BOSTON, May 12, 2014 /CNW/
- Atlantic Power Corporation (NYSE: AT) (TSX: ATP) ("Atlantic
Power" or the "Company") today released its results for the three
months ended March
31, 2014.
"This quarter, we successfully completed a significant
refinancing transaction that addressed the majority of our
near-term debt maturities and provided us with a new revolver of
greater size and flexibility. We took advantage of very favorable
market conditions by undertaking a comprehensive approach to these
maturities rather than being exposed to uncertain market conditions
over the next few years," said Barry Welch, President and CEO of
Atlantic Power. "By doing so, we have accomplished several high
priorities, including extending our debt maturity profile, gaining
financial flexibility and increased liquidity, and reducing our
interest expense and debt levels over time. This resulted in
associated costs in the quarter, some of which would have been
incurred in future years had we not taken this approach. We believe
that this puts us in a stronger position as we consider next
steps."
"Relative to our expectations, our first quarter results were
affected by several plant outages, including two due to extreme
weather, low water flows at Curtis Palmer, and continued challenges
at Piedmont," Mr. Welch continued.
"However, these factors were partially offset by higher PJM power
prices, the resale of gas in Ontario, stronger wind at our
Idaho businesses, and initial strong
results from our optimization initiatives. Based on our results
year to date and our expectations for the rest of the year, we are
reaffirming our 2014 guidance metrics."
All amounts are in U.S. dollars unless otherwise indicated.
Free Cash Flow, Cash Distributions from Projects, 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 "Free Cash Flow", "Cash
Distributions from Projects" and "Project Adjusted EBITDA" as used
in this news release.
Progress on Financial Priorities
- Successfully raised a $600 million term loan maturing in 2021
and used proceeds to prepay $415 million of debt maturing in 2014,
2015 and 2017
- Arranged new $210
million revolver with increased borrowing capacity
and greater flexibility; maturity extended three years to 2018
- Repurchased $140.1 million or 30% of outstanding 9.0%
senior unsecured notes maturing in 2018
- Intend to repay Cdn$45 million convertible debentures at
maturity in October
2014 using cash on hand; following that, will have no
debt maturities until March of 2017
- Expect reduction in interest expense beginning in the second
half of this year and further decreases over time
First Quarter 2014 Financial Highlights
- Project income of $20 million, down $11.3 million
- Project Adjusted EBITDA of $74.2 million, down $6.1 million
- Results affected by weather, outages, low water flows, swap
termination costs and currency translation
- Operating cash flow declined to $(28.7) million and
Free Cash Flow to $(46.3) million
- Cash flow metrics were reduced by approximately $54 million of debt
refinancing and repurchase costs
First Quarter 2014 Operating Highlights
- Availability declined to 92.7%; impact mitigated by strong wind
resources and initial optimization benefits
- Planned optimization of $27 million through 2014; on track for
cash return of at least $8 million in 2015
2014 Guidance Reaffirmed
- Project Adjusted EBITDA of $280 to $305 million
- Free Cash Flow of $0 to $25 million, which excludes
transaction costs and Piedmont debt payment
Atlantic Power
Corporation
Table 1 – Selected
Results
(in millions of
U.S. dollars, except as otherwise stated)
Unaudited
|
|
Three months ended
March 31,
|
|
|
2014
|
2013
|
Excluding results
of discontinued operations (1)
|
|
|
|
Project
revenue
|
|
$145.3
|
$137.4
|
Project
income
|
|
20.0
|
31.3
|
Project Adjusted
EBITDA
|
|
74.2
|
80.3
|
Cash Distributions
from Projects
|
|
50.4
|
53.8
|
Aggregate power
generation (Net MWh)
|
|
2,086.3
|
1,882.2
|
Weighted average
availability
|
|
92.7%
|
95.8%
|
Including results
from discontinued operations (1)
|
|
|
|
Cash flows from
operating activities
|
|
$(28.7)
|
$89.7
|
Free Cash
Flow
|
|
(46.3)
|
82.0
|
(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") were sold in
April 2013, the Company's interest in Rollcast Energy ("Rollcast")
was sold in November 2013, and Thermo Power & Electric, LLC
("Greeley") was sold in March 2014. Accordingly, the revenues,
project income (loss), Project Adjusted EBITDA and Cash
Distributions from these assets are included in discontinued
operations for the three-month periods ended March 31, 2013 and
March 31, 2014. The results of discontinued operations are excluded
from Project revenue, Project income, Project Adjusted EBITDA and
Cash Distributions from Projects as presented in Table 1. The
results for discontinued operations have also been excluded from
the aggregate power generation and weighted average availability
statistics shown in Table 1. Under GAAP, the cash flows
attributable to the Sold Projects, Rollcast and Greeley are
included in cash flows from operating activities as shown on the
Company's Consolidated Statement of Cash Flows; therefore, the
Company's calculation of Free Cash Flow shown on Table 1 also
includes cash flows from the Sold Projects, Rollcast, and
Greeley.
Note: Project
Adjusted EBITDA, Free Cash Flow and Cash Distributions from
Projects 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 Tables 11 through 14 for reconciliations
of these non-GAAP measures to GAAP measures.
|
|
|
|
|
|
Financial and Operating Review
Operations
Results for the three months ended March 31, 2014 were
affected by extreme weather and several plant outages, which caused
a decrease in availability to 92.7% from 95.8% a year ago. The
Company experienced lower water levels at Curtis Palmer and
difficulties sourcing fuel at its biomass projects, both
weather-related. Forced outages occurred at Canadian Hills,
Tunis, Kapuskasing,
Piedmont, and Williams Lake. North Island and Mamquam had
scheduled maintenance outages that were extended. Despite these
outages, generation increased 10.8% as a result of the addition of
Piedmont in April 2013,
increased dispatch of Chambers due to higher power prices in PJM,
increased generation at Manchief and Frederickson and at
Meadow
Creek due to stronger winds, partly offset by the
decline in generation at Curtis Palmer.
Comparison of the three months ended March 31, 2014 to
the three months ended March 31, 2013
Project Income
Reported project income can fluctuate significantly due to
impacts from non-cash mark-to-market fair value of derivatives
adjustments. In the first quarter of 2014, project income decreased
by $11.3
million to $20.0 million, compared to project income
of $31.3
million for the same period in 2013. Table 2 provides
a breakdown of project income by segment for the first quarter of
2014 as compared to the first quarter of 2013.
East: Project income increased $0.4 million in the
first quarter of 2014. Factors positively affecting results
included:
- Non-cash mark-to-market adjustments for gas swaps and gas
purchase agreements at Orlando and Nipigon
totaled $11.3
million.
- Increase of $2.7
million at Morris primarily due to lower maintenance
expenses than the prior period, which included a scheduled outage,
and higher ancillary services revenue.
Factors negatively affecting results included:
- Decrease of $6.6
million at Piedmont, including a $2.1 million
non-cash change in the fair value of an interest-rate swap,
interest and other expenses related to the February term loan
conversion, and the remainder principally due to high maintenance
and fuel expense and forced outages. The project was not in
commercial operation in the first quarter of 2013.
- Decrease of $3.8
million from Curtis Palmer due to lower revenues as a
result of lower water flows and interest prepayments related to
debt redemption.
- Decrease of $2.5
million from Selkirk as higher generation levels
were offset by higher fuel costs.
West: Project income decreased $8.5 million in the
first quarter of 2014. Factors affecting the result included:
- Decrease of $4.2
million at Williams Lake due to lower energy
revenues from a contractual price decrease in April 2013 and a
forced outage.
- Decrease of $2.0
million at North Island primarily due to higher
maintenance costs resulting from a scheduled maintenance
outage.
- Decrease of $1.4
million at Mamquam due primarily to higher
maintenance costs resulting from a scheduled outage and decreased
revenues caused by lower water levels.
Wind: Project income decreased $6.8 million in the
first quarter of 2014. Factors affecting the result included:
- Decrease of $1.8
million at Meadow Creek related to a $5.8 million
non-cash negative change in the fair value of an interest-rate
swap, offset by an increase of $4.0 million due to higher energy revenues
resulting from increased generation.
- Decrease of $3.5
million at Rockland due primarily to a
$4.3
million non-cash negative change in the fair value of
an interest-rate swap.
- Decrease of $1.3
million at Canadian Hills due primarily to a
weather-related forced outage during the first quarter of
2014.
Unallocated corporate: Project loss decreased
$3.6
million in the first quarter of 2014 due to a
$1
million decrease in development expense at Ridgeline
and a $1.7
million decrease in administrative costs.
Atlantic Power
Corporation
Table 2 – Segment
Results
(in millions of
U.S. dollars, except as otherwise stated)
Unaudited
|
|
Three months ended
March 31,
|
|
|
2014
|
2013
|
Project income
(loss)
|
|
|
|
East
|
|
$31.6
|
$31.2
|
West
|
|
(5.1)
|
3.4
|
Wind
|
|
(6.0)
|
0.8
|
Un-allocated
Corporate
|
|
(0.5)
|
(4.1)
|
Total
|
|
20.0
|
31.3
|
Project Adjusted
EBITDA
|
|
|
|
East
|
|
$45.6
|
$49.1
|
West
|
|
11.3
|
20.6
|
Wind
|
|
17.8
|
15.0
|
Un-allocated
Corporate
|
|
(0.5)
|
(4.4)
|
Total
|
|
74.2
|
80.3
|
Note: Project
Adjusted EBITDA 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. Please refer to Tables 11 through 14 for a
reconciliation of this non-GAAP measure to a GAAP
measure.
The Company has not
reconciled non-GAAP financial measures relating to individual
projects to the directly comparable GAAP measure due to the
difficulty in making the relevant adjustments on an individual
project basis.
|
|
|
|
|
|
Project Adjusted EBITDA
In the first quarter of 2014, Project Adjusted EBITDA, which
includes earnings from equity method projects but excludes projects
classified as discontinued operations, decreased by $6.1 million to
$74.2
million, compared to Project Adjusted EBITDA of
$80.3
million for the same period in 2013. The decrease was
attributable to plant outages as described above, the Orlando gas
swap termination cost and other project-specific factors, as
discussed below. Table 2 provides a breakdown of Project Adjusted
EBITDA by segment for the first quarter of 2014 as compared to the
first quarter of 2013.
East: Project Adjusted EBITDA decreased $3.5 million for
the first quarter of 2014. Factors negatively affecting results
included:
- Decrease of $1.4
million at Piedmont, which achieved commercial
operation in April
2013 but experienced high fuel and maintenance
expenses and forced outages during the first quarter of 2014.
- Decreases of $1.1
million at each of Calstock and
Kapuskasing, at Calstock due
to steam turbine maintenance costs and at Kapuskasing
due to a gas turbine forced outage during the first quarter of
2014.
- Decrease of $1.0
million at Orlando, including a $4.0 million cost
to terminate certain natural gas swaps, partly offset by higher
capacity payments under its Power Purchase Agreement (PPA) and
higher energy revenues from increased generation.
These negative factors were partly offset by an increase of
$2.7
million at Morris primarily resulting from lower
maintenance expense as compared to the year-ago period, when the
project underwent a scheduled outage, and higher ancillary services
revenue.
West: Project Adjusted EBITDA decreased $9.3 million for
the first quarter of 2014, primarily attributable to the following
factors:
- Decrease of $4.7
million at Williams Lake due to lower energy
revenues from a contractual price decrease in April 2013 and an
extended forced outage.
- Decrease of $2.0
million at North Island due primarily to higher
maintenance costs resulting from a scheduled maintenance
outage.
- Decrease of $1.4
million at Mamquam resulting from higher maintenance
costs due to a scheduled outage and decreased revenues caused by
lower water levels during the period.
Wind: Project Adjusted EBITDA increased $2.8 million, due
to a $2.8
million increase at Meadow Creek
from higher energy revenue and smaller increases at the Company's
other Idaho wind projects, all resulting from
increased generation due to stronger wind. These increases were
partly offset by a $1.2 million decrease in Project Adjusted
EBITDA for Canadian Hills due primarily to a weather-related forced
outage.
Unallocated corporate: Project Adjusted EBITDA increased
$3.9
million, primarily from a $1.0 million
decrease in development expense at Ridgeline and a $1.7 million
reduction in administrative costs.
Cash Distributions from Projects
Cash Distributions from Projects, which excludes projects
classified as discontinued operations, decreased by $3.4 million to
$50.4
million for the three months ended March 31, 2014,
compared to $53.8
million for the same period in 2013. The decreases
occurred primarily at Chambers, which benefited in the first
quarter of 2013 from the release of the DuPont settlement. Although
the project did not make a distribution in the first quarter of
2014, there was a distribution made in April. Morris distributions
decreased due to gas prepayment requirements under a fuel supply
contract, although this arrangement was terminated at the end of
April and the project is no longer required to prepay for gas or
post letters of credit. Distributions from Williams Lake
declined due to lower Project Adjusted EBITDA and from the Navy
projects in California due to the timing of
payments of certain expenses.
These decreases in distributions were partially offset by
increased distributions from Orlando, Nipigon,
Tunis, Kenilworth,
Rockland and Meadow Creek. Orlando
benefited from more favorable gas costs versus the prior period due
to the termination of swaps that were above market; the project
also benefited from favorable changes to the PPA. The Ontario
projects benefited from the timing of revenue receipts;
Rockland benefited from the release of
construction-related blade reserves; and Meadow Creek
benefited from increased generation.
Cash Flows from Operating Activities
Cash flows from operating activities decreased by $118.4 million to
$(28.7)
million for the three months ended March 31, 2014,
compared to $89.7
million for the same period in 2013. Cash flow was
negatively affected in the first quarter of 2014 by approximately
$54
million of cash expenses associated with the
Company's recent refinancing transactions, including approximately
$49
million of interest expense related to premiums and
accrued interest and approximately $4 million of other
expenses (see Financial Update section for discussion of and detail
on these costs). The cash used in operating activities from changes
in working capital for the first quarter of 2014 was $2.8 million. On a
year-over-year basis, the decrease in cash flows from operating
activities was due to a number of factors, including: the higher
interest and transaction-related expenses; a $27.5 million
reduction of working capital from discontinued operations; and a
$36.3
million net change in working capital (use of funds)
compared with the first quarter of 2013. The year-over-year change
in working capital was primarily the result of a $32.5 million
decrease in prepaid and other assets due to the return of security
deposits related to construction projects completed in 2012 and
early 2013, such as Piedmont, Canadian Hills and
Meadow
Creek, in the first quarter of 2013. Other changes in
working capital included a $14.7 million decrease in accounts payable
and accrued expenses related to gas prepayments with two suppliers
and cash outlays for outage-related expenses at two projects that
were accrued in the fourth quarter of 2013, partially offset by an
$11.7
million increase in accounts receivable as a result
of the timing of revenue collections, which is not expected to
recur.
Free Cash Flow
For the three months ended March 31, 2014, Free Cash Flow decreased
by $128.3
million to $(46.3) million, compared to $82.0 million for
the same period in 2013. The decrease was due primarily to a
$118.4
million decrease in cash flows from operating
activities, as described above, and a $7.3 million
increase in project-level debt repayments. During the first quarter
of 2014 the Company made an $8.1 million principal payment on the
Piedmont construction loan at the time
of its conversion to a term loan in February 2014.
The Company's full year 2014 guidance excludes $49 million of
interest expense related to the transactions and the $8 million
Piedmont construction debt repayment.
On that basis, Free Cash Flow for the first quarter of 2014 was
approximately $11
million compared to $82.0 million for
the same period in 2013.
Financial Results of Discontinued Operations for the three
months ended March
31, 2014 compared with the three months ended
March 31,
2013
Financial results for the three-month periods ended March 31, 2014 and
March 31,
2013 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 results from continuing
operations. 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". The
divested assets included in discontinued operations for these
periods are the Auburndale, Lake, Pasco and Greeley
projects and the Company's interests in Rollcast and Path 15.
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
calculation of Free Cash Flow as shown herein also includes cash
flow from discontinued operations.
- Project income (loss) from discontinued operations was
$(0.1)
million for the three months ended March 31, 2014,
compared to $1.1
million for the same period in 2013.
- Project Adjusted EBITDA from discontinued operations was
$(0.1)
million for the three months ended March 31, 2014,
compared to $31.5
million for the same period in 2013.
- Cash Distributions from Projects from discontinued
operations for the three months ended March 31, 2014 was
$(0.2)
million compared to $22.5 million for
the same period in 2013.
The Delta-Person generating station ("Delta-Person") is under a
purchase and sale agreement and the Company expects the sale will
close later in 2014. The Gregory project was sold in August 2013. Both are accounted for under the
equity method of accounting and therefore are included in the
Company's financial results from continuing operations for the
relevant reporting periods rather than being included in
discontinued operations, as is the case for the other projects that
were divested.
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.
Financial Update
Refinancing and Debt Repurchase Transactions
As reported in the Company's year-end 2013 earnings release, 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.
The Senior Secured Term Loan carries an interest rate of 375
basis points over the Adjusted Eurodollar Rate, with a floor for
that rate of 1.00%, resulting in an all-in minimum rate of 4.75%.
As required under the Senior Secured Term Loan, in early May APLP
entered into interest rate swap agreements to effectively fix the
Adjusted Eurodollar Rate interest rate at 1.16% for $199.0 million of
the outstanding $600
million principal. As a result of entering into these
swap agreements, the all-in rate for the $199.0 million
cannot be less than 4.91% if the Adjusted Eurodollar Rate is equal
to or greater than 1.00%. If the Adjusted Eurodollar Rate is below
1.00%, the interest rate is equivalent to the minimum 4.75% all-in
rate plus any difference between the actual Adjusted Eurodollar
Rate and 1.16%. The interest rate swap agreements are effective
June 30,
2014 and terminate on December 29,
2017.
Proceeds from the Senior Secured Term Loan Facility were used to
redeem $415
million of debt that otherwise would have matured in
2014, 2015 and 2017. In March, the Company used proceeds from the
financing and cash on hand to repurchase approximately $140 million
aggregate principal amount of the Company's 9.0% senior unsecured
notes due in 2018 and make $15.7 million of associated accrued
interest and premium payments as part of the aggregate repurchase
price and $0.1
million of commission fees associated with the
repurchases. Having substantially completed its previously
announced intention to repurchase or redeem up to $150 million
aggregate principal amount of the 9.0% notes, the Company does not
expect at this time to repurchase or redeem any additional amounts
of the 9.0% notes but reserves the right to do so in the
future.
The Company views the refinancing and debt repurchase
transactions as beneficial in achieving progress toward its
financial objectives in the following key respects:
Reduced debt maturities through 2018: The Company
now has only one debt instrument maturing through March of 2017
(Cdn$45
million of convertible debentures maturing in
October
2014), which the Company intends to repay at maturity
using cash. The outstanding principal amount of the senior
unsecured notes maturing in 2018 has been reduced 30% to
approximately $320
million from $460 million.
Reduce interest expense and debt levels over time:
The all-in cost of the new financing, including the swapped rate on
a portion of the principal, is approximately 5.1% versus
approximately 5.9% on the $415 million of debt redeemed and 9.0% on
the $140.1
million of debt repurchased. The Company expects a
reduction in interest expense to begin in the second half of this
year and to continue through the maturity of the Senior Secured
Term Loan Facility. Approximately three-quarters of the Senior
Secured Term Loan Facility is expected to be repaid through annual
amortization and the cash sweep feature of the loan by its 2021
maturity. (See Table 3 for actual debt outstanding at December 31, 2013
and March 31,
2014 and the projected level as of year-end
2014.)
Improve financial flexibility: The Senior Secured
Revolving Credit Facility maturing in 2018 provides additional
liquidity and greater financial flexibility than the previous
facility that would have matured in 2015.
The Company expects to be in compliance with the financial
maintenance covenants in the agreements governing its indebtedness
for at least the next twelve months.
Atlantic Power
Corporation
Table 3 – Debt
Outstanding, including the Company's share of equity method project
debt (in millions of U.S. dollars)
|
Unaudited
|
December 31,
2013
|
March 31,
2014
|
Projected Year-End
2014 (1)
|
Atlantic Power
Corporation
|
$865
|
$715
|
$674
|
Atlantic Power
Limited Partnership
|
612
|
790
|
738
|
Non-Recourse
Project-level (consolidated)
|
399
|
388
|
372
|
Non-Recourse
Project-level (equity method)
|
119
|
117
|
108
|
Total
Debt
|
$1,995
|
$2,010
|
$1,892
|
(1)
Accounts for: the expected repayment in cash at maturity of $40.5
(Cdn$44.8) million convertible debentures (October 2014); 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 expected sale of Delta-Person in 2014 ($6.2 million
equity method debt); and expected project-level debt repayments of
$19.2 million ($3.2 million at equity method projects) in
2014.
|
Due to the aggregate impact of the up-front costs resulting from
the prepayments and repurchases of the Company's indebtedness
described below, the Company can no longer satisfy the fixed charge
coverage ratio test included in the restricted payments covenant of
the indenture governing its 9.0% senior unsecured notes. The fixed
charge coverage ratio must be at least 1.75 to 1.00 and is measured
on a rolling four quarter basis, so the costs associated with debt
prepayments and repurchases incurred in the first quarter of 2014
would no longer be included in the calculation beginning in the
second quarter of 2015. As a consequence of the non-compliance,
further common 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" provision
of the greater of $50
million and 2% of consolidated net assets
(approximately $63
million at March 31, 2014), until such time that the
Company satisfies the fixed charge coverage ratio test. The Company
paid dividends in February, March and April totaling approximately
$11
million that were subject to the basket provision.
The dividend declared on April 15 to be paid May 30 will also be
subject to the basket provision.
Costs associated with recent balance sheet
initiatives
During the first quarter, the Company incurred significant costs
in conjunction with the recent refinancing and debt repurchase
transactions, which included entry into the new credit facilities,
debt redemptions and repurchases, and the Piedmont term
loan conversion. Table 4 provides a breakout of these costs, which
were principally for debt redemption and repurchase premiums and
accrued interest expense associated with retired debt, and were
recorded in interest expense in the first quarter. In addition, in
connection with entering into a new revolving credit facility, the
Company terminated certain above-market gas swaps at Orlando and
incurred a cost of $4
million which was recorded in fuel expense. The
impact on operating cash flow and Free Cash Flow in the first
quarter from these costs was a reduction of approximately
$54
million. With the exception of the Orlando gas
swap termination cost, these transaction costs did not affect
Project income or Project Adjusted EBITDA.
In addition, the Company incurred fees and other financing
expenses directly related to the transactions, totaling
approximately $41
million, which were capitalized and recorded as
deferred financing costs in the financing section of the statement
of cash flows, as shown in Table 4. The Company also paid down
$8.1
million of Piedmont construction debt to
facilitate the term loan conversion in February, and that outlay
was recorded as project debt repayment in the financing section of
the statement of cash flows. That $8.1 million
repayment was included in, and therefore reduced, Free Cash
Flow.
Atlantic Power
Corporation
Table 4 – Costs
associated with refinancing and debt repurchase
transactions
(in millions of
U.S. dollars, except as otherwise stated)
Unaudited
|
|
|
|
|
|
Make-whole payments
and other premiums (US GPs, 9% senior unsecured notes)
|
$(34.5)
|
Accrued interest (US
GPs, 9% senior unsecured notes, Curtis Palmer)
|
(12.3)
|
Termination of
interest-rate swaps (EPP)
|
(2.6)
|
Total included in
interest expense (1)
|
(49.4)
|
Termination of
certain gas swaps at Orlando (fuel expense)
|
(4.0)
|
Termination of
foreign currency forward contracts (foreign exchange gain,
net)
|
(0.4)
|
Total included in
Operating and Free Cash Flow
|
(53.8)
|
|
|
Transaction-related
financing costs (Q1 2014)
|
(37.3)
|
Transaction-related
financing costs (recorded and paid in 2013)
|
(2.3)
|
Amendment to Piedmont
interest rate swap
|
(1.0)
|
Total deferred
financing costs (included in Financing Cash Flow)
|
(40.6)
|
|
|
Total cash
costs
|
(94.3)
|
|
|
|
Non-cash write-off of
deferred financing costs (interest expense)
|
|
(5.8)
|
Total
costs
|
$(100.1)
|
(1) Amount
excluded from 2014 Free Cash Flow guidance of $0 to $25
million.
|
|
|
|
|
|
|
|
|
Liquidity
As can be seen from Table 5, the Company's liquidity increased
to approximately $246
million as of March 31, 2014 from $184 million at
December
31, 2013. The increase resulted from the new
revolving credit facility at APLP that was put in place in
February, which has a capacity of $210 million versus
$150
million under the prior credit facility. The prior
credit facility also had a required cash reserve of $75 million and a
limit on borrowings of $25 million. The increased borrowing
capacity was partly offset by an increase in letters of credit
outstanding to $144
million, consistent with the level at February 26, 2014
as reported in the Company's year-end earnings release.
As of May 9,
2014, letters of credit outstanding had been reduced
to $131
million as a result of a reduction of $10 million in
April in the amount of letters of credit posted with a counterparty
at one project and an approximate $3 million
reduction in the letters of credit posted in connection with the
transition from the prior credit facility to the new revolving
credit facility.
Atlantic Power
Corporation
Table 5 –
Liquidity (in millions of U.S. dollars)
|
|
Unaudited
|
|
December 31,
2013
|
March 31, 2014
(1)
|
Revolver
capacity
|
|
$150
|
$210
|
Letters of credit
outstanding
|
|
(98)
|
(144)
|
Unused borrowing
capacity
|
|
25(2)
|
66
|
Unrestricted cash
(3)
|
|
159
|
180
|
Total
Liquidity
|
|
$184
|
$246
|
Cash earmarked
for convertible debenture repayment in October 2014
(4)
|
|
|
41
|
(1)
Reflects the new $210 million Senior Secured Revolving Credit
Facility.
(2) Limit
of $25.0 million under the August 2013 amendment to the Prior
Credit Facility.
(3)
Includes project-level cash for working capital needs of $20.5
million at December 31, 2013 and $17.6 million at March 31, 2014
and release of $75 million of restricted cash after the close of
the new Senior Secured Revolving Credit Facility.
(4) For
the expected repayment in cash at maturity of Cdn$44.8 million of
convertible debentures at maturity (ATP.DB, due October 2014), and
for which the Company has entered into a foreign currency
hedge.
|
|
|
|
|
|
Reaffirming 2014 Guidance
- Annual Project Adjusted EBITDA guidance of $280 to $305
million
- Annual Free Cash Flow guidance of $0 to $25
million
Project Adjusted EBITDA
The Company is reaffirming its previous guidance for 2014
Project Adjusted EBITDA in the range of $280 to $305
million. This includes a $4 million cost
recorded in the first quarter to terminate certain gas swaps at its
Orlando project that was not previously
included in guidance. Also in the first quarter, the Company had
several plant outages and experienced lower water levels at Curtis
Palmer which resulted in lower energy revenues and, in some cases,
higher maintenance expenses. On the positive side, wind resources
were stronger than expected at the Company's Idaho wind
projects and administrative cost performance has been favorable.
The Company also has begun to realize the benefit of its
optimization initiatives. On balance, the Company still expects to
be within its guidance range of $280 to $305 million.
Free Cash Flow
The Company is reaffirming its previous guidance for 2014 Free
Cash Flow in the range of $0 to $25 million, excluding approximately
$49
million in prepayment penalties (premiums and
make-wholes) and accrued interest expense associated with the
Company's first quarter refinancing and debt repurchase
transactions. The Free Cash Flow guidance also excludes the
$8.1
million repayment of Piedmont
construction debt made to facilitate the term loan conversion in
February.
Free Cash Flow is net of $20 million of planned capital
expenditures 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, which are projected to total
approximately $52
million in 2014.
See Table 6 for full-year 2014 guidance and first quarter 2014
actual results.
Atlantic Power
Corporation
Table 6 – 2014
Annual Guidance and Q1 2014 Actual
(in millions of
U.S. dollars, except as otherwise stated)
|
|
Unaudited
|
|
2014 Annual
Guidance
|
Q1 2014
Actual
|
Project Adjusted
EBITDA
|
|
$280 -
$305
|
$74.2
|
Free Cash Flow
(1)
|
|
$0 - $25
|
$(46.3)
|
APLP Project Adjusted
EBITDA (2)
|
|
$165 -
$175
|
$44.6
|
(1) Free
Cash Flow is defined as cash flows from operating activities less
capex; project-level debt repayments, including amortization of the
Senior Secured Term Loan Facility; and distributions to
noncontrolling interests, including preferred share dividends. Note
that 2014 guidance excludes $54 million of refinancing and debt
repurchase transaction costs in first quarter 2014 and $8 million
of Piedmont debt repayment in February 2014.
(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. The Company has not
reconciled non-GAAP financial measures relating to individual
projects or the APLP projects to the directly comparable GAAP
measures due to the difficulty in making the relevant adjustments
on an individual project basis.
Note: Project
Adjusted EBITDA, APLP 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
The Company has an ongoing effort to identify and implement
discretionary investments in its existing portfolio of projects
designed to improve operating performance and enhance efficiency or
lower costs, with the goal of increasing cash flow. The Company
views these investments as an attractive use of its available cash
as it believes that the risk-adjusted returns are compelling and
the capital requirements are relatively modest. The largest 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 operations and
maintenance expense.
The Company has made approximately $8 million of such
investments in 2013 and plans to make another $19 million in
2014, with the most significant related to a steam generator
replacement at Nipigon and the repowering of two
turbines at Curtis Palmer. The $27 million of committed investments are
expected to produce incremental cash flow of at least $8 million annually
on a run-rate basis beginning in 2015, with approximately half
realized in 2014 attributable to investments completed in 2013 and
initial returns from projects scheduled to be completed in the
early part of 2014.
In the first quarter of 2014, major maintenance and capex
totaled $10.1
million, of which approximately $3 million was
capitalized. For the full year, the Company now expects to have
total expenditures of approximately $40 million, within
a range of $38 to $43
million, including optimization investments of
approximately $18
million. This estimate is up slightly from the
$36 to $40
million previously expected because of additional
expense for gas turbine repairs at Kapuskasing
and North
Bay and a steam generator header repair at
Calstock, following forced outages at
these projects in late 2013 and 2014. Going forward, the Company
expects that major maintenance and routine capex will average
approximately $25
million annually (versus approximately $22 million in
2014). Although the level of optimization investments will vary
year to year, the Company has a goal of identifying approximately
$5 to $10
million of such investments annually.
See Table 7 for 2014 guidance for major maintenance and capex
and optimization investments.
Atlantic Power
Corporation
Table 7 – Major
Maintenance and optimization investments (in millions of U.S.
dollars)
|
|
Unaudited
|
|
2014
Guidance
|
Total major
maintenance and capex
|
|
$40
|
Expensed (included
in Project Adjusted EBITDA)
|
|
20
|
Capitalized
|
|
20
|
|
|
|
Optimization
investments (1)
|
|
19
|
(1) $18
included in $40 total major maintenance and capex
|
|
|
|
|
|
Additional Non-Core Asset Sales
The Company previously announced that it intended to shut down
the 72 MW Greeley project in Colorado following the expiration of
its PPA in August 2013. On
March 6,
2014, the Company closed a transaction with a private
buyer, who purchased all of the issued and outstanding membership
interests in Greeley for approximately $1.0 million. The
Company recorded a $2.1 million non-cash gain on the sale
resulting from the write-off of asset retirement obligations, which
was included in results from continuing operations as of
March 31,
2014.
Supplementary Financial Information
For further information, attached to this news release is a
summary of Project Adjusted EBITDA by segment for the three months
ended March 31,
2014 and 2013 (Table 11) with a reconciliation to
Project income (loss); a bridge from Project Adjusted EBITDA to
Cash Distributions from Projects by segment for the three months
ended March 31,
2014 (Table 12A) and the three months ended
March 31,
2013 (Table 12B); a reconciliation of Cash
Distributions from Projects and Project Adjusted EBITDA to Net
income (loss) and of Free Cash Flow to cash flows from operating
activities for the three months ended March 31, 2014 and
2013 (Table 13); and a summary of Project Adjusted EBITDA for
selected projects (top contributors based on the Company's 2014
budget, representing approximately 80% of total Project Adjusted
EBITDA) for the three months ended March 31, 2014 and
2013 (Table 14).
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.
Investor Conference Call and Webcast
A telephone conference call hosted by Atlantic Power's
management team will be held on Tuesday, May
13, 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 1505021 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 10043891. The replay will be
available 1 hour after the end of the conference call through
August 13,
2014 at 9:00 AM ET. 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 2,945 MW in which its
aggregate ownership interest is approximately 2,024 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, which the Company expects to close in 2014. 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
$400
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:
- 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,
excluding refinancing and debt repurchase transaction costs and
principal repayment of Piedmont construction debt;
- the Company will repay the Cdn$44.8 million aggregate principal
amount of convertible debentures due October 2014 at
maturity using cash;
- the Company does not expect at this time to repurchase or
redeem any additional amounts of the 9.0% notes, but reserves the
right to do so in the future;
- projected debt at year-end 2014 will be $1,892 million,
reflecting initial-year amortization of the term loan,
project-level debt repayments in 2014, the sale of Delta-Person in
2014 and the repayment in cash at maturity of the convertible
debentures due in October 2014;
- the refinancing transaction and other initiatives will result
in a reduction in interest expense beginning in the second half of
this year and further decreases over time and continuing through
the maturity of the Senior Secured Term Loan Facility;
- approximately three-quarters of the Senior Secured Term Loan
Facility will be repaid through annual amortization and the cash
sweep feature of the loan by its 2021 maturity;
- 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 impact of the fixed charge coverage ratio included in the
restricted payments "basket" provision of the indenture governing
the Company's 9.0% senior unsecured notes;
- the level of optimization investments will be approximately
$19
million in 2014, for a two-year (2013 and 2014) total
of approximately $27
million, and that these investments will produce a
cash flow run-rate contribution of approximately $8 million
beginning in 2015, with approximately half realized in 2014
attributable to investments completed in 2013 and initial returns
from projects scheduled to be completed in the early part of
2014;
- the Company will have project capital expenditures and major
maintenance expenses of approximately $40 million in
2014, including optimization initiatives of approximately
$18
million;
- major maintenance expense and maintenance capex will average
approximately $25
million annually, versus approximately $22 million in
2014;
- the Company will have annual optimization capex on average of
approximately $5 to
$10 million;
- the sale of Delta-Person will successfully close in 2014 with
net cash proceeds received by the Company of approximately
$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" and "Forward-Looking
Information" 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 8 –
Consolidated Balance Sheets (in millions of U.S.
dollars)
|
|
|
|
|
|
|
|
|
March
31,
|
December
31,
|
|
|
|
|
2014
|
2013
|
Assets
|
|
|
|
Unaudited
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
$180.0
|
$158.6
|
Restricted
cash
|
|
|
|
40.6
|
114.2
|
Accounts
receivable
|
|
|
|
57.2
|
64.3
|
Current portion of
derivative instruments asset
|
|
|
|
0.5
|
0.2
|
Inventory
|
|
|
|
16.1
|
16.0
|
Prepayments and other
current assets
|
|
|
|
18.2
|
16.1
|
Refundable income
taxes
|
|
|
|
2.6
|
4.0
|
Total current
assets
|
|
|
|
315.2
|
373.4
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
|
1,771.8
|
1,813.4
|
Equity investments in
unconsolidated affiliates
|
|
|
|
391.1
|
394.3
|
Other intangible
assets, net
|
|
|
|
431.3
|
451.5
|
Goodwill
|
|
|
|
296.3
|
296.3
|
Derivative
instruments asset
|
|
|
|
7.4
|
13.0
|
Other
assets
|
|
|
|
83.7
|
53.1
|
Total
assets
|
|
|
|
$3,296.8
|
$3,395.0
|
|
|
|
|
|
|
Liabilities and
Shareholder's Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
|
|
$12.1
|
$14.0
|
Accrued
interest
|
|
|
|
24.0
|
17.7
|
Other accrued
liabilities
|
|
|
|
41.8
|
58.8
|
Current portion of
long-term debt
|
|
|
|
24.6
|
216.2
|
Current portion of
convertible debentures
|
|
|
|
40.5
|
42.1
|
Current portion of
derivative instruments liability
|
|
|
|
22.5
|
28.5
|
Dividends
payable
|
|
|
|
3.6
|
6.8
|
Other current
liabilities
|
|
|
|
4.5
|
5.3
|
Total current
liabilities
|
|
|
|
173.6
|
389.4
|
|
|
|
|
|
|
Long-term
debt
|
|
|
|
1,473.9
|
1,254.8
|
Convertible
debentures
|
|
|
|
354.3
|
363.1
|
Derivative
instruments liability
|
|
|
|
60.2
|
76.1
|
Deferred income
taxes
|
|
|
|
96.6
|
111.5
|
Power purchase and
fuel supply agreement liabilities, net
|
|
|
|
37.0
|
38.7
|
Other non-current
liabilities
|
|
|
|
61.8
|
65.4
|
Commitments and
contingencies
|
|
|
|
-
|
-
|
Total
liabilities
|
|
|
|
2,257.4
|
2,299.0
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Common shares, no par
value, unlimited authorized shares; 120,586,937 and 120,205,813
issued and outstanding at March 31, 2014 and December 31, 2013,
respectively
|
|
|
|
1,286.0
|
1,286.1
|
Preferred shares
issued by a subsidiary company
|
|
|
|
221.3
|
221.3
|
Accumulated other
comprehensive income (loss)
|
|
|
|
(41.2)
|
(22.4)
|
Retained
deficit
|
|
|
|
(684.4)
|
(655.4)
|
Total Atlantic Power
Corporation shareholders' equity
|
|
|
|
781.6
|
829.6
|
Noncontrolling
interests
|
|
|
|
257.8
|
266.4
|
Total
equity
|
|
|
|
1,039.4
|
1,096.0
|
Total liabilities and
equity
|
|
|
|
$3,296.8
|
$3,395.0
|
|
|
|
|
|
|
|
|
|
|
Atlantic Power
Corporation
Table 9 –
Consolidated Statements of Operations
(in millions of
U.S. dollars, except per share amounts)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
|
2014
|
2013
|
Project
revenue:
|
|
|
|
|
Energy
sales
|
|
|
|
$84.3
|
$76.9
|
Energy capacity
revenue
|
|
|
|
33.5
|
34.3
|
Other
|
|
|
|
27.5
|
26.2
|
|
|
|
|
145.3
|
137.4
|
|
|
|
|
|
|
Project
expenses:
|
|
|
|
|
|
Fuel
|
|
|
|
59.8
|
47.7
|
Operations and
maintenance
|
|
|
|
32.9
|
27.6
|
Development
|
|
|
|
0.7
|
1.7
|
Depreciation and
amortization
|
|
|
|
40.5
|
40.9
|
|
|
|
|
133.9
|
117.9
|
Project other income
(expense):
|
|
|
|
|
|
Change in fair value
of derivative instruments
|
|
|
|
14.7
|
12.6
|
Equity in earnings of
unconsolidated affiliates
|
|
|
|
8.6
|
7.2
|
Interest expense,
net
|
|
|
|
(14.6)
|
(8.0)
|
Other expense,
net
|
|
|
|
(0.1)
|
-
|
|
|
|
|
8.6
|
11.8
|
Project
income
|
|
|
|
20.0
|
31.3
|
|
|
|
|
|
|
Administrative and
other expenses (income):
|
|
|
|
|
|
Administration
|
|
|
|
7.1
|
8.3
|
Interest,
net
|
|
|
|
66.5
|
25.9
|
Foreign exchange
gain
|
|
|
|
(16.8)
|
(7.5)
|
Other income,
net
|
|
|
|
(2.1)
|
-
|
|
|
|
|
54.7
|
26.7
|
(Loss) income from
continuing operations before income taxes
|
|
|
|
(34.7)
|
4.6
|
Income tax
benefit
|
|
|
|
(12.3)
|
(2.5)
|
(Loss) income from
continuing operations
|
|
|
|
(22.4)
|
7.1
|
Net (loss) income
from discontinued operations, net of tax (1)
|
|
|
|
(0.1)
|
0.7
|
Net (loss)
income
|
|
|
|
(22.5)
|
7.8
|
Net loss attributable
to noncontrolling interests
|
|
|
|
(6.4)
|
(1.9)
|
Net income
attributable to preferred share dividends of a subsidiary
company
|
|
|
|
2.8
|
3.2
|
Net (loss) income
attributable to Atlantic Power Corporation
|
|
|
|
$(18.9)
|
$6.5
|
|
|
|
|
|
|
Basic earnings per
share:
|
|
|
|
|
|
(Loss) income from
continuing operations attributable to Atlantic Power
Corporation
|
|
|
|
$(0.16)
|
$0.04
|
Income from
discontinued operations, net of tax
|
|
|
|
-
|
0.01
|
Net (loss) income
attributable to Atlantic Power Corporation
|
|
|
|
$(0.16)
|
0.05
|
Diluted earnings per
share:
|
|
|
|
|
|
(Loss) income from
continuing operations attributable to Atlantic Power
Corporation
|
|
|
|
$(0.16)
|
$0.04
|
Income from
discontinued operations, net of tax
|
|
|
|
-
|
0.01
|
Net (loss) income
attributable to Atlantic Power Corporation
|
|
|
|
$(0.16)
|
$0.05
|
(1) Includes
contributions from the Sold Projects and Path 15, which are a
component of discontinued operations.
|
|
|
|
|
|
|
|
|
|
|
|
Atlantic Power
Corporation
Table 10 –
Consolidated Statements of Cash Flows (in millions of U.S.
dollars)
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
|
2014
|
2013
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net (loss)
income
|
|
|
|
$(22.5)
|
$7.8
|
Adjustments to
reconcile to net cash
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
40.5
|
49.1
|
Loss of discontinued
operations
|
|
|
|
-
|
27.5
|
Gain on sale of
asset
|
|
|
|
(2.1)
|
-
|
Long-term incentive
plan expense
|
|
|
|
(0.1)
|
0.3
|
Equity in earnings
from unconsolidated affiliates
|
|
|
|
(8.6)
|
(7.2)
|
Distributions from
unconsolidated affiliates
|
|
|
|
11.8
|
8.9
|
Unrealized foreign
exchange gain
|
|
|
|
(16.7)
|
(5.0)
|
Change in fair value
of derivative instruments
|
|
|
|
(14.7)
|
(21.1)
|
Change in deferred
income taxes
|
|
|
|
(13.5)
|
(4.1)
|
Change in other
operating balances
|
|
|
|
|
|
Accounts
receivable
|
|
|
|
7.1
|
(4.6)
|
Inventory
|
|
|
|
(0.1)
|
0.9
|
Prepayments,
refundable income taxes and other assets
|
|
|
|
7.4
|
39.7
|
Accounts
payable
|
|
|
|
(2.9)
|
(8.0)
|
Accruals and other
liabilities
|
|
|
|
(14.3)
|
5.5
|
Cash (used in)
provided by operating activities
|
|
|
|
(28.7)
|
89.7
|
|
|
|
|
|
|
Cash flows provided
by (used in) investing activities
|
|
|
|
|
|
Change in restricted
cash
|
|
|
|
73.6
|
(18.7)
|
Proceeds from sale of
asset, net
|
|
|
|
1.0
|
-
|
Construction in
progress
|
|
|
|
(0.4)
|
(26.4)
|
Purchase of property,
plant and equipment
|
|
|
|
(2.6)
|
(1.0)
|
Cash provided by
(used in) investing activities
|
|
|
|
71.6
|
(46.1)
|
|
|
|
|
|
|
Cash flows provided
by (used in) financing activities
|
|
|
|
|
|
Proceeds from Senior
secured term loan facility
|
|
|
|
600.0
|
-
|
Proceeds from
project-level debt
|
|
|
|
-
|
20.8
|
Repayment of
project-level debt
|
|
|
|
(565.0)
|
(2.6)
|
Payments for
revolving credit facility borrowings
|
|
|
|
-
|
(2.9)
|
Deferred financing
costs
|
|
|
|
(38.3)
|
-
|
Equity contribution
from noncontrolling interest
|
|
|
|
-
|
2.0
|
Offering costs
related to tax equity
|
|
|
|
-
|
(0.6)
|
Dividends paid to
common shareholders
|
|
|
|
(10.2)
|
(35.4)
|
Dividends paid to
noncontrolling interests
|
|
|
|
(8.0)
|
(0.9)
|
Cash used in
financing activities
|
|
|
|
(21.5)
|
(19.6)
|
|
|
|
|
|
|
Net increase in cash
and cash equivalents
|
|
|
|
21.4
|
24.0
|
Less cash at
discontinued operations
|
|
|
|
-
|
(5.0)
|
Cash and cash
equivalents at beginning of period at discontinued
operations
|
|
|
|
-
|
6.5
|
Cash and cash
equivalents at beginning of period
|
|
|
|
158.6
|
60.2
|
Cash and cash
equivalents at end of period
|
|
|
|
$180.0
|
$85.7
|
|
|
|
|
|
|
Supplemental cash
flow information
|
|
|
|
|
|
Interest
paid
|
|
|
|
$66.8
|
$17.1
|
Income taxes paid,
net
|
|
|
|
$0.2
|
$1.4
|
Accruals for
construction in progress
|
|
|
|
$9.4
|
$17.1
|
|
|
|
|
|
|
|
|
|
|
|
Regulation G Disclosures
Project Adjusted EBITDA, 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 Free Cash Flow and Cash Distributions from Projects are
relevant supplemental measures of the Company's ability to earn and
distribute cash returns to investors. Reconciliations of Free Cash
Flow to cash flows from operating activities and of Cash
Distributions from Projects to Project income (loss) are provided
in Table 13 on page 18 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
noncontrolling 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 11 below and Tables 12A and 12B
on page 17, respectively. Investors are cautioned that the Company
may calculate this measure in a manner that is different from other
companies.
Atlantic Power
Corporation
Table 11 – Project
Adjusted EBITDA by Segment (in millions of U.S.
dollars)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
|
2014
|
2013
|
Project Adjusted
EBITDA by segment
|
|
|
|
|
|
East
(1)
|
|
|
|
$45.6
|
$49.1
|
West
(2)
|
|
|
|
11.3
|
20.6
|
Wind
|
|
|
|
17.8
|
15.0
|
Un-allocated
corporate (3)
|
|
|
|
(0.5)
|
(4.4)
|
Total
|
|
|
|
$74.2
|
$80.3
|
|
|
|
|
|
|
Reconciliation to
project income
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
52.2
|
52.0
|
Interest expense,
net
|
|
|
|
16.2
|
9.5
|
Change in the fair
value of derivative instruments
|
|
|
|
(14.3)
|
(11.7)
|
Other expense
(income)
|
|
|
|
0.1
|
(0.8)
|
Project
income
|
|
|
|
$20.0
|
$31.3
|
(1) Excludes
Auburndale, Lake and Pasco, which are components of discontinued
operations.
(2) Excludes Greeley
and Path 15, which are components of discontinued
operations.
(3) Excludes
Rollcast, which is a component of discontinued
operations.
Note: Table 11
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Atlantic Power
Corporation
Table 12A – Cash
Distributions from Projects (by Segment, in millions of U.S.
dollars)
Three months ended
March 31, 2014 (Unaudited)
|
|
|
|
|
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
|
$33.8
|
$(8.6)
|
$(7.9)
|
$(0.1)
|
$16.6
|
$33.8
|
|
Equity
method
|
11.8
|
(2.1)
|
(3.7)
|
(0.6)
|
3.3
|
8.7
|
|
Total
|
45.6
|
(10.7)
|
(11.6)
|
(0.7)
|
19.9
|
42.5
|
|
West
|
|
|
|
|
|
|
|
Consolidated
|
7.6
|
-
|
-
|
-
|
(10.3)
|
(2.7)
|
|
Equity
method
|
3.7
|
(0.3)
|
-
|
-
|
0.8
|
4.2
|
|
Total
|
11.3
|
(0.3)
|
-
|
-
|
(9.5)
|
1.5
|
|
Wind
|
|
|
|
|
|
|
|
Consolidated
|
14.8
|
-
|
(3.5)
|
(0.9)
|
(5.0)
|
5.4
|
|
Equity
method
|
3.0
|
(0.7)
|
(1.1)
|
0.2
|
(0.4)
|
1.0
|
|
Total
|
17.8
|
(0.7)
|
(4.6)
|
(0.7)
|
(5.4)
|
6.4
|
|
Total
consolidated
|
56.2
|
(8.6)
|
(11.4)
|
(1.0)
|
1.3
|
36.5
|
|
Total equity
method
|
18.5
|
(3.1)
|
(4.8)
|
(0.4)
|
3.7
|
13.9
|
|
Un-allocated
corporate
|
(0.5)
|
-
|
-
|
(0.3)
|
0.8
|
-
|
|
Total
|
$74.2
|
$(11.7)
|
$(16.2)
|
$(1.7)
|
$5.8
|
$50.4
|
|
Note: Table 12A
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.
|
|
Atlantic Power
Corporation
Table 12B – Cash
Distributions from Projects (by Segment, in millions of U.S.
dollars)
Three months ended
March 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
|
$35.5
|
$(0.6)
|
$(3.5)
|
$(0.3)
|
$(0.1)
|
$31.0
|
|
Equity
method
|
13.6
|
(3.5)
|
(1.0)
|
0.2
|
2.3
|
11.6
|
|
Total
|
49.1
|
(4.1)
|
(4.5)
|
(0.1)
|
2.2
|
42.6
|
|
West
|
|
|
|
|
|
|
|
Consolidated
|
16.4
|
-
|
-
|
(0.4)
|
(12.0)
|
4.0
|
|
Equity
method
|
4.2
|
(0.8)
|
-
|
(0.4)
|
0.8
|
3.8
|
|
Total
|
20.6
|
(0.8)
|
-
|
(0.8)
|
(11.2)
|
7.8
|
|
Wind
|
|
|
|
|
|
|
|
Consolidated
|
12.3
|
-
|
(3.8)
|
(1.2)
|
(5.2)
|
2.1
|
|
Equity
method
|
2.7
|
(0.7)
|
(1.1)
|
(0.1)
|
0.5
|
1.3
|
|
Total
|
15.0
|
(0.7)
|
(4.9)
|
(1.3)
|
(4.7)
|
3.4
|
|
Total
consolidated
|
64.2
|
(0.6)
|
(7.3)
|
(1.9)
|
(17.3)
|
37.1
|
|
Total equity
method
|
20.5
|
(5.0)
|
(2.1)
|
(0.3)
|
3.6
|
16.7
|
|
Un-allocated
corporate
|
(4.4)
|
-
|
-
|
-
|
4.4
|
-
|
|
Total
|
$80.3
|
$(5.6)
|
$(9.4)
|
$(2.2)
|
$(9.3)
|
$53.8
|
|
Note: Table 12B
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Atlantic Power
Corporation
Table 13 – Free
Cash Flow (in millions of U.S. dollars)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
|
2014
|
2013
|
Cash Distributions
from Projects
|
|
|
|
$50.4
|
$53.8
|
Repayment of
long-term debt
|
|
|
|
(11.7)
|
(5.6)
|
Interest expense,
net
|
|
|
|
(16.2)
|
(9.4)
|
Capital
expenditures
|
|
|
|
(1.7)
|
(2.2)
|
Other, including
changes in working capital
|
|
|
|
5.8
|
(9.3)
|
Project Adjusted
EBITDA
|
|
|
|
$74.2
|
$80.3
|
Depreciation and
amortization
|
|
|
|
52.2
|
52.0
|
Interest expense,
net
|
|
|
|
16.2
|
9.5
|
Change in the fair
value of derivative instruments
|
|
|
|
(14.3)
|
(11.7)
|
Other
income
|
|
|
|
0.1
|
(0.8)
|
Project
income
|
|
|
|
$20.0
|
$31.3
|
Administrative and
other expenses
|
|
|
|
54.7
|
26.7
|
Income tax
benefit
|
|
|
|
(12.3)
|
(2.5)
|
Net (loss) income
from discontinued operations, net of tax
|
|
|
|
(0.1)
|
0.7
|
Net income
(loss)
|
|
|
|
$(22.5)
|
$7.8
|
Adjustments to
reconcile to net cash provided by operating activities
|
|
|
|
(3.4)
|
48.4
|
Change in other
operating balances
|
|
|
|
(2.8)
|
33.5
|
Cash flows from
operating activities
|
|
|
|
$(28.7)
|
$89.7
|
Project-level debt
repayments
|
|
|
|
(9.9)
|
(2.6)
|
Purchases of
property, plant and equipment
|
|
|
|
(2.6)
|
(1.0)
|
Distributions to
noncontrolling interests
|
|
|
|
(2.1)
|
(0.9)
|
Dividends on
preferred shares of a subsidiary company
|
|
|
|
(3.0)
|
(3.2)
|
Free Cash
Flow
|
|
|
|
$(46.3)
|
$82.0
|
Note: Table 13
presents Cash Distributions from Projects, Project Adjusted EBITDA
and Free Cash Flow, 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 14 – Project
Adjusted EBITDA by Project (for Selected Projects)
(in millions of
U.S. dollars)
Unaudited
|
Three months ended
March 31,
|
2014
|
|
2013
|
East
|
Accounting
|
|
|
|
Cadillac
|
Consolidated
|
$2.0
|
|
$2.2
|
Curtis
Palmer
|
Consolidated
|
6.7
|
|
7.2
|
Morris
|
Consolidated
|
3.8
|
|
1.1
|
Nipigon
|
Consolidated
|
6.0
|
|
6.4
|
North Bay
|
Consolidated
|
5.0
|
|
5.3
|
Piedmont
|
Consolidated
|
(1.4)
|
|
-
|
Tunis
|
Consolidated
|
4.9
|
|
4.8
|
Other
(1)
|
Consolidated
|
6.8
|
|
8.5
|
Chambers
|
Equity
method
|
5.8
|
|
5.7
|
Selkirk
|
Equity
method
|
4.9
|
|
5.8
|
Orlando
|
Equity
method
|
1.1
|
|
2.1
|
Total
|
|
45.6
|
|
49.1
|
West
|
|
|
|
|
Manchief
|
Consolidated
|
3.6
|
|
3.9
|
Naval
Station
|
Consolidated
|
1.3
|
|
1.4
|
Williams
Lake
|
Consolidated
|
3.9
|
|
8.7
|
Other
(2)
|
Consolidated
|
(1.2)
|
|
2.4
|
Frederickson
|
Equity
method
|
3.2
|
|
3.1
|
Other
(3)
|
Equity
method
|
0.5
|
|
1.1
|
Total
|
|
11.3
|
|
20.6
|
Wind
|
|
|
|
|
Canadian
Hills
|
Consolidated
|
5.6
|
|
6.7
|
Meadow
Creek
|
Consolidated
|
5.9
|
|
3.1
|
Rockland
|
Consolidated
|
3.3
|
|
2.5
|
Other
(4)
|
Equity
method
|
3.0
|
|
2.7
|
Total
|
|
17.8
|
|
$15.0
|
Totals
|
|
|
|
|
Consolidated
projects
|
|
56.2
|
|
64.2
|
Equity method
projects
|
|
18.5
|
|
20.5
|
Un-allocated
corporate
|
|
(0.5)
|
|
(4.4)
|
Total Project
Adjusted EBITDA
|
|
$74.2
|
|
$80.3
|
|
|
|
|
|
Depreciation and
amortization
|
|
52.2
|
|
52.0
|
Interest expense,
net
|
|
16.2
|
|
9.5
|
Change in the fair
value of derivative instruments
|
|
(14.3)
|
|
(11.7)
|
Other (income)
expense
|
|
0.1
|
|
(0.8)
|
Project income
(loss)
|
|
$20.0
|
|
$31.3
|
(1) Kenilworth,
Calstock, and Kapuskasing
(2) Moresby Lake,
Mamquam, North Island, Naval Training Station, and
Oxnard
(3) Q1 2013: Koma
Kulshan, Gregory, and Delta-Person; Q1 2014: Koma Kulshan and
Delta-Person
(4) Idaho Wind and
Goshen North
Notes: Table 14
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.
|
|
|
|
|
|
|
|
|
Photo -
http://photos.prnewswire.com/prnh/20110809/NE49346LOGO
SOURCE Atlantic Power Corporation