UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________

FORM 10-Q

_____________________________


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended ~~September~~March 3031, ~~2021~~2022


☐			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: 001-32384

_____________________________

MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

(Exact Name of Registrant as Specified in Its Charter)

_____________________________


Delaware			86-2708886
(State or Other Jurisdiction of Incorporation or Organization)			(IRS Employer Identification No.)

125 West 55th Street

New York, New York 10019

(Address of Principal Executive Offices) (Zip Code)

(212) 231-1000

(Registrant’s Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year if Changed Since Last Report): N/A

_____________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common Units

MIC

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange

Act). Yes ☐ No ☒

There were 88,~~198~~985,~~812~~352 common units outstanding on ~~October~~April 29, ~~2021~~2022.

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Condition and Results of Operations		1
Quantitative and Qualitative Disclosures About Market Risk		12
Controls and Procedures		12
Consolidated Condensed Balance Sheets as of September 30, 2021 (Unaudited) and December 31, 2020		13
Consolidated Condensed Balance Sheets as of March 31, 2022 (Unaudited) and December 31, 2021		13
Consolidated Condensed Statements of Operations for the Quarters and Nine Months Ended September 30, 2021 and 2020 (Unaudited)		15
Consolidated Condensed Statements of Income (Loss) for the Quarters Ended March 31, 2022 and 2021 (Unaudited)		15
Consolidated Condensed Statements of Comprehensive Income (Loss) for the Quarters and Nine Months Ended September 30, 2021 and 2020 (Unaudited)		17
Consolidated Condensed Statements of Unitholders’ Equity for the Quarters Ended March 31, 2022 and 2021 (Unaudited)		17
Consolidated Condensed Statements of Unitholders’ Equity for the Quarters and Nine Months Ended September 30, 2021 and 2020 (Unaudited)		18
Consolidated Condensed Statements of Cash Flows for the Quarters Ended March 31, 2022 and 2021 (Unaudited)		18
Consolidated Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020 (Unaudited)		20
Notes to Consolidated Condensed Financial Statements (Unaudited)		20
Notes to Consolidated Condensed Financial Statements (Unaudited)		22
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	4135
Item 1A.	Risk Factors	4135
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4335
Item 3.	Defaults Upon Senior Securities	4335
Item 4.	Mine Safety Disclosures	4335
Item 5.	Other Information	4335
Item 6.	Exhibits	4335

Macquarie Infrastructure Holdings, LLC ("MIH") is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia) and ~~its~~MIH's obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (~~"MBL"~~“Macquarie Bank”). ~~MBL~~Macquarie Bank does not guarantee or otherwise provide assurance in respect of the obligations of MIH. In addition, if this document relates to an investment, (a) the investor is subject to investment risk including possible delays in repayment and loss of income and principal invested and (b) none of Macquarie Bank or any other Macquarie Group company guarantees any particular rate of return on or the performance of the investment, nor do they guarantee repayment of capital in respect of the investment.

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Cautionary Note Regarding Forward-Looking Statements

In addition to historical information, this quarterly report on Form 10-Q ("Quarterly Report") contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act. Forward-looking statements may appear throughout this Quarterly Report, including without limitation, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section. We may, in some cases, use words such as “project”, “believe”, “anticipate”, “plan”, “expect”, “estimate”, “intend”, “should”, “would”, “could”, “potentially”, “may”, or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Such statements include, among others, those concerning our expected financial performance and strategic and operational plans, statements regarding a sale of the Company, the ~~ability~~completion toof ~~complete~~the ~~such~~ sale ~~and~~of the ~~anticipated~~Company ~~use~~or the termination of ~~any~~the ~~proceeds~~sale ~~therefrom~~effort, statements regarding the anticipated specific and overall impacts of COVID-19 and any related recovery, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and that a number of risks and uncertainties could cause actual results to differ materially from those anticipated in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the risks identified in our Annual Report on the Form 10-K for the year ended December 31, ~~2020~~2021, this Quarterly Report on Form 10-Q, and in other reports we file from time to time with the Securities and Exchange Commission ("SEC").

Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. Many of these factors are beyond our ability to control or predict. Our forward-looking statements speak only as of the date of this Quarterly Report. Other than as required by law, we undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.

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PART I

FINANCIAL INFORMATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of the financial condition and results of operations of Macquarie Infrastructure Holdings, LLC ("MIH") should be read in conjunction with the consolidated condensed financial statements and the notes to those statements included elsewhere herein.

MIH is a Delaware limited liability company formed on February 5, 2021, and the registrant since September 22, 2021. MIH is the successor to Macquarie Infrastructure Corporation ("MIC"), a Delaware corporation formed on May 21, 2015. MIC’s predecessor, Macquarie Infrastructure Company LLC, was formed on April 13, 2004. Except as otherwise specified, all references in this Form 10-Q to “MIH”, “we”, “us”, ~~and~~ “our” and "Company" refer to Macquarie Infrastructure Holdings, LLC and its subsidiaries, or as necessary when referring to previous reporting periods or the period prior to September 22, 2021, MIC and its subsidiaries. The terms "unit", "equity interest", "stock", "security", or "shares" ~~refers~~refer to shares of MIC prior to the Reorganization on September 22, 2021, and "units" in MIH thereafter.

MIH is externally managed by Macquarie Infrastructure Management (USA) Inc. (our "Manager"), pursuant to the terms of a Management Services Agreement, subject to the oversight and supervision of our Board. Six of the eight members of our Board, and all members of each of our Audit, Compensation, and Nominating and Governance Committees, are independent and have no affiliation with Macquarie. Our Manager is a member of the Macquarie Group of companies comprising Macquarie Group Limited and its subsidiaries and affiliates worldwide. Macquarie Group Limited is headquartered in Australia and is listed on the Australian Securities Exchange.

We own and operate ~~businesses~~a business that ~~provide~~provides products to corporations, government agencies, and individual customers in Hawaii. Our ~~businesses~~business ~~comprise~~comprises: (i) Hawaii Gas, Hawaii’s only government-franchised gas utility and an unregulated liquified petroleum gas ("LPG") distribution business providing gas and related services to industrial, commercial, residential, and governmental customers; (ii) controlling interests in two solar facilities on Oahu; and (iii) ~~several~~ smaller ~~businesses~~projects collectively engaged in efforts to reduce the cost and improve the reliability and sustainability of energy in Hawaii.

In October 2019, along with actively managing our existing portfolio of businesses, our Board resolved to pursue strategic alternatives including ~~potentially~~the apotential sale of our Company or ~~our~~its then three operating businesses as a means of unlocking additional value for equity holders. During the quarter ended September 30, 2020, our International-Matex Tank Terminals ("IMTT") business was classified as a discontinued operation and eliminated as a reportable segment. All periods reported herein reflect this change. In December 2020, we completed the sale of IMTT ("IMTT Transaction").

On June 7, 2021, we entered into an agreement for the sale of our Atlantic Aviation business to KKR Apple Bidco, LLC ~~(“Purchaser”)~~, a Delaware limited liability company controlled by funds affiliated with Kohlberg Kravis Roberts & Co. L.P. (“KKR”), for $4.475 billion including cash and the assumption of debt and other transaction and reorganization related obligations (the "AA Transaction").

On June 14, 2021, we entered into a Merger Agreement with AMF Hawaii Holdings, LLC ("AMF Parent"), a Delaware limited liability company affiliated with Argo Infrastructure Partners, LP ("Argo"), and AMF Hawaii Merger Sub, LLC ("AMF Merger Sub"), a recently formed Delaware limited liability company and wholly-owned direct subsidiary of AMF Parent. The Merger Agreement provides that AMF Merger Sub will be merged with and into MIH (the "“Merger"”), with MIH surviving the Merger as a wholly-owned subsidiary of AMF Parent. Upon the completion of the Merger, each of the MIH common units (excluding common units held by AMF Parent or AMF Merger Sub or common units held by MIH in treasury and common units held by any subsidiary of MIH or AMF Parent (other than AMF Merger Sub)), will be converted into the right to receive $3.83 in cash, without interest; or, if the Merger is consummated after July 1, 2022, then each such unit will be converted into the right to receive $4.11 in cash, without interest.

Under the terms of the Merger Agreement, at closing, ~~Argo~~AMF Parent will pay the merger consideration to unitholders and fund transaction costs and a disposition payment to our Manager of $81.7 million if the Merger closes on or before July 1, 2022 or $56.7 million if the Merger closes after this date. The Merger is expected to be completed in the first half of 2022 subject to approvals customary for a transaction of this kind, including by the Hawaii Public Utilities Commission ("HPUC"). Upon the closing of the Merger, our Company will no longer be a publicly traded entity.

Onor ~~September~~$56.7 ~~21,~~million ~~2021,~~if ~~we conducted a Special Meeting of Shareholders during which shareholders voted on and approved~~ the ~~AA Transaction and the~~ Merger. Ascloses aafter ~~result,~~this ~~we classified our Atlantic Aviation business as a discontinued operation~~date.

On September 2221, 2021, we ~~completed~~conducted ~~the~~a ~~previously~~Special Meeting of Shareholders during which shareholders voted on and approved ~~corporate~~the ~~reorganization~~AA Transaction and the Merger. As a result of the ~~reorganization~~approval, ~~Macquarie~~we ~~Infrastructure~~classified ~~Corporation~~our ~~became~~Atlantic Aviation business as a ~~subsidiary~~discontinued ofoperation ~~Macquarie~~and ~~Infrastructure~~eliminated ~~Holdings,~~it ~~LLC,~~as a ~~limited~~reportable ~~liability~~segment. ~~company~~All ~~treated~~prior asperiods areported ~~partnership~~herein ~~for~~reflect ~~tax~~this ~~purposes~~change.

On September 22, 2021, shareholders of Macquarie Infrastructure Corporation became unitholders of Macquarie Infrastructure Holdings, LLC, a limited liability company treated as a partnership for tax purposes, on a one-for-one basis without an exchange of certificates. Commencing September 23, 2021, units of Macquarie Infrastructure Holdings, LLC traded on the New York Stock Exchange ("NYSE") under the same symbol (NYSE: MIC) and with the same CUSIP number (55608B105) as previously associated with shares of Macquarie Infrastructure Corporation.

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OnAs ~~September~~part ~~22,~~of ~~2021~~the reorganization, ~~shareholders~~the ofentity ~~Macquarie~~holding ~~Infrastructure~~the ~~Corporation~~businesses ~~became~~comprising ~~unitholders~~our ofMIC ~~Macquarie~~Hawaii ~~Infrastructure~~segment ~~Holdings,~~was ~~LLC~~distributed onto and became a ~~one-for-one~~direct ~~basis~~subsidiary ~~without~~of anMacquarie ~~exchange~~Infrastructure ofHoldings, ~~certificates~~LLC. ~~Commencing~~For ~~September~~tax 23purposes, ~~2021,~~the ~~units~~distribution ofwas ~~Macquarie~~deemed ~~Infrastructure~~to ~~Holdings,~~be ~~LLC~~a ~~traded~~sale onand ~~the~~unitholders ~~New~~were ~~York~~deemed ~~Stock~~to ~~Exchange~~have ~~under~~received ~~the~~a ~~same~~distribution ~~symbol~~of ~~(NYSE:~~the ~~MIC)~~fair ~~and~~market ~~with~~value of the ~~same~~equity ~~CUSIP~~of ~~number~~MIC ~~(55608B105)~~Hawaii, assubsequently ~~previously~~determined ~~associated~~to ~~with~~equate ~~shares~~to of$3.70 ~~Macquarie~~per ~~Infrastructure Corporation~~unit.

AsOn ~~part~~September of23, 2021, we completed the ~~reorganization~~AA Transaction, and received $3.525 billion at the ~~businesses~~closing. ~~comprising~~Our ~~our~~Board ~~MIC~~elected ~~Hawaii~~to ~~segment~~return ~~were~~certain ~~distributed~~proceeds from the AA Transaction to ~~and~~unitholders, ~~became~~declaring a ~~direct~~one-time ~~subsidiary~~distribution of ~~Macquarie~~$37.386817 ~~Infrastructure~~per ~~Holdings~~common unit, ~~LLC.~~paid ~~For~~on ~~tax~~October ~~purposes~~7, 2021 to unitholders of record as of the ~~distribution~~close ~~was~~of ~~deemed~~trading toon beOctober a4, ~~sale~~2021. ~~and~~The ~~unitholders~~Company's ~~were~~common ~~deemed~~units traded with due-bills attached from October 1, 2021 through October 7, 2021 pursuant to ~~have~~relevant ~~received~~NYSE arules. ~~distribution~~In ofaddition, ~~the~~MIH ~~fair~~made ~~market~~a ~~value~~disposition ofpayment to the ~~equity~~Manager of ~~MIC~~$228.6 ~~Hawaii~~million.

OnThe ~~September~~Merger ~~23,~~is ~~2021,~~expected weto be completed ~~the~~in ~~AA Transaction, and received $3.525 billion at~~ the ~~closing.~~first ~~Our~~half ~~Board~~of ~~elected~~2022 subject to ~~return~~approval ~~certain~~by ~~proceeds from~~ the AAHawaii ~~Transaction~~Public toUtilities ~~unitholders,~~Commission ~~declaring~~("HPUC") aand ~~one-time~~the ~~distribution~~satisfaction of ~~$37.386817~~customary ~~per~~closing ~~common~~conditions ~~unit,~~for ~~paid~~this ontype ~~October 7, 2021 to unitholders~~ of ~~record~~transaction. asUpon of the ~~close~~consummation of ~~trading~~the ~~on October 4~~Merger, ~~2021.~~our ~~The~~ Company's ~~common~~will ~~units~~no ~~traded~~longer ~~with~~be ~~due-bills attached from October 1, 2021 through October 7, 2021 pursuant to relevant New York Stock Exchange (“NYSE”) rules. In addition, MIH made~~ a ~~disposition~~publicly ~~payment~~traded ~~to the Manager of $228~~entity.6 ~~million.~~

Overview

Use of Non-GAAP measures

In addition to our results under U.S. GAAP, we use ~~certain~~the non-GAAP measures ~~including~~ EBITDA excluding non-cash items and Free Cash Flow to assess the performance and prospects of our ~~businesses~~business.

We measure EBITDA excluding non-cash items as it reflects our businesses’ ability to effectively manage the amount of products sold ~~or services provided~~, the operating margin earned on those transactions, and the management of operating expenses independent of ~~the~~our capitalization and tax ~~attributes of those businesses~~position.

In analyzing the financial performance of our ~~businesses~~business, we focus primarily on cash generation and Free Cash Flow in particular. We believe investors could use Free Cash Flow to assess our ability to fund acquisitions, invest in growth projects, reduce or repay indebtedness, and/or return capital to ~~equity holders~~unitholders.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Consolidated — Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow” for further information on our calculation of EBITDA excluding non-cash items and Free Cash Flow and for reconciliations of these non-GAAP measures to the most comparable GAAP measures.

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Historical Distributions

Since January 1, ~~2020~~2021, MIH has paid or declared the following distributions:

Declared

Period Covered

$ per unit

Record Date

Payable Date

September 23, 2021

(1)

~~37.386817~~$

37.386817

October 4, 2021

October 7, 2021

December 23, 2020

(2)

11.00

January 5, 2021

January 8, 2021

February 14, 2020

Fourth quarter 2019

1.00

March 6, 2020

March 11, 2020

___________

(1)One-time distribution declared and paid out of the proceeds from the AA Transaction. Units of MIH traded with "due-bills" attached ~~from October 1, 2021~~ through October 7, 2021 and traded ex-distribution on October 8, 2021.

(2)Special dividend declared and paid out of the proceeds from the IMTT Transaction. Units of MIH traded with “due-bills” attached through January 8, 2021 and traded ex-dividend on January 11, 2021.

AsIn aaddition ~~result~~to the cash distributions paid to unitholders noted above, as part of the ~~completion~~reorganization, ofthe entity holding the businesses comprising our MIC Hawaii segment was distributed to and ~~distribution~~became a direct subsidiary of ~~certain~~MIH. ~~proceeds~~For ~~from~~tax purposes, the AAdistribution ~~Transaction~~was indeemed ~~September~~to ~~2021~~be a sale and unitholders were deemed to have received a distribution of the ~~signing~~fair value of the ~~Merger~~equity inof ~~June~~MIC ~~2021~~Hawaii, wesubsequently dodetermined ~~not~~to ~~expect~~equate to ~~pay~~$3.70 ~~further~~per ~~distributions~~unit.

As a result of the completion of and distribution of certain proceeds from the AA Transaction in September 2021 and the signing of the Merger Agreement in June 2021, we do not expect to pay further distributions.

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Results of Operations

~~Impact~~Our business includes Hawaii Gas and smaller operations collectively engaged in efforts to reduce the cost and improve the reliability and sustainability of ~~COVID-19~~energy in Hawaii. We generate revenue primarily from the provision of gas to commercial, residential, and governmental customers and the generation of power.

Our businesses include Hawaii Gas and several smaller businesses collectively engaged in efforts to reduce the cost and improve the reliability and sustainability of energy in Hawaii. These businesses generate revenue primarily from the provision of gas to commercial, residential, and governmental customers and the generation of power.

Our financial performance is a function of the number of customers served, their consumption of energy and the prices achieved on sales by each of Hawaii Gas’s utility and non-utility operations and under power purchase agreements. The amount of gas consumed is positively correlated with visitor arrivals and general economic activity over the long term. Consumption trends and prices are a function of, among other factors, energy efficiency, weather, the range of competitive energy sources, and commodity input costs.

We continue to closely monitor the effects of COVID-19 and are actively managing our response by placing a priority on the health and safety of our employees and their families, contractors, customers, and the broader communities in which our ~~businesses~~business ~~operate~~operates. Our ~~businesses~~business' operations are classified as providers of essential services, are fully operational, and are adhering to pandemic response plans and are following guidance from the Centers for Disease Control and Prevention ("CDC") as well as federal, state, and local governments with respect to conducting operations safely.

In addition to standard operating procedures designed to maintain safe operations, ~~our~~we ~~businesses~~ have implemented additional measures including: (i) a ~~work~~transitional ~~from~~return ~~home~~to ~~and~~office ~~related~~policy ~~travel~~for ~~policies~~those who were working from home; (ii) enhanced cleaning and disinfecting of facilities; (iii) limited interactions between employees and customers through social distancing; (iv) ~~mandated~~ use of personal protective equipment by employees; and (v) education of customers on alternative payment and customer care options as a means of limiting interactions with employees. Management is engaged in ongoing communications with employees, customers, vendors, lenders, and other stakeholders apprising them of the business' response to the pandemic. We believe our staff and customers of our ~~businesses~~business can access our facilities safely and in compliance with relevant directives.

~~Trends~~Visitor inarrivals ~~the~~to ~~number~~Hawaii, ofthe ~~visitors~~primary todriver ~~Hawaii~~of ~~and~~increases in demand for gas ~~were positive~~ in ~~the third quarter~~Hawaii, ~~although~~improved ~~our~~sequentially ~~financial~~in ~~performance~~the ~~continues~~first toquarter beof ~~adversely~~2022, ~~affected~~which ~~relative~~we tobelieve ~~pre-COVID-19~~reflects ~~periods.~~increased ~~The~~visitor ~~number~~confidence oflevels ~~visitors~~due to ~~Hawaii~~the ~~increased~~availability toof ~~2.1~~COVID-19 ~~million~~vaccines and ~~4.9~~a ~~million~~relatively ~~for~~low ~~the~~level ~~quarter~~of ~~and~~infections ~~nine~~in ~~months~~the ~~ended~~islands. ~~September~~The ~~30,~~rate ~~2021,~~of ~~respectively,~~recovery ~~from~~in ~~55,000 and 2.2 million for~~ the ~~quarter~~number ~~and~~of ~~nine~~visitors ~~months~~to ~~ended~~Hawaii ~~September 30, 2020, respectively. The resulting improvement~~ in ~~hotel~~the ~~occupancy,~~future ~~restaurants~~remains ~~patronage,~~uncertain. ~~and~~COVID-19 ~~use~~continues ~~of commercial laundry services contributed~~ to annegatively ~~increase~~affect inthe ~~gas~~performance ~~consumption~~ of ~~47%~~the ~~and~~Hawaii ~~19%~~businesses, ~~during~~although the ~~quarter~~effects ~~and~~have ~~nine~~diminished ~~months~~relative ~~ended~~to ~~September~~this ~~30,~~time ~~2021,~~last ~~respectively, versus the comparable periods in 2020~~year. The ~~number~~additional easing of ~~visitors~~travel torestrictions ~~Hawaii~~this ~~was~~quarter ~~lower~~has byresulted ~~21%~~in ~~and~~an ~~38%~~increase in ~~the~~economic ~~quarter~~activity and ~~nine~~the ~~months~~number ~~ended~~of ~~September~~primarily ~~30,~~domestic ~~2021,~~visitors ~~respectively~~to Hawaii, ~~and~~but ~~overall~~not ~~gas~~to ~~consumption~~pre-COVID-19 ~~was~~levels. ~~lower~~A bysignificant 7%surge ~~and 12% versus the comparable periods~~ in ~~2019.~~COVID-19 ~~The~~rates ~~rate~~could ofnegatively ~~recovery~~impact in the number of visitors to Hawaii, inwhich ~~the~~would ~~future~~adversely ~~remains uncertain and a significant surge in COVID-19 cases could negatively~~ impact ~~Hawaii~~our ~~tourism.~~operating results.

~~The~~Trends ~~wholesale~~in ~~cost~~the number of ~~LPG~~visitors ~~increased~~to byHawaii ~~approximately~~and ~~40%~~demand ~~between~~for ~~July~~gas ~~and~~were ~~October.~~positive Wein ~~enter~~the ~~into~~first ~~commodity~~quarter, ~~hedges~~although toour ~~mitigate~~financial ~~the~~performance ~~medium~~continues to ~~longer~~lag ~~term~~pre-COVID-19 ~~impact of rising costs~~periods. The ~~percentage~~number of ~~our~~visitors ~~expected~~to ~~LPG~~Hawaii ~~purchases~~increased ~~that~~to is2.0 ~~hedged~~million ~~varies~~for ~~over~~the ~~time~~quarter ~~based~~ended onMarch ~~our~~31, ~~assessment~~2022, offrom ~~the~~847,000 ~~potential~~for ~~volatility~~the inquarter ~~LPG~~ended ~~costs~~March ~~and~~31, ~~the~~2021. ~~duration~~The ~~and~~resulting ~~cost~~improvement ofin ~~the~~hotel ~~hedges.~~occupancy, Werestaurants ~~pass~~patronage, ~~some~~and use of ~~our~~commercial ~~increased~~laundry ~~LPG~~services ~~cost~~contributed ~~through~~ to ~~customers~~an increase in ~~our~~gas ~~regulated~~consumption ~~business~~of ~~through~~11% during the ~~fuel~~quarter ~~adjustment~~ended ~~clause~~March ~~mechanism.~~31, ~~In addition~~2022, asversus ~~has~~the ~~been~~comparable ~~the~~period ~~case~~in ~~from~~2021. ~~time~~The tonumber ~~time~~of ~~historically,~~visitors weto ~~may~~Hawaii ~~pass~~was ~~some~~lower orby ~~all~~21% ofin the ~~increased~~quarter ~~cost~~ended ofMarch ~~LPG~~31, ~~through~~2022, toand ~~our~~overall ~~customers~~gas inconsumption ~~our~~was ~~unregulated~~lower ~~business~~by ~~subject~~13% toversus ~~competitive~~the ~~dynamics~~pre-COVID-19 incomparable ~~Hawaii's~~period ~~energy~~in ~~market~~2019.

The wholesale cost of LPG increased by approximately 38% from December 2021 to March 2022. We enter into commodity hedges to mitigate the medium to longer term impact of rising costs. In any given quarter, the effective cost of LPG to Hawaii Gas will depend on both the total volume hedged and the wholesale cost of LPG during that time. The percentage of our expected LPG purchases that is hedged varies over time based on our assessment of the potential volatility in LPG costs and the duration and cost of the hedges. We pass some of our increased LPG cost through to customers in our regulated business through the fuel adjustment clause mechanism. In addition, as has been the case from time to time historically, we may pass some or all of the increased cost of LPG through to our customers in our unregulated business subject to competitive dynamics in Hawaii's energy market.

Rising inflation rates have not had a substantial impact on our financial performance to date, but may have an impact on our financial performance in the future as our ability to pass on an increase in costs is not entirely within our control.

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Results of Operations – (continued)

Our consolidated results of operations are as follows:

	Quarter Ended September 30,				ChangeFavorable/(Unfavorable)		Nine Months EndedSeptember 30,				ChangeFavorable/(Unfavorable)
					Quarter Ended March 31,		ChangeFavorable/(Unfavorable)
	2021		2020		$	%	2021		2020		$	%
							2022		2021		$	%
	~~($ In Thousands, Except Unit and Per Unit Data) (Unaudited)~~						($ In Thousands, Except Unit and Per Unit Data) (Unaudited)
Revenue
Product revenue	$	~~60,086~~	$	~~39,036~~	~~21,050~~	54	$	~~173~~68,~~413~~681	$	~~136~~54,~~293~~587	3714,~~120~~094	2726
Total revenue	~~60,086~~		~~39,036~~		~~21,050~~	54	~~173~~68,~~413~~681		~~136~~54,~~293~~587		3714,~~120~~094	2726
Costs and expenses
Cost of product sales	~~40,613~~		~~25,059~~		~~(15,554)~~	~~(62)~~	~~113~~40,~~203~~004		8534,~~218~~756		(275,~~985~~248)	(3315)
Selling, general and administrative	~~61,704~~		~~11,135~~		~~(50,569)~~	NM	888,~~429~~381		4011,~~561~~582		~~(47~~3,~~868)~~201	~~(118)~~28
Disposition payment to Manager	~~228,551~~		—		~~(228,551)~~	NM	~~228,570~~—		—19		~~(228,570)~~19	NM100
Total Selling, general and administrative	~~290,255~~		~~11,135~~		~~(279,120)~~	NM	~~316~~8,~~999~~381		4011,~~561~~601		~~(276~~3,~~438)~~220	NM28
Fees to Manager - related party	~~7,698~~		~~4,980~~		~~(2,718)~~	~~(55)~~	~~20,801~~800		165,~~160~~552		(4,~~641)~~752	~~(29)~~86
Depreciation and amortization	~~3,864~~		~~3,822~~		~~(42)~~	~~(1)~~	113,~~452~~781		113,~~224~~748		(~~228~~33)	(21)
Total operating expenses	~~342,430~~		~~44,996~~		~~(297,434)~~	NM	~~462~~52,~~455~~966		~~153~~55,~~163~~657		~~(309~~2,~~292)~~691	NM5
Operating loss	(282,344)		(5,960)		(276,384)	NM	(289,042)		(16,870)		(272,172)	NM
Operating income (loss)							15,715		(1,070)		16,785	NM
Other income (expense)
Interest income	6		~~(42)~~		48	~~114~~	227		223		—4	—133
Interest expense(1)	~~(948)~~		~~(4,905)~~		~~3,957~~	81	(~~13,991~~38)		(167,~~215~~049)		27,~~224~~011	1499
Other income (expense), net	~~180~~		~~(769)~~		~~949~~	~~123~~	~~(238)~~418		(~~937~~336)		~~699~~754	75NM
Net loss from continuing operations before income taxes	(283,106)		(11,676)		(271,430)	NM	(303,249)		(34,000)		(269,249)	NM
Net income (loss) from continuing operations before income taxes							16,102		(8,452)		24,554	NM
Benefit for income taxes	8,455		6,186		2,269	37	6,788		8,808		(2,020)	(23)
(Provision) benefit for income taxes							(4,656)		2,182		(6,838)	NM
Net loss from continuing operations	(274,651)		(5,490)		(269,161)	NM	(296,461)		(25,192)		(271,269)	NM
Net income (loss) from continuing operations							11,446		(6,270)		17,716	NM
Discontinued Operations
Net income (loss) from discontinued operations before income taxes	3,004,955		(718,061)		3,723,016	NM	3,063,442		(688,499)		3,751,941	NM
Net income from discontinued operations before income taxes							—		27,615		(27,615)	(100)
Provisions for income taxes	(50,511)		(169,819)		119,308	70	(66,458)		(175,750)		109,292	62
Provision for income taxes							—		(7,548)		7,548	100
Net income (loss) from discontinued operations	2,954,444		(887,880)		3,842,324	NM	2,996,984		(864,249)		3,861,233	NM
Net income from discontinued operations							—		20,067		(20,067)	(100)
Net income (loss)	2,679,793		(893,370)		3,573,163	NM	2,700,523		(889,441)		3,589,964	NM
Net income							11,446		13,797		(2,351)	(17)
Net loss from continuing operations	(274,651)		(5,490)		(269,161)	NM	(296,461)		(25,192)		(271,269)	NM
Net income (loss) from continuing operations							11,446		(6,270)		17,716	NM
Less: net (loss) income attributable to noncontrolling interests	(14)		(122)		(108)	(89)	167		459		292	64
Less: net income attributable to noncontrolling interests							304		597		293	49
Net loss from continuing operations attributable to MIH	(274,637)		(5,368)		(269,269)	NM	(296,628)		(25,651)		(270,977)	NM
Net income (loss) from continuing operations attributable to MIH							11,142		(6,867)		18,009	NM
Net income (loss) from discontinued operations	2,954,444		(887,880)		3,842,324	NM	2,996,984		(864,249)		3,861,233	NM
Net income from discontinued operations							—		20,067		(20,067)	(100)
Net income (loss) from discontinued operations attributable to MIH	2,954,444		(887,880)		3,842,324	NM	2,996,984		(864,249)		3,861,233	NM
Net income from discontinued operations attributable to MIH							—		20,067		(20,067)	(100)
Net income (loss) attributable to MIH	$	2,679,807	$	(893,248)	3,573,055	NM	$	2,700,356	$	(889,900)	3,590,256	NM
Net income attributable to MIH							$	11,142	$	13,200	(2,058)	(16)
Basic loss per unit from continuing operations attributable to MIH	$	(3.12)	$	(0.06)	(3.06)	NM	$	(3.38)	$	(0.29)	(3.09)	NM
Basic income (loss) per unit from continuing operations attributable to MIH							$	0.13	$	(0.08)	0.21	NM
Basic income (loss) per unit from discontinued operations attributable to MIH	33.61		(10.20)		43.81	NM	34.19		(9.95)		44.14	NM
Basic income per unit from discontinued operations attributable to MIH							—		0.23		(0.23)	(100)
Basic income (loss) per unit attributable to MIH	$	30.49	$	(10.26)	40.75	NM	$	30.81	$	(10.24)	41.05	NM
Basic income per unit attributable to MIH							$	0.13	$	0.15	(0.02)	(13)
Weighted average number of units outstanding: basic	~~87,891,018~~		~~87,030,751~~		~~860,267~~	1	8788,~~645~~494,~~390~~560		8687,~~864~~411,~~951~~455		~~780~~1,~~439~~083,105	1

___________

NM — Not meaningful.

(1)Interest expense includes non-cash gains on derivative instruments of $8,000 and $213,000 for the quarter and nine months ended September 30, 2021, respectively, compared with non-cash losses of $7,000 and $963,000 for the quarter and nine months ended September 30, 2020, respectively.

TABLE OF CONTENTS

Results of Operations – (continued)

(1)Interest expense includes non-cash gains on derivative instruments of $489,000 and $283,000 for the quarters ended March 31, 2022, and 2021 respectively.

Revenue

We generate most of our revenue from the sale of gas. Accordingly, revenue can fluctuate based on the wholesale cost of gas and/or feedstock and may not reflect our ability to effectively manage the amount of gas sold and the margins achieved on those sales. For example, an increase in revenue may be attributable to an increase in the wholesale cost of ~~gas~~feedstock and not an increase in the amount of gas sold or margin achieved. Conversely, a decline in revenue may be attributable to a decrease in the wholesale cost of gas and not a reduction in the amount of gas sold or margin achieved.

Consolidated revenues increased for the quarter ~~and nine months~~ ended ~~September~~March 3031, ~~2021~~2022, compared with the quarter ~~and~~ended ~~nine~~March ~~months~~31, ~~ended~~2021, ~~September~~both ~~30,~~as ~~2020~~a ~~primarily~~result ~~due~~of tothe higher wholesale cost of products sold and an increase in the amount of gas sold. The ~~increase~~increases reflect i) higher feedstock costs passed through to utility customers and increases in ~~the~~LPG ~~amount~~prices charged to certain of ~~gas~~our ~~sold~~non-utility ~~reflects~~customers; and ii) increased consumption by commercial and industrial customers as a result of an increase in the number of visitors to Hawaii ~~and increased commercial activity~~ as Hawaii recovers from the impact of COVID-19.

Cost of Product Sales

Consolidated cost of product sales increased for the quarter ~~and nine months~~ ended ~~September~~March 3031, ~~2021~~2022 compared with the quarter ~~and nine months~~ ended ~~September~~March 3031, ~~2020~~2021 primarily due to increases in the volume and cost of gas sold partially offset by a $10.6 ~~The~~million ~~increase~~non-cash inmark-to-market ~~cost~~adjustment to the value of ~~product~~the ~~sales~~commodity ~~was~~hedge ~~partially~~contracts ~~offset~~for bythe aquarter ~~favorable~~ended March 31, 2022, compared with $1.1 million for the quarter ended March 31, 2021. The change in the non-cash mark-to-market adjustment of the value of the commodity ~~hedge~~hedges ~~contracts~~during ~~for~~the ~~wholesale~~quarter ~~liquified~~ended ~~petroleum~~March ~~gas~~31, ~~(LPG)~~2022, ~~purchases~~primarily ~~executed~~reflects ~~during~~the increase in the ~~period~~forecasted wholesale cost of LPG through the quarter.

WeAs ~~recorded~~noted ~~favorable~~above, ~~adjustments~~we ofuse ~~$2.4~~commodity ~~million~~hedges ~~and~~to ~~$7.3~~reduce ~~million in~~ the ~~mark-to-market~~financial ~~adjustment~~risks of ~~the value of the~~ commodity ~~hedge~~price ~~contracts~~fluctuations ~~for~~associated ~~the~~with ~~quarter~~wholesale ~~and~~LPG ~~nine~~purchases. ~~months~~We ~~ended~~have ~~September~~entered ~~30,~~into ~~2021,~~hedges ~~respectively, compared~~ with ~~$1.3~~varying ~~million~~maturities ~~and~~through ~~$5.3~~September ~~million~~2024 ~~for the quarter~~ and ~~nine~~with ~~months~~respect ~~ended September 30, 2020, respectively. The change in the mark-~~to~~-market~~ ~~adjustment~~a ofvarying ~~the~~percentage ~~value~~ of ~~the~~our ~~commodity~~expected ~~hedges during the quarter and nine months ended September 30, 2021 primarily reflects higher forecast wholesale cost of~~ LPG ~~relative~~purchases toover ~~the~~that ~~hedged cost~~time.

As noted above, we use commodity cost hedges to reduce the financial risks of commodity price fluctuations associated with wholesale LPG purchases. We have entered into hedges with varying maturities through December 2023 and with respect to a varying percentage of our expected LPG purchases over that time.

Selling, General and Administrative Expenses

Selling, general and administrative expenses ~~increased~~decreased for the quarter ~~and nine months~~ ended ~~September~~March 3031, ~~2021~~2022 compared with the quarter ~~and nine months~~ ended ~~September~~March 3031, ~~2020~~2021, primarily due to ~~(i)~~lower ~~a disposition payment of $228.6 million paid to our Manager in connection with the AA Transaction, (ii) higher~~ transaction costs ofpartially ~~$51.6~~offset ~~million~~by and $62.5 million for the quarter and nine months ended September 30, 2021, respectively, compared with $3.3 million and $16.1 million for the quarter and nine months ended September 30, 2020, respectively; (iii) increases in salaries and benefits; and ~~(iv)~~ higher insurance costs.

Fees to Manager

Our Manager is entitled to a monthly base management fee based on our market capitalization and potentially a quarterly performance fee based on our total return relative to a U.S. utilities index. For the quarter ~~and nine months~~ ended ~~September~~March 3031, ~~2021~~2022, we incurred base management fees of $~~7.7 million and $20.8 million~~800,000 ~~respectively,~~ compared with $5.06 million ~~and $16.2 million~~ for the quarter ~~and nine months~~ ended ~~September~~March 3031, ~~2020, respectively~~2021. The ~~increase~~decrease in base management fees reflects ana ~~increase~~reduction in our average market capitalization primarily due to the AA Transaction and the decrease in our average holding company cash balance during the quarter ~~and nine months~~ ended ~~September~~March 3031, ~~2021~~2022. No performance fees were incurred in either of the current or prior comparable ~~periods~~period. The unpaid portion of base management fees and performance fees, if any, at the end of each reporting period is included in the line item Due to Manager-related party in our consolidated condensed balance sheets.

In accordance with the Management Services Agreement, our Manager elected to reinvest any fees to which it was entitled in new primary units in the periods shown below and has currently elected to reinvest future base management fees and performance fees, if any, in new primary units.


Period	Base Management Fee Amount ($ in Thousands)		Performance Fee Amount ($ in Thousands)		Units Issued
2022 Activities:


First quarter 2022	$	800	$	—	219,026	(1)

2021 Activities:
Fourth quarter 2021	$	1,056	$	—	217,273
Third quarter 2021	7,698		—		195,556
Second quarter 2021	7,551		—		214,040
First quarter 2021	5,552		—		176,296

TABLE OF CONTENTS

Results of Operations – (continued)

Period	Base ManagementFee Amount($ in Thousands)		PerformanceFee Amount($ in Thousands)		UnitsIssued
2021 Activities:
Third quarter 2021	$	7,698	$	—	195,556	(1)
Second quarter 2021	7,551		—		214,040
First quarter 2021	5,552		—		176,296
2020 Activities:
Fourth quarter 2020	$	4,903	$	—	162,791
Third quarter 2020	4,980		—		172,976
Second quarter 2020	3,824		—		146,452
First quarter 2020	7,356		—		181,617

___________

(1)Our Manager elected to reinvest all monthly base management fees for the quarter ended ~~September~~March 3031, ~~2021~~2022 in new primary units. We issued ~~195~~219,~~556~~026 units for the quarter ended ~~September~~March 3031, ~~2021~~2022, including 173,~~403~~653 units that were issued in ~~October~~April ~~2021~~2022.

Interest Expense, net, and Gains ~~(Losses)~~ on Derivative Instruments

Interest expense includes non-cash gains on derivative instruments of $8489,000 ~~and~~for ~~$213,000 in~~ the quarter ~~and nine months~~ ended ~~September~~March 3031, ~~2021~~2022, ~~respectively,~~ compared with non-cash ~~losses~~gains of $7283,000 ~~and $963,000~~ for the quarter ~~and nine months~~ ended ~~September~~March 3031, ~~2020~~2021, ~~respectively,~~ and the amortization of debt financing costs ~~and debt discount~~. Gains ~~(losses)~~ on derivatives recorded in interest expense are attributable to the change in fair value of interest rate hedges. For the quarter ~~and nine months~~ ended ~~September~~March 3031, 2021, interest expense also includes non-cash write-offs of debt financing costs of $~~275,000 and $~~4.83 million, ~~respectively,~~ related to the repurchase of our 2.00% Convertible Senior Notes, and the cancellation of our holding company revolving credit facility~~, and the full repayment of $100~~.~~0 million of senior secured notes at Hawaii Gas.~~

Excluding the non-cash adjustments and write-offs, cash interest expense totaled $~~616~~486,000 ~~and $9.5 million~~ for the quarter ~~and nine months~~ ended ~~September~~March 3031, ~~2021~~2022, ~~respectively,~~ and $3.53 million ~~and $10.9 million~~ for the quarter ~~and nine months~~ ended ~~September~~March 3031, ~~2020, respectively~~2021. The decrease in cash interest expense primarily reflects a lower weighted average debt balance~~, partially offset by a $4~~.~~7 million 'make-whole' payment related to the full repayment of $100.0 million of senior secured notes at Hawaii Gas in April 2021.~~

Discontinued Operations

For the quarter ~~and nine months~~ ended ~~September~~March 3031, 2021, discontinued operations reflects the operating results of the businesses sold as part of the AA Transaction. The AA Transaction closed on September 23, 2021. ~~For the quarter and nine months ended September 30, 2020, discontinued operations also reflects the operating results of IMTT. The IMTT Transaction closed on December 23, 2020.~~

Income Taxes

MIH is a limited liability company classified as a partnership for tax purposes. Taxable income or losses reported by MIH will be passed-through to the unitholders and reported on a Schedule K-1. MIH does not pay ~~state~~federal or ~~federal~~state income tax. ~~As a partnership, MIH itself will not pay income tax on the gain from the AA Transaction.~~

AsOur ~~part~~intermediate ofholding ~~the~~company ~~reorganization,~~is ~~our~~organized ~~Hawaii~~as ~~businesses~~a ~~were~~limited ~~distributed~~liability ~~from~~company ~~MIC to~~ and ~~became~~classified as a ~~direct~~corporation ~~subsidiary~~for oftax ~~MIH~~purposes. ~~For~~The intermediate holding company will file a consolidated federal income tax ~~purposes~~return for periods after the ~~distribution~~reorganization. ~~was~~The ~~deemed~~intermediate holding company will continue to befile a ~~sale~~combined ofHawaii ~~those~~state ~~businesses~~income ~~and~~tax ~~unitholders~~return. ~~were~~The ~~deemed~~current totax ~~have~~expense ~~received~~for athe ~~distribution~~quarter ended March 31, 2022 of ~~the~~$3.0 ~~fair~~million ~~market~~consists ~~value~~of federal income tax of ~~the~~$2.2 ~~equity~~million inand ~~our~~state ~~MIC~~income ~~Hawaii~~tax ~~businesses~~of $725,000.

Our Hawaii businesses are owned by an intermediate holding company organized as a limited liability company and classified as a corporation for tax purposes. The intermediate holding company files a combined Hawaii state income tax return and will file a consolidated federal tax return for periods after the reorganization. The Benefit for Income Taxes for the nine months ended September 30, 2021 of $6.8 million is driven by the increased expenses, primarily Selling, general and administrative, recorded during the period.

TABLE OF CONTENTS

Results of Operations – (continued)

Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") excluding non-cash items and Free Cash Flow

In addition to our results under U.S. GAAP, we use the non-GAAP measures EBITDA excluding non-cash items and Free Cash Flow to assess the performance and prospects of our ~~businesses~~business.

We believe investors use EBITDA excluding non-cash items primarily as a measure of our operating performance and to make comparisons with the operating performance of other businesses whose depreciation and amortization expense may vary from ours, particularly where acquisitions and other non-operating factors are involved. We define EBITDA excluding non-cash items as net income (loss) or earnings — the most comparable GAAP measure — before interest, taxes, depreciation and amortization, and non-cash items including impairments, unrealized derivative gains and losses, adjustments for other non-cash items, and pension expense reflected in the statements of ~~operations~~income (loss). Other non-cash items, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries. EBITDA excluding non-cash items also excludes base management fees and performance fees, if any, whether paid in cash or units.

We ~~are owners of high-value, long-lived assets capable of generating substantial Free Cash Flow. We~~ define Free Cash Flow as cash from operating activities — the most comparable GAAP measure — less maintenance capital expenditures and adjusted for changes in working capital.

We use Free Cash Flow as a measure of our ability to fund acquisitions, invest in growth projects, reduce or repay indebtedness, and/or return capital to unitholders. GAAP metrics such as net income (loss) do not provide us with the same level of visibility into our performance and prospects as a result of: (i) the capital intensive nature of our businesses and the generation of non-cash depreciation and amortization; (ii) units issued to our Manager under the Management Services Agreement; (iii) the ability of our subsidiaries to defer all or a portion of current federal income taxes; (iv) non-cash mark-to-market adjustment of the value of derivative instruments; (v) gains (losses) related to the write-off or disposal of assets or liabilities; (vi) non-cash compensation expense incurred in relation to the incentive plans for senior management of our operating businesses; and (vii) pension expenses. Pension expenses primarily consist of interest expense, expected return on plan assets, and amortization of actuarial and performance gains and losses. Any cash contributions to pension plans are reflected as a reduction to Free Cash Flow and are not included in pension expense. We believe that external consumers of our financial statements, including investors and research analysts, could use Free Cash Flow to assess the Company's ability to fund acquisitions, invest in growth projects, reduce or repay indebtedness, and/or return capital to unitholders.

We believe that both EBITDA excluding non-cash items and Free Cash Flow support a more complete and accurate understanding of the financial and operating performance of our Company than would otherwise be achieved using GAAP results alone.

Free Cash Flow does not take into consideration required payments on indebtedness and other fixed obligations or other cash items that are excluded from our definition of Free Cash Flow. We note that Free Cash Flow may be calculated differently by other companies thereby limiting its usefulness as a comparative measure. Free Cash Flow should be used as a supplemental measure to help understand our financial performance and not in lieu of our financial results reported under GAAP.

Classification of Maintenance Capital Expenditures and Growth Capital Expenditures

We categorize capital expenditures as either maintenance capital expenditures or growth capital expenditures. As neither maintenance capital expenditure nor growth capital expenditure is a GAAP term, we have adopted a framework to categorize specific capital expenditures. In broad terms, maintenance capital expenditures primarily maintain our businesses at current levels of operations, capability, profitability or cash flow, while growth capital expenditures primarily provide new or enhanced levels of operations, capability, profitability or cash flow. We consider various factors in determining whether a specific capital expenditure will be classified as maintenance or growth.

We do not bifurcate specific capital expenditures into maintenance and growth components. Each discrete capital expenditure is considered within the above framework and the entire capital expenditure is classified as either maintenance or growth.

TABLE OF CONTENTS

Results of Operations – (continued)

A reconciliation of net income (loss) from continuing operations to EBITDA excluding non-cash items from continuing operations and a reconciliation from cash (used in) ~~provided by~~ operating activities from continuing operations to Free Cash Flow from continuing operations, on a consolidated basis, is provided below.

Quarter Ended September 30,

ChangeFavorable/(Unfavorable)

Nine Months EndedSeptember 30,

ChangeFavorable/(Unfavorable)

Quarter Ended March 31,

ChangeFavorable/(Unfavorable)

2021

2020

2021

2020

2022

2021

~~($ In Thousands) (Unaudited)~~

($ In Thousands) (Unaudited)

Net loss from continuing operations

(274,651)

(5,490)

(296,461)

(25,192)

Net income (loss) from continuing operations

11,446

(6,270)

Interest expense, net(1)

~~942~~

~~4,947~~

~~13,969~~31

167,~~193~~046

Benefit for income taxes

(8,455)

(6,186)

(6,788)

(8,808)

Provision (benefit) for income taxes

4,656

(2,182)

Depreciation and amortization

~~3,864~~

~~3,822~~

113,~~452~~781

113,~~224~~748

Fees to Manager - related party

~~7,698~~

~~4,980~~

~~20,801~~800

165,~~160~~552

Other non-cash income, net(2)

~~(579)~~

~~(21)~~

(310,~~221~~294)

(~~1,319~~31)

EBITDA excluding non-cash items - continuing operations

~~(271,181)~~

~~2,052~~

~~(273,233)~~

~~(260~~10,~~248)~~420

87,~~258~~863

~~(268~~2,~~506)~~557

NM33

EBITDA excluding non-cash items - continuing operations

~~(271,181)~~

~~2,052~~

~~(260~~10,~~248)~~420

87,~~258~~863

Interest expense, net(1)

~~(942)~~

~~(4,947)~~

(~~13,969~~31)

(167,~~193~~046)

Non-cash interest expense, net(1)

~~326~~

~~1,401~~

~~4,491~~(455)

53,~~258~~758

Benefit for current income taxes

1,580

1,765

5,935

7,973

(Provision) benefit for current income taxes

(2,960)

1,848

Changes in working capital

~~(1,331)~~

~~1,191~~

(2811,~~408~~505)

(619,~~620~~365)

Cash (used in) provided by operating activities - continuing operations

(271,548)

1,462

(292,199)

(1,324)

Cash used in operating activities - continuing operations

(4,531)

(12,942)

Changes in working capital

~~1,331~~

~~(1,191)~~

2811,~~408~~505

619,~~620~~365

Maintenance capital expenditures

~~(2,007)~~

~~(1,389)~~

(42,~~767~~482)

(51,~~435~~114)

Free cash flow - continuing operations

~~(272,224)~~

~~(1,118)~~

~~(271,106)~~

~~(268~~4,~~558)~~492

~~(139)~~5,309

(~~268,419~~817)

NM(15)

___________

~~NM — Not~~(1) Interest ~~meaningful~~expense, net, includes non-cash adjustments to derivative instruments and non-cash amortization of debt financing costs. For the quarter ended March 31, 2021, interest expense also includes non-cash write-offs of debt financing costs related to the repurchase of our 2.00% Convertible Senior Notes.

(12) ~~Interest~~ Other ~~expense~~non-cash income, net, includes primarily non-cash ~~adjustments~~ mark-to-market ~~derivative~~adjustment ~~instruments,~~of ~~non-cash~~the ~~amortization~~value of ~~debt~~the ~~financing~~commodity ~~fees~~hedge contracts, ~~and~~ non-cash ~~amortization~~compensation ofexpense ~~debt~~incurred ~~discount~~in ~~related~~relation to ~~our~~the ~~2.00%~~incentive ~~Convertible~~plans ~~Senior~~for ~~Notes.~~senior ~~For~~management ~~the~~of ~~quarter~~our operating businesses, and ~~nine~~non-cash ~~months~~gains ~~ended~~(losses) ~~September~~related ~~30,~~to ~~2021,~~the ~~interest~~write-off ~~expense~~or ~~also~~disposal ~~includes~~of ~~non-cash~~assets ~~write-offs~~or ofliabilities. ~~debt~~Other ~~financing~~non-cash ~~costs~~income, ~~related~~net, toexcludes the ~~repurchase~~adjustment ofto ~~our~~bad ~~2.00%~~debt ~~Convertible~~expense ~~Senior~~related ~~Notes~~to ~~and~~ the ~~full~~specific ~~repayment~~reserve ofcomponent, ~~$100.0~~net ~~million~~ of ~~senior~~recoveries, ~~secured~~for ~~notes~~which atthis ~~Hawaii~~adjustment ~~Gas.~~is Inreported ~~connection~~in ~~with~~working ~~the~~capital ~~repayment~~in of the ~~Hawaii~~above ~~Gas $100~~table.0 ~~million~~See ~~senior~~“Earnings ~~secured~~Before ~~notes~~Interest, ~~the~~Taxes, ~~Company~~Depreciation ~~paid~~and aAmortization ~~$4.7~~("EBITDA") ~~million~~excluding ~~'make~~non-~~whole'~~cash ~~payment~~items and Free Cash Flow” above for further discussion.

(2) Other non-cash income, net, includes primarily non-cash mark-to-market adjustment of the value of the commodity hedge contracts, non-cash compensation expense incurred in relation to the incentive plans for senior management of our operating businesses, and non-cash gains (losses) related to the write-off or disposal of assets or liabilities. Other non-cash income, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See “Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow” above for further discussion.

TABLE OF CONTENTS

Liquidity and Capital Resources

General

Cash requirements of our ~~operating~~business ~~businesses~~generally include ~~primarily~~ normal operating expenses, debt service, debt principal payments, and capital expenditures.

We may from time to time seek to purchase or retire our outstanding debt in open market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, could be material and will depend on market conditions, our liquidity needs, and other factors.

2.00% Convertible Senior Notes

On February 17, 2021, we initiated a tender offer for any and all of our 2.00% Convertible Senior Notes ("Notes") outstanding. On March 16, 2021, we repurchased $358.6 million in aggregate principal amount of the Notes in the tender offer. During the second quarter of 2021, we repurchased an additional $9.9 million of Notes in the open market and reduced the outstanding balance to $34.0 million. On September 23, 2021, we initiated an offer to repurchase any and all Notes outstanding and on October 22, 2021, we repurchased $26.9 million in aggregate principal amount of the Notes outstanding. On March 31, 2022, we had $6.8 million of the 2.00% Convertible Senior Notes outstanding.

Hawaii Gas Senior Secured Notes

On April 19, 2021, Hawaii Gas fully repaid all of its $100.0 million senior secured notes outstanding and incurred a $4.7 million 'make-whole' payment.

Ongoing Operations

We currently expect to service and/or repay our debts, make required tax payments, fund maintenance capital expenditures, and deploy growth capital during ~~2021~~2022 using cash generated from operations and cash on hand.

Debt

On ~~September~~March 3031, ~~2021~~2022, our consolidated debt outstanding totaled $~~127~~99.02 million. We had access to an undrawn revolving credit facility of $60.0 million. The ratio of net debt ~~(adjusted for cash on hand reserved for the one-time distribution)~~/EBITDA excluding non-cash items for our continuing operations was 1.~~29x~~7x on ~~September~~March 3031, ~~2021~~2022.

The following table shows our debt obligations on ~~October~~April 29, ~~2021~~2022 ($ in thousands):

Debt	Weighted Average Remaining Life(in years)	Balance Outstanding		WeightedAverage Rate(1)
2.00% Convertible Senior Notes	1.94	$	6,821	2.00	%
Term Loan- Hawaii Gas(2)	2.3	80,000		1.34	%
Term Loan- Hawaii Gas	1.8	80,000		2.05	%
Term Loan- Solar Facilities in Hawaii(2)	4.7	12,966		3.38	%
Term Loan- Solar facilities in Hawaii(2)	4.2	12,424		3.38	%
Total(3)	2.61	$	99,~~787~~245	12.6521	%

___________

(1)Reflects annualized interest rate on all facilities including interest rate hedges.

(2)The weighted average remaining life does not reflect the scheduled amortization on these facilities.

(3)Hawaii Gas also has a $60.0 million revolving credit facility that was undrawn.

We generally capitalize our ~~businesses~~business in part using floating rate debt with medium-term maturities. ofWe ~~between~~have ~~four~~in ~~and~~the ~~seven~~past ~~years. We~~ also ~~use~~used longer dated private placement debt and other forms of capital including bond or hybrid debt instruments to capitalize our ~~businesses~~business. InExcept ~~general,~~for the ~~debt~~2.00% ~~facilities~~Convertible ofSenior Notes, our ~~businesses~~debt facilities are non-recourse to the ~~holding company~~Company. ~~We are in compliance with all applicable financial covenants in our facilities.~~

For a description of the material terms of MIH and its businesses' debt facilities, see Note 9, “Long-Term Debt”, in Part II, Item 8, of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021.

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Liquidity and Capital Resources – (continued)

Analysis of Consolidated Historical Cash Flows from Continuing Operations

($ In Thousands)	Nine Months EndedSeptember 30,			ChangeFavorable/(Unfavorable)
		2021	2020
		$	$	$	%
Cash used in operating activities		(292,199)	(1,324)	(290,875)	NM
Cash used in investing activities		(10,242)	(10,754)	512	5
Cash used in financing activities		(1,430,529)	(1,006)	(1,429,523)	NM

The following section discusses our sources and uses of cash from continuing operations. All intercompany activities such as corporate allocations, capital contributions, and distributions have been excluded from the table as these transactions are eliminated on consolidation.

___________


($ In Thousands)	Quarter Ended March 31,			Change Favorable/(Unfavorable)
		2022	2021
		$	$	$	%
Cash used in operating activities		(4,531)	(12,942)	8,411	65
Cash used in investing activities		(4,891)	(3,324)	(1,567)	(47)
Cash used in financing activities		(274)	(1,319,824)	1,319,550	100

NM — Not meaningful.

Operating Activities from Continuing Operations

Cash provided by (used in) operating activities is generally comprised of EBITDA excluding non-cash items (as defined by us), less cash interest, cash taxes, and pension payments, and changes in working capital. See “Management's Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations” for discussions around the components of EBITDA excluding non-cash items from continuing operations on a consolidated basis.

The ~~increase~~decrease in consolidated cash used in operating activities for the ~~nine~~quarter ~~months~~ ended ~~September~~March 3031, ~~2021~~2022 compared with the ~~nine~~quarter ~~months~~ ended ~~September~~March 3031, ~~2020~~2021 was primarily due to:

•aan ~~decrease~~absence inof ~~EBITDA excluding non-cash items, primarily due to the disposition~~ payment ~~and~~of transaction costs ~~incurred and paid~~ during ~~2021~~2022;

•a ~~decrease~~favorable inchange ~~benefit~~to ~~for~~accounts ~~current~~receivable ~~taxes~~and inventory resulting from improved collection and lower inventory levels during 2022; and

•ana ~~unfavorable~~decrease ~~change to accounts receivable and inventory and favorable change to accounts payable resulting from the decline~~ in ~~business~~cash ~~activity~~interest ~~and cost of gas from the impact of COVID-19 during 2020~~expense; partially offset by

•atiming ~~decrease~~of inprepaid ~~cash~~expenses, ~~interest~~primarily ~~expense~~related to insurance premiums.

Investing Activities from Continuing Operations

Cash provided by investing activities includes proceeds from divestitures of businesses and disposal of fixed assets. Cash used in investing activities includes acquisitions of businesses and capital expenditures.

The ~~decrease~~increase in cash used in investing activities for the ~~nine~~quarter ~~months~~ ended ~~September~~March 3031, ~~2021~~2022 compared with the ~~nine~~quarter ~~months~~ ended ~~September~~March 3031, ~~2020~~2021 is primarily attributable to ~~lower~~higher capital expenditures.

Financing Activities from Continuing Operations

Cash provided by financing activities includes new equity and debt issuances. Cash used in financing activities includes distributions to our ~~stockholders~~unitholders and the repayment of debt principal balances.

The ~~increase~~decrease in cash used in financing activities for the ~~nine~~quarter ~~months~~ ended ~~September~~March 3031, ~~2021~~2022 compared with ~~nine~~the ~~months~~quarter ended ~~September~~March 3031, ~~2020~~2021 is primarily attributable to athe ~~special~~absence ~~dividend~~ of ~~$11.00~~special ~~per~~dividend ~~security~~ paid in January 2021, from the ~~repurchase~~IMTT ofTransaction aand ~~portion~~the repurchase of our 2.00% Convertible Senior Notes ~~outstanding,~~in ~~and~~March ~~the full repayment of $100~~2021.~~0 million senior secured notes at Hawaii Gas.~~

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Commitments and Contingencies

~~Except~~On ~~as noted above, on September~~March 3031, ~~2021~~2022, there were no material changes in our commitments and contingencies compared with those on December 31, ~~2020~~2021. On ~~September~~March 3031, ~~2021~~2022, we did not have any material purchase obligations. For a discussion of our other future obligations, due by period, under the various contractual obligations, off-balance sheet arrangements, and commitments, see “Liquidity and Capital Resources — Commitments and Contingencies” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021, filed with the SEC on February 1722, ~~2021~~2022.

On ~~September~~March 3031, ~~2021~~2022, we did not have any material reserves for contingencies. We have other contingencies occurring in the normal course of business, including pending legal and administrative proceedings that are not reflected at this time as they are not ascertainable.

Our sources of cash to meet these obligations include:

•cash on hand;

•cash generated from our operations (see “Operating Activities” in “Liquidity and Capital Resources”); and

•cash available from our undrawn credit ~~facilities~~facility (see “Financing Activities” in “Liquidity and Capital Resources”).

Critical Accounting Policies and Estimates

For critical accounting policies and estimates, see “Critical Accounting Policies and Estimates” in Part II, Item 7 and Note 2, “Summary of Significant Accounting Policies”, in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021, and see Note 2, “Basis of Presentation”, in our Notes to Consolidated Condensed Financial Statements in Part I of this Form 10-Q for recently issued accounting standards. Our critical accounting policies and estimates have not changed materially from the description contained in our Annual Report.

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Quantitative and Qualitative Disclosures About Market Risk

For quantitative and qualitative disclosures about market risk, see Part II, Item 7A “Quantitative and Qualitative Disclosures about Market Risk” in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021. Our exposure to market risk has not changed materially since February 1722, ~~2021~~2022, the filing date for our Annual Report on Form 10-K~~, except for the impact of higher wholesale LPG costs~~.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the direction and with the participation of our Chief Executive Officer and Chief Financial Officer, we evaluated our disclosure controls and procedures (as such term is defined under Rule 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. The purpose of disclosure controls is to ensure that information required to be disclosed in our reports filed with or submitted to the SEC under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls are also designed to ensure that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of ~~September~~March 3031, ~~2021~~2022.

Changes in Internal Control Over Financial Reporting

There have not been any changes in our internal control over financial reporting as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) that occurred during the quarter ended ~~September~~March 3031, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

CONSOLIDATED CONDENSED BALANCE SHEETS

($ in Thousands, Except Unit Data)

	September 30,2021		December 31, 2020
	March 31,2022		December 31, 2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	337,~~371,973~~589	$	147,~~518,108~~259
Restricted cash	~~955~~1,025		1,~~036~~051
Accounts receivable, net of allowance for doubtful accounts	2527,~~279~~422		2327,~~113~~824
Inventories	1012,~~543~~175		911,~~564~~658
Prepaid expenses	47,~~334~~491		21,~~212~~813
Other current assets	6,924		1,715
Fair value of derivative instruments	8,344		909
Current assets held for sale(1)	—		2,185,002
Other current assets	5,547		2,255
Total current assets	399,~~420,008~~593		392,~~740,750~~769
Property, equipment, land and leasehold improvements, net	296,637		297,375
Property, equipment, land, and leasehold improvements, net	298,746		297,190
Operating lease assets, net	1112,~~455~~186		912,~~878~~591
Goodwill	120,193		120,193
Intangible assets, net	4,~~604~~392		4,~~923~~498
Other noncurrent assets	11,067		5,520
Fair value of derivative instruments	4,078		470
Total assets	$	3,863,964	$	4,178,639
Other noncurrent assets	8,458		8,740
LIABILITIES AND UNITHOLDERS’ EQUITY
Total assets	$	547,646	$	536,451
Current liabilities:
LIABILITIES AND UNITHOLDERS’ EQUITY
Due to Manager-related party	$	57	$	1,203
Current liabilities:
Accounts payable	6,820		13,082
Due to Manager-related party	$	274	$	260
Accrued expenses	18,891		17,798
Accounts payable	7,214		6,169
Current portion of long-term debt	28,292		1,060
Accrued expenses	13,476		18,449
Distribution payable	3,297,420		960,981
Current portion of long-term debt	1,118		1,107
Operating lease liabilities - current	1,~~829~~800		21,~~019~~794
Other current liabilities	46,~~755~~820		95,~~591~~223
Current liabilities held for sale(1)	—		1,613,830
Total current liabilities	30,702		33,002
Total current liabilities	3,358,064		2,619,564
Long-term debt, net of current portion	97,443		97,655
Long-term debt, net of current portion	97,861		578,169
Deferred income taxes	40,236		38,540
Deferred income taxes	27,294		26,453
Operating lease liabilities - noncurrent	10,365		10,810
Operating lease liabilities - noncurrent	9,581		7,869
Other noncurrent liabilities	53,049		53,062
Other noncurrent liabilities	53,647		53,278
Total liabilities	231,795		233,069
Total liabilities	3,546,447		3,285,333
Commitments and contingencies	—		—
Commitments and contingencies	—		—

See accompanying notes to the consolidated condensed financial statements.

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

CONSOLIDATED CONDENSED BALANCE SHEETS – (continued)

($ in Thousands, Except Unit Data)

September 30,2021

December 31, 2020

March 31,2022

December 31, 2021

(Unaudited)

Unitholders’ equity(2):

Unitholders’ equity(1):

Common units paid in capital (500,000,000 authorized; 88,197,409 units issued and outstanding on September 30, 2021 and 87,361,929 units issued and outstanding on December 31, 2020)

192,207

178,062

Common units paid in capital (500,000,000 authorized; 88,805,519 units issued and outstanding on March 31, 2022 and 88,343,762 units issued and outstanding on December 31, 2021)

194,494

193,471

Accumulated other comprehensive loss

(65,~~171~~106)

(65,~~175~~106)

Retained earnings

~~123~~117,~~027~~681

~~713~~106,~~129~~539

Total unitholders’ equity

~~309~~307,~~063~~069

~~885~~294,~~016~~904

Noncontrolling interests

8,~~454~~782

8,~~290~~478

Total equity

~~317~~315,~~517~~851

~~893~~303,~~306~~382

Total liabilities and equity

3547,~~863,964~~646

4536,~~178,639~~451

___________

(1)~~See~~The ~~Note~~Company 4is authorized to issue 100,000,000 ~~“Discontinued~~preferred ~~Operations~~units. On March 31, 2022 and ~~Dispositions”~~December 31, ~~for~~2021, ~~discussions~~no onpreferred ~~assets~~units were issued or outstanding. The Company had 100 special units issued and ~~liabilities~~outstanding ~~held~~to ~~for~~its ~~sale~~Manager on March 31, 2022 and December 31, 2021, respectively.

(2)The Company is authorized to issue 100,000,000 preferred units. On September 30, 2021 and December 31, 2020, no preferred units were issued or outstanding. The Company had 100 special units issued and outstanding to its Manager on September 30, 2021 and December 31, 2020.

See accompanying notes to the consolidated condensed financial statements.

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

CONSOLIDATED CONDENSED STATEMENTS OF ~~OPERATIONS~~INCOME (LOSS)

(Unaudited)

($ in Thousands, Except Unit and Per Unit Data)

	Quarter Ended September 30,				Nine Months EndedSeptember 30,
					Quarter Ended March 31,
	2021		2020		2021		2020
					2022		2021
Revenue
Product revenue	$	~~60,086~~	$	~~39,036~~	$	~~173~~68,~~413~~681	$	~~136~~54,~~293~~587
Total revenue	~~60,086~~		~~39,036~~		~~173~~68,~~413~~681		~~136~~54,~~293~~587
Costs and expenses
Cost of product sales	~~40,613~~		~~25,059~~		~~113~~40,~~203~~004		8534,~~218~~756
Selling, general and administrative	~~61,704~~		~~11,135~~		888,~~429~~381		4011,~~561~~582
Disposition payment to Manager	~~228,551~~		—		~~228,570~~—		—19
Total Selling, general and administrative	~~290,255~~		~~11,135~~		~~316~~8,~~999~~381		4011,~~561~~601
Fees to Manager - related party	~~7,698~~		~~4,980~~		~~20,801~~800		165,~~160~~552
Depreciation	~~3,757~~		~~3,717~~		113,~~133~~675		103,~~906~~642
Amortization of intangibles	~~107~~		~~105~~		~~319~~106		~~318~~106
Total operating expenses	~~342,430~~		~~44,996~~		~~462~~52,~~455~~966		~~153~~55,~~163~~657
Operating loss	(282,344)		(5,960)		(289,042)		(16,870)
Operating income (loss)					15,715		(1,070)
Other income (expense)
Interest income	6		~~(42)~~		227		223
Interest expense(1)	~~(948)~~		~~(4,905)~~		(~~13,991~~38)		(167,~~215~~049)
Other income (expense), net	~~180~~		~~(769)~~		~~(238)~~418		(~~937~~336)
Net loss from continuing operations before income taxes	(283,106)		(11,676)		(303,249)		(34,000)
Net income (loss) from continuing operations before income taxes					16,102		(8,452)
Benefit for income taxes	8,455		6,186		6,788		8,808
(Provision) benefit for income taxes					(4,656)		2,182
Net loss from continuing operations	(274,651)		(5,490)		(296,461)		(25,192)
Net income (loss) from continuing operations					11,446		(6,270)
Discontinued Operations(2)
Net income (loss) from discontinued operations before income taxes	3,004,955		(718,061)		3,063,442		(688,499)
Net income from discontinued operations before income taxes					—		27,615
Provision for income taxes	~~(50,511)~~		~~(169,819)~~		~~(66,458)~~—		(~~175~~7,~~750~~548)
Net income (loss) from discontinued operations	2,954,444		(887,880)		2,996,984		(864,249)
Net income from discontinued operations					—		20,067
Net income (loss)	2,679,793		(893,370)		2,700,523		(889,441)
Net income					11,446		13,797
Net loss from continuing operations	(274,651)		(5,490)		(296,461)		(25,192)
Net income (loss) from continuing operations					11,446		(6,270)
Less: net (loss) income attributable to noncontrolling interests	(14)		(122)		167		459
Less: net income attributable to noncontrolling interests					304		597
Net loss from continuing operations attributable to MIH	(274,637)		(5,368)		(296,628)		(25,651)
Net income (loss) from continuing operations attributable to MIH					11,142		(6,867)
Net income (loss) from discontinued operations	2,954,444		(887,880)		2,996,984		(864,249)
Net income from discontinued operations					—		20,067
Net income (loss) from discontinued operations attributable to MIH	2,954,444		(887,880)		2,996,984		(864,249)
Net income from discontinued operations attributable to MIH					—		20,067
Net income (loss) attributable to MIH	$	2,679,807	$	(893,248)	$	2,700,356	$	(889,900)
Net income attributable to MIH					$	11,142	$	13,200

See accompanying notes to the consolidated condensed financial statements.

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

CONSOLIDATED CONDENSED STATEMENTS OF ~~OPERATIONS~~INCOME (LOSS) – (continued)

(Unaudited)

($ in Thousands, Except Unit and Per Unit Data)

	Quarter Ended September 30,				Nine Months EndedSeptember 30,
					Quarter Ended March 31,
	2021		2020		2021		2020
					2022		2021
Basic loss per unit from continuing operations attributable to MIH	$	(3.12)	$	(0.06)	$	(3.38)	$	(0.29)
Basic income (loss) per unit from continuing operations attributable to MIH					$	0.13	$	(0.08)
Basic income (loss) per unit from discontinued operations attributable to MIH	33.61		(10.20)		34.19		(9.95)
Basic income per unit from discontinued operations attributable to MIH					—		0.23
Basic income (loss) per unit attributable to MIH	$	30.49	$	(10.26)	$	30.81	$	(10.24)
Basic income per unit attributable to MIH					$	0.13	$	0.15
Weighted average number of units outstanding: basic	~~87,891,018~~		~~87,030,751~~		8788,~~645~~494,~~390~~560		8687,~~864~~411,~~951~~455
Diluted loss per unit from continuing operations attributable to MIH	$	(3.12)	$	(0.06)	$	(3.38)	$	(0.29)
Diluted income (loss) per unit from continuing operations attributable to MIH					$	0.12	$	(0.08)
Diluted income (loss) per unit from discontinued operations attributable to MIH	33.61		(10.20)		34.19		(9.95)
Diluted income per unit from discontinued operations attributable to MIH					—		0.23
Diluted income (loss) per unit attributable to MIH	$	30.49	$	(10.26)	$	30.81	$	(10.24)
Diluted income per unit attributable to MIH					$	0.12	$	0.15
Weighted average number of units outstanding: diluted	~~87,891,018~~		~~87,030,751~~		8789,~~645~~860,~~390~~394		8687,~~864~~411,~~951~~455
Cash distributions declared per unit	$	37.386817	$	—	$	37.386817	$	—

___________

(1)Interest expense includes non-cash gains on derivative instruments of $8489,000 and $~~213~~283,000 for the ~~quarter~~quarters ~~and nine months~~ ended ~~September~~March 3031, ~~2021,~~2022 ~~respectively, compared with non-cash losses of $7,000~~ and ~~$963~~2021,~~000~~ ~~for the quarter and nine months ended September 30, 2020,~~ respectively.

(2)See Note 4, “Discontinued Operations and Dispositions”, for further discussions on businesses classified as held for sale.

See accompanying notes to the consolidated condensed financial statements.

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

($ in Thousands)

	Quarter Ended September 30,				Nine Months EndedSeptember 30,
	2021		2020		2021		2020
Net income (loss)	$	2,679,793	$	(893,370)	$	2,700,523	$	(889,441)
Other comprehensive income (loss), net of taxes:
Change in post retirement benefit plans	10		—		10		—
Translation adjustment (1)	—		545		—		(532)
Reclassification to net income (loss) due to sale of business	(6)		—		(6)		—
Other comprehensive income (loss)	4		545		4		(532)
Comprehensive income (loss)	2,679,797		(892,825)		2,700,527		(889,973)
Less: comprehensive (loss) income attributable to noncontrolling interests	(14)		(122)		167		459
Comprehensive income (loss) attributable to MIH	$	2,679,811	$	(892,703)	$	2,700,360	$	(890,432)

___________

(1)Translation adjustment is presented net of tax expense of $212,000 and tax benefit of $207,000 for the quarter and nine months ended September 30, 2020, respectively. See Note 10, “Unitholders’ Equity”, for further discussions.

See accompanying notes to the consolidated condensed financial statements.

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

CONSOLIDATED CONDENSED STATEMENTS OF UNITHOLDERS’ EQUITY

(Unaudited)

($ in Thousands, Except Unit Data)

	In Units			Common UnitsPaid InCapital		AccumulatedOtherComprehensiveLoss		RetainedEarnings		TotalUnitholders’Equity		NoncontrollingInterests		TotalEquity
	SpecialUnits		CommonUnits(1)
Balance on June 30, 2021	100		87,780,539	$	180,434	$	(6,175)	$	740,640	$	914,899	$	8,468	$	923,367
Balance on December 31, 2021	100		88,343,762	$	193,471	$	(5,106)	$	106,539	$	294,904	$	8,478	$	303,382
Issuance of units to Manager	—		~~265~~217,~~791~~696	~~10,396~~787		—		—		~~10,396~~787		—		~~10,396~~787
Units vested under compensation plans(2)	—		~~205~~356,~~674~~124	—		—		—		—		—		—
Units withheld for taxes on vested units(2)	—		(54,595)	—		—		—		—		—		—
Units withheld for taxes on vested stock(2)	—		(112,063)	—		—		—		—		—		—
Unit-based compensation expense	—		—	~~1,377~~236		—		—		~~1,377~~236		—		~~1,377~~236
Distributions to common unitholders(3)	—		—	—		—		(3,297,420)		(3,297,420)		—		(3,297,420)
Comprehensive income, net of taxes	—		—	—		—		11,142		11,142		304		11,446
Comprehensive income (loss), net of taxes	—		—	—		4		2,679,807		2,679,811		(14)		2,679,797
Balance on March 31, 2022	$	100	88,805,519	$	194,494	$	(5,106)	$	117,681	$	307,069	$	8,782	$	315,851
Balance on September 30, 2021	100		88,197,409	$	192,207	$	(6,171)	$	123,027	$	309,063	$	8,454	$	317,517
Balance on December 31, 2020	100		87,361,929	$	178,062	$	(6,175)	$	713,129	$	885,016	$	8,290	$	893,306
Issuance of units to Manager	—		~~618~~142,~~249~~936	214,~~947~~650		—		—		214,~~947~~650		—		214,~~947~~650
Units vested under compensation plans(2)	—		~~281,206~~952	—		—		—		—		—		—
Units withheld for taxes on vested units(2)	—		(63,975)	—		—		—		—		—		—
Units withheld for taxes on vested stock(2)	—		(365)	—		—		—		—		—		—
Unit-based compensation expense	—		—	62,~~319~~175		—		—		62,~~319~~175		—		62,~~319~~175
Distributions to common unitholders(3)	—		—	—		—		(3,297,420)		(3,297,420)		—		(3,297,420)
Impact of ASU No. 2020-06 adoption, net of taxes(3)	—		—	(14,121)		—		6,962		(7,159)		—		(7,159)
Distributions to noncontrolling interests	—		—	—		—		—		—		(3)		(3)
Comprehensive income, net of taxes	—		—	—		—		13,200		13,200		597		13,797
Impact of ASU 2020-06 adoption(4)	—		—	(14,121)		—		6,962		(7,159)		—		(7,159)
Balance on March 31, 2021	100		87,505,452	$	170,766	$	(6,175)	$	733,291	$	897,882	$	8,887	$	906,769
Comprehensive income, net of taxes	—		—	—		4		2,700,356		2,700,360		167		2,700,527
Balance on September 30, 2021	100		88,197,409	$	192,207	$	(6,171)	$	123,027	$	309,063	$	8,454	$	317,517

See accompanying notes to the consolidated condensed financial statements.

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

CONSOLIDATED CONDENSED STATEMENTS OF UNITHOLDERS’ EQUITY – (continued)

(Unaudited)

($ in Thousands, Except Unit Data)

	In Units		Common UnitsPaid InCapital		AccumulatedOtherComprehensiveLoss		RetainedEarnings		TotalUnitholders’Equity		NoncontrollingInterests		TotalEquity
	SpecialUnits	CommonUnits(1)
Balance on June 30, 2020	100	86,969,144	$	1,127,130	$	(37,949)	$	1,644,338	$	2,733,519	$	8,737	$	2,742,256
Issuance of units to Manager	—	162,067	4,905		—		—		4,905		—		4,905
Units vested under compensation plans(2)	—	4,602	—		—		—		—		—		—
Units withheld for taxes on vested units(2)	—	(1,186)	—		—		—		—		—		—
Unit-based compensation expense	—	—	1,116		—		—		1,116		—		1,116
Distributions to noncontrolling interests	—	—	—		—		—		—		(3)		(3)
Comprehensive income (loss), net of taxes	—	—	—		545		(893,248)		(892,703)		(122)		(892,825)
Balance on September 30, 2020	100	87,134,627	$	1,133,151	$	(37,404)	$	751,090	$	1,846,837	$	8,612	$	1,855,449
Balance on December 31, 2019	100	86,600,302	$	1,197,932	$	(36,872)	$	1,640,990	$	2,802,050	$	8,156	$	2,810,206
Issuance of units to Manager	—	508,720	17,512		—		—		17,512		—		17,512
Units vested under compensation plans(2)	—	27,092	—		—		—		—		—		—
Units withheld for taxes on vested units(2)	—	(1,487)	—		—		—		—		—		—
Unit-based compensation expense	—	—	4,449		—		—		4,449		—		4,449
Distributions to common unitholders(3)	—	—	(86,742)		—		—		(86,742)		—		(86,742)
Distributions to noncontrolling interests	—	—	—		—		—		—		(3)		(3)
Comprehensive income (loss), net of taxes	—	—	—		(532)		(889,900)		(890,432)		459		(889,973)
Balance on September 30, 2020	100	87,134,627	$	1,133,151	$	(37,404)	$	751,090	$	1,846,837	$	8,612	$	1,855,449

___________

(1)The Company is authorized to issue 500,000,000 common units.

(2)Units vested and issued under the 2016 Omnibus Employee Incentive Plan and 2014 Independent Directors' Equity Plan. Under the 2016 Omnibus Employee Incentive Plan, units are withheld for the employee portion of taxes on vested awards and are available for future grants. See Note 10, "Unitholders' Equity", for further discussions.

(3)~~See~~On ~~Note~~January 121, ~~“Related~~2021, ~~Party~~the ~~Transactions”~~Company adopted ASU No. 2020-06, ~~for~~Debt ~~discussion~~- onDebt ~~cash~~with ~~dividends~~Conversion ~~declared~~and Other Options, using the modified retrospective method and ~~paid~~made onan ~~units~~adjustment to the beginning balance to Retained Earnings of $7.0 million, net of taxes. See Note 8, “Long-Term Debt”, for ~~each~~further ~~period~~discussions.

(4)On January 1, 2021, the Company adopted ASU No. 2020-06, Debt - Debt with Conversion and Other Options, using the modified retrospective method and made an adjustment to the beginning balance to Retained Earnings of $7.0 million, net of taxes. See Note 8, “Long-Term Debt”, for further discussions.

See accompanying notes to the consolidated condensed financial statements.

1917

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

($ in Thousands)

	Nine Months Ended September 30,
	Quarter Ended March 31,
	2021		2020
	2022		2021
Operating activities
Net loss from continuing operations	$	(296,461)	$	(25,192)
Net income (loss) from continuing operations	$	11,446	$	(6,270)
Adjustments to reconcile net loss to net cash used in operating activities from continuing operations:
Adjustments to reconcile net income (loss) to net cash used in operating activities from continuing operations:
Depreciation	113,~~133~~675		103,~~906~~642
Amortization of intangibles	~~319~~106		~~318~~106
Write-off of debt financing costs	4,170		2,882
Amortization of debt financing costs	73		4,084
Amortization of debt discount and financing costs	664		1,414
Adjustments to derivative instruments	(11,164)		(1,459)
Adjustments to derivative instruments	(7,628)		(4,290)
Fees to Manager - related party	800		5,552
Fees to Manager - related party	20,801		16,160
Deferred taxes	1,696		(334)
Deferred taxes	(853)		(835)
Other non-cash expense, net	389		1,133
Other non-cash expense, net	4,274		4,085
Changes in other assets and liabilities, net of acquisitions:
Accounts receivable	~~(2,065)~~192		6(1,~~764~~897)
Inventories	(~~2,142~~347)		(~~272~~1,497)
Prepaid expenses and other current assets	(39,~~834~~058)		(12,~~531~~653)
Accounts payable and accrued expenses	(64,~~841~~068)		(37,~~376~~507)
Income taxes payable	(62,~~837)~~878		(102,~~472~~332)
Other, net	(61,~~899~~149)		2(3,~~115~~510)
Net cash used in operating activities from continuing operations	(~~292~~4,~~199~~531)		(112,~~324~~942)
Investing activities
Purchases of property and equipment	(105,~~314~~033)		(103,~~790~~339)
Other, net	72142		3615
Net cash used in investing activities from continuing operations	(104,~~242~~891)		(103,~~754~~324)
Financing activities
Payment of long-term debt	(~~469,253~~274)		(1358,~~003~~843)
Dividends paid to common unitholders	(960,981)		—
Distributions paid to common unitholders	—		(960,981)
Distributions paid to noncontrolling interest	(3)		(3)
Net cash used in financing activities from continuing operations	(274)		(1,319,824)
Debt financing costs paid	(292)		—
Net change in cash, cash equivalents, and restricted cash from continuing operations	(9,696)		(1,336,090)
Net cash used in financing activities from continuing operations	(1,430,529)		(1,006)
Net change in cash, cash equivalents, and restricted cash from continuing operations	(1,732,970)		(13,084)

See accompanying notes to the consolidated condensed financial statements.

2018

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS – (continued)

(Unaudited)

($ in Thousands)

	Nine Months Ended September 30,
	Quarter Ended March 31,
	2021		2020
	2022		2021
Cash flows provided by (used in) discontinued operations:
Net cash provided by operating activities	$	~~28,965~~—	$	~~283~~52,~~506~~935
Net cash provided by (used in) investing activities	3,242,836		(192,913)
Net cash used in investing activities	—		(12,515)
Net cash (used in) provided by financing activities	(5,123)		55,120
Net cash used in financing activities	—		(2,562)
Net cash provided by discontinued operations	~~3,266,678~~—		~~145~~37,~~713~~858
Effect of exchange rate changes on cash and cash equivalents	—		(255)
Net change in cash, cash equivalents, and restricted cash	(9,696)		(1,298,232)
Net change in cash, cash equivalents, and restricted cash	1,533,708		132,374
Cash, cash equivalents, and restricted cash, beginning of period	48,310		1,839,220
Cash, cash equivalents, and restricted cash, beginning of period	1,839,220		358,565
Cash, cash equivalents, and restricted cash, end of period	$	38,614	$	540,988
Cash, cash equivalents, and restricted cash, end of period	$	3,372,928	$	490,939
Supplemental disclosures of cash flow information:
Non-cash investing and financing activities:
Accrued purchases of property and equipment from continuing operations	$	~~680~~743	$	~~443~~237
Accrued purchases of property and equipment from discontinued operations	~~4,201~~—		143,~~848~~665
Leased assets obtained in exchange for new operating lease liabilities from discontinued operations	~~14,666~~—		~~9,419~~787
Cash distribution declared, but not yet paid	3,297,420		—
Taxes received, net, from continuing operations	—		(755)
Taxes received, net, from continuing operations	(625)		—
Taxes paid, net, from discontinued operations	—		1,415
Taxes paid, net, from discontinued operations	143,906		4,970
Interest paid, net, from continuing operations	471		6,761
Interest paid, net, from continuing operations	12,901		10,165
Interest paid, net, from discontinued operations	—		9,809
Interest paid, net, from discontinued operations	29,616		68,544

The following table provides a reconciliation of cash, cash equivalents, and restricted cash from both continuing and discontinued operations reported within the consolidated condensed balance sheets that is presented in the consolidated condensed statements of cash flows:

	As of September 30,
	As of March 31,
	2021		2020
	2022		2021
Cash and cash equivalents	$	337,~~371,973~~589	$	32192,~~667~~842
Restricted cash - current	~~955~~1,025		1,~~374~~085
Cash, cash equivalents, and restricted cash included in assets held for sale	—		~~456~~347,~~898~~061
Total of cash, cash equivalents, and restricted cash shown in the consolidated condensed statement of cash flows	$	338,~~372,928~~614	$	~~490~~540,~~939~~988

See accompanying notes to the consolidated condensed financial statements.

2119

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Description of Business

Macquarie Infrastructure Holdings, LLC ("MIH") is a Delaware limited liability company formed on February 5, 2021, and the registrant since September 22, 2021. MIH is the successor to Macquarie Infrastructure Corporation ("MIC"), a Delaware corporation formed on May 21, 2015. MIC’s predecessor, Macquarie Infrastructure Company LLC, was formed on April 13, 2004. Except as otherwise specified, all references in this Form 10-Q to “MIH” or the "Company" refers to Macquarie Infrastructure Holdings, LLC and its subsidiaries, or as necessary when referring to previous reporting periods or the period prior to September 22, 2021, MIC and its subsidiaries.

MIH is externally managed by Macquarie Infrastructure Management (USA) Inc. (the "Manager"), pursuant to the terms of a Management Services Agreement, subject to the oversight and supervision of the Board. Six of the eight members of the Board, and all members of each of the Company's Audit, Compensation, and Nominating and Governance Committees, are independent and have no affiliation with Macquarie. The Manager is a member of the Macquarie Group of companies comprising Macquarie Group Limited and its subsidiaries and affiliates worldwide. Macquarie Group Limited is headquartered in Australia and is listed on the Australian Securities Exchange.

The Company ~~owns~~provides ~~and operates businesses that provide~~ products to corporations, government agencies, and individual customers in Hawaii. The Company's operations ~~consist~~comprise ~~of businesses comprising~~ an energy company that processes and distributes gas and provides related services, Hawaii Gas, and several smaller ~~businesses~~operations collectively engaged in efforts to reduce the cost and improve the reliability and sustainability of energy in Hawaii.

In October 2019, along with actively managing its existing portfolio of businesses, the Board resolved to pursue strategic alternatives including potentially a sale of the Company or its then three operating businesses as a means of unlocking additional value for ~~stockholders~~equity holders. In December 2020, we completed the sale of IMTT ("IMTT Transaction").

During the quarter ended September 30, 2020, the Company's International-Matex Tank Terminals ("IMTT") business was classified as a discontinued operation and eliminated as a reportable segment. All periods reported herein reflect this change. In December 2020, the Company completed the sale of IMTT ("IMTT Transaction"). For additional information, see Note 4, “Discontinued Operations and Dispositions”.

On June 7, 2021, the Company entered into an agreement for the sale of its Atlantic Aviation business to KKR Apple Bidco, LLC (“Purchaser”), a Delaware limited liability company controlled by funds affiliated with Kohlberg Kravis Roberts & Co. L.P. (“KKR”), for $4.475 billion including cash and the assumption of debt and other transaction and reorganization related obligations (the "AA Transaction").

On June 14, 2021, the Company entered into a merger agreement (the "Merger Agreement") with AMF Hawaii Holdings, LLC ("AMF Parent"), a Delaware limited liability company affiliated with Argo Infrastructure Partners, LP ("Argo"), and AMF Hawaii Merger Sub, LLC ("AMF Merger Sub"), a recently formed Delaware limited liability company and wholly-owned direct subsidiary of AMF Parent. The Merger Agreement provides that AMF Merger Sub will be merged with and into MIH (the "Merger"), with MIH surviving the Merger as a wholly owned subsidiary of AMF Parent. Upon the completion of the Merger, each of the MIH common units (excluding common units held by AMF Parent or AMF Merger Sub or common units held by MIH in treasury and common units held by any subsidiary of MIH or AMF Parent (other than AMF Merger Sub)), will be converted into the right to receive $3.83 in cash, without interest; or, if the Merger is consummated after July 1, 2022, then each such unit will be converted into the right to receive $4.11 in cash, without interest.

Under the terms of the Merger Agreement, at closing, ~~Argo~~AMF Parent will pay the merger consideration to unitholders, and fund transaction costs and fund a disposition payment to MIH’s Manager of $81.7 million if the Merger closes on or before July 1, 2022 or $56.7 million if the Merger closes after this date.

~~The~~On ~~Merger~~September is21, ~~expected~~2021, tothe beCompany ~~completed~~conducted ina ~~the~~Special ~~first~~Meeting ~~half~~ of ~~2022~~Shareholders ~~subject~~during towhich ~~closing~~shareholders ~~conditions~~voted on and ~~approvals~~approved ~~customary~~the ~~for~~AA Transaction and the Merger. As a ~~transaction~~result of ~~this~~the ~~kind~~approval, ~~including~~MIH ~~approval~~classified byits ~~the~~Atlantic ~~Hawaii~~Aviation ~~Public~~business ~~Utilities~~as ~~Commission~~a ~~("HPUC").~~discontinued ~~Upon~~operation ~~the~~and ~~closing~~eliminated ofit ~~the~~as ~~Merger,~~a ~~the~~reportable ~~Company~~segment. ~~will~~All noprior ~~longer~~periods bereported aherein ~~publicly~~reflect ~~traded~~this ~~entity~~change.

On September 2122, 2021, ~~the~~shareholders ~~Company~~of ~~conducted~~Macquarie aInfrastructure ~~Special~~Corporation ~~Meeting~~became unitholders of ~~Shareholders~~Macquarie ~~during~~Infrastructure ~~which~~Holdings, ~~shareholders~~LLC, ~~voted~~a limited liability company treated as a partnership for tax purposes, on ~~and~~a ~~approved~~one-for-one ~~the~~basis AAwithout ~~Transaction~~an ~~and~~exchange ~~the~~of ~~Merger~~certificates. AsCommencing aSeptember ~~result~~23, ~~MIH~~2021, ~~classified~~units ~~its~~of ~~Atlantic~~Macquarie ~~Aviation~~Infrastructure ~~business~~Holdings, LLC traded on the New York Stock Exchange ("NYSE") under the same symbol (NYSE: MIC) and with the same CUSIP number (55608B105) as apreviously ~~discontinued~~associated ~~operation.~~with shares of Macquarie Infrastructure Corporation.

OnAs ~~September~~part ~~22,~~of ~~2021~~the reorganization, the ~~Company~~entity ~~completed~~holding the ~~previously~~businesses ~~approved~~comprising ~~corporate~~MIC's ~~reorganization.~~MIC AsHawaii asegment ~~result~~was ofdistributed ~~the~~to ~~reorganization,~~and ~~Macquarie Infrastructure Corporation~~ became a direct subsidiary of Macquarie Infrastructure Holdings, LLC. For tax purposes, the distribution was deemed to be a ~~limited~~sale ~~liability~~of ~~company~~MIC ~~treated~~Hawaii asby MIC and unitholders were deemed to have received a ~~partnership~~distribution ~~for~~of ~~tax~~the ~~purposes~~fair market value of the equity of that segment, subsequently determined to equate to $3.70 per unit.

2220

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Description of Business – (continued)

On September 2223, 2021, ~~shareholders~~MIH ofcompleted ~~Macquarie~~the ~~Infrastructure~~AA ~~Corporation~~Transaction, ~~became~~and ~~unitholders~~received of$3.525 billion ~~Macquarie~~at ~~Infrastructure~~the ~~Holdings,~~closing. ~~LLC~~The onMIH Board elected to return certain proceeds from the AA Transaction to unitholders, declaring a one-~~for-one~~time ~~basis~~distribution ~~without~~of an$37.386817 ~~exchange~~per common unit of ~~certificates.~~the ~~Commencing~~Company, ~~September~~paid 23on October 7, 2021, ~~units~~to unitholders of ~~Macquarie~~record ~~Infrastructure~~as ~~Holdings~~of the close of trading on October 4, ~~LLC~~2021. The Company's common units traded onwith ~~the~~due-bills ~~New~~attached ~~York~~from ~~Stock~~October ~~Exchange~~1, ~~under~~2021 ~~the~~through ~~same~~October ~~symbol~~7, ~~(NYSE:~~2021 ~~MIC)~~pursuant ~~and~~to ~~with~~relevant ~~the~~NYSE ~~same~~rules. ~~CUSIP~~In ~~number~~addition, ~~(55608B105)~~MIH asmade ~~previously~~a ~~associated~~disposition ~~with~~payment ~~shares~~to the Manager of ~~Macquarie~~$228.6 million. See ~~Infrastructure~~Note ~~Corporation~~4, “Discontinued Operations and Dispositions” for further information.

AsThe ~~part~~Merger ofis ~~the~~expected ~~reorganization,~~to ~~the~~be ~~entity~~completed ~~holding~~in the ~~businesses~~first ~~comprising~~half ~~MIC's~~of ~~MIC~~2022 ~~Hawaii~~subject ~~segment was distributed~~ to ~~and~~the ~~became~~approval aby ~~direct~~the ~~subsidiary~~Hawaii ofPublic ~~Macquarie~~Utilities ~~Infrastructure~~Commission ~~Holdings,~~("HPUC") ~~LLC.~~and ~~For tax purposes,~~ the ~~distribution~~satisfaction ~~was deemed to be a sale~~ of ~~MIC~~customary ~~Hawaii~~closing byconditions ~~MIC~~for ~~and~~this ~~unitholders~~type ~~were~~of ~~deemed~~transaction. toUpon ~~have~~the ~~received~~closing aof ~~distribution~~the ofMerger, the ~~fair~~Company ~~market~~will ~~value~~no oflonger ~~the~~be ~~equity~~a ofpublicly ~~that~~traded ~~segment~~entity.

On September 23, 2021, MIH completed the AA Transaction, and received $3.525 billion at the closing. The MIH Board elected to return certain proceeds from the AA Transaction to unitholders, declaring a one-time distribution of $37.386817 per common unit of the Company, paid on October 7, 2021 to unitholders of record as of the close of trading on October 4, 2021. The Company's common units traded with due-bills attached from October 1, 2021 through October 7, 2021 pursuant to relevant New York Stock Exchange (NYSE) rules. In addition, MIH made a disposition payment to the Manager of $228.6 million. See Note 4, “Discontinued Operations” for further information.

2. Basis of Presentation

The unaudited consolidated condensed financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") in the U.S. and in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X for interim financial information. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

The consolidated balance sheet on December 31, ~~2020~~2021 has been derived from audited financial statements but does not include all the information and notes required by GAAP for complete financial statements. Certain reclassifications were made to the consolidated financial statements for the prior period to conform to current period presentation.

The interim financial information contained herein should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, ~~2020~~2021 included in the Company's Annual Report on Form 10-K, as filed with the SEC on February 1722, ~~2021~~2022. Operating results for the quarter ~~and nine months~~ ended ~~September~~March 3031, ~~2021~~2022 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2021~~2022 or for any future interim periods.

Use of Estimates

The preparation of unaudited consolidated condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures related thereto at the date of the unaudited consolidated condensed financial statements and the reported amounts of revenue and expenses during the reporting period. Management evaluates these estimates and assumptions on an ongoing basis.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited interim consolidated condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.

Financial Instruments

The Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and variable-rate senior debt, are carried at cost, which approximates their fair value because of either the short-term maturity or competitive interest rates assigned to these financial instruments. The fair values of the Company’s other debt instruments fall within level 1 or level 2 of the fair value hierarchy.

The Company considers all highly liquid investments, including commercial paper issued by counterparties with Standard & Poor's rating of A1+ or higher, with maturity of three months or less when purchased to be cash and cash equivalents. The Company did not have any investments in commercial paper on ~~September~~March 3031, ~~2021~~2022 or December 31, ~~2020~~2021.

2321

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

2. Basis of Presentation – (continued)

Income Taxes

MIH is a limited liability company treated as a partnership for tax purposes. Taxable income/losses reported by MIH ~~will~~are be passed-through to the unitholders and reported on a Schedule K-1. MIH does not pay afederal ~~state~~ or ~~federal~~state income tax. ~~As a partnership, MIH itself will not pay income tax on the gain from the AA Transaction.~~

AsThe ~~part~~subsidiaries of the ~~reorganization,~~Company ~~the~~are ~~entity~~owned ~~holding~~by ~~the~~an ~~businesses~~intermediate ~~comprising~~holding ~~MIC's~~company ~~MIC~~organized ~~Hawaii~~as ~~segment~~a ~~was~~limited ~~distributed~~liability tocompany and ~~became~~classified ~~directly~~as ~~owned~~a bycorporation ~~MIH.~~for ~~For~~ tax purposes,. ~~the~~The ~~distribution~~intermediate ~~was~~holding ~~deemed~~company tofiles be a ~~sale~~consolidated ~~and~~federal ~~unitholders~~income ~~were~~tax ~~deemed~~return toand ~~have received~~ a ~~distribution~~combined ofHawaii ~~the~~state ~~fair~~income ~~market~~tax ~~value of the equity of MIC's MIC Hawaii segment~~return.

Following the reorganization, the subsidiaries of the Company are owned by an intermediate holding company organized as a limited liability company and classified as a corporation for tax purposes. The intermediate holding company files a combined Hawaii state income tax return and will file a consolidated federal income tax return for the periods after the reorganization.

Recently Issued Accounting Standards

In August 2020, the Financial Accounting Standards Board ("FASB") issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40). The amendments in this ASU impact the accounting for convertible instruments by reducing the number of accounting models used to account for these instruments and amending diluted earnings per share calculations. It also simplifies the requirements for contracts indexed to and potentially settled in an entity's own equity. The amendments in this update are effective for fiscal years ending after December 15, 2021. Early adoption is permitted. The Company adopted this ASU on January 1, 2021 using the modified retrospective method and made an adjustment to the beginning balance to Retained Earnings. The impact of this ASU has been reflected in the consolidated condensed financial statements and the disclosures related to the Company's convertible debt instruments. See Note 8, "Long-Term Debt", for further discussions.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting, which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued as a result of reference rate reform. In January 2021, the FASB also issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. These amendments are elective and apply to all entities that have derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. These amendments are not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. ASU No. 2020-04 and ASU No. 2021-01 are effective as of March 12, 2020 and through December 31, 2022, and may be applied to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020. The Company is currently evaluating the impact of adoption on its financial statements and related disclosures.

3. Impact of COVID-19

Visitor arrivals to Hawaii, the primary driver of increases in demand for gas in Hawaii, improved sequentially in the ~~third~~first quarter of ~~2021~~2022, aswhich we believe reflects increased visitor confidence levels due to the availability of COVID-19 vaccines and a relatively low level of infections in the islands ~~combined to create an attractive environment for visitors from the U~~.S. ~~mainland.~~ The rate of recovery in the number of visitors to Hawaii in the future remains uncertain. COVID-19 continues to negatively affect the performance of the MIC Hawaii businesses, although the effects have diminished relative to this time last year. The additional easing of travel restrictions this quarter has resulted in an increase in economic activity and the number of primarily domestic visitors to Hawaii, but not to pre-COVID-19 levels. A significant surge in COVID-19 rates could negatively impact the number of visitors to Hawaii.

Trends in the number of visitors to Hawaii and demand for gas were positive in the ~~third~~first quarter, although the financial performance of the Company continues to belag ~~adversely affected relative to~~ pre-COVID-19 periods. The number of visitors to Hawaii increased to 2.10 million ~~and 4.9 million~~ for the quarter ~~and nine months~~ ended ~~September~~March 3031, ~~2021~~2022, ~~respectively,~~ from 55847,000 ~~and 2.2 million~~ for the quarter ~~and nine months~~ ended ~~September~~March 3031, ~~2020, respectively~~2021. The resulting improvement in hotel occupancy, restaurants patronage, and use of commercial laundry services contributed to an increase in gas consumption of 4711% ~~and 19%~~ during the quarter ~~and~~ended ~~nine~~March ~~months~~31, ~~ended~~2022, ~~September~~versus ~~30,~~the comparable period in 2021. The number of visitors to Hawaii was lower by 21% in the quarter ended March 31, ~~respectively~~2022, and overall gas consumption was lower by 13% versus the comparable ~~periods~~pre-COVID-19 period in 2019.

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

3. Impact of COVID-19 – (continued)

2020. The number of visitors to Hawaii was lower by 21% and 38% in the quarter and nine months ended September 30, 2021, respectively, and overall gas consumption was lower by 7% and 12% versus the comparable periods in 2019.

4. Discontinued Operations and Dispositions

The Company accounts for disposals that represent a strategic shift that should have or will have a major effect on operations as discontinued operations in the consolidated condensed statements of ~~operations~~income (loss) commencing in the period in which the business or group of businesses meets the criteria of a discontinued operation. These results include any gain or loss recognized on disposal or adjustment of the carrying amount to fair value less cost to sell.

IMTT Transaction

On December 23, 2020, the Company completed the sale of IMTT (the "IMTT Transaction") to an affiliate of Riverstone Holdings, LLC for $2.67 billion, net of closing adjustments, and including assumed debt including accrued interest of approximately $1.11 billion. The net proceeds of $1.55 billion were used to: (i) pay a special dividend of $11.00 per unit on January 8, 2021; (ii) pay capital gains taxes in April 2021; (iii) pay transaction costs; (iv) pay a disposition payment under the Disposition Agreement, dated October 30, 2019, to its Manager; and (v) repurchase a portion of its 2.00% Convertible Senior Notes.

The sale of IMTT was part of the Company's efforts to unlock value for its unitholders. During the quarter ended September 30, 2020, the Company determined that each of the criteria to be classified as held for sale under ASC 205-20, Presentation of Financial Statements — Discontinued Operations, had been met as it related to IMTT. It was additionally determined that the sale of IMTT was considered a strategic shift for the Company that had a major effect on operations. Accordingly, IMTT was classified as a discontinued operation and the IMTT segment was eliminated. All prior periods were restated to reflect these changes.

Upon completion of the IMTT Transaction on December 23, 2020, the Company recognized a book loss on sale of approximately $25.0 million. The Company incurred $28.5 million in transaction costs and a Disposition Payment of $28.2 million to its Manager, which were included in Selling, general and administrative expenses in the consolidated statement of operations. As part of classifying IMTT as held for sale, the Company recognized an impairment of the IMTT disposal group of $750.0 million, which includes a goodwill impairment of $725.0 million, reported in discontinued operations for the quarter ended September 30, 2020.

During the quarter ended September 30, 2020, the Company increased its deferred tax liability by $158.0 million as it became probable that IMTT would be sold in a taxable transaction. The increase represented the deferred tax expense on the difference between the Company's book and tax basis in its investment in IMTT. Subsequent to the close of the IMTT Transaction in December 2020, the Company reclassified the liability to current and reduced the tax to $126.2 million. The reduction primarily reflected the tax benefit of the Disposition Payment and the final determination of the tax basis of its investment in IMTT, which increased due to higher than forecasted taxable income generated prior to completion of the IMTT Transaction, as fewer assets were placed in service for tax purposes resulting in lower bonus tax depreciation during the Company’s ownership period.

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

4. Discontinued Operations and Dispositions – (continued)

Summarized financial information for discontinued operations included in the Company's consolidated condensed statement of operations related to the IMTT segment for the quarter and nine months ended September 30, 2020 are as follows ($ in thousands):

	Quarter Ended September 30,		Nine Months EndedSeptember 30,
	2020			2020
Service revenue	$	121,655		$	374,062
Cost of services	(49,700)			(145,524)
Selling, general and administrative expenses	(10,224)			(29,303)
Impairment	(750,000)			(750,000)
Depreciation and amortization	(33,963)			(102,193)
Interest expense, net	(9,249)			(34,489)
Other income, net	760			3,642
Net loss from discontinued operations before income taxes	(730,721)			(683,805)
Provision for income taxes	(3,977)			(15,547)
Net loss from discontinued operations	$	(734,698)		$	(699,352)

AA Transaction

On September 23, 2021, MIH completed the AA Transaction for $4.475 billion including cash and the assumption of debt and other transaction and reorganization related obligations. The Company received $3.525 billion from KKR at the closing of the AA Transaction.

The MIH Board elected to return certain proceeds from the AA Transaction to unitholders in a one-time distribution, after a disposition payment by MIH to the Manager of $228.6 million. The Board declared a one-time distribution of $37.386817 per common unit of the Company, paid on October 7, 2021 to unitholders of record as of the close of trading on October 4, 2021.

The sale of Atlantic Aviation was part of the Company's efforts to unlock value for its unitholders. On September 21, 2021, the unitholders of MIC approved the AA Transaction at the Special Meeting and therefore the Company determined that each of the criteria to be classified as held for sale under ASC 205-20, Presentation of Financial Statements — Discontinued Operations, had been met as it relates to Atlantic Aviation. It was additionally determined that the sale of Atlantic Aviation is considered a strategic shift for the Company that will have a major effect on operations. Accordingly, Atlantic Aviation was classified as a discontinued operation and the Atlantic Aviation segment was eliminated. All prior periods have been restated to reflect these changes. 22

Upon completion of the AA Transaction on September 23, 2021, the Company recognized a book gain on sale of approximately $2.97 billion. The Company incurred $50.2 million in transaction costs and a disposition payment of $228.6 million to its Manager, both of which are included in Selling, general and administrative expenses in the consolidated condensed statement of operations.

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

4. Discontinued Operations and Dispositions – (continued)

AThe ~~summary~~sale of ~~assets~~Atlantic Aviation was part of the Company's efforts to unlock value for its unitholders. On September 21, 2021, the unitholders of MIC approved the AA Transaction at the Special Meeting and ~~liabilities~~therefore the Company determined that each of the criteria to be classified as held for sale ~~included~~under inASC ~~the~~205-20, ~~Company's~~Presentation ~~consolidated~~of ~~condensed~~Financial ~~balance~~Statements ~~sheet~~— ~~related~~Discontinued Operations, had been met as it relates to Atlantic Aviation. It was additionally determined that the sale of Atlantic Aviation ~~business~~is ~~("AA~~considered ~~Business")~~a asstrategic ofshift ~~December~~for 31the Company that will have a major effect on operations. Accordingly, ~~2020~~Atlantic ~~are~~Aviation was classified as ~~follows~~a ($discontinued inoperation ~~thousands):~~and the Atlantic Aviation segment was eliminated. All prior periods have been restated to reflect these changes.

	December 31, 2020
Assets
Cash and cash equivalents	$	309,955
Restricted cash	10,121
Accounts receivable, net of allowance for doubtful accounts	23,749
Other current assets	20,583
Total current assets	364,408
Property, equipment, land and leasehold improvements, net	556,825
Operating lease assets, net	313,014
Goodwill	496,746
Intangible assets, net	452,664
Other noncurrent assets	1,345
Total assets	$	2,185,002
Liabilities
Accounts payable and accrued expenses	$	45,702
Current portion of long-term debt	10,250
Operating lease liabilities - current	15,138
Income taxes payable, net	132,113
Other current liabilities	13,270
Total current liabilities	216,473
Long-term debt, net of current portion	976,190
Deferred income taxes	100,405
Operating lease liabilities - noncurrent	303,728
Other noncurrent liabilities	17,034
Total liabilities	$	1,613,830

The Company recognized a book gain on sale of approximately $2.95 billion as a result of the AA Transaction. The Company incurred $50.2 million in transaction costs and a disposition payment of $228.6 million to its Manager, both of which were included in Selling, general and administrative expenses in the consolidated condensed statement of income (loss).

27Summarized financial information for discontinued operations included in the Company's consolidated condensed statement of income (loss) related to the Atlantic Aviation business for the quarter ended March 31, 2021 is as follows ($ in thousands):


	Quarter Ended March 31,
		2021
Service revenue		$	209,604
Cost of services		(82,233)
Selling, general and administrative expenses		(65,411)
Depreciation and amortization		(23,771)
Interest expense, net		(11,412)

Other income, net		838
Net income from discontinued operations before income taxes		$	27,615
Provision for income taxes		(7,548)
Net income from discontinued operations		$	20,067

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

4. Discontinued Operations and Dispositions – (continued)

Summarized financial information for discontinued operations included in the Company's consolidated condensed statement of operations related to the AA Business for the quarter and nine months ended September 30, 2021 and 2020, respectively, are as follows ($ in thousands):

	Quarter Ended September 30,				Nine Months EndedSeptember 30,
	2021		2020		2021		2020
Service revenue	$	238,844	$	162,904	$	678,485	$	491,219
Cost of services	(104,311)		(53,572)		(286,078)		(177,515)
Selling, general and administrative expenses	(64,587)		(58,404)		(195,677)		(189,610)
Depreciation and amortization	(21,945)		(24,193)		(69,792)		(76,340)
Interest expense, net	(9,873)		(14,201)		(32,036)		(52,642)
Gain on sale of business	2,966,504		—		2,966,504		—
Other income, net	323		126		2,036		194
Net income (loss) from discontinued operations before income taxes	3,004,955		12,660		3,063,442		(4,694)
Provision for income taxes	(50,511)		(165,842)		(66,458)		(160,203)
Net income (loss) from discontinued operations	$	2,954,444	$	(153,182)	$	2,996,984	$	(164,897)

5. Income per Unit

Following is a reconciliation of the basic and diluted income (loss) ~~income~~ per unit computations ($ in thousands, except unit and per unit data):

	Quarter Ended September 30,				Nine Months EndedSeptember 30,
			Quarter Ended March 31,
	2021		2020		2021		2020
					2022		2021
Numerator:
Basic and diluted net loss from continuing operations attributable to MIH	$	(274,637)	$	(5,368)	$	(296,628)	$	(25,651)
Net income (loss) from continuing operations attributable to MIH					$	11,142	$	(6,867)
Basic and diluted net income (loss) from discontinued operations attributable to MIH	$	2,954,444	$	(887,880)	$	2,996,984	$	(864,249)
Interest expense attributable to 2.00% Convertible Senior Notes, net of taxes					27		—
Diluted net income (loss) from continuing operations attributable to MIH					$	11,169	$	(6,867)
Basic and diluted net income from discontinued operations attributable to MIH					$	—	$	20,067
Denominator:
Weighted average number of units outstanding: basic	~~87,891,018~~		~~87,030,751~~		8788,~~645~~494,~~390~~560		8687,~~864~~411,~~951~~455
Weighted average number of units outstanding: diluted	87,891,018		87,030,751		87,645,390		86,864,951
Dilutive effect of restricted stock unit grants(1)					254,541		—
Dilutive effect of 2.00% Convertible Senior Notes					1,111,293		—
Weighted average number of units outstanding: diluted					89,860,394		87,411,455

	Quarter Ended September 30,				Nine Months EndedSeptember 30,
	2021		2020		2021		2020
Income per unit:
Basic loss per unit from continuing operations attributable to MIH	$	(3.12)	$	(0.06)	$	(3.38)	$	(0.29)
Basic income (loss) per unit from discontinued operations attributable to MIH	33.61		(10.20)		34.19		(9.95)
Basic income (loss) per unit attributable to MIH	$	30.49	$	(10.26)	$	30.81	$	(10.24)
Diluted loss per unit from continuing operations attributable to MIH	$	(3.12)	$	(0.06)	$	(3.38)	$	(0.29)
Diluted income (loss) per unit from discontinued operations attributable to MIH	33.61		(10.20)		34.19		(9.95)
Diluted income (loss) per unit attributable to MIH	$	30.49	$	(10.26)	$	30.81	$	(10.24)

___________

28(1) Dilutive effect of restricted stock unit grants includes grants to certain employees of the Company's operating businesses under the 2016 Omnibus Employee Incentive Plan.

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	Quarter Ended March 31,
		2022		2021
Income per unit:
Basic income (loss) per unit from continuing operations attributable to MIH		$	0.13	$	(0.08)
Basic income per unit from discontinued operations attributable to MIH		—		0.23
Basic income per unit attributable to MIH		$	0.13	$	0.15

Diluted income (loss) per unit from continuing operations attributable to MIH		$	0.12	$	(0.08)
Diluted income per unit from discontinued operations attributable to MIH		—		0.23
Diluted income per unit attributable to MIH		$	0.12	$	0.15

MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

5. Income per Unit - (continued)

The following represents the weighted average potential dilutive units of common units that were excluded from the diluted income per unit calculation:

Quarter Ended September 30,

Nine Months EndedSeptember 30,

Quarter Ended March 31,

2021

2020

2021

2020

2022

2021

Restricted unit grants

~~87,946~~

~~91,607~~

~~90,526~~—

7083,~~006~~843

2.00% Convertible Senior Notes(1)

~~430,778~~

~~3,634,173~~

~~1,674,628~~—

34,~~634~~175,~~173~~825

Total

~~518,724~~

~~3,725,780~~

~~1,765,154~~—

34,~~704~~259,~~179~~668

___________

(1)During the ~~nine~~quarter ~~months~~ ended March 31, 2021, the Company repurchased $~~368~~358.56 million in aggregate principal amount of its 2.00% Convertible Senior Notes, ~~of which $358~~("Notes").~~6 million~~ ~~was repurchased in the tender offer completed on March 16, 2021.~~ For the quarter ~~and nine months~~ ended ~~September~~March 3031, 2021, the weighted average units reflect the “if-converted” dilutive impact to common units for the repurchased Notes for the period that the Notes were outstanding and the impact of the increase to the conversion rate following the special dividend pertaining to the IMTT Transaction paid on January 8, 2021. See Note 8, “Long-Term Debt”, for further discussion.

~~6. Property, Equipment, Land and Leasehold Improvements~~24

Property, equipment, land and leasehold improvements on September 30, 2021 and December 31, 2020 consisted of the following ($ in thousands):

	September 30,2021		December 31, 2020
Land	$	10,710	$	10,710
Buildings	4,323		4,142
Leasehold and land improvements	20,003		19,824
Machinery and equipment	373,699		363,379
Furniture and fixtures	3,740		3,664
Construction in progress	10,701		11,524
	423,176		413,243
Less: accumulated depreciation	(126,539)		(115,868)
Property, equipment, land and leasehold improvements, net	$	296,637	$	297,375

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

6. Property, Equipment, Land, and Leasehold Improvements

Property, equipment, land, and leasehold improvements on March 31, 2022 and December 31, 2021 consisted of the following ($ in thousands):


	March 31, 2022		December 31, 2021
Land	$	10,710	$	10,710
Buildings	4,533		4,427
Leasehold and land improvements	20,098		20,003
Machinery and equipment	378,948		376,924
Furniture and fixtures	3,740		3,740
Construction in progress	14,216		11,313
	432,245		427,117
Less: accumulated depreciation	(133,499)		(129,927)
Property, equipment, land, and leasehold improvements, net	$	298,746	$	297,190

7. Intangible Assets and Goodwill

Intangible assets on ~~September~~March 3031, ~~2021~~2022 and December 31, ~~2020~~2021 consisted of the following ($ in thousands):

	September 30,2021		December 31, 2020
	March 31,2022		December 31, 2021
Customer relationships	$	7,400	$	7,400
Trade names	8,500		8,500
Leasehold rights	100		100
	16,000		16,000
Less: accumulated amortization	(11,~~396~~608)		(11,~~077~~502)
Intangible assets, net	$	4,~~604~~392	$	4,~~923~~498

The Company tests for goodwill ~~balance~~impairment annually on ~~September~~October 1 of each year and between annual tests if a triggering event indicates the possibility of impairment. With the signing of the Merger, the Company evaluates goodwill for impairment having regard to the Merger transaction value. Goodwill acquired in business combinations, net of disposals was $120.2 30million on March 31, 2022 and December 31, 2021, ~~comprised~~respectively. See Note 1, "Organization and Description of Business" for discussions on the ~~following~~Merger. ($There inwere ~~thousands):~~no triggering events that indicated impairment for the quarter ended March 31, 2022.

Goodwill acquired in business combinations, net of disposals, on December 31, 2020	$	123,333
Accumulated impairment charges	(3,215)
Other	75
Balance on December 31, 2020	120,193
Balance on September 30, 2021	$	120,193

The Company tests for goodwill impairment annually on October 1st of each year and then between annual tests if a triggering event indicates the possibility of impairment. With the signing of the Merger, the Company will evaluate goodwill for impairment having regard to the Merger transaction value. See Note 1, "Organization and Description of Business" for discussions on the Merger.

8. Long-Term Debt

On September 30, 2021 and December 31, 2020, the Company’s consolidated long-term debt balance comprised the following ($ in thousands):

	September 30,2021		December 31, 2020
Term Loan - Hawaii Gas	$	80,000	$	180,000
Term Loan - Solar Facilities in Hawaii	12,966		13,758
2.00% Convertible Senior Notes	34,018		391,252
Total	126,984		585,010
Current portion	(28,292)		(1,060)
Long-term portion	98,692		583,950
Unamortized debt financing costs(1)	(831)		(5,781)
Long-term portion less unamortized debt discount and debt financing costs	$	97,861	$	578,169

___________

(1)The weighted average remaining life of the debt financing costs on September 30, 2021 was 3.1 years.

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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

8. Long-Term Debt ~~– (continued)~~

~~2.00%~~On ~~Convertible~~March 31, ~~Senior~~2022 ~~Notes~~and ~~due~~December 31, ~~October~~2021, ~~2023~~the ~~(2.00%~~Company’s ~~Convertible~~consolidated ~~Senior~~long-term ~~Notes~~debt balance comprised the following ($ in thousands):

The 2.00% Convertible Senior Notes consisted of the following ($ in thousands):


	March 31, 2022		December 31, 2021

Term Loan - Hawaii Gas	$	80,000	$	80,000
Term Loan - Solar Facilities in Hawaii	12,424		12,698
2.00% Convertible Senior Notes	6,821		6,821
Total	99,245		99,519
Current portion	(1,118)		(1,107)
Long-term portion	98,127		98,412
Unamortized debt financing costs(1)	(684)		(757)
Long-term portion less unamortized debt discount and debt financing costs	$	97,443	$	97,655

	September 30, 2021(1)		December 31, 2020
Liability Component:
Principal	$	34,018	$	402,500
Unamortized debt discount	—		(11,248)
Long-term debt, net of unamortized debt discount	34,018		391,252
Unamortized debt financing costs	—		(4,134)
Net carrying amount	$	34,018	$	387,118
Equity Component	$	—	$	26,748

___________

(1)~~Reflects~~The ~~the~~weighted ~~repurchase~~average ofremaining ~~2.00%~~life ~~Convertible~~of ~~Senior Notes and~~ the ~~adoption~~debt offinancing ~~ASU~~costs ~~No.~~on ~~2020-06~~March 31, ~~effective~~2022 ~~January~~was 1,2.7 ~~2021~~years.

2.00% Convertible Senior Notes due October 2023 (2.00% Convertible Senior Notes)

In October 2016, the Company completed an underwritten public offering of a seven year, $402.5 million aggregate principal amount of 2.00% Convertible Senior Notes. The Notes are convertible, at the holder’s option, only upon satisfaction of one or more conditions set forth in the indenture governing the Notes. Upon conversion, the Company will pay or deliver, as the case may be, cash, common units of Company, or a combination thereof, at the Company’s election.

The $402.5 million of 2.00% Convertible Senior Notes had an initial value of the principal amount recorded as a liability of $375.8 million, using an effective interest rate of 3.1%. The remaining $26.7 million of principal amount was allocated to the conversion feature and recorded in Common Units Paid in Capital. This amount represents a discount to the debt to be amortized through interest expense using the effective interest method through maturity. The Company also recorded $11.2 million in debt financing costs from the issuance of the 2.00% Convertible Senior Notes, of which $744,000 was recorded as equity issuance costs as a component of Unitholders’ Equity. ~~On December 31, 2020, the outstanding balance of the liability component of the 2.00% Convertible Senior Notes was $391.3 million with a fair value of approximately $390.0 million.~~

On January 1, 2021, the Company adopted ASU 2020-06 under the modified retrospective method. ASU 2020-06 removes the accounting for cash conversion feature of the Notes such that the Notes would only be classified as a liability. The adoption of ASU 2020-06 resulted in the reversal of the initial equity component recorded of $26.7 million and made an adjustment to the beginning balance to Retained Earnings of $7.0 million primarily for the reversal of the amortization of debt discount taken through that date, net of taxes.

During 2021, the Company repurchased $~~368~~395.57 million in aggregate principal amount of the 2.00% Convertible Senior Notes, of which $358.6 million ~~was~~and $26.9 million were repurchased in a tender ~~offer~~offers on March 16, 2021 and October 22, 2021, respectively. In connection with the repurchases, the Company incurred $1.2 million of transaction costs and wrote-off $3.7 million of debt financing costs recorded in Selling, general and administrative expenses and Interest ~~Expense~~expense, respectively, in the consolidated condensed statements of ~~operations.~~income ~~On September 30, 2021, the outstanding balance of the liability component of the 2~~(loss).~~00%~~ Convertible Senior Notes was $34.0 million which approximated its fair value. The conversion rate on September 30, 2021 was 12.6572 common units per $1,000 principal amount. On October 8, 2021, due to the impact of the one-time distribution paid by the Company on October 7, 2021, the conversion rate increased to 162.9223 common units per $1,000 principal amount.

On March 31, 2022 and December 31, 2021, the outstanding balance of the 2.00% Convertible Senior Notes was $6.8 million. On March 31, 2022 and December 31, 2021, the fair value of the 2.00% Convertible Senior Notes was approximately $6.6 million and $6.8 million, respectively. The conversion rate was 162.9223 common units per $1,000 principal amount on March 31, 2022.

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

8. Long-Term Debt – (continued)

Interest expense related to the 2.00% Convertible Senior Notes consisted of the following ($ in thousands):

	Quarter Ended September 30,				Nine Months Ended September 30,
					Quarter Ended March 31,
	2021		2020		2021		2020
					2022		2021
Contractual interest expense	$	~~168~~	$	~~2,013~~	$	~~2,105~~34	$	61,~~038~~754
Amortization of debt discount	—		968		—		2,882
Amortization of debt financing cost					—		345
Amortization of debt financing cost	31		376		413		1,128
Write-off of debt financing cost					—		3,644
Write-off of debt financing cost	275		—		4,016		—
Total interest expense					$	34	$	5,743
Total interest expense	$	474	$	3,357	$	6,534	$	10,048

On September 23, 2021, the Company initiated an offer to repurchase any and all 2.00% Convertible Senior Notes outstanding in accordance with the terms of the indenture governing the Notes, and on October 22, 2021, the Company repurchased $26.9 million in aggregate principal amount of Notes.

Hawaii Gas

On ~~December 31, 2020, Hawaii Gas had $100.0 million of fixed rate senior notes outstanding with a fair value of approximately $105.0 million.~~ On April 19, 2021, Hawaii Gas fully repaid all of its $100.0 million senior secured notes outstanding and incurred a $4.7 million 'make-whole' payment and wrote-off $154,000 of debt financing costs both recorded in Interest ~~Expense~~expense in the consolidated condensed ~~statement~~ statements of ~~operations~~income (loss).

On ~~September~~March 3031, ~~2021~~2022 and December 31, ~~2020~~2021, Hawaii Gas had an $80.0 million term loan outstanding and a $60.0 million revolving credit facility that was undrawn. During the quarter ended June 30, 2021, Hawaii Gas extended the maturity on its term loan and revolving credit facility from February 2023 to February 2024.

9. Derivative Instruments and Hedging Activities

Interest Rate Contracts

The Company has in place variable-rate debt. Management believes that it is prudent to limit the variability of a portion of the business’ interest payments and the business entered into interest rate swap agreements to manage fluctuations in cash flows resulting from interest rate risk on a portion of its variable-rate debt. Interest rate swaps change the variable-rate cash flow exposure on the debt obligations to fixed cash flows. Under the terms of the interest rate swaps, the Company receives variable rate interest payments and makes fixed rate interest payments, thereby creating the equivalent of fixed-rate debt for the portion of the debt that is swapped.

The Company does not use hedge accounting. All movements in the fair value of the interest rate derivatives are recorded directly through earnings.

Commodity Price Contracts

The risks associated with fluctuations in the prices that Hawaii Gas pays for liquefied petroleum gas ("LPG") is principally a result of market forces reflecting changes in supply and demand for LPG and other energy commodities. Hawaii Gas’ gross margin (revenue less cost of product sales excluding depreciation and amortization) is sensitive to changes in LPG supply costs and Hawaii Gas may not always be able to pass through cost increases fully or on a timely basis, particularly when product costs rise rapidly. To reduce its exposure to volatility in the business’ LPG wholesale market price, Hawaii Gas has used and expects to continue to use over-the-counter commodity derivative instruments. Hawaii Gas does not use commodity derivative instruments for speculative or trading purposes. Over-the-counter derivative instruments used by Hawaii Gas to hedge a portion of forecasted purchases of LPG are generally settled at expiration of the contract. On ~~September~~March 3031, ~~2021~~2022, Hawaii Gas had 1861.47 million gallons of LPG hedged through ~~December~~September ~~2023. In October 2021, Hawaii Gas entered into additional hedge contracts, increasing the total gallons hedged to 39.8 million through March~~ 2024.

Financial Statement Location Disclosure for Derivative Instruments

The Company measures derivative instruments at fair value using the income approach which discounts the future net cash settlements expected under the derivative contracts to a present value. These valuations use primarily observable (level 2) inputs, including contractual terms, interest rates, and yield curves observable at commonly quoted intervals.

3227

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

9. Derivative Instruments and Hedging Activities – (continued)

The Company’s fair value measurements of its derivative instruments and the related location of the assets and liabilities within the consolidated condensed balance sheets on ~~September~~March 3031, ~~2021~~2022 and December 31, ~~2020~~2021 were ($ in thousands):

	Assets (Liabilities) at Fair Value
Balance Sheet Classification	~~September~~March 3031,~~2021~~2022		December 31, ~~2020~~2021
Fair value of derivative instruments - other current assets	$	58,~~105~~344	$	~~935~~909
Fair value of derivative instruments - other noncurrent assets	34,~~115~~078		—470
Total derivative contracts - assets	$	812,~~220~~422	$	~~935~~1,379
Fair value of derivative instruments - other current liabilities	$	~~(158)~~—	$	(~~172~~122)
Fair value of derivative instruments - other noncurrent liabilities	(120)		(449)
Total derivative contracts – liabilities	$	—	$	(122)
Total derivative contracts – liabilities	$	(278)	$	(621)

The Company’s hedging activities for the quarters ~~and nine months~~ ended ~~September~~March 3031, ~~2021~~2022 and ~~2020~~2021 and the related location within the consolidated condensed statements of ~~operations~~income (loss) were ($ in thousands):

Income Statement Classification	~~Amount of Gain (Loss) Recognized in,Consolidated Condensed Statement of Operations~~				Gain Recognized for the Quarters Ended March 31,
	Quarter Ended September 30,				Nine Months EndedSeptember 30,
					2022		2021
	2021		2020		2021		2020
Interest expense - interest rate swaps					$	489	$	283
Interest expense - interest rate swaps	$	8	$	(7)	$	213	$	(963)
Cost of product sales - commodity swaps					12,928		1,626
Cost of product sales - commodity swaps	4,802		177		10,154		(821)
Total					$	13,417	$	1,909
Total	$	4,810	$	170	$	10,367	$	(1,784)

All of the Company's derivative instruments are collateralized by the assets of the respective businesses.

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

10. Unitholders' Equity

2014 Independent Directors' Equity Plan ("2014 Plan")

On May 14, 2020, the Company granted its independent directors a total of 32,112 director share units with a grant date fair value of $27.43 per share. During the quarter ended March 31, 2021, the Company granted an additional 12,024 director share units to preserve the economic value of the unvested director share units after giving effect to the special dividend made in connection with the IMTT Transaction. These director share units vested on May 11, 2021, the day immediately preceding the 2021 Annual Meeting of Shareholders.

On May 19, 2021, the Company granted its independent directors a total of 25,974 director share units with a grant date fair value of $34.90 per share. These director share units fully vested on September 23, 2021, as a result of the AA Transaction, which constituted a change in control as defined in the 2014 Plan. Compensation expenses related to the director share units ~~were~~was $~~825,000 and $1,275,000, respectively, for the quarter and nine months ended September 30, 2021, compared with $~~225,000 ~~and $655,000~~ for the quarter ~~and nine months~~ ended ~~September~~March 3031, ~~2020~~2021.

Short-Term Incentive Plan ("STIP") for MIH Operating Businesses — Restricted Stock Units ("RSUs")

The Company has a STIP to provide cash and stock-based incentives to eligible employees of its operating businesses under the Company’s 2016 Omnibus Employee Incentive Plan ("2016 Plan"). In general, the cash component comprises 75% of any incentive award and is paid in a lump-sum. The remaining 25% of any incentive award is in the form of RSUs representing an interest in the common units of the Company. RSUs are granted following assessment of performance against Key Performance Indicators post the one-year performance period and vest in two equal annual installments following the grant date.

~~The following sets forth unvested STIP RSU grants through September 30, 2021:~~28

	STIP Grants
	Number of RSUs(in units)	Weighted Average Grant-Date Fair Value(per unit)
Unvested balance on December 31, 2019	—	$	—
Granted	55,661	24.50
Forfeited	(1,468)	24.50
Vested(1)	(19,566)	32.57
Unvested balance on December 31, 2020	34,627	$	24.50
Granted(2)	57,071	24.49
Forfeited	(215)	24.92
Vested(3)	(68,776)	31.03
Unvested balance on September 30, 2021	22,707	$	27.64

___________

(1)As a result of the IMTT Transaction, the Company's Compensation Committee and Board approved the accelerated vesting of the STIP RSU grants for former eligible employees of IMTT.

(2)During the quarter ended March 31, 2021, the Company granted an additional 12,614 RSUs to preserve the economic value of the unvested RSUs after giving effect to the special dividend made in connection with the IMTT Transaction.

(3)As a result of the AA Transaction, the Company's Compensation Committee and Board approved the accelerated vesting of the STIP RSU grants for former eligible employees of Atlantic Aviation and MIC Global Services ("MGS"). These RSUs were fully vested on September 23, 2021.

On September 30, 2021, the grant date fair value of the unvested awards was $628,000 and is expected to be recognized over a weighted-average period of 0.7 years. Compensation expense related to the STIP RSUs were $793,000 and $1.9 million for the quarter and nine months ended September 30, 2021, respectively, compared with $177,000 and $506,000 (which includes the former eligible participants of IMTT, Atlantic Aviation, and MGS) for the quarter and nine months ended September 30, 2020, respectively.

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

10. Unitholders’ Equity – (continued)

The following sets forth unvested STIP RSU grants through March 31, 2022:


	STIP Grants
	Number of RSUs (in units)	Weighted Average Grant-Date Fair Value (per unit)
Unvested balance on December 31, 2020	34,627	$	24.50
Granted(1)	286,013	4.89
Forfeited	(215)	24.92
Vested(2)	(68,776)	31.03
Unvested balance on December 31, 2021	251,649	$	2.49
Granted	79,670	3.74
Forfeited	(2,603)	2.16
Vested(3)	(158,844)	2.30
Unvested balance on March 31, 2022	169,872	$	3.26

___________

(1)During the quarter ended March 31, 2021, the Company granted an additional 12,614 RSUs to preserve the economic value of the unvested RSUs after giving effect to the special dividend made in connection with the IMTT Transaction. During the

quarter ended December 31, 2021, the Company granted an additional 228,943 RSUs to preserve the economic value of the

unvested RSUs after giving effect to the one-time distribution made in connection with the AA Transaction.

(2)As a result of the AA Transaction, the Company's Compensation Committee and Board approved the accelerated vesting of the STIP RSU grants for former eligible employees of Atlantic Aviation and MIC Global Services ("MGS"). These RSUs were fully vested on September 23, 2021.

(3)Units related to RSUs vested on March 31, 2022 were issued in April 2022.

On March 31, 2022, the grant date fair value of the unvested awards was $554,000 and is expected to be recognized over a weighted-average period of 1.0 years. Compensation expense related to the STIP RSUs were $354,000 for the quarter ended March 31, 2022, compared with $309,000 (which includes the former eligible participants of Atlantic Aviation and MGS) for the quarter ended March 31, 2021.

From time to time, the Company may issue RSUs to reward or retain employees, or to attract new employees, or for other reasons by providing special grants of RSUs. Vesting dates and terms can vary for each award at the discretion of the Company.

The following sets forth unvested Special RSU grants through ~~September~~March 3031, ~~2021~~2022:

	Special RSU Grants
	Number of RSUs(in units)	Weighted Average Grant-Date Fair Value(per unit)
Unvested balance on December 31, 2019	6,067	$	40.30
Unvested balance on December 31, 2020	4,967	$	40.30
Granted	4,602	23.50
Vested	(5,702)	26.74
Unvested balance on December 31, 2020	4,967	40.30
Granted(1)	1,860	—
Vested	(6,827)	29.32
Unvested balance on September 30, 2021	—	$	—
Unvested balance on December 31, 2021	—	$	—

___________

(1)During the quarter ended March 31, 2021, the Company granted an additional 1,860 RSUs to preserve the economic value of the unvested RSUs after giving effect to the special dividend made in connection with the IMTT Transaction.

Compensation expense related to the Special RSU grants was $200,000 ~~and $152,000~~ for the ~~nine~~quarter ~~months~~ ended ~~September~~March 3031, 2021 ~~and 2020, respectively~~.

~~Long-Term Incentive Plan ("LTIP") for MIH Operating Businesses — Performance Stock Units ("PSUs")~~29

The Company has a LTIP pursuant to which it may make stock-based incentive awards to eligible employees of its operating businesses. The awards would take the form of PSUs convertible into common units of the Company as authorized under its 2016 Plan. The number of PSUs a participant may be awarded reflects a target level of performance by the participant. The participant may be awarded more (over performance limit) or less (threshold limit) than the target number of PSUs based on their achievements relative to Key Performance Indicators during the three-year performance period. Following finalization of the participant’s performance review at the end of the third year of the program generally, the Company may award the PSUs.

The following sets forth unvested LTIP PSU grants through September 30, 2021 at the target level of performance:

	LTIP Grants (at Target)
	Number of PSUs(in units)	Weighted Average Grant-Date Fair Value(per unit)
Unvested balance on December 31, 2019	125,194	$	39.62
Forfeited	(18,965)	39.70
Vested(1)	(34,708)	39.88
Unvested balance on December 31, 2020	71,521	39.47
Granted(2)	245,541	28.11
Forfeited(3)	(86,384)	31.39
Vested(3)	(135,493)	37.93
Unvested balance on September 30, 2021	95,185	$	30.55

___________

(1)As a result of the IMTT Transaction, the Company's Compensation Committee and Board approved the accelerated vesting of the LTIP PSU grants for former eligible employees of IMTT.

(2)During the quarter ended March 31, 2021, the Company granted an additional 26,004 PSUs to preserve the economic value of the unvested PSUs after giving effect to the special dividend made in connection with the IMTT Transaction.

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

10. Unitholders’ Equity – (continued)

~~(3)As~~Long-Term aIncentive ~~result~~Plan ~~of the AA Transaction, the Company's Compensation Committee and Board approved the accelerated vesting of the~~ ("LTIP") ~~PSU grants~~ for ~~former~~MIH ~~eligible~~Operating ~~employees~~Businesses — Performance ofStock ~~Atlantic~~Units ~~Aviation and MGS. These~~ ("PSUs ~~were fully vested on September 23, 2021.~~")

OnThe ~~September 30,~~Company ~~2021,~~has ~~depending~~a ~~upon~~LTIP ~~actual~~pursuant ~~performance, the number of PSUs~~ to bewhich ~~issued~~it ~~will~~makes ~~vary~~stock-based ~~from~~incentive ~~zero~~awards to ~~166,574,~~eligible ~~net~~employees of ~~forfeitures~~its operating businesses. OnThe ~~September 30,~~awards ~~2021,~~take the ~~grant~~form ~~date~~of ~~fair~~PSUs ~~value~~convertible ofinto ~~the~~common ~~unvested~~units ~~awards~~of ~~was~~the ~~$2.9~~Company ~~million,~~as ~~reflecting~~authorized ~~target~~under ~~performance~~its by2016 ~~all participants~~Plan. OnThe ~~September 30,~~number ~~2021,~~of ~~the~~PSUs ~~unrecognized~~a ~~compensation~~participant ~~cost~~may ~~related~~be toawarded ~~unvested~~reflects ~~PSU~~a ~~awards was $677,000 at~~ target level of performance ~~and~~by isthe ~~expected~~participant. toThe beparticipant ~~recognized~~may ~~over~~be aawarded ~~weighted-average~~more ~~period~~(over ofperformance ~~1.2~~limit) ~~years.~~or ~~Compensation~~less ~~expense~~(threshold ~~related~~limit) tothan the ~~LTIP~~target number of PSUs ~~were~~based ~~$1.7 million~~on ~~and~~their ~~$5.1~~achievements ~~million~~relative ~~for~~to ~~the~~Key ~~quarter~~Performance ~~and~~Indicators ~~nine~~during ~~months~~the ~~ended~~three-year ~~September~~performance ~~30,~~period. ~~2021,~~Following ~~respectively,~~finalization ~~compared~~of ~~with~~the ~~$634,000~~participant’s ~~and~~performance ~~$1.7 million~~review, ~~(which~~generally ~~includes~~at the ~~former~~end ~~eligible participants~~ of ~~IMTT,~~the ~~Atlantic~~third ~~Aviation,~~year ~~and~~of ~~MGS)~~the ~~for~~program, the ~~quarter~~Company ~~and~~awards ~~nine~~the ~~months ended 2020, respectively~~PSUs.

~~Accumulated~~The ~~Other~~following ~~Comprehensive~~sets ~~Loss~~forth unvested LTIP PSU grants through March 31, ~~net~~2022 at the target level of ~~taxes~~performance:

The following represents the changes and balances to the components of accumulated other comprehensive loss, net of taxes, for the nine months ended September 30, 2021 and 2020 ($ in thousands):


	LTIP Grants (at Target)
	Number of PSUs (in units)	Weighted Average Grant-Date Fair Value (per unit)
Unvested balance on December 31, 2020	71,521	$	39.47
Granted(1)	1,205,242	5.73
Forfeited(2)	(86,384)	31.39
Vested(2)	(135,493)	37.93
Unvested balance on December 31, 2021	1,054,886	$	2.76
Granted	199,016	3.74

Vested	(356,124)	2.60
Unvested balance on March 31, 2022	897,778	$	3.04

	Post-Retirement Benefit Plans, net of taxes		Translation Adjustment, net of taxes		Total Unitholders’ Accumulated Other Comprehensive Loss, net of taxes
Balance on December 31, 2019	$	(24,155)	$	(12,717)	$	(36,872)
Translation adjustment(1)	—		(532)		(532)
Balance on September 30, 2020	$	(24,155)	$	(13,249)	$	(37,404)
Balance on December 31, 2020	$	(6,175)	$	—	$	(6,175)
Change in post-retirement benefit plans	10		—		10
Reclassification to net income (loss) due to sale of business	(6)		—		(6)
Balance on September 30, 2021	$	(6,171)	$	—	$	(6,171)

___________

(1)~~Translation~~During ~~adjustment~~the isquarter ~~presented~~ended ~~net~~March of31, a2021, ~~tax~~the ~~benefit~~Company ofgranted ~~$207~~an additional 26,~~000~~004 ~~for~~PSUs to preserve the ~~nine~~economic ~~months~~value of the unvested PSUs after giving effect to the special dividend made in connection with the IMTT Transaction. During the quarter ended ~~September~~December 3031, ~~2020~~2021, the Company granted an additional 959,700 PSUs to preserve the economic value of the unvested PSUs after giving effect to the one-time distribution made in connection with the AA Transaction.

11(2)As a result of the AA Transaction, the Company's Compensation Committee and Board approved the accelerated vesting of the LTIP PSU grants for former eligible employees of Atlantic Aviation and MGS. ~~Revenue~~These ~~Recognition~~PSUs were fully vested on September 23, 2021.

~~The~~As ~~Company's~~of ~~businesses~~March 31, ~~comprise:~~2022, ~~(i)~~depending ~~Hawaii~~upon ~~Gas~~actual performance, ~~Hawaii’s~~the ~~only~~number ~~government-franchised~~of ~~gas~~PSUs ~~utility~~to ~~and~~be anissued ~~unregulated~~will ~~LPG~~vary ~~distribution~~from ~~business~~zero ~~providing~~to ~~gas~~1,571,112, ~~and~~net of forfeitures. On March 31, 2022, the grant date fair value of the unvested awards was $2.7 million, reflecting target performance by all participants. On March 31, 2022, the unrecognized compensation cost related ~~services~~to unvested PSU awards was $897,000 at target level performance and is expected to ~~industrial~~be recognized over a weighted-average period of 1.6 years. Compensation expense related to the LTIP PSUs was $298,000 ~~commercial~~for the quarter ended March 31, ~~residential~~2022, ~~and~~compared ~~governmental~~with ~~customers;~~$1.5 million (which includes the former eligible participants of Atlantic Aviation and ~~(ii~~MGS) ~~controlling~~for ~~interests~~the inquarter ~~two~~ended ~~solar~~March ~~facilities~~31, ~~on Oahu~~2021.

~~Revenue~~Accumulated ~~from~~Other ~~the~~Comprehensive ~~Hawaii Gas business is generated from the distribution and sales of synthetic natural gas ("SNG")~~Loss, ~~LPG,~~net ~~liquefied natural gas ("LNG"), and renewable natural gas ("RNG"). Revenue is primarily a function~~ of the amount of SNG, LPG, LNG, and RNG consumed by customers and the price per British Thermal Unit or gallon charged to customers. Revenue levels, without organic growth, will generally track global commodity prices, namely petroleum and natural gas, as its products are derived from these commodities.taxes

~~Revenue~~The ~~from~~following ~~Hawaii~~represents ~~Gas~~the ischanges ~~recorded~~and inbalances ~~product revenue. Hawaii Gas recognizes revenue when products are delivered. Sales of gas~~ to ~~customers are billed on a monthly-cycle basis. Earned but unbilled revenue is accrued and included in accounts receivable and revenue based on~~ the ~~amount~~components of ~~gas~~accumulated ~~that~~other ~~has~~comprehensive ~~been~~loss, ~~delivered~~net ~~but~~of ~~not~~taxes, ~~billed~~for ~~to customers from~~ the ~~latest~~quarter ~~meter~~ended ~~reading~~March 31, or2022 ~~billed~~and ~~delivery~~2021 ~~date~~($ toin ~~the~~thousands): ~~end of an accounting period. The related costs are charged to expense.~~

The renewables projects within the businesses in Hawaii sell substantially all of the electricity generated at a fixed price to primarily electric utility customers pursuant to long-term power purchase agreements ("PPAs") of 20 years. The PPAs are accounted for as operating leases and have no minimum lease payments. Lease income is recorded within product revenue when the electricity is delivered.


	Post-Retirement Benefit Plans, net of taxes		Total Unitholders’ Accumulated Other Comprehensive Loss, net of taxes
Balance on December 31, 2020	$	(6,175)	$	(6,175)


Balance on March 31, 2021	$	(6,175)	$	(6,175)

Balance on December 31, 2021	$	(5,106)	$	(5,106)



Balance on March 31, 2022	$	(5,106)	$	(5,106)

3630

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

11. Revenue Recognition ~~– (continued)~~

The Company's business comprises: (i) Hawaii Gas, Hawaii’s only government-franchised gas utility and an unregulated LPG distribution business providing gas and related services to industrial, commercial, residential, and governmental customers; (ii) controlling interests in two solar facilities on Oahu, and (iii) smaller projects collectively engaged in efforts to reduce the cost and improve the reliability and sustainability of energy in Hawaii.

Revenue from Hawaii Gas is generated from the distribution and sales of synthetic natural gas ("SNG"), LPG, liquefied natural gas ("LNG"), and renewable natural gas ("RNG"). Revenue is primarily a function of the amount of product consumed by customers and the price per British Thermal Unit or gallon charged to customers. Revenue levels, without organic growth, will generally track global commodity prices, namely petroleum and natural gas, as its products are derived from these commodities.

Revenue from Hawaii Gas is recorded in product revenue. Hawaii Gas recognizes revenue when products are delivered. Sales of gas to customers are billed on a monthly-cycle basis. Earned but unbilled revenue is accrued and included in accounts receivable and revenue. This is based on the amount of gas that has been delivered but not billed to customers from the latest meter reading or billed delivery date to the end of an accounting period. The related costs are charged to expense.

The renewables projects in Hawaii sell substantially all of the electricity generated at a fixed price to primarily electric utility customers pursuant to long-term power purchase agreements ("PPAs") of 20 years. The PPAs are accounted for as operating leases and have no minimum lease payments. Lease income is recorded within product revenue when the electricity is delivered.

Revenue from external customers were ($ in thousands):

Quarter Ended September 30,

Nine Months EndedSeptember 30,

Quarter Ended March 31,

2021

2020

2021

2020

2022

2021

Product revenue

Lease

~~1,372~~

~~1,004~~

31,~~500~~071

~~2,677~~890

Gas

~~56,177~~

~~34,390~~

~~161~~64,~~790~~809

~~123~~50,~~166~~751

Other

~~2,537~~

~~3,642~~

82,~~123~~801

102,~~450~~946

Total revenue

~~60,086~~

~~39,036~~

~~173~~68,~~413~~681

~~136~~54,~~293~~587

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

12. Related Party Transactions

Management Services

On ~~September~~March 3031, ~~2021~~2022 and December 31, ~~2020~~2021, the Manager held 14,~~573~~937,~~070~~119 units and 1314,~~954~~719,~~821~~423 units, respectively, of the Company’s common units. Pursuant to the terms of the Fourth Amended and Restated Management Agreement ("MSA"), the Manager may sell these units at any time. Under the MSA, the Manager, at its option, may reinvest base management fees and performance fees, if any, in units of the Company. The Manager’s holdings on ~~September~~March 3031, ~~2021~~2022 represented 16.5282% of the Company's outstanding common units.

Since January 1, ~~2020~~2021, the Company paid the Manager cash dividends and/or distributions on units held for the following periods:

Declared

Period Covered

$ ~~perUnit~~per Unit

Record Date

Payable Date

Cash Paid to Manager($ in thousands)

September 23, 2021

(1)

37.386817

October 4, 2021

October 7, 2021

544,841

December 23, 2020

(2)

11.00

January 5, 2021

January 8, 2021

153,503

February 14, 2020

Fourth quarter 2019

1.00

March 6, 2020

March 11, 2020

13,396

___________

(1) One-time distribution declared and paid out of the proceeds from the AA Transaction. Units of MIH traded with "due-bills" attached through October 7, 2021 and traded ex-distribution on October 8, 2021.

(2) Special dividend declared and paid out of the proceeds from the IMTT Transaction. Units of MIH traded with “due-bills” attached through January 8, 2021 and traded ex-dividend on January 11, 2021.

Under the MSA, subject to the oversight and supervision of the Company’s Board, the Manager is responsible for and oversees the management of the Company’s ~~operating businesses~~business. In addition, the Manager has the right to appoint the Chairman of the Board, subject to minimum equity ownership, and to assign, or second, to the Company, two of its employees to serve as chief executive officer and chief financial officer of the Company and seconds or makes other personnel available as required.

In accordance with the MSA, the Manager is entitled to a monthly base management fee based primarily on the Company’s market capitalization, and potentially a quarterly performance fee based on total unitholder returns relative to a U.S. utilities index. Currently, the Manager has elected to reinvest future base management fees and performance fees, if any, in additional units. For the quarter ~~and nine months~~ ended ~~September~~March 3031, ~~2021~~2022, the Company incurred base management fees of $~~7.7 million and $20.8 million~~800, ~~respectively~~000, compared with $5.06 million ~~and $16.2 million~~ for the quarter ~~and nine months~~ ended ~~September~~March 3031, ~~2020~~2021. The Company did not incur any performance fees for the quarters ~~and nine months~~ ended ~~September~~March 3031, ~~2021~~2022 and ~~2020~~2021.

Effective November 1, 2018, the Manager waived two portions of the base management fee to which it was entitled under the terms of the MSA. In effect, the waivers cap the base management fee at 1% of the Company’s equity market capitalization less any cash balances at the holding company. The waiver applies only to the calculation of the base management fees and not to the remainder of the MSA. The Manager reserves the right to revoke the waivers and revert to the prior terms of the MSA, subject to providing the Company with not less than a one year notice. A revocation of the waiver would not trigger a recapture of previously waived fees. As part of the Disposition Agreement entered into between the Company and its Manager, discussed below, the Manager has agreed not to revoke the waiver during the term of the Disposition Agreement. The amendment to the

37Disposition Agreement, described below, provides for the payment of the waived fees upon the consummation of the Merger.

Disposition Agreement

To facilitate sales of its operating businesses, on October 30, 2019, the Company announced that it entered into a Disposition Agreement with its Manager (see Exhibit 10.3 of the Form 10-K filed on February 22, 2022). Outside of the Disposition Agreement, the Company has limited ability to terminate the MSA. The Disposition Agreement provides for the termination of the Company’s external management relationship with its Manager as to any businesses, or substantial portions thereof, that are sold (including if the Company itself is sold). In connection therewith, the Company will make a payment to its Manager of approximately 2.9% to 6.1% of the net proceeds generated in the event of such sales, subject to a minimum amount of payments for all sales in the aggregate in the event of a Qualifying Termination Event ("QTE") of (i) $50.0 million plus (ii) 1.5% multiplied by proceeds in excess of $500.0 million in the aggregate. A QTE means (i) the sale of the Company or (ii) a transaction or series of transactions resulting in a third party or parties acquiring all the assets of the Company. The Disposition Agreement provides that the MSA will terminate upon the occurrence of a QTE or upon mutual agreement of the parties. If the MSA has not been terminated prior to the sixth anniversary of the Disposition Agreement, the Company's Manager and its

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

12. Related Party Transactions - (continued)

toindependent ~~the~~directors ~~remainder~~will ofengage ~~the~~in ~~MSA. The Manager reserves the right to revoke the waivers and revert to the prior terms of the MSA~~reasonable, ~~subject~~good tofaith ~~providing~~discussions ~~the~~regarding ~~Company with not less than~~ a ~~one~~potential ~~year~~internalization ~~notice.~~or Aother ~~revocation~~framework offor ~~the waiver would not trigger~~ a ~~recapture~~termination of ~~previously waived fees. As part of~~ the ~~Disposition Agreement entered into between the Company and its Manager, discussed below, the Manager has agreed not to revoke the waiver during the term of the Disposition Agreement~~MSA.

Disposition Agreement

To facilitate sales of its operating businesses, on October 30, 2019, the Company announced that it entered into a Disposition Agreement with its Manager (see Exhibit 10.3 of the Form 10-K filed on February 17, 2021). Outside of the Disposition Agreement, the Company has limited ability to terminate the MSA. The Disposition Agreement provides for the termination of the Company’s external management relationship with its Manager as to any businesses, or substantial portions thereof, that are sold (including if the Company itself is sold). In connection therewith, the Company will make a payment to its Manager of approximately 2.9% to 6.1% of the net proceeds generated in the event of such sales, subject to a minimum amount of payments for all sales in the aggregate in the event of a Qualifying Termination Event ("QTE") of (i) $50.0 million plus (ii) 1.5% multiplied by proceeds in excess of $500.0 million in the aggregate. A QTE means (i) the sale of the Company or (ii) a transaction or series of transactions resulting in a third party or parties acquiring all the assets of the Company. The Disposition Agreement provides that the MSA will terminate upon the occurrence of a QTE or upon mutual agreement of the parties. If the MSA has not been terminated prior to the sixth anniversary of the Disposition Agreement, the Company's Manager and its independent directors will engage in reasonable, good faith discussions regarding a potential internalization or other framework for a termination of the MSA.

The Disposition Agreement provides that if a QTE occurs on or prior to January 1, 2022 (subject to extension under certain circumstances for up to six months thereafter), then the Company will pay its Manager an additional payment of $25.0 million. The Disposition Agreement further provides that its Manager will receive a make-whole payment following a QTE, to the extent that the aggregate management fees paid to its Manager through the date of the QTE were less than (i) $20.0 million per year for the two years following the date of the Disposition Agreement and (ii) $10.0 million per year for any period thereafter. In addition, following a QTE, the Manager will be paid in cash all accrued and unpaid management fees, including fees of $8.5 million waived in accordance with the Limited Waiver, which waived fees would have been payable through October 31, 2019. The Manager has agreed not to exercise its right to retract the Limited Waiver for periods after October 31, 2019 and prior to the termination of the Disposition Agreement. The Disposition Agreement will terminate on the earlier to occur of (i) the termination of the MSA and (ii) the sixth anniversary of the agreement, subject to extension under certain circumstances if a transaction is pending.

In connection with the IMTT Transaction and pursuant to the Disposition Agreement as amended by the Amendment noted below, the Company deposited a disposition payment of $28.2 million to its Manager in an escrow account in December 2020 and subsequently released the payment from escrow in March 2021.

In connection with the execution of the Merger, and in order to provide AMF Parent with the fixed amount of the Disposition Payment (as defined in the Disposition Agreement) payable to the Manager with respect to the Merger, on June 14, 2021, the Company and the Manager entered into an amendment (the "Amendment") to the Disposition Agreement. The Amendment provides that the Disposition Payment payable to the Manager with respect to the Merger will be $56.7 million (which amount includes the Waived Fees (as defined in the Disposition Agreement)). These amounts were calculated in accordance with the Disposition Agreement dated as of October 30, 2019, do not include the $25.0 million additional payment to the Manager if the final sale of the Company occurs on or prior to July 1, 2022, and assume a closing date of March 31, 2022, for the Merger~~, which represents the Company’s current expectation as to closing date~~. The Amendment also provides that the Disposition Payments with respect to the Merger will be paid concurrently with the relevant transaction closing, and that the Company’s MSA with the Manager will terminate concurrent with the closing of the Merger and payment of all amounts payable to the Manager under the Disposition Agreement.

In connection with the AA Transaction and pursuant to the Disposition Agreement, the Company paid the Manager $228.6 million in September 2021 concurrent with the closing of the transaction.

The unpaid portion of the base management fees and performance fees, if any, at the end of each reporting period is included in Due to Manager-related party in the consolidated condensed balance sheets. The following table shows the Manager's reinvestment of its base management fees and performance fees, if any, in units:


Period	Base Management Fee Amount ($ in thousands)		Performance Fee Amount ($ in thousands)		Units Issued
2022 Activities:
First quarter 2022	$	800	$	—	219,026	(1)

2021 Activities:
Fourth quarter 2021	1,056		—		217,273
Third quarter 2021	7,698		—		195,556
Second quarter 2021	7,551		—		214,040
First quarter 2021	5,552		—		176,296

___________

(1)The Manager elected to reinvest all monthly base management fees for the quarter ended March 31, 2022 in new primary units. The Company issued 219,026 units for the quarter ended March 31, 2022, including 73,653 units that were issued in April 2022.

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

12. Related Party Transactions - (continued)

Period	Base ManagementFee Amount($ in thousands)		PerformanceFee Amount($ in thousands)		UnitsIssued
2021 Activities:
Third quarter 2021	$	7,698	$	—	195,556	(1)
Second quarter 2021	7,551		—		214,040
First quarter 2021	5,552		—		176,296
2020 Activities:
Fourth quarter 2020	$	4,903	$	—	162,791
Third quarter 2020	4,980		—		172,976
Second quarter 2020	3,824		—		146,452
First quarter 2020	7,356		—		181,617

costs including, but not limited to, expenses incurred in the administration or management of the Company and its subsidiaries, income taxes, audit and legal fees, acquisitions and dispositions, and its compliance with applicable laws and regulations. During the quarter ended March 31, 2022, the Manager charged the Company $1,000 for the reimbursement of out-of-pocket expenses compared with an insiginficant amount for the quarter ended March 31, 2021. The unpaid portion of the out-of-pocket expenses at the end of the reporting period is included in Due to Manager-related party in the consolidated condensed balance sheets. During the quarter ended March 31, 2021, the Company paid $30,000 in legal fees incurred by the the Manager related to certain MIC shareholder litigation. The payment reflects a credit of $30,000 of legal fees incurred by the Manager in 2020.

___________

(1)The Manager elected to reinvest all monthly base management fees for the quarter ended September 30, 2021 in new primary units. The Company issued 195,556 units for the quarter ended September 30, 2021, including 1,403 units that were issued in October 2021.

The Manager is not entitled to any other compensation and all costs incurred by the Manager, including compensation of seconded staff, are paid by the Manager out of its base management fee. However, the Company is responsible for other direct costs including, but not limited to, expenses incurred in the administration or management of the Company and its subsidiaries, income taxes, audit and legal fees, acquisitions and dispositions, and its compliance with applicable laws and regulations. During the nine months ended September 30, 2021, the Manager charged the Company $1,000 for the reimbursement of out-of-pocket expenses compared with $6,000 and $310,000 for the quarter and nine months ended September 30, 2020, respectively. The unpaid portion of the out-of-pocket expenses at the end of the reporting period is included in Due to Manager-related party in the consolidated condensed balance sheets. During the quarter and nine months ended September 30, 2021, the Company paid $8,000 and $38,000, respectively, in legal fees previously incurred for the Manager related to the MIH Unitholder Litigation.

Macquarie Group - Other Services

The Company uses the resources of the Macquarie Group with respect to a range of advisory, procurement, insurance, hedging, lending, and other services. Engagements involving members of the Macquarie Group are reviewed and approved by the Audit Committee of the Company’s Board. Macquarie Group affiliates are engaged on an arm’s length basis and frequently as a member of a syndicate of providers whose other members establish the terms of the interaction.

Advisory Services

The Macquarie Group, and wholly-owned subsidiaries within the Macquarie Group, including Macquarie Bank Limited ("MBL") and Macquarie Capital (USA) Inc. ("MCUSA") have provided various advisory and other services and incurred expenses in connection with the Company’s equity raising activities, acquisitions, and debt structuring for the Company and its businesses. Underwriting fees are recorded in unitholders’ equity as a direct cost of equity offerings. Advisory fees and out-of-pocket expenses relating to acquisitions are expensed as incurred. Debt arranging fees are ~~generally~~deferred ~~capitalized~~ and amortized over the term of the credit facility.

Long-Term Debt

The Company had a $600.0 million senior secured revolving credit facility at the holding company level to which Macquarie Capital Funding LLC had a $40.0 million commitment. On January 19, 2021, all commitments on the senior secured revolving credit facility were terminated in accordance with the terms of that agreement. For the ~~nine~~quarter ~~months~~ ended ~~September~~March 3031, 2021, the Company incurred interest expense of $8,000, related to Macquarie Capital Funding LLC’s portion of the senior secured revolving credit facility~~, compared with $203,000 and $564,000 for the quarter and nine months ended September 30, 2020, respectively~~. ~~All outstanding balances were repaid as of December 31, 2020.~~

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MACQUARIE INFRASTRUCTURE HOLDINGS, LLC

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

12. Related Party Transactions - (continued)

Other Related Party Transactions

For the nine months ended September 30, 2020, the Company incurred $25,000 for advisory services from a former Board member.

13. Legal Proceedings and Contingencies

The Company and its subsidiaries are subject to legal proceedings arising in the ordinary course of business. In management’s opinion, the Company has adequate legal defenses and/or insurance coverage with respect to the eventuality of such actions and does not believe the outcome of any pending legal proceedings will be material to the Company’s financial position or ~~result~~results of operations.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings

~~Upon~~There ~~the~~have ~~completion~~been by the Company of the sale of all outstanding shares of common stock of its wholly owned subsidiary, Macquarie Infrastructure Corporation, which held the Company's Atlantic Aviation business, on September 23, 2021, the Company is no ~~longer~~material adevelopments ~~party~~ to ~~the~~ legal proceedings set forth under Part I1, Item 3 of ~~the~~our ~~Company's~~ Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021, filed with the SEC on February 1722, ~~2021~~2022.

Item 1A. Risk Factors

There have been no material changes to the risk factors set forth under Part I, Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021, filed with the SEC on February 1722, ~~2021, except as follows:~~ 2022.

Risks Related to the Merger

Since completion of the AA Transaction, the size of our Company may be sub-scale, we have substantially fewer assets, and we may be more susceptible to adverse events.

Since the completion of the AA Transaction, and until the completion of the Merger, or if the Merger is not completed, the size of our Company may be sub-scale for a public company owner of a part regulated utility/part propane distribution business, and we may have limited access to financing through the capital markets due to our size. We are subject to concentration of the risks that affect our Hawaii businesses. We have substantially fewer assets and may experience significant decreases in earnings and cash flow and increases in operating costs or other expenses. We continue to be a public company with ongoing costs associated with public company operations, which are a greater percentage of our revenues, and we are unlikely to recover all of those expenses from rate payers of our regulated utility, Hawaii Gas. The market price of our common stock has significantly decreased, and our common stock may be more susceptible to market fluctuations.

The Merger is contingent on a number of conditions, and may not be completed on the timeline currently contemplated or at all.

The consummation of the Merger is subject to various conditions, including, among others, receipt of regulatory approvals. If the Merger is not completed for any reason, the price of our common stock may decline, and our business, financial condition and results of operations may be impacted, including: to the extent that the market price of our common stock reflects positive market assumptions that the Merger will be completed; based on the significant expenses, such as legal and financial advisory services, which generally must be paid regardless of whether the Merger is completed; and due to the risk that we may be unable to enter into an alternative transaction for the sale of our businesses on terms as favorable as the Merger or at all. We may receive a termination fee under certain circumstances, but such fee may not adequately compensate us for our losses if the Merger is not completed. In addition, we may be required to pay a termination fee to the purchaser if the Merger Agreement is terminated under certain circumstances.

While the Merger is pending, the Company will be subject to risks and uncertainties and contractual restrictions that could disrupt our businesses or negatively impact our stock price.

The announcement and pendency of the Merger could cause disruptions and create uncertainty surrounding our businesses and affect our businesses’ relationships with customers, suppliers and business partners. These uncertainties could cause customers, suppliers and others that deal with us and/or our businesses to seek to change existing business relationships. In addition, employee retention could be negatively impacted during the pendency of the Merger. Pending completion of the Merger, the attention of our management may be focused on the Merger and related matters, and diverted from other opportunities that might benefit us. In addition, pursuant to the Merger Agreement, prior to closing we have agreed to conduct the Hawaii businesses in the ordinary course and not to undertake certain actions without the written consent of the purchaser. These restrictions could prevent us from pursuing certain beneficial business opportunities. All of these uncertainties could adversely affect our business, financial condition and results of operations, and could negatively impact the market price of our common stock.

Non-U.S. holders of common units may be subject to U.S. federal income tax and U.S. withholding tax upon their participation in the Merger.

In general, under the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) provisions of the United States Internal Revenue Code of 1986, as amended, non-U.S. persons are subject to U.S. federal income tax in the same manner as U.S. persons on any gain realized on the disposition of an interest, other than an interest solely as a creditor, in U.S. real property. An interest in U.S. real property includes stock in a U.S. corporation (except for certain stock of publicly traded U.S. corporations) if, with respect to a non-U.S. holder, interests in U.S. real property constituted 50% or more by value of the sum

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of the corporation’s assets used in a trade or business, its U.S. real property interests and its interests in real property located outside the United States at any point in time during the shorter of the period during which such non-U.S. holder held such stock or the 5-year period ending on the date of the disposition of such interest (a USRPHC).

It is unclear if the Company subsidiary holding the Hawaii businesses will be treated as a USRPHC for U.S. federal income tax purposes as of the date of the Merger. If such subsidiary were treated as a USRPHC as of such date, the Merger could have certain negative tax consequences for non-U.S. holders of common units, including causing such non-U.S. holders to be subject to U.S. federal income tax and related withholding under the FIRPTA provisions of the Code on any gain realized by such holder on the Merger.

If you are a non-U.S. holder, you are urged to consult your own tax advisors with regard to the U.S. federal income tax consequences to you (as well as the effects of state, local and non-U.S. tax laws) resulting from participation in the Merger.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Item 6. Exhibits

An exhibit index has been filed as part of this Report on page E-1 and is incorporated herein by reference.

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EXHIBIT INDEX

Number						Description
2.1						Purchase Agreement dated June 7, 2021 by and among KKR Apple Bidco, LLC, Macquarie Infrastructure Corporation, Macquarie Infrastructure Holdings, LLC and, solely for specified provisions, MIC Hawaii 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 7, 2021).
2.2						Merger Agreement dated June 14, 2021 by and among AMF Hawaii Holdings, LLC, AMF Hawaii Merger Sub, LLC, Macquarie Infrastructure Corporation and Macquarie Infrastructure 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 15, 2021).
2.3						Agreement and Plan of Merger, dated as of March 30, 2021, by and among the Registrant, Macquarie Infrastructure Corporation and Plum Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 of the Registrant’s Registration Statement on Form S-4, filed on February 17, 2021 (Reg. No. 333- 253193).
3.1						Amended and Restated Limited Liability Company Agreement of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 22, 2021).
4.1						Fourth Supplemental Indenture, dated as of September 22, 2021, by and between the Registrant and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.4 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 22, 2021).
10.1						Fourth Amended and Restated Management Services Agreement, dated September 22, 2021, by and among the Registrant, Macquarie Infrastructure Corporation, MIC Ohana Corporation, MIC Hawaii Holdings, LLC and Macquarie Infrastructure Management (USA) Inc. (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 22, 2021).
10.2						Amended and Restated Disposition Agreement, dated September 22, 2021, by and among the Registrant, Macquarie Infrastructure Corporation, MIC Ohana Corporation, MIC Hawaii Holdings, LLC and Macquarie Infrastructure Management (USA) Inc. (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 22, 2021).
10.3						Second Amended and Restated Registration Rights Agreement, dated September 22, 2021, by and between the Registrant and Macquarie Infrastructure Management (USA) Inc. (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 22, 2021).
31.1*						Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer
31.2*						Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer
32.1**						Section 1350 Certification of Chief Executive Officer
32.2**						Section 1350 Certification of Chief Financial Officer
101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH						XBRL Taxonomy Extension Schema Document
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						XBRL Taxonomy Extension Label Linkbase Document
101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document
104						The cover page from the Registrant's Quarterly Report on Form 10-Q for the quarter ended ~~September~~March 3031, ~~2021~~2022, formatted in XBRL and contained in Exhibit 101.

___________

* Filed herewith.

** Furnished herewith.

E-1

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MACQUARIE INFRASTRUCTURE HOLDINGS, LLC(Registrant)
Dated: November 2, 2021	By:	/s/ Christopher Frost
Dated: May 3, 2022	By:	/s/ Christopher Frost
		Name: Christopher Frost
		Title: Chief Executive Officer
Dated: November 2, 2021	By:	/s/ Nick O'Neil
Dated: May 3, 2022	By:	/s/ Nick O'Neil
		Name: Nick O'Neil
		Title: Chief Financial Officer

Filing Compare · AMF Hawaii Investments, LLC