Great Lakes Hydro Income Fund Announces 2005 Fourth Quarter and Year End Results - Strong fourth quarter results
Revenue generated from operations in the fourth quarter totalled $39.2 million compared to $30.2 million for the same period in 2004. The strong performance in the fourth quarter was a result of above average water inflows that positively impacted generation, which totalled 190 gigawatts higher than the same period last year, and further supports the strength of the Fund's geographic diversification strategy. Revenue for the full year totalled $154.5 million compared to $166.6 million for last year.
Income before non-cash and special items totalled $17.0 million for the fourth quarter compared to $8.3 million for the same period last year. For the year, income before non-cash and special items totalled $69.5 million compared to $78.8 million in 2004.
During the fourth quarter, the Fund completed three initiatives that will increase value to unitholders:
- The installation of two new generating units at the existing Cedar Dam, on the Lièvre River in Québec, was completed and both units were commissioned in December 2005.
- The overhaul of each of the four generating units and conversion of the generators to 60 Hz at the Weldon Generating Station, located on the Penobscot River in Maine, was completed and commissioned at the end of November 2005.
- The successful refinancing of long-term debt related to the Québec facilities, extending the average duration of the Fund’s long-term debt and reducing annual financing costs.
“We are pleased with above average hydrology conditions during the fourth quarter, enabling the Fund to end the year with reservoirs well above expected levels and putting the Fund in a good position to start 2006,” said Richard Legault, President and Chief Executive Officer.
| 2005 FINANCIAL AND OPERATING HIGHLIGHTS | ||||||
|---|---|---|---|---|---|---|
| Unaudited (CDN$ millions, except where noted) |
Three months ended | Twelve months ended | ||||
| December 31 |
December 31 | |||||
| 2005 | 2004 | (1) | 2005 | 2004 | (1) | |
| Generation (GWh) | 894 | 704 | 3,517 | 3,719 | ||
| Revenue | $ 39.2 | $ 30.2 | $ 154.5 | $ 166.6 | ||
| Operating expenses | 11.7 | 12.1 | 46.5 | 48.5 | ||
| Interest expenses | 10.5 | 9.8 | 38.5 | 39.3 | ||
| Income before non-cash and special items | 17.0 | 8.3 | 69.5 | 78.8 | ||
| Distribution to unitholders | $ 14.7 | $ 14.4 | $ 58.7 | $ 57.9 | ||
Tax Information
Tax information will be forwarded to the Canadian Depository for Securities (CDS) Limited and will be posted on the Fund’s Web site by no later than February 28, 2006. Brokerage firms receive the tax information from the Canadian Depository System, and have the responsibility for preparing the required tax slips (T5013) for mailing to unitholders by March 31, 2006.
| Great Lakes Hydro Income Fund CONSOLIDATED BALANCE SHEET |
|||||
|---|---|---|---|---|---|
| Unaudited AS AT DECEMBER 31 (THOUSANDS) |
2005 | 2004 | (1) | ||
| ASSETS | |||||
| Current | |||||
| Cash and cash equivalents | $ | 57,886 | $ | 18,276 | |
| Accounts receivable | 9,931 | 6,424 | |||
| Due from related parties | 3,597 | 1,788 | |||
| Prepaid expenses and maintenance materials | 5,367 | 4,635 | |||
| 76,781 | 31,123 | ||||
| Power generating assets | 1,036,103 | 1,035,361 | |||
| Other assets | 17,872 | 13,407 | |||
| $ | 1,130,756 | $ | 1,079,891 | ||
| LIABILITIES AND UNITHOLDERS' EQUITY | |||||
| Current liabilities | |||||
| Accounts and other payables | $ | 28,661 | $ | 20,570 | |
| Distribution payable to unitholders | 4,888 | 4,828 | |||
| Credit and hydrology reserve facilities | 4,204 | 36,804 | |||
| Current portion of long-term debt | - | 63,200 | |||
| 37,753 | 125,402 | ||||
| Long-term debt | 620,000 | 450,000 | |||
| Due to holder of non-controlling interest | 21,501 | 21,501 | |||
| Deferred credits | 38,715 | 34,858 | |||
| 717,969 | 631,761 | ||||
| Non-controlling interest | (16,379) | (16,316) | |||
| Unitholders' equity | 429,166 | 464,446 | |||
| $ | 1,130,756 | $ | 1,079,891 | ||
(1) All prior period comparatives in this document have been restated to reflect the adoption of Accounting Guideline 15, Consolidation of Variable Interest Entities.
| Great Lakes Hydro Income Fund CONSOLIDATED STATEMENT OF UNITHOLDERS' EQUITY |
||||
|---|---|---|---|---|
| Unaudited YEARS ENDED DECEMBER 31 (THOUSANDS) |
2005 | 2004 | ||
| Trust units, end of year | $ | 573,308 | $ | 573,308 |
| Deficit, beginning of year | (77,788) | (69,509) | ||
| Net income | 28,070 | 49,653 | ||
| Distributions to unitholders | (58,656) | (57,932) | ||
| Deficit, end of year | (108,374) | (77,788) | ||
| Currency translation adjustment, end of year | (35,768) | (31,074) | ||
| Unitholders' equity, end of year | $ | 429,166 | $ | 464,446 |
| Great Lakes Hydro Income Fund CONSOLIDATED STATEMENT OF INCOME |
|||||
|---|---|---|---|---|---|
| Unaudited YEARS ENDED DECEMBER 31 (THOUSAND,S EXCEPT PER TRUST UNIT AMOUNTS) |
2005 | 2004 | (1) | ||
| Revenues | $ | 154,456 | $ | 166,596 | |
| Expenses | |||||
| Operating and maintenance | 44,087 | 45,505 | |||
| Selling and administrative | 2,336 | 2,964 | |||
| 108,033 | 118,127 | ||||
| Interest and financing fees | 35,019 | 35,809 | |||
| Yield maintenance fee | 10,197 | - | |||
| Interest on due to holder of non-controlling interest | 3,510 | 3,510 | |||
| Income before non-cash items | 59,307 | 78,808 | |||
| Gain on disposal of power generating assets | (1,880) | - | |||
| Depreciation and amortization | 27,699 | 27,314 | |||
| Non-controlling interest | 600 | 543 | |||
| Future taxes | 4,818 | 1,298 | |||
| Net income | $ | 28,070 | $ | 49,653 | |
| Net income per trust unit | $ | 0.58 | $ | 1.03 | |
| Weighted average number of units outstanding | 48,276 | 48,276 | |||
(1) All prior period comparatives in this document have been restated to reflect the adoption of Accounting Guideline 15, Consolidation of Variable Interest Entities.
| Great Lakes Hydro Income Fund CONSOLIDATED STATEMENT OF CASH FLOWS |
|||||
|---|---|---|---|---|---|
| Unaudited YEARS ENDED DECEMBER 31 (THOUSANDS) |
2005 | 2004 | (1) | ||
| Operating activities | |||||
| Net income | $ |
28,070 |
$ |
49,653 |
|
| Add (deduct) non-cash items: | |||||
| Gain on disposal of power generating assets | (1,880) | - | |||
| Depreciation and amortization | 27,699 | 27,314 | |||
| Non-controlling interest | 600 | 543 | |||
| Future taxes | 4,818 | 1,298 | |||
| Income before non-cash items | 59,307 | 78,808 | |||
| Change in non-cash working capital | 905 | 18,185 | |||
| 60,212 | 96,993 | ||||
| Investing activities | |||||
| Additions to power generating assets | (34,845) | (31,623) | |||
| Proceeds on disposal of power generating assets | 1,885 | - | |||
| (32,960) | (31,623) | ||||
| Financing activities | |||||
| Financing fees | (6,794) | (3,731) | |||
| Credit facility - drawdown | 8,000 | 11,000 | |||
| Credit facility - repayment | (39,800) | (600) | |||
| Hydrology reserve facility - repayment | (800) | - | |||
| Bridge facility - drawdown | 125,000 | - | |||
| Bridge facility - repayment | (125,000) | - | |||
| Long-term debt - issuance | 225,000 | 169,099 | |||
| Long-term debt - repayment | (113,738) | (169,099) | |||
| Distributions to non-controlling interest | (662) | (636) | |||
| Distributions to unitholders | (58,596) | (57,932) | |||
| 12,610 | (51,899) | ||||
| Effect of foreign exchange rate changes on cash and cash equivalents |
(252) | (864) | |||
| Increase in cash and cash equivalents | 39,610 | 12,607 | |||
| Cash and cash equivalents, beginning of year | 18,276 | 5,669 | |||
| Cash and cash equivalents, end of year | $ | 57,886 | $ | 18,276 | |
| Cash and cash equivalents is comprised of: | |||||
| Cash | $ | 13,605 | $ | 15,860 | |
| Short-term investments | 44,281 | 2,416 | |||
| $ | 57,886 | $ | 18,276 | ||
| Supplementary information: | |||||
| Interest paid during the year | $ | 45,962 | $ | 36,645 | |
| Income taxes paid during the year | $ | 555 | $ | 217 | |
(1) All prior period comparatives in this document have been restated to reflect the adoption of Accounting Guideline 15, Consolidation of Variable Interest Entities.
Forward-Looking Statements
This new release may contain forward-looking statements concerning the Great Lakes Hydro Income Fund (“Fund”) business and operations. Forward looking statements can be identified by the use of words, such as “plans”, “expects”, or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “does not anticipate”, or “believes” or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results or performance to be materially different from any future results or performance expressed or implied by the forward statements.
For further information:
Shelley Moorhead
Director Corporate Communications and Investor Relations
(819) 561-8072, unitholderenquiries@greatlakeshydro.com