Provision for income
taxes
    
    
    2,385
    
    
    
    2,371
    
    
    
    14
    
    
    
    0.6
    
    
    
    968
    
    
    
    3,353
    
    
    
    2,371
    
    
    
    982
    
    
    
    41.4Depreciation and
amortization
    
    
    7,362
    
    
    
    7,171
    
    
    
    191
    
    
    
    2.7
    
    
    
    1,509
    
    
    
    8,871
    
    
    
    7,171
    
    
    
    1,700
    
    
    
    23.7EBITDA
    
    
    23,234
    
    
    
    19,367
    
    
    
    3,867
    
    
    
    20.0
    
    
    
    6,193
    
    
    
    29,427
    
    
    
    19,367
    
    
    
    10,060
    
    
    
    51.9
 
 (1)
    
    We have allocated a portion of NACH interest expense to EAR on the basis of
amortization expense of intangible assets, mainly airport contract rights, of
EAR as a proportion of total intangible assets amortization expense. Therefore,
we recognize interest expense on EAR even though we did not incur any
additional senior debt at the time of our acquisition of EAR.(2)
    
    Corporate allocation expense of $2.0 million, with federal tax effect of
$651,000, has been excluded from the above tables for the quarter and six
months ended June 30, 2006, as they are eliminated on consolidation at the MIC
level. The state tax benefit of $192,000, which is not eliminated, is included
in the above table. The corporate allocation expense was introduced in the
second quarter of 2006. - 33 -




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##### Table of Contents



Revenue and Gross Profit
    
    
    inclusion of the results of EAR in the full quarter and six months of 2006;
    
    rising cost of fuel, which we generally pass on to customers; and
    
    an increase in average dollar per gallon fuel margins at existing locations, resulting
largely from a higher proportion of transient customers, which generally pay higher
margins, partially offset by reduced de-icing activity in the first quarter of 2006
compared to 2005 due to milder weather in the northeast US.
  Operating Expenses
  
    
    additional office costs resulting from higher rent and utility costs;
    
    additional credit card fees related to increased fuel revenue; and
    
    increased compensation expense largely due to issuance of Stock Appreciation Rights in the first quarter of 2006.
  Interest Expense, Net
  EBITDA
  
    
    increased average dollar per gallon fuel margins; and
    
    lower other expense due to transaction costs incurred in 2005 relating to our acquisition of two FBOs in California;
    
    partially offset by lower de-icing revenues in the first quarter; and
    
    higher selling, general and administrative costs, predominantly related to non-cash or
accrued compensation expenses, utilities and credit card fees.
 - 34 -




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##### Table of Contents



Airport Parking Business
   
    
    the SunPark facilities acquired in October 2005 located in Houston, Oklahoma City, St.
Louis, Buffalo, Philadelphia and Columbus;
    
    the Priority facility acquired in July 2005 located in Philadelphia; and
    
    the First Choice facility acquired in October 2005 located in Cleveland.
   Key Factors Affecting Operating Results
  
    
    contribution from new locations;
    
    price increases and reduced discounting in selected markets contributed to the 13.8%
increase in average revenue per car out for comparable locations during the quarter;
    
    marketing efforts targeted at customers with a longer average stay increased average
overnight occupancy by 6.7% for comparable locations during the quarter;
    
    improved operating margins at comparable locations; and
    
    cash settlement received, related to a 2003 acquisition, included in other income.
 - 35 -




---



##### Table of Contents



($ in thousands)
    
    Quarter Ended June 30
    
    
    
    
    
    
    
    
    
    Six Months Ended June 30(unaudited)
    
    2006
    
    2005
    
    Change
    
    2006
    
    2005
    
    Change$
    
    $
    
    $
    
    %
    
    $
    
    $
    
    $
    
    %Revenue
    
    
    19,782
    
    
    
    14,275
    
    
    
    5,507
    
    
    
    38.6
    
    
    
    37,998
    
    
    
    27,584
    
    
    
    10,414
    
    
    
    37.8Direct expenses (1)
    
    
    13,524
    
    
    
    10,188
    
    
    
    3,336
    
    
    
    32.7
    
    
    
    26,959
    
    
    
    20,294
    
    
    
    6,665
    
    
    
    32.8Gross profit
    
    
    6,258
    
    
    
    4,087
    
    
    
    2,171
    
    
    
    53.1
    
    
    
    11,039
    
    
    
    7,290
    
    
    
    3,749
    
    
    
    51.4Selling, general and
administrative expenses
    
    
    1,573
    
    
    
    1,280
    
    
    
    293
    
    
    
    22.9
    
    
    
    3,273
    
    
    
    2,235
    
    
    
    1,038
    
    
    
    46.4Amortization of
intangibles
    
    
    472
    
    
    
    609
    
    
    
    (137
    )
    
    
    (22.5
    )
    
    
    878
    
    
    
    1,218
    
    
    
    (340
    )
    
    
    (27.9
    )Operating income
    
    
    4,213
    
    
    
    2,198
    
    
    
    2,015
    
    
    
    91.7
    
    
    
    6,888
    
    
    
    3,837
    
    
    
    3,051
    
    
    
    79.5Interest expense, net
    
    
    (4,362
    )
    
    
    (2,289
    )
    
    
    (2,073
    )
    
    
    90.6
    
    
    
    (8,283
    )
    
    
    (4,403
    )
    
    
    (3,880
    )
    
    
    88.1Other income (expense)
    
    
    409
    
    
    
    22
    
    
    
    387
    
    
    NM
    
    
    
    317
    
    
    
    (3
    )
    
    
    320
    
    
    NMIncome tax benefit
    
    
    52
    
    
    
    
    
    
    
    52
    
    
    
    
    
    
    
    514
    
    
    
    
    
    
    
    514
    
    
    
    Minority interest in
loss of consolidated
subsidiaries
    
    
    25
    
    
    
    26
    
    
    
    (1
    )
    
    
    (3.8
    )
    
    
    230
    
    
    
    114
    
    
    
    116
    
    
    
    101.8Net profit (loss) (2)
    
    
    337
    
    
    
    (43
    )
    
    
    380
    
    
    
    (883.7
    )
    
    
    (334
    )
    
    
    (455
    )
    
    
    121
    
    
    
    (26.6
    )Reconciliation of net
profit (loss) to EBITDANet profit (loss) (2)
    
    
    337
    
    
    
    (43
    )
    
    
    380
    
    
    
    (883.7
    )
    
    
    (334
    )
    
    
    (455
    )
    
    
    121
    
    
    
    (26.6
    )Interest expense, net
    
    
    4,362
    
    
    
    2,289
    
    
    
    2,073
    
    
    
    90.6
    
    
    
    8,283
    
    
    
    4,403
    
    
    
    3,880
    
    
    
    88.1Income tax benefit
    
    
    (52
    )
    
    
    
    
    
    
    (52
    )
    
    
    
    
    
    
    (514
    )
    
    
    
    
    
    
    (514
    )
    
    
    Depreciation
    
    
    744
    
    
    
    546
    
    
    
    198
    
    
    
    36.3
    
    
    
    1,609
    
    
    
    1,049
    
    
    
    560
    
    
    
    53.4Amortization of
intangibles
    
    
    472
    
    
    
    609
    
    
    
    (137
    )
    
    
    (22.5
    )
    
    
    878
    
    
    
    1,218
    
    
    
    (340
    )
    
    
    (27.9
    )EBITDA
    
    
    5,863
    
    
    
    3,401
    
    
    
    2,462
    
    
    
    72.4
    
    
    
    9,922
    
    
    
    6,215
    
    
    
    3,707
    
    
    
    59.6
 
 NM  Not meaningful(1)
    
    Includes depreciation expense of $744,000 and $546,000 for the quarters
ended June 30, 2006 and 2005, respectively, and $1.6 million and $1.0 million
for the six months ended June 30, 2006 and 2005, respectively.(2)
    
    Corporate allocation expense of $2.4 million with federal tax effect of
$765,000, has been excluded from the above table for the quarter and six months
ended June 30, 2006 as they are eliminated on consolidation at MIC level. The
state tax benefit of $189,000, which is not eliminated, is included in the
above table. The corporate allocation expense was introduced in the second
quarter of 2006. - 36 -




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##### Table of Contents



Quarter Ended June 30
    
    Six Months Ended June 302006
    
    2005
    
    2006
    
    2005Operating Data:Total Revenues (000s)(1):New locations
    
    $
    4,458
    
    
    $
    269
    
    
    $
    8,683
    
    
    $
    512Comparable locations
    
    $
    15,324
    
    
    $
    14,006
    
    
    $
    29,320
    
    
    $
    27,071Comparable locations increase
    
    
    9.4
    %
    
    
    
    
    
    
    8.3
    %Gross Profit Margin:New locations
    
    
    33.6
    %
    
    
    19.0
    %
    
    
    31.2
    %
    
    
    17.4
    %Comparable locations
    
    
    31.0
    %
    
    
    29.0
    %
    
    
    28.3
    %
    
    
    27.5
    %Comparable locations increase
    
    
    2.0
    %
    
    
    
    
    
    
    0.8
    %Parking Revenues (000s)(2):New locations
    
    $
    4,413
    
    
    $
    269
    
    
    $
    8,581
    
    
    $
    512Comparable locations
    
    $
    14,775
    
    
    $
    13,401
    
    
    $
    28,253
    
    
    $
    26,047Comparable locations increase
    
    
    10.3
    %
    
    
    
    
    
    
    8.5
    %Cars Out(3):New locations
    
    
    165,191
    
    
    
    6,981
    
    
    
    327,583
    
    
    
    13,002Comparable locations
    
    
    378,410
    
    
    
    390,460
    
    
    
    733,853
    
    
    
    748,980Comparable locations decrease
    
    
    -3.1
    %
    
    
    
    
    
    
    -2.0
    %Average Revenue per Car Out:New locations
    
    $
    26.72
    
    
    $
    38.49
    
    
    $
    26.19
    
    
    $
    39.38Comparable locations
    
    $
    39.04
    
    
    $
    34.32
    
    
    $
    38.50
    
    
    $
    34.78Comparable locations increase
    
    
    13.8
    %
    
    
    
    
    
    
    10.7
    %Average Overnight Occupancy(4)New locations
    
    
    5,909
    
    
    
    357
    
    
    
    5,905
    
    
    
    333Comparable locations
    
    
    16,428
    
    
    
    15,395
    
    
    
    15,754
    
    
    
    14,826Comparable locations increase
    
    
    6.7
    %
    
    
    
    
    
    
    6.3
    %Locations:New locations
    
    
    8
    
    
    
    
    
    
    
    8Comparable locations
    
    
    22
    
    
    
    
    
    
    
    22
 
 (1)
    
    Total revenues include revenues from all sources, including parking revenues, and
non-parking revenues such as those derived from transportation services and rental of
premises.(2)
    
    Parking revenues include all receipts from parking related revenue streams, which
includes monthly membership, and third party distribution companies.(3)
    
    Cars out refers to the total number of customers exiting during the period.(4)
    
    Average overnight occupancy refers to aggregate average daily occupancy measured
for all locations at the lowest point of the day and does not reflect turnover and intra-day
activity. Revenue
   - 37 -




---



##### Table of Contents



Direct Expenses
    Selling, General and Administrative Expenses
  Amortization of Intangibles
  Interest Expense, Net
   EBITDA
  - 38 -




---



##### Table of Contents



District Energy Business
 Key
Factors Affecting Operating Results
 
    
    capacity revenue generally increased in-line with inflation;
    
    earlier timing of pre-season maintenance expense for system reliability compared to the prior year; and
    
    scheduled increases in contract consumption rates in accordance with the terms of
existing customer contracts increased revenue to offset lower ton-hour sales from cooler
weather.
 ($ in thousands)
    
    Quarter Ended June 30
    
    
    
    
    
    
    
    
    
    Six Months Ended June 30(unaudited)
    
    2006
    
    2005
    
    Change
    
    2006
    
    2005
    
    Change$
    
    $
    
    $
    
    %
    
    $
    
    $
    
    $
    
    %Cooling capacity revenue
    
    
    4,241
    
    
    
    4,127
    
    
    
    114
    
    
    
    2.8
    
    
    
    8,430
    
    
    
    8,186
    
    
    
    244
    
    
    
    3.0Cooling consumption revenue
    
    
    5,258
    
    
    
    5,365
    
    
    
    (107
    )
    
    
    (2.0
    )
    
    
    6,733
    
    
    
    6,724
    
    
    
    9
    
    
    
    0.1Other revenue
    
    
    791
    
    
    
    642
    
    
    
    149
    
    
    
    23.2
    
    
    
    1,636
    
    
    
    1,364
    
    
    
    272
    
    
    
    19.9Finance lease revenue
    
    
    1,285
    
    
    
    1,331
    
    
    
    (46
    )
    
    
    (3.5
    )
    
    
    2,583
    
    
    
    2,673
    
    
    
    (90
    )
    
    
    (3.4
    )Total revenue
    
    
    11,575
    
    
    
    11,465
    
    
    
    110
    
    
    
    1.0
    
    
    
    19,382
    
    
    
    18,947
    
    
    
    435
    
    
    
    2.3Direct expenses  electricity
    
    
    3,341
    
    
    
    3,259
    
    
    
    82
    
    
    
    2.5
    
    
    
    4,285
    
    
    
    4,281
    
    
    
    4
    
    
    
    0.1Direct expenses  other (1)
    
    
    4,208
    
    
    
    4,497
    
    
    
    (289
    )
    
    
    (6.4
    )
    
    
    8,529
    
    
    
    8,298
    
    
    
    231
    
    
    
    2.8Direct expenses  total
    
    
    7,549
    
    
    
    7,756
    
    
    
    (207
    )
    
    
    (2.7
    )
    
    
    12,814
    
    
    
    12,579
    
    
    
    235
    
    
    
    1.9Gross profit
    
    
    4,026
    
    
    
    3,709
    
    
    
    317
    
    
    
    8.5
    
    
    
    6,568
    
    
    
    6,368
    
    
    
    200
    
    
    
    3.1Selling, general and
administrative expenses
    
    
    978
    
    
    
    858
    
    
    
    120
    
    
    
    14.0
    
    
    
    1,775
    
    
    
    1,715
    
    
    
    60
    
    
    
    3.5Amortization of intangibles
    
    
    341
    
    
    
    341
    
    
    
    
    
    
    
    
    
    
    
    678
    
    
    
    678
    
    
    
    
    
    
    
    Operating income
    
    
    2,707
    
    
    
    2,510
    
    
    
    197
    
    
    
    7.8
    
    
    
    4,115
    
    
    
    3,975
    
    
    
    140
    
    
    
    3.5Interest expense, net
    
    
    (2,106
    )
    
    
    (2,016
    )
    
    
    (90
    )
    
    
    4.5
    
    
    
    (4,176
    )
    
    
    (4,158
    )
    
    
    (18
    )
    
    
    0.4Other income (expense)
    
    
    44
    
    
    
    265
    
    
    
    (221
    )
    
    
    (83.4
    )
    
    
    (35
    )
    
    
    297
    
    
    
    (332
    )
    
    
    (111.8
    )(Provision) benefit for
income taxes
    
    
    (94
    )
    
    
    
    
    
    
    (94
    )
    
    
    
    
    
    
    239
    
    
    
    
    
    
    
    239
    
    
    
    Minority interest
    
    
    (130
    )
    
    
    (350
    )
    
    
    220
    
    
    
    (62.9
    )
    
    
    (261
    )
    
    
    (467
    )
    
    
    206
    
    
    
    (44.1
    )Net income (loss) (2)
    
    
    421
    
    
    
    409
    
    
    
    12
    
    
    
    2.9
    
    
    
    (118
    )
    
    
    (353
    )
    
    
    235
    
    
    
    (66.6
    )Reconciliation of net
income (loss) to EBITDANet income (loss) (2)
    
    
    421
    
    
    
    409
    
    
    
    12
    
    
    
    2.9
    
    
    
    (118
    )
    
    
    (353
    )
    
    
    235
    
    
    
    (66.6
    )Interest expense, net
    
    
    2,106
    
    
    
    2,016
    
    
    
    90
    
    
    
    4.5
    
    
    
    4,176
    
    
    
    4,158
    
    
    
    18
    
    
    
    0.4Provision (benefit)
for income taxes
    
    
    94
    
    
    
    
    
    
    
    94
    
    
    
    
    
    
    
    (239
    )
    
    
    
    
    
    
    (239
    )
    
    
    Depreciation
    
    
    1,427
    
    
    
    1,445
    
    
    
    (18
    )
    
    
    (1.2
    )
    
    
    2,850
    
    
    
    2,836
    
    
    
    14
    
    
    
    0.5Amortization of
intangibles
    
    
    341
    
    
    
    341
    
    
    
    
    
    
    
    
    
    
    
    678
    
    
    
    678
    
    
    
    
    
    
    
    EBITDA
    
    
    4,389
    
    
    
    4,211
    
    
    
    178
    
    
    
    4.2
    
    
    
    7,347
    
    
    
    7,319
    
    
    
    28
    
    
    
    0.4
 
 (1)
    
    Includes depreciation expense of $1.4 million for each of the quarters
ended June 30, 2006 and 2005 and $2.9 million and $2.8 million for the six
months ended June 30, 2006 and 2005, respectively.(2)
    
    Corporate allocation expense of $1.3 million, with federal tax effect of
$431,000, has been excluded from the above table for the quarter and six months
ended June 30, 2006, as they are eliminated on consolidation at the MIC level.
The state tax benefit of $97,000, which is not eliminated, is included in the
above table. The corporate allocation expense was introduced in the second
quarter of 2006. - 39 -




---



##### Table of Contents



Gross Profit
   Selling, General and Administrative Expenses
  Interest Expense, Net
  Other Income
  EBITDA
  Gas Utility Business
   Key Factors Affecting Operating Results
 
    
    Therms sold in each of the utility and non-utility sectors increased, mostly
resulting from organic growth in the business;
    
    Cost per therms increased by 24% due principally to higher petroleum costs that
are generally recoverable in billing rates; and
    
    Gross profit per therm increased 6% for the utility and 8% for the non-utility
operations due to lower losses of gas while the product is in pipelines and increased revenue
taxes (which benefit gross profit since the revenue-based taxes are included in revenue but
the related and offsetting expense is included below the gross profit line, in
operating costs).
 - 40 -




---



##### Table of Contents



($ in thousands)
    
    Quarter Ended June 30
    
    
    
    
    
    
    
    
    
    Six Months Ended June 30(unaudited)
    
    2006
    
    2005
    
    Change
    
    2006
    
    2005
    
    Change$
    
    $
    
    $
    
    %
    
    $
    
    $
    
    $
    
    %Revenues:Utility
    
    
    23,864
    
    
    
    20,808
    
    
    
    3,056
    
    
    
    14.7
    
    
    
    48,784
    
    
    
    41,017
    
    
    
    7,767
    
    
    
    18.9Non-utility
    
    
    17,716
    
    
    
    15,262
    
    
    
    2,454
    
    
    
    16.1
    
    
    
    33,784
    
    
    
    29,890
    
    
    
    3,894
    
    
    
    13.0Total revenue
    
    
    41,580
    
    
    
    36,070
    
    
    
    5,510
    
    
    
    15.3
    
    
    
    82,568
    
    
    
    70,907
    
    
    
    11,661
    
    
    
    16.4Generation and purchased gas:Utility
    
    
    13,678
    
    
    
    10,421
    
    
    
    3,257
    
    
    
    31.3
    
    
    
    26,642
    
    
    
    20,256
    
    
    
    6,386
    
    
    
    31.5Non-utility
    
    
    10,047
    
    
    
    9,384
    
    
    
    663
    
    
    
    7.1
    
    
    
    19,926
    
    
    
    17,146
    
    
    
    2,780
    
    
    
    16.2Gross profit
    
    
    17,855
    
    
    
    16,265
    
    
    
    1,590
    
    
    
    9.8
    
    
    
    36,000
    
    
    
    33,505
    
    
    
    2,495
    
    
    
    7.4Operating expenses:Production
    
    
    896
    
    
    
    1,047
    
    
    
    (151
    )
    
    
    (14.4
    )
    
    
    2,052
    
    
    
    1,872
    
    
    
    180
    
    
    
    9.6Transmission and distribution
    
    
    3,731
    
    
    
    3,387
    
    
    
    344
    
    
    
    10.2
    
    
    
    7,049
    
    
    
    6,542
    
    
    
    507
    
    
    
    7.7Taxes-other than income
    
    
    2,424
    
    
    
    2,116
    
    
    
    308
    
    
    
    14.6
    
    
    
    4,932
    
    
    
    4,223
    
    
    
    709
    
    
    
    16.8Selling, general and administrative expenses
    
    
    4,087
    
    
    
    3,619
    
    
    
    468
    
    
    
    12.9
    
    
    
    7,816
    
    
    
    7,503
    
    
    
    313
    
    
    
    4.2Depreciation and amortization
    
    
    1,417
    
    
    
    1,368
    
    
    
    49
    
    
    
    3.6
    
    
    
    2,785
    
    
    
    2,573
    
    
    
    212
    
    
    
    8.2Operating income
    
    
    5,300
    
    
    
    4,728
    
    
    
    572
    
    
    
    12.1
    
    
    
    11,366
    
    
    
    10,792
    
    
    
    574
    
    
    
    5.3Interest expense, net
    
    
    (2,749
    )
    
    
    (989
    )
    
    
    (1,760
    )
    
    
    178.0
    
    
    
    (3,960
    )
    
    
    (1,883
    )
    
    
    (2,077
    )
    
    
    110.3Other (expense) income
    
    
    (2,033
    )
    
    
    104
    
    
    
    (2,137
    )
    
    NM
    
    
    
    (1,844
    )
    
    
    1,474
    
    
    
    (3,318
    )
    
    
    (225.1
    )Income before taxes (1)
    
    
    518
    
    
    
    3,843
    
    
    
    (3,325
    )
    
    
    (86.5
    )
    
    
    5,562
    
    
    
    10,383
    
    
    
    (4,821
    )
    
    
    (46.4
    )Reconciliation of income before taxes to EBITDA:Income before taxes (1)
    
    
    518
    
    
    
    3,843
    
    
    
    (3,325
    )
    
    
    (86.5
    )
    
    
    5,562
    
    
    
    10,383
    
    
    
    (4,821
    )
    
    
    (46.4
    )Interest expense, net
    
    
    2,749
    
    
    
    989
    
    
    
    1,760
    
    
    
    178.0
    
    
    
    3,960
    
    
    
    1,883
    
    
    
    2,077
    
    
    
    110.3Depreciation and amortization
    
    
    1,417
    
    
    
    1,368
    
    
    
    49
    
    
    
    3.6
    
    
    
    2,785
    
    
    
    2,573
    
    
    
    212
    
    
    
    8.2EBITDA
    
    
    4,684
    
    
    
    6,200
    
    
    
    (1,516
    )
    
    
    (24.5
    )
    
    
    12,307
    
    
    
    14,839
    
    
    
    (2,532
    )
    
    
    (17.1
    )
 
 NM  Not meaningful(1)
    
    Gain on transfer of swaps of $6.0 million for the quarter and six months ended June 30, 2006,
has been excluded from income before taxes in the above table, since this amount was eliminated on
consolidation at the MIC level in the second quarter of 2006. Gross Profit
  
    
    Therms sold in the utility sector increased 2% and 1% for the quarter and six month
periods, respectively, while therms sold in the non-utility sector increased 4% and 1% for
the quarter and six month periods, respectively. This overall increase in therms sold
included the benefit of a 1% increase in the number of customers that TGC serves.
    
    Gross profit per therm for the utility operation decreased 4% for the second quarter due
to timing of periodic revenue billing adjustments in 2006 as compared to the timing of 2005
billing adjustments, partially offset by lower product losses during
pipeline distribution. Utility gross profit increased 6% for the six month period due
primarily to lower product losses during pipeline distribution.
 - 41 -




---



##### Table of Contents




    
    Gross profit per therm for the non-utility operations increased 25% and 8%,
respectively, for both the quarter and six month periods due to the pro-rata accrual of a
contract revenue adjustment in 2006 and lower propane inventory losses.
  Operating Expenses
      Interest Expense, Net
  Other (Expense) Income
  EBITDA
  International-Matex Tank Terminals
   Key Factors Affecting Operating Results
 
    
    Terminal revenue and terminal gross profit increased
principally due to increases in average tank rental rates; and
    
    Environmental response gross profit increased due to activities related to hurricane
Katrina and a significant spill response job undertaken in the second quarter.
 - 42 -




---



##### Table of Contents



($ in thousands)(unaudited)
    
    Quarter Ended June 30
    
    
    
    
    
    
    
    
    
    Six Months Ended June 302006
    
    2005
    
    Change
    
    2006
    
    2005
    
    Change$
    
    $
    
    $
    
    %
    
    $
    
    $
    
    $
    
    %RevenueTerminal revenue
    
    
    46,569
    
    
    
    43,110
    
    
    
    3,459
    
    
    
    8.0
    
    
    
    94,332
    
    
    
    88,584
    
    
    
    5,748
    
    
    
    6.5Terminal
revenue  heating
    
    
    3,032
    
    
    
    3,375
    
    
    
    (343
    )
    
    
    (10.2
    )
    
    
    10,542
    
    
    
    9,376
    
    
    
    1,166
    
    
    
    12.4Environmental response revenue
    
    
    5,243
    
    
    
    2,960
    
    
    
    2,283
    
    
    
    77.1
    
    
    
    10,006
    
    
    
    5,904
    
    
    
    4,102
    
    
    
    69.5Nursery revenue
    
    
    3,107
    
    
    
    3,534
    
    
    
    (427
    )
    
    
    (12.1
    )
    
    
    6,057
    
    
    
    6,853
    
    
    
    (796
    )
    
    
    (11.6
    )Total revenue
    
    
    57,951
    
    
    
    52,979
    
    
    
    4,972
    
    
    
    9.4
    
    
    
    120,937
    
    
    
    110,717
    
    
    
    10,220
    
    
    
    9.2Costs and expensesTerminal operating costs
    
    
    23,921
    
    
    
    23,707
    
    
    
    214
    
    
    
    0.9
    
    
    
    48,731
    
    
    
    45,867
    
    
    
    2,864
    
    
    
    6.2Terminal
operating costs  fuel
    
    
    3,292
    
    
    
    3,717
    
    
    
    (425
    )
    
    
    (11.4
    )
    
    
    9,435
    
    
    
    9,505
    
    
    
    (70
    )
    
    
    (0.7
    )Environmental response operating
costs
    
    
    2,858
    
    
    
    2,274
    
    
    
    584
    
    
    
    25.7
    
    
    
    5,954
    
    
    
    4,541
    
    
    
    1,413
    
    
    
    31.1Nursery operating costs
    
    
    3,446
    
    
    
    3,174
    
    
    
    272
    
    
    
    8.6
    
    
    
    6,272
    
    
    
    6,303
    
    
    
    (31
    )
    
    
    (0.5
    )Total operating costs
    
    
    33,517
    
    
    
    32,872
    
    
    
    645
    
    
    
    2.0
    
    
    
    70,392
    
    
    
    66,216
    
    
    
    4,176
    
    
    
    6.3Terminal gross profit
    
    
    22,388
    
    
    
    19,061
    
    
    
    3,327
    
    
    
    17.5
    
    
    
    46,708
    
    
    
    42,588
    
    
    
    4,120
    
    
    
    9.7Environmental response gross profit
    
    
    2,385
    
    
    
    686
    
    
    
    1,699
    
    
    
    247.7
    
    
    
    4,052
    
    
    
    1,363
    
    
    
    2,689
    
    
    
    197.3Nursery gross profit
    
    
    (339
    )
    
    
    360
    
    
    
    (699
    )
    
    
    (194.2
    )
    
    
    (215
    )
    
    
    550
    
    
    
    (765
    )
    
    
    (139.1
    )Gross profit
    
    
    24,434
    
    
    
    20,107
    
    
    
    4,327
    
    
    
    21.5
    
    
    
    50,545
    
    
    
    44,501
    
    
    
    6,044
    
    
    
    13.6General and administrative expenses
    
    
    5,307
    
    
    
    5,061
    
    
    
    246
    
    
    
    4.9
    
    
    
    10,866
    
    
    
    10,213
    
    
    
    653
    
    
    
    6.4Depreciation and amortization
    
    
    7,484
    
    
    
    7,382
    
    
    
    102
    
    
    
    1.4
    
    
    
    15,165
    
    
    
    14,767
    
    
    
    398
    
    
    
    2.7Mark-to-market (gain) loss on
non-hedging derivatives
    
    
    (419
    )
    
    
    31
    
    
    
    (450
    )
    
    NM
    
    
    
    (986
    )
    
    
    (1,240
    )
    
    
    254
    
    
    
    (20.5
    )Operating income
    
    
    12,062
    
    
    
    7,633
    
    
    
    4,429
    
    
    
    58.0
    
    
    
    25,500
    
    
    
    20,761
    
    
    
    4,739
    
    
    
    22.8Interest expense
    
    
    3,983
    
    
    
    5,666
    
    
    
    (1,683
    )
    
    
    (29.7
    )
    
    
    9,400
    
    
    
    11,334
    
    
    
    (1,934
    )
    
    
    (17.1
    )Provision for income taxes
    
    
    3,276
    
    
    
    860
    
    
    
    2,416
    
    
    
    280.9
    
    
    
    6,486
    
    
    
    4,294
    
    
    
    2,192
    
    
    
    51.0Net income
    
    
    4,803
    
    
    
    1,107
    
    
    
    3,696
    
    
    
    333.9
    
    
    
    9,614
    
    
    
    5,133
    
    
    
    4,481
    
    
    
    87.3Reconciliation of net income to EBITDA:Net income
    
    
    4,803
    
    
    
    1,107
    
    
    
    3,696
    
    
    
    333.9
    
    
    
    9,614
    
    
    
    5,133
    
    
    
    4,481
    
    
    
    87.3Interest expense
    
    
    3,983
    
    
    
    5,666
    
    
    
    (1,683
    )
    
    
    (29.7
    )
    
    
    9,400
    
    
    
    11,334
    
    
    
    (1,934
    )
    
    
    (17.1
    )Provision for income taxes
    
    
    3,276
    
    
    
    860
    
    
    
    2,416
    
    
    
    280.9
    
    
    
    6,486
    
    
    
    4,294
    
    
    
    2,192
    
    
    
    51.0Depreciation and amortization
    
    
    7,484
    
    
    
    7,382
    
    
    
    102
    
    
    
    1.4
    
    
    
    15,165
    
    
    
    14,767
    
    
    
    398
    
    
    
    2.7EBITDA
    
    
    19,546
    
    
    
    15,015
    
    
    
    4,531
    
    
    
    30.2
    
    
    
    40,665
    
    
    
    35,528
    
    
    
    5,137
    
    
    
    14.5
 
 NM  Not meaningful Revenue and Gross Profit
   - 43 -




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##### Table of Contents



Operating Expenses
  Interest Expense, Net
  EBITDA
  Toll Road Business
  
    
    our equity in the earnings of Connect M1-A1 Holdings Limited, or CHL, which we hold
through Macquarie Yorkshire Limited, net of amortization expense; and
    
    net interest income resulting from loans between us and a subsidiary of CHL.
 ($ in thousands)
    
    Quarter Ended June 30
    
    
    
    
    
    
    
    
    
    Six Months Ended June 30(unaudited)2006
    
    2005
    
    Change
    
    2006
    
    2005
    
    Change$
    
    $
    
    $
    
    %
    
    $
    
    $
    
    $
    
    %Equity in earnings
of investee
    
    
    3,840
    
    
    
    36
    
    
    
    3,804
    
    
    NM
    
    
    
    7,226
    
    
    
    2,888
    
    
    
    4,338
    
    
    
    150.2Amortization
    
    
    (974
    )
    
    
    (1,175
    )
    
    
    201
    
    
    
    17.1
    
    
    
    (1,907
    )
    
    
    (2,375
    )
    
    
    468
    
    
    
    (19.7
    )Equity in
earnings and
amortization of
investee
    
    
    2,866
    
    
    
    (1,139
    )
    
    
    4,005
    
    
    
    (351.6
    )
    
    
    5,319
    
    
    
    513
    
    
    
    4,806
    
    
    NM
 
 NM  Not meaningful    - 44 -




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##### Table of Contents



Investments
 Macquarie Communications Infrastructure Group, or MCG
  South East Water, or SEW
  LIQUIDITY AND CAPITAL RESOURCES
  
    
    all of our businesses and investments generate, and will continue to generate, significant operating cash flow;
    
    the ongoing maintenance capital expenditures associated with our businesses are modest and readily funded from their
respective operating cash flow;
    
    all significant short-term growth capital expenditure will be funded with cash on hand or from committed undrawn debt
facilities;
    
    CHLs amortizing debt can be paid from operating cash flow;
    
    payments on Thermal Chicago/Northwind Aladdins debt that will begin to amortize in 2007 can be paid from operating cash
flow;
    
    we will be able to raise equity to refinance amounts borrowed under our revolving credit facility prior to its maturity; and
    
    following an equity refinancing, we will have $300.0 million of revolving financing.
  Our Consolidated Cash Flow
    - 45 -




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##### Table of Contents



Six Months Ended, June 30,($ in thousands)
    
    2006
    
    2005
    
    ChangeCash provided by operations
    
    $
    23,419
    
    
    $
    20,744
    
    
    
    12.9
    %Cash used in investing activities
    
    $
    (506,545
    )
    
    $
    (51,650
    )
    
    NMCash provided by financing activities
    
    $
    405,457
    
    
    $
    11,235
    
    
    NM
 
  Airport Services Business Cash Flow
 Six MonthsEnded June 30,($ in thousands)
    
    2006
    
    2005Cash provided by operations
    
    $
    21,864
    
    
    $
    9,169Cash used in investing activities
    
    $
    (1,138
    )
    
    $
    (51,327
    )Cash (used in) provided by financing activities
    
    $
    (17,868
    )
    
    $
    44,238
  
    
    the acquisition of EAR in August 2005 that has increased cash flow in the first six
months of 2006 compared to the first six months of 2005;
    
    improved performance at existing locations;
    
    an increase in interest paid reflecting higher debt levels;
    
    increase in working capital of $5.5 million, primarily relating to increase in accounts
receivable, income tax receivables, and accounts payable offset by a decrease in accrued
expenses;
    
    capital expenditures were $1.1 million in 2006 compared to $1.6 million in 2005, and
included $1.0 million for maintenance and $81,000 for expansion;
    
    distributions to MIC Inc. of $17.4 million in 2006 compared to $6.7 million in 2005;
    
    the acquisition in the first quarter of 2005 of GAH and related proceeds received from
the issuance of long term debt and a capital contribution from MIC Inc. in January 2005;
and
    
    subsequent to June 30, 2006, additional debt of $180.0 million drawn to partially
finance the Trajen acquisition.
  - 46 -




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##### Table of Contents



Airport Parking Business Cash Flow
 Six MonthsEnded June 30,($ in thousands)
    
    2006
    
    2005Cash provided by operations
    
    $
    3,433
    
    
    $
    2,192Cash used in investing activities
    
    $
    (2,168
    )
    
    $
    (377
    )Cash used in financing activities
    
    $
    (3,197
    )
    
    $
    (141
    )
  
    
    an increase in working capital of $715,000 through management of accounts receivable and payable balances;
    
    2006 shuttle bus acquisitions funded with cash rather than capital lease obligations as in 2005; and
    
    repayment, in part, of loan from MIC Inc. and a receipt of cash settlement related to acquisitions in 2003.
  District Energy Business Cash Flow
 Six MonthsEnded June 30,($ in thousands)
    
    2006
    
    2005Cash provided by operations
    
    $
    4,499
    
    
    $
    4,162Cash (used in) provided by investing activities
    
    $
    (1,109
    )
    
    $
    39Cash used in financing activities
    
    $
    (3,879
    )
    
    $
    (4,061
    )
  
    
    working capital usage reflecting timing of trade receivables and payment of accrued expenses;
    
    increase in cash used due to the timing of on-going maintenance capital
expenditures for system reliability and the 2005 goodwill adjustment of $694,000 related to
our share of a settlement providing for the early release of escrow on the Aladdin
bankruptcy;
 
    
    dividend distributions of $5.5 million in 2006 compared to $4.6 million in 2005; and
    
    additional borrowings in 2006 of $1.9 million to finance capital expenditures.
  
    debt service ratio at June 30, 2006:
    
    2.18 : 1
    drawdown of revolving credit facility as of June 30, 2006:
    
    $2.7 million
 - 47 -




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##### Table of Contents



Gas Utility Business Cash Flow
  Six MonthsEnded June 30,($ in thousands)
    
    2006
    
    2005Cash provided by operations
    
    $
    11,211
    
    
    $
    11,618Cash used in investing activities
    
    $
    (260,207
    )
    
    $
    (3,376
    )Cash provided by (used in) financing activities
    
    $
    255,450
    
    
    $
    (3,153
    )
  
    
    the decrease in operating cash flow for the first half of 2006 was mainly the result of
normal working capital fluctuations. The key factors that drive operating cash flows
include customer receipts less purchases of fuel, materials and supplies, and less payment
of payroll and benefit costs, franchise and revenue taxes, vendor services and
administrative charges;
    
    cash used in investing activities increased mainly due to our acquisition of TGC; and
    
    cash provided by financing activities increased due to $160.0 million of new term debt
incurred to finance the purchase of TGC, $106.7 million of capital received from us upon
our acquisition of the business, and $2.0 million drawn on TGCs revolving credit agreement
to fund working capital needs immediately following the acquisition.
   IMTT Cash Flow
  Six MonthsEnded June 30,($ in thousands)
    
    2006
    
    
    2005Cash provided by operations
    
    $
    38,799
    
    
    $
    26,134Cash used in investing activities
    
    $
    (33,512
    )
    
    $
    (14,050
    )Cash provided by (used in) financing activities
    
    $
    87,646
    
    
    $
    (11,198
    )
  
    
    cash provided by operations increased due to an increase in gross profit and a decrease
in interest paid as discussed in Business Segment Operations and a reduction in working
capital;
    
    cash used in investing activities increased principally due to high levels of specific
capital expenditure relating to the construction of the new facility at Geismar, LA and the
construction of new storage tanks at IMTTs existing facility at St. Rose, LA as discussed
in Capital Expenditure; and
    
    substantial cash was provided to IMTT from financing activities as a result of our
investment in IMTT net of dividends paid to the existing shareholders of IMTT and
repayments of borrowings.
 - 48 -




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##### Table of Contents



Senior Notes
    
    Senior Notes
    
    Revolving Credit FacilityAmount Outstanding
as at June 30, 2006.
    
    $50.0 million
    
    $60.0 million
    
    $38.9 million
letters of credit
outstandingUndrawn Amount
    
    N/A
    
    N/A
    
    $101.1 million
available for cash
draw or letter of
credit.Term
    
    November, 2016
    
    November, 2016
    
    November, 2007Amortization
    
    $7.14 million per annum
commencing November, 2010
through November 2015
with balance payable at
maturity.
    
    $8.57 million per annum
commencing November, 2010
through November 2015 with
balance payable at maturity.
    
    Revolving. Payable
at maturity.Interest Rate
    
    Fixed at 8%.
    
    Fixed at 7.15%.
    
    Floating at LIBOR +
1.075% to 1.7%
based on Debt to
EBITDA ratio grid.Makewhole on Early
Repayment
    
    Makewhole equals
difference between the
outstanding principal
balance and the value of
the senior notes
discounting the remaining
payments at a discount
rate of 0.5% over the
U.S. treasury security
with a maturity equal to
the remaining weighted
average maturity of
senior notes.
    
    Makewhole equals difference
between the outstanding
principal balance and the
value of the senior notes
discounting the remaining
payments at a discount rate
of 0.5% over the U.S.
treasury security with a
maturity equal to the
remaining weighted average
maturity of senior notes.
    
    Nil.Debt Service
Reserves Required
    
    Nil.
    
    Nil.
    
    Nil.Security
    
    Unsecured
    
    Unsecured
    
    Unsecured

Debt to EBITDA: Max
4.0xFinancial Covenants
    
    Debt to EBITDA: Max 4.0x
    
    
    
    EBITDA to Interest:(applicable to
IMTTs key operating
subsidiaries on a
combined basis).
    
    EBITDA to Interest: Min
3.25x 
Min Tangible Net Worth:
$161.6 million
    
    Debt to EBITDA: Max 4.0x
EBITDA to Interest: Min 3.25x
Min Tangible Net Worth:
$161.6 million
    
    Min 3.25x 
Min Tangible Net
Worth: $161.6
millionFinancial Covenant
Ratios as at June
30, 2006. (IMTTs
key operating
subsidiaries on a
    
    Debt to EBITDA Ratio: 2.5x
EBITDA to Interest Ratio:
8.2x 
Tangible Net Worth: $270.0 million
    
    Debt to EBITDA Ratio: 2.5x

EBITDA to Interest Ratio: 8.2x
Tangible Net Worth: $270.0 million
    
    Debt to EBITDA
Ratio: 2.5x
EBITDA to Interest
Ratio: 8.2x
Tangible Net Worth: $270.0 millioncombined basis).Restrictions on
payments of
dividends
    
    None provided no default
as a result of payment
    
    None provided no default as a
result of payment
    
    None provided no
default as a result
of paymentInterest Rate Hedging
    
    
    
    
    
    Hedged when drawn
with the balance of
$50m, 6.4% fixed v
LIBOR interest rate
swap expiring
October 2007 not
used to hedge
IMTTs tax exempt
debt.
 - 49 -




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##### Table of Contents



New Jersey EconomicNew Jersey Economic
    
    Development AuthorityDevelopment Authority Dock
    
    Variable Rate DemandFacility Revenue Refund
    
    Revenue RefundingCAD Revolving Credit Facility
    
    Bonds
    
    BondAmount Outstanding
as at June 30, 2006
    
    $5.6 million
    
    $30.0 million
    
    $6.3 millionUndrawn Amount
    
    $9.4 million
    
    N/A
    
    N/ATerm
    
    November, 2007
    
    December, 2027
    
    December, 2021Amortization
    
    Revolving. Payable at
maturity.
    
    Payable at maturity.
    
    Payable at maturity.Interest Rate
    
    Floating at CAD Bankers
Acceptance Rate + 1.075%
to 1.7% based on Debt to
EBITDA ratio grid
    
    Floating at tax exempt
bond daily tender rates
    
    Floating at tax exempt bond daily
tender ratesMakewhole on Early
Repayment
    
    Nil.
    
    Nil.
    
    Nil.Debt Service
Reserves Required
    
    Nil
    
    Nil
    
    NilSecurity
    
    Unsecured
    
    Unsecured (required to be
supported at all times by
bank letter of credit
issued under the
revolving credit
facility).
    
    Unsecured (required
to be supported at
all times by bank
letter of credit
issued under the
revolving credit
facility).Financial Covenants
(applicable to IMTTs key operating
subsidiaries on a
combined basis).
    
    Debt to EBITDA: Max 4.0x EBITDA to Interest: Min 3.25x
Min Tangible Net Worth: $161.6 million
    
    Nil.
    
    Nil.Financial Covenant
Ratios as at June 30,
2006 (IMTTs key
operating subsidiaries on a
combined basis)
    
    Debt to EBITDA Ratio: 2.5x
EBITDA to Interest Ratio: 8.2x
Tangible Net Worth: $270.0 million
    
    N/A
    
    N/ARestrictions on
payments of
dividends
    
    None provided no default
as a result of payment
    
    None provided no default
as a result of payment
    
    None provided no
default as a result
of paymentInterest Rate Hedging
    
    
    
    Hedged with part of $50.0
million, 6.4% fixed v
LIBOR interest rate swap
expiring October, 2007.
    
    Hedged with part of
$50.0 million, 6.4%
fixed v LIBOR
interest rate swap
expiring October,
2007.
  - 50 -




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##### Table of Contents



Term Loan FacilityAmount Outstanding as at
June 30, 2006
    
    $117.0 millionUndrawn Amount
    
    N/ATerm
    
    December, 2012Amortization
    
    $13.0 million per annum from
December 2006 through December
2010 with balance payable at
maturity.Interest Rate
    
    Floating at LIBOR + 1.0%Makewhole on Early Repayment
    
    Nil.Debt Service Reserves
Required
    
    Nil.Security
    
    Unsecured.The facility is required to be
progressively guaranteed by
IMTTs key operating
subsidiaries. These
subsidiaries currently
guarantee $13.0 million of the
outstanding balance and the
guarantee requirement
increases by $13.0 million per
annum from December, 2006
through December, 2009 at
which time the full
outstanding amount will be
guaranteed by IMTTs key
operating subsidiaries.
Further, if the Debt to EBITDA
ratio of IMTTs key operating
subsidiaries on a combined
basis exceeds 4.5x as at Dec
31, 2009, IMTTs key operating
subsidiaries will assume the
obligations under the term
loan facility.As a result of a previous
transaction, $52.0 million of
the outstanding balance is
currently guaranteed by Royal
Vopak. In the event that Royal
Vopak defaults under its
guarantee obligations, the
lender has no right of
acceleration against IMTT. The
Royal Vopak guarantee
decreases by $13.0 million in
December 2006, $26.0 million
in December 2007 and
terminates entirely in
December 2008.Financial Covenants
    
    Nil.Financial Covenant Ratios
as at June 30, 2006
    
    Not applicable.Restrictions on payments of
dividends
    
    None.Interest Rate Hedging
    
    Fully hedged with $117.0
million amortizing, 6.29%
fixed v LIBOR interest rate
swap expiring December 2012.
  Toll Road Business
  Investments in MCG and SEW
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Capital Expenditures
   Airport Services Business
 Maintenance Capital Expenditure
  Specific Capital Expenditure
  Estimated Cost/AmountRemaining (fromLocation
    
    Item
    
    Expected Timing
    
    December 31, 2005)Teterboro Airport
    
    Ramp construction
    
    Commencing fourth quarter
2006
    
    $4.5 millionMetroport East 34th
Street
Heliport
    
    Upgrade of heliport
in exchange for
ten-year operating
agreement
    
    Commencing fourth quarter
2006
    
    $2.8 millionPittsburgh
International Airport
    
    Original lease
requires further
capital
expenditure. This
will be fulfilled
through the
development of a
new hangar.
    
    Commenced June 2006
    
    $5.1 millionTucson International
Airport
    
    Hangar construction
    
    Commencing third quarter 2006
    
    $850,000El Paso International
Airport
    
    Hangar and terminal
construction
    
    Completion expected by end
of 2006
    
    $1.2 millionAustin Bergstrom
International Airport
    
    Hangar construction
    
    Completion expected in third
quarter of 2006
    
    $624,000
 Airport Parking Business
 Maintenance Capital Expenditure
  Specific Capital Expenditure
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District Energy Business
 Maintenance Capital Expenditure
  Specific Capital Expenditure
     Gas Utility Business
 Maintenance Capital Expenditure
  Specific Capital Expenditure
  IMTT
 Maintenance Capital Expenditure
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Specific Capital Expenditure
  Toll Road Business
 Maintenance Capital Expenditure
  Commitments and Contingencies
  MIC Inc.
  The Gas Company
  Payments Due by Period($ in thousands)
    
    Note
    
    
    Total
    
    
    Prior to 12/31/2006
    
    
    2007-2008
    
    
    2009-2011
    
    
    ThereafterLong-term debt
    
    
    (1)
    
    
    $
    160,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    160,000Capital lease obligations
    
    
    (2)
    
    
    
    12,909
    
    
    
    562
    
    
    
    1,966
    
    
    
    2,514
    
    
    
    7,867Barge charter obligations
    
    
    (3)
    
    
    
    4,691
    
    
    
    521
    
    
    
    1,842
    
    
    
    2,328
    
    
    
    Post-retirement benefits
    
    
    (4)
    
    
    
    1,120
    
    
    
    30
    
    
    
    203
    
    
    
    285
    
    
    
    602Pension benefit payments
    
    
    (5)
    
    
    
    19,201
    
    
    
    625
    
    
    
    3,487
    
    
    
    5,977
    
    
    
    9,112Total
    
    
    
    
    
    $
    197,921
    
    
    $
    1,738
    
    
    $
    7,498
    
    
    $
    11,104
    
    
    $
    177,581
 
 (1)
    
    The long-term debt represents TGCs obligations to its various lenders. TGC borrowed
$160.0 million in connection with our acquisition of TGC. No principal payments are
required on this debt until 2013.(2)
    
    TGC is obligated under non-cancelable real-estate operating leases with terms longer
than one year. The amounts represent the minimum annual rental payments required to be
paid in connection with these leases.
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(3)
    
    TGC has a five-year time charter agreement with Sause Bros. for the use of two LPG
barges that it uses to carry LPG from Oahu to the islands of Hawaii, Maui and Kauai. The
amounts represent the minimum charter payments under the agreement. TGC is also obligated
to pay certain operating costs in connection with the charter hire. These costs, which are
based on utilization of the barges, comprise principally port, dockage and towage charges.(4)
    
    TGC is obligated to pay post-retirement medial costs for employees that were part of
its union labor force prior to retirement. The amounts include the estimated cash payments
for these benefits.(5)
    
    Certain of TGCs employees belong to a pension plan. The amounts include the estimated
benefit payments for this pension plan. See Note 3, Significant Accounting Policies, to our
consolidated condensed financial statements in Part I, Item I of this Form 10-Q for further
information on the TGC pension plan which is incorporated herein by reference.
  CRITICAL ACCOUNTING POLICIES
  NEW ACCOUNTING PRONOUNCEMENTS
  OTHER MATTERS
   
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
  Interest Rate Risk
 MIC Inc. Level Debt
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Airport Services Business
   The Gas Company
    IMTT
    - 56 -




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
   
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  Toll Road Business
  SEW
  
 ITEM 1A. RISK FACTORS
  TGC relies on its SNG plant for a significant portion of its sales. Disruptions at that facility
could adversely affect TGCs ability to serve customers.
  TGC depends heavily on the two Oahu oil refineries for liquefied petroleum gas and the primary
feedstock for its SNG plant. Disruptions at either of those refineries may adversely affect the
TGCs operations.
  TGCs most significant costs are LPG and feed stock for the SNG plant, the costs of which are
directly related to petroleum prices. To the extent that these costs cannot be passed on to
customers, TGCs sales and cash flows will be adversely affected.
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TGCs operations on the islands of Hawaii, Maui and Kauai rely on LPG that is transported to those
islands by Jones Act qualified barges from Oahu and from non-Jones Act vessels from foreign ports.
Disruptions to those vessels could adversely affect TGCs results of operations.
  The recovery of amounts expended for capital projects in the regulated operations is subject to
approval by the HPUC, which exposes TGC to the risk of incurring costs that may not be recoverable
from regulated customers.
  The non-regulated operations of TGC are subject to a variety of competitive pressures and the
actions of competitors, particularly from other energy sources, could have a materially adverse
effect on operating results.
  Approximately two-thirds of TGCs employees are members of a labor union. A work interruption may
adversely affect TGCs business.
  TGCs operating results are affected by Hawaiis economy.
   TGC has certain environmental risks.
  Because of its geographic location, Hawaii, and in turn TGC, is subject to certain weather risks
that could materially disrupt operations.
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TGC may face a greater exposure to terrorism than other businesses because of the nature of its
products.
  TGCs income may be affected adversely if additional compliance costs are required as a result of
new safety, health or environmental regulation.
  IMTTs business is dependent on the demand for bulk liquid storage capacity in the locations where
it operates.
  IMTTs business could be adversely affected by a substantial increase in bulk liquid storage
capacity in the locations where it operates.
  IMTTs business involves hazardous activities, is partly located in a region with a history of
significant adverse weather events and is potentially a target for terrorist attacks. We cannot
assure you that IMTT is, or will be in the future, adequately insured against all such risks.
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IMTT is subject to environmental, health and safety risks that may impact its future cash flows and
profitability.
   Hurricane Katrina resulted in labor and materials shortages in the regions affected. This may have
a negative impact on the cost and construction timeline of IMTTs new storage facility in
Louisiana, which could result in a loss of customer contracts and reduced revenues and
profitability.
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 Unregistered Sales of Equity Securities
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    Against/
    
    
    
    
    
    BrokerFor
    
    Withheld
    
    Abstain
    
    Non-vote*Election of Directors:Nominee:Norman H. Brown, Jr.
    
    
    22,869,817
    
    
    
    57,102
    
    
    
    *
    
    
    
    
    *George W. Carmany, III
    
    
    22,870,172
    
    
    
    56,747
    
    
    
    *
    
    
    
    
    *William H. Webb
    
    
    22,867,420
    
    
    
    59,499
    
    
    
    *
    
    
    
    
    *Ratification of Independent Auditors:
    
    
    22,880,829
    
    
    
    26,197
    
    
    
    19,893
    
    
    
    
    *
 
 *
    
    Not applicable. - 60 -




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##### Table of Contents



ITEM 5. OTHER INFORMATION
 Item 1.01. Entry into a Material Definitive Agreement.
  U.S. Acquisition Priorities
  SectorAirport fixed base operationsDistrict energyAirport parkingRegulated Assets (including, but not
limited to, electricity and gas
transmission and distribution and water
services)User pays assets, contracted assets, and
regulated assetsThe above priority in user pays assets, contracted assets and regulated assets
is subject to the following qualifications:Roads:
    
    We have second priority after Macquarie Infrastructure Group, any successor thereto
or spin-off managed entity thereof or any one managed entity, or a MIG Transferee, to which
Macquarie Infrastructure Group has transferred a substantial interest in its U.S. Assets;
provided that, in the case of such MIG Transferee, both Macquarie Infrastructure Group and
such entity are co-investing in the proposed investment.Airport ownership:
    
    We have second priority after Macquarie Airports (consisting of Macquarie Airports
Group (MAG) and Macquarie Airports (MAp)), any successor thereto or spin-off managed entity
thereof or any one managed entity, or a MAp Transferee, to which Macquarie Airports has
transferred a substantial interest in its U.S. Assets; provided that, in the case of such
MApTransferee, both Macquarie Airports and such entity are co-investing in the proposed
investment.Communications:
    
    We have second priority after Macquarie Communications Infrastructure Group, any
successor thereto or spin-off managed entity thereof or any one managed entity, or a MCG
Transferee, to which Macquarie Communications Infrastructure Group has transferred a
substantial interest in its U.S. Assets; provided that, in the case of such MCG Transferee,
both Macquarie Communications Infrastructure Group and such entity are co-investing in the
proposed investment.Regulated Assets (including, but not
limited to, electricity and gas
transmission and distribution and
water services):
    
    We have second priority after
Macquarie Essential Assets
Partnership (MEAP) until such
time as MEAP has invested a
further CAD 45 million in the
United States. Thereafter, we
will have first priority.
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ITEM 6. EXHIBITS
  - 62 -




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SIGNATURES
  Macquarie Infrastructure Company TrustDated: August 9, 2006
    
    By: /s/ Peter StokesName: Peter StokesTitle: Regular Trustee
  Macquarie Infrastructure Company LLCDated: August 9, 2006
    
    By: /s/ Peter StokesName: Peter StokesTitle: Chief Executive OfficerMacquarie Infrastructure Company LLCDated: August 9, 2006
    
    By: /s/ David MitchellName: David MitchellTitle: Chief Financial Officer
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##### Table of Contents



ExhibitNumber
    
    Description2.1
    
    Side Letter, dated March 7, 2006, amending the Purchase Agreement dated August 2, 2005, as amended, among k1
Ventures Limited, K-1 HGC Investment, LLC and Macquarie Gas Holdings LLC (incorporated by reference to Exhibit
2.1 of the Registrants Current Report on Form 8-K, filed with the SEC on June 12, 2006 (the June Current
Report))10.1
    
    Amended and Restated Loan Agreement, dated as of June 28, 2006, among North America Capital Holding Company, as
Borrower, the Lenders defined therein and Mizuho Corporate Bank, Ltd.10.2
    
    Amended and Restated Loan Agreement dated as of June 7, 2006, among HGC Holdings LLC, Macquarie Gas Holdings
LLC, the Lenders named herein and Dresdner Bank AG London Branch (incorporated by reference to Exhibit 10.1 of
the June Current Report)10.3
    
    Amended and Restated Loan Agreement, dated as of June 7, 2006, among The Gas Company LLC, Macquarie Gas
Holdings LLC, the Lenders defined therein and Dresdner Bank AG London Branch (incorporated by reference to
Exhibit 10.2 of the June Current Report)10.4
    
    Petroleum Feedstock Agreement, dated as of October 31, 1997, by and between BHP Petroleum Americas Refining
Inc. and Citizens Utilities Company10.5
    
    Twenty-Third Amendment to the District Cooling System Use Agreement dated as of November 1, 2005 by and between
the City of Chicago and Thermal Chicago Corporation10.6
    
    Amendment No. 1 to the Management Services Agreement dated as of August 8, 2006, among Macquarie Infrastructure
Management (USA) Inc., Macquarie Infrastructure Company LLC and certain of its subsidiaries named therein10.7
    
    Commitment letter with Capmark Finance, Inc. relating to the refinancing of debt of the airport parking business31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer31.2
    
    Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer32.1
    
    Section 1350 Certification of the Chief Executive Officer32.2
    
    Section 1350 Certification of the Chief Financial Officer99.1
    
    Earnings release related to the quarter ended June 30, 2006
 - E-1 -