885 0 Kommentare Northland Power Announces Record Annual Sales and Adjusted EBITDA in 2014

TORONTO, ON--(Marketwired - February 18, 2015) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OR ITS POSSESSIONS. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.

Northland Power Inc. ("Northland" or "the Company") (TSX: NPI) (TSX: NPI.PR.A) (TSX: NPI.PR.C) (TSX: NPI.DB.B) (TSX: NPI.DB.C) today reported financial results for the fourth quarter and year ended December 31, 2014.

2014 Highlights:

36% and 32% increase in sales and gross profit, respectively, compared to 2013;
38% increase in adjusted EBITDA from 2013 and a 43% increase in cash provided by operating activities;
6% decrease in both the cash (70%) and total dividend payout (95%) ratios from 2013;
Accounting net loss of $177.5 million for the year was primarily due to a $296.6 million marked-to-market non-cash adjustment on Northland's financial derivative contracts;
Acquired a 60% interest in Project Gemini, closed financing and commenced construction on the 600 megawatt (MW) offshore wind farm located off the coast of the Netherlands;
Acquired an 85% stake in three offshore wind farms in Germany, with the first 332 MW near-term project to commence construction in 2015 ("Nordsee One");
Successfully completed over $4 billion of debt and equity financings, including Project Gemini which represented the largest-ever financing for an offshore wind farm; and
Achieved commercial operations on 90 MW of projects including the 60 MW (30 MW net interest) McLean's wind project and three 10 MW ground-mounted solar projects.

Fourth Quarter Highlights:

8% and 7% increase in sales and gross profit, respectively, compared to 2013;
12% increase in quarterly adjusted EBITDA from $83 million in 2013 to $93.2 million in 2014, primarily due to contributions from the inclusion of McLean's wind project and three additional ground-mounted solar projects;
8% increase in quarterly free cash flow over the same period in 2013; from $38.1 million to $41.1 million, commensurate with the higher adjusted EBITDA;
Quarterly dividend payout ratio was 71% of free cash flow versus 72% in the fourth quarter of 2013; and
Accounting net loss of $70.4 million for the quarter was primarily due to a $98.7 million marked-to-market non-cash adjustment on Northland's financial derivative contracts.

The following comments are made with reference to the attached unaudited consolidated financial statements of Northland.

"Our strong performance in 2014 reflects our ability to manage significant growth while delivering stable returns," said John Brace, Chief Executive Officer. "The continued expansion of our European offshore wind portfolio, coupled with our extensive platform of operating assets has validated our business strategy. We are well-positioned for continued growth in Canada, Europe and other international jurisdictions throughout 2015 and beyond, while maintaining the dividend payments and delivering results our shareholders can depend on."

Subsequent Events
In January 2015, Northland announced the closing of a $157.5 million offering of Series C convertible unsecured subordinated debentures (including over-allotment).

In January 2015, Northland announced that its affiliate, Kirkland Lake Power Corp. ("Kirkland") signed a new 20-year contract with the Ontario Power Authority (OPA, now merged with the Independent Electricity System Operator, IESO), for the 30 MW gas peaking portion of the facility. The existing peaking contract was due to expire in August 2015. The 42 MW Cochrane Power Corporation's ("Cochrane") existing facility contract was extended to May 2015. However, negotiations for all non-utility generation facilities have been temporarily suspended due to a directive issued by the Ministry of Energy. Management is currently addressing this issue with the stakeholders.

In January 2015, Northland entered into an agreement with two First Nations groups which, once closed, will provide the First Nations with a combined 37.5% equity interest in the ground-mounted solar sites under construction. Closing of the sale is contingent on the achievement of certain conditions and receipt of third-party approvals.

In 2010, Northland was awarded 20-year power purchase agreements (PPAs) for 13 individual 10 MW ground-mounted solar projects qualifying under the Green Energy Act 2009 (collectively, the "GMS Projects"). The 130 MW of GMS Projects were built or are being built in phases, and have all been financed. As of December 31, 2014, nine projects totaling 90 MW are completed and operating, and four projects totaling 40 MW remain under construction. These four projects, also known as the Ground-mounted Solar Phase III Projects, are all expected to be completed in 2015. The nine completed GMS Projects are all operating according to Northland's expectations.

In late December 2014, Northland terminated its engineering, procurement and construction (EPC) contract with H.B. White Canada Corp. ("White") for default of White's obligations to construct the Ground-mounted Solar Phase III Projects. Northland subsequently retained Ganotec Inc., a subsidiary of Peter Kiewit Sons Co. Ltd., to assist with the completion of the projects. Northland previously used Peter Kiewit Sons Co. Ltd. to construct the Thorold and North Battleford facilities. Northland and Ganotec are in the process of estimating the costs to complete the projects. Northland does not expect the final GMS Project costs to exceed $775 million, which is approximately 12% higher than the $690 million originally estimated. This difference is largely attributable to potential increases in Ground-mounted Solar Phase III Projects from the $246 million previously disclosed, prior to cost recovery through legal claims against White and its U.S. parent, the potential benefit of force majeure claims in the related PPAs and prior to being able to fully explore cost mitigation strategies while completing the projects. The capital costs to complete the projects are expected to be funded through cash and credit resources on hand. Although the final returns for the Ground-mounted Solar Phase III Projects cannot be estimated at this time, the GMS Projects are expected to meet Northland's project return requirements.

In January 2015, Northland entered into an agreement to sell its 66.7% interest in the 24 MW advanced stage development wind project located in Frampton, Quebec. Completion of the sale is conditional on the achievement of certain conditions and receipt of third-party approvals.


SUMMARY OF FINANCIAL RESULTS		3 Months Ended Dec. 31		12 Months Ended Dec. 31
		2014	2013	2014	2013
FINANCIAL (in thousands of dollars, except per share and energy unit amounts)
	Sales	188,197	174,331	760,071	557,238
	Gross profit	121,481	113,364	469,379	354,759
	Adjusted EBITDA⁽¹⁾	93,164	82,986	363,497	263,296
	Operating income	60,029	60,973	248,781	182,338
	Net income (loss)	(70,395)	22,008	(177,455)	167,019

	Free cash flow⁽¹⁾	41,124	38,068	164,866	130,117
	Cash Dividends paid to Common and Class A Shareholders	29,266	27,385	115,322	98,908
	Total Dividends declared to Common and Class A Shareholders⁽²⁾	40,367	35,758	157,395	133,200

Per Share
	Free cash flow	0.28	0.28	1.12	1.05
	Dividends declared to Shareholders⁽²⁾	0.27	0.27	1.08	1.08
Energy Volumes
	Electricity sales volume (megawatt hours)	1,327,977	1,653,355	5,063,721	4,139,908
	(1) See "Non-IFRS measures" for a detailed description.
	(2) Total dividends to Common and Class A Shareholders represent cash dividends plus share dividends issued as part of Northland's dividend reinvestment plan.

Full Year 2014 Results - Summary
Sales and gross profit
Sales for 2014 at $760.1 million were $202.8 million higher than the previous year largely due to contributions from North Battleford, McLean's, the ground-mounted solar projects and Kirkland Lake and Cochrane. Sales and gross profit for 2014 were also favourably affected by natural gas resale margins in the first quarter.

Management and administration
Management and administration costs at $41.3 million were $8.2 million higher than the prior year largely due to the inclusion of Kirkland, Cochrane, CEEC, North Battleford, McLean's, the ground-mounted solar projects, Gemini and Nordsee, as well as higher corporate costs related to increased personnel and administrative costs.

Investment income
Investment income at $5.9 million was $5 million higher than 2013 primarily due a final dividend from Northland's Panda-Brandywine investment.

Finance costs, net
Net finance costs (primarily interest expense) at $122.1 million increased by $38.5 million from 2013 due to the inclusion of interest on North Battleford, McLean's and the ground-mounted solar projects debt; higher convertible debenture interest due to the issuance of the Series B convertible unsecured subordinated debentures ("2019 Debentures") in March 2014 and interest on the $250 million term facility.

Write-off of deferred development costs
The write-off of deferred development costs was $5.2 million higher than 2013 and associated with the Kabinakagami hydro project that no longer qualified for capitalization under Northland's deferred development policy.

Impairments and Write-downs
Impairments and write-downs at $40.1 million were $37.3 million higher than 2013 and relate to Northland's property, plant and equipment, contracts and other intangible assets, goodwill and Panda-Brandywine equity investment. It is generally anticipated that there will be annual goodwill impairments as future cash flows are realized.

Non-cash fair value losses
Non-cash fair value losses of $296 million (compared to a $133.7 million gain in 2013) comprised a $296.6 million loss in the fair value of Northland's financial derivative contracts that include interest rate swaps on the facilities' non-recourse project debt, the long-term financial hedge related to future natural gas prices at Iroquois Falls and foreign exchange contracts, combined with a $0.6 million unrealized foreign exchange gain. These fair value adjustments are non-cash items that will reverse over time and have no impact on the cash obligations of Northland or its projects. A significant portion ($248.7 million) of the 2014 non-cash fair value loss represents the consolidated marked-to-market adjustment on interest rate swaps entered into by Gemini. Northland's policy is to economically hedge interest rate and foreign exchange exposures where material.

Net income
The factors described above, combined with a $7.9 million provision for current taxes and a $63.4 million recovery of deferred taxes, resulted in a net loss for the year of $177.5 million, compared to a net income of $167 million in the previous year.

Adjusted EBITDA
Northland's 2014 consolidated adjusted EBITDA of $363.5 million was $100.2 million or 38% higher than the prior year and reflects a full year of contributions from North Battleford and the operations of McLean's and the ground-mounted solar projects, overall favourable results from Northland's other operating facilities, largely due to natural gas resales, higher investment income, interest on the subordinated loan to Project Gemini and performance incentive fees earned from Cochrane and Kirkland Lake. These favourable results were partially offset by increased corporate management and administration costs and the write-off of deferred development costs in the first quarter of 2014.

Free Cash Flow, Payout Ratio and Dividends to Shareholders
Free cash flow of $164.9 million was $34.7 million higher (27%) than in 2013; significant factors increasing and decreasing free cash flow in 2014 are described below.

Factors increasing free cash flow were:

$84.9 million higher adjusted EBITDA from Northland's operating facilities, as previously discussed;
$12.5 million increase in management fees from Kirkland Lake and Cochrane substantially due to achieving certain conditions which entitles Northland to share in Cochrane cash flows after all operating and financing expenses;
$5.8 million release of funds previously set aside for future major maintenance that were either no longer required for Thorold or the steam turbine inspection and overhaul at Iroquois Falls; and
$5.3 million increase in adjusted EBITDA generated from the final Panda dividend and interest earned on the loan to the equity partner at McLean's.

Factors decreasing free cash flow were:

$34.9 million net interest expense increase related to the inclusion of North Battleford (operational in June 2013), McLean's (not operational in 2013) and Ground-mounted Solar Phase I and II debt (six Ground-mounted solar projects operational in 2013) and funds raised related to Northland's Project Gemini investment (Northland's term facility and the March 5, 2014 issuance of convertible unsecured subordinated debentures);
$21.7 million increase in scheduled debt repayments as a result of including North Battleford and Ground-mounted Solar Phase I and II projects (no scheduled payments until December 2013);
$5.8 million increase in corporate general and administration costs;
$5.2 million write-off of deferred development costs;
$2.6 million of fees related to the renewal and expansion of Northland's corporate credit facility;
$1.3 million variance associated with milestone payments related to Kingston's gas turbine maintenance contract;
$1.4 million (Northland's share) of overhead costs incurred at the Gemini and Nordsee projects; and
$0.9 million increase in operations-related capital expenditures largely related to a steam turbine inspection/overhaul at Iroquois Falls. Funds were drawn from the reserve account to cover this expenditure.

For 2014, Northland's dividend payout ratio was 70% of free cash flow (95% excluding the effect of dividends reinvested through the DRIP) compared to 76% and 101%, respectively in 2013.

Fourth Quarter Results - Summary
Thermal facilities
Electricity production during the fourth quarter of 2014 was approximately 5% lower than the prior year due to fewer economic production periods and a 17-day planned outage at Thorold. Revenue and gross profit were consistent with the prior year as increases at North Battleford from higher production and improved gas turbine performance was offset by Thorold's lower results as discussed above. Operating expenses were higher than 2013 due to Thorold's 2014 maintenance outage and increased GE maintenance contract costs at North Battleford, which are tied to the facility's availability. As a result of the above factors, operating income and adjusted EBITDA were both $1.3 million lower than the prior year.

Renewable facilities
Electricity production and revenue during the fourth quarter of 2014 was higher than the prior year, largely due to the inclusion of McLean's ($6.9 million) and three additional ground-mounted solar facilities ($2.3 million), which offset lower production and revenue at Mont Louis and the German wind farms. Operating expenses were approximately $2 million higher than the prior year due to the inclusion of McLean's and the receipt of insurance proceeds by Mont Louis during 2013. Higher revenue, partially offset by increased operating expenses resulted in operating income and adjusted EBITDA during the quarter both exceeding the prior year by $1 million.

Management and administration costs
Management and administration costs were $2.9 million higher than the same period in 2013 largely due to the inclusion of McLean's, the ground-mounted solar projects, Gemini and Nordsee, as well as increased personnel related costs and increased development prospecting costs.

Finance costs, net
Net finance costs (primarily interest expense) increased by $6.7 million from 2013 due to the inclusion of interest on McLean's and the Ground-mounted Solar Phase I and II project debt, higher convertible debenture interest due to the issuance of the 2019 Debentures and interest on the $250 million term facility utilized for the Gemini Project.

Impairments
Non-cash impairments consisted of a $37 million impairment loss that relates to Northland's goodwill, property, plant and equipment and contracts.

Non-cash fair value losses
Non-cash fair value losses of $99.3 million (compared to a $0.2 million gain in 2013) consisted of a $98.7 million loss in the fair value of Northland's financial derivative contracts and $0.6 million in unrealized foreign exchange losses. The fair value loss of $81.5 million on the financial derivative contracts is associated with the interest rate swap contracts at Gemini.

The factors described above combined with a provision for $1.6 million of current taxes and a recovery of $43.9 million of deferred taxes resulted in net loss for the quarter of $70.4 million and adjusted EBITDA of $93.2 million. Adjusted EBITDA in the fourth quarter was also positively impacted by higher management and performance fees from Kirkland Lake and Cochrane and investment income earned on the subordinate loan to Project Gemini. Both of these items are eliminated upon consolidation, but are however included in adjusted EBITDA.

Free Cash Flow, Payout Ratio and Dividends to Shareholders
Fourth-quarter free cash flow at $41.1 million was $3.1 million higher than the same period last year. The factors affecting the quarter were: (i) the $10.2 million increase in adjusted EBITDA reduced by the $5.3 million of investment income from Gemini which will be included in free cash flow as received, (ii) $5.1 million reduction in funds previously set aside for future major maintenance; and (iii) $0.7 million of miscellaneous items including lower non-expansionary capital expenditures and funds set aside / scheduled debt repayments. Partially offsetting these favourable variances were; (i) a $5.4 million net interest expense increase, related to the inclusion of McLean's and Ground-mounted Solar Phase II projects (McLean's was not operational in 2013, while only Ground-mounted Solar Phase I entities were operational in 2013) and funds raised related to Northland's Project Gemini investment (Northland's term facility and the March 5, 2014 issuance of convertible unsecured debentures); and (ii) a $2.2 million unfavourable change in other liabilities associated with a milestone payment on North Battleford's GE service agreement.

For the three-month period ending December 31, 2014, common share and Class A Share dividends declared for the quarter totalled $0.27 per share. This is equivalent to a payout ratio of 71% compared to 72% in the same quarter last year (98% excluding the effect of dividends reinvested through the DRIP versus 94% in the fourth quarter of 2013).

Outlook
Northland actively pursues new power development opportunities that encompass a range of clean technologies, including natural gas, wind, solar and hydro.

In 2015, management continues to expect adjusted EBITDA of approximately $380 to $400 million based on the current completion schedules for Northland's projects with power contracts. Adjusted EBITDA was $363.5 million in 2014. The 2015 adjusted EBITDA expectation reflects the following changes over 2014:

$14 to $18 million in additional adjusted EBITDA from a full year of McLean's and the Ground-mounted Solar Phase II projects because they were operational for only part of 2014;
$3 to $11 million lower adjusted EBITDA from Northland's operating facilities primarily due to strong performance in 2014 at the thermal facilities from high natural gas prices in the first quarter of 2014 which is not expected for 2015 and better performance at the North Battleford facility;
$8 to $10 million higher adjusted EBITDA from a full year of investment income on the Gemini junior debt facility which existed for only part of 2014;
$5 to $9 million in additional adjusted EBITDA from the remaining four Ground-mounted Solar Phase III facilities once they reach commercial operations in 2015;
$6 million lower adjusted EBITDA due to a one-time payment from Panda-Brandywine in 2014;
$5 million higher adjusted EBITDA from a write-off of deferred development costs in 2014; and
$2 to $4 million increase of adjusted EBITDA due to lower expected corporate management and administration costs.

Northland's 2015 dividend payments, on a total dividend basis, are expected to exceed free cash flow due largely to the level of spending on growth initiatives and payments of dividends and interest on capital raised for construction projects for which corresponding cash flows will not be received until the projects for which the capital is raised are completed. For 2015, management expects the cash dividends to be 75-85% of free cash flow, including the impact of reinvested dividends through the DRIP, and 100-115% of free cash flow excluding the impact of reinvested dividends through the DRIP (compared with 70% and 95%, respectively, in 2014). Free cash flow for 2015, includes $35.8 million of proceeds from the sale of 37.5% of four ground-mounted solar projects and the Frampton wind project which are expected to occur in 2015 upon meeting certain sale conditions. Prior to its expected capital raise for its investments in Nordsee and Grand Bend, management expected the dividend payout ratio to continue to be below 100% on a total dividend basis, based on the successful conclusion of a period of significant growth and capital expenditures for Northland. Due to the significant capital costs for Northland's investment in Nordsee and Grand Bend, additional corporate capital will be required in 2015 to fund the project, and as a result the payout ratio may exceed 100% until Gemini and Nordsee are completed in 2017. Northland has sufficient liquidity to bridge the payout of the current dividend in excess of free cash flow during this period. Management expects the payout ratio during Gemini's and Nordsee's construction to be significantly lower than during the growth period experienced by Northland from 2009 to 2014.

The 2015 payout ratio reflects the higher forecasted adjusted EBITDA as described previously, along with the following expected changes in free cash flows and dividend payments:

$36 million in additional free cash flow expected from the sale of 37.5% equity interest in the remaining four Ground-mounted Phase III projects and the Frampton wind project;
$20 to $30 million lower free cash flow from the current operating facilities due to lower adjusted EBITDA as described previously, combined with higher reserve funding and capital expenditures;
$2 to $5 million in additional free cash flow from the McLean's and Ground-mounted Solar Phase II projects because they were operational for only part of 2014 as described previously;
$6 million lower free cash flow from a one-time payment from Panda-Brandywine in 2014 as described previously;
$5 million higher free cash flow from a write-off of deferred development costs in 2014 as described previously;
$7 to $11 million lower free cash flow from other items, primarily higher corporate interest costs on recently issued convertible debentures and the Gemini term loan facility which was drawn for only part of 2014; and
An increase in cash and share dividends as a result of the additional equity investment for Nordsee and Grand Bend.

Northland's Board and management are committed to maintaining the current monthly dividend of $0.09 per share ($1.08 per share on an annual basis). Northland's management and Board have anticipated the impact of growth on the payout ratio and are confident that Northland has adequate access to funds to meet its dividend commitment, including operating cash flows, cash and cash equivalents on hand and, if necessary, use of its line of credit or external financing. Management expects to continue its DRIP to provide an additional source of liquidity.

Non-IFRS Measures
This press release includes references to Northland's free cash flow and adjusted EBITDA which are not measures prescribed by International Financial Reporting Standards (IFRS). Free cash flow and adjusted EBITDA, do not have any standardized meaning under IFRS and as presented, may not be comparable to similar measures presented by other companies. These measures should not be considered alternatives to net income, cash flow from operating activities or other measures of financial performance calculated in accordance with IFRS. Rather, these measures are provided to complement IFRS measures in the analysis of Northland's results of operations from management's perspective. Management believes that free cash flow and adjusted EBITDA are widely accepted financial indicators used by investors to assess the performance of a company and its ability to generate cash through operations.

Earnings Conference Call
Northland will hold an earnings conference call on February 19 at 1:00 pm EST to discuss its 2014 annual financial results. John Brace, Northland's Chief Executive Officer, Sean Durfy, Northland's President and Chief Development Officer and Paul Bradley, Northland's Chief Financial Officer will discuss the financial results and company developments before opening the call to questions from analysts and members of the media.

Conference call details are as follows:
Date: Thursday, February 19, 2015
Start Time: 1:00 p.m. eastern standard time
Phone Number: Toll free within North America: 1-800-920-4316 or Local: 416-981-9015

For those unable to attend the live call, an audio recording will be available on Northland's website at (www.northlandpower.ca) from the morning of February 20 until March 13, 2015.

ABOUT NORTHLAND

Northland is an independent power producer founded in 1987, and publicly traded since 1997. Northland develops, builds, owns and operates facilities that produce 'clean' (natural gas) and 'green' (wind, solar, and hydro) energy, providing sustainable long-term value to shareholders, stakeholders, and host communities.

The Company owns or has a net economic interest in 1,345 MW of operating generating capacity; 640 MW (400 MW net to Northland) of generating capacity under construction, including a 60% equity stake in Gemini, a 600 MW (360 MW net to Northland) offshore wind project in the North Sea near the Netherlands; and 456 MW (348 MW net to Northland) of projects with awarded power contracts under advanced development, including an 85% equity stake in Nordsee One. Northland's cash flows are diversified over four geographically separate regions and regulatory jurisdictions in Canada and Europe.

Northland's common shares, Series 1 and Series 3 preferred shares and Series B and Series C convertible debentures trade on the Toronto Stock Exchange under the symbols NPI, NPI.PR.A, NPI.PR.C, NPI.DB.B, and NPI.DB.C, respectively.

FORWARD-LOOKING STATEMENTS

This release contains certain forward-looking statements which are provided for the purpose of presenting information about management's current expectations and plans. Readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects," "anticipates," "plans," "believes," "estimates," "intends," "targets," "projects," "forecasts" or negative versions thereof and other similar expressions, or future or conditional verbs such as "may," "will," "should," "would" and "could." These statements may include, without limitation, statements regarding the use of proceeds of the Offering and Private Placement, future adjusted EBITDA, free cash flows, dividend payment and dividend payout ratios, the construction, completion, attainment of commercial operations, cost and output of development projects, plans for raising capital, and the operations, business, financial condition, priorities, ongoing objectives, strategies and outlook of Northland and its subsidiaries. These statements are based upon certain material factors or assumptions that were applied in developing the forward-looking statements, including the design specifications of development projects, the provisions of contracts to which Northland or a subsidiary is a party, management's current plans, its perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances. Although these forward-looking statements are based upon management's current reasonable expectations and assumptions, they are subject to numerous risks and uncertainties. Some of the factors that could cause results or events to differ from current expectations include, but are not limited to, construction risks, counterparty risks, operational risks, foreign exchange rates, regulatory risks, maritime risks for construction and operation, and the variability of revenues from generating facilities powered by intermittent renewable resources and the other factors described in the "Risks and Uncertainties" section of Northland's 2014 Annual Report and Annual Information Form, both of which can be found at www.sedar.com under Northland's profile and on Northland's website www.northlandpower.ca. Northland's actual results could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur.

The forward-looking statements contained in this release are based on assumptions that were considered reasonable on February 18, 2015. Other than as specifically required by law, Northland undertakes no obligation to update any forward-looking statements to reflect events or circumstances after such date or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.



NORTHLAND POWER INC.
Consolidated Balance Sheets
(unaudited, stated in thousands of Canadian dollars)

ASSETS

	Dec. 31, 2014			Dec. 31, 2013

Current
Cash and cash equivalents		193,412			138,460
Restricted cash		45,245			74,365
Trade and other receivables		84,371			124,606
Inventories		15,731			12,793
Prepayments		12,002			7,595
Investment in Panda-Brandywine		-			3,100
Finance lease receivable		2,750			2,530

Total current assets		353,511			363,449

Finance lease receivable		158,485			161,235
Equity-accounted investment		4,666			4,941
Property, plant and equipment		3,788,571			2,094,262
Contracts and other intangible assets		348,161			187,121
Deferred tax asset		88,980			23,206
Other assets		4,020			8,845
Goodwill		219,238			220,167

Total assets	$	4,965,632		$	3,063,226


LIABILITIES AND EQUITY

Current
Trade and other payables		229,523			84,993
Interest-bearing loans and borrowings		68,596			59,173
Dividends payable - non-controlling interest		941			3,460
Dividends payable		13,537			11,968

Total current liabilities		312,597			159,594

Interest-bearing loans and borrowings		2,725,965			1,762,397
Corporate term loan facility		246,048			-
Convertible debentures		75,307			15,992
Other liabilities		2,836			3,050
Provisions		30,473			16,205
Derivative financial instruments		334,908			46,622
Deferred tax liability		135,278			106,628

Total liabilities		3,863,412			2,110,488


Equity
Preferred shares		261,279			261,737
Common shares		1,904,906			1,637,480
Long-term incentive plan reserve		2,137			7,319
Contributed surplus		1,328			-
Convertible shares		14,615			14,615
Accumulated other comprehensive income (loss)		(33,741	)		204
Deficit		(1,319,713	)		(1,041,872	)

Equity attributable to shareholders		830,811			879,483


Non-controlling interests		271,409			73,255


Total equity		1,102,220			952,738


Total liabilities and equity	$	4,965,632		$	3,063,226

NORTHLAND POWER INC.

Consolidated Statements of Income (Loss)

(unaudited, stated in thousands of Canadian dollars except per share amounts)

Three Months Ended Dec. 31,

Twelve Months Ended Dec. 31,

2014

2013

2014

2013

Sales

Electricity

184,921

173,992

719,140

535,206

Steam, natural gas and other

3,276

339

40,931

22,032

Total sales

188,197

174,331

760,071

557,238

Cost of sales

66,716

60,967

290,692

202,479

Gross profit

121,481

113,364

469,379

354,759

Expenses

Plant operating costs

21,939

19,390

78,662

64,235

Management and administration costs - operations

6,925

5,316

20,275

15,620

Management and administration costs - development

5,665

4,332

21,024

17,512

Depreciation of property, plant and equipment

30,405

27,323

120,191

89,879

64,934

56,361

240,152

187,246

Investment income

523

5,898

939

Finance lease income

3,395

3,447

13,656

13,886

Operating income

60,029

60,973

248,781

182,338

Finance costs

32,622

25,529

124,980

84,885

Equity investment (gain) loss

(250

)

(262

)

Amortization of contracts and other intangible assets

4,655

5,053

19,815

19,930

Write-off of deferred development costs

5,181

Impairment of property, plant and equipment

11,001

Impairment of contracts and other intangible assets

25,076

Impairment of goodwill

929

2,407

929

2,407

Foreign exchange (gain) loss

592

(1,932

)

(622

)

(3,787

)

Finance (income)

(921

)

(493

)

(2,831

)

(1,207

)

Fair value (gain) loss on derivative contracts

98,742

1,696

296,586

(102,072

)

Fair value (gain) loss on convertible shares

(27,834

)

Writedown of Panda-Brandywine equity investments

400

3,100

400

Other (income)

(1,222

)

(1,526

)

Income (loss) before income taxes

(112,677

)

28,304

(232,962

)

211,404

Provision for (recovery of) income taxes:

Current

1,627

2,917

7,928

8,780

Deferred

(43,909

)

3,379

(63,435

)

35,605

(42,282

)

6,296

(55,507

)

44,385

Net income (loss) for the period

(70,395

)

22,008

(177,455

)

167,019

Net income (loss) attributable to:

Non-controlling interests

(22,739

)

8,111

(70,884

)

15,885

Common shareholders

(47,656

)

13,897

(106,571

)

151,134

(70,395

)

22,008

(177,455

)

167,019

Weighted average number of shares outstanding - basic

149,517

132,979

146,764

126,719

Weighted average number of shares outstanding - diluted

149,517

132,979

146,764

133,478

Net income (loss) per share - basic

(0.34

)

0.08

(0.82

)

1.08

Net income (loss) per share - diluted

(0.34

)

0.08

(0.82

)

1.03

NORTHLAND POWER INC.

Consolidated Statements of Cash Flows

(unaudited, stated in thousands of Canadian dollars except per share amounts)

Three Months Ended Dec. 31,

Twelve Months Ended Dec. 31,

2014

2013

2014

2013

Operating activities

Net income (loss) for the period

(70,395

)

22,008

(177,455

)

167,019

Items not involving cash or operations:

Depreciation of property, plant and equipment

30,405

27,323

120,191

89,879

Amortization of contracts and other intangible assets

4,655

5,053

19,815

19,930

Write-off and impairment of property, plant and equipment, intangible assets and goodwill

37,006

2,407

42,187

2,407

Writedown of Panda-Brandywine equity investments

400

3,100

400

Finance costs, net

38,119

24,473

117,161

78,402

Fair value (gain) loss on derivative contracts

98,742

1,696

296,586

(102,072

)

Fair value (gain) loss on convertible shares

(27,834

)

Finance lease

652

599

2,530

2,988

Unrealized foreign exchange (gain) loss

620

(1,864

)

(686

)

(3,620

)

Equity loss (gain), net of distributions

276

376

Other

(1,517

)

931

712

1,548

Deferred income tax (recovery)

(43,909

)

3,379

(63,435

)

35,605

94,388

86,414

360,982

265,028

Net change in non-cash working capital balances related to operations

(19,744

)

(7,930

)

5,607

(7,950

)

Cash provided by operating activities

74,644

78,484

366,589

257,078

Investing activities

Purchase of property, plant and equipment

(446,217

)

(59,901

)

(1,814,609

)

(335,312

)

Cash reserves utilization (funding)

135,624

(51,373

)

27,390

(46,546

)

Increase in intangible assets

(17,798

)

(13,541

)

(46,039

)

(84,401

)

Interest received

921

493

2,831

1,207

Gemini acquisition, net

(30,811

)

Nordsee acquisition, net

1,320

(6,952

)

Net change in working capital related to investing activities

(174,757

)

(29,130

)

58,579

10,031

Other

750

Acquisition of CEEC, net

10,865

Cash used in investing activities

(500,907

)

(153,452

)

(1,808,861

)

(444,156

)

Financing activities

Proceeds from borrowings, net of transacation costs

535,716

169,500

1,034,811

446,248

Corporate term facility proceeds, net

247,402

Non-controlling interest equity contribution

263,770

Net proceeds from bond offerings

228,895

(528

)

228,895

816,001

Repayment of borrowings

(233,179

)

(13,384

)

(273,596

)

(719,552

)

Settlement of interest rate swaps

(2,118

)

(2,118

)

(65,409

)

Decrease in bank indebtedness

(12,000

)

(1,071

)

Net proceeds from publice offerings and private placement

275,729

Interest paid

(37,494

)

(23,705

)

(114,217

)

(74,857

)

Dividends to non-controlling interests

(6,089

)

(1,668

)

(11,581

)

(11,683

)

Preferred share dividends

(3,470

)

(3,469

)

(13,876

)

(13,876

)

Common and Class A Share dividends

(29,266

)

(27,385

)

(115,322

)

(98,908

)

Other

4,126

15,986

4,126

16,790

Cash provided by financing activities

457,121

103,347

1,524,023

293,683

Effect of exchange rate differences on cash and cash equivalents

467

(26,799

)

140

Net change in cash and cash equivalents during the period

31,325

28,476

54,952

106,745

Cash and cash equivalents, beginning of the period

162,087

109,984

138,460

31,715

Cash and cash equivalents, end of the period

193,412

138,460

193,412

138,460

Per Share

Dividends declared to shareholders

0.27

1.08



NORTHLAND POWER INC.
FREE CASH FLOW AND DIVIDENDS TO SHAREHOLDERS
(stated in thousands of Canadian dollars except per share amounts)

	Three Months ended Dec. 31,				Twelve Months ended Dec. 31,
	2014		2013		2014		2013

Cash provided by operating activities	74,644		78,484		366,589		257,078
Northland adjustments:
Net change in non-cash working capital balances related to operations	19,744		7,930		(5,607	)	7,950
Capital expenditures, net-non-expansionary	(416	)	(863	)	(2,200	)	(1,339	)
Interest paid, net	(36,573	)	(23,212	)	(111,386	)	(73,650	)
Scheduled principal repayments on term loans	(15,542	)	(11,866	)	(52,706	)	(30,467	)
Funds utilized (set aside) for quarterly scheduled principal repayments	3,444		(607	)	(79	)	(607	)
Restricted cash utilization (funding) for major maintenance	1,379		(3,766	)	1,036		(4,716	)
Write-off of deferred development costs	-		-		(5,181	)	-
Consolidation of managed facilities	(2,140	)	(4,621	)	(9,851	)	(10,899	)
Corporate credit facility renewal costs	-		-		(2,598	)	-
Equity accounting	53		58		(25	)	(107	)
Proceeds from sale of NP Chips assets	-		-		750		-
Funds set aside for asset purchase	-		-		-		750
Preferred share dividends	(3,469	)	(3,469	)	(13,876	)	(13,876	)


Free cash flow	41,124		38,068		164,866		130,117

Cash Dividends paid to common and Class A shareholders	29,266		27,385		115,322		98,908

Free cash flow payout ratio	71	%	72	%	70	%	76	%



Total Dividends paid to common and Class A shareholders	40,204		35,619		155,827		131,664

Free cash flow payout ratio	98	%	94	%	95	%	101	%
Free cash flow payout ratio since inception					103	%	104	%




Average number of shares - basic (thousands of share)	149,517		132,612		146,765		123,482
Average number of shares - fully diluted (thousands of shares)	155,488		132,612		153,307		123,482


Per share ($/share)
Free cash flow - basic	0.28		0.28		1.12		1.05
Free cash flow - fully diluted	0.27		0.28		1.10		1.05