Algonquin Power & Utilities Corp. Announces 2016 Third Quarter and Year to Date Financial Results

OAKVILLE, ON, Nov. 10, 2016 /CNW/ - Algonquin Power & Utilities Corp. (TSX: AQN) ("APUC") today announced financial results for the third quarter ended September 30, 2016.

Third Quarter Financial Highlights:

• Revenue was $221.3 million compared to $189.6 million during the third quarter in 2015, an increase of $31.7 million.  The increase in APUC revenue during the quarter was primarily due to the acquisition of the Park Water utility.  For the first nine months of 2016, APUC generated revenue of $785.8 million compared to $767.6 million in the first nine months of 2015.
• APUC reported Adjusted Net Earnings¹ of $26.6 million or $0.09 per common share in the third quarter of 2016 compared to Adjusted Net Earnings¹ of $17.3 million or $0.06 per common share in the third quarter of 2015.  APUC reported Adjusted Net Earnings¹ of $114.0 million or $0.40 per common share for the first nine months of 2016 compared to $82.0 million or $0.31 per common share for the first nine months of 2015.
• In the third quarter of 2016, Adjusted Earnings Before Interest, Taxes, Depreciation & Amortization ("Adjusted EBITDA"¹) totalled $91.4 million as compared to $70.2 million during the same period in 2015, an increase of $21.2 million or 30.2%.  The increase in Adjusted EBITDA was primarily due to the newly acquired Park Water System.  APUC reported Adjusted EBITDA¹ of $338.6 million for the first nine months of 2016 compared to $266.0 million for the first nine months of 2015.
• Adjusted Funds from Operations¹ totalled $61.0 million or $0.22 per common share in the third quarter of 2016 compared to Adjusted Funds from Operations¹ of $54.3 million or $0.22 per common share during the same period in 2015.  The change in Adjusted Funds from Operations is primarily due to increased earnings from operating activities as compared to the same period in 2015.  For the first nine months of 2016, Adjusted Funds from Operations¹ totalled $260.0 million or $0.95 per common share compared to $210.3 million or $0.85 per common share for the first nine months of 2015.

"We are pleased to report third quarter and year to date financial results that reflect solid growth in our earnings and cash flows as we continue to successfully execute on our growth program," commented Ian Robertson, Chief Executive Officer of APUC.  "During the quarter we commissioned the 200 MW Odell Wind Facility and came several steps closer to gaining all regulatory approvals required to complete the Empire acquisition, which remains on track for completion in early 2017."

Third Quarter Highlights:

• Approvals for The Empire District Electric Company merger are nearly complete.  During the quarter, both the Arkansas Public Service Commission and the Missouri Public Service Commission issued orders approving the transaction.  In Kansas, a unanimous stipulation agreement was filed with the Kansas Corporation Commission ("KCC") and a hearing on its merits was held on November 9, 2016.  A decision from the KCC is expected in late 2016 which would complete all necessary regulatory approvals and allow the transaction to close in early 2017.
• On July 29, 2016, construction of the Odell Wind Facility, a 200 MW wind generating facility located in Minnesota, was completed.  The Odell Wind Facility is the Generation Group's ninth wind generating facility and consists of 100 Vestas V110 2.0 wind turbines.  The facility is expected to generate 831.8 GW-hrs of energy per year, 2.1% higher than initial estimates, with all energy sold pursuant to a 20 year power purchase agreement.  On August 5, 2016, tax equity financing of approximately U.S. $180 million was completed.  On September 15, 2016, the Company acquired the remaining 50% interest in Odell SponsorCo LLC for U.S. $26.5 million.
• Subsequent to the end of the quarter, on November 10, 2016, APUC's Board of Directors declared the fourth quarter 2016 dividends of U.S. $0.1059 per common share.  Based on the Bank of Canada noon exchange rate on the declaration date, the Canadian dollar equivalent for the fourth quarter 2016 dividends is Cdn $0.1427 per common share.

APUC's supplemental information is available on the website at www.AlgonquinPowerandUtilities.com.

APUC will hold an earnings conference call at 10:00 a.m. eastern time on Friday, November 11, 2016, hosted by Chief Executive Officer, Ian Robertson and Chief Financial Officer, David Bronicheski.

Conference call details:

Date: Friday, November 11, 2016

Start Time: 10:00 a.m. eastern time

Phone Number: Toll free within North America: 1-800-319-4610 or Toronto: 416-915-3239

Conference ID: Please ask to join the Algonquin Power & Utilities Corp. conference call

Presentation Access: http://services.choruscall.ca/links/algonquinpower20161111.html

For those unable to attend the live call, a digital recording will be available for replay two hours after the call by dialing 1-855-669-9658 or 1-604-638-9010, access code 0855 from Friday, November 11, 2016 until Friday, November 25, 2016.

About Algonquin Power & Utilities Corp.

APUC is a $5.0 billion North American diversified generation, transmission and distribution utility. The distribution business group provides rate regulated water, electricity and natural gas utility services to over 564,000 customers in the United States. The generation business group owns a portfolio of North American based contracted wind, solar, hydroelectric and natural gas powered generating facilities representing more than 1,300 MW of installed capacity. The transmission business group invests in rate regulated electric transmission and natural gas pipeline systems in the United States and Canada. APUC delivers continuing growth through an expanding pipeline of renewable energy development projects, organic growth within its regulated distribution and transmission businesses, and the pursuit of accretive acquisitions. Common shares, preferred shares, and instalment receipts are traded on the Toronto Stock Exchange under the symbols AQN, AQN.PR.A, AQN.PR.D, and AQN.IR.

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 contain information that is forward-looking within the meaning of certain securities laws, including information and statements regarding prospective results of operations, financial position or cash flows. 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 the management's discussion and analysis section of APUC's most recent annual report, quarterly report, and APUC's 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 or information 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 and analysis of "Adjusted Net Earnings", Adjusted EBITDA, and "Adjusted Funds from Operations" can be found in the Management's Discussion & Analysis for the quarter ended September 30, 2016.

Adjusted EBITDA

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 and gain or loss on foreign exchange, earnings or loss from discontinued operations 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.  Where APUC manages the day to day operations of a facility and receives the majority of its economic benefits, the full operating profit of such facility is included in calculating the measure.  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 GAAP.

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 and are viewed as not directly related to a company's operating performance. Net earnings of APUC can be impacted positively or negatively by gains and losses on derivative financial instruments, including foreign exchange forward contracts, interest rate swaps and energy forward purchase contracts as well as to movements in foreign exchange rates on foreign currency denominated debt and working capital balances. Adjusted weighted average shares outstanding represents weighted average shares outstanding adjusted to remove the dilution effect related to shares issued in advance of funding requirements. 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, litigation expenses and write down of intangibles and property, plant and equipment, earnings or loss from discontinued operations 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. It is not intended to be representative of net earnings or loss determined in accordance with GAAP.

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 and are viewed as not directly related to a company's operating performance. Cash flows from operating activities of APUC can be impacted positively or negatively by changes in working capital balances, acquisition expenses, litigation expenses, and cash provided or used in discontinued operations. Adjusted weighted average shares outstanding represents weighted average shares outstanding adjusted to remove the dilution effect related to shares issued in advance of funding requirements. 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 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.  Where APUC manages the day to day operations of a facility and receives the majority of its economic benefits, the Adjusted Funds from Operations of the entire facility is included in calculating the measure.  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. It is not intended to be representative of cash flows from operating activities as determined in accordance with GAAP.

SOURCE Algonquin Power & Utilities Corp.

Ian Tharp, CFA, Vice President, Investor Relations, Algonquin Power & Utilities Corp., 354 Davis Road, Oakville, Ontario, L6J 2X1, Telephone: [phone], Website: www.AlgonquinPowerandUtilities.com