BOSTON, Feb. 27, 2014
/PRNewswire/ -- Atlantic Power Corporation (NYSE: AT) (TSX:
ATP) ("Atlantic Power" or the "Company") today released its results
for the three months and year ended December
31, 2013.
All amounts are in U.S. dollars unless otherwise indicated.
Cash Available for Distribution, Cash Distributions from Projects,
Payout Ratio, and Project Adjusted EBITDA are not recognized
measures under generally accepted accounting principles in
the United States ("GAAP") and do
not have standardized meanings prescribed by GAAP; therefore, these
measures may not be comparable to similar measures presented by
other companies. Please see "Regulation G Disclosures" attached to
this news release for an explanation and the GAAP reconciliation of
"Cash Available for Distribution", "Cash Distributions from
Projects", "Payout Ratio" and "Project Adjusted EBITDA" as used in
this news release. Going forward, the Company expects to provide
guidance and updates regarding Project Adjusted EBITDA and Free
Cash Flow, which are non-GAAP measures, along with reconciliations
to project income and cash flows from operating activities,
respectively, the most directly comparable GAAP
measures.
Full Year 2013 Financial Highlights
- Project income increased $93.7 million
to $64.3 million in 2013 compared to a project loss of
$(29.4) million in 2012
- Cash flows from operating activities, including discontinued
operations, decreased $14.7 million
from 2012 to $152.4 million in
2013
- Project Adjusted EBITDA increased $42.9
million from 2012 to $270.5
million in 2013, slightly above the midpoint of the
Company's revised guidance range
- Cash Available for Distribution, including discontinued
operations, decreased $22.8 million
from 2012 to $108.8 million in 2013,
above the upper end of the Company's guidance range
Recent Financing Developments
- Made significant progress in achieving financial goals of
addressing near-term debt maturities, gaining additional financial
flexibility and reducing debt over time
- Closed new $210 million senior
secured revolving credit facility maturing in 2018, which replaced
the existing $150 million revolver
maturing in March 2015
- Closed new $600 million senior
secured term loan maturing in 2021; proceeds applied to redeem
$415 million of debt with maturities
in 2014, 2015 and 2017
- All-in interest rate on new facilities of 4.75% is favorable to
the weighted average rate on debt redeemed (5.9%)
- Converted Piedmont's
construction loan to a $68.5 million
term loan maturing in August
2018
2014 Guidance
- Project Adjusted EBITDA in the range of $280 to $305 million
- Free Cash Flow in the range of $0 to $25
million, after discretionary capex of approximately
$18 million, projected repayment of
project debt and amortization of the new term loan totaling
approximately $79 million
"Our projects performed well and our financial results met
or exceeded our guidance for the year. In 2014, we expect growth of
8% in Project Adjusted EBITDA, including an initial contribution
from investments made last year to optimize the performance of our
projects," said Barry Welch,
President and CEO of Atlantic Power. "We are ramping up these
efforts and have now committed to $27
million of organic growth investments through 2014, which we
expect will produce a run-rate Project Adjusted EBITDA contribution
of at least $8 million in
2015."
Mr. Welch continued, "We were very pleased with the
successful execution of our refinancing, which is an important step
in increasing our financial flexibility and liquidity and
addressing our near-term debt maturities. In addition, we
plan to redeem our C$45 million
convertible debenture due in October with cash on hand and, subject
to market and other conditions, may reduce up to $150 million of additional debt with the excess
proceeds from the financing and a portion of cash on hand.
Additionally, we will be evaluating a range of options, including
asset sales or joint ventures to raise capital in a cost-effective
manner for growth or additional debt reduction, as well as broader
strategic options to improve shareholder value. Our dividend
level will be reviewed as part of this analysis."
Atlantic Power Corporation
|
Table 1 – Selected Results
|
(in millions of U.S. dollars, except as otherwise
stated)
|
|
|
|
|
Years ended December
31,
|
Unaudited
|
2013
|
2012
|
Excluding results from discontinued operations
(1)
|
|
|
Project revenue
|
$551.7
|
$440.4
|
Project income (loss)
|
64.3
|
(29.4)
|
Project Adjusted EBITDA
|
270.5
|
227.6
|
Cash Distributions from Projects
|
225.6
|
199.8
|
Aggregate power generation (thousands of Net
MWh)
|
8,436.0
|
5,906.2
|
Weighted average availability
|
95%
|
95%
|
Including results from discontinued
operations
|
|
|
Cash flows from operating
activities
|
$152.4
|
$167.1
|
Cash Available for Distribution
|
108.8
|
131.6
|
Total cash dividends declared to
shareholders
|
58.0
|
131.8
|
Payout Ratio
|
53%
|
100%
|
(1) The Path 15 transmission line ("Path
15"), Auburndale Power Partners, L.P. ("Auburndale"), Lake CoGen,
Ltd. ("Lake") and Pasco Cogen, Ltd. ("Pasco") (collectively, the
"Sold Projects") and Rollcast were sold in April 2013 and November
2013, respectively, and accordingly, the revenues, project income
(loss), Project Adjusted EBITDA and Cash Distributions from
Projects of these assets have been classified as discontinued
operations for the years ended December 31, 2013 and 2012, which
means that the results from these discontinued operations are
excluded from these figures. The results for discontinued
operations have also been excluded from the aggregate power
generation and weighted average availability statistics. Under
GAAP, the cash flows attributable to the Sold Projects and Rollcast
are included in cash flows from operating activities as shown on
the Consolidated Statement of Cash Flows; therefore, the Company's
calculations of Cash Available for Distribution and Payout Ratio as
shown herein also include cash flows from the Sold Projects and
Rollcast.
|
|
|
|
Note: Project Adjusted EBITDA, Cash Available for
Distribution, Cash Distributions from Projects and Payout Ratio are
not recognized measures under GAAP and do not have any standardized
meaning prescribed by GAAP; therefore, these measures may not be
comparable to similar measures presented by other companies. Please
refer to Table 11 for reconciliations of these non-GAAP measures to
GAAP measures.
|
Financial Review for the Year Ended December 31, 2013
GAAP Measures
Project income increased by $93.7
million to $64.3 million in
2013 compared to a project loss of $(29.4)
million in 2012. The increase in project income relates
primarily to a $30.4 million gain on
the sale of the Company's 17% interest in the Gregory project in
August 2013, additional project
income from an increased interest in Rockland and new projects added in
December 2012 (particularly Canadian
Hills and Meadow Creek) in the
Company's Wind segment and mark-to-market adjustments to
interest rate swaps and gas purchase agreements for three of the
Company's gas-fired projects in Ontario in the Company's East segment. These
increases were partially offset by $(34.9)
million of goodwill impairments. Generally, reported
project income can fluctuate significantly due to impacts from
non-cash mark-to-market fair value of derivatives
adjustments.
Cash flows from operating activities, which include cash
flows from discontinued operations, decreased by $14.7 million to $152.4
million in 2013 compared to $167.1
million in 2012. Factors positively contributing to
annual results include cash flows from new projects added in
December 2012 (see project income
discussion above), and positive changes in working capital.
These factors were more than offset by reduced cash flow
contributions from assets that were divested in April 2013.
Non-GAAP Measures
Project Adjusted EBITDA, which includes earnings from the
Company's equity method investments but excludes the results of
discontinued operations, increased by $42.9
million to $270.5 million for
2013 compared to $227.6 million for
2012. The increase is primarily due to contributions from new
projects added in December 2012 and
April 2013, which include
$25.6 million from Canadian Hills,
$14.0 million from Meadow Creek, and a modest contribution from
Piedmont. Rockland
contributed $6.8 million more in 2013
than in 2012, which is attributable to the 100% consolidation of
the former equity method project after increasing the Company's
ownership from 30% to 50% as part of the Ridgeline acquisition in
December 2012. Several projects in the Company's East segment
also posted higher operating results for the year, due to a
combination of factors including higher generation, higher capacity
revenues and favorable outage comparisons. Two projects in
the Company's West segment experienced a decline in Project
Adjusted EBITDA resulting from higher maintenance costs due to
scheduled outages and decreased energy revenues caused by low water
levels and contractual price decreases. The Company has not
reconciled non-GAAP financial measures relating to individual
projects to the directly comparable GAAP measures due to the
difficulty in making the relevant adjustments on an individual
project basis.
Cash Distributions from Projects, which excludes cash
distributions from discontinued operations, increased by
$25.8 million to $225.6 million in 2013, compared to $199.8 million in 2012. The increase in
Cash Distributions from Projects for the year is primarily due to
distributions from Canadian Hills and Meadow Creek, both of which were added in
December 2012. Results were also helped by increased
distributions from the Company's East segment including projects in
Ontario, which benefited from
higher waste heat, as well as cash distributions made to the
Company in 2013 by the Chambers project. In 2012,
distributions from the Chambers project were restricted from being
made due to project holding company debt requirements. These
increased distributions were partly offset by decreased
distributions in the West segment in 2013 compared to 2012.
Cash Available for Distribution begins with cash flows
from operating activities and deducts project-level debt
repayments, capital expenditures, distributions to non-controlling
interests (primarily the other 50% owner of Rockland and the tax equity investors at
Canadian Hills) and preferred dividends. In 2013, Cash
Available for Distribution decreased by $22.8 million to $108.8
million from $131.6 million in
2012. The primary reasons for the decline include a reduction
in cash flow contributions from assets that were divested in
April 2013, higher capital
expenditures associated with a repowering of two turbines at the
Company's Curtis Palmer project and initial outlays at Nipigon for a steam generator upgrade planned
for 2014. These reductions were partly offset by positive
contributions from new projects added in December 2012, including Canadian Hills,
Meadow Creek and Rockland, net of distributions to their
minority interests, if any; positive changes in working capital;
and, to a lesser extent, lower project-level debt
repayments.
Payout Ratio for the year ended December 31, 2013 was 53% compared to 100% in
2012. The payout ratio for 2013 as compared to the same
period in 2012 was positively impacted by the reduced cash
dividends declared to shareholders as well as the first full year
of operating results from Canadian Hills and Meadow Creek. This was partially offset by
lower operating cash flow contributions from assets that were
divested in April 2013. For
further information, attached to this news release is a
reconciliation of Cash Available for Distribution and Payout Ratio
to cash flows from operating activities (Table 11).
Financial Review for the Three Months Ended December 31, 2013
Project income increased by $13.0
million to $7.2 million for
the three months ended December 31,
2013 compared to a project loss of $(5.8) million in the year-ago period. The
increase in project income relates primarily to a $24.0 million mark-to-market increase in the fair
value of gas purchase agreements at the North Bay and Kapuskasing projects, partially offset by an
increase in project expenses.
Project Adjusted EBITDA increased by $0.3 million to $57.2
million for the three months ended December 31, 2013 from $56.9 million for the year-ago period.
Contributions from new projects for this period were $7.3 million from Canadian Hills, $3.6 million from Meadow Creek and $(1.4)
million from Piedmont. These contributions were mostly
offset by decreases from other projects, including Curtis Palmer
(lower water levels) and Tunis
(outage due to extreme cold temperatures in Ontario). The Company has not reconciled
non-GAAP financial measures relating to individual projects to the
directly comparable GAAP measures due the difficulty in making the
relevant adjustments on an individual project basis.
Results of Discontinued Operations
Financial results for the three months and year ended
December 31, 2013 and December 31, 2012 are affected by the
classification of the Company's interests in its divested assets as
discontinued operations; accordingly, the revenues, project income,
Project Adjusted EBITDA and Cash Distributions from Projects
classified as discontinued operations are excluded from continuing
operations results. The results of discontinued operations
have been separately stated in the Consolidated Statements of
Operations as "Net income (loss) from discontinued operations, net
of tax".
Under GAAP, the cash flow attributable to discontinued
operations is included in cash flows from operating activities as
shown on the Consolidated Statement of Cash Flows; therefore, the
Company's calculations of Cash Available for Distribution and
Payout Ratio as shown herein also include cash flow from
discontinued operations.
Project income (loss) from discontinued operations was
$(0.2) million and $(6.2) million for the three months and year
ended December 31, 2013, compared to
$(34.8) million and $13.9 million, respectively, for the same periods
in 2012.
Project Adjusted EBITDA from discontinued operations was
$(0.2) million and $35.2 million for the three months and year ended
December 31, 2013, respectively,
compared to $25.8 million and
$104.9 million, respectively, for the
same periods in 2012.
Cash Available for Distribution from discontinued
operations for the year ended December 31,
2013 was $36 million compared
to $48 million for the same period in
2012.
The Delta-Person generating station ("Delta-Person"), which is
under a purchase and sale agreement, and the Gregory project, which
was sold in August 2013, are included
in the Company's financial results from continuing operations for
the three months and year ended December 31,
2013 and 2012, as the projects are accounted for under the
equity method of accounting.
The Company has not reconciled non-GAAP financial measures
relating to discontinued operations to the directly comparable GAAP
measures due to the difficulty in making the relevant adjustments
on an individual project basis.
Supplementary Financial Tables
For further information, attached to this news release is a:
- Summary of Project Adjusted EBITDA by segment for the three
months ended December 31, 2013 and
2012 and the years ended December 31,
2013, 2012 and 2011 (Table 9) with a reconciliation to
Project income (loss);
- Bridge from Project Adjusted EBITDA to Cash Distributions from
Projects by segment for the year ended December 31, 2013 (Table 10A) and the year ended
December 31, 2012 (Table 10B);
- Reconciliation of Cash Distributions from Projects and Project
Adjusted EBITDA to net income (loss) for the years ended
December 31, 2013, 2012 and 2011
(Table 11);
- Reconciliation of Cash Available for Distribution and Payout
Ratio to cash flows from operating activities for the years ended
December 31, 2013, 2012 and 2011
(Table 11); and
- Summary of Project Adjusted EBITDA for selected projects (top
contributors based on the Company's 2013 budget, representing
approximately 75% to 80% of total Project Adjusted EBITDA) for the
years ended December 31, 2013, 2012
and 2011 (Table 12).
Liquidity and Financing Update
New Term Loan and Revolving Credit Facility
At December 31, 2013, the Company
had liquidity of $183.6 million,
consisting of $158.6 million of
unrestricted cash and $25 million of
borrowing capacity under its existing senior secured revolving
credit facility (the "Prior Credit Facility").
On February 24, 2014, Atlantic
Power Limited Partnership ("APLP") entered into new senior secured
credit facilities (the "Senior Secured Credit Facilities"),
comprised of a $600 million senior
secured term loan facility (the "Senior Secured Term Loan
Facility") maturing in February 2021
and a senior secured revolving credit facility (the "Senior Secured
Revolving Credit Facility") with a capacity of $210 million maturing in February 2018. The Senior Secured Credit
Facilities are secured by the 17 projects at APLP, which were
acquired when the Company purchased Capital Power Income LP in
November 2011.
The $210 million Senior Secured
Revolving Credit Facility at APLP replaced the $150 million Prior Credit Facility at Atlantic
Power Corporation in place at December 31,
2013 that would have otherwise matured in March 2015. Borrowings under the Senior
Secured Credit Facilities bear interest at a rate equal to the
Adjusted Eurodollar rate, the Base Rate or the Canadian Prime Rate
(as defined in the credit agreement governing the Senior Secured
Credit Facilities). Currently, the applicable margin for term
loans based on the Adjusted Eurodollar Rate is 3.75%, with an
Adjusted Eurodollar Rate floor of 1.00%, or an all-in rate of
4.75%. The Senior Secured Term Loan Facility has a mandatory
amortization of 1% annually. In addition, the loan will be
paid down via a 50% sweep of APLP's cash flow after capex and debt
service.
Proceeds from the Senior Secured Term Loan Facility were used to
redeem in whole, at a price equal to par plus accrued interest and
applicable make-whole premiums, the $190
million Curtis Palmer Notes maturing in 2014, the
$150 million Series A Notes maturing
in 2015 and the $75 million Series B
Notes maturing in 2017 issued by Atlantic Power (US) GP. Key
positive characteristics of this refinancing include:
- Substantial reduction in the Company's near-term debt
maturities ($415 million). After the
planned redemption of the C$45
million convertible debenture maturing in October with cash,
the Company will have no maturities until March 2017;
- Attractive all-in interest rate of 4.75%, which is below the
cost of the redeemed debt ($415
million; weighted average of 5.9%);
- Subject to market conditions and other factors, that the
Company may use the remaining proceeds from the Senior Secured Term
Loan Facility, together with cash on hand, to repurchase or redeem,
by means of a tender offer or otherwise, up to $150 million aggregate principal amount of the
Company's high-yield 9.0% notes;
- Mandatory 1% amortization and 50% cash sweep features of the
term loan result in significant debt repayment through project cash
flows by maturity and the expected reduction in interest expense
over time;
- Borrowing capacity under the Senior Secured Revolving Credit
Facility is $210 million less letters
of credit outstanding, versus a $25
million cap under the Prior Credit Facility, and with no
requirement to maintain a $75 million
cash reserve.
The foregoing description of the Senior Secured Credit
Facilities is qualified in its entirety by reference to the
Company's Current Report on Form 8-K filed on February 26, 2014 announcing the execution,
closing and funding of the Senior Secured Credit Facilities and the
full text of the credit agreement governing the Senior Secured
Credit Facilities, which the Company filed as Exhibit 10.1 to its
Annual Report on Form 10-K for the year ended December 31, 2013.
The Company expects to be in compliance with the financial
maintenance covenants in the Senior Secured Credit Facilities for
at least the next twelve months.
Due to the aggregate impact of the up-front costs resulting from
the prepayments on the Company's indebtedness described
above, the Company is no longer in compliance with the fixed charge
coverage ratio included in the restricted payments test of the
indenture governing its high-yield 9.0% notes. As a consequence,
further dividend payments, which are declared and paid at the
discretion of the Company's board of directors, in the aggregate
cannot exceed the restricted payments "basket" of the greater of
$50 million and 2% of consolidated
net assets, as defined, (approximately $61
million at December 31, 2013)
until such time that the Company is in compliance with the fixed
charge coverage ratio.
See Table 2 for actual debt outstanding at December 31, 2013, pro forma adjustments to
reflect the refinancing transaction, and projected debt at year-end
2014, which also reflects initial-year amortization of the term
loan, project-level debt repayments in 2014, the potential
repurchase or redemption, subject to market conditions, by means of
a tender offer or otherwise, of up to $150
million of the Company's high-yield 9.0% notes, and the
redemption of the convertible debentures due in October 2014.
Atlantic Power
Corporation
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Table 2 – Debt
Outstanding, including the Company's share of equity method project
debt (in millions of U.S. dollars)
|
|
Unaudited
|
December 31,
2013
|
Pro Forma
(1)
|
Projected Year End
(2)
|
Atlantic Power
Corporation
|
$865
|
$865
|
$673
|
Atlantic Power
Limited Partnership
|
612
|
797
|
745
|
Non-Recourse
Project-level (consolidated)
|
399
|
391
|
372
|
Non-Recourse
Project-level (equity method)
|
119
|
119
|
108
|
Total
Debt
|
$1,995
|
$2,172
|
$1,898
|
(1) Pro
forma for the following: pay-down of Piedmont construction debt by
$8.1 million and conversion of remainder to a $68.5 million term
loan maturing in August 2018; issuance of $600 million APLP term
loan maturing in February 2021; redemption of $190 million Curtis
Palmer debt (Feb 2014); and redemption of $225 million US GP notes
(Feb 2014).
(2)
Accounts for: payment of $42.1 (C$44.8) million convertible
debentures (October 2014); the potential repurchase or redemption,
subject to market conditions, by means of a tender offer or
otherwise, of up to $150 million par value of the high-yield 9%
notes; 1% mandatory amortization and 50% cash sweep on APLP's term
loan (expected to be approximately $52.0 million on a pro rata
basis in 2014), the sale of Delta-Person in 2014 ($6.5 million
equity method debt), and project-level debt repayments and other
debt payments of $22.6 million ($3.7 million at equity method
projects) in 2014.
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Liquidity
Letters of credit outstanding at year end 2013 totaled
$98 million. As of February 26, 2014, letters of credit outstanding
totaled $144 million. The
increase from year end reflects net changes with various
counterparties due to changes in commodity prices, a $15.8 million letter of credit posted in
conjunction with the debt service reserve required under the new
term loan, a reduction in letters of credit resulting from the
Piedmont term loan conversion
(discussed below), and the resolution of discussions with an
existing gas supplier that resulted in the posting of additional
collateral in the form of letters of credit and cash. In
March, the Company expects to reduce its outstanding letters of
credit by a total of $16 million, by
reducing letters of credit posted with another counterparty by
$10 million and by reducing the level
of letters of credit required to be posted in the transition from
the Prior Credit Facility to the new Senior Secured Revolving
Credit Facility by $6
million.
The Senior Secured Revolving Credit Facility, unlike the Prior
Credit Facility, does not require the company to maintain a
$75 million restricted cash reserve;
therefore, unrestricted cash on a pro forma basis increased by
$75 million to $234 million.
Adjusted for the Senior Secured Credit Facilities, the
additional contribution into Piedmont in February (discussed below) and the
increased letters of credit outstanding, on a pro forma basis the
Company would have $325 million of
unrestricted cash and total liquidity of $391 million, including $66 million of undrawn availability under the
Senior Secured Revolving Credit Facility.
See Table 3 for actual liquidity at December 31, 2013 and pro forma adjustments.
Atlantic Power
Corporation
|
Table 3 –
Liquidity (in millions of U.S. dollars)
|
|
|
|
Unaudited
|
|
December 31,
2013
|
Pro Forma
(1)
|
Unrestricted cash
(12/31/2013) (2)
|
|
$159
|
$159
|
Pro forma
adjustments (February 2014):
|
|
|
|
Release of restricted
cash
|
|
-
|
75
|
Refinancing
proceeds
|
|
-
|
600
|
Completed debt
redemptions
|
|
-
|
(415)
|
Curtis Palmer and US
GP Notes make-whole payments and interest payments prior to
redemption
|
|
-
|
(34)
|
Financing and
advisory fees
|
|
-
|
(46)
|
Piedmont
contribution
|
|
-
|
(14)
|
Unrestricted cash
(pro forma) (2)
|
|
-
|
$325
|
|
|
|
|
Revolver
capacity
|
|
150
|
210
|
Letters of credit
outstanding
|
|
(98)
|
(144)(3)
|
Unused borrowing
capacity
|
|
25(4)
|
66
|
Total
Liquidity
|
|
$184
|
$391
|
|
|
|
|
Cash earmarked
for additional debt reduction in 2014
(5)
|
|
|
~$200
|
(1) Pro
forma reflects the new $210 million Senior Secured Revolving Credit
Facility and $600 million Senior Secured Term Loan Facility at APLP
and release of $75 million of restricted cash, net cash impact of
refinancing transaction, and additional Piedmont equity
contribution.
(2)
Includes $20.5 million project-level cash for working capital
needs.
(3) In
March, the Company expects to reduce its outstanding letters of
credit by a total of $16 million, by reducing letters of credit
posted with another counterparty by $10 million and by reducing the
level of letters of credit required to be posted in the transition
from the Prior Credit Facility to the new Senior Secured Revolving
Credit Facility by $6 million.
(4) Limit
of $25.0 million under the August 2013 amendment to the Prior
Credit Facility.
(5)
Including redemption of $C44.8 million of convertible debentures at
maturity (ATP.DB, due October 2014), and the potential repurchase
or redemption, subject to market conditions, by means of a tender
offer or otherwise, of up to $150 million par value of high-yield
9% notes, and related fees and expenses.
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|
|
|
|
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Piedmont Term Loan Conversion
As previously reported, Piedmont achieved commercial operation under
its PPA with Georgia Power Company at a declared capacity of 53.5
MW on April 19, 2013. Piedmont and its engineering, procurement and
construction ("EPC") contractor, Zachry Industrial, Inc.
("Zachry"), are disputing certain issues under the EPC agreement
including the condition and performance of the project, during
which time Piedmont is withholding
the amount still retained under the EPC agreement; the dispute has
entered the arbitration process and an arbitration hearing has been
tentatively scheduled in the latter part of 2014.
On February 14, 2014, the Company
completed the conversion of the $76.6
million construction loan at Piedmont to a $68.5
million term loan maturing in August 2018. To
facilitate the conversion, the Company repaid $8.1 million of the construction loan. The term
loan has an all-in interest rate of 5.2%. In addition, the Company
made a $6.1 million equity
contribution to the project which was used to fund various reserves
and fees associated with the term loan conversion.
Due to the delay in and costs associated with achieving
commercial operation and optimizing performance, and the need to
build cash reserves at the project the Company did not receive any
distributions from Piedmont in
2013, and does not expect to receive any in 2014. The Company
had previously expected $6 to $8
million of annual project distributions from Piedmont on a run-rate basis but now expects
distributions to average $4 to $6
million annually after 2014.
2014 Guidance
- Project Adjusted EBITDA guidance of $280
to $305 million
- Free Cash Flow guidance in the range of $0 - $25
million
Project Adjusted EBITDA
The Company provided guidance for 2014 Project Adjusted EBITDA
in the range of $280 to $305 million,
an increase of $22 million based on
the midpoint of the range compared to 2013 actual results of
$270.5 million. Key drivers of
the increase include a full year of operations and improved
performance at Piedmont, a more
favorable PPA and gas supply agreement at Orlando, and an expected increase in results
from the Company's Meadow Creek
and hydro projects due to assumed normal generation levels, where
these were mostly below normal in 2013. These positive
factors are partly offset by the expiration of the Selkirk PPA and
steam contracts and lower energy prices for the portion of
Selkirk that is already merchant
as well as the sale or closure of three projects that contributed
to Project Adjusted EBITDA in 2013 but will not be material
contributors in 2014 (Greeley, Gregory and Delta-Person).
Project Adjusted EBITDA for APLP is expected to be in the range
of $165 to $175 million.
Free Cash Flow
Free Cash Flow is defined as cash flows from operating
activities less capex, including discretionary optimization
initiatives; project-level debt repayments, including amortization
of the new term loan; and distributions to non-controlling
interests, including preferred share dividends. Free Cash
Flow is comparable to Cash Available for Distribution, the
Company's previous non-GAAP guidance metric. Free Cash Flow
would be available for additional debt reduction, internal or
external growth, or distributions to shareholders, depending on the
amount of Free Cash Flow and the decision of management, together
with the board, on the allocation of such Free Cash Flow.
The Company provided 2014 Free Cash Flow guidance of
$0 to $25 million, excluding
approximately $80 million in
prepayment and other expenses associated with the Company's recent
refinancing transaction. This figure also excludes the
$8.1 million repayment of
Piedmont construction debt made to
facilitate the term loan conversion.
The decrease of approximately $96
million, based on the midpoint of the range for 2014 Free
Cash Flow, compared to $108.8 million
of Cash Available for Distribution in 2013 is attributable to
several factors, including: lower operating cash flow, primarily
from the loss of more than $30
million of cash flow from assets divested in April 2013 and $38
million from working capital items that benefited
2013, but are not expected to recur in 2014; $12 million of higher capex; and debt repayments
under the APLP term loan, including 1% mandatory amortization and
50% sweep of APLP's cash flow after capex and debt service
(estimated to total $52 million in
2014). These reductions are partly offset by increased
Project Adjusted EBITDA and lower interest expense in 2014,
excluding the prepayments and additional interest expense
associated with the refinancing transaction, which are excluded
from Free Cash Flow.
See Table 4 for full-year 2014 guidance.
Atlantic Power
Corporation
|
Table 4 – 2014
Annual Guidance
|
(in millions of
U.S. dollars)
|
Unaudited
|
2014 Annual
Guidance
|
Project Adjusted
EBITDA
|
$280 -
$305
|
Free Cash Flow
(1)
|
$0 - $25
|
APLP Project Adjusted
EBITDA (2)
|
$165 -
$175
|
(1) Free
Cash Flow is defined as cash flows from operating activities less
capex; project-level debt repayments, including amortization of the
new term loan; and distributions to non-controlling interests,
including preferred share dividends.
(2) APLP
is a wholly owned subsidiary of the Company. APLP Project
Adjusted EBITDA is a summation of Project Adjusted EBITDA at each
APLP project, and is calculated in a manner which is consistent
with the Company's Project Adjusted EBITDA
calculation.
Note: Project
Adjusted EBITDA and Free Cash Flow are not recognized measures
under GAAP and do not have any standardized meaning prescribed by
GAAP; therefore, these measures may not be comparable to similar
measures presented by other companies. The Company has not
provided a reconciliation of forward-looking non-GAAP measures, due
primarily to variability and difficulty in making accurate
forecasts and projections, as not all of the information necessary
for a quantitative reconciliation is available to the Company
without unreasonable efforts.
|
Business Update
Major Maintenance and Optimization Initiatives
In 2013, the Company's project capital expenditures and major
maintenance expenses totaled $41
million. The majority of these expenditures represents
major maintenance on the Company's projects and are expensed.
In addition, the Company has an ongoing effort to identify and
implement discretionary investments in its existing portfolio of
projects designed to improve operating performance, enhance
efficiency or lower costs, with a goal of increasing Project
Adjusted EBITDA. The larger of these optimization investments
typically are included in major maintenance and capex, but there
are also many smaller investments of this type that are expensed as
part of normal operation and maintenance expense.
The Company had previously indicated plans to invest
$20 million in such optimization
projects in 2013 and 2014, including a steam generator replacement
at Nipigon and the repowering of
two turbines at Curtis Palmer, with an expected Project Adjusted
EBITDA run rate contribution of at least $6
million beginning in 2015.
Since the third-quarter conference call, the Company has
identified and expects to proceed with additional discretionary
investments in 2014 of $7 million,
including a $2.2 million project to
boost output at Morris. Total investments of this type are
now expected to be approximately $27
million, with an expected Project Adjusted EBITDA run-rate
contribution of at least $8 million
beginning in 2015. The Company expects to realize
approximately half this level in 2014 attributable to investments
completed in 2013 and initial returns from projects scheduled to be
completed in the early part of 2014.
In 2014, the Company expects to have project capital
expenditures and major maintenance expenses of approximately
$38 million, including optimization
investments of $18 million.
Total expenditures are expected to be slightly lower than the
$41 million in 2013 despite a higher
level of optimization-related spending because there is lower major
maintenance this year as a result of fewer scheduled gas turbine
outages.
Going forward, the Company expects that major maintenance
expense and capex will average approximately $25 million annually. Although the level of
optimization investments will vary year to year, and is unlikely to
reach the level budgeted in 2014, the Company hopes to identify
approximately $5 to $10 million of
such investments annually.
See Table 5 for 2013 actual and 2014 guidance for major
maintenance and capex and optimization investments.
Atlantic Power
Corporation
|
Table 5 – Major
Maintenance and optimization investments (in millions of U.S.
dollars)
|
|
|
|
|
Unaudited
|
2013
Actual
|
2014
Guidance
|
Total
|
Total major
maintenance and capex
|
$41.0
|
$38
|
-
|
Expensed (included in
Project Adjusted EBITDA)
|
34.5
|
19
|
-
|
Capitalized
|
6.5
|
19
|
-
|
|
|
|
|
Optimization
investments (most of which are included above)
|
8
|
19
|
$27
|
Asset Sales
As previously disclosed, in December
2012, the Company signed a purchase and sale agreement with
PNM, a subsidiary of PNM Resources, Inc., pursuant to which the
Company and its partners in the investment have agreed to sell
Delta-Person. The Company expects this transaction to close
in 2014, subject to receipt of all required approvals, and expects
to receive net cash proceeds of approximately $9 million.
In November 2013, the Company
completed the sale of its 60% interest in Rollcast. As
consideration for the sale, the Company was assigned asset
management contracts for the Cadillac and Piedmont projects as well as the remaining 2%
ownership interest in Piedmont, bringing its total ownership of
this project to 100%.
Investor Conference Call and Webcast
A telephone conference call hosted by Atlantic Power's
management team will be held on Friday, February 28, 2014 at
8:30 AM ET. An accompanying
slide presentation will be available on the Company's website prior
to the call. The telephone numbers for the conference call
are: U.S. Toll Free: 1-888-317-6003; Canada Toll Free:
1-866-284-3684; International Toll: +1 412-317-6016.
Participants will need to provide access code 4932951
to enter the conference call. The conference call will also
be broadcast over Atlantic Power's website, with an accompanying
slide presentation. 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; Canada Toll Free 1-855-669-9658; International
Toll: +1-412-317-0088. Please enter conference call number
10039266. The conference call will also be archived on
Atlantic Power's website.
About Atlantic Power
Atlantic Power owns and operates a diverse fleet of power
generation assets in the United
States and Canada. Atlantic Power's power generation
projects sell electricity to utilities and other large commercial
customers largely under long-term power purchase agreements, which
seek to minimize exposure to changes in commodity prices. Its
power generation projects in operation have an aggregate gross
electric generation capacity of approximately 2,950 MW in which its
aggregate ownership interest is approximately 2,025 MW. These
totals exclude the Company's 40% interest in the Delta-Person
generating station that the Company entered into an agreement to
sell in December 2012. Its current portfolio consists of
interests in twenty-eight operational power generation projects
across eleven states in the United
States and two provinces in Canada.
Atlantic Power has a market capitalization of approximately
$300 million 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 certain financial data and other publicly filed
documents are 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 expectations that:
- 2014 Project Adjusted EBITDA will be in the range of
$280 to $305 million;
- 2014 APLP Project Adjusted EBITDA will be in the range of
$165 to $175 million;
- 2014 Free Cash Flow will be in the range of $0 to $25 million;
- The availability of Free Cash Flow for additional debt
reduction, internal or external growth, or distributions to
shareholders, depending on the amount of Free Cash Flow generated
and the decision of management, together with the board, on the
allocation of such Free Cash Flow;
- project distributions from Canadian Hills and Meadow Creek will be $15 to $19 million and $7
to $8 million, respectively, on a multi-year average annual
basis;
- distributions from Piedmont
will average $4 to $6 million
annually after 2014;
- projected debt at year-end 2014 will be $1,898 million, reflecting initial-year
amortization of the term loan, project-level debt repayments in
2014 and the redemption of the convertible debentures due in
October 2014;
- the Company will be in compliance with the financial
maintenance covenants in the agreements governing its indebtedness
for at least the next twelve months;
- the Company, in March, will reduce its outstanding letters of
credit by a total of $16 million, by
reducing letters of credit posted with another counterparty by
$10 million and by reducing the level
of letters of credit required to be posted in the transition from
the Prior Credit Facility to the new Senior Secured Revolving
Credit Facility by $6 million;
- total capex for the investment upgrade at Nipigon will be approximately $10 million and the new steam generator at
Nipigon will result in improved
Project Adjusted EBITDA and cash flows beginning in 2015;
- the level of optimization capex will be $18 million in 2014, for a two-year total of
approximately $27 million, and that
these investments will produce a Project Adjusted EBITDA run-rate
contribution of approximately $8
million beginning in 2015;
- the Company's evaluations of a broad range of options,
including asset sales or joint ventures to raise capital in a
cost-effective manner for growth or additional debt reduction, as
well as broader more strategic options, and the outcome of such
evaluations;
- the Company will have project capital expenditures and major
maintenance expenses of approximately $38
million in 2014, including optimization initiatives of
$18 million;
- major maintenance expense and maintenance capex will average
approximately $25 million
annually;
- the Company will have annual optimization capex on average of
$5 to $10 million;
- subject to market conditions and other factors, the Company may
use the remaining proceeds from the Senior Secured Term Loan
Facility, together with cash on hand, to repurchase or redeem, by
means of a tender offer or otherwise, up to $150 million aggregate principal amount of the
Company's high-yield 9.0% notes;
- the Company will reduce interest expense going forward;
- the sale of Delta-Person will successfully close in 2014 with
net cash proceeds received by the Company of $9 million; and
- the results of operations and performance of the Company's
projects, business prospects, opportunities and future growth of
the Company will be as described herein.
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
|
Table 6 –
Consolidated Balance Sheet (in millions of U.S.
dollars)
|
|
|
December
31,
|
December
31,
|
|
2013
|
2012
|
Assets
|
(Unaudited)
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$158.6
|
$60.2
|
Restricted
cash
|
114.2
|
28.6
|
Accounts
receivable
|
64.3
|
58.5
|
Current portion of
derivative instruments asset
|
0.2
|
9.5
|
Inventory
|
16.0
|
16.9
|
Prepayments and other
current assets
|
16.1
|
13.4
|
Security
deposits
|
-
|
19.0
|
Assets held for
sale
|
-
|
351.4
|
Refundable income
taxes
|
4.0
|
4.2
|
Total current
assets
|
373.4
|
561.7
|
|
|
|
Property, plant and
equipment, net
|
1,813.4
|
2,055.5
|
Equity investments in
unconsolidated affiliates
|
394.3
|
428.7
|
Power purchase
agreements and intangible assets, net
|
451.5
|
524.9
|
Goodwill
|
296.3
|
334.7
|
Derivative
instruments asset
|
13.0
|
11.1
|
Other
assets
|
53.1
|
86.1
|
Total
assets
|
$3,395.0
|
$4,002.7
|
|
|
|
Liabilities and
Shareholder's Equity
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$14.0
|
$17.8
|
Accrued
interest
|
17.7
|
19.0
|
Other accrued
liabilities
|
58.8
|
73.7
|
Revolving credit
facility
|
-
|
67.0
|
Current portion of
long-term debt
|
216.2
|
121.2
|
Current portion of
convertible debentures
|
42.1
|
-
|
Current portion of
derivative instruments liability
|
28.5
|
33.0
|
Dividends
payable
|
6.8
|
11.5
|
Liabilities
associated with assets held for sale
|
-
|
189.0
|
Other current
liabilities
|
5.3
|
3.3
|
Total current
liabilities
|
389.4
|
535.5
|
|
|
Long-term
debt
|
1,254.8
|
1,459.1
|
Convertible
debentures
|
363.1
|
424.2
|
Derivative
instruments liability
|
76.1
|
118.1
|
Deferred income
taxes
|
111.5
|
164.0
|
Power purchase and
fuel supply agreement liabilities, net
|
38.7
|
44.0
|
Other long-term
liabilities
|
65.4
|
71.4
|
Commitments and
contingencies
|
-
|
-
|
Total
liabilities
|
2,299.0
|
2,816.3
|
|
|
|
Equity
|
|
|
Common shares, no par
value, unlimited authorized shares; 120,205,813 and 119,446,865
issued and outstanding at December 31, 2013 and December 31, 2012,
respectively
|
1,286.1
|
1,285.5
|
Preferred shares
issued by a subsidiary company
|
221.3
|
221.3
|
Accumulated other
comprehensive income (loss)
|
(22.4)
|
9.4
|
Retained
deficit
|
(655.4)
|
(565.2)
|
Total Atlantic Power
Corporation shareholders' equity
|
829.6
|
951.0
|
Noncontrolling
interest
|
266.4
|
235.4
|
Total
equity
|
1,096.0
|
1,186.4
|
Total liabilities and
equity
|
$3,395.0
|
$4,002.7
|
Atlantic Power
Corporation
|
Table 7 –
Consolidated Statements of Operations
|
(in millions of
U.S. dollars, except per share amounts)
|
Unaudited
|
|
|
|
|
Years Ended
December 31,
|
Three months
ended December
31,
|
|
2013
|
2012
|
2011
|
2013
|
2012
|
Project
revenue
|
|
|
|
|
|
Energy
sales
|
$304.2
|
$217.0
|
$43.6
|
$99.8
|
$58.0
|
Energy capacity
revenue
|
168.8
|
154.9
|
34.0
|
12.4
|
37.6
|
Other
|
78.7
|
68.5
|
16.3
|
18.5
|
18.4
|
|
551.7
|
440.4
|
93.9
|
130.7
|
114.0
|
|
|
|
|
|
|
Project
expenses:
|
|
|
|
|
|
Fuel
|
198.7
|
169.1
|
37.5
|
49.9
|
45.6
|
Operations and
maintenance
|
152.4
|
122.8
|
20.9
|
40.0
|
34.8
|
Development
|
7.2
|
-
|
-
|
2.3
|
-
|
Depreciation and
amortization
|
167.1
|
118.0
|
23.6
|
41.4
|
30.6
|
|
525.4
|
409.9
|
82.0
|
133.6
|
111.0
|
Project other income
(expense):
|
|
|
|
|
|
Change in fair value
of derivative instruments
|
49.5
|
(59.3)
|
(14.6)
|
16.1
|
(7.9)
|
Equity in earnings of
unconsolidated affiliates
|
26.9
|
15.2
|
6.4
|
2.3
|
3.4
|
Gain on sale of
equity investments
|
30.4
|
0.6
|
-
|
-
|
-
|
Interest expense,
net
|
(34.4)
|
(16.4)
|
(7.3)
|
(8.7)
|
(4.2)
|
Impairment of
goodwill
|
(34.9)
|
-
|
-
|
-
|
-
|
Other income,
net
|
0.5
|
-
|
-
|
0.4
|
(0.1)
|
|
38.0
|
(59.9)
|
(15.5)
|
10.1
|
(8.8)
|
Project income
(loss)
|
64.3
|
(29.4)
|
(3.6)
|
7.2
|
(5.8)
|
|
|
|
|
|
|
Administrative and
other expenses (income):
|
|
|
|
|
|
Administration
|
35.2
|
28.3
|
37.7
|
6.7
|
6.3
|
Interest,
net
|
104.1
|
89.8
|
26.0
|
25.4
|
20.6
|
Foreign exchange loss
(gain)
|
(27.4)
|
0.5
|
13.8
|
(14.5)
|
(3.9)
|
Other income,
net
|
(10.5)
|
(5.7)
|
(0.1)
|
(1.0)
|
(0.1)
|
|
101.4
|
112.9
|
77.4
|
16.6
|
22.9
|
Loss from continuing
operations before income taxes
|
(37.1)
|
(142.3)
|
(81.0)
|
(9.4)
|
(28.7)
|
Income tax
benefit
|
(19.5)
|
(28.1)
|
(11.1)
|
(17.6)
|
(9.0)
|
Income (loss) from
continuing operations
|
(17.6)
|
(114.2)
|
(69.9)
|
8.2
|
(19.7)
|
Net income (loss)
from discontinued operations, net of tax (1)
|
(6.2)
|
13.9
|
34.3
|
(0.2)
|
(34.8)
|
Net income
(loss)
|
(23.8)
|
(100.3)
|
(35.6)
|
8.0
|
(54.5)
|
Net income (loss)
attributable to noncontrolling interest
|
(3.4)
|
(0.6)
|
(0.5)
|
(0.1)
|
0.1
|
Net income
attributable to preferred share dividends of a subsidiary
company
|
12.6
|
13.1
|
3.3
|
3.2
|
3.4
|
Net income (loss)
attributable to Atlantic Power Corporation
|
$(33.0)
|
$(112.8)
|
$(38.4)
|
$4.9
|
$(58.0)
|
|
|
|
|
|
|
Basic and diluted
earnings (loss) earnings per share:
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Atlantic Power
Corporation
|
$(0.23)
|
$(1.09)
|
$(0.94)
|
$0.04
|
$(0.20)
|
Income (loss) from
discontinued operations, net of tax
|
(0.05)
|
0.12
|
0.44
|
-
|
(0.30)
|
Net income (loss)
attributable to Atlantic Power Corporation
|
$(0.28)
|
(0.97)
|
$(0.50)
|
$0.04
|
$(0.50)
|
(1) Includes
contributions from the Sold Projects and Rollcast which are a
component of discontinued operations.
|
|
|
|
|
|
|
|
|
|
Atlantic Power
Corporation
|
Table 8 –
Consolidated Statements of Cash Flows (in millions of U.S.
dollars)
|
|
|
Years ended
December 31,
|
Unaudited
|
2013
|
2012
|
2011
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$(23.8)
|
$(100.3)
|
$(35.6)
|
Adjustments to
reconcile to net cash provided by operating activities
|
|
|
|
Depreciation and
amortization
|
176.4
|
157.2
|
63.6
|
Loss of discontinued
operations
|
32.8
|
-
|
-
|
(Gain) loss on sale
of assets & other charges
|
(5.1)
|
0.8
|
-
|
Long-term incentive
plan expense
|
2.2
|
2.5
|
3.2
|
Asset and goodwill
impairment charges
|
39.7
|
60.5
|
1.5
|
Gain on sale of
equity investments
|
(30.4)
|
(0.6)
|
-
|
Equity in earnings
from unconsolidated affiliates
|
(26.9)
|
(25.7)
|
(7.9)
|
Distributions from
unconsolidated affiliates
|
40.9
|
38.4
|
21.9
|
Unrealized foreign
exchange (gain) loss
|
(13.0)
|
19.0
|
8.6
|
Change in fair value
of derivative instruments
|
(60.2)
|
46.7
|
22.8
|
Change in deferred
income taxes
|
(27.3)
|
(34.1)
|
(9.9)
|
Change in other
operating balances
|
|
|
|
Accounts
receivable
|
3.4
|
2.3
|
(15.6)
|
Inventory
|
0.8
|
(6.2)
|
(0.4)
|
Prepayments,
refundable income taxes and other assets
|
51.5
|
(13.3)
|
2.1
|
Accounts
payable
|
(8.4)
|
21.1
|
4.9
|
Accruals and other
liabilities
|
(0.2)
|
(1.2)
|
(3.3)
|
Cash provided by
operating activities
|
152.4
|
167.1
|
55.9
|
|
|
|
|
|
Cash flows provided
by (used in) investing activities
|
|
|
|
Change in restricted
cash
|
(93.7)
|
(11.6)
|
(5.7)
|
Proceeds from sale of
assets and equity investments, net
|
182.6
|
27.9
|
8.5
|
Cash paid for
acquisitions and investments, net of cash acquired
|
-
|
(80.5)
|
(591.6)
|
Proceeds from related
party
|
-
|
-
|
22.8
|
Proceeds from
treasury grant
|
103.2
|
-
|
-
|
Biomass development
costs
|
(0.2)
|
(0.5)
|
(0.9)
|
Construction in
progress
|
(38.3)
|
(456.2)
|
(113.1)
|
Purchase of property,
plant and equipment
|
(6.5)
|
(2.9)
|
(2.0)
|
Cash provided by
(used in) investing activities
|
147.1
|
(523.8)
|
(682.0)
|
|
|
|
|
|
Cash flows (used in)
provided by financing activities
|
|
|
|
Proceeds from
issuance of long-term debt
|
-
|
-
|
460.0
|
Proceeds from
issuance of convertible debentures
|
-
|
230.6
|
-
|
Proceeds from
issuance of equity, net of offering costs
|
(1.0)
|
66.3
|
155.4
|
Proceeds from
project-level debt
|
20.8
|
291.9
|
100.8
|
Repayment of
project-level debt
|
(118.8)
|
(284.8)
|
(21.5)
|
Payments for
revolving credit facility borrowings
|
(67.0)
|
(60.8)
|
-
|
Proceeds from
revolving credit facility borrowings
|
-
|
69.8
|
58.0
|
Deferred financing
costs
|
(2.8)
|
(31.2)
|
(26.4)
|
Equity contribution
from noncontrolling interest
|
44.6
|
225.0
|
-
|
Dividends paid to
common shareholders
|
(65.1)
|
(131.0)
|
(81.8)
|
Dividends paid to
noncontrolling interests
|
(18.3)
|
(13.1)
|
(3.2)
|
Cash (used in)
provided by financing activities
|
(207.6)
|
362.7
|
641.3
|
|
|
|
|
|
Net increase in cash
and cash equivalents
|
91.9
|
6.0
|
15.2
|
Less cash at
discontinued operations
|
-
|
(6.5)
|
-
|
Cash and cash
equivalents at beginning of period at discontinued
operations
|
6.5
|
-
|
-
|
Cash and cash
equivalents at beginning of period
|
60.2
|
60.7
|
45.5
|
Cash and cash
equivalents at end of period
|
$158.6
|
$60.2
|
$60.7
|
Supplemental cash
flow information
|
|
|
|
Interest
paid
|
$130.4
|
$40.2
|
$40.2
|
Income taxes paid,
net
|
$5.9
|
$1.1
|
$1.1
|
Accruals for
construction in progress
|
$8.9
|
$4.1
|
$4.1
|
|
|
|
|
|
Regulation G Disclosures
Cash Available for Distribution, Payout Ratio, Cash
Distributions from Projects and Free Cash Flow are not measures
recognized under GAAP and do not have standardized meanings
prescribed by GAAP. Management believes that Cash Available
for Distribution, Payout Ratio and Cash Distributions from Projects
are relevant supplemental measures of the Company's ability to earn
and distribute cash returns to investors. Reconciliations of
Cash Available for Distribution and Payout Ratio to cash flows from
operating activities and of Cash Distributions from Projects to
Project income (loss) are provided in Table 11 on page 16 of this
release. Investors are cautioned that the Company may
calculate these measures in a manner that is different from other
companies.
Free Cash Flow is defined as cash flows from operating
activities less capex; project-level debt repayments, including
amortization of the new term loan; and distributions to
non-controlling interests, including preferred share dividends.
Project Adjusted EBITDA is defined as project income (loss) 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 companies 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 and believes such information
is helpful to investors. A reconciliation of Project Adjusted
EBITDA to project income (loss) and a bridge to Cash Distributions
from Projects are provided in Table 9 below and Tables 10A and 10B
on page 15, respectively. Investors are cautioned that the
Company may calculate this measure in a manner that is different
from other companies.
Atlantic Power
Corporation
|
Table 9 – Project
Adjusted EBITDA by
segment
|
Unaudited
|
|
|
|
Years ended
December 31,
|
Three months ended
December 31,
|
|
2013
|
2012
|
2011
|
2013
|
2012
|
Project Adjusted
EBITDA by segment
|
|
|
|
|
|
East
(1)
|
$150.7
|
$145.7
|
$66.8
|
$38.6
|
$46.2
|
West
(2)
|
78.8
|
82.1
|
16.4
|
9.6
|
10.2
|
Wind
|
59.6
|
10.9
|
4.3
|
16.2
|
4.2
|
Un-allocated
corporate (3)
|
(18.6)
|
(11.1)
|
(0.7)
|
(7.2)
|
(3.7)
|
Total
|
270.5
|
227.6
|
86.8
|
57.2
|
56.9
|
|
|
|
|
|
|
Reconciliation to
project income
|
|
|
|
|
|
Depreciation and
amortization
|
209.8
|
164.9
|
55.5
|
55.3
|
41.9
|
Interest expense,
net
|
38.5
|
24.0
|
15.2
|
8.0
|
5.9
|
Change in the fair
value of derivative instruments
|
(50.3)
|
56.6
|
17.2
|
(15.5)
|
7.7
|
Other
expense
|
8.2
|
11.5
|
2.5
|
2.2
|
7.2
|
Project income
(loss)
|
$64.3
|
$(29.4)
|
$(3.6)
|
$7.2
|
$(5.8)
|
(1) Excludes
Auburndale, Lake and Pasco, which are components of discontinued
operations.
(2) Excludes Path 15,
which is a component of discontinued operations.
(3) Excludes
Rollcast, which is a component of discontinued
operations.
Notes: Table 9
presents Project Adjusted EBITDA, which 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 a similar
measure presented by other companies.
The Company has four
reportable segments: East, West, Wind and Un-allocated Corporate.
The Company revised its reportable business segments in the fourth
quarter of 2013 as a result of recent significant asset sales and
in order to align with changes in management's structure, resource
allocation and performance assessment in making decisions regarding
its operations. The Company's financial results for the years ended
December 31, 2013, 2012 and 2011 and the three months ended
December 31, 2013 and 2012 have been presented to reflect these
changes in operating segments. These changes reflect the Company's
current operating focus. The segment classified as Un-allocated
Corporate includes activities that support the executive and
administrative offices, capital structure and costs of being a
public registrant. These costs are not allocated to the operating
segments when determining segment profit or loss.
|
|
|
|
|
|
|
|
Atlantic Power
Corporation
|
Table 10A – Cash
Distributions from Projects (by Segment, in millions of U.S.
dollars)
|
Year ended
December 31, 2013
|
|
|
|
|
|
|
|
Unaudited
|
Project
Adjusted
EBITDA
|
Repayment
of
long-term
debt
|
Interest
expense, net
|
Capital
expenditures
|
Other,
including
changes in
working
capital
|
Cash
Distributions
from
Projects
|
Segment
|
|
|
|
|
|
|
East
|
|
|
|
|
|
|
Consolidated
|
$100.3
|
$(3.9)
|
$(17.3)
|
$(6.7)
|
$18.8
|
$91.2
|
Equity
method
|
50.4
|
(14.0)
|
(3.6)
|
(0.9)
|
4.3
|
36.2
|
Total
|
150.7
|
(17.9)
|
(20.9)
|
(7.6)
|
23.1
|
127.4
|
West
|
|
|
|
|
|
|
Consolidated
|
61.6
|
-
|
-
|
(1.1)
|
(2.3)
|
58.2
|
Equity
method
|
17.2
|
1.2
|
(0.3)
|
(1.1)
|
(2.9)
|
14.1
|
Total
|
78.8
|
1.2
|
(0.3)
|
(2.2)
|
(5.2)
|
72.3
|
Wind
|
|
|
|
|
|
|
Consolidated
|
50.0
|
(7.0)
|
(14.6)
|
(11.2)
|
6.2
|
23.4
|
Equity
method
|
9.6
|
(2.6)
|
(4.9)
|
-
|
0.4
|
2.5
|
Total
|
59.6
|
(9.6)
|
(19.5)
|
(11.2)
|
6.6
|
25.9
|
Total
consolidated
|
211.9
|
(10.9)
|
(31.9)
|
(19.0)
|
22.7
|
172.8
|
Total equity
method
|
77.2
|
(15.4)
|
(8.8)
|
(2.0)
|
1.8
|
52.8
|
Un-allocated
corporate
|
(18.6)
|
(0.2)
|
3.1
|
0.1
|
15.6
|
-
|
Total
|
$270.5
|
$(26.5)
|
$(37.6)
|
$(20.9)
|
$40.1
|
$225.6
|
Notes: Table 10A
presents Cash Distributions from Projects and Project Adjusted
EBITDA, which are not recognized measures under GAAP and do not
have any standardized meanings prescribed by GAAP; therefore, these
measures may not be comparable to similar measures presented by
other companies.
The Company has four
reportable segments: East, West, Wind and Un-allocated Corporate.
The Company revised its reportable business segments in the fourth
quarter of 2013 as a result of recent significant asset sales and
in order to align with changes in management's structure, resource
allocation and performance assessment in making decisions regarding
its operations. The Company's financial results for the year ended
December 31, 2013 has been presented to reflect these changes in
operating segments. These changes reflect the Company's current
operating focus. The segment classified as Un-allocated Corporate
includes activities that support the executive and administrative
offices, capital structure and costs of being a public registrant.
These costs are not allocated to the operating segments when
determining segment profit or loss.
|
|
|
Atlantic Power
Corporation
|
Table 10B – Cash
Distributions from Projects (by Segment, in millions of U.S.
dollars)
|
Year ended
December 31, 2012
|
|
Unaudited
|
Project
Adjusted
EBITDA
|
Repayment
of
long-term
debt
|
Interest
expense, net
|
Capital
expenditures
|
Other,
including
changes in
working
capital
|
Cash
Distributions
from
Projects
|
Segment
|
|
|
|
|
|
|
East
|
|
|
|
|
|
|
Consolidated
|
$91.2
|
$(2.4)
|
$(13.8)
|
$(1.3)
|
$14.6
|
$88.3
|
Equity
method
|
54.5
|
(19.3)
|
(4.7)
|
(0.4)
|
0.4
|
30.5
|
Total
|
145.7
|
(21.7)
|
(18.5)
|
(1.7)
|
15.0
|
118.8
|
West
|
|
|
|
|
|
|
Consolidated
|
67.6
|
-
|
-
|
(0.1)
|
0.5
|
68.0
|
Equity
method
|
14.5
|
(3.6)
|
(0.4)
|
(0.2)
|
1.4
|
11.7
|
Total
|
82.1
|
(3.6)
|
(0.4)
|
(0.3)
|
1.9
|
79.7
|
Wind
|
|
|
|
|
|
|
Consolidated
|
4.3
|
-
|
(1.9)
|
-
|
(2.4)
|
-
|
Equity
method
|
6.6
|
(2.0)
|
(3.2)
|
0.2
|
(0.3)
|
1.3
|
Total
|
10.9
|
(2.0)
|
(5.1)
|
0.2
|
(2.7)
|
1.3
|
Total
consolidated
|
163.1
|
(2.4)
|
(15.7)
|
(1.4)
|
12.7
|
156.3
|
Total equity
method
|
75.6
|
(24.9)
|
(8.3)
|
(0.4)
|
1.5
|
43.5
|
Un-allocated
corporate
|
(11.1)
|
-
|
-
|
-
|
11.1
|
-
|
Total
|
$227.6
|
$(27.3)
|
$(24.0)
|
$(1.8)
|
$25.3
|
$199.8
|
Notes: Table 10B
presents Cash Distributions from Projects and Project Adjusted
EBITDA, which are not recognized measures under GAAP and do not
have any standardized meanings prescribed by GAAP; therefore, these
measures may not be comparable to similar measures presented by
other companies.
The Company has four
reportable segments: East, West, Wind and Un-allocated Corporate.
The Company revised its reportable business segments in the fourth
quarter of 2013 as a result of recent significant asset sales and
in order to align with changes in management's structure, resource
allocation and performance assessment in making decisions regarding
its operations. The Company's financial results for the year ended
December 31, 2012 has been presented to reflect these changes in
operating segments. These changes reflect the Company's current
operating focus. The segment classified as Un-allocated Corporate
includes activities that support the executive and administrative
offices, capital structure and costs of being a public registrant.
These costs are not allocated to the operating segments when
determining segment profit or loss.
|
|
|
|
|
|
|
|
|
Atlantic Power
Corporation
Table 11 – Cash
Available for Distribution (in millions of U.S.
dollars)
Unaudited
|
Years ended
December 31,
|
|
2013
|
2012
|
2011
|
Cash Distributions
from Projects
|
$225.6
|
$199.8
|
$35.9
|
Repayment of
long-term debt
|
(26.5)
|
(27.3)
|
(62.3)
|
Interest expense,
net
|
(37.6)
|
(24.0)
|
(15.2)
|
Capital
expenditures
|
(20.9)
|
(1.8)
|
(2.6)
|
Other, including
changes in working capital
|
40.1
|
25.3
|
29.2
|
Project Adjusted
EBITDA
|
$270.5
|
$227.6
|
$86.8
|
Depreciation and
amortization
|
209.8
|
164.9
|
55.5
|
Interest expense,
net
|
38.5
|
24.0
|
15.2
|
Change in the fair
value of derivative instruments
|
(50.3)
|
56.6
|
17.2
|
Other (income)
expense
|
8.2
|
11.5
|
2.5
|
Project income
(loss)
|
$64.3
|
$(29.4)
|
$(3.6)
|
Administrative and
other expenses
|
101.4
|
112.9
|
77.4
|
Income tax expense
(benefit)
|
(19.5)
|
(28.1)
|
(11.1)
|
Income (loss) from
discontinued operations, net of tax
|
(6.2)
|
13.9
|
34.3
|
Net
loss
|
$(23.8)
|
$(100.3)
|
$(35.6)
|
Adjustments to
reconcile to net cash provided by operating activities
|
129.1
|
264.7
|
103.8
|
Change in other
operating balances
|
47.1
|
2.7
|
(12.3)
|
Cash flows from
operating activities
|
$152.4
|
$167.1
|
$55.9
|
Project-level debt
repayments
|
(15.6)
|
(19.6)
|
(21.5)
|
Purchases of
property, plant and equipment (1)
|
(6.5)
|
(2.9)
|
(2.0)
|
Transaction costs
(2)
|
-
|
-
|
33.4
|
Realized foreign
currency losses on hedges associated with the Partnership
transaction (3)
|
-
|
-
|
16.5
|
Distributions to
noncontrolling interests
|
(8.9)
|
-
|
-
|
Dividends on
preferred shares of a subsidiary company
|
(12.6)
|
(13.0)
|
(3.2)
|
Cash Available for
Distribution
|
$108.8
|
$131.6
|
$79.1
|
Total cash dividends
declared to shareholders
|
58.0
|
131.8
|
86.4
|
Payout
Ratio
|
53%
|
100%
|
109%
|
(1) Excludes
construction costs related to our Piedmont biomass project and
Canadian Hills and Meadow Creek projects.
(2) Represents costs
incurred associated with the Partnership acquisition.
(3) Represents
realized foreign currency losses associated with foreign exchange
forwards entered into in order to hedge a portion of the foreign
currency exchange risks associated with the closing of the
Partnership acquisition.
Note: Table 11
presents Cash Distributions from Projects, Project Adjusted EBITDA,
Cash Available for Distribution and Payout Ratio, which are not
recognized measures under GAAP and do not have any standardized
meanings prescribed by GAAP; therefore, these measures may not be
comparable to similar measures presented by other
companies.
|
Atlantic Power
Corporation
Table 12 – Project
Adjusted EBITDA by Project (for Selected
Projects)
(in millions of
U.S. dollars)
Unaudited
|
|
|
Years ended
December 31,
|
|
|
2013
|
2012
|
2011
|
East
|
Accounting
|
|
|
|
Cadillac
|
Consolidated
|
$9.1
|
$9.3
|
$8.9
|
Curtis
Palmer
|
Consolidated
|
32.1
|
28.0
|
8.1
|
Nipigon
|
Consolidated
|
13.4
|
14.6
|
1.8
|
North Bay
|
Consolidated
|
8.5
|
8.1
|
1.9
|
Tunis
|
Consolidated
|
9.5
|
13.5
|
3.0
|
Piedmont
|
Consolidated
|
2.3
|
(0.1)
|
-
|
Other
(1)
|
Consolidated
|
25.4
|
17.8
|
3.4
|
Chambers
|
Equity
method
|
20.6
|
27.8
|
16.6
|
Selkirk
|
Equity
method
|
20.8
|
17.8
|
16.5
|
Orlando
|
Equity
method
|
9.0
|
8.9
|
6.6
|
Total
|
|
150.7
|
145.7
|
66.8
|
West
|
|
|
|
|
Manchief
|
Consolidated
|
16.9
|
15.1
|
3.6
|
Williams
Lake
|
Consolidated
|
16.5
|
18.5
|
2.7
|
Other
(2)
|
Consolidated
|
28.2
|
34.0
|
3.3
|
Other
(3)
|
Equity
method
|
17.2
|
14.5
|
6.8
|
Total
|
|
78.8
|
82.1
|
16.4
|
Wind
|
|
|
|
|
Canadian
Hills
|
Consolidated
|
25.6
|
0.8
|
-
|
Meadow
Creek
|
Consolidated
|
14.0
|
-
|
-
|
Rockland
|
Consolidated
|
10.4
|
3.5
|
-
|
Other
(4)
|
Equity
method
|
9.6
|
6.6
|
4.3
|
Total
|
|
59.6
|
10.9
|
4.3
|
Totals
|
|
|
|
|
Consolidated
projects
|
|
211.9
|
163.1
|
36.7
|
Equity method
projects
|
|
77.2
|
75.6
|
50.8
|
Un-allocated
corporate
|
|
(18.6)
|
(11.1)
|
(0.7)
|
Total Project
Adjusted EBITDA
|
|
$270.5
|
$227.6
|
$86.8
|
|
|
|
|
|
Depreciation and
amortization
|
|
$209.8
|
$164.9
|
$55.5
|
Interest expense,
net
|
|
38.5
|
24.0
|
15.2
|
Change in the fair
value of derivative instruments
|
|
(50.3)
|
56.6
|
17.2
|
Other (income)
expense
|
|
8.2
|
11.5
|
2.5
|
Project income
(loss)
|
|
$64.3
|
$(29.4)
|
$(3.6)
|
(1) 2013, 2012 and
2011: Kenilworth, Calstock, Kapuskasing and Morris
(2) 2013: Moresby
Lake, Mamquam, Naval Station, North Island, Naval Training Station,
Greeley, Oxnard; 2012 and 2011: Includes 2013 projects and Badger
Creek
(3) 2013: Koma
Kulshan, Gregory, Delta-Person, Frederickson; 2012 and 2011:
Includes 2013 projects and PERH
(4) 2013: Idaho Wind,
Goshen North; 2012 and 2011: Idaho Wind
Notes: Table 12
presents Project Adjusted EBITDA, which 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 a similar
measure presented by other companies. The Company has not
reconciled non-GAAP financial measures relating to individual
projects to the directly comparable GAAP measures due to the
difficulty in making the relevant adjustments on an individual
project basis.
The Company has four
reportable segments: East, West, Wind and Un-allocated Corporate.
The Company revised its reportable business segments in the fourth
quarter of 2013 as a result of recent significant asset sales and
in order to align with changes in management's structure, resource
allocation and performance assessment in making decisions regarding
its operations. The Company's financial results for the years ended
December 31, 2013, 2012 and 2011 have been presented to reflect
these changes in operating segments. These changes reflect the
Company's current operating focus. The segment classified as
Un-allocated Corporate includes activities that support the
executive and administrative offices, capital structure and costs
of being a public registrant. These costs are not allocated to the
operating segments when determining segment profit or
loss.
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SOURCE Atlantic Power Corporation