Atlantic Power Corporation (NYSE:AT) Q3 2018 Earnings Conference Call Transcript

Nov 02, 2018 • 08:30 am ET

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Atlantic Power Corporation (NYSE:AT) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, and welcome to the Atlantic Power Corporation Third Quarter 2018 Results and Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note, this event is being recorded.

I would now like to turn the conference over to Robert Bialobrzeski, Director of Finance. Please go ahead.

Executive
Robert Bialobrzeski

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September 30, 2018, were issued by press release yesterday afternoon and are available on our website, www.atlanticpower.com and on EDGAR and SEDAR. Management's prepared remarks and the accompanying presentation for today's call and webcast can be found in the Conference Call section of our website. A replay of today's webcast will be available on our website for a period of one year.

Financial figures that we will be presenting are stated in US dollars and are approximate unless otherwise noted.

(Forward-Looking Cautionary 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. For reconciliations of this measure to the most directly comparable GAAP financial measure, to the extent that 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'll turn the call over to Jim Moore, President and CEO of Atlantic Power.

Executive
Jim Moore

Thank you, Ron. We had a good quarter of steady progress on all fronts. On debt, we paid off nearly $21 million of debt in the third quarter and expect to pay off $100 million of debt in 2018. We repriced our term loan and revolver for the fourth time, lowering the spread by another 25 basis points to 275 basis points, down from an initial rate of 500 basis points over LIBOR. The combination of lower debt levels and a lower rate on the term loan is continuing to reduce our annual interest payments, which benefits our operating cash flow.

As we have noted on past calls, we believe we can reach a net debt zero position by 2025 or so if we keep to our current delevering path. We are not committed to go into net debt zero, if there are better uses for our discretionary cash, but we are pointing out that we now have the ability to get there in the foreseeable time period.

Costs. We have reduced corporate G&A expense to a run rate of $22 million, of which an estimated $4 million to $6 million represents public company costs. We completed the move to smaller headquarter space in our existing building in September. In Boston, the annual rent for our headquarters was approximately $1.2 million, which we cut by more than half with the move to Dedham in April 2015 and then cut by roughly half again to approximately $285,000, as a result of the recent move and reduction in space. Meanwhile, our asset management team continues to improve the cost