Q2 2020 Macquarie Infrastructure Corp Earnings Call
<unk> second quarter 2020, <unk> earnings call.
At this time, all participants are any listen only mode.
After the speakers presentation, there will be a question and answer session.
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Please be advised that today's conference is being recorded.
I would now I turn the conference over to our host Mr. Jay Davis. Please go ahead Sir.
Thank you and welcome to Macquarie Infrastructure Corporation's earnings Conference call, that's probably the second quarter up 2020.
Our call today is being webcast is open to the media. In addition to discussing our financial performance on this call. We had published a press release summarizing the results and filed financial report on form 10-Q, with the Securities and Exchange Commission.
Materials were released this morning and copies may be downloaded from our website at www dot already dot com slash I see.
Before turning the proceedings overdue Macquarie infrastructure corporations, Chief Executive Officer, Christopher Foss, Let me remind you that this presentation is Jerry and all while our reserve.
Any recording rebroadcast or other uses this presentation in all in part without the prior written consent of Macquarie infrastructure Corporation is prohibited.
His presentation is based on information definitely available to the public and does not contain any material nonpublic information.
The presentation has been prepared solely for informational purposes, I, just thought that solicitation of an offer to buy or sell any security or instrument.
This presentation contains forward looking statements.
In some cases, you words, but can they do a future events or outcomes to watch and buy these forward looking statements, including those used to describe the anticipated specific and overall impacts of cold at 19.
<unk> looking statements in this presentation are subject to a number of risks and uncertainties a description of known risks that could cause our actual results could differ appears under the caption risk factors you know forms 10-K and 10-Q.
Actual results performance prospects, while opportunities could differ materially from those expressed in the war implied by the forward looking statements.
Additional risks of which we all got caught me to where it could also cause our actual results to differ.
The forward looking to them as discussed in this presentation may not occur.
These forward looking statements or maybe doesn't the date of this presentation. We undertake no obligation to publicly update or revise and forward looking statements. After the completion of this presentation, whether as a result of new information ensure bench or otherwise except as required by law.
During today's call, we will reference the non-GAAP measures earnings before interest taxes, depreciation and amortization or EBITDA and free cash flow as defined by us.
A reconciliation of these non-GAAP measures in the most comparable GAAP measures can be found in our 10-Q as is the tables attached to our earnings press release.
Also participating in today's call is Macquarie infrastructure Corporation's Chief Financial Officer, Liam Stewart.
With us if it's my pleasure to welcome EMI sees Chief Executive Officer, Christopher Frost.
Thank you Jay and I supposed to be joining our call. This morning, I heard you on your family supplements. So he said well.
I was you'll be aware, we reported machines for natural in operational results for the second quarter Twentytwenty told me this morning.
I will begin alcohol by commenting on some of the hard lots for boys results and the steps, we're taking to navigate the challenges posed by the ongoing Clinton.
Label provides additional detail went off an actual results adult hofh, how prepared remarks by discussing our outlook for twentytwenty before the call to your questions.
Well hold up to them I see that's businesses in the second quarter Twentytwenty reflects.
Improvement of utilization of all MTT, which have reached just something off you caught the Sims and ended the quarter, 95.7% I'm a stable level than some of these services.
<unk> monthly sequential improvement in general aviation flight activity at airports. So much Atlantic Aviation operates from 21% to the levels recorded in April 20, Don team to approximately 77% off the levels recorded in June 2090.
I'm, sorry, the impact to reduce tourism in Hawaii, driven by the state migration coffee they call insane to remain in place throughout the period.
During the course, though we continue to focus on before priorities identified now so this quarter cool.
Yes.
Checking the health and safety valve employees and customers second keeping out businesses operating safely and efficiently.
Good enhancing our liquidity in reducing costs and for protecting the basketball about businesses, while continuing to because she sales of age.
Regarding health and safety, we are fortunate to have had a low incidence of probably been launching amongst our employees.
Repeat this took a timely and effective decisions made by our leadership teams and to the diligence about employees to protect our employees and customers. We continue to maintain a portrait physical systems to clean and disinfect facilities regularly and requires the use of personal protective equipment by old employees.
We also upside to that 40% features like changes to the physical layout infrastructural about facilities where appropriate.
A sizable portion of our employees continue to work it out facilities central continuity of service and a portion continue to work remarkably well.
We have developed a return to work protocols and intend to implement bugs as local conditions permit.
I would love to take this opportunity to once again publicly centel employees for their resilience and commitment to delivering a central services provided by our businesses together. These steps up about almost feel use all terminals and old facilities and operations in Hawaii to continue to serve customers safely and without interruption Jordan.
Hi, Jim it.
Regarding our liquidity in cost controls.
As noted in that first Oh, we have drawn nearly 600 million goes on L. holding company Volvo.
Given the better than anticipated performance of Atlantic Aviation, particularly in the second quarter I'm, taking into consideration of obligations to not do vision and any effect patch.
Second the cost reduction initiatives implemented in April has had a meaningful positive impact on our results.
Businesses, primarily Atlantic aviation.
Able to achieve an unrealized approximately $50 million of cost savings in the second quarter, though.
Most of the savings were reductions in operating expenses consistent with the lower activity levels, we will see nice cool.
The increase in general aviation plot activity some of the Atlantic Aviation staff, who are working with GE styles have returned to normal al.
Some of it would be filled by these have been we're cool.
These actions have reduced in the life savings to approximately 25 million Boes.
Regarding sells about businesses.
We have continued to move toward with sales prices during the past quarter tongue, but non team has clearly had an impact and logistics and the Communist Party assistance.
Once again, we believe the sales of that will probably businesses remains the best while generating additional value for shareholders.
We continue to be encouraged about the level of interest in our businesses.
As locked down Rollbacks continues we expect to work with potential partners to facilitate on the ground due diligence and face to face meetings with a management things in order to Boston sales purposes.
Practically speaking a transaction put him I see why maybe achievable in the council bonds, given the size of that business.
We'll be informed by view on what to recovery in terms of books like in the study.
I am teens, clearly performing well and demonstrating the resilience of storage assets all potential positive Atlantic aviation Alexey the need to see additional Casa regarding the recovery in general aviation plot activity in order for us.
Probably for that business.
That's good enough for this quarter coal the steps we have tightened over the past two policies to strength about balance sheet I've been pretty tough at actual flexibility has positioned us well to navigate the impact of private 19 on battelle operations and build out sales party citizens.
In terms of operational highlights during the second quarter.
The increase in a general aviation plot activity during the second quarter well supported by the progressive rollback of looked out measures across the U.S.
Improvement was driven by ledger orientated activity markets, including Florida in Colorado Real Atlantic Aviation has a significant presence.
We believe that a substantial portion of this activity reflected how snows quality outside of major cities.
A mass appeal salt bloodlines, you've hedged in the second quarter Twentytwenty declined by more than the reduction in flight activity.
We believe this is a result of changes in travel patterns and the things a temporary.
Specifically, we saw some overreact crops and single destination plots in addition to the lower activity levels.
We also believe the pandemic has had a disproportionately negative impact on long distance flight activity, including international and perhaps continental domestic trips a target market for Atlantic Aviation.
Collectively we believe these accounts for the difference between the extent recovering plot activity and the change in fuel cells.
As expected 10, 100 rental income remained stable during the second quarter.
As we discussed in our first quarter cool approximately 20% of Atlantic Aviations gross margin was generated from 10 to hang a rental in 29 10 cannot handle the central helped Atlantic aviation generate positive EBIT dollars each month of the second quarter and gives us confidence because this will continue to meet its obligations.
Internally generated with sources.
We must see Hawaii business performed as expected Jordan a second quarter.
The ongoing requirements for 14 days quote I'm sitting on the water.
Tourist visits to the orders were down by more than 90 plus assumed during the period.
Resorts in restaurants constitute a sizable portion of commercial industrial gas consumption.
Significantly lower level of tourism was halted the chladni Gus sales of approximately 40 person versus the prior comparable quarter in long without comments on our first quarter coal.
MRC, Hawaii also generated positive EBITDA in each of the three months of the second quarter and we remain confident but that business will continue to make its obligations from internally generated resources.
The continued good performance of on T.T. supported our people results for the quarter.
Although utilization remains strong and is expected to average my body to be dodges percent range for the either with relatively change storage contracts coming up from yield during the remainder of the Reits are unlikely to increase materially twentytwenty.
Ancillary services revenue such as three core blending them hazing was flat with the second quarter 2019, and ahead of our expectations discussing out this quarter pool.
Together with a high level of utilization things resulted in our MTT generating an increase in EBITDA of 6% versus the prior comparable theory.
In summary, given the better than anticipated activity levels at Atlantic Aviation to date.
For much of volume to see we remain confident we'll be able to fund our operations and contractual commitments without external capital of without using the phone was drawn on our holding company revolving credit facility.
At this point I'll turn the call over to bring him for the high lots about financial performance during the second quarter.
Thank you Chris good morning, everyone.
Second quarter Twentytwenty versus the prior comparable period.
Adjusted EBITDA, excluding non cash items declined by 35 cents.
The early reflecting the impact is caused by train room nights of travel and other restrictions on Atlantic I'd be ice and NYSE Hawaii.
Offset by improved performance at onsite.
Second quarter. This year also included and that's 7 million dollar provision recorded in history, and I added to that to tie the action for environmental remediation at one of our speakers.
Adjusted free cash flow to caused by 40 I said.
Free cash flow was reduced by the <unk> EBITDA bought hot like capital expenditures, the partially offset by a tax benefit.
We continue to expect top businesses to deploy a total of approximately $60 million excitements capex during the year.
With the majority of thought occurring catalyze heating.
Yeah, My Seaboard Herman thought it was appropriate to continue the suspension that's any different than.
Regarding the performance of our operating businesses.
The sharp reduction in general aviation flight activity in the quarter resulted in a substantial reduction.
The amounts of fuel cell potlatch it'd be eisman, although this was partially offset by stability in the gross profit generated by tenant Haggen rentals.
For the quarter exotic Ivy I shouldn't generated EBITDA and free cash flow.
17 billion Goldex and ultimately Goldex, respectively.
It's down substantially versus the comparable periods can twentys, Ontario.
The exotic ideation claim that quickly to lots lots of cost sites to the business.
That's a lot of activity the side, we're seeing in early April.
I'm buying time, they cycling through the second quarter the spot the increasing activity.
That's really these costs will increase to the extent current activity levels off site.
That's crystallizes.
<unk> levels of activity, we are confident in its actually type you actually the ability to meet its financial obligations using internally generated resources.
Hawaii gas experienced a significant declining gas consumption during the second quarter.
The reduction in the number of tourists visiting the dogs.
Fewer people stay in hotels in anyhow stuff consumption the call I bought approximately 40% so since the second quarter last year.
MRC, Hawaii generated EBITDA of 7 million goals for the quarter.
Yes, 50% versus 29 tank.
On free cash flow $3 million down 70%. This is the pot comparable periods.
In addition to the reduction in the amounts discussed Sol Hawaii gas also realized losses of $2 million on certain of its commodity hedge contracts during the quarter.
These costs, it's Richard EBITDA and free cash flow for the quarter.
I just the types with Atlantic Aviation, we're confident that MRC, Hawaii will continue to maybe complications from internally generated resources.
Oh I see pay it was a substantial drive up about financial results for the quarter.
With utilization in the mid Ninetys percent lines that allowed to be normal level of that Hillary services revenue.
Oh I see page on the right 60, I know you're going to be the saw an increase of 6% all over the prior comparable period and free cash flow $44 million versus $45 billion cost.
The modest the caught in free cash flows reflects an increase in light of capex at $5 million for the quarter.
Which is more about or timing as we continue to expect thought cixi joint desk between 40 and $45 million Bison that's capital for the.
Looking ahead, we believe bogs he will continue to be a stable contributor to our results over the remainder of figure.
A lot dicing is full cost to average.
She's percent rides and we expect rights to remind stable through the balance of the.
I would say take continues to progress and number of growth projects.
<unk> projects at backed by long dated contracts.
Repositioning the business and in printers connectivity to new and existing customers.
The projects that have will be placed in service. During that you are expected to generate approximately $4 million incremental EBITDA in twentytwenty the growth projects under development out on seating a part about logic capital deployment program.
I did investing in the infrastructure about businesses second proving that our resiliency. We continue to expect to the point between 200 million and $225 million off broad topic will be she.
Approximately $190 million, because that's being allocated to projects at all and TT pretty ended the second quarter. We had successfully deployed 119 billion goal. It's at the total amount.
Finally, we recorded a small amounts of negative EBITDA kind of slightly larger amounts of negative free cash flows in our corporate and all this segment.
As anticipated selling general and administrative expenses were flat with 29 say.
But down sequentially as we foreshadowed in after this quarter cool when we noted that professional services costs for hot at this thought about styles processes.
[noise], an income tax liability issue versus a tax benefit last few resulted in the generation of negative $15 billion in free cash flow versus negative $10 million in 20 Nazi.
We ended the second quarter with 874 million goal with cash on hand.
$599 million completes what's going on at holiday copy revolver.
We remain confident in the liquidity in funding position about business.
[laughter] would be in passive college it nicely now consolidated leverage increased to 4.9 times debt to EBITDA at quarter end.
We assume leverage will increase through the end to be driven by the ongoing toxicology tight on our operating performance.
With that I will turn the call back over to create.
Ben slate.
Before turning the call to your questions I'll spend a couple of minutes discussing our outlook for the remainder twentytwenty.
First we assume no additional cope with 19 when thanks, Colin Timo look down majors are implemented while changes in consumer preference.
Turning private rather than commercial aviation for sustained increase in major trouble ball I, probably would change could drive further increases in general aviation plot activity and the performance of Atlantic Aviation.
We need to see a more complete rollback of look out initiatives.
This would likely positively impact business oriented and corporate flight activity in major metropolitan area.
International travel and the resumption of in person events and Paulson suits.
We believe a resumption of these talk that activity is lucky necessary Claude activity is to recover to 29 teams Liberals, particularly in markets, such as New York Chicago Los Angeles.
Second in Hawaii, the Governor has extended quarantine rules and travel restrictions through to the end of August and September one.
So the state will have to demonstrate they have recently tested make any proposed at 19 price worldwide.
I noticed the state's quarantine rules have been extended several targets.
Our recovery gas sales to commercial industrial customers, particularly the hotels and restaurants could take time.
Importantly gas sales to residential customers are expected to remain state.
Last we believe we have good visibility into the Apple Prawn T T.
Environment remains constructive for the storage business and given the relatively modest number of contracts coming up for renewal. We are confident in the ongoing state and performance of the business over the remainder of the though.
With that I think two again fuel participation in our call. This morning at this time a loss calibrated twice in the five months for your questions.
And ladies and gentlemen, as a reminder, if he would like to ask an audio question. Please press star one on your telephone we'll pause for a moment compiled acuity roster.
And our first question comes from the line up Tristan Richardson with.
With truth Securities. Please go ahead Sir.
Good morning, I assume really.
Really appreciate all the the detailing on activity you're seeing in a.
No did the comment you made around June being down only 23% year over year. Paul can you talk a little bit about what you're seeing in july or or or even the past few weeks and and then secondly should we assume that.
That mix shift persist I mean is just seems like as the recovery continues it seems like a return to larger aircraft and door.
Larger longer legs might lag that recovery, but just curious your thoughts.
Yeah look I think Chris and that's a good summary trading through July has been pool will be consistent with.
<unk>, albeit we saw obviously, a good increasing plant activity, but the July pool weekend.
And I think it was actually up year over year, but as I sit in the prepaid remarks that for I wanted to liquidity and planning purposes, we are assuming.
Necessarily see that recovery in the business all corporate orientated travel the have been proven traveled and by have been proven Trevor let me large being put us in sporting events and conferences.
Also international travel so.
Well, we remain confident the outlook for that business and the resilience of GE, a slide activity for I won't internal planning purposes.
Were assuming that that so.
Those markets may take a little longer to recover.
Yes.
Then just one quick one in aviation just around the environmental expense at one of the FBO should we think of that is is sort of onetime in nature and that $7 million is the entire estimated cost to to resolve the matters. There. There are two tristan its they are satellites to an IP 20, nontraded that and the reason for.
According to this quarters, we have.
Clarity around the plan for maybe I should that clarity around the estimated costs about remediation as well I'm sorry that represents not calling it current thinking around around the plan they might be some variation. According to how the plan or eventually transport is good and recognition this quarter. It was really out there.
Estimate of what the total environmental liabilities to clean it up.
Thanks, Lehman and then just last one from me just around the strategic initiatives that I appreciate all that and incremental comments, you're giving their.
Around sales processes for the operating business can you talk about.
Tax considerations there as it seems maybe the sale of the individual businesses might be the probable outcome rather than an outright sale the company.
And how you how you're planning for that.
When I sort of address the the philosophy from Maine can pick up the first.
I think it's it's.
Right.
We see today that is more likely to be a sale to be individual operating businesses.
It's been a sale of the whole and the reason I say that.
He is tying back to the comments in your prepared remarks.
As it relates to Atlantic Aviation I.
I don't think it's appropriate to advance that process at this stage.
Given that I expect potential buyers will lead to see further evidence of the recovery in general aviation flight activity in order for us to maximize value for that business. So Dave will that would sort of suggests that at this stage.
I Love the company as a home is perhaps less likely the night a sale of the individual operating businesses and behind that we would be sort of saying the sale of.
Am I see Hawaii enzyme see tea, and then Atlantic being sold through I'd tell you count on the listed entity, which would continue to home Atlantic Aviation.
Just in terms of the way that we would evaluate that I mean, clearly our objective is to maximize value to shareholders and as I sit on our first quarter cool that the way that we would do that is really look at what the present value would be expected proceeds aki shareholders onto the different sale configurations, all sales structure.
Is under consideration.
The the judgments as to what sales structure, we ultimately pursue.
We will be one, which we believe maximizes value taking into account.
Any capital gains tax that will be payable will be to sell the.
Underlying businesses.
The interested I hear as Chris said.
Good off sort of kind of mutations we didn't the side with the individual businesses.
General ride a more tax effective outcome than just selling three individual businesses out of that boosted parents side. The example, the Chris mentioned with the loss divestiture.
Affected we'd be a tight down at the public company. It's one that's more efficient than just selling all three businesses out of MRC.
Clearly, we're focused on maximizing value on and off the tax basis.
Great. Thank you guys very much.
Great. Thanks, Justin.
And our next question comes from a line of TJ Schultz with RBC capital. Please go ahead.
Good morning, Teekay, Hey, good morning.
First at Atlantic <unk>, what was the mix of business first leisure travel and 2019 and as you think about.
Trying to get back to 29 teen levels.
When you think about lower corporate travel and pure and person event sounds like you are planning for some slow recovery, there, which makes sense, but maybe if you could just provide some color on.
What run rate cash flow may look like in a slower corporate travel environment.
So what do I take the first part of that.
Let's see the sort of the short answer is in terms of the the split between leisure and business.
It's very difficult to assess that on the basis that we just started no I mean, clearly one of the attributes of crying applying private aviation.
Views, we don't have visibility as to the purpose of bent tree.
What I would say in tying it back to the prepared remarks in June we saw quite activity being down 23 at the same compared to the product comparable period. We think are one of the recovery was driven by a little orientated travel and the absence of corporate we'll move business orientated.
Level.
What I would say uses that international and have been driven Tracee, we would estimate to be two to account for around 15% of atlantic's traffic in a normal the idea to.
To the extent could we see a complete rolled back and businesses incorporates returning to more normal activity. Then I would anticipate we would sort of see a substitution from what we surmises leisure oriented to try to be more business orientated traffic, which would have been the added benefit old being supported by larger.
Crossline longer distances with multiple destinations and therefore using more fuel.
So we don't have visibility as to the ultimate purpose Super trip site. Unlike commercial airlines and I think you'd appreciate that I mean, clearly that is one of the the attributes tool for passengers using a using private aviation, but but as I said I think in terms of international and have been proven trustee, we see that is.
As a does.
Accounting for about 15% of the traffic and the the the other recoveries really going to come from a shift the mix away from Malaysia to more of the business and corporate.
Okay. That's helpful.
Switching gears on storage contracts at AMC T., what percent of or the capacity that is under contract comes due.
For renewal and 2021 I'm just trying to understand if we should expect some.
In a small step down in utilization next year from one year contracts that maybe you entered into due to covered related disruptions. Thanks, yes.
What I was sort of refer to his previous comments, we've made which would sort of say in the ordinary course, we normally see a third of the customer pull coming up for renewal be chia.
I would also say that where we stand today, we see a constructive market the storage.
And enjoying good demand both from system players and from volatility traders, who will play a role in terms of balancing the the commodity markets I think as we start to see a recovery.
In the U.S. economy, and global economies more generally we would expect to see some volatility in some of the commodity markets for petroleum products and as we noted that the the periods of volatility volatility is often but terminal operators off would benefit from that so I think.
As we as we sort of see the the recovery take hold our expectation is that we're going to continue to see strong demand from the system players, particularly around fuel insane and we're also I'd like to the see good demand from volatility traders.
Who will be looking to take advantage of any arbitrage opportunities in those markets.
So we're feeling pretty good about certainly for the worried about the outlook for Twentytwenty and the market is currently constructive for storage and for so many of the petroleum products that continues three to 2021.
Okay. Thank you very much.
And our next question comes from the line up to roam Han Investor. Please go ahead.
Yes more.
Calling.
True point, though when you might.
Bruce for dividends.
Thank you. Thanks for the other question. So clearly the dividend. This is a matter for the board.
And as always our board considers the the current performance of the business and the expected future performance as the business under a range of different scenarios and in spirits category as well as considering.
The site about balance sheet, as well as financial commitments and through contractual obligation mix as it relates to the curve for the support assists toolbars fast food and determined that maintaining the suspension of the dividend we see the most appropriate way forward it wouldn't be appropriate for me through to speculate.
As to what the board may decide to suspect to to Q3.
Thank you for a few states.
Yeah, Unfortunately, [laughter] all right.
Looking forward, the driven 40 sales and lower your return on those.
Through dividends.
So over the years old, though was the use of fueled by regardless.
This was a major flows.
Just a question.
I appreciate fashion, but I think given the CEO for currency environment that we read the.
The steps we've taken a really designed to improve we have sufficient liquidity to work through this crisis as well as im sure we protect the gradual ramp businesses.
Somebody to realize that value through the side with the real Friday.
I think super Thanks for your question.
Thank you very much.
And our next question comes from the line of Thomas Shen with Gold tree. Please go ahead.
Hi, I'm in regard to kind of July are you seeing big differences.
In in locations and how they are recovering.
Oh Atlantic aggregates in time.
So Tom it's it's Dan Heyler as Chris said in terms of trading performance through July Board, we consistent.
With what we saw engineering in terms of spot activity than roughly 23% down year RV [noise].
We haven't yet senior so to speak variation in geography is relative to what we observe could be ended the second quarter on legacy assets, you know wall school holidays, and still onto I across the bulk of the country. We want kind it will really be sort of as we get to Ukraine to the true quota that we might see some some differential rather.
So what we observe some of our Tyson.
I would like Tyson, Vice and seeing the second quarter.
I guess intuitively I you know I would think like in July the northeast would would have done better than like Texas, Florida kind of opposite of maybe what you would have thought in late may or may is that kind of the correct way to think about it.
No.
Through very good reason sort of pool would be spacing them more leisure oriented tester destinations rather than the commercial destinations in the more faced some thing one sort of.
Formed a little better notwithstanding you know sort of case count some not talk the stuff that could cause ignored saying, okay. Good year sort of typically you would see squalor activity in the northeast at this time of the just giving people on vacations et cetera et cetera. So it's a good bit hazza.
So tight you know what might be card because carbon specific relative to what might just be a function of the fact that people are owned by case, you know nowadays resource allocations insightful.
And you mentioned when when business activity does come back.
As as a substitution for for leisure travel I guess why would it be a substitution.
Necessarily as opposed to just.
Added.
Kind of demand.
I think it's a good point in time I as I sit in the prepared remarks. It may be that you know given the advantages that private aviation has the commercial airlines, but we will continue to see laser trying to be growing.
We are optimizing.
You said a lot of the flood actually because we have seen.
Perhaps sites quarantining.
Out of the Metropolitan area.
While business and corporate activity.
Pretty something to the extent, we see a complete well roll back at the locked down niches.
Businesses returned to more normal activity. That's made you folks who have relocated to those resort areas.
Returned to normal normal activity.
Gotcha.
Thank you.
Thank you.
And our next question comes from a line of Jonathan Reeder with Wells Fargo. Please go ahead.
Hi, good morning, gentlemen.
Good morning Duncan.
Chris did you say you thought the sale of am I see Hawaii could move forward sooner rather than later, even without seeing a recovering Hawaiian economy, just given the reform.
Small size of the business.
I think from Jonathan when I said in his prepared remarks is ultimately it's going to be formed.
By the a recovery tourism and I think the important thing that we need to see he's the guy. He is the governor lifting the foresee quarantine restrictions.
And as I sit in the prepared remarks that will also.
Enable us to work with the pieces to facilitate there.
On the Grand due diligence and price the price meetings with the management team and.
I think that is the important steps as we need to see as we advance that prices going forward my comment around Hawaii was all sorry related to the to the size of that business relative to the opposite.
Okay, and then remind us where are you assuming in terms of time to close.
The sale of that business has presumably you need to state utility regulatory Commission approval.
Yeah, that's that's correct and perhaps that is also another another factor now you now thinking that it might make sense to advance that prices school, what given the tons. The type who pay you see approval and for outlined planning purposes, we're assuming that from entering into definitive agreements with the by a free.
[music] obtaining PC approval is likely to tight 12 months as they as they are typically done in the state of Hawaii.
Great. Thanks, Ryan additional color appreciate it.
Sure.
Mm.
And our next question comes from the line at Matthew Mark.
With jet capital. Please go ahead.
Hi, I had a question which is in 2019 had a can you speak that sort of what utilization was as a share of theoretical potential kind of flight capacity or a complaint volumes how much busier.
In a recovery assuming a meaningful pickup in.
Private aviation demand, how much busier could those.
So does that feels b.
Yes, I think the best way to answer that question, we just coming back to where we sort of seeing flight activity today as I say June is down 23% compared to the same month last year trading through July is consistent with what we're seeing drew.
Good.
As I sit in the prepared remarks, what we are not necessarily see.
These international private aviation activity, given a lot of the travel restrictions on inbound arrivals into the U.S. and we don't see a little of the in person then.
Sporting events in conferences traffic.
As I said previously we estimate that that is worth about 15% of flight activity.
And so I think.
As I said I think in order for us to see a return to 29 team labels I wouldn't want to see that complete rolled back.
Particularly that orientation of the mix to more corporate travel and other also want to see the international markets, you know as well as seem to sort of appreciate your line of impose some conferences and sporting events.
Yes, we would sort of suggests would probably drive around 10%.
Our 2019 activity level.
Hi, I'm like that.
I'd like to my landline I think it is difficult to actually look at the the theoretical seat capacity.
Within the market and therefore, how much of you shouldn't you could pick up.
Okay. Thanks.
And our next question comes from a line of Kyle Chung Investor. Please go ahead.
Hi, Thank you for any additional color on the sale process.
I think you previously mentioned I think you mentioned today that youre very encouraged by the level.
Interest can you characterize the sort of mix the potential buyers there is it.
Primarily private equity as a primary strategic or any color you could offer there.
Yeah I.
I would prefer not to get drawn on the onto the sort of the livable do for still the characteristics of the potential buyers I.
I think we need wheel, we need to.
Preserve a degree of confidentiality not to prejudice same lessees position in the sales process.
I understand I think it's been about.
With respect to the corporate revolving facility.
And matures and abruptly here and a half.
View, you anticipate the you'll need to push out that maturity or do you anticipate that.
Much of a sales process or are there will be self finale, plus l. process.
Prior to the maturity of the revolver.
Then.
Are you seeing as well.
You'll appreciate as you mentioned that is down nearest maturity notwithstanding that we have the cash proceeds from the drawdown sitting on our balance sheet. We are currently evaluating extending that facility.
Thank you very much.
Thank you and now I would like to turn the conference back over to Mr. Frost for any closing comments.
Thank you for participating in a conference call today, we look forward to speaking we show in our next quarterly call. We'll project that is the circumstances warrant with that Weve issue a great day.
Ladies and gentlemen, thank you for your participation. This does conclude today's conference call you may now disconnect.
[noise] [noise] Mr. Davis.
[noise].