Advanced Emissions Solutions Comments on Tax Reform Legislation and Increases Outlook for Future Expected Cash Flows; Announc...
February 21 2018 - 7:35PM
Advanced Emissions Solutions, Inc.'s (NASDAQ:ADES) (the “Company"
or “ADES”) today commented on the recently enacted Tax Cuts &
Jobs Act and its expected implications for the Company. The Tax
Cuts & Jobs Act (“Tax Act”) was signed into law on December 22,
2017 and prior to its final passage, the tax bill underwent
numerous revisions and amendments that had implications for ADES.
L. Heath Sampson, President and CEO of ADES,
commented, “There were a number of significant changes within the
recently enacted Tax Act. Overall, we were pleased with the final
Tax Act and its reinforcement of tax credits derived from the
production and sale of refined coal, which is critical to our
equity investment in Tinuum Group, LLC (“Tinuum”). The
reaffirmation of these tax credits is an acknowledgment of the
critical role they play in advancing our country’s clean energy
initiatives. Within the legislation itself, we, along with Tinuum,
view the removal of the corporate alternative minimum tax (“AMT”)
as a positive.
"While the impact of the Base Erosion Anti-Abuse
Tax (“BEAT”) has some ambiguity, discussion with our current
investors has confirmed their continued conviction of their
investments in refined coal. Investors that are impacted by BEAT
are still able to appropriately use refined coal tax credits;
however, their margin related to those credits may be
impacted."
Sampson concluded, “Despite some temporary
uncertainty around this BEAT provision for a few investors, the
clarity of this tax legislation and the removal of the corporate
AMT provide a net positive for Tinuum's business. The Tax Act
eliminates the market uncertainty of what tax reform would bring.
It provides additional clarity to the large majority of potential
investors in Tinuum's pipeline, and has the potential to open up
new prospective tax-equity investors in Tinuum’s ongoing focus to
lease or sell its remaining refined coal facilities. Lower
corporate tax rates do reduce the total project margins available
in a refined coal transaction as the expenses of the projects are
worth less in tax benefits. We do note that for some of Tinuum's
projects, there are minor one-time rent reduction provisions to
account for tax reform. Having said that, as a result of these
one-time adjustments, the two additional refined coal facilities
Tinuum sold during the fourth quarter of 2017 and our confidence
based on this legislation and Tinuum's ongoing conversations with
its current investors, we are updating our forecast of expected
future cash flows at ADES from our Tinuum investments, net of taxes
and applicable interest charges as of December 31, 2017, to a range
between $275 million and $300 million through 2021. This is an
increase of over 20% compared to our prior estimate at the end of
September 2017, even after receiving $16.5 million in distributions
from our Tinuum investments in the fourth quarter of 2017. We look
forward to providing more details on these developments, as well as
insight into our cashflows, capital allocation process, and overall
business strategy and status on our upcoming earnings call on March
13, 2018.”
The Company expects to release its fourth quarter 2017 financial
results and file its Annual Report on Form 10-K for the year
ended December 31, 2017 after market close
on Monday, March 12, 2018. The conference call to discuss the
Company's financial performance is scheduled to begin at 9:00
a.m. Eastern Time on Tuesday, March 13, 2018. The
conference call webcast information will be available via the
Investor Resources section of ADES's website
at www.advancedemissionssolutions.com. Interested parties may
also participate in the call by dialing: (833) 227-5845 (Domestic)
or (647) 689-4072 (International) conference ID 8970009. A
supplemental investor presentation will be available on the
Company's Investor Resources section of the website prior to the
start of the conference call.
About Advanced Emissions Solutions,
Inc.Advanced Emissions Solutions, Inc. serves as the
holding entity for a family of companies that provide emissions
solutions to customers in the power generation and other
industries.
ADA-ES, Inc. (“ADA”) is a wholly-owned subsidiary of Advanced
Emissions Solutions, Inc. (“ADES”) that provides emissions control
solutions for coal-fired power generation and industrial boiler
industries. With more than 25 years of experience developing
advanced mercury control solutions, ADA delivers proprietary
environmental technologies, equipment and specialty chemicals that
enable coal-fueled boilers to meet emissions regulations. These
solutions enhance existing air pollution control equipment,
maximizing capacity and improving operating efficiencies. Our track
record includes securing more than 40 US and international patents
for emissions control technology and systems and selling the most
activated carbon injection systems for power plant mercury control
in North America. For more information on ADA, and its products and
services, visit www.adaes.com.
Tinuum Group, LLC (“Tinuum Group”) is a 42.5% owned joint
venture by ADA that provides ADA’s patented Refined Coal (“RC”)
CyClean™ technology to enhance combustion of and reduce emissions
of NOx and mercury from coals in cyclone boilers and ADA’s patented
M-45™ and M-45-PC™ technologies for Circulating Fluidized boilers
and Pulverized Coal boilers respectively.
Caution on Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934,
which provides a “safe harbor” for such statements in certain
circumstances. The forward-looking statements include statements or
expectations regarding projection on future cash flows from the
Company's investment in Tinuum, and expectations about potential
transactions with tax-equity investors. These statements are based
on current expectations, estimates, projections, beliefs and
assumptions of the Company’s management. Such statements involve
significant risks and uncertainties. Actual events or results could
differ materially from those discussed in the forward-looking
statements as a result of various factors, including but not
limited to, the timing and amount of investment in Tinuum by
tax-equity investors, investors’ view of BEAT as regulatory
guidance is clarified, timing of new and pending regulations and
any legal challenges to or extensions of compliance dates of them;
the US government’s failure to promulgate regulations or
appropriate funds that benefit our business; changes in laws and
regulations, prices, economic conditions and market demand; impact
of competition; availability, cost of and demand for alternative
energy sources and other technologies; inability to sell or lease
additional RC facilities; termination of or amendments to the
contracts for sale or lease of RC facilities; decreases in the
production of RC; and other factors discussed in greater detail in
the Company’s filings with the Securities and Exchange
Commission (“SEC”). You are cautioned not to place undue
reliance on such statements and to consult the
Company’s SEC filings for additional risks and
uncertainties that may apply to the Company’s business and the
ownership of its securities. The Company’s forward-looking
statements are presented as of the date made, and the Company
disclaims any duty to update such statements unless required by law
to do so.
Source: Advanced Emissions Solutions, Inc.
Investor Contact:
Alpha IR GroupRyan Coleman or Chris
Hodges312-445-2870ADES@alpha-ir.com
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