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Algonquin Power & Utilities Corp. Announces 2019 Second Quarter and Year to Date Financial Results

PR Newswire - Thu Aug 8, 7:34PM CDT

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 EBITDA 1 of $189.8 million , a year-over-year increase of 18%
  • Adjusted net earnings 1 of $55.0 million , a year-over-year increase of 8%
  • Adjusted net earnings per share 1 of $0.11 , consistent with the previous year
  • Adjusted Funds from Operations 1 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 Earnings 1

55.0

50.9

8%

148.7

191.9

(23)%

Per share

0.11

0.11

0%

0.29

0.42

(31)%

Adjusted EBITDA 1

189.8

160.8

18%

421.5

439.8

(4)%

Adjusted Funds from Operations 1

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 share 1

$

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

 

Cision View original content: http://www.prnewswire.com/news-releases/algonquin-power--utilities-corp-announces-2019-second-quarter-and-year-to-date-financial-results-300899257.html

SOURCE Algonquin Power & Utilities Corp.

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