OAKVILLE, ON, Feb. 27, 2020 /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, 2019. All amounts are shown in
United States dollars unless
otherwise noted.
"We are pleased to report strong fourth quarter and full year
2019 results reflecting another successful year of growth and
execution across our business groups. In 2019, we welcomed nearly
30,000 new customers through the completion of two gas utility
acquisitions, made significant progress on our Mid-West wind
development project as part of our 'Greening the Fleet' initiative,
and announced definitive agreements to acquire two new regulated
utilities, Bermuda Electric Light Company and New York American
Water," said Ian Robertson, Chief
Executive Officer of APUC. "Looking into 2020 and beyond, we remain
committed to delivering on our recently-announced five-year,
$9.2 billion growth plan to drive
growth in earnings and cash flows which will, in turn, support a
growing dividend and compelling returns for our shareholders."
Fourth Quarter and Full Year Financial Highlights
- Annual revenue of $1,624.9
million, a decrease of 1%;
- Annual Adjusted EBITDA1 of $838.6 million, an increase of 4%;
- Annual Adjusted net earnings1 of $321.3 million, an increase of 3%;
- Annual Adjusted net earnings1 per share of
$0.63, a decrease of 5%;
- Fourth quarter revenue of $439.7
million, an increase of 4%;
- Fourth quarter Adjusted EBITDA1 of $231.5 million, an increase of 16%;
- Fourth quarter Adjusted net earnings1 of
$103.6 million, an increase of 47%;
and,
- Fourth quarter Adjusted net earnings1 per share of
$0.20, an increase of 43%, in each
case 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
|
Quarter ended
December 31
|
Year ended
December 31
|
2019
|
2018
|
Variance
|
2019
|
2018
|
Variance
|
Revenue
|
$439.7
|
$421.9
|
4%
|
$1,624.9
|
$1,648.5
|
(1)%
|
Net earnings
attributable to shareholders
|
$172.1
|
$44.0
|
291%
|
$530.9
|
$185.0
|
187%
|
Per
share
|
$0.34
|
$0.09
|
278%
|
$1.05
|
$0.38
|
176%
|
Adjusted net
earnings1
|
$103.6
|
$70.5
|
47%
|
$321.3
|
$312.2
|
3%
|
Per
share
|
$0.20
|
$0.14
|
43%
|
$0.63
|
$0.66
|
(5)%
|
Adjusted
EBITDA1
|
$231.5
|
$198.9
|
16%
|
$838.6
|
$804.4
|
4%
|
Adjusted Funds
from Operations1
|
$144.1
|
$132.5
|
9%
|
$566.2
|
$554.1
|
2%
|
Dividend per
share
|
$0.1410
|
$0.1282
|
10%
|
$0.5512
|
$0.5011
|
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.
|
Business and Financial Highlights Summary
Regulated Services Group Highlights
- Definitive Agreement to acquire Bermuda Electric Light
Company - On June 3, 2019, APUC
announced it had agreed to acquire the Ascendant Group Limited
("Ascendant") for a purchase price of approximately $365.0 million. Ascendant, through its
major subsidiary Bermuda Electric Light Company, is the sole
electric utility providing regulated electrical generation,
transmission and distribution services to approximately 63,000
residents and businesses in Bermuda. Approval of Ascendant's common
shareholders has been received and the closing of the transaction
is expected to occur in 2020 subject to customary closing
conditions.
- Definitive Agreement to Acquire New York American Water
- On November 20, 2019, APUC
announced that it entered into a stock purchase agreement with
American Water Works Company, Inc. to purchase its regulated
operations in the State of New
York ("New York American Water") for a purchase price of
$608.0 million, subject to customary
adjustments. New York American Water is a regulated water and
wastewater utility serving over 125,000 customer connections across
seven counties in southeastern New York. Operations include
approximately 1,270 miles of water mains and distribution lines
with 98% of customers located in Nassau
County on Long Island. The transaction remains subject
to regulatory approval and other typical closing conditions and is
expected to close sometime in 2021.
- Acquisition of New Brunswick Gas - On October 1, 2019, APUC completed the acquisition
of the New Brunswick Gas System ("New Brunswick Gas") for
approximately C$339.0 million.
New Brunswick Gas is a regulated utility that provides natural gas
to approximately 12,000 customers in 12 communities across
New Brunswick, and operates
approximately 1,200 km of natural gas distribution pipeline.
- Acquisition of St. Lawrence Gas - On November 1, 2019, the Regulated Services Group
completed the acquisition of the St. Lawrence Gas System ("St.
Lawrence Gas") for approximately $61.8
million. St. Lawrence Gas is a regulated utility that
provides natural gas to approximately 17,000 customers in the state
of New York and operates
approximately 1,100 km of natural gas distribution pipeline.
- Significant Milestones Achieved on Mid-West Wind Development
Project - In June 2019, the
Regulated Services Group received certificates of convenience and
necessity ("CC&N") to acquire, once completed, three wind farms
generating up to 600 MW of wind energy located in Missouri and Kansas. Receipt of the
CC&N allows construction to commence on the three wind
generation sites. Construction of two of the wind farms began
in the fourth quarter of 2019 and construction on the third wind
farm began in the first quarter of 2020.
Renewable Energy Group Highlights
- Significant Progress on Renewable Energy Projects - In
2019, the Renewable Energy Group achieved significant milestones in
the advancement of several renewable energy projects including the
Maverick Creek Wind Project located in Texas, Sugar Creek Wind Project located in
Illinois, Great Bay Solar Project
located in Maryland, and Altavista
Solar Project2 located in Virginia.
2.
|
Power from the
project will be sold, in part, to Facebook Operations, LLC pursuant
to a power purchase agreement.
|
APUC Corporate Highlights
- Environmental, Social and Governance Leadership – In
November 2019, APUC reported on its
environmental, social and governance leadership and was recognized
as one of the most sustainable companies in the world.
Further, APUC's Renewable Energy Group in 2019 issued its inaugural
"green bonds", an offering of C$300.0
million senior unsecured debentures with a maturity date of
January 29, 2029.
APUC to Host Conference Call
APUC will hold an earnings conference call at 10:00 a.m. eastern time on Friday, February 28,
2020, hosted by Chief Executive Officer, Ian Robertson and Chief Financial Officer,
David Bronicheski.
Earnings Conference Call Details:
Date:
|
February 28,
2020
|
|
10:00 a.m.
ET
|
Dial-in
Details:
|
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/algonquinpower20200228.html
Presentation also
available at: www.algonquinpowerandutilities.com
|
Call
Replay:
|
Toll Free
Canada/US
|
1-855-669-9658
|
(available until
March 13, 2020)
|
Vancouver
Local
|
1-604-674-8052
|
|
Access
Code
|
4049
|
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.
About Algonquin Power & Utilities Corp.
APUC is a diversified international generation, transmission and
distribution utility with approximately U.S. $11 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
approximately 804,000 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 GW of installed capacity and more
than 1.4 GW of incremental renewable energy capacity under
construction.
APUC strives to deliver 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
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 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, 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 New York
American Water; 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 MD&A and annual information form for
the year ended December 31, 2019.
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 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 U.S. 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 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 APUC's MD&A for the
year ended December 31, 2019.
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 (other than those realized in
connection with the sales of development assets), 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. The non-cash accounting charge
related to the revaluation of U.S. deferred income tax assets and
liabilities as a result of implementation of the effects of the Tax
Cuts and Jobs Act ("U.S. Tax Reform") is adjusted as it is also
considered a non-recurring 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.
|
Three Months
Ended
December 31
|
Twelve Months
Ended
December 31
|
(all dollar
amounts in $ millions)
|
2019
|
2018
|
2019
|
2018
|
Net earnings
attributable to shareholders
|
$
|
172.1
|
$
|
44.0
|
$
|
530.9
|
$
|
185.0
|
Add
(deduct):
|
|
|
|
|
Net earnings
attributable to the non-controlling interest,
exclusive of HLBV1
|
(3.7)
|
3.4
|
19.1
|
4.8
|
Income tax
expense
|
12.5
|
2.8
|
70.1
|
53.4
|
Interest expense on
long-term debt and others
|
47.4
|
40.3
|
181.5
|
152.1
|
Other
losses
|
6.2
|
2.3
|
15.1
|
2.7
|
Acquisition-related
costs
|
6.4
|
(8.9)
|
11.6
|
0.7
|
Pension and
post-employment non-service costs
|
8.4
|
3.4
|
17.3
|
5.0
|
Change in value of
investments carried at fair value2
|
(98.1)
|
46.0
|
(278.1)
|
138.0
|
Costs related to tax
equity financing
|
—
|
1.3
|
—
|
1.3
|
Loss (gain) on
derivative financial instruments
|
(0.5)
|
(0.3)
|
(16.1)
|
0.6
|
Realized (loss) gain
on energy derivative contracts
|
—
|
0.1
|
(0.2)
|
0.1
|
Loss (gain) on
foreign exchange
|
3.1
|
0.7
|
3.1
|
(0.1)
|
Depreciation and
amortization
|
77.7
|
63.8
|
284.3
|
260.8
|
Adjusted
EBITDA
|
$
|
231.5
|
$
|
198.9
|
$
|
838.6
|
$
|
804.4
|
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 twelve
months ended December 31, 2019 amounted to $16.0 million and $65.0
million as compared
to $13.8 million and $110.7 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 $90.1 million year over year.
|
2
|
See Note 8 in
APUC's 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 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
December 31
|
Twelve Months
Ended
December 31
|
(all dollar
amounts in $ millions except per share information)
|
2019
|
2018
|
2019
|
2018
|
Net earnings
attributable to shareholders
|
$
|
172.1
|
$
|
44.0
|
$
|
530.9
|
$
|
185.0
|
Add
(deduct):
|
|
|
|
|
Loss (gain) on
derivative financial instruments1
|
(0.5)
|
(0.3)
|
(0.3)
|
0.6
|
Realized (loss) gain
on energy derivative contracts
|
—
|
0.1
|
(0.2)
|
0.1
|
Other
Losses
|
6.1
|
1.9
|
15.1
|
0.8
|
Loss (gain) on
foreign exchange
|
3.0
|
0.7
|
3.1
|
(0.1)
|
Acquisition-related
costs
|
6.4
|
(8.9)
|
11.6
|
0.7
|
Change in value of
investments carried at fair value3
|
(98.1)
|
46.0
|
(278.1)
|
138.0
|
Costs related to tax
equity financing
|
—
|
1.3
|
—
|
1.3
|
Other non-recurring
adjustments
|
2.2
|
—
|
2.2
|
—
|
U.S. Tax Reform and
related deferred tax adjustments2
|
—
|
(18.4)
|
—
|
(18.4)
|
Adjustment for taxes
related to above
|
12.4
|
4.1
|
37.0
|
4.2
|
Adjusted Net
Earnings
|
$
|
103.6
|
$
|
70.5
|
$
|
321.3
|
$
|
312.2
|
Adjusted Net
Earnings per share
|
$
|
0.20
|
$
|
0.14
|
$
|
0.63
|
$
|
0.66
|
1
|
Excludes the gain
related to the discontinuation of hedge accounting on an energy
hedge put in place early in the development of the Sugar Creek
Wind
Project (See Note 24(b)(ii) in APUC's annual audited
consolidated financial statements).
|
2
|
Represents the
non-cash accounting adjustment related to the revaluation of U.S.
deferred income tax assets and liabilities as a result of
implementation
of the effects of U.S. Tax Reform.
|
3
|
See Note
8 in APUC's annual audited consolidated financial
statements
|
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
December 31
|
Twelve Months
Ended
December 31
|
(all dollar
amounts in $ millions)
|
2019
|
2018
|
2019
|
2018
|
Cash flows from
operating activities
|
$
|
167.5
|
$
|
168.6
|
$
|
611.3
|
$
|
530.4
|
Add
(deduct):
|
|
|
|
|
Changes in non-cash
operating items
|
(29.8)
|
(27.3)
|
(60.3)
|
8.1
|
Production based cash
contributions from non-controlling
interests
|
—
|
—
|
3.6
|
13.9
|
Acquisition-related
costs
|
6.4
|
(8.8)
|
11.6
|
0.7
|
Reimbursement of
operating expenses incurred on joint venture
|
—
|
—
|
—
|
1.0
|
Adjusted Funds
from Operations
|
$
|
144.1
|
$
|
132.5
|
$
|
566.2
|
$
|
554.1
|
View original
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SOURCE Algonquin Power & Utilities Corp.