BOSTON, May 7, 2012 /PRNewswire/ -- Atlantic Power
Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the
"Company") today announced its results for the three months ended
March 31, 2012. 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 "Project Adjusted EBITDA" and
"Cash Available for Distribution" as used in this news
release.
Highlights
- Project Adjusted EBITDA increased by $56.9 million, or 158%, from the comparable
period
- Acquired a 99% interest in Canadian Hills Wind, an approximate
300 MW wind power project in Oklahoma, and closed construction financing in
March; construction commenced in April
- Announced agreement with Primary Energy Recycling Corporation
("PERC") in February, in which they agreed to purchase Atlantic
Power's 14.3% interest in Primary Energy Recycling Holdings
("PERH")
"Thanks to our transformative acquisition of Capital Power
Income, LP (the "Partnership") last year, we are benefiting from
being a much larger company that owns and operates more than half
of its projects," said Barry Welch,
President & CEO. "We are building on the momentum of our
recent growth initiatives and continue to deliver long-term value
to our many stakeholders. Our commercial development team is
benefiting from increased interest on the part of development
companies to partner on a variety of late-stage development
projects, and from passive equity partners focused on leveraging
our operating expertise. Canadian Hills is a perfect example
where we are deploying capital in an accretive acquisition that has
added significant value to the Company. We are also
considering opportunities to rationalize any non-core assets in our
portfolio given our scale and primary business focus."
Operating Performance
Project Adjusted EBITDA, including earnings from equity
investments, increased by $56.9 million, or 158%, to $92.9 million for the quarter ended March 31, 2012 compared to $36.0 million for the same period in 2011,
primarily due to contributions from the 18 projects added to
Atlantic Power's portfolio when it acquired the Partnership,
including: $9 million from
Curtis Palmer; $6.4 million from Williams Lake; and $5.4
million from Tunis.
Aggregate power generation in MWhs for the three months ended
March 31, 2012 increased
approximately 138% from the comparable 2011 period primarily due to
increased generation from the newly acquired Partnership
projects. Weighted average availability of Atlantic Power's
projects increased by 2.7% to 96.3% for the quarter ended
March 31, 2012, compared to the same
period in 2011.
Cash Available for Distribution
For the three months ended March 31,
2012, Cash Available for Distribution increased by
$43.2 million compared to the same
period in 2011, primarily due to an increase in working capital
associated with the Ontario plants
acquired in the Partnership acquisition as well as reducing the
Company's combined foreign currency forward positions as a result
of the acquisition. The payout ratio for the quarter
ended March 31, 2012 was 55% compared
to 114% for the same prior year period. Due to the timing of
numerous working capital adjustments and the cash payments
associated with the Company's corporate level interest payments,
the Company's payout ratio will fluctuate from quarter to
quarter. For example, the interest payments on its
$460 million Senior Notes are due
semi-annually (May and November) and will impact the payout ratio
in the second and fourth quarters.
The calculation of Cash Available for Distribution (in both US$
and Cdn$) and a summary of Project Adjusted EBITDA by segment for
the quarters ended March 31, 2012 and
2011 are attached to this news release. [In addition, a summary of
Project Adjusted EBITDA by project for the quarter ended
March 31, 2012 is attached to this
news release.]
Canadian Hills
In March, the Company closed on a $310 million non-recourse, project-level
construction financing facility, for its 99% ownership interest in
Canadian Hills Wind, which includes a $290
million construction loan and a $20
million, 5-year letter of credit facility. The
construction loan is structured to be repaid by tax equity
investments, which we are actively pursuing, when the project
commences commercial operations. Atlantic Power is committed
to investing approximately $180
million of equity (net of financing costs) following the
funding of the construction financing. The project began
construction in April and we anticipate that the Project will begin
commercial operations by the fourth quarter of 2012. The
Company expects approximately $16 to $19
million in cash distributions from the project for each full
year of operations through 2020, after which time the Company
expects distributions to increase.
Commercial Developments
In February, Atlantic Power entered into an agreement with
Primary Energy Recycling Corporation whereby PERC will purchase the
Company's 14.3% common membership interests in PERH for
approximately $24 million, plus a
management agreement termination fee of approximately $6.1 million for a total price of $30.1 million. The transaction remains
subject to financing as well as pricing adjustment or termination
under certain circumstances, and is expected to close in the second
quarter of 2012.
In February, the Chambers project received a favorable ruling
from the Superior Court of New
Jersey in Salem County
related to a summary judgment motion on liability related to the
suit the project filed against DuPont regarding its performance
under the energy services agreement. The court's decision included
a description of the pricing methodology that is consistent with
the project's position. In April, the court issued its
written opinion which ordered DuPont to pay Chambers $15.7 million (Atlantic's share, $6.8 million) in damages and an estimated
approximately $10.6 million
(Atlantic's share, $4.2 million) in
additional interest and true-up charges. Additional details
on the suit can be found in the Company's filings.
In March, Path 15 filed a formal settlement agreement
establishing a revenue requirement at $28.8
million with the Administrative Law Judge for her review and
certification to FERC for approval. All of the parties in the
rate case either support or do not oppose the settlement
agreement. Path 15 expects an order approving the settlement
from FERC during the second quarter of 2012.
Outlook
Based on actual performance to date and projections for the
remainder of the year, Atlantic Power expects to receive
distributions from its projects in the range of $250 to $265 million for the full year 2012. The
Company expects overall levels of operating cash flows in 2012 to
be improved over 2011 levels due primarily to full year
contributions from the Partnership assets and increased
distributions from Selkirk
following the final payment of its non-recourse, project-level debt
by mid-2012. These increased operating cash flows in 2012, in
addition to the smaller and final $1
million management termination fee to ArcLight and one-time
realized gains from the termination of a portion of aggregate
foreign currency forward contracts from the combined company, are
expected to result in a significant increase in cash available for
distribution from 2011. Atlantic Power continues to
anticipate a 2012 payout ratio of approximately 90% to 97%, subject
to the financial performance of its projects.
Investor Conference Call and Webcast
A telephone conference call hosted by Atlantic Power's
management team will be held on Tuesday, May 8, 2012 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 10012731. 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. The
Company's 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 2,140 MW, consisting of interests in 31
operational power generation projects across 11 states and 2
provinces and an 84-mile, 500 kilovolt electric transmission line
located in California. In addition, the Company has one 53 MW
biomass project under construction in Georgia and one approximate 300 MW wind
project under construction in Oklahoma. Atlantic Power also
owns a majority interest in Rollcast Energy, a biomass power plant
developer in Charlotte, NC. Atlantic Power is incorporated in
British Columbia, headquartered in
Boston and has offices in
Chicago, Toronto, Vancouver and San
Diego.
The Company's corporate strategy is to increase the value of the
company through accretive acquisitions in North American markets
while generating stable, contracted cash flows from its existing
assets to sustain its dividend payout to shareholders. The
Company's dividend is currently paid monthly at an annual rate of
Cdn$1.15 per share.
Atlantic Power has a market capitalization of approximately
$1.6 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 $250 million to $265 million for the full
year 2012;
- The expectation that overall levels of operating cash flows in
2012 will be improved over actual 2011 levels;
- The expectation that the payout ratio in 2012 will be
approximately 90% to 97%;
- The expectation that the PERH transaction will close in the
second quarter of 2012;
- The expectation that Canadian Hills will achieve commercial
operation by the fourth quarter of 2012;
- The expectation that Canadian Hills will provide between
$16 and $19 million in cash
distributions for each full year through 2020, after which time the
Company expects distributions to increase; and
- The expectation that Path 15 will receive an order approving
the settlement from FERC during the second quarter of 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)
|
|
|
|
|
March
31,
|
December
31,
|
|
2012
|
2011
|
|
(Unaudited)
|
|
Assets
|
|
|
Current
assets:
|
|
|
Cash and cash equivalents
|
$106,609
|
$60,651
|
Restricted cash
|
27,761
|
21,412
|
Accounts receivable
|
59,501
|
79,008
|
Current portion of derivative instruments
asset
|
10,610
|
10,411
|
Inventory
|
18,214
|
18,628
|
Prepayments and other
|
23,647
|
7,615
|
Refundable income taxes
|
2,301
|
3,042
|
Total current assets
|
248,643
|
200,767
|
|
|
|
Property,
plant and equipment, net
|
1,549,626
|
1,388,254
|
Transmission system rights
|
178,319
|
180,282
|
Equity
investments in unconsolidated affiliates
|
477,098
|
474,351
|
Other
intangible assets, net
|
597,633
|
584,274
|
Goodwill
|
343,586
|
343,586
|
Derivative
instruments asset
|
16,589
|
22,003
|
Other
assets
|
64,216
|
54,910
|
Total assets
|
$3,475,710
|
$3,248,427
|
|
|
|
Liabilities and Shareholders'
Equity
|
|
|
Current
liabilities:
|
|
|
Accounts payable
|
$20,561
|
$18,122
|
Accrued interest
|
33,534
|
19,916
|
Other accrued liabilities
|
41,456
|
43,968
|
Revolving credit facility
|
72,800
|
58,000
|
Current portion of long-term debt
|
246,520
|
20,958
|
Current portion of derivative instruments
liability
|
50,030
|
20,592
|
Dividends payable
|
10,921
|
10,733
|
Other current liabilities
|
1,278
|
165
|
Total current liabilities
|
477,100
|
192,454
|
|
|
|
Long-term
debt
|
1,364,685
|
1,404,900
|
Convertible debentures
|
193,269
|
189,563
|
Derivative
instruments liability
|
109,873
|
33,170
|
Deferred
income taxes
|
165,413
|
182,925
|
Power
purchase and fuel supply agreement liabilities, net
|
46,811
|
71,775
|
Other
non-current liabilities
|
60,022
|
57,859
|
Commitments and contingencies
|
-
|
-
|
Total liabilities
|
$2,417,173
|
$2,132,646
|
|
|
|
Equity
|
|
|
Common shares, no par value, unlimited authorized shares;
113,680,643 and 113,526,182 issued and outstanding at March
31, 2012
and December 31, 2011, respectively
|
1,217,893
|
1,217,265
|
Preferred shares issued by a subsidiary
company
|
221,304
|
221,304
|
Accumulated other comprehensive income
(loss)
|
12,216
|
(5,193)
|
Retained deficit
|
(395,743)
|
(320,622)
|
Total Atlantic Power Corporation shareholders'
equity
|
1,055,670
|
1,112,754
|
Noncontrolling interest
|
2,867
|
3,027
|
Total
equity
|
1,058,537
|
1,115,781
|
Total
liabilities and equity
|
$3,475,710
|
$3,248,427
|
Atlantic Power Corporation
Consolidated Statements of
Operations (in thousands of U.S. dollars, except per
share amounts)
|
|
(Unaudited)
|
|
|
|
Three months ended March 31,
|
|
2012
|
2011
|
Project
revenue:
|
|
Energy sales
|
$75,968
|
$18,502
|
Energy capacity revenue
|
62,518
|
27,138
|
Transmission services
|
7,161
|
7,644
|
Other
|
21,963
|
381
|
|
167,610
|
53,665
|
|
|
|
Project
expenses:
|
|
|
Fuel
|
62,099
|
17,068
|
Operations and maintenance
|
31,500
|
11,072
|
Depreciation and amortization
|
36,468
|
10,879
|
|
130,067
|
39,019
|
Project
other income (expense):
|
|
|
Change in fair value of derivative
instruments
|
(58,122)
|
3,561
|
Equity in earnings of unconsolidated
affiliates
|
2,947
|
1,311
|
Interest expense
|
(7,033)
|
(4,647)
|
Other income (expense), net
|
15
|
(2)
|
|
(62,193)
|
223
|
Project
income
|
$(24,650)
|
$14,869
|
|
|
|
Administrative and other expenses
(income):
|
|
|
Administration
|
7,833
|
4,054
|
Interest, net
|
22,036
|
3,968
|
Foreign exchange loss (gain)
|
986
|
(658)
|
|
30,855
|
7,364
|
Income
(loss) from operations before income taxes
|
(55,505)
|
7,505
|
Income tax
expense (benefit)
|
(16,291)
|
1,523
|
Net (loss)
income
|
(39,214)
|
5,982
|
Net loss
attributable to noncontrolling interest
|
(161)
|
(154)
|
Net income
attributable to preferred shares of a subsidiary company
|
3,239
|
-
|
Net (loss)
income attributable to Atlantic Power Corporation
|
$(42,292)
|
$6,136
|
|
|
|
Net (loss)
income per share attributable to Atlantic Power Corporation
Shareholders:
|
|
|
Basic
|
$(0.37)
|
$0.09
|
Diluted
|
$(0.37)
|
$0.09
|
|
|
|
|
|
Atlantic Power Corporation
Consolidated Statements of Cash
Flows (in thousands of U.S. dollars)
|
|
|
(Unaudited)
|
|
|
|
|
|
Three
months ended March 31,
|
|
|
2012
|
2011
|
|
Cash flows
from operating activities:
|
|
|
|
|
Net
loss
|
|
$(39,214)
|
$5,982
|
|
Adjustments to reconcile to net cash provided by
operating activities
|
|
|
|
|
Depreciation and amortization
|
|
36,468
|
10,879
|
|
Long-term incentive plan expense
|
|
1,081
|
825
|
|
Earnings from unconsolidated affiliates
|
|
(2,947)
|
(1,311)
|
|
Distributions from unconsolidated
affiliates
|
|
249
|
1,450
|
|
Unrealized foreign exchange loss
|
|
12,916
|
1,878
|
|
Change in fair value of derivative
instruments
|
|
58,122
|
(3,561)
|
|
Change in deferred income taxes
|
|
(17,676)
|
2,011
|
|
Change in
other operating balances
|
|
|
|
|
Accounts receivable
|
|
19,507
|
(419)
|
|
Prepayments, refundable income taxes and other
assets
|
|
(14,134)
|
176
|
|
Accounts payable and accrued liabilities
|
|
10,574
|
1,937
|
|
Other liabilities
|
|
1,546
|
500
|
|
Net cash
provided by operating activities
|
|
$66,492
|
$20,347
|
|
|
|
|
|
|
Cash flows
(used in) provided by investing activities:
|
|
|
|
|
Proceeds from loan with Idaho Wind
|
|
-
|
5,110
|
|
Change in restricted cash
|
|
(6,349)
|
(7,524)
|
|
Biomass development costs
|
|
(123)
|
(308)
|
|
Construction in progress
|
|
(163,427)
|
(15,055)
|
|
Purchase of property, plant and equipment
|
|
(716)
|
(338)
|
|
Net cash
used in investing activities
|
|
(170,615)
|
(18,115)
|
|
|
|
|
|
|
Cash flows
(used in) provided by financing activities:
|
|
|
|
|
Proceeds from issuance of project level
debt
|
|
184,216
|
2,781
|
|
Repayment of project-level debt
|
|
(2,725)
|
(3,400)
|
|
Proceeds from revolving credit facility
borrowings
|
|
22,800
|
-
|
|
Repayments of revolving credit facility
borrowings
|
|
(8,000)
|
-
|
|
Dividends paid
|
|
(36,031)
|
(18,852)
|
|
Deferred financing costs
|
|
(10,179)
|
-
|
|
Net cash
provided by (used in) financing activities
|
|
150,081
|
(19,471)
|
|
Net
(decrease) increase in cash and cash equivalents
|
|
45,958
|
(17,239)
|
|
Cash and
cash equivalents at beginning of the period
|
|
60,651
|
45,497
|
|
Cash and
cash equivalents at end of the period
|
|
$106,609
|
$28,258
|
|
Supplemental cash flow information
|
|
|
|
|
Interest paid
|
|
$17,953
|
$4,659
|
|
Income taxes paid (refunded), net
|
|
$644
|
$14
|
|
Accruals for capital expenditures
|
|
$3,695
|
$-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 is defined as project income plus
interest, taxes, depreciation and amortization (including non-cash
impairment charges) and changes in fair value of derivative
instruments. Project Adjusted EBITDA 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 March 31,
|
|
|
2012
|
2011
|
Cash flows
from operating activities
|
|
$66,492
|
$20,347
|
Project-level debt repayments
|
|
(2,725)
|
(3,400)
|
Purchase
of property, plant and equipment
|
|
(716)
|
(338)
|
Dividends
on preferred shares of a subsidiary company
|
|
(3,239)
|
-
|
Cash
Available for Distribution(1)
|
|
59,812
|
16,609
|
|
|
|
|
Total
dividends declared to shareholders
|
|
$32,780
|
$18,992
|
|
|
|
|
Payout
ratio
|
|
55%
|
114%
|
|
|
|
|
Expressed in Cdn$
|
|
|
|
Cash
Available for Distribution
|
|
59,882
|
16,407
|
|
|
|
|
Total
dividends declared to shareholders
|
|
$32,667
|
$18,623
|
|
(1) 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" above.
|
Atlantic Power Corporation
Project
Adjusted EBITDA by Segment (in thousands of U.S.
dollars)
(Unaudited)
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
|
2012
|
2011
|
Project
Adjusted EBITDA by segment
|
|
|
|
|
|
Northeast
|
|
|
|
$42,398
|
$7,488
|
Southeast
|
|
|
|
21,674
|
19,588
|
Northwest
|
|
|
|
13,439
|
866
|
Southwest
|
|
|
|
18,764
|
8,501
|
Un-allocated corporate
|
|
|
|
(3,425)
|
(450)
|
Total
|
|
|
|
$92,850
|
$35,993
|
|
|
|
|
|
|
Reconciliation to project income
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
49,945
|
17,437
|
Interest expense, net
|
|
|
|
8,868
|
6,240
|
Change in the fair value of derivative
instruments
|
|
|
|
58,421
|
(2,784)
|
Other expense
|
|
|
|
266
|
231
|
Project
income
|
|
|
|
$(24,650)
|
$14,869
|
|
|
|
|
|
|
|
Atlantic Power Corporation
Project
Adjusted EBITDA by Project (those contributing more
than $4,000) (in thousands of U.S. dollars)
(Unaudited)
|
|
|
Three months ended March 31,
|
|
|
|
|
2012
|
Project
Adjusted EBITDA by project
|
|
|
|
|
Northeast
|
|
|
|
|
Chambers
|
|
|
|
$5,886
|
Curtis Palmer
|
|
|
|
8,981
|
Kapuskasing
|
|
|
|
4,487
|
Nipigon
|
|
|
|
4,653
|
North Bay
|
|
|
|
4,750
|
Selkirk
|
|
|
|
4,600
|
Tunis
|
|
|
|
5,398
|
Other
|
|
|
|
3,643
|
Total
|
|
|
|
42,398
|
Southeast
|
|
|
|
|
Auburndale
|
|
|
|
10,566
|
Lake
|
|
|
|
8,030
|
Other
|
|
|
|
3,078
|
Total
|
|
|
|
21,674
|
Northwest
|
|
|
|
|
Williams Lake
|
|
|
|
6,394
|
Other
|
|
|
|
7,045
|
Total
|
|
|
|
13,439
|
Southwest
|
|
|
|
|
Manchief
|
|
|
|
4,359
|
Morris
|
|
|
|
4,012
|
Path 15
|
|
|
|
6,675
|
Other
|
|
|
|
3,718
|
Total
|
|
|
|
18,764
|
Un-allocated corporate
|
|
|
|
(3,425)
|
Total
|
|
|
|
$92,850
|
|
|
|
|
|
Reconciliation to project income
|
|
|
|
|
Depreciation and amortization
|
|
|
|
$49,945
|
Interest expense, net
|
|
|
|
8,868
|
Change in the fair value of derivative
instruments
|
|
|
|
58,421
|
Other (income) expense
|
|
|
|
266
|
Project
income
|
|
|
|
$(24,650)
|
|
|
|
|
|
|
SOURCE Atlantic Power Corporation