Alterra Power Announces Audited Results for the Year Ended December 31, 2013 and Project Updates

Alterra Power Announces Audited Results for the Year Ended December 31, 2013 
and Project Updates 
(under IFRS and all amounts in US dollars unless otherwise stated) 
TSX : AXY 
VANCOUVER, March 27, 2014 /CNW/ - Alterra Power Corp. (TSX: AXY) ("Alterra" or 
the "Company") is pleased to report its financial and operating results for 
the year ended December 31, 2013. For further information on these results 
please see Alterra's Consolidated Financial Statements and Management's 
Discussion and Analysis. 
Alterra consolidates 100% of the results of operations at HS Orka and Soda 
Lake, while Alterra's interests in the Toba Montrose run of river hydro 
facility and the Dokie 1 wind facility are accounted for as equity 
investments. In certain statements in this news release, Alterra's results are 
disclosed as Alterra's "net interest", which means the effective portion of 
results that Alterra would have reported if each of HS Orka (66.6%), Toba 
Montrose (40%), Dokie 1 (51% from January to December 19, 2013 and 25.5% for 
the remainder of 2013), ABW Solar (10% from August 23, 2013 to November 29, 
2013) and Soda Lake (100%) had been reported in accordance with Alterra's 
actual share of ownership at December 31, 2013 and for the twelve months then 
ended.  Management believes that net interest reporting provides the clearest 
view of Alterra's performance. 
Highlights for the year include: 


        --  Increased revenue and recurring net interest EBITDA: Revenue
            was up 5% to $63.9 million due to a higher level of contracted
            power sales at HS Orka. Net interest revenue (including
            business interruption proceeds) was $88.9 million, up 2% from
            the comparative year, primarily due to the increase in revenue
            at HS Orka.  Net interest EBITDA was 8% lower at $32.8 million,
            but would have been 4% higher ($37.2 million) if the
            non-recurring costs related to the Montrose rockslide that were
            expensed were excluded.
        --  Reliable power generation: Alterra's fleet of power projects
            generated 1,268,294 MWh of clean power (net interest),
            achieving 94% of budgeted generation despite the Montrose hydro
            facility being offline for nearly nine months. Generation would
            have been 101% of budget had the Montrose plant had been
            operating for the whole period. Total generation from plants
            operated by Alterra was 2,156,803 MWh.
        --  Positive cash flow: The Company generated cash flow from
            operations of $16.6 million versus $12.1 million in the
            comparative period.
        --  Strategic asset sales:
      o Dokie 1 partial sale: Alterra sold half of its 51% interest in
        Dokie 1 to Fiera Axium for $26.8 million plus up to C$2.3 million
        over the next three years dependent on asset performance. The
        Company retains a 25.5% ownership of Dokie 1 and continues to
        operate and manage the project. The Company recognized a pre-tax
        gain on the sale of $17.5 million in the year.
      o ABW Solar: Alterra sold its 10% interest in the ABW Solar project
        to Fiera Axium, for proceeds of $9.8 million. The Company
        recognized a pre-tax gain on the sale of $2.8 million in the year.
        --  Montrose facility back in service:Penstock replacement at the
            Montrose hydro facility was completed and the facility was
            brought back into service on September 22, 2013. Several site
            improvements including protective berms have also been
            completed and will significantly lessen the likelihood of any
            future damage or interruption.
        --  Reykjanes field maintenance program:  The Company commenced a
            fluid reinjection program at the Reykjanes field to enhance
            future field stability.  In support of the fluid reinjection
            program, the Company completed drilling of a new large-diameter
            well (RN-33) with positive initial indications of permeability.
            Two new production wells were drilled at the Reykjanes
            reservoir early in 2013. The first of these wells has been tied
            in to the power plant and is supplying an additional 6 MW of
            capacity. Testing of the second well is underway.
        --  Distributions received:The Company recognized equity
            distributions declared during the year from TMGP, DGP, and the
            Blue Lagoon in the amounts of $0.8 million, $2.0 million, and
            $1.8 million respectively. In 2013, HS Orka declared a dividend
            of $1.2 million of which the Company's share was $0.8 million.
        --  Jimmie Creek hydro project highlights:
      o Pre-construction activities: Alterra executed a further limited
        notice to proceed with SNC Lavalin to provide pre-construction
        design work and other services in preparation to commence
        construction on the 62 MW Jimmie Creek hydro project in British
        Columbia in 2014.
      o Power purchase agreement amended: The Company completed an
        amendment to the power purchase agreement ("PPA") for Jimmie Creek.
        Under the contract, the project will sell 100% of its power to BC
        Hydro for 40 years commencing in August 2016.
      o Purchase agreement executed: Alterra completed an agreement in
        November to purchase the 49% stake of the Jimmie Creek project then
        held by an affiliate of GE Energy Financial Services ("GE EFS"). 
        On March 6, 2014 the transaction was completed, following which the
        Company owned 100% of the project.
        --  Shannon wind project highlights:
      o Completed acquisition:  Alterra acquired a 10% interest in the
        Shannon wind project (a 202 MW development-stage wind project in
        Clay County, Texas, USA), and subsequent to year end acquired the
        remaining 90% for a small up-front payment and a developer's fee to
        be paid at financial close.
      o Commencement of construction:In December Alterra completed the
        construction of the initial phase of turbine foundations and
        project roads and began construction of the project's main power
        transformer. These activities are expected to qualify the project
        for the US Production Tax Credit.
      o Interconnection Security: Subsequent to year end, Alterra placed a
        $4.5 million cash deposit with the project's transmission provider
        to begin the design and equipment procurement for the project's
        interconnection substation.
      o Current activities: The Company is in the process of finalizing
        project contracts (turbine supply, O&M, etc.), documenting a power
        hedge for project output, and finalizing terms with tax equity
        investors. The Company has also entered into an exclusivity
        agreement with a large energy infrastructure fund as a potential
        equity partner for the project.
        --  South American joint ventures:Alterra finalized its joint
            venture with Energy Development Corporation ("EDC") for the
            development of the Mariposa project in Chile and certain
            geothermal concessions in Peru (the last of which were agreed
            subsequent to year end). EDC will hold a 70% interest in the
            projects and fund 100% of the next $58.3 million of project
            expenditures at Mariposa and the next $14.0 million of project
            expenditures across the two Peruvian concession groups.
        --  Italy joint venture:The Company finalized a joint venture with
            an affiliate of Graziella Green Power ("Graziella"), an Italian
            developer of solar and geothermal assets to further advance
            Alterra's geothermal concessions in Italy.

John Carson, Alterra's CEO, said, "2013 was a year of meeting challenges for 
Alterra. While we were busy for most of the year completing repairs at our 
Montrose facility, our team was still able to deliver another solid year of 
revenue, cash flow, generation and team safety. In 2014, we are already at 
full speed pursuing our goals of adding new projects and maintaining our track 
record as a premier renewable energy operator."

Financial Results

The following table shows Alterra's net interest in selected operating and 
financial results for the year, in addition to key financial information 
extracted from the consolidated results.

(expressed in thousands of US dollars, except for production)
    ($000 except where                                                                                  
    specified)
                                                                                                        
    For the 12                                                  ABW                        
    months ended               Toba   Dokie 1      Soda       Solar Exploration
    December 31, HS Orka   Montrose   (25.5%)      Lake   (10%) (b)      Netead             Consolidated
    2013         (66.6%)      (40%)       (a)    (100%)             Interestice                  Results
    Generation   852,528    194,927   151,268    67,512     2,059     —   1,268,294    1,347,584  
    (MWh)
    Total         39,512     20,153    16,658     4,545       832     —      81,700       63,872  
    Revenue
    Business     —      7,166   —   —   —     —       7,166      —  
    Interruption
    Proceeds
    Gross Profit  10,156     10,028     7,602   (2,228)       555     —      26,113       13,021  
    (Loss)
    EBITDA (d)    16,388     15,363    11,371       266       276      (10,885)    32,779       41,044  
                                                                                             
    ($000 except where                                                                                  
    specified)
                                                                                                        
    For the 12                 Toba                Soda       ABW                     Net  
    months ended HS Orka   Montrose                Lake     Solar   Exploration  Interest
    December 31, (66.6%)      (40%)   Dokie 1    (100%)     (10%)      and Head     Total   Consolidated
    2012             (c)                (51%)                            Office                  Results
    Generation   817,549    264,564   151,667    64,421   —     —   1,298,201    1,292,008  
    (MWh)
    Total         38,367     27,238    17,034     4,406   —     —      87,045        61,112  
    Revenue
    Gross Profit  11,904     15,248     6,480   (2,982)   —     —      30,650       14,524  
    (Loss)
    EBITDA        15,214     20,463    10,550     (614)   —       (9,884)    35,729       44,692  
    (a)  Reflect 51% interest from January 1, 2013 to December 19, 2013 and
         25.5% interest for the remainder of 2013.
    (b)  Represent the Company's 10% interest from August 23, 2013 to
         November 29, 2013.
    (c)  Pro forma information which reflects what the results would have
         been had the Company consolidated 66.6% of HS Orka for the full
         twelve month period ended December 31, 2012 (versus the actual 75%
         held through February 29, 2012).
    (d)  Here and elsewhere, Adjusted EBITDA ("EBITDA") is defined by
         Alterra as earnings before interest, taxes, foreign exchange,
         depreciation and amortization, as well as before deductions for
         change in fair value of bonds payable and derivatives, foreign
         exchange gain (loss), write off of development costs and goodwill
         and other income (expense) except business interruption proceeds,
         amortization of below market contracts, and value assigned to
         options granted less share of income (loss) of equity accounted
         investees plus the Company's interest in EBITDA of its equity
         accounted investees. Alterra discloses EBITDA as it is a measure
         used by analysts and by management to evaluate Alterra's
         performance. As EBITDA is a non-IFRS measure, it may not be
         comparable to EBITDA calculated by others. In addition, as EBITDA
         is not a substitute for net earnings, readers should consider net
         earnings in evaluating Alterra's performance. For a reconciliation
         of consolidated EBITDA to Alterra's consolidated financial
         statements refer to the Company's Management's Discussion and
         Analysis for the year ended December 31, 2013.

Consolidated Results

Revenue was up 5% at $63.9 million due to increased generation and contractual 
sales at HS Orka. Gross profit decreased to $13.0 million ($14.5 million at 
December 31, 2012) as the increase in revenue was offset primarily by 
increased power plant maintenance costs due to the planned cleaning and repair 
of two geothermal wells at HS Orka.

Net loss increased to $116.3 million, largely as a result of one-time 
write-offs of development projects as well as other non-cash items, offset in 
part by gains from the sale of investments and interest from equity accounted 
joint ventures.  Non-cash items contributing to the loss include:
        --  A $21.7 million non-cash loss resulting primarily from the
            change in the fair value of embedded derivatives related to
            aluminum-linked PPAs offset in part by a $2.7 million non-cash
            gain in the fair value of bonds payable.  Both of these
            movements relate primarily to fluctuations in forecasted
            aluminum prices which fell in the year by 8%.
        --  A $120.5 million write-off of development projects ($1.6
            million at December 31, 2012), which included $50.5 million for
            the Bute Inlet project, $10.6 million for the Upper Toba River
            project, $2.4 million for other hydro projects and $32.7
            million for certain geothermal development properties. There
            was also a write-off of $24.3 million for select plant and
            equipment.  The hydro write-offs were related to a decline in
            the market outlook for renewable energy projects as a result of
            the new Integrated Resource Plan ("IRP") from the BC
            Government. An additional write down was recorded for certain
            HS Orka development projects as a result of a lowered outlook
            on available power contract pricing.  The Company remains
            active with these projects and will look to develop them in the
            future when market outlook improves.

Consolidated cash and cash equivalents at December 31, 2013 were $41.7 million 
($39.2 million at December 31, 2012) of which $33.9 million is held by HS Orka.

Net Interest Results

Alterra's net interest in revenue remained stable in 2013, with a  2%  
increase primarily due to new contractual revenues at HS Orka and the addition 
of ABW Solar. 2013 EBITDA was consistent with 2012 with the exception of Toba 
Montrose, where the EBITDA declined by $5.1 million due to non-recurring costs 
related to the removal of the damaged portion of the penstock plus higher 
insurance premiums in the period. These rockslide-related events caused net 
interest in EBITDA to decrease by 8% (down $3.0 million).

The net interest cash position at December 31, 2013 was $38.1 million.

Iceland Operations (66.6% Interest)

The 100 MW Reykjanes plant generated 526,502 MWh of electricity (99% of 
budget), and the 72 MW Svartsengi plant generated 326,026 MWh of electricity 
(109% of budget), and continued to supply thermal energy for district heating.

Toba Montrose Operations (40% Interest)

The Toba Montrose facility generated 194,927 MWh of electricity, or 69% of the 
generation projected for both units running at full service.  Although the 
Montrose facility was offline for repairs during the majority of the year, the 
measured water flow for purposes of business interruption insurance payments 
(attributed generation) was 94,290 MWh, for a combined pro forma generation of 
289,217, or 102% of budget.

On December 13, 2012 a rockslide damaged a 300 meter section of the five 
kilometer penstock (which supplies water from the intake to the power 
generating plant) at the Montrose hydro facility.  The penstock repairs were 
completed and the plant resumed operation on September 22, 2013. Several site 
improvements including protective berms were completed that will significantly 
lessen the likelihood of any future damage or interruption.

The Company's proportionate share of the insurance proceeds received to date 
is $15.2 million  ($8.0 million for property damage and $7.2 million for 
business interruption).  At December 31, 2013 an insurance receivable of $3.4 
million was recognized by Toba Montrose, of which $2.9 million currently 
remains outstanding.   The final $2.5 million property claim is being reviewed 
with respect to eligible property costs and sub-limits and has not been 
accrued for at December 31, 2013.

The project renewed its insurance package in September 2013 with earth 
movement coverage capped at C$50.0 million. As a result, Toba Montrose agreed 
with its lenders to temporarily defer distributions until a higher level of 
earth movement coverage is re-established. Toba Montrose expects to obtain a 
significantly higher level of coverage and is in discussion with the lenders 
to extinguish the waiver and resume distributions once this coverage is in 
place.

Dokie 1 Operations (25.5% Interest)

The 144 MW Dokie 1 wind farm generated 151,268 MWh of electricity for the year 
(reflecting 51% interest from January 1 to December 19, 2013 and 25.5% 
interest for the remainder of the year), or 91% of budget. Generation is lower 
than budget due to lower winds in the third quarter.

On December 20, 2013 the Company sold half of its 51% interest in the Dokie 1 
wind farm to an affiliate of Fiera Axium Infrastructure, Inc. ("Fiera Axium"), 
the Company's partner at Dokie 1 and Toba Montrose. The Company received 
initial sales proceeds of $26.8 million, and may receive further earn-out 
payments of up to C$2.3 million over the next three years depending on asset 
performance. The Company retains a 25.5% ownership of Dokie 1 and continues to 
operate and manage the project. The Company recognized a pre-tax gain on the 
sale of $17.5 million in the year.

ABW Solar Operations (Sold)

On November 29, 2013 the Company sold its 10% interest in ABW to an affiliate 
of Fiera Axium for proceeds of $9.8 million, recognizing a pre-tax gain of 
$2.8 million. The Company had acquired the 10% interest in the ABW Solar 
project, a 50 MW solar project in Ontario, Canada for $7.1 million in August 
2013. The Company was the managing partner for the project, and held the ABW 
Solar interest together with its partner, GE EFS.

Soda Lake Operations (100% Interest)

The 15 MW Soda Lake geothermal plant generated 67,512 MWh of electricity for 
the year, or 99% of budget.

Expansion and Development Projects

Jimmie Creek hydro (formerly Upper Toba)

The Company holds 100% interest in the fully permitted 62 MW Jimmie Creek 
project, and commenced construction activities in March 2014. The Jimmie Creek 
Project is being delivered under an Engineering, Procurement, Construction 
Management (EPCM) contract with SNC Lavalin. Project advancements during the 
year included completion of drilling and seismic testing for the powerhouse 
and intake locations, further hydrology work and continued construction 
preparation with project contractors and consultants.

The Jimmie Creek project has a 40 year PPA with BC Hydro, has at a nameplate 
capacity of 62 MW and projected annual firm energy of 114 GWh.

Shannon wind project

The Company holds a 100% interest in Shannon Wind Holdings LLC, a 202 MW wind 
project located in Clay County, Texas, USA.

In December 2013, the Company completed certain construction activities to 
ensure the Shannon wind project will qualify for the U.S. Production Tax 
Credit, which included contracting with Mortenson to complete the initial 
phase of on-site construction and contracting with Siemens Energy to begin 
manufacturing the project's main power transformer.

In February 2014, $4.5 million of cash was deposited with Oncor Electric 
Delivery Company LLC, the project's transmission service provider, which has 
commenced the design and equipment procurement for the project's 
interconnection substation.

Contract negotiations for construction, turbine supply, operations and 
maintenance and other contracts are underway and the Company is working with 
several financing parties in preparation for closing project financing, which 
is projected for the second quarter of 2014.

The Company expects to sell electricity generated from the Shannon wind 
project under a long term power hedging agreement which it is currently in 
documentation. Subsequent to year end, Alterra entered into an exclusivity 
agreement with a large energy infrastructure fund as a potential equity 
partner for the project.

Dokie 2 wind farm expansion

Alterra holds a 51% interest in a planned expansion of the Dokie 1 wind farm 
(Dokie 2) with projected additions to capacity of up to 156 MW. During the 
year Alterra continued to collect data, conduct engineering work and perform 
other studies to complete the assessment of the project.

South American geothermal projects

The Company holds a 30% interest in the Mariposa project in Chile and a 30% 
interest in a number of early stage development projects in Peru. The 
remaining 70% interest is held by EDC, who will fund the next $58.3 million in 
projected expenditures at Mariposa, and $8.0 million and $6.0 million spend 
respectively under the two Peruvian joint venture agreements. The next major 
phase of activity at Mariposa is expected to include drilling large-diameter 
rotary holes to confirm rock permeability, reservoir chemistry, fluid 
chemistry and other resource parameters in order to finalize plant design. The 
next steps of development for the Peruvian concessions include advanced 
exploration activities designed to identify the best locations for power plant 
development and construction.

Italian geothermal projects

The Company holds a 45% interest in the Mensano and Roccastrada geothermal 
concessions, the 55% interest is held by Graziella who will fund approximately 
$4.0 million for the joint venture's next development activities.

Reykjanes Expansion

Alterra has commenced a reinjection program at the Reykjanes field, and will 
refine the timeline for the Reykjanes expansion pending results from the 
program. The key matters remaining prior to construction are conclusion of a 
PPA, completion of project financing and confirmation of the resource field.

Other development projects

During 2013 the Company has continued to perform hydrology studies on the Bute 
Inlet and other hydro projects and has maintained all existing permits and 
licenses in good standing.  The Company will continue to collect hydrology 
data and maintain all projects in good standing despite writing down these 
projects to nil for accounting purposes in the year, and will look to develop 
these projects in the future when market outlook improves.

In Iceland, Alterra began an environmental assessment on the Bulandsvirkjun 
hydroelectric project, which is owned 50% by HS Orka.

Outlook

Ross Beaty, Alterra's Chairman, said, "2013 was a challenging year for us due 
to a weaker power outlook in BC where so many of our development projects are 
located, and the knock-on effects from the rockslide at Montrose in late 2012. 
At year-end we decided to write off most of the historic costs carried on our 
books for most of our development projects while retaining our interest in 
these projects for when conditions recover in the future allowing their 
development. Today, Montrose is back in operation and we have shifted our 
development efforts to Texas where things look very promising at our 200 MW 
Shannon wind project and where power markets remain strong. We have an 
exceptional team and adequate financial capacity to manage our growth, and I 
look forward to excellent results as 2014 progresses."


 
________________________________________________________________________________________________________________________
________ 
|Alterra Power will host a conference call to discuss financial and operating results on Friday, March 28, 2014 at 
11:30 am ET   | 


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|North American participants dial 1-888-390-0546 and International participants dial 1-416-764-8688; the conference 
ID is        | 


    |73147598.                                                                                                          
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    |The call will also be broadcast live on the Internet at                                                            
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    |http://www.newswire.ca/en/webcast/detail/1312591/1449113 |
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|The call will be available for replay for one week after the call by dialing 1-416-764-8677 and entering replay 
PIN 147598.     | 

|_______________________________________________________________________________________________________________________
_________| 
Cautionary Note Regarding Forward-Looking Statements and Information 
Certain statements included in this news release may contain information that 
is forward-looking within the meaning of certain securities laws, including 
information and statements regarding prospective results of operations, 
financial position, cash flows or growth potential.  These statements are 
based on factors or assumptions that were applied in drawing a conclusion or 
making a forecast or projection, including assumptions based on historical 
trends, current conditions and expected future developments. Since 
forward-looking statements relate to future events and conditions, by their 
very nature they require making assumptions and involve inherent risks and 
uncertainties. Alterra cautions that although it is believed that the 
assumptions are reasonable in the circumstances, these risks and uncertainties 
give rise to the possibility that actual results may differ materially from 
the expectations set out in the forward-looking statements. Material risk 
factors include those set out in the management's discussion and analysis 
section of Alterra's most recent annual report and quarterly report, and in 
Alterra's Annual Information Form. Given these risks, undue reliance should 
not be placed on these forward-looking statements, which apply only as of 
their dates. Other than as specifically required by law, Alterra undertakes no 
obligation to update any forward-looking statements or information to reflect 
new information, subsequent or otherwise.
 

SOURCE  Alterra Power Corp. 
Peter Lekich, Corporate Communications Alterra Power Corp. Phone: 604.235.6719 
Email:info@alterrapower.ca 
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CO: Alterra Power Corp.
ST: British Columbia
NI: NASDAQ UTI ERN CONF  
-0- Mar/28/2014 03:43 GMT
 
 
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