OAKVILLE, ON, Feb. 28, 2019 /CNW/ - Algonquin Power &
Utilities Corp. (TSX/NYSE: AQN) ("APUC" or the "Company") today
announced its financial results for the fourth quarter and
year-ended December 31, 2018.
"Our fourth quarter and full year 2018 results reflect another
great year of progress and growth across our businesses, both
domestically and internationally. We saw the completion of 150 MW
of sustainable new wind and solar capacity, welcomed further
regulatory progress in support of our Customer Saving Plan
initiative, announced the purchase of New Brunswick Gas, and added
to our interest in Atlantica Yield," said Ian Robertson, Chief Executive Officer of APUC.
"As we move through 2019, we remain highly focused on delivering on
our five-year, $7.5 billion growth
plan which is designed to drive growth in earnings and cash flows
to support compelling total returns for our shareholders."
Fourth Quarter and Full Year Financial Highlights
- Annual revenue of $1,647.4
million, an increase of 8%;
- Annual Adjusted EBITDA1 of $803.3 million, an increase of 17%;
- Annual Adjusted net earnings1 of $312.2 million, an increase of 39%;
- Annual Adjusted net earnings1 per share of
$0.66, an increase of 16%;
- Fourth quarter revenue of $419.9
million, an increase of 3%;
- Fourth quarter Adjusted EBITDA1 of $196.9 million, an increase of 6%;
- Fourth quarter Adjusted net earnings1 of
$70.5 million, an increase of 5%;
and,
- Fourth quarter Adjusted net earnings1 per share of
$0.14, a decline of 13%, on a
year-over-year basis.
Fourth Quarter and Full Year Financial Results Table
In USD millions or
on a per share basis unless
otherwise noted
|
Quarterly
|
Annual
|
Quarter ended
Dec. 31, 2018
|
Year ended
Dec. 31, 2018
|
2018
|
2017
|
Variance
|
2018
|
2017
|
Variance
|
Revenue
|
$419.9
|
$409.5
|
3%
|
$1,647.4
|
$1,521.9
|
8%
|
Net earnings
attributable to shareholders
|
$44.0
|
$47.2
|
-7%
|
$185.0
|
$149.5
|
24%
|
Per
share
|
$0.09
|
$0.11
|
-18%
|
$0.38
|
$0.37
|
3%
|
Adjusted net
earnings1
|
$70.5
|
$67.0
|
5%
|
$312.2
|
$225.0
|
39%
|
Per
share
|
$0.14
|
$0.16
|
-13%
|
$0.66
|
$0.57
|
16%
|
Adjusted
EBITDA1
|
$196.9
|
$185.8
|
6%
|
$803.3
|
$689.4
|
17%
|
Adjusted Funds
from Operations1
|
$132.5
|
$126.0
|
5%
|
$554.1
|
$477.1
|
16%
|
Dividend per
share
|
$0.1282
|
$0.1165
|
10%
|
$0.5011
|
$0.4660
|
8%
|
1.
|
Please refer to
Non-GAAP Financial Measures and Use of Non-GAAP Financial Measures
at the end of this document for further details.
|
FY18 Business and Financial Highlights Summary
Liberty Utilities Highlights
- Continued progress on Customer Savings Plan
– on July 11, 2018, an order
was received 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. Further filings to advance the Plan
were also completed in October and November of 2018.
- Acquired New Brunswick Gas – on
December 4, 2018, APUC announced that
it entered into an agreement to purchase New Brunswick Gas for
C$331 million. The transaction is
expected to close expected in 2019, following receipt of regulatory
approvals.
- Achieved successful rate review outcomes– during
2018, several rate reviews were successfully completed,
representing a cumulative annualized revenue increase of
approximately $24.5 million.
- Added new Canadian transmission project
initiative – subsequent to year-end, acquired a
9.8% ownership interest in a new electricity transmission project
under development in Northwestern
Ontario, the Wataynikaneyap Power Transmission
Project.
Liberty Power Highlights
- Completed new solar and wind projects totaling 150
MW – commercial operations were achieved on the 75 MW
Great Bay solar project located in Somerset County, Maryland on March 29, 2018. In addition, the 75 MW Amherst
Island wind project achieved commercial operations on June 15, 2018.
- Successful issuance of Liberty Power Group's inaugural
Green Bond – subsequent to year-end, on January 29, 2019, the Liberty Power Group issued
C$300.0 million of senior unsecured
debentures, bearing interest at 4.6% and with a maturity date of
January 29, 2029 representing its
inaugural "green bond" offering.
Corporate Highlights
- Created an international project development joint
venture, Abengoa-Algonquin Global Energy Solutions
("AAGES") – on March 9,
2018, APUC completed the formation of the AAGES Joint
Venture with Abengoa S.A. During 2018 APUC also acquired, in two
tranches, an approximate 41.5% interest in Atlantica Yield plc, a
diversified portfolio of long term contracted clean energy and
water infrastructure assets
- Common equity issued for accretive growth
initiatives – in 2018, APUC completed two common
equity financings of C$444.4 million
and C$172.5 million, raising a total
of C$616.9 million to fund its
strategic growth plan.
Adoption of Advance Notice By-Law
APUC also announced the adoption by its Board of Directors of an
advance notice by-law that establishes a framework for the advance
notice of nominations of directors of APUC by shareholders.
Among other things, the advance notice by-law establishes deadlines
by which shareholders must notify APUC of nominations of directors
prior to a meeting of APUC shareholders and sets forth the
information that must be included with such a nomination and the
method by which a nomination must be delivered to APUC.
The adoption of the advance notice by-law is effective
immediately and will be placed before shareholders for approval and
ratification at the annual and special meeting of shareholders
scheduled to be held on June 6,
2019. In the event that shareholders determine not to approve
and ratify the advance notice by-law by ordinary resolution, the
by-law will terminate and be void and of no further force and
effect following the termination of such meeting.
For further information, refer to our corporate website at
www.algonquinpowerandutilities.com and our corporate filings
on SEDAR at www.sedar.com and EDGAR at www.sec.gov.
APUC to Host Conference Call
APUC will hold an earnings conference call at 10:00 a.m. eastern time on Friday, March 1, 2019,
hosted by Chief Executive Officer, Ian
Robertson and Chief Financial Officer, David Bronicheski.
Earnings Conference Call Details:
Date:
|
Friday, March 1,
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/algonquinpower20190301.html
Presentation also
available at: www.algonquinpowerandutilities.com
|
Call
Replay: (available until
March 15, 2019)
|
Toll Free
Canada/US
|
1-855-669-9658
|
Vancouver
local
|
1-604-674-8052
|
|
Access
code
|
2866
|
APUC's financial statements and management discussion and
analysis ("MD&A") are available on our corporate website at
www.algonquinpowerandutilities.com and in our corporate
filings on SEDAR at www.sedar.com and EDGAR at
www.sec.gov.
All dollar amounts referenced herein are in U.S. dollars unless
otherwise noted.
About Algonquin Power & Utilities Corp.
APUC is a diversified generation, transmission and distribution
utility with approximately $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 768,000
connections in the United States,
and is committed to being a global leader in the generation of
clean energy through ownership of or investments in long-term
contracted wind, solar and hydroelectric generating facilities
representing over 2 GW of installed capacity. APUC delivers
continuing growth through an expanding pipeline of renewable
energy, electric transmission, and water infrastructure development
projects with a global focus, 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 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", "intends", "expects" 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
contained in this news release include statements with respect to
the payment of dividends on the common shares of APUC. 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's
discussion and analysis and most recent annual information form.
Given these risks, undue reliance should not be placed on these
forward-looking statements, which apply only as of the date hereof.
Other than as specifically required by law, APUC undertakes no
obligation to update any forward-looking statements to reflect new
information, subsequent or otherwise.
Non-GAAP Financial Measures and Use of Non-GAAP Financial
Measures
The terms Adjusted Net Earnings, Adjusted Net Earnings per
share, Adjusted EBITDA, and Adjusted Funds from Operations are used
in this press release. These terms are not recognized measures
under GAAP. There is no standardized measure of these measures and
consequently APUC's method of calculating these measures may differ
from methods used by other companies and may not be comparable to
similar measures presented by other companies. A calculation,
analysis and reconciliation to the nearest U.S. GAAP measure of
each measure can be found below and in the MD&A for the quarter
and year ended December 31, 2018.
Adjusted Net Earnings and Adjusted Net Earnings Per
Share
Adjusted Net Earnings and Adjusted Net Earnings Per Share are
non-GAAP measures 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 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 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.
(all dollar amounts
in USD millions)
|
Three Months
Ended
Dec
31
|
Twelve Months
Ended
Dec
31
|
2018
|
2017
|
2018
|
2017
|
Net earnings
attributable to shareholders
|
$44.0
|
$47.2
|
$185.0
|
$149.5
|
Add
(deduct):
|
|
|
|
|
|
Net earnings
attributable to non-controlling interest, exclusive of
HLBV
|
3.4
|
0.6
|
4.8
|
2.4
|
|
Income tax
expense
|
2.8
|
29.7
|
53.4
|
73.4
|
|
Interest expense on
convertible debentures and costs related to
acquisition financing
|
—
|
—
|
—
|
13.4
|
|
Interest expense on
long-term debt and others
|
40.3
|
33.3
|
152.1
|
142.4
|
|
Other
losses
|
2.3
|
3.8
|
2.7
|
0.7
|
|
Acquisition-related
costs
|
(8.9)
|
1.0
|
0.7
|
47.7
|
|
Pension and
post-employment non-service costs1
|
1.4
|
2.5
|
3.9
|
9.0
|
|
Change in value of
investment in Atlantica carried at fair value
|
46.0
|
—
|
138.0
|
—
|
|
Costs related to tax
equity financing
|
1.3
|
0.4
|
1.3
|
1.8
|
|
Loss (gain) on
derivative financial instruments
|
(0.3)
|
(3.1)
|
0.6
|
(1.9)
|
|
Realized (loss) gain
on energy derivative contracts
|
0.1
|
—
|
0.1
|
(0.6)
|
|
Loss (gain) on
foreign exchange
|
0.7
|
1.2
|
(0.1)
|
0.3
|
|
Depreciation and
amortization
|
63.8
|
69.2
|
260.8
|
251.3
|
Adjusted
EBITDA
|
$196.9
|
$185.8
|
$803.3
|
$689.4
|
1
|
As a result of
adoption of ASU 2017-07 certain components of net benefit pension
costs are considered non-service costs and are now classified
outside of operating income (see Note 2(a) in the annual
audited consolidated financial statements).
|
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 USD millions, except per share data)
|
Three Months
Ended
Dec
31
|
Twelve Months
Ended
Dec
31
|
2018
|
2017
|
2018
|
2017
|
Net earnings
attributable to shareholders
|
$44.0
|
$47.2
|
$185.0
|
$149.5
|
Add
(deduct):
|
|
|
|
|
|
Loss (gain) on
derivative financial instruments
|
(0.3)
|
(3.1)
|
0.6
|
(1.9)
|
|
Realized (loss) gain
on energy derivative contracts
|
0.1
|
—
|
0.1
|
(0.6)
|
|
Loss (gain) on
long-lived assets, net
|
1.9
|
1.2
|
0.8
|
(1.8)
|
|
Loss (gain) on
foreign exchange
|
0.7
|
1.2
|
(0.1)
|
0.3
|
|
Interest expense on
convertible debentures and costs related to
acquisition financing
|
—
|
—
|
—
|
13.4
|
|
Acquisition-related
costs
|
(8.9)
|
1.0
|
0.7
|
47.7
|
|
Change in value of
investment in Atlantica carried at fair value
|
46.0
|
—
|
138.0
|
—
|
|
Costs related to tax
equity financing
|
1.3
|
0.4
|
1.3
|
1.8
|
|
Other
adjustments
|
—
|
2.5
|
—
|
2.5
|
|
U.S. Tax Reform and
related deferred tax adjustments1
|
(18.4)
|
17.1
|
(18.4)
|
17.1
|
|
Adjustment for taxes
related to above
|
4.1
|
(0.5)
|
4.2
|
(3.0)
|
Adjusted Net
Earnings
|
$70.5
|
$67.0
|
$312.2
|
$225.0
|
Adjusted Net
Earnings per share2
|
$0.14
|
$0.16
|
$0.66
|
$0.57
|
1
|
Represents the
non-cash accounting charge related to the revaluation of U.S. net
deferred income tax assets and liabilities as a result of U.S. Tax
Reform.
|
2
|
Per share amount
calculated after preferred share dividends and excluding
subscription receipts issued for projects or acquisitions not
reflected in earnings.
|
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
Dec
31
|
Twelve Months
Ended
Dec
31
|
2018
|
2017
|
2018
|
2017
|
Cash flows from
operating activities
|
$168.6
|
$116.0
|
$530.4
|
$326.6
|
Add
(deduct):
|
|
|
|
|
|
Changes in non-cash
operating items
|
(27.3)
|
9.1
|
8.1
|
87.7
|
|
Production based cash
contributions from non-controlling interests
|
—
|
—
|
13.9
|
7.9
|
|
Interest expense on
convertible debentures and costs related to
acquisition financing1
|
—
|
—
|
—
|
7.2
|
|
Acquisition-related
costs
|
(8.8)
|
0.9
|
0.7
|
47.7
|
|
Reimbursement of
operating expenses incurred on joint venture
|
—
|
—
|
1.0
|
—
|
Adjusted Funds
from Operations
|
$132.5
|
$126.0
|
$554.1
|
$477.1
|
1
|
Exclusive of deferred
financing fees of $6.2 million.
|
View original
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SOURCE Algonquin Power & Utilities Corp.