BOSTON, MASSACHUSETTS, Nov 14, 2005 (CCNMatthews via COMTEX News Network) -- Atlantic Power Corporation (TSX:ATP.UN) -
- Closed Chambers acquisition on September 8, 2005
- Increased annual distribution to Cdn $1.03 effective as of September distribution
- Cash flow available for distribution of US $9.1 million (Cdn $0.30 per IPS)
- Payout ratio of 81% for nine months ending September 30, 2005
Atlantic Power Corporation (TSX:ATP.UN) (the "Company") today announced its results for the three and nine month periods ended September 30, 2005. All amounts are in US dollars unless otherwise indicated.
During the third quarter the Company completed the acquisition of a 40% interest in a 262 MW coal-fired cogeneration facility located at E.I. DuPont de Nemours & Company's Chambers Works complex in southwestern New Jersey. The total purchase price was approximately US $64.9 million and was funded by cash on hand and a draw on the revolving credit facility. The acquisition diversified the Atlantic Power portfolio's fuel mix, increased its off taker diversity, lengthened the weighted average term of its power purchase portfolio and increased the Company's aggregate net interests to 899MW of generating capacity.
With the completion of the Chambers acquisition, the Company also announced during the quarter that, effective with the September 2005 payment, annualized cash distributions were increased by Cdn $0.03 per Income Participating Security ("IPS") to Cdn $1.03 per year.
"The acquisition of our interest in the Chambers project was immediately accretive to our cash flow, and, as a result, we were very pleased to have implemented our first increase in monthly cash distributions," commented Barry Welch, President and CEO. "We believe there are additional opportunities available in the US power generation sector that will add further accretive growth and stability to our cash flows going forward."
Including the contribution from the Chambers facility commencing on September 8, 2005, cash available for distributions was $9.1 million or Cdn $0.30 per IPS in the third quarter. Distributions declared for the period were $7.8 million or Cdn $0.25 per IPS. For the nine months ended September 30, 2005 cash available for distributions was $28.0 million or Cdn $0.92 per IPS, while distributions declared were $ 22.69 million or Cdn $0.75 per IPS. The payout ratio was 86% in the third quarter and 81% through the first nine months of 2005.
The Company generated project and other revenue of $50.8 million and income before administrative and other expenses of $16.6 million in the third quarter. The net loss for the three months ended September 30, 2005 was $7.9 million or $0.21 (Cdn $0.26) per IPS. For the nine months ended September 30, 2005, project and other revenue was $126.7 million, generating income before administrative and other expenses of $40.6 million. The net loss was $3.2 million or $0.09 (Cdn $0.10) per IPS for the first nine months of 2005.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") at the Company's power producing projects were down 1% in the third quarter versus the same period in 2004, but up 6% for the nine month period ending September 30, 2005 (excluding the contribution from the lessor interest in the Lake Project acquired in late 2004 and Mid-Georgia's deferred revenue adjustment). The decrease for the quarter is primarily due to the loss of MASSPOWER revenues resulting from the successful buyout of three of its former PPAs, and lower swap settlements from Onondaga expected per its schedule, partially offset by improved operating margins at Lake and Pasco, increased ownership in the Gregory project and almost one month of Chambers ownership. The increase in nine months' EBITDA is due primarily to improved operating margins at the Lake and Pasco projects, increased ownership in the Gregory project and almost a month of Chambers ownership, offset by unfavorable impacts from the MASSPOWER PPA buyouts and increased natural gas costs at Selkirk beyond what can be passed through under one of its PPAs.
A breakdown of contributions (EBITDA excluding other income) by individual project for the three and nine month periods ending September 30, 2005 is provided in the attached Appendix.
In July the Company received a distribution from the MASSPOWER project which included approximately $3.3 million from a further release of net proceeds from dispositions of its power purchase and gas supply agreements. The project has repaid its outstanding debt and will continue to make available approximately 7.9% of its output under its remaining power purchase agreement through 2013 when it is dispatched, and will have the option to sell the remainder of its output into the wholesale spot market. The owners have entertained bids to buy the project company and recently entered into an exclusivity period with one of the bidders, which could conclude in negotiation of a purchase and sale agreement.
"We were pleased with our results in the quarter and first nine months of the year, and anticipate continuing solid and stable performance over the long term," Mr. Welch concluded.
The full financial statements for the period, including Management's Discussion and Analysis, are available on the Company's web site at www.atlanticpowercorporation.com.
CALCULATION OF CASH FLOW AVAILABLE FOR DISTRIBUTION
Periods Ending (Unaudited) September 30, September 30,
2005 2005
---------------------------
(3 months) (9 months)
Cash Flow Available For Distributions
Cash flows from operating activities 9,533 61,269
Proceeds on disposal of MASSPOWER PPA's
and other contracts(1) (3,291) (42,372)
---------------------------
Cash flows from operating activities
net of proceeds on disposal 6,242 18,897
Project level debt repayment (3,885) (10,627)
Interest on IPS portion of
subordinated notes 4,901 14,337
Income tax withholding installments
recoverable(2) 2,180 6,914
Purchase of property, plant and equipment (308) (1,490)
---------------------------
Cash flow available for distribution, USD 9,130 28,031
Cash flow available for distribution, Cdn. 10,902 33,828
Distributions
Interest on IPS subordinated notes 4,901 14,337
Dividend on IPS common shares 2,907 8,351
---------------------------
Total IPS distributions, USD 7,808 22,688
Total IPS distributions, Cdn. 9,297 27,703
Cash flow available for distribution
per IPS, Cdn. 0.30 0.92
Total distribution per IPS, Cdn. 0.25 0.75
(1) MASSPOWER's aggregate distributions less their normalized
operating cash flow (normalized EBITDA less principal
repayments).
(2) Represents the portion of income tax withholding installments
paid during the quarter related to operating activities exclusive
of amounts associated with MASSPOWER PPA and other contract
disposals.
Atlantic Power Corporation owns interests in a diversified portfolio of sixteen power generation projects located primarily in major markets in the United States. The Company's objectives are to sustain and grow its cash distributions over the long term by enhancing the performance of its existing assets and by making accretive acquisitions.
When used in this news release, the words "anticipate", "expect", "project", "believe", "estimate", "forecast" and similar expressions are intended to identify forward-looking statements, which include statements relating to the projects and potential acquisitions by the Company. Such statements are subject to certain risks, uncertainties and assumptions pertaining to operating performance, regulatory parameters, weather and economic conditions and, in the case of potential acquisitions, risks relating to sourcing, financing and completing acquisitions.
Cash Flow Available for Distributions is not a measure recognized under GAAP and does not have a standardized meaning prescribed by GAAP. Management believes Cash Flow Available for Distributions is a relevant supplemental measure of the Company's ability to earn and distribute cash returns to investors. A reconciliation of net cash provided by operating activities to Cash Flow Available for Distributions is set out in this MD&A. Investors are cautioned that the Company may calculate this measure in a manner that is different from other companies.
EBITDA is not a measure recognized under GAAP and does not have a standardized meaning prescribed by GAAP. Management uses aggregate EBITDA at the Projects as a cash flow measure to provide aggregate annual comparative information about Project performance.
Appendix - Project Contributions (1) ($US 000)
Three months ended Nine months ended
September 30, 2005 September 30, 2005
--------------------------------------
(Unaudited)
Contributions from
consolidated and
proportionately consolidated
projects(1)
Lake 6,868 18,740
Pasco 3,644 9,946
Orlando 2,907 5,794
Onondaga (2) 1,456 4,366
Mid-Georgia 2,102 3,482
Badger 734 3,480
Stockton 705 1,991
Chambers 1,906 1,906
Topsham 415 890
Koma Kulshan (19) 449
Other 886 425
--------------------------------------
Total contributions from
consolidated and
proportionately consolidated
projects 21,604 51,469
Amortization 7,900 22,673
Interest expense, net 1,648 4,573
--------------------------------------
Consolidated and
proportionately
consolidated project
earnings, net 12,056 24,223
--------------------------------------
Contributions from equity
projects(1)
Selkirk 4,067 13,480
Rumford 1,765 5,377
Gregory 1,664 3,971
MASSPOWER 99 3,484
JPPC 1,224 3,328
Delta Person 537 1,500
Other (29) (226)
--------------------------------------
Total contributions from
equity accounted projects 9,327 30,914
Amortization 3,265 10,924
Interest expense, net 1,663 5,590
Other income (expense) 137 1,974
--------------------------------------
Equity earnings, net 4,536 16,374
--------------------------------------
Total consolidated and
proportionately consolidated
project earnings, net 12,056 24,223
Total equity earnings, net 4,536 16,374
--------------------------------------
Income before the undernoted 16,592 40,597
--------------------------------------
(1) Project Contributions, represent project EBITDA (earnings before
interest, taxes, depreciation and amortization) excluding other
income. Project contributions may differ from cash flow to
Holdings due to a variety of reasons, including principal
repayments, deferred revenue, mark to market adjustments and
Project cash requirements.
(2) During the three month and nine month periods ending September
30, 2005, Onondaga received net indexed swap on hedge settlements
of $5,645 and $20,289 respectively.
SOURCE: Atlantic Power Corporation
Atlantic Power Corporation Barry Welch President and CEO (617) 531-6379 info@atlanticpowercorporation.com