PR Newswire
OAKVILLE, ON, May 7, 2020
OAKVILLE, ON, May 7, 2020 /PRNewswire/ - Algonquin Power & Utilities Corp. (TSX/NYSE: AQN) ("APUC" or the "Company") today announced financial results for the first quarter ended March 31, 2020. All amounts are shown in United States dollars ("U.S. $" or "$"), unless otherwise noted.
"APUC's strong and resilient business model allowed the Company to continue growing in the first quarter of 2020 while navigating through what was a challenging weather environment," said Ian Robertson, Chief Executive Officer of APUC. "We believe APUC is well positioned to deal with the impact COVID-19 may have on our business in 2020. Further, our long term growth prospects continue to provide our Board of Directors with the confidence to approve a 10% increase in APUC's annual dividend this quarter. We also are able to reaffirm that our long term capital plan remains unchanged as we move forward with over $9.2 billion of investment opportunities through 2024."
Q1 2020 Financial Highlights
Key Financial Information
All dollar amounts in U.S. $ millions except per share information | Q1 2020 | Q1 2019 | Variance |
Revenue | 464.9 | 477.2 | (3)% |
Net earnings (loss) attributable to shareholders | (63.8) | 86.4 | (174)% |
Per share | (0.13) | 0.17 | (176)% |
Adjusted Net Earnings1 | 103.3 | 93.8 | 10% |
Per share | 0.19 | 0.19 | — |
Adjusted EBITDA1 | 242.2 | 231.5 | 5% |
Adjusted Funds from Operations1 | 179.3 | 173.5 | 3% |
Dividend per share | 0.1410 | 0.1282 | 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. |
APUC Business Highlights
Regulated Services Group Highlights
Company Response to COVID-19 Pandemic
APUC's supplemental information is available on the web site at www.AlgonquinPowerandUtilities.com and in our corporate filings on SEDAR at www.sedar.com and EDGAR at www.sec.gov.
Earnings Conference Call
APUC will hold an earnings conference call at 10:00 a.m. eastern time on Friday, May 8, 2020 hosted by Chief Executive Officer, Ian Robertson and Chief Financial Officer, David Bronicheski. Also in attendance on the call will be Chris Jarratt, Vice Chair and Arun Banskota, President.
Date: | Friday, May 8, 2020 | |
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/algonquinpower20200508.html Presentation also available at: www.algonquinpowerandutilities.com | |
Call Replay: | Toll Free Canada/US: | 1-855-669-9658 |
Vancouver local: | 1-604-674-8052 | |
Access code: | 4357 |
Phone networks are currently very busy due to the pandemic. It is recommended that you start trying to connect 10 - 15 minutes prior to the scheduled start time. If you have tried all the appropriate numbers provided above several times and still can't get through, consider whether you have another phone on a different phone network that you could try.
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 805,000 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", "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 APUC's liquidity position; expectations regarding APUC's Adjusted Net Earnings per share for the 2020 fiscal year; and expectations and plans with respect to current and planned capital projects and expenditures. 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 and assumptions include those set out in APUC's most recent annual and interim Management Discussion & 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.
Non-GAAP Financial Measures and Use of Non-GAAP Financial Measures
The terms "Adjusted Net Earnings", "Adjusted EBITDA", "Adjusted Funds from Operations" and "Net Utility Sales" are used in this press release. The terms "Adjusted Net Earnings", "Adjusted EBITDA", "Adjusted Funds from Operations" and "Net Utility Sales" are not recognized measures under U.S. GAAP. There is no standardized measure of "Adjusted Net Earnings", "Adjusted EBITDA", "Adjusted Funds from Operations" and "Net Utility Sales"; 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 and analysis of "Adjusted Net Earnings", "Adjusted EBITDA", "Adjusted Funds from Operations" and "Net Utility Sales", including a reconciliation to the U.S. GAAP equivalent, where applicable, can be found in APUC's Management Discussion & Analysis for the three months ended March 31, 2020.
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 (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 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 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.
Net Utility Sales
Net Utility Sales is a non-GAAP measure used by investors to identify utility revenue after commodity costs, either natural gas or electricity, where these commodity costs are generally included as a pass through in rates to its utility customers. APUC uses Net Utility Sales to assess its utility revenues without the effects of fluctuating commodity costs as such costs are predominantly passed through and paid for by utility customers. APUC believes that analysis and presentation of Net Utility Sales on this basis will enhance an investor's understanding of the revenue generation of its utility businesses. It is not intended to be representative of revenue as determined in accordance with U.S. GAAP.
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 | |||||
(all dollar amounts in $ millions) | 2020 | 2019 | |||
Net earnings (loss) attributable to shareholders | $ | (63.8) | $ | 86.4 | |
Add (deduct): | |||||
Net earnings attributable to the non-controlling interest, exclusive of HLBV1 | 4.4 | 7.6 | |||
Income tax expense (recovery) | (13.7) | 14.8 | |||
Interest expense on long-term debt and others | 46.2 | 42.6 | |||
Other net losses | 4.3 | 3.8 | |||
Change in value of investments carried at fair value2 | 190.8 | 5.8 | |||
Loss (gain) on derivative financial instruments | (0.1) | 0.2 | |||
Realized loss on energy derivative contracts | (0.1) | (0.2) | |||
Gain on foreign exchange | (4.7) | (0.5) | |||
Depreciation and amortization | 78.9 | 71.0 | |||
Adjusted EBITDA | $ | 242.2 | $ | 231.5 |
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 months ended March 31, 2020 amounted to $19.9 million as compared to $21.1 million during the same period in 2019. |
2 | See Note 6 in the unaudited interim 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 | ||||||
(all dollar amounts in $ millions except per share information) | 2020 | 2019 | ||||
Net earnings (loss) attributable to shareholders | $ | (63.8) | $ | 86.4 | ||
Add (deduct): | ||||||
Loss (gain) on derivative financial instruments | (0.1) | 0.2 | ||||
Realized loss on energy derivative contracts | (0.1) | (0.2) | ||||
Other losses | 0.9 | 0.2 | ||||
Gain on foreign exchange | (4.7) | (0.5) | ||||
Acquisition-related costs | — | 1.9 | ||||
Change in value of investments carried at fair value1 | 190.8 | 5.8 | ||||
Other non-recurring adjustments | 1.0 | — | ||||
Adjustment for taxes related to above | (20.7) | — | ||||
Adjusted Net Earnings | $ | 103.3 | $ | 93.8 | ||
Adjusted Net Earnings per share | $ | 0.19 | $ | 0.19 |
1 | See Note 6 in the unaudited interim 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 | ||||||
(all dollar amounts in $ millions) | 2020 | 2019 | ||||
Cash flows from operating activities | $ | 66.9 | $ | 122.1 | ||
Add (deduct): | ||||||
Changes in non-cash operating items | 109.0 | 45.9 | ||||
Production based cash contributions from non-controlling interests | 3.4 | 3.6 | ||||
Acquisition-related costs | — | 1.9 | ||||
Adjusted Funds from Operations | $ | 179.3 | $ | 173.5 |
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SOURCE Algonquin Power & Utilities Corp.