BOSTON, Feb. 27,
2014 /CNW/ - Atlantic Power Corporation (NYSE: AT) (TSX:
ATP) ("Atlantic Power" or the "Company") today released its results
for the three months and year ended December 31,
2013.
All amounts are in U.S. dollars unless otherwise indicated.
Cash Available for Distribution, Cash Distributions from Projects,
Payout Ratio, and Project Adjusted EBITDA are not recognized
measures under generally accepted accounting principles in
the United
States ("GAAP") and do not have standardized meanings
prescribed by GAAP; therefore, these measures may not be comparable
to similar measures presented by other companies. Please see
"Regulation G Disclosures" attached to this news release for an
explanation and the GAAP reconciliation of "Cash Available for
Distribution", "Cash Distributions from Projects", "Payout Ratio"
and "Project Adjusted EBITDA" as used in this news release. Going
forward, the Company expects to provide guidance and updates
regarding Project Adjusted EBITDA and Free Cash Flow, which are
non-GAAP measures, along with reconciliations to project income and
cash flows from operating activities, respectively, the most
directly comparable GAAP measures.
Full Year 2013 Financial Highlights
- Project income increased $93.7 million to $64.3 million in 2013
compared to a project loss of $(29.4) million in 2012
- Cash flows from operating activities, including discontinued
operations, decreased $14.7 million from 2012 to $152.4 million in
2013
- Project Adjusted EBITDA increased $42.9 million from
2012 to $270.5
million in 2013, slightly above the midpoint of the
Company's revised guidance range
- Cash Available for Distribution, including discontinued
operations, decreased $22.8 million from 2012 to $108.8 million in
2013, above the upper end of the Company's guidance range
Recent Financing Developments
- Made significant progress in achieving financial goals of
addressing near-term debt maturities, gaining additional financial
flexibility and reducing debt over time
- Closed new $210
million senior secured revolving credit facility
maturing in 2018, which replaced the existing $150 million
revolver maturing in March 2015
- Closed new $600
million senior secured term loan maturing in 2021;
proceeds applied to redeem $415 million of debt with maturities in
2014, 2015 and 2017
- All-in interest rate on new facilities of 4.75% is favorable to
the weighted average rate on debt redeemed (5.9%)
- Converted Piedmont's construction loan to a
$68.5
million term loan maturing in August 2018
2014 Guidance
- Project Adjusted EBITDA in the range of $280 to $305
million
- Free Cash Flow in the range of $0 to $25 million,
after discretionary capex of approximately $18 million,
projected repayment of project debt and amortization of the new
term loan totaling approximately $79 million
"Our projects performed well and our financial results met
or exceeded our guidance for the year. In 2014, we expect growth of
8% in Project Adjusted EBITDA, including an initial contribution
from investments made last year to optimize the performance of our
projects," said Barry Welch, President and CEO of
Atlantic Power. "We are ramping up these efforts and have now
committed to $27
million of organic growth investments through 2014,
which we expect will produce a run-rate Project Adjusted EBITDA
contribution of at least $8 million in 2015."
Mr. Welch continued, "We were very pleased with the
successful execution of our refinancing, which is an important step
in increasing our financial flexibility and liquidity and
addressing our near-term debt maturities. In addition, we plan to
redeem our C$45
million convertible debenture due in October with
cash on hand and, subject to market and other conditions, may
reduce up to $150
million of additional debt with the excess proceeds
from the financing and a portion of cash on hand. Additionally, we
will be evaluating a range of options, including asset sales or
joint ventures to raise capital in a cost-effective manner for
growth or additional debt reduction, as well as broader strategic
options to improve shareholder value. Our dividend level will be
reviewed as part of this analysis."
Atlantic Power Corporation
|
Table 1 – Selected Results
|
(in millions of U.S. dollars, except as otherwise
stated)
|
|
|
|
|
Years ended December
31,
|
Unaudited
|
2013
|
2012
|
Excluding results from discontinued operations
(1)
|
|
|
Project revenue
|
$551.7
|
$440.4
|
Project income (loss)
|
64.3
|
(29.4)
|
Project Adjusted EBITDA
|
270.5
|
227.6
|
Cash Distributions from Projects
|
225.6
|
199.8
|
Aggregate power generation (thousands of Net
MWh)
|
8,436.0
|
5,906.2
|
Weighted average availability
|
95%
|
95%
|
Including results from discontinued
operations
|
|
|
Cash flows from operating
activities
|
$152.4
|
$167.1
|
Cash Available for Distribution
|
108.8
|
131.6
|
Total cash dividends declared to
shareholders
|
58.0
|
131.8
|
Payout Ratio
|
53%
|
100%
|
(1) The Path 15 transmission line ("Path
15"), Auburndale Power Partners, L.P. ("Auburndale"), Lake CoGen,
Ltd. ("Lake") and Pasco Cogen, Ltd. ("Pasco") (collectively, the
"Sold Projects") and Rollcast were sold in April 2013 and November
2013, respectively, and accordingly, the revenues, project income
(loss), Project Adjusted EBITDA and Cash Distributions from
Projects of these assets have been classified as discontinued
operations for the years ended December 31, 2013 and 2012, which
means that the results from these discontinued operations are
excluded from these figures. The results for discontinued
operations have also been excluded from the aggregate power
generation and weighted average availability statistics. Under
GAAP, the cash flows attributable to the Sold Projects and Rollcast
are included in cash flows from operating activities as shown on
the Consolidated Statement of Cash Flows; therefore, the Company's
calculations of Cash Available for Distribution and Payout Ratio as
shown herein also include cash flows from the Sold Projects and
Rollcast.
|
|
|
|
Note: Project Adjusted EBITDA, Cash Available for
Distribution, Cash Distributions from Projects and Payout Ratio are
not recognized measures under GAAP and do not have any standardized
meaning prescribed by GAAP; therefore, these measures may not be
comparable to similar measures presented by other companies. Please
refer to Table 11 for reconciliations of these non-GAAP measures to
GAAP measures.
|
Financial Review for the Year Ended December 31,
2013
GAAP Measures
Project income increased by $93.7 million to
$64.3
million in 2013 compared to a project loss of
$(29.4)
million in 2012. The increase in project income
relates primarily to a $30.4 million gain on the sale of the
Company's 17% interest in the Gregory project in August 2013,
additional project income from an increased interest in
Rockland and new projects added in
December
2012 (particularly Canadian Hills and Meadow Creek)
in the Company's Wind segment and mark-to-market adjustments to
interest rate swaps and gas purchase agreements for three of the
Company's gas-fired projects in Ontario in
the Company's East segment. These increases were partially offset
by $(34.9)
million of goodwill impairments. Generally, reported
project income can fluctuate significantly due to impacts from
non-cash mark-to-market fair value of derivatives adjustments.
Cash flows from operating activities, which include cash
flows from discontinued operations, decreased by $14.7 million to
$152.4
million in 2013 compared to $167.1 million in
2012. Factors positively contributing to annual results include
cash flows from new projects added in December 2012 (see
project income discussion above), and positive changes in working
capital. These factors were more than offset by reduced cash flow
contributions from assets that were divested in April 2013.
Non-GAAP Measures
Project Adjusted EBITDA, which includes earnings from the
Company's equity method investments but excludes the results of
discontinued operations, increased by $42.9 million to
$270.5
million for 2013 compared to $227.6 million for
2012. The increase is primarily due to contributions from new
projects added in December 2012 and April 2013, which
include $25.6
million from Canadian Hills, $14.0 million from
Meadow
Creek, and a modest contribution from Piedmont.
Rockland contributed $6.8 million more
in 2013 than in 2012, which is attributable to the 100%
consolidation of the former equity method project after increasing
the Company's ownership from 30% to 50% as part of the Ridgeline
acquisition in December 2012. Several
projects in the Company's East segment also posted higher operating
results for the year, due to a combination of factors including
higher generation, higher capacity revenues and favorable outage
comparisons. Two projects in the Company's West segment experienced
a decline in Project Adjusted EBITDA resulting from higher
maintenance costs due to scheduled outages and decreased energy
revenues caused by low water levels and contractual price
decreases. The Company has not reconciled non-GAAP financial
measures relating to individual projects to the directly comparable
GAAP measures due to the difficulty in making the relevant
adjustments on an individual project basis.
Cash Distributions from Projects, which excludes cash
distributions from discontinued operations, increased by
$25.8
million to $225.6 million in 2013, compared to
$199.8
million in 2012. The increase in Cash Distributions
from Projects for the year is primarily due to distributions from
Canadian Hills and Meadow Creek, both of which were added
in December 2012. Results were also
helped by increased distributions from the Company's East segment
including projects in Ontario, which benefited from higher
waste heat, as well as cash distributions made to the Company in
2013 by the Chambers project. In 2012, distributions from the
Chambers project were restricted from being made due to project
holding company debt requirements. These increased distributions
were partly offset by decreased distributions in the West segment
in 2013 compared to 2012.
Cash Available for Distribution begins with cash flows
from operating activities and deducts project-level debt
repayments, capital expenditures, distributions to non-controlling
interests (primarily the other 50% owner of Rockland and
the tax equity investors at Canadian Hills) and preferred
dividends. In 2013, Cash Available for Distribution decreased by
$22.8
million to $108.8 million from $131.6 million in
2012. The primary reasons for the decline include a reduction in
cash flow contributions from assets that were divested in
April
2013, higher capital expenditures associated with a
repowering of two turbines at the Company's Curtis Palmer project
and initial outlays at Nipigon for a steam generator upgrade
planned for 2014. These reductions were partly offset by positive
contributions from new projects added in December 2012,
including Canadian Hills, Meadow Creek and Rockland, net
of distributions to their minority interests, if any; positive
changes in working capital; and, to a lesser extent, lower
project-level debt repayments.
Payout Ratio for the year ended December 31, 2013
was 53% compared to 100% in 2012. The payout ratio for 2013 as
compared to the same period in 2012 was positively impacted by the
reduced cash dividends declared to shareholders as well as the
first full year of operating results from Canadian Hills and
Meadow
Creek. This was partially offset by lower operating
cash flow contributions from assets that were divested in
April
2013. For further information, attached to this news
release is a reconciliation of Cash Available for Distribution and
Payout Ratio to cash flows from operating activities (Table
11).
Financial Review for the Three Months Ended December 31,
2013
Project income increased by $13.0 million to
$7.2
million for the three months ended December 31, 2013
compared to a project loss of $(5.8) million in the year-ago period. The
increase in project income relates primarily to a $24.0 million
mark-to-market increase in the fair value of gas purchase
agreements at the North Bay and Kapuskasing
projects, partially offset by an increase in project expenses.
Project Adjusted EBITDA increased by $0.3 million to
$57.2
million for the three months ended December 31, 2013
from $56.9
million for the year-ago period. Contributions from
new projects for this period were $7.3 million from
Canadian Hills, $3.6
million from Meadow Creek and $(1.4) million from
Piedmont. These contributions were
mostly offset by decreases from other projects, including Curtis
Palmer (lower water levels) and Tunis (outage
due to extreme cold temperatures in Ontario). The
Company has not reconciled non-GAAP financial measures relating to
individual projects to the directly comparable GAAP measures due
the difficulty in making the relevant adjustments on an individual
project basis.
Results of Discontinued Operations
Financial results for the three months and year ended
December 31,
2013 and December 31, 2012 are affected by the
classification of the Company's interests in its divested assets as
discontinued operations; accordingly, the revenues, project income,
Project Adjusted EBITDA and Cash Distributions from Projects
classified as discontinued operations are excluded from continuing
operations results. The results of discontinued operations have
been separately stated in the Consolidated Statements of Operations
as "Net income (loss) from discontinued operations, net of
tax".
Under GAAP, the cash flow attributable to discontinued
operations is included in cash flows from operating activities as
shown on the Consolidated Statement of Cash Flows; therefore, the
Company's calculations of Cash Available for Distribution and
Payout Ratio as shown herein also include cash flow from
discontinued operations.
Project income (loss) from discontinued operations was
$(0.2)
million and $(6.2) million for the three months and
year ended December
31, 2013, compared to $(34.8) million and
$13.9
million, respectively, for the same periods in
2012.
Project Adjusted EBITDA from discontinued operations was
$(0.2)
million and $35.2 million for the three months and
year ended December
31, 2013, respectively, compared to $25.8 million and
$104.9
million, respectively, for the same periods in
2012.
Cash Available for Distribution from discontinued
operations for the year ended December 31, 2013 was $36 million
compared to $48
million for the same period in 2012.
The Delta-Person generating station ("Delta-Person"), which is
under a purchase and sale agreement, and the Gregory project, which
was sold in August
2013, are included in the Company's financial results
from continuing operations for the three months and year ended
December 31,
2013 and 2012, as the projects are accounted for
under the equity method of accounting.
The Company has not reconciled non-GAAP financial measures
relating to discontinued operations to the directly comparable GAAP
measures due to the difficulty in making the relevant adjustments
on an individual project basis.
Supplementary Financial Tables
For further information, attached to this news release is a:
- Summary of Project Adjusted EBITDA by segment for the three
months ended December
31, 2013 and 2012 and the years ended December 31, 2013,
2012 and 2011 (Table 9) with a reconciliation to Project income
(loss);
- Bridge from Project Adjusted EBITDA to Cash Distributions from
Projects by segment for the year ended December 31, 2013
(Table 10A) and the year ended December 31, 2012 (Table 10B);
- Reconciliation of Cash Distributions from Projects and Project
Adjusted EBITDA to net income (loss) for the years ended
December 31,
2013, 2012 and 2011 (Table 11);
- Reconciliation of Cash Available for Distribution and Payout
Ratio to cash flows from operating activities for the years ended
December 31,
2013, 2012 and 2011 (Table 11); and
- Summary of Project Adjusted EBITDA for selected projects (top
contributors based on the Company's 2013 budget, representing
approximately 75% to 80% of total Project Adjusted EBITDA) for the
years ended December
31, 2013, 2012 and 2011 (Table 12).
Liquidity and Financing Update
New Term Loan and Revolving Credit Facility
At December 31,
2013, the Company had liquidity of $183.6 million,
consisting of $158.6
million of unrestricted cash and $25 million of
borrowing capacity under its existing senior secured revolving
credit facility (the "Prior Credit Facility").
On February 24,
2014, Atlantic Power Limited Partnership ("APLP")
entered into new senior secured credit facilities (the "Senior
Secured Credit Facilities"), comprised of a $600 million senior
secured term loan facility (the "Senior Secured Term Loan
Facility") maturing in February 2021 and a senior secured
revolving credit facility (the "Senior Secured Revolving Credit
Facility") with a capacity of $210 million maturing in February 2018. The
Senior Secured Credit Facilities are secured by the 17 projects at
APLP, which were acquired when the Company purchased Capital Power
Income LP in November 2011.
The $210
million Senior Secured Revolving Credit Facility at
APLP replaced the $150 million Prior Credit Facility at
Atlantic Power Corporation in place at December 31, 2013
that would have otherwise matured in March 2015.
Borrowings under the Senior Secured Credit Facilities bear interest
at a rate equal to the Adjusted Eurodollar rate, the Base Rate or
the Canadian Prime Rate (as defined in the credit agreement
governing the Senior Secured Credit Facilities). Currently, the
applicable margin for term loans based on the Adjusted Eurodollar
Rate is 3.75%, with an Adjusted Eurodollar Rate floor of 1.00%, or
an all-in rate of 4.75%. The Senior Secured Term Loan Facility has
a mandatory amortization of 1% annually. In addition, the loan will
be paid down via a 50% sweep of APLP's cash flow after capex and
debt service.
Proceeds from the Senior Secured Term Loan Facility were used to
redeem in whole, at a price equal to par plus accrued interest and
applicable make-whole premiums, the $190 million Curtis
Palmer Notes maturing in 2014, the $150 million Series
A Notes maturing in 2015 and the $75 million Series
B Notes maturing in 2017 issued by Atlantic Power (US) GP. Key
positive characteristics of this refinancing include:
- Substantial reduction in the Company's near-term debt
maturities ($415
million). After the planned redemption of the
C$45
million convertible debenture maturing in October
with cash, the Company will have no maturities until March 2017;
- Attractive all-in interest rate of 4.75%, which is below the
cost of the redeemed debt ($415 million; weighted average of
5.9%);
- Subject to market conditions and other factors, that the
Company may use the remaining proceeds from the Senior Secured Term
Loan Facility, together with cash on hand, to repurchase or redeem,
by means of a tender offer or otherwise, up to $150 million
aggregate principal amount of the Company's high-yield 9.0%
notes;
- Mandatory 1% amortization and 50% cash sweep features of the
term loan result in significant debt repayment through project cash
flows by maturity and the expected reduction in interest expense
over time;
- Borrowing capacity under the Senior Secured Revolving Credit
Facility is $210
million less letters of credit outstanding, versus a
$25
million cap under the Prior Credit Facility, and with
no requirement to maintain a $75 million cash reserve.
The foregoing description of the Senior Secured Credit
Facilities is qualified in its entirety by reference to the
Company's Current Report on Form 8-K filed on February 26, 2014
announcing the execution, closing and funding of the Senior Secured
Credit Facilities and the full text of the credit agreement
governing the Senior Secured Credit Facilities, which the Company
filed as Exhibit 10.1 to its Annual Report on Form 10-K for the
year ended December
31, 2013.
The Company expects to be in compliance with the financial
maintenance covenants in the Senior Secured Credit Facilities for
at least the next twelve months.
Due to the aggregate impact of the up-front costs resulting from
the prepayments on the Company's indebtedness described above, the
Company is no longer in compliance with the fixed charge coverage
ratio included in the restricted payments test of the indenture
governing its high-yield 9.0% notes. As a consequence, further
dividend payments, which are declared and paid at the discretion of
the Company's board of directors, in the aggregate cannot exceed
the restricted payments "basket" of the greater of $50 million and 2%
of consolidated net assets, as defined, (approximately $61 million at
December 31,
2013) until such time that the Company is in
compliance with the fixed charge coverage ratio.
See Table 2 for actual debt outstanding at December 31, 2013,
pro forma adjustments to reflect the refinancing transaction, and
projected debt at year-end 2014, which also reflects initial-year
amortization of the term loan, project-level debt repayments in
2014, the potential repurchase or redemption, subject to market
conditions, by means of a tender offer or otherwise, of up to
$150
million of the Company's high-yield 9.0% notes, and
the redemption of the convertible debentures due in October 2014.
Atlantic Power
Corporation
|
Table 2 – Debt
Outstanding, including the Company's share of equity method project
debt (in millions of U.S. dollars)
|
|
Unaudited
|
December 31,
2013
|
Pro Forma
(1)
|
Projected Year End
(2)
|
Atlantic Power
Corporation
|
$865
|
$865
|
$673
|
Atlantic Power
Limited Partnership
|
612
|
797
|
745
|
Non-Recourse
Project-level (consolidated)
|
399
|
391
|
372
|
Non-Recourse
Project-level (equity method)
|
119
|
119
|
108
|
Total
Debt
|
$1,995
|
$2,172
|
$1,898
|
(1) Pro
forma for the following: pay-down of Piedmont construction debt by
$8.1 million and conversion of remainder to a $68.5 million term
loan maturing in August 2018; issuance of $600 million APLP term
loan maturing in February 2021; redemption of $190 million Curtis
Palmer debt (Feb 2014); and redemption of $225 million US GP notes
(Feb 2014).
(2)
Accounts for: payment of $42.1 (C$44.8) million convertible
debentures (October 2014); the potential repurchase or redemption,
subject to market conditions, by means of a tender offer or
otherwise, of up to $150 million par value of the high-yield 9%
notes; 1% mandatory amortization and 50% cash sweep on APLP's term
loan (expected to be approximately $52.0 million on a pro rata
basis in 2014), the sale of Delta-Person in 2014 ($6.5 million
equity method debt), and project-level debt repayments and other
debt payments of $22.6 million ($3.7 million at equity method
projects) in 2014.
|
Liquidity
Letters of credit outstanding at year end 2013 totaled
$98
million. As of February 26, 2014, letters of credit
outstanding totaled $144 million. The increase from year end
reflects net changes with various counterparties due to changes in
commodity prices, a $15.8 million letter of credit posted in
conjunction with the debt service reserve required under the new
term loan, a reduction in letters of credit resulting from the
Piedmont term loan conversion
(discussed below), and the resolution of discussions with an
existing gas supplier that resulted in the posting of additional
collateral in the form of letters of credit and cash. In March, the
Company expects to reduce its outstanding letters of credit by a
total of $16
million, by reducing letters of credit posted with
another counterparty by $10 million and by reducing the level of
letters of credit required to be posted in the transition from the
Prior Credit Facility to the new Senior Secured Revolving Credit
Facility by $6
million.
The Senior Secured Revolving Credit Facility, unlike the Prior
Credit Facility, does not require the company to maintain a
$75
million restricted cash reserve; therefore,
unrestricted cash on a pro forma basis increased by $75 million to
$234
million.
Adjusted for the Senior Secured Credit Facilities, the
additional contribution into Piedmont in February (discussed below)
and the increased letters of credit outstanding, on a pro forma
basis the Company would have $325 million of unrestricted cash and
total liquidity of $391 million, including $66 million of
undrawn availability under the Senior Secured Revolving Credit
Facility.
See Table 3 for actual liquidity at December 31, 2013
and pro forma adjustments.
Atlantic Power
Corporation
|
Table 3 –
Liquidity (in millions of U.S. dollars)
|
|
|
|
Unaudited
|
|
December 31,
2013
|
Pro Forma
(1)
|
Unrestricted cash
(12/31/2013) (2)
|
|
$159
|
$159
|
Pro forma
adjustments (February 2014):
|
|
|
|
Release of restricted
cash
|
|
-
|
75
|
Refinancing
proceeds
|
|
-
|
600
|
Completed debt
redemptions
|
|
-
|
(415)
|
Curtis Palmer and US
GP Notes make-whole payments and interest payments prior to
redemption
|
|
-
|
(34)
|
Financing and
advisory fees
|
|
-
|
(46)
|
Piedmont
contribution
|
|
-
|
(14)
|
Unrestricted cash
(pro forma) (2)
|
|
-
|
$325
|
|
|
|
|
Revolver
capacity
|
|
150
|
210
|
Letters of credit
outstanding
|
|
(98)
|
(144)(3)
|
Unused borrowing
capacity
|
|
25(4)
|
66
|
Total
Liquidity
|
|
$184
|
$391
|
|
|
|
|
Cash earmarked
for additional debt reduction in 2014
(5)
|
|
|
~$200
|
(1) Pro
forma reflects the new $210 million Senior Secured Revolving Credit
Facility and $600 million Senior Secured Term Loan Facility at APLP
and release of $75 million of restricted cash, net cash impact of
refinancing transaction, and additional Piedmont equity
contribution.
(2)
Includes $20.5 million project-level cash for working capital
needs.
(3) In
March, the Company expects to reduce its outstanding letters of
credit by a total of $16 million, by reducing letters of credit
posted with another counterparty by $10 million and by reducing the
level of letters of credit required to be posted in the transition
from the Prior Credit Facility to the new Senior Secured Revolving
Credit Facility by $6 million.
(4) Limit
of $25.0 million under the August 2013 amendment to the Prior
Credit Facility.
(5)
Including redemption of $C44.8 million of convertible debentures at
maturity (ATP.DB, due October 2014), and the potential repurchase
or redemption, subject to market conditions, by means of a tender
offer or otherwise, of up to $150 million par value of high-yield
9% notes, and related fees and expenses.
|
|
|
|
|
|
Piedmont Term Loan Conversion
As previously reported, Piedmont achieved commercial operation
under its PPA with Georgia Power Company at a declared capacity of
53.5 MW on April 19, 2013.
Piedmont and its engineering,
procurement and construction ("EPC") contractor, Zachry Industrial,
Inc. ("Zachry"), are disputing certain issues under the EPC
agreement including the condition and performance of the project,
during which time Piedmont is withholding the amount
still retained under the EPC agreement; the dispute has entered the
arbitration process and an arbitration hearing has been tentatively
scheduled in the latter part of 2014.
On February 14,
2014, the Company completed the conversion of the
$76.6
million construction loan at Piedmont to a
$68.5
million term loan maturing in August 2018. To facilitate the conversion, the
Company repaid $8.1
million of the construction loan. The term loan has
an all-in interest rate of 5.2%. In addition, the Company made a
$6.1
million equity contribution to the project which was
used to fund various reserves and fees associated with the term
loan conversion.
Due to the delay in and costs associated with achieving
commercial operation and optimizing performance, and the need to
build cash reserves at the project the Company did not receive any
distributions from Piedmont in 2013, and does not expect
to receive any in 2014. The Company had previously expected
$6 to $8
million of annual project distributions from
Piedmont on a run-rate basis but now
expects distributions to average $4 to $6 million
annually after 2014.
2014 Guidance
- Project Adjusted EBITDA guidance of $280 to $305
million
- Free Cash Flow guidance in the range of $0 - $25 million
Project Adjusted EBITDA
The Company provided guidance for 2014 Project Adjusted EBITDA
in the range of $280
to $305 million, an increase of $22 million based
on the midpoint of the range compared to 2013 actual results of
$270.5
million. Key drivers of the increase include a full
year of operations and improved performance at Piedmont, a
more favorable PPA and gas supply agreement at Orlando, and
an expected increase in results from the Company's Meadow Creek
and hydro projects due to assumed normal generation levels, where
these were mostly below normal in 2013. These positive factors are
partly offset by the expiration of the Selkirk PPA and steam
contracts and lower energy prices for the portion of Selkirk that
is already merchant as well as the sale or closure of three
projects that contributed to Project Adjusted EBITDA in 2013 but
will not be material contributors in 2014 (Greeley, Gregory and
Delta-Person).
Project Adjusted EBITDA for APLP is expected to be in the range
of $165 to $175
million.
Free Cash Flow
Free Cash Flow is defined as cash flows from operating
activities less capex, including discretionary optimization
initiatives; project-level debt repayments, including amortization
of the new term loan; and distributions to non-controlling
interests, including preferred share dividends. Free Cash Flow is
comparable to Cash Available for Distribution, the Company's
previous non-GAAP guidance metric. Free Cash Flow would be
available for additional debt reduction, internal or external
growth, or distributions to shareholders, depending on the amount
of Free Cash Flow and the decision of management, together with the
board, on the allocation of such Free Cash Flow.
The Company provided 2014 Free Cash Flow guidance of
$0 to $25
million, excluding approximately $80 million in
prepayment and other expenses associated with the Company's recent
refinancing transaction. This figure also excludes the $8.1 million
repayment of Piedmont construction debt made to
facilitate the term loan conversion.
The decrease of approximately $96 million, based
on the midpoint of the range for 2014 Free Cash Flow, compared to
$108.8
million of Cash Available for Distribution in 2013 is
attributable to several factors, including: lower operating cash
flow, primarily from the loss of more than $30 million of cash
flow from assets divested in April 2013 and $38 million from
working capital items that benefited 2013, but are not expected to
recur in 2014; $12
million of higher capex; and debt repayments under
the APLP term loan, including 1% mandatory amortization and 50%
sweep of APLP's cash flow after capex and debt service (estimated
to total $52
million in 2014). These reductions are partly offset
by increased Project Adjusted EBITDA and lower interest expense in
2014, excluding the prepayments and additional interest expense
associated with the refinancing transaction, which are excluded
from Free Cash Flow.
See Table 4 for full-year 2014 guidance.
Atlantic Power
Corporation
|
Table 4 – 2014
Annual Guidance
|
(in millions of
U.S. dollars)
|
Unaudited
|
2014 Annual
Guidance
|
Project Adjusted
EBITDA
|
$280 -
$305
|
Free Cash Flow
(1)
|
$0 - $25
|
APLP Project Adjusted
EBITDA (2)
|
$165 -
$175
|
(1) Free
Cash Flow is defined as cash flows from operating activities less
capex; project-level debt repayments, including amortization of the
new term loan; and distributions to non-controlling interests,
including preferred share dividends.
(2) APLP
is a wholly owned subsidiary of the Company. APLP Project Adjusted
EBITDA is a summation of Project Adjusted EBITDA at each APLP
project, and is calculated in a manner which is consistent with the
Company's Project Adjusted EBITDA calculation.
Note: Project
Adjusted EBITDA and Free Cash Flow are not recognized measures
under GAAP and do not have any standardized meaning prescribed by
GAAP; therefore, these measures may not be comparable to similar
measures presented by other companies. The Company has not provided
a reconciliation of forward-looking non-GAAP measures, due
primarily to variability and difficulty in making accurate
forecasts and projections, as not all of the information necessary
for a quantitative reconciliation is available to the Company
without unreasonable efforts.
|
Business Update
Major Maintenance and Optimization Initiatives
In 2013, the Company's project capital expenditures and major
maintenance expenses totaled $41 million. The majority of these
expenditures represents major maintenance on the Company's projects
and are expensed. In addition, the Company has an ongoing effort to
identify and implement discretionary investments in its existing
portfolio of projects designed to improve operating performance,
enhance efficiency or lower costs, with a goal of increasing
Project Adjusted EBITDA. The larger of these optimization
investments typically are included in major maintenance and capex,
but there are also many smaller investments of this type that are
expensed as part of normal operation and maintenance expense.
The Company had previously indicated plans to invest
$20
million in such optimization projects in 2013 and
2014, including a steam generator replacement at Nipigon and
the repowering of two turbines at Curtis Palmer, with an expected
Project Adjusted EBITDA run rate contribution of at least
$6
million beginning in 2015.
Since the third-quarter conference call, the Company has
identified and expects to proceed with additional discretionary
investments in 2014 of $7 million, including a $2.2 million
project to boost output at Morris. Total investments of this type
are now expected to be approximately $27 million, with
an expected Project Adjusted EBITDA run-rate contribution of at
least $8
million beginning in 2015. The Company expects to
realize approximately half this level in 2014 attributable to
investments completed in 2013 and initial returns from projects
scheduled to be completed in the early part of 2014.
In 2014, the Company expects to have project capital
expenditures and major maintenance expenses of approximately
$38
million, including optimization investments of
$18
million. Total expenditures are expected to be
slightly lower than the $41 million in 2013 despite a higher level
of optimization-related spending because there is lower major
maintenance this year as a result of fewer scheduled gas turbine
outages.
Going forward, the Company expects that major maintenance
expense and capex will average approximately $25 million
annually. Although the level of optimization investments will vary
year to year, and is unlikely to reach the level budgeted in 2014,
the Company hopes to identify approximately $5 to $10 million
of such investments annually.
See Table 5 for 2013 actual and 2014 guidance for major
maintenance and capex and optimization investments.
Atlantic Power
Corporation
|
Table 5 – Major
Maintenance and optimization investments (in millions of U.S.
dollars)
|
|
|
|
|
Unaudited
|
2013
Actual
|
2014
Guidance
|
Total
|
Total major
maintenance and capex
|
$41.0
|
$38
|
-
|
Expensed (included
in Project Adjusted EBITDA)
|
34.5
|
19
|
-
|
Capitalized
|
6.5
|
19
|
-
|
|
|
|
|
Optimization
investments (most of which are included above)
|
8
|
19
|
$27
|
Asset Sales
As previously disclosed, in December 2012, the Company signed a
purchase and sale agreement with PNM, a subsidiary of PNM
Resources, Inc., pursuant to which the Company and its partners in
the investment have agreed to sell Delta-Person. The Company
expects this transaction to close in 2014, subject to receipt of
all required approvals, and expects to receive net cash proceeds of
approximately $9
million.
In November
2013, the Company completed the sale of its 60%
interest in Rollcast. As consideration for the sale, the Company
was assigned asset management contracts for the Cadillac and Piedmont
projects as well as the remaining 2% ownership interest in
Piedmont, bringing its total ownership of this project to 100%.
Investor Conference Call and Webcast
A telephone conference call hosted by Atlantic Power's
management team will be held on Friday,
February 28, 2014 at 8:30 AM ET. An accompanying slide
presentation will be available on the Company's website prior to
the call. The telephone numbers for the conference call are: U.S.
Toll Free: 1-888-317-6003; Canada Toll Free: 1-866-284-3684;
International Toll: +1 412-317-6016. Participants will need to
provide access code 4932951 to enter the conference call.
The conference call will also be broadcast over Atlantic Power's
website, with an accompanying slide presentation. Please call or
log in 10 minutes prior to the call. The telephone numbers to
listen to the conference call after it is completed (Instant
Replay) are U.S. Toll Free: 1-877-344-7529; Canada Toll Free
1-855-669-9658; International Toll: +1-412-317-0088. Please enter
conference call number 10039266. The conference call will
also be archived on Atlantic Power's website.
About Atlantic Power
Atlantic Power owns and operates a diverse fleet of power
generation assets in the United States and Canada. Atlantic Power's power generation
projects sell electricity to utilities and other large commercial
customers largely under long-term power purchase agreements, which
seek to minimize exposure to changes in commodity prices. Its power
generation projects in operation have an aggregate gross electric
generation capacity of approximately 2,950 MW in which its
aggregate ownership interest is approximately 2,025 MW. These
totals exclude the Company's 40% interest in the Delta-Person
generating station that the Company entered into an agreement to
sell in December 2012. Its current
portfolio consists of interests in twenty-eight operational power
generation projects across eleven states in the United
States and two provinces in Canada.
Atlantic Power has a market capitalization of approximately
$300
million and trades on the New York Stock Exchange
under the symbol AT and on the Toronto Stock Exchange under the
symbol ATP. For more information, please visit the Company's
website at www.atlanticpower.com or contact:
Atlantic Power Corporation
Amanda
Wagemaker, Investor Relations
(617) 977-2700
info@atlanticpower.com
Copies of certain financial data and other publicly filed
documents are filed on SEDAR at www.sedar.com or on EDGAR at
www.sec.gov/edgar.shtml under "Atlantic Power Corporation" or on
the Company's website.
Cautionary Note Regarding Forward-looking Statements
To the extent any statements made in this news release contain
information that is not historical, these statements are
forward-looking statements within the meaning of Section 27A of the
U.S. Securities Act of 1933, as amended, and Section 21E of the
U.S. Securities Exchange Act of 1934, as amended and under Canadian
securities law (collectively, "forward-looking statements").
Certain statements in this news release may constitute
"forward-looking statements", which reflect the expectations of
management regarding the future growth, results of operations,
performance and business prospects and opportunities of our Company
and our projects. These statements, which are based on certain
assumptions and describe our future plans, strategies and
expectations, can generally be identified by the use of the words
"may," "will," "project," "continue," "believe," "intend,"
"anticipate," "expect" or similar expressions that are predictions
of or indicate future events or trends and which do not relate
solely to present or historical matters. Examples of such
statements in this press release include, but are not limited, to
statements with respect to the following expectations that:
- 2014 Project Adjusted EBITDA will be in the range of
$280 to $305
million;
- 2014 APLP Project Adjusted EBITDA will be in the range of
$165 to $175
million;
- 2014 Free Cash Flow will be in the range of $0 to $25
million;
- The availability of Free Cash Flow for additional debt
reduction, internal or external growth, or distributions to
shareholders, depending on the amount of Free Cash Flow generated
and the decision of management, together with the board, on the
allocation of such Free Cash Flow;
- project distributions from Canadian Hills and Meadow Creek
will be $15 to $19
million and $7 to $8 million, respectively, on a
multi-year average annual basis;
- distributions from Piedmont will average $4 to $6 million
annually after 2014;
- projected debt at year-end 2014 will be $1,898 million,
reflecting initial-year amortization of the term loan,
project-level debt repayments in 2014 and the redemption of the
convertible debentures due in October 2014;
- the Company will be in compliance with the financial
maintenance covenants in the agreements governing its indebtedness
for at least the next twelve months;
- the Company, in March, will reduce its outstanding letters of
credit by a total of $16 million, by reducing letters of credit
posted with another counterparty by $10 million and by
reducing the level of letters of credit required to be posted in
the transition from the Prior Credit Facility to the new Senior
Secured Revolving Credit Facility by $6 million;
- total capex for the investment upgrade at Nipigon will
be approximately $10
million and the new steam generator at Nipigon will
result in improved Project Adjusted EBITDA and cash flows beginning
in 2015;
- the level of optimization capex will be $18 million in
2014, for a two-year total of approximately $27 million, and
that these investments will produce a Project Adjusted EBITDA
run-rate contribution of approximately $8 million
beginning in 2015;
- the Company's evaluations of a broad range of options,
including asset sales or joint ventures to raise capital in a
cost-effective manner for growth or additional debt reduction, as
well as broader more strategic options, and the outcome of such
evaluations;
- the Company will have project capital expenditures and major
maintenance expenses of approximately $38 million in
2014, including optimization initiatives of $18 million;
- major maintenance expense and maintenance capex will average
approximately $25
million annually;
- the Company will have annual optimization capex on average of
$5 to $10
million;
- subject to market conditions and other factors, the Company may
use the remaining proceeds from the Senior Secured Term Loan
Facility, together with cash on hand, to repurchase or redeem, by
means of a tender offer or otherwise, up to $150 million
aggregate principal amount of the Company's high-yield 9.0%
notes;
- the Company will reduce interest expense going forward;
- the sale of Delta-Person will successfully close in 2014 with
net cash proceeds received by the Company of $9 million;
and
- the results of operations and performance of the Company's
projects, business prospects, opportunities and future growth of
the Company will be as described herein.
Forward-looking statements involve significant risks and
uncertainties, should not be read as guarantees of future
performance or results, and will not necessarily be accurate
indications of whether or not or the times at or by which such
performance or results will be achieved. Please refer to the
factors discussed under "Risk Factors" in the Company's periodic
reports as filed with the Securities and Exchange Commission from
time to time for a detailed discussion of the risks and
uncertainties affecting our Company. Although the forward-looking
statements contained in this news release are based upon what are
believed to be reasonable assumptions, investors cannot be assured
that actual results will be consistent with these forward-looking
statements, and the differences may be material. These
forward-looking statements are made as of the date of this news
release and, except as expressly required by applicable law, the
Company assumes no obligation to update or revise them to reflect
new events or circumstances. The financial outlook information
contained in this news release is presented to provide readers with
guidance on the cash distributions expected to be received by the
Company and to give readers a better understanding of the Company's
ability to pay its current level of distributions into the future.
Readers are cautioned that such information may not be appropriate
for other purposes.
Atlantic Power
Corporation
|
Table 6 –
Consolidated Balance Sheet (in millions of U.S.
dollars)
|
|
|
December
31,
|
December
31,
|
|
2013
|
2012
|
Assets
|
(Unaudited)
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$158.6
|
$60.2
|
Restricted
cash
|
114.2
|
28.6
|
Accounts
receivable
|
64.3
|
58.5
|
Current portion of
derivative instruments asset
|
0.2
|
9.5
|
Inventory
|
16.0
|
16.9
|
Prepayments and other
current assets
|
16.1
|
13.4
|
Security
deposits
|
-
|
19.0
|
Assets held for
sale
|
-
|
351.4
|
Refundable income
taxes
|
4.0
|
4.2
|
Total current
assets
|
373.4
|
561.7
|
|
|
|
Property, plant and
equipment, net
|
1,813.4
|
2,055.5
|
Equity investments in
unconsolidated affiliates
|
394.3
|
428.7
|
Power purchase
agreements and intangible assets, net
|
451.5
|
524.9
|
Goodwill
|
296.3
|
334.7
|
Derivative
instruments asset
|
13.0
|
11.1
|
Other
assets
|
53.1
|
86.1
|
Total
assets
|
$3,395.0
|
$4,002.7
|
|
|
|
Liabilities and
Shareholder's Equity
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$14.0
|
$17.8
|
Accrued
interest
|
17.7
|
19.0
|
Other accrued
liabilities
|
58.8
|
73.7
|
Revolving credit
facility
|
-
|
67.0
|
Current portion of
long-term debt
|
216.2
|
121.2
|
Current portion of
convertible debentures
|
42.1
|
-
|
Current portion of
derivative instruments liability
|
28.5
|
33.0
|
Dividends
payable
|
6.8
|
11.5
|
Liabilities
associated with assets held for sale
|
-
|
189.0
|
Other current
liabilities
|
5.3
|
3.3
|
Total current
liabilities
|
389.4
|
535.5
|
|
|
Long-term
debt
|
1,254.8
|
1,459.1
|
Convertible
debentures
|
363.1
|
424.2
|
Derivative
instruments liability
|
76.1
|
118.1
|
Deferred income
taxes
|
111.5
|
164.0
|
Power purchase and
fuel supply agreement liabilities, net
|
38.7
|
44.0
|
Other long-term
liabilities
|
65.4
|
71.4
|
Commitments and
contingencies
|
-
|
-
|
Total
liabilities
|
2,299.0
|
2,816.3
|
|
|
|
Equity
|
|
|
Common shares, no par
value, unlimited authorized shares; 120,205,813 and 119,446,865
issued and outstanding at December 31, 2013 and December 31, 2012,
respectively
|
1,286.1
|
1,285.5
|
Preferred shares
issued by a subsidiary company
|
221.3
|
221.3
|
Accumulated other
comprehensive income (loss)
|
(22.4)
|
9.4
|
Retained
deficit
|
(655.4)
|
(565.2)
|
Total Atlantic Power
Corporation shareholders' equity
|
829.6
|
951.0
|
Noncontrolling
interest
|
266.4
|
235.4
|
Total
equity
|
1,096.0
|
1,186.4
|
Total liabilities and
equity
|
$3,395.0
|
$4,002.7
|
Atlantic Power
Corporation
|
Table 7 –
Consolidated Statements of Operations
|
(in millions of
U.S. dollars, except per share amounts)
|
Unaudited
|
|
|
|
|
Years Ended
December 31,
|
Three months
ended December
31,
|
|
2013
|
2012
|
2011
|
2013
|
2012
|
Project
revenue
|
|
|
|
|
|
Energy
sales
|
$304.2
|
$217.0
|
$43.6
|
$99.8
|
$58.0
|
Energy capacity
revenue
|
168.8
|
154.9
|
34.0
|
12.4
|
37.6
|
Other
|
78.7
|
68.5
|
16.3
|
18.5
|
18.4
|
|
551.7
|
440.4
|
93.9
|
130.7
|
114.0
|
|
|
|
|
|
|
Project
expenses:
|
|
|
|
|
|
Fuel
|
198.7
|
169.1
|
37.5
|
49.9
|
45.6
|
Operations and
maintenance
|
152.4
|
122.8
|
20.9
|
40.0
|
34.8
|
Development
|
7.2
|
-
|
-
|
2.3
|
-
|
Depreciation and
amortization
|
167.1
|
118.0
|
23.6
|
41.4
|
30.6
|
|
525.4
|
409.9
|
82.0
|
133.6
|
111.0
|
Project other income
(expense):
|
|
|
|
|
|
Change in fair value
of derivative instruments
|
49.5
|
(59.3)
|
(14.6)
|
16.1
|
(7.9)
|
Equity in earnings of
unconsolidated affiliates
|
26.9
|
15.2
|
6.4
|
2.3
|
3.4
|
Gain on sale of
equity investments
|
30.4
|
0.6
|
-
|
-
|
-
|
Interest expense,
net
|
(34.4)
|
(16.4)
|
(7.3)
|
(8.7)
|
(4.2)
|
Impairment of
goodwill
|
(34.9)
|
-
|
-
|
-
|
-
|
Other income,
net
|
0.5
|
-
|
-
|
0.4
|
(0.1)
|
|
38.0
|
(59.9)
|
(15.5)
|
10.1
|
(8.8)
|
Project income
(loss)
|
64.3
|
(29.4)
|
(3.6)
|
7.2
|
(5.8)
|
|
|
|
|
|
|
Administrative and
other expenses (income):
|
|
|
|
|
|
Administration
|
35.2
|
28.3
|
37.7
|
6.7
|
6.3
|
Interest,
net
|
104.1
|
89.8
|
26.0
|
25.4
|
20.6
|
Foreign exchange loss
(gain)
|
(27.4)
|
0.5
|
13.8
|
(14.5)
|
(3.9)
|
Other income,
net
|
(10.5)
|
(5.7)
|
(0.1)
|
(1.0)
|
(0.1)
|
|
101.4
|
112.9
|
77.4
|
16.6
|
22.9
|
Loss from continuing
operations before income taxes
|
(37.1)
|
(142.3)
|
(81.0)
|
(9.4)
|
(28.7)
|
Income tax
benefit
|
(19.5)
|
(28.1)
|
(11.1)
|
(17.6)
|
(9.0)
|
Income (loss) from
continuing operations
|
(17.6)
|
(114.2)
|
(69.9)
|
8.2
|
(19.7)
|
Net income (loss)
from discontinued operations, net of tax (1)
|
(6.2)
|
13.9
|
34.3
|
(0.2)
|
(34.8)
|
Net income
(loss)
|
(23.8)
|
(100.3)
|
(35.6)
|
8.0
|
(54.5)
|
Net income (loss)
attributable to noncontrolling interest
|
(3.4)
|
(0.6)
|
(0.5)
|
(0.1)
|
0.1
|
Net income
attributable to preferred share dividends of a subsidiary
company
|
12.6
|
13.1
|
3.3
|
3.2
|
3.4
|
Net income (loss)
attributable to Atlantic Power Corporation
|
$(33.0)
|
$(112.8)
|
$(38.4)
|
$4.9
|
$(58.0)
|
|
|
|
|
|
|
Basic and diluted
earnings (loss) earnings per share:
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to Atlantic Power
Corporation
|
$(0.23)
|
$(1.09)
|
$(0.94)
|
$0.04
|
$(0.20)
|
Income (loss) from
discontinued operations, net of tax
|
(0.05)
|
0.12
|
0.44
|
-
|
(0.30)
|
Net income (loss)
attributable to Atlantic Power Corporation
|
$(0.28)
|
(0.97)
|
$(0.50)
|
$0.04
|
$(0.50)
|
(1) Includes
contributions from the Sold Projects and Rollcast which are a
component of discontinued operations.
|
|
|
|
|
|
|
|
|
|
Atlantic Power
Corporation
|
Table 8 –
Consolidated Statements of Cash Flows (in millions of U.S.
dollars)
|
|
|
Years ended
December 31,
|
Unaudited
|
2013
|
2012
|
2011
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$(23.8)
|
$(100.3)
|
$(35.6)
|
Adjustments to
reconcile to net cash provided by operating activities
|
|
|
|
Depreciation and
amortization
|
176.4
|
157.2
|
63.6
|
Loss of discontinued
operations
|
32.8
|
-
|
-
|
(Gain) loss on sale
of assets & other charges
|
(5.1)
|
0.8
|
-
|
Long-term incentive
plan expense
|
2.2
|
2.5
|
3.2
|
Asset and goodwill
impairment charges
|
39.7
|
60.5
|
1.5
|
Gain on sale of
equity investments
|
(30.4)
|
(0.6)
|
-
|
Equity in earnings
from unconsolidated affiliates
|
(26.9)
|
(25.7)
|
(7.9)
|
Distributions from
unconsolidated affiliates
|
40.9
|
38.4
|
21.9
|
Unrealized foreign
exchange (gain) loss
|
(13.0)
|
19.0
|
8.6
|
Change in fair value
of derivative instruments
|
(60.2)
|
46.7
|
22.8
|
Change in deferred
income taxes
|
(27.3)
|
(34.1)
|
(9.9)
|
Change in other
operating balances
|
|
|
|
Accounts
receivable
|
3.4
|
2.3
|
(15.6)
|
Inventory
|
0.8
|
(6.2)
|
(0.4)
|
Prepayments,
refundable income taxes and other assets
|
51.5
|
(13.3)
|
2.1
|
Accounts
payable
|
(8.4)
|
21.1
|
4.9
|
Accruals and other
liabilities
|
(0.2)
|
(1.2)
|
(3.3)
|
Cash provided by
operating activities
|
152.4
|
167.1
|
55.9
|
|
|
|
|
|
Cash flows provided
by (used in) investing activities
|
|
|
|
Change in restricted
cash
|
(93.7)
|
(11.6)
|
(5.7)
|
Proceeds from sale of
assets and equity investments, net
|
182.6
|
27.9
|
8.5
|
Cash paid for
acquisitions and investments, net of cash acquired
|
-
|
(80.5)
|
(591.6)
|
Proceeds from related
party
|
-
|
-
|
22.8
|
Proceeds from
treasury grant
|
103.2
|
-
|
-
|
Biomass development
costs
|
(0.2)
|
(0.5)
|
(0.9)
|
Construction in
progress
|
(38.3)
|
(456.2)
|
(113.1)
|
Purchase of property,
plant and equipment
|
(6.5)
|
(2.9)
|
(2.0)
|
Cash provided by
(used in) investing activities
|
147.1
|
(523.8)
|
(682.0)
|
|
|
|
|
|
Cash flows (used in)
provided by financing activities
|
|
|
|
Proceeds from
issuance of long-term debt
|
-
|
-
|
460.0
|
Proceeds from
issuance of convertible debentures
|
-
|
230.6
|
-
|
Proceeds from
issuance of equity, net of offering costs
|
(1.0)
|
66.3
|
155.4
|
Proceeds from
project-level debt
|
20.8
|
291.9
|
100.8
|
Repayment of
project-level debt
|
(118.8)
|
(284.8)
|
(21.5)
|
Payments for
revolving credit facility borrowings
|
(67.0)
|
(60.8)
|
-
|
Proceeds from
revolving credit facility borrowings
|
-
|
69.8
|
58.0
|
Deferred financing
costs
|
(2.8)
|
(31.2)
|
(26.4)
|
Equity contribution
from noncontrolling interest
|
44.6
|
225.0
|
-
|
Dividends paid to
common shareholders
|
(65.1)
|
(131.0)
|
(81.8)
|
Dividends paid to
noncontrolling interests
|
(18.3)
|
(13.1)
|
(3.2)
|
Cash (used in)
provided by financing activities
|
(207.6)
|
362.7
|
641.3
|
|
|
|
|
|
Net increase in cash
and cash equivalents
|
91.9
|
6.0
|
15.2
|
Less cash at
discontinued operations
|
-
|
(6.5)
|
-
|
Cash and cash
equivalents at beginning of period at discontinued
operations
|
6.5
|
-
|
-
|
Cash and cash
equivalents at beginning of period
|
60.2
|
60.7
|
45.5
|
Cash and cash
equivalents at end of period
|
$158.6
|
$60.2
|
$60.7
|
Supplemental cash
flow information
|
|
|
|
Interest
paid
|
$130.4
|
$40.2
|
$40.2
|
Income taxes paid,
net
|
$5.9
|
$1.1
|
$1.1
|
Accruals for
construction in progress
|
$8.9
|
$4.1
|
$4.1
|
|
|
|
|
|
Regulation G Disclosures
Cash Available for Distribution, Payout Ratio, Cash
Distributions from Projects and Free Cash Flow are not measures
recognized under GAAP and do not have standardized meanings
prescribed by GAAP. Management believes that Cash Available for
Distribution, Payout Ratio and Cash Distributions from Projects are
relevant supplemental measures of the Company's ability to earn and
distribute cash returns to investors. Reconciliations of Cash
Available for Distribution and Payout Ratio to cash flows from
operating activities and of Cash Distributions from Projects to
Project income (loss) are provided in Table 11 on page 16 of this
release. Investors are cautioned that the Company may calculate
these measures in a manner that is different from other
companies.
Free Cash Flow is defined as cash flows from operating
activities less capex; project-level debt repayments, including
amortization of the new term loan; and distributions to
non-controlling interests, including preferred share dividends.
Project Adjusted EBITDA is defined as project income (loss) plus
interest, taxes, depreciation and amortization (including non-cash
impairment charges) and changes in fair value of derivative
instruments. Project Adjusted EBITDA is not a measure recognized
under GAAP and is therefore unlikely to be comparable to similar
measures presented by other companies and does not have a
standardized meaning prescribed by GAAP. Management uses Project
Adjusted EBITDA at the project level to provide comparative
information about project performance and believes such information
is helpful to investors. A reconciliation of Project Adjusted
EBITDA to project income (loss) and a bridge to Cash Distributions
from Projects are provided in Table 9 below and Tables 10A and 10B
on page 15, respectively. Investors are cautioned that the Company
may calculate this measure in a manner that is different from other
companies.
Atlantic Power
Corporation
|
Table 9 – Project
Adjusted EBITDA by
segment
|
Unaudited
|
|
|
|
Years ended
December 31,
|
Three months ended
December 31,
|
|
2013
|
2012
|
2011
|
2013
|
2012
|
Project Adjusted
EBITDA by segment
|
|
|
|
|
|
East
(1)
|
$150.7
|
$145.7
|
$66.8
|
$38.6
|
$46.2
|
West
(2)
|
78.8
|
82.1
|
16.4
|
9.6
|
10.2
|
Wind
|
59.6
|
10.9
|
4.3
|
16.2
|
4.2
|
Un-allocated
corporate (3)
|
(18.6)
|
(11.1)
|
(0.7)
|
(7.2)
|
(3.7)
|
Total
|
270.5
|
227.6
|
86.8
|
57.2
|
56.9
|
|
|
|
|
|
|
Reconciliation to
project income
|
|
|
|
|
|
Depreciation and
amortization
|
209.8
|
164.9
|
55.5
|
55.3
|
41.9
|
Interest expense,
net
|
38.5
|
24.0
|
15.2
|
8.0
|
5.9
|
Change in the fair
value of derivative instruments
|
(50.3)
|
56.6
|
17.2
|
(15.5)
|
7.7
|
Other
expense
|
8.2
|
11.5
|
2.5
|
2.2
|
7.2
|
Project income
(loss)
|
$64.3
|
$(29.4)
|
$(3.6)
|
$7.2
|
$(5.8)
|
(1) Excludes
Auburndale, Lake and Pasco, which are components of discontinued
operations.
(2) Excludes Path 15,
which is a component of discontinued operations.
(3) Excludes
Rollcast, which is a component of discontinued
operations.
Notes: Table 9
presents Project Adjusted EBITDA, which is not a recognized measure
under GAAP and does not have any standardized meaning prescribed by
GAAP; therefore, this measure may not be comparable to a similar
measure presented by other companies.
The Company has four
reportable segments: East, West, Wind and Un-allocated Corporate.
The Company revised its reportable business segments in the fourth
quarter of 2013 as a result of recent significant asset sales and
in order to align with changes in management's structure, resource
allocation and performance assessment in making decisions regarding
its operations. The Company's financial results for the years ended
December 31, 2013, 2012 and 2011 and the three months ended
December 31, 2013 and 2012 have been presented to reflect these
changes in operating segments. These changes reflect the Company's
current operating focus. The segment classified as Un-allocated
Corporate includes activities that support the executive and
administrative offices, capital structure and costs of being a
public registrant. These costs are not allocated to the operating
segments when determining segment profit or loss.
|
|
|
|
|
|
|
|
Atlantic Power
Corporation
|
Table 10A – Cash
Distributions from Projects (by Segment, in millions of U.S.
dollars)
|
Year ended
December 31, 2013
|
|
|
|
|
|
|
|
Unaudited
|
Project
Adjusted
EBITDA
|
Repayment
of
long-term
debt
|
Interest
expense, net
|
Capital
expenditures
|
Other,
including
changes in
working
capital
|
Cash
Distributions
from
Projects
|
Segment
|
|
|
|
|
|
|
East
|
|
|
|
|
|
|
Consolidated
|
$100.3
|
$(3.9)
|
$(17.3)
|
$(6.7)
|
$18.8
|
$91.2
|
Equity
method
|
50.4
|
(14.0)
|
(3.6)
|
(0.9)
|
4.3
|
36.2
|
Total
|
150.7
|
(17.9)
|
(20.9)
|
(7.6)
|
23.1
|
127.4
|
West
|
|
|
|
|
|
|
Consolidated
|
61.6
|
-
|
-
|
(1.1)
|
(2.3)
|
58.2
|
Equity
method
|
17.2
|
1.2
|
(0.3)
|
(1.1)
|
(2.9)
|
14.1
|
Total
|
78.8
|
1.2
|
(0.3)
|
(2.2)
|
(5.2)
|
72.3
|
Wind
|
|
|
|
|
|
|
Consolidated
|
50.0
|
(7.0)
|
(14.6)
|
(11.2)
|
6.2
|
23.4
|
Equity
method
|
9.6
|
(2.6)
|
(4.9)
|
-
|
0.4
|
2.5
|
Total
|
59.6
|
(9.6)
|
(19.5)
|
(11.2)
|
6.6
|
25.9
|
Total
consolidated
|
211.9
|
(10.9)
|
(31.9)
|
(19.0)
|
22.7
|
172.8
|
Total equity
method
|
77.2
|
(15.4)
|
(8.8)
|
(2.0)
|
1.8
|
52.8
|
Un-allocated
corporate
|
(18.6)
|
(0.2)
|
3.1
|
0.1
|
15.6
|
-
|
Total
|
$270.5
|
$(26.5)
|
$(37.6)
|
$(20.9)
|
$40.1
|
$225.6
|
Notes: Table 10A
presents Cash Distributions from Projects and Project Adjusted
EBITDA, which are not recognized measures under GAAP and do not
have any standardized meanings prescribed by GAAP; therefore, these
measures may not be comparable to similar measures presented by
other companies.
The Company has four
reportable segments: East, West, Wind and Un-allocated Corporate.
The Company revised its reportable business segments in the fourth
quarter of 2013 as a result of recent significant asset sales and
in order to align with changes in management's structure, resource
allocation and performance assessment in making decisions regarding
its operations. The Company's financial results for the year ended
December 31, 2013 has been presented to reflect these changes in
operating segments. These changes reflect the Company's current
operating focus. The segment classified as Un-allocated Corporate
includes activities that support the executive and administrative
offices, capital structure and costs of being a public registrant.
These costs are not allocated to the operating segments when
determining segment profit or loss.
|
|
|
Atlantic Power
Corporation
|
Table 10B – Cash
Distributions from Projects (by Segment, in millions of U.S.
dollars)
|
Year ended
December 31, 2012
|
|
Unaudited
|
Project
Adjusted
EBITDA
|
Repayment
of
long-term
debt
|
Interest
expense, net
|
Capital
expenditures
|
Other,
including
changes in
working
capital
|
Cash
Distributions
from
Projects
|
Segment
|
|
|
|
|
|
|
East
|
|
|
|
|
|
|
Consolidated
|
$91.2
|
$(2.4)
|
$(13.8)
|
$(1.3)
|
$14.6
|
$88.3
|
Equity
method
|
54.5
|
(19.3)
|
(4.7)
|
(0.4)
|
0.4
|
30.5
|
Total
|
145.7
|
(21.7)
|
(18.5)
|
(1.7)
|
15.0
|
118.8
|
West
|
|
|
|
|
|
|
Consolidated
|
67.6
|
-
|
-
|
(0.1)
|
0.5
|
68.0
|
Equity
method
|
14.5
|
(3.6)
|
(0.4)
|
(0.2)
|
1.4
|
11.7
|
Total
|
82.1
|
(3.6)
|
(0.4)
|
(0.3)
|
1.9
|
79.7
|
Wind
|
|
|
|
|
|
|
Consolidated
|
4.3
|
-
|
(1.9)
|
-
|
(2.4)
|
-
|
Equity
method
|
6.6
|
(2.0)
|
(3.2)
|
0.2
|
(0.3)
|
1.3
|
Total
|
10.9
|
(2.0)
|
(5.1)
|
0.2
|
(2.7)
|
1.3
|
Total
consolidated
|
163.1
|
(2.4)
|
(15.7)
|
(1.4)
|
12.7
|
156.3
|
Total equity
method
|
75.6
|
(24.9)
|
(8.3)
|
(0.4)
|
1.5
|
43.5
|
Un-allocated
corporate
|
(11.1)
|
-
|
-
|
-
|
11.1
|
-
|
Total
|
$227.6
|
$(27.3)
|
$(24.0)
|
$(1.8)
|
$25.3
|
$199.8
|
Notes: Table 10B
presents Cash Distributions from Projects and Project Adjusted
EBITDA, which are not recognized measures under GAAP and do not
have any standardized meanings prescribed by GAAP; therefore, these
measures may not be comparable to similar measures presented by
other companies.
The Company has four
reportable segments: East, West, Wind and Un-allocated Corporate.
The Company revised its reportable business segments in the fourth
quarter of 2013 as a result of recent significant asset sales and
in order to align with changes in management's structure, resource
allocation and performance assessment in making decisions regarding
its operations. The Company's financial results for the year ended
December 31, 2012 has been presented to reflect these changes in
operating segments. These changes reflect the Company's current
operating focus. The segment classified as Un-allocated Corporate
includes activities that support the executive and administrative
offices, capital structure and costs of being a public registrant.
These costs are not allocated to the operating segments when
determining segment profit or loss.
|
|
|
|
|
|
|
|
|
Atlantic Power
Corporation
Table 11 – Cash
Available for Distribution (in millions of U.S.
dollars)
Unaudited
|
Years ended
December 31,
|
|
2013
|
2012
|
2011
|
Cash Distributions
from Projects
|
$225.6
|
$199.8
|
$35.9
|
Repayment of
long-term debt
|
(26.5)
|
(27.3)
|
(62.3)
|
Interest expense,
net
|
(37.6)
|
(24.0)
|
(15.2)
|
Capital
expenditures
|
(20.9)
|
(1.8)
|
(2.6)
|
Other, including
changes in working capital
|
40.1
|
25.3
|
29.2
|
Project Adjusted
EBITDA
|
$270.5
|
$227.6
|
$86.8
|
Depreciation and
amortization
|
209.8
|
164.9
|
55.5
|
Interest expense,
net
|
38.5
|
24.0
|
15.2
|
Change in the fair
value of derivative instruments
|
(50.3)
|
56.6
|
17.2
|
Other (income)
expense
|
8.2
|
11.5
|
2.5
|
Project income
(loss)
|
$64.3
|
$(29.4)
|
$(3.6)
|
Administrative and
other expenses
|
101.4
|
112.9
|
77.4
|
Income tax expense
(benefit)
|
(19.5)
|
(28.1)
|
(11.1)
|
Income (loss) from
discontinued operations, net of tax
|
(6.2)
|
13.9
|
34.3
|
Net
loss
|
$(23.8)
|
$(100.3)
|
$(35.6)
|
Adjustments to
reconcile to net cash provided by operating activities
|
129.1
|
264.7
|
103.8
|
Change in other
operating balances
|
47.1
|
2.7
|
(12.3)
|
Cash flows from
operating activities
|
$152.4
|
$167.1
|
$55.9
|
Project-level debt
repayments
|
(15.6)
|
(19.6)
|
(21.5)
|
Purchases of
property, plant and equipment (1)
|
(6.5)
|
(2.9)
|
(2.0)
|
Transaction costs
(2)
|
-
|
-
|
33.4
|
Realized foreign
currency losses on hedges associated with the Partnership
transaction (3)
|
-
|
-
|
16.5
|
Distributions to
noncontrolling interests
|
(8.9)
|
-
|
-
|
Dividends on
preferred shares of a subsidiary company
|
(12.6)
|
(13.0)
|
(3.2)
|
Cash Available for
Distribution
|
$108.8
|
$131.6
|
$79.1
|
Total cash dividends
declared to shareholders
|
58.0
|
131.8
|
86.4
|
Payout
Ratio
|
53%
|
100%
|
109%
|
(1) Excludes
construction costs related to our Piedmont biomass project and
Canadian Hills and Meadow Creek projects.
(2) Represents costs
incurred associated with the Partnership acquisition.
(3) Represents
realized foreign currency losses associated with foreign exchange
forwards entered into in order to hedge a portion of the foreign
currency exchange risks associated with the closing of the
Partnership acquisition.
Note: Table 11
presents Cash Distributions from Projects, Project Adjusted EBITDA,
Cash Available for Distribution and Payout Ratio, which are not
recognized measures under GAAP and do not have any standardized
meanings prescribed by GAAP; therefore, these measures may not be
comparable to similar measures presented by other
companies.
|
Atlantic Power
Corporation
Table 12 – Project
Adjusted EBITDA by Project (for Selected Projects)
(in millions of
U.S. dollars)
Unaudited
|
|
|
Years ended
December 31,
|
|
|
2013
|
2012
|
2011
|
East
|
Accounting
|
|
|
|
Cadillac
|
Consolidated
|
$9.1
|
$9.3
|
$8.9
|
Curtis
Palmer
|
Consolidated
|
32.1
|
28.0
|
8.1
|
Nipigon
|
Consolidated
|
13.4
|
14.6
|
1.8
|
North Bay
|
Consolidated
|
8.5
|
8.1
|
1.9
|
Tunis
|
Consolidated
|
9.5
|
13.5
|
3.0
|
Piedmont
|
Consolidated
|
2.3
|
(0.1)
|
-
|
Other
(1)
|
Consolidated
|
25.4
|
17.8
|
3.4
|
Chambers
|
Equity
method
|
20.6
|
27.8
|
16.6
|
Selkirk
|
Equity
method
|
20.8
|
17.8
|
16.5
|
Orlando
|
Equity
method
|
9.0
|
8.9
|
6.6
|
Total
|
|
150.7
|
145.7
|
66.8
|
West
|
|
|
|
|
Manchief
|
Consolidated
|
16.9
|
15.1
|
3.6
|
Williams
Lake
|
Consolidated
|
16.5
|
18.5
|
2.7
|
Other
(2)
|
Consolidated
|
28.2
|
34.0
|
3.3
|
Other
(3)
|
Equity
method
|
17.2
|
14.5
|
6.8
|
Total
|
|
78.8
|
82.1
|
16.4
|
Wind
|
|
|
|
|
Canadian
Hills
|
Consolidated
|
25.6
|
0.8
|
-
|
Meadow
Creek
|
Consolidated
|
14.0
|
-
|
-
|
Rockland
|
Consolidated
|
10.4
|
3.5
|
-
|
Other
(4)
|
Equity
method
|
9.6
|
6.6
|
4.3
|
Total
|
|
59.6
|
10.9
|
4.3
|
Totals
|
|
|
|
|
Consolidated
projects
|
|
211.9
|
163.1
|
36.7
|
Equity method
projects
|
|
77.2
|
75.6
|
50.8
|
Un-allocated
corporate
|
|
(18.6)
|
(11.1)
|
(0.7)
|
Total Project
Adjusted EBITDA
|
|
$270.5
|
$227.6
|
$86.8
|
|
|
|
|
|
Depreciation and
amortization
|
|
$209.8
|
$164.9
|
$55.5
|
Interest expense,
net
|
|
38.5
|
24.0
|
15.2
|
Change in the fair
value of derivative instruments
|
|
(50.3)
|
56.6
|
17.2
|
Other (income)
expense
|
|
8.2
|
11.5
|
2.5
|
Project income
(loss)
|
|
$64.3
|
$(29.4)
|
$(3.6)
|
(1) 2013, 2012 and
2011: Kenilworth, Calstock, Kapuskasing and Morris
(2) 2013: Moresby
Lake, Mamquam, Naval Station, North Island, Naval Training Station,
Greeley, Oxnard; 2012 and 2011: Includes 2013 projects and Badger
Creek
(3) 2013: Koma
Kulshan, Gregory, Delta-Person, Frederickson; 2012 and 2011:
Includes 2013 projects and PERH
(4) 2013: Idaho Wind,
Goshen North; 2012 and 2011: Idaho Wind
Notes: Table 12
presents Project Adjusted EBITDA, which is not a recognized measure
under GAAP and does not have any standardized meaning prescribed by
GAAP; therefore, this measure may not be comparable to a similar
measure presented by other companies. The Company has not
reconciled non-GAAP financial measures relating to individual
projects to the directly comparable GAAP measures due to the
difficulty in making the relevant adjustments on an individual
project basis.
The Company has four
reportable segments: East, West, Wind and Un-allocated Corporate.
The Company revised its reportable business segments in the fourth
quarter of 2013 as a result of recent significant asset sales and
in order to align with changes in management's structure, resource
allocation and performance assessment in making decisions regarding
its operations. The Company's financial results for the years ended
December 31, 2013, 2012 and 2011 have been presented to reflect
these changes in operating segments. These changes reflect the
Company's current operating focus. The segment classified as
Un-allocated Corporate includes activities that support the
executive and administrative offices, capital structure and costs
of being a public registrant. These costs are not allocated to the
operating segments when determining segment profit or
loss.
|
|
|
|
|
|
|
|
SOURCE Atlantic Power Corporation