Company Quick10K Filing
Atlantic Power
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 138 $328
10-Q 2019-10-31 Quarter: 2019-09-30
10-Q 2019-08-01 Quarter: 2019-06-30
10-Q 2019-05-02 Quarter: 2019-03-31
10-K 2019-02-28 Annual: 2018-12-31
10-Q 2018-11-01 Quarter: 2018-09-30
10-Q 2018-08-02 Quarter: 2018-06-30
10-Q 2018-05-03 Quarter: 2018-03-31
10-K 2018-03-01 Annual: 2017-12-31
10-Q 2017-11-09 Quarter: 2017-09-30
10-Q 2017-08-03 Quarter: 2017-06-30
10-Q 2017-05-04 Quarter: 2017-03-31
10-K 2017-03-02 Annual: 2016-12-31
10-Q 2016-11-07 Quarter: 2016-09-30
10-Q 2016-08-08 Quarter: 2016-06-30
10-Q 2016-05-05 Quarter: 2016-03-31
10-K 2016-03-07 Annual: 2015-12-31
10-Q 2015-11-05 Quarter: 2015-09-30
10-Q 2015-08-10 Quarter: 2015-06-30
10-Q 2015-05-07 Quarter: 2015-03-31
10-K 2015-02-26 Annual: 2014-12-31
10-Q 2014-11-06 Quarter: 2014-09-30
10-Q 2014-08-07 Quarter: 2014-06-30
10-Q 2014-05-12 Quarter: 2014-03-31
10-K 2014-02-28 Annual: 2013-12-31
10-Q 2013-11-07 Quarter: 2013-09-30
10-Q 2013-08-08 Quarter: 2013-06-30
10-Q 2013-05-08 Quarter: 2013-03-31
10-K 2013-03-01 Annual: 2012-12-31
10-Q 2012-11-05 Quarter: 2012-09-30
10-Q 2012-08-08 Quarter: 2012-06-30
10-Q 2012-05-07 Quarter: 2012-03-31
10-K 2012-02-29 Annual: 2011-12-31
10-Q 2011-11-14 Quarter: 2011-09-30
10-Q 2011-08-12 Quarter: 2011-06-30
10-Q 2011-05-11 Quarter: 2011-03-31
10-K 2011-03-18 Annual: 2010-12-31
10-Q 2010-11-10 Quarter: 2010-09-30
10-Q 2010-08-09 Quarter: 2010-06-30
10-Q 2010-05-14 Quarter: 2010-03-31
8-K 2019-12-05 Other Events, Exhibits
8-K 2019-12-02 Other Events, Exhibits
8-K 2019-11-19 Regulation FD, Exhibits
8-K 2019-11-14 Other Events, Exhibits
8-K 2019-11-11 Officers
8-K 2019-11-01 Earnings, Exhibits
8-K 2019-10-31 Earnings, Regulation FD, Exhibits
8-K 2019-08-20 Regulation FD, Exhibits
8-K 2019-08-02 Earnings, Exhibits
8-K 2019-08-01 Earnings, Regulation FD, Exhibits
8-K 2019-06-19 Regulation FD, Exhibits
8-K 2019-06-19 Shareholder Rights, Shareholder Vote, Regulation FD, Exhibits
8-K 2019-05-24 Enter Agreement, Off-BS Arrangement, Regulation FD, Exhibits
8-K 2019-05-08 Regulation FD, Exhibits
8-K 2019-05-03 Earnings, Exhibits
8-K 2019-05-02 Earnings, Regulation FD, Exhibits
8-K 2019-04-30 Regulation FD, Exhibits
8-K 2019-04-10 Leave Agreement, Regulation FD, Exhibits
8-K 2019-03-13 Regulation FD, Exhibits
8-K 2019-03-07 Regulation FD, Other Events, Exhibits
8-K 2019-03-01 Earnings, Exhibits
8-K 2019-02-28 Earnings, Regulation FD, Exhibits
8-K 2019-02-26 Officers, Regulation FD, Exhibits
8-K 2019-01-23 Officers, Regulation FD, Exhibits
8-K 2018-11-08 Regulation FD, Exhibits
8-K 2018-11-02 Earnings, Exhibits
8-K 2018-11-01 Earnings, Regulation FD, Exhibits
8-K 2018-08-06 Regulation FD, Exhibits
8-K 2018-08-03 Earnings, Exhibits
8-K 2018-08-02 Earnings, Regulation FD, Exhibits
8-K 2018-06-19 Regulation FD, Exhibits
8-K 2018-06-19 Shareholder Vote, Exhibits
8-K 2018-05-15 Regulation FD, Exhibits
8-K 2018-05-04 Earnings, Exhibits
8-K 2018-05-03 Earnings, Regulation FD, Exhibits
8-K 2018-04-27 Earnings, Regulation FD, Exhibits
8-K 2018-03-08 Regulation FD, Exhibits
8-K 2018-03-02 Earnings, Exhibits
8-K 2018-03-02 Earnings, Regulation FD, Exhibits
8-K 2018-01-29 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2018-01-29 Other Events
8-K 2018-01-22 Other Events, Exhibits
AT 2019-09-30
Item 2. Management’S Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Item 1A. Risk Factors
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-31.1 at-20190930ex311587a37.htm
EX-31.2 at-20190930ex312035f66.htm
EX-32.1 at-20190930ex321fb8d4b.htm
EX-32.2 at-20190930ex32259e103.htm

Atlantic Power Earnings 2019-09-30

AT 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
AZRE 464 108,864 83,467 0 0 0 0 56,261 0%
AT 328 994 804 288 0 27 99 256 0% 2.6 3%
SKYS 248 585 507 0 0 0 0 248 0%
ELLO 83 211 134 0 0 0 0 47 0%
ESNC 20 10 4 11 2 -12 -12 17 22% -1.5 -116%
ELC 18 5 2 0 0 -0 -0 20 0% -144.3 -3%
OPTT 12 16 3 1 -1 -12 -12 -2 -90% 0.2 -74%
EAB
GPJA
EMP

10-Q 1 at-20190930x10q.htm 10-Q at_Current_Folio_10Q

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to        

 

COMMISSION FILE NUMBER 001‑34691

ATLANTIC POWER CORPORATION

(Exact name of registrant as specified in its charter)

 

 

British Columbia, Canada
(State or other jurisdiction of
incorporation or organization)

55‑0886410
(I.R.S. Employer
Identification No.)

3 Allied Drive, Suite 155
Dedham, MA
(Address of principal executive offices)

02026
(Zip code)

 

(617) 977‑2400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading symbol

Name of Exchange on which registered

Common Shares, no par value, and the associated Rights to Purchase Common Shares

AT

The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S‑T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act:

 

 

 

 

Large accelerated filer ☐

Accelerated filer ☒

Non‑accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

 

 

 

 

If an emerging company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐  No ☒

The number of shares outstanding of the registrant’s Common Stock as of October 30, 2019 was 109,328,782.

 

 

 

 

ATLANTIC POWER CORPORATION

 

FORM 10‑Q

 

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019

 

Index

 

 

General :

    

3

 

PART I—FINANCIAL INFORMATION

 

 

ITEM 1.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND NOTES

 

 

 

Consolidated Balance Sheets as of September 30, 2019 (unaudited) and December 31, 2018

 

4

 

Consolidated Statements of Operations for the three and nine months ended September 30, 2019 (unaudited) and September 30, 2018 (unaudited)

 

5

 

Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2019 (unaudited) and September 30, 2018 (unaudited)

 

6

 

Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 (unaudited) and September 30, 2018 (unaudited)

 

7

 

Condensed Notes to Consolidated Financial Statements (unaudited)

 

8

ITEM 2. 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

40

ITEM 3. 

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

65

ITEM 4. 

CONTROLS AND PROCEDURES

 

65

 

PART II—OTHER INFORMATION

 

 

ITEM 1A. 

RISK FACTORS

 

66

ITEM 2. 

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

66

ITEM 6. 

EXHIBITS

 

68

 

 

 

 

GENERAL

 

In this Quarterly Report on Form 10‑Q, references to “Cdn$” and “Canadian dollars” are to the lawful currency of Canada and references to “$”, “US$” and “U.S. dollars” are to the lawful currency of the United States. All dollar amounts herein are in U.S. dollars, unless otherwise indicated.

 

Unless otherwise stated, or the context otherwise requires, references in this Quarterly Report on Form 10‑Q to “we,” “us,” “our,” “Atlantic Power” and the “Company” refer to Atlantic Power Corporation, those entities owned or controlled by Atlantic Power Corporation and predecessors of Atlantic Power Corporation.

3

ATLANTIC POWER CORPORATION

 

CONSOLIDATED BALANCE SHEETS

 

(in millions of U.S. dollars)

 

 

 

 

 

 

 

 

 

 

September 30, 

 

December 31, 

 

 

 

2019

 

2018

    

Assets

    

(unaudited)

    

 

    

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

58.1

 

$

68.3

 

Restricted cash

 

 

1.7

 

 

2.1

 

Accounts receivable

 

 

35.3

 

 

35.7

 

Current portion of derivative instruments asset (Notes 8 and 9)

 

 

0.1

 

 

4.2

 

Inventory

 

 

18.2

 

 

15.8

 

Prepayments

 

 

5.2

 

 

4.0

 

Income taxes receivable

 

 

2.3

 

 

0.3

 

Lease receivable

 

 

1.5

 

 

 —

 

Other current assets

 

 

0.7

 

 

5.9

 

Total current assets

 

 

123.1

 

 

136.3

 

Property, plant, and equipment, net

 

 

505.7

 

 

549.5

 

Equity investments in unconsolidated affiliates (Note 5)

 

 

152.6

 

 

140.8

 

Power purchase agreements and intangible assets, net

 

 

151.9

 

 

170.1

 

Goodwill

 

 

21.3

 

 

21.3

 

Derivative instruments asset (Notes 8 and 9)

 

 

 —

 

 

0.3

 

Operating lease right-of-use assets (Note 1)

 

 

5.9

 

 

 —

 

Insurance recovery receivable (Note 15)

 

 

24.2

 

 

 —

 

Other assets

 

 

3.3

 

 

6.2

 

Total assets

 

$

988.0

 

$

1,024.5

 

Liabilities

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

3.4

 

$

2.5

 

Accrued interest

 

 

3.5

 

 

2.3

 

Other accrued liabilities

 

 

19.4

 

 

20.2

 

Current portion of long-term debt (Note 6)

 

 

108.1

 

 

68.1

 

Current portion of derivative instruments liability (Notes 8 and 9)

 

 

10.8

 

 

4.5

 

Convertible debentures (Note 7)

 

 

 —

 

 

18.1

 

Operating lease liabilities (Note 16)

 

 

1.5

 

 

 —

 

Other current liabilities

 

 

0.6

 

 

0.2

 

Total current liabilities

 

 

147.3

 

 

115.9

 

Long-term debt, net of unamortized discount and deferred financing costs (Note 6)

 

 

457.3

 

 

540.7

 

Convertible debentures, net of discount and unamortized deferred financing costs (Note 7)

 

 

79.1

 

 

75.7

 

Derivative instruments liability (Notes 8 and 9)

 

 

15.5

 

 

15.4

 

Deferred income taxes

 

 

6.9

 

 

9.0

 

Power purchase agreements and intangible liabilities, net

 

 

20.1

 

 

21.2

 

Asset retirement obligations, net

 

 

50.9

 

 

49.2

 

Operating lease liabilities (Note 16)

 

 

5.0

 

 

 —

 

Other long-term liabilities

 

 

3.9

 

 

5.0

 

Total liabilities

 

 

786.0

 

 

832.1

 

Equity

 

 

 

 

 

 

 

Common shares, no par value, unlimited authorized shares; 109,379,611 and 108,341,738 issued and outstanding at September 30, 2019 and December 31, 2018

 

 

1,261.3

 

 

1,260.9

 

Accumulated other comprehensive loss (Note 4)

 

 

(143.1)

 

 

(146.2)

 

Retained deficit

 

 

(1,098.9)

 

 

(1,121.6)

 

Total Atlantic Power Corporation shareholders’ equity

 

 

19.3

 

 

(6.9)

 

Preferred shares issued by a subsidiary company (Note 13)

 

 

182.7

 

 

199.3

 

Total equity

 

 

202.0

 

 

192.4

 

Total liabilities and equity

 

$

988.0

 

$

1,024.5

 

 

See accompanying notes to consolidated financial statements.

4

ATLANTIC POWER CORPORATION

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

(in millions of U.S. dollars, except per share amounts)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 

 

Nine Months Ended September 30, 

 

 

 

2019

 

2018

 

2019

    

2018

 

Project revenue:

    

 

    

    

 

    

    

 

    

 

 

    

    

Energy sales (Note 2)

 

$

29.2

 

$

25.0

 

$

102.7

 

$

94.8

 

Energy capacity revenue (Note 2)

 

 

38.0

 

 

29.5

 

 

99.8

 

 

72.9

 

Other  (Note 2)

 

 

3.9

 

 

10.9

 

 

12.9

 

 

43.9

 

 

 

 

71.1

 

 

65.4

 

 

215.4

 

 

211.6

 

Project expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Fuel

 

 

19.4

 

 

16.7

 

 

55.2

 

 

54.0

 

Operations and maintenance

 

 

19.5

 

 

18.0

 

 

54.6

 

 

66.5

 

Depreciation and amortization

 

 

16.2

 

 

21.0

 

 

48.5

 

 

65.7

 

 

 

 

55.1

 

 

55.7

 

 

158.3

 

 

186.2

 

Project other income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of derivative instruments (Notes 8 and 9)

 

 

1.1

 

 

 —

 

 

(8.3)

 

 

3.6

 

Equity in earnings of unconsolidated affiliates (Note 5)

 

 

12.1

 

 

10.2

 

 

34.4

 

 

33.7

 

Interest, net

 

 

(0.3)

 

 

(0.4)

 

 

(0.9)

 

 

(1.4)

 

Insurance loss (Note 15)

 

 

(1.0)

 

 

 —

 

 

(1.0)

 

 

 —

 

Other income (expense), net

 

 

 —

 

 

6.7

 

 

(1.2)

 

 

6.7

 

 

 

 

11.9

 

 

16.5

 

 

23.0

 

 

42.6

 

Project income

 

 

27.9

 

 

26.2

 

 

80.1

 

 

68.0

 

Administrative and other expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Administration

 

 

5.5

 

 

5.7

 

 

17.3

 

 

17.9

 

Interest expense, net

 

 

10.9

 

 

14.6

 

 

33.0

 

 

40.7

 

Foreign exchange (gain) loss

 

 

(2.8)

 

 

4.5

 

 

7.1

 

 

(9.1)

 

Other (income) expense, net

 

 

(0.2)

 

 

2.5

 

 

0.7

 

 

0.3

 

 

 

 

13.4

 

 

27.3

 

 

58.1

 

 

49.8

 

Income (loss) from operations before income taxes

 

 

14.5

 

 

(1.1)

 

 

22.0

 

 

18.2

 

Income tax expense (Note 10)

 

 

0.2

 

 

3.6

 

 

2.4

 

 

7.7

 

Net income (loss)

 

 

14.3

 

 

(4.7)

 

 

19.6

 

 

10.5

 

Net income (loss) attributable to preferred shares of a subsidiary company (Note 13)

 

 

1.7

 

 

(1.5)

 

 

(3.1)

 

 

(1.6)

 

Net income (loss) attributable to Atlantic Power Corporation

 

$

12.6

 

$

(3.2)

 

$

22.7

 

$

12.1

 

Net earnings (loss) per share attributable to Atlantic Power Corporation shareholders: (Note 12)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.12

 

$

(0.03)

 

$

0.21

 

$

0.11

 

Diluted

 

 

0.10

 

 

(0.03)

 

 

0.19

 

 

0.11

 

Weighted average number of common shares outstanding: (Note 12)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

109.4

 

 

111.1

 

 

109.4

 

 

112.8

 

Diluted

 

 

137.8

 

 

111.1

 

 

138.3

 

 

142.3

 

 

See accompanying notes to consolidated financial statements.

 

5

ATLANTIC POWER CORPORATION

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

 

(in millions of U.S. dollars)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 

 

Nine Months Ended September 30, 

 

 

 

2019

 

2018

 

2019

 

2018

 

Net income

    

$

14.3

    

$

(4.7)

    

$

19.6

    

$

10.5

 

Other comprehensive income, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on hedging activities

 

$

 —

 

$

0.1

 

$

(0.4)

 

$

0.3

 

Net amount reclassified to earnings

 

 

 —

 

 

0.1

 

 

0.2

 

 

0.3

 

Net realized and unrealized (loss) gain on derivatives

 

 

 —

 

 

0.2

 

 

(0.2)

 

 

0.6

 

Foreign currency translation adjustments

 

 

(1.6)

 

 

2.2

 

 

3.3

 

 

(5.3)

 

Other comprehensive income (loss), net of tax

 

 

(1.6)

 

 

2.4

 

 

3.1

 

 

(4.7)

 

Comprehensive income (loss)

 

 

12.7

 

 

(2.3)

 

 

22.7

 

 

5.8

 

Less: Comprehensive income (loss) attributable to preferred shares of a subsidiary company

 

 

1.7

 

 

(1.5)

 

 

(3.1)

 

 

(1.6)

 

Comprehensive income (loss) attributable to Atlantic Power Corporation

 

$

11.0

 

$

(0.8)

 

$

25.8

 

$

7.4

 

 

See accompanying notes to consolidated financial statements.

6

ATLANTIC POWER CORPORATION

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(in millions of U.S. dollars)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

Nine months ended

 

 

September 30, 

 

 

2019

 

2018

Cash provided by operating activities:

    

 

    

    

 

    

Net income

 

$

19.6

 

$

10.5

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

48.5

 

 

65.7

Gain on disposal of fixed assets and inventory

 

 

(0.1)

 

 

 —

Other gain

 

 

(0.8)

 

 

 —

Gain on step acquisition of equity investment

 

 

 —

 

 

(6.7)

Share-based compensation

 

 

1.2

 

 

1.8

Asset retirement obligation

 

 

1.4

 

 

 —

Insurance loss

 

 

1.0

 

 

 —

Equity in earnings from unconsolidated affiliates

 

 

(34.4)

 

 

(33.7)

Distributions from unconsolidated affiliates

 

 

41.4

 

 

37.4

Unrealized foreign exchange loss (gain)

 

 

7.3

 

 

(8.6)

Change in fair value of derivative instruments

 

 

9.8

 

 

(3.3)

Amortization of debt discount, deferred financing costs and operating lease right-of-use assets

 

 

6.4

 

 

7.4

Change in deferred income taxes

 

 

(1.8)

 

 

5.0

Change in other operating balances

 

 

 

 

 

 

Accounts receivable

 

 

4.7

 

 

19.7

Inventory

 

 

0.3

 

 

0.8

Prepayments and other assets

 

 

(0.2)

 

 

3.2

Accounts payable

 

 

(1.3)

 

 

(1.0)

Accruals and other liabilities

 

 

1.5

 

 

(0.4)

Cash provided by operating activities

 

 

104.5

 

 

97.8

Cash used in investing activities:

 

 

 

 

 

 

Investment in unconsolidated affiliates

 

 

(18.7)

 

 

 —

Cash paid for acquisition, net of cash received

 

 

(10.0)

 

 

(12.8)

Deposit for acquisition

 

 

 —

 

 

(2.6)

Proceeds from asset sales

 

 

1.6

 

 

 —

Purchase of property, plant and equipment

 

 

(0.9)

 

 

(1.5)

Cash used in investing activities:

 

 

(28.0)

 

 

(16.9)

Cash used in financing activities:

 

 

 

 

 

 

Proceeds from convertible debenture issuance

 

 

 —

 

 

92.2

Repayment of convertible debentures

 

 

(18.5)

 

 

(88.1)

Common share repurchases

 

 

(0.8)

 

 

(12.3)

Preferred share repurchases

 

 

(8.0)

 

 

(8.0)

Repayment of corporate and project-level debt

 

 

(52.3)

 

 

(79.5)

Cash payments for vested LTIP units, including amounts withheld for taxes

 

 

(2.0)

 

 

(0.8)

Deferred financing costs

 

 

 —

 

 

(5.1)

Dividends paid to preferred shareholders

 

 

(5.5)

 

 

(6.3)

Cash used in financing activities:

 

 

(87.1)

 

 

(107.9)

Net decrease in cash, restricted cash and cash equivalents

 

 

(10.6)

 

 

(27.0)

Cash, restricted cash and cash equivalents at beginning of period

 

 

70.4

 

 

84.9

Cash, restricted cash and cash equivalents at end of period

 

$

59.8

 

$

57.9

Supplemental cash flow information

 

 

 

 

 

 

Interest paid

 

$

27.0

 

$

30.3

Income taxes paid, net

 

$

3.5

 

$

2.5

Accruals for construction in progress

 

$

0.2

 

$

 —

 

See accompanying notes to consolidated financial statements.

 

 

7

Table of Contents

ATLANTIC POWER CORPORATION

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

(in millions of U.S. dollars, except per‑share amounts)

 

(Unaudited)

 

1. Nature of business

 

General

 

Atlantic Power is an independent power producer that owns power generation assets in eleven states in the United States and two provinces in Canada. Our power generation projects, which are diversified by geography, fuel type, dispatch profile and offtaker, sell electricity to utilities and other large customers predominantly under long‑term power purchase agreements (“PPAs”), which seek to minimize exposure to changes in commodity prices. As of September 30, 2019, our portfolio consisted of twenty-one operating projects with an aggregate electric generating capacity of approximately 1,723 megawatts (“MW”) on a gross ownership basis and approximately 1,327 MW on a net ownership basis. Sixteen of the projects are majority‑owned by the Company.  

 

Atlantic Power is a corporation established under the laws of the Province of Ontario on June 18, 2004 and continued to the Province of British Columbia on July 8, 2005. Our shares trade on the Toronto Stock Exchange (“TSX”) under the symbol “ATP” and on the New York Stock Exchange (“NYSE”) under the symbol “AT.” Our registered office is located at 215-10451 Shellbridge Way, Richmond, British Columbia V6X 2W8, Canada and our headquarters is located at 3 Allied Drive, Suite 155, Dedham, Massachusetts 02026, USA. Our telephone number in Dedham is (617) 977‑2400 and the address of our website is www.atlanticpower.com. Information contained on Atlantic Power’s website or that can be accessed through its website is not incorporated into and does not constitute a part of this Quarterly Report on Form 10‑Q. We have included our website address only as an inactive textual reference and do not intend it to be an active link to our website. We make available on our website, free of charge, our Annual Report on Form 10‑K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8‑K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (“SEC”). Additionally, we make available on our website our Canadian securities filings, which are not incorporated by reference into our Exchange Act filings.

 

Basis of presentation

 

The interim condensed consolidated financial statements included in this Quarterly Report on Form 10‑Q have been prepared in accordance with the SEC regulations for interim financial information and with the instructions to Form 10‑Q. The following notes should be read in conjunction with the accounting policies and other disclosures as set forth in the notes to our financial statements in our Annual Report on Form 10‑K for the year ended December 31, 2018. Interim results are not necessarily indicative of results for the full year.

 

In our opinion, the accompanying unaudited interim condensed consolidated financial statements present fairly our consolidated financial position as of September 30, 2019, the results of operations and comprehensive income (loss) for the three and nine months ended September 30, 2019 and 2018, and our cash flows for the nine months ended September 30, 2019 and 2018, in accordance with U.S. generally accepted accounting policies. In the opinion of management, all adjustments (consisting of normal recurring accruals and other adjustments) considered necessary for a fair presentation have been included.

 

Use of estimates

 

The preparation of financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the year. Actual results could differ from those estimates. During the periods presented, we have made a number of estimates and valuation assumptions, including the fair value of assets acquired and liabilities assumed in purchase accounting, the useful lives and recoverability of property, plant and

8

Table of Contents

ATLANTIC POWER CORPORATION

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

(in millions of U.S. dollars, except per‑share amounts)

 

(Unaudited)

 

equipment, valuation of goodwill, intangible assets and liabilities related to PPAs and fuel supply agreements, the recoverability of equity investments, the recoverability of deferred tax assets, tax provisions, recovery of expected insurance proceeds, the fair value of financial instruments and derivatives, pension obligations, asset retirement obligations and equity-based compensation. In addition, estimates are used to test long-lived assets and goodwill for impairment and to determine the fair value of impaired assets. These estimates and valuation assumptions are based on present conditions and our planned course of action, as well as assumptions about future business and economic conditions. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2018. As better information becomes available or actual amounts are determinable, the recorded estimates are revised. Should the underlying valuation assumptions and estimates change, the recorded amounts could change by a material amount.

 

Recently adopted and issued accounting standards

 

Accounting Standards Adopted

 

In February 2016, the FASB issued authoritative guidance intended to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new guidance, lessees will be required to recognize a right-of-use asset and a lease liability, measured on a discounted basis, at the commencement date for all leases with terms greater than twelve months. Additionally, this guidance will require disclosures to help investors and other financial statement users to better understand the amount, timing, and uncertainty of cash flows arising from leases, including qualitative and quantitative requirements. Any leases that expire before the initial application date will not require any accounting adjustment. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. In July 2018, the FASB issued further authoritative guidance to provide an additional transition method to adopt the new lease requirements by allowing entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We elected this transition method. We adopted this guidance and related updates issued in July 2018 and December 2018 on January 1, 2019 and elected certain practical expedients permitted, including the expedient that permits us to retain our existing lease assessment and classification. The Company has elected not to apply the recognition requirements to short-term leases and not to separate non-lease components from associated lease components, for all classes of underlying assets.

As the result of our adoption of the guidance, we recorded $6.4 million and $7.2 million of right-of-use assets and lease liabilities, respectively, in the consolidated balance sheets on January 1, 2019. We have no transitional adjustments to our opening retained earnings or our consolidated statements of operations. See Note 16, Leases for further information.

In August 2017, the FASB issued authoritative guidance to align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The guidance expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. We adopted this guidance on January 1, 2019 and it did not have an impact on the consolidated financial statements.

 

In February 2018, the FASB issued authoritative guidance to allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. We adopted this guidance on January 1, 2019 and it did not have an impact on the consolidated financial statements.

 

9

Table of Contents

ATLANTIC POWER CORPORATION

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

(in millions of U.S. dollars, except per‑share amounts)

 

(Unaudited)

 

Accounting Standards Issued

 

In August 2018, the FASB issued authoritative guidance to modify the disclosure requirements on fair value measurement disclosures. The guidance requires removals of certain disclosures, such as the amount of and reasons for transfers between level 1 and level 2 of fair value hierarchy and the policy for timing of transfers between levels. The guidance further requires modifications and additions surrounding the disclosures of level 3 fair value measurements and related unrealized gains and losses. The guidance is effective for fiscal years beginning after December 15, 2019. We do not expect this to have a material impact to the consolidated financial statements upon adoption.

 

In August 2018, the FASB issued authoritative guidance to remove disclosures that no longer are considered cost-beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. The scope of the guidance is broad and includes reporting comprehensive income, debt modifications and extinguishments and other sub topics. The guidance is effective for fiscal years beginning after December 15, 2019. We are currently evaluating the impact that adoption will have on our disclosures.

 

2. Revenue from contracts

 

Disaggregation of revenue

 

We have four reportable segments: East U.S., West U.S., Canada and Un-Allocated Corporate.  Each segment contains various power generation projects and performance obligations as described above.  For more detailed information about reportable segments, see Note 14, Segment and geographical information. Revenue, receivables and contract liabilities by segment consists of following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2019

 

    

    

 

 

    

 

 

    

 

    

Un-Allocated

    

Consolidated

 

 

East U.S.

 

West U.S.

 

Canada

 

Corporate

 

Total

Project revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy sales

 

$

21.2

 

$

3.0

 

$

5.0

 

$

 —

 

$

29.2

Energy capacity revenue

 

 

17.2

 

 

10.2

 

 

10.6

 

 

 —

 

 

38.0

Steam energy and capacity revenue

 

 

0.2

 

 

 —

 

 

 —

 

 

 —

 

 

0.2

Ancillary and transmission services

 

 

2.8

 

 

 —

 

 

0.6

 

 

 —

 

 

3.4

Asset management and operation

 

 

 —

 

 

 —

 

 

 —

 

 

0.2

 

 

0.2

Miscellaneous revenue

 

 

 —

 

 

0.1

 

 

 —

 

 

 —

 

 

0.1

 

 

 

41.4

 

 

13.3

 

 

16.2

 

 

0.2

 

 

71.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2018

 

    

    

 

 

    

 

 

    

 

    

    

Un-Allocated

    

    

Consolidated

 

 

 

East U.S.

 

 

West U.S.

 

 

Canada

 

 

Corporate

 

 

Total

Project revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy sales

 

$

16.0

 

$

3.3

 

$

5.7

 

$

 —

 

$

25.0

Energy capacity revenue

 

 

16.6

 

 

10.2

 

 

2.7

 

 

 —

 

 

29.5

Steam energy and capacity revenue

 

 

2.7

 

 

 —

 

 

 —

 

 

 —

 

 

2.7

Enhanced dispatch contracts

 

 

 —

 

 

 —

 

 

6.1

 

 

 —

 

 

6.1

Ancillary and transmission services

 

 

1.0

 

 

 —

 

 

0.6

 

 

 —

 

 

1.6

Asset management and operation

 

 

 —

 

 

 —

 

 

 —

 

 

0.2

 

 

0.2

Miscellaneous revenue

 

 

 —

 

 

0.3

 

 

 —

 

 

 —

 

 

0.3

 

 

 

36.3

 

 

13.8

 

 

15.1

 

 

0.2

 

 

65.4

 

10

Table of Contents

ATLANTIC POWER CORPORATION

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

(in millions of U.S. dollars, except per‑share amounts)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2019

 

    

    

 

 

    

 

 

    

 

    

Un-Allocated

    

Consolidated

 

 

East U.S.

 

West U.S.

 

Canada

 

Corporate

 

Total

Project revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy sales

 

$

74.4

 

$

8.9

 

$

19.4

$

 

 —

 

$

102.7

Energy capacity revenue

 

 

43.8

 

 

21.7

 

 

34.3

 

 

 —

 

 

99.8

Steam energy and capacity revenue

 

 

0.1

 

 

 —

 

 

 —

 

 

 —

 

 

0.1

Ancillary and transmission services

 

 

10.3

 

 

 —

 

 

2.2

 

 

 —

 

 

12.5

Asset management and operation

 

 

 —

 

 

 —

 

 

 —

 

 

0.7

 

 

0.7

Miscellaneous revenue

 

 

 —

 

 

(0.4)

 

 

 —

 

 

 —

 

 

(0.4)

 

 

 

128.6

 

 

30.2

 

 

55.9

 

 

0.7

 

 

215.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2018

 

    

    

 

 

    

 

 

    

 

    

    

Un-Allocated

    

    

Consolidated

 

 

 

East U.S.

 

 

West U.S.

 

 

Canada

 

 

Corporate

 

 

Total

Project revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy sales

 

$

62.9

 

$

10.1

 

$

21.8

 

$

 —

 

$

94.8

Energy capacity revenue

 

 

41.5

 

 

22.9

 

 

8.5

 

 

 —

 

 

72.9

Steam energy and capacity revenue

 

 

8.9

 

 

2.8

 

 

 —

 

 

 —

 

 

11.7

Waste heat revenue

 

 

 —

 

 

 —

 

 

0.1

 

 

 —

 

 

0.1

Enhanced dispatch contracts

 

 

 —

 

 

 —

 

 

21.1

 

 

 —

 

 

21.1

Ancillary and transmission services

 

 

3.6

 

 

 —

 

 

6.8

 

 

 —

 

 

10.4

Asset management and operation

 

 

 —

 

 

 —

 

 

 —

 

 

0.7

 

 

0.7

Miscellaneous revenue

 

 

 —