UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

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

For the quarterly period ended March 31, 2006

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Macquarie Infrastructure Company Trust

(Exact name of registrant as specified in its charter)

Delaware		20-6196808
(State or Other Jurisdiction of Incorporation or		(I.R.S. Employer Identification No.)
Organization)

Macquarie Infrastructure Company LLC

(Exact name of registrant as specified in its charter)

Delaware		43-2052503
(State or Other Jurisdiction of Incorporation or		(I.R.S. Employer Identification No.)
Organization)

125 West 55th Street, 22nd Floor		10019
New York, New York		(Zip Code)
(Address of principal executive offices)

(212) 231-1000
(Registrants’ Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year if Changed Since Last Report)

Securities registered pursuant to Section 12 (g) of the Act: None

     Indicate by check mark whether the registrants (1) have 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 registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.

Yes þ No o

     Indicate by check mark whether the registrants are collectively a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

		Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o

     Indicate by check mark whether the registrants are collectively a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

     There were 27,050,745 shares of trust stock without par value outstanding at May 1, 2006.

 

 

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements			4
MACQUARIE INFRASTRUCTURE COMPANY TRUST
Consolidated Condensed Balance Sheets as of March 31, 2006 (Unaudited) and December 31, 2005			4
Consolidated Condensed Statement of Operations for the Quarters Ended March 31, 2006 and 2005 (Unaudited)			6
Consolidated Condensed Statement of Cash Flows for the Quarters Ended March 31, 2006 and 2005 (Unaudited)			7
Notes to Consolidated Condensed Financial Statements (Unaudited)			9
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			19
ITEM 3. Quantitative and Qualitative Disclosure About Market Risk			38
ITEM 4. Controls and Procedures			38
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings			38
ITEM 1A. Risk Factors			38
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds			38
ITEM 3. Defaults Upon Senior Securities			38
ITEM 4. Submission of Matters to a Vote of Security Holders			39
ITEM 5. Other Information			39
ITEM 6. Exhibits			39
EX-31.1: CERTIFICATION
EX-32.1: CERTIFICATION

Investments in Macquarie Infrastructure Company Trust are not deposits with or other liabilities of Macquarie Bank Limited or any of Macquarie Group company and are subject to investment risk, including possible delays in repayment and loss of income and principal invested. Neither Macquarie Bank Limited nor any other member company of the Macquarie Group guarantees the performance of Macquarie Infrastructure Company Trust or the repayment of capital from Macquarie Infrastructure Company Trust.

Overview

This Quarterly Report on Form 10-Q/A, or this Amendment, is being filed for the purpose of amending and restating our unaudited consolidated financial statements and other financial information contained in our Quarterly Report on Form 10-Q that was originally filed with the Securities and Exchange Commission on May 10, 2006. The Amendment is being made to change an accounting error in the treatment for interest rate and foreign exchange derivative instruments that did not qualify for hedge accounting during these periods. Regardless of the accounting treatment reflected in our unaudited financial statements, we continue to believe that our various derivative instruments are economically effective to hedge our exposure to interest and currency exchange rate fluctuations.

The change in the accounting treatment for these instruments is reflected as a non-cash gain in other income in our income statement. The effect of the restatement on our consolidated balance sheet at the end of any of the reported periods is immaterial and the restatement has no net effect on our operating income, cash from operations or consolidated statements of cash flows. See Note 18 to our unaudited consolidated financial statements for a more detailed discussion of the nature of this error and the effect of this change in our accounting treatment on our quarterly financial information for the quarters ended March 31, 2006 and March 31, 2005.

This Amendment also corrects our evaluation of disclosure controls and procedures in Part I, Item 4 as a result of our reassessment of material weaknesses in internal control over financial reporting. We also included as exhibits to this Amendment new certifications of our principal executive officer and principal financial officer.

In light of the restatement, readers should no longer rely on our previously filed financial statements and other financial information for the quarters ended March 31, 2006 and March 31, 2005.

Except as described above, no attempt has been made in this Amendment to amend or update other disclosures presented in the Quarterly Report on Form 10-Q/A. Therefore, this Amendment does not reflect events occurring after the original filing on May 10, 2006 or amend or update those disclosures, or related exhibits, affected by subsequent events. Accordingly, this Amendment should be read in conjunction with our other filings with the SEC subsequent to the original filing of our Quarterly Report on Form 10-Q.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MACQUARIE INFRASTRUCTURE COMPANY TRUST

CONSOLIDATED CONDENSED BALANCE SHEETS

As of March 31, 2006 and December 31, 2005

($ in thousands, except share amounts)

		March 31, 2006
		(unaudited)				December 31, 2005
		(restated)
Assets
Current assets:
Cash and cash equivalents		$	126,483			$	115,163
Restricted cash			1,471				1,332
Accounts receivable, less allowance for doubtful accounts of $882 and $839, respectively			21,386				21,150
Dividends receivable			2,651				2,365
Inventories			1,611				1,981
Prepaid expenses			5,545				4,701
Deferred income taxes			2,115				2,101
Income tax receivable			3,420				3,489
Other			5,057				4,394
Total current assets			169,739				156,676
Property, equipment, land and leasehold improvements, net			334,094				335,119
Restricted cash			19,516				19,437
Equipment lease receivables			42,999				43,546
Investment in unconsolidated business			70,409				69,358
Investment, cost			35,716				35,295
Securities, available for sale			69,233				68,882
Related party subordinated loan			19,492				19,866
Goodwill			281,809				281,776
Intangible assets, net			296,041				299,487
Deposits and deferred costs on acquisitions			18,552				14,746
Deferred financing costs, net of accumulated amortization			12,168				12,830
Fair value of derivative instruments			14,478				4,660
Other			1,614				1,620
Total assets		$	1,385,860			$	1,363,298
Liabilities and stockholders’ equity
Current liabilities:
Due to manager		$	6,546			$	2,637
Accounts payable			15,634				11,535
Accrued expenses			12,382				13,994
Current portion of notes payable and capital leases			5,970				2,647
Current portion of long-term debt			146				146
Dividends payable			13,525				—
Other			3,501				3,639
Total current liabilities			57,704				34,598
Capital leases and notes payable, net of current portion			3,607				2,864
Long-term debt, net of current portion			610,811				610,848
Related party long-term debt			18,714				18,247
Deferred income taxes			112,940				113,794
Income tax liability			2,656				—

		March 31, 2006
		(unaudited)				December 31, 2005
		(restated)
Other			7,567				6,342
Total liabilities			813,999				786,693
Minority interests			8,883				8,940
Stockholders’ equity:
Trust stock, no par value; 500,000,000 authorized; 27,050,745 shares issued and outstanding at March 31, 2006 and December 31, 2005			569,497				583,023
Accumulated other comprehensive loss			(11,688	)			(12,966	)
Accumulated earnings (deficit)			5,169				(2,392	)
Total stockholders’ equity			562,978				567,665
Total liabilities and stockholders’ equity		$	1,385,860			$	1,363,298

See accompanying notes to the consolidated condensed financial statements.

MACQUARIE INFRASTRUCTURE COMPANY TRUST

CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

For the Quarters Ended March 31, 2006 and 2005

(Unaudited)

(in thousands, except share and per share data)

		Quarter Ended
		March 31, 2006				March 31, 2005
		(restated)				(restated)
Revenues
Revenue from fuel sales		$	41,992			$	30,241
Service revenue			42,904				34,152
Financing and equipment lease income			1,298				1,342
Total revenue			86,194				65,735
Costs and expenses
Cost of fuel sales			25,269				17,095
Cost of services			21,032				17,073
Selling, general and administrative expenses			23,950				19,345
Fees to manager			6,478				1,943
Depreciation expense			1,710				1,327
Amortization of intangibles			3,446				3,085
Total operating expenses			81,885				59,868
Operating income			4,309				5,867
Other income (expense)
Dividend income			2,651				—
Interest income			1,702				1,099
Interest expense			(15,663	)			(7,758	)
Equity in earnings and amortization charges of investee			2,453				1,653
Unrealized gain on derivative instruments			13,675				4,343
Other expense, net			(167	)			(915	)
Net income before income taxes and minority interests			8,960				4,289
Income tax expense			1,393				—
Net income before minority interests			7,567				4,289
Minority interests			6				51
Net income		$	7,561			$	4,238
Basic income per share:		$	0.28			$	0.16
Weighted average number of shares of trust stock outstanding: basic			27,050,745				26,610,100
Diluted income per share:		$	0.28			$	0.16
Weighted average number of shares of trust stock outstanding: diluted			27,066,618				26,617,744
Cash dividends declared per share		$	0.50			$	—

See accompanying notes to the consolidated condensed financial statements.

MACQUARIE INFRASTRUCTURE COMPANY TRUST

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS

For the Quarters Ended March 31, 2006 and 2005

(Unaudited)

($ in thousands)

		Quarter Ended
		March 31, 2006				March 31, 2005
		(restated)				(restated)
Operating activities
Net income		$	7,561			$	4,238
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment			3,998				3,221
Amortization of intangible assets			3,446				3,085
Loss on disposal of equipment			44				13
Equity in earnings and amortization charges of investee			(56	)			238
Amortization of finance charges			720				265
Noncash derivative gains, net of noncash interest expense			(9,453	)			(4,343	)
Accretion of asset retirement obligation			55				65
Deferred rent			583				605
Deferred revenue			92				110
Deferred taxes			(1,701	)			—
Minority interests			6				51
Noncash compensation			543				—
Post retirement obligations			29				(20	)
Other noncash income			(8	)			—
Accrued interest expense on subordinated debt – related party			249				259
Changes in operating assets and liabilities:
Restricted cash			(139	)			(13	)
Accounts receivable			(236	)			(1,130	)
Equipment lease receivable, net			436				306
Dividend receivable			(295	)			1,743
Inventories			371				451
Prepaid expenses and other current assets			330				407
Accounts payable and accrued expenses			(1,163	)			(1,726	)
Income taxes payable			2,720				—
Due to manager			3,909				1,924
Other			(220	)			11
Net cash provided by operating activities			11,821				9,760
Investing activities
Acquisition of businesses and investments, net of cash acquired			—				(49,594	)
Additional costs of acquisitions			(33	)			(68	)
Deposits and deferred costs on future acquisitions			(111	)			—
Collection on notes receivable			—				24
Purchases of property and equipment			(1,490	)			(879	)
Proceeds received on subordinated loan			611				686
Net cash used in investing activities			(1,023	)			(49,831	)
Financing activities
Proceeds from long-term debt			—				32,000
Proceeds from line-credit facility			1,275				—
Debt financing costs			(58	)			(1,674	)
Distributions paid to minority shareholders			(63	)			—
Payment of long-term debt			(37	)			(26	)
Offering costs			—				(1,833	)
Restricted cash			(79	)			(1,079	)
Payment of notes and capital lease obligations			(486	)			(349	)
Net cash provided by financing activities			552				27,039

		Quarter Ended
		March 31, 2006				March 31, 2005
		(restated)				(restated)
Effect of exchange rate changes on cash			(30	)			11
Net change in cash and cash equivalents			11,320				(13,021	)
Cash and cash equivalents, beginning of period			115,163				140,050
Cash and cash equivalents, end of period		$	126,483			$	127,029
Supplemental disclosures of cash flow information:
Noncash investing and financing activity:
Accrued purchases of property and equipment		$	241			$	—
Accrued deposits and deferred costs on acquisitions		$	3,695			$	—
Acquisition of property through capital leases		$	1,669			$	438
Income taxes paid		$	290			$	311
Interest paid		$	10,263			$	7,134

     See accompanying notes to the consolidated condensed financial statements.

MACQUARIE INFRASTRUCTURE COMPANY TRUST

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Description of Business

Macquarie Infrastructure Company Trust, or the Trust, a Delaware statutory trust, was formed on April 13, 2004. Macquarie Infrastructure Company LLC, or the Company, a Delaware limited liability company, was also formed on April 13, 2004. Prior to December 21, 2004, the Trust was a wholly-owned subsidiary of Macquarie Infrastructure Management (USA) Inc., or MIMUSA. MIMUSA is a subsidiary of the Macquarie Group of companies, which is comprised of Macquarie Bank Limited and its subsidiaries and affiliates worldwide. Macquarie Bank Limited is headquartered in Australia and is listed on the Australian Stock Exchange.

The Trust and the Company were formed to own, operate and invest in a diversified group of infrastructure businesses in the United States and other developed countries. In accordance with the Trust Agreement, the Trust is the sole holder of 100% of the LLC interests of the Company and, pursuant to the LLC Agreement, the Company will have outstanding the identical number of LLC interests as the number of outstanding shares of trust stock. The Company is the operating entity with a Board of Directors and other corporate governance responsibilities generally consistent with that of a Delaware corporation.

On December 21, 2004, the Trust and the Company completed an initial public offering, or IPO, and concurrent private placement, issuing a total of 26,610,000 shares of trust stock at a price of $25.00 per share. Total gross proceeds were $665.3 million, before offering costs and underwriting fees of $51.6 million. MIMUSA purchased two million shares ($50 million) of the total shares issued, through the private placement offering. The majority of the proceeds were used to acquire the Company’s initial infrastructure businesses and investments.

In December 2004, subsequent to the IPO, the Company purchased the following companies:

     (i) North America Capital Holding Company, or NACH — an airport service business that is an operator of 13 fixed-based operations, or FBOs, (including additional FBOs acquired during 2005) which provide fuel, de-icing, aircraft parking, hangar and other services. The FBOs are located in various locations in the United States and the corporate headquarters are in Plano, Texas.

     (ii) Macquarie Airports North America, Inc., or MANA — an airport service business that is an operator of five FBOs and one heliport which provides fuel, de-icing, aircraft parking and hangar services, airport management, and other aviation services. The FBOs are located in the northeast and southern regions of the United States and the corporate headquarters were formerly in Baltimore, Maryland. During 2005, MANA’s operations and management were integrated into NACH.

     (iii) Macquarie Americas Parking Corporation, or MAPC — an airport parking business that provides off-airport parking services as well as ground transportation to and from the parking facilities and the airport terminals. MAPC operates 31 off-airport parking facilities located at 20 airports (including facilities at airports from acquisitions during 2005) throughout the United States and maintains its headquarters in Downey, California.

     (iv) Macquarie District Energy Holdings, LLC, or MDEH — a business that provides district cooling to 98 customers in downtown Chicago, Illinois and provides district heating and cooling to a single customer outside of downtown Chicago and to the Aladdin Resort & Casino located in Las Vegas, Nevada. MDEH maintains its headquarters in Chicago, Illinois.

     (v) Macquarie Yorkshire Limited, or MYL — an entity that owns a 50% interest in a shadow toll road located in the United Kingdom, pursuant to a concession agreement with the U.K. government.

In December 2004, the Company also purchased an interest in Macquarie Communications Infrastructure Group, or MCG, an investment vehicle managed by a member of the Macquarie Group that operates an Australian broadcast transmission provider and a provider of broadcast transmission and site leasing infrastructure operated in the U.K. and the Republic of Ireland. The Company also purchased an indirect interest in South East Water, or SEW, a utility company that provides water to households and industrial customers in southeastern England.

During the year ended December 31, 2005, the Company’s major acquisitions were as follows:

     (i) On January 14, 2005, NACH acquired all of the membership interests in General Aviation Holdings, LLC, or GAH, an entity that operates two FBOs in California.

     (ii) On August 12, 2005, Macquarie FBO Holdings LLC, a wholly owned subsidiary of Macquarie Infrastructure Company Inc.,

or MIC Inc., acquired all of the membership interest in Eagle Aviation Resources, Ltd., or EAR, an FBO company doing business as Las Vegas Executive Air Terminal.

     (iii) On October 3, 2005, MAPC completed the acquisition of real property and personal and intangible assets related to six off-airport parking facilities (collectively referred to as “SunPark”).

The airport services, airport parking and district energy businesses are owned by the Company’s wholly-owned subsidiary, MIC Inc. The investments and the business that operates a toll road are owned by the Company through separate Delaware limited liability companies.

2. Basis of Presentation

The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States 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. Operating results for the quarter ended March 31, 2006 are not necessarily indicative of the results that may be expected for the year ending December 31, 2006.

The consolidated balance sheet at December 31, 2005 has been derived from audited financial statements but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.

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, 2005 included in the Company’s Annual Report on Form 10 K/A.

3. Significant Accounting Policy

     Derivative Instruments

The Company accounts for derivatives and hedging activities in accordance with FASB Statement No. 133, Accounting for Derivative Instruments and Certain Hedging Activities, as amended (SFAS 133), which requires that all derivative instruments be recorded on the balance sheet at their respective fair values.

For all derivatives eligible for hedge accounting, on the date a derivative contract is entered into, the Company designates the derivative as either a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair value hedge), a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge), or a foreign-currency fair-value or cash-flow hedge (foreign currency hedge). For all hedging relationships the Company formally documents the hedging relationship and its risk-management objective and strategy for undertaking the hedge, the hedging instrument, the item, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed, and a description of the method of measuring ineffectiveness. This process includes linking all derivatives that are designated as fair-value, cash-flow, or foreign-currency hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. Changes in the fair value of a derivative that is highly effective and that is designated and qualifies as a fair-value hedge, along with the loss or gain on the hedged asset or liability or unrecognized firm commitment of the hedged item that is attributable to the hedged risk, are recorded in earnings. Changes in the fair value of a derivative that is highly effective and that is designated and qualifies as a cash-flow hedge are recorded in other comprehensive income to the extent that the derivative is effective as a hedge, until earnings are affected by the variability in cash flows of the designated hedged item. Changes in the fair value of derivatives that are highly effective as hedges and that are designated and qualify as foreign-currency hedges are recorded in either earnings or other comprehensive income, depending on whether the hedge transaction is a fair-value hedge or a cash-flow hedge. The ineffective portion of the change in fair value of a derivative instrument that qualifies as either a fair-value hedge or a cash-flow hedge is reported in earnings.

The Company discontinues hedge accounting prospectively when it is determined that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative expires or is sold, terminated, or exercised, the derivative is no longer designated as a hedging instrument, because it is unlikely that a forecasted transaction will occur, a hedged firm commitment no longer meets the definition of a firm commitment, or management determines that designation of the derivative as a hedging instrument is no longer appropriate.

In all situations in which hedge accounting is discontinued or when the Company elects not to apply hedge accounting, the Company continues to carry the derivative at its fair value on the balance sheet and recognizes any subsequent changes in its fair value in earnings. When hedge accounting is discontinued because it is determined that the derivative no longer qualifies as an effective fair-value hedge, the Company no longer adjusts the hedged asset or liability for changes in fair value. The adjustment of the carrying amount of the hedged asset or liability is accounted for in the same manner as other components of the carrying amount of that asset or liability. When hedge accounting is discontinued because the hedged item no longer meets the definition of a firm commitment, the Company removes any asset or liability that was recorded pursuant to recognition of the firm commitment from the balance sheet, and recognizes any gain or loss in earnings. When hedge accounting is discontinued because it is probable that a forecasted transaction will not occur, the Company recognizes immediately in earnings gains and losses that were accumulated in other comprehensive income.

As discussed in Note 18, the Company’s derivatives did not qualify for hedge accounting for the quarters ended March 31, 2006 and March 31, 2005. Changes in the fair value of these derivatives are recorded as unrealized gains on derivative instruments in the consolidated income statement.

4. Earnings Per Share

Following is a reconciliation of the basic and diluted number of shares used in computing earnings per share:

		Quarter Ended				Quarter Ended
		March 31, 2006				March 31, 2005
Weighted average number of shares of trust stock outstanding: basic			27,050,745				26,610,100
Dilutive effect of restricted stock unit grants			15,873				7,644
Weighted average number of shares of trust stock outstanding: diluted			27,066,618				26,617,744

The effect of potentially dilutive shares is calculated by assuming that the restricted stock unit grants issued to our independent directors had been fully converted to shares on the date of vesting.

5. Pending Acquisitions

     The Gas Company

On August 17, 2005, the Company, through a wholly-owned subsidiary, entered into a joinder agreement with k1 Ventures Limited, K-1 HGC Investment, L.L.C. (together with k1 Ventures, the “K1 Parties”), and Macquarie Investment Holdings Inc., or MIHI and a related assignment agreement with MIHI. Under these agreements, the Company’s wholly owned subsidiary assumed all of MIHI’s rights and obligations as a Buyer under a purchase agreement between MIHI and the K1 Parties for no additional consideration other than providing MIHI with an indemnification for the liabilities, cost and expenses it has incurred as “Buyer” under the purchase agreement. The purchase agreement provides for the acquisition by the Buyer of, at the option of k1 Ventures, either 100% of the interests in HGC Investment or 100% of the membership interests of HGC Holdings, L.L.C.

HGC Investment owns a 99.9% non-managing membership interest in HGC Holdings, a Hawaii limited liability company, and has the right to acquire the remaining membership interest in HGC Holdings. HGC Holdings is the sole member of The Gas Company, L.L.C., a Hawaii limited liability company which owns and operates the sole regulated gas production and distribution business in Hawaii as well as a propane sales and distribution business in Hawaii.

The purchase agreement provides for the payment in cash of a base purchase price of $238 million (subject to working capital and capital expenditure adjustments) with no assumed interest-bearing debt. The Company currently expects working capital and capital expenditure adjustments to add approximately $12 million to the total purchase price. In addition to the purchase price, it is anticipated that approximately a further $9 million will be paid to cover transaction costs. The Company expects to finance the acquisition, including an initial up-front deposit of $12.2 million, with $160 million of future subsidiary level debt and the remainder from the revolving debt facility or other sources of available cash.

On May 3, 2006, we received approval from the Hawaii Public Utilities Commission for the purchase of The Gas Company, or TGC. We are making an additional deposit of $12.2 million in May and, subject to customary closing conditions, expect the transaction to close by the end of the second quarter of 2006.

Macquarie Securities (USA) Inc., or MSUSA, is acting as financial advisor to the Company on the transaction, including the debt financing and hedging strategy arrangements, for which we expect to pay fees of approximately $4.8 million. As at March 31, 2006, $403,000 of these fees were payable in connection with the transaction and are included in accounts payable in the accompanying consolidated condensed balance sheet. MIHI and MSUSA are both wholly owned indirect subsidiaries of Macquarie Bank Limited, the parent company of the Company’s Manager.

6. Property, Equipment, Land and Leasehold Improvements

Property, equipment, land and leasehold improvements consist of the following (in thousands):

		March 31, 2006				December 31,
		(unaudited)				2005
Land		$	62,520			$	62,520
Easements			5,624				5,624
Buildings			32,961				32,866
Leasehold and land improvements			109,055				108,726
Machinery and equipment			134,070				132,196
Furniture and fixtures			1,998				1,920
Construction in progress			3,831				3,486
Property held for future use			1,233				1,196
Other			933				764
			352,225				349,298
Less: Accumulated depreciation			(18,131	)			(14,179	)
Property, equipment, land and leasehold improvements, net		$	334,094			$	335,119

7. Intangible Assets

Intangible assets consist of the following (in thousands):

		Weighted Average				March 31, 2006
		Life (Years)				(unaudited)				December 31, 2005
Contractual arrangements			32.0			$	237,572			$	237,572
Non-compete agreements			2.8				4,835				4,835
Customer relationships			9.8				26,640				26,640
Leasehold rights			13.3				8,259				8,259
Trade names		Indefinite(1)					26,175				26,175
Domain names		Indefinite(1)					8,307				8,307
Technology			5.0				460				460
							312,248				312,248
Less: Accumulated amortization							(16,207	)			(12,761	)
Intangible assets, net						$	296,041			$	299,487

(1) Trade names of $500,000 and domain names of $320,000 are being amortized over a period of 1.5 years and 4 years, respectively.

Amortization expense for the quarter ended March 31, 2006 totaled $3.4 million.

8. Long-Term Debt

The Company capitalizes its operating businesses separately using non-recourse, project finance style debt. At March 31, 2006, the Company had no indebtedness outstanding at the MIC LLC, Trust or MIC Inc. level. On April 28, 2006, MIC Inc. borrowed $175 million under its revolving credit facility to finance the acquisition of a 50% interest in IMTT Holdings, Inc. as discussed below in Note 17 to the financial statements.

Long-term debt consisted of the following (in thousands):

		March 31, 2006
		(unaudited)				December 31, 2005
MDE senior notes (1)		$	120,000			$	120,000
Airport services debt (2)			300,000				300,000
MAPC loan payable			125,448				125,448
MAPC loan payable			4,548				4,574
PCAA SP loan payable			58,740				58,740
Priority loan payable			2,221				2,232
			610,957				610,994
Less: current portion			146				146
Long-term portion		$	610,811			$	610,848

9. Derivative Instruments and Hedging Activities

The Company has interest-rate related and foreign-exchange related derivative instruments to manage its interest rate exposure on its debt instruments, and to manage its exchange rate exposure on its future cash flows from its non-U.S. investments. In addition, the Company used foreign exchange option contracts to acquire its stake in MYL and its investment in SEW. The Company does not enter into derivative instruments for any purpose other than interest rate hedging or cash-flow hedging purposes. That is, the Company does not speculate using derivative instruments.

By using derivative financial instruments to hedge exposures to changes in interest rates and foreign exchange rates, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is negative, the Company owes the counterparty and, therefore, it does not possess credit risk. The Company minimizes the credit risk in derivative instruments by entering into transactions with high-quality counterparties.

Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates or currency exchange rates. The market risk associated with interest rate is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

     Anticipated future cash flows

The Company entered into foreign exchange forward contracts for its anticipated cash flows in order to hedge the market risk associated with fluctuations in foreign exchange rates. The forward contracts limit the unfavorable effect that foreign exchange rate changes will have on cash flows. All of the Company’s forward contracts relating to anticipated future cash flows were initially designated as cash flow hedges. The maximum term over which the Company is currently hedging exposures relating to the variability of foreign exchange rates is 24 months.

Changes in the fair value of forward contracts designated as cash flow hedges that effectively offset the variability of cash flows associated with anticipated distributions are reported in other comprehensive income. These amounts subsequently are reclassified into other income or expense when the contract is expired or executed. Changes in the fair value of forward contracts not eligible for hedge accounting are reported in other income (loss) on the consolidated statement of income. In accordance with SFAS 133, the Company concluded that all of its foreign exchange forward contracts did not qualify as cash flow hedges, as further discussed in Note 18.

     Debt Obligations

The Company has in place variable-rate debt. The debt obligations expose the Company to variability in interest payments due to changes in interest rates. Management believes that it is prudent to limit the variability of a portion of its interest payments. To meet this objective, management enters into interest rate swap agreements to manage fluctuations in cash flows resulting from interest rate risk. These 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 interest rate payments and makes fixed interest rate payments, thereby creating the equivalent of fixed-rate debt for the portion of the debt that is swapped.

Changes in the fair value of interest rate swaps designated as hedging instruments that effectively offset the variability of cash flows associated with variable-rate, long-term debt obligations are reported in other comprehensive income. These amounts subsequently are reclassified into interest expense as a yield adjustment of the hedged interest payments in the same period in which the related interest affects earnings. Changes in the fair value of interest rate swaps not eligible for hedge accounting are reported in other income (loss) on the consolidated statement of income. In accordance with SFAS 133, the Company concluded that all of its interest rate swaps did not qualify as cash flow hedges, as further discussed in Note 18. The Company anticipates the interest rate swaps qualifying as hedges to be effective in the first quarter of 2007. The term over which the Company is currently hedging exposures relating to debt is through August 2013.

10. Comprehensive Income (Loss)

The Company follows the requirements of FASB Statement No. 130, Reporting Comprehensive Income, for the reporting and display of comprehensive income and its components. FASB Statement No. 130 requires unrealized gains or losses on the Company’s available for sale securities, foreign currency translation adjustments and change in fair value of derivatives accounted for as hedges to be included in other comprehensive (loss) income.

Total comprehensive income for the quarter ended March 31, 2006 was $8.8 million. The difference between net income of $7.6 million for the quarter ended March 31, 2006 and comprehensive income is primarily attributable to an unrealized gain on marketable securities of $2 million, offset by foreign currency translation adjustments of $265,000 and an adjustment relating to the fair value of interest rate swaps of $469,000. These amounts are included in the accumulated other comprehensive loss on the Company’s consolidated condensed balance sheet as of March 31, 2006.

11. Stockholders’ Equity

The Trust is authorized to issue 500,000,000 shares of trust stock, and the Company is authorized to issue a corresponding number of LLC interests. Unless the Trust is dissolved, it must remain the sole holder of 100% of the Company’s LLC interests and, at all times, the Company will have the identical number of LLC interests outstanding as shares of trust stock. Each share of trust stock represents an undivided beneficial interest in the Trust, and each share of trust stock corresponds to one underlying LLC interest in the Company. Each outstanding share of the trust stock is entitled to one vote for each share on any matter with respect to which members of the Company are entitled to vote.

12. Reportable Segments

The Company’s operations are classified into three reportable business segments: airport services business, airport parking business, and district energy business. All of the business segments are managed separately. During the prior year, the airport services business consisted of two reportable segments, Atlantic and AvPorts. These businesses are currently managed together. Therefore, they are now combined into a single reportable segment. Results for prior periods have been aggregated to reflect the new combined segment.

The airport services business reportable segment principally derives income from fuel sales and from airport services. Airport services revenue includes fuel related services, de-icing, aircraft parking, airport management and other aviation services. All of the revenue of the airport services business is derived in the United States. The airport services business operated 18 FBOs and one

heliport and managed six airports under management contracts as of March 31, 2006.

The revenue from the airport parking business reportable segment is included in service revenue and primarily consists of fees from off-airport parking and ground transportation to and from the parking facilities and the airport terminals. At March 31, 2006, the airport parking business operated 31 off-airport parking facilities located in California, Arizona, Colorado, Texas, Georgia, Tennessee, Missouri, Pennsylvania, Connecticut, New York, New Jersey, Ohio, Oklahoma and Illinois.

The revenue from the district energy business reportable segment is included in service revenue and financing and equipment lease income. Included in service revenue is capacity charge revenue, which relates to monthly fixed contract charges, and consumption revenue, which relates to contractual rates applied to actual usage. Financing and equipment lease income relates to direct financing lease transactions and equipment leases to the Company’s various customers. The Company provides such services to buildings throughout the downtown Chicago area and to the Aladdin Resort and Casino and shopping mall located in Las Vegas, Nevada.

Selected information by reportable segment is presented in the following tables (in thousands):

Revenue from external customers for the Company’s segments for the quarter ended March 31, 2006 are as follows:

		Airport Services				Airport Parking				District Energy				Total
Revenue from Product Sales
Fuel sales		$	41,992			$	—			$	—			$	41,992
			41,992				—				—				41,992
Service Revenue
Other services			18,179				—				845				19,024
Cooling capacity revenue			—				—				4,189				4,189
Cooling consumption revenue			—				—				1,475				1,475
Parking services			—				18,216				—				18,216
			18,179				18,216				6,509				42,904
Financing and Lease Income
Financing and equipment lease			—				—				1,298				1,298
			—				—				1,298				1,298
Total Revenue		$	60,171			$	18,216			$	7,807			$	86,194

Financial data by reportable business segments are as follows (in thousands):

		Quarter Ended March 31, 2006																At March 31, 2006
		(unaudited)																(unaudited)
		(restated)																Property,
																		Equipment, Land
		Segment				Interest				Depreciation/				Capital				and Leasehold				Total
		Profit (1)				Expense				Amortization(2)				Expenditures				Improvements				Assets
Airport services		$	32,570			$	9,020			$	4,413			$	550			$	91,739			$	553,019
Airport parking			4,781				3,901				1,271				447				96,074				290,419
District energy			2,542				2,145				1,760				493				146,281				240,879
Total		$	39,893			$	15,066			$	7,444			$	1,490			$	334,094			$	1,084,317

The above table does not include financial data for our equity and cost investments.

Reconciliation of total reportable segment assets to total consolidated assets at March 31, 2006 (in thousands):

Total assets of reportable segments		$	1,084,317
Equity and cost investments:
Investment in Yorkshire Link			70,409
Investment in SEW			35,716
Investment in MCG			69,233
Corporate and other			381,256
Less: Consolidation entries			(255,071	)
Total consolidated assets		$	1,385,860

Reconciliation of total reportable segment profit (as restated) to total consolidated income before income taxes and minority interests for the quarter ended March 31, 2006 (in thousands):

Total reportable segment profit		$	39,893
Selling, general and administrative expenses			(23,950	)
Fees to manager			(6,478	)
Depreciation and amortization (1)			(5,156	)
			4,309
Unrealized gains on derivative instruments			13,675
Other expense, net			(9,024	)
Total consolidated income before income taxes and minority interests		$	8,960

Revenue from external customers for the Company’s segments for the quarter ended March 31, 2005 are as follows (in thousands):

		Airport Services				Airport Parking				District Energy				Total
Revenue from Product Sales
Fuel sales		$	30,241			$	—			$	—			$	30,241
			30,241				—				—				30,241
Service Revenue
Other services			14,703				—				643				15,346
Cooling capacity revenue			—				—				4,059				4,059
Cooling consumption revenue			—				—				1,438				1,438
Parking services			—				13,309				—				13,309
			14,703				13,309				6,140				34,152
Financing and Lease Income
Financing and equipment lease			—				—				1,342				1,342
			—				—				1,342				1,342
Total Revenue		$	44,944			$	13,309			$	7,482			$	65,735

Financial data by reportable business segments are as follows (in thousands):

		Quarter Ended March 31, 2005																At March 31, 2005
		(unaudited)																(unaudited)
		(restated)																Property,
																		Equipment, Land
		Segment				Interest				Depreciation/				Capital				and Leasehold				Total
		Profit (1)				Expense				Amortization(2)				Expenditures				Improvements				Assets
Airport services		$	25,705			$	3,467			$	3,466			$	597			$	77,993			$	468,996
Airport parking			3,203				2,126				1,112				31				66,970				205,494
District energy			2,659				2,194				1,728				251				150,543				252,718
Total		$	31,567			$	7,787			$	6,306			$	879			$	295,506			$	927,208

The above table does not include financial data for our equity and cost investments.

Reconciliation of total reportable segment assets to total consolidated assets at March 31, 2005 (in thousands):

Total assets of reportable segments		$	927,208
Equity and cost investments:
Investment in Yorkshire Link			76,978
Investment in SEW			38,786
Investment in MCG			72,130
Corporate and other			366,783
Less: Consolidation entries			(238,277	)
Total consolidated assets		$	1,243,608

Reconciliation of total reportable segment profit (as restated) to total consolidated income before income taxes and minority interests for the quarter ended March 31, 2005 (in thousands):

Total reportable segment profit		$	31,567
Selling, general and administrative expenses			(19,345	)
Fees to manager			(1,943	)
Depreciation and amortization (1)			(4,412	)
			5,867
Unrealized gain on derivative instruments			4,343
Other expense, net			(5,921	)
Total consolidated income before income taxes and minority interests		$	4,289

13. Related Party Transactions

Management Services Agreement with Macquarie Infrastructure Management (USA) Inc., or MIMUSA

MIMUSA acquired 2,000,000 shares of company stock concurrently with the closing of the initial public offering in December 2004, with an aggregate purchase price of $50 million, at a purchase price per share equal to the initial public offering price of $25. Pursuant to the terms of the Management Agreement (discussed below), MIMUSA may sell up to 65% of these shares at any time and may sell the balance at any time from and after December 21, 2007 (the third anniversary of the IPO closing).

The Company entered into a management services agreement, or Management Agreement, with MIMUSA dated December 21, 2004 pursuant to which MIMUSA manages the Company’s day-to-day operations and oversees the management teams of the Company’s operating businesses. In addition, MIMUSA has seconded a Chief Executive Officer and a Chief Financial Officer to the Company and makes other personnel available as required.

In accordance with the Management Agreement, MIMUSA is entitled to a quarterly base management fee based primarily on the Trust’s market capitalization and a performance fee, as defined, based on the performance of the trust stock relative to a weighted average of two benchmark indices, a U.S. utilities index and a European utilities index, weighted in proportion to the Company’s equity investments. For the quarter ended March 31, 2006, base management fees of $2.3 million and performance fees of $4.1 million were payable to MIMUSA and are included as due to manager in the accompanying consolidated condensed balance sheet at March 31, 2006. MIMUSA has elected to reinvest these performance fees in shares of trust stock, which are expected to be issued no earlier than the end of June at a price determined over a 15 trading day period in June 2006.

MIMUSA is not entitled to any other compensation and all costs incurred by MIMUSA including compensation of seconded staff, are paid out of its 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 and investments, income taxes, audit and legal fees, and acquisitions and dispositions and its compliance with applicable laws and regulations. During the quarter ended March 31, 2006, MIMUSA charged the Company $68,000 for reimbursement of out of pocket expenses.

Advisory and Other Services from the Macquarie Group and its Affiliates

MSUSA has been engaged by the Company and its subsidiaries in connection with various on-going transactions for which no fees had been paid as of March 31, 2006. Fees payable to the Macquarie Group for pending acquisitions have been disclosed in Note 5. Fees paid to the Macquarie Group subsequent to March 31, 2006, have been disclosed in Note 17.

The Company and its airport services and airport parking businesses pay fees for employee consulting services to the Detroit and Canada Tunnel Corporation, which is owned by an entity managed by the Macquarie Group. Fees paid for the quarter ended March 31, 2006 were $13,000.

During the quarter ended March 31, 2006, Macquarie Bank Limited charged the Company $27,000 for reimbursement of out of pocket expenses, in relation to work performed on various advisory roles for the Company.

Related Party Loans

Macquarie Bank Limited has extended a loan to a subsidiary within our group. Details on this loan are disclosed in Note 8.

Derivative Instruments and Hedging Activities

The Company, through its limited liability subsidiaries, has entered into foreign-exchange related derivative instruments with Macquarie Bank Limited to manage its exchange rate exposure on its future cash flows from its non-US investments.

As of March 31, 2006, South East Water LLC and Macquarie Yorkshire LLC each had two forward contracts with Macquarie Bank Limited.

On August 18, 2005, MIC Inc. entered into two interest rate swaps with Macquarie Bank Limited to manage its future interest rate exposure. The effective date of the swaps are August 31, 2006 and no payments or receipts have arisen in relation to these swaps, during the quarter ended March 31, 2006.

14. Income Taxes

Macquarie Infrastructure Company Trust is classified as a grantor trust for U.S. federal income tax purposes, and therefore is not subject to income taxes. The Company is treated as a partnership for U.S. federal income tax purposes and is also not subject to income taxes. MIC Inc. and its wholly-owned subsidiaries are subject to income taxes.

Consolidated pre-tax income for the quarter ended March 31, 2006 was $9 million. Macquarie Infrastructure Company LLC accounted for $4.1 million of total pre-tax income. As a partnership for U.S. federal income tax purposes, this income is not subject to income taxes.

The remaining $4.9 million of pre-tax income was generated by MIC Inc. and its subsidiaries and is subject to income taxes. The Company records its income taxes in accordance with SFAS 109 “Accounting for Income Taxes.”

The Company expects to incur a net operating loss for federal consolidated return purposes, as well as certain states that provide for consolidated returns, for the year ended December 31, 2006. The Company believes that it will be able to utilize the projected federal and state consolidated 2006 and prior year losses. Accordingly, the Company has not provided a valuation allowance against any deferred tax assets generated in 2006. However, the Company has subsidiaries that expect to generate taxable income for the year ended December 31, 2006, on a separate company basis. As such, a net current state tax provision of approximately $649,000 has been recorded for separate company state taxes, on a separate company pre-tax income of $6.4 million for the quarter ended March 31, 2006.

For the 2006 year, the Company projects a net loss before taxes at the MIC Inc. level for which it expects to record an income tax benefit. The Company also projects deriving net income before taxes outside MIC Inc. that will not be subject to income tax payable by the Company. This income derived from outside MIC Inc. is projected to be mostly offset by the pre-tax loss at the MIC Inc. level, resulting in projected pre-tax income on a consolidated basis.

15. Legal Proceedings and Contingencies

Refer to the legal proceedings described in our Annual Report on Form 10-K/A, as filed on October 16, 2006, for the year ended December 31, 2005. There were no material changes during the quarter ended March 31, 2006.

16. Dividends

The Company’s board of directors declared dividends of $0.50 per share per quarter during 2005 and an additional dividend of $0.0877 per share for the period ended December 31, 2004. These dividends were all paid in 2005 except the dividend for the quarter ended December 31, 2005, which was declared on March 14, 2006 and was paid on April 10, 2006 to holders of record on April 5, 2006. The dividends declared on March 14, 2006 have been recorded as a reduction to trust stock in the stockholders’ equity section of the accompanying consolidated condensed balance sheet at March 31, 2006.

17. Subsequent Events

Dividends

On May 4, 2006 our board of directors declared a dividend of $0.50 per share for the quarter ended March 31, 2006, payable on June 9, 2006 to holders of record on June 5, 2006.

Acquisitions

     International-Matex Tank Terminals

On May 1, 2006, the Company, through a wholly-owned subsidiary, completed its purchase of newly issued common stock of IMTT Holdings, Inc. formerly known as Loving Enterprises, Inc., pursuant to a Stock Subscription Agreement, or SSA, with IMTT Holdings and the Current Shareholders of IMTT Holdings for a purchase price of $250 million plus approximately $7 million in transaction related costs. As a result of the closing of the transaction, the Company owns 50% of IMTT Holdings' issued and outstanding common stock. The Current Shareholders continue to own the balance of the common stock of IMTT Holdings.

IMTT Holdings is the ultimate holding company for a group of companies and partnerships that own International-Matex Tank Terminals, or IMTT. IMTT is the owner and operator of 8 bulk liquid storage terminals in the United States and the part owner and operator of 2 bulk liquid storage terminals in Canada. IMTT is one of the largest companies in the bulk liquid storage terminal industry in the US, based on capacity.

IMTT Holdings distributed $100 million of the proceeds from the stock issuance to the Current Shareholders as a dividend. The remaining $150 million, less approximately $5 million that will be used to pay fees and expenses incurred by IMTT in connection with the transaction, will be used ultimately to finance additional investment in existing and new facilities.

The Company financed the investment and the associated transaction costs with $75 million of available cash and $175 million of borrowings under the revolving acquisition facility of Macquarie Infrastructure Company Inc., or MIC Inc. as discussed below. MIC Inc. is a wholly owned subsidiary of the Company and the holding company for its businesses and investments in the US.

MIC expects the acquisition to be immediately yield accretive, inclusive of current yield, management fees and estimated cost of

equity issuance if any.

MSUSA acted as financial advisor to the Company on the transaction for which it received fees in May 2006 totaling $4 million. Total fees to MSUSA (including unpaid amounts) are estimated to be $4.4 million.

     Trajen

On April 18, 2006, the Company, through its wholly-owned subsidiary, Macquarie FBO Holdings LLC, or MFBO, entered into a purchase and sale agreement with Trajen Holdings, Inc., or Trajen, and its security holders (named below) for the purchase of 100% of the shares of Trajen Holdings, Inc. Trajen is the holding company for a group of companies, limited liability companies and limited partnerships that own and operate 21 FBOs at airports in 11 states. In addition, Trajen is in the process of acquiring 2 additional FBOs that are expected to be a part of the Company’s acquisition.

The purchase and sale agreement provides for a purchase price payment of $331.1 million for 22 FBOs, subject to certain working capital and capital expenditure adjustments, with the closing of the 22nd FBO by Trajen being a condition to closing. The Company expects that Trajen will purchase the 23rd FBO for approximately $7 million, including estimated working capital adjustments, which may increase or decrease the purchase price paid by the Company to the extent that Trajen is able to conclude its prior acquisition of that FBO.

The Company expects to incur costs in addition to the purchase price, including transaction costs of $11.4 million (including fees to related parties outlined in this section), integration costs of $3 million, pre-funded capital expenditures of $1.8 million and an increase in its debt service reserve of $6.3 million for a total outlay of $360.6 million. Trajen owns two businesses, Trajen Systems and Department of Defense Services, providers of logistical and technical services to government agencies that will be retained by the sellers of Trajen. The results of the business will be reported as components of the Company’s airport services business segment.

The Company expects to ultimately close the transaction through NACH. The Company expects to finance the purchase price and the associated transaction and other costs, in part, with $180 million of additional term loan borrowings under an expansion of the credit facility at NACH and the remainder with additional borrowings to be made available under an amendment to the revolving acquisition facility of MIC Inc. The additional borrowing commitments have been provided by Merrill Lynch Capital Corporation, Citigroup Global Markets Inc. and Credit Suisse, Cayman Islands Branch, each as described below.

Subject to the satisfaction of the conditions precedent incorporated in the purchase and sale agreement, the Company expects to close the transaction in the third quarter of 2006. If consummated, the Company expects that the acquisition will be immediately yield accretive, inclusive of current yield, management fees and estimated cost of equity issuance if any.

MSUSA is acting as financial advisor to the Company on the transaction, as well as on the financing of the transaction. To date, $350,000 in fees are payable in connection with the transaction and we expect to pay total fees of approximately $6.1 million.

     Acquisition Financing Facility

MIC Inc. has amended its revolving acquisition facility to increase the revolving portion of the facility to $50 million for a total of $300 million and to provide for a term loan of $180 million to finance the Trajen acquisition, increasing the total amount of borrowings available under this facility to $480 million. Amounts borrowed and repaid under the term loan portion of this facility may not be reborrowed. The interest margin under the facility is LIBOR plus 2.00% or the base rate plus 1.00%, increasing by 0.50% in six month and again in 12 months, up to a maximum of 3.00% and 2.00%, respectively. The current margin on outstanding borrowings is LIBOR plus 2%. Once the term loan borrowings have been repaid in full, or the term loan commitments otherwise terminated, the interest rate on the amended acquisition facility will decrease to LIBOR plus 1.25% or the base rate plus 0.25%. The amended acquisition facility requires an annual commitment fee equal to 20% of the applicable LIBOR margin on the average daily undrawn balance (initially 0.40%). The amended acquisition facility also includes the following additional covenants and restrictions:

	•		a restriction on incurring additional debt at the MIC or MIC Inc. level prior to term loan repayment or termination of commitments; and
	•		an increase in the maximum leverage ratio to 6.8x through the end of 2006, declining to 6.1x through March 31, 2008, returning to 5.6x upon term loan repayment or termination of commitments; and
	•		any amounts drawn under the facility to finance the Trajen acquisition in excess of the $180 million term loan will reduce amounts available under the facility for working capital purposes.

All other material terms in the existing revolving acquisition facility will remain unchanged, including the interest coverage ratio covenant. The MIC Inc. acquisition facility will continue to be secured solely by the direct subsidiaries of the Company and MIC Inc.

It is anticipated that all funds borrowed under the amended acquisition facility will be repaid from the proceeds of a subsequent public offering of trust stock. The Company expects to repay all of the outstanding borrowings under this facility with the proceeds from an equity capital raising to be concluded at management’s discretion, depending on prevailing market conditions, at any time prior to the maturity of the debt at March 31, 2008.

MSUSA is acting as financial advisor to the Company in connection with the increase in the facility for which we expect to pay fees of approximately $575,000. Macquarie Bank Limited, one of the lenders under this facility received fees of $250,000 in connection with the increase in the facility.

     Trajen Senior Debt Financing

MIC Inc. has also received commitment letters from Mizuho Corporate Bank, Ltd., The Governor and Company of Bank of Ireland, Bayerische Landesbank, New York Branch and Macquarie Bank Limited providing for a $180 million expansion of the NACH debt facility to finance the acquisition. Macquarie Bank Limited is expected to provide up to $40 million of the $180 million in additional term loan borrowing, for which we expect to pay approximately $440,000 in financing fees. The term loan facility, currently $300 million due in December 2010, will be increased to $480 million on terms that are substantially similar to those in place on the existing term loan facility, with the following exceptions: the trailing 12 month minimum earnings before interest, taxes, depreciation and amortization, or EBITDA, will increase to $66.9 million in 2006, $71.9 million in 2007 and $77.5 million in 2008 and we will be required to hedge 100% of our interest rate exposure under this facility. The NACH credit facility will continue to be secured by all of the assets and stock of NACH and its subsidiaries, including Trajen and its subsidiaries following the closing. We have entered into a forward starting interest rate swap with the following terms:

Notional Principal Amount:		$180 million
Effective Date:		December 31, 2006
Termination Date:		December 12, 2010
Fixed Rate:		5.495%

Macquarie Bank Limited is the counterparty to the interest rate swap.

18. Restatement Relating to Derivative Hedge Accounting

Restatement

During the third quarter of 2006, we, in consultation with our external auditors, discovered that our application of, and documentation related to, the “short-cut” and “critical terms match” methods under SFAS 133 for certain of our derivative instruments was incorrect.

Following our discovery of these errors, our Audit Committee determined that we would amend and restate previously issued unaudited financial statements and other financial information for the quarters ended March 31, 2006 and June 30, 2006 for certain derivative instruments that did not qualify for hedge accounting during those periods and that the originally filed financial statements and other financial information should not be relied upon. As a result, we announced on September 14, 2006 our intent to amend and restate our financial statements and other financial information for the quarters ended March 31, 2006 and June 30, 2006 with respect to the accounting for these derivative instruments. We also initiated a comprehensive review of all of our determinations and documentation related to hedge accounting for our derivative instruments, as well as our related processes and procedures.

As a result of that review, management determined that none of our interest rate and foreign exchange derivative instruments met the criteria required for use of either the “short-cut” or “critical terms match” methods of hedge accounting for all periods from April 13, 2004 (inception) through June 30, 2006. We are not permitted to retroactively apply an appropriate method of qualifying for hedge accounting treatment and, as a result, the non-cash changes in the fair value of these derivative instruments are required to be recorded in other income in the income statement rather than in accumulated other comprehensive income in the balance sheet.

The change in the accounting treatment for these derivatives is reflected as a non-cash gain in other income under unrealized gain on derivative instruments. The effect of the restatement on our consolidated balance sheet at March 31, 2006 and March 31, 2005 is immaterial and the restatement has no net effect on our operating income, cash from operations in our consolidated statements of cash flows for the quarter ended March 31, 2006 and March 31, 2005.

The impact on our consolidated financial results of reporting the change in the fair value of the swaps has resulted in an aggregate increase in our net income of $8.9 million, year to date through March 31, 2006. The change to the first quarter ended March 31, 2006 and March 31, 2005 is as follows:

		Quarter Ended March 31, 2006								Quarter Ended March 31, 2005
		As Reported				As Restated **				As Reported				As Restated
		In thousands, except per share data
Operating income		$	4,309			$	4,309			$	5,867			$	5,867
Other income (expense) *			(5,647	)			3,252				(5,950	)			(1,629	)
Net income (loss)			(1,338	)			7,561				(83	)			4,238
Net income (loss) per share, basic and diluted		$	(0.049	)		$	.28			$	(0.003	)		$	.16

The impact on the financial results of our business segments of reporting the change in the fair value of the swaps is as follows:

		Quarter Ended March 31, 2006								Quarter Ended March 31, 2005
		As Reported				As Restated **				As Reported				As Restated
						In thousands
Airport Services Business
Operating income		$	9,459			$	9,459			$	6,874			$	6,874
Other expense *			(7,214	)			(4,907	)			(5,493	)			(1,576	)
Net income			2,245				4,552				1,381				5,298
Airport Parking Business
Operating income			2,675				2,675				1,639				1,639
Other expense *			(3,346	)			(2,967	)			(2,051	)			(1,903	)
Net (loss)			(671	)			(292	)			(412	)			(264	)

The differences between the changes to our business segments and our consolidated results is primarily attributable to the lower effective tax rate applicable to our consolidated results.

In light of the restatement, readers should no longer rely on our previously filed unaudited financial statements and other financial information for the quarters ended March 31, 2006 and March 31, 2005.

We intend to apply an appropriate method of effectiveness testing for our interest rate derivatives during the first quarter of 2007 and expect that these instruments will qualify for hedge accounting from that time.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain financial information within this section has been restated as detailed in Note 18 to our unaudited consolidated financial statements included herein.

The following discussion of the financial condition and results of operations of the company should be read in conjunction with the consolidated condensed financial statements and the notes to those statements included elsewhere herein. This discussion contains forward looking statements that involve risks and uncertainties and are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and similar expressions identify such forward-looking statements. Our actual results and timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K/A, as filed on October 16, 2006, for the fiscal year ended December 31, 2005. Unless required by law, we can undertake no obligation to update forward-looking statements. Readers should also carefully review the risk factors set forth in other reports and documents filed from time to time with the SEC.

Except as otherwise specified, “Macquarie Infrastructure Company,” “we,” “us,” and “our” refer to both the Trust and the Company and its subsidiaries together. Macquarie Infrastructure Management (USA) Inc., which we refer to as our Manager or MIMUSA, is part of the Macquarie group of companies, which we refer to as the Macquarie Group, which comprises Macquarie Bank Limited and its subsidiaries and affiliates worldwide. Macquarie Bank Limited is headquartered in Australia and is listed on the Australian Stock Exchange.

GENERAL

We own, operate and invest in a diversified group of infrastructure businesses, which are businesses that provide basic, everyday services, such as parking, roads and water, through long-life physical assets. These infrastructure businesses generally operate in sectors with limited competition and high barriers to entry. As a result, they have sustainable and growing long-term cash flows. We operate and finance our businesses in a manner that maximizes these cash flows.

We are dependent upon cash distributions from our businesses and investments to meet our corporate overhead and management fee expenses and to pay dividends. We receive dividends from our airport services business, airport parking business and district energy business through our directly owned holding company Macquarie Infrastructure Company Inc., or MIC Inc., for all of our businesses based in the United States. We receive interest and principal on our subordinated loans to, and dividends from, our toll road business

and dividends from our investments in Macquarie Communications Infrastructure Group, or MCG, and South East Water, or SEW, through directly owned holding companies that we have formed to hold our interest in each business and investment.

Distributions received from our businesses and investments net of taxes, are available first to meet management fees and corporate overhead expenses then to fund dividend payments by the Company to the Trust for payment to holders of trust stock. Base and performance management fees payable to our Manager are allocated between the Company and the directly owned subsidiaries based on the Company’s internal allocation policy.

The Company’s board of directors declared dividends of $0.50 per share per quarter during 2005 and an additional dividend of $0.0877 per share for the period ended December 31, 2004. These dividends were all paid in 2005 except the dividend for the quarter ended December 31, 2005, which was declared on March 14, 2006 and was paid on April 10, 2006 to holders of record on April 5, 2006.

On May 4, 2006, the Company’s board of directors declared a dividend of $0.50 per share for the quarter ended March 31, 2006 payable on June 9, 2006 to holders of record on June 5, 2006.

As a result of our discovery of errors in the accounting treatment of our derivative instruments, we have determined that we will not use hedge accounting through the remainder of 2006. Therefore, changes in the fair value of these instruments will be recorded as a pre-tax non-cash gain or loss in our income statement and will result in a corresponding after-tax increase or decrease in net income and EBITDA. For the third quarter of 2006, including all segments except for our district energy business, we expect to record a pre-tax loss in the fair value of derivatives in the range of $18 million to $20 million on a consolidated basis.

Tax Treatment of Distributions

We currently estimate that in 2006, none of our distributions to the holders of our trust stock from our wholly-owned subsidiary, MIC Inc. are likely to be treated as dividend income for US federal income tax purposes, but rather as a return of capital. Distributions to holders of our trust stock that are treated as return of capital for US federal income tax purposes are generally not taxable in the hands of holders to the extent that the total amount of such distributions received does not exceed the holders’ tax basis in the trust stock. Instead such distributions that are not in excess of the holders’ tax basis in the trust stock will reduce such holders’ tax basis in the trust stock resulting in more capital gain or less capital loss upon ultimate disposal of the trust stock. We currently estimate that distributions from MIC Inc., net of allocated expenses, will be between $35 million and $40 million in 2006, representing from 61% to 70% of the total distributions expected to be received by the company from our businesses and investments in calendar year 2006. In our 2005 tax year, our distributions from our investment in SEW were not deemed to qualify for the reduced rates applicable to qualified dividend income. We have since restructured our investment such that distributions expected to be received in 2006, amounting to approximately $5.9 million, will qualify for the lower rates applicable to qualified dividend income.

Beyond 2006, the portion of our distributions that will be treated as dividends or return of capital for US federal income tax purposes is subject to a number of uncertainties. We currently anticipate that substantially all of the portion of our regular distributions that are treated as dividends for US federal income tax purposes should be characterized as qualified dividend income.

Recent and Pending Acquisitions

See Note 5, Pending Acquisitions and Note 17, Subsequent Events, to the consolidated condensed financial statements in Part I, Item I of this Form 10-Q/A for further information on recent and pending acquisitions and the financing related to these acquisitions which is incorporated herein by reference.

On May 1, 2006, we completed the purchase of newly issued common stock of IMTT Holdings Inc., formerly known as Loving Enterprises, Inc., the holding company for a group of companies and partnerships that own International-Matex Tank Terminals, or IMTT. As a result of this transaction, we own 50% of IMTT Holdings' issued and outstanding common stock. The Company has entered into, through a wholly-owned subsidiary, a Shareholders’ Agreement, or SHA, with IMTT Holdings, and the Current Shareholders of IMTT Holdings. The SHA provides, among other things, that minimum quarterly distributions of $14 million be paid to shareholders by IMTT Holdings ($7 million to the Current Shareholders, $7 million to the Company) beginning with the quarter ended June 30, 2006 through the quarter ending December 31, 2007. The minimum quarterly distribution may be reduced or eliminated in the event that the Board of IMTT Holdings determines that such distribution would result in IMTT Holdings having insufficient reserves with which to meet normal operating expenses and previously approved capital expenditures, or otherwise failing to comply with financing agreements and applicable law.

Our interest in IMTT Holdings will be reflected in our equity in earnings and amortization charges of investee line in our financial statements from May 1, 2006 and will constitute a new segment.

We have also entered into agreements to acquire TGC, a Hawaii limited liability company which owns and operates the sole regulated gas production and distribution business in Hawaii as well as a propane sales and distribution business in Hawaii, and Trajen, the holding company for a group of companies, limited liability companies and limited partnerships that own and operate 21 FBOs at airports in 11 states. In addition, Trajen is in the process of acquiring 2 additional FBOs that are expected to be a part of the Company’s acquisition. Upon acquisition, TGC would constitute a new segment. Our acquisition of Trajen will be reflected in the results of our airport services business segment from the date of acquisitions. Both transactions are subject to regulatory or

governmental approvals and other customary closing conditions.

RESULTS OF OPERATIONS

We recognized net income for the quarter ended March 31, 2006 of $7.6 million and net income for the quarter ended March 31, 2005 of $4.2 million. Consolidated performance was primarily driven by:

	•		38% increase in fuel revenue, due to the inclusion of the EAR acquisition and the rise in fuel prices generally, offset by an increase in our cost of fuel. Average dollar per gallon fuel margins continued to improve while volumes increased by approximately 2% at existing locations;
	•		a 26% increase in service revenue, reflecting the increased activity and 8 new locations in our parking business and the inclusion of EAR acquisition;
	•		higher management fees, including the $4.1 million performance fee earned by the manager in the first quarter which it has elected to reinvest in shares of trust stock;
	•		the recognition of dividend income of $2.7 million in the first quarter of 2006 from our investment in SEW, which in 2005 was received in the second quarter;
	•		unrealized gains on derivative instruments of $13.7 million recorded in the first quarter of 2006; and
	•		an increase in interest expense due to the overall increase in our debt to $611 million at the end of 2005, coupled with the overall increase in interest rates during 2005.

Our consolidated results of operations are summarized below ($ in thousands):

		Quarter Ended
		March 31, 2006				March 31, 2005				Change
		(restated)				(restated)
		$				$				$				%
Revenue
Revenue from fuel sales			41,992				30,241				11,751				38.9
Service revenue			42,904				34,152				8,752				25.6
Financing and equipment lease income			1,298				1,342				(44	)			(3.3	)
			86,194				65,735				20,459				31.1
Costs and expenses
Cost of fuel sales			25,269				17,095				8,174				47.8
Cost of services			21,032				17,073				3,959				23.2
Gross profit			39,893				31,567				8,326				26.4
Selling, general and administrative expenses			23,950				19,345				4,605				23.8
Fees to manager			6,478				1,943				4,535				233.4
Depreciation expense			1,710				1,327				383				28.9
Amortization of intangibles			3,446				3,085				361				11.7
Operating income			4,309				5,867				(1,558	)			(26.6	)
Other income (expense)
Dividend income			2,651				—				2,651				—
Interest income			1,702				1,099				603				54.9
Interest expense			(15,663	)			(7,758	)			(7,905	)			101.9
Equity in earnings and amortization charges of investee			2,453				1,653				800				48.4
Unrealized gain on derivative instruments			13,675				4,343				9,332				214.9
Other expense, net			(167	)			(915	)			748				(81.7	)
Net income before income taxes and minority interests			8,960				4,289				4,671				—
Income tax expense			1,393				—				1,393				—
Net income before minority interests			7,567				4,289				3,278				—
Minority interests			6				51				(45	)			(88.2	)
Net income			7,561				4,238				3,323				78.4

Gross Profit

The $8.5 million increase in our consolidated gross profit was due primarily to the acquisitions of EAR and SunPark during the second half of 2005. The acquisitions added approximately $6.2 million in gross profit in 2006. Additionally, higher average dollar per gallon fuel margins at existing locations in our airport services business and higher average revenue per car out in our airport parking business contributed to increases in gross profit. These results reflect performance improvements over the corresponding period in

2005 and the prior quarter.

Selling, General and Administrative Expenses

The most significant factor in the increase in selling, general and administrative expenses is $2 million additional costs from our airport services business’ acquisition made in the second half of 2005 and additional costs of $0.7 million at our parking business’ corporate office primarily to support a larger organization resulting from growth in number of locations. In addition to the acquisition, our airport services business’ selling, general and administrative costs increased $1.4 million due to Stock Appreciation Rights that were issued during 2006, additional utilities expense and additional credit card fees. Our corporate selling, general and administrative costs increased $0.6 million due primarily to costs related to an unsuccessful acquisition bid of approximately $400,000 and residual Sarbanes Oxley costs.

Our management fee paid to our Manager increased due to $4.1 million in performance fees in 2006 compared to none in 2005, as well as a $0.4 million increase in the base fee due primarily to a higher market capitalization of MIC in 2006.

Other Income (Expense)

Our dividend income in 2006 consists of a dividend declared by and received from SEW. The comparable dividend from 2005 was both declared and received subsequent to the first quarter.

Interest income increased primarily as a result of higher interest rates on invested cash in 2006. Interest expense increased due mostly to a higher level of debt in 2006.

Our equity in the earnings on our Yorkshire Link investment increased primarily due to decreases in the fair value of interest rate swap liabilities that Yorkshire records in the income statement.

The decrease in other expense was due primarily to $913,000 in underwriting fees incurred in 2005 related to our acquisition of GAH.

Income Taxes

The Company recorded a pre-tax loss at the MIC, Inc. level in the first quarter of 2005. However, as the Company was recently formed with no operating history, it recorded a full valuation allowance on the benefits of the pre-tax loss incurred. Therefore, the Company recorded no income tax benefit in the first quarter of 2005.

For the 2006 year, the Company projects a net loss before taxes at the MIC Inc. level for which it expects to record an income tax benefit. The Company also projects deriving net income before taxes outside MIC Inc. that will not be subject to income tax payable by the Company. This income derived from outside MIC Inc. is projected to be partially offset by the pre-tax loss at the MIC Inc. level, resulting in projected pre-tax income on a consolidated basis.

Earnings Before Interest, Taxes, Depreciation and Amortization, or EBITDA

We have included EBITDA, a non-GAAP financial measure, on both a consolidated basis as well as for each segment as we consider it to be an important measure of our overall performance. We believe EBITDA provides additional insight into the performance of our operating companies and our ability to service our obligations and support our ongoing dividend policy.

A reconciliation of net income to EBITDA is provided below ($ in thousands):

		Quarter Ended
		March 31, 2006				March 31, 2005				Change
		$				$				$				%
Net income (1)			7,561				4,238				3,323				78.4
Interest expense, net			13,961				6,659				7,302				109.7
Income taxes			1,393				—				1,393				—
Depreciation (2)			3,998				3,221				777				24.1
Amortization (3)			3,446				3,085				361				11.7
EBITDA		$	30,359			$	17,203				13,156				76.5

BUSINESS SEGMENT OPERATIONS

Airport Services Business

In the prior year, the airport services business consisted of two reportable segments, Atlantic and AvPorts. These businesses are currently being integrated and managed together. Therefore, they are now combined into a single reportable segment. Results for prior periods have been restated to reflect the new combined segment.

The following section summarizes the historical consolidated financial performance of our airport services business for the quarter ended March 31, 2006. Information relating to existing locations in 2006 represents the results of our airport services business excluding the results of EAR. The acquisition column below and total 2006 quarter results include operating results of EAR from the acquisition date of August 12, 2005.

Key Factors Affecting Operating Results

	•		contribution of positive operating results from one FBO in Las Vegas acquired in August 2005;
	•		higher dollar per gallon fuel margins at existing locations and higher fuel volumes of approximately 2%;
	•		lower de-icing due to milder weather;
	•		continued increases in fuel prices;
	•		higher selling, general and administrative costs primarily relating to non-cash and accrued compensation expense; and
	•		higher interest costs from higher debt levels resulting from the refinancing in December 2005.

Quarter Ended March 31, 2006 Compared to Quarter Ended March 31, 2005

		Existing Locations (NACH & MANA)																EAR				Total
($ in thousands) (unaudited)		2006				2005				Change								Acquisition				2006				2005				Change
		$				$				$				%				$				$				$				$				%
Revenues
Fuel revenue			36,382				30,241				6,141				20.3				5,610				41,992				30,241				11,751				38.9
Non-fuel revenue			14,631				14,703				(72	)			(0.5	)			3,548				18,179				14,703				3,476				23.6
Total revenue			51,013				44,944				6,069				13.5				9,158				60,171				44,944				15,227				33.9
Cost of Revenue
Cost of revenue-fuel			21,359				16,999				4,360				25.6				3,911				25,270				16,999				8,271				48.7
Cost of revenue-non-fuel			2,168				2,240				(72	)			(3.2	)			163				2,331				2,240				91				4.1
Total cost of revenue			23,527				19,239				4,288				22.3				4,074				27,601				19,239				8,362				43.5
Fuel gross profit			15,023				13,242				1,781				13.4				1,699				16,722				13,242				3,480				26.3
Non-fuel gross profit			12,463				12,463				—				—				3,385				15,848				12,463				3,385				27.2
Gross Profit			27,486				25,705				1,781				6.9				5,084				32,570				25,705				6,865				26.7
Selling, general and administrative			16,606				15,365				1,241				8.1				2,092				18,698				15,365				3,333				21.7
Depreciation & amortization			3,661				3,466				195				5.6				752				4,413				3,466				947				27.3
Operating income			7,219				6,874				345				5.0				2,240				9,459				6,874				2,585				37.6
Unrealized gain on derivative instruments			7,315				3,914				3,401				86.9								7,315				3,914				3,401				86.9
Other expense			(36	)			(923	)			(887	)			(96.1	)			—				(36	)			(923	)			(887	)			(96.1	)
Interest expense, net			(7,729	)			(3,424	)			4,305				125.7				(1,184	)			(8,913	)			(3,424	)			5,489				160.3
Provision for income taxes			(2,903	)			(1,143	)			1,760				154.0				(370	)			(3,273	)			(1,143	)			2,130				186.4