Northland Power Income Fund

Northland Power Income Fund

November 11, 2005 08:53 ET

Northland Power Income Fund Reports Strong Third Quarter And Increases 2005 Distributions By 3%

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

3 Months Ended 9 Months Ended
Sept. 30 Sept. 30
2005 2004 2005 2004
FINANCIAL (thousands, except
per unit amounts)
Sales $31,707 $20,936 $91,525 $65,714
Net income $5,217 $1,021 $32,126 $21,781

Funds from operations before
changes in working
capital(1) $14,978 $10,955 $48,150 $34,489
Distributable cash(1) $13,947 $10,176 $47,807 $33,933

Distributions declared to
Unitholders $12,560 $11,860 $36,911 $35,578

Units outstanding at quarter
end 49,308 47,916 49,308 47,916
Average number of units
outstanding - basic 48,932 47,916 48,289 47,916
Average number of units
outstanding - diluted 48,932 49,894 53,116 48,580
Per Unit - basic
Funds from operations before
changes in working
capital(1) $0.3061 $0.2286 $0.9971 $0.7198
Distributable cash(1) $0.2850 $0.2124 $0.9900 $0.7082
Distributions declared to
Unitholders $0.2550 $0.2475 $0.7625 $0.7425
Electricity sales volume
(megawatthours) 256,798 183,359 761,640 590,525
Steam sales volume
(thousands of pounds) 223,289 178,078 825,594 783,973

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

The Fund's financial results in the third quarter included three full months of operations from the Mont Miller wind farm. The first nine months of 2005 include a 50% share of the Kingston facility, compared to 25% last year.

The quarter's financial results were positively affected by increased market prices for electricity and natural gas. The selling price under the Iroquois Falls plant's power purchase agreement ("PPA") increased by 4.0% retroactive to January 1 as a direct result of higher wholesale market electricity prices in Ontario to which the rates under the PPA are related. Sales of electricity at Iroquois Falls outside the terms of the PPA at wholesale market prices significantly exceeded the prior year with respect to both prices and volumes. The Kingston plant received higher prices for natural gas resold. Financial results at the Panda-Brandywine plant exceeded last year due to higher dispatch levels associated with increased electricity demand because of this year's unseasonably hot summer. The Mont Miller project completed its first full quarter of operations; production was 6% below expectations as the unusually hot summer adversely affected wind speeds in July and August.

For the Quarter

In the three months ended September 30, 2005 the Fund increased distributable cash by 37% compared to the same period last year. Consolidated sales rose 51%, while net income increased five-fold from 2004.

Year to date

For the nine months ended September 30, distributable cash was up nearly 41% from 2004 (40% on a per-unit basis). Sales increased by 39% and net income 47%. The factors that positively affected third-quarter results also applied for the nine-month period. In addition, the Fund 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 nine-month period, distributable cash exceeded distributions declared by $10.9 million. The Fund applied that excess distributable cash along with the $23.5 million proceeds from the senior loan prepayment in the first quarter and cash on hand to repay the Fund's acquisition line of credit in the first and second quarters ($37.3 million had been drawn in late 2004 to fund the additional investment in the Kingston facility.)

Increase in Distributions

Management of the Fund considers that much of the increase in distributable cash experienced in 2005 is sustainable as it is due to the results of its successful investments over the last few years and to upward pressure on electricity prices in Ontario. Consistent with its distribution policy, the Fund is announcing an increase in the rate of monthly distributions to $0.0875 per unit per month, a 3% increase, effective with the November 2005 distribution. The distribution in December 2005 will be $0.1125 per unit so that the total amount distributed in 2005 will be topped up to $1.05. This represents an increase from the rate of $1.02 established at the beginning of the year and 5% from the $1.00 paid out in 2004. Distributions in 2006 are expected to total $1.05 per unit.

John Brace, President of the Fund's Manager said, "The Fund's solid financial performance in the first half continued into the third quarter, as the Iroquois Falls and Kingston assets performed better than expected, and the Fund recorded initial income from its new Mont Miller wind project in the Gaspesie. The announced increase in distributions to $1.05 per unit represents a 5% increase over 2004."

The Fund's consolidated financial statements for the third quarter of 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 a new wind farm in Quebec. 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 there from.

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)