News Release

Macquarie Power and Infrastructure Corporation Announces Fiscal 2010 Results


  • Achieved 6.8% increase in revenue
  • Delivered 10.7% increase in adjusted EBITDA from core assets
  • Achieved growth and diversification of portfolio

TORONTO, ONTARIO--(Marketwire - March 10, 2011) - Macquarie Power and Infrastructure Corporation (TSX:MPT)(TSX:MPT.DB.A) ("MPIC" or the "Corporation") today reported audited results for the fiscal year ended December 31, 2010. The Corporation's 2010 Annual Report to shareholders, including Management's Discussion and Analysis and the audited consolidated financial statements, is available on the Corporation's website at and on SEDAR at

"Our portfolio performed well in 2010 with increased power production overall and an average weighted availability of 97.5% compared with 95.0% in 2009. In addition, we successfully executed on our growth strategy, re-focusing our portfolio on core infrastructure businesses and making investments in the Amherstburg Solar Park and the Swedish district heating business, both of which will help support the long-term sustainability of our cash flow. We also completed a $69-million equity financing that gives us the capacity to pursue additional growth opportunities," said Michael Bernstein, President and Chief Executive Officer. "Our annual financial results primarily reflected the impact of the Leisureworld divestment in the first quarter and significantly higher than anticipated one-time costs related to corporate conversion and IFRS implementation, resulting in lower adjusted EBITDA, FFO and distributable cash for the year. Notably, adjusted EBITDA from our core businesses increased by 10.7% in 2010 over 2009, which highlights the underlying strength and quality of our portfolio."

Financial Overview
(in millions of Canadian dollars or on a per share basis unless otherwise noted)
  Quarter ended Dec 31 Variance   Year ended Dec 31 Variance  
2010 2009 (%)   2010 2009 (%)  
Revenue 44.3 42.8 3.4   158.5 148.4 6.8  
Cash flows from operating activities 1.1 9.5 (88.9 ) 30.6 38.0 (19.7 )
Adjusted EBITDA1 15.4 21.4 (28.0 ) 55.0 61.2 (10.1 )
Funds from operations1 11.2 17.8 (37.1 ) 40.0 48.1 (16.8 )
Distributable cash1 11.3 16.1 (30.0 ) 36.7 49.6 (26.0 )
Distributable cash per share1 0.206 0.323 (36.2 ) 0.732 0.994 (26.4 )
Dividends per share 0.165 0.262 (37.0 ) 0.660 1.050 (37.1 )
Payout ratio1 77.7% 81.2% (3.5 ) 91% 106% (15.0 )
Electricity production (MWh) 542,128 555,291 (2.5 ) 2,059,127 2,035,557 1.2  

1 "Adjusted EBITDA", "Funds From Operations", "distributable cash", "distributable cash per share" and "payout ratio" are non-GAAP financial measures and do not have any standardized meaning prescribed by Canadian GAAP. As a result, these measures are unlikely to be comparable to similar measures presented by other issuers. Definitions of each measure are provided on page 18 of Management's Discussion and Analysis with reconciliation to GAAP measures provided on pages 28, 29 and 30, respectively.

Key Drivers of Annual Financial Results

Higher revenue

MPIC achieved a 6.8% increase in total revenue in 2010 primarily due to a higher electricity price at the Cardinal gas cogeneration facility ("Cardinal"), increased production at Cardinal and the Whitecourt biomass power facility ("Whitecourt") due to fewer maintenance outages than in 2009, and higher revenue from the hydro power facilities. The production of these facilities was partially offset by lower production at Erie Shores Wind Farm due to lower than normal wind speeds. Total electricity production increased 1.2% from the prior year. 

Higher operating expenses

Operating expenses increased by 4.5%, primarily due to a 12.9% increase in fuel expenses at Cardinal, which reflected a higher TransCanada Pipelines Limited ("TCPL") gas transportation toll of $1.64 per gigajoule ("GJ") compared with $1.19 per GJ in 2009 as well as increased fuel prices.

Higher administrative expenses

Administrative expenses increased by 55.1% over 2009. This variance primarily reflected non-recurring costs related to corporate conversion and the transition to International Financial Reporting Standards. These factors were only partially offset by the decrease in management fees paid to the Manager following the sale of Leisureworld in the first quarter.

Higher interest expense

Interest expense increased by 19.7% over 2009 due to the higher principal amount outstanding on the Corporation's 6.50% convertible debentures compared with last year as well as a higher rate on the MPC-Cardinal credit facility (formerly the CPOT-Cardinal credit facility) established in May 2009. 

Sale of Leisureworld Senior Care LP ("Leisureworld")

Adjusted EBITDA, FFO and distributable cash for the year were lower than in 2009, primarily reflecting the decrease in Leisureworld's contribution to MPIC, which was $2.5 million in 2010 compared with $10.4 million in 2009, as a result of the sale of that business on March 23, 2010, and the lag in reinvesting the sale proceeds into new infrastructure businesses. 

Financial Position

As at December 31, 2010, the Corporation's unrestricted cash and cash equivalents totalled $131.4 million (December 31, 2009 - $53.1 million) of which $119.9 million (December 31, 2009 - $42.5 million) was not designated for major maintenance, capital expenditure or general reserves. The Corporation was conservatively leveraged relative to the low risk profile and long life of its assets, with a debt to capitalization2 ratio of 38.5% (December 31, 2009 – 49.9%). After giving effect to the Corporation's proposed investments in the Swedish district heating business and Amherstburg Solar Park, the Corporation will have more than $60 million in capital to pursue new acquisitions. 

2 The fair value of unitholders' equity reflected the Corporation's market capitalization as at December 31, 2010 based on a share price of $8.22 (December 31, 2009 - $6.11) and shares outstanding of 59,601,851 (December 31, 2009 – 49,914,927 shares). Shares outstanding include Class B exchangeable units of a subsidiary of the Corporation of which there were 3,249,390 outstanding at December 31, 2010 (December 31, 2009 – 3,249,390 units).

Fiscal 2011 Outlook

An outlook for each of the Corporation's assets is provided on pages 39 to 43 of the 2010 Annual Report. Notably, the Amherstburg Solar Park is progressing on schedule and is expected to start commercial operations in June 2011. Additionally, the acquisition of the Swedish district heating business by the Corporation and its investment partner, Macquarie European Infrastructure Fund II, has received regulatory approvals from the Swedish Competition Authority and Stockholm City Council. The Corporation expects to complete the transaction by the end of March 2011. 

The Corporation expects continuing strong operational performance from its businesses in 2011. EBITDA and FFO in 2011 are expected to be lower than in 2010 due to significantly higher TCPL interim gas transportation tolls of $2.24 per GJ, commencing March 1, 2011, compared with $1.64 per GJ in 2010, which is expected to increase operating costs at Cardinal in 2011 by approximately $5.5 - $6.0 million. 

Based on the Corporation's current portfolio and outlook, the Corporation's dividend policy of $0.66 cents per share on an annualized basis is expected to be sustainable through 2014. The Corporation currently anticipates that its payout ratio for 2011 will be approximately 100%3, reflecting the impact of the higher gas transportation toll as well as a greater number of shares outstanding following the financing that was completed in December 2010. These factors will be only partially offset by cash flow from the Amherstburg Solar Park and the Swedish district heating business in the second half of the year. 

3 Assumes an annualized TCPL gas transportation rate of approximately $2.14 per GJ, the anticipated contribution in 2011 from the Amherstburg Solar Park and the district heating business, and the increase in shares outstanding primarily as a result of the financing completed in December 2010.

As previously disclosed, the independent members of MPIC's Board of Directors established a special committee ("Special Committee") on December 22, 2009 to engage in discussions with the Manager regarding potential new management arrangements for MPIC following its conversion to a corporation. Although MPIC's corporate conversion and reorganization occurred on January 1, 2011, discussions between the Special Committee and the Manager are continuing. 

Conference Call and Webcast

Management will hold a conference call (with accompanying slides) to discuss year-end results on Friday, March 11, 2011 at 8:30 a.m. ET. The event will be accessible via webcast through the Corporation's website with accompanying slides at and by telephone at 416-340-8530 (Canada) or 1-877-240-9772 (North America). A replay of the call will be available until March 25, 2011 by dialling 905-694-9451 or 1-800-408-3053 and entering the passcode 1417868.

Dividend Reinvestment Plan (DRIP)

Eligible shareholders may elect to participate in the Corporation's Dividend Reinvestment Plan. For more information about the DRIP, please visit the Corporation's website at

About Macquarie Power and Infrastructure Corporation

Macquarie Power and Infrastructure Corporation's mission is to build and responsibly manage a high quality portfolio of infrastructure businesses in Canada and internationally in order to deliver a superior total return to shareholders through a combination of stable dividends and capital appreciation. MPIC's portfolio currently includes investments in gas cogeneration, wind, hydro and biomass power generating facilities, representing approximately 350 MW of installed capacity. MPIC is also currently developing a 20 MW solar power facility in Ontario and has entered into an agreement to acquire a 33.3% interest in a district heating portfolio in Sweden. MPIC is managed by an affiliate of Macquarie Group Limited. Please visit for additional information.

Notice to Readers

This news release is not an offer or invitation for subscription or purchase of or a recommendation of securities. It does not take into account the investment objectives, financial situation and particular needs of the investor. Before making an investment in the Corporation, the investor or prospective investor should consider whether such an investment is appropriate to their particular investment needs, objectives and financial circumstances and consult our investment adviser if necessary. 

None of the entities noted in this news release is an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542. Macquarie Bank Limited does not guarantee or otherwise provide assurance in respect of the obligations of these entities.

Certain of the statements contained in this news release are forward-looking and reflect management's expectations regarding the Corporation's future growth, results of operations, performance and business based on information currently available to the Corporation. Forward-looking statements are provided for the purpose of presenting information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements use forward-looking words, such as "anticipate", "continue", "could", "expect", "may", "will", "estimate", "believe" or other similar words. These statements are subject to known and unknown risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied by such statements and, accordingly, should not be read as guarantees of future performance or results. The forward-looking statements in this news release are based on information currently available and what the Corporation currently believes are reasonable assumptions, including the material assumptions for each of the Corporation's assets set out in its fiscal 2010 Annual Report under the heading "Asset Performance" as updated in subsequently filed Quarterly Financial Reports of the Corporation (such documents are available on the Canadian Securities Administrators' System for Electronic Document Analysis and Retrieval ("SEDAR") at Other material factors or assumptions that were applied in formulating the forward-looking statements contained herein include the assumption that the business and economic conditions affecting the Corporation's operations will continue substantially in their current state, including, with respect to industry conditions, general levels of economic activity, regulations, weather, taxes and interest rates, that there will be no unplanned material changes to the Corporation's facilities, equipment or contractual arrangements, and that the Corporation's previously announced investment in the Swedish district heating business ("DH Business") will be completed as described in the Corporation's material change report dated December 21, 2010, which is available on SEDAR.

Although the Corporation believes that it has a reasonable basis for the expectations reflected in these forward-looking statements, actual results may differ from those suggested by the forward-looking statements for various reasons, including risks related to: power infrastructure (operational performance; power purchase agreements; fuel costs and supply; contract performance; development risk; technology risk; default under credit agreements; land tenure and related rights; regulatory regime and permits; environmental, health and safety; climate change and the environment; and force majeure) and the Corporation (tax-related risks; variability and payment of dividends, which are not guaranteed; geographic concentration and non-diversification; dependence on Macquarie Power Management Ltd. ("MPML" or the "Manager") and potential conflicts of interest; insurance; environmental, health and safety regime; availability of financing; shareholder dilution; and the unpredictability and volatility of the common share price of the Corporation). There are also a number of risks related to the Corporation's proposed investment in the DH Business, including: general business risks inherent in the district heating business; geographic concentration; minority interest; government regulation; termination of supply and customer contracts; possible failure to complete the acquisition; enforcement of indemnities against the vendors of the DH Business; environmental health and safety liabilities; liability and insurance; and reliance on key personnel. There is also a risk that the DH Business may not achieve expected results.

For a more comprehensive description of these and other possible risks, please see the Corporation's Annual Information Form dated March 25, 2010 for the year ended December 31, 2009 as updated in subsequently filed Quarterly Financial Reports and other filings of the Corporation with the Canadian regulatory authorities. These filings are available on SEDAR. The assumptions, risks and uncertainties described above are not exhaustive and other events and risk factors could cause actual results to differ materially from the results and events discussed in the forward-looking statements. These forward-looking statements reflect current expectations of the Corporation as at the date of this news release and speak only as at the date of this news release. Except as may be required by law, the Corporation does not undertake any obligation to publicly update or revise any forward-looking statements.

Macquarie Power and Infrastructure Corporation is not an authorized deposit taking institution for the purposes of the Banking Act (Cth) 1959 and Macquarie Power and Infrastructure Corporation's obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL).  MBL does not guarantee or otherwise provide assurance in respect of the obligations of Macquarie Power and Infrastructure Corporation.


Macquarie Power and Infrastructure Corporation
Michael Smerdon
Executive Vice President and Chief Financial Officer
(416) 607 5167
Macquarie Power and Infrastructure Corporation
Aaron Boles
Vice President, Communications and Investor Relations
(416) 649 1325