Northland Power Income Fund

Northland Power Income Fund

May 12, 2005 09:38 ET

Northland Power Income Fund Increases Distributable Cash 71% in First Quarter 2005

TORONTO, ONTARIO--(CCNMatthews - May 12, 2005) - Northland Power Income Fund (the "Fund")(TSX:NPI.UN)(TSX:NPI.DB) today reported strong financial performance for the three months ended March 31, 2005.


3 Months Ended Mar. 31
2005 2004
FINANCIAL (thousands, except per unit amounts)
Sales $31,875 $23,411
Net income $16,574 $10,633

Funds from operations before changes in
working capital(1)
Distributable cash(1) $20,899 $12,372
$21,408 $12,529

Distributions declared to Unitholders $12,107 $11,859

Units Outstanding at Quarter End 47,958 47,916
Average Number of Units Outstanding - basic 47,936 47,916
Average Number of Units Outstanding - diluted 53,116 47,916

Per Unit - basic
Funds from operations before changes in
working capital1 $0.4358 $0.2582
Distributable cash(1) $0.4466 $0.2615
Distributions declared to Unitholders $0.2525 $0.2475
Electricity sales volume (megawatthours) 272,504 217,580
Steam sales volume (thousands of pounds) 373,806 371,450
Fuel consumption (thousands of gigajoules) 2,554 2,118

(1) These are non-GAAP financial measures. Please refer to schedule
of Distributable Cash and Distributions to Unitholders in the
Fund's first quarter MD&A for the calculations of funds from
operations before changes in working capital and distributable

In the first quarter of 2005, the Fund increased distributable cash by 71%, being $8.8 million in total or $0.185 per unit, compared to the same period last year. The closing of the sale of the Panda-Rosemary plant in February contributed $5.3 million of distributable cash ($0.11 per unit) on a one-time basis. The Fund's first quarter distributable cash also reflected the increase in ownership in the Kingston cogeneration facility from 25% to 50% effective from December 2004.

Proceeds received this quarter from the sale of the Panda-Rosemary plant in the United States were applied primarily to repaying $28.5 million of the Fund's acquisition line of credit which had been drawn in December 2004 to fund the purchase of the additional 25% interest in the Kingston facility.

Sales and operating income in the first quarter at the Iroquois Falls plant increased from last year due to sales of emission allowances and credits this quarter and to higher electricity sales. Shortly after quarter-end, a new, five-year collective agreement with the International Union of Operating Engineers was negotiated for employees at the Iroquois Falls facility. The Kingston plant's financial performance in the first quarter 2005 also improved relative to 2004 when downtime and costs associated with scheduled major overhauls on both the gas and steam turbines and unplanned gas turbine repairs adversely affected results.

The Fund's consolidated net income increased 56% over last year due to higher investment income earned on the Panda Energy Corp. investment and senior loan to its subsidiary, and to the other factors mentioned above.

As of May 11th, the Mont Miller wind project had 26 of 30 wind turbines fully operational with the remaining four having been erected and in process of being commissioned. The Fund's Manager expects full commercial operations of the project by the end of the month.

On February 25th, Northland Power Inc. ("NPI"), the parent of the Fund's Manager, and the Fund jointly announced that long-term power purchase agreements had been signed with Hydro-Quebec for the electricity to be delivered from two previously announced wind power projects totaling 250 MW located in the Gaspesie region of Quebec. The projects will use modern wind turbines produced by GE Energy for the North American market and the specific wind regime of the region. NPI has and will continue to undertake the development of these two projects. Any investment by the Fund is subject to the prior approval of a committee of the Fund's independent trustees, which management expects to seek for the first project during 2006.

John Brace, the President of the Fund's Manager said, "The Fund had an outstanding first quarter this year, as all of its operating assets performed well, and we completed the successful sale of a U.S. asset. We look forward to the Mont Miller project contributing to distributable cash in the second quarter, and to further proceeds from our new, environment-friendly source of revenue - the sale of emission allowances and credits."

A copy of the Fund's first quarter report and MD&A can be found at and the Fund's web site at


Northland Power Income Fund indirectly owns interests in four power projects: three combined-cycle cogeneration power plants that efficiently and cleanly produce electricity and steam for sale and one wind power project. Two cogeneration plants are located in Ontario: the 120 megawatt (MW) Iroquois Falls facility that has been wholly-owned by the Fund since its inception in 1997, and the 110 MW Kingston facility, of which the Fund now owns 50%. Through its 19% equity interest in Panda Energy Corp. (PEC) and loan to a PEC subsidiary, the Fund has an interest in the 230 MW Panda-Brandywine cogeneration power plant located just outside Washington, D.C. Electricity and steam sales from the cogeneration plants are made under long-term contracts with creditworthy entities to ensure revenue stability, and long-term contracts assure the supply and price of natural gas, which is the Fund's largest cost. The 54 MW Mont Miller wind power project, when completed, will supply power to Hydro-Quebec under the terms of a 21-year power purchase agreement.

The Fund's trust units and convertible debentures, which trade on the Toronto Stock Exchange under the symbols NPI.UN and NPI.DB respectively, are qualified investments and not considered foreign property for RRSPs and DPSPs under the Canadian Income Tax Act.

The Fund has in place a distribution re-investment plan that allows unitholders who are residents of Canada to automatically have their monthly cash distributions re-invested in additional units. Participants do not pay any costs associated with the plan, including brokerage commissions. For further information or to join the plan, contact your financial advisor or broker.


The disclosure above contains certain forward-looking statements. Although these forward-looking statements are based upon current expectations and assumptions, they are subject to numerous risks and uncertainties, certain of which are beyond the Fund's control. No assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of distributions, the Fund and unitholders will derive there from.

Contact Information

  • Northland Power Income Fund Management Inc.
    Barb Bokla
    Manager, Investor Relations
    (416) 962-6262 x156
    (416) 962-6266 (FAX)
    Northland Power Income Fund Management Inc.
    Tony Anderson
    Chief Financial Officer
    (416) 962-6262 x120
    (416) 962-6266 (FAX)