Alterra Power Announces Results for the Quarter Ended March 31, 2016 and Annual General Meeting

 (under IFRS and all amounts in US dollars unless otherwise stated)

VANCOUVER, May 10, 2016 /CNW/ - Alterra Power Corp. (TSX: AXY) ("Alterra" or the "Company") is pleased to report its financial and operating results for the quarter ended March 31, 2016. For further information on these results please see Alterra's Condensed Consolidated Interim Financial Statements and Management's Discussion and Analysis.

At March 31, 2016, Alterra consolidated 100% of the results of operations from its Icelandic subsidiary HS Orka, while Alterra's interests in the Toba Montrose, Dokie 1 and Shannon renewable power projects were accounted for as equity investments. In certain statements in this news release, Alterra's results are disclosed as Alterra's "net interest", by which the Company means the effective portion of operating results that the Company would have reported if each of HS Orka (66.6%), Toba Montrose (40%), Dokie 1 (25.5%), Shannon (50% sponsor equity interest) and Soda Lake (100% until Soda Lake was sold on January 30, 2015) had been reported in accordance with Alterra's actual share of ownership at March 31, 2016 and for the three months then ended. Management believes that net interest reporting provides the clearest view of Alterra's performance.

Highlights for the quarter and subsequent period include:

• Continued strong generation at Toba Montrose: Consistent with comparative quarter Toba Montrose exceeded its first quarter forecast with generation at 105.4%, although down from the comparative quarter (248% of budget). With exceptional generation in April Toba Montrose has achieved year-to-date record generation through April (174% of budget).
• Announcement of landmark deep drilling project at HS Orka: Subsequent to the period, the last major contract was signed for a 5,000 meter deep drilling program at the Reykjanes plant in Iceland. The project will test for very high energy geothermal resources below the current Reykjanes geothermal field, and any resulting power will be utilized at the Reykjanes power plant.
• Jimmie Creek construction nearing completion: Construction for the 62 MW hydro project continued with completion projected to occur on-time and within budget in the summer of 2016. Progress during the current quarter included completion of the penstock, switchyard and tie-in to the transmission line. The project is expected to generate first power in June 2016.
• USA wind and solar projects: The Company continued to advance its early-stage wind projects and is working towards the acquisition of several new greenfield and existing development assets.
• Distributions: The Company received distributions during the quarter from equity investments of $3.9 million (plus a separate $0.6 million return of capital from Shannon) and HS Orka declared a $2.8 million dividend of which the Company's share is $1.9 million.
• Adjusted EBITDA and revenue: Consolidated and net interest Adjusted EBITDA decreased by 27% to $6.4 million and 33% to $4.3 million, respectively, and consolidated and net interest revenue decreased by 9% to $14.9 million and $13.9 million, respectively. The decrease in EBITDA and revenue is primarily due to the lower quarterly generation.

Financial Results

The following table shows Alterra's net interest in select operating and financial results for the quarter, in addition to key financial information extracted from the consolidated results.

For the three months ended March 31, 2016 ^(a)	HS Orka		Toba Montrose		Dokie 1		Shannon		Development and Head Office		Net  Interest Total		Consolidated Results
	(66.6%)		(40%)		(25.5%)		(50%)^(d)
Generation (MWh)	205,386		10,167		20,139		102,106		—		337,798		308,387
Total revenue	9,943		882		1,824		1,255		—		13,904		14,930
Gross profit	2,567		(558)		993		(854)		—		2,148		3,854
Adjusted EBITDA ^(b)	4,281		(75)		1,314		162		(1,413)		4,269		6,417

For the three months ended March 31, 2015	HS Orka		Toba Montrose		Dokie 1		Soda Lake		Development and Head Office		Net Interest Total		Consolidated Results
	(66.6%)		(40%)		(25.5%)		(100%)^(c)
Generation (MWh)	216,100		23,622		22,520		6,991		—		269,233		331,466
Total revenue	10,624		1,901		2,278		449		—		15,252		16,401
Gross profit	3,246		103		1,368		167		—		4,884		5,041
Adjusted EBITDA ^(b)	4,953		592		1,730		152		(1,090)		6,337		8,822

(a)	Here and elsewhere, all tabular amounts (except generation) are expressed in thousands of US dollars.
(b)	Here and elsewhere, adjusted EBITDA ("Adjusted EBITDA") is defined by the Company as earnings before interest, taxes, foreign exchange, depreciation and amortization, as well as adjustments for changes in the fair value of holding company bonds (Sweden) and derivatives, write-offs of development costs, other income (expense) except business interruption insurance proceeds, amortization of below market contracts, value assigned to options granted, share of results of equity investments, the Company's proportionate interest in Adjusted EBITDA of its equity investments and non-recurring items (insurance deductibles, litigation and arbitration costs).   Adjusted EBITDA has been calculated on a consistent basis with the comparative quarter.  The Company discloses Adjusted EBITDA as it is a measure used by analysts and by management to evaluate the Company's performance.  As Adjusted EBITDA is a non-IFRS measure, it may not be comparable to Adjusted EBITDA calculated by others.  In addition, Adjusted EBITDA is not a substitute for net earnings.  Readers should consider net earnings in evaluating the Company's performance.  Readers should also consider the risks and assumptions in estimates of Adjusted EBITDA discussed under the heading "Cautionary Note Regarding Forward-Looking Statements".  For a reconciliation of consolidated Adjusted EBITDA to Alterra's condensed consolidated interim financial statements refer to the Company's Management's Discussion and Analysis for the three months ended March 31, 2016 available on SEDAR at www.sedar.com.
(c)	The facility was sold on January 30, 2015.
(d)	Here and elsewhere, the 50% net interest in Shannon reflects the Company's 50% share in sponsor equity. Under the partnership agreement between the sponsors and the tax equity investors, 99% of taxable earnings (losses) and tax credits will be allocated from the project to the tax equity investors, as well as a minority allocation of cash that will vary under certain conditions, until the tax equity investors achieve an agreed yield, which is expected to occur within ten years of the commercial operations date.

Consolidated Results

Revenue was $14.9 million for the quarter, down 9% from the comparative quarter primarily due to lower generation and a decrease of 18% in aluminum prices at HS Orka as well as the sale of Soda Lake on January 30, 2015.

The Company recorded a net loss of $2.0 million, an improvement from the comparative quarter ($16.3 million loss), resulting primarily from changes in non-cash items such as the fair value of derivatives and foreign exchange fluctuations.

Consolidated cash and cash equivalents at March 31, 2016 was $9.6 million of which $5.9 million is held in the Company's Icelandic subsidiary ($10.3 million and $6.4 million respectively at December 31, 2015).

The Company's consolidated working capital deficit at March 31, 2016 was $134.3 million compared to a working capital deficit of $123.3 million at December 31, 2015.  The working capital deficit is primarily due to the fair value of the holding company bonds (Sweden) being classified as short-term (the bonds mature in July and December 2016). Excluding HS Orka and the holding company bonds (Sweden), which the Company plans to retire through refinancings in 2016, the Company has positive working capital of $4.2 million.

Net Interest Results

Alterra's net interest revenue decreased by $1.3 million to $13.9 million primarily due to lower quarterly generation. These factors also resulted in a 33% decrease in Adjusted EBITDA to $4.3 million.

The net interest cash position at March 31, 2016 was $13.1 million.

Operating Results

The Company achieved 99.9% of its budgeted generation for the quarter, led by Toba Montrose.

	Q1 2016 Generation (MWh)
	Total				Net Interest
Facility	Budget ^(a)		Actual		Budget ^(a)		Actual		% of Budget
Reykjanes	172,990		177,833		115,211		118,437		102.8	%
Svartsengi	131,040		130,554		87,273		86,949		99.6	%
Toba Montrose	24,110		25,417		9,644		10,167		105.4	%
Dokie 1	90,872		78,975		23,172		20,139		86.9	%
Shannon	205,346		204,211		102,673		102,106		99.4	%
TOTAL	624,358		616,990		337,973		337,798		99.9	%

(a) Includes planned maintenance outages

"We're pleased to report another quarter of on-target fleet generation, as well as the progress on our Jimmie Creek project, which we expect to be completed on-time and on-budget," said John Carson, Alterra's CEO. "Separately we remain focused on developing and acquiring our next near-term growth projects as we continue to build value for our shareholders."

Results of Annual General Meeting

Alterra is also pleased to announce that, at its annual general meeting of shareholders held on May 10, 2016 (the "Meeting"), all nominees listed in the management information circular dated April 1, 2016, were re-elected as directors of the Company. The report of the vote by ballot is as follows:

Name of Nominee	Votes in Favour	Votes Withheld
Ross J. Beaty	182,752,387	228,100
David W. Cornhill	182,543,749	436,738
Donald Shumka	182,456,865	523,622
Donald A. McInnes	182,329,011	651,476
James M.I. Bruce	182,538,725	441,762
John B. Carson	182,364,989	615,498
Kerri L. Fox	182,626,201	354,246

By a majority vote, PricewaterhouseCoopers LLP was also re-appointed as the Company's auditors at the Meeting. A formal report on voting results from the Meeting will be filed on Alterra's public profile at www.sedar.com in due course.

Alterra Power will host a conference call to discuss financial and operating results on Wednesday, May 11, 2016 at 11:30 am ET (8:30 am PT).

North American participants dial 1-888-390-0546 and International participants dial 1-416-764-8688; the conference ID is 57376039

The call will also be broadcast live on the Internet at

http://event.on24.com/r.htm?e=1182050&s=1&k=94CD3F67903FFBFE8D7DB3565BAE936C

 

The call will be available for replay for one week after the call by dialing 1-416-764-8677 and entering replay PIN 376039#

Cautionary Note Regarding Forward-Looking Statements and Information
Certain Certain of the statements and information included in this news release constitute forward-looking statements and information within the meaning of applicable securities laws. All statements, other than statements of historical fact, are forward-looking statements or information. This information may involve known and unknown risks, assumptions and uncertainties, and other factors which may cause the Company's actual results, performance or achievements to be materially different from the future results, performance or achievements implied by such statements or information. Specifically, forward-looking statements within this news release relate to, among other things: success of the deep drilling program at Reykjanes, estimates regarding construction and generation timing at Jimmie Creek, successful development and construction of our pre-operational projects and properties, success, timing and receipt of future payments and financial milestones, our ability to successfully refinance certain bonds, results of operations, and financial position.

These statements and information reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions that, while considered reasonable by the Company, are inherently subject to significant operational, business, economic and regulatory uncertainties and contingencies. These assumptions include, among others, the expected power generation from our operations, the success and timely completion of planned development, expansion and construction programs, and modeling and budgeting based on historical trends, our ability or inability to obtain financing or refinancing to pursue our growth strategy and business plans, current conditions and expected future developments. Forward-looking statements and information also involve known and unknown risks that may cause actual results to differ materially from those expressed by such statements or information, and the Company has made assumptions and estimates based on or related to many of these factors. These risks include volatility of renewable energy resources, inherent risks in operating and constructing power plants and development programs related to the same, contractual risks related to credit facilities, partnership and power purchase agreements, prospective power, currency and commodity price fluctuations, health, safety, social and environmental risks and risks related to reliance on third parties.  Additional risks, assumptions and influential factors are set out in the Company's management discussion analysis and Alterra's most recent annual information form, copies of which are available on SEDAR at www.sedar.com.

Although the Company has attempted to identify important factors that could cause actual results to differ materially, given the inherent uncertainties in such forward-looking statements and information, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Investors are cautioned against undue reliance on any such forward-looking statements or information, which apply only as of their dates. Other than as specifically required by law, Alterra undertakes no obligation to update any forward-looking statements or information to reflect new information.

SOURCE Alterra Power Corp.

Peter Lekich, Corporate Communications, Alterra Power Corp., Phone: [phone], Email: [email protected]