OAKVILLE, ON, Nov. 8, 2018
/CNW/ - Algonquin Power & Utilities Corp. (TSX/NYSE: AQN)
("APUC") today announced financial results for the third quarter
ended September 30, 2018.
"Our third quarter results demonstrate the continuing
benefits of our diversified portfolio of regulated utility
operations augmented with long term contracted electric generating
facilities," commented Ian
Robertson, Chief Executive Officer of APUC. "We continued to
make progress on our five year growth plan including significant
organic investment within our utilities group as well as on the
final stage of the regulatory approval process for our Midwest
electric service rate base investment in wind generation
as part of our Customer Savings Plan."
Financial Highlights
Summary results are as follows:
- Revenues of U.S.$366.5 million, a
year-over-year increase of 4%
- Earnings per share of U.S.$0.12,
unchanged with the third quarter in 2017
- Adjusted EBITDA1 of U.S.$164.2 million, a year-over-year increase of
4%
- Net earnings attributable to shareholders of U.S.$57.9 million, a year-over-year increase of
21%
- Adjusted net earnings1 of U.S.$49.7 million, a year-over-year decrease of
4%
- Adjusted net earnings per share1 of U.S.$0.10, a year-over-year decrease of 23%
- Adjusted Funds from Operations1 of U.S.$127.7 million, a year-over-year increase of
22%
In millions of
USD or on a per share basis unless
otherwise noted (unaudited)
|
|
Three Months Ended
Sept. 30
|
Nine Months Ended
Sept. 30
|
|
2018
|
2017
|
Change
|
2018
|
2017
|
Change
|
Revenue
|
|
$366.5
|
$353.7
|
4%
|
$1,227.5
|
$1,112.5
|
10%
|
Net earnings
attributable to shareholders
|
|
$57.9
|
$47.7
|
21%
|
$141.0
|
$102.3
|
38%
|
Per
share
|
|
$0.12
|
$0.12
|
-
|
$0.30
|
$0.26
|
15%
|
Cash provided by
operating activities
|
|
$131.5
|
$98.4
|
34%
|
$361.7
|
$210.6
|
72%
|
Adjusted Net
Earnings1
|
|
$49.7
|
$52.0
|
(4)%
|
$241.6
|
$158.0
|
53%
|
Per
share
|
|
$0.10
|
$0.13
|
(23)%
|
$0.52
|
$0.41
|
27%
|
Adjusted
EBITDA1
|
|
$164.2
|
$157.7
|
4%
|
$603.7
|
$497.1
|
21%
|
Adjusted Funds from
Operations1
|
|
$127.7
|
$104.3
|
22%
|
$421.6
|
$351.1
|
20%
|
Dividends Per
Share
|
|
$0.1282
|
$0.1165
|
10%
|
0.3729
|
0.3495
|
7%
|
1. Please
refer to Non-GAAP Financial Measures and Use of Non-GAAP Financial
Measures at the end of this document for further
details.
|
Third Quarter Highlights
Progress Made on "Greening the Fleet" - On
July 12, 2018, Empire received an
order from the Missouri Public Service Commission ("MPSC")
supporting various requests related to its proposed Customer
Savings Plan, which calls for the development of 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
and recognizes that "millions of dollars of customer savings could
be of considerable benefit to Empire's customers and the entire
state". On October 18, 2018, Empire
filed with the MPSC a request for approval of the Certificate of
Convenience and Necessity ("CCN") for 300 MW of the 600 MW
contemplated as part of the initiative. A proposed procedural
schedule has been filed requesting an MPSC Order be issued no later
than April 30, 2019. Empire is
anticipated to file a CCN for the remaining 300 MW during the
fourth quarter of 2018.
APUC Enters into U.S. Public Debt Markets with Issuance of
Fixed-to-Floating Subordinated Notes - Subsequent to
quarter-end, on October 17, 2018,
APUC issued U.S.$287.5 million of 60
(non-call 5) year fixed-to-floating 6.875% subordinated notes. The
notes are rated by Standard & Poor's Ratings Services and Fitch
Ratings Inc. ("Fitch") and receive 50% equity treatment from both
rating agencies. The offering represents APUC's inaugural entry
into the U.S. public debt markets. APUC's application to list the
subordinated notes on the New York Stock Exchange has been approved
and they are now trading under the ticker symbol "AQNA".
Fitch Assigns First-Time Ratings to Algonquin Power &
Utilities Corp. and Subsidiaries - On July 20, 2018, Fitch assigned a BBB (flat)
Long-Term Issuer Default Rating ("IDR") and an F2 Short- Term IDR
to APUC and Liberty Utilities Co., the parent company for the
Liberty Utilities Group. Fitch assigned a BBB (flat) Long-Term IDR
and an F3 Short-Term IDR to Algonquin Power Co, the parent company
for the Liberty Power Group. The rating outlook for each entity is
stable. Fitch also assigned a BBB (high) rating to the senior
unsecured debt issued by Liberty Utilities Finance GP1, a special
purpose financing entity of Liberty Utilities Co.
2018 Analyst & Investor Day in Toronto and New
York – December 4 &
5
APUC will be hosting its 2018 Analyst & Investor Day
events in Toronto and New York, on December
4 and 5, respectively. For more information, please
contact investorrelations@apucorp.com.
AQN to Host Conference Call
APUC will hold an earnings
conference call at 10:00 a.m. eastern time
on Friday, November 9, 2018, hosted by Chief Executive
Officer, Ian Robertson and Chief
Financial Officer, David
Bronicheski.
Conference call details are as follows:
Date:
|
Friday, November 9,
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/algonquinpower20181109.html
Presentation also
available at: www.algonquinpowerandutilities.com
|
|
|
Call
Replay:
|
Toll Free
Canada/US
|
1-855-669-9658
|
(available until
November 23)
|
Vancouver
local
|
1-604-674-8052
|
|
Access
code
|
2656
|
APUC's financial statements and management discussion and
analysis ("MD&A") are available on the web site at
www.AlgonquinPowerandUtilities.com and under its issuer profile on
SEDAR at www.sedar.com.
About Algonquin Power & Utilities Corp.
APUC is a diversified generation, transmission and distribution
utility with approximately US$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
760,000 connections in the United
States, and is committed to being a global leader in the
generation of clean energy through its ownership of, or interest
in, long term contracted wind, solar and hydroelectric generating
facilities representing approximately 1.7 GW of installed capacity.
With a team of over 2,300 talented employees, 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. APUC's common shares, Series A
preferred shares and Series D preferred shares are listed on the
Toronto Stock Exchange under the symbols AQN, AQN.PR.A, and
AQN.PR.D. APUC's common shares and Series A subordinated notes are
also listed on the New York Stock Exchange under the symbols AQN
and AQNA.
Visit APUC at www.algonquinpowerandutilities.com and
follow us on Twitter @AQN_Utilities.
Caution Regarding Forward-Looking Information
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: 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 below and in the MD&A for the quarter ended
September 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.
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. The following
table shows the reconciliation of net earnings to Adjusted EBITDA
exclusive of these items:
(all dollar amounts
in USD millions, except per share data)
|
Three Months
Ended
Sept
30
|
Nine Months
Ended
Sept
30
|
2018
|
2017
|
2018
|
2017
|
Net earnings
attributable to shareholders
|
$57.9
|
$47.7
|
$141.0
|
$102.3
|
Add
(deduct):
|
|
|
|
|
Net earnings
attributable to non-controlling interest, exclusive of
HLBV
|
0.3
|
0.5
|
1.4
|
1.8
|
Income tax
expense
|
10.7
|
11.7
|
50.6
|
43.7
|
Interest
expense on Conv. Debs & acquisition financing costs
|
—
|
—
|
—
|
13.4
|
Interest
expense on long-term debt and others
|
37.9
|
36.4
|
111.8
|
109.1
|
Other losses
(gains)
|
2.0
|
0.6
|
0.4
|
(3.1)
|
Acquisition-related costs
|
1.0
|
0.8
|
9.6
|
46.7
|
Change in
value of investment in Atlantica carried at fair value
|
(10.1)
|
—
|
91.9
|
—
|
Costs related
to tax equity financing
|
—
|
1.0
|
—
|
1.4
|
Loss on
derivative financial instruments
|
0.7
|
—
|
0.9
|
1.2
|
Realized loss
on energy derivative contracts
|
—
|
—
|
—
|
(0.6)
|
Loss (gain) on
foreign exchange
|
0.3
|
2.1
|
(0.8)
|
(0.9)
|
Depreciation
and amortization
|
63.5
|
56.9
|
196.9
|
182.1
|
Adjusted
EBITDA
|
$164.2
|
$157.7
|
$603.7
|
$497.1
|
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 U.S. $ millions, except per share data)
|
Three Months
Ended
Sept
30
|
Nine Months
Ended
Sept
30
|
2018
|
2017
|
2018
|
2017
|
Net earnings
attributable to shareholders
|
$57.9
|
$47.7
|
$141.0
|
$102.3
|
Add
(deduct):
|
|
|
|
|
Loss on
derivative financial instruments
|
0.7
|
—
|
0.9
|
1.2
|
Realized gain
on derivative financial instruments
|
—
|
—
|
—
|
(0.6)
|
Other losses
(gains)
|
0.3
|
0.6
|
(1.1)
|
(3.0)
|
Loss (gain) on
foreign exchange
|
0.3
|
2.1
|
(0.8)
|
(0.9)
|
Interest
expense on Conv. Debs & acquisition financing costs
|
—
|
—
|
—
|
13.4
|
Acquisition-related costs
|
1.0
|
0.8
|
9.6
|
46.7
|
Change in
value of investment in Atlantica carried at fair value
|
(10.1)
|
—
|
91.9
|
—
|
Costs related
to tax equity financing
|
—
|
1.0
|
—
|
1.4
|
Adjustment for
taxes related to above
|
(0.4)
|
(0.2)
|
0.1
|
(2.5)
|
Adjusted Net
Earnings
|
$49.7
|
$52.0
|
$241.6
|
$158.0
|
Adjusted Net
Earnings per share1
|
$0.10
|
$0.13
|
$0.52
|
$0.41
|
|
|
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 USD millions)
|
Three Months
Ended
Sept
30
|
Nine Months
Ended
Sept
30
|
2018
|
2017
|
2018
|
2017
|
Cash flows from
operating activities
|
$131.5
|
$98.4
|
$361.7
|
$210.6
|
Add
(deduct):
|
|
|
|
|
Changes in non-cash
operating items
|
(4.8)
|
5.1
|
35.4
|
78.7
|
Production based cash
contributions from non-controlling interests
|
—
|
—
|
13.9
|
7.9
|
Interest expense on
Conv. Debs & acquisition financing costs1
|
—
|
—
|
—
|
7.2
|
Acquisition-related
costs
|
1.0
|
0.8
|
9.6
|
46.7
|
Reimbursement of
operating expenses incurred on joint venture
|
—
|
—
|
1.0
|
—
|
Adjusted Funds
from Operations
|
$127.7
|
$104.3
|
$421.6
|
$351.1
|
|
|
|
|
|
1
Exclusive of deferred financing fees of $6.2 million in
2017.
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/algonquin-power--utilities-corp-announces-2018-third-quarter-and-year-to-date-financial-results-300747189.html
SOURCE Algonquin Power & Utilities Corp.