Intrinsic value of Macquarie Infrastructure - MIC

Previous Close

$72.11

  Intrinsic Value

$2.81

stock screener

  Rating & Target

str. sell

-96%

  Value-price divergence*

-96%

Previous close

$72.11

 
Intrinsic value

$2.81

 
Up/down potential

-96%

 
Rating

str. sell

 
Value-price divergence*

-96%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of MIC stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 6.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  0.79
  13.90
  13.01
  12.21
  11.49
  10.84
  10.26
  9.73
  9.26
  8.83
  8.45
  8.10
  7.79
  7.51
  7.26
  7.04
  6.83
  6.65
  6.48
  6.34
  6.20
  6.08
  5.97
  5.88
  5.79
  5.71
  5.64
  5.58
  5.52
  5.47
  5.42
Revenue, $m
  1,652
  1,882
  2,126
  2,386
  2,660
  2,948
  3,251
  3,567
  3,897
  4,242
  4,600
  4,973
  5,360
  5,763
  6,181
  6,616
  7,068
  7,538
  8,027
  8,536
  9,065
  9,617
  10,191
  10,790
  11,415
  12,066
  12,747
  13,457
  14,200
  14,976
  15,788
Variable operating expenses, $m
 
  1,919
  2,143
  2,380
  2,630
  2,893
  3,169
  3,457
  3,759
  4,073
  4,400
  4,537
  4,891
  5,259
  5,640
  6,037
  6,450
  6,879
  7,325
  7,789
  8,272
  8,775
  9,299
  9,846
  10,416
  11,010
  11,631
  12,280
  12,957
  13,665
  14,406
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  1,331
  1,919
  2,143
  2,380
  2,630
  2,893
  3,169
  3,457
  3,759
  4,073
  4,400
  4,537
  4,891
  5,259
  5,640
  6,037
  6,450
  6,879
  7,325
  7,789
  8,272
  8,775
  9,299
  9,846
  10,416
  11,010
  11,631
  12,280
  12,957
  13,665
  14,406
Operating income, $m
  321
  -38
  -16
  6
  30
  56
  82
  110
  139
  169
  200
  435
  469
  504
  541
  579
  619
  660
  703
  747
  793
  842
  892
  944
  999
  1,056
  1,116
  1,178
  1,243
  1,311
  1,382
EBITDA, $m
  612
  403
  455
  511
  569
  631
  696
  764
  834
  908
  985
  1,064
  1,147
  1,234
  1,323
  1,416
  1,513
  1,614
  1,718
  1,827
  1,941
  2,059
  2,182
  2,310
  2,443
  2,583
  2,729
  2,881
  3,040
  3,206
  3,380
Interest expense (income), $m
  109
  112
  136
  161
  188
  216
  245
  276
  308
  342
  377
  414
  452
  492
  533
  576
  620
  666
  714
  764
  816
  870
  927
  986
  1,047
  1,111
  1,177
  1,247
  1,320
  1,396
  1,475
Earnings before tax, $m
  226
  -150
  -152
  -155
  -157
  -160
  -163
  -166
  -170
  -173
  -177
  21
  17
  13
  8
  3
  -1
  -7
  -12
  -17
  -23
  -29
  -35
  -41
  -48
  -55
  -62
  -69
  -77
  -85
  -93
Tax expense, $m
  71
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  6
  5
  3
  2
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  156
  -150
  -152
  -155
  -157
  -160
  -163
  -166
  -170
  -173
  -177
  16
  12
  9
  6
  3
  -1
  -7
  -12
  -17
  -23
  -29
  -35
  -41
  -48
  -55
  -62
  -69
  -77
  -85
  -93

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  45
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  7,559
  8,553
  9,666
  10,846
  12,092
  13,402
  14,777
  16,214
  17,715
  19,280
  20,909
  22,603
  24,364
  26,195
  28,097
  30,074
  32,129
  34,265
  36,487
  38,799
  41,205
  43,712
  46,323
  49,045
  51,884
  54,847
  57,939
  61,170
  64,545
  68,072
  71,761
Adjusted assets (=assets-cash), $m
  7,514
  8,553
  9,666
  10,846
  12,092
  13,402
  14,777
  16,214
  17,715
  19,280
  20,909
  22,603
  24,364
  26,195
  28,097
  30,074
  32,129
  34,265
  36,487
  38,799
  41,205
  43,712
  46,323
  49,045
  51,884
  54,847
  57,939
  61,170
  64,545
  68,072
  71,761
Revenue / Adjusted assets
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
Average production assets, $m
  5,143
  5,858
  6,620
  7,428
  8,281
  9,179
  10,120
  11,105
  12,133
  13,204
  14,319
  15,480
  16,686
  17,940
  19,243
  20,597
  22,004
  23,467
  24,989
  26,572
  28,220
  29,936
  31,725
  33,589
  35,533
  37,562
  39,680
  41,893
  44,204
  46,620
  49,147
Working capital, $m
  -6
  -13
  -15
  -17
  -19
  -21
  -23
  -25
  -27
  -30
  -32
  -35
  -38
  -40
  -43
  -46
  -49
  -53
  -56
  -60
  -63
  -67
  -71
  -76
  -80
  -84
  -89
  -94
  -99
  -105
  -111
Total debt, $m
  3,080
  3,674
  4,351
  5,068
  5,826
  6,623
  7,458
  8,332
  9,245
  10,196
  11,186
  12,217
  13,288
  14,401
  15,557
  16,759
  18,008
  19,307
  20,658
  22,064
  23,527
  25,051
  26,638
  28,293
  30,020
  31,821
  33,701
  35,665
  37,717
  39,862
  42,105
Total liabilities, $m
  4,606
  5,200
  5,877
  6,594
  7,352
  8,149
  8,984
  9,858
  10,771
  11,722
  12,712
  13,743
  14,814
  15,927
  17,083
  18,285
  19,534
  20,833
  22,184
  23,590
  25,053
  26,577
  28,164
  29,819
  31,546
  33,347
  35,227
  37,191
  39,243
  41,388
  43,631
Total equity, $m
  2,953
  3,353
  3,789
  4,251
  4,740
  5,254
  5,792
  6,356
  6,944
  7,558
  8,196
  8,860
  9,551
  10,268
  11,014
  11,789
  12,595
  13,432
  14,303
  15,209
  16,153
  17,135
  18,159
  19,226
  20,339
  21,500
  22,712
  23,978
  25,301
  26,684
  28,130
Total liabilities and equity, $m
  7,559
  8,553
  9,666
  10,845
  12,092
  13,403
  14,776
  16,214
  17,715
  19,280
  20,908
  22,603
  24,365
  26,195
  28,097
  30,074
  32,129
  34,265
  36,487
  38,799
  41,206
  43,712
  46,323
  49,045
  51,885
  54,847
  57,939
  61,169
  64,544
  68,072
  71,761
Debt-to-equity ratio
  1.043
  1.100
  1.150
  1.190
  1.230
  1.260
  1.290
  1.310
  1.330
  1.350
  1.360
  1.380
  1.390
  1.400
  1.410
  1.420
  1.430
  1.440
  1.440
  1.450
  1.460
  1.460
  1.470
  1.470
  1.480
  1.480
  1.480
  1.490
  1.490
  1.490
  1.500
Adjusted equity ratio
  0.387
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392
  0.392

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  156
  -150
  -152
  -155
  -157
  -160
  -163
  -166
  -170
  -173
  -177
  16
  12
  9
  6
  3
  -1
  -7
  -12
  -17
  -23
  -29
  -35
  -41
  -48
  -55
  -62
  -69
  -77
  -85
  -93
Depreciation, amort., depletion, $m
  291
  441
  471
  504
  539
  576
  614
  654
  696
  739
  784
  629
  678
  729
  782
  837
  894
  954
  1,016
  1,080
  1,147
  1,217
  1,290
  1,365
  1,444
  1,527
  1,613
  1,703
  1,797
  1,895
  1,998
Funds from operations, $m
  566
  290
  319
  350
  382
  416
  451
  488
  526
  566
  607
  645
  691
  739
  788
  840
  893
  947
  1,004
  1,063
  1,124
  1,188
  1,255
  1,324
  1,397
  1,472
  1,551
  1,634
  1,720
  1,810
  1,905
Change in working capital, $m
  6
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
Cash from operations, $m
  560
  292
  321
  352
  384
  418
  453
  490
  528
  568
  610
  647
  693
  741
  791
  843
  896
  951
  1,007
  1,066
  1,128
  1,192
  1,259
  1,328
  1,401
  1,477
  1,556
  1,639
  1,725
  1,816
  1,910
Maintenance CAPEX, $m
  0
  -209
  -238
  -269
  -302
  -337
  -373
  -411
  -451
  -493
  -537
  -582
  -629
  -678
  -729
  -782
  -837
  -894
  -954
  -1,016
  -1,080
  -1,147
  -1,217
  -1,290
  -1,365
  -1,444
  -1,527
  -1,613
  -1,703
  -1,797
  -1,895
New CAPEX, $m
  -315
  -715
  -762
  -808
  -853
  -898
  -941
  -985
  -1,028
  -1,071
  -1,115
  -1,160
  -1,206
  -1,254
  -1,303
  -1,354
  -1,407
  -1,463
  -1,522
  -1,583
  -1,648
  -1,716
  -1,788
  -1,864
  -1,944
  -2,029
  -2,118
  -2,212
  -2,311
  -2,416
  -2,526
Cash from investing activities, $m
  -377
  -924
  -1,000
  -1,077
  -1,155
  -1,235
  -1,314
  -1,396
  -1,479
  -1,564
  -1,652
  -1,742
  -1,835
  -1,932
  -2,032
  -2,136
  -2,244
  -2,357
  -2,476
  -2,599
  -2,728
  -2,863
  -3,005
  -3,154
  -3,309
  -3,473
  -3,645
  -3,825
  -4,014
  -4,213
  -4,421
Free cash flow, $m
  183
  -632
  -679
  -726
  -771
  -817
  -861
  -906
  -951
  -996
  -1,042
  -1,095
  -1,142
  -1,191
  -1,241
  -1,293
  -1,348
  -1,407
  -1,468
  -1,533
  -1,600
  -1,672
  -1,747
  -1,826
  -1,909
  -1,997
  -2,089
  -2,186
  -2,289
  -2,397
  -2,511
Issuance/(repayment) of debt, $m
  -168
  634
  677
  717
  758
  797
  836
  874
  913
  951
  990
  1,030
  1,071
  1,113
  1,157
  1,202
  1,249
  1,299
  1,351
  1,406
  1,463
  1,524
  1,588
  1,655
  1,726
  1,801
  1,880
  1,964
  2,052
  2,145
  2,243
Issuance/(repurchase) of shares, $m
  415
  555
  588
  617
  646
  674
  702
  730
  758
  787
  816
  649
  678
  708
  740
  772
  807
  844
  883
  924
  966
  1,011
  1,059
  1,108
  1,161
  1,216
  1,274
  1,335
  1,400
  1,468
  1,539
Cash from financing (excl. dividends), $m  
  235
  1,189
  1,265
  1,334
  1,404
  1,471
  1,538
  1,604
  1,671
  1,738
  1,806
  1,679
  1,749
  1,821
  1,897
  1,974
  2,056
  2,143
  2,234
  2,330
  2,429
  2,535
  2,647
  2,763
  2,887
  3,017
  3,154
  3,299
  3,452
  3,613
  3,782
Total cash flow (excl. dividends), $m
  418
  557
  586
  609
  632
  654
  676
  698
  720
  741
  764
  584
  607
  631
  655
  681
  708
  736
  765
  796
  829
  863
  900
  938
  978
  1,021
  1,066
  1,113
  1,163
  1,215
  1,271
Retained Cash Flow (-), $m
  77
  -555
  -588
  -617
  -646
  -674
  -702
  -730
  -758
  -787
  -816
  -664
  -690
  -718
  -746
  -775
  -807
  -844
  -883
  -924
  -966
  -1,011
  -1,059
  -1,108
  -1,161
  -1,216
  -1,274
  -1,335
  -1,400
  -1,468
  -1,539
Prev. year cash balance distribution, $m
 
  5
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  7
  -3
  -8
  -14
  -20
  -26
  -32
  -38
  -45
  -52
  -80
  -84
  -87
  -90
  -94
  -99
  -108
  -117
  -127
  -137
  -148
  -159
  -171
  -183
  -195
  -209
  -223
  -237
  -252
  -268
Discount rate, %
 
  8.20
  8.61
  9.04
  9.49
  9.97
  10.47
  10.99
  11.54
  12.12
  12.72
  13.36
  14.02
  14.73
  15.46
  16.24
  17.05
  17.90
  18.79
  19.73
  20.72
  21.76
  22.84
  23.99
  25.19
  26.45
  27.77
  29.16
  30.61
  32.15
  33.75
PV of cash for distribution, $m
 
  7
  -2
  -6
  -10
  -12
  -14
  -15
  -16
  -16
  -16
  -20
  -17
  -15
  -12
  -10
  -8
  -7
  -5
  -4
  -3
  -2
  -2
  -1
  -1
  -1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  91.5
  84.2
  77.9
  72.4
  67.7
  63.5
  59.7
  56.4
  53.4
  50.7
  48.8
  47.0
  45.3
  43.8
  42.3
  40.9
  39.6
  38.4
  37.2
  36.0
  35.0
  33.9
  32.9
  32.0
  31.1
  30.2
  29.3
  28.5
  27.7
  26.9

Macquarie Infrastructure Corporation, through its subsidiaries, owns and operates a portfolio of businesses that provide services to businesses, government agencies, and individuals. It operates through four segments: International-Matex Tank Terminals (IMTT), Atlantic Aviation, Contracted Power (CP), and MIC Hawaii. The IMTT segment offers bulk liquid storage, handling, and other services for petroleum products, chemicals, renewable fuels, and vegetable and animal oils at 10 marine terminals in the United States and 2 marine terminals in Canada. This segment also provides environmental emergency responses, industrial services, and waste transportation and disposal services. The Atlantic Aviation segment offers fueling and fuel-related services, de-icing, aircraft parking, catering, and hangar rental services to owners/operators of jet aircraft; and for commercial, military, freight, and government aviation customers. The CP segment generates electricity through wind, solar, and gas-fired sources. As of December 31, 2016, it had interests in six solar power generating facilities with an aggregate generating capacity of 137 megawatts (MW) located in Arizona, California, Utah, and Texas; two wind power generating facilities with an aggregate generating capacity of 203 MW located in New Mexico and Idaho; and gas-fired facility with a generating capacity of 512 MW located in Bayonne, New Jersey. The MIC Hawaii segment processes, distributes, and sells synthetic natural gas; and distributes and sells liquefied natural gas and petroleum gas to residential, commercial, hospitality, military, and wholesale customers, as well as to public sector in Oahu, Hawaii, Maui, Kauai, Molokai, and Lanai. This segmentÂ’s products are used in various commercial and residential applications, such as water heating, drying, cooking, power generation, and decorative lighting, as well as for use in specialty vehicles. The company was founded in 2004 and is headquartered in New York, New York.

FINANCIAL RATIOS  of  Macquarie Infrastructure (MIC)

Valuation Ratios
P/E Ratio 37.9
Price to Sales 3.6
Price to Book 2
Price to Tangible Book
Price to Cash Flow 10.6
Price to Free Cash Flow 24.1
Growth Rates
Sales Growth Rate 0.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 62.4%
Cap. Spend. - 3 Yr. Gr. Rate 23.2%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 102.9%
Total Debt to Equity 104.3%
Interest Coverage 3
Management Effectiveness
Return On Assets 3.1%
Ret/ On Assets - 3 Yr. Avg. 9%
Return On Total Capital 2.6%
Ret/ On T. Cap. - 3 Yr. Avg. 9.8%
Return On Equity 5.2%
Return On Equity - 3 Yr. Avg. 18.6%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 60.4%
Gross Margin - 3 Yr. Avg. 53.8%
EBITDA Margin 37.9%
EBITDA Margin - 3 Yr. Avg. 48%
Operating Margin 19.4%
Oper. Margin - 3 Yr. Avg. 31.6%
Pre-Tax Margin 13.7%
Pre-Tax Margin - 3 Yr. Avg. 26%
Net Profit Margin 9.4%
Net Profit Margin - 3 Yr. Avg. 26.6%
Effective Tax Rate 31.4%
Eff/ Tax Rate - 3 Yr. Avg. 21.8%
Payout Ratio 253.8%

MIC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MIC stock intrinsic value calculation we used $1652 million for the last fiscal year's total revenue generated by Macquarie Infrastructure. The default revenue input number comes from 2016 income statement of Macquarie Infrastructure. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our MIC stock valuation model: a) initial revenue growth rate of 13.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 8.2%, whose default value for MIC is calculated based on our internal credit rating of Macquarie Infrastructure, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Macquarie Infrastructure.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of MIC stock the variable cost ratio is equal to 103.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for MIC stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.7% for Macquarie Infrastructure.

Corporate tax rate of 27% is the nominal tax rate for Macquarie Infrastructure. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the MIC stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for MIC are equal to 311.3%.

Life of production assets of 24.6 years is the average useful life of capital assets used in Macquarie Infrastructure operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for MIC is equal to -0.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2953 million for Macquarie Infrastructure - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 82.701 million for Macquarie Infrastructure is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Macquarie Infrastructure at the current share price and the inputted number of shares is $6.0 billion.

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COMPANY NEWS

▶ Macquarie posts 2Q profit   [Aug-02-17 09:54PM  Associated Press]
▶ MIC Increases 2017 Growth Capital Deployment Target   [Jun-27-17 07:00AM  Business Wire]
▶ US$ 300 Million Syndicated Loan Closed in Colombia   [Jun-22-17 08:52AM  PR Newswire]
▶ MIC to Present at East Coast IDEAS Conference   [May-15-17 05:15PM  Business Wire]
▶ Macquarie posts 1Q profit   [05:03AM  Associated Press]
▶ Millicom Q1 2017 Results, 26 April 2017   [Apr-26-17 02:19AM  PR Newswire]
▶ Millicom Appoints Michel Morin as VP Investor Relations   [Mar-20-17 03:07AM  PR Newswire]
▶ Macquarie posts 4Q profit   [Feb-21-17 06:21PM  Associated Press]
▶ Millicom Q4 & FY 2016 Results, 8 February 2017   [Feb-08-17 02:26AM  PR Newswire]
▶ Is Commscope Holding Company Inc (COMM) A Good Stock To Buy?   [Nov-24-16 09:29PM  at Insider Monkey]
▶ Corporate Document-Factsheet for Macquarie Infrastructure Corp.   [Nov-18-16 08:27AM  at Company Spotlight]
Stock chart of MIC Financial statements of MIC
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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