Algonquin Power & Utilities Corp. Announces 2010 Fourth Quarter and Year End Financial Results

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Mar 03, 2011, 07:06 ET

OAKVILLE, ON, March 3 /PRNewswire-FirstCall/ - Algonquin Power & Utilities Corp. (TSX: AQN), today announced financial results for the fourth quarter and year ended December 31, 2010. On October 27, 2009, Algonquin Power Income Fund became a wholly owned subsidiary of Algonquin Power & Utilities Corp. (collectively "APUC"), maintaining the same operations and business activities, but under a new corporate structure. Year-over-year results are compared to the results of Algonquin Power Income Fund in the relevant period.

Fourth Quarter Financial Highlights:

For the fourth quarter of 2010, revenue was $48.9 million as compared to $43.4 million in the fourth quarter of 2009. The increase in revenue over 2009 is primarily the result of the acquisition of the Tinker facility by Algonquin Power Co. ("APCo") in Q1 2010 and increases due to the results of rate case approvals for revenue increases in Liberty Water Co. ("Liberty Water").
Adjusted earnings before interest, taxes, depreciation, and amortization ("Adjusted EBITDA") was $20.7 million in the fourth quarter of 2010 as compared to $18.0 million in the fourth quarter of 2009. The increase in Adjusted EBITDA is primarily related to the acquisition of the Tinker facility and increases due to the results of rate case approvals for revenue increases in Liberty Water.
APUC reported net earnings in the fourth quarter of 2010 of $16.9 million or $0.18 per share as compared to a net loss of $1.4 million or $0.03 per share for the fourth quarter of 2009. The increase is primarily due to increased earnings from operating facilities and increased recoveries of income tax expense.
Adjusted net earnings are utilized to report the net earnings of APUC without the effects of gains or losses on foreign exchange, foreign exchange forward contracts, and interest rate swaps as these are primarily non-cash items that are not reflective of the performance of the underlying business of APUC. APUC reported adjusted net earnings of $18.0 million or $0.19 per share in Q4 2010 as compared to adjusted net earnings of $11.5 million or $0.14 per share in Q4 2009.

2010 Financial Highlights:

For the year 2010, revenue was $182.9 million as compared to $187.3 million in 2009. The decrease in revenue over 2009 is primarily the result of the impact of the stronger Canadian dollar, lower average hydrology and wind resources and the impact of the outage at the Energy-from-Waste facility.
Adjusted EBITDA was $75.1 million in 2010 as compared to $79.4 million in 2009. The decrease in adjusted EBITDA is primarily related to lower earnings from operations resulting from lower average hydrology and wind resources and the impact of the outage at the Energy-from-Waste facility.
For the year 2010, APUC reported net earnings of $19.6 million or $0.21 per share as compared to $31.3 million or $0.39 per share for the year 2009. The decrease in net earnings is due to increased interest expense, reduced interest dividend and other income and lower earnings from operating facilities.
APUC reported adjusted net earnings of $19.9 million or $0.21 per share for 2010 as compared to adjusted net earnings of $30.5 million or $0.38 per share in 2009. The decrease in adjusted net earnings is due to increased interest expense, reduced interest dividend and other income and lower earnings from operating facilities.

Fourth Quarter Performance, Operational, and Growth Highlights:

In the fourth quarter of 2010, APCo's Maritime and Quebec regions experienced resources significantly higher than long-term averages, producing approximately 40% and 15% above long-term average resources, respectively. The New York region experienced resources approximately equal to the long-term average, while the Manitoba and New England regions experienced resources approximately 10% below long-term averages. The Ontario and Western regions continued to experience results significantly below long-term average resources. While wind and hydrologic conditions generally showed improvements during the fourth quarter, APUC was impacted by the change in operating model at the Windsor Locks facility and the stronger Canadian dollar.
During the fourth quarter, Liberty Water experienced revenue increases in both its water distribution and wastewater treatment business of 16.5% and 17.9% respectively. The increases are due to increased customer demand and the implementation of rate increases at several facilities. In addition, the acquisition of the Galveston facility contributed to the increase in the wastewater treatment business. During 2010, Liberty Water completed rate case proceedings at nine utilities in Arizona and Texas which on an annualized basis will contribute an additional $10.2 million of revenue. One remaining rate case requesting $1.1 million in annual revenue requirement is expected to be concluded by the first quarter of 2011.
On December 9, 2010, APUC announced that Liberty Energy Utilities Co. ("Liberty Energy"), APUC's regulated utility subsidiary, entered into agreements to acquire all issued and outstanding shares of Granite State Electric Company, a regulated electric utility, and EnergyNorth Natural Gas Inc., a regulated natural gas utility, for total consideration of US$285.0 million. Closings of the transactions are subject to certain conditions including state and federal regulatory approval, and are expected to occur in the fall of 2011.
On December 21st, 2010 APUC announced that Hydro-Québec Distribution accepted proposals for the purchase of energy from the 24MW Saint-Damase and 24MW Val-Éo wind power generating projects. The projects were submitted with support from APUC in response to the community based call for offers announced in the spring of 2009. Preliminary permitting began for both projects in early 2011, with all major authorizations targeted for completion by the end of 2012.
In late December 2010 both Liberty Water and Liberty Energy entered into private placement debt financings. Liberty Water completed a senior unsecured US$50 million private placement debt financing with proceeds used to reduce outstanding indebtedness under APCo's senior credit facility; Liberty Energy entered into a senior unsecured US$70 million private placement debt financing which proceeds were used to partially finance the acquisition of the California Pacific Electric Company. These financings improve the alignment of US dollar denominated subsidiary debt with the respective operating assets.
Following the end of the fourth quarter, APCo was notified that the Ontario Power Authority has agreed to enter into a power purchase contract in respect of APCo's 75MW Amherst Island wind project located approximately 30km west of Kingston, Ontario.

"Our primary focus in 2010 was to deliver on the value consolidation and committed growth initiatives outlined during the year", commented Ian Robertson, Chief Executive Officer of APUC. "We are pleased with our success in completing these initiatives and expect 2011 to enjoy the full year impact of these activities, notably the completion of rate cases in Liberty Water and the closing of the acquisition of the California Pacific Electric Company, which marks a new but well aligned utility business for us. Looking forward, 2011 objectives include further growth in the Liberty Energy business with the closing of the Granite State and EnergyNorth together with additional in-scope utility acquisitions, and expansion of the APCo business primarily through green-field development projects, evident in our recent wind power contract awards in Quebec and Ontario. This will be an active year for APUC and we look forward to communicating our success as we successfully achieve our goals."

APUC's financial information and analysis are available on the web site at www.algonquinpowerandutilities.com.

APUC will hold an earnings conference call at 9:00 a.m. eastern time on Friday, March 4, 2011, hosted by Chief Executive Officer Ian Robertson and Chief Financial Officer David Bronicheski.

Conference call details are as follows:

Date: Friday, March 4, 2011
Start Time: 9:00 a.m. eastern
Phone Number: Toll free within North America: 1-800-814-4859 or Local 416-644-3415.
Conference ID#: 4403330

For those unable to attend the live call, a digital recording will be available for replay two hours after the call by dialing 1-877-289-8525 or 416-640-1917 access code 4403330# from March 4, 2011 until March 18, 2011.

About Algonquin Power & Utilities Corp.

Through its distinct operating subsidiaries, APUC owns and operates a diversified portfolio of $1.1 billion of clean renewable electric generation and sustainable utility distribution businesses in North America. Liberty Water Co., APUC's water utility subsidiary, provides regulated water utility services to more than 70,000 customers with a portfolio of 19 water distribution and wastewater treatment utility systems. Through its wholly owned subsidiary Liberty Energy Utilities Co., APUC provides regulated electricity and natural gas distribution services, currently serving more than 47,000 electric customers in the Lake Tahoe, CA area. Pursuant to previously announced agreements, Liberty Energy Utilities Co. is committed to acquiring Granite State Electric Company, a New Hampshire electric distribution company, and EnergyNorth Natural Gas Inc., a regulated natural gas distribution utility, which together serve approximately 130,000 customers. Algonquin Power Co., APUC's electric generation subsidiary, includes 45 renewable energy facilities and 12 thermal energy facilities representing more than 460 MW of installed capacity. APUC and its operating subsidiaries deliver continuing growth through an expanding pipeline of greenfield and expansion renewable power and clean energy projects, organic growth within its regulated utilities and the pursuit of accretive acquisition opportunities. APUC's common shares and convertible debentures are traded on the Toronto Stock Exchange under the symbols AQN, AQN.DB, AQN.DB.A and AQN.DB.B. Visit Algonquin Power & Utilities Corp. on the web at www.AlgonquinPowerandUtilities.com.

Caution Regarding Forward-Looking Information

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.

SOURCE Algonquin Power & Utilities Corp.