DEDHAM, Mass., May 3, 2018 /PRNewswire/ --
First Quarter 2018 Financial Highlights
- Cash provided by operating activities of $50.3 million in Q1 2018 vs. $34.1 million in Q1 2017
- Net income attributable to Atlantic Power of $15.9 million in Q1 2018 vs. loss of $(2.7) million in Q1 2017; improvement primarily
due to increase in unrealized foreign exchange gain, higher project
income and lower corporate interest expense
- Project income increased $3.0
million to $28.3 million in Q1
2018 from $25.3 million in Q1
2017
- Project Adjusted EBITDA of $53.4
million in Q1 2018 vs. $63.8
million in Q1 2017; decline primarily attributable to
contract expirations in Ontario
and San Diego, partially offset by
other factors
- Repaid $32.4 million of term loan
and project debt in Q1 2018; expect to repay $100 million in 2018
- In January, issued new Cdn$115.0
million 6.00% convertible debentures with a 2025 maturity
and used proceeds to redeem all but Cdn$24.7
million of remaining 2019 convertible debentures
- Repurchased approximately 3.0 million common shares and 320,595
preferred shares in March 2018, at a
total cost of approximately $10.4
million
- Liquidity at March 31, 2018 was
$205.1 million, including
approximately $32 million of
discretionary cash
Recent Developments (April
2018)
- Executed third re-pricing of term loan and revolver, reducing
spread by another 50 basis points
- Repurchased approximately 0.5 million common shares, at a cost
of approximately $1.1 million
- Kenilworth customer executed a
one-year renewal option under the contract to September 2019
2018 Guidance
- Reaffirmed 2018 Project Adjusted EBITDA guidance (see page 5 of
this news release)
Atlantic Power Corporation (NYSE: AT) (TSX: ATP) ("Atlantic
Power" or the "Company") today reported its financial results for
the three months ended March 31,
2018. Net income attributable to Atlantic Power was
$15.9 million versus a loss of
$(2.7) million in the year-ago
period, as discussed above. Project Adjusted EBITDA decreased
$10.4 million from the 2017 period,
primarily due to expiration of the PPAs at Kapuskasing and North Bay (in Ontario) in December
2017 and the cessation of operations at the Company's three
projects in San Diego in
February 2018, partially offset by
higher Project Adjusted EBITDA at Morris and more modest increases
at other projects. Despite lower Project Adjusted EBITDA,
Cash provided by operating activities increased $16.2 million from the year-ago period, mostly
because of a decrease in working capital at the Company's
Ontario and San Diego projects and because of lower cash
interest payments.
"Although Project Adjusted EBITDA declined in the first quarter
due to PPA expirations in Ontario
and San Diego, results exceeded
our expectations, as our Morris project benefited from higher power
prices and energy sales during the extremely cold weather earlier
this year and our Mamquam project experienced higher water flows,"
said James J. Moore, Jr., President
and CEO of Atlantic Power. "During the quarter we continued
to strengthen our balance sheet and credit profile by repaying
$32.4 million of term loan and
project debt and refinancing the majority of our 2019 convertible
debenture maturities. We ended the first quarter with
liquidity of $205 million, including
approximately $32 million of
discretionary cash, after repurchasing $6.4
million of common shares and $4
million (US$ equivalent) of preferred shares in March.
In April, we repurchased another $1.1
million of common shares and executed the third successful
re-pricing of our term loan and revolver, which will further reduce
our cash interest payments on those facilities by approximately
$8.5 million through their respective
maturity dates."
Atlantic Power
Corporation
|
Table 1 – Summary
of Financial Results
|
(in millions of
U.S. dollars, except as otherwise stated)
|
Unaudited
|
|
|
|
|
|
|
Three months
ended
March 31,
|
|
|
|
|
|
2018
|
2017
|
Financial
Highlights
|
|
|
|
|
|
|
Project
revenue
|
|
|
|
|
$80.0
|
$98.4
|
Project
income
|
|
|
|
|
28.3
|
25.3
|
Net income (loss)
attributable to Atlantic Power Corporation
|
|
|
|
|
15.9
|
(2.7)
|
Cash provided by
operating activities
|
|
|
|
|
50.3
|
34.1
|
Project Adjusted
EBITDA
|
|
|
|
|
53.4
|
63.8
|
|
All amounts are in
U.S. dollars and are approximate unless otherwise indicated.
Project Adjusted EBITDA is not a recognized measure under
generally accepted accounting principles in the United States
("GAAP") and does not have a standardized meaning prescribed by
GAAP; therefore, this measure may not be comparable to similar
measures presented by other companies. Please refer to
"Non-GAAP Disclosures" on page 12 of this news release for an
explanation and a reconciliation of "Project Adjusted EBITDA" as
used in this news release to Project income (loss), the most
directly comparable measure on a GAAP basis, and Net
loss.
|
|
Financial Results for the Three Months Ended March 31, 2018
Results for the first quarter of 2018 were adversely affected,
as expected, by the expirations of the PPAs at Kapuskasing and North Bay in Ontario at year-end 2017, the early
terminations of the PPAs for the three San Diego projects effective March 1, 2018, and maintenance costs incurred to
return Tunis to service later this
year. Positive variances occurred at Morris, which benefited
from higher power prices and demand levels in January due to
extremely cold temperatures, and at Mamquam, which experienced
water flows that were significantly better than average. A
non-cash foreign exchange gain and reduced interest expense
resulted in higher net income for the quarter, although these
factors do not affect Project Adjusted EBITDA.
Net income, Project Income and Project Adjusted
EBITDA
Net income attributable to Atlantic Power Corporation for
the first quarter of 2018 was $15.9
million compared to a net loss of $(2.7) million in the first quarter of
2017. The $18.6 million
improvement was primarily attributable to a $3.0 million increase in Project income
(discussed below); a $10.7 million
increase in unrealized foreign exchange gain, most of which was
related to the revaluation of debt denominated in Canadian dollars
(due to the depreciation of the Canadian dollar since December 31, 2017); a $2.2
million reduction in corporate interest expense as a result
of debt repayment and re-pricing of the Company's credit
facilities; a $2.0 million change in
fair value of the conversion option derivative related to the
Series E convertible debentures; and a $3.9
million gain on the repurchase of the Company's preferred
shares.
Project income for the first quarter of 2018 increased
$3.0 million to $28.3 million from $25.3
million in the year-ago period. Lower project income
at Kapuskasing, North Bay, Tunis and the three San Diego projects was more than offset by
increased project income at Williams
Lake, due to lower depreciation expense resulting from an
impairment recorded in 2017, and higher contracted firm energy
revenues; Morris, due to higher generation levels and higher energy
and capacity prices; Nipigon,
mostly due to an increase in the fair value of a derivative;
Piedmont, due to lower interest
expense following the repayment of the project debt in full in
October 2017; Frederickson, due to
lower amortization expense resulting from an impairment recorded in
2017; and Mamquam, which experienced higher water flows than the
year-ago period (as well as against average levels).
Project Adjusted EBITDA for the first quarter of 2018
declined $10.4 million to
$53.4 million from $63.8 million in the first quarter of 2017.
The decrease was primarily attributable to the expiration of
contracts at Kapuskasing and
North Bay at year-end 2017
(-$14.9 million); the termination of
PPAs for all three San Diego
projects effective March 1, 2018
(-$2.7 million); and maintenance
expenses incurred at Tunis in
preparation for restart (-$2.6
million). Partially offsetting these decreases were
increases at Morris, due to higher generation levels and higher
power prices resulting from extremely cold temperatures in January,
a higher capacity price realized in the PJM capacity auction for
this year, and higher steam and ancillary services revenue
($3.6 million); Nipigon, due to a higher capacity rate under
the contract ($1.7 million);
Williams Lake, due to higher firm
energy revenues ($1.0 million);
Mamquam, due to higher water flows ($0.9
million), and more modest increases at several other
projects, including a $0.7 million
benefit from Selkirk, which had
posted a loss in the first quarter of 2017 and was sold in November
2017.
Cash Flow
Cash provided by operating activities for the first
quarter of 2018 increased $16.2
million to $50.3 million from
$34.1 million in the year-ago
period. The impact on operating cash flow of a $10.4 million reduction in Project Adjusted
EBITDA was more than offset by a $4.5
million reduction in cash interest payments (resulting from
debt repayment and a lower spread on the Company's credit
facilities) and $20.9 million of net
favorable changes in working capital, including an $18.3 million decrease in working capital at
Kapuskasing, North Bay, Nipigon and the San
Diego projects. The PPAs for five of these projects
expired between the end of 2017 and March
31, 2018.
Cash used in investing activities for the first quarter
of 2018 was $(1.1) million, slightly
lower than the $(2.0) million in the
first quarter of 2017. This was the result of lower capital
expenditures.
Cash used in financing activities for the first quarter
of 2018 was $(45.7) million as
compared to $(29.5) million in the
year-ago period. The Company issued $92.2 million (US$ equivalent) of Series E
convertible debentures and used the proceeds to redeem all of its
Series C convertible debentures and most of its Series D
convertible debentures, totaling $(88.1)
million. The Company also repaid $(32.4) million of term loan and project debt,
repurchased $(6.4) million of common
shares and $(4.0) million (US$
equivalent) of preferred shares. It also paid $(2.2) million of preferred dividends. In
the comparable 2017 period, the Company repaid $(27.4) million of term loan and project debt and
paid $(2.1) million of preferred
dividends.
For the quarter, the Company had a $3.5
million net increase in cash and cash
equivalents.
Liquidity and Balance Sheet
Liquidity
As shown in Table 2, the Company's liquidity at March 31, 2018 was $205.1
million, an increase of $6.9
million from the December 31,
2017 level. The Company's unrestricted cash of
$82.6 million includes $39.2 million at the parent, of which the Company
considers approximately $32 million
to be discretionary cash available for general corporate
purposes. The $10.5 million
reduction in cash at the parent from the December 31, 2017 level was primarily
attributable to the repurchase of $10.4
million of common and preferred shares in March
2018.
Atlantic Power
Corporation
|
Table 2 –
Liquidity (in millions of U.S. dollars)
|
Unaudited
|
|
|
|
|
Mar. 31,
2018
|
Dec. 31,
2017
|
Cash and cash
equivalents, parent
|
|
|
$39.2
|
$49.7
|
Cash and cash
equivalents, projects
|
|
|
43.4
|
29.0
|
Total cash
and cash equivalents
|
|
|
82.6
|
78.7
|
Revolving credit
facility
|
|
|
200.0
|
200.0
|
Letters of credit
outstanding
|
|
|
(77.5)
|
(80.5)
|
Availability under revolving credit facility
|
|
|
122.5
|
119.5
|
Total
liquidity
|
|
|
$205.1
|
$198.2
|
|
|
|
|
|
Excludes restricted
cash of:
|
|
|
$5.7
|
$6.2
|
|
Balance Sheet
Debt Repayment
During the first quarter of 2018, the Company repaid
$30 million of the APLP Holdings term
loan and amortized $2.4 million of
project-level debt. This is consistent with the Company's
plan to repay $90 million of the term
loan and amortize $10 million of
project debt in 2018. At March 31,
2018, the Company's consolidated debt was $810 million, excluding unamortized discounts and
deferred financing costs, and the Company's consolidated leverage
ratio (consolidated gross debt to trailing 12-month consolidated
Adjusted EBITDA) was 3.2 times.
Convertible Debentures
As previously reported, on January 29,
2018, the Company closed the offering (the "Series E
Offering") of Cdn$100.0 million of
6.00% Series E convertible unsecured subordinated debentures (the
"Series E Debentures"). On February 2,
2018, the underwriters exercised their over-allotment
option, which resulted in the Company issuing another Cdn$15.0 million of Series E Debentures.
The Series E Debentures have a maturity date of January 31, 2025. The conversion rate on
the Series E Debentures is approximately 238.0952 common shares per
Cdn$1,000 principal amount,
representing a conversion price of Cdn$4.20 per common share. Net proceeds
from the offering after expenses totaled Cdn$109.1 million.
The Company used the net proceeds from the Series E Offering to
redeem, in full, the outstanding principal amount of US$42.5 million of 5.75% Series C convertible
unsecured subordinated debentures (which have a maturity date of
June 2019) (the "Series C
Debentures") and to redeem Cdn$56.2
million, on a pro rata basis, of the outstanding principal
amount of the 6.00% Series D extendible convertible unsecured
subordinated debentures (which have a maturity date of December 2019) (the "Series D Debentures").
The redemptions occurred on March 5
and March 7, 2018,
respectively. Following the redemptions, the Company has
Cdn$24.7 million of Series D
Debentures outstanding ($19.2 million
on a US$ equivalent basis).
Debt Maturity Profile
As a result of the convertible debenture transactions, the
Company has no bullet maturities until December 2019, the maturity date of the remaining
Cdn$24.7 million of Series D
Debentures. The Series D Debentures are callable at par at
any time prior to maturity. There are no bullet maturities in
2020 or 2021. The Company's $200
million revolving credit facility matures in April
2022. The $510 million APLP
Holdings term loan has an April 2023
maturity, although it is expected to be more than 80% repaid by the
maturity date. The Cdn$115.0
million of Series E Debentures have a January 2025 maturity date.
Re-pricing of Term Loan and Revolver
As previously reported in its April 19, 2018 press release,
the Company executed a re-pricing of the APLP Holdings term loan
and revolving credit facility, reducing the interest rate margin on
the term loan and revolver by 50 basis points, to LIBOR plus 300
basis points. This represented the third re-pricing for these
facilities since April 2017,
resulting in a cumulative reduction in the spread of 200 basis
points. The Company expects to realize, before related
transaction costs, $2.1 million of
interest cost savings in 2018 and $8.5
million over the remaining terms of the facilities, as a
result of the 50 basis point reduction. The combined savings
of the three re-pricing transactions are expected to be
approximately $41 million over the
remaining terms of the facilities. Transaction costs
associated with the re-pricing will be included in interest expense
in the second quarter of 2018.
Normal Course Issuer Bid (NCIB) Update
On December 29, 2017, the Company
put in place an NCIB for its common and preferred shares and
convertible debentures. It did not make any purchases under
the NCIB in January or February. In March and April 2018, the Company purchased and canceled
approximately 3.5 million common shares at a total cost of
$7.4 million, or an average price of
$2.10 per share. In
March 2018, the Company purchased and
canceled 237,500 shares of the 4.85% Cumulative Redeemable
Preferred, Series 1 at Cdn$15.25 per
share and 83,095 shares of the Cumulative Floating Rate Preferred,
Series 3 at Cdn$17.80 per share, for
a total payment of Cdn$5.1
million.
2018 Guidance
The Company has not provided guidance for Project income or Net
income because of the difficulty of making accurate forecasts and
projections without unreasonable efforts with respect to certain
highly variable components of these comparable GAAP metrics,
including changes in the fair value of derivative instruments and
foreign exchange gains or losses. These factors, which
generally do not affect cash flow, are not included in Project
Adjusted EBITDA.
The Company is reaffirming its guidance for 2018 Project
Adjusted EBITDA in the range of $170
to $185 million. As discussed
in the Company's March 1, 2018
year-end 2017 earnings release, when it initiated 2018 guidance,
the expected decrease from 2017 Project Adjusted EBITDA of
$288.8 million is primarily
attributable to the impact of PPA expirations in 2017 and 2018 and
the non-recurrence of revenues received under the OEFC settlement
in 2017. Other factors contributing to lower Project Adjusted
EBITDA include maintenance expense associated with a planned gas
turbine overhaul at Manchief in the second quarter of 2018 and
restart costs for Tunis. The majority of the Tunis costs are being incurred in the first
six months of 2018 and a substantial majority will be
expensed. The Company's 2018 guidance assumes average water
conditions as compared to favorable conditions in 2017. These
negative factors are expected to be partially offset by increases
at several other projects, including Morris (a higher PJM capacity
price) and Frederickson (maintenance outage in
2017).
Table 3 provides a bridge of the Company's 2018 Project Adjusted
EBITDA guidance to Cash provided by operating activities. For
purposes of providing this bridge to a cash flow measure, the
impact of changes in working capital is assumed to be nil.
The impact of lower Project Adjusted EBITDA on cash provided by
operating activities is expected to be mitigated by a $27 million reduction in cash interest payments
in 2018 relative to 2017, which is $2
million better than the Company's previous expectation as a
result of the recent re-pricing of its term loan and
revolver. The reduction in cash interest payments is
attributable to a full year benefit from the $166 million of debt repaid in 2017, a partial
year benefit from the expected debt repayment of $100 million in 2018, the lower interest rate on
the term loan and revolver, and the non-recurrence of the
Piedmont interest rate swap
termination cost incurred in 2017.
|
Atlantic Power
Corporation
Table 3 – Bridge
of 2018 Project Adjusted EBITDA Guidance to Cash Provided by
Operating Activities
(in millions of
U.S. dollars)
Unaudited
|
|
|
|
|
2018
Guidance
(initiated
3/1/18)
|
|
|
Project Adjusted
EBITDA
|
$170 -
$185
|
|
|
Adjustment for equity
method projects(1)
|
(2)
|
|
|
Corporate G&A
expense
|
(22)
|
|
|
Cash interest
payments
|
(45)
|
|
|
Cash taxes
|
(4)
|
|
|
Other (including
changes in working capital)
|
-
|
|
|
Cash provided by
operating activities
|
$95 -
$110
|
|
|
Note: For the
purpose of providing a bridge of Project Adjusted EBITDA guidance
to a cash flow measure, the impact of changes in working capital on
Cash provided by operating activities is assumed to be
nil.
|
(1) For
equity method projects, represents difference between Project
Adjusted EBITDA and cash distribution from equity method
projects.
|
|
Commercial and Operational Updates
2018-2019 PPA Expirations
The Company has five projects with PPAs that expired in 2018 or
are scheduled to expire in 2019.
Naval Station, NTC and North Island (San Diego). As previously reported,
the projects ceased operations on February
7, 2018 when the land use agreements with the U.S. Navy that
provided the Company the right to use the sites expired. The
early termination of the PPAs with San Diego Gas & Electric was
approved by the California Public Utilities Commission on
March 1, 2018, and the appeal period
for that approval has since expired, thus eliminating the risk of
any potential liabilities to the Company arising from the early
termination. Although the Company has executed new power
contracts for all three projects, those contracts are conditioned
upon the Company obtaining the right to remain on the Navy sites
for the contract term, which appears unlikely. The Company is
proceeding with plans to decommission the three projects, which is
required by its land use agreements with the Navy, and is in the
process of defining the scope of work and timing with the Navy.
Williams Lake (British Columbia). Since
April 2, 2018, the project has been
operating under a short-term extension of the energy purchase
agreement with BC Hydro. The extension is scheduled to expire
on June 30, 2019, or September 30, 2019 at the option of BC
Hydro. The amended contract is subject to the approval of the
BC Utilities Commission (BCUC), which in early April ordered a
written hearing process that commenced recently. If the BCUC
has not approved the amended contract within a specified timeframe,
either party has the right to terminate the contract.
Kenilworth. In
late April 2018, Merck, which is the
customer under the Energy Services Agreement (ESA) at Kenilworth, exercised the first of its three
one-year renewal options under the contract. The expiration
date of the ESA is now September 30,
2019. The economics of the extension are substantially
similar to those under the original ESA term.
Tunis Planned Restart
The Company is continuing work to return Tunis to service as a simple-cycle plant and
recently gave notice to the Ontario Independent Electricity System
Operator that it plans to restart operations on July 1, 2018. The estimated $5 to $6 million
cost of the restart is being expensed, with the majority of these
costs to be incurred in the first six months of 2018. The
project has a 15-year PPA that will commence with commercial
operation. Under the PPA, Tunis will receive monthly capacity payments
and will earn energy revenues for those periods during which it
operates.
Manchief Outage
The Company began a major gas turbine outage at its Manchief
project in mid-April, which is expected to run through late
May. This is similar to the one undertaken in 2015 for the
project's other gas turbine. The costs will be
expensed. The Company expects the outage to reduce Project
Adjusted EBITDA for Manchief by approximately $7 million in the second quarter of
2018.
Maintenance and Capex
There has been no change to the Company's planned maintenance
expenses of approximately $34.8
million and capital expenditures of approximately
$1.4 million for 2018. The
modest increase in maintenance expense relative to the 2017 level
($32.6 million) is associated with
the Tunis restart work and the
Manchief gas turbine outage, partially offset by lower maintenance
expense at Frederickson and other projects.
Supplementary Information Regarding Non-GAAP
Disclosures
A discussion of non-GAAP disclosures and schedules reconciling
Project Adjusted EBITDA, a non-GAAP measure, to the comparable GAAP
measure, can be found on page 12 of this release.
Investor Conference Call and Webcast
Atlantic Power's management team will host a telephone
conference call and webcast on Friday, May
4, 2018 at 8:30 AM ET.
Management's prepared remarks and an accompanying presentation will
be available on the Conference Calls page of the Company's website
prior to the call.
Conference Call / Webcast Information:
Date: Friday, May 4,
2018
Start Time: 8:30 AM
ET
Phone Number: U.S. (Toll Free) 1-855-239-3193;
Canada (Toll Free) 1-855-669-9657;
International (Toll) 1-412-542-4129.
Conference Access: Please request access to the
Atlantic Power conference call.
Webcast: The call will be broadcast over Atlantic
Power's website at www.atlanticpower.com.
Replay/Archive Information:
Replay: Access conference call number
10119184 at the following telephone numbers: U.S.
(Toll Free) 1-877-344-7529; Canada
(Toll Free) 1-855-669-9658; International (Toll)
1-412-317-0088. The replay will be available one hour after
the end of the conference call through June
4, 2018 at 11:59 PM
ET.
Webcast archive: The conference call will be
archived on Atlantic Power's website at www.atlanticpower.com for a
period of 12 months.
About Atlantic Power
Atlantic Power is an independent power producer that owns power
generation assets in nine states in the
United States and two provinces in Canada. The
generation projects sell electricity and steam to investment-grade
utilities and other creditworthy large customers predominantly
under long‑term PPAs that have expiration dates ranging from 2019
to 2037. The Company seeks to minimize its exposure to
commodity prices through provisions in the contracts, fuel supply
agreements and hedging arrangements. The projects are
diversified by geography, fuel type, technology, dispatch profile
and offtaker (customer). The majority of the projects in
operation are 100% owned and directly operated and maintained by
the Company. The Company has expertise in operating most fuel
types, including gas, hydro, and biomass, and it owns a 40%
interest in one coal project.
Atlantic Power's shares trade 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
Investor Relations
(617) 977-2700
info@atlanticpower.com
Copies of the Company's financial data and other publicly filed
documents are available 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 expectation that it will repay $100 million of debt in 2018;
- the Company's estimates of interest cost savings resulting from
the April 2018 re-pricing of its
credit facilities;
- the Company's view that approximately $32 million of cash at the parent is available
for discretionary purposes;
- the Company's estimate that it will have repaid more than 80%
of its term loan by the April 2023
maturity date;
- the Company's guidance for 2018 Project Adjusted EBITDA in the
range of $170 to $185 million;
- the Company's estimate that the majority of the expected
decline in 2018 Project Adjusted EBITDA is attributable to the
impact of PPA expirations in 2017 and 2018 and the non-recurrence
of revenues received under the OEFC settlement;
- the Company's estimate that decreases to 2018 Project Adjusted
EBITDA, including the impact of PPA expirations and lower expected
results at Tunis and Manchief,
will be partially offset by increases at several other projects,
including Morris and Frederickson;
- the Company's estimate for 2018 Cash provided by operating
activities in the range of $95 to
$110 million, assuming for this
purpose that changes in working capital are nil;
- the Company's estimate that cash interest payments in 2018 will
be approximately $45 million, or
$27 million lower than the 2017
level, with the decline attributable to debt repayment in 2017 and
2018, the re-pricings of the Company's credit facilities, and the
non-recurrence of the Piedmont
interest rate swap termination cost incurred in October 2017;
- the Company's view that it is unlikely to obtain site control
at its three San Diego
projects;
- the Company's expectations with respect to progress on PPAs
expiring in 2019;
- the Company's expectations with respect to the estimated cost
and timing of a planned restart of its Tunis project;
- the Company's expectations with respect to the estimated cost
and timing of a major gas turbine outage at its Manchief project in
the second quarter of 2018;
- the Company's estimation that, in 2018, including its share of
equity-owned projects, maintenance expense will total approximately
$34.8 million and capital
expenditures will total approximately $1.4
million; and
- the results of operations and performance of the Company's
projects, business prospects, opportunities and future growth of
the Company will be as described herein.
Forward-looking statements involve significant risks and
uncertainties, should not be read as guarantees of future
performance or results, and will not necessarily be accurate
indications of whether or not or the times at or by which such
performance or results will be achieved. Please refer to the
factors discussed under "Risk Factors" and "Forward-Looking
Information" in the Company's periodic reports as filed with the
U.S. Securities and Exchange Commission (the "SEC") from time to
time for a detailed discussion of the risks and uncertainties
affecting the Company. Although the forward-looking
statements contained in this news release are based upon what are
believed to be reasonable assumptions, investors cannot be assured
that actual results will be consistent with these forward-looking
statements, and the differences may be material. These
forward-looking statements are made as of the date of this news
release and, except as expressly required by applicable law, the
Company assumes no obligation to update or revise them to reflect
new events or circumstances.
|
Atlantic Power
Corporation
Table 4 –
Consolidated Balance Sheet (in millions of U.S.
dollars)
Unaudited
|
|
|
|
|
|
|
March
31,
|
December
31,
|
|
|
2018
|
2017
|
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$82.6
|
$78.7
|
|
Restricted
cash
|
5.7
|
6.2
|
|
Accounts
receivable
|
26.7
|
52.7
|
|
Current portion of
derivative instruments asset
|
4.8
|
2.7
|
|
Inventory
|
16.1
|
17.7
|
|
Prepayments
|
6.3
|
6.9
|
|
Income taxes
receivable
|
0.8
|
1.0
|
|
Other current
assets
|
3.8
|
3.1
|
|
Total current
assets
|
146.8
|
169.0
|
|
Property, plant and
equipment, net
|
585.8
|
602.3
|
|
Equity investments in
unconsolidated affiliates
|
169.4
|
163.7
|
|
Power purchase
agreements and intangible assets, net
|
178.5
|
191.2
|
|
Goodwill
|
21.4
|
21.3
|
|
Derivative
instruments asset
|
3.4
|
2.8
|
|
Other
assets
|
7.8
|
8.5
|
|
Total
assets
|
$1,113.1
|
$1,158.8
|
|
|
|
|
|
Liabilities
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$5.7
|
$2.2
|
|
Accrued
interest
|
3.7
|
0.3
|
|
Other accrued
liabilities
|
16.4
|
25.5
|
|
Current portion of
long-term debt
|
83.6
|
99.5
|
|
Current portion of
derivative instruments liability
|
6.4
|
4.4
|
|
Other current
liabilities
|
0.3
|
1.0
|
|
Total current
liabilities
|
116.1
|
132.9
|
|
Long-term debt, net
of unamortized discount and deferred financing costs
|
597.1
|
616.3
|
|
Convertible
debentures, net of discount and unamortized deferred financing
costs
|
98.9
|
105.4
|
|
Derivative
instruments liability
|
18.0
|
19.9
|
|
Deferred income
taxes
|
14.3
|
11.7
|
|
Power purchase and
fuel supply agreement liabilities, net
|
23.3
|
24.1
|
|
Other long-term
liabilities
|
50.8
|
51.7
|
|
Total
liabilities
|
$918.5
|
$962.0
|
|
|
|
|
|
Equity
|
|
|
|
Common shares, no par
value, unlimited authorized shares; 112,978,994 and 115,211,976
issued and outstanding at March 31, 2018 and December 31, 2017,
respectively
|
1,269.0
|
1,274.8
|
|
Accumulated other
comprehensive loss
|
(139.1)
|
(134.8)
|
|
Retained
deficit
|
(1,142.6)
|
(1,158.4)
|
|
Total Atlantic Power
Corporation shareholders' equity
|
(12.7)
|
(18.4)
|
|
Preferred shares
issued by a subsidiary company
|
207.3
|
215.2
|
|
Total
equity
|
194.6
|
196.8
|
|
Total liabilities and
equity
|
$1,113.1
|
$1,158.8
|
|
|
|
|
|
|
|
|
Atlantic Power
Corporation
Table 5 – Consolidated Statements of Operations
(in millions of U.S. dollars, except per share amounts)
Unaudited
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
March
31,
|
|
|
|
|
2018
|
2017
|
|
|
Project
revenue:
|
|
|
|
|
|
Energy
sales
|
|
$38.4
|
$37.1
|
|
|
Energy capacity
revenue
|
|
20.1
|
19.5
|
|
|
Other
|
|
21.5
|
41.8
|
|
|
|
|
80.0
|
98.4
|
|
|
Project
expenses:
|
|
|
|
|
|
Fuel
|
|
22.2
|
28.9
|
|
|
Operations and
maintenance
|
|
21.2
|
20.4
|
|
|
Depreciation and
amortization
|
|
23.8
|
29.5
|
|
|
|
|
67.2
|
78.8
|
|
|
Project other
income:
|
|
|
|
|
|
Change in fair value
of derivative instruments
|
|
3.8
|
(1.2)
|
|
|
Equity in earnings of
unconsolidated affiliates
|
|
12.3
|
9.0
|
|
|
Interest,
net
|
|
(0.6)
|
(2.2)
|
|
|
Other income,
net
|
|
-
|
0.1
|
|
|
|
|
15.5
|
5.7
|
|
|
Project
income
|
|
28.3
|
25.3
|
|
|
|
|
|
|
|
|
Administrative and
other expenses:
|
|
|
|
|
|
Administration
|
|
6.0
|
6.4
|
|
|
Interest expense,
net
|
|
15.1
|
17.3
|
|
|
Foreign exchange
(gain) loss
|
|
(8.2)
|
2.5
|
|
|
Other income,
net
|
|
(2.0)
|
-
|
|
|
|
|
10.9
|
26.2
|
|
|
Income (loss) from
operations before income taxes
|
|
17.4
|
(0.9)
|
|
|
Income tax expense
(benefit)
|
|
3.2
|
(0.3)
|
|
|
Net income
(loss)
|
|
14.2
|
(0.6)
|
|
|
Net (loss) income
attributable to preferred shares of a subsidiary company
|
|
(1.7)
|
2.1
|
|
|
Net income (loss)
attributable to Atlantic Power Corporation
|
|
$15.9
|
($2.7)
|
|
|
Net income (loss) per
share attributable to Atlantic Power Corporation:
|
|
|
|
|
|
Basic
|
|
$0.14
|
($0.02)
|
|
|
Diluted
|
|
$0.12
|
($0.02)
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
Basic
|
|
114.8
|
114.8
|
|
|
Diluted
|
|
137.5
|
114.8
|
|
|
|
|
|
Atlantic Power
Corporation
Table 6 – Consolidated Statements of Cash Flows (in millions of
U.S. dollars)
Unaudited
|
|
|
|
|
Three months
ended
March 31,
|
|
|
2018
|
2017
|
|
Cash provided by
operating activities:
|
|
|
|
Net income
(loss)
|
$14.2
|
($0.6)
|
|
Adjustments to
reconcile net (loss) income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
23.8
|
29.5
|
|
Stock-based
compensation
|
0.5
|
0.4
|
|
Equity in earnings
from unconsolidated affiliates
|
(12.3)
|
(9.0)
|
|
Distributions from
unconsolidated affiliates
|
6.6
|
3.7
|
|
Unrealized foreign
exchange (gain) loss
|
(8.0)
|
2.5
|
|
Change in fair value
of derivative instruments
|
(3.8)
|
1.2
|
|
Change in fair value
of convertible debenture conversion option derivative
|
(2.1)
|
-
|
|
Amortization of debt
discount and deferred financing costs
|
3.4
|
2.7
|
|
Change in deferred
income taxes
|
2.2
|
(1.2)
|
|
Change in other
operating balances
|
|
|
|
Accounts
receivable
|
26.1
|
0.2
|
|
Inventory
|
1.6
|
(0.1)
|
|
Prepayments and other
assets
|
0.8
|
(3.2)
|
|
Accounts
payable
|
3.2
|
(0.4)
|
|
Accruals and other
liabilities
|
(5.9)
|
8.4
|
|
Cash provided by
operating activities
|
50.3
|
34.1
|
|
|
|
|
|
Cash used in
investing activities:
|
|
|
|
Purchase of property,
plant and equipment
|
(1.1)
|
(2.0)
|
|
Cash used in
investing activities
|
(1.1)
|
(2.0)
|
|
|
|
|
|
Cash used in
financing activities:
|
|
|
|
Proceeds from
convertible debenture issuance
|
92.2
|
-
|
|
Repayment of
convertible debentures
|
(88.1)
|
-
|
|
Common share
repurchases
|
(6.4)
|
-
|
|
Preferred share
repurchases
|
(4.0)
|
-
|
|
Repayment of corporate
and project-level debt
|
(32.4)
|
(27.4)
|
|
Deferred financing
costs
|
(4.8)
|
-
|
|
Dividends paid to
preferred shareholders
|
(2.2)
|
(2.1)
|
|
Cash used in
financing activities:
|
(45.7)
|
(29.5)
|
|
|
|
|
|
Net increase in cash
and cash equivalents
|
3.5
|
2.6
|
|
Cash, restricted cash
and cash equivalents at beginning of period
|
84.8
|
98.8
|
|
Cash, restricted cash
and cash equivalents at end of period
|
$88.3
|
$101.4
|
|
|
|
|
|
Supplemental cash
flow information
|
|
|
|
Interest
paid
|
$8.6
|
$13.1
|
|
Income taxes paid,
net
|
$1.0
|
$0.9
|
|
Accruals for
construction in progress
|
$0.3
|
-
|
Non-GAAP 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. Investors are cautioned that
the Company may calculate this non-GAAP measure in a manner that is
different from other companies. The most directly comparable
GAAP measure is Project income (loss). 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) and to Net loss on a consolidated basis is
provided in Table 7 below.
Cash Distributions from Projects is the amount of cash
distributed by the projects to the Company out of available project
cash flow after all project-level operating costs, interest
payments, principal repayment, capital expenditures and working
capital requirements. A bridge of Project Adjusted EBITDA to
Cash Distributions from Projects can be found in the first quarter
2018 presentation on the Company's website.
Project income (loss) and Project Adjusted EBITDA by project
also can be found in the first quarter 2018 presentation on the
Company's website.
Atlantic Power
Corporation
|
|
Table 7 –
Reconciliation of Net income to Project Adjusted
EBITDA
|
|
(in millions of
U.S. dollars)
|
|
Unaudited
|
|
|
Three months
ended
March 31,
|
|
2018
|
2017
|
Net income (loss)
attributable to Atlantic Power Corporation
|
$15.9
|
($2.7)
|
Net (loss) income
attributable to preferred share dividends of a subsidiary
company
|
(1.7)
|
2.1
|
Net income
(loss)
|
$14.2
|
($0.6)
|
Income tax expense
(benefit)
|
3.2
|
(0.3)
|
Income (loss) from
operations before income taxes
|
17.4
|
(0.9)
|
Administration
|
6.0
|
6.4
|
Interest expense,
net
|
15.1
|
17.3
|
Foreign exchange
(gain) loss
|
(8.2)
|
2.5
|
Other income,
net
|
(2.0)
|
-
|
Project
income
|
$28.3
|
$25.3
|
|
|
|
Reconciliation to
Project Adjusted EBITDA
|
|
|
Depreciation and
amortization
|
$27.9
|
$34.9
|
Interest expense,
net
|
1.0
|
2.4
|
Change in the fair
value of derivative instruments
|
(3.8)
|
1.2
|
Project Adjusted
EBITDA
|
$53.4
|
$63.8
|
View original
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SOURCE Atlantic Power Corporation