DEDHAM, Mass., May 7, 2015
/CNW/ -- Atlantic Power Corporation (NYSE: AT) (TSX: ATP)
("Atlantic Power" or the "Company") today released its results for
the three months ended March 31,
2015.
"We continue to execute on our long-term strategic plan with an
overall objective of increasing intrinsic value per share for our
shareholders. During the quarter, we achieved a key milestone
in our goal of reshaping our balance sheet by reaching an agreement
to divest our wind assets at an attractive valuation. We plan
to deploy the cash proceeds to optimize our capital structure to
the benefit of shareholders," said James J.
Moore, Jr., President and Chief Executive Officer of
Atlantic Power. "We also made significant progress on other
key initiatives. In April, we announced a further planned
reduction in our corporate overhead from $38
million in 2015 to $28 million
in 2016 and completed the relocation of our headquarters to
Dedham, Massachusetts. We
are also on track to make $10 million
of discretionary investments in our fleet this year that we expect
will generate compelling cash returns."
"Project Adjusted EBITDA from our continuing businesses this
quarter increased modestly compared to the first quarter of 2014
despite significant reductions from our Tunis and Selkirk projects. These reductions were
more than offset by increases at a few other projects in the East
as well as lower maintenance expenses for several projects that had
outages in the first quarter of last year," Mr. Moore
continued. "Our Adjusted Free Cash Flow declined relative to
last year, but mostly because of the amortization of $24 million of term loan and project debt this
quarter. For the year we expect to amortize $65 to $70 million of debt using project-level
cash flows. In addition, we made discretionary debt
repurchases totaling approximately $26
million year to date through April."
First Quarter 2015 Highlights
- Reached agreement for sale of wind portfolio for cash proceeds
of approximately $350 million
(subject to certain adjustments), representing a valuation of
approximately 13 times expected 2015 cash distributions
- Announced planned $10 million
reduction in 2016 corporate general and administrative (G&A)
expense to $28 million; cumulative
reduction of approximately 48% from the 2013 level of $54 million
- U.S. District Court granted Company's motion to dismiss U.S.
securities class action lawsuit; plaintiffs have filed a notice of
appeal; Company will oppose that appeal
- Project Adjusted EBITDA of $58.6
million excluding the wind businesses increased $2.2 million from year-ago period, despite
significantly lower contributions from Tunis and Selkirk
- Project income of $21.5 million
excluding the wind businesses decreased $4.2
million from a year ago, but excluding non-cash
mark-to-market impacts would have increased $19.5 million from a year ago
- Cash flows from operating activities of $35.1 million increased $63.8 million from year-ago period, which
included $46.8 million of costs
associated with refinancing transactions; wind businesses
contributed $10.8 million to cash
flows from operating activities versus $8.8
million in the year-ago period
- Repaid $24 million of term loan
and project debt and made $16 million
of discretionary debt repurchases in the first quarter (total
$26 million of discretionary debt
repurchases year to date through April)
- Liquidity at March 31, 2015
totaled $202 million, including
$102 million of revolver availability
and $100 million of unrestricted
cash; next debt maturity is not until March
2017
- Revised 2015 guidance for the wind sale and planned use of cash
proceeds
All amounts are in U.S. dollars and are approximate unless
otherwise indicated. Adjusted Cash Flows from Operating Activities,
Free Cash Flow, Adjusted Free Cash Flow, Cash Distributions from
Projects, Project Adjusted EBITDA and APLP 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 "Adjusted Cash Flows from Operating Activities",
"Free Cash Flow", "Adjusted Free Cash Flow", "Cash Distributions
from Projects" and "Project Adjusted EBITDA" as used in this news
release. The Company has not reconciled non-GAAP financial
measures relating to individual projects or the projects in
discontinued operations or the APLP projects to the directly
comparable GAAP measures due to the difficulty in making the
relevant adjustments on an individual project basis. 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.
Atlantic Power
Corporation
Table 1 – Selected
Results
(in millions of
U.S. dollars, except as otherwise stated)
|
|
Three months ended
March 31,
|
Unaudited
|
2015
|
2014
|
Excluding results
from discontinued operations (1)
|
|
|
Project
revenue
|
$111.3
|
$125.3
|
Project
income
|
21.5
|
25.7
|
Project Adjusted
EBITDA
|
58.6
|
56.4
|
Cash Distributions
from Projects
|
56.9
|
44.0
|
Adjusted Cash Flows
from Operating Activities
|
34.4
|
35.3
|
Adjusted Free Cash
Flow
|
7.0
|
27.9
|
Aggregate power
generation (thousands of Net MWh)
|
1,485.1
|
1,648.7
|
Weighted average
availability
|
97.6%
|
92.7%
|
Including results
from discontinued operations (1)
|
|
|
Cash flows from
operating activities
|
$35.1
|
$(28.7)
|
Free Cash
Flow
|
5.0
|
(46.3)
|
Results of
discontinued operations
|
|
|
Project Adjusted
EBITDA
|
13.3
|
17.8
|
Cash Distributions
from Projects
|
7.3
|
6.2
|
Cash flows from
operating activities
|
10.8
|
8.8
|
(1)
Canadian Hills, Meadow Creek, Goshen North, Idaho Wind and Rockland
(the "Wind Projects") are designated as assets held for sale and a
component of discontinued operations for the three months ended
March 31, 2015 and 2014. Thermo Power & Electric, LLC
("Greeley") was sold in March 2014 and is included as a component
of discontinued operations for the three months ended March 31,
2014. The results of discontinued operations are excluded
from Project revenue, Project income, Project Adjusted EBITDA, Cash
Distributions from Projects, Adjusted Cash Flows from Operating
Activities and Adjusted Free Cash Flow 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 Wind Projects 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 Wind Projects and Greeley.
However, the inclusion of Greeley in 2014 had no impact on cash
flows from operating activities or Free Cash Flow. Results of
discontinued operations shown above are for the Wind Projects, as
Greeley had no impact on Project Adjusted EBITDA, Cash
Distributions from Projects or cash flows from operating activities
for the 2014 period in which it was included in discontinued
operations.
|
|
|
|
|
2015 Guidance Revised for Wind Sale and Planned Use of
Proceeds
- Company plans to use proceeds of the wind sale (approximately
$338 million net of transaction and
other costs) to redeem its $310.9
million of 9% senior unsecured notes following closing of
the transaction
- Total Company Project Adjusted EBITDA of $200 to $220 million (previously $265 to $285 million)
- APLP Project Adjusted EBITDA of $148 to
$160 million (unchanged)
- Adjusted Cash Flows from Operating Activities of $90 to $110 million (previously $120 to $140 million)
- Adjusted Free Cash Flow of $0 to $20
million (previously $10 to $30
million)
Strategy
The Company continues to focus on executing its long-term
business plan with an overall objective of increasing intrinsic
value per share for the benefit of shareholders. In the near
term the key elements of this plan include reducing overhead costs,
optimizing the Company's capital structure and reducing leverage in
order to improve its cost of capital and lower its interest
expense, and enhancing the value of its existing assets through
discretionary capital investments designed to generate attractive
returns and to be accretive to free cash flow. The Company
will also look to pursue opportunities for early extensions or
renewals of its Power Purchase Agreements (PPAs) where such
agreements would be economically advantageous for the Company and
the customer. As the Company continues to make progress on
its balance sheet objectives, management expects to consider
additional internal as well as external growth investments, subject
to a strong cost discipline and focus on opportunities to create
value. Going forward, as the Company executes its business
strategy, and consistent with its objectives, the Board of
Directors together with management will regularly evaluate the
optimal dividend policy for the Company.
Operating Results for the First Quarter of 2015
The discussion of operating results excludes the Wind
Projects, which are classified as discontinued operations.
Project availability increased to 97.6% in the first
quarter of 2015 from 92.7% for the same period in 2014. The
increase was attributable to improved availability at Chambers,
Kapuskasing and North Island, all
of which had scheduled maintenance outages during the first quarter
of 2014; Piedmont, which had a
lower amount of forced outage hours relative to the comparable
year-ago period, and Moresby Lake and Williams Lake, both of which had forced
maintenance outages during the first quarter of 2014.
Generation decreased 9.9% year over year due primarily to
reductions at Frederickson, which experienced lower dispatch
resulting from warmer weather relative to the comparable 2014
period; Tunis, which was
mothballed in the first quarter of 2015 following the expiration of
its PPA, and Selkirk, which is now
a fully merchant facility following its PPA expiration in
August 2014 and experienced reduced
dispatch due to unfavorable market conditions. These
decreases were partially offset by increased generation at Mamquam
and North Island, which underwent turbine maintenance in the 2014
period.
Financial Results for the First Quarter of 2015
Table 2 provides a breakdown of project income and Project
Adjusted EBITDA by segment for the three months ended March 31, 2015 as compared to the same period in
2014. The Company's Wind Projects were designated as assets
held for sale effective March 31,
2015 and included in results of discontinued operations for
the three-month periods ended March 31,
2015 and March 31, 2014.
Results for project income and Project Adjusted EBITDA exclude
discontinued operations. Accordingly, results of the Wind
Projects and Greeley are not included in Project income or Project
Adjusted EBITDA for either the 2015 or 2014 period shown in Table
2.
Atlantic Power
Corporation
Table 2 – Segment
Results
(in millions of
U.S. dollars, except as otherwise stated)
Unaudited
|
|
|
Three months ended
March 31,
|
|
|
2015
|
2014
|
Project income
(loss)
|
|
|
|
East
|
|
$22.2
|
$31.6
|
West
|
|
2.0
|
(5.1)
|
Un-allocated
Corporate
|
|
(2.7)
|
(0.8)
|
Total
|
|
21.5
|
25.7
|
Project Adjusted
EBITDA
|
|
|
|
East
|
|
$43.2
|
$45.6
|
West
|
|
17.2
|
11.3
|
Un-allocated
Corporate
|
|
(1.8)
|
(0.5)
|
Total
|
|
58.6
|
56.4
|
The results of the
Wind Projects and Greeley, which are components of discontinued
operations, are excluded from Project income and Project Adjusted
EBITDA as presented in Table 2.
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 8 through 11 for a
reconciliation of this non-GAAP measure to a GAAP measure.
The Company has not reconciled this non-GAAP financial measure
relating to individual project segments to the directly comparable
GAAP measure due to the difficulty in making the relevant
adjustments on a segment basis.
|
Project income can fluctuate significantly due to
non-cash adjustments to "mark-to-market" the fair value of
derivatives. Non-cash goodwill impairment charges and gains
or losses on the sale of assets are included in project income and
can also affect year-over-year comparisons. None of these
items are included in Project Adjusted EBITDA.
Project income decreased $4.2
million to $21.5 million in
the first quarter of 2015 from $25.7
million for the comparable period in 2014. Results
included a year-over-year change of $(23.7)
million in the fair value of derivatives. Excluding
this non-cash item, project income was $23.2
million versus $3.7 million in
2014, with the $19.5 million
improvement primarily attributable to a $9.0
million reduction in project interest expense (partly due to
the repayment of Curtis Palmer debt in the first quarter of 2014),
$13.6 million of lower fuel costs and
lower maintenance expense at several projects that had outages in
the year-ago period, partially offset by a reduction in project
income at Tunis, which was
mothballed during the first quarter of 2015 following the
expiration of its PPA at year end 2014.
Project Adjusted EBITDA includes proportional EBITDA from
the Company's equity method projects.
Project Adjusted EBITDA increased by $2.2
million to $58.6 million for
the three months ended March 31, 2015
from $56.4 million for the same
period in 2014. For the quarter, the most significant
contributors to the improvement in Project Adjusted EBITDA were
Orlando, which had lower fuel
expenses related to a lower cost of gas and the absence of a fuel
swap termination cost incurred in the first quarter of 2014;
Piedmont, primarily due to the
absence of legal expenses incurred in the first quarter of 2014;
Morris, due to lower fuel expenses as a result of a lower cost of
gas, partially offset by the impact of lower gas prices on revenue;
and North Island, Mamquam and Williams
Lake, which had outages in the year-ago period.
Mamquam also benefited from increased water flows, although this is
not expected to continue due to low snowpack in the West.
These increases were partially offset by reductions at Tunis and Selkirk, for reasons described above.
Currency had an approximate $(3)
million impact on Project Adjusted EBITDA, with an average
U.S. dollar to Canadian dollar exchange rate for the first quarter
of 2015 of 1.26 versus 1.11 for the year-ago period. However,
from an overall cash standpoint, that impact was mostly offset by
the benefit of the weaker Canadian dollar on the Company's
Canadian-denominated interest and dividend payments.
Corporate-level General & Administrative expense
(shown as "Administration" on the Consolidated Statements of
Operations) increased $2.3 million to
$9.4 million in the first quarter of
2015 from $7.1 million in the first
quarter of 2014. The increase was primarily attributable to
$2.9 million of severance charges in
the first quarter of 2015 associated with recent management changes
and staffing reductions, which are expected to result in lower
expenses going forward. This and other increases were
partially offset by a decrease in legal expenses.
Cash Flow Metrics
Cash flows from operating activities (GAAP) and Free Cash
Flow include the cash flows from projects classified as
discontinued operations.
Cash flows from operating activities of $35.1 million for the first quarter of 2015
increased $63.8 million from
$(28.7) million for the same period
in 2014. The increase was primarily due to (i) $46.8 million of costs associated with the debt
repayment and repurchase transactions incurred in the first quarter
of 2014, and (ii) an $18.9 million
increase in cash inflows for working capital. Results
included $10.8 million from
discontinued operations in 2015 versus $8.8
million in 2014.
Free Cash Flow increased by $51.3
million to $5.0 million for
the first quarter of 2015 compared to $(46.3) million for the same period in
2014. The increase is primarily due to the $63.8 million increase in operating cash flows,
partially offset by the $21.3 million
amortization of the Atlantic Power Limited Partnership ("APLP")
term loan.
Cash Distributions from Projects and adjusted cash flow
metrics (all non-GAAP) exclude cash flows from projects classified
as discontinued operations.
Cash Distributions from Projects increased by
$12.9 million to $56.9 million for the first quarter of 2015
compared to $44.0 million for the
same period in 2014.
Significant increases for the first quarter of 2015 occurred at
the following projects: Morris, which benefited from
significantly lower market prices for gas; the Navy projects in
California, which had a major gas
turbine overhaul at North Island in the first quarter of 2014, and
which experienced lower working capital requirements in 2015
associated with a new gas supply agreement in 2014; Chambers, which
experienced a change in the distribution date under the project's
new debt agreement in 2014, with a distribution made by the project
in December and released to the Company in January 2015; Mamquam, due to higher revenues
from increased water flows and lower major maintenance projects
relative to the year-ago period, and Kapuskasing, which experienced a forced outage
in the first quarter of 2014 but had no outages in the first
quarter of 2015.
These increases were partially offset by decreases at the
following projects: Tunis,
for which the PPA expired at year end 2014 and which is currently
mothballed; Selkirk, for which the
PPA expired in August 2014, is
currently operating on a merchant basis although dispatch was
significantly reduced in the first quarter of 2015 due to
unfavorable market conditions; Nipigon, which benefited in the first quarter
of 2014 from the timing of revenue receipts; and Orlando, which benefited from working capital
changes in the first quarter of 2014, which were adverse in the
first quarter of 2015.
Adjusted Cash Flows from Operating Activities, which
excludes discontinued operations, changes in working capital,
severance, acquisition and disposition expenses and restructuring
charges, declined slightly to $34.4
million from $35.3 million for
the same period in 2014.
Adjusted Free Cash Flow, which excludes the same
variables listed above, declined $20.9
million to $7.0 million from
$27.9 million for the same period in
2014, due primarily to the initial amortization of the APLP term
loan, which commenced in the second quarter of 2014.
Tables 10 and 11 of this press release provide a reconciliation
of the Company's non-GAAP cash flow metrics to cash flows from
operating activities.
Results of Discontinued Operations
Canadian Hills, Meadow Creek, Goshen
North, Idaho Wind and Rockland (the "Wind Projects") are designated
as assets held for sale and a component of discontinued operations
for the three months ended March 31,
2015 and 2014. Thermo Power & Electric, LLC
("Greeley") was sold in March 2014
and is included as a component of discontinued operations for the
2014 period. The results for Greeley were immaterial in the
first quarter of 2014. Project Adjusted EBITDA of the Wind
Projects was $13.3 million for the
first quarter of 2015 versus $17.8
million for the comparable year-ago period. The
$4.5 million decrease is primarily
attributable to decreases of $2.9
million and $0.8 million at
Meadow Creek and Rockland, respectively, resulting from
unfavorable winds as compared to 2014. Generation of the Wind
Projects declined 10.7% in the first quarter of 2015 from the
year-ago period. Cash flows from operating activities of the
Wind Projects were $10.8 million for
the first quarter of 2015 versus $8.8
million for the first quarter of 2014. Cash
Distributions from the Wind Projects were $7.3 million for the first quarter of 2015 versus
$6.2 million for the first quarter of
2014.
Liquidity
Table 3 presents the Company's liquidity excluding the Wind
Projects, which are included in discontinued operations. As
can be seen from Table 3, the Company's liquidity decreased
slightly from approximately $210
million as of December 31,
2014 to $202 million at
March 31, 2015, including
$102 million of revolver availability
and $100 million of unrestricted
cash. During the first quarter, the Company generated
Adjusted Free Cash Flow of $7.0
million, using that in combination with cash on hand to make
$16 million of discretionary debt
repurchases and to pay $2.9 million
of dividends on its common shares.
Atlantic Power
Corporation
Table 3 –
Liquidity (in millions of U.S. dollars)
|
Unaudited
|
|
December 31,
2014
|
March 31,
2015
|
Revolver
capacity
|
|
$210.0
|
$210.0
|
Letters of credit
outstanding
|
|
(105.7)
|
(108.1)
|
Unused borrowing
capacity
|
|
104.3
|
101.9
|
Unrestricted cash
(1)
|
|
106.0
|
100.1
|
Total
Liquidity
|
|
$210.3
|
$202.0
|
(1)
Includes project-level cash for working capital needs of $10.2
million at December 31, 2014 and $12.5 million at March 31,
2015.
|
Other Financial Updates
Senior Unsecured Notes – Fixed Charge Coverage Ratio
As of March 31, 2015, the Company
was again in compliance with the Fixed Charge Coverage Ratio test
under the restricted payments covenant of its 9% senior unsecured
note indenture. During the period that it was not in
compliance, from the first quarter of 2014 through the end of the
first quarter of 2015, the Company was subject to a Restricted
Payments basket which limited the payment of common dividends to
the greater of $50 million and 2% of
consolidated net assets (approximately $46.7
million at March 31,
2015). Through March 31, 2015,
the Company had paid dividends totaling $35.4 million that were subject to this basket
provision. As long as the Company remains in compliance with
the ratio, dividend payments are not subject to the basket
limitation. However, the basket does not reset if the Company
were to fall out of compliance at any point in the future.
Dividends to shareholders are paid, if and when declared by, and
subject to the discretion of, the Board of
Directors.
G&A Expense Targets
As previously announced, the Company continues to take
significant steps to achieve meaningful reductions in its corporate
G&A expense. In April the Company completed the
relocation of its headquarters from Boston to Dedham,
Massachusetts, with a 30% reduction in space and more than a
40% reduction in annual rental expense for the headquarters
beginning in 2016. In addition, the Company is in the process
of closing its offices in Seattle,
Portland and outside of
Chicago, and will be reducing the
size of its Toronto office.
The Company has also made significant reductions in its corporate
staff. Including staff associated with the wind assets that
are being divested, the corporate staff will be reduced by an
expected 25% this year and by more than 50% from 2013.
As a result of these and other cost reduction efforts, the
Company now expects corporate G&A expense of $28 million in 2016, a $10
million reduction from $38
million in 2015 (which includes approximately $4 million of severance expense) and a cumulative
reduction of approximately 48% from the 2013 level of $53.8 million.
Debt Reduction
In the first quarter of 2015, the Company amortized $21.3 million of the APLP term loan and
$2.5 million of project-level
debt. Excluding debt associated with its wind assets, the
Company expects to amortize approximately $14 to $15 million of project-level debt in
2015. It also expects to repay $50 to
$60 million of the APLP term loan through the 50% cash sweep
and 1% mandatory amortization, for a total debt reduction through
amortization in 2015 of approximately $65 to
$70 million. Amortization of project-level debt and
the APLP term loan is expected to average approximately
$70 to $75 million annually over the
next several years.
In addition, the Company made discretionary debt repurchases
totaling $16 million during the
quarter, including $9.0 million of
senior unsecured notes in January and $7.0
million of convertible debentures under the Normal Course
Issuer Bid (NCIB). In April, the Company repurchased another
$10.3 million of convertible
debentures under the NCIB. Thus, discretionary debt
repurchases this year to date through April total $26.3 million. The Company had also
repurchased $3.1 million of
convertible debentures under the NCIB in December 2014.
Maintenance and Capex
For 2015, the Company projects that capital expenditures will
total approximately $11.5 million, of
which approximately $10 million
relates to discretionary optimization projects described
subsequently. In addition to amounts capitalized, the Company
incurs maintenance expense to maintain its projects.
Previously the Company had provided an outlook for major
maintenance expense, which included only the more significant
maintenance expenditures, but going forward believes that total
maintenance expense is a more standard definition within the
industry. Excluding the Company's wind assets, total
maintenance expense is expected to be approximately $44 million for 2015, representing an increase of
approximately $3 million from 2014,
which is primarily attributable to the scheduled gas turbine outage
at Manchief in 2015 and the absence of insurance recoveries and
other proceeds that were credited at Piedmont in 2014, partially offset by
reductions at several other projects that had maintenance outages
in 2014.
During the first quarter of 2015, the Company incurred
$5.2 million of maintenance expense
and $1.3 million of capital
expenditures. Capex during the quarter were primarily
associated with one of the Company's optimization initiatives at
Morris.
Optimization Investments
Consistent with its strategy, the Company continues to make
discretionary investments in its existing projects designed to
increase their output or improve their efficiency in order to
enhance the margins of these facilities. The Company
considers these investments to be an attractive use of its cash
considering the relatively modest capital requirements and
potential for strong risk-adjusted returns. As previously
disclosed, the Company invested approximately $7 million in 2013 and $11
million in 2014 in these discretionary
initiatives. It expects to realize a cash flow benefit
of $4 to $8 million from these
investments in 2015. The Company expects to revisit this cash
flow expectation as it gains operating experience this summer with
the completed upgrades at Morris and Nipigon.
Excluding its Wind Projects, the Company expects to invest
$10 million in such initiatives in
2015 across a number of projects, with the most significant at
Curtis Palmer, Mamquam, Nipigon,
and several at Morris. This expected investment is included
in the Company's 2015 capex budget of approximately $11.5 million. For the three-year period
2013 through 2015, these discretionary optimization investments are
expected to total $28 million.
The Company expects to realize a cash flow benefit from these
investments of at least $10 million
in 2016. The Company is optimistic that it can identify and
execute on another $5 to $10 million
of such discretionary investments in 2016.
In addition to these production-based investments, the Company
continues to pursue commercial and asset management opportunities
around its existing projects, some of which require only a modest
level of capital expenditures or expense.
Business Updates
Wind Sale
On April 1, the Company announced
that its subsidiary, Atlantic Power Transmission, Inc., had reached
an agreement with a subsidiary of TerraForm Power for the sale of
its five operating Wind Projects in Idaho and Oklahoma, representing 521 MW of net
ownership, for approximately $350
million in cash proceeds (subject to certain
adjustments). The implied valuation is approximately 13 times
estimated 2015 cash distributions from the projects. In
addition, upon closing of the transaction the Company expects to
deconsolidate from its balance sheet approximately $249 million of project debt and $229 million of noncontrolling interests related
to Canadian Hills and Rockland. The expected net proceeds to
the Company after transaction fees and transaction-related taxes
are estimated to be approximately $338
million. Closing is subject to regulatory approvals
and is expected by the end of the second quarter. On
April 14, the transaction received
early termination of the waiting period under the Hart-Scott-Rodino
Act. Also on April 14, the
parties to the agreement filed for approval of the transaction with
the Federal Energy Regulatory Commission. Pro forma for the
sale of the wind assets, the Company's weighted average remaining
PPA life is approximately eight
years.
Frontier Sale
In April, the Company closed a transaction for the sale of
Ridgeline's equity interests in Frontier Solar, LLC for net cash
proceeds of $4.3 million.
Frontier has been developing an approximately 20 MW solar electric
generating facility in California. The Company expects to
record a $3.5 million gain on the
sale in the second quarter of 2015.
2015 Guidance
- Project Adjusted EBITDA of $200
to $220 million (previously $265 to
$285 million)
- APLP Project Adjusted EBITDA of $148 to $160 million (unchanged)
- Adjusted Cash Flows from Operating Activities of
$90 to $110 million (previously
$120 to $140 million)
- Adjusted Free Cash Flow of $0 to
$20 million (previously $10 to $30
million)
The Company has revised its 2015 guidance to account for the
expected sale of its wind portfolio based on an expected closing
date of June 2015. The Wind Projects were included in
discontinued operations in the first quarter and thus are excluded
from Project Adjusted EBITDA for the full year beginning
January 1, 2015. The impact on
Project Adjusted EBITDA guidance is a reduction of approximately
$65 million.
The planned use of approximately $338
million of proceeds net of transaction and other costs is
the redemption of the Company's $310.9
million of 9% senior unsecured notes following the closing
of the transaction. The Company's adjusted cash flow metrics
exclude the cash flows of the wind assets for the entire year, but
the benefit to interest expense is included in cash flow only after
the notes have been redeemed (i.e., partial year). Adjusted
cash flow metrics exclude redemption premiums and accrued
interest. On a full year basis and excluding the premiums and
accrued interest, the reduction in interest expense would more than
offset the loss of cash flows from the wind assets. There can
be no assurance that the sale of the Wind Projects will close on
the expected or assumed timeline or that the Company will use
proceeds from such sale as planned.
See Table 4 for full-year initial 2015 guidance, full-year
revised 2015 guidance and Q1 2015 actual results.
Atlantic Power
Corporation
Table 4 – 2015
Annual Guidance (Initial and Revised) vs. Q1 2015 Actual
Results
(in millions of
U.S. dollars, except as otherwise stated)
|
|
Unaudited
|
|
2015
Annual
(Initial
2/26/15)
|
2015
Annual
(Revised
5/7/15)
|
Q1
2015
Actual
|
Project Adjusted
EBITDA
|
|
$265 -
$285
|
$200 -
$220
|
$58.6
|
Adjusted Cash Flows
from Operating Activities (1)
|
|
$120 -
$140
|
$90 - $110
|
$34.4
|
Adjusted Free Cash
Flow (2)
|
|
$10 - $30
|
$0 - $20
|
$7.0
|
APLP Project Adjusted
EBITDA (3)
|
|
$148 -
$160
|
$148 -
$160
|
$45.7
|
(1)
Adjusted Cash Flows from Operating Activities is used to evaluate
cash flows from operating activities without the effects of changes
in working capital balances, acquisition and disposition expenses,
litigation expenses, severance and restructuring charges, and cash
provided by or used in discontinued operations. The intent is
to reflect normal operations and remove items that are not
reflective of the long-term operations of the business.
(2)
Adjusted Free Cash Flow is defined as Free Cash Flow excluding
changes in working capital balances, acquisition and disposition
expenses, litigation expense, severance and restructuring charges,
and cash provided by or used in discontinued operations. 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.
(3) 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, Adjusted Cash Flows from Operating Activities,
Adjusted Free Cash Flow and APLP Project Adjusted EBITDA 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.
|
|
|
|
|
|
|
|
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, 2015 and 2014 (Table
8) 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,
2015 (Table 9A) and the three months ended March 31, 2014 (Table 9B); a reconciliation of
Cash Distributions from Projects and Project Adjusted EBITDA to net
income (loss) and of various non-GAAP cash flow metrics to cash
flows from operating activities for the three months ended
March 31, 2015 and 2014 (Table 10); a
reconciliation of Adjusted Cash Flows from Operating Activities and
Adjusted Free Cash Flow to cash flows from operating activities
(Table 11); and a summary of Project Adjusted EBITDA for selected
projects (top contributors based on the Company's 2015 budget,
representing approximately 90% of total Project Adjusted EBITDA)
for the three months ended March 31,
2015 and 2014 (Table 12).
Investor Conference Call and Webcast
A telephone conference call hosted by Atlantic Power's
management team will be held on Friday, May 8, 2015 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: +1-412-317-6061. Participants will need to provide
access code 8551325 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 10063343. The replay will be available 1
hour after the end of the conference call through August 6, 2015 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.
The Company's power generation projects sell electricity to
utilities and other large commercial customers largely under
long-term power purchase agreements ("PPAs"), which seek to
minimize exposure to changes in commodity prices. Pro forma
for the expected sale of the Wind Projects, Atlantic Power's power
generation projects in operation have an aggregate gross electric
generation capacity of approximately 2,137 megawatts ("MW") in
which its aggregate ownership interest is approximately 1,502 MW.
The Company's current portfolio consists of interests in
twenty-three operational power generation projects across nine
states in the United States and
two provinces in Canada.
Atlantic Power 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 the Company
and its projects. These statements, which are based on
certain assumptions and describe the Company's future plans,
strategies and expectations, can generally be identified by the use
of the words "may," "will," "project," "continue," "believe,"
"intend," "anticipate," "expect" or similar expressions that are
predictions of or indicate future events or trends and which do not
relate solely to present or historical matters. Examples of
such statements in this press release include, but are not limited,
to statements with respect to the following:
- the Company's expectations regarding the sale of the Wind
Projects, including the timing of the closing of such sale, the
amount of expected net proceeds from such sale, the expected use of
those proceeds for the redemption of the Company's $310.9 million of 9% senior unsecured notes and
the revised guidance provided by the Company to reflect the closing
of the sale and receipt and use of proceeds therefrom;
- the Company's plans for 2015, including further significant
reductions in overhead run rates from 2015 to 2016 and additional
investments in its fleet that the Company expects will generate
compelling cash returns, both of which the Company expects to
result in improved cash flow;
- the Company's expectation that successful execution of its
business plan will provide a stable platform for it to begin
growing its business again in 2016 on an absolute basis, in
addition to the organic growth in cash flows provided by returns on
discretionary investments in its fleet and cost reductions;
- the outcome or impact of the Company's business plan, including
the objectives of reducing its overhead and improving its cost
structure, enhancing the value of its existing assets through
attractive discretionary investment and commercial activities, and
optimizing its capital structure and reducing its leverage to
improve its cost of capital and ability to compete for new
investments;
- the Company's expectations regarding the pursuit of commercial
and asset management opportunities around its existing projects and
any cash contributions from such opportunities;
- 2015 Project Adjusted EBITDA will be in the range of
$200 to $220 million;
- 2015 APLP Project Adjusted EBITDA will be in the range of
$148 to $160 million;
- 2015 Adjusted Cash Flows from Operating Activities will be in
the range of $90 to $110
million;
- 2015 Adjusted Free Cash Flow will be in the range of
$0 to $20 million;
- the Company expects to amortize $50 to
$60 million of the APLP term loan and $14 to $15 million of project-level debt in 2015,
for a total debt reduction through amortization of approximately
$65 to $70 million; and the
expectation that amortization of project-level debt and the APLP
term loan will average approximately $70 to
$75 million annually over the next several years;
- the Company's expectations regarding compliance with the fixed
charge coverage ratio test included in the restricted payments
covenant in its senior unsecured note indenture;
- the expectation that recent management changes and personnel
reduction will result in cost savings going forward;
- the Company expects to have G&A costs of no more than
$38 million in 2015, for a total
reduction of at least $16 million
relative to 2013, with another $10
million improvement expected in 2016;
- the Company expects to incur approximately $4 million of severance expense in 2015;
- the optimization investments in 2013 and 2014 of approximately
$18 million will produce
approximately $4 to $8 million of
cash flow benefit in 2015;
- the level of optimization investments will be approximately
$10 million in 2015, and cumulative
investments for 2013 through 2015 will produce a cash flow
contribution of at least $10 million
annually in 2016;
- the Company's dividend level;
- for 2015, the Company projects that capital expenditures will
total approximately $11.5 million,
including approximately $10 million
relating to discretionary optimization investments, and total
maintenance expense is expected to be approximately $44 million;
- the Company will look to pursue opportunities for early
extensions or renewals of its PPAs;
- the Company expects to record a $3.5
million gain on the Frontier sale in the second quarter of
2015; 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 the Company,
including, without limitation, the Company's ability to evaluate
and/or implement potential options, including asset sales or joint
ventures, if the valuation of a particular asset or assets is
compelling, to raise additional capital for growth and/or potential
debt reduction. 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. The
Company's ability to achieve its longer-term goals, including those
described in this news release, is based on significant assumptions
relating to and including, among other things, the general
conditions of the markets in which it operates, revenues, internal
and external growth opportunities, its ability to sell assets at
favorable prices or at all and general financial market and
interest rate conditions. The Company's actual results may
differ, possibly materially and adversely, from these
goals. Readers are cautioned that such information may not be
appropriate for other purposes.
Atlantic Power
Corporation
Table 5 –
Consolidated Balance Sheet (in millions of U.S.
dollars)
|
|
|
March
31,
|
December
31,
|
|
2015
|
2014
|
Assets
|
(Unaudited)
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$100.1
|
$106.0
|
Restricted
cash
|
14.1
|
22.5
|
Accounts
receivable
|
40.2
|
46.2
|
Inventory
|
15.7
|
19.3
|
Prepayments and other
current assets
|
13.1
|
13.9
|
Assets held for
sale
|
780.8
|
792.1
|
Refundable income
taxes
|
-
|
0.2
|
Total current
assets
|
964.0
|
1,000.2
|
|
|
|
Property, plant and
equipment, net
|
914.9
|
962.9
|
Equity investments in
unconsolidated affiliates
|
310.1
|
305.2
|
Other intangible
assets, net
|
356.0
|
377.1
|
Goodwill
|
197.2
|
197.2
|
Derivative
instruments asset
|
0.3
|
1.1
|
Deferred financing
costs
|
59.2
|
62.8
|
Other
assets
|
10.4
|
10.1
|
Total
assets
|
$2,812.1
|
$2,916.6
|
|
|
|
Liabilities
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$6.7
|
$9.4
|
Income taxes
payable
|
0.6
|
-
|
Accrued
interest
|
17.8
|
5.3
|
Other accrued
liabilities
|
25.8
|
30.7
|
Current portion of
long-term debt
|
19.4
|
20.0
|
Current portion of
derivative instruments liability
|
34.7
|
36.1
|
Liabilities held for
sale
|
281.1
|
271.8
|
Other current
liabilities
|
5.7
|
6.8
|
Total current
liabilities
|
391.8
|
380.1
|
|
|
|
Long-term
debt
|
1,098.4
|
1,145.9
|
Convertible
debentures
|
315.7
|
340.6
|
Derivative
instruments liability
|
44.6
|
47.5
|
Deferred income
taxes
|
86.3
|
92.4
|
Power purchase and
fuel supply agreement liabilities, net
|
31.0
|
33.4
|
Other non-current
liabilities
|
58.4
|
60.2
|
Commitments and
contingencies
|
-
|
-
|
Total
liabilities
|
2,026.2
|
2,100.1
|
|
|
|
Equity
|
|
|
Common shares, no par
value, unlimited authorized shares; 121,747,980 and
121,323,614
issued and
outstanding at March 31, 2015 and December 31, 2014,
respectively
|
1,288.9
|
1,288.4
|
Accumulated other
comprehensive loss
|
(103.7)
|
(68.3)
|
Retained
deficit
|
(849.4)
|
(863.9)
|
Total Atlantic Power
Corporation shareholders' equity
|
335.8
|
356.2
|
Preferred shares
issued by a subsidiary company
|
221.3
|
221.3
|
Noncontrolling
interests held for sale
|
228.8
|
239.0
|
Total
equity
|
785.9
|
816.5
|
Total liabilities and
equity
|
$2,812.1
|
$2,916.6
|
Atlantic Power
Corporation
Table 6 –
Consolidated Statements of Operations
(in millions of
U.S. dollars, except per share amounts)
Unaudited
|
|
|
|
Three months ended
March 31,
|
|
|
2015
|
2014
|
Project
revenue:
|
|
|
Energy
sales
|
|
$54.0
|
$64.3
|
Energy capacity
revenue
|
|
33.5
|
33.5
|
Other
|
|
23.8
|
27.5
|
|
|
111.3
|
125.3
|
|
|
|
|
Project
expenses:
|
|
|
|
Fuel
|
|
46.2
|
59.8
|
Operations and
maintenance
|
|
21.5
|
27.8
|
Development
|
|
1.1
|
0.7
|
Depreciation and
amortization
|
|
28.0
|
30.5
|
|
|
96.8
|
118.8
|
Project other income
(expense):
|
|
|
|
Change in fair value
of derivative instruments
|
|
(1.7)
|
22.0
|
Equity in earnings of
unconsolidated affiliates
|
|
10.8
|
8.4
|
Interest expense,
net
|
|
(2.1)
|
(11.1)
|
Other
expense
|
|
-
|
(0.1)
|
|
|
7.0
|
19.2
|
Project
income
|
|
21.5
|
25.7
|
|
|
|
|
Administrative and
other expenses (income):
|
|
|
|
Administration
|
|
9.4
|
7.1
|
Interest,
net
|
|
25.7
|
66.5
|
Foreign exchange
gain
|
|
(32.2)
|
(16.8)
|
Other
income
|
|
(1.4)
|
-
|
|
|
1.5
|
56.8
|
Income (loss) from
continuing operations before income taxes
|
|
20.0
|
(31.1)
|
Income tax
benefit
|
|
(4.6)
|
(16.9)
|
Income (loss) from
continuing operations
|
|
24.6
|
(14.2)
|
Net loss from
discontinued operations, net of tax (1)
|
|
(12.3)
|
(8.3)
|
Net income
(loss)
|
|
12.3
|
(22.5)
|
Net loss attributable
to noncontrolling interests designated as discontinued
operations
|
|
(7.5)
|
(6.4)
|
Net income
attributable to preferred shares of a subsidiary company
|
|
2.3
|
2.8
|
Net income (loss)
attributable to Atlantic Power Corporation
|
|
$17.5
|
$(18.9)
|
|
|
|
|
Basic earnings (loss)
per share:
|
|
|
|
Income (loss) from
continuing operations attributable to Atlantic Power
Corporation
|
|
$0.17
|
$(0.15)
|
Loss from discontinued
operations, net of tax
|
|
(0.03)
|
(0.01)
|
Net income (loss)
attributable to Atlantic Power Corporation
|
|
$0.14
|
$(0.16)
|
Diluted earnings
(loss) per share:
|
|
|
|
Income (loss) from
continuing operations attributable to Atlantic Power
Corporation
|
|
$0.17
|
$(0.15)
|
Loss from discontinued
operations, net of tax
|
|
(0.03)
|
(0.01)
|
Net income (loss)
attributable to Atlantic Power Corporation
|
|
$0.14
|
$(0.16)
|
(1) Includes
contributions from the Wind Projects and Greeley, which are
components of discontinued operations.
|
Atlantic Power
Corporation
Table 7 –
Consolidated Statements of Cash Flows (in millions of U.S.
dollars)
|
Unaudited
|
|
|
Three months ended
March 31,
|
|
|
2015
|
2014
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
|
$12.3
|
$(22.5)
|
Adjustments to
reconcile to net cash provided by (used in) operating
activities
|
|
|
|
Depreciation and
amortization
|
|
38.1
|
40.5
|
Gain on sale of
asset
|
|
-
|
(2.1)
|
Gain on repurchase of
convertible debentures and other
|
|
(1.4)
|
-
|
Long-term incentive
plan expense
|
|
0.5
|
(0.1)
|
Equity in earnings
from unconsolidated affiliates
|
|
(9.9)
|
(8.6)
|
Distributions from
unconsolidated affiliates
|
|
7.2
|
11.8
|
Unrealized foreign
exchange gain
|
|
(32.8)
|
(16.7)
|
Change in fair value
of derivative instruments
|
|
9.0
|
(14.7)
|
Change in deferred
income taxes
|
|
(3.9)
|
(13.5)
|
Change in other
operating balances
|
|
|
|
Accounts
receivable
|
|
6.0
|
7.1
|
Inventory
|
|
3.6
|
(0.1)
|
Prepayments,
refundable income taxes and other assets
|
|
4.3
|
7.4
|
Accounts
payable
|
|
(5.6)
|
(2.9)
|
Accruals and other
liabilities
|
|
7.7
|
(14.3)
|
Cash provided by
(used in) operating activities
|
|
35.1
|
(28.7)
|
|
|
|
|
Cash flows provided
by investing activities
|
|
|
|
Change in restricted
cash
|
|
9.7
|
73.6
|
Proceeds from sale of
asset, net
|
|
-
|
1.0
|
Construction in
progress
|
|
-
|
(0.4)
|
Capitalized
development costs
|
|
(0.8)
|
-
|
Purchase of property,
plant and equipment
|
|
(1.3)
|
(2.6)
|
Cash provided by
investing activities
|
|
7.6
|
71.6
|
|
|
|
|
Cash flows used in
financing activities
|
|
|
|
Proceeds from senior
secured term loan facility
|
|
-
|
600.0
|
Repayment of corporate
and project-level debt
|
|
(32.8)
|
(565.0)
|
Repayment of
convertible debentures
|
|
(5.7)
|
-
|
Deferred financing
costs
|
|
-
|
(38.3)
|
Dividends paid to
common shareholders
|
|
(2.9)
|
(10.2)
|
Dividends paid to
noncontrolling interests
|
|
(5.0)
|
(8.0)
|
Cash used in
financing activities
|
|
(46.4)
|
(21.5)
|
|
|
|
|
Net (decrease)
increase in cash and cash equivalents
|
|
(3.7)
|
21.4
|
Less cash at
discontinued operations
|
|
(6.2)
|
(9.4)
|
Cash and cash
equivalents at beginning of period at discontinued
operations
|
|
3.9
|
-
|
Cash and cash
equivalents at beginning of period
|
|
106.1
|
158.6
|
Cash and cash
equivalents at end of period
|
|
$100.1
|
$170.6
|
|
|
|
|
Supplemental cash
flow information
|
|
|
|
Interest
paid
|
|
$11.7
|
$66.8
|
Income taxes paid,
net
|
|
$0.4
|
$0.2
|
Accruals for
construction in progress
|
|
$-
|
$9.4
|
|
|
|
|
Regulation G Disclosures
Project Adjusted EBITDA is not a measure recognized under
GAAP and does not have a standardized meaning prescribed by GAAP,
and is therefore unlikely to be comparable to similar measures
presented by other companies. Project Adjusted EBITDA is
defined as project income (loss) plus interest, taxes, depreciation
and amortization (including non-cash impairment charges) and
changes in the fair value of derivative instruments.
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)
is provided in Table 8 below. Investors are cautioned that
the Company may calculate this measure in a manner that is
different from other companies.
Cash Distributions from Projects, Adjusted Cash Flows from
Operating Activities, Free Cash Flow and Adjusted Free Cash
Flow are not measures recognized under GAAP and do not have
standardized meanings prescribed by GAAP, and are therefore
unlikely to be comparable to similar measures presented by other
companies. Adjusted Cash Flows from Operating Activities is
used to evaluate cash flows from operating activities without the
effects of changes in working capital balances, acquisition and
disposition expenses, litigation expenses, severance and
restructuring charges, and cash provided by or used in discontinued
operations. The intent is to reflect normal operations and
remove items that are not reflective of the long-term operations of
the business. 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.
Adjusted Free Cash Flow is defined as Free Cash Flow excluding
changes in working capital balances, acquisition and disposition
expenses, litigation expense, severance and restructuring charges,
and cash provided by or used in discontinued operations.
Management believes that these non-GAAP cash flow measures
are relevant supplemental measures of the Company's ability to earn
and distribute cash returns to investors. A bridge of Project
Adjusted EBITDA to Cash Distributions from Projects is provided in
Tables 9A and 9B on page 15. A reconciliation of Free Cash
Flow to cash flows from operating activities is provided in Table
10 on page 16 of this release. Reconciliations of Adjusted
Free Cash Flow and Adjusted Cash Flows from Operating Activities to
cash flows from operating activities are provided in Table 11 on
page 17 of this release. Investors are cautioned that the
Company may calculate these measures in a manner that is different
from other companies.
Atlantic Power
Corporation
Table 8 – Project
Adjusted EBITDA by Segment (in millions of U.S.
dollars)
Unaudited
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
2015
|
2014
|
Project Adjusted
EBITDA by segment
|
|
|
|
East
|
|
$43.2
|
$45.6
|
West
(1)
|
|
17.2
|
11.3
|
Un-allocated
corporate
|
|
(1.8)
|
(0.5)
|
Total
|
|
$58.6
|
$56.4
|
|
|
|
|
Reconciliation to
project income
|
|
|
|
Depreciation and
amortization
|
|
32.9
|
40.8
|
Interest expense,
net
|
|
2.5
|
11.5
|
Change in the fair
value of derivative instruments
|
|
1.7
|
(21.9)
|
Other
expense
|
|
-
|
0.3
|
Project
income
|
|
$21.5
|
$25.7
|
(1)
Excludes Greeley, which is a component of discontinued
operations.
Notes:
Table 8 excludes the
Wind Projects, which comprise the entirety of the Wind segment. The
Wind Projects are designated as assets held for sale and a
component of discontinued operations for the three months ended
March 31, 2015 and 2014.
Table 8 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 9A – Cash
Distributions from Projects (by Segment, in millions of U.S.
dollars)
Three months ended
March 31, 2015 (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
|
$31.7
|
$(1.0)
|
$(1.9)
|
$(1.3)
|
$6.7
|
$34.2
|
|
Equity
method
|
11.5
|
(1.5)
|
(0.6)
|
(0.3)
|
(0.6)
|
8.5
|
|
Total
|
43.2
|
(2.5)
|
(2.5)
|
(1.6)
|
6.1
|
42.7
|
|
West
|
|
|
|
|
|
|
|
Consolidated
|
13.7
|
-
|
-
|
-
|
(3.6)
|
10.1
|
|
Equity
method
|
3.5
|
-
|
-
|
-
|
0.6
|
4.1
|
|
Total
|
17.2
|
-
|
-
|
-
|
(3.0)
|
14.2
|
|
Total
consolidated
|
45.4
|
(1.0)
|
(1.9)
|
(1.3)
|
3.1
|
44.3
|
|
Total equity
method
|
15.0
|
(1.5)
|
(0.6)
|
(0.3)
|
-
|
12.6
|
|
Un-allocated
corporate
|
(1.8)
|
-
|
-
|
-
|
1.8
|
-
|
|
Total
|
$58.6
|
$(2.5)
|
$(2.5)
|
$(1.6)
|
$4.9
|
$56.9
|
|
Note: Table 9A
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 9B – Cash
Distributions from Projects (by Segment, in millions of U.S.
dollars)
Three months ended
March 31, 2014 (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
|
|
Total
consolidated
|
41.4
|
(8.6)
|
(7.9)
|
(0.1)
|
6.3
|
31.1
|
|
Total equity
method
|
15.5
|
(2.4)
|
(3.7)
|
(0.6)
|
4.1
|
12.9
|
|
Un-allocated
corporate
|
(0.5)
|
-
|
-
|
(0.3)
|
0.8
|
-
|
|
Total
|
$56.4
|
$(11.0)
|
$(11.6)
|
$(1.0)
|
$11.2
|
$44.0
|
|
Note: Table 9B
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 10 – Free
Cash Flow (in millions of U.S. dollars)
Unaudited
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
2015
|
2014
|
Cash Distributions
from Projects
|
|
$56.9
|
$44.0
|
Repayment of long-term
debt
|
|
(2.5)
|
(11.0)
|
Interest expense,
net
|
|
(2.5)
|
(11.6)
|
Capital
expenditures
|
|
(1.6)
|
(1.0)
|
Other, including
changes in working capital
|
|
4.9
|
11.2
|
Project Adjusted
EBITDA
|
|
$58.6
|
$56.4
|
Depreciation and
amortization
|
|
32.9
|
40.8
|
Interest expense,
net
|
|
2.5
|
11.5
|
Change in the fair
value of derivative instruments
|
|
1.7
|
(21.9)
|
Other
income
|
|
-
|
0.3
|
Project
income
|
|
$21.5
|
$25.7
|
Administrative and
other expenses
|
|
1.5
|
56.8
|
Income tax
benefit
|
|
(4.6)
|
(16.9)
|
Net (loss) income from
discontinued operations, net of tax
|
|
(12.3)
|
(8.3)
|
Net income
(loss)
|
|
$12.3
|
$(22.5)
|
Adjustments to
reconcile to net cash provided by operating activities
|
|
6.8
|
(3.4)
|
Change in other
operating balances
|
|
16.0
|
(2.8)
|
Cash flows from
operating activities
|
|
$35.1
|
$(28.7)
|
Term loan facility
repayments (1)
|
|
(21.3)
|
-
|
Project-level debt
repayments
|
|
(2.5)
|
(9.9)
|
Purchases of property,
plant and equipment (2)
|
|
(1.3)
|
(2.6)
|
Distributions to
noncontrolling interests (3)
|
|
(2.7)
|
(2.1)
|
Dividends on preferred
shares of a subsidiary company
|
|
(2.3)
|
(3.0)
|
Free Cash
Flow
|
|
$5.0
|
$(46.3)
|
Additional GAAP cash
flow measures:
|
|
|
|
Cash flows from
investing activities
|
|
7.6
|
71.6
|
Cash flows from
financing activities
|
|
(46.4)
|
(21.5)
|
(1)
Includes mandatory 1% annual amortization and 50% excess cash flow
repayments by the Partnership.
(2)
Excludes construction costs related to the Company's Canadian Hills
project in 2014.
(3)
Distributions to noncontrolling interests include distributions to
the tax equity investors at Canadian Hills and to the other 50%
owner of Rockland.
Note: Table 10
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 11 –
Adjusted Cash Flows from Operating Activities and Adjusted Free
Cash Flow (in millions of U.S. dollars)
Unaudited
|
|
|
Three months ended
March 31,
|
|
|
2015
|
2014
|
Cash flows from
operating activities
|
|
$35.1
|
$(28.7)
|
Changes in other
operating balances
|
|
6.0
|
22.7
|
Cash flows from
discontinued operations
|
|
(10.8)
|
(8.8)
|
Severance
charges
|
|
2.9
|
0.5
|
Restructuring charges,
asset dispositions and other
|
|
1.2
|
0.0
|
Shareholder litigation
expenses
|
|
0.0
|
0.2
|
Refinancing
transaction costs
|
|
0.0
|
49.4
|
Adjusted Cash
Flows from Operating Activities
|
|
$34.4
|
$35.3
|
Term loan facility
repayments (1)
|
|
(21.3)
|
0.0
|
Project-level debt
repayments
|
|
(2.5)
|
(9.9)
|
Amount
associated with discontinued operations (included in line
above)
|
|
0.0
|
0.0
|
Principal repayment of Piedmont debt at term conversion (included
above)
|
|
0.0
|
8.1
|
Purchases of property,
plant and equipment (2)
|
|
(1.3)
|
(2.6)
|
Amount
associated with discontinued operations (included in line
above)
|
|
0.0
|
0.0
|
Distributions to
noncontrolling interests (3)
|
|
(2.7)
|
(2.1)
|
Amount
associated with discontinued operations (included in line
above)
|
|
2.7
|
2.1
|
Dividends on preferred
shares of a subsidiary company
|
|
(2.3)
|
(3.0)
|
Adjusted Free Cash
Flow
|
|
$7.0
|
$27.9
|
Additional GAAP cash
flow measures:
|
|
|
|
Cash flows from
investing activities
|
|
$7.6
|
$71.6
|
Cash flows from
financing activities
|
|
$(46.4)
|
$(21.5)
|
(1)
Includes mandatory 1% annual amortization and 50% excess cash flow
repayments by the Partnership.
(2)
Excludes construction costs related to the Company's Canadian Hills
project in 2014 and 2013 and its Piedmont and Meadow Creek projects
in 2013.
(3)
Distributions to noncontrolling interests primarily include
distributions, if any, to the tax equity investors at Canadian
Hills and to the other 50% owner of Rockland.
Note: Table 11
presents Adjusted Cash Flows from Operating Activities and Adjusted
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 12 – Project
Adjusted EBITDA by Project (for Selected
Projects)
(in millions of
U.S. dollars)
Unaudited
|
|
|
Three months ended
March 31,
|
|
|
2015
|
|
2014
|
East
|
Accounting
|
|
|
|
Cadillac
|
Consolidated
|
$2.1
|
|
$2.0
|
Calstock
|
Consolidated
|
2.7
|
|
2.1
|
Curtis
Palmer
|
Consolidated
|
5.8
|
|
6.7
|
Kapuskasing
|
Consolidated
|
4.0
|
|
3.3
|
Morris
|
Consolidated
|
4.8
|
|
3.8
|
Nipigon
|
Consolidated
|
5.9
|
|
6.0
|
North Bay
|
Consolidated
|
4.1
|
|
5.0
|
Piedmont
|
Consolidated
|
0.8
|
|
(1.4)
|
Other
(1)
|
Consolidated
|
1.5
|
|
6.3
|
Chambers
|
Equity
method
|
6.2
|
|
5.8
|
Orlando
|
Equity
method
|
5.1
|
|
1.1
|
Other
(2)
|
Equity
method
|
0.2
|
|
4.9
|
Total
|
|
43.2
|
|
45.6
|
West
|
|
|
|
|
Manchief
|
Consolidated
|
3.7
|
|
3.6
|
Naval
Station
|
Consolidated
|
1.4
|
|
1.3
|
North
Island
|
Consolidated
|
1.2
|
|
(1.4)
|
Williams
Lake
|
Consolidated
|
5.0
|
|
3.9
|
Other
(3)
|
Consolidated
|
2.4
|
|
0.2
|
Frederickson
|
Equity
method
|
3.1
|
|
3.2
|
Other
(4)
|
Equity
method
|
0.4
|
|
0.5
|
Total
|
|
17.2
|
|
11.3
|
Totals
|
|
|
|
|
Consolidated
projects
|
|
45.4
|
|
41.4
|
Equity method
projects
|
|
15.0
|
|
15.5
|
Un-allocated
corporate
|
|
(1.8)
|
|
(0.5)
|
Total Project
Adjusted EBITDA
|
|
$58.6
|
|
$56.4
|
|
|
|
|
|
Depreciation and
amortization
|
|
32.9
|
|
40.8
|
Interest expense,
net
|
|
2.5
|
|
11.5
|
Change in the fair
value of derivative instruments
|
|
1.7
|
|
(21.9)
|
Other (income)
expense
|
|
-
|
|
0.3
|
Project
income
|
|
$21.5
|
|
$25.7
|
(1) Kenilworth,
Tunis
(2)
Selkirk
(3) Moresby Lake,
Mamquam, Naval Training Station, and Oxnard
(4) Q1 2014:
Koma Kulshan and Delta-Person; Q1 2015: Koma
Kulshan
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.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/atlantic-power-corporation-releases-first-quarter-2015-results-300080018.html
SOURCE Atlantic Power Corporation