OAKVILLE, ON, Aug. 9, 2018 /CNW/ - Algonquin Power &
Utilities Corp. (TSX/NYSE: AQN) ("APUC" or the "Company") today
announced financial results for the second quarter ended
June 30, 2018. All amounts are shown
in United States dollars ("U.S.$"
or "$") unless otherwise noted.
"We are pleased to report strong second quarter results with
solid year over year increases in both cash flow and earnings per
share," said Ian Robertson, CEO of
APUC. "In terms of creating additional value for shareholders, we
made significant progress against our 5 year growth plan with the
commissioning of our 75 MW Amherst Island wind project and the
issuance of a regulatory order in Missouri supporting investment in 600 MW
of new wind power pursuant to our "Greening the Fleet"
initiative."
Q2 2018 Financial Highlights
- Revenues of U.S.$366.2 million, a
year-over-year increase of 9%
- Adjusted EBITDA1 of U.S.$160.3 million, a year-over-year increase of
9%
- Adjusted net earnings1 of U.S.$50.9 million, a year-over-year increase of
29%
- Adjusted net earnings per share1 of U.S.$0.11, a year over year increase of 22%
- Adjusted Funds from Operations1 of U.S.$113.9 million, a year-over-year increase of
26%
Key Financial Information
All amounts in
U.S.$ millions
except per share
information
|
Quarter ended June
30
|
Six months ended
June 30
|
2018
|
2017
|
Change
|
2018
|
2017
|
Change
|
Revenue
|
$366.2
|
$337.1
|
9%
|
$861.1
|
$758.8
|
13%
|
Net earnings
attributable to shareholders
|
$65.5
|
$35.3
|
86%
|
$83.1
|
$54.6
|
52%
|
|
Per
share
|
$0.14
|
$0.09
|
56%
|
$0.18
|
$0.14
|
29%
|
Cash provided by
operating activities
|
$133.3
|
$54.8
|
143%
|
$230.3
|
$110.3
|
109%
|
Adjusted Net
Earnings1
|
$50.9
|
$39.5
|
29%
|
$191.9
|
$106.0
|
81%
|
|
Per
share
|
$0.11
|
$0.09
|
22%
|
$0.42
|
$0.28
|
50%
|
Adjusted
EBITDA1
|
$160.3
|
$147.1
|
9%
|
$439.5
|
$339.4
|
29%
|
Adjusted Funds from
Operations1
|
$113.9
|
$90.1
|
26%
|
$293.8
|
$246.8
|
19%
|
Dividends per
share
|
$0.1282
|
$0.1165
|
10%
|
$0.2447
|
$0.2330
|
5%
|
|
|
1.
|
Please refer to
Non-GAAP Financial Measures and Use of Non-GAAP Financial Measures
at the end of this document for further details.
|
Q2 2018 APUC Corporate Highlights
- Investment in Atlantica Yield plc
("Atlantica") – On April 17,
2018, APUC announced that it entered into an agreement to
purchase an additional 16.5% equity interest in Atlantica for a
total purchase price of approximately U.S.$345 million, which is expected to close in
the second half of 2018.
Q2 2018 Liberty Power Group Highlights
- Completion of the Amherst Island Wind Project - On
June 15, 2018, the Amherst Island
Wind Facility achieved commercial operations. The project consists
of a 75 MW wind powered electric generating facility located on
Amherst Island, is comprised of 26
turbines, and is expected to generate approximately 235.0 GWhrs of
electrical energy annually.
Q2 2018 Liberty Utilities Group Highlights
- Continued Progress on "Greening the Fleet" –
On July 12, 2018, APUC's wholly-owned
subsidiary, Empire District Electric Company ("Empire") received an
order from the Missouri Public Service Commission supporting
various requests related to its proposed plans to develop up to 600
MW of sustainable, cost-effective wind power to serve the needs of
electricity customers within the Liberty Utilities Group's Midwest
electric service territory. The order allows the Liberty Utilities
Group to continue to pursue the development of up to 600 MW of wind
power.
Presentation of Annual Financial Statements and MD&A in
United States Dollars
Effective the first quarter of 2018, APUC changed its
presentation currency to United States Dollars (U.S.$). In
order to provide for consistency in presentation as between APUC`s
current interim and its current annual financial statements,
concurrently with the filing of APUC`s interim financial statements
and interim management discussion and analysis ("MD&A") for the
second quarter ended June 30, 2018,
APUC has re-filed its annual audited financial statements and its
MD&A for the year ended December 31,
2017, in U.S. dollars.
APUC's financial statements and MD&A are available on its
web site at www.AlgonquinPowerandUtilities.com and under its issuer
profile on SEDAR at www.sedar.com.
APUC will hold an earnings conference call at 10:00 a.m. Eastern Time on Friday, August 10,
2018, hosted by Chief Executive Officer, Ian Robertson and Chief Financial Officer,
David Bronicheski.
Conference call details are as follows:
Date:
|
Friday, August 10,
2018
|
Time:
|
10:00 a.m.
ET
|
Conference Call
Access:
|
Toll Free
Canada/US:
|
1-800-319-4610
|
|
Toronto
local:
|
416-915-3239
|
|
Please ask to join
the Algonquin Power & Utilities Corp. conference
call
|
Presentation
Access:
|
http://services.choruscall.ca/links/algonquinpower20180810.html
|
Presentation also
available at: www.algonquinpowerandutilities.com
|
Call
Replay: (available until
August 24)
|
Toll Free
Canada/US:
|
1-855-669-9658
|
Vancouver
local:
|
1-604-674-8052
|
|
Access
code:
|
2425
|
About Algonquin Power & Utilities Corp.
APUC is a diversified generation, transmission and distribution
utility with U.S.$9 billion of total
assets. Through its two business groups, APUC provides rate
regulated natural gas, water, and electricity generation,
transmission, and distribution utility services to over 750,000
customers in the United States,
and is committed to being a global leader in the generation of
clean energy through its portfolio of long term contracted wind,
solar and hydroelectric generating facilities representing more
than 1,600 MW of installed capacity. APUC delivers continuing
growth through an expanding pipeline of renewable energy
development projects, organic growth within its rate regulated
generation, distribution and transmission businesses, and the
pursuit of accretive acquisitions. Common shares and preferred
shares are traded on the Toronto Stock Exchange under the symbols
AQN, AQN.PR.A, and AQN.PR.D. APUC's common shares are also
listed on the New York Stock Exchange under the symbol AQN.
Visit APUC at www.algonquinpowerandutilities.com and follow
us on Twitter @AQN_Utilities.
Caution Regarding Forward-Looking Information and Non-GAAP
Financial Measures
Certain statements included in this news release may contain
information that is forward-looking within the meaning of
applicable securities laws, including information and statements
regarding prospective results of operations, financial position or
cash flows. Specific forward-looking information in this document
includes, but is not limited to: the expected completion and
timeline for completion of the purchase of additional 16.5% equity
interest in Atlantica; expectations with respect to the timing of
APUC's growth plans, earnings, cash flow and dividend amounts; and
expectations with respect to regulatory orders relating to Liberty
Empire wind energy generation projects. These statements are based
on factors or assumptions that were applied in drawing a conclusion
or making a forecast or projection, including assumptions based on
historical trends, current conditions and expected future
developments. Since forward-looking statements relate to future
events and conditions, by their very nature they require making
assumptions and involve inherent risks and uncertainties. APUC
cautions that although it is believed that the assumptions are
reasonable in the circumstances, these risks and uncertainties give
rise to the possibility that actual results may differ materially
from the expectations set out in the forward-looking statements.
Material risk factors include those set out in APUC's most recent
MD&A and Annual Information Form. Given these risks, undue
reliance should not be placed on these forward-looking statements,
which apply only as of their dates. Other than as specifically
required by law, APUC undertakes no obligation to update any
forward-looking statements or information to reflect new
information, subsequent or otherwise.
Non-GAAP Financial Measures and Use of Non-GAAP Financial
Measures
The terms Adjusted Net Earnings, Adjusted EBITDA, and Adjusted
Funds from Operations are used in this press release. The terms
Adjusted Net Earnings, Adjusted EBITDA, and Adjusted Funds from
Operations are not recognized measures under GAAP. There is no
standardized measure of Adjusted Net Earnings, Adjusted EBITDA, and
Adjusted Funds from Operations and consequently APUC's method of
calculating these measures may differ from methods used by other
companies and therefore may not be comparable to similar measures
presented by other companies. A calculation, analysis and
reconciliation to the nearest U.S. GAAP measure of Adjusted Net
Earnings, Adjusted EBITDA, and Adjusted Funds from Operations can
be found in the MD&A for the quarter ended June 30, 2018
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP measure used by many investors to
compare companies on the basis of ability to generate cash from
operations. APUC uses these calculations to monitor the amount of
cash generated by APUC as compared to the amount of dividends paid
by APUC. APUC uses Adjusted EBITDA to assess the operating
performance of APUC without the effects of (as applicable):
depreciation and amortization expense, income tax expense or
recoveries, acquisition costs, litigation expenses, interest
expense, gain or loss on derivative financial instruments, write
down of intangibles and property, plant and equipment, earnings
attributable to non-controlling interests and gain or loss on
foreign exchange, earnings or loss from discontinued operations,
changes in value of investments carried at fair value, and other
typically non-recurring items. APUC adjusts for these factors as
they may be non-cash, unusual in nature and are not factors used by
management for evaluating the operating performance of the Company.
APUC believes that presentation of this measure will enhance an
investor's understanding of APUC's operating performance. Adjusted
EBITDA is not intended to be representative of cash provided by
operating activities or results of operations determined in
accordance with U.S. GAAP, and can be impacted positively or
negatively by these items.
Adjusted Net Earnings
Adjusted Net Earnings is a non-GAAP measure used by many
investors to compare net earnings from operations without the
effects of certain volatile primarily non-cash items that generally
have no current economic impact or items such as acquisition
expenses or litigation expenses that are viewed as not directly
related to a company's operating performance. APUC uses Adjusted
Net Earnings to assess its performance without the effects of (as
applicable): gains or losses on foreign exchange, foreign exchange
forward contracts, interest rate swaps, acquisition costs, one-time
costs of arranging tax equity financing, litigation expenses and
write down of intangibles and property, plant and equipment,
earnings or loss from discontinued operations, unrealized
mark-to-market revaluation impacts, changes in value of investments
carried at fair value, and other typically non-recurring items as
these are not reflective of the performance of the underlying
business of APUC. For 2017, the one-time impact of the
revaluation of U.S. non-regulated net deferred income tax assets as
a result of the U.S. federal corporate income tax rate reduction
from 35% to 21% enacted in December
2017 is adjusted as it is also considered a nonrecurring
item not reflective of the performance of the underlying business
of APUC. APUC believes that analysis and presentation of net
earnings or loss on this basis will enhance an investor's
understanding of the operating performance of its businesses.
Adjusted Net Earnings is not intended to be representative of net
earnings or loss determined in accordance with U.S. GAAP, and can
be impacted positively or negatively by these items.
Adjusted Funds from Operations
Adjusted Funds from Operations is a non-GAAP measure used by
investors to compare cash flows from operating activities without
the effects of certain volatile items that generally have no
current economic impact or items such as acquisition expenses that
are viewed as not directly related to a company's operating
performance. APUC uses Adjusted Funds from Operations to assess its
performance without the effects of (as applicable): changes in
working capital balances, acquisition expenses, litigation
expenses, cash provided by or used in discontinued operations and
other typically non-recurring items affecting cash from operations
as these are not reflective of the long-term performance of the
underlying businesses of APUC. APUC believes that analysis and
presentation of funds from operations on this basis will enhance an
investor's understanding of the operating performance of its
businesses. Adjusted Funds from Operations is not intended to be
representative of cash flows from operating activities as
determined in accordance with U.S. GAAP, and can be impacted
positively or negatively by these items.
NON-GAAP FINANCIAL MEASURES
Reconciliation of Adjusted EBITDA to Net Earnings
The following table is derived from and should be read in
conjunction with the consolidated statement of operations. This
supplementary disclosure is intended to more fully explain
disclosures related to Adjusted EBITDA and provides additional
information related to the operating performance of APUC. Investors
are cautioned that this measure should not be construed as an
alternative to U.S. GAAP consolidated net earnings.
(all dollar
amounts in $ millions)
|
Three Months Ended
June 30
|
Six Months Ended
June 30
|
2018
|
2017
|
2018
|
2017
|
Net earnings
attributable to shareholders
|
$65.5
|
$35.3
|
$83.1
|
$54.6
|
Add
(deduct):
|
|
|
|
|
|
Net earnings
attributable to the non-controlling interest, exclusive of
HLBV
|
0.4
|
0.5
|
1.1
|
1.3
|
|
Income tax
expense
|
6.8
|
17.6
|
39.9
|
32.0
|
|
Interest expense on
convertible debentures and costs related to acquisition
financing
|
—
|
—
|
—
|
13.4
|
|
Interest expense on
long-term debt and others
|
38.4
|
37.2
|
73.9
|
72.7
|
|
Other
gains
|
(0.4)
|
(3.7)
|
(1.6)
|
(3.7)
|
|
Acquisition-related
costs
|
1.0
|
0.1
|
8.6
|
45.9
|
|
Change in value of
investment in Atlantica carried at fair value
|
(15.0)
|
—
|
102.0
|
—
|
|
Costs related to tax
equity financing
|
—
|
0.4
|
—
|
0.4
|
|
Loss on derivative
financial instruments
|
0.1
|
—
|
0.2
|
1.2
|
|
Realized gain (loss)
on energy derivative contracts
|
—
|
—
|
—
|
(0.6)
|
|
Gain on foreign
exchange
|
(1.3)
|
(3.0)
|
(1.1)
|
(3.0)
|
|
Depreciation and
amortization
|
64.8
|
62.7
|
133.4
|
125.2
|
Adjusted
EBITDA
|
$160.3
|
$147.1
|
$439.5
|
$339.4
|
Reconciliation of Adjusted Net Earnings to Net
Earnings
The following table is derived from and should be
read in conjunction with the consolidated statement of operations.
This supplementary disclosure is intended to more fully explain
disclosures related to Adjusted Net Earnings and provides
additional information related to the operating performance of
APUC. Investors are cautioned that this measure should not be
construed as an alternative to U.S. GAAP consolidated net
earnings.
The following table shows the reconciliation of net earnings to
Adjusted Net Earnings exclusive of these items:
(all dollar
amounts in $ millions)
|
Three Months Ended
June 30
|
Six Months Ended
June 30
|
2018
|
2017
|
2018
|
2017
|
Net earnings
attributable to shareholders
|
$65.5
|
$35.3
|
$83.1
|
$54.6
|
Add
(deduct):
|
|
|
|
|
|
Loss on derivative
financial instruments
|
0.1
|
—
|
0.2
|
1.2
|
|
Realized gain on
derivative financial instruments
|
—
|
—
|
—
|
(0.6)
|
|
Other
gains
|
(0.2)
|
(3.6)
|
(1.4)
|
(3.6)
|
|
Gain on foreign
exchange
|
(1.3)
|
(3.0)
|
(1.1)
|
(3.0)
|
|
Interest expense on
Conv. Debentures & acquisition financing costs
|
—
|
—
|
—
|
13.4
|
|
Acquisition-related
costs
|
1.0
|
0.1
|
8.6
|
45.9
|
|
Change in value of
investment in Atlantica carried at fair value
|
(15.0)
|
—
|
102.0
|
—
|
|
Costs related to tax
equity financing
|
—
|
0.4
|
—
|
0.4
|
|
Adjustment for taxes
related to above
|
0.8
|
10.3
|
0.5
|
(2.3)
|
Adjusted Net
Earnings
|
$50.9
|
$39.5
|
$191.9
|
$106.0
|
Adjusted Net
Earnings per share1
|
$0.11
|
$0.09
|
$0.42
|
$0.28
|
|
|
1
|
Per share amount
calculated after preferred share dividends.
|
Reconciliation of Adjusted Funds from Operations to Cash
Flows from Operating Activities
The following table is
derived from and should be read in conjunction with the
consolidated statement of operations and consolidated statement of
cash flows. This supplementary disclosure is intended to more fully
explain disclosures related to Adjusted Funds from Operations and
provides additional information related to the operating
performance of APUC. Investors are cautioned that this measure
should not be construed as an alternative to funds from operations
in accordance with U.S. GAAP.
The following table shows the reconciliation of funds from
operations to Adjusted Funds from Operations exclusive of these
items:
(all dollar
amounts in $ millions)
|
Three Months Ended
June 30
|
Six Months Ended
June 30
|
2018
|
2017
|
2018
|
2017
|
Cash flows from
operating activities
|
$133.3
|
$54.8
|
$230.3
|
$110.3
|
Add
(deduct):
|
|
|
|
|
|
Changes in non-cash
operating items
|
(23.0)
|
34.1
|
40.0
|
75.5
|
|
Production based cash
contributions from non-controlling interests
|
2.6
|
1.1
|
13.9
|
7.9
|
|
Interest expense on
Conv. Debs. & acquisition financing
costs1
|
—
|
—
|
—
|
7.2
|
|
Acquisition-related
costs
|
1.0
|
0.1
|
8.6
|
45.9
|
|
Reimbursement of
operating expenses incurred on joint venture
|
—
|
—
|
1.0
|
—
|
Adjusted Funds
from Operations
|
$113.9
|
$90.1
|
$293.8
|
$246.8
|
|
1
|
Exclusive of deferred
financing fees of $6.2 million in 2017.
|
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SOURCE Algonquin Power & Utilities Corp.