Atlantic Power Corporation Releases 3rd Quarter 2019 Results English Francais.

DEDHAM, Mass: Third Quarter 2019 Financial Highlights

Net income attributable to Atlantic Power increased to $12.6 million or $0.10 per diluted share from a net loss of $3.2 million or ($0.03) per diluted share in Q3 2018

Project income increased to $27.9 million from $26.2 million in Q3 2018

Cash from operating activities increased to $36.4 million from $19.5 million in Q3 2018

Project Adjusted EBITDA increased to $48.9 million from $45.4 million in Q3 2018

Repaid $18.3 million of term loan and project debt; leverage ratio improved to 3.7 times

Liquidity at September 30, 2019 of $181 million, including approximately $24 million of discretionary cash, after using $29 million for two acquisitions in July and August

Third Quarter 2019 Developments

Completed the acquisition of the Allendale and Dorchester contracted biomass plants for $12.6 million and the acquisition of equity interests in the Craven County and Grayling contracted biomass plants for $18.7 million

Williams Lake biomass plant executed new 10-year contract with BC Hydro, effective Oct. 1, 2019

Equipment malfunction and fire at Cadillac plant resulted in significant damage; financial impact expected to be limited to insurance deductibles of approximately $2.5 million to $3.0 million

2019 Updated Outlook

Increased 2019 Project Adjusted EBITDA guidance to a range of $185 million to $195 million from a range of $175 million to $190 million(1)

Increased estimate of 2019 operating cash flow (assuming working capital changes are nil) to a range of $115 million to $125 million from a range of $100 million to $115 million

Atlantic Power Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the "Company") today reported its financial results for the three and nine months ended September 30, 2019.

"During the third quarter, we acquired two contracted biomass plants and equity interests in two others at attractive valuations. These acquisitions increase the level and length of our contracted cash flows. We also executed a new ten-year contract for our Williams Lake biomass plant. All of these are expected to be accretive to our estimates of intrinsic value per share," said James J. Moore, President and CEO of Atlantic Power. "Financial results for the third quarter exceeded our expectations, in a continuation of the first half performance, and we have increased our full year guidance accordingly. We continue to allocate our cash flow and liquidity rationally to debt reduction, repurchases of common and preferred shares, and external acquisitions when expected returns appear to be superior to those we can obtain internally."

Mr. Moore continued, "The most challenging event of the quarter was the fire at our Cadillac plant in September. Fortunately, no one was injured. We tell our people that safety is more important than money. We are proud of our Cadillac employees as well as those across Atlantic Power for the way they responded on September 22 and afterward. Although the plant incurred significant damage and is expected to be out of service for a lengthy period, we expect that the financial impact will be limited by our insurance coverage."

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(1)The Company has not provided guidance for Project income or Net income because of the difficulty of making accurate forecasts and projections without unreasonable efforts with respect to certain highly variable components of these comparable GAAP metrics, including changes in the fair value of derivative instruments and foreign exchange gains or losses. These factors, which generally do not affect cash flow, are not included in Project Adjusted EBITDA.

Financial Results for the Three Months Ended September 30, 2019

Third quarter 2019 results for Project Adjusted EBITDA and operating cash flow exceeded expectations, mostly because of the acquisitions of Allendale and Dorchester and equity interests in Craven and Grayling in the third quarter (which were not included in the Company's initial guidance) and the new contract for the Williams Lake biomass plant (which avoided severance expense and inventory adjustments that previously had been expected to be recorded in the third quarter).

Project income, Net income and Project Adjusted EBITDA

Project income for the third quarter of 2019 was $27.9 million, a $1.7 million increase from $26.2 million in the year-ago period. Project revenue increased $5.7 million as a result of the acquisition of Allendale and Dorchester in July 2019, higher water flows at Curtis Palmer, the start-up of Tunis under a new Power Purchase Agreement (PPA) in October 2018 and the consolidation of Koma Kulshan in July 2018. Depreciation and amortization expense decreased $4.8 million as the 2018 period included $5.3 million of amortization expense for the remaining PPA intangible asset at Nipigon. These favorable comparisons were partially offset by the non-recurrence of the $6.7 million step-up gain on the consolidation of Koma Kulshan in 2018 and a $1.0 million insurance loss on the Cadillac fire recorded in 2019.

Net income attributable to Atlantic Power Corporation for the third quarter of 2019 was $12.6 million compared to a $3.2 million net loss in the third quarter of 2018. The improvement of $15.8 million was primarily attributable to the $1.7 million increase in Project income, a $7.3 million reduction in foreign exchange loss ($2.8 million gain versus a $4.5 million loss in 2018), lower interest expense of $3.7 million, a $2.8 million increase in the fair value of the convertible debenture conversion option (included in "Other (income) expense, net"), and a $3.4 million reduction in income tax expense. The foreign exchange gain of $2.8 million was related to the revaluation of debt denominated in Canadian dollars (the Canadian dollar depreciated from June 30, 2019 to September 30, 2019).

Project Adjusted EBITDA for the third quarter of 2019 increased $3.5 million to $48.9 million from $45.4 million in the third quarter of 2018. The increase was primarily driven by the acquisitions of...