Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Atlantic Power Announces Dismissal of the U.S. Securities Class Action Lawsuit by the U.S. District Court
Source: PR Newswire (Canada)
BOSTON, March 16, 2015 /CNW/ -- Atlantic Power Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the "Company") today announced that the U.S. District Court for the District of Massachusetts (the "District Court") has granted the defendants' motion to dismiss the amended complaint in the securities class action suit originally filed on March 15, 2013 against Atlantic Power and certain of its current and former officers and directors. In addition, the District Court denied plaintiffs' motion to amend their complaint as futile. "We are very pleased with the court's decision," said James Moore, President and CEO of Atlantic Power. Plaintiffs will have 30 days to file an appeal after the District Court enters a final judgment. The Company will continue to vigorously defend against the proposed Canadian class proceeding.
About Atlantic Power
Atlantic Power owns and operates a diverse fleet of power generation assets in the United States and Canada. Atlantic Power's power generation projects sell electricity to utilities and other large commercial customers largely under long-term power purchase agreements, which seek to minimize exposure to changes in commodity prices. Its power generation projects have an aggregate gross electric generation capacity of approximately 2,945 MW in which its aggregate ownership interest is approximately 2,024 MW. Its current portfolio consists of interests in twenty-eight operational power generation projects across eleven states in the United States and two provinces in Canada.
Atlantic Power trades on the New York Stock Exchange under the symbol AT and on the Toronto Stock Exchange under the symbol ATP. For more information, please visit the Company's website at www.atlanticpower.com or contact: Atlantic Power Corporation, Amanda Wagemaker, Investor Relations (617) 977-2700, info@atlanticpower.com. Copies of financial data and other publicly filed documents are filed on SEDAR at www.sedar.com or on EDGAR at www.sec.gov/edgar.shtml under "Atlantic Power" or on Atlantic Power'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 nature of any further proceedings in the U.S. class action securities litigation; and
the Company's ability to vigorously defend against the proposed Canadian class proceeding.
Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not or the times at or by which such performance or results will be achieved. Please refer to the factors discussed under "Risk Factors" and "Forward-Looking Information" in the Company's periodic reports as filed with the Securities and Exchange Commission from time to time for a detailed discussion of the risks and uncertainties affecting the Company, including, without limitation, the purported class action shareholder litigation. 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. Readers are cautioned that the information contained herein may not be appropriate for other purposes.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/atlantic-power-announces-dismissal-of-the-us-securities-class-action-lawsuit-by-the-us-district-court-300050762.html
SOURCE Atlantic Power Corporation
Copyright 2015 Canada NewsWire
Very big news!
Now this is big news IMO
http://ih.advfn.com/p.php?pid=nmona&article=65875035
Lift off coming?
these large buys keep happening for weeks now. Today another 30k+ shares purchased after hours today. Someone is loading this thing.
For sure once we can get past the resistance at $2.93, that gap will start to close much faster.
Absolutely!
A big 50k+ shares sold after close again today. Big buyers are moving in. This thing is going to move for sure. Let's close that gap!
Atlantic Power Corporation and Atlantic Power Preferred Equity Ltd. Announce Quarterly Dividend Rate on the Cumulative Floati...
Source: PR Newswire (US)
BOSTON, March 2, 2015 /PRNewswire/ -- Atlantic Power Corporation ("Atlantic Power") and Atlantic Power Preferred Equity Ltd. (TSX: AZP.PR.A, AZP.PR.B and AZP.PR.C) (the "Corporation"), a subsidiary of Atlantic Power, announced the dividend rate on the Corporation's outstanding Cumulative Floating Rate Preferred Shares, Series 3 (AZP.PR.C) (the "Series 3 Shares") will be 4.94% which will be payable June 30, 2015.
The Series 3 Shares dividend rate was calculated on March 1, 2015 to be 4.94%, representing the sum of the Canadian Government 90-day Treasury Bill yield (using the three-month average result of 0.76%) plus 4.18%.
Tax Information for Shareholders
The Corporation designates the dividend on each of the Series 1 Shares and the Series 2 Shares to be an "eligible dividend" pursuant to subsection 89(14) of the Income Tax Act (Canada) and its equivalent in any of the provinces and territories of Canada.
U.S. individual or other non-corporate taxpayers should be eligible for the reduced rate of tax currently applicable to "qualified dividends" provided that the investor meets the holding period and any other requirements.
Taxpayers should always seek their own independent qualified professionals regarding the tax consequences of purchasing or owning preferred shares of the Corporation.
About Atlantic Power Preferred Equity Ltd.
The Corporation is a corporation incorporated under the laws of the Province of Alberta and is an indirect, wholly-owned subsidiary of Atlantic Power. The Corporation directly holds Atlantic Power's business and power generation and other assets in British Columbia, operates as a holding company and indirectly holds certain of Atlantic Power's business and power generation and other assets in the United States, including Atlantic Power's Curtis Palmer, Manchief, Frederickson, Naval Station, North Island, Naval Training Center, Oxnard, Greeley, Kenilworth, and Morris power generating facilities.
About Atlantic Power
Atlantic Power owns and operates a diverse fleet of power generation assets in the United States and Canada. Atlantic Power's power generation projects sell electricity to utilities and other large commercial customers largely under long-term power purchase agreements, which seek to minimize exposure to changes in commodity prices. Its power generation projects in operation have an aggregate gross electric generation capacity of approximately 2,945 MW in which its aggregate ownership interest is approximately 2,024 MW. Its current portfolio consists of interests in twenty-eight operational power generation projects across eleven states in the United States and two provinces in Canada.
Atlantic Power trades on the New York Stock Exchange under the symbol AT and on the Toronto Stock Exchange under the symbol ATP. For more information, please visit the Company's website at www.atlanticpower.com or contact:
Atlantic Power Corporation
Amanda Wagemaker, Investor Relations
(617) 977-2700
info@atlanticpower.com
Copies of financial data and other publicly filed documents are filed on SEDAR at www.sedar.com or on EDGAR at www.sec.gov/edgar.shtml under "Atlantic Power Corporation" or on Atlantic Power's website.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/atlantic-power-corporation-and-atlantic-power-preferred-equity-ltd-announce-quarterly-dividend-rate-on-the-cumulative-floating-rate-preferred-shares-series-3-of-atlantic-power-preferred-equity-ltd-300043704.html
SOURCE Atlantic Power Corporation; Atlantic Power Preferred Equity Ltd.
Copyright 2015 PR Newswire
Atlantic Power Corporation (NYSE:AT)
Q4 2014 Results Earnings Conference Call
February 27, 2015, 08:30 AM ET
Executives
Amanda Wagemaker - IR
James J. Moore - President and CEO
Terrence Ronan - EVP and CFO
Dan Rorabaugh - Senior Vice President of Asset Management
Analysts
Rupert Merer - National Bank
Ben Pham - BMO Capital Markets
Nelson Ng - RBC Capital Markets
Matthew Farwell - Imperial Capital
Sean Steuart - TD Securities
Presentation
Operator
Good morning and welcome to Atlantic Power Corporation Conference Call. All participants will be in a listen-only mode. [Operator Instructions]
Please note this event is being recorded. I would now like to turn the conference over to Amanda Wagemaker, Investor Relations Associate. Please go ahead.
Amanda Wagemaker
Welcome and thank you for joining us this morning. Please note that we have provided slides to accompany today’s call and webcast, which can be found in the Investor Relations section of our website, www.atlanticpower.com. This call will be available for replay on our website for a period of three months.
Our results for the three months and year ended December 31, 2014 were issued by press release yesterday afternoon and are available on our website and on EDGAR and SEDAR. Financial figures that we’ll be presenting are stated in US dollars unless otherwise noted.
The financial results in yesterday’s press release and the matters we will be discussing today include both GAAP and non-GAAP measures. GAAP to non-GAAP reconciliation information for our historical results is appended to the press release and annual report on Form 10-K, each of which in the Investor Relations section of our website. We have not provided a reconciliation of forward-looking non-GAAP measures to the directly comparable GAAP measures because not all of the information necessary for a quantitative reconciliation is available to the company without unreasonable efforts, primarily as a result of the variability and difficulty in making accurate forecasts and projections.
We also have not reconciled non-GAAP financial measures relating to individual projects to the directly comparable GAAP measures due to the difficulty in making the relevant adjustments on an individual project basis.
Before we begin, let me remind everyone that this conference call may contain forward-looking statements. These statements are not guarantees of future performance and involve certain risks and uncertainties that are more fully described in our various securities filings. Actual results may differ materially from such forward-looking statements.
Now, let me turn the call over to Jim Moore, President and CEO of Atlantic Power.
James J. Moore
Good morning. And thank you for joining the call today. With me are Terry Ronan, our CFO and Dan Rorabaugh, Senior Vice President of Asset Management, as well as several other members of the Atlantic Power Management team. Following my remarks, Terry will review our financial results and discuss 2015 guidance and then Dan will discuss operation with a focus on our optimization and asset management activities.
I joined the company about four weeks ago and my initial impressions are that we have core group of talented and committed employees and some very good assets. Unfortunately in the current power market environment replacing expiring PPAs is challenging, investing in external growth is not very promising, given the very low cost of capital employed by competitive bidders in the power markets.
The flipside however of a low cost of capital hobbling external growth opportunities at the moment is that it means the market for sellers of assets is robust. This is while to say window of opportunity to reshape our assets and liability mix. Against that backdrop, we are focused on six things.
First, asset divestures, we hate to part with any assets because we know we have a very good fleet, nimbi, tightening environmental standards and world power crisis have hit gas and coal plants particularly hard, but the United States and Canada rely in those plants, as the low cost backbone of reliable power grid and we'll do so for decades to come.
Renewable plants has been brought into the grid to respond to public policy mandates have pushed on the run rates and valuations of non-intermittent forms of generation. That may continue for years, but ultimately public policy needs to integrate, intermittent power on to the grid, while providing incentive to maintain and operate reliable base load and cycling plants.
Today non-renewable generation is out of favor and priced accordingly. Renewable energy is very popular and we are covered by PPAs, valuations are robust. We're in the process of testing the market and the valuation of some pieces of our portfolio.
Interest has been high. The lost cost of capital not withstanding buyers in this market are sophisticated and disciplined. We in turn intend to be a very disciplined seller. If we don’t transact an asset sales we'll continue to enhance our internal cash flows, invest in our fleet and reshape the liability side of the balance sheet. We expect to provide an update on our asset divesture plans by our next earnings call in May.
Second, balance sheet. We have a good company that has too much debt at rates that are too high. This is a good environment to address those issues. We will be working on those options over the coming months and expect to be elaborate on our direction later this year. I the meantime, we are amortizing a significant amount of debt each year out of our project cash flows, including $79 million in 2014, and an expected $75 million in 2015.
Third, overhead. These costs been too high in the past, although the company's addressed meaningfully already, we believe there is much more that can achieved. The run rate and corporate overheads, which includes new project development expense was approximately $54 billion in 2013 and was reduced to $45 million in 2014, including severance and other non-recurring cost.
We have guided to $38 billion or lower for this year. We expect to achieve significant reductions from 2015 to the 2016 run rate, on which we'll provide greater clarity later this year. We expect to have completed rationalizing our organizational structure and costs by the end of this year. So the run rate for 2016 G&A should be stable from that point.
Four, capital expenditures. Our major maintenance to capital expenditure budget of approximately $35 million annually runs well below our GAAP depreciation charge. In addition, to true maintenance CapEx, we've been making discretionary investments in our fleet. The returns on these investments are higher than anything we can get investing outside the company. They are based on much stronger knowledge and therefore have much lower risk then things we might invest in externally.
We can grow our cash flows most effectively and generate the highest returns internally at the moment and cash on cash returns we are seeing are exciting. We see strong opportunities in this area for growing our per share intrinsic value as measured by metric such as cash flow and free cash flow. Dan Rorabaugh, will go into this program in detail later on the call.
Fifth, growth. Atlantic Power is a small company and a market of much larger players, our cost of capital was higher than other market participants, such as the yield curves. Once we've rationalized our balance sheet and cost structure we ought to have a stable platform for making disciplined growth investments. We'll need to be very capital efficient and very rational in evaluating any growth investments be way internal, development or acquisitions.
Our small size doesn’t mean we can move the needle on the company's value with investments that are too small for larger players. Rather than competing with low cost capital players we view them as buyer for existing or new development projects.
Over the first half of this year, we'll be focused on the asset divesture process, the balance sheet, overhead reductions and internal growth opportunities. Rationalizing those areas should put us in a better position to evaluate opportunities and strategies for low cost, disciplined growth in the balance of the year and beyond.
Lastly, dividend, we're very focused on growing intrinsic value per share for the common equity holders. The dividend obviously provide a current return to shareholders, but its not the primary means by which hope to create value as we evaluate divestures and consider the use of proceeds, together with the board, we will consider what the optimal dividend policy is for the company going forward and how that fits with our goals of de-risking the balance sheet, investing in our fleet at attractive returns, strengthening the company's ability to grow and creating value for shareholders in the most effective way possible.
Now, I'll turn it over to Terry.
Terrence Ronan
Thanks, Jim. And good morning, everyone. Slide seven summarizes our financial results for the fourth quarter. We have strong finish to the year with fourth quarter project adjusted EBITDA of $78 million, up $20 million from the comparable period a year ago.
The most significant contributors to the increase were Orlando which had improved margins for favorable PPA and lower gas supply cost in 2014 relative to 2013. North Island which had turbine overhaul in 2013, Williams Lake which benefited from higher availability and higher generation levels, Calstock due to higher waste heat and lower maintenance expenses, Manqualm due to favorable water flows and lower maintenance due to expense, favorable wind conditions in Idaho that benefit with our projects there through significant increases in generation and Piedmont, which had favorable maintenance comparison with the year ago period and which also benefited from an outer period adjustments.
During 2013, the project incurred additional maintenance expense to address to certain operational issues subsequent to commercial operations. With the settlement of the arbitration with EPC contract in November, we reversed $3.2 million of the 2013 reserve of the dispute which was credited to maintenance expense in the fourth quarter of 2014.
These are and other positive factors were partially offset by a reduction from Selkirk for which the PPA expired on August 31st of last year and which had significantly reduced dispatch in the fourth quarter. We also benefited from a $4.8 million reduction in our project level administrative and development expenses as a result of actions that took place earlier in the year.
Turning to our cash flow results for the quarter, I point out that our semi annual interest payments on our senior unsecured notes, medium term notes and convertible debentures occurred in the second and fourth quarters of the year and thus our operating cash flow and free cash flow measures are typically lower than in other quarters.
Operating cash flow for the quarter increased $10 million with higher project adjusted EBITDA and distributions from unconsolidated projects partially offset by unfavorable working capital changes.
Cash flow results also included $6 million of severance payments that we disclosed to you on our last quarterly call. We had free cash flow for the quarter of negative $7 million versus negative $4 million in the year ago period. This was lower than we'd expected primarily because we amortize $5 million more of the APLP term loan that we had projected.
Slide eight shows our full year results as compared to 2013, as well as our 2014 guidance. Projects adjusted EBITDA of $299 million increased $30 million from the comparable 2013 period and was at the high end of the $285 million to $300 million guidance that we provided in November.
APLP results of $176 million increased $15 million from 2013 that were also at the high end of our guidance range. Our cash flow results were within our guidance ranges with free cash flow toward the lower end of the range because of the higher than projected term loans and payment in the fourth quarter.
Now, I'll come to the full year results in a bit more detail in the next couple of slides. Slide nine presents a bridge of our project adjusted EBITDA from 2013 to 2014. For the year, results benefited from strong contribution by our wind projects, particularly those in Idaho, increased waste heat and lower maintenance expenses at Ontario projects.
Higher margins at our Orlando project, favorable maintenance comparisons and other factors with a few other projects, particularly Morris, naval training center, a full year of operation of lower maintenance expense of Piedmont and a reduction in our project level administrative and development expenses. These positive factors were partially offset by lower results from Selkirk due to lower dispatch and exploration of PPA, low results in several projects outages in the sales of Delta-Person and Gregory.
Slide 10, presents our cash flow results for the year. Operating cash flow was $65 million, which declined $87 million from 2013 due primarily to the transaction related costs we incurred in the first quarter of 2014 and favorable changes in working capital and the loss of cash flows from discontinued operations.
These factors were partially offset by increased project adjusted EBITDA and higher distributions from unconsolidated projects. Free cash flows reported was negative $56 million. From a guidance standpoint we excluded the transaction related cost in the repayment of Piedmont principal term conversion and on that basis free cash flow for the year was $2 million.
As I mentioned earlier, this result was at the low end of our guidance range primarily because we amortized $58 million of the APLP term loan rather than expected $53 million. Other project debt repayment and CapEx were consistent with our expectations.
Turning to slide 11, at December 31, we had liquidity of $214 million, including $110 million on unrestricted cash. We have no borrowings outstanding under our revolver, although we are using a $106 million of revolver availability for letters of credit.
The decline in our cash balance from $168 million at September 30 is attributable primarily to the use of $41 million of cash for the repayment of our Canadian $44.8 million convertible debenture at maturity in October.
In addition, in December we purchased $3 million of our convertible debentures under the normal course issuer bid that we announced in November and we paid $3 million of common dividends.
Slide 12 summarizes the changes to our debt 2014, for the year we reduced total debt including our share of equity method projects by approximately $93 million, excluding the unrealized impact of foreign currency changes on our debt, which was positive $36 million at year end. The $93 million exceeded our expectation of $85 million and includes the following.
$58 million of APLP term loan amortization bringing the outstanding balance down to $542 million, $26 million of consolidated project debt amortization, including an $8 million repayment of Piedmont construction debt at term loan conversion and $7 million of equity method project debt including $6 million that was associated with the sale of Delta-Person.
The repayment of convertible debentures that mature in October do not contribute to reducing our overall debt levels for the year, and that it as essentially funded out of excess proceeds for $600 million term loan.
Looking ahead to this year, we expect further reduction in our debt levels, although we don’t have any bond maturities in 2015, we expect to amortize a total of approximately $75 million of project level debt and APLT term loan using project level cash flows. In addition, in January we used cash on hand to repurchase $9 million of our senior unsecured notes reducing the balance outstanding to $310 million and year-to-date we have repurchased $6 million par value of our convertible debentures under the NCIB. Thus we would expect to reduce debt by at least $90 million in 2015, excluding any additional discretionary debt repurchases or the use of proceeds for potential asset sales.
Slide 13 summarizes 2015 guidance for our key metrics, as well as provide an outlook and a couple of other items you may find helpful. And I'll cover each of these in a bit more detail.
As you can see from slide 14, we're expecting project adjusted EBITDA for 2015 to be in the range of $265 million to $285 million. At the mid point of the range this would represent a decline of approximately $24 million from 2014. Approximately $17 million of this is attributable to the exploration of the PPAs for Tunis and Selkirk projects. In addition we have a planned gas turbine overhaul at Manchief and we're also assuming more typical levels of waste heat at our Ontario projects in 2015 relative to 2014 when we had significant benefit.
On the positive side, we expected increase in Orlando attributable to a contractual increase in capacity revenue in the absence of the $4 million gas swap termination charge that we incurred in 2014. And at Nipigon where we took a significant outage in 2014 to install the new heat recovery steam generator. We expect to benefit form the generator upgrade, the assets coming out into this year and contractual increases under the PPA. There also smaller increases across the number of other projects.
Slide 15 provides a bridge of our project adjusted EBITDA guidance to operating cash flow, as well as our new non-GAAP metric we have introduced, adjusted cash flow from operating activities. We believe this will be a more useful way evaluate our cash flow generating ability since it excludes changes in working capital, cash flow from discontinued operations and certain expense that we wouldn’t consider routine, including severance restructuring charges and cost associated with ongoing shareholder litigation. It also excludes debt pre payment charges such as those we incurred in connection with the APLP term loan financing in early 2014.
You should think of this cash flow metric and the cash flow from our business is after operating costs, interest expense and G&A expense. It is available to us to invest in our projects, repay debt, make discretionary growth investments or discretionary repurchases of debt, make distributions to non-controlling interest and pay dividends on our preferred common shares.
For 2015 we expect adjusted cash flows from operating activities of $120 million to $140 million as compared to a $142 million in 2014. The primary driver of the decrease is lower project adjusted EBITDA, partially offset by lower cash interest of approximately $8 million and a reduction in the corporate portion of total G&A expense of about $8 million.
Slide 16 provides a bridge for adjusted cash flows from operating activities to adjusted free cash flow. Starting with a $120 million to a $140 million adjusted cash flows from operating activities, we deducted plant maintenance expense to $2 million, distributions to our partner at Rocklin and the tax equity interest at Canadian Hills of $12 million and preferred dividends of a $11 million. We also expect to repay consolidate project debt of $20 million – $21 million.
And we amortize $48 million to $54 million of the APLT term loan. After these payments we expect to have $20 million to $40 million of discretionary cash flow of which we've committed approximately $10 million of the share to optimization projects in the fleet.
Adjusted free cash flow to these plants capital expenditures is expected to be $10 million to $30 million. This would be available for other potential uses, including the payment of common dividends additional growth investments or optimization projects and discretionary repurchases debt. We also have a modes amount of excess cash on hand which we expect would be available for these as well.
Year-to-date, we've repurchased $15 million of our debt and declared $3 million common dividends to be paid at March. Compared to the 2014 adjusted free cash flow of $30 million, we expect 2015 to show a decline primarily because of lower project adjusted EBITDA partially offset by lower corporate G&A, lower cash interest and modestly lower debt repayment.
Slide 17 shows the breakdown of G&A expenses for 2013 and 2014, as well as our expectation for 2015. We've broken it down by the three primary components of project level G&A, development expenses and corporate G&A.
Last years total of $45 million included $6 million severance expenses. As Jim indicated, we have already taken steps necessary to achieve an expenses level of now more then $38 million for 2015 which would represent a reduction of nearly $16 million or 29% from 2013.
The $38 million includes approximately $3 million of severance charges that we expect to record this year. We continue to focus on our overhead cost and expect continued significant reductions in 2016.
Lastly, turning to slide 18, I'll provide an update from our 10-K and a couple of items we've discussed in the past. First, goodwill. You may recall that the third quarter of 2014 we undertook an event driven impairment analysis which resulted in non-cash goodwill impairments of $92 million at three of our projects. In the fourth quarter we performed our annual assessment of our goodwill and carrying values of our long lived assets which did not result in any further impairments.
We also [indiscernible] for which the PPA expire at year end. In the second quarter we had impaired the projects remaining $5 million of goodwill and wrote down the carrying value of its assets by $10 million. Our analysis determine that no further impairments were required at this time.
Second, Piedmont. The project remains out of compliance with a debt service coverage ration due to outages that reduced expected capacity payments and higher than expected fuel costs. As long as the project remain out of compliance it is prohibited to making cash distributions. We do not expect Piedmont to meet its debt service coverage ratio test before 2017 in the earliest.
Third, as previously disclosed, the company is not compliance with fix charge coverage ratio test included in the restricted payments covenant of the 9% senior unsecured notes. The restricted payments covenant limits our ability to pay common dividends in the aggregate with a greater $50 million, 2% on net assets which was approximately $56 million at December 31.
We have utilized $35.6 million of this basket capacity to the March 2015 dividend that was recently declared. However the debt prepayment charges that we incur in the first quarter of 2014 will rollout of the coverage ratio calculation this quarter and therefore we expect to be back in compliance with this test in the second quarter assuming no additional prepayment charges are recorded.
Now, I'd like to turn the call over to Dan.
Dan Rorabaugh
Thanks, Terry. And good morning, everyone. As Jim mentioned, we're excited about the opportunities we have to grow our cash flows by making compelling investments in our existing projects. These investments have strong current returns and require relatively modest capital investment. They also have shorter pay backs in typical development project and they are not subject to the degree of competition that external projects are, so we see them as having much higher risk adjusted returns.
You've heard talk about these optimization projects on past calls, but we're now defining these a bit narrowly than the last time we spoke to you. In the optimization category, we're including only those projects designed to boost production, improve efficiency or increase the margin of the project.
The most significant of these projects that we completed in the past two years, include we replaced an upgraded to steam generator Nipigon which increases output and improves efficiency in order to increase revenues, we re-powered two turbines at Curtis Palmer Units 4 and 5 with more efficient equipment for higher output, we installed power phase technology at Morris to increase output from the gas turbines increasing total plant output by about 7 megawatts during times of higher ambient temperature. We upgraded the Interconnect at North Island for higher out put in order to increase energy revenues during the peak summer season and re-weighted [ph] the wood fire boiler at Calstock
to increase steam generation and energy revenues.
In 2013 and 2014, we made approximately $18 million of these optimization investments, including many that were quite small well on a $100 investments required. The ones I highlighted accounted for about $14.5 million or approximately 80% of the $18 million total.
We expect the cash return on these investments of about $4 million to $8 million this year. The power phase project at Morris was only completed after the summer peak season last year, so as we gain operating experience with how the units performed this summer, we expect to refine this range.
We are planning on investing another $11 million in optimization projects in 2015 with the most significant investments, including several projects at Morris, including upgrades to gas turbine and water treatment, design to improve plant heat rate, steam delivery reliability an to boost power output.
Also we'll replace the purified water production system with new more efficient equipment that we expect will produce better margins for us. As second phase at Nipigon to install the pure [ph] water booster pump to further increase steam and electricity generation, some work at Namcom [ph] to improve the projects efficiency and optimizing the spillway system at Curtis Palmer to reduce force outages and de rates and increase generation, together these projects account for about 90% of the $11 million.
We believe that the three year total investment of approximately $29 million will yield annual cash flow benefits of at least $10 million beginning in 2016. After this year, we're also optimistic that we can continue to make $5 million to $10 million per year of this cycle of high return investments.
In addition to these optimization projects, we're doing a number things on the asset management front to improve the value of our projects often with very low investment required, examples include bringing third party management contracts in house and improving churns of fuel suppliers and other vendors. Although these are not included in the investment or cash returns I just discussed, they are very attractive uses of our cash and we will expect them to be additive to those cash returns.
Now, I'd like to touch briefly on another value driver for us. Opportunities to enhance the value of our existing PPAs or extend them ahead of this schedule exploration date, thereby extending the commercial viability of our existing fleet. As you know the PPAs for our Selkirk and Tunis projects expired in 2014 and we do not have any other explorations before year ended 2017, on a PPAs for two of other Ontario projects are schedule to expire.
We continue to work on potential early extension or renewals of PPA expiring 2018 and beyond by creating value for both the customer and ourselves. This includes responding to request for offers or proposals RFOs, RFPs, as well negotiations with existing customers outside of the formal RFO or RFP process.
In some cases, we're looking at making additional investments at existing facilities to support our existing customers and we expect to be compensated for these investments either through amendments to the existing PPA or extensions or renewals of the PPA.
Although we don’t have specific announcements to make at this time, we are optimistic that our efforts will produce some results as early as this year.
Lastly, I'd like to provide an update on our Tunis project. We shut the plant down on December 31, and completed mothballing the project earlier this month. The expected cost to maintenance in this status is negligible.
We also announced in mid January a new 15 year agreement with the independent electric system operator which would be effective at our option starting between November 2017 and June 2019. Under this arrangement Tunis will operate as a market participant receiving capacity payments for being available and making energy margin when it is economic to operate.
The agreement is subject to two conditions. First, that we're able to make the necessary modifications to Tunis to convert it to simple cycle operation which we don’t see as an obstacle and expect would require only modest capital cost. And second, that we are economically able to procure firm gas transportation for the project.
The latter is dependent on the pricing that will result from pipeline capacity auctions in the region which is not within our control but we're optimistic on this point, particularly because of some new gas supply projects proposed for this time frame,
Now I'll turn it back to Jim.
James J. Moore
Thanks, Dan. United States and Canada have need for low cost efficient fleets of renewable and non-renewable generation facilities much like shale investment has had a huge beneficial impact on the manufacturing base and other consumers of power and reduced the [indiscernible] imports.
Having a reliable low cost power grid is important. The maker of the power grid is evolving rapidly. We think Atlantic Powers fleet and the potential to grow that fleet will make it important contribution to United States and Canada.
That’s our mission, provides reliable, low cost power for customers, while growing the intrinsic value for share of our equity. There are two parts to the Atlantic Power teams job in the coming months and years.
First, we need to rationalize the balance sheet cost and business overall. Second, we need to grow the business but in a highly disciplined rational manner, focusing not on absolute size, but on growth and intrinsic value per share. By approving our balance sheet and reducing our cost structure, we believe we could the company in a stronger position to be competitive for growth opportunities. I look forward to updating you on our progress on future calls.
Let me conclude by saying, I didn’t come to Atlantic Power to get ready for sale, I came here to serve the shareholders, customers and employees. In my last two IPPCO jobs I was in place for seven years each and we grew both businesses rapidly. At the end we took one business public as part of the parent transaction and we sold the other bus twice I prefer to have another seven year longer run at building a great power business, but if someone wants to buy the company we'll have a view on intrinsic value, we'll look at the price the value proposition versus where we can get to on our own.
That concludes my prepared remarks. We're now please to take any questions you may have.
Question-and-Answer Session
Operator
We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Rupert Merer from National Bank. Please go ahead.
Rupert Merer
Hi, good morning everyone. Good update. On the NCIB, how much liquidity is available for future buybacks of debt and can you effectively refinance your NCIB with other credit facilities, like your revolver?
Dan Rorabaugh
Well, I mean, the NCIB is limited to 10% of the outstanding principal amount of those various instruments on a annual basis, so in this case approximately $35 million. Our intent is not to use revolver for that purpose, our intent – I think when we talked about this in the last call as to you, trying to a minimum of $15 million and perhaps up to the total of $35 million, if the valuation of those instruments is compelling and if we have sufficient discretionary cash flow to make those purchases.
Rupert Merer
Great. And then on Tunis you said the cost of reconfiguration to simply cycle was not significant, but how are you looking at the return on that investment and how does it compare with your other low hanging fruit for optimization capital?
Dan Rorabaugh
Well, I mean, the conversion to simple cycle gives us access to a 15 year PPA extension, so I would say, pretty compelling returns in that regard. And it really is in the case of conversion we'll get compensated for our operations largely via capacity payment, its already been negotiated.
Rupert Merer
Okay. Sounds very good. I'll leave it there. Thank you.
Dan Rorabaugh
You're welcome.
Operator
The next question is comes from Ben Pham from BMO Capital Markets. Please go ahead.
Ben Pham
Thanks. And good morning, everybody.
Dan Rorabaugh
Morning.
Ben Pham
Morning. I just wanted to go back to your six priorities, is that spoken in rank of priory?
Dan Rorabaugh
Yes, I'd say pretty much, so and there is no mathematical kind of precision to it. But roughly speaking.
Ben Pham
Okay. And then just on priority number one, the asset sale – and looking at that over the next quarter, could you talk about other than just valuations, is there anything else that you're looking at as criteria to [indiscernible] geography you are trying to get of same size that you want to target upfront to move the needle?
Dan Rorabaugh
No, I am very agnostic about technologies and geographies and to me it’s all about price to value. We wouldn’t be selling perhaps if we had a less leveraged balance sheet, certainly given the robust market for assets today and the fact that our leverage is so high, we want to take advantage of that window to rebalance. And so that process is going to focus on price to value and not on technologies or geographies.
Ben Pham
Okay. And then you mentioned – you did mention high debt or high leverage on the balance sheet, and you've been paying that quite a bit over the last year, are you expecting to get to your historical debt EBITDA levels to feel that you have a more better position balance sheet, i.e. five times that EBITDA?
Terrence Ronan
Hi, Ben. Its Terry. We talked about this a bit on the last call as setting up some guidelines and one was to get our consolidated debt to adjusted EBITDA ratio down at the range of five to five and three quarters times over time. And I think that the – it’s a matter of timing.
We've talked about looking at selective asset divestures and the proceeds of any such divestures would allow us to do that more rapidly, with the goal of more than likely targeting our highest cost of debt capital, but leaving us with some options to do some other things with some of the other instruments.
In the even that, you know, there wasn’t a transaction like that. We are amortizing sort of in that $75 million a year, between the term loan B and project related debt and we're also going to be looking at the debt itself of the balance sheet with a strong bank market with opportunities to potentially refinance some of these facilities upsize other facilities, push out maturities, increase amortization. So I think we have a number of options there, so it comes down to a matter of timing on some of these asset sale divesture possibilities on how quickly we can get to the five to five and three quarters times, but directionally that’s where we're heading.
Ben Pham
Okay. Thanks for taking my questions.
Terrence Ronan
Thanks, Ben.
Operator
The next question comes from Nelson Ng from RBC Capital Markets. Please go ahead.
Nelson Ng
Thanks. Quick question on the $110 million unrestricted cash, so is the intention to continue to proceed with the NCIB or did you have any other plans with that cash, given that your free cash flow should cover of some of it, pretty much you dividends and everything else?
Terrence Ronan
Well, I think it comes down to valuation. Let me just start off with the 110, we've talked in the past about the working capital needs of the businesses, so being in the $80 million to a $100 million range, that’s one thing that we keep in mind.
Secondly, I talked last quarter – earlier today about our intent with the NCIB is predicated on the compelling valuation of what we're buying versus what we could do with the cash otherwise. So we've targeted at least $15 million and depending on the circumstances and available cash we could go all the way up to the limit of $35 million.
At the same time, my partner Dan is looking at optimization projects internally that have high returns. So we'll be balancing all those items with our free cash flow that we have a discretionary use for whether it’s the coverts, whether its other optimization projects or whether it’s the high yield. I think of it that way.
Nelson Ng
Okay. So, realistically the 800 out of the 110 is affects reserve for kind of working capital, is that another way of looking at it?
Terrence Ronan
That is the way to look at it, yes.
Nelson Ng
Okay. And then just moving to Orlando, you mentioned that 2015 contribution should be higher, I was just wondering how much of the gas going forward is hedged relative to the 20, 23 PPA exploration?
Terrence Ronan
Right now I think that if you look at 2015, we've got about 100% of our on-peak and base load hedged and then as you go out into future years, right now we have some of the on-peak hedged to 16 at Orlando and then not much beyond that. But its something that we're looking at all the time, but we look at gas storage levels and the surprising amount of production despite a very cold winter last year and how well storage filled up and where gas prices are today, we're going to be very thoughtful about what we do beyond – beyond where we are today. But attractive places will – we'll probably step in and do something, not necessarily everything, but something.
Nelson Ng
Okay. And the my last question is on Selkirk, did the asset generate negative EBITDA in Q4, and I was just wondering in terms of your expectations for 2015, and seasonality do you expect EBITDA to be positive and let say Q1 and during December in Q3 and during the shoulder periods would you expect potential negative EBITDA for that asset in 2015 and also going forward?
Terrence Ronan
So Selkirk will really have two streams of revenue, one is selling steam to the thermal host and the other is playing as a market participant and yes, you would naturally expect bigger revenue for the merchant plant in New York will come in the summer time.
Having said that, we're seeing opportunities to do things like enter into hedges and make income, but yes, you would naturally expect those summer months to be the biggest earning months.
Nelson Ng
Okay. Thanks for that. Those are all my questions.
Terrence Ronan
Thanks, Nelson.
Operator
The next question comes from Matt Farwell from Imperial Capital. Please go ahead.
Matthew Farwell
Hey, good morning. Thanks for the great color so far. Some questions on the refinancing tenant [ph] of your goals, can you just give me some thoughts on how you would approach that and I am looking at the Holdco notes you've got the convertible notes and the senior notes, would you entertain some sort of more formal tender offer for the convertible notes in conjunction with a global refinancing at the Holdco perhaps in conjunction with the dividend cut.
I guess secondarily if you do plan to cut the dividend how would address the retail shareholder impact I think as the shares were hit pretty hard the last time, would there be plan to sort of mitigate the impact through the communication of building shareholder value?
Terrence Ronan
Well, let me talk to the first one before we get to the second. I think we have a number of options and strong bank market right now, perhaps not quite as strong as last year, but still very robust. A lot of this depends on timing, I think we've talked a bit today about selected asset, divestures and interest in the market.
I think that should we execute on one of those that the use of proceeds would be used primarily for leverage reduction. We've talked at lengths I think about the high yield notes being our highest cost of debt capital. On the other hand, the 17s mature before that. So – and that we may not have an asset divesture, but any event I think that one option would be to upsize the existing term loan and perhaps take out some of the other pieces of debt as we see fit, whether its high yield or the coverts.
The valuation again plays a big role of what we choose to do, but we're aware of the maturities and what they come up also. And that’s something we look at in either circumstance with selective assets divestures or not. So its just a matter of timing I think on that.
The second question regarding the dividend, I think we've been pretty clear that the dividend is – the dividend policy of a dividend level is at the discretion of the Board of Directors and I think Jim made it pretty clear during his part of the presentation that as we go down the road and we execute on some of these objectives that is something that the board and management will be looking at to determine what is the optimal dividend level going forward as we go down the road as a company.
Dan Rorabaugh
Yes, I'll just jump in there a bit a say, the dividend policy set by the board, but I think its way too early to call the level of the dividend, either direction. I think the asset divestures is important and then reshaping the balance sheet and then we need to determine where we're trying to go with the company and growth and I think we can put all that together we can make a more thoughtful analysis of the dividend.
Anything we do on the dividend now, I expect will be on the back of strength and not on the back of weakness. So I think anything we communicate should be part of a stronger company going forward this year.
Matthew Farwell
That’s great. Other question on the optimization investment could you just give us an idea going forward how - what is your how do you think about them with respect to metrics, are you looking for three or four year payback something like that?
Terrence Ronan
Certainly that’s what we've been achieving and that's what makes them enticing you know you would expect maybe some decline in that – that we pick over, but my view on this is these initiatives are largely made possible by change and so as we have changes in the relationship with gas price and power, we have change in our thermal host, steam load, markets, these where the opportunities come from. So what we're doing is evaluating changes and opportunities and looking for places we can optimize around that and so far we're getting very high returns.
Dan Rorabaugh
And I'll just jump in that, I think the internal investments are so compelling versus anything available in the external market that it’s really a no-brainer for us. The question that I focused on is, how much of a backlog do we have, how many year does it go out, is reportable we kind of picked up the low hanging fruit and then what's the run rate on that, cash, is it kind of lumpy or is it look more like a trapezoid and so far the answers are coming back are probably the most pleasant surprise I've had the company. I think there is just lot of scope to grow the value with a company where things that are just much more compelling than was available on the external market place.
Matthew Farwell
That make sense. And then when we look at the 2017 contract explorations, could you give us an estimate of what EBITDA or cash flow is at risk?
Terrence Ronan
Well, if you look at the 2017s on – that’s North Bay and Kapuskasing, we don’t generally give guidance on those numbers, but to give you a flavor, let see, I think if you, on page – table 13 of the press release is a breakout of those various projects. So if you look at those combined, its probably in the $20 million range of EBITDA, North Bay and Kapuskasing.
So, we had – I think we talked a long time about the inability to get insight into the OPA contracting process and we did manage to get a contract at Tunis that we were pleased with and I think that the number we came up with in that contract and its up being approximately what we talked about, a 75% approximately cut or thereabouts from what we experienced in the past and we have a [indiscernible] yet to change our opinion on that. There is certainly some optimism that the supply, demand dynamics will change over the next three years of the province, but for now I think if you looked at Tunis, if we had to call up today you'd be looking at something similar at Captain and North Bay going forward. But we're still – we're more than 2 years away from that and we're optimistic it might be a little bit better, but for now you should look at that as Tunis.
Matthew Farwell
Got it. That’s very helpful. Could you review the currency exposure how you explain the currency exposure of the company with respect to EBITDA or free cash flow since some of your debt is denominated in Canadian dollars that currency is depreciated?
James J. Moore
Sure well we have in general when you look at our project adjusted EBITDA that US dollars has strengthen versus the Canadian dollar. So there is a translation adjustment to that.
Now that’s on pure project adjusted EBITDA what I would tell you that with the dividend reductions that we had and some of the convert that we most recently paid off we’ve gone from short Canadian dollars to slightly long Canadian dollars.
So though there is that there is a translation impact on project adjusted EBITDA, by the time you roll through our Canadian denominated securities we actually come out pretty close to breakeven probably of slightly on the positive side.
So right now we haven’t got anything hedged as far as the Canadian dollar goes just because of that relationship of being slightly long Canadian dollars and the debt that we have north of the border.
Matthew Farwell
Great well I appreciate the color and good luck in the next quarter.
Thanks Matt.
Operator
The next question comes from Sean Steuart of TD Securities. Please go ahead.
Sean Steuart
Thanks good morning everyone. Just one question. On question on growth and this sounds like it will be longer term priority for you guys. But with respect to development is there anything in the Ridgeline portfolio that you guys see is maybe coming to fruition over the next few years?
James J. Moore
No I think growth is going to come more from the late stage development things that are not quite ready to Yieldcos creative M&A and if we get to a modest side deal we can move in the needle given the size of the company. But nothing Greenfield or from Ridgeline it is really kind of progressing at this point.
Sean Steuart
Okay, thanks that’s all I had guys.
James J. Moore
Thanks Sean.
Operator
The next question comes from [indiscernible]
Unidentified Analyst
Yes if we cannot just talk about your redefining growth CapEx and maintenance so I always classify growth CapEx as something that improves margin as you did this time.
And maintenance is something that doesn’t reduce margin. And I was curious just what changed this straight forward definition, but at the same time you reduce that from 27 to 18, but the expected cash return did drop as well from a range of 8 or somewhere single number 8 to the range of 4 to 8.
So I was wondering if you can talk about you are redefining it and how that affects your return profiles that you’re showing the street?
James J. Moore
Sure in terms of the redefinition it’s really separating out we have sort of one category that we call the optimization initiatives and they had within it a number of activities that will really started in the commercial and asset management arena.
We do a regulatory filing and get some ancillary services or things with sometimes very small investment and various sort of outsize return. And we took in now to look at it how we’re defining all this for the reason you said.
We had to separate out the actual optimization initiatives the things that I said increase efficiency, output, availability, and that’s discretionary spend is not mean the spending but discretionary spending that achieves those objectives.
And the other thing that we did I mean we still we spent the money and we sort of get the returns. But if you look at strictly the optimization investments that’s the $4 million to 8$ million.
So it takes out the commercial activities, but it also gives us room to see how the both the Morris power base project do and double check our Nipigon this spring we’ll be seeing how it does and sort of the shorter months. And once we get those returns and we’ll be able to narrow down that range.
Unidentified Analyst
Okay, great. And then on the preferred there was – wasn’t any mention as I see the dividend decline and there was a rate reset. And a couple of questions, where do you see that is obviously they had a severe discount to liquidity preference.
So the implied IRR if there’s going to be liquidity event it would be quite high on those. But also with reset is there any floor in that or if government rates go negative is there a chance where you just use the negative rate as the base to determine the spread?
James J. Moore
Yeah, there’s a spread above that government rate. So and that spread is 4.18%, but I think that that would be the floor to break one negative I don’t think that we get the negative type of spread would be floor of 4.18.
Unidentified Analyst
Okay. And in terms of buying those back where do you – how do you think of those?
James J. Moore
Well I think certainly mathematically we’d agree with you that would be a great buy if we had additional liquidity and not as much leverage as we have, but right now our focus is going to be on he viability side of the balance sheet with respect to debt at least for now.
Unidentified Analyst
Okay, great, thanks a lot.
James J. Moore
You’re welcome.
Operator
And the last question today will come from [indiscernible]
Unidentified Analyst
Good morning gentlemen. Thanks for taking my call. My first question is about the D&O insurance. Can you clarify what you mean by that with respect to the shareholder law suits can you basically summarize that for us is that issue kind of been put to bed?
James J. Moore
Well as far as the D&O insurance goes we’ve never disclosed how D&O insurance we have I would tell you that from our perspective and the intelligence we have through our brokers and so forth.
That we have a level of D&O insurance that is very similar to other companies of our size and this industry so we feel comfortable about that.
We do disclose in the 10-K where we are, the shareholder litigation, it’s working slowly through the courts that’s somewhat frustrating for us, but we’ve got a motion to dismiss in place that the judge will hear at her discretion totally will be shortly.
And that we’re working to the Canadian courts too, but other than that really can’t say much more and then much from the 10-K.
Unidentified Analyst
Well I mean the press release talked I was just replication about what you put in the press release last night with respect to the D&O insurance so?
James J. Moore
Well again we haven’t disclosed the amount don’t think it’s that interest to do so.
Unidentified Analyst
And I’m not asking you, and I’m not asking that can you clarify the press what you put in the press release last night?
James J. Moore
All right well let me look at the press release and see if I can buy that.
Unidentified Analyst
Or we can talk offline if that’s better for you.
James J. Moore
I’m happy to talk offline.
Operator
I would like to turn the conference back over to Jim Moore President and CEO for any closing remarks.
James J. Moore
Okay, thanks for your time and attention today and for your continued interest in Atlantic Power. We look forward to updating you on our progress in May. Thanks.
Operator
The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.
• Atlantic Power (NYSE:AT): Q4 EPS of -$0.09 beats by $0.06.
• Revenue of $142.4M (+9.0% Y/Y) misses by $7.7M.
• Press Release
Would like to see back above 3.5-4 as it was around mid 2014. IMO I believe we will continue to see the trend upward and hold support over 3.1
Nice close for sure. I noticed yesterday that a 30K order came in after close. It happened today that a 38k order cam in at 4:05 for $2.90.
This should move next week. I am really ready for this to start closing the gap.
Really picked up in volume.
I agree, though i wish were had been at $2.80 yesterday. The earnings were good and we beat the street by .06 a share. I think this should be the turn around point for this stock.
Atlantic Power Corporation Releases Fourth Quarter and Year End 2014 Results
Font size: A | A | A
5:27 PM ET 2/26/15 | PR Newswire
Atlantic Power Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the "Company") today released its results for the three months and year ended December 31, 2014.
"Since our third quarter earnings call, Atlantic Power has made significant progress on its strategy by meaningfully reducing overhead costs, delivering attractive cash returns from discretionary investments in its fleet, and moving ahead on a potential asset divestiture process," said Mr. James J. Moore, Jr., President and Chief Executive Officer of Atlantic Power. "Our plans for 2015 include further significant reductions in our overhead run rates from 2015 to 2016 and additional investments in our fleet at cash returns and risk levels that are much more favorable than those available in the external markets, both of which should result in improved internal cash flow. In addition, we are evaluating potential asset divestitures as well as refinancing to achieve our goal of reshaping our debt. We expect that our successful execution of this plan will provide a stable platform for Atlantic Power to begin growing its business again in 2016 on an absolute basis, in addition to the organic growth in cash flows provided by returns on discretionary investments in our fleet and cost reductions."
Mr. Moore continued, "Project Adjusted EBITDA for 2014 came in at the high end of our guidance range. We also generated an increase in Adjusted Cash Flows from Operating Activities, which we used to reinvest in our projects, pay down debt and pay dividends to shareholders. Our results benefited from strong wind generation, increased waste heat at our Ontario generation projects, and steps we took to reduce administrative expenses. We also received a modest contribution from the $18 million of discretionary optimization investments made in our existing fleet in 2013 and 2014."
"We continue to make significant progress in rationalizing our corporate overhead, including development expense, reducing it from $54 million in 2013 to an expected level of $38 million or lower in 2015, with further significant improvement expected in 2016. We also expect to make another $11 million of discretionary optimization investments in 2015, for a three-year total of approximately $29 million. By 2016, we expect these investments to be producing a cash flow benefit of at least $10 million annually," said Mr. Moore. "In addition, we remain focused on reducing our leverage through amortization, opportunistic repurchases of our debt and the use of proceeds from potential asset divestitures, if market valuations are compelling, or by reshaping our debt through refinancing and extended amortization. We expect to be able to provide greater detail on these efforts by our next quarterly earnings report."
All amounts are in U.S. dollars and are approximate unless otherwise indicated. Adjusted Cash Flows from Operating Activities, Free Cash Flow, Adjusted Free Cash Flow, Cash Distributions from Projects, Project Adjusted EBITDA and APLP Project Adjusted EBITDA are not recognized measures under generally accepted accounting principles in the United States ("GAAP") and do not have standardized meanings prescribed by GAAP; therefore, these measures may not be comparable to similar measures presented by other companies. Please see "Regulation G Disclosures" attached to this news release for an explanation and the GAAP reconciliation of "Adjusted Cash Flows from Operating Activities", "Free Cash Flow", "Adjusted Free Cash Flow", "Cash Distributions from Projects" and "Project Adjusted EBITDA" as used in this news release. The Company has not reconciled non-GAAP financial measures relating to individual projects or the APLP projects to the directly comparable GAAP measures due to the difficulty in making the relevant adjustments on an individual project basis. The Company has not provided a reconciliation of forward-looking non-GAAP measures, due primarily to variability and difficulty in making accurate forecasts and projections, as not all of the information necessary for a quantitative reconciliation is available to the Company without unreasonable efforts.
View data
Atlantic Power Corporation Table 1 - Selected Results (in millions of U.S. dollars, except as otherwise stated) Years ended December 31, Unaudited 2014 2013 Excluding results from discontinued operations (1) Project revenue $569.2 $544.1 Project (loss) income (50.5) 63.7 Project Adjusted EBITDA 299.3 268.9 Cash Distributions from Projects 248.9 223.0 Adjusted Cash Flows from Operating Activities 142.4 75.7 Adjusted Free Cash Flow 29.9 37.6 Aggregate power generation (thousands of Net MWh) 8,199.3 8,094.5 Weighted average availability 93% 95% Including results from discontinued operations (1) Cash flows from operating activities $65.0 $152.4 Free Cash Flow (55.6) 108.8 (1) The Path 15 transmission line ("Path 15"), Auburndale Power Partners, L.P. ("Auburndale"), Lake CoGen, Ltd. ("Lake") and Pasco Cogen, Ltd. ("Pasco") (collectively, the "Sold Projects") were sold in April 2013, the Company's interest in Rollcast Energy ("Rollcast") was sold in November 2013, and Thermo Power & Electric, LLC ("Greeley") was sold in March 2014. Accordingly, the revenues, project income (loss), Project Adjusted EBITDA, Cash Distributions from Projects, and Adjusted Cash Flows from Operating Activities from these assets are included in discontinued operations for the years ended December 31, 2013 and December 31, 2014. The results of discontinued operations are excluded from Project revenue, Project income, Project Adjusted EBITDA, Cash Distributions from Projects, Adjusted Cash Flows from Operating Activities and Adjusted Free Cash Flow as presented in Table 1. The results for discontinued operations have also been excluded from the aggregate power generation and weighted average availability statistics shown in Table 1. Under GAAP, the cash flows attributable to the Sold Projects, Rollcast and Greeley are included in cash flows from operating activities as shown on the Company's Consolidated Statement of Cash Flows; therefore, the Company's calculation of Free Cash Flow shown on Table 1 also includes cash flows from the Sold Projects, Rollcast, and Greeley. The Gregory project ("Gregory"), which was sold in August 2013, and the Delta-Person generating station ("Delta-Person"), which was sold in July 2014, are both accounted for under the equity method of accounting and therefore are included in the Company's financial results from continuing operations.
Year End 2014 Financial Highlights
-- Project Adjusted EBITDA of $299.3 million increased $30.4 million from 2013 and came in at the high end of the Company's revised guidance range of $285 to $300 million
-- GAAP results included $106.6 million of non-cash impairments and an $8.7 million non-cash loss on changes in the fair value of derivatives, partially offset by an $8.6 million asset sale gain, for a project loss of $(50.5) million; excluding these items, project income was $56.2 million. For 2013, project income of $63.7 million included a $34.9 million non-cash impairment, which was more than offset by a $49.5 million non-cash gain on changes in the fair value of derivatives and a $30.4 million asset sale gain; project income excluding these items was $18.7 million. Thus, the year-over-year increase in project income excluding these items was $37.5 million
-- Cash flows from operating activities of $65.0 million decreased $87.4 million from 2013, primarily due to interest expense related to the debt repayment and repurchase transactions in the first quarter of 2014, changes in working capital and the loss of cash flows from businesses that were divested in 2013
-- Free Cash Flow of $(55.6) million decreased $164.4 million from 2013 due primarily to the decrease in cash flows from operating activities described above, increased debt repayment and higher capex
-- Adjusted Cash Flows from Operating Activities, which excludes the items affecting cash flows from operating activities described above, was approximately $142 million in 2014, and was primarily used to reduce debt, fund capital expenditures, and pay dividends to shareholders; the increase of $66.7 million from 2013 was attributable to increased Project Adjusted EBITDA, higher cash distributions from projects and modestly lower cash interest expense
-- Adjusted Free Cash Flow of $29.9 million decreased $7.7 million from 2013, as the increase in Adjusted Cash Flows from Operating Activities was more than offset by a higher level of debt amortization
-- Completed $18 million of major optimization projects in 2013-2014 and expect to realize cash flow benefit of $4 to $8 million in 2015
Progress on Debt Reduction Goals
-- Reduced outstanding amount of APLP term loan through mandatory amortization and cash sweep by $58 million, approximately $5 million more than expected
-- Repaid approximately $29 million of project-level debt, including at equity-owned projects
-- Repaid Cdn$44.8 million convertible debenture at maturity on October 31, 2014 using cash on hand; expect interest savings in 2015 of $2.7 million
-- Repurchased $3.1 million of convertible debentures in December under Normal Course Issuer Bid (NCIB) and another $6.1 million in 2015 to date
-- Repurchased $9 million of senior unsecured notes in January 2015; amount outstanding now $310.9 million
2015 Guidance and Capital Deployment Plans
-- Total Company Project Adjusted EBITDA of $265 to $285 million
-- APLP Project Adjusted EBITDA of $148 to $160 million
-- Adjusted Cash Flows from Operating Activities of $120 to $140 million
-- Adjusted Free Cash Flow of $10 to $30 million
-- Expect to achieve at least a $16 million reduction in general and administrative (G&A) and development expenses in 2015 relative to 2013
-- Planning $11 million of optimization investments in 2015
-- Expect major maintenance and capex of approximately $35 million in 2015
-- Expect to amortize approximately $48 to $54 million of APLP term loan and $24 million of project-level debt (total of approximately $75 million); will continue to evaluate opportunistic debt repurchases using cash on hand and proceeds from potential asset sales, if market valuations are compelling
Strategy
The Company continues to focus on executing its business plan, including the objectives of enhancing the value of its existing assets through discretionary capital investments and commercial activities, delevering its balance sheet to reduce its interest expense and improve its cost of capital to better compete for new investments, improving its cost structure and reducing overhead. In addition, the Company continues to assess other potential options, including selected asset sales or the contribution of assets to a joint venture, if the valuation of a particular asset or assets is compelling, in order to raise additional capital for growth and/or debt reduction. Going forward, as the Company executes its business strategy, and consistent with its objectives, the Board of Directors, together with management will regularly evaluate the optimal dividend policy for the Company.
Operating Results
Project availability declined to 93.4% in 2014 from 94.8% in 2013. The decrease was attributable to a combination of forced outages (some weather-related, particularly in the first quarter) and extensions of scheduled maintenance outages, particularly at Nipigon, Chambers, Orlando and Canadian Hills. For the year, reduced availability resulted in capacity payments being $10.3 million lower than their expected level. The majority of this impact was at the Ontario projects, which had unplanned outages due to weather and other factors in the first quarter of 2014, and Piedmont, which had several forced outages during the year.
Generation increased 1.3% year over year due primarily to the addition of Piedmont in April 2013 (additional quarter in 2014), increased generation at Orlando due to the expiration of an unfavorable natural gas contract in the comparable 2013 period, higher dispatch at Frederickson and favorable wind conditions for Meadow Creek. These positive comparisons were partially offset by reduced dispatch at Manchief and Williams Lake, reduced generation at Selkirk due to mild summer weather, and reduced generation at Canadian Hills due to weather-related outages.
Financial Results
Table 2 provides a breakdown of project income and Project Adjusted EBITDA by segment for the year ended December 31, 2014 as compared to the same period in 2013.
View data
Atlantic Power Corporation Table 2 - Segment Results (in millions of U.S. dollars, except as otherwise stated) Unaudited Years ended December 31, 2014 2013 Project income (loss) East $21.8 $25.8 West (51.3) 35.8 Wind (11.5) 18.6 Un-allocated Corporate (9.5) (16.5) Total (50.5) 63.7 Project Adjusted EBITDA East $158.5 $150.7 West 78.5 77.2 Wind 69.8 59.6 Un-allocated Corporate (7.5) (18.6) Total 299.3 268.9 Note: Project Adjusted EBITDA is not a recognized measure under GAAP and does not have any standardized meaning prescribed by GAAP; therefore, this measure may not be comparable to similar measures presented by other companies. Please refer to Tables 8 through 11 for a reconciliation of this non-GAAP measure to a GAAP measure.
Project Income
Reported project income can fluctuate significantly due to non-cash adjustments to "mark-to-market" the fair value of derivatives. Non-cash goodwill impairment charges and gains or losses on the sale of assets are included in project income and can also affect year-over-year comparisons. None of these items are included in Project Adjusted EBITDA.
Project income decreased by $114.2 million to a loss of $(50.5) million for the year ended December 31, 2014 compared to project income of $63.7 million for the same period in 2013. The reduction in project income was primarily due to non-cash impairment charges in 2014 of $106.6 million, an increase of $71.7 million from the 2013 period; decreased asset sale gains of $21.8 million; net year-over-year non-cash changes in the fair value of gas purchase agreements and interest rate swap agreements accounted for as derivatives totaling $(58.2) million; and decreased project income of $11.9 million at Selkirk, due to lower energy revenues and accelerated depreciation. These negative factors were partially offset by improvements at several projects in the East and West segments due to favorable outage comparisons; increased margins at Morris and Orlando; lower interest expense at Curtis Palmer; improved generation at Meadow Creek; an additional quarter of Piedmont operation; and a $7.1 million reduction in loss in the Un-allocated Corporate segment, primarily attributable to $3.5 million in development and administrative expense reductions at Ridgeline as well as administrative reduction initiatives undertaken during the year.
Excluding the non-cash impairment charges, asset sale gains or losses and non-cash changes in the fair value of derivatives described above, the comparisons would be as follows:
-- 2014: Reported project loss of $(50.5) million included $106.6 million of non-cash impairments, an $8.7 million non-cash loss on changes in the fair value of derivatives, and an $8.6 million asset sale gain. Excluding these items, results were project income of $56.2 million.
-- 2013: Reported project income of $63.7 million included a $34.9 million non-cash impairment, which was more than offset by a $49.5 million non-cash gain on changes in the fair value of derivatives and a $30.4 million asset sale gain. Excluding these items, project income was $18.7 million.
-- Thus, the year-over-year increase in project income excluding these items was $37.5 million. The increase was attributable to the factors described previously (improved results at several projects, lower interest expense at Curtis Palmer and a reduction in loss in the Un-allocated Corporate segment).
Project Adjusted EBITDA
Project Adjusted EBITDA includes proportional EBITDA from the Company's equity method projects and 100% of EBITDA from Rockland, which is 50% owned by the Company, but is consolidated. Projects classified as discontinued operations are excluded from Project Adjusted EBITDA.
Project Adjusted EBITDA increased by $30.4 million to $299.3 million for the year ended December 31, 2014 from $268.9 million for the same period in 2013, at the high end of the Company's guidance range of $285 to $300 million. For the year, the most significant contributors to the improvement in Project Adjusted EBITDA were the wind projects, primarily Meadow Creek, due to increased generation; the Ontario projects other than Calstock, due to the timing of maintenance expense and increased waste heat generation; Morris, due primarily to an increase in energy revenues, partially offset by higher fuel expenses; Orlando, due to higher gross margins under an amended PPA and following the expiration of above-market gas swaps; Piedmont, due to a full year of operation and lower maintenance expense; Naval Training Center, due primarily to favorable maintenance comparisons; Mamquam, due to favorable maintenance comparisons and improved water flows; and an $11.1 million reduction in loss from the Un-allocated Corporate segment, primarily due to a reduction in development costs at Ridgeline and a reduction in administrative costs. These positive factors were partially offset by decreases at Selkirk, due to the expiration of the project's PPA in August 2014 and lower dispatch due to mild summer weather; Manchief, due to higher than normal dispatch in 2013; Chambers, due to higher major maintenance costs in 2014; the sales of Gregory in August 2013 and Delta-Person in July 2014; and smaller decreases at several other projects in the East and West segments.
Corporate G&A Expense
Administrative expenses, which include corporate-level G&A expense, interest expense, foreign exchange gains and losses and other income, are not included in Project Adjusted EBITDA.
For the year, administration expense increased $2.7 million from the comparable year-ago period. In the second half of the year, the Company incurred $6.0 million of severance charges associated with management changes and personnel reductions, which are expected to result in lower administrative costs going forward. These charges were partially offset by lower transaction costs related to the asset divestitures in 2013 and a reduction in legal expenses, as in the third quarter of 2014 the Company exceeded its deductible under its directors and officers insurance policy with regard to legal costs incurred for the purported class action shareholder litigation, and expects additional incurred costs to be paid by its insurance carrier to the extent set forth under its terms of coverage.
Cash Flow Metrics
Cash Distributions from Projects
Cash Distributions from Projects, which excludes projects classified as discontinued operations, increased by $25.9 million to $248.9 million for the year ended December 31, 2014, compared to $223.0 million for the same period in 2013. This result includes an increase of $8.5 million in the fourth quarter of 2014 from the year-ago period.
Significant increases for 2014 occurred at: (i) Meadow Creek, Canadian Hills, Rockland and Idaho Wind, due to the release of construction-related blade and credit reserves and increased wind generation; (ii) Orlando, due to lower gas costs following the termination of swaps that were above market as well as favorable changes to the project's PPA; (iii) the Navy projects in California, attributable to lower operation and maintenance expenses than in 2013, during which the projects experienced planned outages, and to lower working capital requirements associated with a new gas supply agreement in 2014; (iv) the Ontario projects, due to higher waste heat availability; and (v) Mamquam, due to lower maintenance expense.
These increases were partially offset by decreases at (i) Selkirk, due to the expiration of the PPA at the end of August; (ii) Morris, due to gas storage purchases; and (iii) Chambers, which benefited from the release of the DuPont settlement in the 2013 period and for which there was a change in the distribution date under the project's new debt agreement in 2014. The project made a distribution in December, which was released to the Company in January 2015.
Cash Flows from Operating Activities
Cash flows from operating activities decreased by $87.4 million to $65.0 million for the year ended December 31, 2014 compared to $152.4 million for the same period in 2013. The decrease is primarily due to $46.8 million of interest expense related to the debt repayment and repurchase transactions in the first quarter (as described in more detail in the first quarter 2014 press release dated May 12, 2014), a $65.7 million increase in cash outflows for working capital due to a $39.4 million decrease in prepaid and other assets due to the collection of security deposits related to completed construction projects in the first quarter of 2013, and a decrease in cash flows from discontinued operations (projects sold in 2013).
Free Cash Flow
Free Cash Flow decreased by $164.4 million to $(55.6) million for the year ended December 31, 2014 compared to $108.8 million for the same period in 2013. The decrease is primarily due to an $87.4 million decrease in operating cash flows as described previously, $58.4 million of term loan facility repayments by APLP and a $10.6 million increase in project-level debt repayment.
The Company's full year 2014 Free Cash Flow guidance of $0 to $10 million excluded (i) $49.4 million of interest expense related to the refinancing and debt repurchase transactions and (ii) the $8.1 million Piedmont construction debt repayment. On that basis, Free Cash Flow for the full year 2014 was approximately $2 million compared to $109 million for the same period in 2013. Relative to the Company's guidance, Free Cash Flow was reduced by approximately $5 million due to a higher level of term loan repayments than previously expected.
Adjusted Cash Flows from Operating Activities
Adjusted Cash Flows from Operating Activities increased by $66.7 million to $142.4 million for the year ended December 31, 2014 compared to $75.7 million for the same period in 2013. Unlike cash flows from operating activities, which decreased on a year-over-year basis, Adjusted Cash Flows from Operating Activities excludes the impact of certain non-recurring items, such as the refinancing and repurchase transactions in the first quarter of 2014, as well as changes in working capital (both of which reduced operating cash flow in 2014 relative to 2013). The increase in Adjusted Cash Flows from Operating Activities for the year was primarily attributable to higher levels of Project Adjusted EBITDA, higher cash distributions from projects and modestly lower cash interest expense.
Adjusted Free Cash Flow
Adjusted Free Cash Flow decreased by $7.7 million to $29.9 million for the year ended December 31, 2014 compared to $37.6 million for the same period in 2013, as the increase in Adjusted Cash Flows from Operating Activities was more than offset by higher levels of debt repayment, particularly amortization of the APLP term loan. Unlike Free Cash Flow, Adjusted Free Cash Flow does not include changes in working capital or cash outlays for transaction expenses (such as the refinancing transaction expenses incurred in the first quarter of 2014) or the repayment of Piedmont debt at term loan conversion, both of which reduced Free Cash Flow.
Tables 11 and 12 of this press release provide a reconciliation of the Company's non-GAAP cash flow metrics to cash flows from operating activities.
Financial Results for the Three Months Ended December 31, 2014
Project income decreased by $4.5 million to $2.8 million for the three months ended December 31, 2014 from $7.3 million for the year-ago period. The decrease in project income relates primarily to a $37.5 million mark-to-market decrease in the fair value of derivatives, partially offset by higher levels of Project Adjusted EBITDA and a reduction in project expenses including depreciation and interest expense.
Project Adjusted EBITDA increased by $19.8 million to $77.9 million for the three months ended December 31, 2014 from $58.1 million for the year-ago period. Significant increases occurred at Piedmont (lower maintenance expense due to a maintenance outage in the fourth quarter of 2013 and a partial reversal of a 2013 accrual), Orlando (more favorable PPA and gas supply costs), North Island (major gas turbine overhaul in 2013 period), Williams Lake (higher availability and other factors), and the wind projects in Idaho (favorable winds). In addition, the Company benefited from a reduction in Un-allocated Corporate expenses of $4.8 million due to steps taken earlier in the year to reduce administrative and development expense. These positive factors were partially offset by a reduction at Selkirk, for which the PPA expired on August 31, and which was also affected by mild weather and reduced dispatch in the fourth quarter.
Liquidity
As can be seen from Table 3, the Company's liquidity decreased from approximately $272 million as of September 30, 2014, to $214 million at December 31, 2014, including $110 million of unrestricted cash. During the fourth quarter, the Company used approximately $43 million of cash on hand to repay Cdn$44.8 million of convertible debentures (ATP.DB) at their October 31st maturity date. It also repurchased $3.1 million of convertible debentures under the NCIB and paid $3.1 million of dividends on its common shares.
View data
Atlantic Power Corporation Table 3 - Liquidity (in millions of U.S. dollars) Unaudited September 30, 2014 December 31, 2014 Revolver capacity $210.0 $210.0 Letters of credit outstanding (106.0) (105.7) Unused borrowing capacity 104.0 104.3 Unrestricted cash (1) 167.6 109.9 Total Liquidity $271.6 $214.2 (1) Includes project-level cash for working capital needs of $16.3 million at September 30, 2014 and $18.2 million at December 31, 2014.
Other Financial Updates
Goodwill Impairment Assessment
At December 31, 2014, the Company had $197.2 million of goodwill. As previously reported, the Company performed an event-driven test of its goodwill and long-lived assets at all of its projects as of August 31, 2014 and during the third quarter of 2014 recorded goodwill impairments at its Kenilworth, Manchief and Williams Lake projects. During the fourth quarter, the Company performed its annual goodwill impairment test as of November 30, 2014 and determined that no further impairments were required at that time. The Company also updated its asset impairment analysis for Tunis and determined that no further impairment of long-lived assets was required (the Company had previously written off all of the goodwill at Tunis).
Senior Unsecured Notes - Fixed Charge Coverage Ratio
As previously reported, the Company can no longer satisfy the Fixed Charge Coverage Ratio test under the restricted payments covenant of its senior unsecured note indenture. The test is based on rolling four quarter results. In the second quarter of 2015, the charges recorded in the first quarter of 2014 for the refinancing and repurchase transaction costs will no longer be included in the calculation and the Company expects to be back in compliance at that time. Until then, the Company is limited to the payment of common dividends not exceeding the Restricted Payments basket, which is the greater of $50 million or 2% of consolidated net assets ($55.8 million as of December 31, 2014). Through year-end 2014, the Company had paid dividends totaling $32.5 million that count against the basket provision; another $3 million of dividends declared in February 2015 to be paid in March 2015 are also subject to the basket provision. In addition, any similar debt prepayment charges incurred in connection with further debt reduction would also be reflected in the calculation of the fixed charge coverage ratio on a rolling four quarter basis, beginning with the quarter in which such charges are incurred, as would any associated reduction in interest expense.
2015 Guidance and Outlook
G&A Expense Targets
Project-level G&A expense and Ridgeline expenses, including development expense, are included in the Un-allocated Corporate segment and therefore included in Project Adjusted EBITDA. Corporate-level G&A expense is included in Administration expense, which is not included in Project Adjusted EBITDA. Together these comprise total G&A expense.
As previously disclosed, during 2013 and 2014 the Company undertook a number of steps to reduce its G&A and development costs, including recent management changes and personnel reductions. These actions are expected to result in cost savings going forward, including in 2015. In addition to personnel cost savings, the Company expects to have lower project and business development expense, including a $3 million annual benefit from the scheduled expiration of a contractual obligation related to the Ridgeline acquisition in the first quarter of 2015. In addition, as discussed above, the Company expects to have lower legal expenses going forward.
Total G&A expense in 2014 was $45 million, including $6 million of severance expense. The Company expects G&A expense in 2015 of no more than $38 million, including approximately $3 million of severance expense. The Company is targeting further significant improvement in G&A expense in 2016.
Optimization Investments
In 2013 and 2014, the Company made approximately $18 million of discretionary investments in its existing projects designed to increase the output, improve the efficiency or improve the margins of these facilities. In 2015, the Company expects to realize a cash flow benefit of $4 to $8 million from these investments. The most significant of these projects were the repowering of two turbines at Curtis Palmer, the steam generator replacement and upgrade at Nipigon, an investment designed to boost output at Morris during peak periods and an interconnection upgrade at North Island. The Company expects to revisit this expectation as it gains operating experience with these upgrades over the course of this year.
The Company expects to invest another $11 million in 2015 across a number of projects, with the most significant at Curtis Palmer, Mamquam, Nipigon, and several at Morris. Together with optimization investments completed in 2013 and 2014, the Company expects a cash flow benefit from these investments of at least $10 million in 2016.
In addition to these production-based investments, the Company continues to pursue commercial and asset management opportunities around its existing projects, some of which require only a modest level of capital expenditures or expense. Examples of these include bringing outsourced project management contracts in-house; improving commercial terms around fuel supply or other consumables; reducing letter of credit requirements; identifying ways to improve the terms of existing PPAs for both the Company and its customers; and positioning the projects to be able to take advantage of opportunities in the power markets. Any cash contribution from these efforts is incremental to those realized from production-based optimization projects.
The Company views both the optimization projects as well as its commercial and asset management activities to be an attractive use of its cash considering the relatively modest capital requirements and potential for strong risk-adjusted returns.
Major Maintenance and Capex
In 2014, the Company had capex of $13 million and major maintenance expense of $20 million, for a total of $33 million, in line with the Company's expectation of $35 million. The capex figure is net of approximately $2.4 million of insurance proceeds and other recoveries for Piedmont. Most of the capex (approximately $12 million) were for the discretionary optimization investments discussed above at Curtis Palmer, Nipigon, Morris and North Island.
For 2015, the Company expects capex of approximately $12 million, of which approximately $10 million relates to discretionary optimization investments at Morris, Nipigon and Curtis Palmer. (Approximately $11 million of the $12 million total capex budget is for projects at APLP.) Major maintenance expense is expected to be approximately $23 million, with the increase from 2014 primarily attributable to the scheduled gas turbine outage at Manchief.
Debt Reduction
The Company expects to amortize approximately $24 million of project-level debt in 2015, including its share of debt at equity method projects. It also expects to repay $48 to $54 million of APLP term loan through the 50% cash sweep and 1% mandatory amortization, for a total debt reduction through amortization of approximately $75 million. Amortization of project-level debt and the APLP term loan is expected to average approximately $75 million annually over the next five years ($80 million on a three-year average basis). In addition, the Company will continue to evaluate discretionary repurchases of debt using cash on hand or the proceeds from potential asset sales, if the valuation of a particular asset or assets is compelling. In January 2015, the Company repurchased $9 million of senior unsecured notes. Year to date through February 21, 2015, it had repurchased $6.1 million of convertible debentures under the NCIB.
Guidance
The Company is initiating 2015 guidance as follows:
-- Project Adjusted EBITDA of $265 to $285 million. The decline from 2014 ($299.3 million) is primarily attributable to the expiration of PPAs for Selkirk and Tunis in 2014 and a gas turbine overhaul at Manchief, partially offset by higher results from Orlando, Nipigon and several other projects.
-- Project Adjusted EBITDA for APLP of $148 to $160 million
-- Adjusted Cash Flows from Operating Activities of $120 to $140 million. The decline from 2014 ($142 million) is primarily attributable to lower Project Adjusted EBITDA, partially offset by lower G&A expense and lower interest expense.
-- Adjusted Free Cash Flow of $10 to $30 million. This is net of planned capital expenditures totaling $12 million and consolidated project-level debt and term loan amortization totaling approximately $72 million. The decrease in Adjusted Free Cash Flow from the 2014 level of $30 million is primarily attributable to lower levels of G&A expense, interest expense, and debt amortization, which are expected to be more than offset by lower Project Adjusted EBITDA.
See Table 4 for full-year 2015 guidance and 2014 actual results.
View data
Atlantic Power Corporation Table 4 - 2015 Annual Guidance vs. 2014 Actual Results (in millions of U.S. dollars, except as otherwise stated) Unaudited 2015 Annual Guidance 2014 Actual Project Adjusted EBITDA $265 - $285 $299.3 Adjusted Cash Flows from Operating Activities (1) $120 - $140 $142.4 Adjusted Free Cash Flow (2) $10 - $30 $29.9 APLP Project Adjusted EBITDA (3) $148 - $160 $176.1 (1) Adjusted Cash Flows from Operating Activities is used to evaluate cash flows from operating activities without the effects of changes in working capital balances, acquisition expenses, litigation expenses, severance and restructuring charges, and cash provided by or used in discontinued operations. The intent is to reflect normal operations and remove items that are not reflective of the long-term operations of the business. (2) Adjusted Free Cash Flow is defined as Free Cash Flow excluding changes in working capital balances, acquisition expenses, litigation expense, severance and restructuring charges, and cash provided by or used in discontinued operations. Free Cash Flow is defined as cash flows from operating activities less capex; project-level debt repayments, including amortization of the new term loan; and distributions to noncontrolling interests, including preferred share dividends. (3) APLP is a wholly owned subsidiary of the Company. APLP Project Adjusted EBITDA is a summation of Project Adjusted EBITDA at each APLP project, and is calculated in a manner which is consistent with the Company's Project Adjusted EBITDA calculation. Note: Project Adjusted EBITDA, Adjusted Cash Flows from Operating Activities, Adjusted Free Cash Flow and APLP Project Adjusted EBITDA are not recognized measures under GAAP and do not have any standardized meaning prescribed by GAAP; therefore, these measures may not be comparable to similar measures presented by other companies.
Business Update
Piedmont
Currently the Company does not expect its Piedmont project to meet its debt service coverage ratio covenants, restricting its ability to make distributions before 2017 at the earliest, due to continued operational issues that have resulted in higher forecasted maintenance and fuel expenses than initially expected.
Tunis
The PPA with the Ontario Power Authority (OPA) for the Company's Tunis project expired on December 31, 2014; however, the Company has entered into an agreement with the OPA and its successor, the Independent Electricity System Operator (IESO), for the future operations of the Tunis facility. Subject to meeting certain technical modifications to the plant, gas delivery and other requirements, Tunis will operate under a 15-year agreement with the IESO commencing between November 2017 and June 2019.
The new contract will require the plant to become fully dispatchable as opposed to its current baseload configuration. As such, Tunis will provide electricity to the Ontario grid only when required, thereby assisting to reduce the incidents of surplus baseload generation in the market. The new agreement provides Tunis with a fixed monthly payment which escalates annually according to a pre-defined formula while allowing Tunis to earn additional energy revenues for those periods during which it is called upon to operate.
Supplementary Financial Information
For further information, attached to this news release is a summary of Project Adjusted EBITDA by segment for the three months and years ended December 31, 2014 and 2013 (Table 9) with a reconciliation to Project income (loss); a bridge from Project Adjusted EBITDA to Cash Distributions from Projects by segment for the year ended December 31, 2014 (Table 10A) and the year ended December 31, 2013 (Table 10B); a reconciliation of Cash Distributions from Projects and Project Adjusted EBITDA to net income (loss) and of various non-GAAP cash flow metrics to cash flows from operating activities for the years ended December 31, 2014 and 2013 (Table 11); a reconciliation of Adjusted Cash Flows from Operating Activities and Adjusted Free Cash Flow to cash flows from operating activities (Table 12); and a summary of Project Adjusted EBITDA for selected projects (top contributors based on the Company's 2014 budget, representing approximately 80% of total Project Adjusted EBITDA) for the years ended December 31, 2014 and 2013 (Table 13).
Investor Conference Call and Webcast
A telephone conference call hosted by Atlantic Power's management team will be held on Friday, February 27, 2015 at 8:30 AM ET. An accompanying slide presentation will be available on the Company's website prior to the call. The telephone numbers for the conference call are: U.S. Toll Free: 1-888-317-6003; Canada Toll Free: 1-866-284-3684; International Toll: +1 412-317-6061. Participants will need to provide access code 4977312 to enter the conference call. The conference call will also be broadcast over Atlantic Power's website, with an accompanying slide presentation. Please call or log in 10 minutes prior to the call. The telephone numbers to listen to the conference call after it is completed (Instant Replay) are U.S. Toll Free: 1-877-344-7529; Canada Toll Free 1-855-669-9658; International Toll: +1-412-317-0088. Please enter conference call number 10058795. The replay will be available 1 hour after the end of the conference call through May 28, 2015 at 9:00 AM ET. The conference call will also be archived on Atlantic Power's website.
About Atlantic Power
Atlantic Power owns and operates a diverse fleet of power generation assets in the United States and Canada. Atlantic Power's power generation projects sell electricity to utilities and other large commercial customers largely under long-term power purchase agreements, which seek to minimize exposure to changes in commodity prices. Its power generation projects in operation have an aggregate gross electric generation capacity of approximately 2,945 MW in which its aggregate ownership interest is approximately 2,024 MW. Its current portfolio consists of interests in twenty-eight operational power generation projects across eleven states in the United States and two provinces in Canada.
Atlantic Power trades on the New York Stock Exchange under the symbol AT and on the Toronto Stock Exchange under the symbol ATP. For more information, please visit the Company's website at www.atlanticpower.com or contact:
Atlantic Power Corporation Amanda Wagemaker, Investor Relations (617) 977-2700 info@atlanticpower.com
Copies of certain financial data and other publicly filed documents are filed on SEDAR at www.sedar.com or on EDGAR at www.sec.gov/edgar.shtml under "Atlantic Power Corporation" or on the Company's website.
************************************************************************************************************************
Cautionary Note Regarding Forward-looking Statements
To the extent any statements made in this news release contain information that is not historical, these statements are forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, and under Canadian securities law (collectively, "forward-looking statements").
Certain statements in this news release may constitute "forward-looking statements", which reflect the expectations of management regarding the future growth, results of operations, performance and business prospects and opportunities of the Company and its projects. These statements, which are based on certain assumptions and describe the Company's future plans, strategies and expectations, can generally be identified by the use of the words "may," "will," "project," "continue," "believe," "intend," "anticipate," "expect" or similar expressions that are predictions of or indicate future events or trends and which do not relate solely to present or historical matters. Examples of such statements in this press release include, but are not limited, to statements with respect to the following:
-- the Company's plans for 2015, including further significant reductions in overhead run rates from 2015 to 2016 and additional investments in its fleet at cash returns that the company believes are more favorable than those available in external markets, both of which the company expects to result in improved cash flow;
-- the Company's expectation that successful execution of its business plan will provide a stable platform for it to begin growing its business again in 2016 on an absolute basis, in addition to the organic growth in cash flows provided by returns on discretionary investments in its fleet and cost reductions;
-- the outcome or impact of the Company's business plan, including the objective of enhancing the value of its existing assets through optimization investment and commercial activities, delevering its balance sheet to improve its cost of capital and ability to compete for new investments, utilizing its core competencies to create proprietary investment opportunities, improving its cost structure and reducing overhead;
-- the Company's ability to evaluate and/or implement potential options, including asset sales or the contribution of assets to a joint venture, if the valuation of a particular asset or assets is compelling, in order to raise additional capital for growth and/or debt reduction, and the outcome or impact on the Company's business plan of any such potential options;
-- the Company's expectations regarding the pursuit of commercial and asset management opportunities around its existing projects and any cash contributions from such opportunities;
-- the Company will achieve expected annual interest rate savings of $2.7 million in 2015 in connection with the repayment at maturity of the Company's Cdn$44.8 million convertible debenture on October 31, 2014;
-- 2015 Project Adjusted EBITDA will be in the range of $265 to $285 million;
-- 2015 APLP Project Adjusted EBITDA will be in the range of $148 to $160 million;
-- 2015 Adjusted Cash Flows from Operating Activities will be in the range of $120 to $140 million;
-- 2015 Adjusted Free Cash Flow will be in the range of $10 to $30 million;
-- the Company expects to amortize $48 to $54 million of the APLP term loan and $24 million of project-level debt in 2015, for a total debt reduction through amortization of approximately $75 million; and the expectation that amortization of project-level debt and the APLP term loan will average approximately $75 million annual over the next five years ($80 million on a three-year average basis);
-- the Company's expectations regarding compliance with the fixed charge coverage ratio test included in the restricted payments covenant in its senior unsecured note indenture;
-- the expectation that recent management changes and personnel reduction will result in cost savings going forward;
-- the Company expects to have G&A costs of no more than $38 million in 2015, for a total reduction of at least $16 million relative to 2013, with further significant improvement expected in 2016;
-- the Company expects to incur approximately $3 million of severance expense in 2015;
-- the Company expects to have lower project and business development expenses, including a $3 million annual benefit from the scheduled expiration of a contractual obligation related to the Ridgeline acquisition beginning in the first quarter of 2015;
-- the Company expects to have lower legal expenses associated with the purported class action shareholder litigation, and expects that additional costs incurred in connection with such purported class action shareholder litigation will be paid by the Company's directors and officers insurance carrier to the extent set forth under the terms of its coverage;
-- the optimization investments in 2013 and 2014 of approximately $18 million will produce approximately $4 to $8 million of annual cash flow benefit;
-- the level of optimization investments will be approximately $11 million in 2015, and cumulative investments for 2013 through 2015 will produce a cash flow contribution of at least $10 million annually in 2016;
-- the Company will have project capital expenditures and major maintenance expenses of approximately $35 million in 2015, including optimization initiatives of approximately $11 million;
-- Piedmont will be unable to pass its debt service coverage ratio covenant or make distributions before 2017; and
-- the results of operations and performance of the Company's projects, business prospects, opportunities and future growth of the Company will be as described herein.
Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not or the times at or by which such performance or results will be achieved. Please refer to the factors discussed under "Risk Factors" and "Forward-Looking Information" in the Company's periodic reports as filed with the Securities and Exchange Commission from time to time for a detailed discussion of the risks and uncertainties affecting the Company, including, without limitation, the Company's ability to evaluate and/or implement potential options, including asset sales or joint ventures, if the valuation of a particular asset or assets is compelling, to raise additional capital for growth and/or potential debt reduction. Although the forward-looking statements contained in this news release are based upon what are believed to be reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward-looking statements, and the differences may be material. These forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the Company assumes no obligation to update or revise them to reflect new events or circumstances. The financial outlook information contained in this news release is presented to provide readers with guidance on the cash distributions expected to be received by the Company and to give readers a better understanding of the Company's ability to pay its current level of distributions into the future. The Company's ability to achieve its longer-term goals, including those described in this news release, is based on significant assumptions relating to and including, among other things, the general conditions of the markets in which it operates, revenues, internal and external growth opportunities, its ability to sell assets at favorable prices or at all and general financial market and interest rate conditions. The Company's actual results may differ, possibly materially and adversely, from these goals. Readers are cautioned that such information may not be appropriate for other purposes.
View data
Atlantic Power Corporation Table 6 - Consolidated Balance Sheet (in millions of U.S. dollars) December 31, December 31, 2014 2013 Assets (Unaudited) Current assets: Cash and cash equivalents $109.9 $158.6 Restricted cash 22.5 96.2 Accounts receivable 57.4 64.3 Current portion of derivative instruments asset - 0.2 Inventory 19.3 16.0 Prepayments and other current assets 16.3 16.1 Refundable income taxes 0.2 4.0 Total current assets 225.6 355.4 Property, plant and equipment, net 1,673.4 1,813.4 Equity investments in unconsolidated affiliates 343.9 394.3 Power purchase agreements and intangible assets, net 381.4 451.5 Goodwill 197.2 296.3 Derivative instruments asset 1.1 13.0 Restricted cash 19.1 18.0 Deferred financing costs 64.2 41.7 Other assets 10.7 11.4 Total assets $2,916.6 $3,395.0 Liabilities Current liabilities: Accounts payable $11.0 $14.0 Accrued interest 5.4 17.7 Other accrued liabilities 34.9 58.8 Current portion of long-term debt 26.4 216.2 Current portion of convertible debentures - 42.1 Current portion of derivative instruments liability 39.2 28.5 Dividends payable - 6.8 Other current liabilities 6.8 5.3 Total current liabilities 123.7 389.4 Long-term debt 1,388.3 1,254.8 Convertible debentures 340.6 363.1 Derivative instruments liability 57.5 76.1 Deferred income taxes 92.3 111.5 Power purchase and fuel supply agreement liabilities, net 33.4 38.7 Other long-term liabilities 64.2 65.4 Commitments and contingencies - - Total liabilities 2,100.1 2,299.0 Equity Common shares, no par value, unlimited authorized shares; 121,323,614 and 120,205,813 issued and outstanding at December 31, 2014 and December 31, 2013, respectively 1,288.4 1,286.1 Preferred shares issued by a subsidiary company 221.3 221.3 Accumulated other comprehensive income (loss) (68.3) (22.4) Retained deficit (863.9) (655.4) Total Atlantic Power Corporation shareholders' equity 577.5 829.6 Noncontrolling interest 239.0 266.4 Total equity 816.6 1,096.0 Total liabilities and equity $2,916.6 $3,395.0
View data
Atlantic Power Corporation Table 7 - Consolidated Statements of Operations (in millions of U.S. dollars, except per share amounts) Unaudited Years Ended Three months ended December 31, December 31, 2014 2013 2012 2014 2013 Project revenue Energy sales $315.9 $302.2 $214.5 $81.7 $75.6 Energy capacity revenue 161.3 163.7 147.2 37.3 36.6 Other 92.0 78.2 68.1 23.4 18.5 569.2 544.1 429.8 142.4 130.7 Project expenses: Fuel 210.4 194.3 164.9 50.9 48.5 Operations and maintenance 130.2 150.8 119.6 29.4 41.2 Development 3.7 7.2 - 1.0 2.3 Depreciation and amortization 162.6 166.1 116.6 40.3 41.4 506.9 518.4 401.1 121.6 133.4 Project other income (expense): Change in fair value of derivative instruments (8.7) 49.5 (59.3) (21.0) 16.1 Equity in earnings of unconsolidated affiliates 25.8 26.9 15.2 7.1 2.3 Gain on sale of equity investments 8.6 30.4 0.6 - - Interest expense, net (31.9) (34.4) (16.4) (5.6) (8.7) Impairment of goodwill (106.6) (34.9) - - - Other income, net - 0.5 - 1.5 0.3 (112.8) 38.0 (59.9) (18.0) 10.0 Project (loss) income (50.5) 63.7 (31.2) 2.8 7.3 Administrative and other expenses (income): Administration 37.9 35.2 28.3 12.0 6.7 Interest, net 146.7 104.1 89.8 25.9 25.4 Foreign exchange (gain) loss (38.3) (27.4) 0.5 (17.9) (14.5) Other income, net (2.8) (10.5) (5.7) (0.7) (1.0) 143.5 101.4 112.9 19.3 16.6 Loss from continuing operations before income taxes (194.0) (37.7) (144.1) (16.5) (9.3) Income tax benefit (11.9) (19.5) (28.1) (4.5) (17.6) (Loss) income from continuing operations (182.1) (18.2) (116.0) (12.0) 8.3 Net (loss) income from discontinued operations, net of tax (1) (0.1) (5.6) 15.7 - (0.4) Net (loss) income (182.2) (23.8) (100.3) (12.0) 7.9 Net loss attributable to noncontrolling interest (16.4) (3.4) (0.6) (4.6) (0.1) Net income attributable to preferred share dividends of a subsidiary company 11.6 12.6 13.1 2.8 3.0 Net (loss) income attributable to Atlantic Power Corporation $(177.4) $(33.0) $(112.8) $(10.2) $4.9 Basic and diluted earnings (loss) earnings per share: (Loss) income from continuing operations attributable to Atlantic Power Corporation $(1.47) $(0.23) $(1.10) $(0.09) $0.04 (Loss) income from discontinued operations, net of tax - (0.05) 0.13 - - Net (loss) income attributable to Atlantic Power Corporation $(1.47) $(0.28) (0.97) $(0.09) $0.04 (1) Includes contributions from the Sold Projects and Rollcast which are a component of discontinued operations.
View data
Atlantic Power Corporation Table 8 - Consolidated Statements of Cash Flows (in millions of U.S. dollars) Years ended December 31, Unaudited 2014 2013 2012 Cash flows from operating activities: Net loss $(182.2) $(23.8) $(100.3) Adjustments to reconcile to net cash provided by operating activities Depreciation and amortization 162.6 176.4 157.2 Loss from discontinued operations - 32.8 - (Gain) loss on sale of assets & other charges (2.9) (5.1) 0.8 Long-term incentive plan expense 3.5 2.2 2.5 Long-lived asset and goodwill impairment charges 106.6 39.7 60.5 Gain on sale of equity investments (8.6) (30.4) (0.6) Equity in earnings from unconsolidated affiliates (25.8) (26.9) (25.7) Distributions from unconsolidated affiliates 76.2 40.9 38.4 Unrealized foreign exchange (gain) loss (38.8) (13.0) 19.0 Change in fair value of derivative instruments 8.7 (60.2) 46.7 Change in deferred income taxes (15.7) (27.3) (34.1) Change in other operating balances Accounts receivable 6.9 3.4 2.3 Inventory (3.3) 0.8 (6.2) Prepayments, refundable income taxes and other assets 21.1 51.5 (13.3) Accounts payable (4.1) (8.4) 21.1 Accruals and other liabilities (39.2) (0.2) (1.2) Cash provided by operating activities 65.0 152.4 167.1 Cash flows provided by (used in) investing activities Change in restricted cash 72.6 (93.7) (11.6) Proceeds from sale of assets and equity investments, net 9.5 182.6 27.9 Cash paid for acquisitions and investments, net of cash acquired - - (80.5) Proceeds from treasury grant - 103.2 - Biomass development costs - (0.2) (0.5) Construction in progress - (39.3) (456.2) Purchase of property, plant and equipment (13.4) (5.5) (2.9) Cash provided by (used in) investing activities 68.7 147.1 (523.8) Cash flows (used in) provided by financing activities Proceeds from senior secured term loan facility 600.0 - - Proceeds from issuance of convertible debentures - - 230.6 Proceeds from issuance of equity, net of offering costs - (1.0) 66.3 Proceeds from project-level debt - 20.8 291.9 Repayment of corporate and project-level debt (639.8) (118.8) (284.8) Repayment of convertible debentures (43.0) - - Payments for revolving credit facility borrowings - (67.0) (60.8) Proceeds from revolving credit facility borrowings - - 69.8 Deferred financing costs (39.0) (2.8) (31.2) Equity contribution from noncontrolling interest - 44.6 225.0 Dividends paid to common shareholders (34.9) (65.1) (131.0) Dividends paid to noncontrolling interests (25.7) (18.3) (13.1) Cash (used in) provided by financing activities (182.4) (207.6) 362.7 Net (decrease) increase in cash and cash equivalents (48.7) 91.9 6.0 Less cash at discontinued operations - - (6.5) Cash and cash equivalents at beginning of period at discontinued operations - 6.5 - Cash and cash equivalents at beginning of period 158.6 60.2 60.7 Cash and cash equivalents at end of period $109.9 $158.6 $60.2 Supplemental cash flow information Interest paid $168.8 $130.4 $40.2 Income taxes paid, net $3.8 $5.9 $1.1 Accruals for construction in progress $- $8.9 $4.1
Regulation G Disclosures
Project Adjusted EBITDA is not a measure recognized under GAAP and does not have a standardized meaning prescribed by GAAP, and is therefore unlikely to be comparable to similar measures presented by other companies. Project Adjusted EBITDA is defined as project income (loss) plus interest, taxes, depreciation and amortization (including non-cash impairment charges) and changes in the fair value of derivative instruments. Management uses Project Adjusted EBITDA at the project level to provide comparative information about project performance and believes such information is helpful to investors. A reconciliation of Project Adjusted EBITDA to project income (loss) is provided in Table 9 below. Investors are cautioned that the Company may calculate this measure in a manner that is different from other companies.
Cash Distributions from Projects, Adjusted Cash Flows from Operating Activities, Free Cash Flow and Adjusted Free Cash Flow are not measures recognized under GAAP and do not have standardized meanings prescribed by GAAP, and are therefore unlikely to be comparable to similar measures presented by other companies. Adjusted Cash Flows from Operating Activities is used to evaluate cash flows from operating activities without the effects of changes in working capital balances, acquisition expenses, litigation expenses, severance and restructuring charges, and cash provided by or used in discontinued operations. The intent is to reflect normal operations and remove items that are not reflective of the long-term operations of the business. Free Cash Flow is defined as cash flows from operating activities less capex; project-level debt repayments, including amortization of the new term loan; and distributions to noncontrolling interests, including preferred share dividends.
Adjusted Free Cash Flow is defined as Free Cash Flow excluding changes in working capital balances, acquisition expenses, litigation expense, severance and restructuring charges, and cash provided by or used in discontinued operations. Management believes that these non-GAAP cash flow measures are relevant supplemental measures of the Company's ability to earn and distribute cash returns to investors. A bridge of Project Adjusted EBITDA to Cash Distributions from Projects is provided in Tables 10A and 10B on page 17. A reconciliation of Free Cash Flow to cash flows from operating activities is provided in Table 11 on page 18 of this release. Reconciliations of Adjusted Free Cash Flow and Adjusted Cash Flows from Operating Activities to cash flows from operating activities are provided in Table 12 on page 19 of this release. Investors are cautioned that the Company may calculate these measures in a manner that is different from other companies.
View data
Atlantic Power Corporation Table 9 - Project Adjusted EBITDA by segment Unaudited Years ended Three months ended December 31, December 31, 2014 2013 2012 2014 2013 Project Adjusted EBITDA by segment East (1) $158.5 $150.7 $145.7 $42.2 $38.2 West (2) 78.5 77.2 78.9 16.0 9.5 Wind 69.8 59.6 10.9 20.8 16.3 Un-allocated corporate (3) (7.5) (18.6) (11.1) (1.1) (5.9) Total 299.3 268.9 224.4 77.9 58.1 Reconciliation to project income Depreciation and amortization 201.7 208.8 163.5 46.8 55.2 Interest expense, net 39.5 38.5 24.0 7.4 10.7 Change in the fair value of derivative instruments 10.4 (50.3) 56.6 22.0 (15.4) Other expense 98.2 8.2 11.5 - 0.4 Project (loss) income $(50.5) $63.7 $(31.2) $1.7 $7.2 (1) Excludes Auburndale, Lake and Pasco, which are components of discontinued operations. (2) Excludes Path 15, which is a component of discontinued operations. (3) Excludes Rollcast, which is a component of discontinued operations. Notes: Table 9 presents Project Adjusted EBITDA, which is not a recognized measure under GAAP and does not have any standardized meaning prescribed by GAAP; therefore, this measure may not be comparable to a similar measure presented by other companies.
View data
Atlantic Power Corporation Table 10A - Cash Distributions from Projects (by Segment, in millions of U.S. dollars) Year ended December 31, 2014 Unaudited Project Repayment of Interest Capital Other, including Cash Distributions Adjusted long-term debt expense, net expenditures changes in from Projects EBITDA working capital Segment East Consolidated $114.2 $(14.6) $(7.6) $(10.1) $10.7 $92.6 Equity method 44.3 (5.0) (6.8) (0.6) 1.0 32.9 Total 158.5 (19.6) (14.4) (10.7) 11.7 125.5 West Consolidated 64.1 - - (0.8) 6.4 69.7 Equity method 14.4 (1.0) (0.1) - 1.0 14.3 Total 78.5 (1.0) (0.1) (0.8) 7.4 84.0 Wind Consolidated 58.2 (6.4) (14.2) (1.4) (2.2) 34.0 Equity method 11.6 (2.8) (4.8) 0.1 1.3 5.4 Total 69.8 (9.2) (19.0) (1.3) (0.9) 39.4 Total consolidated 236.5 (21.0) (21.8) (12.3) 14.9 196.3 Total equity method 70.3 (8.8) (11.7) (0.5) 3.3 52.6 Un-allocated corporate (7.5) - - (1.2) 8.7 - Total $299.3 $(29.8) $(33.5) $(14.0) $26.9 $248.9 Notes: Table 10A presents Cash Distributions from Projects and Project Adjusted EBITDA, which are not recognized measures under GAAP and do not have any standardized meanings prescribed by GAAP; therefore, these measures may not be comparable to similar measures presented by other companies. Atlantic Power Corporation Table 10B - Cash Distributions from Projects (by Segment, in millions of U.S. dollars) Year ended December 31, 2013 Unaudited Project Repayment of Interest Capital Other, including Cash Distributions Adjusted long-term debt expense, net expenditures changes in from Projects EBITDA working capital Segment East Consolidated $100.3 $(3.9) $(17.3) $(6.7) $18.8 $91.2 Equity method 50.4 (14.0) (3.6) (0.9) 4.3 36.2 Total 150.7 (17.9) (20.9) (7.6) 23.1 127.4 West Consolidated 60.0 - - (1.1) (3.3) 55.6 Equity method 17.2 1.2 (0.3) (1.1) (2.9) 14.1 Total 77.2 1.2 (0.3) (2.2) (6.2) 69.7 Wind Consolidated 50.0 (7.0) (14.6) (5.5) 0.5 23.4 Equity method 9.6 (2.6) (4.9) - 0.4 2.5 Total 59.6 (9.6) (19.5) (5.5) 0.9 25.9 Total consolidated 210.3 (10.9) (31.9) (13.3) 16.0 170.2 Total equity method 77.2 (15.4) (8.8) (2.0) 1.8 52.8 Un-allocated corporate (18.6) (0.2) 3.1 0.2 15.5 - Total $268.9 $(26.5) $(37.6) $(15.1) $33.3 $223.0 Notes: Table 10B presents Cash Distributions from Projects and Project Adjusted EBITDA, which are not recognized measures under GAAP and do not have any standardized meanings prescribed by GAAP; therefore, these measures may not be comparable to similar measures presented by other companies.
View data
Atlantic Power Corporation Table 11 - Free Cash Flow (in millions of U.S. dollars) Unaudited Years ended December 31, 2014 2013 2012 Cash Distributions from Projects $248.9 $223.0 $196.6 Repayment of long-term debt (29.8) (26.5) (27.4) Interest expense, net (33.5) (37.6) (24.0) Capital expenditures (14.0) (15.1) (1.8) Other, including changes in working capital 26.9 33.3 25.4 Project Adjusted EBITDA $299.3 $268.9 $224.4 Depreciation and amortization 201.7 208.8 163.5 Interest expense, net 39.5 38.5 24.0 Change in the fair value of derivative instruments 10.4 (50.3) 56.6 Other (income) expense 98.2 8.2 11.5 Project (loss) income $(50.5) $63.7 $(31.2) Administrative and other expenses 143.5 101.4 112.9 Income tax expense (benefit) (11.9) (19.5) (28.1) Income (loss) from discontinued operations, net of tax (0.1) (5.6) 15.7 Net loss $(182.2) $(23.8) $(100.3) Adjustments to reconcile to net cash provided by operating activities 265.8 129.1 264.7 Change in other operating balances (18.6) 47.1 2.7 Cash flows from operating activities $65.0 $152.4 $167.1 Term loan facility repayments (1) (58.4) - - Project-level debt repayments (26.2) (15.6) (19.6) Purchases of property, plant and equipment (2) (13.4) (6.5) (2.9) Distributions to noncontrolling interests (3) (11.0) (8.9) - Dividends on preferred shares of a subsidiary company (11.6) (12.6) (13.0) Free Cash Flow $(55.6) $108.8 $131.6 Additional GAAP cash flow measures: Cash flows from investing activities $68.7 $147.1 $(523.8) Cash flows from financing activities $(182.4) $(207.6) $362.7 (1) Includes mandatory 1% annual amortization and 50% excess cash flow repayments by the Partnership. (2) Excludes construction costs related to the Company's Canadian Hills project in 2014 and 2013 and its Piedmont and Meadow Creek projects in 2013. (3) Distributions to noncontrolling interests primarily include distributions, if any, to the tax equity investors at Canadian Hills and to the other 50% owner of Rockland. Note: Table 11 presents Cash Distributions from Projects, Project Adjusted EBITDA and Free Cash Flow, which are not recognized measures under GAAP and do not have any standardized meanings prescribed by GAAP; therefore, these measures may not be comparable to similar measures presented by other companies.
View data
Atlantic Power Corporation Table 12 - Adjusted Cash Flows from Operating Activities and Adjusted Free Cash Flow (in millions of U.S. dollars) Unaudited Years ended December 31, 2014 2013 2012 Cash flows from operating activities $65.0 $152.4 $167.1 Changes in other operating balances 18.6 (47.1) (2.7) Cash flows from discontinued operations - (31.6) (89.0) Severance charges 6.0 1.0 - Restructuring charges 2.0 - - Shareholder litigation expenses 1.4 1.0 - Refinancing transaction costs 49.4 - - Adjusted Cash Flows from Operating Activities $142.4 $75.7 $75.4 Term loan facility repayments (1) (58.4) - - Project-level debt repayments (26.2) (15.6) (19.6) Amount associated with discontinued operations (included in line above) - 5.2 15.6 Principal repayment of Piedmont debt at term conversion (included above) 8.1 - - Purchases of property, plant and equipment (2) (13.4) (6.5) (2.9) Amount associated with discontinued operations (included in line above) - 0.3 1.6 Distributions to noncontrolling interests (3) (11.0) (8.9) - Dividends on preferred shares of a subsidiary company (11.6) (12.6) (13.0) Adjusted Free Cash Flow $29.9 $37.6 $57.1 Additional GAAP cash flow measures: Cash flows from investing activities $68.7 $147.1 $(523.8) Cash flows from financing activities $(182.4) $(207.6) $362.7 (1) Includes mandatory 1% annual amortization and 50% excess cash flow repayments by the Partnership. (2) Excludes construction costs related to the Company's Canadian Hills project in 2014 and 2013 and its Piedmont and Meadow Creek projects in 2013. (3) Distributions to noncontrolling interests primarily include distributions, if any, to the tax equity investors at Canadian Hills and to the other 50% owner of Rockland. Note: Table 12 presents Adjusted Cash Flows from Operating Activities and Adjusted Free Cash Flow, which are not recognized measures under GAAP and do not have any standardized meanings prescribed by GAAP; therefore, these measures may not be comparable to similar measures presented by other companies.
View data
Atlantic Power Corporation Table 13 - Project Adjusted EBITDA by Project (for Selected Projects) (in millions of U.S. dollars) Unaudited Years ended December 31, 2014 2013 2012 East Accounting Cadillac Consolidated $7.5 $9.1 $9.2 Curtis Palmer Consolidated 31.5 32.1 28.0 Morris Consolidated 12.7 6.3 8.2 Nipigon Consolidated 15.3 13.4 14.6 North Bay Consolidated 10.6 8.5 8.1 Piedmont Consolidated 6.5 2.3 (0.1) Tunis Consolidated 10.3 9.5 13.5 Other (1) Consolidated 19.8 19.1 9.6 Chambers Equity method 18.6 20.6 27.8 Selkirk Equity method 10.3 20.8 17.8 Orlando Equity method 15.4 9.0 9.0 Total 158.5 150.7 145.7 West Manchief Consolidated 15.0 16.9 15.1 Naval Station Consolidated 10.3 10.5 7.3 Williams Lake Consolidated 15.8 16.5 18.5 Other (2) Consolidated 23.0 16.1 23.0 Frederickson Equity Method 12.2 12.1 10.8 Other (3) Equity method 2.2 5.1 4.2 Total 78.5 77.2 78.9 Wind Canadian Hills Consolidated 26.6 25.6 0.8 Meadow Creek Consolidated 19.3 14.0 - Rockland Consolidated 12.3 10.4 3.5 Other (4) Equity method 11.6 9.6 6.6 Total 69.8 59.6 10.9 Totals Consolidated projects 236.5 210.3 159.3 Equity method projects 70.3 77.2 76.2 Un-allocated corporate (7.5) (18.6) (11.1) Total Project Adjusted EBITDA $299.3 $268.9 $224.4 Depreciation and amortization $201.7 $208.8 $163.5 Interest expense, net 39.5 38.5 24.0 Change in the fair value of derivative instruments 10.4 (50.3) 56.6 Other (income) expense 98.2 8.2 11.5 Project income (loss) $(50.5) $63.7 $(31.2) (1) 2012 and 2013: Kenilworth, Calstock, Kapuskasing, and Onondaga; 2014: Kenilworth, Calstock, and Kapuskasing (2) Moresby Lake, Mamquam, North Island, Naval Training Station, and Oxnard (3) 2012: Badger Creek, Delta-Person, Gregory, PERH, and Koma Kulshan; 2013: Koma Kulshan, Gregory, and Delta-Person; 2014: Koma Kulshan and Delta-Person (4) 2012: Idaho Wind; 2013 and 2014: Idaho Wind and Goshen North Notes: Table 13 presents Project Adjusted EBITDA, which is not a recognized measure under GAAP and does not have any standardized meaning prescribed by GAAP; therefore, this measure may not be comparable to a similar measure presented by other companies. The Company has not reconciled non-GAAP financial measures relating to individual projects to the directly comparable GAAP measures due to the difficulty in making the relevant adjustments on an individual project basis.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/atlantic-power-corporation-releases-fourth-quarter-and-year-end-2014-results-300042516.html
SOURCE Atlantic Power Corporation
looking good here. the 200ma is being broke through. What will earnings next week bring us?
• Atlantic Power (NYSE:AT) declares C$0.03/share quarterly dividend, in line with previous.
• Forward yield 3.62%
• Payable March 31; for shareholders of record Feb. 27; ex-div Feb. 25
Atlantic Power Corporation names James J. Moore, Jr. as President and CEO
Source: PR Newswire (Canada)
BOSTON, Jan. 23, 2015 /CNW/ -- Atlantic Power Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the "Company") today announced that its Board of Directors has appointed James J. Moore, Jr. as the Company's President and Chief Executive Officer and a member of the Board of Directors effective January 26. Moore replaces Ken Hartwick, Interim President and CEO, who guided the Company during the search for a permanent CEO and will remain a member of the Company's Board of Directors.
Moore joins Atlantic Power from Diamond Castle Holdings LLC ("DCH"), a $1.8 billion private equity firm in New York City, where he served as Chairman of Energy and Power from 2008 to 2015. From 2001 to 2008, Moore served as CEO of Catamount Energy Corporation ("Catamount"), where he helped transform a small Vermont energy company into a wind-focused growth company. The new strategy led to the sale of the company to DCH in 2005 and later to Duke Energy in 2008. Prior to his tenure at Catamount, Moore served as Chairman and CEO of American National Power and on the Board of International Power PLC. Moore also previously served on the Board of Comverge, Inc. in 2012.
"The Board of Directors is pleased with the outcome of our search as Jim Moore brings a track record of thirty-three years in the energy industry including building two IPP businesses," said Irving Gerstein, the Chair of the Company's Board of Directors. "We were attracted by the fact that Jim has already led restructuring and business building efforts as a CEO in the IPP industry."
"My top priorities are the investment in our existing fleet, continued improvement in our balance sheet and examination of strategic and other growth opportunities that fit within Atlantic Power's strategy," Moore said. He also noted the positive progress of the Company during 2014 stating that "the Company has made significant progress in restructuring by reducing corporate overhead and corporate staff levels nearly 40% from 2013 to 2015."
Moore said that Atlantic Power has disposed of non-core assets, reduced and refinanced debt, and exercised discipline with respect to capital expenditures. "We need to continue those efforts with a sense of urgency and focus on metrics such as free cash flow per share," he said.
On January 22, 2015, the Compensation Committee of the Board of Directors approved a one-time grant of 523,256 notional shares to Moore, effective as of January 26, 2015, of which 50% will vest on or after the second anniversary of his start date upon achievement of certain stock price targets, and 50% will vest on the fourth anniversary of his start date, subject to his continued employment.
Really great news today! This thing should start to move very soon.
Atlantic Power Corporation Announces Entry by Atlantic Power Limited Partnership into Agreement with Ontario Power Authority ...
Source: PR Newswire (US)
BOSTON, Jan. 20, 2015 /PRNewswire/ -- Atlantic Power Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the "Company") today announced that Atlantic Power Limited Partnership, a wholly-owned indirect subsidiary of the Company ("APLP"), entered into an agreement with the Ontario Power Authority and its successor, the Independent Electricity System Operator ("IESO"), for the future operations of the Tunis facility.
"This agreement represents the culmination of many months of discussions with the IESO to obtain an arrangement that is beneficial for both the ratepayers of Ontario and the Company," said Ken Hartwick, Interim President and CEO. "Atlantic Power's focused approach of working with the IESO to arrive at a mutually-beneficial outcome is demonstrable of both our capabilities and our resolve in developing opportunities to extend the commercial viability of our existing fleet. The agreement with the IESO provides for a strong baseline cashflow profile for Tunis which will form part of the facility's total return profile extending out to at least 2032."
Subject to meeting certain technical modifications to the plant, gas delivery and other requirements, Tunis will operate under a 15-year agreement with the IESO commencing between November 2017 and June 2019.
The new contract will require the plant to become fully dispatchable as opposed to its current baseload configuration. As such, Tunis will only provide electricity to the Ontario grid when required thereby assisting to reduce the incidents of surplus baseload generation in the market. The new agreement provides APLP with a fixed monthly payment which escalates annually according to a pre-defined formula while allowing Tunis to earn additional energy revenues for those periods during which it is called upon to operate.
AT looking great right now. Nice post, definitely a buy
Congress Extends Tax Credit for Wind Power
By a 76-16 vote, the U.S. Senate last night extended the federal Production Tax Credit for wind power facilities until the end of 2015, but the extension is unlikely to serve as an incentive for new wind turbines.
The Production Tax Credit will provide wind turbine owners slightly more than two cents in tax credits for every kilowatt-hour of electrical power their qualifying turbines produce. That may not sound like much, but it adds up: a large 2.5 megawatt turbine would earn its owners more than $50 in tax credits for every hour it produces power at full capacity.
Zack upgrades AT to Buy!
http://www.zacks.com/stock/quote/AT?q=at
Yea wouldn't mind being back over few like a few months ago
Yeah man that last 10 minutes were just buy after buy. Really nice close. I think we might really start moving north here. I think those insider buys are really an important sign.
Huge buy at end of day!
Really nice move here! Looking for us to break $2.79 so we can start filling that gap to $3.77.
Atlantic Power Corporation and Atlantic Power Preferred Equity Ltd. Announce Dividend Rate on Cumulative Rate Reset Preferred...
BOSTON, Dec. 2, 2014 /PRNewswire/ -- As previously announced on November 14, 2014 by Atlantic Power Corporation ("Atlantic Power") and Atlantic Power Preferred Equity Ltd. ("Preferred Equity"), the dividend rate on Preferred Equity's outstanding Cumulative Rate Reset Preferred Shares, Series 2 (the "Series 2 Shares") will be reset on December 31, 2014, using a reset dividend rate (the "Reset Dividend Rate") calculated on December 1, 2014.
Atlantic Power Corporation Logo
The Reset Dividend Rate was calculated on December 1, 2014 to be 5.57%, representing the sum of the Canadian Government five-year bond yield of 1.39% plus 4.18%.
Such Reset Dividend Rate will commence with the March 31, 2015 dividend payment to the holders of the Series 2 Shares and continue through the December 31, 2019 dividend payment to the holders of the Series 2 Shares, at which time such Reset Dividend Rate will again be reset.
On December 31, 2014 and again on December 31 of every fifth year thereafter, the holders of Series 2 Shares have the right to convert their Series 2 Shares, on a one-for-one basis, into Cumulative Floating Rate Preferred Shares (the "Series 3 Shares").
The Series 3 Shares dividend rate was calculated on December 1, 2014 to be 5.09%, representing the sum of the Canadian Government 90-day Treasury Bill yield (using the three-month average result of .91%) plus 4.18%.
Holders of Series 2 Shares who wish to convert such securities to Series 3 Shares should contact the financial institution, broker or other intermediary through which they hold the Series 2 Shares to exercise this conversion privilege. Notice of the exercise of the conversion privilege must be received by Preferred Equity not earlier than December 1, 2014 and not later than 5:00 p.m. (Toronto time) on December 16, 2014.
If after giving effect to all Election Notices, there would remain outstanding less than 1 million Series 2 Shares, then all remaining outstanding Series 2 Shares will automatically convert into Series 3 Shares, on a one-for-one basis on December 31, 2014. Holders of the Series 2 Shares will not be permitted to convert their Series 2 Shares into Series 3 Shares if, after giving effect to all Election Notices, there would be outstanding less than 1 million Series 3 Shares.
Inquiries should be directed to Preferred Equity's registrar and transfer agent, Computershare Trust Company of Canada, at (800) 564-6253.
About Atlantic Power Preferred Equity Ltd.
Preferred Equity is a corporation incorporated under the laws of the Province of Alberta and is an indirect, wholly-owned subsidiary of Atlantic Power. Preferred Equity directly holds Atlantic Power's business and power generation and other assets in British Columbia, operates as a holding company and indirectly holds certain of Atlantic Power's business and power generation and other assets in the United States, including Atlantic Power's Curtis Palmer, Manchief, Frederickson, Naval Station, North Island, Naval Training Center, Oxnard, Greeley, Kenilworth, and Morris power generating facilities.
About Atlantic Power
Atlantic Power owns and operates a diverse fleet of power generation assets in the United States and Canada. Atlantic Power's power generation projects sell electricity to utilities and other large commercial customers largely under long-term power purchase agreements, which seek to minimize exposure to changes in commodity prices. Its power generation projects in operation have an aggregate gross electric generation capacity of approximately 2,945 MW in which its aggregate ownership interest is approximately 2,024 MW. Its current portfolio consists of interests in twenty-eight operational power generation projects across eleven states in the United States and two provinces in Canada.
Atlantic Power trades on the New York Stock Exchange under the symbol AT and on the Toronto Stock Exchange under the symbol ATP. For more information, please visit the Company's website at www.atlanticpower.com or contact:
Atlantic Power Corporation
Amanda Wagemaker, Investor Relations
(617) 977-2700
info@atlanticpower.com
Copies of financial data and other publicly filed documents are filed on SEDAR at www.sedar.com or on EDGAR at www.sec.gov/edgar.shtml under "Atlantic Power Corporation" or on Atlantic Power's website.
They are now paying quarterly
Is they paying dividends every month or are they paying quarterly?
Atlantic Power Corporation Comments on Clinton Group Letter
BOSTON, Oct. 21, 2014 /CNW/ -- Atlantic Power Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the "Company") previously disclosed on September 16, 2014 that the Company's Board of Directors, with the assistance of its financial advisors, Goldman, Sachs & Co. and Greenhill & Co., LLC, conducted a thorough review of the options available to the Company with respect to a possible sale or merger and concluded that a sale or merger of the Company was not in the best interests of the Company or its stakeholders at that time.
Atlantic Power Corporation Logo
On October 16, 2014, Clinton Group Inc. ("Clinton Group") delivered a letter to the Company's Board of Directors urging the Company to reinstate the strategic review process based upon Clinton Group's belief that the strategic review process (which concluded in September, as noted above) yielded offers for the Company at or above $4.00 per share and a transaction may still be consummated at a price above $4.00 per share. Clinton Group's speculation about the Company's sale or merger process is not consistent with the actual results of that process.
The Company is committed to having an open and constructive dialogue with its security holders, and regularly communicates with significant stakeholders either proactively or in response to enquiries. Consistent with that approach, on October 17, 2014 the Company spoke with representatives of Clinton Group. In order to dispel Clinton Group's misconceptions about the results of the sale or merger process, the Company offered to share certain information from the sale process, provided that Clinton Group agreed to be bound by confidentiality obligations with respect to such information. Clinton Group declined the Company's request to be bound by confidentiality obligations.
In light of the letter and enquiries from investors, the Company wishes to provide the following additional detail to all shareholders concerning the process. The Company did not receive any offers that the Company's Board of Directors believed could be consummated at or above the closing share price of $3.04 on May 1, 2014, being the day prior to press rumors concerning a possible sale or merger of the Company.
As such, the Company's Board of Directors reaffirms that, at the present time, the interests of the Company and its stakeholders are best served by continuing to operate as an independent company and executing the Company's business plan, including the objectives of enhancing the value of its existing assets through optimization investments and commercial activities, delevering its balance sheet to improve both its cost of capital and ability to compete for new investments, and utilizing the Company's core competencies to create proprietary investment opportunities. In addition, the Company will continue to assess other potential options, including asset sales or the contribution of assets to a joint venture in order to raise additional capital for growth and/or debt reduction.
About Atlantic Power
Atlantic Power owns and operates a diverse fleet of power generation assets in the United States and Canada. Atlantic Power's power generation projects sell electricity to utilities and other large commercial customers largely under long-term power purchase agreements, which seek to minimize exposure to changes in commodity prices. Its power generation projects in operation have an aggregate gross electric generation capacity of approximately 2,945 MW in which its aggregate ownership interest is approximately 2,024 MW. Its current portfolio consists of interests in twenty-eight operational power generation projects across eleven states in the United States and two provinces in Canada.
Atlantic Power trades on the New York Stock Exchange under the symbol AT and on the Toronto Stock Exchange under the symbol ATP. For more information, please visit the Company's website at www.atlanticpower.com or contact:
Atlantic Power Corporation Amanda Wagemaker, Investor Relations (617) 977-2700, info@atlanticpower.com
Copies of financial data and other publicly filed documents are filed on SEDAR at www.sedar.com or on EDGAR at www.sec.gov/edgar.shtml under "Atlantic Power" or on Atlantic Power's website.
The over-leveraged, unregulated merchant power company is a terrible business model. The segment is rife with bankruptcies. Atlantic Power's management and Board of Directors have not proven that they can competently manage this sort of company. The company should be sold off as a whole or in parts before this poorly managed mess loses even more shareholder value.
It is mind-boggling to me that more shareholders of this company aren't loudly voicing their complaints about Atlantic Power's incompetent Board of Directors both directly to them and in articles. They have been horrendous stewards of shareholder capital over the past several years. Something needs to change. As Albert Einstein said, the definition of insanity is doing the same thing over and over again and expecting different results. I would gladly support a change in the board in a proxy battle.
Jason
The following is a copy of my open letter to Atlantic Power management.
I urge all common stock shareholders to contact AT investor relations and management to voice their displeasure with the recent actions of the company's management and directors.
http://caps.fool.com/Blogs/an-open-letter-to-atlantic/1005996
Hang in there everyone. This isn't over yet. Have a great weekend!
Jason
Read more at http://www.stockhouse.com/companies/bullboard/t.atp/atlantic-power-corporation#41C3y02iI3IIsrPW.99
Saw some 2.65 trades going after hours earlier ........ Not sure where it's at now
Clinton Group to call on Atlantic Power to explore sale again
http://www.reuters.com/article/2014/10/16/atlantic-pw-us-ma-idUSL2N0SB2RT20141016
Oct 16 (Reuters) - New York-based activist investor Clinton Group Inc is preparing to call on Atlantic Power Corp on Thursday to restart a sale process it abandoned last month, according to a draft letter to the company's board of directors seen by Reuters.
Clinton Group is confident that bids for Atlantic Power came in at least at $4 per share, the fund manager's senior managing director Joseph De Perio writes in the letter.
"With an unaffected price of $3 per share, such bids after a competitive process should have been attractive," De Perio writes.
Clinton is open to working with Atlantic Power in a constructive manner and believes many other shareholders are of like mind, De Perio writes. He adds that Clinton Group has a "meaningful" stake in Atlantic Power.
A representative for Boston-based Atlantic Power did not immediately respond to a request for comment. The company owns and operates a diverse fleet of power generation assets in the United States and Canada and has a market value of more than $300 million. (Reporting by Mike Stone in New York; Editing by James Dalgleish)
Was a great day today. I was trying to understand the reason for the run. I was thinking that the Chesapeake Energy sale today might have shown AT had some real value if they were to sell.
good day here. clinton group to call on atlantic power to explore sale again. apparently AT was offered at least $4 per share over a month ago. could be huge tomorrow
Yea definitely hurts
This sucks as now the divy is not worth the investment.....
Atlantic Power Provides Update on Outcome of Strategic Review Process; Announces Revised Dividend Rate of Cdn$0.12 Annually; ...
BOSTON, Sept. 16, 2014 /CNW/ --
Update on outcome of strategic review
Sale or merger of Company not in best interests of Company or its stakeholders at this time
Continue to operate independently and execute on business plan
Continue to assess other potential options, including asset sales or joint ventures
Dividend reduced to Cdn$0.12 annually from Cdn$0.40
August dividend of Cdn$0.03333 to be paid as scheduled on September 30
Company to move to quarterly dividend rate of Cdn$0.03, with first quarterly dividend to be declared in November and paid at the end of December 2014
Company announces President and CEO transition and appoints Director Ken Hartwick as Interim President and CEO
Targeting additional corporate expense reductions of approximately $7 million annually, for total run-rate savings of approximately $15 million annually in 2015
Reaffirmed 2014 guidance for Project Adjusted EBITDA and Free Cash Flow
Strong liquidity as of June 30, 2014 of $261 million, including $158 million of unrestricted cash
Atlantic Power Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the "Company") announced today that as part of its previously announced strategic review process, it has concluded that a sale or merger of the Company is not in the best interests of the Company or its stakeholders at this time. Atlantic Power also announced a reduction in its dividend rate to Cdn$0.12 from Cdn$0.40 on an annual basis.
With the assistance of its external financial advisors, Goldman, Sachs & Co. and Greenhill & Co., LLC, Atlantic Power's Board of Directors conducted a thorough review of the options available to the Company with respect to a possible sale or merger. The Board of Directors has determined that the interests of the Company and its stakeholders are best served at this time by continuing to operate as an independent company and executing the Company's business plan, including the objectives of enhancing the value of its existing assets through optimization investments and commercial activities, delevering its balance sheet to improve both its cost of capital and ability to compete for new investments, and utilizing the Company's core competencies to create proprietary investment opportunities. In addition, the Company will continue to assess other potential options, including asset sales or the contribution of assets to a joint venture in order to raise additional capital for growth and/or debt reduction.
The Company intends to continue to allocate a portion of its Free Cash Flow to optimization investments in its existing projects that are expected to produce attractive returns. As previously disclosed, Atlantic Power is on target to invest $17 million in such optimization projects in 2014 (for total 2013-2014 investments of $27 million) to boost output, improve efficiency and reduce costs, with an expected cash return of at least $8 million annually beginning in 2015. As part of its commercial optimization efforts, the Company is proactively seeking extensions of existing power purchase agreements at several of its projects prior to their expiration dates in 2018 and later. The Company also intends to pursue external growth opportunities with accretive returns, to the extent available.
The Company also intends to continue its efforts to reduce general and administrative and other corporate expenses. In particular, the Company disclosed in its second quarter ("Q2") 2014 earnings call presentation that it expected reductions in the areas of development and other corporate expenses to exceed the $8 million goal that was initially communicated on the Company's Q2 2013 earnings call. Since the Q2 2014 earnings call, the Company has identified additional cost savings such that annual run-rate cost savings are expected to total approximately $15 million in 2015 relative to 2013. Certain expenses related to today's announcements may affect 2014 Free Cash Flow.
At June 30, 2014, the Company had a strong liquidity position of $261 million, including $158 million of unrestricted cash, out of which the Company plans to use $41 million to repay a Cdn$45 million convertible debenture maturity in October 2014. After that debt repayment, the Company will not have any maturities of non-amortizing debt for almost thirty months, when the next convertible debenture maturity occurs in March 2017.
As discussed on the Q2 2014 earnings call, Atlantic Power continues to expect 2014 Project Adjusted EBITDA of $280 to $305 million and Free Cash Flow of $0 to $25 million, which is net of approximately $52 to $55 million of term loan amortization and approximately $17 million of discretionary optimization investments.
Revised Dividend Rate
As previously disclosed, the allocation of a significant portion of the Company's available cash flow to mandatory debt amortization reduces the amount of cash flow available for other corporate purposes. As part of the strategic review process, the Board of Directors, together with management, assessed the best uses of currently anticipated Free Cash Flow in order to meet the Company's objectives, including enhancing the value of existing assets, delevering its balance sheet to improve both its cost of capital and ability to compete for new investments, and providing a current return to its shareholders. After taking into consideration all of these objectives, the Board of Directors has determined to set a dividend level of Cdn$0.12 per share on an annual basis, equivalent to approximately US$13 million annually.
Going forward, Atlantic Power intends to pay dividends on a quarterly basis. As previously announced, the monthly dividend of Cdn$0.03333 declared August 15, 2014 will be paid September 30, 2014. The Company will then move to a quarterly dividend rate of Cdn$0.03, with the first quarterly dividend to be declared in November and paid at the end of December 2014.
President and CEO Transition
Atlantic Power's Board of Directors also announced today that it has appointed Director Ken Hartwick, 51, as Interim President and CEO effective immediately, following the mutual agreement for Barry Welch to step down as President, CEO and a Director of the Company. Mr. Hartwick will remain a member of Atlantic Power's Board. He will not be a candidate for the permanent President and CEO position and will continue his role as a member of the Board following the appointment of a new President and CEO. The Board has commenced a process to identify and evaluate candidates to serve as the Company's next President and CEO and will promptly engage a leading executive search firm to assist in the process.
Mr. Hartwick has served as a member of the Board of Atlantic Power since 2004 and has more than 15 years of management experience in the energy sector and 20 years of experience in the financial sector. Mr. Hartwick's experience in the energy industry spans several markets, and he recently served as President and CEO for Just Energy Group Inc., an integrated retailer of commodity products that sells to residential and commercial businesses.
"The Board, following a comprehensive review of options available to Atlantic Power, has determined that the interests of the Company and its stakeholders are best served at this time by continuing to operate as an independent company and executing the Company's business plan," said Irving Gerstein, Chairman of the Board of Atlantic Power. "As part of this process, and in order for the Company to be better positioned to achieve its objectives, the Board has reset the dividend. Additionally, we are pleased that Ken has agreed to assume the role of Interim President and CEO and are confident that his in-depth knowledge of Atlantic Power and his expertise as a successful senior executive in the energy sector will allow us to effect a seamless transition as we search for a permanent President and CEO. Ken has been a valuable member of our Board since 2004. Under his leadership, Atlantic Power will focus on enhancing the value of its existing assets, deleveraging the balance sheet and utilizing the Company's core competencies to create proprietary investment opportunities. Atlantic Power has a diverse set of power generating assets and we are confident that this is the best path forward to drive value for shareholders. Lastly, we thank Barry for his years of service and wish him the best in his future endeavors."
Project Adjusted EBITDA and Free Cash Flow are not recognized measures under generally accepted accounting principles in the United States ("GAAP") and do not have standardized meanings prescribed by GAAP. Therefore, these measures may not be comparable to similar measures presented by other companies. The Company has not provided a reconciliation of forward-looking non-GAAP measures due primarily to variability and difficulty in making accurate forecasts and projections, as not all information necessary for quantitative reconciliation is available to the Company without unreasonable efforts. As previously disclosed, the Company's Free Cash Flow guidance for 2014 excludes approximately $49 million of costs related to its debt refinancing and repurchase transactions and $8 million of Piedmont debt repayment.
About Atlantic Power
Atlantic Power owns and operates a diverse fleet of power generation assets in the United States and Canada. Atlantic Power's power generation projects sell electricity to utilities and other large commercial customers largely under long-term power purchase agreements, which seek to minimize exposure to changes in commodity prices. Its power generation projects in operation have an aggregate gross electric generation capacity of approximately 2,945 MW in which its aggregate ownership interest is approximately 2,024 MW. Its current portfolio consists of interests in twenty-eight operational power generation projects across eleven states in the United States and two provinces in Canada.
Atlantic Power trades on the New York Stock Exchange under the symbol AT and on the Toronto Stock Exchange under the symbol ATP. For more information, please visit the Company's website at www.atlanticpower.com or contact:
Atlantic Power Corporation
Amanda Wagemaker, Investor Relations
(617) 977-2700
info@atlanticpower.com
BOSTON, Sept. 5, 2014 /CNW/ -- Atlantic Power Corporation (Atlantic Power) and Atlantic Power Preferred Equity Ltd. (TSX: AZP.PR.A and AZP.PR.B) (the Corporation), a subsidiary of Atlantic Power, announced that the Corporation has declared quarterly dividends of Cdn$0.303125 per share on its Cumulative Redeemable Preferred Shares, Series 1 (the Series 1 Shares) and Cdn$0.437500 on its Cumulative Rate Reset Preferred Shares, Series 2 (the Series 2 Shares).
The dividends on the Series 1 Shares and the Series 2 Shares are to be paid on September 30, 2014 to shareholders of record at the close of business on September 16, 2014.
Tax Information for Shareholders
The Corporation designates the dividend on each of the Series 1 Shares and the Series 2 Shares to be an "eligible dividend" pursuant to subsection 89(14) of the Income Tax Act (Canada) and its equivalent in any of the provinces and territories of Canada.
U.S. individual or other non-corporate taxpayers should be eligible for the reduced rate of tax currently applicable to "qualified dividends" provided that the investor meets the holding period and any other requirements.
Taxpayers should always seek their own independent qualified professionals regarding the tax consequences of purchasing or owning preferred shares of the Corporation.
About Atlantic Power Preferred Equity Ltd.
The Corporation is a corporation incorporated under the laws of the Province of Alberta and is an indirect, wholly-owned subsidiary of Atlantic Power. The Corporation directly holds Atlantic Power's business and power generation and other assets in British Columbia, operates as a holding company and indirectly holds certain of Atlantic Power's business and power generation and other assets in the United States, including Atlantic Power's Curtis Palmer, Manchief, Frederickson, Naval Station, North Island, Naval Training Center, Oxnard, Greeley, Kenilworth, and Morris power generating facilities.
About Atlantic Power
Atlantic Power owns and operates a diverse fleet of power generation assets in the United States and Canada. Atlantic Power's power generation projects sell electricity to utilities and other large commercial customers largely under long-term power purchase agreements, which seek to minimize exposure to changes in commodity prices. Its power generation projects in operation have an aggregate gross electric generation capacity of approximately 2,945 MW in which its aggregate ownership interest is approximately 2,024 MW. Its current portfolio consists of interests in twenty-eight operational power generation projects across eleven states in the United States and two provinces in Canada.
Atlantic Power trades on the New York Stock Exchange under the symbol AT and on the Toronto Stock Exchange under the symbol ATP. For more information, please visit the Company's website at www.atlanticpower.com or contact:
Copies of financial data and other publicly filed documents are filed on SEDAR at www.sedar.com or on EDGAR at www.sec.gov/edgar.shtml under "Atlantic Power Corporation" or on Atlantic Power's website.
Atlantic Power Corporation
Amanda Wagemaker, Investor Relations
(617) 977-2700
info@atlanticpower.com
Logo - http://photos.prnewswire.com/prnh/20110809/NE49346LOGO
SOURCE Atlantic Power Corporation
Followers
|
18
|
Posters
|
|
Posts (Today)
|
0
|
Posts (Total)
|
323
|
Created
|
05/04/12
|
Type
|
Free
|
Moderators |
Volume | |
Day Range: | |
Bid Price | |
Ask Price | |
Last Trade Time: |