Reykjanes geothermal plant (100 MW): Iceland
[Excavation at the Jimmie Creek powerhouse site : 11 November 2014]
Page
1 2014
13|Nov
2 0 1 4 Q 3 R E Swww.alterrapower.ca
ULTS CONFERENCE CALL
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Forward-Looking Information
This presentation contains certain “forward-looking information” within the meaning of Canadian securities laws, which may include, but is not limited to,
statements with respect to future events or future performance, management’s expectations regarding Alterra’s production capacity, results of operations,
cash flows, revenues and requirements for capital, future demand for and prices of electricity, and Alterra’s business prospects and opportunities.
These statements reflect the current views of Alterra with respect to future events and are necessarily based upon a number of assumptions and estimates
that, while considered reasonable by Alterra, are inherently subject to significant business, economic, political and social uncertainties and contingencies.
Many factors, both known and unknown, could cause Alterra’s actual results, performance or achievements to be materially different from the results,
performance or achievements that are or may be expressed or implied by such forward-looking statements contained in this presentation, and Alterra has
made assumptions based on or related to many of these factors. Such factors include, without limitation: fluctuations in currency markets (particularly with
respect to the Icelandic krona, the U.S. dollar and Canadian dollar); risks related to the technological and operational nature of Alterra’s business; changes
in national or regional governments, legislation, regulation, permitting or taxation; political or economic developments in Canada, the United States, Iceland
or other countries where Alterra may carry on business; risks and hazards associated with the business of renewable energy generation; risks relating to the
creditworthiness and financial condition of suppliers and other parties which Alterra will deal with; inadequate insurance or inability to obtain insurance to
cover these risks and hazards; employee relations; relationships with and claims by local communities and First Nations; availability and costs of equipment
and labour; litigation; the success and timely completion of planned expansion and development programs; the growth rate in net electricity consumption;
support and demand for renewable energy; government initiatives to support the development of renewable energy generation; the reliability of technical
data and capital expenditure estimates; and availability of capital to fund development and expansion programs. Forward-looking information and
statements are also based upon the assumption that none of the identified risk factors that could cause actual results to differ materially from the forwardlooking information and statements will occur.
Although Alterra has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause
results not to be as anticipated, estimated, described or intended. There can be no assurance that the forward-looking information will prove to be
accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, prospective investors should
not place undue reliance on forward-looking information. Other than as required by applicable securities laws, Alterra does not assume any obligation to
update or revise such forward-looking information to reflect new events or circumstances.
Page | 2
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Participants
Introduction
•
Ross Beaty

•
John Carson

Financials
•
•
•
•
•
CEO
Ross Beaty

Page | 3
VP Hydro Power
John Carson

Summary
VP Wind and Geothermal Power
Jay Sutton

Growth Opportunities
VP Hydro Power
Paul Rapp

Construction
CFO
Jay Sutton

•
CEO
Lynda Freeman

Operations
Executive Chairman
Executive Chairman
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Alterra Power Q3 2014 Results Call
Financials | Lynda Freeman, CFO
Third Quarter Consolidated Results:
Consolidated Results ($MM)
Revenue
Gross profit
Equity income
Other income (expenses)
Income before tax
Q3 2014
16.2
3.1
12.1
(12.8)
2.4
Q3 2013
14.1
2.2
17.9
(2.0)
18.1
Alterra Power 2013 Results Call
•
Consolidated revenue increased 15% to $16.2 MM

•
Equity income decreased by $5.8 MM

•
Reflects increased sales at HS Orka, aluminum price movements, and increased generation at Soda Lake
$6.3 MM of non-recurring property insurance proceeds at Toba Montrose in 3Q 2013
Other expenses increased by $10.8 MM

Page | 4
Primarily non-cash items including a reduction in the fair value of PPA-related embedded derivatives
($9.6MM) and bonds payable ($2.5MM), plus foreign exchange
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Alterra Power Q3 2014 Results Call
Financials | Lynda Freeman, CFO
Third Quarter Comparative Information (Net Interest) ($000)
For the 3 months ended September 30, 2014
Generation (MWh)
Revenue
EBITDA
(a)
HS Orka
(66.6%)
200,223
Toba
Montrose
(40%)
161,337
Dokie 1
(25.5%)
14,802
10,198
15,895
1,477
5,186
13,709
837
Soda Lake Development
(100%) and head office
13,916
-
Total
390,278
896
-
28,466
(344)
(1,555)
17,833
For the 3 months ended September 30, 2013
Generation (MWh)
Revenue
Insurance proceeds (BI)
EBITDA
(a)
(b)
(c)
HS Orka
(66.6%)
206,791
8,821
4,787
Toba
Montrose
(40%)
113,474
12,143
5,052
14,541
Soda
Dokie 1
Lake
(25.5%)(b) (100%)
13,212
12,631
1,389
817
633
(430)
ABW
(10%)(c)
1,072
434
-
Development
and head
office
-
347,180
23,604
5,052
268
(2,179)
17,620
Total
Here and elsewhere, EBITDA is a non-IFRS measure as defined in the Company’s MD&A.
Pro forma operating results for Dokie 1 reflect what the results would have been if the Company's ownership had been 25.5% in Q3 2013.
3Q 2013 includes the results from ABW Solar, a 50 MW solar generation project located in Ontario, Canada, that was sold on November 29, 2013.
•
Generation and revenue were lower in 3Q 2014 despite strong operating performance (100% of budget) vs. 3Q
2013 where generation was 103% of plan (when including pro forma generation at the Montrose facility)
•
EBITDA increased overall per increased sales at HS Orka and lower head office expenses
Page | 5
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Alterra Power Q3 2014 Results Call
Financials | Lynda Freeman, CFO
Third Quarter Comparative Information (Net Interest)
2014
2013
Production (GWh)
250
200
57,636 MWh of pro forma generation
from Montrose facility
150
100
50
HS Orka
Toba
Montrose
Dokie 1
Soda Lake
ABW
Revenue
EBITDA
18.0
16.0
Includes non-recurring
business interruption proceeds
15.0
12.0
9.0
8.0
6.0
4.0
3.0
HS Orka
Page | 6
12.0
Toba
Montrose
Dokie 1
Soda Lake
ABW
HS Orka
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Toba
Montrose
Dokie 1
Soda Lake
ABW
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Alterra Power Q3 2014 Results Call
Financials | Lynda Freeman, CFO
Balance Sheet Highlights (Consolidated Basis)
•
Increase in total assets included:
— $ 58.2 MM
Increased construction activities at Jimmie Creek
— $ 20.4 MM
Shannon interconnection security, development activities and contingent fee to early-stage developer
— $ (5.7 MM)
Reduction of equity interest primarily reflecting Toba distribution received
— $ (18.2 MM)
Plant and equipment – mostly foreign exchange
•
The Company received net proceeds of C$64.5 MM (US$57.6 MM) from the holding company loan facility during the period
•
Working capital decreased per:
•
An increase in accounts payable ($14.6 MM) mostly related to Jimmie Creek construction
•
Shannon contingent bonus payment (to be paid at financial closing) of $6.3 MM recorded as short term
Select Balance Sheet Statistics ($MM)
Cash
Total assets
September 30, 2014 December 31, 2013
31.5
41.7
680.7
633.6
Total debt
Total liabilities
290.5
418.3
247.4
353.8
Net assets
262.4
279.9
64.3
62.9
1.4*
65.8
44.0
21.8
Current assets
Current liabilities
Working capital
*Note: working capital is $26.7 million as of November 12.
Page | 7
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Alterra Power Q3 2014 Results Call
Financials | Lynda Freeman, CFO
Long Term Debt (net interest)
•
— $128.3 MM
— $ 57.6 MM
— $ 0.0 MM
Alterra Power
Corp.
100%
100%
•
Holdco I
Magma Sweden
$57.6 MM
(matures 2023)
$128.3 MM
(matures 2016)
Jimmie Creek*
(matures 2054)
•
$80.4 MM
40%
Dokie 1
(matures 2030)
Toba Montrose
(matures 2045)
HS Orka
(matures 2016-2023)
$36.2 MM
$161.3 MM
$69.6MM
•
$161.3 MM
$ 36.2 MM
$ 69.6 MM
$157.6 MM*
Toba Montrose
Dokie 1
HS Orka
Jimmie Creek (closed October 14)
Debt service paid during the third quarter:
—
—
—
—
66.6%
Bonds payable (HS Orka acquisition debt)
Holding company loan facility
Revolving credit facility (100% available)
$267.1 MM total project debt includes:
—
—
—
—
51%
25.5%
Alterra holds the following corporate debt:
$ 2.6 MM
$ 0.7 MM
$ 3.8 MM
$ 45.9 MM
Toba Montrose
Dokie 1
HS Orka
Revolver
(interest only)
(interest only)
($3.4 MM principal)
($45.0MM principal)
See Appendix 1 for further information on long-term debt
* Pro forma: Financing closed on October 14, 2014
Page | 8
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Alterra Power Q3 2014 Results Call
Operations | Jay Sutton, VP Hydro Power
Location: British Columbia
Capacity:
235 MW
Ownership: 40% Alterra
Toba Montrose – Highlights
•
Generation:
–
–
–
106% of forecast generation (406.0
GWh) for Q3 2014
• Driven by flows higher than
forecast in all three months
Production in October was 187% of
forecast (88.1 GWh), putting the
project at 109% of target YTD
Achieved annual generation target on
21 October
•
Plants operating well with no significant
issues
•
Annual maintenance starts in November
when flows are lower
Montrose Intake during a rain storm (September 2014)
Page | 9
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Alterra Power Q3 2014 Results Call
Operations | Paul Rapp, VP Wind and Geothermal Power
Location: British Columbia
Capacity:
144 MW
Ownership: 25.5% Alterra
Dokie 1 – Highlights
•
Generation:
–
–
–
81% of budgeted generation (58.0
GWh) for Q3
Production for October was 95% of
forecast (31.8 GWh)
Generation lower than plan due to low
winds
•
Plant operating well with no equipment
issues
•
Vestas meeting guaranteed availability
targets
•
Mount McAllister forest fire, which
came near the Dokie site in July/August,
has now been fully extinguished
–
Minimal impact on operations and no
assets damaged.
Page | 10
Dokie substation (November 2014)
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Alterra Power Q3 2014 Results Call
Operations | Paul Rapp, VP Wind and Geothermal Power
Location: Nevada
Capacity:
15 MW
Ownership: 100% Alterra
Soda Lake – Highlights
•
Generation
— 122% of budgeted generation (13.9 GWh)
for Q3
— Higher generation due to:
•
Production well pump replacement
and reconfiguration
• Steam reheating system optimized
• High plant availability
— Production for October was 90% of
forecast (6.0 GWh) due to planned
maintenance and warmer weather
•
99.2% plant availability YTD
•
94.3% generator availability YTD
Page | 11
Soda Lake cooling towers (October 2014)
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Alterra Power Q3 2014 Results Call
Operations | Paul Rapp, VP Wind and Geothermal Power
Location: Iceland
Capacity:
174 MW
Ownership: 66.6% Alterra
Svartsengi / Reykjanes – Highlights
•
Generation:
–
–
–
96% of budgeted generation (300.6
GWh) for Q3
Production for October was 99% of
forecast (108.4 GWh)
Reykjanes generation improving per
improved field management
•
No equipment issues
•
Workover of Reykjanes well RN-10
completed and tied in
–
•
Incremental 4.5 MW of capacity
Reykjanes field maintenance program to
continue in 2015
Reykjanes Well RN-10 workover (October 2014)
Page | 12
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Alterra Power Q3 2014 Results Call
Construction | Jay Sutton, VP Hydro Power
Location: British Columbia
Capacity:
62 MW
Ownership: 51% Alterra
Jimmie Creek - Highlights
•
Alterra and Fiera Axium completed the
project financing on October 14
— $176.5 MM total funds
— 40-year tenor (plus two years of construction)
— Fixed interest rate of 5.26%
•
Full construction is underway on site
— Main river diversion complete and cofferdam
construction has commenced
— 30% of penstock has been installed and
backfilled
— Excavation for powerhouse and switchyard is
complete
•
Concrete work has commenced for the
powerhouse foundation
Jimmie Creek diversion and cofferdam (November 2014)
— Work camp completed in September
Page | 13
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Alterra Power Q3 2014 Results Call
Growth Opportunities | John Carson, CEO
Location: Clay County, Texas
Capacity:
204.1 MW
Ownership: 100% Alterra
Shannon Wind - Highlights
•
Project financing expected to close in Q1 2015
•
Planned commencement of commercial
operations in 2H 2015
•
Interconnection substation construction has
commenced
•
Civil design is complete, electrical design is 90%
complete
•
Major contracts executed or in final stage
Shannon interconnection construction site (October 2014)
Page | 14
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Alterra Power Q3 2014 Results Call
Geothermal Development | John Carson, CEO
Mariposa (Chile)
•
Summer 2014/2015 field work commencing, including
completion of civil works (roads, camp upgrades), surface
casing and water supply system
• Large diameter drilling will begin in late 2015
Peru
• Joint venture #1 no longer pursued
• Joint venture #2 properties under further analysis
Italy
•
Exploration work underway including thermal gradient
drilling, micro-seismic monitoring and geologic modelling
Thermal gradient drilling at Roccastrada, Italy (November 2014)
Page | 15
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Alterra Power Q3 2014 Results Call
Growth Opportunities | John Carson, CEO
Other growth projects:
Wind
Hydro
Geothermal
Solar
Page | 16
Dokie 2 (BC): 156 MW permitted wind expansion / GE is 49% partner
BC Coastal: Four large growth projects (three are near prospective LNG facilities)
Other: Other potential growth opportunities in USA
Bute Inlet: 17-project cluster in northern BC; First Nations agreements in place
Europa: North BC opportunity near Kitimat area
Fir Point: 1,000 MW early-stage pumped storage opportunity in BC
Bulandsvirkjun: 150 MW hydro opportunity in Iceland
Other: Multiple early stage opportunities in British Columbia and Iceland
Reykjanes: 80 MW expansion; resource confirmation in process
Eldvörp: 50 MW greenfield opportunity in Iceland
Krýsuvík: Up to 500 MW greenfield opportunity in Iceland
Soda Lake: Three solar bids submitted to NV Energy’s RFP on November 12
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APPENDIX 1: Alterra Power Q3 2014 Results Call
Financials | Lynda Freeman, CFO
Long-term debt (all non-recourse)
•
•
Alterra’s project debt (net interest) at September 30, 2014 was $267.1 MM, and includes:
— Toba Montrose fixed rate debt (6.17% - 6.69%) with annual repayments until 2045
— Dokie 1 fixed rate debt (7.24%) with bi-annual repayments until 2030
— HS Orka floating rate debt with all-in interest rates of 1.05% – 5.62%, expiring between 2016 and 2023
Subsequent to September 30, 2014, Jimmie Creek completed a $157.6 MM (C$176.5 MM) non-recourse, fixed rate
loan facility (5.26%) with annual repayments beginning in 2017 until 2054
Project Debt Service: 2014-2022 ($ MM)
2014
2015
2016
2017
2018
2019
2020
2021
2022
•
Toba Montrose (40%)
Principal Interest
1.8
10.5
1.9
10.4
2.0
10.3
2.1
10.2
2.3
10.1
2.4
9.9
2.6
9.8
2.7
9.6
2.9
9.4
Dokie 1 (25.5%)
Principal Interest
1.2
2.7
1.2
2.6
1.1
2.5
1.0
2.4
1.7
2.3
1.8
2.2
2.0
2.1
1.9
2.0
1.7
1.8
HS Orka (66.6%)
Principal
Interest
12.5
1.5
12.6
1.3
12.7
1.0
11.1
0.8
9.7
0.5
9.7
0.3
6.6
0.2
4.9
1.9
-
Jimmie Creek (51%)
Principal
Interest
0.4
2.9
3.2
1.4
4.3
0.3
4.2
0.4
4.2
0.5
4.2
0.6
4.2
0.7
4.1
Total Net Interest
Principal
Interest
15.5
15.1
15.7
17.2
15.8
17.0
15.6
17.7
14.0
17.1
14.3
16.6
11.7
16.3
10.1
15.8
7.2
15.3
Alterra also has $128.3 MM of non-recourse long-term bonds issued for the acquisition of HS Orka with interest rates
of 1.5% and 3.5%, repayable in July and December 2016 (bullet maturities), and a $57.6 MM holding company loan
facility with a floating interest rate at CDOR/LIBOR + 6.5%, repayable on February 5, 2023
Page | 18
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APPENDIX 1: Alterra Power Q3 2014 Results Call
Financials | Lynda Freeman, CFO
Long-Term Debt (cont’d)
Interest
Principal
All values in $MM
Toba Montrose (40%)
Dokie 1 (25.5%)
15.0
5.0
12.5
4.0
10.0
7.5
3.0
5.0
2.0
2.5
1.0
0.0
2014
2015
2016
2017
2018
2019
2020
2021
2022
0.0
2014 2015 2016 2017 2018 2019 2020 2021 2022
HS Orka (66.6%)
Jimmie Creek (51%)
15.0
6.0
12.5
5.0
10.0
4.0
7.5
3.0
5.0
2.0
2.5
1.0
0.0
0.0
2014
Page | 19
2015
2016
2017
2018
2019
2020
2021
2022
2014
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2015
2016
2017
2018
2019
2020
2021
2022
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APPENDIX 1: Alterra Power Q3 2014 Results Call
Financials | Lynda Freeman, CFO
Long-Term Debt (cont’d)
Interest
Principal
All values in $MM
Total Debt Service
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
2014
Page | 20
2015
2016
2017
2018
2019
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2020
2021
2022
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