Equity

6 Months Ended

Jun. 30, 2020

Equity

Equity

11. Equity

The following tables provide reconciliations of the beginning and ending equity attributable to shareholders of Atlantic Power Corporation, preferred shares issued by a subsidiary company and total equity for the three and six months ended June 30, 2020 and 2019:

					Accumulated		Total		Preferred
					Other		Atlantic Power		Shares of a
	Common		Retained		Comprehensive		Corporation		Subsidiary		Total
	Shares		Deficit		(loss) income		Shareholders' Deficit		Company		Equity
Balance at March 31, 2020	$	1,252.1	$	(1,134.7)	$	(152.2)	$	(34.8)	$	168.8	$	134.0
Net (loss) income		—		(5.7)		—		(5.7)		1.7		(4.0)
Share-based compensation		0.4		—		—		0.4		—		0.4
Common share repurchases		(27.9)		—		—		(27.9)		—		(27.9)
Dividends on preferred shares of a subsidiary company - Series 1 (Cdn$0.303125 per share)		—		—		—		—		(0.8)		(0.8)
Dividends on preferred shares of a subsidiary company - Series 2 (Cdn$0.358688 per share)		—		—		—		—		(0.7)		(0.7)
Dividends on preferred shares of a subsidiary company - Series 3 (Cdn$0.363146 per share)		—		—		—		—		(0.2)		(0.2)
Foreign currency translation adjustments		—		—		4.9		4.9		—		4.9
Balance at June 30, 2020	$	1,224.6	$	(1,140.4)	$	(147.3)	$	(63.1)	$	168.8	$	105.7

					Accumulated		Total		Preferred
					Other		Atlantic Power		Shares of a
	Common		Retained		Comprehensive		Corporation		Subsidiary		Total
	Shares		Deficit		(loss) income		Shareholders' Equity		Company		Equity
Balance at March 31, 2019	$	1,261.4	$	(1,112.7)	$	(144.1)	$	4.6	$	183.2	$	187.8
Net income		—		1.2		—		1.2		1.7		2.9
Share-based compensation		0.2		—		—		0.2		—		0.2
Common share repurchases		(0.7)		—		—		(0.7)		—		(0.7)
Preferred share repurchases		—		—		—		—		(0.2)		(0.2)
Dividends on preferred shares of a subsidiary company - Series 1 (Cdn$0.303125 per share)		—		—		—		—		(0.9)		(0.9)
Dividends on preferred shares of a subsidiary company - Series 2 (Cdn$0.348125 per share)		—		—		—		—		(0.6)		(0.6)
Dividends on preferred shares of a subsidiary company - Series 3 (Cdn$0.363697 per share)		—		—		—		—		(0.3)		(0.3)
Realized and unrealized loss on hedging activities, net of tax		—		—		(0.1)		(0.1)		—		(0.1)
Foreign currency translation adjustments		—		—		2.7		2.7		—		2.7
Balance at June 30, 2019	$	1,260.9	$	(1,111.5)	$	(141.5)	$	7.9	$	182.9	$	190.8

					Accumulated		Total		Preferred
					Other		Atlantic Power		Shares of a
	Common		Retained		Comprehensive		Corporation		Subsidiary		Total
	Shares		Deficit		(loss) income		Shareholders' Deficit		Company		Equity
Balance at January 1, 2020	$	1,259.9	$	(1,164.2)	$	(140.7)	$	(45.0)	$	182.7	$	137.7
Net income (loss)		—		23.8		—		23.8		(4.1)		19.7
Share-based compensation		0.8		—		—		0.8		—		0.8
Common share repurchases		(36.1)		—		—		(36.1)		—		(36.1)
Preferred share repurchases		—		—		—		—		(6.4)		(6.4)
Dividends on preferred shares of a subsidiary company - Series 1 (Cdn$0.606250 per share)		—		—		—		—		(1.6)		(1.6)
Dividends on preferred shares of a subsidiary company - Series 2 (Cdn$0.717376 per share)		—		—		—		—		(1.3)		(1.3)
Dividends on preferred shares of a subsidiary company - Series 3 (Cdn$0.726488 per share)		—		—		—		—		(0.5)		(0.5)
Realized and unrealized loss on hedging activities, net of tax		—		—		(0.3)		(0.3)		—		(0.3)
Foreign currency translation adjustments		—		—		(6.3)		(6.3)		—		(6.3)
Balance at June 30, 2020	$	1,224.6	$	(1,140.4)	$	(147.3)	$	(63.1)	$	168.8	$	105.7

					Accumulated		Total		Preferred
					Other		Atlantic Power		Shares of a
	Common		Retained		Comprehensive		Corporation		Subsidiary		Total
	Shares		Deficit		(loss) income		Shareholders' Equity		Company		Equity
Balance at January 1, 2019	$	1,260.9	$	(1,121.6)	$	(146.2)	$	(6.9)	$	199.3	$	192.4
Net income (loss)		—		10.1		—		10.1		(4.8)		5.3
Share-based compensation		0.8		—		—		0.8		—		0.8
Common share repurchases		(0.8)		—		—		(0.8)		—		(0.8)
Preferred share repurchases		—		—		—		—		(7.9)		(7.9)
Dividends on preferred shares of a subsidiary company - Series 1 (Cdn$0.606250 per share)		—		—		—		—		(1.8)		(1.8)
Dividends on preferred shares of a subsidiary company - Series 2 (Cdn$0.696250 per share)		—		—		—		—		(1.2)		(1.2)
Dividends on preferred shares of a subsidiary company - Series 3 (Cdn$0.726590 per share)		—		—		—		—		(0.7)		(0.7)
Realized and unrealized gain on hedging activities, net of tax		—		—		(0.2)		(0.2)		—		(0.2)
Foreign currency translation adjustments		—		—		4.9		4.9		—		4.9
Balance at June 30, 2019	$	1,260.9	$	(1,111.5)	$	(141.5)	$	7.9	$	182.9	$	190.8

Share Repurchase Programs

Normal Course Issuer Bid

On December 31, 2019, we commenced a new Normal Course Issuer Bid (“NCIB”) for our Series E Debentures, our common shares and for each series of the preferred shares of Atlantic Power Preferred Equity Ltd. (“APPEL”), our wholly-owned subsidiary. The NCIBs expire on December 30, 2020 or such earlier date as the Company and/or APPEL complete their respective purchases pursuant to the new NCIBs. Under the NCIB, we may purchase up to a total of 10,578,799 common shares based on 10% of our public float as of December 17, 2019 and we are limited to daily purchases of 9,243 common shares per day with certain exceptions including block purchases and purchases on other approved exchanges. We may also purchase up to Cdn$11.5 million of Series E Debentures; 384,750 shares of 4.85% Cumulative Redeemable Preferred Shares, Series 1 (the “Series 1 Shares”); 223,072 shares of 7.0% Cumulative Rate Preferred Shares Series 2 (the “Series 2 Shares”); and 133,031 shares of Cumulative Floating Rate Preferred Shares, Series 3 (the “Series 3 Shares”) of APPEL.

All purchases made under the NCIBs will be made through the facilities of the TSX or other Canadian designated exchanges and published marketplaces and in accordance with the rules of the TSX at market prices prevailing at the time of purchase. Common share purchases under the NCIBs may also be made on the New York Stock Exchange (“NYSE”) in compliance with Rule 10b-18 under the Exchange Act, as amended, or other designated exchanges and published marketplaces in the United States in accordance with applicable regulatory requirements. The ability to make certain purchases through the facilities of the NYSE is subject to regulatory approval.

The NCIB permits the Company to repurchase common and preferred shares and Series E Debentures. In addition to the current NCIBs, from time to time we may repurchase our securities, including our common shares, our Series E Debentures and our APPEL preferred shares through open market purchases, including pursuant to one or more “Rule 10b5-1 plans” pursuant to such provision under the Exchange Act, NCIBs, issuer self tender or substantial issuer bids, or in privately negotiated transactions. There can be no assurances as to the amount, timing or prices of repurchases, which may vary based on market conditions, other market opportunities and other factors. Any share repurchases outside of previously authorized NCIBs would be effected after taking into account our then current cash position and then anticipated cash obligations or business opportunities. Beginning on March 25, 2020, we commenced a Substantial Issuer Bid (“SIB”) (described below) that expired on April 30, 2020. During the time the SIB was active, the NCIB was suspended for the purchase of common shares and Series E Debentures, but not for the preferred shares of APPEL.

In the six months ended June 30, 2020, we repurchased and cancelled 4,810,325 common shares under the NCIB at a total cost of $10.3 million. Subsequent to June 30, 2020 and through the date of this Form 10-Q, we repurchased and cancelled an additional 2,729,780 common shares at a total cost of $5.5 million.

In the six months ended June 30, 2020, we also repurchased and cancelled 381,794 Series 1 Shares, 62,365 Series 2 Shares and 120,000 Series 3 Shares of APPEL at a total cost of $6.4 million. As a result of the repurchase, a $7.4 million loss was attributed to the preferred shares of a subsidiary company in the condensed consolidated statements of operations for the six months ended June 30, 2020.

Substantial Issuer Bid

On March 25, 2020, we commenced a SIB for the purchase of up to $25 million common shares. This was equivalent to 12,820,512 common shares, or approximately 12% of our total issued and outstanding common shares based on a $1.95 per share purchase price (the minimum price per common share under the offer) as measured on the date of commencement. The SIB expired on April 30, 2020. During the time the SIB was active, the NCIB was suspended for the purchase of common shares and Series E Debentures, but not for the preferred shares of APPEL.

The SIB proceeded by way of a “modified Dutch auction.” Holders of common shares were able to tender to the offer by: (i) auction tenders in which they specified the number of common shares being tendered at a price of not less than US$1.95 and not more than US$2.20 per common share in increments of US$0.05 per common share, or (ii) purchase price tenders in which they did not specify a price per Common Share, but rather agreed to have a specified number of common shares purchased at the purchase price determined by auction tenders.

The purchase price paid by the Company for each validly deposited common share was based on the number of common shares validly deposited pursuant to auction tenders and purchase price tenders, and the prices specified by shareholders making auction tenders. The purchase price was the lowest price which enabled the Company to purchase common shares up to the maximum amount available for auction tenders and purchase price tenders, determined in accordance with the terms of the offer. Common shares that were deposited at or below the final determined purchase price were purchased at such purchase price. Common shares that were not taken up in connection with the offer, including common shares deposited pursuant to auction tenders at prices above the purchase price, were returned to the shareholders.

We repurchased and cancelled 12,500,000 common shares under the SIB at a total cost of $25.8 million, including transaction costs, upon its expiration on April 30, 2020.