Northland Power Income Fund

Northland Power Income Fund

August 11, 2005 18:08 ET

Northland Power Income Fund Announces Solid Operating Results and 11% Higher Distributable Cash in 2nd Quarter of 2005

TORONTO, ONTARIO--(CCNMatthews - Aug. 11, 2005) - Northland Power Income Fund (TSX:NPI.UN) (TSX:NPI.DB) (the "Fund") today reported strong financial performance for the period ended June 30, 2005.


3 Months 6 Months
Ended June 30 Ended June 30
2005 2004 2005 2004
FINANCIAL (thousands,
except per unit amounts)
Sales $27,943 $21,367 $59,818 $44,778
Net income $10,335 $10,127 $26,909 $20,760

Funds from operations
before changes in
working capital (1) $12,273 $11,162 $33,172 $23,534
Distributable cash (1) $12,452 $11,228 $33,860 $23,757

Distributions declared
to Unitholders $12,244 $11,859 $24,351 $23,718

Units Outstanding
at Quarter End 48,075 47,916 48,075 47,916
Average Number of
Units Outstanding
- basic 47,989 47,916 47,963 47,916
Average Number of
Units Outstanding
- diluted 53,116 47,916 53,116 47,916

Per Unit - basic
Funds from operations
before changes in
working capital
changes (1) $0.2557 $0.2329 $0.6916 $0.4912
Distributable cash (1) $0.2595 $0.2343 $0.7060 $0.4958
Distributions declared
to Unitholders $0.2550 $0.2475 $0.5075 $0.4950
Electricity sales volume
(megawatthours) 232,338 189,586 504,842 407,166
Steam sales volume
(thousands of pounds) 228,499 234,445 602,305 605,895
Fuel consumption
(thousands of gigajoules) 2,078 1,788 4,632 3,906

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

In the second quarter of 2005, the Fund increased distributable cash by 11%, both in total and per unit (basic), compared to the same period last year, primarily as a result of the increase in ownership in the Kingston cogeneration facility from 25% to 50% in December 2004, as well as favourable operating performance from all generating facilities, and initial income from the Fund's new Mont Miller wind farm. Consolidated sales increased 31% in the three months ended June 30, 2005, while net income rose 2% and distributions per unit were up 3% from 2004.

For the six months ended June 30, distributable cash increased over 42% from 2004 to 2005, both in total and on a per unit basis; sales were up 34%, net income 30% and distributions per unit 3%. Sales and gross profit at the Fund's Iroquois Falls facility increased 4% and 7% respectively in the first half of the year compared to last year due to the sale of emission allowances and credits in the first quarter 2005 and to higher electricity sales. The Kingston facility's financial performance also improved in the first half of 2005 as a result of the increased ownership interest, and the adverse impact in 2004 of gas and steam turbine major maintenance. The Fund also benefited from higher investment income related to the sale in the first quarter 2005 of its ownership interest in Panda Energy Corporation's Rosemary facility in the US.

For the six months ended June 30, 2005, distributable cash exceeded distributions declared by $9.5 million. The Fund applied that excess distributable cash along with the $23.5 million proceeds from the senior loan prepayment and cash on hand to repay the Fund's acquisition line of credit ($28.5 million in the first quarter and $8.8 million in the second quarter). The Fund had drawn $37.3 million on its acquisition line of credit in late 2004 to fund the additional investment in the Kingston facility.

John Brace, President of the Fund's Manager said, "The Fund's solid financial performance in the first quarter continued into the second quarter this year, as all operating assets performed well, and we recorded initial revenue from our new Mont Miller wind project in Gaspesie. The 30-turbine wind farm operated with 99% availability for the 22 days from its official commissioning on June 9 to the end of June."

The Fund's consolidated financial statements with notes for the second quarter 2005 and related Management Discussion & Analysis can be found at the Fund's web site ( and at


Northland Power Income Fund indirectly owns interests in four power generating facilities: 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 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 outside Washington, D.C. Electricity sales from the cogeneration plants are made under long-term power purchase agreements (PPAs) with creditworthy customers 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 supplies power to Hydro-Quebec under the terms of a 21-year PPA.

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 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.


This news release 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 therefrom.

Contact Information

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