Countryside Power Income Fund Reports Financial Results for the Fiscal Year 2005.LONDON -- Acquisition of Cogeneration cogeneration In power systems, use of steam for both power generation and heating. High-temperature, high-pressure steam from a boiler and superheater first passes through a turbine to produce power. Assets Fuel Strong Cash Flow Growth Countryside Power Income Fund (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :COU COU Calendar of Updates COU Council of Ontario Universities COU Change Of Use COU Curso de Orientación Universitaria COU Columbia, MO, USA - Columbia Regional (Airport Code) COU Cardiac Observation Unit COU Cable Orderwire Unit .UN)("the Fund") today announced its financial results for the fourth quarter and fiscal year ended December 31, 2005. All figures are in Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents unless otherwise stated. Highlights for Fiscal 2005: - Cash available for distribution increased to $20.0 million, resulting in distributable cash(i) of $1.274 per unit and a solid 80.7% payout ratio Payout Ratio The percentage of earnings paid out in dividends. It is calculated by dividing dividends per share by earnings per share. Notes: The payout ratio indicates how well earnings support the dividend payments: the lower the ratio, the more secure the dividend. - Cash distributions to unitholders were increased by 1 cent per unit annually to $1.035 - Acquisition of two Cogeneration Facilities in the U.S. through execution of growth strategy - Strengthened governance practices and modified management arrangements to facilitate opportunities for further accretive investments in power generation and utility infrastructure "In 2005, Countryside delivered excellent financial results and strong growth. We improved operational performance, further diversified diversified (di·verˑ·s our asset base, and increased our two most important measures of cash flow - Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (i) and cash available for distribution. As a result, we increased distributions to unitholders," said Goran Mornhed, President and Chief Executive Officer of Countryside Ventures LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control (the "Manager"). Results for Fiscal 2005 Countryside's consolidated revenue increased substantially from the prior year period(ii) due primarily to the successful acquisition of Ripon Power LLC (the "Cogen Facilities") in June 2005. Revenue for the fiscal year 2005 was $67.2 million compared with $21.1 million for 2004. The Fund delivered significantly higher Adjusted EBITDA for 2005 of $24.5 million, compared with $11.3 million for 2004. The Cogen Facilities contributed six months of solid operating results in the second half of 2005, with an Adjusted EBITDA of $10.1 USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. million, primarily as a result of an operational focus on maximizing cash flow margins. In the District Energy Systems, Adjusted EBITDA was $5.9 million for the year, an increase of 27% from 2004, due primarily to efficiency and operational improvements. Net income was $13.2 million or $0.85 per unit as compared with $7.6 million or $0.51 per unit in the prior year period. In the 12-month period, distributable cash was $20.0 million and distributions declared were $16.1 million, resulting in a payout ratio of 80.7%. The payout ratio reflects the strong performance and peak operating season at the Cogen Facilities. The Fund also implemented a foreign exchange hedging program on a portion of the cash flows from the Cogen Facilities, ensuring there is a foreign currency hedge Currency hedge Applies mainly to international equities. Hedging technique to guard against foreign exchange fluctuations (i.e., short Euro l00 mm when holding a long position of Euro l00 mm in stocks). on substantially all U.S. dollar amounts that are required to meet the Fund's Canadian dollar-denominated obligations and anticipated unitholder distributions.
CONSOLIDATED STATEMENTS OF INCOME AND DEFICIT
---------------------------------------------
For the For the
year 267-day
ended period ended
December 31, December 31,
2005 2005
$ $
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REVENUES
Energy sales 52,823 10,466
Fuel and other fees 2,252 1,679
Interest income on loans to U.S. Energy
Biogas Corp. 11,546 8,556
Income from U.S. Energy Biogas Corp.
royalty interest 369 410
Other income 171 25
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67,161 21,136
EXPENSES
Fuel, operating and maintenance 34,898 7,775
General and administration 7,753 2,053
Depreciation and amortization 8,061 1,986
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50,712 11,814
Operating income 16,449 9,322
Interest expense 5,578 1,181
Unrealized loss (gain) on interest rate swaps (312) 60
Realized gain on interest rate swap (2,559) -
Unrealized gain on foreign exchange (750) -
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1,957 1,241
Income before provision for income taxes 14,492 8,081
Provision for income taxes
Current 22 10
Future 1,309 506
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1,331 516
Net income for the period 13,161 7,565
Deficit, beginning of period (3,596) -
Distributions declared to Unitholders (16,145) (11,161)
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Deficit, end of period (6,580) (3,596)
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Net income per trust unit - basic 0.85 0.51
Net income per trust unit - diluted 0.84 0.51
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Results for the Fourth Quarter 2005 Countryside's consolidated revenue for the three months ended December 31, 2005 was $23.8 million, an increase of $16.0 million compared with the same period last year, primarily as a result of the acquisition of the Cogen Facilities. Excluding the effect of the acquisition, revenue would have been $8.7 million, up 10.7% from $7.9 million in the same period in 2004. The Fund's Adjusted EBITDA for the three-months ended December 31, 2005 was $6.5 million, an increase of $2.6 million from the prior year period, again due primarily to the addition of the Cogen Facilities. Excluding the quarterly results of Ripon and other Ripon-related expenses, Adjusted EBITDA would have been $4.2 million in the fourth quarter, an increase of 9.7% compared with $3.8 million in the prior year period. The higher Adjusted EBITDA is due primarily to increased energy prices, efficiency and operational improvements. Net income was $4.0 million and $0.23 per unit as compared with $2.2 million and $0.14 per unit in the prior year period. Distributable cash available for the quarterly period ended December 31, 2005 was $6.2 million, resulting in a payout ratio for the period of 75.3%. Excluding the quarterly results of the Cogen Facilities and other Ripon-related expenses, distributable cash would have been $4.0 million, up 7.1% from $3.7 million in the comparable period last year. Distributions As a result of improvements in operating performance and expected increases in cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses , Countryside increased distributions to unitholders in September 2005 to $1.035 per unit annually from $1.025. The Fund anticipates that unitholder cash distributions will continue at $1.035 per unit for the remainder of fiscal 2006. Cash retained by the Fund in fiscal 2005 that is reflected by the 2005 payout ratio of 80.7% should provide flexibility for possible further increases in distributions, as well as a strong protection against unexpected events. Outlook The Cogen Facilities' power purchase agreements provide for both electrical capacity Noun 1. electrical capacity - an electrical phenomenon whereby an electric charge is stored capacitance, capacity electrical phenomenon - a physical phenomenon involving electricity and energy payments that will not expire until 2016 and 2018. Based on these long-term commercial arrangements and strong growth fundamentals in the California power market, the Fund is currently evaluating profit improvement strategies that may include, among other things, an expansion of plant capacity. No major maintenance expenditures are expected at the Cogen Facilities until 2007 and 2008. In mid-2006, when the Cogen Facilities' energy pricing under the power purchase agreements ("PPA PPA 1. Palpation, Percussion & Ausculation 2. Pittsburgh pneumonia agent 3. Postpartum amenorrhea 4. Price per accession 5. Pure pulmonary atresia ") revert re·vert v. 1. To return to a former condition, practice, subject, or belief. 2. To undergo genetic reversion. to pricing formulas correlated cor·re·late v. cor·re·lat·ed, cor·re·lat·ing, cor·re·lates v.tr. 1. To put or bring into causal, complementary, parallel, or reciprocal relation. 2. with California gas price indices, and the current gas purchase arrangements end, the Cogen Facilities intend to enter into new arrangements with one or more investment grade gas supplier(s) that would provide full natural gas requirements. The California Public Utility Commission is currently reviewing possible adjustments of energy payment pricing formulas under PPAs for qualifying power generation facilities in California that are governed by the Public Utility Regulatory Policies Act The Public Utility Regulatory Policies Act (or PURPA) was a law passed in 1978 by the United States Congress as part of the National Energy Act. It was meant to promote greater use of renewable energy. of 1978 and applicable California state regulations. The outcome of an adjustment in energy pricing, if any, may affect approximately 7,000 megawatts of qualifying power generation facilities, including the Fund's Cogen Facilities. The final terms of any long-term arrangements for fuel supply that may be entered into by the Cogen Facilities will be based on the outcome of the California Public Utility Commission review, with an aim to substantially correlate fuel pricing with the PPA energy pricing formula then in effect. The Ontario Power Authority The Ontario Power Authority (OPA) was established through the Electricity Restructuring Act, 2004 (Bill 100). It operates independently and as a non-profit corporation. Licensed by the Ontario Energy Board, it reports to the legislature through the Ministry of Energy (Ontario). ("OPA OPA: see Office of Price Administration. ") is seeking to solicit up to 1,000 megawatts of combined heat and power generation in the Province of Ontario. The Fund's London, Ontario based district energy facility already operates in this market and may be able to meet the criteria for providing a portion of the requested power generation. The London System
The London System is a complex of related chess openings that begin with 1.d4 followed by an early Bf4. will evaluate if an expansion of its facilities and the terms of a concomitant concomitant /con·com·i·tant/ (kon-kom´i-tant) accompanying; accessory; joined with another. concomitant adjective Accompanying, accessory, joined with another new power purchase agreement with OPA would be competitive in the market and economically beneficial to the Fund, as well as accretive to the Fund's distributable cash. The Manager is committed to growing the Fund through new accretive investments in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and is continually evaluating investment opportunities. The Manager has a disciplined investment strategy to identify and pursue acquisitions and investment opportunities. Tax Deferral tax deferral The delay of a tax liability until a future date. For example, an IRA may result in a tax deferral on the amount contributed to the IRA and on any income earned on funds in the IRA until withdrawals are made. Rate(iii) The Manager of the Fund estimates that in 2005, the composition of distributions for tax purposes will be approximately 34 per cent return of capital, with the remaining 66 per cent will be subject to tax in the hands of unitholders.
Distributable Cash Reconciliation
---------------------------------
Three-month Year 267-day
period ended ended period ended
December 31, December 31, December 31,
2005 2005 2004
$ $ $
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Net income for the period 4,039 13,161 7,565
Add (deduct) items not
involving cash:
Depreciation and amortization 3,097 8,061 1,986
Unrealized (gain) / loss on
interest rate swap 1,774 (312) 60
Realized (gain) / loss on
interest rate swap (2,559) (2,559) -
Provision for future income
taxes (275) 1,309 506
Unrealized (gain) / loss on
foreign exchange (750) (750) -
Accreted interest on
debentures 24 24 -
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5,350 18,934 10,117
Add:
Receipt of principal on USEB loans 476 1,828 1,211
Transaction costs expensed 642 1,080 -
Deduct:
Principal repayments on Cogen
Facilities' project-related debt - 957 -
Purchases of capital assets
for regular operations2 128 504 253
Royalty Interest 133 369 -
Distributable cash for the period 6,207 20,012 11,075
Distributions declared for the period 4,674 16,145 11,161
Distributable cash per Trust
Unit for the period $0.364 $1.290 $0.743
Distributions declared per
Trust Unit for the period
(whole dollars) $0.271 $1.041 $0.749
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Conference Call and Webcast Management will host a conference call at 10 a.m. (ET) on Friday, March 10, 2006 to discuss the results. Please call 416-644-3416 or 1-866-249-1964 to access the call. The call will be webcast live and archived on the Countryside web site at www.countrysidepowerfund.com. Countryside's financial statements for the period and management's discussion and analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial are available at www.countrysidepowerfund.com. (i)Non-GAAP Measures Distributable cash does not have any standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. meaning prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). by GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and is therefore unlikely to be comparable to similar measures presented by other issuers. Since the Fund and its subsidiaries distribute substantially all of their available cash on an on-going basis, management believes that distributable cash is an important measure in evaluating the performance of the Fund and determining whether to invest in units of the Fund. For a reconciliation of cash provided by operating activities from the Consolidated Statements of Cash Flows to distributable cash please see the Fund's MD&A for the year ended December 31, 2005. Adjusted earnings before interest, income taxes, unrealized and realized interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. and unrealized foreign exchange gains and losses, and depreciation and amortization ("Adjusted EBITDA") is not a measure under Canadian GAAP and there is no standardized measure of Adjusted EBITDA and therefore, it may not be comparable to similar measures presented by other funds or companies. Management uses Adjusted EBITDA as a key measure of operating performance, and thus has framed a portion of the MD&A comments accordingly. Adjusted EBITDA can be calculated from the Fund's GAAP statements as operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , plus depreciation and amortization. (ii)Prior Year Period The prior year comparative period includes operating results for the 267-day period from April 8, 2004, the date of the Fund's initial public offering, to December 31, 2004. (iii)Tax Deferral Investors should consult their own tax advisors A tax advisor is a financial expert especially trained in tax law. Some countries require tax advisors to verify the balance sheets of companies above a certain size. Individuals usually require tax advisors to minimize taxation, to avoid learning the details of tax law in for advice with respect to the tax consequences of an investment in Countryside's trust units based on their respective circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . About Countryside Power Income Fund Countryside Power Income Fund has investments in two district energy systems in Canada, with a combined thermal and electric generation capacity of approximately 122 megawatts, and two gas-fired cogeneration plants in California with a combined power generation capacity of 94 megawatts. In addition, the Fund has an indirect investment in 22 renewable power and energy projects located in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , which currently have approximately 51 megawatts of electric generation capacity and sold approximately 710,000 MMBtus of boiler boiler, device for generating steam. It consists of two principal parts: the furnace, which provides heat, usually by burning a fuel, and the boiler proper, a device in which the heat changes water into steam. fuel in 2005. The Fund's investment in the projects consists of loans to, and a convertible royalty interest royalty interest The proportional ownership interest by the owner of oil and gas rights in income produced by the asset. See also overriding royalty interest. in, U.S. Energy Biogas bi·o·gas n. A mixture of methane and carbon dioxide produced by bacterial degradation of organic matter and used as a fuel. biogas Noun gaseous fuel produced by the fermentation of organic waste Corp. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release may contain forward-looking statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc expected future events and financial and operating results of the Fund that involve risks and uncertainties. Actual results may differ materially from management expectations as projected in such forward-looking statements for a variety of reasons, including market and general economic conditions and the risks and uncertainties detailed from time to time in the Fund's prospectus filed with the Canadian securities regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities . Due to the potential impact of these factors, the Fund disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law. Countryside Power Income Fund (TSX:COU.UN) |
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