BOSTON, May 12, 2014 /PRNewswire/ -- 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