OAKVILLE, ON, Aug. 8, 2019 /PRNewswire/ - Algonquin Power &
Utilities Corp. (TSX/NYSE: AQN) ("APUC" or the "Company") today
announced financial results for the second quarter ended
June 30, 2019. All amounts are shown
in United States dollars ("U.S. $"
or "$") unless otherwise noted.
Q2 2019 Financial Highlights
- Revenues of $343.6 million, a
year-over-year decrease of 6%
- Adjusted EBITDA1 of $189.8
million, a year-over-year increase of 18%
- Adjusted net earnings1 of $55.0 million, a year-over-year increase of
8%
- Adjusted net earnings per share1 of $0.11, consistent with the previous year
- Adjusted Funds from Operations1 of $128.3 million, a year-over-year increase of
13%
Key Financial Information
All amounts in
U.S. $ millions
except per share
information
|
Quarter ended June
30
|
Six months ended
June 30
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
Revenue
|
343.6
|
366.1
|
(6)%
|
820.8
|
860.4
|
(5)%
|
Net earnings
attributable to shareholders
|
156.6
|
65.5
|
139%
|
243.0
|
83.1
|
192%
|
Per
share
|
0.31
|
0.14
|
121%
|
0.49
|
0.18
|
172%
|
Cash provided by
operating activities
|
133.6
|
133.3
|
0%
|
255.7
|
230.3
|
11%
|
Adjusted Net
Earnings1
|
55.0
|
50.9
|
8%
|
148.7
|
191.9
|
(23)%
|
Per
share
|
0.11
|
0.11
|
0%
|
0.29
|
0.42
|
(31)%
|
Adjusted
EBITDA1
|
189.8
|
160.8
|
18%
|
421.5
|
439.8
|
(4)%
|
Adjusted Funds from
Operations1
|
128.3
|
113.9
|
13%
|
301.9
|
293.8
|
3%
|
Dividends per
share
|
0.1410
|
0.1282
|
10%
|
0.2692
|
0.2447
|
10%
|
|
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 2019 APUC Corporate Highlights
- Acquisition of Bermuda Electric Light Company - On
June 3, 2019, APUC announced an
agreement to acquire, through Ascendant Group Limited (BSX:
AGL.BH), the Bermuda Electric Light Company, the sole provider of
regulated electrical generation, transmission and distribution
services to approximately 63,000 residents and businesses in
Bermuda. Closing of the
transaction is expected to occur in late 2019 subject to regulatory
and shareholder approval.
Q2 2019 Liberty Utilities Group Highlights
- Significant Milestone Achieved on Midwest Wind Development
Project – On June 20,
2019, the Liberty Utilities Group received certificates of
convenience and necessity ("CC&N") to acquire, once completed,
three wind farms generating, in the aggregate, up to 600 MW of wind
energy, and located in U.S. Midwest. Receipt of the CC&N allows
construction to commence on the three wind generation sites.
Construction of the wind farms is expected to begin in the third
quarter of 2019 and to be completed by the end of 2020.
"We are pleased to report solid operating results for the second
quarter of 2019 while at the same time making significant progress
on the execution of our five year $7.5
billion capital plan," said Ian
Robertson, Chief Executive Officer of APUC. "We have
received the final certificates allowing 600 MW of new wind
generation to be built in the U.S. Midwest as we transition away
from coal generation. This is part of our 'Greening the
Fleet' initiative which continues to demonstrate our ongoing
commitment to sustainability."
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 9,
2019, hosted by Chief Executive Officer, Ian Robertson and Chief Financial Officer,
David Bronicheski.
Conference call details are as follows:
Date:
|
Friday, August 9,
2019
|
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/algonquinpower20190809.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:
|
3415
|
About Algonquin Power & Utilities Corp.
APUC is a diversified international generation, transmission and
distribution utility with approximately U.S. $10 billion of total assets. Through its two
business groups, APUC is committed to providing safe, reliable and
cost effective rate-regulated natural gas, water, and electricity
generation, transmission and distribution utility services to
nearly 800,000 connections in the United
States and Canada, and is a
global leader in renewable energy through its portfolio of
long-term contracted wind, solar and hydroelectric generating
facilities representing over 2.5 GW of net installed capacity and
more than 500 MW of incremental renewable energy capacity under
construction. APUC delivers continuing growth through an
expanding global pipeline of renewable energy, electric
transmission, and water infrastructure 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, Series 2018-A subordinated notes and Series 2019-A
subordinated notes are listed on the New York Stock Exchange under
the symbols AQN, AQNA and AQNB.
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 constitute
''forward-looking information'' within the meaning of applicable
securities laws in each of the provinces of Canada and the respective policies,
regulations and rules under such laws and ''forward-looking
statements'' within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995 (collectively, ''forward-looking
statements"). The words "will", "expects", "intends" and similar
expressions are often intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. Specific forward-looking statements in
this news release include, but are not limited to: expectations
with respect to the timing and amounts of APUC's growth plans,
earnings, cash flow and dividend amounts; expectations regarding
the timing for closing the acquisition of Ascendant; and
expectations and plans with respect to current and planned capital
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 annual and interim Management
Discussion and Analysis 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 to reflect new information,
subsequent or otherwise.
(1) 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 APUC's
Management's Discussion & Analysis for the quarter ended
June 30, 2019.
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, non-service pension and
post-employment costs, cost related to tax equity financing, 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. 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.
|
Three Months Ended
June 30
|
|
Six Months Ended
June 30
|
(all dollar
amounts in $ millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net earnings
attributable to shareholders
|
$
|
156.6
|
|
$
|
65.5
|
|
$
|
243.0
|
|
$
|
83.1
|
Add
(deduct):
|
|
|
|
|
|
|
|
Net earnings
attributable to the non-controlling interest, exclusive of HLBV
1
|
7.6
|
|
0.4
|
|
15.2
|
|
1.1
|
Income tax
expense
|
20.8
|
|
6.8
|
|
35.6
|
|
39.9
|
Interest expense on
long-term debt and others
|
45.8
|
|
38.4
|
|
88.5
|
|
73.9
|
Other losses
(gains)
|
5.4
|
|
(0.4)
|
|
6.0
|
|
(1.6)
|
Acquisition-related
costs
|
0.4
|
|
1.0
|
|
2.4
|
|
8.6
|
Pension and
post-employment non-service costs
|
3.7
|
|
0.5
|
|
5.0
|
|
0.3
|
Change in value of
investments carried at fair value
|
(121.4)
|
|
(15.0)
|
|
(115.6)
|
|
102.0
|
Loss (gain) on
derivative financial instruments
|
(0.4)
|
|
0.1
|
|
(0.2)
|
|
0.2
|
Realized loss on
energy derivative contracts
|
—
|
|
—
|
|
(0.2)
|
|
—
|
Loss (gain) on foreign
exchange
|
1.5
|
|
(1.3)
|
|
0.9
|
|
(1.1)
|
Depreciation and
amortization
|
$
|
69.8
|
|
$
|
64.8
|
|
$
|
140.9
|
|
$
|
133.4
|
Adjusted
EBITDA
|
$
|
189.8
|
|
$
|
160.8
|
|
$
|
421.5
|
|
$
|
439.8
|
|
1 HLBV
represents the value of net tax attributes earned during the period
primarily from electricity generated by certain U.S. wind power and
U.S. solar generation facilities. HLBV earned in the three
and six months ended June 30, 2019 amounted to $18.3 million and
$37.0 million as compared to $11.2 million and $91.3 million during
the same period in 2018. In the first quarter of 2018, a one-time
acceleration of HLBV income in the amount of $55.9 million was
recorded as a result of U.S. Tax Reform. Excluding the one-time
acceleration of HLBV due to U.S. Tax Reform, Adjusted EBITDA
increased by $37.6 million year over year.
|
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 consolidated net earnings in
accordance with U.S. GAAP.
The following table shows the reconciliation of net earnings to
Adjusted Net Earnings exclusive of these items:
|
Three Months Ended
June 30
|
|
Six Months Ended
June 30
|
(all dollar
amounts in $ millions except per share information)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net earnings
attributable to shareholders
|
$
|
156.6
|
|
$
|
65.5
|
|
$
|
243.0
|
|
$
|
83.1
|
Add
(deduct):
|
|
|
|
|
|
|
|
Loss (gain) on
derivative financial instruments
|
(0.4)
|
|
0.1
|
|
(0.2)
|
|
0.2
|
Realized loss on
derivative financial instruments
|
—
|
|
—
|
|
(0.2)
|
|
—
|
Loss (gain) on
long-lived assets
|
5.9
|
|
(0.2)
|
|
6.1
|
|
(1.4)
|
Loss (gain) on foreign
exchange
|
1.5
|
|
(1.3)
|
|
0.9
|
|
(1.1)
|
Acquisition-related
costs
|
0.4
|
|
1.0
|
|
2.4
|
|
8.6
|
Change in value of
investments carried at fair value
|
(121.4)
|
|
(15.0)
|
|
(115.6)
|
|
102.0
|
Adjustment for taxes
related to above
|
12.4
|
|
0.8
|
|
12.3
|
|
0.5
|
Adjusted Net
Earnings
|
$
|
55.0
|
|
$
|
50.9
|
|
$
|
148.7
|
|
$
|
191.9
|
Adjusted Net
Earnings per share1
|
$
|
0.11
|
|
$
|
0.11
|
|
$
|
0.29
|
|
$
|
0.42
|
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:
|
Three Months Ended
June 30
|
|
Six Months Ended
June 30
|
(all dollar
amounts in $ millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Cash flows from
operating activities
|
$
|
133.6
|
|
$
|
133.3
|
|
$
|
255.7
|
|
$
|
230.3
|
Add
(deduct):
|
|
|
|
|
|
|
|
Changes in non-cash
operating items
|
(5.7)
|
|
(23.0)
|
|
40.2
|
|
40.0
|
Production based cash
contributions from non-controlling interests
|
—
|
|
2.6
|
|
3.6
|
|
13.9
|
Acquisition-related
costs
|
0.4
|
|
1.0
|
|
2.4
|
|
8.6
|
Reimbursement of
operating expenses incurred on joint venture
|
—
|
|
—
|
|
—
|
|
1.0
|
Adjusted Funds
from Operations
|
$
|
128.3
|
|
$
|
113.9
|
|
$
|
301.9
|
|
$
|
293.8
|
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SOURCE Algonquin Power & Utilities Corp.