ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
4. Long-term debt
Long-term debt consists of the following:
|
|
|
|
|
|
|
|
|
(in millions)
|
|
March 31,
2013
|
|
December 31,
2012
|
|
Interest Rate
|
Recourse Debt:
|
|
|
|
|
|
|
|
|
Senior unsecured notes, due 2018
|
|
$
|
460.0
|
|
$
|
460.0
|
|
9.0%
|
Senior unsecured notes, due June 2036 (Cdn$210.0)
|
|
|
206.7
|
|
|
211.1
|
|
6.0%
|
Senior unsecured notes, due July 2014
|
|
|
190.0
|
|
|
190.0
|
|
5.9%
|
Series A senior unsecured notes, due August 2015
|
|
|
150.0
|
|
|
150.0
|
|
5.9%
|
Series B senior unsecured notes, due August 2017
|
|
|
75.0
|
|
|
75.0
|
|
6.0%
|
Non-Recourse Debt:
|
|
|
|
|
|
|
|
|
Epsilon Power Partners term facility, due 2019
|
|
|
32.7
|
|
|
33.5
|
|
7.4%
|
Cadillac term loan, due 2025
|
|
|
37.2
|
|
|
37.8
|
|
6.0% 8.0%
|
Piedmont construction loan, due 2013
|
|
|
127.6
|
(1)
|
|
127.4
|
|
Libor plus 3.5%
|
Meadow Creek term loan, due 2030
|
|
|
229.3
|
(2)
|
|
208.7
|
|
1.3% 5.1%
|
Rockland term loan, due 2031
|
|
|
86.5
|
|
|
86.5
|
|
6.4%
|
Other long-term debt
|
|
|
0.8
|
|
|
0.3
|
|
5.5% 6.7%
|
Less current maturities
|
|
|
(121.7
|
)
|
|
(121.2
|
)
|
|
|
|
|
|
|
|
|
Total long-term debt
|
|
$
|
1,474.1
|
|
$
|
1,459.1
|
|
|
|
|
|
|
|
|
|
Current
maturities consist of the following:
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
December 31,
2012
|
|
Interest Rate
|
Current Maturities:
|
|
|
|
|
|
|
|
|
Epsilon Power Partners term facility, due 2019
|
|
$
|
3.5
|
|
$
|
3.0
|
|
7.4%
|
Cadillac term loan, due 2025
|
|
|
2.3
|
|
|
2.4
|
|
6.0% 8.0%
|
Piedmont construction loan, due 2013
|
|
|
55.1
|
(1)
|
|
55.1
|
|
Libor plus 3.5%
|
Meadow Creek term loan, due 2013
|
|
|
59.5
|
(2)
|
|
59.5
|
|
1.3% 5.1%
|
Rockland term loan, due 2031
|
|
|
1.2
|
|
|
1.2
|
|
6.4%
|
Other current maturities
|
|
|
0.1
|
|
|
|
|
5.5% 6.7%
|
|
|
|
|
|
|
|
Total current maturities
|
|
$
|
121.7
|
|
$
|
121.2
|
|
|
|
|
|
|
|
|
|
-
(1)
-
The
terms of the Piedmont project-level debt financing include a $51.0 million bridge loan, a portion of which we expect to repay with
the proceeds from the stimulus grant expected to be received from the U.S. Treasury, and an $82.0 million construction loan that we expect to convert to a term loan. While we fully expect the
construction loan to convert to a term loan in second quarter 2013 based on the project meeting specified milestone requirements, if it does not, we have the option of amending or refinancing the
construction loan or infusing additional equity into the project. On April 19, 2013, Piedmont achieved commercial operations and expects to submit an application under the 1603 federal grant
program within 60 days from this date to recover approximately 30% of its capital cost, subject to the potential impact of the federal sequester on spending which we estimate to be an
approximate $2.0 million shortfall. The $51.0 million bridge loan is expected to be repaid by end of third quarter of 2013 and repayment of the expected $82.0 million term loan
would commence in 2013.
14
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
4. Long-term debt (Continued)
-
(2)
-
Meadow
Creek debt consists of $172.8 million drawn on a construction loan which converted to a term loan in March 2013 and a
$56.5 million cash grant loan. The cash grant loan was repaid in April 2013 with $49.0 million of proceeds from the 1603 grant with the U.S. Treasury, $4.7 million from the former
owners to cover the shortfall resulting from the federal sequester on spending and a $2.8 million contribution from us to cover the shortfall from lower grant-eligible costs, primarily as a
result of lower project cost versus budget.
Project-level debt of our consolidated projects is secured by the respective project and its contracts with no other recourse to us.
Project-level debt generally amortizes during the term of the respective revenue generating contracts of the projects. The loans have certain financial covenants that must be met. At March 31,
2013, Delta-Person and Gregory had not achieved the levels of debt service coverage ratios required by the project-level debt arrangements as a condition to make distributions and were therefore
restricted from making distributions to us. None of these covenant failures create an event of default or result in the non-recourse debt being callable at March 31, 2013.
We have a senior credit facility of $300.0 million on a senior secured basis (the "senior credit facility"),
$200.0 million of which may be utilized for letters of credit. Borrowings under the facility are available in U.S. dollars and Canadian dollars and bear interest at a variable rate equal to the
U.S. Prime Rate, the London Interbank Offered Rate or the Canadian Prime Rate, as applicable, plus an applicable margin of between 0.8% and 3.0% that varies based on our corporate credit rating. The
senior credit facility matures on November 4, 2015.
On
November 2, 2012, we amended the senior credit facility in order to change certain financial and leverage ratio covenants. These changes involved the better accommodation of
construction stage projects with no historical financial performance, the better accommodation of the possibility of certain asset sales, including our Florida Projects, by waiving a material
disposition covenant and permitting inclusion of the disposed assets' trailing twelve months EBITDA for covenant calculations, and the better accommodation of the same possible asset sales by
temporarily modifying the Total Leverage Ratio. See Note 9 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31,
2012 for further information.
At
March 31, 2013, $64.1 million has been drawn under the senior credit facility and the applicable margin was 2.8%. The balance was repaid in full on April 15, 2013
with a portion of the proceeds from the sale of the Florida Projects. As of March 31, 2013, $111.6 million was issued in letters of credit, but
not drawn, to support contractual credit requirements at several of our projects. On April 30, 2013, letters of credit issued, but not drawn, were reduced to $82.5 million resulting from
the sale of the Florida Projects and Path 15.
15
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
5. Fair value of financial instruments
The following represents the recurring measurements of fair value hierarchy of our financial assets and liabilities that were recognized at fair value as of March 31, 2013 and
December 31, 2012. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2013
|
|
(in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
85.7
|
|
$
|
|
|
$
|
|
|
$
|
85.7
|
|
Restricted cash
|
|
|
43.5
|
|
|
|
|
|
|
|
|
43.5
|
|
Derivative instruments asset
|
|
|
|
|
|
14.8
|
|
|
|
|
|
14.8
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
129.2
|
|
$
|
14.8
|
|
$
|
|
|
$
|
144.0
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative instruments liability
|
|
$
|
|
|
$
|
136.1
|
|
$
|
|
|
$
|
136.1
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
$
|
136.1
|
|
$
|
|
|
$
|
136.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
60.2
|
|
$
|
|
|
$
|
|
|
$
|
60.2
|
|
Restricted cash
|
|
|
28.6
|
|
|
|
|
|
|
|
|
28.6
|
|
Derivative instruments asset
|
|
|
|
|
|
20.6
|
|
|
|
|
|
20.6
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
88.8
|
|
$
|
20.6
|
|
$
|
|
|
$
|
109.4
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative instruments liability
|
|
$
|
|
|
$
|
151.1
|
|
$
|
|
|
$
|
151.1
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
$
|
151.1
|
|
$
|
|
|
$
|
151.1
|
|
|
|
|
|
|
|
|
|
|
|
The
carrying amounts for cash and cash equivalents and restricted cash approximate fair value due to their short-term nature.
The
fair values of our derivative instruments are based upon trades in liquid markets. Valuation model inputs can generally be verified and valuation techniques do not involve
significant judgment. The fair values of such financial instruments are classified within Level 2 of the fair value hierarchy. We use our best estimates to determine the fair value of commodity
and derivative contracts we hold. These estimates consider various factors including closing exchange prices, time value, volatility factors and credit exposure. The fair value of each contract is
discounted using a risk free interest rate.
We
also adjust the fair value of financial assets and liabilities to reflect credit risk, which is calculated based on our credit rating and the credit rating of our counterparties. As
of March 31, 2013, the credit valuation adjustments resulted in a $16.7 million net increase in fair value, which consists of
16
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
5. Fair value of financial instruments (Continued)
a
$0.9 million pre-tax gain in other comprehensive income and a $15.8 million gain in change in fair value of derivative instruments. As of December 31, 2012, the
credit valuation adjustments resulted in an $18.4 million net increase in fair value, which consists of a $1.1 million pre-tax gain in other comprehensive income and a
$13.8 million gain in change in fair value of derivative instruments, offset by a $3.6 million related to interest rate swaps assumed in the acquisition of Ridgeline.
6. Derivative instruments and hedging activities
We recognize all derivative instruments on the balance sheet as either assets or liabilities and measure them at fair value each reporting period. For certain contracts designated as
cash flow hedges, we defer the effective portion of the change in fair value of the derivatives in accumulated other comprehensive income (loss), until the hedged transactions occur and are recognized
in earnings. The ineffective portion of a cash flow hedge is immediately recognized in earnings.
For
derivatives that are not designated as cash flow hedges, the changes in the fair value are immediately recognized in earnings. The guidelines apply to our natural gas swaps, interest
rate swaps, and foreign exchange contracts.
On March 12, 2012, we discontinued the application of the normal purchase normal sales ("NPNS") exemption on gas purchase
agreements at our North Bay, Kapuskasing and Nipigon projects. On that date, we entered into an agreement with a third party that resulted in the gas purchase agreements no longer qualifying for the
NPNS exemption. The agreements at North Bay and Kapuskasing expire on December 31, 2016. These gas purchase agreements are derivative financial instruments and are recorded in the consolidated
balance sheets at fair value and the changes in their fair market value are recorded in the consolidated statements of operations.
In
May 2012, the Nipigon project entered into a long-term contract for the purchase of natural gas beginning on January 1, 2013 and expiring on December 31,
2022. This contract is accounted for as a derivative financial instrument and is recorded in the consolidated balance sheet at fair value at December 31, 2012. Changes in the fair market value
of the contract are recorded in the consolidated statements of operations.
Our strategy to mitigate a portion of the future exposure to changes in natural gas prices at our projects consists of periodically
entering into financial swaps that effectively fix the price of natural gas expected to be purchased at these projects. These natural gas swaps are derivative financial instruments and are recorded in
the consolidated balance sheets at fair value and the changes in their fair market value are recorded in the consolidated statements of operations.
The
operating margin at our 50% owned Orlando project is exposed to changes in natural gas prices following the expiration of its fuel contract at the end of 2013. We have entered into
natural gas swaps to effectively fix the price of 3.2 million Mmbtu of future natural gas purchases, or approximately
17
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
6. Derivative instruments and hedging activities (Continued)
64%
of our share of the expected natural gas purchases at the project during 2014 and 2015. We also entered into natural gas swaps to effectively fix the price of 1.3 million Mmbtu of future
natural gas purchases representing approximately 25% of our share of the expected natural gas purchases at the project during 2016 and 2017.
Cadillac Renewable Energy, LLC ("Cadillac") has an interest rate swap agreement that effectively fixes the interest rate at 6.0%
from February 16, 2011 to February 15, 2015, 6.1% from February 16, 2015 to February 15, 2019, 6.3% from February 16, 2019 to February 15, 2023, and 6.4%
thereafter. The notional amount of the interest rate swap agreement matches the outstanding principal balance over the remaining life of Cadillac's debt. This swap agreement, which qualifies for and
is designated as a cash flow hedge, is effective through June 2025 and the effective portion of the changes in the fair market value is recorded in accumulated other comprehensive income (loss).
The
Piedmont Green Power project ("Piedmont") has interest rate swap agreements to economically fix its exposure to changes in interest rates related to its variable-rate
debt. The interest rate swap agreement effectively converts the floating rate debt to a fixed interest rate of 1.7% plus an
applicable margin ranging from 3.5% to 3.8% through February 29, 2016. From February 2016 until November 2017, the fixed rate of the swap is 4.5% and the applicable margin is 4.0%, resulting in
an all-in rate of 8.5%. The swap continues at the fixed rate of 4.5% from the maturity of the debt in November 2017 until November 2030. The notional amounts of the interest rate swap
agreements match the estimated outstanding principal balance of Piedmont's cash grant bridge loan and the construction loan facility that will convert to a term loan. The interest rate swaps were
executed on October 21, 2010 and November 2, 2010 and expire on February 29, 2016 and November 30, 2030, respectively. The interest rate swap agreements are not designated
as hedges, and changes in their fair market value are recorded in the consolidated statements of operations.
Epsilon
Power Partners ("Epsilon") has an interest rate swap to economically fix the exposure to changes in interest rates related to the variable-rate
non-recourse debt. The interest rate swap agreement effectively converted the floating rate debt to a fixed interest rate of 7.4% and has a maturity date of July 2019. The notional amount
of the swap matches the outstanding principal balance over the remaining life of Epsilon's debt. This interest rate swap agreement is not designated as a hedge and changes in its fair market value are
recorded in the consolidated statements of operations.
Rockland
Wind Farm, LLC ("Rockland") entered into interest rate swaps to manage interest rate risk exposure. These swaps effectively modify the project's exposure by converting
the project's floating rate debt to a fixed basis. The interest rate swaps are with various counterparties and swap 100% of the expected interest payments from floating LIBOR to fixed rates structured
in two tranches. The first tranche is for the notional amount due on the term loan commencing on December 30, 2011 and ending December 31, 2026 and fixes the interest rate at 4.2%. The
second tranche is the post-term portion of the loan, or the balloon payment and commences on December 31, 2026 and ends on December 31, 2031, fixing the interest rate at
5.1%. This interest rate swap agreement is not designated as a hedge and changes in its fair market value are recorded in the consolidated statements of operations.
18
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
6. Derivative instruments and hedging activities (Continued)
The
Meadow Creek project ("Meadow Creek") has interest rate swap agreements to economically fix its exposure to changes in interest rates related to its variable-rate debt.
The interest rate swap agreement effectively converted the floating rate debt to a fixed interest rate of 5.1% from December 31, 2012 to December 31, 2024. From December 2024 until the
maturity of the debt in December 2030, the fixed rate of the swap is 6.7%. The notional amounts of the interest rate swap agreements match the estimated outstanding principal balance of Meadow Creek's
term loan. The interest rate swaps were both executed on September 17, 2012 and expire on December 31, 2024 and December 31, 2030, respectively. The interest rate swap agreements
are not designated as hedges, and changes in their fair market value are recorded in the consolidated statements of operations.
We use foreign currency forward contracts to manage our exposure to changes in foreign exchange rates, as we generate cash flow in U.S.
dollars and Canadian dollars but pay dividends to shareholders and interest on our Canadian dollar denominated convertible debentures and long-term debt predominantly in Canadian dollars.
We have a hedging strategy for the purpose of mitigating the currency risk impact on the future payments of dividends to shareholders. We have executed this strategy by entering into forward contracts
to purchase Canadian dollars at a fixed rate to hedge an average of approximately 112% of our expected dividend and convertible debenture interest payments through 2015. Changes in the fair value of
the forward contracts more than offset foreign exchange gain or losses on the U.S. dollar equivalent of our Canadian dollar obligations. At March 31, 2013, the forward contracts consist of
(1) monthly purchases through the end of 2013 of Cdn$6.0 million at an exchange rate of Cdn$1.134 per U.S. dollar and (2) contracts assumed in our acquisition of Atlantic Power
Limited Partnership (formerly, Capital Power Income L.P.) (the "Partnership") with various expiration dates through December 2015 to purchase a total of Cdn$99.7 million at an average
exchange rate of Cdn$1.14 per U.S. dollar. It is our intention to periodically consider extending the length or terminating these forward contracts. The foreign currency forward contracts are not
designated as hedges, and changes in their market value are recorded in the consolidated statements of operations.
In
April 2013 we terminated various foreign currency forward contracts with expiration dates through June 2015 assumed in our acquisition of the Partnership resulting in proceeds of
$9.4 million. Subsequent to the termination, cash flows from our projects that generate Canadian dollars and our remaining forward contracts to purchase Canadian dollars at a fixed rate, hedge
an average of approximately 75% of our expected dividend, Canadian dollar denominated long-term debt and convertible debenture interest payments through 2015.
19
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
6. Derivative instruments and hedging activities (Continued)
We have entered into derivative instruments in order to economically hedge the following notional volumes of forecasted transactions as
summarized below, by type, excluding those derivatives that qualified for the NPNS exemption as of March 31, 2013 and December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
Units
|
|
March 31,
2013
|
|
December 31,
2012
|
|
Natural gas swaps
|
|
Natural Gas (MMBtu)
|
|
|
8.6
|
|
|
10.6
|
|
Gas purchase agreements
|
|
Natural Gas (GJ)
|
|
|
46.8
|
|
|
49.8
|
|
Interest rate swaps
|
|
Interest (US$)
|
|
|
170.6
|
|
|
172.0
|
|
Foreign currency forwards
|
|
Cdn$
|
|
|
153.7
|
|
|
176.6
|
|
Fair value of derivative instruments
The fair value of our derivative assets and liabilities under counterparty master netting agreement are disclosed net on the
consolidated balance sheets at March 31, 2013 and December 31, 2012. In the following table, we have elected to disclose derivative instrument assets and liabilities on a
trade-by-trade basis and do not offset amounts at the counterparty master agreement level. The following table summarizes the fair value of our derivative assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
March 31, 2013
|
|
|
|
Derivative
Assets
|
|
Derivative
Liabilities
|
|
|
|
(in millions)
|
|
Derivative instruments designated as cash flow hedges:
|
|
|
|
|
|
|
|
Interest rate swaps current
|
|
$
|
|
|
$
|
1.3
|
|
Interest rate swaps long-term
|
|
|
|
|
|
4.7
|
|
|
|
|
|
|
|
Total derivative instruments designated as cash flow hedges
|
|
|
|
|
|
6.0
|
|
|
|
|
|
|
|
Derivative instruments not designated as cash flow hedges:
|
|
|
|
|
|
|
|
Interest rate swaps current
|
|
|
|
|
|
9.6
|
|
Interest rate swaps long-term
|
|
|
0.4
|
|
|
21.7
|
|
Foreign currency forward contracts current
|
|
|
8.9
|
|
|
0.1
|
|
Foreign currency forward contracts long-term
|
|
|
5.7
|
|
|
0.1
|
|
Natural gas swaps current
|
|
|
0.2
|
|
|
0.3
|
|
Natural gas swaps long-term
|
|
|
0.2
|
|
|
3.4
|
|
Gas purchase agreements current
|
|
|
|
|
|
14.7
|
|
Gas purchase agreements long-term
|
|
|
|
|
|
80.8
|
|
|
|
|
|
|
|
Total derivative instruments not designated as cash flow hedges
|
|
|
15.4
|
|
|
130.7
|
|
|
|
|
|
|
|
Total derivative instruments
|
|
$
|
15.4
|
|
$
|
136.7
|
|
|
|
|
|
|
|
20
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
6. Derivative instruments and hedging activities (Continued)
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
Derivative
Assets
|
|
Derivative
Liabilities
|
|
Derivative instruments designated as cash flow hedges:
|
|
|
|
|
|
|
|
Interest rate swaps current
|
|
$
|
|
|
$
|
1.3
|
|
Interest rate swaps long-term
|
|
|
|
|
|
5.2
|
|
|
|
|
|
|
|
Total derivative instruments designated as cash flow hedges
|
|
|
|
|
|
6.5
|
|
|
|
|
|
|
|
Derivative instruments not designated as cash flow hedges:
|
|
|
|
|
|
|
|
Interest rate swaps current
|
|
|
|
|
|
7.3
|
|
Interest rate swaps long-term
|
|
|
0.1
|
|
|
27.7
|
|
Foreign currency forward contracts current
|
|
|
9.5
|
|
|
|
|
Foreign currency forward contracts long-term
|
|
|
11.0
|
|
|
|
|
Natural gas swaps current
|
|
|
|
|
|
|
|
Natural gas swaps long-term
|
|
|
0.1
|
|
|
3.9
|
|
Gas purchase agreements current
|
|
|
0.1
|
|
|
24.5
|
|
Gas purchase agreements long-term
|
|
|
|
|
|
81.4
|
|
|
|
|
|
|
|
Total derivative instruments not designated as cash flow hedges
|
|
|
20.8
|
|
|
144.8
|
|
|
|
|
|
|
|
Total derivative instruments
|
|
$
|
20.8
|
|
$
|
151.3
|
|
|
|
|
|
|
|
The following table summarizes the changes in the accumulated other comprehensive income (loss) ("OCI") balance attributable to
derivative financial instruments designated as a hedge, net of tax:
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31, 2013
|
|
Interest Rate
Swaps
|
|
Natural Gas
Swaps
|
|
Total
|
|
|
|
(in millions)
|
|
Accumulated OCI balance at December 31, 2012
|
|
$
|
(1.5
|
)
|
$
|
0.1
|
|
$
|
(1.4
|
)
|
Realized from OCI during the period
|
|
|
0.3
|
|
|
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
Accumulated OCI balance at March 31, 2013
|
|
$
|
(1.2
|
)
|
$
|
0.1
|
|
$
|
(1.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31, 2012
|
|
Interest Rate
Swaps
|
|
Natural Gas
Swaps
|
|
Total
|
|
Accumulated OCI balance at December 31, 2011
|
|
$
|
(1.7
|
)
|
$
|
0.3
|
|
$
|
(1.4
|
)
|
Realized from OCI during the period
|
|
|
0.3
|
|
|
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
Accumulated OCI balance at March 31, 2012
|
|
$
|
(1.4
|
)
|
$
|
0.3
|
|
$
|
(1.1
|
)
|
|
|
|
|
|
|
|
|
21
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
6. Derivative instruments and hedging activities (Continued)
The following table summarizes realized (gains) and losses for derivative instruments not designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
Classification of (gain) loss
recognized in income
|
|
|
|
2013
|
|
2012
|
|
Gas purchase agreements
|
|
Fuel
|
|
$
|
16.3
|
|
$
|
10.8
|
|
Foreign currency forwards
|
|
Foreign exchange loss (gain)
|
|
|
(2.5
|
)
|
|
(11.9
|
)
|
Interest rate swaps
|
|
Interest, net
|
|
|
2.6
|
|
|
1.1
|
|
The
following table summarizes the unrealized gains and losses resulting from changes in the fair value of derivative financial instruments that are not designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
Classification of (gain) loss
recognized in income
|
|
|
|
2013
|
|
2012
|
|
Natural gas swaps
|
|
Change in fair value of derivatives
|
|
$
|
(0.4
|
)
|
$
|
0.9
|
|
Gas purchase agreements
|
|
Change in fair value of derivatives
|
|
|
(8.1
|
)
|
|
57.9
|
|
Interest rate swaps
|
|
Change in fair value of derivatives
|
|
|
(4.1
|
)
|
|
(1.6
|
)
|
|
|
|
|
|
|
|
|
Total change in fair value of derivative instruments
|
|
|
|
$
|
(12.6
|
)
|
$
|
57.2
|
|
|
|
|
|
|
|
|
|
Foreign currency forwards
|
|
Foreign exchange loss (gain)
|
|
$
|
6.0
|
|
$
|
9.2
|
|
|
|
|
|
|
|
|
|
7. Income taxes
Income tax benefit from continuing operations for the three months ended March 31, 2013 was $2.5 million. The difference between the actual tax benefit of
$2.5 million for the three months ended March 31, 2013 and the expected income tax expense of $1.1 million, based on the Canadian enacted statutory rate of 25%, is primarily due
to $1.8 million related to operating projects in higher tax rates in various tax jurisdictions, $2.3 million in foreign exchange and $2.4 million in other permanent differences,
partially offset by a $2.9 million change in the valuation allowance.
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
2013
|
|
2012
|
|
Current income tax expense
|
|
$
|
2.0
|
|
$
|
1.4
|
|
Deferred tax benefit
|
|
|
(4.5
|
)
|
|
(18.3
|
)
|
|
|
|
|
|
|
Total income tax benefit
|
|
$
|
(2.5
|
)
|
$
|
(16.9
|
)
|
|
|
|
|
|
|
As
of March 31, 2013, we have recorded a valuation allowance of $118.2 million. This amount is comprised primarily of provisions against available Canadian and U.S. net
operating loss carryforwards. In assessing the recoverability of our deferred tax assets, we consider whether it is more likely than not
22
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
7. Income taxes (Continued)
that
some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon projected future taxable income in the United States and in
Canada and available tax planning strategies.
8. Employee incentive programs
The following table summarizes the changes in LTIP notional units during the three months ended March 31, 2013:
|
|
|
|
|
|
|
|
(Units in thousands)
|
|
Units
|
|
Grant Date
Weighted-Average
Price per Unit
|
|
Outstanding at December 31, 2012
|
|
|
492,535
|
|
$
|
13.9
|
|
Granted
|
|
|
482,384
|
|
|
4.9
|
|
Additional units from dividends
|
|
|
9,906
|
|
|
13.8
|
|
Forfeited
|
|
|
(42,000
|
)
|
|
12.3
|
|
Vested
|
|
|
(200,697
|
)
|
|
13.6
|
|
|
|
|
|
|
|
Outstanding at March 31, 2013
|
|
|
742,128
|
|
$
|
8.2
|
|
|
|
|
|
|
|
Certain
awards have a market condition based on our total shareholder return during the performance period compared to a group of peer companies. Compensation expense for notional units
granted in 2013 is recorded net of estimated forfeitures. See Note 14 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended
December 31, 2012 for further details. Cash payments made for vested notional units for the three months ended March 31, 2013 was $0.9 million.
The
calculation of simulated total shareholder return under the Monte Carlo model for the remaining time in the performance period for awards with market conditions included the
following assumptions as of March 31, 2013 and December 31, 2012:
|
|
|
|
|
|
|
|
|
|
March 31, 2013
|
|
December 31, 2012
|
|
Weighted average risk free rate of return
|
|
|
0.1%
|
|
|
0.1 0.3%
|
|
Dividend yield
|
|
|
8.0%
|
|
|
10.1%
|
|
Expected volatilityAtlantic Power
|
|
|
48.6%
|
|
|
22.5%
|
|
Expected volatilitypeer companies
|
|
|
11.9 72.8%
|
|
|
11.9 97.1%
|
|
Weighted average remaining measurement period
|
|
|
0.9 years
|
|
|
1.4 years
|
|
9. Basic and diluted earnings (loss) per share
Basic earnings (loss) per share are calculated by dividing net income (loss) by the weighted average common shares outstanding during their respective period. Diluted earnings (loss) per
share are computed including dilutive potential shares as if they were outstanding shares during the year. Dilutive potential shares include shares that would be issued if all of the convertible
debentures were converted into shares at January 1, 2013. Dilutive potential shares also include the weighted average
23
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
9. Basic and diluted earnings (loss) per share (Continued)
number
of shares, as of the date such notional units were granted, that would be issued if the unvested notional units outstanding under the LTIP were vested and redeemed for shares under the terms of
the LTIP.
The
following table sets forth the diluted net income and potentially dilutive shares utilized in the per share calculation for the three months ended March 31, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
2013
|
|
2012
|
|
Numerator:
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Atlantic Power Corporation
|
|
$
|
5.6
|
|
$
|
(53.9
|
)
|
Income from discontinued operations, net of tax
|
|
|
0.9
|
|
|
11.6
|
|
|
|
|
|
|
|
Net loss attributable to Atlantic Power Corporation
|
|
$
|
6.5
|
|
$
|
(42.3
|
)
|
Denominator:
|
|
|
|
|
|
|
|
Weighted average basic shares outstanding
|
|
|
119.5
|
|
|
113.6
|
|
Dilutive potential shares:
|
|
|
|
|
|
|
|
Convertible debentures
|
|
|
27.7
|
|
|
13.3
|
|
LTIP notional units
|
|
|
0.4
|
|
|
0.5
|
|
|
|
|
|
|
|
Potentially dilutive shares
|
|
|
147.6
|
|
|
127.4
|
|
|
|
|
|
|
|
Diluted loss per share from continuing operations attributable to Atlantic Power Corporation
|
|
$
|
0.04
|
|
$
|
(0.47
|
)
|
Diluted earnings per share from discontinued operations
|
|
|
0.01
|
|
|
0.10
|
|
|
|
|
|
|
|
Diluted loss per share attributable to Atlantic Power Corporation
|
|
$
|
0.05
|
|
$
|
(0.37
|
)
|
|
|
|
|
|
|
Potentially
dilutive shares from convertible debentures have been excluded from fully diluted shares for the three months ended March 31, 2013 because their impact would be
anti-dilutive and potentially dilutive shares from convertible debentures and LTIP notional units have been excluded from fully diluted shares for the three months ended March 31,
2012 because their impact would be anti-dilutive.
10. Assets held for sale
Path 15 and the Florida Projects have been classified as assets held for sale based on our intention to sell the projects within the next twelve months. We approved a plan to sell these
assets prior to December 31, 2012. Accordingly, the assets and liabilities of Path 15 and the Florida Projects have been classified separately as held for sale in the consolidated balance
sheets at March 31, 2013 and December 31, 2012 and the projects' net income is recorded as income from discontinued operations,
net of tax in the statements of operations for the three months ended March 31, 2013 and 2012. The Florida Projects and Path 15 sales closed on April 12, 2013 and April 30, 2013,
respectively.
24
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
10. Assets held for sale (Continued)
We
recorded a $27.5 million reserve related to the sale of the Florida Projects that is included in liabilities associated with assets held for sale on the consolidated balance
sheets at March 31, 2013 and in income from discontinued operations on the consolidated statements of operation for the three months ended March 31, 2013. The reserve was recorded as a
prepayment of the closing price of the sale transaction resulting from the cash distributions we received from the Florida Projects during the three months ended March 31, 2013.
The
following tables summarize the revenue, income from operations, and income tax expense of Path 15, Auburndale, Lake, and Pasco for the three months ended March 31, 2013 and
2012 as well as the assets and liabilities held for sale at March 31, 2013 and December 31, 2012:
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
(in millions)
|
|
2013
|
|
2012
|
|
Revenue
|
|
$
|
63.2
|
|
$
|
49.0
|
|
|
|
|
|
|
|
Income from operations of discontinued businesses
|
|
|
1.3
|
|
|
12.2
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
0.4
|
|
|
0.6
|
|
|
|
|
|
|
|
Income from operations of discontinued businesses, net of tax
|
|
$
|
0.9
|
|
$
|
11.6
|
|
|
|
|
|
|
|
25
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
10. Assets held for sale (Continued)
Basic
and diluted earnings per share related to income from discontinued operations for the Path 15, Auburndale, Lake and Pasco projects was $0.01 and $0.10 for the three months ended
March 31, 2013 and 2012, respectively.
|
|
|
|
|
|
|
|
(in millions)
|
|
March 31, 2013
|
|
December 31, 2012
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
5.0
|
|
$
|
6.5
|
|
Restricted cash
|
|
|
16.5
|
|
|
12.6
|
|
Accounts receivable
|
|
|
22.6
|
|
|
21.9
|
|
Other current assets
|
|
|
5.6
|
|
|
6.3
|
|
|
|
|
|
|
|
|
|
|
49.7
|
|
|
47.3
|
|
Non-current assets assets:
|
|
|
|
|
|
|
|
Property, plant & equipment
|
|
|
110.1
|
|
|
111.9
|
|
Transmission system rights
|
|
|
170.5
|
|
|
172.4
|
|
Goodwill
|
|
|
8.9
|
|
|
8.9
|
|
Other assets
|
|
|
7.6
|
|
|
10.9
|
|
|
|
|
|
|
|
Assets held for sale
|
|
|
346.8
|
|
|
351.4
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable and other accrued liabilities
|
|
$
|
15.5
|
|
$
|
16.5
|
|
Current portion of long-term debt
|
|
|
13.0
|
|
|
14.3
|
|
Current portion of derivative instruments liability
|
|
|
11.5
|
|
|
20.0
|
|
Other liabilities
|
|
|
27.8
|
|
|
0.5
|
|
|
|
|
|
|
|
|
|
|
67.8
|
|
|
51.3
|
|
Long term liabilities
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
137.5
|
|
|
137.7
|
|
|
|
|
|
|
|
Liabilities held for sale
|
|
|
205.3
|
|
|
189.0
|
|
26
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
11. Equity
The following table provides a reconciliation of the beginning and ending equity attributable to shareholders of Atlantic Power, preferred shares issued by a subsidiary company,
noncontrolling interests and total equity as of March 31, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2013
|
|
(in millions)
|
|
Total Atlantic
Power Corporation
Shareholders'
Equity
|
|
Preferred shares
issued by a
subsidiary
company
|
|
Noncontrolling
Interests
|
|
Total Equity
|
|
Balance at January 1
|
|
$
|
729.7
|
|
$
|
221.3
|
|
$
|
235.4
|
|
$
|
1,186.4
|
|
Net income (loss)
|
|
|
6.5
|
|
|
3.2
|
|
|
(1.9
|
)
|
|
7.8
|
|
Realized and unrealized loss on hedging activities, net of tax
|
|
|
0.3
|
|
|
|
|
|
|
|
|
0.3
|
|
Foreign currency translation adjustment, net of tax
|
|
|
(12.1
|
)
|
|
|
|
|
|
|
|
(12.1
|
)
|
Common shares issued for LTIP
|
|
|
0.3
|
|
|
|
|
|
|
|
|
0.3
|
|
Contribution by noncontrolling interest
|
|
|
|
|
|
|
|
|
2.0
|
|
|
2.0
|
|
Costs associated with tax equity raise
|
|
|
(0.7
|
)
|
|
|
|
|
|
|
|
(0.7
|
)
|
Dividends paid to noncontrolling interest
|
|
|
|
|
|
|
|
|
(1.0
|
)
|
|
(1.0
|
)
|
Dividends declared on common shares
|
|
|
(24.6
|
)
|
|
|
|
|
|
|
|
(24.6
|
)
|
Dividends declared on preferred shares of a subsidiary company
|
|
|
|
|
|
(3.2
|
)
|
|
|
|
|
(3.2
|
)
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31
|
|
$
|
699.4
|
|
$
|
221.3
|
|
$
|
234.5
|
|
$
|
1,155.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2012
|
|
|
|
Total Atlantic
Power Corporation
Shareholders'
Equity
|
|
Preferred shares
issued by a
subsidiary
company
|
|
Noncontrolling
Interests
|
|
Total Equity
|
|
Balance at January 1
|
|
$
|
891.5
|
|
$
|
221.3
|
|
$
|
3.0
|
|
$
|
1,115.8
|
|
Net income (loss)
|
|
|
(42.3
|
)
|
|
3.2
|
|
|
(0.2
|
)
|
|
(39.3
|
)
|
Realized and unrealized loss on hedging activities, net of tax
|
|
|
0.2
|
|
|
|
|
|
|
|
|
0.2
|
|
Foreign currency translation adjustment, net of tax
|
|
|
17.2
|
|
|
|
|
|
|
|
|
17.2
|
|
Common shares issued for LTIP
|
|
|
0.2
|
|
|
|
|
|
|
|
|
0.2
|
|
Dividends declared on common shares
|
|
|
(32.4
|
)
|
|
|
|
|
|
|
|
(32.4
|
)
|
Dividends declared on preferred shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of a subsidiary company
|
|
|
|
|
|
(3.2
|
)
|
|
|
|
|
(3.2
|
)
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31
|
|
$
|
834.4
|
|
$
|
221.3
|
|
$
|
2.8
|
|
$
|
1,058.5
|
|
|
|
|
|
|
|
|
|
|
|
27
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
12. Segment and geographic information
Our operating segments are Northeast, Northwest, Southeast, Southwest and Un-allocated Corporate. Our segments align with management's resource allocation and assessment of
performance and reflect our current operating focus. The segment classified as Un-allocated Corporate includes activities that support the executive offices, capital structure and costs of
being a public registrant in the United States and Canada. Un-allocated Corporate also includes Rollcast, a 60% owned company, which develops, owns and operates renewable power plants that
use wood or biomass fuel and Ridgeline, which develops and operates wind and solar power projects. These costs are not allocated to the operating segments when determining segment profit or loss.
We
analyze the performance of our operating segments based on Project Adjusted EBITDA which is defined as project income 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 does not have a standardized meaning
prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other companies. We use Project Adjusted EBITDA to provide comparative information about project
performance without considering how projects are capitalized or whether they contain derivative contracts that are required to be recorded at fair value. Path 15, a component of the Southwest segment,
and the Auburndale, Lake and Pasco projects, which are components of the Southeast segment, are included in the income from discontinued operations line item in the table below. We have adjusted prior
periods to reflect this reclassification. A reconciliation of project income to Project Adjusted EBITDA is included in the tables below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northeast
|
|
Southeast
|
|
Northwest
|
|
Southwest
|
|
Un-allocated
Corporate
|
|
Consolidated
|
|
Three months ended March 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Project revenues
|
|
$
|
67.8
|
|
$
|
|
|
$
|
24.7
|
|
$
|
48.0
|
|
$
|
(0.3
|
)
|
$
|
140.2
|
|
Segment assets
|
|
|
1,147.1
|
|
|
372.6
|
|
|
1,192.6
|
|
|
1,143.8
|
|
|
83.3
|
|
|
3,939.4
|
|
Project Adjusted EBITDA
|
|
$
|
45.9
|
|
$
|
2.1
|
|
$
|
21.3
|
|
$
|
16.0
|
|
$
|
(4.7
|
)
|
|
80.6
|
|
Change in fair value of derivative instruments
|
|
|
(8.1
|
)
|
|
(1.3
|
)
|
|
(3.0
|
)
|
|
|
|
|
0.9
|
|
|
(11.5
|
)
|
Depreciation and amortization
|
|
|
20.1
|
|
|
1.5
|
|
|
15.8
|
|
|
15.0
|
|
|
|
|
|
52.4
|
|
Interest, net
|
|
|
4.4
|
|
|
|
|
|
4.7
|
|
|
0.2
|
|
|
0.2
|
|
|
9.5
|
|
Other project (income) expense
|
|
|
0.4
|
|
|
|
|
|
|
|
|
|
|
|
(1.3
|
)
|
|
(0.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Project income (loss)
|
|
|
29.1
|
|
|
1.9
|
|
|
3.8
|
|
|
0.8
|
|
|
(4.5
|
)
|
|
31.1
|
|
Administration
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.3
|
|
|
8.3
|
|
Interest, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25.9
|
|
|
25.9
|
|
Foreign exchange gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7.5
|
)
|
|
(7.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
29.1
|
|
|
1.9
|
|
|
3.8
|
|
|
0.8
|
|
|
(31.2
|
)
|
|
4.4
|
|
Income tax benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2.5
|
)
|
|
(2.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations
|
|
|
29.1
|
|
|
1.9
|
|
|
3.8
|
|
|
0.8
|
|
|
(28.7
|
)
|
|
6.9
|
|
Income from discontinued operations
|
|
|
|
|
|
0.3
|
|
|
|
|
|
0.6
|
|
|
|
|
|
0.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
29.1
|
|
$
|
2.2
|
|
$
|
3.8
|
|
$
|
1.4
|
|
$
|
(28.7
|
)
|
$
|
7.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
12. Segment and geographic information (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northeast
|
|
Southeast
|
|
Northwest
|
|
Southwest
|
|
Un-allocated
Corporate
|
|
Consolidated
|
|
Three months ended March 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Project revenues
|
|
$
|
67.2
|
|
$
|
|
|
$
|
15.3
|
|
$
|
35.5
|
|
$
|
0.7
|
|
$
|
118.7
|
|
Segment assets
|
|
|
1,198.7
|
|
|
431.0
|
|
|
825.0
|
|
|
940.7
|
|
|
80.3
|
|
|
3,475.7
|
|
Project Adjusted EBITDA
|
|
$
|
42.4
|
|
$
|
2.1
|
|
$
|
13.4
|
|
$
|
12.1
|
|
$
|
(3.4
|
)
|
|
66.6
|
|
Change in fair value of derivative instruments
|
|
|
58.0
|
|
|
(0.5
|
)
|
|
|
|
|
|
|
|
|
|
|
57.5
|
|
Depreciation and amortization
|
|
|
17.4
|
|
|
1.4
|
|
|
10.4
|
|
|
10.6
|
|
|
0.1
|
|
|
39.9
|
|
Interest, net
|
|
|
4.7
|
|
|
|
|
|
1.1
|
|
|
|
|
|
0.2
|
|
|
6.0
|
|
Other project (income) expense
|
|
|
0.2
|
|
|
|
|
|
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
0.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Project (loss) income
|
|
|
(37.9
|
)
|
|
1.2
|
|
|
1.9
|
|
|
1.4
|
|
|
(3.6
|
)
|
|
(37.0
|
)
|
Administration
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.7
|
|
|
7.7
|
|
Interest, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22.0
|
|
|
22.0
|
|
Foreign exchange loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.0
|
|
|
1.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
(37.9
|
)
|
|
1.2
|
|
|
1.9
|
|
|
1.4
|
|
|
(34.3
|
)
|
|
(67.7
|
)
|
Income tax benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16.9
|
)
|
|
(16.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations
|
|
|
(37.9
|
)
|
|
1.2
|
|
|
1.9
|
|
|
1.4
|
|
|
(17.4
|
)
|
|
(50.8
|
)
|
Income from discontinued operations
|
|
|
|
|
|
10.6
|
|
|
|
|
|
1.0
|
|
|
|
|
|
11.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(37.9
|
)
|
$
|
11.8
|
|
$
|
1.9
|
|
$
|
2.4
|
|
$
|
(17.4
|
)
|
$
|
(39.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The tables below provide information, by country, about our consolidated operations. Revenue is recorded in the country in which it is earned and
assets are recorded in the country in which they are located.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, Plant and
Equipment, net of
accumulated depreciation
|
|
|
|
Project Revenue
Three months ended
March 31,
|
|
|
|
March 31, 2013
|
|
December 31, 2012
|
|
|
|
2013
|
|
2012
|
|
United States
|
|
$
|
72.7
|
|
$
|
55.4
|
|
$
|
1,489.5
|
|
$
|
1,504.8
|
|
Canada
|
|
|
67.5
|
|
|
63.3
|
|
|
530.5
|
|
|
550.7
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
140.2
|
|
$
|
118.7
|
|
$
|
2,020.0
|
|
$
|
2,055.5
|
|
|
|
|
|
|
|
|
|
|
|
The
Ontario Electricity Financial Corp ("OEFC") and British Columbia Hydro and Power Authority ("BC Hydro") provided for approximately 36.0% and 12.1%, respectively, of total
consolidated revenues for the three months ended March 31, 2013 and approximately 40.3% and 12.9%, respectively, of total consolidated revenues for the three months ended March 31, 2012.
OEFC purchases electricity from the Calstock, Kapuskasing, Nipigon, North Bay and Tunis projects in the Northeast segment and BC Hydro purchases electricity from the Mamquam, Moresby Lake and Williams
Lake projects in the Northwest segment.
13. Commitments and contingencies
We are party to numerous legal proceedings, including securities class actions, from time to time. In particular, we and/or certain of our current and former officers have been named as
defendants in
29
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
13. Commitments and contingencies (Continued)
various
class action lawsuits. Due to the nature of these proceedings, the lack of precise damage claims and the type of claims we are subject to, we are unable to determine the ultimate or maximum
amount of monetary liability or financial impact, if any, to us in these legal matters, which unless otherwise specified, seek damages from the defendants of material or indeterminate amounts.
On March 8, 14, 15 and 25, 2013 and April 23, 2013, five purported securities fraud class action complaints were filed by
alleged investors in Atlantic Power common shares in the United States District Court for the District of Massachusetts (the "District Court") against Atlantic Power and Barry E. Welch, our
President and Chief Executive Officer and a Director of Atlantic Power, in each of the actions, and, in addition to Mr. Welch, some or all of Patrick J. Welch, our former Chief Financial
Officer, Lisa Donahue, our former interim Chief Financial Officer, and Terrence Ronan, our current Chief Financial Officer, in certain of the actions (the "Individual Defendants," and together with
Atlantic Power, the "Defendants") (the "U.S. Actions"). On March 19, 2013 and April 2, 2013, two notices of action relating to Canadian securities class action claims against the
Defendants were also issued by alleged investors in Atlantic Power common shares, and in one of the actions, holders of Atlantic Power convertible debentures, with the Ontario Superior Court of
Justice in the Province of Ontario and on April 8, 2013, a similar claim issued by alleged investors in Atlantic Power common shares seeking to initiate a class action against the Defendants
was filed with the Superior Court of Quebec in the Province of Quebec (the "Canadian Actions"). On May 2, 2013, a statement of claim relating to the April 2, 2013 notice of action was
filed with the Ontario Superior Court of Justice in the Province of Ontario.
The
District Court complaints differ in terms of the identities of the Individual Defendants they name, as noted above, the named plaintiffs, and the purported class period they allege
(July 23, 2010 to March 4, 2013 in three of the District Court actions and August 8, 2012 to February 28, 2013 in the other two District Court actions), but in general each
alleges, among other things, that in Atlantic Power's press releases, quarterly and year-end filings and conference calls with analysts and investors, Atlantic Power and the Individual
Defendants made materially false and misleading statements and omissions regarding the sustainability of Atlantic Power's common share dividend that artificially inflated the price of Atlantic Power's
common shares. The District Court complaints assert claims under Section 10(b) and, against the Individual Defendants, under Section 20(a) of the Securities Exchange Act of 1934, as
amended. The allegations in the Canadian Actions are essentially the same as those asserted in the District Court actions.
The
parties to each District Court action have filed joint motions requesting that the District Court set a schedule in the District Court actions, including: (i) setting a
deadline for the lead plaintiff to file a consolidated amended class action complaint (the "Amended Complaint"), after the appointment of lead plaintiff and counsel; (ii) setting a
deadline for Defendants to answer, file a motion to dismiss or otherwise respond to the Amended Complaint (and for subsequent briefing regarding any such motion to dismiss); and
(iii) confirming that Defendants need not answer, move to dismiss or otherwise respond to any of the five District Court complaints prior to the filing of the Amended Complaint. Pursuant to the
Private Securities Litigation Reform Act of 1995, all discovery is stayed in the five District Court actions. As of May 6, 2013, the plaintiffs have not specified an amount
30
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
13. Commitments and contingencies (Continued)
of
alleged damages in the respective U.S. and Canadian Actions other than in the Canadian Actions filed on March 19, 2013 and April 2, 2013 (including the related statement of claim
filed on May 2, 2013), in which the plaintiffs have alleged damages of Cdn$1,100,000,000 and Cdn$208,500,000, respectively, plus interest and costs. However, because both the U.S. and Canadian
Actions are in their early stages, Atlantic Power is unable to reasonably estimate the possible loss or range of losses, if any, arising from these litigations. Atlantic Power intends to defend
vigorously against these actions.
On May 29, 2011, our Morris facility was struck by lightning. As a result, steam and electric deliveries were interrupted to our
host Equistar Chemicals, LP. ("Equistar"). We believed the interruption constituted a force majeure under the energy services agreement with Equistar. Equistar disputed this interpretation and
initiated arbitration proceedings under the relevant agreement for recovery of resulting lost profits and equipment damage among other items. The Equistar arbitration claim has now been fully
resolved. The lost profits portion of the claim was dismissed by the Arbitration Panel and all claims for equipment damage were resolved by the parties and their insurers through mediation on
April 11 and 12, 2013, and a definitive Settlement Agreement and Mutual Release was executed effective as of April 30, 2013.
Other than as described above, there were no material changes to legal proceedings disclosed in "Item 3. Legal Proceedings" of
our Annual Report on Form 10-K for the year ended December 31, 2012.
In
addition to the other matters listed, from time to time, Atlantic Power, its subsidiaries and the projects are parties to disputes and litigation that arise in the normal course of
business. We assess our exposure to these matters and record estimated loss contingencies when a loss is likely and can be reasonably estimated. With respect to such other matters arising in the
normal course of business, there are no matters pending which are expected to have a material adverse impact on our financial position or results of operations or have been reserved for as of
March 31, 2013.
14. Guarantees and condensed consolidating financial information
In connection with the tax equity investments in our Canadian Hills project, we have expressly indemnified the investors for certain representations and warranties made by a wholly-owned
subsidiary with respect to matters which we believe are remote and improbable to occur. The expiration dates of these guarantees vary from less than one year through the indefinite termination date of
the project. Our maximum undiscounted potential exposure is limited to the amount of tax equity investment less cash distributions made to the investors and any amount equal to the net federal income
tax benefits arising from production tax credits.
We
and our subsidiaries enter into various contracts that include indemnification and guarantee provisions as a routine part of our business activities. Examples of these contracts
include asset purchases and sale agreements, joint venture agreements, operation and maintenance agreements, and other types of contractual agreements with vendors and other third parties, as well as
affiliates. These
31
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
14. Guarantees and condensed consolidating financial information (Continued)
contracts
generally indemnify the counterparty for tax, environmental liability, litigation and other matters, as well as breaches of representations, warranties and covenants set forth in these
agreements.
As
of March 31, 2013 and December 31, 2012, we had $460.0 million of Senior Notes. These notes are guaranteed by certain of our wholly owned subsidiaries, or
guarantor subsidiaries. These guarantees are joint and several.
Unless
otherwise noted below, each of the following 100% owned guarantor subsidiaries fully and unconditionally guaranteed the Senior Notes as of March 31, 2013:
Atlantic
Power Limited Partnership, Atlantic Power GP Inc. , Atlantic Power (US) GP, Atlantic Oklahoma Wind LLC, Atlantic Power Corporation, Atlantic Power
Generation, Inc., Atlantic Power Transmission, Inc., Atlantic Power Holdings, Inc,. Atlantic Power Services Canada GP Inc., Atlantic Power Services Canada LP,
Atlantic Power Services, LLC, Atlantic Rockland Holdings, LLC, Teton Power Funding, LLC, Harbor Capital Holdings, LLC, Epsilon Power Funding, LLC, Atlantic
Auburndale, LLC, Auburndale LP, LLC, Auburndale GP, LLC, Atlantic Cadillac Holdings, LLC, Atlantic Idaho Wind Holdings, LLC, Atlantic Idaho Wind
C, LLC, Baker Lake Hydro, LLC, Olympia Hydro, LLC, Teton East Coast Generation, LLC, NCP Gem, LLC, NCP Lake Power, LLC, Lake Investment, LP, Teton New
Lake, LLC, Lake Cogen Ltd., Atlantic Renewables Holdings, LLC, Orlando Power Generation I, LLC, Orlando Power Generation II, LLC, NCP Dade Power, LLC, NCP
Pasco LLC, Dade Investment, LP, Pasco Cogen, Ltd., Atlantic Piedmont Holdings LLC, Teton Selkirk, LLC, Teton Operating Services, LLC, Atlantic Ridgeline
Holdings, LLC, Ridgeline Energy Holdings, Inc., Ridgeline Energy LLC, Pah Rah Holding Company LLC, Lewis Ranch Wind Project LLC, Hurricane Wind LLC, Ridgeline
Power Services LLC, Ridgeline Eastern Energy LLC, Ridgeline Alternative Energy LLC, Frontier Solar LLC, Ridgeline Energy Solar LLC, Pah Rah Project
Company LLC, Monticello Hills Wind LLC, Dry Lots Wind LLC, Smokey Avenue Wind LLC, Saunders Bros. Transportation Corporation, Bruce Hill Wind LLC, South Mountain
Wind LLC, Great Basin Solar Ranch LLC, Goshen Wind Holdings LLC, Meadow Creek Holdings LLC, Ridgeline Holdings Junior Inc., Rockland Wind Ridgeline
Holdings LLC and Meadow Creek Intermediate Holdings LLC.
The
following condensed consolidating financial information presents the financial information of Atlantic Power, the guarantor subsidiaries, and Curtis Palmer, LLC ("Curtis
Palmer") (our non-guarantor subsidiary) in accordance with Rule 3-10 under the SEC's Regulation S-X. The principal elimination entries eliminate
investments in subsidiaries and intercompany balances and transactions. The financial information may not necessarily be indicative of results of operations or financial position had the guarantor
subsidiaries or Curtis Palmer operated as independent entities.
In
this presentation, Atlantic Power consists of parent company operations. Guarantor subsidiaries of Atlantic Power are reported on a combined basis. For companies acquired, the fair
values of the assets and liabilities acquired have been presented on a push-down accounting basis.
32
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
14. Guarantees and condensed consolidating financial information (Continued)
ATLANTIC POWER CORPORATION
CONDENSED CONSOLIDATING BALANCE SHEET
March 31, 2013
(in millions of U.S. dollars)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guarantor
Subsidiaries
|
|
Curtis
Palmer
|
|
Atlantic
Power
|
|
Eliminations
|
|
Consolidated
Balance
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
79.4
|
|
$
|
|
|
$
|
6.3
|
|
$
|
|
|
$
|
85.7
|
|
Restricted cash
|
|
|
43.5
|
|
|
|
|
|
|
|
|
|
|
|
43.5
|
|
Accounts receivable
|
|
|
142.5
|
|
|
14.5
|
|
|
2.1
|
|
|
(80.7
|
)
|
|
78.4
|
|
Prepayments, supplies, and other current assets
|
|
|
43.9
|
|
|
1.1
|
|
|
6.3
|
|
|
(1.0
|
)
|
|
50.3
|
|
Asset held for sale
|
|
|
346.8
|
|
|
|
|
|
|
|
|
|
|
|
346.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
656.1
|
|
|
15.6
|
|
|
14.7
|
|
|
(81.7
|
)
|
|
604.7
|
|
Property, plant, and equipment, net
|
|
|
1,849.0
|
|
|
172.3
|
|
|
|
|
|
(1.3
|
)
|
|
2,020.0
|
|
Equity investments in unconsolidated affiliates
|
|
|
4,692.1
|
|
|
|
|
|
1,001.3
|
|
|
(5,282.3
|
)
|
|
411.1
|
|
Other intangible assets, net
|
|
|
350.6
|
|
|
155.1
|
|
|
|
|
|
|
|
|
505.7
|
|
Goodwill
|
|
|
276.5
|
|
|
58.2
|
|
|
|
|
|
|
|
|
334.7
|
|
Other assets
|
|
|
523.6
|
|
|
|
|
|
438.6
|
|
|
(899.0
|
)
|
|
63.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
8,347.9
|
|
$
|
401.2
|
|
$
|
1,454.6
|
|
$
|
(6,264.3
|
)
|
$
|
3,939.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
87.9
|
|
$
|
16.5
|
|
$
|
63.7
|
|
$
|
(80.7
|
)
|
$
|
87.4
|
|
Revolving credit facility
|
|
|
44.1
|
|
|
|
|
|
20.0
|
|
|
|
|
|
64.1
|
|
Current portion of long-term debt
|
|
|
121.7
|
|
|
|
|
|
|
|
|
|
|
|
121.7
|
|
Liabilities held for sale
|
|
|
205.3
|
|
|
|
|
|
|
|
|
|
|
|
205.3
|
|
Other current liabilities
|
|
|
28.7
|
|
|
|
|
|
3.9
|
|
|
(1.0
|
)
|
|
31.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
487.7
|
|
|
16.5
|
|
|
87.6
|
|
|
(81.7
|
)
|
|
510.1
|
|
Long-term debt
|
|
|
824.1
|
|
|
190.0
|
|
|
460.0
|
|
|
|
|
|
1,474.1
|
|
Convertible debentures
|
|
|
|
|
|
|
|
|
418.2
|
|
|
|
|
|
418.2
|
|
Other non-current liabilities
|
|
|
1,217.0
|
|
|
8.4
|
|
|
0.5
|
|
|
(844.1
|
)
|
|
381.8
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares
|
|
|
5,082.0
|
|
|
186.3
|
|
|
1,285.3
|
|
|
(5,268.3
|
)
|
|
1,285.3
|
|
Preferred shares issued by a subsidiary company
|
|
|
256.7
|
|
|
|
|
|
|
|
|
(35.4
|
)
|
|
221.3
|
|
Accumulated other comprehensive loss
|
|
|
(2.4
|
)
|
|
|
|
|
|
|
|
|
|
|
(2.4
|
)
|
Retained deficit
|
|
|
248.3
|
|
|
|
|
|
(797.0
|
)
|
|
(34.8
|
)
|
|
(583.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Atlantic Power Corporation shareholders' equity
|
|
|
5,584.6
|
|
|
186.3
|
|
|
488.3
|
|
|
(5,338.5
|
)
|
|
920.7
|
|
Noncontrolling interests
|
|
|
234.5
|
|
|
|
|
|
|
|
|
|
|
|
234.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
5,819.1
|
|
|
186.3
|
|
|
488.3
|
|
|
(5,338.5
|
)
|
|
1,155.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
8,347.9
|
|
$
|
401.2
|
|
$
|
1,454.6
|
|
$
|
(6,264.3
|
)
|
$
|
3,939.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
14. Guarantees and condensed consolidating financial information (Continued)
ATLANTIC POWER CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
Three months ended March 31, 2013
(in millions of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guarantor
Subsidiaries
|
|
Curtis
Palmer
|
|
Atlantic
Power
|
|
Eliminations
|
|
Consolidated
Balance
|
|
Project revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total project revenue
|
|
$
|
131.6
|
|
$
|
8.8
|
|
$
|
|
|
$
|
(0.2
|
)
|
$
|
140.2
|
|
Project expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel
|
|
|
49.6
|
|
|
|
|
|
|
|
|
|
|
|
49.6
|
|
Operations and maintenance
|
|
|
26.5
|
|
|
1.6
|
|
|
0.3
|
|
|
(0.1
|
)
|
|
28.3
|
|
Development
|
|
|
1.7
|
|
|
|
|
|
|
|
|
|
|
|
1.7
|
|
Depreciation and amortization
|
|
|
37.5
|
|
|
3.8
|
|
|
|
|
|
|
|
|
41.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
115.3
|
|
|
5.4
|
|
|
0.3
|
|
|
(0.1
|
)
|
|
120.9
|
|
Project other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of derivative instruments
|
|
|
12.6
|
|
|
|
|
|
|
|
|
|
|
|
12.6
|
|
Equity in earnings of unconsolidated affiliates
|
|
|
7.2
|
|
|
|
|
|
|
|
|
|
|
|
7.2
|
|
Interest, net
|
|
|
(5.2
|
)
|
|
(2.8
|
)
|
|
|
|
|
|
|
|
(8.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14.6
|
|
|
(2.8
|
)
|
|
|
|
|
|
|
|
11.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Project income (loss)
|
|
|
30.9
|
|
|
0.6
|
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|
31.1
|
|
Administrative and other expenses (income):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administration
|
|
|
4.6
|
|
|
|
|
|
3.7
|
|
|
|
|
|
8.3
|
|
Interest, net
|
|
|
19.3
|
|
|
|
|
|
6.6
|
|
|
|
|
|
25.9
|
|
Foreign exchange gain
|
|
|
(2.5
|
)
|
|
|
|
|
(5.0
|
)
|
|
|
|
|
(7.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21.4
|
|
|
|
|
|
5.3
|
|
|
|
|
|
26.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
9.5
|
|
|
0.6
|
|
|
(5.6
|
)
|
|
(0.1
|
)
|
|
4.4
|
|
Income tax benefit
|
|
|
(2.5
|
)
|
|
|
|
|
|
|
|
|
|
|
(2.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations
|
|
|
12.0
|
|
|
0.6
|
|
|
(5.6
|
)
|
|
(0.1
|
)
|
|
6.9
|
|
Net income from discontinued operations
|
|
|
0.9
|
|
|
|
|
|
|
|
|
|
|
|
0.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
12.9
|
|
|
0.6
|
|
|
(5.6
|
)
|
|
(0.1
|
)
|
|
7.8
|
|
Net income (loss) attributable to noncontrolling interest
|
|
|
(1.9
|
)
|
|
|
|
|
|
|
|
3.2
|
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Atlantic Power Corporation
|
|
$
|
14.8
|
|
$
|
0.6
|
|
$
|
(5.6
|
)
|
$
|
(3.3
|
)
|
$
|
6.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
14. Guarantees and condensed consolidating financial information (Continued)
ATLANTIC POWER CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
Three months ended March 31, 2013
(in millions of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guarantor
Subsidiaries
|
|
Curtis
Palmer
|
|
Atlantic
Power
|
|
Eliminations
|
|
Consolidated
Balance
|
|
Net income (loss)
|
|
$
|
12.9
|
|
$
|
0.6
|
|
$
|
(5.6
|
)
|
$
|
(0.1
|
)
|
$
|
7.8
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net amount reclassified to earnings
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized losses on derivatives
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
|
(12.1
|
)
|
|
|
|
|
|
|
|
|
|
|
(12.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive loss, net of tax
|
|
|
(11.8
|
)
|
|
|
|
|
|
|
|
|
|
|
(11.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss)
|
|
|
1.1
|
|
|
0.6
|
|
|
(5.6
|
)
|
|
(0.1
|
)
|
|
(4.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Comprehensive income attributable to noncontrolling interests
|
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) attributable to Atlantic Power Corporation
|
|
$
|
(0.2
|
)
|
$
|
0.6
|
|
$
|
(5.6
|
)
|
$
|
(0.1
|
)
|
$
|
(5.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
35
Table of Contents
ATLANTIC POWER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
14. Guarantees and condensed consolidating financial information (Continued)
ATLANTIC POWER CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Three months ended March 31, 2013
(in millions of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guarantor
Subsidiaries
|
|
Curtis
Palmer
|
|
Atlantic
Power
|
|
Eliminations
|
|
Consolidated
Balance
|
|
Net cash provided by operating activities
|
|
$
|
51.3
|
|
$
|
0.2
|
|
$
|
22.7
|
|
$
|
|
|
$
|
74.2
|
|
Cash flows used in investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions and investments, net of cash acquired
|
|
|
3.0
|
|
|
|
|
|
(3.0
|
)
|
|
|
|
|
|
|
Construction in progress
|
|
|
(9.7
|
)
|
|
|
|
|
|
|
|
|
|
|
(9.7
|
)
|
Change in restricted cash
|
|
|
(18.7
|
)
|
|
|
|
|
|
|
|
|
|
|
(18.7
|
)
|
Purchase of property, plant and equipment
|
|
|
(2.0
|
)
|
|
(0.2
|
)
|
|
|
|
|
|
|
|
(2.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(27.4
|
)
|
|
(0.2
|
)
|
|
(3.0
|
)
|
|
|
|
|
(30.6
|
)
|
Cash flows provided by financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Offering costs related to tax equity
|
|
|
(0.6
|
)
|
|
|
|
|
|
|
|
|
|
|
(0.6
|
)
|
Repayment for long-term debt
|
|
|
(2.6
|
)
|
|
|
|
|
|
|
|
|
|
|
(2.6
|
)
|
Proceeds from project-level debt
|
|
|
20.8
|
|
|
|
|
|
|
|
|
|
|
|
20.8
|
|
Payments for revolving credit facility borrowings
|
|
|
(2.9
|
)
|
|
|
|
|
|
|
|
|
|
|
(2.9
|
)
|
Equity contribution from noncontrolling interest
|
|
|
|
|
|
|
|
|
2.0
|
|
|
|
|
|
2.0
|
|
Dividends paid
|
|
|
(4.0
|
)
|
|
|
|
|
(32.3
|
)
|
|
|
|
|
(36.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
10.7
|
|
|
|
|
|
(30.3
|
)
|
|
|
|
|
(19.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
34.6
|
|
|
|
|
|
(10.6
|
)
|
|
|
|
|
24.0
|
|
Less cash at discontinued operation
|
|
|
(5.0
|
)
|
|
|
|
|
|
|
|
|
|
|
(5.0
|
)
|
Cash and cash equivalents at beginning of period at discontinued operations
|
|
|
6.5
|
|
|
|
|
|
|
|
|
|
|
|
6.5
|
|
Cash and cash equivalents at beginning of period
|
|
|
43.3
|
|
|
|
|
|
16.9
|
|
|
|
|
|
60.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
79.4
|
|
$
|
|
|
$
|
6.3
|
|
$
|
|
|
$
|
85.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36
Table of Contents
FORWARD-LOOKING INFORMATION
Certain statements in this Quarterly Report on Form 10-Q constitute "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook," "objective," "may," "will,"
"expect," "intend," "estimate," "anticipate," "believe," "should," "plans," "continue," or similar expressions suggesting future outcomes or events. Examples of such statements in this Quarterly
Report on Form 10-Q include, but are not limited to, statements with respect to the following:
-
-
our ability to generate sufficient amounts of cash and cash equivalents to maintain our operations and meet obligations as
they become due; and
-
-
the impact of legislative, regulatory, competitive and technological changes.
Such
forward-looking statements reflect our current expectations regarding future events and operating performance and speak only as of the date of this Quarterly Report on
Form 10-Q. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to the assumption that the projects will
operate and perform in accordance with our expectations. Many of these risks and uncertainties can affect our actual results and could cause our actual results to differ materially from those
expressed or implied in any forward-looking statement made by us or on our behalf.
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. In addition, a number of factors could cause actual results to differ materially from the
results discussed in the forward-looking statements, including, but not limited to, the factors included in the filings Atlantic Power makes from time to time with the SEC and the risk factors
described under "Item 1A. Risk Factors" in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31,
2012. Our business is both highly competitive and subject to various risks.
These
risks include, without limitation:
-
-
the expiration or termination of power purchase agreements;
-
-
the dependence of our projects on their electricity, thermal energy and transmission services customers;
-
-
exposure of certain of our projects to fluctuations in the price of electricity or natural gas;
-
-
projects not operating according to plan;
-
-
the dependence of our projects on third-party suppliers;
-
-
the effects of weather, which affects demand for electricity and fuel as well as operating conditions;
-
-
the dependence of our windpower projects on suitable wind and associated conditions;
-
-
U.S., Canadian and/or global economic conditions and uncertainty;
-
-
risks beyond our control, including but not limited to acts of terrorism or related acts of war, geopolitical crisis,
natural disasters or other catastrophic events;
-
-
the adequacy of our insurance coverage;
-
-
the impact of significant energy, environmental and other regulations on our projects;
-
-
increased competition, including for acquisitions;
-
-
our limited control over the operation of certain minority owned projects;
37
Table of Contents
-
-
transfer restrictions on our equity interests in certain projects;
-
-
construction risks;
-
-
labor disruptions;
-
-
our ability to retain, motivate and recruit executives and other key employees;
-
-
unstable capital and credit markets;
-
-
our indebtedness and financing arrangements;
-
-
compliance with our senior credit facility and our ability to obtain requested waivers and/or amendments;
-
-
changes in our creditworthiness; and
-
-
the outcome of certain shareholder class action lawsuits.
Material
factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information include third party projections of regional
fuel and electric capacity and energy prices or cash flows that are based on assumptions about future economic conditions and courses of action. Although the forward-looking statements contained in
this Quarterly Report on Form 10-Q 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. Certain statements included in this Quarterly Report on Form 10-Q may be considered "financial outlook" for the
purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this Quarterly Report on Form 10-Q. These forward-looking
statements are made as of the date of this Quarterly Report on Form 10-Q and, except as expressly required by applicable law, we assume no obligation to update or revise them to
reflect new events or circumstances.