Attached files

file filename
EX-10.1 - EX-10.1 - ATLANTIC POWER CORPa2225535zex-10_1.htm
EX-31.2 - EX-31.2 - ATLANTIC POWER CORPa2225535zex-31_2.htm
EX-31.1 - EX-31.1 - ATLANTIC POWER CORPa2225535zex-31_1.htm
EX-32.2 - EX-32.2 - ATLANTIC POWER CORPa2225535zex-32_2.htm
EX-32.1 - EX-32.1 - ATLANTIC POWER CORPa2225535zex-32_1.htm

Use these links to rapidly review the document
TABLE OF CONTENTS

Table of Contents


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549



FORM 10-Q


ý

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

OR

o

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                   to                 

COMMISSION FILE NUMBER 001-34691

ATLANTIC POWER CORPORATION
(Exact name of registrant as specified in its charter)

British Columbia, Canada
(State or other jurisdiction of
incorporation or organization)
  55-0886410
(I.R.S. Employer
Identification No.)

3 Allied Drive, Suite 220
Dedham, MA

(Address of principal executive offices)

 

02026
(Zip code)

(617) 977-2400
(Registrant's telephone number, including area code)

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý    No o

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o   Accelerated filer ý   Non-accelerated filer o
(Do not check if a
smaller reporting company)
  Smaller reporting company o

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

        The number of shares outstanding of the registrant's Common Stock as of August 7, 2015 was 122,032,729.

   


Table of Contents

ATLANTIC POWER CORPORATION

FORM 10-Q

THREE AND SIX MONTHS ENDED JUNE 30, 2015

Index

 

General:

  3

 

PART I—FINANCIAL INFORMATION

   

ITEM 1.

 

CONSOLIDATED FINANCIAL STATEMENTS AND NOTES

   

 

Consolidated Balance Sheets as of June 30, 2015 (unaudited) and December 31, 2014

  4

 

Consolidated Statements of Operations for the three and six months ended June 30, 2015 and June 30, 2014 (unaudited)

  5

 

Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2015 and June 30, 2014 (unaudited)

  6

 

Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and June 30, 2014 (unaudited)

  7

 

Notes to Consolidated Financial Statements (unaudited)

  8

ITEM 2.

 

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

  40

ITEM 3.

 

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

  66

ITEM 4.

 

CONTROLS AND PROCEDURES

  67

 

PART II—OTHER INFORMATION

  68

ITEM 1.

 

LEGAL PROCEEDINGS

  68

ITEM 1A.

 

RISK FACTORS

  71

ITEM 6.

 

EXHIBITS

  72

Table of Contents

GENERAL

        In this Quarterly Report on Form 10-Q, references to "Cdn$" and "Canadian dollars" are to the lawful currency of Canada and references to "$" and "US$" and "U.S. dollars" are to the lawful currency of the United States. All dollar amounts herein are in U.S. dollars, unless otherwise indicated.

        Unless otherwise stated, or the context otherwise requires, references in this Quarterly Report on Form 10-Q to "we," "us," "our," "Atlantic Power" and the "Company" refer to Atlantic Power Corporation, those entities owned or controlled by Atlantic Power Corporation and predecessors of Atlantic Power Corporation.

3


Table of Contents


ATLANTIC POWER CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions of U.S. dollars)

 
  June 30,
2015
  December 31,
2014
 
 
  (unaudited)
   
 

Assets

             

Current assets:

             

Cash and cash equivalents

  $ 393.8   $ 106.0  

Restricted cash

    17.6     22.5  

Accounts receivable

    45.2     46.2  

Inventory

    16.5     19.3  

Prepayments and other current assets

    12.3     13.9  

Assets held for sale (Note 3)

        792.1  

Refundable income taxes

        0.2  

Total current assets

    485.4     1,000.2  

Property, plant, and equipment, net of accumulated depreciation of $218.9 million and $195.9 million at June 30, 2015 and December 31, 2014, respectively

    908.6     962.9  

Equity investments in unconsolidated affiliates (Note 4)

    300.6     305.2  

Other intangible assets, net of accumulated amortization of $220.8 million and $200.3 million at June 30, 2015 and December 31, 2014, respectively

    342.7     377.1  

Goodwill

    197.2     197.2  

Derivative instruments asset (Notes 7 and 8)

    0.4     1.1  

Deferred financing costs

    56.0     62.8  

Other assets

    9.0     10.1  

Total assets

  $ 2,299.9   $ 2,916.6  

Liabilities

             

Current liabilities:

             

Accounts payable

  $ 4.4   $ 9.4  

Income taxes payable

    3.8      

Accrued interest

    5.2     5.3  

Other accrued liabilities

    36.7     30.7  

Current portion of long-term debt (Note 5)

    328.4     20.0  

Current portion of derivative instruments liability (Notes 7 and 8)

    36.0     36.1  

Liabilities held for sale (Note 3)

        271.8  

Other current liabilities

    7.6     6.8  

Total current liabilities

    422.1     380.1  

Long-term debt (Note 5)

    762.4     1,145.9  

Convertible debentures (Note 6)

    304.6     340.6  

Derivative instruments liability (Notes 7 and 8)

    37.1     47.5  

Deferred income taxes (Note 9)

    111.1     92.4  

Power purchase and fuel supply agreement liabilities, net of accumulated amortization of $12.8 million and $11.4 million at June 30, 2015 and December 31, 2014, respectively

    30.3     33.4  

Other non-current liabilities

    58.0     60.2  

Commitments and contingencies (Note 15)

         

Total liabilities

    1,725.6     2,100.1  

Equity

             

Common shares, no par value, unlimited authorized shares; 122,007,113 and 121,323,614 issued and outstanding at June 30, 2015 and December 31, 2014, respectively (Note 12)

    1,289.5     1,288.4  

Accumulated other comprehensive loss

    (98.9 )   (68.3 )

Retained deficit

    (837.6 )   (863.9 )

Total Atlantic Power Corporation shareholders' equity

    353.0     356.2  

Preferred shares issued by a subsidiary company (Note 12)

    221.3     221.3  

Noncontrolling interests held for sale (Notes 3 and 12)

        239.0  

Total equity

    574.3     816.5  

Total liabilities and equity

  $ 2,299.9   $ 2,916.6  

   

See accompanying notes to consolidated financial statements.

4


Table of Contents


ATLANTIC POWER CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions of U.S. dollars, except per share amounts)

(Unaudited)

 
  Three months ended
June 30,
  Six months ended
June 30,
 
 
  2015   2014   2015   2014  

Project revenue:

                         

Energy sales

  $ 47.5   $ 62.4   $ 101.5   $ 124.7  

Energy capacity revenue

    38.0     41.3     71.5     74.8  

Other

    17.6     19.4     41.4     48.9  

    103.1     123.1     214.4     248.4  

Project expenses:

                         

Fuel

    38.0     50.4     84.2     110.2  

Operations and maintenance

    35.3     29.1     56.8     56.7  

Development

        1.1     1.1     1.8  

Depreciation and amortization

    28.2     30.8     56.1     61.4  

    101.5     111.4     198.2     230.1  

Project other income (expense):

                         

Change in fair value of derivative instruments (Notes 7 and 8)

    6.8     (0.4 )   5.2     21.6  

Equity in earnings of unconsolidated affiliates (Note 4)

    8.6     3.7     19.3     12.1  

Interest expense, net

    (2.0 )   (2.2 )   (4.1 )   (13.3 )

Other income (expense), net

    2.2     (14.8 )   2.2     (14.8 )

    15.6     (13.7 )   22.6     5.6  

Project (loss) income

    17.2     (2.0 )   38.8     23.9  

Administrative and other expenses (income):

   
 
   
 
   
 
   
 
 

Administration

    6.6     10.2     16.0     17.5  

Interest, net

    24.6     27.7     50.3     94.1  

Foreign exchange loss (gain) (Note 8)

    4.8     15.3     (27.4 )   (1.5 )

Other income, net (Note 6)

    (1.7 )       (3.1 )    

    34.3     53.2     35.8     110.1  

(Loss) income from continuing operations before income taxes

    (17.1 )   (55.2 )   3.0     (86.2 )

Income tax expense (benefit) (Note 9)

    2.9     (4.5 )   (1.7 )   (21.4 )

(Loss) income from continuing operations

    (20.0 )   (50.7 )   4.7     (64.8 )

Net income (loss) from discontinued operations, net of tax (Note 3)

    33.6     (5.7 )   21.1     (14.0 )

Net income (loss)

    13.6     (56.4 )   25.8     (78.8 )

Net loss attributable to noncontrolling interests of discontinued operations

    (3.4 )   (0.3 )   (11.0 )   (6.7 )

Net income attributable to preferred shares of a subsidiary company

    2.3     3.1     4.6     5.9  

Net income (loss) attributable to Atlantic Power Corporation

  $ 14.7   $ (59.2 ) $ 32.2   $ (78.0 )

Basic and diluted earnings per share: (Note 11)

                         

Loss from continuing operations attributable to Atlantic Power Corporation

  $ (0.18 ) $ (0.45 ) $ 0.00   $ (0.59 )

Income (loss) from discontinued operations, net of tax

    0.30     (0.04 )   0.26     (0.06 )

Net income (loss) attributable to Atlantic Power Corporation

  $ 0.12   $ (0.49 ) $ 0.26   $ (0.65 )

Weighted average number of common shares outstanding: (Note 11)

   
 
   
 
   
 
   
 
 

Basic

    121.9     120.6     121.7     120.5  

Diluted

    122.1     120.6     121.9     120.5  

Dividends paid per common share:

 
$

0.02
 
$

0.09
 
$

0.05
 
$

0.17
 

   

See accompanying notes to consolidated financial statements.

5


Table of Contents


ATLANTIC POWER CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions of U.S. dollars)

(Unaudited)

 
  Three months ended
June 30,
  Six months ended
June 30,
 
 
  2015   2014   2015   2014  

Net income (loss)

  $ 13.6   $ (56.4 ) $ 25.8   $ (78.8 )

Other comprehensive income (loss), net of tax:

   
 
   
 
   
 
   
 
 

Unrealized income (loss) on hedging activities

  $ 0.2   $ (0.3 ) $ (0.4 ) $ (0.7 )

Net amount reclassified to earnings

    0.1     0.1     0.4     0.4  

Net unrealized gain (loss) on derivatives

    0.3     (0.2 )       (0.3 )

Foreign currency translation adjustments

   
4.5
   
17.3
   
(30.6

)
 
(1.4

)

Other comprehensive income (loss), net of tax

    4.8     17.1     (30.6 )   (1.7 )

Comprehensive income (loss)

    18.4     (39.3 )   (4.8 )   (80.5 )

Less: Comprehensive (loss) income attributable to noncontrolling interests

    (1.1 )   2.8     (6.4 )   (0.8 )

Comprehensive income (loss) attributable to Atlantic Power Corporation

  $ 19.5   $ (42.1 ) $ 1.6   $ (79.7 )

   

See accompanying notes to consolidated financial statements.

6


Table of Contents


ATLANTIC POWER CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions of U.S. dollars)

(Unaudited)

 
  Six months
ended June 30,
 
 
  2015   2014  

Cash flows from operating activities:

             

Net (loss) income

  $ 25.8   $ (78.8 )

Adjustments to reconcile to net cash provided by operating activities:

             

Depreciation and amortization

    66.4     81.5  

Gain on sale of discontinued operations

    (47.3 )   (2.1 )

Gain on sale of development project and other assets

    (2.3 )    

Gain on purchase and cancellation of convertible debentures

    (3.0 )    

Stock-based compensation expense

    1.0     0.9  

Impairment charges

        14.8  

Equity in earnings from unconsolidated affiliates

    (19.3 )   (11.9 )

Distributions from unconsolidated affiliates

    27.0     37.8  

Unrealized foreign exchange gain

    (27.6 )   (1.4 )

Change in fair value of derivative instruments

    (4.5 )   (11.9 )

Change in deferred income taxes

    20.4     (15.5 )

Change in other operating balances

             

Accounts receivable

    0.6     2.8  

Inventory

    2.8     (2.6 )

Prepayments, refundable income taxes and other assets

    9.3     14.7  

Accounts payable

    (3.4 )   (4.6 )

Accruals and other liabilities

    7.5     (18.2 )

Cash provided by operating activities

    53.4     5.5  

Cash flows provided by investing activities:

   
 
   
 
 

Change in restricted cash

    4.9     78.4  

Proceeds from sale of discontinued operations and development project, net of cash sold

    326.3     1.0  

Contribution to unconsolidated affiliate

    (0.6 )    

Capitalized development costs

    (0.8 )    

Construction in progress

        (1.5 )

Purchase of property, plant and equipment

    (5.0 )   (2.5 )

Cash provided by investing activities

    324.8     75.4  

Cash flows used in financing activities:

   
 
   
 
 

Proceeds from senior secured term loan facility

        600.0  

Repayment of corporate and project-level debt

    (62.2 )   (608.0 )

Repayment of convertible debentures

    (18.0 )      

Deferred financing costs

        (38.8 )

Dividends paid to common shareholders

    (5.8 )   (20.9 )

Dividends paid to noncontrolling interests

    (8.4 )   (14.2 )

Cash used in financing activities

    (94.4 )   (81.9 )

Net increase (decrease) in cash and cash equivalents

   
283.8
   
(1.0

)

Cash and cash equivalents at beginning of period at discontinued operations

    3.9      

Cash and cash equivalents at beginning of period

    106.1     158.6  

Cash and cash equivalents at end of period

  $ 393.8   $ 157.6  

Supplemental cash flow information

             

Interest paid

  $ 46.3   $ 114.7  

Income taxes paid, net

  $ 1.7   $ 1.0  

Accruals for construction in progress

  $   $ 8.2  

   

See accompanying notes to consolidated financial statements.

7


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

1. Nature of business

General

        Atlantic Power owns and operates a diverse fleet of power generation assets in the United States and Canada. Our power generation projects sell electricity to utilities and other large commercial customers largely under long-term power purchase agreements ("PPAs"), which seek to minimize exposure to changes in commodity prices. As of June 30, 2015, our power generation projects in operation had an aggregate gross electric generation capacity of approximately 2,137 megawatts ("MW") in which our aggregate ownership interest is approximately 1,502 MW. Our current portfolio consists of interests in twenty-three operational power generation projects across nine states in the United States and two provinces in Canada. Eighteen of our projects are majority-owned subsidiaries. These totals exclude an aggregate of 521 MWs from our previous 100% ownership interest in Meadow Creek Project Company, LLC ("Meadow Creek"), 99% ownership in Canadian Hills Wind, LLC ("Canadian Hills"), 50% ownership interest in Rockland Wind Farm, LLC ("Rockland"), 27.6% ownership interest in Idaho Wind Partners 1, LLC ("Idaho Wind") and 12.5% ownership interest in Goshen Phase II, LLC ("Goshen") (collectively, the "Wind Projects"), which we sold on June 26, 2015, and which are designated as discontinued operations for the three and six months ended June 30, 2015 and 2014.

        Atlantic Power is a corporation established under the laws of the Province of Ontario, Canada on June 18, 2004 and continued to the Province of British Columbia on July 8, 2005. Our shares trade on the Toronto Stock Exchange under the symbol "ATP" and on the New York Stock Exchange under the symbol "AT." Our registered office is located at 215-10451 Shellbridge Way, Richmond, British Columbia V6X 2W8 Canada and our headquarters is located at 3 Allied Drive, Suite 220, Dedham, Massachusetts 02026, USA. Our telephone number in Dedham is (617) 977-2400 and the address of our website is www.atlanticpower.com. Information contained on Atlantic Power's website or that can be accessed through its website is not incorporated into and does not constitute a part of this Quarterly Report on Form 10-Q. We have included our website address only as an inactive textual reference and do not intend it to be an active link to our website. We make available on our website, free of charge, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission ("SEC"). Additionally, we make available on our website our Canadian securities filings, which are not incorporated by reference into our Exchange Act filings.

Basis of presentation

        The interim consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in accordance with the SEC regulations for interim financial information and with the instructions to Form 10-Q. The following notes should be read in conjunction with the accounting policies and other disclosures as set forth in the notes to our financial statements in our Annual Report on Form 10-K for the year ended December 31, 2014. Interim results are not necessarily indicative of results for the full year.

8


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

1. Nature of business (Continued)

        In our opinion, the accompanying unaudited interim consolidated financial statements present fairly our consolidated financial position as of June 30, 2015, the results of operations and comprehensive income (loss) for the three and six months ended June 30, 2015 and 2014, and our cash flows for the six months ended June 30, 2015 and 2014 in accordance with U.S generally accepted accounting policies. In the opinion of management, all adjustments (consisting of normal recurring accruals and other adjustments) considered necessary for a fair presentation have been included.

Use of estimates

        The preparation of financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the year. Actual results could differ from those estimates. During the periods presented, we have made a number of estimates and valuation assumptions, including the fair values of acquired assets, the useful lives and recoverability of property, plant and equipment, valuation of goodwill, intangible assets and liabilities related to PPAs and fuel supply agreements, the recoverability of equity investments, the recoverability of deferred tax assets, tax provisions, the fair value of financial instruments and derivatives, pension obligations, asset retirement obligations, equity-based compensation and the allocation of taxable income and losses, tax credits and cash distributions using the hypothetical liquidation book value ("HLBV") method. In addition, estimates are used to test long-lived assets and goodwill for impairment and to determine the fair value of impaired assets. These estimates and valuation assumptions are based on present conditions and our planned course of action, as well as assumptions about future business and economic conditions. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2014. As better information becomes available or actual amounts are determinable, the recorded estimates are revised. Should the underlying valuation assumptions and estimates change, the recorded amounts could change by a material amount.

Revision to the presentation of preferred shares issued by a subsidiary company

        The classification of preferred shares issued by a subsidiary company has been revised from total Atlantic Power Corporation shareholder's equity on the Consolidated Balance Sheets at December 31, 2014 to a separate line item in the noncontrolling interests section of equity. The revision does not impact total equity in either period presented. The revision was appropriate in order to properly present the preferred shares issued by a subsidiary company in the consolidated balance sheet. The revision is not considered material to any previously issued financial statements.

Recently issued accounting standards

    Adopted

        In April 2014, the Financial Accounting Standards Board ("FASB") issued changes to reporting discontinued operations and disclosures of disposals of components of an entity. These changes require a disposal of a component to meet a higher threshold in order to be reported as a discontinued

9


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

1. Nature of business (Continued)

operation in an entity's financial statements. The threshold is defined as a strategic shift that has, or will have, a major effect on an entity's operations and financial results such as a disposal of a major geographical area or a major line of business. Additionally, the following two criteria have been removed from consideration of whether a component meets the requirements for discontinued operations presentation: (i) the operations and cash flows of a disposal component have been or will be eliminated from the ongoing operations of an entity as a result of the disposal transaction, and (ii) an entity will not have any significant continuing involvement in the operations of the disposal component after the disposal transaction. Furthermore, equity method investments now may qualify for discontinued operations presentation. These changes also require expanded disclosures for all disposals of components of an entity, whether or not the threshold for reporting as a discontinued operation is met, related to profit or loss information and/or asset and liability information of the component. These changes became effective on January 1, 2015 and were implemented when designating the Wind Projects as assets held for sale and discontinued operations on March 31, 2015. See Note 3, Discontinued operations.

    Issued

        In January 2015, the FASB issued changes to the presentation of extraordinary items. Such items are defined as transactions or events that are both unusual in nature and infrequent in occurrence, and, currently, are required to be presented separately in an entity's income statement, net of income tax, after income from continuing operations. The changes eliminate the concept of an extraordinary item and, therefore, the presentation of such items will no longer be required. Notwithstanding this change, an entity will still be required to present and disclose a transaction or event that is both unusual in nature and infrequent in occurrence in the notes to the financial statements. These changes become effective for us on January 1, 2016. We have determined that the adoption of these changes will not have an impact on the consolidated financial statements.

        In February 2015, the FASB issued changes to the analysis that an entity must perform to determine whether it should consolidate certain types of legal entities. These changes (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, (ii) eliminate the presumption that a general partner should consolidate a limited partnership, (iii) affect the consolidation analysis of reporting entities that are involved with variable interest entities, particularly those that have fee arrangements and related party relationships, and (iv) provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. These changes become effective for us on January 1, 2016. We are currently evaluating the potential impact of these changes on the consolidated financial statements.

        In April 2015, the FASB issued changes to the presentation of debt issuance costs. Currently, such costs are required to be presented as a noncurrent asset in an entity's balance sheet and amortized into interest expense over the term of the related debt instrument. The changes require that debt issuance costs be presented in an entity's balance sheet as a direct deduction from the carrying value of the related debt liability. The amortization of debt issuance costs remains unchanged. These changes

10


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

1. Nature of business (Continued)

become effective for us on January 1, 2016. Management has determined that the adoption of these changes will result in a decrease of approximately $56.0 million based on the outstanding amount at June 30, 2015 to both Deferred financing costs located in noncurrent assets and Long-term debt on the accompanying consolidated balance sheets.

2. Changes in accumulated other comprehensive loss by component

        The changes in accumulated other comprehensive loss by component were as follows:

 
  Three months ended
June 30,
  Six months ended
June 30,
 
 
  2015   2014   2015   2014  

Foreign currency translation

                         

Balance at beginning of period

  $ (101.4 ) $ (40.9 ) $ (66.3 ) $ (22.2 )

Other comprehensive income (loss):

                         

Foreign currency translation adjustments(1)

    4.5     17.3     (30.6 )   (1.4 )

Balance at end of period

  $ (96.9 ) $ (23.6 ) $ (96.9 ) $ (23.6 )

Pension

                         

Balance at beginning of period

  $ (2.1 ) $ (0.4 ) $ (2.1 ) $ (0.4 )

Other comprehensive loss:

                         

Amortization of net actuarial gain

                 

Balance at end of period

  $ (2.1 ) $ (0.4 ) $ (2.1 ) $ (0.4 )

Cash flow hedges

                         

Balance at beginning of period

  $ (0.2 ) $ 0.1   $ 0.1   $ 0.2  

Other comprehensive (loss) income:

                         

Net change from periodic revaluations

    0.2     (0.5 )   (0.3 )   (1.1 )

Tax benefit (expense)

    (0.1 )   0.2     0.1     0.4  

Total Other comprehensive (loss) income before reclassifications, net of tax

    0.1     (0.3 )   (0.2 )   (0.7 )

Net amount reclassified to earnings (loss):

                         

Interest rate swaps(2)

    0.3     0.2     0.6     0.7  

Tax benefit (expense)

    (0.1 )   (0.1 )   (0.4 )   (0.3 )

Total amount reclassified from Accumulated other comprehensive loss, net of tax

    0.2     0.1     0.2     0.4  

Total Other comprehensive (loss) income

    0.3     (0.2 )       (0.3 )

Balance at end of period

  $ 0.1   $ (0.1 ) $ 0.1   $ (0.1 )

(1)
In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings (loss).

(2)
This amount was included in Interest expense, net on the accompanying consolidated statements of operations.

11


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

3. Discontinued operations

    Wind Projects

        On March 31, 2015, Atlantic Power Transmission, Inc. ("APT"), our wholly-owned, direct subsidiary, entered into a definitive agreement (the "Purchase Agreement") with TerraForm AP Acquisition Holdings, LLC ("TerraForm"), an affiliate of SunEdison, Inc. (an affiliate of TerraForm Power, Inc.), to sell our Wind Projects. On June 26, 2015, the sale was completed for aggregate cash proceeds of approximately $335 million after transaction fees, exclusive of transaction-related taxes. We recorded a $47.3 million gain on sale, which is included as a component of income from discontinued operations in the consolidated statements of operations for the three and six months ended June 30, 2015.

        Terraform acquired from APT, 100% of APT's direct membership interests in a holding company formed to facilitate the sale, thereby acquiring our indirect interests in our portfolio of Wind Projects consisting of five operating wind projects in Idaho and Oklahoma and representing 521 MW net ownership: Goshen (12.5% economic interest), Idaho Wind (27.6% economic interest), Meadow Creek (100% economic interest); Rockland Wind Farm (50% economic interest, but consolidated on a 100% basis); and Canadian Hills (99% economic interest). As a result of the sale, we deconsolidated approximately $249 million of project debt (or approximately $274 million as adjusted for our proportional ownership of Rockland, Goshen North and Idaho Wind) and approximately $224 million of non-controlling interest related to tax equity interests at Canadian Hills and the minority ownership interests at Rockland and Canadian Hills.

        On January 1, 2015, we adopted the FASB's issued changes to reporting discontinued operations and determined that the sale of the Wind Projects meets the threshold to be reported as discontinued operations in our consolidated financial statements. Our determination was based on the impact the sale will have on our operations and financial results and because the Wind Projects made up the entirety of our Wind reportable Segment. The Wind Projects were designated as assets held for sale and discontinued operations on March 31, 2015, the date we established a firm commitment to a plan to sell the wind assets. We stopped depreciating the property, plant and equipment of the Wind Projects on the designation date.

    Greeley

        In March 2014, we closed a transaction with Initium Power Partners, LLC. ("Initium"), whereby Initium agreed to purchase all of the issued and outstanding membership interests in Greeley for approximately $1.0 million. We recorded a $2.1 million non-cash gain on the sale resulting from the write-off of asset retirement obligations in the consolidated statement of operations as of March 31, 2014. Greeley is accounted for as a component of discontinued operations in the consolidated statements of operations for the three and six months ended June 30, 2014.

12


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

3. Discontinued operations (Continued)

        The following table summarizes the revenue and income (loss) from operations of the Wind Projects and Greeley for the three and six months ended June 30, 2015 and 2014:

 
  Three months
ended
June 30,
  Six months
ended
June 30,
 
 
  2015   2014   2015   2014  

Revenue

  $ 18.1   $ 20.1   $ 34.8   $ 40.1  

Project expenses:

                         

Operations and maintenance

    5.2     5.4     10.8     10.6  

Depreciation and amortization

    0.1     10.1     10.3     20.1  

    5.3     15.5     21.1     30.7  

Project other income (expense):

   
 
   
 
   
 
   
 
 

Change in fair value of derivatives

    6.7     (2.4 )   (0.7 )   (9.7 )

Equity in earnings of unconsolidated affiliates

    0.7     (0.4 )   (0.2 )   (0.2 )

Interest expense, net

    (3.3 )   (3.6 )   (6.7 )   (7.1 )

Gain on sale of discontinued operations

    47.3         47.3     2.1  

    51.4     (6.4 )   39.7     (14.9 )

Income (loss) from operations of discontinued businesses

    64.2     (1.8 )   53.4     (5.5 )

Income tax expense

    30.6     3.9     32.3     8.5  

Income (loss) from operations of discontinued businesses, net of tax

    33.6     (5.7 )   21.1     (14.0 )

Net loss attributable to noncontrolling interests of discontinued businesses

    (3.4 )   (0.3 )   (11.0 )   (6.7 )

Income (loss) from operations of discontinued businesses, net of noncontrolling interests

  $ 37.0   $ (1.5 ) $ 32.1   $ 1.2  

        Basic and diluted earnings (loss) per share related to income (loss) from discontinued operations for the Wind Projects and Greeley was $0.30 and $(0.04) for the three months ended June 30, 2015 and 2014, respectively and $0.26 and $(0.06) for the six months ended June 30, 2015 and 2014, respectively.

        The following table summarizes the operating and investing cash flows of the Wind Projects for the six months ended June 30, 2015 and 2014:

 
  Six months
ended
June 30,
 
 
  2015   2014  

Cash provided by operating activities

  $ 21.9   $ 26.2  

Cash (used in) provided by investing activities

    (12.8 )   6.5  

13


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

3. Discontinued operations (Continued)

        The following table summarizes the December 31, 2014 financial position of the Wind Projects that were classified as assets held for sale:

 
  December 31,
2014
 

Current assets:

       

Cash and cash equivalents

  $ 3.9  

Accounts receivable

    11.2  

Other current assets

    2.4  

    17.5  

Non-current assets:

   
 
 

Property, Plant & Equipment

    710.5  

Equity investments in unconsolidated affiliates

    38.7  

Other intangible assets, net

    4.3  

Restricted cash

    19.1  

Other assets

    2.0  

Assets held for sale

    792.1  

Current liabilities:

   
 
 

Accounts payable and other accrued liabilities

  $ 5.9  

Current portion of long-term debt

    6.4  

Current portion of derivative instruments liability

    3.1  

    15.4  

Long term liabilities

   
 
 

Long-term debt

    242.4  

Derivative instruments liability

    10.0  

Other long-term liabilities

    4.0  

Liabilities held for sale

    271.8  

Noncontrolling interests held for sale

   
239.0
 

14


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

4. Equity method investments in unconsolidated affiliates

        The following summarizes the operating results for the three and six months ended June 30, 2015 and 2014, respectively, for earnings in our equity method investments:

 
  Three months
ended
June 30,
  Six months
ended
June 30,
 
Operating results
  2015   2014   2015   2014  

Revenue

                         

Chambers

  $ 10.9   $ 12.6   $ 26.3   $ 30.6  

Orlando

    14.1     10.8     26.9   $ 24.1  

Other(1)

    8.0     19.1     17.6     41.6  

    33.0     42.5     70.8     96.3  

Project expenses

   
 
   
 
   
 
   
 
 

Chambers

    9.6     10.8     20.9     25.1  

Orlando

    6.7     7.5     13.3     16.2  

Other(1)

    7.6     18.8     16.4     40.5  

    23.9     37.1     50.6     81.8  

Project other expense

   
 
   
 
   
 
   
 
 

Chambers

    (0.5 )   (1.5 )   (0.9 )   (2.1 )

Orlando

                 

Other(1)

        (0.2 )       (0.3 )

    (0.5 )   (1.7 )   (0.9 )   (2.4 )

Project income

   
 
   
 
   
 
   
 
 

Chambers

  $ 0.8   $ 0.3   $ 4.5   $ 3.4  

Orlando

    7.4     3.3     13.6     7.9  

Other(1)

    0.4     0.1     1.2     0.8  

    8.6     3.7     19.3     12.1  

(1)
Includes equity method investments that individually do not exceed 10% of consolidated total assets or income (loss) before income taxes.

15


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

5. Long-term debt

        Long-term debt consists of the following:

 
  June 30,
2015
  December 31,
2014
  Interest Rate

Recourse Debt:

               

Senior secured term loan facility, due 2021

  $ 494.6   $ 541.5   LIBOR(1) plus 3.8%

Senior unsecured notes, due 2018(2)

    310.9     319.9   9.0%

Senior unsecured notes, due June 2036 (Cdn$210.0)

    168.1     181.0   6.0%

Non-Recourse Debt:(3)

               

Epsilon Power Partners term facility, due 2019

    22.5     25.5   LIBOR plus 3.1%

Cadillac term loan, due 2025

    30.8     33.4   6.2%

Piedmont term loan, due 2018

    63.4     64.0   5.2%

Other long-term debt

    0.5     0.6   5.5% – 6.7%

Less: current maturities

    (328.4 )   (20.0 )  

Total long-term debt

  $ 762.4   $ 1,145.9    

        Current maturities consist of the following:

 
  June 30,
2015
  December 31,
2014
  Interest Rate

Current Maturities:

               

Senior unsecured notes, due 2018(2)

  $ 310.9         9.0%

Senior secured term loan facility, due 2021

    4.9     5.4   LIBOR(1) plus 3.8%

Epsilon Power Partners term facility, due 2019

    6.0     6.1   LIBOR plus 3.1%

Cadillac term loan, due 2025

    2.5     3.9   6.2%

Piedmont term loan, due 2018

    3.9     4.5   5.2%

Other short-term debt

    0.2     0.1   5.5 – 6.7%

Total current maturities

  $ 328.4   $ 20.0    

(1)
LIBOR cannot be less than 1.00%. On May 5, 2014, we entered into interest rate swap agreements to mitigate the exposure to changes in LIBOR for $167.3 million amount of the $494.6 million outstanding aggregate borrowings under our senior secured term loan facility. See Note 8, Accounting for derivative instruments and hedging activities for further details.

(2)
On July 26, 2015, we redeemed all of our outstanding $310.9 million aggregate principal amount of 9.0% Senior Unsecured Notes due November 2018 (the "Notes") with the cash proceeds received from the sale of the Wind Projects. The Notes were redeemed at a price equal to 104.50 percent of the principal amount of the 9.0% notes, plus accrued and unpaid interest to the redemption date. We paid $330.4 million in cash to fund the full redemption of the Notes. We will record approximately $28.5 million of interest in the third quarter of 2015 related to the redemption premium, accrued interest and the write-off of deferred financing costs.

(3)
The table does not include non-recourse debt at the Wind Projects which have been sold and are classified as discontinued operations at December 31, 2014.

16


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

5. Long-term debt (Continued)

    Non-Recourse Debt

        Project-level debt of our consolidated projects is secured by the respective project and its contracts with no other recourse to us. Project-level debt generally amortizes during the term of the respective revenue generating contracts of the projects. The loans have certain financial covenants that must be met in order to distribute available cash to Atlantic Power. At June 30, 2015, all of our projects with the exception of Piedmont were in compliance with the covenants contained in project-level debt. We do not expect our Piedmont project to meet its debt service coverage ratio covenants limiting the project's ability to make distributions to us before 2017 at the earliest, due to continued operational issues that have resulted in higher forecasted maintenance and fuel expenses than initially expected.

6. Convertible debentures

        The following table provides details related to outstanding convertible debentures:

 
  6.25% Debentures
due March 2017
  5.6% Debentures
due June 2017
  5.75% Debentures
due June 2019
  6.00% Debentures
due December 2019
  Total  

Balance at December 31, 2014

  $ 58.0   $ 68.6   $ 128.4   $ 85.6   $ 340.6  

Repayment of convertible debentures

        (0.3 )   (3.4 )   (2.0 )   (5.7 )

Foreign exchange gain

    (4.9 )   (5.8 )       (7.2 )   (17.9 )

Gain on repurchase of convertible debentures

            (0.8 )   (0.5 )   (1.3 )

Balance at March 31, 2015

  $ 53.1   $ 62.5   $ 124.2   $ 75.9   $ 315.7  

Repayment of convertible debentures

        (1.8 )   (6.0 )   (4.5 )   (12.3 )

Foreign exchange gain

    0.8     0.9         1.2     2.9  

Gain on repurchase of convertible debentures

        (0.1 )   (1.0 )   (0.6 )   (1.7 )

Balance at June 30, 2015

  $ 53.9   $ 61.5   $ 117.2   $ 72.0   $ 304.6  

        During the fourth quarter of 2014, we announced a Normal Course Issuer Bid ("NCIB") for our convertible debentures. Under the NCIB, we entered into a pre-defined automatic securities purchase plan with our broker in order to facilitate purchases of our convertible debentures. The NCIB commenced on November 11, 2014 and will expire on November 10, 2015 or such earlier date as we complete our purchases pursuant to the NCIB. The actual amount of convertible debentures that may be purchased under the NCIB cannot exceed approximately $31.0 million and is further limited based on the outstanding principal of the individual outstanding tranches. As of December 31, 2014, we had repurchased and cancelled $3.1 million of convertible debentures and recorded a gain of $0.7 million in the consolidated statement of operations related to these transactions. Through June 30, 2015, we repurchased and cancelled $21.0 million aggregate principal amount of convertible debentures at a cost

17


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

6. Convertible debentures (Continued)

of $18.0 million and recorded a gain of $3.0 million in the consolidated statement of operations for the six months ended June 30, 2015.

7. Fair value of financial instruments

        The following represents the recurring measurements of fair value hierarchy of our financial assets and liabilities that were recognized at fair value as of June 30, 2015 and December 31, 2014. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement.

 
  June 30, 2015  
 
  Level 1   Level 2   Level 3   Total  

Assets:

                         

Cash and cash equivalents

  $ 393.8   $   $   $ 393.8  

Restricted cash

    17.6             17.6  

Derivative instruments asset

        0.4         0.4  

Total

  $ 411.4   $ 0.4   $   $ 411.8  

Liabilities:

                         

Derivative instruments liability

  $   $ 73.1   $   $ 73.1  

Total

  $   $ 73.1   $   $ 73.1  

 

 
  December 31, 2014  
 
  Level 1   Level 2   Level 3   Total  

Assets:

                         

Cash and cash equivalents

  $ 106.0   $   $   $ 106.0  

Restricted cash

    22.5             22.5  

Derivative instruments asset

        1.1         1.1  

Total

  $ 128.5   $ 1.1   $   $ 129.6  

Liabilities:

                         

Derivative instruments liability

  $   $ 83.6   $   $ 83.6  

Total

  $   $ 83.6   $   $ 83.6  

        The fair values of our derivative instruments are based upon trades in liquid markets. Valuation model inputs can generally be verified and valuation techniques do not involve significant judgment. The fair values of such financial instruments are classified within Level 2 of the fair value hierarchy. We use our best estimates to determine the fair value of commodity and derivative contracts we hold. These estimates consider various factors including closing exchange prices, time value, volatility factors and credit exposure. The fair value of each contract is discounted using a risk free interest rate.

18


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

7. Fair value of financial instruments (Continued)

        We also adjust the fair value of financial assets and liabilities to reflect credit risk, which is calculated based on our credit rating and the credit rating of our counterparties. As of June 30, 2015, the credit valuation adjustments resulted in a $3.4 million net increase in fair value, which consists of a $0.2 million pre-tax gain in other comprehensive income and a $3.2 million gain in change in fair value of derivative instruments. As of December 31, 2014, the credit valuation adjustments resulted in an $8.3 million net increase in fair value, which consists of a $0.7 million pre-tax gain in other comprehensive income and a $7.6 million gain in change in fair value of derivative instruments.

        The carrying amounts for cash and cash equivalents and restricted cash approximate fair value due to their short-term nature.

8. Accounting for derivative instruments and hedging activities

        We recognize all derivative instruments on the balance sheet as either assets or liabilities and measure them at fair value in each reporting period. We have one contract designated as a cash flow hedge, and we defer the effective portion of the change in fair value of the derivatives in accumulated other comprehensive income (loss), until the hedged transactions occur and are recognized in earnings (loss). The ineffective portion of a cash flow hedge is immediately recognized in earnings (loss). For our other derivatives that are not designated as cash flow hedges, the changes in the fair value are immediately recognized in earnings (loss). These guidelines apply to our natural gas swaps, interest rate swaps, and foreign exchange contracts.

    Gas purchase agreements

        Gas purchase agreements to purchase gas forward at our North Bay, Kapuskasing and Nipigon projects do not qualify for the normal purchase normal sales ("NPNS") exemption and are accounted for as derivative financial instruments. The gas purchase agreements at North Bay and Kapuskasing satisfy all of the forecasted fuel requirements for these projects through their expiration on December 31, 2016. The gas purchase agreement for Nipigon satisfies the majority of forecasted fuel requirements through December 31, 2022. These derivative financial instruments are recorded in the consolidated balance sheets at fair value and the changes in their fair market value are recorded in the consolidated statements of operations.

        In June 2014, Atlantic Power Limited Partnership (the "Partnership") entered into contracts for the purchase of 2.9 million Gigajoules ("Gj") of future natural gas purchases beginning on November 1, 2014 and expiring on December 31, 2017 for our projects in Ontario. These contracts effectively fix the price of approximately 98% of our expected uncontracted gas requirements for 2015 and 32% and 30% of our expected uncontracted gas requirements for 2016 and 2017, respectively. These contracts are accounted for as derivative financial instruments and are recorded in the consolidated balance sheet at fair value. Changes in the fair market value of these contracts are recorded in the consolidated statement of operations.

19


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

8. Accounting for derivative instruments and hedging activities (Continued)

    Natural gas swaps

        Our strategy to mitigate future exposure to changes in natural gas prices at our projects consists of periodically entering into financial swaps that effectively fix the price of natural gas expected to be purchased at these projects. These natural gas swaps are derivative financial instruments and are recorded in the consolidated balance sheets at fair value and the changes in their fair market value are recorded in the consolidated statements of operations.

        We have entered into various natural gas swaps to effectively fix the price of 6.3 million MMbtu of future natural gas purchases at Orlando, which is approximately 100% of our share of the expected on-peak natural gas purchases at the project through 2016 or approximately 96% and 65% of our share of the expected base load natural gas purchases for 2015 and 2016, respectively. These contracts are accounted for as derivative financial instruments and are recorded in the consolidated balance sheet at fair value at June 30, 2015. Changes in the fair market value of these contracts are recorded in the consolidated statement of operations. On February 20, 2014, we paid $4.0 million to terminate certain of the natural gas contracts for our Orlando project in connection with the termination of our prior revolving credit facility. We recorded fuel expense related to the settlement of these contracts in the consolidated statement of operations for the six months ended June 30, 2014.

    Interest rate swaps

        On May 5, 2014, the Partnership entered into interest rate swap agreements to mitigate exposure to changes in the Adjusted Eurodollar Rate for $199.0 million notional amount ($167.3 million at June 30, 2015) of the $600 million aggregate principal amount of borrowings ($494.6 million of borrowings at June 30, 2015) under the Term Loan Facility. Borrowings under the $600 million Term Loan Facility bear interest at a rate equal to the Adjusted Eurodollar Rate plus an applicable margin of 3.75%. Based on the terms of the Credit Agreement, the Adjusted Eurodollar Rate cannot be less than 1.00% resulting in a minimum of a 4.75% all-in rate on the Term Loan Facility. As a result of entering into the swap agreements, the all-in rate for $199.0 million of the Term Loan Facility cannot be less than 4.91% if the Adjusted Eurodollar Rate is equal to or greater than 1.00%. If the Adjusted Eurodollar Rate is below 1.00%, we will pay interest at a rate equivalent to the minimum 4.75% all-in rate plus any difference between the actual Adjusted Eurodollar Rate and 1.16%. The interest rate swap agreements were effective June 30, 2014 and terminate on December 29, 2017. The interest rate swap agreements are not designated as hedges and changes in their fair market value will be recorded in the consolidated statements of operations.

        The Piedmont project has interest rate swap agreements to economically fix its exposure to changes in interest rates related to its variable-rate debt. The interest rate swap agreement effectively converts the floating rate debt to a fixed interest rate of 1.7% plus an applicable margin ranging from 3.5% to 3.8% through February 29, 2016. From February 2016 until the maturity of the debt in August 2018, the fixed rate of the swap is 4.47% and the applicable margin is 4.0%, resulting in an all-in rate of 8.5%. The swap continues at the fixed rate of 4.47% until November 2030. Prior to conversion of the Piedmont construction loan facility to a term loan, the notional amounts of the interest rate swap agreements matched the estimated outstanding principal balance of Piedmont's construction loan

20


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

8. Accounting for derivative instruments and hedging activities (Continued)

facility. The interest rate swaps were executed on October 21, 2010 and November 2, 2010 and expire on February 29, 2016 and November 30, 2030, respectively. As a result of the Piedmont term loan conversion on February 14, 2014, these swap agreements were amended to reduce the notional amounts to match the outstanding $68.5 million principal of the term loan. The interest rate swap agreements are not designated as hedges, and changes in their fair market value are recorded in the consolidated statements of operations.

        The Cadillac project has an interest rate swap agreement that effectively fixes the interest rate at 6.0% through February 15, 2015, 6.1% from February 16, 2015 to February 15, 2019, 6.3% from February 16, 2019 to February 15, 2023, and 6.4% thereafter. The notional amount of the interest rate swap agreement matches the outstanding principal balance over the remaining life of Cadillac's debt. This swap agreement, which qualifies for and is designated as a cash flow hedge, is effective through June 2025 and the effective portion of the changes in the fair market value is recorded in accumulated other comprehensive loss.

        Epsilon Power Partners, our wholly owned subsidiary, previously had an interest rate swap to economically fix the exposure to changes in interest rates related to the variable-rate non-recourse debt. The interest rate swap agreement effectively converted the floating rate debt to a fixed interest rate of 7.37% and had a maturity date of July 2019. The notional amount of the swap matched the outstanding principal balance over the remaining life of Epsilon Power Partners' debt. On February 20, 2014, we paid $2.6 million to terminate this contract in connection with the termination of our prior revolving credit facility. We recorded interest expense related to its settlement in the consolidated statement of operations for the six months ended June 30, 2014.

    Foreign currency forward contracts

        From time to time, we use foreign currency forward contracts to manage our exposure to changes in foreign exchange rates, as many of our projects generate cash flow in U.S. dollars and Canadian dollars. On February 20, 2014, we paid $0.4 million to terminate all of our remaining foreign currency forward contracts in connection with the termination of our prior revolving credit facility and recorded their settlement in foreign exchange gain in the consolidated statement of operations for the six months ended June 30, 2014.

    Volume of forecasted transactions

        We have entered into derivative instruments in order to economically hedge the following notional volumes of forecasted transactions as summarized below, by type, excluding those derivatives that qualified for the NPNS exemption at June 30, 2015 and December 31, 2014:

 
  Units   June 30,
2015
  December 31,
2014
 

Natural gas swaps

  Natural Gas (MMbtu)     4.5     6.3  

Gas purchase agreements

  Natural Gas (Gj)     29.4     33.9  

Interest rate swaps

  Interest (US$)     38.1     40.6  

21


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

8. Accounting for derivative instruments and hedging activities (Continued)

    Fair value of derivative instruments

        We have elected to disclose derivative instrument assets and liabilities on a trade-by-trade basis and do not offset amounts at the counterparty master agreement level. The following table summarizes the fair value of our derivative assets and liabilities:

 
  June 30, 2015  
 
  Derivative
Assets
  Derivative
Liabilities
 

Derivative instruments designated as cash flow hedges:

             

Interest rate swaps current

  $   $ 1.2  

Interest rate swaps long-term

        2.8  

Total derivative instruments designated as cash flow hedges

        4.0  

Derivative instruments not designated as cash flow hedges:

             

Interest rate swaps current

        2.1  

Interest rate swaps long-term

    0.4     7.2  

Natural gas swaps current

        4.1  

Natural gas swaps long-term

        1.5  

Gas purchase agreements current

        28.6  

Gas purchase agreements long-term

        25.6  

Total derivative instruments not designated as cash flow hedges

    0.4     69.1  

Total derivative instruments

  $ 0.4   $ 73.1  

 

 
  December 31, 2014  
 
  Derivative
Assets
  Derivative
Liabilities
 

Derivative instruments designated as cash flow hedges:

             

Interest rate swaps current

  $   $ 1.1  

Interest rate swaps long-term

        2.9  

Total derivative instruments designated as cash flow hedges

        4.0  

Derivative instruments not designated as cash flow hedges:

             

Interest rate swaps current

        2.0  

Interest rate swaps long-term

    1.1     6.9  

Natural gas swaps current

        4.4  

Natural gas swaps long-term

        2.2  

Gas purchase agreements current

        28.6  

Gas purchase agreements long-term

        35.5  

Total derivative instruments not designated as cash flow hedges

    1.1     79.6  

Total derivative instruments

  $ 1.1   $ 83.6  

22


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

8. Accounting for derivative instruments and hedging activities (Continued)

    Accumulated other comprehensive income

        The following table summarizes the changes in the accumulated other comprehensive income (loss) ("OCI") balance attributable to derivative financial instruments designated as a hedge, net of tax:

For the three months ended June 30, 2015
  Interest Rate
Swaps
 

Accumulated OCI balance at March 31, 2015

  $ (0.2 )

Change in fair value of cash flow hedges

    0.2  

Realized from OCI during the period

    0.1  

Accumulated OCI balance at June 30, 2015

  $ 0.1  

 

For the three months ended June 30, 2014
  Interest Rate
Swaps
 

Accumulated OCI balance at March 31, 2014

  $ 0.1  

Change in fair value of cash flow hedges

    (0.3 )

Realized from OCI during the period

    0.1  

Accumulated OCI balance at June 30, 2014

  $ (0.1 )

 

For the six months ended June 30, 2015
  Interest Rate
Swaps
 

Accumulated OCI balance at January 1, 2014

  $ 0.1  

Change in fair value of cash flow hedges

    (0.4 )

Realized from OCI during the period

    0.4  

Accumulated OCI balance at June 30, 2015

  $ 0.1  

 

For the six months ended June 30, 2014
  Interest Rate
Swaps
 

Accumulated OCI balance at January 1, 2014

  $ 0.2  

Change in fair value of cash flow hedges

    (0.7 )

Realized from OCI during the period

    0.4  

Accumulated OCI balance at June 30, 2014

  $ (0.1 )

23


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

8. Accounting for derivative instruments and hedging activities (Continued)

    Impact of derivative instruments on the consolidated statements of operations

        The following table summarizes realized loss (gain) for derivative instruments not designated as cash flow hedges:

 
   
  Three months
ended
June 30,
  Six months
ended
June 30,
 
 
  Classification of (gain) loss
recognized in income
 
 
  2015   2014   2015   2014  

Natural gas swaps

  Fuel   $ 1.6   $ (0.2 ) $ 3.0   $ 3.7  

Gas purchase agreements

  Fuel     12.3     13.4     24.2     29.3  

Interest rate swaps

  Interest, net     1.0     0.6     1.9     4.9  

Foreign currency forwards

  Foreign exchange (gain) loss                 (0.1 )

        The following table summarizes the unrealized loss (gain) resulting from changes in the fair value of derivative financial instruments that are not designated as cash flow hedges:

 
   
  Three months
ended
June 30,
  Six months
ended
June 30,
 
 
  Classification of (gain) loss
recognized in income
 
 
  2015   2014   2015   2014  

Natural gas swaps

  Change in fair value of derivatives   $ 1.4   $ (1.0 ) $ 0.8   $ 3.5  

Gas purchase agreements

  Change in fair value of derivatives     3.9     2.6     5.6     18.6  

Interest rate swaps

  Change in fair value of derivatives     1.5     (2.0 )   (1.2 )   (0.5 )

Total change in fair value of derivative instruments

      $ 6.8   $ (0.4 ) $ 5.2   $ 21.6  

Foreign currency forwards

  Foreign exchange (gain) loss   $   $ (1.4 ) $   $ (0.3 )

9. Income taxes

 
  Three months
ended
June 30,
  Six months
ended
June 30,
 
 
  2015   2014   2015   2014  

Current income tax expense

  $ 6.2   $ 1.3   $ 7.3   $ 2.6  

Deferred tax benefit

    (3.3 )   (5.8 )   (9.0 )   (24.0 )

Total income tax (benefit), net

  $ 2.9   $ (4.5 ) $ (1.7 ) $ (21.4 )

        Income tax expense for the three months ended June 30, 2015 was $2.9 million. Expected income tax benefit for the same period, based on the Canadian enacted statutory rate of 26% was $4.4 million. The primary items impacting the tax rate for the three months ended June 30, 2015 were $9.0 million relating to a change in the valuation allowance, $3.4 million of dividend withholding and other state taxes, and $2.5 million of other permanent differences. These items were partially offset by $3.6 million relating to tax credits, $2.4 million relating to foreign exchange and $1.6 million relating to operating in higher tax rate jurisdictions.

24


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

9. Income taxes (Continued)

        Income tax benefit for the three months ended June 30, 2014 was $9.1 million. Expected income tax benefit for the same period, based on the Canadian enacted statutory rate of 26%, was $12.9 million. The primary items impacting the tax rate for the three months ended June 30, 2014 were $14.2 million relating to a change in the valuation allowance and $2.4 million relating to foreign exchange. These items were partially offset by $4.1 million relating to operating in higher tax rate jurisdictions, $2.4 million of minority interest adjustments, and $6.3 million relating to other permanent differences.

        Income tax benefit for the six months ended June 30, 2015 was $1.7 million. Expected income tax expense for the same period, based on the Canadian enacted statutory rate of 26%, was $0.8 million. The primary items impacting the tax rate for the six months ended June 30, 2015 were $4.1 million relating to foreign exchange, $4.0 million relating to operating in higher tax rate jurisdictions, $3.6 million related to tax credits, and $0.6 million of other permanent differences. These items were partially offset by $6.2 million relating to a change in the valuation allowance, and $3.6 million relating to dividend withholding and other taxes.

        Income tax benefit for the six months ended June 30, 2014 was $21.4 million. Expected income tax benefit for the same period, based on the Canadian enacted statutory rate of 26%, was $21.9 million. The primary items impacting the tax rate for the six months ended June 30, 2014 were $29.3 million relating to a change in the valuation allowance. These items were partially offset by $11.1 million of capital losses recognized on tax restructuring, $9.7 million of operating in higher tax rate jurisdictions, $1.2 million relating to foreign exchange and $6.8 million of other permanent differences.

        As of June 30, 2015, we have recorded a valuation allowance of $174.7 million. The amount is comprised primarily of provisions against Canadian and U.S. net operating loss carryforwards. In assessing the recoverability of our deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon projected future taxable income in the United States and in Canada and available tax planning strategies.

10. Equity compensation plans

    Long-term incentive plan ("LTIP")

        The following table summarizes the changes in outstanding LTIP notional units during the six months ended June 30, 2015:

 
  Units   Weighted-Average
Price per Unit
 

Outstanding at December 31, 2014

    1,443,254   $ 3.28  

Granted

    1,007,726     2.75  

Reinvested

    28,658     2.85  

Forfeited

    (63,499 )   4.19  

Vested

    (597,406 )   3.61  

Outstanding at June 30, 2015

    1,818,733   $ 2.85  

25


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

10. Equity compensation plans (Continued)

        Certain awards have a market condition based on our total shareholder return during the performance period as compared to a group of peer companies and, in some cases, Project Adjusted EBITDA per common share compared to budget. Compensation expense for notional units granted is recorded net of estimated forfeitures. See Note 16 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2014 for further details. Cash payments made for vested notional units for the six months ended June 30, 2015 and 2014 was $0.6 million and $0.2 million, respectively. Compensation expense for LTIP was $0.5 million and $1.0 million for the three and six months ended June 30, 2015, respectively, and $1.0 million and $0.9 million for the three and six months ended June 30, 2014, respectively.

    Transition Equity Participation Agreement

        We also have 523,256 transition notional shares outstanding at June 30, 2015 under the Transition Equity Participation Agreement. Fifty percent of the transition notional shares granted with respect to fiscal year 2015 will vest upon the four-year anniversary of the date of grant and the remaining portion will vest on or any time after the two-year anniversary of the grant if the weighted average Canadian dollar closing price of our common shares on the TSX for at least three consecutive calendar months has exceeded the market price per common share determined as of January 22, 2015 ($2.58) by at least 50%.

11. Basic and diluted earnings (loss) per share

        Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average common shares outstanding during their respective period. Diluted earnings (loss) per share is computed including dilutive potential shares as if they were outstanding shares during the year. Dilutive potential shares include the weighted average number of shares, as of the date such notional units were granted, that would be issued if the unvested notional units outstanding under the LTIP were vested and redeemed for shares under the terms of the LTIP.

        Because we reported a loss for the three and six months ended June 30, 2014, diluted earnings per share are equal to basic earnings per share as the inclusion of potentially dilutive shares in the computation is anti-dilutive.

26


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

11. Basic and diluted earnings (loss) per share (Continued)

        The following table sets forth the diluted net income and potentially dilutive shares utilized in the per share calculation for the three and six months ended June 30, 2015 and 2014:

 
  Three months
ended June 30,
  Six months
ended June 30,
 
 
  2015   2014   2015   2014  

Numerator:

                         

Loss from continuing operations attributable to Atlantic Power Corporation

  $ (22.3 ) $ (53.8 ) $ (0.1 ) $ (70.7 )

Income (loss) from discontinued operations, net of tax

    37.0     (5.4 )   32.1     (7.3 )

Net income (loss) attributable to Atlantic Power Corporation

  $ 14.7   $ (59.2 ) $ 32.2   $ (73.0 )

Denominator:

   
 
   
 
   
 
   
 
 

Weighted average basic shares outstanding

    121.9     120.6     121.7     120.5  

Dilutive potential shares:

                         

Convertible debentures

    22.6     27.7     23.0     27.7  

LTIP notional units

    0.2     0.4     0.2     0.2  

Potentially dilutive shares

    144.7     148.7     144.9     148.4  

Diluted loss per share from continuing operations attributable to Atlantic Power Corporation

  $ (0.18 ) $ (0.45 ) $ (0.0 ) $ (0.59 )

Diluted income (loss) per share from discontinued operations

    0.30     (0.04 )   0.26     (0.06 )

Diluted income (loss) per share attributable to Atlantic Power Corporation

  $ 0.12   $ (0.49 ) $ 0.26   $ (0.65 )

        Potentially dilutive shares from convertible debentures of 22.6 million and 23.0 million have been excluded from fully diluted shares in the three and six months ended June 30, 2015, respectively, because their impact would be anti-dilutive. Potentially dilutive shares from convertible debentures of 27.7 million and 27.7 million have been excluded from fully diluted shares in the three and six months ended June 30, 2014, respectively, because their impact would be anti-dilutive. Potentially dilutive shares from LTIP notional units have been excluded from fully diluted shares in the three and six months ended June 30, 2014 because their impact would be anti-dilutive.

27


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

12. Equity

        The following table provides a reconciliation of the beginning and ending equity attributable to shareholders of Atlantic Power Corporation, preferred shares issued by a subsidiary company, noncontrolling interests and total equity for the six months ended June 30, 2015 and 2014:

 
  Six months ended June 30, 2015  
 
  Total Atlantic
Power Corporation
Shareholders'
Equity
  Preferred shares
issued by a
subsidiary
company
  Noncontrolling
Interests
  Total Equity  

Balance at January 1

  $ 356.2   $ 221.3   $ 239.0   $ 816.5  

Net income (loss)

    32.2     4.6     (11.0 )   25.8  

Foreign currency translation adjustment, net of tax

    (30.6 )           (30.6 )

Stock-based compensation

    1.0             1.0  

Dividends paid to noncontrolling interests

            (3.7 )   (3.7 )

Dividends declared on common shares

    (5.8 )           (5.8 )

Dividends declared on preferred shares of a subsidiary company

        (4.6 )       (4.6 )

Derecognition of noncontrolling interests upon sale of subsidiaries

                (224.3 )   (224.3 )

Balance at June 30

  $ 353.0   $ 221.3   $   $ 574.3  

 

 
  Six months ended June 30, 2014  
 
  Total Atlantic
Power Corporation
Shareholders'
Equity
  Preferred shares
issued by a
subsidiary
company
  Noncontrolling
Interests
  Total Equity  

Balance at January 1

  $ 608.3   $ 221.3   $ 266.4   $ 1,096.0  

Net (loss) income

    (78.0 )   5.9     (6.7 )   (78.8 )

Realized and unrealized gain on hedging activities, net of tax

    (0.2 )           (0.2 )

Foreign currency translation adjustment, net of tax

    (1.5 )           (1.5 )

Stock-based compensation

    0.6             0.6  

Dividends paid to noncontrolling interest

            (5.2 )   (5.2 )

Dividends declared on common shares

    (21.1 )           (21.1 )

Dividends declared on preferred shares of a subsidiary company

        (5.9 )       (5.9 )

Balance at June 30

  $ 508.1   $ 221.3   $ 254.5   $ 983.9  

28


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

13. Segment and geographic information

        We have four reportable segments: East U.S., West U.S., Canada and Un-allocated Corporate. We revised our reportable business segments in the second quarter of 2015 as the result of recent significant asset sales and in order to align with changes in management's structure, resource allocation and performance assessment in making decisions regarding our operations. The Wind Projects, which made up the entirety of the former Wind segment, were sold in June 2015 and are designated as discontinued operations for the three and six months ended June 30, 2014 and 2015. Our financial results for the three and six months ended June 30, 2014 have been revised to reflect these changes in operating segments. We analyze the performance of our operating segments based on Project Adjusted EBITDA which is defined as project income (loss) plus interest, taxes, depreciation and amortization (including non-cash impairment charges) and changes in fair value of derivative instruments. Project Adjusted EBITDA is not a measure recognized under GAAP and does not have a standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other companies. We use Project Adjusted EBITDA to provide comparative information about project performance without considering how projects are capitalized or whether they contain derivative contracts that are required to be recorded at fair value. Our equity investments in unconsolidated affiliates are presented as proportionately consolidated based on our ownership percentage in the reconciliation of Project Adjusted EBITDA to project income (loss).

        A reconciliation of Project Adjusted EBITDA to project income (loss) for the three and six months ended June 30, 2014 and 2015 reflecting our revised reportable business segments is included in the table below:

 
  East U.S.   West U.S.   Canada   Un-allocated
Corporate
  Consolidated  

Three months ended June 30, 2015

                               

Project revenues

  $ 38.9   $ 26.3   $ 37.7   $ 0.2   $ 103.1  

Segment assets

    858.6     375.8     612.8     452.7     2,299.9  

Project Adjusted EBITDA

  $ 27.0   $ 5.7   $ 11.6   $ (0.4 ) $ 43.9  

Change in fair value of derivative instruments

    (3.0 )       (3.9 )       (6.9 )

Depreciation and amortization          

    10.8     10.0     12.7     (0.2 )   33.3  

Interest, net

    2.5                 2.5  

Other project expense (income)          

                (2.2 )   (2.2 )

Project income (loss)

    16.7     (4.3 )   2.8     2.0     17.2  

Administration

                6.6     6.6  

Interest, net

                24.6     24.6  

Foreign exchange loss

                4.8     4.8  

Other income, net

                (1.7 )   (1.7 )

Income (loss) from continuing operations before income taxes

    16.7     (4.3 )   2.8     (32.3 )   (17.1 )

Income tax expense

                2.9     2.9  

Net income (loss) from continuing operations

    16.7     (4.3 )   2.8     (35.2 )   (20.0 )

29


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

13. Segment and geographic information (Continued)


 
  East U.S.   West U.S.   Canada   Un-allocated
Corporate
  Consolidated  

Three months ended June 30, 2014

                               

Project revenues

  $ 44.9   $ 33.1   $ 44.9   $ 0.2   $ 123.1  

Segment assets

    921.4     477.6     770.8     222.7     2,392.5  

Project Adjusted EBITDA

  $ 30.8   $ 15.9   $ 14.6   $ (3.6 ) $ 57.7  

Change in fair value of derivative instruments

    1.8         (2.6 )   1.1     0.3  

Depreciation and amortization          

    15.2     10.1     15.3     0.2     40.8  

Interest, net

    3.7             0.1     3.8  

Other project expense

            14.8         14.8  

Project income (loss)

    10.1     5.8     (12.9 )   (5.0 )   (2.0 )

Administration

                10.2     10.2  

Interest, net

                27.7     27.7  

Foreign exchange loss

                15.3     15.3  

Other income, net

                     

Income (loss) from continuing operations before income taxes

    10.1     5.8     (12.9 )   (58.2 )   (55.2 )

Income tax benefit

                (4.5 )   (4.5 )

Net income (loss) from continuing operations

    10.1     5.8     (12.9 )   (53.7 )   (50.7 )

 

 
  East U.S.   West U.S.   Canada   Un-allocated
Corporate
  Consolidated  

Six months ended June 30, 2015

                               

Project revenues

  $ 76.5   $ 49.3   $ 88.3   $ 0.3   $ 214.4  

Segment assets

    960.7     273.7     612.8     452.7     2,299.9  

Project Adjusted EBITDA

  $ 53.7   $ 15.6   $ 35.4   $ (2.2 ) $ 102.5  

Change in fair value of derivative instruments

    (0.4 )       (5.5 )   0.8     (5.1 )

Depreciation and amortization          

    21.2     19.6     24.9     0.4     66.1  

Interest, net

    4.9                 4.9  

Other income

                (2.2 )   (2.2 )

Project income (loss)

    28.0     (4.0 )   16.0     (1.2 )   38.8  

Administration

                16.0     16.0  

Interest, net

                50.3     50.3  

Foreign exchange gain

                (27.4 )   (27.4 )

Other income, net

                (3.1 )   (3.1 )

Income (loss) from continuing operations before income taxes

    28.0     (4.0 )   16.0     (37.0 )   3.0  

Income tax benefit

                (1.7 )   (1.7 )

Net income (loss) from continuing operations

    28.0     (4.0 )   16.0     (35.3 )   4.7  

30


Table of Contents


ATLANTIC POWER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in millions U.S. dollars, except per-share amounts)

(Unaudited)

13. Segment and geographic information (Continued)


 
  East U.S.   West U.S.   Canada   Un-allocated
Corporate
  Consolidated  

Six months ended June 30, 2014

                               

Project revenues

  $ 90.6   $ 60.3   $ 97.2   $ 0.3   $ 248.4  

Segment assets

    921.4     477.6     770.8     222.7     2,392.5  

Project Adjusted EBITDA

  $ 55.2   $ 23.7   $ 39.3   $ (3.6 ) $ 114.6  

Change in fair value of derivative instruments

    (4.0 )       (18.6 )   1.2     (21.4 )

Depreciation and amortization          

    30.6     20.4     30.4     0.5     81.9  

Interest, net

    15.3     0.1             15.4  

Other project expense

            14.8         14.8  

Project income (loss)

    13.3     3.2     12.7     (5.3 )   23.9  

Administration

                17.5     17.5  

Interest, net

                94.1     94.1  

Foreign exchange gain

                (1.5 )   (1.5 )

Other income, net

                     

Income (loss) from continuing operations before income taxes

    13.3     3.2     12.7     (115.4 )   (86.2 )

Income tax benefit

                (21.4 )   (21.4 )

Net income (loss) from continuing operations

    13.3     3.2     12.7     (94.0 )   (64.8 )

        The table below provides information, by country, about our consolidated operations for each of the three and six months ended June 30, 2015 and 2014 and Property, Plant & Equipment as of June 30, 2015 and December 31, 2014, respectively. Revenue is recorded in the country in which it is earned and assets are recorded in the country in which they are located.

 
   
   
   
   
  Property, Plant
and Equipment,
net of accumulated
depreciation
 
 
  Project Revenue
Three months
ended June 30,
  Project Revenue
Six months ended
June 30,
 
 
  June 30,
2015
  December 31,
2014
 
 
  2015   2014   2015   2014  

United States

  $ 65.4   $ 78.2   $ 126.1   $ 151.2   $ 541.6   $ 553.5  

Canada

    37.7     44.9     88.3     97.2     367.0     409.4