BOSTON, Nov, 11, 2011
/PRNewswire/ -- Atlantic Power Corporation (NYSE: AT) (TSX: ATP)
("Atlantic Power" or the "Company") today announced its results for
the three and nine months ended September
30, 2011. All amounts are in U.S. dollars unless
otherwise indicated. Please see "Regulation G Disclosures"
attached to this news release for an explanation and US GAAP
reconciliation of the terms "EBITDA," "Project Adjusted EBITDA" and
"Cash Available for Distribution" as used in this news release.
Highlights
- Closed acquisition of Capital Power Income L.P. ("CPILP") on
November 5, 2011
- Financial results in line with expectations
- Maintaining 2011 project cash flow and payout ratio
guidance
"We are pleased that the results for the quarter met our
expectations and are in line with our guidance for the year,"
commented Barry Welch, President and
CEO. "With the successful close of the CPILP acquisition
behind us, we are focusing on the critical task of fully
integrating CPILP's people and assets into our organization.
First and foremost, we are dedicated to finding a permanent
CFO to join our management team. We have met with several
great candidates, and hope to have an announcement on that front
soon."
Operating Performance
Project Adjusted EBITDA, including earnings from equity
investments, decreased by $0.5 million to $41.0 million for the quarter ended
September 30, 2011 compared to
$41.5 million for the same
period last year. The primary drivers behind the decrease
were:
- decreased earnings at Chambers due to an increase in operations
and maintenance costs in connection with a forced outage in
July 2011;
- decreased earnings at Lake attributable to the plant running
favorable off-peak dispatch during the third quarter of 2010;
and
- decreased earnings at Badger Creek due to lower capacity
payments under the new one year interim power purchase agreement
beginning in April 2011.
These decreases were partially offset by:
- contributions from the Cadillac Renewable facility, which was
acquired in December 2010; and
- contributions from Idaho Wind, which became operational in the
first quarter of 2011.
Project Adjusted EBITDA, including earnings from equity
investments, increased by $1.0 million to $119.8 million for the nine months ended
September 30, 2011 compared to
$118.8 million for the same
period last year. The increase in EBITDA was attributable to
the following factors:
- contributions from the Cadillac Renewable facility, which was
acquired in December 2010; and
- contributions from Idaho Wind, which became operational in the
first quarter of 2011.
These increases were partially offset by:
- decreased earnings at Selkirk
due to lower capacity revenue in connection with a planned outage
that was longer than expected and resulted in a delay of
recognition of capacity payments until the fourth quarter of
2011;
- decreased earnings at Pasco primarily due to higher operations
and maintenance expenses attributable to the unplanned replacement
of gas turbine blades during a maintenance outage and un-planned
repairs associated with the generator and boiler;
- decreased earnings at Chambers attributable to lower dispatch
and a forced outage in July 2011;
and
- decreased earnings at Topsham, as the project was sold in
May 2011.
Cash Available for Distribution
For the three and nine months ended September 30, 2011, Cash Available for
Distribution increased by $2.6 million and $11.8 million, respectively, compared to the
prior year. The payout ratio for the nine months ended
September 30, 2011 was 93% compared
to 96% for the same period in 2010. The decrease in the
payout ratio is attributable to the increase in EBITDA previously
described and the release of $5.8
million previously trapped cash at Selkirk. The
current payout ratio and project distributions are in line with
expectations and previous guidance for the full year 2011.
The calculation of Cash Available for Distribution (in both US$
and Cdn$) and a summary of Project Adjusted EBITDA by individual
project for the three and nine months ended September, 2011 are
attached to this news release.
Capital Power Income L.P. Acquisition
On November 5, Atlantic Power
acquired all the outstanding units of CPILP pursuant to the Plan of
Arrangement that was approved by the Court of Queen's Bench of
Alberta on November 1. Details of the acquisition can be
found in our closing press release dated November 7, 2011.
Guidance
Based on our actual performance to date and projections for the
remainder of the year, we continue to expect to receive
distributions from our projects in the range of $80 million to
$90 million for the full year 2011. We expect overall levels
of operating cash flows in 2011 to be improved over actual 2010
levels. Higher distributions from existing projects, initial
distributions from our recent investment in Idaho Wind and
Cadillac, and a slightly lower payment under the management
termination agreement are expected to be partially offset by the
one-time cash tax refund of $8.0 million received in 2010. These
increased operating cash flows in 2011, combined with the impact of
our public offerings in 2010, are expected to result in a payout
ratio of approximately 100% to 105% in 2011 subject to the
financial performance of our projects. In 2012, additional
increases in distributions from projects are expected to further
increase operating cash flow compared to 2011. The most significant
factors in the expected higher operating cash flow in 2012 is
accretion from the acquisition of CPILP and increased distributions
from Selkirk following the final
payment of its non-recourse project level debt in mid-2012.
Outstanding Common Shares and Convertible Debentures
As of November 9, 2011, we had
113,474,259 common shares, Cdn$44.9 million principal amount of 6.50%
convertible secured debentures due October 31, 2014,
Cdn$68.1 million principal
amount of 6.25% convertible debentures due March 15, 2017, and
Cdn$80.5 million principal
amount of 5.60% convertible debentures due June 30, 2017
outstanding. Holders of common shares currently receive a monthly
dividend at an annual rate of Cdn$1.15 per common share.
Investor Conference Call and Webcast
A telephone conference call hosted by Atlantic Power's
management team will be held on Monday, November 14, 2011 at
10:00 AM ET. The telephone
numbers for the conference call are: U.S. Toll Free:
1-877-317-6789; Canada Toll Free: 1-866-605-3852; International
Toll: +1 412-317-6789. The Conference Call will also be
broadcast over Atlantic Power's website. Please call or log in 10
minutes prior to the call. The telephone numbers to listen to the
conference call after it is completed (Instant Replay) are U.S.
Toll Free: 1-877-344-7529; International Toll: +1-412-317-0088.
Please enter conference call number 10005106. The conference call
will also be archived on Atlantic Power's website.
About Atlantic Power
Atlantic Power is a leading publicly traded, power generation
and infrastructure company with a well diversified portfolio of
assets in the United States and
Canada. Our power generation
projects sell electricity to utilities and other large commercial
customers under long-term power purchase agreements, which seek to
minimize exposure to changes in commodity prices. The net
generating capacity of the Company's projects is approximately
2,116 MW, consisting of interests in 30 operational power
generation projects across 11 states and 2 provinces, one 53 MW
biomass project under construction in Georgia, and an 84-mile, 500 kilovolt electric
transmission line located in California. Atlantic Power also owns a
majority interest in Rollcast Energy, a biomass power plant
developer with several projects under development. Atlantic
Power is incorporated in British
Columbia, headquartered in Boston and has offices in Chicago, Toronto, and Richmond, B.C.
Our corporate strategy is to generate stable cash flows from our
existing assets and to make accretive acquisitions to sustain our
dividend payout to shareholders, which is currently paid monthly at
an annual rate of Cdn$1.15 per share.
Atlantic Power has a market capitalization of approximately
$1.5 billion and trades on the New
York Stock Exchange under the symbol AT and on the Toronto Stock
Exchange under the symbol ATP. For more information, please
visit the Company's website at www.atlanticpower.com or
contact:
Atlantic Power Corporation
Amanda Wagemaker, Investor
Relations
(617) 977-2700
info@atlanticpower.com
Copies of financial data and other publicly filed documents get
filed on SEDAR at www.sedar.com or on EDGAR at
www.sec.gov/edgar.shtml under "Atlantic Power Corporation" or on
the Company's website.
Cautionary Note Regarding Forward-looking Statements
To the extent any statements made in this news release contain
information that is not historical, these statements are
forward-looking statements within the meaning of Section 27A of the
U.S. Securities Act of 1933, as amended, and Section 21E of the
U.S. Securities Exchange Act of 1934, as amended and under Canadian
securities law (collectively, "forward-looking statements").
Certain statements in this news release may constitute
"forward-looking statements", which reflect the expectations of
management regarding the future growth, results of operations,
performance and business prospects and opportunities of our Company
and our projects. These statements, which are based on
certain assumptions and describe our future plans, strategies and
expectations, can generally be identified by the use of the words
"may," "will," "project," "continue," "believe," "intend,"
"anticipate," "expect" or similar expressions that are predictions
of or indicate future events or trends and which do not relate
solely to present or historical matters. Examples of such
statements in this press release include, but are not limited, to
statements with respect to the following:
- The expectation that distributions from our projects will be in
the range of $80 million to $90 million for the full year
2011;
- The expectation that overall levels of operating cash flows in
2011 will be improved over actual 2010 levels; and
- The expectation that the payout ratio in 2011 will be
approximately 100%-105% and that improvements in cash flow and
payout ratio are expected in 2012.
Forward-looking statements involve significant risks and
uncertainties, should not be read as guarantees of future
performance or results, and will not necessarily be accurate
indications of whether or not or the times at or by which such
performance or results will be achieved. Please refer to the
factors discussed under "Risk Factors" in the Company's periodic
reports as filed with the Securities and Exchange Commission from
time to time for a detailed discussion of the risks and
uncertainties affecting our Company. Although the
forward-looking statements contained in this news release are based
upon what are believed to be reasonable assumptions, investors
cannot be assured that actual results will be consistent with these
forward-looking statements, and the differences may be material.
These forward-looking statements are made as of the date of
this news release and, except as expressly required by applicable
law, the Company assumes no obligation to update or revise them to
reflect new events or circumstances. The financial outlook
information contained in this news release is presented to provide
readers with guidance on the cash distributions expected to be
received by the Company and to give readers a better understanding
of the Company's ability to pay its current level of distributions
into the future. Readers are cautioned that such information
may not be appropriate for other purposes.
|
|
Atlantic
Power Corporation
Consolidated
Balance Sheets (in
thousands of U.S. dollars)
|
|
|
|
|
|
|
September
30,
|
December 31,
|
|
|
2011
|
2010
|
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Current assets:
|
|
|
|
Cash and cash
equivalents
|
$38,254
|
$45,497
|
|
Restricted cash
|
28,123
|
15,744
|
|
Accounts receivable
|
19,104
|
19,362
|
|
Note receivable – related
party
|
7,326
|
22,781
|
|
Current portion of derivative
instruments asset
|
649
|
8,865
|
|
Prepayments, supplies and
other
|
10,967
|
8,480
|
|
Refundable income
taxes
|
1,594
|
1,593
|
|
Total current assets
|
106,017
|
122,322
|
|
|
|
|
|
Property, plant and
equipment, net
|
360,594
|
271,830
|
|
Transmission system
rights
|
182,245
|
188,134
|
|
Equity investments in
unconsolidated affiliates
|
275,425
|
294,805
|
|
Other intangible assets,
net
|
71,802
|
88,462
|
|
Goodwill
|
12,453
|
12,453
|
|
Derivative instruments
asset
|
4,593
|
17,884
|
|
Other assets
|
15,892
|
17,122
|
|
Total assets
|
$1,029,021
|
$1,013,012
|
|
|
|
|
|
Liabilities
and Shareholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and accrued
liabilities
|
$42,373
|
$20,530
|
|
Current portion of long-term
debt
|
22,562
|
21,587
|
|
Current portion of derivative
instruments liability
|
34,921
|
10,009
|
|
Interest payable on convertible
debentures
|
2,442
|
3,078
|
|
Dividends payable
|
6,003
|
6,154
|
|
Other current
liabilities
|
10
|
5
|
|
Total current
liabilities
|
108,311
|
61,363
|
|
|
|
|
|
Long term debt
|
294,989
|
244,299
|
|
Convertible
debentures
|
188,620
|
220,616
|
|
Derivative instruments
liability
|
27,892
|
21,543
|
|
Deferred income
taxes
|
18,142
|
29,439
|
|
Other non-current
liabilities
|
2,193
|
2,376
|
|
Commitments and
contingencies
|
-
|
-
|
|
Total liabilities
|
640,147
|
579,636
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
Common shares, no par value,
unlimited authorized shares; 68,997,122 and 67,188,154 issued and
outstanding September 30, 2011 and December 31, 2010,
respectively
|
649,070
|
626,108
|
|
Accumulated other comprehensive
income (loss)
|
(1,218)
|
255
|
|
Retained deficit
|
(262,136)
|
(196,494)
|
|
Total Atlantic Power Corporation
shareholders' equity
|
385,716
|
429,869
|
|
Noncontrolling
interest
|
3,158
|
3,507
|
|
Total equity
|
388,874
|
433,376
|
|
Total liabilities and
equity
|
$1,029,021
|
$1,013,012
|
|
|
|
|
|
|
|
|
Atlantic
Power Corporation
Consolidated
Statements of Operations (in
thousands of U.S. dollars, except per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
September
30,
|
Nine months
ended
September
30,
|
|
|
2011
|
2010
|
2011
|
2010
|
|
Project
revenue:
|
|
|
|
|
|
Energy sales
|
$17,104
|
$22,713
|
$53,471
|
$55,285
|
|
Energy capacity
revenue
|
27,070
|
23,196
|
81,859
|
69,585
|
|
Transmission services
|
7,638
|
7,813
|
22,773
|
23,186
|
|
Other
|
521
|
317
|
1,153
|
1,108
|
|
|
52,333
|
54,039
|
159,256
|
149,164
|
|
|
|
|
|
|
|
Project
expenses:
|
|
|
|
|
|
Fuel
|
14,818
|
19,678
|
46,202
|
51,606
|
|
Operations and
maintenance
|
8,645
|
6,846
|
27,518
|
19,248
|
|
Depreciation and
amortization
|
10,908
|
10,082
|
32,711
|
30,224
|
|
|
34,371
|
36,606
|
106,431
|
101,078
|
|
Project other income
(expense):
|
|
|
|
|
|
Change in fair value of
derivative instruments
|
(11,484)
|
(9,744)
|
(12,497)
|
(20,946)
|
|
Equity in earnings of
unconsolidated affiliates
|
2,374
|
4,088
|
5,647
|
12,550
|
|
Interest expense, net
|
(4,494)
|
(4,165)
|
(13,684)
|
(12,884)
|
|
Other income (expense),
net
|
(7)
|
22
|
(40)
|
233
|
|
|
(13,611)
|
(9,799)
|
(20,574)
|
(21,047)
|
|
Project income
|
4,351
|
7,634
|
32,251
|
27,039
|
|
Administrative and other
expenses (income):
|
|
|
|
|
|
Administration
|
11,936
|
4,103
|
20,661
|
12,046
|
|
Interest
|
3,337
|
2,707
|
10,815
|
8,019
|
|
Foreign exchange loss
(gain)
|
21,576
|
(2,253)
|
20,383
|
179
|
|
Other income, net
|
-
|
-
|
-
|
(26)
|
|
|
36,849
|
4,557
|
51,859
|
20,218
|
|
(Loss) income from
operations before income taxes
|
(32,498)
|
3,077
|
(19,608)
|
6,821
|
|
Income tax (benefit)
expense
|
(4,520)
|
3,614
|
(10,681)
|
12,105
|
|
Net loss
|
(27,978)
|
(537)
|
(8,927)
|
(5,284)
|
|
Net loss attributable to
noncontrolling interest
|
(78)
|
(99)
|
(349)
|
(228)
|
|
Net loss attributable to
Atlantic Power Corporation
|
$(27,900)
|
$(438)
|
$(8,578)
|
$(5,056)
|
|
|
|
|
|
|
|
Net loss per share
attributable to Atlantic Power Corporation Shareholders:
|
|
|
|
|
|
Basic
|
$(0.40)
|
$(0.01)
|
$(0.13)
|
$(0.08)
|
|
Diluted
|
$(0.40)
|
$(0.01)
|
$(0.13)
|
$(0.08)
|
|
Weighted average number of
common shares outstanding:
|
|
|
|
|
|
Basic
|
68,910
|
60,511
|
68,384
|
60,466
|
|
Diluted
|
66,910
|
60,511
|
68,384
|
60,466
|
|
|
|
|
|
|
|
|
|
|
Atlantic
Power Corporation
Consolidated
Statements of Cash Flows (in
thousands of U.S. dollars)
(Unaudited)
|
|
|
|
|
|
|
Nine months
ended September 30,
|
|
|
2011
|
2010
|
|
Cash flows from operating
activities:
|
|
|
|
Net loss
|
$(8,927)
|
$(5,284)
|
|
Adjustments to reconcile
to net cash provided by operating activities
|
|
|
|
Depreciation and
amortization
|
32,711
|
30,224
|
|
Long-term incentive plan
expense
|
2,257
|
3,287
|
|
Gain on step-up valuation of
Rollcast acquisition
|
-
|
(211)
|
|
Equity in earnings from
unconsolidated affiliates
|
(5,647)
|
(12,550)
|
|
Distributions from
unconsolidated affiliates
|
15,542
|
9,897
|
|
Unrealized foreign exchange
loss
|
28,175
|
4,369
|
|
Change in fair value of
derivative instruments
|
12,497
|
20,946
|
|
Change in deferred income
taxes
|
(10,315)
|
10,555
|
|
Change in other operating
balances
|
|
|
|
Accounts receivable
|
258
|
(3,072)
|
|
Prepayments, refundable income
taxes and other assets
|
(570)
|
1,189
|
|
Accounts payable and accrued
liabilities
|
1,536
|
3,747
|
|
Other liabilities
|
(1,178)
|
576
|
|
Net cash provided by
operating activities
|
66,339
|
63,673
|
|
|
|
|
|
Cash flows used in
investing activities:
|
|
|
|
Acquisitions and investments,
net of cash acquired
|
-
|
(41,182)
|
|
Change in restricted
cash
|
(12,379)
|
(7,398)
|
|
Proceeds from sale of equity
investments
|
8,500
|
-
|
|
Proceeds from Idaho Wind
loan
|
15,455
|
-
|
|
Short-term loan to Idaho
Wind
|
-
|
(12,801)
|
|
Biomass development
costs
|
(753)
|
(1,827)
|
|
Purchase of property, plant and
equipment
|
(79,070)
|
(2,077)
|
|
Net cash used in investing
activities
|
(68,247)
|
(65,285)
|
|
|
|
|
|
Cash flows used in
financing activities:
|
|
|
|
Proceeds from project-level
debt
|
65,374
|
-
|
|
Repayment of project-level
debt
|
(13,166)
|
(11,841)
|
|
Equity investment from
noncontrolling interest
|
-
|
200
|
|
Proceeds from revolving credit
facility borrowings
|
-
|
20,000
|
|
Dividends paid
|
(57,543)
|
(47,599)
|
|
Net cash used in financing
activities
|
(5,335)
|
(39,240)
|
|
Net decrease in cash and
cash equivalents
|
(7,243)
|
(40,852)
|
|
Cash and cash equivalents
at beginning of period
|
45,497
|
49,850
|
|
Cash and cash equivalents
at end of period
|
$38,254
|
$8,998
|
|
Supplemental cash flow
information
|
|
|
|
Interest paid
|
$21,567
|
$16,587
|
|
Income taxes refunded,
net
|
$(352)
|
$(1,607)
|
|
Accruals for capital
expenditures
|
$19,547
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Regulation G Disclosures
Cash Available for Distribution is not a measure recognized
under U.S. generally accepted accounting principles ("GAAP") and
does not have a standardized meaning prescribed by GAAP.
Management believes Cash Available for Distribution is a
relevant supplemental measure of the Company's ability to earn and
distribute cash returns to investors. A reconciliation of
Cash Flows from Operating Activities to Cash Available for
Distributions is provided below. Investors are cautioned that
the Company may calculate this measure in a manner that is
different from other companies.
Project Adjusted EBITDA, earnings before interest, taxes,
depreciation and amortization (including non-cash impairment
charges), is not a measure recognized under GAAP and is therefore
unlikely to be comparable to similar measures presented by other
issuers and does not have a standardized meaning prescribed by
GAAP. Management uses Project Adjusted EBITDA at the
Project-level to provide comparative information about project
performance. A reconciliation of Project Adjusted EBITDA to
project income is provided on the following page. Investors
are cautioned that the Company may calculate this measure in a
manner that is different from other issuers.
|
|
Atlantic
Power Corporation
Cash
Available for Distribution
(In
thousands of U.S. dollars, except as otherwise
stated)
(Unaudited)
|
|
|
|
|
|
|
|
|
Three months
ended
September 30,
|
Nine months
ended
September
30,
|
|
|
2011
|
2010
|
2011
|
2010
|
|
Cash flows from operating
activities
|
$21,624
|
$27,695
|
$66,339
|
$63,673
|
|
Project-level debt
repayments
|
(2,825)
|
(2,700)
|
(13,166)
|
(11,841)
|
|
Purchase of property,
plant and equipment(1)
|
(268)
|
(557)
|
(814)
|
(2,077)
|
|
Transaction
Costs(2)
|
8,470
|
-
|
9,238
|
-
|
|
Cash Available for
Distribution(3)
|
27,001
|
24,438
|
61,597
|
49,755
|
|
|
|
|
|
|
|
Total dividends to
shareholders
|
19,010
|
15,904
|
57,552
|
47,618
|
|
|
|
|
|
|
|
Payout ratio
|
70%
|
65%
|
93%
|
96%
|
|
|
|
|
|
|
|
Expressed in
Cdn$
|
|
|
|
|
|
Cash Available for
Distribution
|
26,833
|
25,404
|
60,520
|
51,552
|
|
|
|
|
|
|
|
Total dividends to
shareholders
|
18,874
|
16,556
|
56,259
|
49,639
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes
construction-in-progress related to our Piedmont biomass
project.
|
|
(2) Represents costs
associated with the CPILP acquisition.
|
|
(3) Cash Available for
Distribution is not a recognized measure under GAAP and does not
have any standardized meaning prescribed by GAAP. Therefore, this
measure may not be comparable to similar measures presented by
other companies. See "Supplementary Non-GAAP Financial
Information".
|
|
|
|
|
Atlantic
Power Corporation
Project
Adjusted EBITDA (in
thousands of U.S. dollars)
(Unaudited)
|
|
|
|
|
|
|
|
|
Three months
ended
September 30,
|
Nine months
ended
September
30,
|
|
|
2011
|
2010
|
2011
|
2010
|
|
Project
Adjusted EBITDA by individual segment
|
|
|
|
|
|
Auburndale
|
$10,158
|
$10,018
|
$32,077
|
$29,820
|
|
Lake
|
8,517
|
9,325
|
25,431
|
23,937
|
|
Pasco
|
1,149
|
1,335
|
1,541
|
3,752
|
|
Path 15
|
7,117
|
7,318
|
20,873
|
21,348
|
|
Chambers
|
3,358
|
4,637
|
12,389
|
14,780
|
|
Total
|
30,299
|
32,633
|
92,311
|
93,637
|
|
Other
Project Assets
|
|
|
|
|
|
Selkirk
|
4,322
|
3,927
|
8,636
|
10,983
|
|
Orlando
|
1,824
|
2,185
|
4,917
|
5,856
|
|
Cadillac
|
2,178
|
-
|
6,569
|
-
|
|
Gregory
|
1,027
|
1,373
|
2,755
|
3,656
|
|
Idaho Wind
|
747
|
-
|
2,798
|
-
|
|
Badger Creek
|
(63)
|
699
|
738
|
2,209
|
|
Delta Person
|
561
|
461
|
1,403
|
1,365
|
|
Koma Kulshan
|
374
|
53
|
808
|
606
|
|
Rollcast
|
(348)
|
(249)
|
(1,121)
|
(628)
|
|
Piedmont
|
(14)
|
-
|
(75)
|
-
|
|
Topsham
|
-
|
415
|
-
|
1,378
|
|
Other
|
73
|
46
|
88
|
(244)
|
|
Total
Adjusted EBITDA from Other Project Asset segment
|
10,681
|
8,910
|
27,516
|
25,181
|
|
Total
adjusted EBITDA from all Projects
|
40,980
|
41,543
|
119,827
|
118,818
|
|
Depreciation and
amortization
|
17,824
|
16,349
|
52,922
|
49,331
|
|
Interest expense, net
|
6,624
|
5,906
|
19,952
|
17,784
|
|
Change in the fair value of
derivative instruments
|
10,871
|
10,706
|
12,913
|
23,435
|
|
Other expense
|
1,310
|
948
|
1,789
|
1,229
|
|
Project income as reported in
the statement of operations
|
$4,351
|
$7,634
|
$32,251
|
$27,039
|
|
|
|
|
|
|
|
|
SOURCE Atlantic Power Corporation