Stockholders' Equity

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Classes of Stock

The Company is authorized to issue (i) 500,000,000 shares of common stock, par value $0.001 per share, (ii) 100 shares of special stock, par value $0.001 per share and (iii) 100,000,000 shares of preferred stock, par value $0.001 per share. At December 31, 2019, the Company had 86,600,302 shares of common stock issued and outstanding and 100 shares of special stock issued to its Manager and outstanding. There was no preferred stock issued or outstanding at December 31, 2019. Each outstanding share of common stock of the Company is entitled to one vote on any matter with respect to which holders of shares are entitled to vote.

The sole purpose for the special stock was to preserve the Manager’s right to appoint one director to serve as the chairman of the Board. The special stock is not listed on any stock exchange and is non-transferable. Holders of special stock are not entitled to any dividends or to share in any distribution of assets upon the liquidation or dissolution of the Company.

Dividends

The Company’s Board have made or declared the following dividends in 2019, 2018 and 2017:

Declared	Period Covered	$ per Share		Record Date	Payable Date
February 14, 2020	Fourth quarter 2019	$	1.00	March 6, 2020	March 11, 2020
October 29, 2019	Third quarter 2019	1.00		November 11, 2019	November 14, 2019
July 30, 2019	Second quarter 2019	1.00		August 12, 2019	August 15, 2019
April 29, 2019	First quarter 2019	1.00		May 13, 2019	May 16, 2019
February 14, 2019	Fourth quarter 2018	1.00		March 4, 2019	March 7, 2019
October 30, 2018	Third quarter 2018	1.00		November 12, 2018	November 15, 2018
July 31, 2018	Second quarter 2018	1.00		August 13, 2018	August 16, 2018
May 1, 2018	First quarter 2018	1.00		May 14, 2018	May 17, 2018
February 19, 2018	Fourth quarter 2017	1.44		March 5, 2018	March 8, 2018
October 30, 2017	Third quarter 2017	1.42		November 13, 2017	November 16, 2017
August 1, 2017	Second quarter 2017	1.38		August 14, 2017	August 17, 2017
May 2, 2017	First quarter 2017	1.32		May 15, 2017	May 18, 2017
February 17, 2017	Fourth quarter 2016	1.31		March 3, 2017	March 8, 2017

The Board regularly reviews the Company’s dividend policy and payout ratio. In determining whether to adjust the amount of the quarterly dividend, the Board will take into account such matters as the state of the capital markets and general business and economic conditions, the impact of any acquisitions or dispositions related to its pursuit of strategic alternatives, the Company’s financial condition, results of operations, indebtedness levels, capital requirements, capital opportunities and any contractual, legal and regulatory restrictions on the payment of dividends by the Company to its stockholders or by its subsidiaries to the Company, and any other factors that it deems relevant, subject to maintaining a prudent level of reserves and without creating undue volatility in the amount of such dividends where possible. Moreover, the Company's senior secured credit facility and the debt commitments at its businesses contain restrictions that may limit the Company's ability to pay dividends. Although historically the Company has declared cash dividends on its shares, any or all of these or other factors could result in the modification of its dividend policy, or the reduction, modification or elimination of its dividend in the future.

The dividends paid have been recorded as a reduction to Additional Paid in Capital in the stockholders’ equity section of the consolidated balance sheets.

Independent Director Equity Plan (2014 Plan)

In 2014, MIC adopted, and MIC’s stockholders approved, the 2014 Plan to replace the 2004 Independent Directors Equity Plan, which expired in December 2014. The purpose of this plan is to promote the long-term growth and financial success of the Company by attracting, motivating and retaining independent directors of outstanding ability. Only the Company’s independent directors may participate in the 2014 Plan. The only type of award that may be granted under the 2014 Plan is an award of director shares. Each share is an unsecured promise to transfer one share on the settlement date, subject to satisfaction of the applicable terms and conditions. The maximum number of shares available for issuance under the 2014 Plan is 300,000 shares, of which 227,274 shares remained available for issuance at December 31, 2019. The aggregate grant date fair value of awards granted to an independent director during any single fiscal year (excluding awards made at the election of the independent director in lieu of all or a portion of annual and committee cash retainers) may not exceed $350,000. The 2014 Plan does not provide a formula for

the determination of awards and the Compensation Committee will have the authority to determine the size of all awards under the 2014 Plan, subject to the limits on the number of shares that may be granted annually.

Since 2017, the Company has granted and issued the following stock to the Board under the Plans:

Date of Grant	Stock Units Granted	Price of Stock Units Granted		Date of Vesting
May 17, 2017	9,435	$	79.51	May 15, 2018
June 7, 2018	19,230	39.00		May 14, 2019
September 5, 2018(1)	4,416	47.03		May 14, 2019
May 15, 2019	21,390	42.08		(2)

_____________

(1) Represents additional restricted stock unit grants to new independent directors.

(2) Date of vesting will be the day immediately preceding the 2020 annual meeting of the Company’s stockholders.

2016 Omnibus Employee Incentive Plan (2016 Plan)

On May 18, 2016, the Company adopted the 2016 Plan. The 2016 Plan provides for the issuance of equity awards to attract, retain, and motivate employees, consultants and others who perform services for the Company and its subsidiaries. Under the 2016 Plan, the Compensation Committee determines the persons who will receive awards, the time at which they are granted and the terms of the awards. Type of awards include stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, cash-based awards and other stock-based awards. Shares of common stock underlying forfeited awards are available for future grants. On March 28, 2019, the Company’s Board adopted Amendment No. 1 to the 2016 Plan (the Amendment), which was approved in May 2019 by the Company’s stockholders at the 2019 Annual Meeting of Shareholders. The Amendment, among other things, increased the number of shares of common stock available for grant under the 2016 Plan from 500,000 to 1,500,000.

Macquarie Infrastructure Corporation Short-Term Incentive Plan (STIP) for MIC Operating Businesses —  Restricted Stock Units (RSUs)

During the first quarter of 2019, the Company established the STIP to provide cash and stock-based incentives to eligible employees of its operating businesses under the Company’s 2016 Plan. In general, the cash component comprises approximately 75% of any incentive award and is paid in a lump-sum. The remaining 25% of any incentive award is in the form of RSUs representing an interest in the common stock of the Company. RSUs are granted following assessment of performance against Key Performance Indicators post the one-year performance period and vest in two equal annual installments following the grant date. Through December 31, 2019, no grants of RSUs under the STIP had been made.

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

The following represents unvested Special RSUs granted through 2019:

	2019 Special Grants
	Number of RSUs (in units)	Weighted Average Grant-Date Fair Value (per share)
Unvested at December 31, 2018	—	$	—
Granted	6,067	40.30
Unvested at December 31, 2019	6,067	$	40.30

Compensation expense related to the Special RSU grants in 2019 was not significant. At December 31, 2019, the cost is expected to be recognized over a weighted-average period of 1.1 years.

Macquarie Infrastructure Corporation Long-Term Incentive Plan (LTIP) for MIC Operating Businesses —  Performance Stock Units (PSUs)

During the first quarter of 2019, the Company established the LTIP pursuant to which it may make stock-based incentive awards to eligible employees of its operating businesses. The awards would take the form of PSUs convertible into common stock

of the Company as authorized under its 2016 Plan. The number of PSUs a participant may be awarded reflects a target level of performance by the participant. The participant may be awarded more (over performance limit) or less (threshold limit) than the target number of PSUs based on their achievements relative to Key Performance Indicators during the three-year performance period. Following finalization of the participant’s performance review at the end of the third year of the program, the Company may award the PSUs.

The following represents unvested LTIP grants through December 31, 2019 at the target level of performance:

	2019 LTIP (at Target)
	Number of PSUs (in units)	Weighted Average Grant-Date Fair Value (per share)
Unvested at December 31, 2018	—	$	—
Granted	134,671	39.59
Forfeited	(9,477)	39.26
Unvested at December 31, 2019	125,194	$	39.62

At December 31, 2019, depending upon actual performance, the number of PSUs to be issued will vary from zero to 230,566, net of forfeitures. At December 31, 2019, the grant date fair value of the unvested awards was approximately $5 million, reflecting target performance by all participants. In 2019, the Company recognized approximately $1 million of compensation expense related to the LTIP. At December 31, 2019, the unrecognized compensation cost related to unvested PSU awards was approximately $4 million at target level performance. If target level performance is achieved, the unrecognized cost is expected to be recognized over a weighted-average period of 2.0 years.

Accumulated Other Comprehensive Loss, net of taxes

The following represents the changes and balances to the components of accumulated other comprehensive loss, net of taxes, in 2019, 2018 and 2017 ($ in millions):

	Post-Retirement Benefit Plans, net of taxes(1)			Translation Adjustment, net of taxes(2)			Total Stockholders’ Accumulated Other Comprehensive Loss, net of taxes
Balance at December 31, 2016	$	(17	)	$	(12	)	$	(29	)
Change in post-retirement benefit plans	(4		)	—			(4		)
Translation adjustment	—			3			3
Balance at December 31, 2017	$	(21	)	$	(9	)	$	(30	)
Cumulative effect of change in accounting principle(3)	(4		)	—			(4		)
Change in post-retirement benefit plans	9			—			9
Translation adjustment	—			(5		)	(5		)
Balance at December 31, 2018	$	(16	)	$	(14	)	$	(30	)
Change in post-retirement benefit plans	(9		)	—			(9		)
Translation adjustment	—			2			2
Balance at December 31, 2019	$	(25	)	$	(12	)	$	(37	)

____________

(1) Change in post-retirement benefit plans is presented net of tax benefit of $3 million in both 2019 and 2017 and net of tax expense of $3 million in 2018.

(2) Translation adjustment is presented net of tax expense of $1 million and $2 million in 2019 and 2017, respectively, and net of tax benefit of $2 million in 2018.

(3)

In 2018, the Company adopted ASU No. 2018-02 and made a $4 million adjustment to reclassify stranded tax effects in Accumulated Other Comprehensive Loss to Retained Earnings.