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  PR Newswire  VANCOUVER, March 27, 2014  (under IFRS and all amounts in US dollars unless otherwise stated)  TSX : AXY  VANCOUVER, March  27,  2014 /PRNewswire/  -  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:         *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.         *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:         *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.         *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.         *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:         *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.         *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.         *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.         *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 December31, HS Orka   Montrose   (25.5%)      Lake     (10%)    and Head       Net   Consolidated 2013         (66.6%)      (40%)      ^(a)    (100%)      ^(b)      Office  Interest        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 December31, (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 (8:30 am PT).  North American participants dial 1-888-390-0546 and International participants dial 1-416-764-8688; the conference ID is 73147598.  The call will also be broadcast live on the Internet at  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.  Contact:  Peter Lekich, Corporate Communications Alterra Power Corp. Phone: 604.235.6719  
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