Tag Archives: debt

Alterra Power’s (MGMXF) CEO John Carson on Q1 2016 Results – Earnings Call Transcript

Alterra Power Corp. ( OTCPK:MGMXF ) Q1 2016 Earnings Conference Call May 11, 2016 11:30 AM ET Executives Ross Beaty – Executive Chairman John Carson – CEO Lynda Freeman – CFO Jay Sutton – VP, Hydro Power Paul Rapp – VP, Wind and Geothermal Power Analysts Jonathan Lo – Raymond James Rupert Mayer – National Bank Operator Good morning, ladies and gentlemen and welcome to the Alterra Power First Quarter Results Conference Call. At this time all lines are in a listen-only mode. Following the presentation we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded on Wednesday May 11, 2016. I would like to turn the conference over to your host Ross Beaty. Please go ahead. Ross Beaty Thank you very much operator and good morning ladies and gentlemen. Welcome to Alterra’s Q1 financial and technical operating results conference call. I would first like to draw your attention to the forward-looking statements in our disclosure materials and note that we have cautionary language there regarding forward-looking statements and we seek Safe Harbor for these. So joining me today around the table are our senior management team. We had our annual meeting yesterday. We had a nice crowd, lots of questions and it was really a pleasure to talk about where we are right now. We had a very good year in 2015 and continue that in 2016 and you’ll see in the financial results here. But there is a lot behind those results a lot of hard work and a lot of great team work here. I’m going to turn the call over right now to John Carson our CEO, who will describe these results in more detail. John? John Carson Thanks, Ross. We had a good quarter this year. Our generation was on target again and again very strong generation at our Toba Montrose asset and look forward to telling you all about these items I now going to start by turning it over to our CFO, who will summarize the financial results. Lynda? Lynda Freeman Thanks John, and good morning, everyone. With only a months ago that we had our year-end results call where we updated the group on the latest development of Alterra. So I’ll keep this first quarter update relatively brief. This is the first quarter that we’ve had all six operating assets in use for the whole period. With Shannon coming online on December 10th, we are now reporting the generation and operating results of this facility for a full quarter. Other than the introduction of Shannon this was a routine quarter. I’ll start my presentation with the discussion on the consolidated results of the company. On slide four for those of you following the presentation. As released yesterday, our consolidated revenue, which reflects 100% of the results HS Orka was $14.9 million in the quarter, a reduction of $1.5 million against the first quarter of 2015. This reduction is due to lower generation and lower aluminum prices with 22% of HS Orka’s revenue linked to the price of aluminum. Generation at HS Orka was marginally up from budget with budget reflecting reduction in generation in 2016 until the reinjection program that is currently underway at Reykjanes [ph] takes effect. The impact of the two new wells in Svartsengi is also projected to take effect later in 2015. So we’re expecting the generation numbers to increase during the year. The reduction in generation directly impacted gross profit because cost of sales remained flat quarter-on-quarter. The company reported a loss before tax for the period of just under $1 million against $17.6 million loss in the same period of 2015. Our consolidated results continue to be affected by large drilling caused by non-cash items such as the embedded derivatives, foreign exchange and the fair value of bonus payable this quarter was no exception. Moving on to slide five and our net interest results for the quarter, generation, revenue and EBITDA are down for HS Orka, Toba and Dokie. Speaking about to Toba, I’d like to remind everyone that back in 2015 Toba had a record first quarter as a result of a particularly mild winter. This resulted in generation of 248% of budget which had a direct impact on revenue and EBITDA. Talking 2016 now, although Toba was down on the prior quarter, I would like to highlight that the generation revenue numbers were again up on budget. As mentioned above, this is the first full quarter results for Shannon. The asset is performing well and generation was in accordance with budget. Revenue of $1.3 million was recorded in the period which is below expectations due to merchant spot prices realized. Shannon will commence selling the majority of its power in the 13 year power hedge on June 1st of this year. Turning your attention to the balance sheet on slide seven, foreign exchange is the largest contributing factors to an increase in assets and liabilities with both the Canadian dollar and the Icelandic kroner strengthening against the U.S. dollar since December. The other thing to highlight is consistent with December 31st the company remains in a negative working capital position, primarily due to the inclusion of the Sweden bond of $123 million which mature in July and December of this year. Refinancing assets for the ISK denominated bonds have been delayed due to unrelated financial complications of the bond holder. The Municipality which holds the bond is seeking resolution with a large group of creditors if it is the unsuccessful it will be placed under state control. Discussions are ongoing to refinance both the ISK and the U.S. dollar bonds. Further disclosure in relation to the bond is included within both our financial statements, our MD&A and is shown on slide eight. Excluding HS Orka and the impact of the bonds, working capital was $4.2 million at March 31st, and the company continues to have a $20 million Canadian dollar revolving line of credit at its disposal, which could be used to fund unbudgeted development spend if necessary. Finally the last slide I’m going to talk to you is net debt. Other than the Swedish bonds, the company had Holdco debt of $67 million and net project debt of $278 million at March 31. The company continues to paydown the debt to each of the operating project location, is up to-date on all interest payments, and is in compliance with all debt covenants. Further information on the paydown of the debt is contained within the Appendix 1 to the presentation. That concludes my presentation. I’ll now hand you back to John. John Carson Thanks, Lynda. And I’d just like to reiterate that though we mentioned EBITDA and revenue decreasing for what we’re terming decrease generation is actually a good new story last year was just an exceptional quarter for generation. We were right on target this year. So that’s really the right way to look at it. With that we’re going to do our review of our assets. And I’m going to turn it over to the leaders of our operations. That’s Paul Rapp for Wind and Geothermal and Jay Sutton for Hydro. Jay, let’s start with you. Jay Sutton Thanks, John. Turning to slide 10, TMGP had a successful first quarter 2016 producing 25 gigawatt hours of energy versus our forecast of 24 gigawatt hours. Our April generation of 61 gigawatt hours was 238% of forecast resulting in us currently being at 167% of year-to-date. So although our first quarter of 2016 was behind the record production in the first quarter of 2015 we made up for it in April and have had the best January to April performance since we started operation in 2010. We spent the last three months performing our annual maintenance in preparation for the high inflows that started in April and our plants are running very well. I spoke to the operations crew this morning and the plants are currently generating 115 megawatts and we are at 150% of our forecast month-to-date for May. On the slide you can see one of our operators in grinding one of our runners, performing some maintenance on it that occurred in March of this year. We are continuing to make improvements to reduce outage time, increase the plant efficiency and squeeze out as much generation and revenue from the plants as we can. Snowpack is near the long-term average for this time of year so we’re looking forward to continue the good generation throughout the spring and summer. Finally our crews continue to operate the plants and maintain them safely and within our environmental commitments and we are well over two years without a recordable incident for our employees or our contractors. That’s it for Toba, John. Back over to you. John Carson Thanks, Jay. Appreciate that and I just like to bring one thing to mind for those who are listening in today is that you get a quarterly update as to how these assets are doing. I happen to get a daily update and it’s a real joy to see those updates come through to see just how hard our team works at keeping this asset in excellent condition, it just seems to do better and better each year. 2014 record breaking, 2015 record breaking and now 2016 on track again. So my complements Jay to you and the team and really our whole ops team. Let’s continue with the asset review Paul. Paul Rapp Thanks, John. We’ll start with Shannon, so Shannon we had a great — it’s our first quarter operations and it really worked well, the facility is operating very, very well, we’ve maintained very high wind turbine availability and we’ve had very few of the normal PDing [ph] issues that you would expect to see at a new plant like Shannon. Generation for Q1 was 99% of plant and we did see low wind in April, but we’re seeing very strong generation in May last couple of days have been exceptional. GE is maintaining our balance of plant and the wind turbines and doing a great job in that role. As Lynda mentioned we need to sell our power into the merchant market until the start of our hedge, which is in just a few weeks and we’re looking forward to it. Let’s move on to the next slide so Dokie, Dokie continues to operate very well we have no equipment issues at Dokie. The plant really is running at a very smooth zone right now, we have very few issues, the vested crews are very attuned to the operation, they are doing a very good job of maintaining the turbine and our turbine availability for the quarter has been at 99%, which is exceptional. Production for the first quarter and year-to-date is slightly behind plan and that is strictly due to lower than planned wind. At Dokie we also continue to operate very well with no safety or environmental issues and as I said no significant equipment issues. You may have heard about a number of forest fires in the Fort St. John region. They have been in the order of 80 forest fires burning in the region, but just wanted to note that none of them were anywhere Dokie unlike a couple of years ago. So Dokie is doing well. Okay on to the next slide. Okay you to Iceland for Svartsengi and Reykjanes so both Svartsengi and Reykjanes have had very strong production performance year-to-date and combine generation at the plant is 101% of the plant for both Q1 and year-to-date. Highlights at the Svartsengi plant include the testing of our first of our two new wells that were drilled last year and early this year, Svartsengi 25 has been completed and the results indicate that the well will be a good producer in the 3 to 5 megawatt range which is great news. Work is underway at the plant right now to connect this well to the plant and that should be completed in summer. The second well Svartsengi 26 is still heating up after completion of the drilling and will be tested later this year. However early indications from the drilling and the testing done during drilling are that it’s quite positive making another good addition to production. At the same time we’re completing a new discharge system at Svartsengi, which will allow for more steam utilization and generation at the plant all combined with this the two wells that we’ve drilled. Down at Reykjanes our reinjection program that was mentioned by Lynda is well underway and the pipeline that we’ve been talking about for quite a few weeks calls supply is injected from the plant to our two big injection wells, well 33 and 34 to the north of the plant are in operation and we’re reinjected as we speak. And we’re also very excited about the start of the deep drilling program at Reykjanes in August, which will deepen an existing production well from about 2.5 kilometers to 5 kilometers. This will be a first for Iceland and could result in a very strong production well for the plant as well as providing the consortium that’s participating the project with really valuable information on drilling at these extreme depths and temperatures. So stay tuned very exciting development at Reykjanes. John? John Carson Okay. Thanks, Paul. I do want to point out about those two wells which we’ve drilled at Svartsengi wells 25 and 26. 25 is on the Southern extreme of our field, 26 is on the Eastern extreme. Both of these were further up than any other wells in those directions that we’ve drilled and it’s very comprehending to see that they have likewise strong results. We don’t know how big the Svartsengi field is, but it’s been generally strongly for about 40 years now. So it’s very large. We don’t know how large and we are very happy with it and these are great results from this drilling. Jay, let’s turn to the construction side of the business and talk about Jimmie Creek. Jay Sutton Alright. So I’m on slide 14 now. Contractors looking at Jimmie Creek made great progress in the first quarter of 2016 and the construction of the project is essentially complete. The photo on the slide shows the completed intake structure at the upper end of the project where the water is diverted into the Penstock. Civil contractors have demobilized from site and the environmental remediation has been completed on all the sites that were disturbed during the construction. At the end of February Jimmie Creek was connected into the TMGP transmission line and all the electrical work to interconnect the facility to the BC hydro system has been completed and tested. The installation of the turbines and generators will be completed next week and we are well into commissioning of the plant systems. In two weeks we’ll start running water through the plant as part of what is called wet commissioning, which will be followed by online testing and finally our marketable power test. We are under budget ahead of schedule and expect to complete all the commissioning and start generating by the end of June. I would really like to thank the Alterra team and all the contractors who worked so hard over the past two years to build this another high quality asset in the Toba valley. We are very excited to be bringing this asset online and can’t wait to start producing electricity. John Carson Thanks, Jay. And I echo your comments to the team and we’ll be excited to announce the first generation at this plant hopefully next month. Now let’s flip to slide 15 and this will be the last slide of the presentation looking ahead. So first I’d like to reemphasize, we have a strong development focus in the USA, as we publicize and has really publicized by the industry last year got a two year extension to the production tax and investment tax credit programs. This really helps give a kick start to renewable power projects, which are the ones that we specialized in, of course. I also cite here that we received further positive guidance just last week. It appears that the credits are going to be good for four years instead of formally two years once construction has commenced. This is another unexpected boom and another display of the USA’s intent to really displace carbon generating power with clean power and we happen to be in the right place at the right time. Next, we are doing Greenfield development. Greenfield means that it’s an uncharted areas an area where nothing has ever been done before for both wind and solar sites. We have signed leases for multiple sites and we are actively working in several different power markets. We’ve included a photograph which you might not find very exciting, but a wind developer loves this photograph. It’s very flat and easy to build on terrain and you can imagine that the wind is quite strong and steady at a site like this. So this is one of our sites for which we’ve signed leases in Texas. Next we are analyzing several acquisitions of opportunities that are at development stage. Some of them are early stage, some of them are later stage and I would expect to see some deals, some transactions completed by us as the year goes on. Next turning our attention to Iceland and by the way for questions-and-answers we’ve included our CEO of the Iceland business Asgeir Margeirsson with us. Our team there is advancing several projects. The two I’ll just mentioned today are the first ones in line which are Reykjanes 4 plant, which really will adjoin our existing Reykjanes 1 and 2 plant. We’ve emphasized before that this new plant 30 megawatts is what we are targeting would require no further drilling. It will only use the steam that’s currently being released after generation at the current units. So it’s really within the respect of geothermal projects. One of the easiest projects you could build and very low risk. Secondly I mentioned the 9.3 megawatt Brúarvirkjun project. It’s a small but high capacity factor hydro project. About an hour and half away from our exisiting operations in the Reykjanes Peninsula. So these are just two assets, we’ll be talking about in the future, there is more behind them as well, and our Iceland has done a fantastic job, we’re very excited about where we’re headed there. I would also mentioned, our small hydro program in BC, taking advantage of the standing upper program at BC Hydro the local utility has, we’ve talked about our Tahumming project several times and we also mentioned the South Toba projects before on these calls, these projects would be suitable for that program, so stay tuned there as we continue to develop those projects. And finally, we’ve mentioned our Mariposa Geothermal project in Chile with whom we partner with EDC, the Philippine Geothermal operator, we are still thinking together with them about when we will start drilling, they visit us here in our offices last month. We considered things strongly and we’ll have to just wait and see as we look at market factors and other factors that would affect the timing for our drilling program, still holding out hope for this year, but we’ll update that as we go. With that Ross, that completes our formal presentation, I turn it back to you. Ross Beaty Thanks very much, John. And I think, I have no further comments, it was an orderly quarter and we look forward to some further news on acquisition particularly in the next quarter. So with that operator, I will turn it over to questions. Thank you all. Question-and-Answer Session Operator Thank you. Ladies and gentlemen, we’ll now begin the question-and-answer session [Operator Instructions] Your first question comes from Jonathan Lo, Raymond James. Jonathan, please go ahead. Jonathan Lo Hi, thanks for taking the questions. Just on the guidance, you didn’t mention it this quarter, is it still the same for 2016-2017? Lynda Freeman Yeah. Hi, Steven, yes it is, at this stage we look to the actuals against budget look at full cost and we believe still that we’re on track for the numbers that we put in the MD&A back in December, it was based on December ones. Jonathan Lo Great. And were there any further discussions on the dividend expectation for this year or going forward? John Carson There is no further discussion we have this — we bring this up actually every Board Meeting, we have the obvious balance between issuing return of capital to shareholders and deploying the capital in our business for growth. And at the current time, we’re still doing the later, but we do have as an objective to kick out a dividend, as soon as possible and so watch this space literally on a quarterly basis. Jonathan Lo And for Shannon, how should we look at the pricing, the merchant pricing for 2Q, should it be about the same as the first quarter or is it — has it improved? John Carson Yeah. I don’t have that crystal ball, unfortunate to tell you, where it will move, I can easily tell you where it has moved, we were very disappointed with how low the prices were in the first quarter, it’s — it moves at all times, and the reason it moved so low was if you look at where the natural gas was pricing, Henry Hub or whatever node you choose to look at, it was at a historic low, we’re talking decades low point that directly affects the power prices realized in Texas, and that’s why we saw low prices. I’m happy to report over the just the last few days that we have had combined not only of high power generation, high wind, is been accompanied by higher power prices. So we have had some very good revenue day’s right here in May. We hope that that continues, but in any event the very good news is that our hedge will kick in next month provided by an affiliate of Citigroup, that hedge last for 13 years I will remind you and it’s certainly priced higher than anything we’re seeing in the power market at the moment. Jonathan Lo And that hedge starts on June 1st? John Carson I believe, yes. It is the first. Jonathan Lo Okay. Great. That’s all the questions I have today, thanks. John Carson Thanks, Jon. Operator [Operator Instructions] Your next question comes from Robert Kelly, Private. Robert, please go ahead. Unidentified Analyst Hi, this question is for Ross or John. I’m just wondering about the share price. Is it where you expect it to be, are you disappointing with the share price? And where do you expect that to be over the next-year? Ross Beaty Okay. Robert, well, expect and realize are big things, we certainly expected to go higher, we had a very good year, last year, as you know, we were actually top performing energy stock in Canada last year. That’s nothing to write home about our stock went up about 50% in the oil and gas sector particularly cratered because of the decline in oil and gas prices. So relatively speaking, we had a great year last year. But we actually do expect that to continue to rise this year. And one of the things we’re going to do that we didn’t do last year is we’re going to start talking about our story. We wanted to really wait until we had a story that we felt would be very compelling to new shareholders, institutional investors particularly. We haven’t been on the road for some time. We’re going to start getting on the road and talking about it on a monthly basis. We have a program to do that and we hope that that will only result in our stock going to a more I guess a price that reflects the reality of our assets whether you look at our stock on a net asset value basis or at a multiple basis — multiples of EBITDA or revenue or generation. You should see that we are trading at a discount and it’s our job to try to get that discount to become a premium. We certainly feel we deserve a premium for the quality of our management team for the execution of our most recent projects and for the growth we’ve had in our company. The other thing we’re going to try to do is layer on some new growth that investors can see we’ll continue the successful we’ve had with Shannon and Jimmie Creek in particular in the last couple of years. And with that, really get on the road and tell the story and hopefully it has some benefit from the standpoint of share price improvement. Unidentified Analyst Thank you very much. Ross Beaty Hey, Robert. Operator Thank you. Your next question comes from Rupert Mayer, National Bank. Rupert, please go ahead. Rupert Mayer Hey, good morning everyone thanks for all of the color. Just have a quick question on your comment about development stage acquisition opportunities. Can you give us anymore color on the sorts of opportunities you’re looking at, the scale of project maybe the type of project in terms of say generation source, winds, geothermal, solar? And what sort of target returns you would be looking at? What would be your hurdles on those potential acquisitions? John Carson All great questions. We are looking at as I pointed out in the USA primarily and at wind primarily and then solar just after wind. We do seek for the opportunistic Hydro project now and again. But those are tougher to come by for sure. With respect to the scope of the projects, we definitely aim for large ones. You’ll notice that the smallest project we have in our whole portfolio is a 62 megawatt project. So definitely we seek to do large projects, the same amount of work large and small, we’d always prefer a larger project. Then also with respect to the stage of development projects, some of these already have revenue contracts and are late in the stage of development needing financing and maybe a few other late stage items. And some of them are early stage groups of assets with promising futures with interesting locations and resources. So it really spans the breadth of size and stages of development activity. And with respect to the rate of return question, for sure we try to make every project that we have to be well into double-digit returns. That has become more difficult in the industry; A, because of competition; B, because of how offtake pricing has been negatively affected by the aforementioned gas prices. So there are challenges to achieving those returns and a lot of investors though are take comfort in the fact that these are very reliable projects. So in the end, while returns may have notch down a turn or two we’re still seeing double-digit returns in all the projects we’re looking at. Ross Beaty And I’d just add to what John said. The growth we have right in front of us in Iceland, which will be geothermal based and hydro based. Rupert Mayer Excellent, thanks very much. Operator Thank you. And there are no further questions at this time, at this time. Please proceed. John Carson Very good. Well if there is no further question we’ll end the call. And thank everyone for joining us today. Thank you, operator. Operator Thank you. Ladies and gentlemen this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited. THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY’S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY’S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY’S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS. If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com . Thank you!

Talen Energy Corporation’ (TLN) CEO Paul Farr on Q1 2016 Results – Earnings Call Transcript

Talen Energy Corporation (NYSE: TLN ) Q1 2016 Earnings Conference Call May 10, 2016 8:00 AM ET Executives Andrew Ludwig – Director of Investor Relations Paul Farr – Chief Executive Officer Jeremy McGuire – Chief Financial Officer Analysts Ali Ahga – SunTrust Julian Dumoulin-Smith – UBS Abe Azar – Deutsche Bank Srinjoy Banerjee – Barclays Operator Welcome to the Talen Energy First Quarter Result Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Andrew Ludwig. Mr. Ludwig, please go ahead. Andrew Ludwig Thanks Kate, and good morning everyone. Thank you for joining the Talen Energy Corporation conference call to discuss first quarter 2016 results. Today’s presentation is being webcast and we are providing slide to the presentation on our website at talenenergy.com. This presentation may contain forward-looking statements and we encourage you to review our filings with the SEC to a more about certain risk factors that could cause actual results to differ from these forward-looking statements. This presentation also will contain references to non-GAAP financial information that we use to measure our business. You can find the reconciliation between the non-GAAP financial measures we use and the most directly comparable GAAP measures in the schedules to our earnings release and the presentation that we posted on our website. With that, I’ll now turn the call over to Paul Farr, Talen Energy President and CEO. Paul Farr Thanks Andy, and thank you all for joining us on our first quarter earnings call. Joining me on the call today are; Jeremy McGuire, our CFO; Joe Hopf, who has lead our Commercial team and our non-nuclear Generation; as well as Tim Rausch, our Chief Nuclear Officer. After my prepared remarks, Jeremy will take you through a more detailed review of the financial performance and our forecast, and we’ll then take questions. We are about three week shiny anniversary of the spin and the acquisition of the RJS portfolio, and I’m extremely proud of the efforts and the accomplishments of our entire team over the past two years of planning and execution. We’ll touch on a number of initiatives that we have on our way to grow value for stockholders in our prepared remarks. So I’ll move right into Slide 4. The April 1 sale of the eastern hydro assets for $860 million marked the end of the FERC mitigation asset sales, all of which were executed at great values in competitive processes. Our Brunner Island co-fire project remains on schedule which should permit us to bring gas in Unit 3 by August and the smaller two units by the end of the year. We made significant progress on the Montana project evaluation as well and expect to have a final decision on that in the next two weeks. That project is expected to be executed all differently than Brunner Island and that we are working with the midstream company to finance, construct and operate the lateral pipeline. Since the Brunner Island project has a much smaller lateral, we are initially financing and constructing the gas line ourselves. Once the Brunner project is completed, we plan to assess the value of selling the line to a midstream company to free-up the capital we invested in that portion of the project. At Susquehanna, we safely and successfully completed our Unit 1 refueling outage, which included normal refueling and maintenance activities as well as major work to replace the original heat water heaters and the installation of shortened blades on the second Unit 1 LP turbine. That leaves the third and final LP turbine blade replacement on Unit 1 for the outage schedules in the spring of 2018. I want to thank the entire Susquehanna team for staying focused on safe execution of this work, all well keeping Susquehanna Unit 2 running at a capacity factor of 100% for 10 months in County, fantastic work by all. The great operating performance and the addition of assets to the portfolio over the past year allowed us to achieve comparable adjusted EBITDA performance for the quarter versus Q1 2015, despite significant declines in energy prices. As we noted when we provided you 2016 adjusted EBITDA and adjusted free cash flow guidance on our yearend call in late February, we excluded from that guidance, the financial contribution of the assets being sold to meet the FERC mitigation requirements. Our revised guidance ranges have been updated to reflect the actual financial contribution of those assets, which were sold and Jeremy will comment more on that in his remarks. On Slide 6, we begin the commercial and operational review. Given our fuel diverse portfolio, you can clearly see the impact low natural gas prices are having on generation assets in the region. Gas continues to gain additional runtime at the expense of coal, a major driver of our decision to invest in gasification of the Brunner Island plans and our evaluation of a similar investment at modular assets. Susquehanna generation was lower year-on-year primarily due to a difference in the timing of the 2015 and 2016 refueling outages. Our forced outage performance continues to be extremely strong, setting well for CP and pay for performance capacity constructs in both PJM and New England. We began the 2019, 2020 PJM capacity auction this week with results expected to be announced on May 24t. As usual, we are not providing a forecast to the auction results, but we see better behavior on economically and environmentally challenge assets as a key driver of the outcome. On the safety front, we continue to make meaningful strides to improve our safety track record as evidenced in the chart on the bottom right of the slide, but we remain highly focused on achieving even better levels of safety performance. Turning now to market updates, beginning with PJM on slide 7, I would broadly highlight that we’ve seen an improvement in forward gas and power pricing in all markets since the end of February. Outside of just the pricing improvement in PJM that you can see in the graph, we secured key victories at the U.S. Supreme Court in the Maryland and New Jersey litigation on subsidize new gas bills and from FERC in the Ohio attempt to subsidize existing merchant generation. Maintaining a level playing field among competitors is an essential element to having well structured, transparent and functioning markets that encourage sensible investments in existing and new generation resources. Now moving to ERCOT, the ERCOT market on Slide 8, pricing has improved from very low levels in late February, but continues to present challenges for coal and nuclear generators in that market. With wind penetration reaching almost 50% quick-start gas assets like ours that goes in our Texas portfolio become even more valuable for system reliability. Recent forecast of potential shortness in the market for the next few summers bodes well if we get any type of help from the weather, we saw that with just two weeks of heat last summer. In the New York ISO with the tempered weather and low seasonal gas pricing, we’re getting good runtimes in assets. We’ve seen some modest improvement in forward prices over the past two months, and even though the constitution pipeline is been delayed both spark spreads and energy prices have improved in the short term. Based on the public comments from the developers of the pipeline and the fact this pipeline is fully subscribed, we expect the developers will be pursuing options to move forward with that project. Finally, turning to New England, 2017-2018 power prices are up modestly since our last update with spark spreads slapped down on a recent spike and forward gas in the region. ISO New England will implement rental demand curves for the 2020-2021 forward capacity auctions. We expect this will gradual downward pressure on capacity prices due to the transition that was negotiated by the generators. On Slide 11, we’ll provide updated hedge levels and margin sensitivities. We have increased our 2016 generation hedge levels across the board, which reflects a combination of Q1 delivered results and some modest balance of your hedging. For 2017, we were on some additional hedges for the East nuclear and coal assets prior to the end of the quarter and we’re about a third hedge based on our projected output at March 31. Since that time, we have seen some additional improvement in pricing and have added additional hedges that take the hedge level to over 60% for East nuclear and coal. In the West, we added some hedges for the summer for both 2016 and 2017. I’ll now turn the call over to Jeremy for a more detailed look at financials. Jeremy? Jeremy McGuire Thanks Paul. On Slide 13, you will see some of the key drivers of our first quarter adjusted EBITDA as compared to the same quarter last year. Overall margins were higher due principally to the addition of RJS and MACH Gen margins. They were not part of last year’s first quarter results as well as higher capacity prices. Offsetting these positive margin drivers will lower realized energy prices, timing of the Susquehanna refueling outage in the early February sale of the Ironwood facility. The increase in O&M reflects the addition of RJS and MACH Gen operations, as well as the Susquehanna refueling outage timing. The increase in cost was partially offset by lower corporate costs following the separation from PPL. Let’s turn to Slide 14. As Paul previewed in his remarks, we’re affirming and updating our guidance of same time. We believe our solid operational performance, our hedging program and our continuous efforts to control costs we’ll keep this on track versus our 2016 guidance. If you recall when we initiated our 2016 guidance that we did not include any anticipated contribution from the mitigation assets. Now that the sales are complete, we know a certainty what they contributed towards our 2016 results. The net results as the $20 million increase to our 2016 adjusted EBITDA guidance and a $10 million increased to our 2016 adjusted free cash guidance. We’ve provided these adjustments so that our guidance will more closely aligned with our reported results as we move through the year. Before I turn it back to Paul, let spend just a minute on capital allocation on slide 15. Please note that we have updated the cash from operations in the chart on the bottom of the page reflect first quarter results, including the actual results for the asset sold in 2016 consistent with our guidance update. We continued to stay the course with respect to our capital allocation as discussed in the fourth quarter call. We closed our hydro sale last month which brought in $860 million from gross proceeds completing the FERC mitigation requirement. We are making good progress on the major potential projects that will influence our capital allocation decisions. We expect to have a decision on the Montana station project very soon as Paul indicated and we’ll continue our assessment with respect to the Harquahala station. We remain on discussions with various entities around potential local resource needs and we’re simultaneously refining plans to potentially move all or a portion of the capacity to the Northeast. As we’ve discussed in the past moving summer all of park would required capital investment beyond the current plan. Finally, we continue to review our liability management options, obviously on-prices have improve since our last update which will be factored into our analysis. However, there are other factors such as managing the maturity calendar and reducing interest expense, therefore consider. With that, I’ll hand it back to Paul. Paul Farr Thanks Jeremy. Our scripted remarks were fairly concise this morning as we gave you a pretty fulsome update in late February on the yearend call on many fronts. We’ve had a very solid financial start to the year, executed fully on the committed asset sales, identify further opportunities to reduce costs and continue to invest projects that we believe will improve the profitability and risk profile of our portfolio. Before we get in the Q&A session, given recent market rumors involving the company, I want to take the opportunity to remind you that we do not comment or speculate on market rumors, we never have and we never will. Please keep this in mind as you craft your questions for us this morning, operator we’re now ready to take those questions. Question-and-Answer Session Operator [Operator Instructions] The first question comes from Ali Ahga of SunTrust. Please go ahead. Ali Ahga Thank you and good morning. Paul Farr Good morning. Ali. Ali Ahga Good morning. First just a logistic question, so to be clear under your old way of reporting and showing us guidance, first quarter results would have excluded the 20 million that is associated with assets that were eventually sold. Is that the way to think about it apples-to-apples? Paul Farr Yeah, that’s correct, Ali. Ali Ahga Okay. Then second, Paul I wanted to get your perspective on this new joint venture that or venture whatever you call it, the Riverstone has harmed in Texas. From this reading it appears to be a direct competitor of Talen, and I am just wondering as they being your largest shareholder? Was there any discussion with you guys? I want to just get your perspective on how to look at that venture versus talent? And just excuse me to reading through that release. Paul Farr Ali, I don’t think we have any comments on what Riverstone is doing basically that’s just the Topaz team that was managing the RJS portfolio before we bought it, is our understanding. So beyond that and then renaming the team, we don’t have a perspective on what their – I don’t think they have assets, but I’m not sure what to read into that actually. Ali Ahga Okay. But am I right in thinking that they will be going after fossil fuel projects just like you guys in your regular course of business maybe looking for fossil fuel assets as well? Paul Farr Well, we had said at when we conceived the spin that this did not represent the spin of PPL portfolio and the merger or acquisition of RJS that did not mark the – that was not a Riverstone exiting the business and that they had the capability to pursue congressional generation assets in the future, which they had planned to do. Now they have market power limitations based upon being an affiliate of Talen, but beyond that they are free to continue to pursue those opportunities, nothing change there. Ali Ahga I see. Separately in the past in one of your presentations when you had talked about what could be uplifts to your EBITDA profile. You had mentioned that the add of money shall find in Longwood contracts expiring I believe at the end of the year would add about 60 million a year, and then you were still at that something in the Brunner dual-fuel would add about 25 million a year. Are those numbers still valid today? Paul Farr The first number will still be valid. I have to believe in Joe sitting here that Brunner for ’16 especially because we had originally planned to bring all three units on by yearend. We’ve now with strong execution and construction, we feel confident we can get Brunner 3 the big Unit to 750 megawatts unit on by August. That will provide an uplift, but gas prices have declined since, so the project is going add more gross margin and look more attractive. There will be an offsetting impact on the other solid fuel assets in the portfolio but that project will look better. Ali Ahga It looks better. Okay. Last question, not specifically trying to go after these rumors out there, but just conceptually your views on consolidation in the industry today versus where they were three to six months ago? Paul Farr I don’t think that I or we have necessarily a changed opinion, I think even with some improvement in the multiples of our three peers, this whole industry of four that the cash flows were compelling. I think that scale is important that driving out cost is important. I guess I would say that as I think back on our experience in going after cost here, in the way that we went after a cost as part of an integrated utility holding company it’s much difference. So I would say that from my perspective and looking at operators operating uneconomic plants in Ohio, and looking at some nuclear shutdown that’s going on in the industry, getting after costs is much more, I guess I’ll call it aggressive in an IPP context and inside of the utility holding company with common systems, common business processes, it’s just the different urgency in a different culture. So, I would expect and I would wholeheartedly support the remaining integrated, the disintegrating and becoming carefully, but I am not really sure you have to ask the other CEO is how they think about consolidation in the industry. Everything is obviously gets limited by ultimately market power, we’re going to grind to that at some point with only four companies in the key markets where there are market power concentrations. Ali Ahga Thank you. Operator The next question comes from Julian Dumoulin-Smith of UBS. Please go ahead. Julian Dumoulin-Smith Good morning. Paul Farr Good morning, Julian. Julian Dumoulin-Smith So let me follow-up on the questions there on capital allocation, Jeremy, what’s the timing this year on taking through when you would execute on a growth that stay back or what have you given the cash is now in the door? Jeremy McGuire Yeah. So I think the two key projects that pace our timing there are the Montana co-fire which just Paul said we expect in the coming weeks to have a final view on moving forward or not and then the other is Harquahala. If part of the path value there is moving summer all of that capacity that – what can represent a really attractive return to shareholders. It will certainly require some substantial capital investment. So I think we just want to have clarity on that before we take this all as capital and do something with it. I know the markets are – the financing markets are getting better than there were, but they are not all better yet. So I think we are very cautious about doing anything in the capital markets to shrink our debt, and then suddenly realize in weeks or months later, oh gosh we need to go on raise a bunch of debt again to fence a hard move. So we are just trying to sort, draw all that now, I think that still a first half of year decision in terms of where we are moving. So I wouldn’t really expect anything splashy on the capital allocation front before the first half of the year. Julian Dumoulin-Smith Got it. And just remind us what the hard CapEx figure you’re looking at as you sharpen the pencils? Paul Farr Yeah. We were originally at around 500 KW and we fine tune that down to $300 to $400 range so on, if all three trains were moved at 1080 megawatts, that’s call it 325 million to 450 million some more in that ZIP code, if all three trains are moved. So, again Julian, it’s free-up another $100 million or $200 million by selling it in-situ or move all three, those are kind of the bookends, but that’s a potential $600 million range there of outcomes. We are continuing the dialogue with load serving and other entities in that market on the potential for sale. So we’re simultaneously evaluating both sale and relocation to markets in the Mid-Atlantic and Northeast. Julian Dumoulin-Smith Got it. And just a clarification, I’m just going to stay away from the market rumors, but on the RMT what are the limitations in terms of change in ownership and any implications if any for PPL, if you don’t mind reminding us on where that stands post there? Paul Farr At this stage, there is not practically any limiting factors there. Jeremy McGuire We have a general safe harbor, I mean people have to ticker on tax advice, I mean there is always a tax disclaimer right, we are not your tax lawyers. But there is a general safe harbor that provided any future transaction was not pursuant to preconceived plan at the time of the spin or prior to the time of the spin, then you’re generally okay to do whatever. It’s just there is a coincidence in timing, the closer you are to that spin date, the more scrutiny there is and the more sort of inference that there was a preconceived plan. But in general, there was no preconceive plan to a transaction at the time of spin or prior to the spin then you’d have a general safe harbor proceed. Julian Dumoulin-Smith Got it. Can you comment briefly here on the kinds of unit in PJM in the upcoming auction there you’ve seen – I know you mentioned the economics here – like we saw on fuel, but can you elaborate a little bit more regionally or how you see that changing year-over-year obviously power prices down, any elaboration we appreciate? Paul Farr Well, I mean just look back on the 18-19 auction, there was a major unit in our neighborhood that that owner said did not clear the auction. The nuclear promise activities are underway, but those haven’t born yet substantial cost reduction fruit. Tim is leading one of the initiatives there and there are number clearly underway, but that’s going to take some time to get to. So, higher cost units in what remains a persistently low gas price market are going to be under pressure. The owners of the assets I believe in all the testimonies that I’ve seen in Ohio were all quote uneconomic generation in the absence of getting subsidies well then those units should shut. The market worked just fine. There are negative impacts to markets given what the actions EPA has taken and the impact of this cheap gas that exists and persists in the region, that’s not a problem of poorly functioning markets that has impact. So, they’ll be assets like Brunner and Montour that can be gasified. There will be nuclear plants that have margin to be able to cut costs, and then there will be solid fuel plants that are not in good locations and were cost cutting where the costs are either already at very low levels and not much more can be done it. People for trying to do certain things, but at the end of the day that is creating a – that subsidization activity across all these markets is preserving uneconomic generation which is having a downward pressure on both capacity and energy. So those owners and other owners that are facing the impact of Marcellus and now Utica gap need to take a hard look in the mirror and make some tough decisions. Julian Dumoulin-Smith Speaking to tough decisions, any update on Montana lastly? Paul Farr No. We are working constructively with the parties in the state as we speak. We are doing everything we can to try to find the path to a new owner of those assets, which will result at the end of the day in some form or fashion of our exit from that market. So we’re working diligently to try to execute that in the best way possible for all the stakeholders, for employees, for the state, industrial load, for all involved there to try to find the best solution that we can. Julian Dumoulin-Smith Great. Thank you. Operator The next question is from Abe Azar of Deutsche Bank. Please go ahead. Abe Azar Good morning. In the 2018-2019 PJM auctions, about 20% of your portfolio went uncleared with lower demand and expect the pricing in its upcoming auction. Should we expect the similar amount of megawatts will remain uncleared or have you revisited your risk assumptions for CP? Paul Farr Well, I would say, Abe, I’d like to say a couple of things. One, that amount that roughly 2200 to 2500 megawatt so that didn’t clear also included assets that we have now sold as part of the FERC mitigation process, so that will be one point. The second point I would say is that auction obviously concluded before the transitional auctions for the prior years and you’ll know that we cleared more capacity in those auction. So as we evaluated with the market did by way of bidding, we did modify or bidding behavior somewhat. So I think again, I don’t see us changing, think about the risk reward relationship and there are projects that we know and megawatts are cleared that have since been announced to be shuttered. So ultimately, there is going to be demand in subsequent auctions for the modest amount of capacity, net of FERC mitigation sales that we’ve got and the amount that we want to reserve for our own insurance, I am using my [indiscernible] so you can’t see four asset performance in the future, even though we’ve got assets that have a really good track record of reliability. Abe Azar Great. And shifting gears a bit, you mentioned that FERC were affiliate waivers as we have seen the company have not given out. Do you think the current proposed iteration impacts the market the same way, and if so, where and how do you plan to challenge? Paul Farr Well, maybe a couple of thoughts. I don’t think that even at the state level there is a resolution before the capacity auction, results are in – well, not just the result, you know the bidding activity is done the 17 th , and then the results come out May 24, so nothing is going to be finalized in two weeks. So they’ll have to do it accordingly and how they see risk reward there, I don’t think by changing the fact that there is no affiliate contract, the substance at the end of the day and the result is the same. Uneconomic generation is subsidized and it has an impact on wholesale pricing in the market, and that’s a FERC jurisdictional issue. We will to the extent that these things are filed, we will likely have to with our peers engage peers that are viewing subsidies as unwarranted and impermissible will bring another challenge back at the state and federal level, again in certain if they pursue. Abe Azar Okay. Thank you. Operator The next question is from Srinjoy Banerjee of Barclays. Please go ahead. Srinjoy Banerjee Hi. Thank you for taking my questions. Paul you could have been asked previously in the call, but just hypothetically and going into the debt language, it doesn’t change your controls, is it just a 25 which have a change of control? And then specifically, are there any callouts depending on you may hope hypothetically acquire the group? Paul Farr Is that $600 million and about little north of $200 million of IRB, industrial revenue bonds that are outstanding that would have a potential change of control acceleration, if there were to be a rating downgrade as a result of potential transaction. Jeremy McGuire That’s the rating of the issue itself not of the company. Paul Farr Correct. That’s all the…. Srinjoy Banerjee Right. Oaky. And then there are any callout as specific that you may acquire the group? Paul Farr Sorry. I missed that last piece. Srinjoy Banerjee There was a callout or exceptions to that change you can control being apply specific that you may acquire the group. Paul Farr No. Jeremy McGuire No. Srinjoy Banerjee Okay. Thank you. Paul Farr Sure. Operator There are no additional questions at this time. This concludes our question-and-answer session. Paul Farr Okay. Thanks Kate, and thank you all for joining us on the call today. We look forward to further dialogue as we get into potentially some road shows, and then later in the year as we get to the normal conference schedule. Thanks all and have a good day. Operator The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect. Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited. THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY’S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY’S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY’S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS. If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com . Thank you!

Atlantic Power’s (AT) CEO Jim Moore on Q1 2016 Results – Earnings Call Transcript

Atlantic Power Corporation (NYSE: AT ) Q1 2016 Earnings Conference Call May 06, 2016 08:30 AM ET Executives Edward Vamenta – Director of Financial Planning and Analysis Jim Moore – President and CEO Terry Ronan – CFO Dan Rorabaugh – SVP of Asset Management Analysts Rupert Merer – National Bank Sean Steuart – TD Securities Ben Pham – BMO Operator Good morning, and welcome to the Atlantic Power Corporation First Quarter 2016 Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, today’s call is being recorded. I would now like to turn the conference over to Edward Vamenta, Director of Financial Planning and Analysis. Please go ahead. Edward Vamenta Welcome, and thank you for joining us this morning. Our results for the three ended March 31, 2016 were issued by press release yesterday afternoon and are available on our website www.atlanticpower.com and on EDGAR and SEDAR. The accompanying presentation to today’s call and webcast can be found in the Investor Relations section of our website. A replay of today’s call will be available on our website for a period of one year. Financial figures that we’ll be presenting are stated in U.S. dollars and are approximate unless otherwise noted. Please be advised that this conference call and presentation will contain forward-looking statements. As discussed in the company’s Safe Harbor statement on page 2 of today’s presentation, these statements are not guarantees of future performance and involve certain risks and uncertainties that are more fully described in our various securities filings. Actual results may differ materially from such forward-looking statements. In addition, the financial results in yesterday’s press release and today’s presentation include both GAAP and non-GAAP measures including project adjusted EBITDA, adjusted cash flows from operating activities, and adjusted free cash flow. For a reconciliations of these measures to the most directly comparable GAAP financial measures to the extent they are available without unreasonable effort, please refer to the press release, the appendix of today’s presentation, or our quarterly report on Form 10-Q, all of which are available on our website. Now I will turn the call over to Jim Moore, President and CEO of Atlantic Power. Jim Moore Good morning. With me this morning are Terry Ronan, our CFO; and Dan Rorabaugh, our Senior Vice President of Asset Management, as well as several other members of the Atlantic Power management team. In terms of this morning’s agenda, first I will recap recent progress, then Dan will review plant operating performance and provide an update on our capital expenditures. Terry will review the first quarter financial results, discuss the recent refinancing transaction, and provide an update to our 2016 guidance. I will wrap up the call with additional comments on strategy. As shown on slide 4, so far this year, our plants performed well and financial results for the first quarter were in line with our expectations. We have continued to repay debt using our strong operating cash flow. We also opportunistically repurchased convertible debentures and common shares under the NCIB. Just a little over three weeks ago, we closed a significant refinancing of both our term loan and revolving credit facility, although this a difficult significant market environment in which undertaking this transaction, we are pleased to have completed it. And our view of the positive aspects of this transaction outweigh the higher interest rate. Pro forma for the planned redemptions of our 2017 convertibles later this month, we have no corporate debt maturities prior to 2019. We also have a $105 million of remaining proceeds to further reshape our balance sheet and invest in growth. In addition, our new $200 million corporate revolver provides us with greater flexibility to finance growth or additional debt repurchases. Lastly, the pending shareholder asset in Quebec was dismissed in April with no payments by us consistent with the resolution of the US and Ontario actions earlier. This brings to a close all outstanding shareholder litigation. Now, I will turn the call over to Dan. Dan Rorabaugh Thanks, Jim and good morning everyone. Slide 5 summarizes our operational performance for the first quarter of 2016. This quarter we have added a report on safety to our operations reviews, where safety of our plants and our people is a high priority at Atlantic Power. Although we have a strong track record, we are continually striving for even better performance. This quarter we had one recordable incident in early January, but none in the four months since then. In comparing our results for the industry average, keep in mind that the average includes much larger companies for which the rate tends to be lower. Our loss time injury rate which we’ve not shown in the chart is typically lower than the industry average. I’d also note that we didn’t have any environmental or regulatory violations during the quarter. Our availability factor in the first quarter of 2016 was 96.6% versus 97.5% for the comparable period a year ago. The slight increase was due to maintenance outages at our three Navy plants and a utility requested outage at Naval training center. The impact of these outages on availability was partially offset by improved availability at Mamquam and Piedmont, both of which had scheduled maintenance outages in the prior period. Generation increased 4.4%, primarily due to Frederickson, which had increased dispatch and Curtis Palmer and Mamquam, which had higher water flows as compared to below normal levels in 2015. These increases were partially offset by reduction at Manchief, due to reduced dispatch, and at the Navy plants, due to reduced availability. Waste heat production in Ontario was down approximately 3.9% from very high levels in 2015. Our 2016 forecast has assumed a reduction from 2015 levels, but results for the quarter were ahead of our expectations. Our Mamquam facility is benefiting from significantly higher snow pack this year than last. In addition, spring has come early and run-off is ahead of schedule. Slide 6 summarizes our 2016 planned optimization investments as well as capital expenditures related to PPA extensions. On the optimization side, we have not made any significant changes since our fourth quarter call in March. At Morris, we are in the process of adding past our capability to one of our boilers with commissioning expected late in the second quarter. The objective it to improve the reliability of steam delivery to the customer. We also plan to upgrade certain components for two of the gas turbines this year during the extended customer outage in late summer and for the third in 2017. This is being done in order to increase output and improve fuel efficiency from the turbines as well as enhance the reliability of steam delivery for the customer. Total optimization investments for this year are expected to be approximately $4 million with most of it for the Morris projects and the balance for spillway upgrade project at Curtis Palmer we have undertaken in late summer. On our March conference call, I indicated that we have budgeted approximately $7 million for CapEx related for repowering and PPA extension related investments at Tunis and Williams Lake, most of which was for Williams Lake. However, it now appears that there may be a delay in the availability of gas transportation for Tunis, which have affected timing of the restart of the project and therefore the timing of the required investment in the project to convert it to simple cycle operation. Accordingly, we have reduced our CapEx budget for this year, which includes the optimization investments to approximately $14 million from $16 million with most of the reduction related to Tunis. I would also note that whether we begin work on a new fuel shredder for Williams Lake this year, it depends on the timing of receipt of an amendment to the air permit currently expected in the third quarter or potentially subject to appeal and the status of discussions with BC Hydro on an extension of the existing contract. Initial outweighs for this project were approximately $6 million of our capital expenditure forecast for this year. We will provide an update on the timing of that investment on our second quarter call. I will close by providing a brief update on our efforts to extend our PPAs. We are continuing to aggressively pursue opportunities to extend or renew our existing PPAs in California. Due to non-disclosure provisions in the more formal processes, we cannot provide any detail on our efforts or specific bids. The PPA market is difficult, but we believe that our assets, particularly those in San Diego are well positioned to continue to provide necessary capacity close [indiscernible]. At Williams Lake, as I mentioned earlier, we expect to provide more of an update on our second quarter call. Now I will turn it over to Terry. Terry Ronan Thanks, Dan, and good morning everyone. I will begin with a review of our first quarter results, then discuss our refinancing transaction and close with an update on our guidance. Turning to slide 7, as Jim mentioned, results for the first quarter were in line with our expectations. We reported project adjusted EBITDA of $62.5 million, up $3.9 million from $58.6 million in the year-ago period. The 2015 results excludes our Wind business, which we sold in June of last year. The increase was primarily attributable to higher water flows in our Curtis Palmer and Mamquam hydro projects and lower expenses in our unallocated corporate segment. This was partially offset by a stronger US dollar, which reduced results by approximately $3 million. Slide 8 shows our cash flow results for the first quarter of 2016. The 2015 numbers are presented excluding the Wind business, which contributed $10.8 million of operating cash flow in the first quarter of last year. On a continuing operations basis, as shown on the slide, operating cash flow increased $5 million to $29 million from $24 million a year ago. The increase was primarily attributable to higher project adjusted EBITDA and lower interest payments resulting from the redemption of our 9% senior unsecured notes last year and continued amortization of the APLP term loan. Adjusted cash flow from operating activities, which excludes changes in working capital and severance and restructuring charges increased $6 million to $37 million from $31 million, again due to higher project adjusted EBITDA and lower interest payments. Adjusted free cash flow, which is after principal payments on the APLP term loan and project level debt increased approximately $8 million to $11.8 million from $3.9 million a year ago. This increase was attributable to higher adjusted cash flows from operating activities and receipt of cost reimbursement for customer-owned construction project, which helped cash flow by $4.7 million. These positive factors were partially offset by higher debt repayments on the term loan and project level debt of $27.5 million versus $23.8 million in the year-ago period. Slide 9 summarizes the key aspects of the refinancing transactions that we completed last month. We refinanced our existing APLP term loan with a new $700 million term loan at APLP Holdings, which has a maturity date of April 2023, two years later then the maturity of the term loan that replaced. We used 112 million of the proceeds to call all of our 2017 convertible debentures. After that redemption closes on the May 13, we will have no remaining corporate debt maturities prior to our next convertible debenture maturity in June 2019. Net proceeds remaining after paying transactional related fees are probably 105 million which are available to us for debt and equity purchases as well as growth investments. Debt reduction remains a very high priority for the company and we plan to use at least 65 million of the proceeds for the repurchase of 2019 convertible debentures. Although the initial impact of the refinancing was to increase our leverage to approximately 6.4 times from 5.8 times at year-end 2050, we expect to drop below 6 times by the end of this year due to the additional convertible repurchases I mentioned and to amortization of new term loan. As shown on slide 10, as part of this transaction, we also closed on a new 200 million revolving credit facility which replaces our previous 210 million revolver. The maturity date of the new facility is April 2021, a three-year maturity extension versus the one it replaced. The new revolver is a more traditional one and we can use it for general corporate purposes subject to certain limitations. It does provide us more flexibility to fund growth both internal and external including acquisitions. Slide 11 provides some additional details of the new term loan, two features of which I’d like to elaborate on. First interest-rate, the spread is 500 basis points over LIBOR as compared to the rate on the previous term loan of L+375. The LIBOR portion of the rate is a minimum of 1%. We’re required to fix a certain portion of our floating rate exposure through interest rate swaps for the 90 days of closing and that’s something we’re working on now. We expect the all-in rate will be approximately 6.25% to 6.50% as compared to slightly less than 5% on the previous term loan. Second, amortization, the term loan has a 1% mandatory annual amortization just as the previous term loan did. Repayments under the cash sweep works somewhat differently however, each quarter the amount of debt repayment is determined by the greater of a 50% cash sweep for the amount of repayment required to achieve the targeted quarter-end debt balances specified in the credit agreement which declined over time. Thus the minimum is 50%. We expect the cash sweep to average at 65% of 70% over the life of the loan, although it is higher in the early years and there was a fair amount of variability year-to-year but that target schedule envisions that approximately 80% of the loan will be paid down by maturity through mandatory and targeted amortization. Although the interest rate and debt repayment terms are less favorable than under our previous term loan, we believe these considerations are far outweighed by the positive aspects of this transaction as Jim indicated. Specifically we’ve extended the maturity of the term loan and revolver to 2023 and 2021 respectively, remove the overhang caused by the near term maturity of 2017 converts and obtain greater flexibility regarding revolver use of proceeds. We view the more aggressive debt repayment schedule into the new term loan as consistent with our goal of further deleveraging. In addition, we completed a tax restructuring concurrent with the closing of the refinancing moving both Atlantic Power Generation and Atlantic Power Transmission into the APLT structure which we believe will help us make more efficient use of our NOLs going forward. On the bottom of slide 11, we presented our current debt maturity profile split between both maturities on the left and amortizing debt on the right. Pro forma for the transaction and redemption of the 2017 convertible debentures approximately 67% of our debt is now amortizing rather than bullet maturities. Slide 12 provides details on each of our debt instruments and preferred securities including where in the organization they reside maturity date and interest rate. The changes arriving from the refinancing transaction are highlighted in yellow, separately I would note that during the quarter we repurchased 18.8 million principal amount of convertible debentures, primarily those with 2019 maturities under our normal course issuer bid. Slide 13 presents our liquidity at March 31 2016, both on an actual and pro-forma basis, several items of note. As I mentioned on the year-end call in March, we received approximately 6 million in cash in February representing a reimbursement for a customer owned construction project that we undertook on their behalf. We’re also able to reduce our letters of credit posted by 10 million following S&P’s upgrade of our corporate credit rate into B+ in February. During the quarter we used cash to repurchase convertible debentures and common shares under the NCIB. Thus we ended the quarter with 178 million of liquidity including 64 million of unrestricted cash. The pro forma column in slide 13 adjust for the refinancing transaction. Cash is increased by 105 million of net proceeds. However this is partially offset by the 10 million reduction in capacity under the new revolver and increased letters of credit associated with their larger debt service reserve requirement because of the large size of the term loan. On balance, our liquidity is approximately 86 million higher at 263.5 million including 169 million of cash. As we previously indicated, we believe that a base cash reserve of 50 million to 60 million is adequate for our business. Slide 14 presents our 2016 guidance updated to incorporate the impact of the refinancing transactions to our cash flow metrics. There is no impact on our project adjusted EBITDA guidance and we still expect to be in the range of 200 million to 220 million. Relative to our previous guidance, we expect cash interest to be higher as a result of a wider spread and the larger side of the new term loan partially offset by interest savings associated with the redemption of the 2017 convertibles and other debt reduction. Accordingly, we’ve lowered our guidance for adjusted cash flows from operating activities by 15 million, most of which is attributable to higher cash interest payments. The revised range is 95 million to 115 million. The other impact of the refinancing is on our adjusted free cash flow metric which is after debt repayment. We expect the higher level of amortization under the new term loan. In the first quarter, we amortized 25 million of the previous term loan and we expected to be amortize approximately 57 million to 60 million for the full year. In contrast, under the targeted sweep positions of a new term loan, we expect to repay through mandatory amortization the sweep approximately 60 million in the remaining nine months of this year representing an increase of approximately 25 million relative to previous expectations. Accordingly, we have reduced our adjusted free cash flow guidance by 40 million driven by higher interest payments and higher debt repayment. Our revised guidance is a range of negative 20 million to zero. Our adjusted cash flow from operating activities is what we focus on when we think of cash flow metrics. The guidance for adjusted free cash flow is based on us paying off 96 million of principal which helps us meet our deleveraging priorities. As Jim discussed elsewhere in his remarks, the refinancing leave us in a position we have more liquidity to debt repurchases, equity repurchases and capitalize opportunities we are pursuing. Slide 15 is an update of the guidance bridge that we typically provide for project adjusted EBITDA to our cash adjusted cash flow metrics. As I just discussed, the primary changes are higher interest payments and higher debt amortization partially offset by a slightly lower CapEx forecast. Now I will turn the call back to Jim. Jim Moore Thanks, Terry. We are an important turning point for Atlantic Power Corporation. In the past two years, we have one, paying executive management, two, refresh the board, three cut corporate overhead in half, a reduction of $27 million, four reduce debt by $879 million and interest expense by $65 million prior to the impact of the term loan financing, five resolve all pending shareholder litigation without having to make any cash payments to plaintiffs, six, sold off one quarter of our assets at a good price and use the proceeds to redeem our most expensive debt thereby removing our exposure to volatile win results and the overhand of a 2018 maturity, while still realizing a slight benefit from our ongoing cash flow. Seven, we eliminated common dividend to free up cash for uses such as debt repurchases, equity repurchases and investments in our fleet. Eight, invested $22 million in discretionary capital upgrade to the fleet, which we expect will generate approximately $10 million this year in tax returns. Nine, we brought an EVP of Commercial Development with power and energy storage expertise. Ten, we closed four of our offices and consolidated the corporate staff into one office. We moved that office from Boston’s financial district to that of Massachusetts. We also reduced corporate staff from 109 to 48. Eleven, we negotiated 11-year extension of our PPA at Morris. The first PPA extension in more than two years. The changes to that PPA are modestly accretive to expected projected adjusted EBITDA, project adjusted EBITDA. Twelve, refinanced our term loan and corporate revolver despite very difficult markets for energy companies, which resulted in longer terms for both, increased liquidity and additional flexibility. Although, additionally this will result in increased debt and interest expense, we expect both the decline over time as a result of debt repayment using our cash flow. Thirteen, we restarted our external growth efforts. Fourteen, insiders have been making significant equity purchases in these open market. As a result of these efforts, we are in a very different place than we were two years ago. On the defensive side, we have a much improved balance sheet in terms of leverage ratios and maturity profile. Our leverage ratio has improved from 8.9 times at year end 2013 to 6.4 times on a pro-forma basis for the refinancing transaction. We received $645 million of debt maturing in 2017 and 2018, leaving us with a manageable medium-term maturity in 2019 and the longer term maturity at 2036. As a result, our corporate credit rating has been upgraded by both Moody’s and S&P. We expect to further de-lever by amortizing debt from our strong operating cash flows. Our guidance is midpoint $105 million and using a portion of our liquidity to further redeem or repurchase debt. The power business is in the midst of a downcycle today. We can’t predict how low or how long it will go. So our best defense has been to reduce debt, reduce interest payments and overheads and extend our debt maturities. We expect our improved balance sheet and maturity profile will put us in a much stronger position to ride through the downcycles in energy and power markets. This allows us to be patient and disciplined on PPA renewals or asset sales. On the PPA front, we’re engaged in discussions across the fleet, particularly for those projects for which PPAs are scheduled to expire in the next several years. It is a difficult pricing environment, so we are being disciplined. We’ve had a poor outcome on Selkirk at a disappointing one at Tunis, but a good result at Morris. Although we can’t provide much guidance on PPA renewals in advance of reaching agreements, we are cautiously optimistic. We expect this to play out over the coming quarters and years. On the offensive side, we remain focused on growth in intrinsic value per share. That’s growth in absolute terms. We have approximately $700 million of debt and equity securities that we view as attractively priced. Repurchase of these at or near current levels carries more certain returns than those available on M&A markets. The refinancing transaction puts us in better position to undertake these repurchases. In addition, we see the potential for growth through internal investments in our own fleet. As we ramp down on discretionary optimization investments, we will be increasing our focus on PPA related investments or repowering projects. Some of these internal investments can be funded with operating cash flow pre-sweep and other larger projects at some of our plants can be funded by borrowings under the revolver. Between repurchasing securities and making internal investments in the fleet, we have more traffic uses than we had discretionary capital. We are reviewing the best options for deploying the $105 million in net proceeds from the refinancing. We are targeting the use of the leased $65 million for repurchase of 2019 convertibles. Further deleveraging of the balance sheet is an important priority. As always, our capital allocation decisions will be made with price to value relationships being the determining factor. Now, looking at external growth, given the returns in risks of external M&A markets for power generation versus what we see for internal investments, we’re still highly focused on growing intrinsic value per share organically. However, power asset markets tend to be volatile. This management team has had its strong record of investing and selling at a counter cyclical manner. The management team members also have had success in building IPP businesses in early mover ways since the 1980s with the most recent being a wind energy growth strategy at another company in 2001 through 2008. We are looking for undervalued assets that are too small for the average or large size M&A players, but are significant enough to move the needle for us. We will be disciplined, patient and optimistic in that effort — opportunistic in that effort. We are also looking at capital light early mover opportunities such as energy storage, but we have nothing specific to report yet. We also now have improved liquidity to capitalize on the growth opportunities that we identify, including proceeds from the recent refinancings that are available to us for security repurchases, internal and external growth. The new $200 million revolver is also more flexible with respect to financing debt repurchases for growth investments as Terry discussed. As I began my remarks by saying we have reached the turning point, we have taken the key steps necessary to strengthen our financial position, reduce near-term maturity risk and remove the overhang of litigation. We believe that we are now not only in a much stronger defensive position, but we are credibly positioned to allocate capital to debt reduction, share repurchases, internal capital expenditures and capital light external investments. The refinancing provides us with the dry powder we need for those purposes. As we have for three decades, and as we did at Atlantic Power with the timely sale of or wind business and the redemption of our high yield notes, we will be disciplined and patient, punctuated by occasional bold moves and a sense of urgency when the math is compelling for our shareholders. We won’t try to make genius decisions, as the management team to tell you genius is well outside my circle of competence, but our goal is to make rational decisions, even in unpopular and patiently build value over the long haul. If you are a patient, value oriented investor, the management team is likeminded. From here, it is all about continued execution. That concludes my prepared remarks. We are now pleased to take any questions you may have. Question-and-Answer Session Operator [Operator Instructions] Our first question comes from Rupert Merer of National bank. Please go ahead. Rupert Merer Good morning, everyone and thanks for all the detail so far. On the PPA renewals, you touched on that briefly and I realize there is probably not much more information you can give us, but can you provide some thoughts on the outlook for your Ontario projects, the Kapuskasing and North Bay projects. I think those are your next contract expires in December later this year? Dan Rorabaugh Sure. This is Dan Rorabaugh. Happy to. You are right, they do expire at the end of next year. And as we’ve discussed in past calls, there was a report on non-utility generators that came out last year that was essentially very negative to the idea of renewing these PPAs, but these projects do have value in particular, Kapuskasing and Calstock were called out as being important to local reliability. We’ve approached the idea, so and the OEFC and we are actually in discussions right now with alternatives to extract some of that value and get some value back to them and to us in terms of sending those PPAs. Rupert Merer And is it likely that they would need some sort of capital reinvestment before you would get a contract expiry and is that something you consider in your long-term capital plans? Dan Rorabaugh We do consider the kinds of investments that we would be looking at are more in the course of the normal gas turbine maintenance kind of investments and not large capital expenditures. Rupert Merer Okay, great. And then secondly, you’ve talked a little bit about the M&A market and your focus on organic growth and deleveraging. I understand it may not be the best market for an asset seller. Are you still contemplating select asset sales for debt reduction or capital recycling? Dan Rorabaugh It’s not a great market for an asset buyer. So we look at the returns that are clearing the market when you go out and buy assets and then we’d look at the returns we can get on our old balance sheet and/or investing in our old fleet. And even the returns on the debt are pretty closer to returns you could get in investing in external M&A markets and of course the returns are a lot more certain. And then the returns we’ve gotten from our discretionary CapEx is much better than what’s available on the external M&A markets. We sold a quarter of the business last year and this management team has sold large counts of businesses and demerge businesses and sold entire companies before. So we’re always actively looking at buy and sell opportunities and we’re happy to do those when it makes sense. We ended any large-scale book set, selling assets when we sold off the wind projects, but we do look at individual offers on individual assets as things come up and we consider that as part of our long-term planning, but we don’t have anything we can update you on today. Operator And our next question comes from Sean Steuart of TD Securities. Please go ahead. Sean Steuart Thanks. Good morning, everyone and thanks for all the detail. Question on the revolver, I know there is a lot more flexibility post the refinancing activity, but you mentioned some limitations on use, can you go into detail on what that would pertain to? Terry Ronan Sure. I can give you a couple of things, Sean. First of all, the biggest qualifier is we can use the revolver which were in the covenant compliance which is always the case I guess. Secondly, we are able to use the revolver for debt purchases of the converts. However, there is cap on that usage of $100 million and that we are not able to buy back equity or preferred using the revolver proceeds. And then finally, we can use the revolver for growth purposes. Sean Steuart Okay, thanks. Terry Ronan On a general corporate basis. Sean Steuart Got it. And of the $105 million of net proceeds you said $65 million towards convert repurchases I presume that’s all the December 2019 that you’d be focused on correct? Terry Ronan I would say that we haven’t completely determined what that’s going to be, the number will be at least $65 million. We will be looking at both series potentially a combination of both, but we haven’t fully made that decision yet. Sean Steuart Okay. Rest of my questions were addressed. Thanks very much. Terry Ronan Thanks, Sean. Operator And our next question comes from Ben Pham of BMO. Please go ahead. Ben Pham Okay, thanks and good morning everybody. I may have missed this at the beginning some of the commentary. On the credit facility, the new credit facility, it seems like there’s quite a dramatic interest rate and even size relative to maybe some of your initial commentary on that and I’m wondering from your side in your discussions with the debt investors and the credit, what was kind of the main issues they had. I mean you secured more assets on the debt and you spent like you said a good job of paying down debt over time. I am just wondering what were folks concern about your discussions with them as you move through your process? Terry Ronan Well, there is lot of questions there. Let me try and walk through that here, Ben. One, the interest rate is obviously higher. We can’t call the market, we wish it was lower, but that’s the market where it is today. We talked about the reasons why we think that that this is a good transaction for us because it expands the maturities, it also allows us more flexibility. It removes the 2017 overhang. So those are the good things. If you look at where the lenders were coming from if I had to step into their shoes for a moment, I think their concern was ensuring that the overall outstandings were amortized down by maturity to somewhere in the $125 million range which would be approximately 80% of the principal amount of the $700 million. Thus we have the introduction of the greater of 50% sweep for these targeted debt levels which is the equivalent of a 65% to 70% sweep. It’s a little lumpy as we go over time with that. And that’s just a market. That was the market that we faced. It was a difficult market. The market has been difficult since last summer, but it was important to us when the window opened and there was an opportunity to do this that we do it particularly with the first of the 17s coming due in March of 2017. And it has also allowed us to extend the revolver into a five-year facility out to 21. So from our perspective it’s a very good transaction. The positives outweigh the negatives. Jim Moore This is Jim Moore. I think I heard you ask something too, I will try to add answer maybe you didn’t ask it, but I will answer it anyhow. But so we got done with the sale and then high yield redemption and in that case I think we really kind of [indiscernible] the market, but that kind of timing is usually locked, not prescience and we went right to work on the TLB side of it. It takes a while to get everything and put together. So we weren’t making a market judgment call at that point. We were going as fast as we could. When we were ready to go market things had gotten very dicey in the energy markets, so our advice was to – from our financial advisors was to deposit that and when we saw the market opening up a bit, we went back out with this transaction. The feedback we got was very good. The fact that we were able to raise $700 million in this kind of environment I think was every good. But some of the people on the debt side felt very good about the credit that they were looking at although we were facing a market where across-the-board people are trying to reduce high yield energy and power market exposure. So we were – I think the clean insured and a bunch dirty shirts sectors so we didn’t make a judgment to try to play games with the market. We got ready to go as quickly as we could. And then we had opportunity we went. The rates obviously have moved up since the last refinancing and we didn’t touch the bottom of the rate cycle, but we think overall the rates not a bad rate on a historical basis. We do have the higher sweep, but with the 17s fast approaching we didn’t want to make the perfect enemy of the good. So instead of sitting near and waiting for the opportune time or trying to play to markets a bit on rates, we decided let’s go ahead and do this deal because it eliminates the 17s. When I showed up in January, the big concern I had about this company was we had three walls of debt coming at us, we had a wall of debt in 17, we had a wall of high yield. That cost us 9%, that was coming at 18 and then we had to convert to 19. With the completion of this refinancing we’ve now once we redeem the ’17 to May eliminated the 17 wall, eliminated the 18 wall, as Terry pointed out we are on a good path for 19 wall. So all of that was important to us that we not get too cute on trying to play the rates. We were viewed as the strong credit which enabled us to go get this $700 million with increased flexibility. Another important thing in addition to avoiding the 17 by getting too cute was that the revolvers are difficult to replace in any market particularly this market and we came out with a very good outcome on the revolver. So in addition we extended the term of the revolver, we extended the term for the TLB and even after the higher suite with this $105 million to allocate to debt, equity and internal uses, so we would have preferred to have gotten more rates or hit the bottom of a market, but I think we were very well received which allowed us to raise a total of $900 million of debt in debt revolver in a very difficult market. And I’m actually very optimistic at this point about being able to get off our back foot and as a theme of my remarks was go from a – completely defensive mode to where we can play a little bit of offense. And we don’t need tons of liquidity. I mean our market cap is $310 million or so, so we don’t need tons of liquidity to make meaningful debt repurchases or common repurchases or investments in capital. And if you look at our $105 million with the new more flexible $200 million revolver and a cap that we already have on the balance sheet for working capital, we think our liquidity positions is now very strong relative to the opportunity sizes that we see in front of us. Ben Pham Okay, thanks for the color. And the only other thing I want to check on looking through the slides, the covenants in slide 27 specifically and it looks like you expected to I guess get down to 4.25 times leverage here at about 6 today, does that contemplate any change in PPA re-contracting rates or you feel like you are factoring that in, but maybe there’s some positive offsets that looks like you think the 80% debt profit today look likes it’s [indiscernible] what you are seeing in this year. You can add bit more color there. Terry Ronan So it does assume that in those numbers, but at a very conservative re-contracting assumption. Ben Pham Okay, so you are assuming some decline, but is that what you said? Terry Ronan Yes, that’s exactly what I said. Ben Pham Okay, all right. Thanks everybody. Terry Ronan Thank you. Operator [Operator Instructions] Showing no further questions, I would like to turn the conference back over to the management team for any closing remarks. Jim Moore Okay. Well, thank you for your time and attention today and your continued it interest in Atlantic Power. We look forward to updating you on our progress on our next conference call in August. Thank you. Operator Thank you. And everyone have a – today’s conference has now concluded. We thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day. Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited. THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY’S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY’S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY’S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS. If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com . Thank you!