2
|
|
5
|
|
7
|
|
10 | |
11
|
|
12
|
|
14
|
|
17 | |
18 | |
28 | |
33 | |
35
|
|
37
|
|
38 | |
40 | |
43 | |
44 | |
44 | |
46
|
|
60 | |
61 | |
61 | |
62 |
(all dollar amounts in $ millions except per share information)
|
Three Months Ended
December 31
|
Twelve Months Ended
December 31
|
||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|
Net earnings attributable to shareholders
|
$504.2
|
$172.1
|
193%
|
$782.5
|
$530.9
|
47%
|
Adjusted Net Earnings1
|
$127.0
|
$103.6
|
23%
|
$365.8
|
$321.3
|
14%
|
Adjusted EBITDA1
|
$253.1
|
$230.4
|
10%
|
$869.5
|
$838.6
|
4%
|
Net earnings per common share
|
$0.84
|
$0.34
|
147%
|
$1.38
|
$1.05
|
31%
|
Adjusted Net Earnings per common share1
|
$0.21
|
$0.20
|
5%
|
$0.64
|
$0.63
|
2%
|
1 |
See Non-GAAP Financial Measures.
|
Q2
2020
|
Q3
2020
|
Q4
2020
|
Q1
2021
|
Total
|
|||||||||
U.S. dollar dividend
|
$
|
0.1551
|
$
|
0.1551
|
$
|
0.1551
|
$
|
0.1551
|
$0.6204
|
||||
Canadian dollar equivalent
|
$
|
0.2191
|
$
|
0.2056
|
$
|
0.2019
|
$
|
0.1959
|
$0.8225
|
Key Financial Information
|
Three Months Ended December 31
|
||||||
(all dollar amounts in $ millions except per share information)
|
2020
|
2019
|
|||||
Revenue
|
$
|
492.4
|
$
|
440.0
|
|||
Net earnings attributable to shareholders
|
504.2
|
172.1
|
|||||
Cash provided by operating activities
|
174.0
|
167.5
|
|||||
Adjusted Net Earnings1
|
127.0
|
103.6
|
|||||
Adjusted EBITDA1
|
253.1
|
230.4
|
|||||
Adjusted Funds from Operations1
|
179.3
|
144.1
|
|||||
Dividends declared to common shareholders
|
93.1
|
74.3
|
|||||
Weighted average number of common shares outstanding
|
597,165,849
|
519,846,220
|
|||||
Per share
|
|||||||
Basic net earnings
|
$
|
0.84
|
$
|
0.34
|
|||
Diluted net earnings
|
$
|
0.83
|
$
|
0.33
|
|||
Adjusted Net Earnings1,2
|
$
|
0.21
|
$
|
0.20
|
|||
Dividends declared to common shareholders
|
$
|
0.16
|
$
|
0.14
|
1 |
See Non-GAAP Financial Measures.
|
2 |
AQN uses per share Adjusted Net Earnings to enhance assessment and understanding of the performance of AQN.
|
(all dollar amounts in $ millions)
|
Three Months
Ended
December 31
|
||
Comparative Prior Period Revenue
|
$
|
440.0
|
|
REGULATED SERVICES GROUP
|
|||
Existing Facilities
|
|||
Electricity: Increase is primarily due to higher pass through commodity costs at the CalPeco Electric System and in the Midwest
compared to the same period in the prior year. The favourable variance was partially offset by fewer heating degree days at the Midwest.
|
2.9
|
||
Gas: Decrease is primarily due to lower pass through commodity costs as compared to the same period in the prior year
|
(8.8)
|
||
Water: Increase is primarily due to higher consumption and growth in connections at the Litchfield Park Water System, and higher
pass through commodity costs at the Park Water System.
|
3.3
|
||
Other: Decrease is primarily due to a reduction in projects at Ft. Benning.
|
(2.8)
|
||
(5.4)
|
|||
New Facilities
|
|||
Electricity: Acquisition of Ascendant (November 2020).
|
29.1
|
||
Gas: Acquisition of St. Lawrence Gas (November 2019).
|
2.0
|
||
Water: Acquisition of ESSAL (October 2020).
|
19.9
|
||
51.0
|
|||
Rate Reviews
|
|||
Electricity: Implementation of new rates effective January 2019 at the CalPeco Electric System and an increase in rates as a
result of adding the Turquoise Solar Facility to its rate base as well as the implementation of new rates at the Granite State Electric System.
|
2.9
|
||
Gas: Implementation of new rates at the EnergyNorth Gas System.
|
2.2
|
||
Water: Decrease is primarily due to an unfavourable true up in interim rates with the 2019 general rate review at the Park Water System.
|
(1.4)
|
||
3.7
|
|||
Estimated Impact of COVID-191
|
(0.7)
|
||
RENEWABLE ENERGY GROUP
|
|||
Existing Facilities
|
|||
Hydro
|
0.1
|
||
Wind Canada: Increase is primarily due to higher production.
|
1.2
|
||
Wind U.S.: Increase is primarily due to higher overall production and favourable REC pricing, partially offset by unfavourable energy pricing.
|
0.5
|
||
Solar: Increase is primarily due to favourable REC pricing at the Great Bay I Solar Facility.
|
0.8
|
||
Thermal
|
—
|
||
Other
|
(0.5)
|
||
2.1
|
|||
New Facilities
|
|||
Solar: Great Bay II Solar Facility achieved full COD in August 2020.
|
1.4
|
||
1.4
|
|||
Foreign Exchange
|
0.3
|
||
Current Period Revenue
|
$
|
492.4
|
1 |
The impacts of COVID-19 were estimated by normalizing sales in both periods for changes in weather and attributing the remaining variances to COVID-19.
|
Key Financial Information
|
Twelve Months Ended December 31
|
||||||||||
(all dollar amounts in $ millions except per share information)
|
2020
|
2019
|
2018
|
||||||||
Revenue
|
$
|
1,677.1
|
$
|
1,626.4
|
$
|
1,648.5
|
|||||
Net earnings attributable to shareholders
|
782.5
|
530.9
|
185.0
|
||||||||
Cash provided by operating activities
|
505.2
|
611.3
|
530.4
|
||||||||
Adjusted Net Earnings1
|
365.8
|
321.3
|
312.2
|
||||||||
Adjusted EBITDA1
|
869.5
|
838.6
|
804.4
|
||||||||
Adjusted Funds from Operations1
|
600.2
|
566.2
|
554.1
|
||||||||
Dividends declared to common shareholders
|
344.4
|
277.8
|
235.4
|
||||||||
Weighted average number of common shares outstanding
|
559,633,275
|
499,910,876
|
461,818,023
|
||||||||
Per share
|
|||||||||||
Basic net earnings
|
$
|
1.38
|
$
|
1.05
|
$
|
0.38
|
|||||
Diluted net earnings
|
$
|
1.37
|
$
|
1.04
|
$
|
0.38
|
|||||
Adjusted Net Earnings1,2
|
$
|
0.64
|
$
|
0.63
|
$
|
0.66
|
|||||
Dividends declared to common shareholders
|
$
|
0.61
|
$
|
0.55
|
$
|
0.50
|
|||||
Total assets
|
13,223.9
|
10,920.8
|
9,398.6
|
||||||||
Long term debt3
|
4,538.8
|
3,932.2
|
3,337.3
|
1 |
See Non-GAAP Financial Measures.
|
2 |
AQN uses per share Adjusted Net Earnings to enhance assessment and understanding of the performance of AQN.
|
3 |
Includes current and long-term portion of debt and convertible debentures per the financial statements.
|
(all dollar amounts in $ millions)
|
Twelve Months
Ended December 31
|
||
Comparative Prior Period Revenue
|
$
|
1,626.4
|
|
REGULATED SERVICES GROUP
|
|||
Existing Facilities
|
|||
Electricity: Decrease is primarily due to lower consumption driven by 4% fewer heating degree days and 15% fewer cooling degree
days in the Midwest than the prior year.
|
(41.1)
|
||
Gas: Decrease is primarily due to lower pass through commodity costs.
|
(40.8)
|
||
Water: Increase is primarily due to higher consumption and growth in connections at the Litchfield Park Water System, and higher
pass through commodity costs at the Park Water System.
|
6.5
|
||
Other: Decrease is primarily due to a reduction in projects at Ft. Benning.
|
(2.5)
|
||
(77.9)
|
|||
New Facilities
|
|||
Electricity: Acquisition of Ascendant (November 2020).
|
29.1
|
||
Gas: Acquisitions of New Brunswick Gas (October 2019) and St. Lawrence Gas (November 2019).
|
61.2
|
||
Water: Acquisition of ESSAL (October 2020).
|
19.9
|
||
110.2
|
|||
Rate Reviews
|
|||
Electricity: Implementation of new rates effective January 2019 at the CalPeco Electric System and an increase in rates as a
result of adding the Turquoise Solar Facility to its rate base as well as the implementation of new rates at the Granite State Electric System.
|
18.6
|
||
Gas: Implementation of new rates at the EnergyNorth Gas System.
|
2.2
|
||
Water: Decrease is primarily due to an unfavourable true up in interim rates with the 2019 general rate review at the Park Water
System.
|
(0.7)
|
||
20.1
|
|||
Estimated Impact of COVID-191
|
(15.7)
|
||
RENEWABLE ENERGY GROUP
|
|||
Existing Facilities
|
|||
Hydro: Decrease is primarily due to unfavourable pricing at the Western and Maritime Regions, as well as lower overall
production.
|
(0.3)
|
||
Wind Canada: Increase is primarily due to higher production as well as the addition of the Amherst Island Wind Facility which was
previously accounted for as an equity investment before the Company acquired the remaining 50% interest and began consolidating in April 2019.
|
11.2
|
||
Wind U.S.: Increase is primarily due to favourable energy and REC pricing, as well as higher overall production.
|
2.2
|
||
Solar: Increase is primarily due to favourable REC pricing at the Great Bay I Solar Facility.
|
0.6
|
||
Thermal: Decrease is primarily due to unfavourable energy and capacity pricing as well as lower REC revenue at the Windsor Locks
Thermal Facility.
|
(3.7)
|
||
Other
|
0.9
|
||
10.9
|
|||
New Facilities
|
|||
Solar: Great Bay II Solar Facility achieved full COD in August 2020.
|
4.0
|
||
4.0
|
|||
Foreign Exchange
|
(0.9)
|
||
Current Period Revenue
|
$
|
1,677.1
|
1 |
The impacts of COVID-19 were estimated by normalizing sales in both periods for changes in weather and attributing the remaining variances to COVID-19.
|
Adjusted EBITDA by business units
|
Three Months Ended
December 31
|
Twelve Months Ended
December 31
|
|||||||||||||
(all dollar amounts in $ millions)
|
2020
|
2019
|
2020
|
2019
|
|||||||||||
Regulated Services Group Operating Profit
|
$
|
161.8
|
$
|
159.4
|
$
|
590.2
|
$
|
566.4
|
|||||||
Renewable Energy Group Operating Profit
|
102.9
|
85.9
|
337.2
|
327.6
|
|||||||||||
Administrative Expenses
|
(12.4)
|
(15.2)
|
(59.5)
|
(56.8)
|
|||||||||||
Other Income & Expenses
|
0.8
|
0.3
|
1.6
|
1.4
|
|||||||||||
Total AQN Adjusted EBITDA
|
$
|
253.1
|
$
|
230.4
|
$
|
869.5
|
$
|
838.6
|
|||||||
Change in Adjusted EBITDA ($)
|
$
|
22.7
|
$
|
30.9
|
|||||||||||
Change in Adjusted EBITDA (%)
|
9.9
|
%
|
3.7
|
%
|
Change in Adjusted EBITDA
|
Three Months Ended December 31, 2020
|
|||||||||||
(all dollar amounts in $ millions)
|
Regulated
Services
|
Renewable
Energy
|
Corporate
|
Total
|
||||||||
Prior period balances
|
$
|
159.4
|
$
|
85.9
|
$
|
(14.9)
|
$
|
230.4
|
||||
Existing Facilities and Investments
|
(16.2)
|
15.4
|
0.4
|
(0.4)
|
||||||||
New Facilities and Investments
|
15.6
|
1.3
|
—
|
16.9
|
||||||||
Rate Reviews
|
3.7
|
—
|
—
|
3.7
|
||||||||
Estimated Impact of COVID-191
|
(0.7)
|
—
|
—
|
(0.7)
|
||||||||
Foreign Exchange Impact
|
—
|
0.3
|
—
|
0.3
|
||||||||
Administrative Expenses
|
—
|
—
|
2.9
|
2.9
|
||||||||
Total change during the period
|
$
|
2.4
|
$
|
17.0
|
$
|
3.3
|
$
|
22.7
|
||||
Current period balances
|
$
|
161.8
|
$
|
102.9
|
$
|
(11.6)
|
$
|
253.1
|
Change in Adjusted EBITDA
|
Twelve Months Ended December 31, 2020
|
|||||||||||
(all dollar amounts in $ millions)
|
Regulated
Services
|
Renewable
Energy
|
Corporate
|
Total
|
||||||||
Prior period balances
|
$
|
566.4
|
$
|
327.6
|
$
|
(55.4)
|
$
|
838.6
|
||||
Existing Facilities and Investments
|
(16.1)
|
4.0
|
0.2
|
(11.9)
|
||||||||
New Facilities and Investments
|
34.5
|
3.8
|
—
|
38.3
|
||||||||
Rate Reviews
|
20.1
|
—
|
—
|
20.1
|
||||||||
Estimated Impact of COVID-191
|
(14.7)
|
—
|
—
|
(14.7)
|
||||||||
Foreign Exchange Impact
|
—
|
1.8
|
—
|
1.8
|
||||||||
Administrative Expenses
|
—
|
—
|
(2.7)
|
(2.7)
|
||||||||
Total change during the period
|
$
|
23.8
|
$
|
9.6
|
$
|
(2.5)
|
$
|
30.9
|
||||
Current period balances
|
$
|
590.2
|
$
|
337.2
|
$
|
(57.9)
|
$
|
869.5
|
1 |
The impacts of COVID-19 were estimated by normalizing sales in both periods for changes in weather and attributing the remaining variances to COVID-19.
|
Utility System Type
|
As at December 31
|
|||||||||||||||
2020
|
2019
|
|||||||||||||||
(all dollar amounts in $ millions)
|
Assets
|
Net Utility
Sales1
|
Total
Customer
Connections2
|
Assets
|
Net Utility
Sales1
|
Total
Customer
Connections2
|
||||||||||
Electricity
|
3,271.8
|
548.8
|
306,000
|
2,792.4
|
538.4
|
267,000
|
||||||||||
Natural Gas
|
1,470.1
|
271.4
|
371,000
|
1,377.3
|
232.1
|
369,000
|
||||||||||
Water and Wastewater
|
827.8
|
142.5
|
409,000
|
513.6
|
122.4
|
168,000
|
||||||||||
Other
|
187.8
|
58.1
|
80.4
|
49.5
|
||||||||||||
Total
|
$
|
5,757.5
|
$
|
1,020.8
|
1,086,000
|
$
|
4,763.7
|
$
|
942.4
|
804,000
|
||||||
Accumulated Deferred Income Taxes Liability
|
$
|
520.1
|
$
|
474.0
|
1 |
Net Utility Sales for the twelve months ended December 31, 2019 and 2020. See Non-GAAP Financial Measures.
|
2 |
Total Customer Connections represents the sum of all active and vacant customer connections.
|
Electric Distribution Systems
|
Three Months Ended
December 31
|
Twelve Months Ended
December 31
|
|||||||||
2020
|
2019
|
2020
|
2019
|
||||||||
Average Active Electric Customer Connections For The Period
|
|||||||||||
Residential
|
263,200
|
228,000
|
262,100
|
227,200
|
|||||||
Commercial and industrial
|
42,300
|
38,100
|
42,200
|
38,100
|
|||||||
Total Average Active Electric Customer Connections For The Period
|
305,500
|
266,100
|
304,300
|
265,300
|
|||||||
Customer Usage (GW-hrs)
|
|||||||||||
Residential
|
638.0
|
599.7
|
2,485.9
|
2,488.1
|
|||||||
Commercial and industrial
|
896.3
|
932.1
|
3,406.0
|
3,944.5
|
|||||||
Total Customer Usage (GW-hrs)
|
1,534.3
|
1,531.8
|
5,891.9
|
6,432.6
|
Natural Gas Distribution Systems
|
Three Months Ended
December 31
|
Twelve Months Ended
December 31
|
|||||||||
2020
|
2019
|
2020
|
2019
|
||||||||
Average Active Natural Gas Customer Connections For The Period
|
|||||||||||
Residential
|
316,700
|
302,700
|
317,100
|
303,100
|
|||||||
Commercial and industrial
|
37,300
|
35,700
|
37,700
|
35,600
|
|||||||
Total Average Active Natural Gas Customer Connections For The Period
|
354,000
|
338,400
|
354,800
|
338,700
|
|||||||
Customer Usage (One Million British Thermal Units("MMBTU"))
|
|||||||||||
Residential
|
6,022,000
|
6,341,000
|
21,214,000
|
20,213,000
|
|||||||
Commercial and industrial
|
6,159,000
|
5,969,000
|
22,032,000
|
15,676,000
|
|||||||
Total Customer Usage (MMBTU)
|
12,181,000
|
12,310,000
|
43,246,000
|
35,889,000
|
Water and Wastewater Distribution Systems
|
Three Months Ended
December 31
|
Twelve Months Ended
December 31
|
|||||||||
2020
|
2019
|
2020
|
2019
|
||||||||
Average Active Customer Connections For The Period
|
|||||||||||
Wastewater customer connections
|
45,900
|
44,400
|
45,300
|
43,900
|
|||||||
Water distribution customer connections
|
356,100
|
116,200
|
355,500
|
115,500
|
|||||||
Total Average Active Customer Connections For The Period
|
402,000
|
160,600
|
400,800
|
159,400
|
|||||||
Gallons Provided (millions of gallons)
|
|||||||||||
Wastewater treated
|
639
|
592
|
2,535
|
2,338
|
|||||||
Water provided
|
7,066
|
3,868
|
19,319
|
15,204
|
|||||||
Total Gallons Provided (millions of gallons)
|
7,705
|
4,460
|
21,854
|
17,542
|
Three Months Ended
December 31
|
Twelve Months Ended
December 31
|
||||||||||||||
(all dollar amounts in $ millions)
|
2020
|
2019
|
2020
|
2019
|
|||||||||||
Revenue
|
|||||||||||||||
Utility electricity sales and distribution
|
$
|
213.3
|
$
|
181.9
|
$
|
776.3
|
$
|
785.8
|
|||||||
Less: cost of sales – electricity
|
(69.4)
|
(59.2)
|
(227.5)
|
(247.4)
|
|||||||||||
Net Utility Sales - electricity1
|
143.9
|
122.7
|
548.8
|
538.4
|
|||||||||||
Utility natural gas sales and distribution
|
124.9
|
131.3
|
415.7
|
402.6
|
|||||||||||
Less: cost of sales – natural gas
|
(48.1)
|
(58.9)
|
(144.3)
|
(170.5)
|
|||||||||||
Net Utility Sales - natural gas1
|
76.8
|
72.4
|
271.4
|
232.1
|
|||||||||||
Utility water distribution & wastewater treatment sales and distribution
|
52.9
|
32.0
|
155.0
|
130.5
|
|||||||||||
Less: cost of sales – water
|
(3.2)
|
(2.2)
|
(12.5)
|
(8.1)
|
|||||||||||
Net Utility Sales - water distribution & wastewater treatment1
|
49.7
|
29.8
|
142.5
|
122.4
|
|||||||||||
Gas transportation
|
12.1
|
11.4
|
39.1
|
35.1
|
|||||||||||
Other revenue
|
9.6
|
7.6
|
19.0
|
14.4
|
|||||||||||
Net Utility Sales1
|
292.1
|
243.9
|
1,020.8
|
942.4
|
|||||||||||
Operating expenses
|
(133.8)
|
(96.0)
|
(445.5)
|
(397.1)
|
|||||||||||
Other income
|
1.7
|
10.2
|
7.9
|
15.3
|
|||||||||||
HLBV2
|
1.8
|
1.3
|
7.0
|
5.8
|
|||||||||||
Divisional Operating Profit1,3
|
$
|
161.8
|
$
|
159.4
|
$
|
590.2
|
$
|
566.4
|
1 |
See Non-GAAP Financial Measures.
|
2 |
HLBV income represents the value of net tax attributes monetized by the Regulated Services Group in the period at the Luning and Turquoise Solar Facilities.
|
3 |
Certain prior year items have been reclassified to conform with current year presentation.
|
(all dollar amounts in $ millions)
|
Three Months Ended
December 31
|
|||
Prior Period Operating Profit
|
$
|
159.4
|
||
Existing Facilities
|
||||
Electricity: Decrease is primarily due to lower consumption at the Empire Electric System driven by fewer heating degree days
than the same period in the prior year.
|
(5.2)
|
|||
Gas: Decrease is primarily due to higher operating costs at the Midstates and EnergyNorth Gas Systems, partially offset by
mechanism revenues at the New England Gas System.
|
(2.1)
|
|||
Water: Increase is primarily due to higher consumption and growth at the Litchfield Park Water System.
|
1.0
|
|||
Other: Decrease is due to lower earnings from the San Antonio Water System investment, lower income from allowance for funds used
during construction (AFUDC), as well as reduction of projects at Ft. Benning.
|
(9.9)
|
|||
(16.2)
|
||||
New Facilities
|
||||
Electricity: Acquisition of Ascendant (November 2020).
|
8.6
|
|||
Gas: Acquisition of St. Lawrence Gas (November 2019).
|
1.1
|
|||
Water: Acquisition of ESSAL (October 2020).
|
5.9
|
|||
15.6
|
||||
Rate Reviews
|
||||
Electricity: Implementation of new rates effective January 2019 at the CalPeco Electric System and an increase in rates as a
result of adding the Turquoise Solar Facility to its rate base as well as the implementation of new rates at the Granite State Electric System.
|
2.9
|
|||
Gas: Implementation of new rates at the EnergyNorth Gas System.
|
2.2
|
|||
Water: Decrease is due to an unfavourable true up in interim rates with the 2019 general rate review at the Park Water System.
|
(1.4)
|
|||
3.7
|
||||
Estimated Impact of COVID-191
|
(0.7)
|
|||
Current Period Divisional Operating Profit2
|
$
|
161.8
|
1 |
The impacts of COVID-19 were estimated by normalizing sales in both periods for changes in weather and attributing the remaining variances to COVID-19.
|
2 |
See Non-GAAP Financial Measures.
|
(all dollar amounts in $ millions)
|
Twelve Months
Ended December 31
|
||
Prior Period Operating Profit
|
$
|
566.4
|
|
Existing Facilities
|
|||
Electricity: Decrease is primarily due to lower consumption at the Empire Electric System driven by fewer heating degree days and
cooling degree days than the prior year as well as higher operating costs at the CalPeco Electric System. This was partially offset by operating cost savings at the Empire Electric System.
|
(8.5)
|
||
Gas: Increase is primarily due to higher mechanism revenues at EnergyNorth and New England Gas Systems, partially offset by lower
consumption driven by unfavourable weather at the Empire Gas System and higher operating costs at Midstates Gas System.
|
1.2
|
||
Water: Increase is due to higher consumption and growth at the Litchfield Park Water System.
|
0.2
|
||
Other: Decrease is due to fees earned from the San Antonio Water System investment, lower income from allowance for funds used
during construction (AFUDC), as well as reduction of projects at Ft. Benning.
|
(9.0)
|
||
(16.1)
|
|||
New Facilities
|
|||
Electricity: Acquisition of Ascendant (November 2020).
|
8.6
|
||
Gas: Acquisitions of New Brunswick Gas (October 2019) and St. Lawrence Gas (November 2019).
|
20.0
|
||
Water: Acquisition of ESSAL (October 2020).
|
5.9
|
||
34.5
|
|||
Rate Reviews
|
|||
Electricity: Implementation of new rates at the CalPeco Electric System and an increase in rates as a result of adding the
Turquoise Solar Facility to its rate base as well as the implementation of new rates at the Granite State Electric System.
|
18.6
|
||
Gas: Implementation of new rates at the EnergyNorth Gas System.
|
2.2
|
||
Water: Decrease is due to a true up in interim rates with the 2019 general rate review at the Park Water System.
|
(0.7)
|
||
20.1
|
|||
Estimated Impact of COVID-191
|
(14.7)
|
||
Current Period Divisional Operating Profit2
|
$
|
590.2
|
1 |
The impacts of COVID-19 were estimated by normalizing sales in both periods for changes in weather and attributing the remaining variances to COVID-19.
|
2 |
See Non-GAAP Financial Measures.
|
Utility
|
Jurisdiction
|
Regulatory
Proceeding Type
|
Rate Request
(millions)
|
Current Status
|
|
Completed Rate Reviews
|
|||||
New England Gas System
|
Massachusetts
|
Gas System Enhancement Program ("GSEP")
|
$2.7
|
On October 31, 2019, filed the 2020 GSEP application requesting an incremental increase in revenue of $2.7 million. On April 30, 2020, the application was approved for
new rates effective May 1, 2020.
|
|
Energy North Gas System
|
New Hampshire
|
2020 Cast Iron/Bare Steel Replacement Program Results
|
$1.6
|
On April 15, 2020, filed its Annual 2020 Cast Iron/Bare Steel Replacement Program Results requesting recovery of an incremental revenue requirement for fiscal year 2020
of $1.6 million. On June 30, 2020, the New Hampshire Public Utilities Commission ("NHPUC") issued an order approving the requested revenue increase.
|
|
Granite State Electric System
|
New Hampshire
|
General Rate Case ("GRC")
|
$8.6
|
On April 30, 2019, filed a rate review requesting increases of $5.7 million, subsequently updated to $6.7 million, effective May 1, 2020, (inclusive of a $2.1 million
temporary increase effective July 1, 2019), plus a step increase of $2.1 million effective May 1, 2020, for certain capital additions as of December 31, 2019. On June 28, 2019, a temporary rate increase of $2.1 million was approved by the
NHPUC. An order was issued June 30, 2020, approving recovery of a revenue requirement increase of $4.2 million beginning July 1, 2020. This is to be reconciled with temporary rates of $2.1 million that took effect on July 1, 2019.
Multi-year step increases were approved of approximately $1.3 million, effective July 1, 2020; approximately $1.8 million effective July 1, 2021; and approximately $1.8 million effective July 1, 2022. Full revenue decoupling was approved
effective July 1, 2021, with the continuation of a Lost Revenue Adjustment Mechanism during the period prior to the implementation of decoupling.
|
Utility
|
Jurisdiction
|
Regulatory
Proceeding Type
|
Rate Request
(millions)
|
Current Status
|
|
Empire Electric (Missouri System)
|
Missouri
|
GRC
|
$21.8
|
On July 1, 2020, the Missouri Public Service Commission ("MPSC") issued an Order on the issues in the case resulting in an increase in revenue of approximately $1.0 million based on a 9.25%
return on equity ("ROE") and on a 46% equity capital structure. In the Company's view, the proposed capital structure does not appropriately reflect the equity value at risk for the utility and is estimated to have a $5.7 million annual
impact on the Company's returns. Also, neither the MPSC Staff's nor the Company's proposed weather normalization mechanism were approved, which allowed the Company the option to elect the use of Plant-In-Service Accounting (see further
detail below). The Office of the Public Counsel ("OPC") and the Company filed applications for rehearing on July 10, 2020. On July 23, 2020, the MPSC issued an Amended Report and Order denying as moot both the Company and OPC's motions for
rehearing. The Amended Report and Order provided clarification on the MPSC Staff's revenue requirement calculation. On July 31, 2020, second applications for rehearing were filed by OPC and the Company, which were denied on October 14,
2020. A Notice of Appeal to the Missouri Court of Appeals was filed by OPC on October 14, 2020, and on October 29, 2020, the Company filed its Notice of Appeal. The appeals were consolidated by the court, and briefs are being filed. The new rates, which were effective September 16, 2020, will remain in effect pending the appeals.
|
|
Peach State Gas System
|
Georgia
|
GRC
|
$2.9
|
On April 1, 2020, filed an application for an annual increase in the revenue requirement of $2.9 million. On July 30, 2020, the Georgia Public Service Commission
issued a final order approving the settlement agreement the Company reached with Staff for an increase of $1.6 million. The new rates were effective August 1, 2020.
|
|
CalPeco Electric System
|
California
|
GRC
|
$14.9
|
On December 3, 2018, filed a three year application requesting a rate increase of $16.4 million ($6.7 million for 2019, $5.9 million for 2020 and $3.8 million for
2021). The requested rate increase was updated to $14.9 million over three years ($6.9 million for 2019, $4.1 million for 2020, and $3.9 million for 2021). In August 2020, the California Public Utilities Commission ("CPUC") issued an Order
approving a $5.3 million revenue increase effective January 1, 2019 and an opportunity for an additional $3.1 million and $1.8 million in base rates for 2020 and 2021, respectively. The Post Test Year Adjustment Mechanism will be used for
rate recovery of the 2020 and 2021 capital investments.
|
|
Various
|
Various
|
GRC
|
$1.1
|
Approval of approximately $0.3 million in net rate decreases across two water utilities and one natural gas utility.
|
Utility
|
Jurisdiction
|
Regulatory
Proceeding Type
|
Rate Request
(millions)
|
Current Status
|
|
Pending Rate Reviews
|
|||||
EnergyNorth Gas System
|
New Hampshire
|
GRC
|
$13.5
|
On July 31, 2020, EnergyNorth filed an application requesting a permanent increase in annual revenue of approximately $13.5 million effective August 1, 2021, a request
for a temporary increase in revenues of $6.5 million (effective October 1, 2020); and a step increase of $5.7 million annually associated with capital expenditure projects completed during the twelve months ending December 31, 2020 (effective
no earlier than August 1, 2021). On September 30, 2020, the Commission issued an Order on temporary rates, setting temporary rates at the current level of distribution rates, approving an adjustment to the Revenue Per Customer (RPC) amounts
upward to allow the Company to retain the December 31, 2019 test year level of revenue received (prior to decoupling adjustments), and approving an increase in distribution revenues to $92.9 million.
|
|
BELCO
|
Bermuda
|
GRC
|
$5.9
|
On November 17, 2020, BELCO filed its revenue allowance application to request an allowance of approximately $204.0 million after adjustments and recommended a deferral
of $16.6 million for recovery over three years commencing in 2022. On January 18, 2021, BELCO filed a revised revenue allowance application for approximately $213.0 million, removed the entire deferral recovery amount and requested an
incremental increase of $5.9 million over 2020’s revenue allowance.
|
|
ESSAL
|
Chile
|
VII Tariff Process
|
N/A
|
ESSAL’s VII tariff process began in April 2020 to set rates for the five-year period from September 2021 to September 2026. A tariff decision is expected from the Superintendence of
Sanitation Services (“SISS”) in the fourth quarter of 2021.
|
|
Various
|
Various
|
Various
|
$1.5
|
Other pending rate review requests across one wastewater utility and one natural gas utility.
|
2020 Electricity Generation Performance
|
|||||||||||||||||
Long Term
Average
Resource |
Three Months Ended
December 31
|
Long Term
Average
Resource
|
Twelve Months Ended
December 31
|
||||||||||||||
(Performance in GW-hrs sold)
|
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Hydro Facilities:
|
|||||||||||||||||
Maritime Region
|
37.6
|
41.8
|
35.8
|
148.2
|
119.4
|
132.7
|
|||||||||||
Quebec Region
|
72.6
|
80.6
|
72.7
|
273.3
|
281.7
|
270.8
|
|||||||||||
Ontario Region
|
26.2
|
27.7
|
22.2
|
120.4
|
104.1
|
103.4
|
|||||||||||
Western Region
|
12.6
|
7.0
|
13.3
|
65.0
|
63.2
|
65.5
|
|||||||||||
149.0
|
157.1
|
144.0
|
606.9
|
568.4
|
572.4
|
||||||||||||
Canadian Wind Facilities:
|
|||||||||||||||||
St. Damase
|
22.7
|
21.9
|
20.5
|
76.9
|
76.9
|
76.7
|
|||||||||||
St. Leon
|
121.4
|
119.4
|
112.4
|
430.2
|
427.5
|
404.0
|
|||||||||||
Red Lily1
|
24.1
|
25.6
|
23.4
|
88.5
|
92.1
|
81.8
|
|||||||||||
Morse
|
30.5
|
31.6
|
25.9
|
108.8
|
111.2
|
96.4
|
|||||||||||
Amherst
|
67.9
|
70.6
|
67.0
|
229.8
|
216.3
|
223.4
|
|||||||||||
266.6
|
269.1
|
249.2
|
934.2
|
924.0
|
882.3
|
||||||||||||
U.S. Wind Facilities:
|
|||||||||||||||||
Sandy Ridge
|
43.6
|
41.1
|
31.9
|
158.3
|
143.8
|
126.5
|
|||||||||||
Minonk
|
189.8
|
195.1
|
193.7
|
673.7
|
618.5
|
654.6
|
|||||||||||
Senate
|
140.0
|
142.2
|
131.1
|
520.4
|
501.8
|
506.0
|
|||||||||||
Shady Oaks
|
100.5
|
102.9
|
97.7
|
355.6
|
319.6
|
345.8
|
|||||||||||
Odell
|
238.0
|
212.8
|
224.9
|
831.8
|
795.3
|
748.1
|
|||||||||||
Deerfield
|
167.9
|
174.2
|
163.9
|
546.0
|
541.0
|
522.6
|
|||||||||||
Sugar Creek4
|
123.9
|
62.8
|
—
|
123.9
|
62.8
|
—
|
|||||||||||
Maverick Creek5
|
295.2
|
137.8
|
—
|
295.2
|
137.8
|
—
|
|||||||||||
1,298.9
|
1,068.9
|
843.2
|
3,504.9
|
3,120.6
|
2,903.6
|
||||||||||||
Solar Facilities:
|
|||||||||||||||||
Cornwall
|
2.2
|
1.9
|
1.8
|
14.7
|
14.7
|
15.0
|
|||||||||||
Bakersfield
|
13.0
|
11.0
|
12.2
|
77.2
|
64.5
|
68.6
|
|||||||||||
Great Bay3
|
37.6
|
40.3
|
24.2
|
190.2
|
171.6
|
134.2
|
|||||||||||
52.8
|
53.2
|
38.2
|
282.1
|
250.8
|
217.8
|
||||||||||||
Renewable Energy Performance
|
1,767.3
|
1,548.3
|
1,274.6
|
5,328.1
|
4,863.8
|
4,576.1
|
|||||||||||
Thermal Facilities:
|
|||||||||||||||||
Windsor Locks
|
N/A2
|
34.0
|
28.0
|
N/A2
|
122.1
|
115.3
|
|||||||||||
Sanger
|
N/A2
|
25.5
|
17.8
|
N/A2
|
59.6
|
57.6
|
|||||||||||
59.5
|
45.8
|
181.7
|
172.9
|
||||||||||||||
Total Performance
|
1,607.8
|
1,320.4
|
5,045.5
|
4,749.0
|
1 |
AQN owns a 75% equity interest but accounts for the facility using the equity method. The production figures represent full energy produced by the facility.
|
2 |
Natural gas fired co-generation facility.
|
3 |
The Great Bay II Solar Facility achieved partial completion on April 15, 2020 and COD on August 13, 2020.
|
4 |
Achieved COD on November 9, 2020. The LTAR (as defined herein) noted above represents all production from the date of COD.
|
5 |
Achieved partial completion on November 6, 2020. The LTAR noted above represents all production from the date of partial completion.
|
2020 Renewable Energy Group Operating Results
|
|||||||||||||||
Three Months Ended
December 31
|
Twelve Months Ended
December 31
|
||||||||||||||
(all dollar amounts in $ millions)
|
2020
|
2019
|
2020
|
2019
|
|||||||||||
Revenue1
|
|||||||||||||||
Hydro
|
$
|
10.8
|
$
|
10.4
|
$
|
39.8
|
$
|
40.3
|
|||||||
Wind
|
51.0
|
49.4
|
166.0
|
153.3
|
|||||||||||
Solar
|
3.4
|
2.8
|
19.7
|
18.6
|
|||||||||||
Thermal
|
8.5
|
8.1
|
30.6
|
32.9
|
|||||||||||
Total Revenue
|
$
|
73.7
|
$
|
70.7
|
$
|
256.1
|
$
|
245.1
|
|||||||
Less:
|
|||||||||||||||
Cost of Sales - Energy2
|
(1.4)
|
(0.9)
|
(5.1)
|
(4.3)
|
|||||||||||
Cost of Sales - Thermal
|
(3.5)
|
(3.2)
|
(11.5)
|
(13.0)
|
|||||||||||
Realized loss on hedges3
|
(0.2)
|
—
|
(1.1)
|
(0.2)
|
|||||||||||
Net Energy Sales7
|
$
|
68.6
|
$
|
66.6
|
$
|
238.4
|
$
|
227.6
|
|||||||
Renewable Energy Credits4
|
4.1
|
2.8
|
12.4
|
10.1
|
|||||||||||
Other Revenue
|
0.1
|
0.8
|
1.9
|
1.4
|
|||||||||||
Total Net Revenue
|
$
|
72.8
|
$
|
70.2
|
$
|
252.7
|
$
|
239.1
|
|||||||
Expenses & Other Income
|
|||||||||||||||
Operating expenses
|
(18.8)
|
(19.2)
|
(75.0)
|
(74.7)
|
|||||||||||
Dividend, interest, equity and other income5
|
30.1
|
20.2
|
96.9
|
104.0
|
|||||||||||
HLBV income8
|
18.8
|
14.7
|
62.6
|
59.2
|
|||||||||||
Divisional Operating Profit6,7
|
$
|
102.9
|
$
|
85.9
|
$
|
337.2
|
$
|
327.6
|
1 |
Many of the Renewable Energy Group's PPAs include annual rate increases. However, a change to the weighted average production levels resulting from higher average production from facilities
that earn lower energy rates can result in a lower weighted average energy rate earned by the division as compared to the same period in the prior year.
|
2 |
Cost of Sales - Energy consists of energy purchases in the Maritime Region to manage the energy sales from the Tinker Hydro Facility which is sold to retail and industrial customers under
multi-year contracts.
|
3 |
See Note 24(b)(iv) in the annual consolidated financial statements.
|
4 |
Qualifying renewable energy projects receive RECs for the generation and delivery of renewable energy to the power grid. The energy credit certificates represent proof that 1 MW-hr of
electricity was generated from an eligible energy source.
|
5 |
Includes dividends received from Atlantica and related parties (see Note 8 and 16 in the annual consolidated financial statements).
|
6 |
Certain prior year items have been reclassified to conform to current year presentation.
|
7 |
See Non-GAAP Financial Measures.
|
(all dollar amounts in $ millions)
|
Three Months Ended
December 31
|
||
Prior Period Divisional Operating Profit
|
$
|
85.9
|
|
Existing Facilities and Investments
|
|||
Hydro: Decrease is primarily due to lower production in the Western Region and unfavourable pricing in the Maritime Region.
|
(0.5)
|
||
Wind Canada: Increase is primarily due to higher production.
|
1.2
|
||
Wind U.S.: Increase is primarily due to higher production, partially offset by an increase in operating costs.
|
4.0
|
||
Solar: Increase is primarily due to favourable REC pricing at the Great Bay I Solar Facility, partially offset by lower HLBV
income.
|
0.1
|
||
Thermal: Decrease is primarily due lower REC revenue at the Windsor Locks Thermal Facility as well as higher overall cost of fuel
at the Sanger Thermal Facility.
|
(0.8)
|
||
Investments: Decrease is primarily due to lower dividends related to AQN's investment in AYES Canada1.
|
(0.9)
|
||
Other: Increase is primarily from higher equity income and reimbursements from AAGES as well as higher capitalized development
expenses.
|
12.3
|
||
15.4
|
|||
New Facilities and Investments
|
|||
Solar: Great Bay II Solar Facility achieved COD in August 2020.
|
1.3
|
||
1.3
|
|||
Foreign Exchange
|
0.3
|
||
Current Period Divisional Operating Profit2
|
$
|
102.9
|
1 |
See Note 8 and 16 in the annual consolidated financial statements.
|
2 |
See Non-GAAP Financial Measures.
|
(all dollar amounts in $ millions)
|
Twelve Months
Ended December 31
|
||
Prior Period Divisional Operating Profit
|
$
|
327.6
|
|
Existing Facilities
|
|||
Hydro: Decrease is primarily due to unfavourable pricing at the Western and Maritime Regions, as well as lower overall
production.
|
(1.4)
|
||
Wind Canada: Increase is primarily due to higher production, partially offset by an increase in operating costs.
|
1.5
|
||
Wind U.S.: Increase is primarily due to overall favourable energy and REC pricing, higher overall production as well as higher
HLBV income, partially offset by an increase in operating costs.
|
7.8
|
||
Solar: Decrease is primarily due to lower overall HLBV income as all tax attributes at the Bakersfield I Solar Facility have been
fully recognized.
|
(3.5)
|
||
Thermal: Decrease is primarily due to unfavourable energy and capacity pricing as well as lower REC revenue at the Windsor Locks
Thermal Facility, partially offset by overall lower cost of fuel.
|
(2.0)
|
||
Investments: Decrease is primarily due to lower cash distributions and timing of a dividend received in the second quarter of 2019 related to AQN's
investment in AYES Canada1.
|
(3.3)
|
||
Other: Increase is primarily from higher equity income and reimbursements from AAGES as well as higher capitalized development
expenses.
|
4.9
|
||
4.0
|
|||
New Facilities and Investments
|
|||
Solar: Great Bay II Solar Facility achieved COD in August 2020.
|
3.8
|
||
3.8
|
|||
Foreign Exchange
|
1.8
|
||
Current Period Divisional Operating Profit2
|
$
|
337.2
|
1 |
See Note 8 and 16 in the annual consolidated financial statements.
|
2 |
See Non-GAAP Financial Measures.
|
Three Months Ended
December 31
|
Twelve Months Ended
December 31
|
||||||||||||||
(all dollar amounts in $ millions)
|
2020
|
2019
|
2020
|
2019
|
|||||||||||
Corporate and other expenses:
|
|||||||||||||||
Administrative expenses
|
$
|
12.4
|
$
|
15.2
|
$
|
59.5
|
$
|
56.8
|
|||||||
Loss (gain) on foreign exchange
|
3.5
|
3.1
|
(2.1)
|
3.1
|
|||||||||||
Interest expense
|
45.3
|
47.4
|
181.9
|
181.5
|
|||||||||||
Depreciation and amortization
|
88.0
|
77.7
|
314.1
|
284.3
|
|||||||||||
Change in value of investments carried at fair value
|
(464.0)
|
(98.1)
|
(559.7)
|
(278.1)
|
|||||||||||
Interest, dividend, equity, and other income1
|
(0.6)
|
(0.4)
|
(2.1)
|
(1.6)
|
|||||||||||
Pension and post-employment non-service costs
|
4.7
|
7.3
|
14.1
|
17.3
|
|||||||||||
Other net losses
|
16.6
|
12.6
|
61.3
|
26.7
|
|||||||||||
Loss (gain) on derivative financial instruments
|
0.8
|
(0.5)
|
(1.0)
|
(16.1)
|
|||||||||||
Income tax expense
|
51.1
|
12.5
|
64.6
|
70.1
|
1 |
Excludes income directly pertaining to the Regulated Services and Renewable Energy Groups (disclosed in the relevant sections).
|
Three Months Ended
December 31 |
Twelve Months Ended
December 31
|
||||||||||||||
(all dollar amounts in $ millions)
|
2020
|
2019
|
2020
|
2019
|
|||||||||||
Net earnings attributable to shareholders
|
$
|
504.2
|
$
|
172.1
|
$
|
782.5
|
$
|
530.9
|
|||||||
Add (deduct):
|
|||||||||||||||
Net earnings attributable to the non-controlling interest, exclusive of HLBV1
|
3.1
|
(3.7)
|
14.9
|
19.1
|
|||||||||||
Income tax expense
|
51.1
|
12.5
|
64.6
|
70.1
|
|||||||||||
Interest expense
|
45.3
|
47.4
|
181.9
|
181.5
|
|||||||||||
Other net losses3
|
16.6
|
12.6
|
61.3
|
26.7
|
|||||||||||
Pension and post-employment non-service costs
|
4.7
|
7.3
|
14.1
|
17.3
|
|||||||||||
Change in value of investments carried at fair value2
|
(464.0)
|
(98.1)
|
(559.7)
|
(278.1)
|
|||||||||||
Loss (gain) on derivative financial instruments
|
0.8
|
(0.5)
|
(1.0)
|
(16.1)
|
|||||||||||
Realized loss on energy derivative contracts
|
(0.2)
|
—
|
(1.1)
|
(0.2)
|
|||||||||||
Loss (gain) on foreign exchange
|
3.5
|
3.1
|
(2.1)
|
3.1
|
|||||||||||
Depreciation and amortization
|
88.0
|
77.7
|
314.1
|
284.3
|
|||||||||||
Adjusted EBITDA
|
$
|
253.1
|
$
|
230.4
|
$
|
869.5
|
$
|
838.6
|
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, 2020 amounted to $20.4 million and $69.5 million, respectively as compared to $16.0 million and $65.0 million, respectively, during the same period in 2019.
|
2 |
See Note 8 in the annual consolidated financial statements.
|
3 |
See Note 19 in the annual consolidated financial statements.
|
Three Months Ended
December 31
|
Twelve Months Ended
December 31
|
||||||||||||||
(all dollar amounts in $ millions except per share information)
|
2020
|
2019
|
2020
|
2019
|
|||||||||||
Net earnings attributable to shareholders
|
$
|
504.2
|
$
|
172.1
|
$
|
782.5
|
$
|
530.9
|
|||||||
Add (deduct):
|
|||||||||||||||
Loss (gain) on derivative financial instruments
|
0.8
|
(0.5)
|
(1.0)
|
(0.3)
|
|||||||||||
Realized loss on energy derivative contracts
|
(0.2)
|
—
|
(1.1)
|
(0.2)
|
|||||||||||
Other net losses2
|
16.6
|
12.5
|
61.3
|
26.7
|
|||||||||||
Loss (gain) on foreign exchange
|
3.5
|
3.0
|
(2.1)
|
3.1
|
|||||||||||
Change in value of investments carried at fair value1
|
(464.0)
|
(98.1)
|
(559.7)
|
(278.1)
|
|||||||||||
Other non-recurring adjustments
|
—
|
2.2
|
1.0
|
2.2
|
|||||||||||
Adjustment for taxes related to above3
|
66.1
|
12.4
|
84.9
|
37.0
|
|||||||||||
Adjusted Net Earnings
|
$
|
127.0
|
$
|
103.6
|
$
|
365.8
|
$
|
321.3
|
|||||||
Adjusted Net Earnings per share
|
$
|
0.21
|
$
|
0.20
|
$
|
0.64
|
$
|
0.63
|
1 |
See Note 8 in the annual consolidated financial statements.
|
2 |
See Note 19 in the annual consolidated financial statements.
|
3 |
Includes a one-time tax expense of $9.3 million to reverse the benefit of deductions taken in the prior year. See Note 18 in the annual consolidated financial statements.
|
Three Months Ended
December 31
|
Twelve Months Ended
December 31
|
||||||||||||||
(all dollar amounts in $ millions)
|
2020
|
2019
|
2020
|
2019
|
|||||||||||
Cash flows from operating activities
|
$
|
174.0
|
$
|
167.5
|
$
|
505.2
|
$
|
611.3
|
|||||||
Add (deduct):
|
|||||||||||||||
Changes in non-cash operating items
|
(2.8)
|
(29.8)
|
77.5
|
(60.3)
|
|||||||||||
Production based cash contributions from non-controlling interests
|
—
|
—
|
3.4
|
3.6
|
|||||||||||
Acquisition-related costs
|
8.1
|
6.4
|
14.1
|
11.6
|
|||||||||||
Adjusted Funds from Operations
|
$
|
179.3
|
$
|
144.1
|
$
|
600.2
|
$
|
566.2
|
Three Months Ended
December 31
|
Twelve Months Ended
December 31 |
||||||||||||||
(all dollar amounts in $ millions)
|
2020
|
2019
|
2020
|
2019
|
|||||||||||
Regulated Services Group
|
|||||||||||||||
Rate Base Maintenance
|
$
|
54.7
|
$
|
51.9
|
$
|
210.8
|
$
|
194.5
|
|||||||
Rate Base Growth
|
242.0
|
185.1
|
537.4
|
373.5
|
|||||||||||
Property, Plant & Equipment Acquired1
|
656.5
|
186.2
|
656.5
|
186.6
|
|||||||||||
$
|
953.2
|
$
|
423.2
|
$
|
1,404.7
|
$
|
754.6
|
||||||||
Renewable Energy Group
|
|||||||||||||||
Maintenance
|
$
|
11.4
|
$
|
12.5
|
$
|
27.5
|
$
|
37.3
|
|||||||
Investment in Capital Projects2
|
(126.4)
|
(47.1)
|
103.3
|
425.8
|
|||||||||||
International Investments
|
(11.9)
|
28.0
|
10.3
|
122.2
|
|||||||||||
$
|
(126.9)
|
$
|
(6.6)
|
$
|
141.1
|
$
|
585.3
|
||||||||
Total Capital Expenditures
|
$
|
826.3
|
$
|
416.6
|
$
|
1,545.8
|
$
|
1,339.9
|
1 |
Property, Plant & Equipment acquired through acquisitions.
|
2 |
Includes expenditures on Property Plant & Equipment, equity-method investees, and acquisitions of operating entities that may have been jointly developed by the Company with another third
party developer.
|
(all dollar amounts in $ millions)
|
|||||||
Regulated Services Group:
|
|||||||
Rate Base Maintenance
|
$
|
250.0
|
-
|
$
|
300.0
|
||
Rate Base Growth
|
1,750.0
|
-
|
1,825.0
|
||||
Rate Base Acquisitions
|
600.0
|
-
|
625.0
|
||||
Total Regulated Services Group:
|
$
|
2,600.0
|
-
|
$
|
2,750.0
|
||
Renewable Energy Group:
|
|||||||
Maintenance
|
$
|
25.0
|
-
|
$
|
50.0
|
||
Investment in Capital Projects
|
1,250.0
|
-
|
1,550.0
|
||||
International Investments
|
125.0
|
-
|
150.0
|
||||
Total Renewable Energy Group:
|
$
|
1,400.0
|
-
|
$
|
1,750.0
|
||
Total 2021 Capital Investments
|
$
|
4,000.0
|
-
|
$
|
4,500.0
|
As at December 31, 2020
|
As at
Dec 31, 2019
|
||||||||||||||||||
(all dollar amounts in $ millions)
|
Corporate
|
Regulated
Services
Group
|
Renewable
Energy
Group
|
Total
|
Total
|
||||||||||||||
Credit facilities
|
$
|
1,550.0
|
1
|
$
|
1,175.0
|
$
|
850.0
|
2
|
$
|
3,575.0
|
$
|
1,775.0
|
|||||||
Funds drawn on facilities/ Commercial paper issued
|
(155.0)
|
(190.5)
|
—
|
(345.5)
|
(361.0)
|
||||||||||||||
Letters of credit issued
|
(13.9)
|
(43.3)
|
(384.2)
|
(441.4)
|
(216.8)
|
||||||||||||||
Liquidity available under the facilities
|
1,381.1
|
941.2
|
465.8
|
2,788.1
|
1,197.2
|
||||||||||||||
Undrawn Portion of Uncommitted Letter of Credit Facilities
|
(39.8)
|
—
|
(66.0)
|
(105.8)
|
(149.9)
|
||||||||||||||
Cash on hand
|
101.6
|
62.5
|
|||||||||||||||||
Total Liquidity and Capital Reserves
|
$
|
1,341.3
|
$
|
941.2
|
$
|
399.8
|
$
|
2,783.9
|
$
|
1,109.8
|
1 |
Includes a $50 million uncommitted standalone letter of credit facility.
|
2 |
Includes a $350 million uncommitted standalone letter of credit facility.
|
(all dollar amounts in $ millions)
|
Total
|
Due in less
than 1 year
|
Due in 1
to 3 years
|
Due in 4
to 5 years
|
Due after
5 years
|
||||||||||||||
Principal repayments on debt obligations1,2
|
$
|
4,534.0
|
$
|
334.4
|
$
|
821.5
|
$
|
285.6
|
$
|
3,092.5
|
|||||||||
Advances in aid of construction
|
79.8
|
1.2
|
—
|
—
|
78.6
|
||||||||||||||
Interest on long-term debt obligations2
|
1,884.2
|
195.9
|
337.2
|
267.1
|
1,084.0
|
||||||||||||||
Purchase obligations
|
561.7
|
561.7
|
—
|
—
|
—
|
||||||||||||||
Environmental obligations
|
66.2
|
17.0
|
26.4
|
1.3
|
21.5
|
||||||||||||||
Derivative financial instruments:
|
|||||||||||||||||||
Cross currency interest rate swaps
|
84.5
|
37.3
|
30.0
|
19.9
|
(2.7)
|
||||||||||||||
Interest rate swaps
|
19.3
|
2.7
|
4.3
|
4.4
|
7.9
|
||||||||||||||
Energy derivative and commodity contracts
|
6.5
|
1.9
|
(0.2)
|
0.9
|
3.9
|
||||||||||||||
Purchased power
|
318.7
|
45.1
|
53.5
|
52.7
|
167.4
|
||||||||||||||
Gas delivery, service and supply agreements
|
425.0
|
89.0
|
111.2
|
79.9
|
144.9
|
||||||||||||||
Service agreements
|
496.7
|
56.8
|
97.0
|
94.4
|
248.5
|
||||||||||||||
Capital projects
|
654.4
|
654.4
|
—
|
—
|
—
|
||||||||||||||
Land easements
|
229.4
|
6.7
|
13.7
|
14.0
|
195.0
|
||||||||||||||
Other obligations
|
216.2
|
79.2
|
6.6
|
5.2
|
125.2
|
||||||||||||||
Total Obligations
|
$
|
9,576.6
|
$
|
2,083.3
|
$
|
1,501.2
|
$
|
825.4
|
$
|
5,166.7
|
1 |
Exclusive of deferred financing costs, bond premium/discount, fair value adjustments at the time of issuance or acquisition.
|
2 |
The Company's subordinated unsecured notes have a maturity in 2078 and 2079, respectively. However, the Company currently anticipates repaying in 2023 and 2029 upon exercising its redemption
right.
|
• |
4,800,000 cumulative rate reset Series A preferred shares, yielding 5.162% annually for the five-year period ending on December 31, 2023;
|
• |
100 Series C preferred shares that were issued in exchange for 100 Class B limited partnership units by St. Leon Wind Energy LP; and
|
• |
4,000,000 cumulative rate reset Series D preferred shares, yielding 5.091% annually for the five year period ending on March 31, 2024.
|
• |
To maintain its capital structure consistent with investment grade credit metrics appropriate to the sectors in which AQN operates;
|
• |
To maintain appropriate debt and equity levels in conjunction with standard industry practices and to limit financial constraints on the use of capital;
|
• |
To ensure capital is available to finance capital expenditures sufficient to maintain existing assets;
|
• |
To ensure generation of cash is sufficient to fund sustainable dividends to shareholders as well as meet current tax and internal capital requirements;
|
• |
To maintain sufficient liquidity to ensure sustainable dividends made to shareholders; and
|
• |
To have appropriately sized revolving credit facilities available for ongoing investment in growth and development opportunities.
|
• |
operating, supply chain and project development and construction delays, disruptions and cost overruns;
|
• |
delayed collection of accounts receivable and increased levels of bad debt expense;
|
• |
delayed placed-in-service dates for the Company's renewable energy projects, which may give rise to, among other things, lower than anticipated revenue, delay-related liabilities to contractual counterparties and
increased amounts of interest payable to construction lenders;
|
• |
reduced availability of funding under construction loans and tax equity financing, which may require the Company to initially increase its funding and, if possible, directly realize the tax benefits;
|
• |
lower revenue from the Company’s utility operations, including as a result of decreased consumption by customers not covered by rate decoupling;
|
• |
negative impacts to the Company's existing and planned rate reviews, including non-recovery of certain costs incurred directly or indirectly as a result of the COVID-19 pandemic and delays in filing, processing
and settlement of the reviews;
|
• |
introduction of new legislation, policies, rules or regulations that adversely impact the Company;
|
• |
labour shortages and shutdowns (including as a result of government regulation and prevention measures), reduced employee and/or contractor productivity, and loss of key personnel;
|
• |
inability to implement the Company’s growth strategy, including sourcing new acquisitions and completing previously-announced acquisitions;
|
• |
inability to carry out the Company’s capital expenditure plans on previously anticipated timelines;
|
• |
lower earnings from unhedged power generation as a result of lower wholesale commodity prices in energy markets;
|
• |
losses or liabilities resulting from default, delays or non-performance by either the Company or its counterparties under the Company’s contracts, including joint venture agreements, supply agreements,
construction agreements, services agreements and power purchase and other offtake agreements;
|
• |
lower revenue from the Company's power generation facilities as a result of system load reduction and related system directed curtailments;
|
• |
delay in the permitting process of certain development projects, affecting the timing of final investment decisions and start of construction dates;
|
• |
reduced ability of the Company and its employees to effectively respond to, or mitigate the effects of, another force majeure or other significant event;
|
• |
increased operating costs for emergency supplies, personal protective equipment, cleaning services, enabling technology and other specific needs in response to COVID-19, some of which may not be recovered through
future rates;
|
• |
increased market volatility and lower pension plan returns which could adversely impact the valuation of the plan assets and future funding requirements for the Company's pension plans;
|
• |
deterioration in financial metrics and other factors that impact the Company’s credit ratings;
|
• |
inability to meet the requirements of the covenants in existing credit facilities;
|
• |
inability to access credit and capital markets on acceptable terms or at all, including to refinance maturing indebtedness;
|
• |
IT and operational technology system interruptions, loss of critical data and increased cybersecurity and privacy breaches due to “work from home” arrangements implemented by the Company;
|
• |
business disruptions and costs when "work from home" arrangements are reduced and a greater number of employees return to the office;
|
• |
losses to the Company caused by fluctuations and volatility in the trading price of Atlantica’s ordinary shares or reduction of the dividend paid to holders of Atlantica’s ordinary shares; and
|
• |
fluctuations and volatility in the trading price of the Company’s common shares and other securities, which could result in losses for the Company’s security holders.
|
• |
the Corporate Credit Facility is subject to a variable interest rate and had $155.0 million outstanding as at December 31, 2020. As a result, a 100 basis point change in the variable rate charged would impact
interest expense by $1.6 million annually;
|
• |
the Corporate Liquidity Facility is subject to a variable interest rate and had no amounts outstanding as at December 31, 2020. As a result, a 100 basis point change in the variable rate charged would not impact
interest expense;
|
• |
the Regulated Services Credit Facility is subject to a variable interest rate and had no amounts outstanding as at December 31, 2020. As a result, a 100 basis point change in the variable rate charged would not
impact interest expense;
|
• |
the Regulated Services Liquidity Facility is subject to a variable interest rate and had no amounts outstanding as at December 31, 2020. As a result, a 100 basis point change in the variable rate charged would
not impact interest expense;
|
• |
the BELCO Credit Facility is subject to a variable interest rate and had $68.5 million outstanding as at December 31, 2020. As a result, a 100 basis point change in the variable rate charged would impact interest
expense by $0.7 million annually;
|
• |
the Regulated Services Group's commercial paper program is subject to a variable interest rate and had $122.0 million outstanding as at December 31, 2020. As a result, a 100 basis point change in the variable
rate charged would impact interest expense by $1.2 million annually;
|
• |
the Renewable Energy Credit Facility is subject to a variable interest rate and had no amounts outstanding as at December 31, 2020. As a result, a 100 basis point change in the variable rate charged would not
impact interest expense; and
|
• |
term facilities at BELCO and ESSAL that are subject to variable interest rates had $152.3 million outstanding as at December 31, 2020. As a result, a 100 basis point change in the variable rate charged would
impact interest expense by $1.5 million annually.
|
• |
have economic or business interests or goals that are inconsistent with the Company’s economic or business interests or goals;
|
• |
take actions contrary to the Company’s policies or objectives with respect to the Company’s investments;
|
• |
contravene applicable anti-bribery laws that carry substantial penalties for non-compliance and could cause reputational damage and a material adverse effect on the business, financial position and results of
operations of the joint venture and the Company;
|
• |
have to give its consent with respect to certain major decisions, including among others, decisions relating to funding and transactions with affiliates;
|
• |
become bankrupt, limiting its ability to meet calls for capital contributions and potentially making it more difficult to refinance or sell projects;
|
• |
become engaged in a dispute with the Company that might affect the Company’s ability to develop a project; or
|
• |
have competing interests in the Company’s markets that could create conflict of interest issues.
|
(all dollar amounts in $ millions except per share information)
|
1st Quarter
2020
|
2nd Quarter
2020
|
3rd Quarter
2020
|
4th Quarter
2020
|
|||||||||||
Revenue
|
$
|
465.0
|
$
|
343.6
|
$
|
376.1
|
$
|
492.4
|
|||||||
Net earnings (loss) attributable to shareholders
|
(63.8)
|
286.2
|
55.9
|
504.2
|
|||||||||||
Net earnings (loss) per share
|
(0.13)
|
0.54
|
0.09
|
0.84
|
|||||||||||
Diluted net earnings (loss) per share
|
(0.13)
|
0.53
|
0.09
|
0.83
|
|||||||||||
Adjusted Net Earnings1
|
103.3
|
47.4
|
88.1
|
127.0
|
|||||||||||
Adjusted Net Earnings per share1
|
0.19
|
0.09
|
0.15
|
0.21
|
|||||||||||
Adjusted EBITDA1
|
242.2
|
176.3
|
197.9
|
253.1
|
|||||||||||
Total assets
|
10,900.6
|
11,188.0
|
11,739.9
|
13,223.9
|
|||||||||||
Long term debt2
|
4,205.1
|
4,155.1
|
3,978.0
|
4,538.8
|
|||||||||||
Dividend declared per common share
|
$
|
0.14
|
$
|
0.16
|
$
|
0.16
|
$
|
0.16
|
1st Quarter
2019
|
2nd Quarter
2019
|
3rd Quarter
2019
|
4th Quarter
2019
|
||||||||||||
Revenue
|
$
|
477.2
|
$
|
343.6
|
$
|
365.6
|
$
|
440.0
|
|||||||
Net earnings attributable to shareholders
|
86.4
|
156.6
|
115.8
|
172.1
|
|||||||||||
Net earnings per share
|
0.17
|
0.31
|
0.23
|
0.34
|
|||||||||||
Diluted net earnings per share
|
0.17
|
0.31
|
0.23
|
0.33
|
|||||||||||
Adjusted Net Earnings1
|
94.0
|
54.5
|
69.2
|
103.6
|
|||||||||||
Adjusted Net Earnings per share1
|
0.19
|
0.11
|
0.14
|
0.20
|
|||||||||||
Adjusted EBITDA1
|
231.3
|
190.0
|
186.9
|
230.4
|
|||||||||||
Total assets
|
9,671.3
|
10,034.3
|
10,618.9
|
10,920.8
|
|||||||||||
Long term debt2
|
3,651.9
|
3,782.3
|
4,276.6
|
3,932.2
|
|||||||||||
Dividend declared per common share
|
$
|
0.13
|
$
|
0.14
|
$
|
0.14
|
$
|
0.14
|
1 |
See Non-GAAP Financial Measures
|
2 |
Includes current portion of long-term debt, long-term debt and convertible debentures.
|
(all dollar amounts in $ millions)
|
2020
|
2019
|
|||||
Revenue
|
$
|
1,013.3
|
$
|
1,011.5
|
|||
Profit for the year
|
16.9
|
74.6
|
|||||
Total non-current assets
|
8,514.1
|
8,540.6
|
|||||
Total current assets
|
1,424.3
|
1,119.2
|
|||||
Total non-current liabilities
|
7,714.2
|
6,971.6
|
|||||
Total current liabilities
|
483.3
|
973.4
|
2020 Pension Plans
|
2020 OPEB Plans
|
||||||||||||
(all dollar amounts in $ millions)
|
Accrued
Benefit
Obligation
|
Net Periodic
Pension Cost
|
Accumulated
Postretirement
Benefit
Obligation
|
Net Periodic
Postretirement
Benefit Cost
|
|||||||||
Discount Rate
|
|||||||||||||
1% increase
|
(91.3)
|
(4.0)
|
(45.0)
|
(2.9)
|
|||||||||
1% decrease
|
113.6
|
5.8
|
58.3
|
4.3
|
|||||||||
Future compensation rate
|
|||||||||||||
1% increase
|
4.0
|
2.2
|
—
|
—
|
|||||||||
1% decrease
|
(3.5)
|
(2.1)
|
—
|
—
|
|||||||||
Expected return on plan assets
|
|||||||||||||
1% increase
|
—
|
(5.8)
|
—
|
(1.4)
|
|||||||||
1% decrease
|
—
|
5.8
|
—
|
1.4
|
|||||||||
Health care trend
|
|||||||||||||
1% increase
|
—
|
—
|
52.2
|
5.3
|
|||||||||
1% decrease
|
—
|
—
|
(41.0)
|
(4.6)
|
/s/ Arun Banskota
|
/s/ Arthur Kacprzak
|
|||
Chief Executive Officer
|
Chief Financial Officer
|
Regulatory assets and liabilities—Recovery of costs through rate regulation
|
||
Description of the Matter
|
As described in Note 7 to the consolidated financial statements, the Company has approximately $845 million in regulatory assets and approximately $602 million in
regulatory liabilities that are subject to regulation by the public utility commissions of the regions in which they operate. Rates are determined under cost of service regulation. The regulation of rates is premised on the full recovery of
prudently incurred costs and a reasonable rate of return on assets or common shareholder’s equity. Regulatory decisions can have an impact on the timely recovery of costs and the approved returns. The recoverability of such costs through
rate-regulation impacts multiple financial statement line items and disclosures, including property, plant, and equipment, regulatory assets and liabilities, regulated electricity, gas and water distribution revenues and the corresponding
expenses, income tax expense, and depreciation and amortization expense.
Although the Company expects to recover its costs from customers through rates, there is a risk that the respective regulator will not approve full recovery of the
costs incurred. Auditing the recoverability of these costs through rates is complex and highly judgmental due to the significant judgments and probability assessments made by the Company to support its accounting and disclosure for
regulatory matters when final regulatory decisions or orders have not yet been obtained or when regulatory formulas are complex. There is also subjectivity involved in assessing the potential impact of future regulatory decisions on the
financial statements. The Company’s judgments include evaluating the probability of recovery of and recovery on costs incurred, or probability of refund to customers through future rates.
|
|
How We Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s evaluation of the likelihood of recovery of
regulatory assets and refund of regulatory liabilities, including management’s controls over the initial recognition and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future
rates, a refund, or future changes in rates.
We performed audit procedures that included, amongst others, evaluating the Company’s assessment of the probability of future recovery for regulatory assets and refund
of regulatory liabilities, by comparison to the relevant regulatory orders, filings and correspondence, and other publicly available information including past precedents. For regulatory matters for which regulatory decisions or orders have
not yet been obtained, we inspected the Company’s filings for any evidence that might contradict the Company’s assertions, and reviewed other regulatory orders, filings and correspondence for other entities within the same or similar
jurisdictions to assess the likelihood of recovery in future rates based on the respective regulator’s treatment of similar costs under similar circumstances. We evaluated the Company’s analysis and corroborated that analysis with letters
from legal counsel, when appropriate, regarding cost recoveries or future changes in rates. We also assessed the methodology and mathematical accuracy of the Company’s calculations of regulatory asset and liability balances based on
provisions and formulas outlined in rate orders and other correspondence with regulators.
|
Accounting for Long-term Investments and Related Financing Arrangements
|
||
Description of the Matter
|
As more fully described in Notes 8 and 16 to the consolidated financial statements, the Company has various long-term
investments and related financing arrangements with Atlantica Sustainable Infrastructure PLC, Abengoa-Algonquin Global Energy Solutions B.V., Atlantica Yield Energy Solutions Canada Inc. and other development entities.
The accounting for these investments involves the application of the variable interest model, which includes evaluating whether various entities
within these investment structures are variable interest entities (“VIE”) and whether the Company is the primary beneficiary of the VIE. If the Company is the primary beneficiary of the VIE, then the VIE is consolidated. These assessments
are technically complex, require significant judgment and the involvement of subject matter experts as necessary. Such judgments include a consideration of the adequacy of equity at risk within the entities, consideration of whether other
parties to the arrangements are agents or defacto agents, determining the party that has the power to direct the activities of the entities that most significantly affect their economic performance. In addition, certain financing
arrangements entered into as part of the funding of these investment structures required a consideration of whether the financing arrangements are debt or non-controlling interests.
Subsequent to the initial set-up, the Company also monitors for reconsideration events relating to these investment structures, including
evaluating the continuing ability of other parties to honour their obligations under the arrangements. This necessitates on-going critical judgments over whether any events have arisen that require a re-evaluation of prior accounting
judgments.
|
|
How We Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s
application of the variable interest model, including the process of evaluating whether an entity is a VIE, whether the Company is the primary beneficiary of the VIE, the classification of related financing instruments and the assessment of
reconsideration events.
To evaluate the Company’s conclusions about the determination of VIE and consolidation, our audit procedures included, amongst others, obtaining
and reviewing all agreements associated with the set-up of the respective investments, subsidiary financial information and other legal documents. We reviewed management’s analysis of the significant activities and evaluated which party has
the power to direct such activities, considering the purpose and design of the entity, composition of the board of directors and other legal rights of the parties, including whether there were indicators that other parties to the
arrangement were acting in the role of agents or defacto agents. We also compared the rights of each party to underlying legal documents, articles of incorporation and board of directors’ minutes. In addition, we performed an evaluation of
the various entities’ equity and whether such equity at risk was sufficient to conduct its related activities. We analyzed the at risk equity holder’s obligation to absorb the investments’ expected losses and right to receive expected
residual returns.
We further evaluated the accounting and presentation of related financing instruments by reviewing the agreements and terms related to such
instruments and assessing their equity and debt characteristics.
Finally, we inspected any changes to related agreements and considered the continuing ability of other parties to honour their commitments under
the arrangements within the respective structures to determine if a reconsideration event arose that necessitated a re-evaluation of previous accounting judgments.
|
Impairment of Goodwill
|
||
Description of the Matter
|
As at December 31, 2020, the Company’s goodwill balance of $1.2 billion is largely comprised of previous acquisitions and is
inclusive of goodwill of $163.5 million generated from the current year acquisitions of Ascendent Group Limited and Empresa de Servicios de Los Lagos S.A. As discussed in Note 1(c) to the consolidated financial statements, goodwill is
tested for impairment at least annually at the reporting unit level. The Company assesses qualitative and quantitative factors to determine whether it is more likely than not that the fair value of a reporting unit to which goodwill is
attributed is less than its carrying amount.
Auditing management’s goodwill impairment test is complex and highly judgmental due to the significant estimation required in determining the fair
value of the reporting units. In particular, the fair value estimate is sensitive to significant assumptions, such as the weighted average cost of capital, forecasted future revenue, operating expenses, capital expenditures, and working
capital balances as well as terminal growth rates, which are affected by expectations about future market and economic conditions. These significant assumptions are forward-looking and could be affected by future economic and market
conditions.
|
|
How We Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s
goodwill impairment review process and budget review process, including controls over management’s review of the significant assumptions described above. We performed audit procedures that included, amongst others, assessing the significant
assumptions and the underlying data used by the Company in its analysis. This encompassed an assessment of both the shorter and long-term growth assumptions used by management as well as the terminal growth rates.
We involved our Valuation specialists in the evaluation of the discounted cash flow model utilized by management, including the computation of the
weighted average cost of capital. We compared significant assumptions in the valuation model, especially the forecasted revenue, operating expenses, capital expenditures and terminal growth rates, to current industry, market and economic
trends. In addition, we also compared the forecasted revenue, operating expenses, capital expenditures and terminal growth rates used by management to regulatory rate case filings and approvals. We inspected the Company’s budget and
forecast for any changes or modifications that were inconsistent with the above identified assumptions used by management and evaluated any contrary information. We also performed sensitivity analyses of significant assumptions including
the forecasted revenue, operating expenses, capital expenditures and terminal growth rates, to evaluate the changes in the fair value of the reporting units that would result from changes in the assumptions.
|
/s/ Ernst & Young LLP
|
||
Chartered Professional Accountants
|
||
Licensed Public Accountants
|
||
We have served as the Company's auditor since 2013.
|
||
Toronto, Canada
|
||
March 4, 2021
|
/s/ Ernst & Young LLP
|
||
Chartered Professional Accountants
|
||
Licensed Public Accountants
|
||
Toronto, Canada
|
||
March 4, 2021
|
(thousands of U.S. dollars, except per share amounts)
|
Year ended December 31
|
|||||||
2020
|
2019
|
|||||||
Revenue
|
||||||||
Regulated electricity distribution
|
$
|
777,577
|
$
|
784,396
|
||||
Regulated gas distribution
|
456,267
|
439,153
|
||||||
Regulated water reclamation and distribution
|
154,995
|
130,488
|
||||||
Non-regulated energy sales
|
255,955
|
246,601
|
||||||
Other revenue
|
32,264
|
25,754
|
||||||
1,677,058
|
1,626,392
|
|||||||
Expenses
|
||||||||
Operating expenses
|
520,452
|
471,989
|
||||||
Regulated electricity purchased
|
227,509
|
247,417
|
||||||
Regulated gas purchased
|
144,271
|
170,487
|
||||||
Regulated water purchased
|
12,583
|
8,142
|
||||||
Non-regulated energy purchased
|
16,645
|
17,258
|
||||||
Administrative expenses
|
59,490
|
56,802
|
||||||
Depreciation and amortization
|
314,123
|
284,304
|
||||||
Loss (gain) on foreign exchange
|
(2,108)
|
3,146
|
||||||
1,292,965
|
1,259,545
|
|||||||
Operating income
|
384,093
|
366,847
|
||||||
Interest expense
|
(181,934)
|
(181,488)
|
||||||
Income from long-term investments (note 8)
|
664,671
|
397,621
|
||||||
Other net losses (note 19)
|
(61,311)
|
(26,694)
|
||||||
Pension and other post-employment non-service costs (note 10)
|
(14,072)
|
(17,332)
|
||||||
Gain on derivative financial instruments (note 24(b)(iv))
|
964
|
16,113
|
||||||
408,318
|
188,220
|
|||||||
Earnings before income taxes
|
792,411
|
555,067
|
||||||
Income tax expense (note 18)
|
||||||||
Current
|
(4,888)
|
(16,431)
|
||||||
Deferred
|
(59,695)
|
(53,686)
|
||||||
(64,583)
|
(70,117)
|
|||||||
Net earnings
|
727,828
|
484,950
|
||||||
Net effect of non-controlling interests (note 17)
|
||||||||
Non-controlling interests
|
67,286
|
62,416
|
||||||
Non-controlling interests held by related party (note 16(b))
|
(12,651)
|
(16,482)
|
||||||
$
|
54,635
|
$
|
45,934
|
|||||
Net earnings attributable to shareholders of Algonquin Power & Utilities Corp.
|
$
|
782,463
|
$
|
530,884
|
||||
Series A and D Preferred shares dividend (note 15)
|
8,401
|
8,486
|
||||||
Net earnings attributable to common shareholders of Algonquin Power & Utilities Corp.
|
$
|
774,062
|
$
|
522,398
|
||||
Basic net earnings per share (note 20)
|
$
|
1.38
|
$
|
1.05
|
||||
Diluted net earnings per share (note 20)
|
$
|
1.37
|
$
|
1.04
|
(thousands of U.S. dollars)
|
Year ended December 31
|
|||||||
2020
|
2019
|
|||||||
Net earnings
|
$
|
727,828
|
$
|
484,950
|
||||
Other comprehensive income (loss) (“OCI”):
|
||||||||
Foreign currency translation adjustment, net of tax recovery of $1,526 and of $289, respectively (notes 24(b)(iii) and 24(b)(iv))
|
28,406
|
7,795
|
||||||
Change in fair value of cash flow hedges, net of tax recovery of $9,046 and tax expense of $3,862 respectively (note 24(b)(ii))
|
(24,282)
|
10,580
|
||||||
Change in pension and other post-employment benefits, net of tax recovery of $6,881 and $2,735, respectively (note 10)
|
(17,561)
|
(6,509)
|
||||||
Other comprehensive income (loss), net of tax
|
(13,437)
|
11,866
|
||||||
Comprehensive income
|
714,391
|
496,816
|
||||||
Comprehensive loss attributable to the non-controlling interests
|
(55,326)
|
(43,506)
|
||||||
Comprehensive income attributable to shareholders of Algonquin Power & Utilities Corp.
|
$
|
769,717
|
$
|
540,322
|
(thousands of U.S. dollars)
|
|||||||
December 31,
2020
|
December 31,
2019
|
||||||
ASSETS
|
|||||||
Current assets:
|
|||||||
Cash and cash equivalents
|
$
|
101,614
|
$
|
62,485
|
|||
Accounts receivable, net (note 4)
|
325,644
|
259,144
|
|||||
Fuel and natural gas in storage
|
30,567
|
30,804
|
|||||
Supplies and consumables inventory
|
104,078
|
60,295
|
|||||
Regulatory assets (note 7)
|
63,042
|
50,213
|
|||||
Prepaid expenses
|
49,640
|
29,003
|
|||||
Derivative instruments (note 24)
|
13,106
|
13,483
|
|||||
Other assets (note 11)
|
7,266
|
7,764
|
|||||
694,957
|
513,191
|
||||||
Property, plant and equipment, net (note 5)
|
8,241,838
|
7,240,980
|
|||||
Intangible assets, net (note 6)
|
114,913
|
47,616
|
|||||
Goodwill (note 6)
|
1,208,390
|
1,031,696
|
|||||
Regulatory assets (note 7)
|
782,429
|
509,674
|
|||||
Long-term investments (note 8)
|
|||||||
Investments carried at fair value
|
1,837,429
|
1,294,147
|
|||||
Other long-term investments
|
214,583
|
121,968
|
|||||
Derivative instruments (note 24)
|
39,001
|
72,221
|
|||||
Deferred income taxes (note 18)
|
21,880
|
30,585
|
|||||
Other assets (note 11)
|
68,486
|
58,708
|
|||||
$
|
13,223,906
|
$
|
10,920,786
|
(thousands of U.S. dollars)
|
|||||||
December 31,
2020
|
December 31,
2019
|
||||||
LIABILITIES AND EQUITY
|
|||||||
Current liabilities:
|
|||||||
Accounts payable
|
$
|
192,160
|
$
|
150,336
|
|||
Accrued liabilities
|
369,530
|
307,952
|
|||||
Dividends payable (note 15)
|
92,720
|
73,945
|
|||||
Regulatory liabilities (note 7)
|
38,483
|
41,683
|
|||||
Long-term debt (note 9)
|
139,874
|
225,013
|
|||||
Other long-term liabilities (note 12)
|
72,505
|
57,939
|
|||||
Derivative instruments (note 24)
|
41,980
|
5,898
|
|||||
Other liabilities
|
7,901
|
9,300
|
|||||
955,153
|
872,066
|
||||||
Long-term debt (note 9)
|
4,398,596
|
3,706,855
|
|||||
Regulatory liabilities (note 7)
|
563,035
|
565,695
|
|||||
Deferred income taxes (note 18)
|
568,644
|
491,538
|
|||||
Derivative instruments (note 24)
|
68,430
|
78,766
|
|||||
Pension and other post-employment benefits obligation (note 10)
|
341,502
|
224,094
|
|||||
Other long-term liabilities (note 12)
|
339,181
|
243,401
|
|||||
7,234,541
|
6,182,415
|
||||||
Redeemable non-controlling interests (note 17)
|
|||||||
Redeemable non-controlling interest, held by related party (note 16(b))
|
306,316
|
305,863
|
|||||
Redeemable non-controlling interests
|
20,859
|
25,913
|
|||||
327,175
|
331,776
|
||||||
Equity:
|
|||||||
Preferred shares
|
184,299
|
184,299
|
|||||
Common shares (note 13(a))
|
4,935,304
|
4,017,044
|
|||||
Additional paid-in capital
|
60,729
|
50,579
|
|||||
Retained earnings (deficit)
|
45,753
|
(367,107)
|
|||||
Accumulated other comprehensive loss (“AOCI”) (note 14)
|
(22,507)
|
(9,761)
|
|||||
Total equity attributable to shareholders of Algonquin Power & Utilities Corp.
|
5,203,578
|
3,875,054
|
|||||
Non-controlling interests (note 17)
|
|||||||
Non-controlling interests
|
399,487
|
457,834
|
|||||
Non-controlling interest, held by related party (note 16(c))
|
59,125
|
73,707
|
|||||
458,612
|
531,541
|
||||||
Total equity
|
5,662,190
|
4,406,595
|
|||||
Commitments and contingencies (note 22)
|
|||||||
Subsequent events (notes 3, 8, 13 and 26)
|
|||||||
$
|
13,223,906
|
$
|
10,920,786
|
(thousands of U.S. dollars)
For the year ended December 31, 2020
|
|||||||||||||||||||||||||||
Algonquin Power & Utilities Corp. Shareholders
|
|||||||||||||||||||||||||||
Common
shares
|
Preferred
shares
|
Additional
paid-in
capital
|
Retained
earnings
(deficit)
|
Accumulated
OCI
|
Non-
controlling
interests
|
Total
|
|||||||||||||||||||||
Balance, December 31, 2019
|
$
|
4,017,044
|
$
|
184,299
|
$
|
50,579
|
$
|
(367,107)
|
$
|
(9,761)
|
$
|
531,541
|
$
|
4,406,595
|
|||||||||||||
Net earnings (loss)
|
—
|
—
|
—
|
782,463
|
—
|
(54,635)
|
727,828
|
||||||||||||||||||||
Effect of redeemable non-controlling interests not included in equity (note 17)
|
—
|
—
|
—
|
—
|
—
|
(5,696)
|
(5,696)
|
||||||||||||||||||||
Other comprehensive loss
|
—
|
—
|
—
|
—
|
(12,746)
|
(691)
|
(13,437)
|
||||||||||||||||||||
Dividends declared and distributions to non-controlling interests
|
—
|
—
|
—
|
(281,977)
|
—
|
(25,749)
|
(307,726)
|
||||||||||||||||||||
Dividends and issuance of shares under dividend reinvestment plan
|
70,830
|
—
|
—
|
(70,830)
|
—
|
—
|
—
|
||||||||||||||||||||
Contributions received from non-controlling interests
|
—
|
—
|
—
|
—
|
—
|
3,371
|
3,371
|
||||||||||||||||||||
Common shares issued upon conversion of convertible debentures
|
48
|
—
|
—
|
—
|
—
|
—
|
48
|
||||||||||||||||||||
Common shares issued upon public offering, net of cost
|
823,891
|
—
|
—
|
—
|
—
|
—
|
823,891
|
||||||||||||||||||||
Common shares issued under employee share purchase plan
|
4,327
|
—
|
—
|
—
|
—
|
—
|
4,327
|
||||||||||||||||||||
Share-based compensation
|
—
|
—
|
25,859
|
—
|
—
|
—
|
25,859
|
||||||||||||||||||||
Common shares issued pursuant to share-based awards
|
19,164
|
—
|
(13,959)
|
(16,796)
|
—
|
—
|
(11,591)
|
||||||||||||||||||||
Acquisition of redeemable non-controlling interest, net (note 3(b))
|
—
|
—
|
(1,750)
|
—
|
—
|
10,471
|
8,721
|
||||||||||||||||||||
Balance, December 31, 2020
|
$
|
4,935,304
|
$
|
184,299
|
$
|
60,729
|
$
|
45,753
|
$
|
(22,507)
|
$
|
458,612
|
$
|
5,662,190
|
(thousands of U.S. dollars)
For the year ended December 31, 2019
|
|||||||||||||||||||||||||||
Algonquin Power & Utilities Corp. Shareholders
|
|||||||||||||||||||||||||||
Common
shares
|
Preferred
shares
|
Additional
paid-in
capital
|
Accumulated
deficit
|
Accumulated
OCI
|
Non-
controlling
interests
|
Total
|
|||||||||||||||||||||
Balance, December 31, 2018
|
$
|
3,562,418
|
$
|
184,299
|
$
|
45,553
|
$
|
(595,259)
|
$
|
(19,385)
|
$
|
519,896
|
$
|
3,697,522
|
|||||||||||||
Adoption of ASU 2017-12 on hedging
|
—
|
—
|
—
|
(186)
|
186
|
—
|
—
|
||||||||||||||||||||
Net earnings (loss)
|
—
|
—
|
—
|
530,884
|
—
|
(45,934)
|
484,950
|
||||||||||||||||||||
Redeemable non-controlling interests not included in equity (note 17)
|
—
|
—
|
—
|
—
|
—
|
(7,476)
|
(7,476)
|
||||||||||||||||||||
Other comprehensive income
|
—
|
—
|
—
|
—
|
9,438
|
2,428
|
11,866
|
||||||||||||||||||||
Dividends declared and distributions to non-controlling interests
|
—
|
—
|
—
|
(217,464)
|
—
|
(37,691)
|
(255,155)
|
||||||||||||||||||||
Dividends and issuance of shares under dividend reinvestment plan (note 13(a)(iii))
|
68,856
|
—
|
—
|
(68,856)
|
—
|
—
|
—
|
||||||||||||||||||||
Contributions received from non-controlling interests
|
—
|
—
|
—
|
—
|
—
|
100,318
|
100,318
|
||||||||||||||||||||
Common shares issued upon conversion of convertible debentures
|
148
|
—
|
—
|
—
|
—
|
—
|
148
|
||||||||||||||||||||
Common shares issued upon public offering, net of cost
|
364,211
|
—
|
—
|
—
|
—
|
—
|
364,211
|
||||||||||||||||||||
Issuance of common shares under employee share purchase plan
|
2,853
|
—
|
—
|
—
|
—
|
—
|
2,853
|
||||||||||||||||||||
Share-based compensation
|
—
|
—
|
12,974
|
—
|
—
|
—
|
12,974
|
||||||||||||||||||||
Common shares issued pursuant to share-based awards
|
18,558
|
—
|
(7,948)
|
(16,226)
|
—
|
—
|
(5,616)
|
||||||||||||||||||||
Balance, December 31, 2019
|
$
|
4,017,044
|
$
|
184,299
|
$
|
50,579
|
$
|
(367,107)
|
$
|
(9,761)
|
$
|
531,541
|
$
|
4,406,595
|
(thousands of U.S. dollars)
|
Year ended December 31
|
|||||||
2020
|
2019
|
|||||||
Cash provided by (used in):
|
||||||||
Operating Activities
|
||||||||
Net earnings
|
$
|
727,828
|
$
|
484,950
|
||||
Adjustments and items not affecting cash:
|
||||||||
Depreciation and amortization
|
314,123
|
284,304
|
||||||
Deferred taxes
|
59,695
|
53,686
|
||||||
Unrealized gain on derivative financial instruments
|
(2,124)
|
(15,237)
|
||||||
Share-based compensation expense
|
24,637
|
11,042
|
||||||
Cost of equity funds used for construction purposes
|
(2,219)
|
(4,896)
|
||||||
Change in value of investments carried at fair value
|
(559,701)
|
(276,458)
|
||||||
Pension and post-employment expense in excess of (lower than) contributions
|
2,182
|
(8,952)
|
||||||
Distributions received from equity investments, net of income
|
3,869
|
7,487
|
||||||
Others
|
14,406
|
15,031
|
||||||
Net change in non-cash operating items (note 23)
|
(77,479)
|
60,303
|
||||||
505,217
|
611,260
|
|||||||
Financing Activities
|
||||||||
Increase in long-term debt
|
3,471,740
|
3,614,758
|
||||||
Decrease in long-term debt
|
(3,160,523)
|
(3,048,008)
|
||||||
Issuance of common shares, net of costs
|
820,767
|
362,364
|
||||||
Cash dividends on common shares
|
(253,762)
|
(196,391)
|
||||||
Dividends on preferred shares
|
(8,401)
|
(8,486)
|
||||||
Contributions from non-controlling interests, related party
|
—
|
96,752
|
||||||
Contributions from non-controlling interests and redeemable non-controlling interests (note 17)
|
3,717
|
3,403
|
||||||
Production-based cash contributions from non-controlling interest
|
3,371
|
3,565
|
||||||
Distributions to non-controlling interests, related party (note 16(b) and (c))
|
(27,447)
|
(38,718)
|
||||||
Distributions to non-controlling interests
|
(11,417)
|
(12,251)
|
||||||
Payments upon settlement of derivatives
|
—
|
(8,732)
|
||||||
Shares surrendered to fund withholding taxes on exercised share options
|
(5,274)
|
(5,282)
|
||||||
Repurchase of non-controlling interest
|
(76,046)
|
—
|
||||||
Increase in other long-term liabilities
|
18,342
|
10,175
|
||||||
Decrease in other long-term liabilities
|
(8,208)
|
(39,783)
|
||||||
766,859
|
733,366
|
|||||||
Investing Activities
|
||||||||
Additions to property, plant and equipment and intangible assets
|
(786,030)
|
(581,332)
|
||||||
Increase in long-term investments
|
(279,188)
|
(669,832)
|
||||||
Acquisitions of operating entities (note 3)
|
(402,784)
|
(308,423)
|
||||||
Increase in other assets
|
(21,419)
|
(16,690)
|
||||||
Receipt of principal on development loans receivable
|
244,285
|
251,118
|
||||||
Distributions received from equity investments
|
14,818
|
1,000
|
||||||
Proceeds from sale of long-lived assets
|
415
|
—
|
||||||
(1,229,903)
|
(1,324,159)
|
|||||||
Effect of exchange rate differences on cash and restricted cash
|
573
|
1,032
|
||||||
Increase in cash, cash equivalents and restricted cash
|
42,746
|
21,499
|
||||||
Cash, cash equivalents and restricted cash, beginning of year
|
87,272
|
65,773
|
||||||
Cash, cash equivalents and restricted cash, end of year
|
$
|
130,018
|
$
|
87,272
|
(thousands of U.S. dollars)
|
Year ended December 31
|
|||||||
2020
|
2019
|
|||||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid during the year for interest expense
|
$
|
190,942
|
$
|
171,548
|
||||
Cash paid during the year for income taxes
|
$
|
5,603
|
$
|
14,543
|
||||
Cash received during the year for distributions from equity investments
|
$
|
121,506
|
$
|
131,492
|
||||
Non-cash financing and investing activities:
|
||||||||
Property, plant and equipment acquisitions in accruals
|
$
|
74,505
|
$
|
98,231
|
||||
Issuance of common shares under dividend reinvestment plan and share-based compensation plans
|
$
|
94,321
|
$
|
87,414
|
||||
Issuance of common shares upon conversion of convertible debentures
|
$
|
50
|
$
|
155
|
||||
Sale of property, plant and equipment, intangible assets and accrued liabilities in exchange of note receivable
|
$
|
27,611
|
$
|
57,753
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
1. |
Significant accounting policies
|
(a) |
Basis of preparation
|
(b) |
Basis of consolidation
|
(c) |
Business combinations, intangible assets and goodwill
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
1. |
Significant accounting policies (continued)
|
(d) |
Accounting for rate regulated operations
|
(e) |
Cash and cash equivalents
|
(f) |
Restricted cash
|
(g) |
Accounts receivable
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
1. |
Significant accounting policies (continued)
|
(h) |
Fuel and natural gas in storage
|
(i) |
Supplies and consumables inventory
|
(j) |
Property, plant and equipment
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
1. |
Significant accounting policies (continued)
|
(j) |
Property, plant and equipment (continued)
|
Range of useful lives
|
Weighted average useful lives
|
||||||
2020
|
2019
|
2020
|
2019
|
||||
Generation
|
3 - 60
|
3 - 60
|
33
|
33
|
|||
Distribution
|
1 - 100
|
5 - 100
|
40
|
42
|
|||
Equipment
|
5 - 50
|
5 - 44
|
11
|
10
|
(k) |
Commonly owned facilities
|
(l) |
Impairment of long-lived assets
|
(m) |
Variable interest entities
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
1. |
Significant accounting policies (continued)
|
(m) |
Variable interest entities (continued)
|
(n) |
Long-term investments and notes receivable
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
1. |
Significant accounting policies (continued)
|
(o) |
Pension and other post-employment plans
|
(p) |
Asset retirement obligations
|
(q) |
Leases
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
1. |
Significant accounting policies (continued)
|
(r) |
Share-based compensation
|
(s) |
Non-controlling interests
|
(t) |
Recognition of revenue
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
1. |
Significant accounting policies (continued)
|
(t) |
Recognition of revenue (continued)
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
1. |
Significant accounting policies (continued)
|
(t) |
Recognition of revenue (continued)
|
(u) |
Foreign currency translation
|
(v) |
Income taxes
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
1. |
Significant accounting policies (continued)
|
(v) |
Income taxes (continued)
|
(w) |
Financial instruments and derivatives
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
1. |
Significant accounting policies (continued)
|
(x) |
Fair value measurements
|
• |
Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
|
• |
Level 2 Inputs: Other than quoted prices included in level 1, inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
|
• |
Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any,
market activity for the asset or liability at the measurement date.
|
(y) |
Commitments and contingencies
|
(z) |
Use of estimates
|
(aa) |
COVID-19 pandemic
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
2.
|
Recently issued accounting pronouncements
|
(a) |
Recently adopted accounting pronouncements
|
(b) |
Recently issued accounting guidance not yet adopted
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
3.
|
Business acquisitions and development projects
|
(a) |
Acquisition of Ascendant Group Limited
|
Working capital
|
$
|
71,948
|
|
Property, plant and equipment
|
417,947
|
||
Intangible assets
|
27,315
|
||
Goodwill
|
93,202
|
||
Regulatory assets
|
9,859
|
||
Other assets
|
4,992
|
||
Long-term debt
|
(159,682)
|
||
Pension and other post-employment benefits
|
(58,746)
|
||
Derivative instruments
|
(12,748)
|
||
Other liabilities
|
(29,619)
|
||
Total net assets acquired
|
$
|
364,468
|
|
Cash and cash equivalents acquired
|
42,920
|
||
Total net assets acquired, net of cash and cash equivalents
|
$
|
321,548
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
3. |
Business acquisitions and development projects (continued)
|
(b) |
Acquisition of ESSAL
|
Working capital
|
$
|
11,278
|
|
Property, plant and equipment
|
238,504
|
||
Intangible assets
|
37,095
|
||
Goodwill
|
70,382
|
||
Other assets
|
22
|
||
Long-term debt
|
(139,534)
|
||
Other post-employment benefits
|
(2,292)
|
||
Deferred tax liabilities, net
|
(28,074)
|
||
Other liabilities
|
(14,881)
|
||
Non-controlling interest
|
(84,525)
|
||
Total net assets acquired
|
$
|
87,975
|
|
Cash and cash equivalents acquired
|
6,983
|
||
Total net assets acquired, net of cash and cash equivalents
|
$
|
80,992
|
(c) |
Acquisition of Enbridge Gas New Brunswick Limited Partnership & St. Lawrence Gas Company, Inc.
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
3. |
Business acquisitions and development projects (continued)
|
(d) |
Acquisition of Mid-West Wind Development Project
|
(e) |
Acquisition of Turquoise Solar Facility
|
(f) |
Great Bay Solar II Facility
|
4. |
Accounts receivable
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
5. |
Property, plant and equipment
|
2020
|
|||||||||||
Cost
|
Accumulated
depreciation
|
Net book value
|
|||||||||
Generation
|
$
|
2,918,692
|
$
|
633,210
|
$
|
2,285,482
|
|||||
Distribution and transmission
|
5,766,885
|
661,786
|
5,105,099
|
||||||||
Land
|
114,847
|
—
|
114,847
|
||||||||
Equipment
|
99,722
|
51,979
|
47,743
|
||||||||
Construction in progress
|
|||||||||||
Generation
|
136,424
|
—
|
136,424
|
||||||||
Distribution and transmission
|
552,243
|
—
|
552,243
|
||||||||
$
|
9,588,813
|
$
|
1,346,975
|
$
|
8,241,838
|
2019
|
|||||||||||
Cost
|
Accumulated
depreciation
|
Net book value
|
|||||||||
Generation
|
$
|
—
|
|||||||||
Distribution and transmission
|
—
|
||||||||||
Land
|
—
|
||||||||||
Equipment
|
—
|
||||||||||
Construction in progress
|
|||||||||||
Generation
|
—
|
||||||||||
Distribution and transmission
|
—
|
||||||||||
$
|
—
|
$
|
—
|
$
|
—
|
• |
Cost of $885,087 (2019 - $1,125,062) and accumulated depreciation of $28,779 (2019 - $81,480) related to regulated generation assets. In 2020, the Asbury plant ceased operations and net book value was
transferred to a regulatory asset (note 7(a)).
|
• |
Cost of $531,191 (2019 - $514,709) and accumulated depreciation of $50,919 (2019 - $31,349) related to commonly owned facilities (note 1(k)). Total expenditures incurred on these facilities for the year ended
December 31, 2020 were $61,827 (2019 - $69,210).
|
• |
Cost of $3,076 (2019 - $3,076) and accumulated depreciation of $1,321 (2019 - $1,003) related to assets under finance lease.
|
• |
Expansion costs of $1,000 (2019 - $1,000) on which the Company does not currently earn a return.
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
5. |
Property, plant and equipment (continued)
|
2020
|
2019
|
||||||
Interest capitalized on non-regulated property
|
$
|
9,359
|
$
|
4,538
|
|||
AFUDC capitalized on regulated property:
|
|||||||
Allowance for borrowed funds
|
3,475
|
2,745
|
|||||
Allowance for equity funds
|
2,219
|
4,896
|
|||||
$
|
15,053
|
$
|
12,179
|
6. |
Intangible assets and goodwill
|
2020
|
Cost
|
Accumulated
amortization
|
Net book value
|
||||||||
Power sales contracts
|
$
|
57,943
|
$
|
41,184
|
$
|
16,759
|
|||||
Customer relationships (note 3)
|
83,342
|
10,967
|
72,375
|
||||||||
Interconnection agreements
|
15,028
|
1,458
|
13,570
|
||||||||
Other (a)
|
12,209
|
—
|
12,209
|
||||||||
$
|
168,522
|
$
|
53,609
|
$
|
114,913
|
2019
|
Cost
|
Accumulated
amortization
|
Net book value
|
||||||||
Power sales contracts
|
$
|
56,206
|
$
|
38,931
|
$
|
17,275
|
|||||
Customer relationships
|
26,797
|
10,104
|
16,693
|
||||||||
Interconnection agreements
|
14,827
|
1,179
|
13,648
|
||||||||
$
|
97,830
|
$
|
50,214
|
$
|
47,616
|
2020
|
2019
|
||||||
Opening balance
|
$
|
1,031,696
|
$
|
954,282
|
|||
Business acquisitions (note 3)
|
167,209
|
76,313
|
|||||
Foreign exchange
|
9,485
|
1,101
|
|||||
Closing balance
|
$
|
1,208,390
|
$
|
1,031,696
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
7. |
Regulatory matters
|
Utility
|
State
|
Regulatory proceeding
type
|
Annual revenue
increase
(decrease)
|
Effective date
|
New England Natural Gas System
|
Massachusetts
|
General System Enhancement Plan
|
$2,679
|
May 1, 2020
|
Energy North Gas System
|
New Hampshire
|
Cast Iron/Bare Steel Replacement Program Results
|
$1,613
|
July 1, 2020
|
Granite State Electric System
|
New Hampshire
|
General Rate Review
|
$5,474
|
July 1, 2020. The regulator also approved a one-time recoupment of
$1,836 for the difference between the final rates and temporary rate increase of $2,093 granted on July 1, 2019.
|
Empire Electric System (Missouri)
|
Missouri
|
General Rate Review
|
$992
|
September 16, 2020
|
Peach State Gas System
|
Georgia
|
General Rate Review
|
$1,566
|
August 1, 2020
|
Calpeco Electric System
|
California
|
General Rate Review
|
$5,277
|
Retroactive to January 1, 2019
|
Various
|
Various
|
General Rate Review
|
($283)
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
7. |
Regulatory matters (continued)
|
December 31, 2020
|
December 31, 2019
|
||||||
Regulatory assets
|
|||||||
Retired generating plant (a)
|
$
|
194,192
|
$
|
—
|
|||
Pension and post-employment benefits (b)
|
178,403
|
143,292
|
|||||
Rate adjustment mechanism (c)
|
99,853
|
69,121
|
|||||
Environmental remediation (d)
|
87,308
|
82,300
|
|||||
Income taxes (e)
|
77,730
|
71,506
|
|||||
Debt premium (f)
|
35,688
|
42,150
|
|||||
Fuel and commodity cost adjustments (g)
|
18,094
|
23,433
|
|||||
Clean energy and other customer programs (h)
|
26,400
|
25,859
|
|||||
Deferred capitalized costs (i)
|
34,398
|
38,833
|
|||||
Asset retirement obligation (j)
|
26,546
|
23,841
|
|||||
Wildfire mitigation and vegetation management (k)
|
22,736
|
5,043
|
|||||
Long-term maintenance contract (l)
|
14,405
|
13,264
|
|||||
Rate review costs (m)
|
8,054
|
7,205
|
|||||
Other
|
21,664
|
14,040
|
|||||
Total regulatory assets
|
$
|
845,471
|
$
|
559,887
|
|||
Less: current regulatory assets
|
(63,042)
|
(50,213)
|
|||||
Non-current regulatory assets
|
$
|
782,429
|
$
|
509,674
|
|||
Regulatory liabilities
|
|||||||
Income taxes (e)
|
$
|
322,317
|
$
|
321,960
|
|||
Cost of removal (n)
|
200,739
|
205,739
|
|||||
Pension and post-employment benefits (b)
|
26,311
|
22,256
|
|||||
Fuel and commodity costs adjustments (g)
|
20,136
|
17,729
|
|||||
Rate adjustment mechanism (c)
|
5,214
|
10,446
|
|||||
Clean energy and other customer programs (h)
|
10,440
|
6,871
|
|||||
Rate base offset (o)
|
6,874
|
8,719
|
|||||
Other
|
9,487
|
13,658
|
|||||
Total regulatory liabilities
|
$
|
601,518
|
$
|
607,378
|
|||
Less: current regulatory liabilities
|
(38,483)
|
(41,683)
|
|||||
Non-current regulatory liabilities
|
$
|
563,035
|
$
|
565,695
|
(a) |
Retired generating plant
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
7. |
Regulatory matters (continued)
|
(b) |
Pension and post-employment benefits
|
(c) |
Rate adjustment mechanism
|
(d) |
Environmental remediation
|
(e) |
Income taxes
|
(f) |
Debt premium
|
(g) |
Fuel and commodity cost adjustments
|
(h) |
Clean energy and other customer programs
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
7. |
Regulatory matters (continued)
|
(i) |
Deferred capitalized costs
|
(j) |
Asset retirement obligation
|
(k) |
Wildfire mitigation and vegetation management
|
(l) |
Long-term maintenance contract
|
(m) |
Rate review costs
|
(n) |
Cost of removal
|
(o) |
Rate base offset
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
8. |
Long-term investments
|
December 31,
2020
|
December 31,
2019
|
||||||
Long-term investments carried at fair value
|
|||||||
Atlantica (a)
|
$
|
1,706,900
|
$
|
1,178,581
|
|||
Atlantica share subscription agreement (b)
|
20,015
|
—
|
|||||
Atlantica Yield Energy Solutions Canada Inc. (c)
|
110,514
|
88,494
|
|||||
San Antonio Water System (d)
|
—
|
27,072
|
|||||
$
|
1,837,429
|
$
|
1,294,147
|
||||
Other long-term investments
|
|||||||
Equity-method investees (e), (f)
|
$
|
186,452
|
$
|
82,111
|
|||
Development loans receivable from equity-method investees (f)
|
22,912
|
36,204
|
|||||
Other
|
5,219
|
3,653
|
|||||
$
|
214,583
|
$
|
121,968
|
Year ended December 31,
|
||||||||
2020
|
2019
|
|||||||
Fair value gain (loss) on investments carried at fair value
|
||||||||
Atlantica
|
$
|
519,297
|
$
|
290,740
|
||||
Atlantica share subscription agreement
|
20,015
|
—
|
||||||
Atlantica Yield Energy Solutions Canada Inc.
|
20,272
|
(6,649)
|
||||||
San Antonio Water System
|
117
|
(6,007)
|
||||||
$
|
559,701
|
$
|
278,084
|
|||||
Dividend and interest income from investments carried at fair value
|
||||||||
Atlantica
|
$
|
74,604
|
$
|
69,307
|
||||
Atlantica Yield Energy Solutions Canada Inc.
|
14,731
|
25,572
|
||||||
San Antonio Water System
|
2,113
|
6,007
|
||||||
$
|
91,448
|
$
|
100,886
|
|||||
Other long-term investments
|
||||||||
Equity method income (loss)
|
209
|
(9,108)
|
||||||
Interest and other income
|
13,313
|
27,759
|
||||||
$
|
664,671
|
$
|
397,621
|
(a) |
Investment in Atlantica
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
8. |
Long-term investments (continued)
|
(b) |
Atlantica share subscription agreement
|
(c) |
Investment in AYES Canada
|
(d) |
San Antonio Water System
|
(e) |
Equity-method investees
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
8. |
Long-term investments (continued)
|
(e) |
Equity-method investees (continued)
|
2020
|
2019
|
||||||
Total assets
|
$
|
3,201,967
|
$
|
833,791
|
|||
Total liabilities
|
2,913,188
|
697,751
|
|||||
Net assets
|
$
|
288,779
|
$
|
136,040
|
|||
AQN's ownership interest in the entities
|
141,666
|
63,624
|
|||||
Difference between investment carrying amount and underlying equity in net assets(a)
|
44,786
|
18,487
|
|||||
AQN's investment carrying amount for the entities
|
$
|
186,452
|
$
|
82,111
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
8. |
Long-term investments (continued)
|
(e) |
Equity-method investees (continued)
|
2020
|
2019
|
||||||
AQN's maximum exposure in regards to VIEs
|
|||||||
Carrying amount
|
$
|
174,685
|
$
|
59,091
|
|||
Development loans receivable (e)
|
21,804
|
35,000
|
|||||
Performance guarantees and other commitments on behalf of VIEs
|
965,291
|
1,364,871
|
|||||
$
|
1,161,780
|
$
|
1,458,962
|
(f) |
Development loans receivable from equity investees
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
9. |
Long-term debt
|
Borrowing type
|
Weighted
average
coupon |
Maturity
|
Par value
|
December 31,
2020
|
December 31,
2019
|
||||||||||||
Senior unsecured revolving credit facilities (a)
|
—
|
2021-2024
|
N/A
|
$
|
223,507
|
$
|
141,577
|
||||||||||
Senior unsecured bank credit facilities (b)
|
—
|
2021-2031
|
N/A
|
152,338
|
75,000
|
||||||||||||
Commercial paper (c)
|
—
|
2021
|
N/A
|
122,000
|
218,000
|
||||||||||||
U.S. dollar borrowings
|
|||||||||||||||||
Senior unsecured notes (d)
|
3.46
|
%
|
2022-2047
|
$
|
1,700,000
|
1,688,390
|
1,219,579
|
||||||||||
Senior unsecured utility notes (e)
|
6.34
|
%
|
2023-2035
|
$
|
142,000
|
157,212
|
233,686
|
||||||||||
Senior secured utility bonds (f)
|
4.71
|
%
|
2026-2044
|
$
|
556,229
|
561,494
|
672,337
|
||||||||||
Canadian dollar borrowings
|
|||||||||||||||||
Senior unsecured notes (g)
|
4.28
|
%
|
2021-2050
|
C$
|
1,150,669
|
899,710
|
728,679
|
||||||||||
Senior secured project notes
|
10.21
|
%
|
2027
|
C$
|
25,882
|
20,315
|
21,961
|
||||||||||
Chilean Unidad de Fomento borrowings
|
|||||||||||||||||
Senior unsecured utility bonds (h)
|
4.29
|
%
|
2028-2040
|
CLF 1,868
|
92,183
|
—
|
|||||||||||
$
|
3,917,149
|
$
|
3,310,819
|
||||||||||||||
Subordinated U.S. dollar borrowings
|
|||||||||||||||||
Subordinated unsecured notes (i)
|
6.50
|
%
|
2078-2079
|
$
|
637,500
|
621,321
|
621,049
|
||||||||||
$
|
4,538,470
|
$
|
3,931,868
|
||||||||||||||
Less: current portion
|
(139,874)
|
(225,013)
|
|||||||||||||||
$
|
4,398,596
|
$
|
3,706,855
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
9. |
Long-term debt (continued)
|
(a)
|
Senior unsecured revolving credit facilities (continued)
|
(b)
|
Senior unsecured bank credit facilities
|
(c)
|
Commercial paper
|
(d)
|
Senior unsecured notes
|
(e)
|
Senior unsecured utility notes
|
(f)
|
Senior secured utility bonds
|
(g)
|
Canadian dollar senior unsecured notes
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
9. |
Long-term debt (continued)
|
2021
|
2022
|
2023
|
2024
|
2025
|
Thereafter
|
Total
|
||||||||||||||
$
|
334,352
|
$
|
422,609
|
$
|
111,427
|
$
|
240,151
|
$
|
45,451
|
$
|
3,380,045
|
$
|
4,534,035
|
10. |
Pension and other post-employment benefits
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
10. |
Pension and other post-employment benefits (continued)
|
(a) |
Net pension and OPEB obligation
|
Pension benefits
|
OPEB
|
||||||||||||||
2020
|
2019
|
2020
|
2019
|
||||||||||||
Change in projected benefit obligation
|
|||||||||||||||
Projected benefit obligation, beginning of year
|
$
|
564,970
|
$
|
484,707
|
$
|
219,217
|
$
|
168,325
|
|||||||
Projected benefit obligation assumed from business combination
|
195,231
|
20,196
|
44,950
|
11,646
|
|||||||||||
Modifications to plans
|
(191)
|
(7,705)
|
—
|
—
|
|||||||||||
Service cost
|
15,450
|
12,351
|
6,175
|
4,587
|
|||||||||||
Interest cost
|
19,281
|
20,222
|
7,695
|
7,575
|
|||||||||||
Actuarial loss
|
76,618
|
65,443
|
34,507
|
33,605
|
|||||||||||
Contributions from retirees
|
171
|
—
|
2,037
|
1,913
|
|||||||||||
Medicare Part D
|
—
|
—
|
377
|
414
|
|||||||||||
Benefits paid
|
(37,020)
|
(30,244)
|
(8,434)
|
(8,848)
|
|||||||||||
Foreign exchange
|
403
|
—
|
—
|
—
|
|||||||||||
Projected benefit obligation, end of year
|
$
|
834,913
|
$
|
564,970
|
$
|
306,524
|
$
|
219,217
|
|||||||
Change in plan assets
|
|||||||||||||||
Fair value of plan assets, beginning of year
|
407,074
|
339,099
|
158,873
|
115,542
|
|||||||||||
Plan assets acquired in business combination
|
179,600
|
8,004
|
—
|
15,688
|
|||||||||||
Actual return on plan assets
|
52,876
|
68,025
|
21,219
|
25,464
|
|||||||||||
Employer contributions
|
26,099
|
22,190
|
2,583
|
8,628
|
|||||||||||
Contributions from retirees
|
171
|
—
|
1,998
|
1,913
|
|||||||||||
Medicare Part D subsidy receipts
|
—
|
—
|
377
|
414
|
|||||||||||
Benefits paid
|
(37,020)
|
(30,244)
|
(8,434)
|
(8,776)
|
|||||||||||
Foreign exchange
|
357
|
—
|
—
|
—
|
|||||||||||
Fair value of plan assets, end of year
|
$
|
629,157
|
$
|
407,074
|
$
|
176,616
|
$
|
158,873
|
|||||||
Unfunded status
|
$
|
(205,756)
|
$
|
(157,896)
|
$
|
(129,908)
|
$
|
(60,344)
|
|||||||
Amounts recognized in the consolidated balance sheets consist of:
|
|||||||||||||||
Non-current assets (note 11)
|
488
|
—
|
10,174
|
8,437
|
|||||||||||
Current liabilities
|
(1,989)
|
(1,415)
|
(2,835)
|
(1,168)
|
|||||||||||
Non-current liabilities
|
(204,255)
|
(156,481)
|
(137,247)
|
(67,613)
|
|||||||||||
Net amount recognized
|
$
|
(205,756)
|
$
|
(157,896)
|
$
|
(129,908)
|
$
|
(60,344)
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
10. |
Pension and other post-employment benefits (continued)
|
(a) |
Net pension and OPEB obligation (continued)
|
Pension
|
OPEB
|
||||||||||||||
2020
|
2019
|
2020
|
2019
|
||||||||||||
Accumulated benefit obligation
|
$
|
727,981
|
$
|
504,403
|
$
|
288,594
|
$
|
202,422
|
|||||||
Fair value of plan assets
|
$
|
578,143
|
$
|
407,074
|
$
|
148,496
|
$
|
133,711
|
Pension
|
OPEB
|
||||||||||||||
2020
|
2019
|
2020
|
2019
|
||||||||||||
Projected benefit obligation
|
$
|
833,846
|
$
|
564,971
|
$
|
288,594
|
$
|
202,422
|
|||||||
Fair value of plan assets
|
$
|
627,601
|
$
|
407,074
|
$
|
148,496
|
$
|
133,711
|
(b) |
Pension and post-employment actuarial changes
|
Change in AOCI (before tax)
|
Pension
|
OPEB
|
|||||||||||||
Actuarial
losses (gains)
|
Past service
gains
|
Actuarial
losses (gains)
|
Past service
gains |
||||||||||||
Balance, January 1, 2019
|
$
|
34,257
|
$
|
(6,221)
|
$
|
(13,888)
|
$
|
(208)
|
|||||||
Additions to AOCI
|
17,905
|
(7,705)
|
14,871
|
—
|
|||||||||||
Amortization in current period
|
(3,530)
|
784
|
409
|
208
|
|||||||||||
Reclassification to regulatory accounts
|
(10,122)
|
6,962
|
(10,538)
|
—
|
|||||||||||
Balance, December 31, 2019
|
$
|
38,510
|
$
|
(6,180)
|
$
|
(9,146)
|
$
|
—
|
|||||||
Additions to AOCI
|
50,026
|
(191)
|
22,036
|
—
|
|||||||||||
Amortization in current period
|
(5,430)
|
1,609
|
(509)
|
—
|
|||||||||||
Reclassification to regulatory accounts
|
(25,875)
|
(544)
|
(16,680)
|
—
|
|||||||||||
Balance, December 31, 2020
|
$
|
57,231
|
$
|
(5,306)
|
$
|
(4,299)
|
$
|
—
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
10. |
Pension and other post-employment benefits (continued)
|
(c) |
Assumptions
|
Pension benefits
|
OPEB
|
||||||||||
2020
|
2019
|
2020
|
2019
|
||||||||
Discount rate
|
2.49
|
%
|
3.19
|
%
|
2.58
|
%
|
3.29
|
%
|
|||
Interest crediting rate (for cash balance plans)
|
4.15
|
%
|
4.48
|
%
|
N/A
|
N/A
|
|||||
Rate of compensation increase
|
4.00
|
%
|
4.00
|
%
|
N/A
|
N/A
|
|||||
Health care cost trend rate
|
|||||||||||
Before age 65
|
6.00
|
%
|
6.125
|
%
|
|||||||
Age 65 and after
|
6.00
|
%
|
6.125
|
%
|
|||||||
Assumed ultimate medical inflation rate
|
4.75
|
%
|
4.75
|
%
|
|||||||
Year in which ultimate rate is reached
|
2031
|
2031
|
Pension benefits
|
OPEB
|
||||||||||
2020
|
2019
|
2020
|
2019
|
||||||||
Discount rate
|
3.19
|
%
|
4.19
|
%
|
3.29
|
%
|
4.25
|
%
|
|||
Expected return on assets
|
6.85
|
%
|
6.87
|
%
|
5.57
|
%
|
6.51
|
%
|
|||
Rate of compensation increase
|
3.96
|
%
|
4.00
|
%
|
N/A
|
N/A
|
|||||
Health care cost trend rate
|
|||||||||||
Before Age 65
|
6.125
|
%
|
6.25
|
%
|
|||||||
Age 65 and after
|
6.125
|
%
|
6.25
|
%
|
|||||||
Assumed ultimate medical inflation rate
|
4.75
|
%
|
4.75
|
%
|
|||||||
Year in which ultimate rate is reached
|
2031
|
2031
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
10. |
Pension and other post-employment benefits (continued)
|
(d) |
Benefit costs
|
Pension benefits
|
OPEB
|
||||||||||||||
2020
|
2019
|
2020
|
2019
|
||||||||||||
Service cost
|
$
|
15,450
|
$
|
12,351
|
$
|
6,175
|
$
|
4,587
|
|||||||
Non-service costs
|
|||||||||||||||
Interest cost
|
19,281
|
20,222
|
7,695
|
7,575
|
|||||||||||
Expected return on plan assets
|
(26,285)
|
(20,485)
|
(8,748)
|
(6,725)
|
|||||||||||
Amortization of net actuarial loss (gain)
|
5,430
|
3,530
|
509
|
(409)
|
|||||||||||
Amortization of prior service credits
|
(1,609)
|
(784)
|
—
|
(208)
|
|||||||||||
Amortization of regulatory accounts
|
16,272
|
12,082
|
1,527
|
2,534
|
|||||||||||
$
|
13,089
|
$
|
14,565
|
$
|
983
|
$
|
2,767
|
||||||||
Net benefit cost
|
$
|
28,539
|
$
|
26,916
|
$
|
7,158
|
$
|
7,354
|
(e) |
Plan assets
|
Asset class
|
Target (%)
|
Range (%)
|
|||
Equity securities
|
47
|
%
|
30% -100%
|
||
Debt securities
|
43
|
%
|
20% - 60%
|
||
Other
|
10
|
%
|
0% - 20%
|
||
100
|
%
|
Asset class
|
2020
|
Percentage
|
|||||||
Equity securities
|
$
|
479,506
|
59
|
%
|
|||||
Debt securities
|
255,975
|
32
|
%
|
||||||
Other
|
70,292
|
9
|
%
|
||||||
$
|
805,773
|
100
|
%
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
10. |
Pension and other post-employment benefits (continued)
|
(e) |
Plan assets (continued)
|
Level 3
|
|||
Balance, January 1, 2020
|
$
|
—
|
|
Contributions into funds
|
6,726
|
||
Unrealized gains
|
1,188
|
||
Distributions
|
(169)
|
||
Balance, December 31, 2020
|
$
|
7,745
|
(f) |
Cash flows
|
2021
|
2022
|
2023
|
2024
|
2025
|
2026—2030
|
||||||||||||||||||
Pension plan
|
$
|
46,858
|
$
|
44,993
|
$
|
46,358
|
$
|
47,028
|
$
|
48,197
|
$
|
241,151
|
|||||||||||
OPEB
|
10,414
|
11,033
|
11,601
|
12,165
|
12,687
|
68,826
|
11. |
Other assets
|
2020
|
2019
|
||||||
Restricted cash
|
$
|
28,404
|
$
|
24,787
|
|||
OPEB plan assets (note 10(a))
|
10,662
|
8,437
|
|||||
Atlantica related prepaid amount
|
—
|
8,844
|
|||||
Long-term deposits
|
13,459
|
6,319
|
|||||
Income taxes recoverable
|
4,717
|
4,416
|
|||||
Deferred financing costs
|
6,774
|
5,477
|
|||||
Other
|
11,736
|
8,192
|
|||||
$
|
75,752
|
$
|
66,472
|
||||
Less: current portion
|
(7,266)
|
(7,764)
|
|||||
$
|
68,486
|
$
|
58,708
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
12.
|
Other long-term liabilities
|
2020
|
2019
|
||||||
Advances in aid of construction (a)
|
$
|
79,864
|
$
|
60,828
|
|||
Environmental remediation obligation (b)
|
69,383
|
58,061
|
|||||
Asset retirement obligations (c)
|
79,968
|
53,879
|
|||||
Customer deposits (d)
|
31,939
|
31,946
|
|||||
Unamortized investment tax credits (e)
|
17,893
|
18,234
|
|||||
Deferred credits (f)
|
21,156
|
18,952
|
|||||
Preferred shares, Series C (g)
|
13,698
|
13,793
|
|||||
Hook up fees (h)
|
17,704
|
9,610
|
|||||
Lease liabilities (note 1(q))
|
14,288
|
9,695
|
|||||
Contingent development support obligations (i)
|
12,273
|
9,446
|
|||||
Note payable to related party (j)
|
30,493
|
—
|
|||||
Other
|
23,027
|
16,896
|
|||||
$
|
411,686
|
$
|
301,340
|
||||
Less: current portion
|
(72,505)
|
(57,939)
|
|||||
$
|
339,181
|
$
|
243,401
|
(a)
|
Advances in aid of construction
|
(b) |
Environmental remediation obligation
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
(b) |
Environmental remediation obligation (continued)
|
2020
|
2019
|
||||||
Opening balance
|
$
|
58,061
|
$
|
55,621
|
|||
Remediation activities
|
(5,130)
|
(1,678)
|
|||||
Accretion
|
436
|
1,065
|
|||||
Changes in cash flow estimates
|
3,828
|
981
|
|||||
Revision in assumptions
|
3,402
|
2,072
|
|||||
Obligation assumed from business acquisition
|
8,786
|
—
|
|||||
Closing balance
|
$
|
69,383
|
$
|
58,061
|
(c) |
Asset retirement obligations
|
2020
|
2019
|
||||||
Opening balance
|
$
|
53,879
|
$
|
43,291
|
|||
Obligation assumed from business acquisition and constructed projects
|
20,420
|
3,226
|
|||||
Retirement activities
|
(1,724)
|
(443)
|
|||||
Accretion
|
2,674
|
2,148
|
|||||
Change in cash flow estimates
|
4,719
|
5,657
|
|||||
Closing balance
|
$
|
79,968
|
$
|
53,879
|
(d) |
Customer deposits
|
(e) |
Unamortized investment tax credits
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
(f) |
Deferred credits
|
(g) |
Preferred shares, Series C
|
Estimated dividend payments due in the next five years and dividend and redemption payments thereafter are as follows:
|
|||
2021
|
$
|
1,075
|
|
2022
|
1,097
|
||
2023
|
1,324
|
||
2024
|
1,536
|
||
2025
|
1,552
|
||
Thereafter to 2031
|
7,693
|
||
Redemption amount
|
4,195
|
||
$
|
18,472
|
||
Less: amounts representing interest
|
(4,774)
|
||
$
|
13,698
|
||
Less current portion
|
(1,075)
|
||
$
|
12,623
|
(h) |
Hook up fees
|
(i) |
Contingent development support obligations
|
(j) |
Note payable to related party
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
13. |
Shareholders’ capital
|
(a) |
Common shares
|
2020
|
2019
|
|||||
Common shares, beginning of year
|
524,223,323
|
488,851,433
|
||||
Public offering
|
66,130,063
|
28,009,341
|
||||
Dividend reinvestment plan
|
5,217,071
|
6,068,465
|
||||
Exercise of share-based awards (b)
|
1,565,537
|
1,274,655
|
||||
Conversion of convertible debenture
|
6,225
|
19,429
|
||||
Common shares, end of year
|
597,142,219
|
524,223,323
|
(i) |
Public offering
|
(ii) |
At-the-market equity program
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
13. |
Shareholders’ capital (continued)
|
(a) |
Common shares (continued)
|
(iii) |
Dividend reinvestment plan
|
(b) |
Preferred shares
|
Preferred shares
|
Number of
shares
|
Price per
share
|
Carrying
amount C$ |
Carrying
amount $
|
||||||||||
Series A
|
4,800,000
|
C$
|
25
|
C$
|
116,546
|
$
|
100,463
|
|||||||
Series D
|
4,000,000
|
C$
|
25
|
C$
|
97,259
|
$
|
83,836
|
|||||||
$
|
184,299
|
(c) |
Share-based compensation
|
2020
|
2019
|
||||||
Share options
|
$
|
1,743
|
$
|
1,288
|
|||
Director deferred share units
|
870
|
798
|
|||||
Employee share purchase
|
511
|
322
|
|||||
Performance and restricted share units
|
21,513
|
8,634
|
|||||
Total share-based compensation
|
$
|
24,637
|
$
|
11,042
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
13. |
Shareholders’ capital (continued)
|
(c) |
Share-based compensation (continued)
|
(i) |
Management succession and executive retirements
|
(ii) |
Share option plan
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
13. |
Shareholders’ capital (continued)
|
(c) |
Share-based compensation (continued)
|
(ii) |
Share option plan (continued)
|
2020
|
2019
|
||||||
Risk-free interest rate
|
1.2
|
%
|
1.9
|
%
|
|||
Expected volatility
|
24
|
%
|
20
|
%
|
|||
Expected dividend yield
|
4.1
|
%
|
4.3
|
%
|
|||
Expected life
|
5.50 years
|
5.50 years
|
|||||
Weighted average grant date fair value per option
|
C$
|
2.72
|
C$
|
1.66
|
Number of
awards
|
Weighted
average
exercise
price
|
Weighted
average
remaining
contractual
term (years)
|
Aggregate
intrinsic
value
|
|||||||||
Balance, January 1, 2019
|
6,292,642
|
C$
|
11.61
|
5.75
|
C$
|
13,342
|
||||||
Granted
|
1,113,775
|
14.96
|
8.00
|
—
|
||||||||
Exercised
|
(3,882,505)
|
11.23
|
4.45
|
6,225
|
||||||||
Balance, December 31, 2019
|
3,523,912
|
C$
|
13.09
|
5.87
|
C$
|
18,609
|
||||||
Granted
|
999,962
|
16.78
|
7.27
|
—
|
||||||||
Exercised
|
(2,386,275)
|
12.52
|
5.16
|
18,465
|
||||||||
Forfeited
|
(27,151)
|
14.96
|
—
|
—
|
||||||||
Balance, December 31, 2020
|
2,110,448
|
C$
|
15.45
|
6.55
|
C$
|
11,604
|
||||||
Exercisable, December 31, 2020
|
1,710,662
|
C$
|
15.22
|
6.44
|
C$
|
9,798
|
(iii) |
Employee share purchase plan
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
13. |
Shareholders’ capital (continued)
|
(c) |
Share-based compensation (continued)
|
(iii) |
Employee share purchase plan (continued)
|
(iv) |
Director's deferred share units
|
(v) |
Performance and restricted share units
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
13. |
Shareholders’ capital (continued)
|
(c) |
Share-based compensation (continued)
|
(v) |
Performance and restricted share units (continued)
|
Number of awards
|
Weighted
average
grant-date
fair value
|
Weighted
average
remaining
contractual
term (years)
|
Aggregate
intrinsic
value
|
||||||||||
Balance, January 1, 2019
|
1,392,132
|
C$
|
12.75
|
1.60
|
C$
|
19,114
|
|||||||
Granted, including dividends
|
1,471,442
|
14.69
|
2.00
|
16,302
|
|||||||||
Exercised
|
(344,340)
|
11.55
|
—
|
5,148
|
|||||||||
Forfeited
|
(107,191)
|
13.84
|
—
|
—
|
|||||||||
Balance, December 31, 2019
|
2,412,043
|
C$
|
14.00
|
1.86
|
C$
|
44,309
|
|||||||
Granted, including dividends
|
1,313,171
|
19.31
|
2.00
|
24,966
|
|||||||||
Exercised
|
(968,470)
|
14.45
|
—
|
20,105
|
|||||||||
Forfeited
|
(35,537)
|
15.62
|
—
|
745
|
|||||||||
Balance, December 31, 2020
|
2,721,207
|
C$
|
16.58
|
0.93
|
C$
|
44,289
|
|||||||
Exercisable, December 31, 2020
|
707,630
|
C$
|
12.70
|
—
|
C$
|
14,825
|
(vi) |
Bonus deferral RSUs
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
14.
|
Accumulated other comprehensive income (loss)
|
Foreign
currency
cumulative
translation
|
Unrealized
gain on cash
flow hedges
|
Pension and
post-
employment actuarial changes
|
Total
|
||||||||||||
Balance, January 1, 2019
|
$
|
(74,189)
|
$
|
64,333
|
$
|
(9,529)
|
$
|
(19,385)
|
|||||||
Adoption of ASU 2017-12 on hedging
|
—
|
186
|
—
|
186
|
|||||||||||
Other comprehensive income (loss)
|
4,267
|
19,177
|
(7,999)
|
15,445
|
|||||||||||
Amounts reclassified from AOCI to the consolidated statement of operations
|
3,528
|
(8,597)
|
1,490
|
(3,579)
|
|||||||||||
Net current period OCI
|
$
|
7,795
|
$
|
10,580
|
$
|
(6,509)
|
$
|
11,866
|
|||||||
OCI attributable to the non-controlling interests
|
(2,428)
|
—
|
—
|
(2,428)
|
|||||||||||
Net current period OCI attributable to shareholders of AQN
|
$
|
5,367
|
$
|
10,580
|
$
|
(6,509)
|
$
|
9,438
|
|||||||
Balance, December 31, 2019
|
$
|
(68,822)
|
$
|
75,099
|
$
|
(16,038)
|
$
|
(9,761)
|
|||||||
Other comprehensive income (loss)
|
25,643
|
(13,418)
|
(20,964)
|
(8,739)
|
|||||||||||
Amounts reclassified from AOCI to the consolidated statement of operations
|
2,763
|
(10,864)
|
3,403
|
(4,698)
|
|||||||||||
Net current period OCI
|
$
|
28,406
|
$
|
(24,282)
|
$
|
(17,561)
|
$
|
(13,437)
|
|||||||
OCI attributable to the non-controlling interests
|
691
|
—
|
—
|
691
|
|||||||||||
Net current period OCI attributable to shareholders of AQN
|
$
|
29,097
|
$
|
(24,282)
|
$
|
(17,561)
|
$
|
(12,746)
|
|||||||
Balance, December 31, 2020
|
$
|
(39,725)
|
$
|
50,817
|
$
|
(33,599)
|
$
|
(22,507)
|
15. |
Dividends
|
2020
|
2019
|
||||||||||||||
Dividend
|
Dividend per
share
|
Dividend
|
Dividend per
share
|
||||||||||||
Common shares
|
$
|
344,382
|
$
|
0.6063
|
$
|
277,835
|
$
|
0.5512
|
|||||||
Series A preferred shares
|
C$
|
6,194
|
C$
|
1.2905
|
C$
|
6,194
|
C$
|
1.2905
|
|||||||
Series D preferred shares
|
C$
|
5,091
|
C$
|
1.2728
|
C$
|
5,068
|
C$
|
1.2671
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
16.
|
Related party transactions
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
17. |
Non-controlling interests and redeemable non-controlling interests
|
2020
|
2019
|
||||||
HLBV and other adjustments attributable to:
|
|||||||
Non-controlling interests - tax equity partnership units
|
$
|
63,080
|
$
|
55,963
|
|||
Non-controlling interests - redeemable tax equity partnership units
|
6,955
|
9,006
|
|||||
Other net earnings attributable to:
|
|||||||
Non-controlling interests
|
(2,749)
|
(2,553)
|
|||||
$
|
67,286
|
$
|
62,416
|
||||
Redeemable non-controlling interest, held by related party
|
(12,651)
|
(16,482)
|
|||||
Net effect of non-controlling interests
|
$
|
54,635
|
$
|
45,934
|
Redeemable non-controlling
interests held by related party
|
Redeemable non-controlling
interests
|
||||||||||||||
2020
|
2019
|
2020
|
2019
|
||||||||||||
Opening balance
|
$
|
305,863
|
$
|
307,622
|
$
|
25,913
|
$
|
33,364
|
|||||||
Net effect from operations
|
12,651
|
16,482
|
(6,955)
|
(9,006)
|
|||||||||||
Contributions, net of costs
|
—
|
—
|
3,717
|
3,403
|
|||||||||||
Dividends and distributions declared
|
(12,198)
|
(18,241)
|
(951)
|
(1,848)
|
|||||||||||
Repurchase of non-controlling interest
|
—
|
—
|
(865)
|
—
|
|||||||||||
Closing balance
|
$
|
306,316
|
$
|
305,863
|
$
|
20,859
|
$
|
25,913
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
18. |
Income taxes
|
2020
|
2019
|
||||||
Expected income tax expense at Canadian statutory rate
|
$
|
209,989
|
$
|
147,093
|
|||
Increase (decrease) resulting from:
|
|||||||
Effect of differences in tax rates on transactions in and within foreign jurisdictions and change in tax rates
|
(27,082)
|
(27,703)
|
|||||
Adjustments from investments carried at fair value
|
(87,058)
|
(60,730)
|
|||||
Non-controlling interests share of income
|
18,243
|
16,991
|
|||||
Non-deductible acquisition costs
|
3,223
|
2,500
|
|||||
Tax credits
|
(40,185)
|
(9,332)
|
|||||
Adjustment relating to prior periods
|
(4,228)
|
(1,240)
|
|||||
Amortization and settlement of excess deferred income tax
|
(12,392)
|
(2,554)
|
|||||
Other
|
4,073
|
5,092
|
|||||
Income tax expense
|
$
|
64,583
|
$
|
70,117
|
2020
|
2019
|
||||||
Canada (1)
|
$
|
626,980
|
$
|
351,908
|
|||
U.S.
|
165,431
|
203,159
|
|||||
$
|
792,411
|
$
|
555,067
|
Current
|
Deferred
|
Total
|
|||||||||
Year ended December 31, 2020
|
|||||||||||
Canada
|
$
|
6,336
|
$
|
61,440
|
$
|
67,776
|
|||||
United States
|
(1,448)
|
(1,745)
|
(3,193)
|
||||||||
$
|
4,888
|
$
|
59,695
|
$
|
64,583
|
||||||
Year ended December 31, 2019
|
|||||||||||
Canada
|
$
|
6,695
|
$
|
17,607
|
$
|
24,302
|
|||||
United States
|
9,736
|
36,079
|
45,815
|
||||||||
$
|
16,431
|
$
|
53,686
|
$
|
70,117
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
18. |
Income taxes (continued)
|
2020
|
2019
|
||||||
Deferred tax assets:
|
|||||||
Non-capital loss, investment tax credits, currently non-deductible interest expenses, and financing costs
|
$
|
531,353
|
$
|
382,448
|
|||
Pension and OPEB
|
66,826
|
54,113
|
|||||
Environmental obligation
|
16,145
|
15,541
|
|||||
Regulatory liabilities
|
168,054
|
160,200
|
|||||
Other
|
65,787
|
59,103
|
|||||
Total deferred income tax assets
|
$
|
848,165
|
$
|
671,405
|
|||
Less: valuation allowance
|
(29,824)
|
(29,447)
|
|||||
Total deferred tax assets
|
$
|
818,341
|
$
|
641,958
|
|||
Deferred tax liabilities:
|
|||||||
Property, plant and equipment
|
$
|
733,211
|
$
|
707,185
|
|||
Outside basis differentials
|
406,429
|
235,063
|
|||||
Regulatory accounts
|
212,937
|
145,852
|
|||||
Other
|
12,528
|
14,811
|
|||||
Total deferred tax liabilities
|
$
|
1,365,105
|
$
|
1,102,911
|
|||
Net deferred tax liabilities
|
$
|
(546,764)
|
$
|
(460,953)
|
|||
Consolidated balance sheets classification:
|
|||||||
Deferred tax assets
|
$
|
21,880
|
$
|
30,585
|
|||
Deferred tax liabilities
|
(568,644)
|
(491,538)
|
|||||
Net deferred tax liabilities
|
$
|
(546,764)
|
$
|
(460,953)
|
Non-capital loss carryforward and credits
|
2021-2026
|
2027+
|
Total
|
||||||
Canada
|
$
|
58
|
$
|
552,506
|
$
|
552,564
|
|||
US
|
13,427
|
912,589
|
926,016
|
||||||
Total non-capital loss carryforward
|
$
|
13,485
|
$
|
1,465,095
|
$
|
1,478,580
|
|||
Tax credits
|
$
|
3,624
|
$
|
72,849
|
$
|
76,473
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
19. |
Other net losses
|
2020
|
2019
|
|||||||
Acquisition and transition-related costs
|
$
|
14,104
|
$
|
11,609
|
||||
Tax reform (a)
|
11,728
|
—
|
||||||
Management succession and executive retirement (b)
|
12,639
|
—
|
||||||
Other (c)
|
22,840
|
15,085
|
||||||
$
|
61,311
|
$
|
26,694
|
(a) |
Tax reform
|
(b) |
Management succession and executive retirement
|
(c) |
Other
|
20. |
Basic and diluted net earnings per share
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
20. |
Basic and diluted net earnings per share (continued)
|
2020
|
2019
|
|||||||
Net earnings attributable to shareholders of AQN
|
$
|
782,463
|
$
|
530,884
|
||||
Series A preferred shares dividend
|
4,611
|
4,666
|
||||||
Series D preferred shares dividend
|
3,790
|
3,820
|
||||||
Net earnings attributable to common shareholders of AQN – basic and diluted
|
$
|
774,062
|
$
|
522,398
|
||||
Weighted average number of shares
|
||||||||
Basic
|
559,633,275
|
499,910,876
|
||||||
Effect of dilutive securities
|
4,740,561
|
4,828,678
|
||||||
Diluted
|
564,373,836
|
504,739,554
|
21. |
Segmented information
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
21. |
Segmented information (continued)
|
Year ended December 31, 2020
|
|||||||||||||||
Regulated
Services Group
|
Renewable
Energy Group
|
Corporate
|
Total
|
||||||||||||
Revenue (1)(2)
|
$
|
1,405,136
|
$
|
270,398
|
$
|
1,524
|
$
|
1,677,058
|
|||||||
Fuel, power and water purchased
|
384,363
|
16,645
|
—
|
401,008
|
|||||||||||
Net revenue
|
1,020,773
|
253,753
|
1,524
|
1,276,050
|
|||||||||||
Operating expenses
|
445,459
|
74,981
|
12
|
520,452
|
|||||||||||
Administrative expenses
|
34,141
|
24,719
|
630
|
59,490
|
|||||||||||
Depreciation and amortization
|
219,089
|
92,890
|
2,144
|
314,123
|
|||||||||||
Gain on foreign exchange
|
—
|
—
|
(2,108)
|
(2,108)
|
|||||||||||
Operating income
|
322,084
|
61,163
|
846
|
384,093
|
|||||||||||
Interest expense
|
(99,161)
|
(52,656)
|
(30,117)
|
(181,934)
|
|||||||||||
Income from long-term investments
|
7,753
|
96,652
|
560,266
|
664,671
|
|||||||||||
Other
|
(40,128)
|
(6,537)
|
(27,754)
|
(74,419)
|
|||||||||||
Earnings before income taxes
|
$
|
190,548
|
$
|
98,622
|
$
|
503,241
|
$
|
792,411
|
|||||||
Property, plant and equipment
|
$
|
5,757,532
|
$
|
2,451,706
|
$
|
32,600
|
$
|
8,241,838
|
|||||||
Investments carried at fair value
|
—
|
1,837,429
|
—
|
1,837,429
|
|||||||||||
Equity-method investees
|
74,673
|
111,779
|
—
|
186,452
|
|||||||||||
Total assets
|
8,528,172
|
4,589,521
|
106,213
|
13,223,906
|
|||||||||||
Capital expenditures
|
$
|
690,792
|
$
|
80,746
|
$
|
14,492
|
$
|
786,030
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
21. |
Segmented information (continued)
|
Year ended December 31, 2019
|
|||||||||||||||
Regulated
Services Group
|
Renewable
Energy Group
|
Corporate
|
Total
|
||||||||||||
Revenue (1)(2)
|
$
|
1,368,411
|
$
|
256,510
|
$
|
1,471
|
$
|
1,626,392
|
|||||||
Fuel and power purchased
|
426,046
|
17,258
|
—
|
443,304
|
|||||||||||
Net revenue
|
942,365
|
239,252
|
1,471
|
1,183,088
|
|||||||||||
Operating expenses
|
397,092
|
74,676
|
221
|
471,989
|
|||||||||||
Administrative expenses
|
36,667
|
19,366
|
769
|
56,802
|
|||||||||||
Depreciation and amortization
|
194,766
|
88,557
|
981
|
284,304
|
|||||||||||
Loss on foreign exchange
|
—
|
—
|
3,146
|
3,146
|
|||||||||||
Operating income
|
313,840
|
56,653
|
(3,646)
|
366,847
|
|||||||||||
Interest expense
|
(101,518)
|
(61,039)
|
(18,931)
|
(181,488)
|
|||||||||||
Income from long-term investments
|
9,334
|
104,025
|
284,262
|
397,621
|
|||||||||||
Other
|
(32,297)
|
15,951
|
(11,567)
|
(27,913)
|
|||||||||||
Earnings before income taxes
|
$
|
189,359
|
$
|
115,590
|
$
|
250,118
|
$
|
555,067
|
|||||||
Property, plant and equipment
|
$
|
4,763,689
|
$
|
2,444,382
|
$
|
32,909
|
$
|
7,240,980
|
|||||||
Investments carried at fair value
|
27,072
|
1,267,075
|
—
|
1,294,147
|
|||||||||||
Equity-method investees
|
29,827
|
52,284
|
—
|
82,111
|
|||||||||||
Total assets
|
6,825,379
|
4,014,067
|
81,340
|
10,920,786
|
|||||||||||
Capital expenditures
|
$
|
478,936
|
$
|
102,396
|
$
|
—
|
$
|
581,332
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
21. |
Segmented information (continued)
|
2020
|
2019
|
|||||||
Revenue
|
||||||||
United States
|
$
|
1,475,087
|
$
|
1,537,695
|
||||
Canada
|
153,569
|
88,697
|
||||||
Other regions
|
48,402
|
—
|
||||||
$
|
1,677,058
|
$
|
1,626,392
|
|||||
Property, plant and equipment
|
||||||||
United States
|
$
|
6,666,015
|
$
|
6,488,964
|
||||
Canada
|
884,195
|
752,016
|
||||||
Other regions
|
691,628
|
—
|
||||||
$
|
8,241,838
|
$
|
7,240,980
|
|||||
Intangible assets
|
||||||||
United States
|
$
|
24,825
|
$
|
23,821
|
||||
Canada
|
23,123
|
23,795
|
||||||
Other regions
|
66,965
|
—
|
||||||
$
|
114,913
|
$
|
47,616
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
(a) |
Contingencies
|
(b) |
Commitments
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
(b) |
Commitments (continued)
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Thereafter
|
Total
|
|||||||||||||||
Power purchase (i)
|
$
|
45,083
|
$
|
27,310
|
$
|
26,178
|
$
|
26,236
|
$
|
26,472
|
$
|
167,380
|
$
|
318,659
|
|||||||
Gas supply and service agreements (ii)
|
89,034
|
62,781
|
48,427
|
42,174
|
37,699
|
144,885
|
425,000
|
||||||||||||||
Service agreements
|
56,828
|
46,817
|
50,223
|
48,671
|
45,766
|
248,540
|
496,845
|
||||||||||||||
Capital projects
|
654,399
|
—
|
—
|
—
|
—
|
—
|
654,399
|
||||||||||||||
Land easements
|
6,747
|
6,783
|
6,874
|
6,958
|
7,036
|
194,995
|
229,393
|
||||||||||||||
Total
|
$
|
852,091
|
$
|
143,691
|
$
|
131,702
|
$
|
124,039
|
$
|
116,973
|
$
|
755,800
|
$
|
2,124,296
|
(i) |
Power purchase: AQN’s electric distribution facilities have commitments to purchase physical quantities of power for load serving requirements. The commitment amounts included in the table above are based on
market prices as of December 31, 2020. However, the effects of purchased power unit cost adjustments are mitigated through a purchased power rate-adjustment mechanism.
|
(ii) |
Gas supply and service agreements: AQN’s gas distribution facilities and thermal generation facilities have commitments to purchase physical quantities of natural gas under contracts for purposes of load serving
requirements and of generating power.
|
23. |
Non-cash operating items
|
2020
|
2019
|
|||||||
Accounts receivable
|
$
|
(52,778)
|
$
|
(20,857)
|
||||
Fuel and natural gas in storage
|
237
|
13,985
|
||||||
Supplies and consumables inventory
|
1,058
|
(6,028)
|
||||||
Income taxes recoverable
|
(3,440)
|
17,796
|
||||||
Prepaid expenses
|
(15,411)
|
(7,501)
|
||||||
Accounts payable
|
40,885
|
63,854
|
||||||
Accrued liabilities
|
(29,150)
|
8,872
|
||||||
Current income tax liability
|
3,818
|
(5,016)
|
||||||
Asset retirements and environmental obligations
|
3,562
|
(2,494)
|
||||||
Net regulatory assets and liabilities
|
(26,260)
|
(2,308)
|
||||||
$
|
(77,479)
|
$
|
60,303
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
24. |
Financial instruments
|
(a) |
Fair value of financial instruments
|
December 31, 2020
|
Carrying
amount
|
Fair
value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||
Long-term investments carried at fair value
|
$
|
1,837,429
|
$
|
1,837,429
|
$
|
1,706,900
|
$
|
20,015
|
$
|
110,514
|
|||||||||
Development loans and other receivables
|
23,804
|
31,088
|
—
|
31,088
|
—
|
||||||||||||||
Derivative instruments:
|
|||||||||||||||||||
Energy contracts designated as a cash flow hedge
|
51,525
|
51,525
|
—
|
—
|
51,525
|
||||||||||||||
Energy contracts not designated as cash flow hedge
|
388
|
388
|
—
|
—
|
388
|
||||||||||||||
Commodity contracts for regulated operations
|
194
|
194
|
—
|
194
|
—
|
||||||||||||||
Total derivative instruments
|
52,107
|
52,107
|
—
|
194
|
51,913
|
||||||||||||||
Total financial assets
|
$
|
1,913,340
|
$
|
1,920,624
|
$
|
1,706,900
|
$
|
51,297
|
$
|
162,427
|
|||||||||
Long-term debt
|
$
|
4,538,470
|
$
|
5,140,059
|
$
|
2,316,586
|
$
|
2,823,473
|
$
|
—
|
|||||||||
Notes payable to related party
|
30,493
|
30,493
|
—
|
30,493
|
—
|
||||||||||||||
Convertible debentures
|
295
|
623
|
623
|
—
|
—
|
||||||||||||||
Preferred shares, Series C
|
13,698
|
15,565
|
—
|
15,565
|
—
|
||||||||||||||
Derivative instruments:
|
|||||||||||||||||||
Energy contracts designated as a cash flow hedge
|
5,597
|
5,597
|
—
|
—
|
5,597
|
||||||||||||||
Energy contracts not designated as a cash flow hedge
|
332
|
332
|
—
|
—
|
332
|
||||||||||||||
Cross-currency swap designated as a net investment hedge
|
84,543
|
84,543
|
—
|
84,543
|
—
|
||||||||||||||
Interest rate swaps designated as a hedge
|
19,324
|
19,324
|
—
|
19,324
|
—
|
||||||||||||||
Commodity contracts for regulated operations
|
614
|
614
|
—
|
614
|
—
|
||||||||||||||
Total derivative instruments
|
110,410
|
110,410
|
—
|
104,481
|
5,929
|
||||||||||||||
Total financial liabilities
|
$
|
4,693,366
|
$
|
5,297,150
|
$
|
2,317,209
|
$
|
2,974,012
|
$
|
5,929
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
24. |
Financial instruments (continued)
|
(a) |
Fair value of financial instruments (continued)
|
December 31, 2019
|
Carrying
amount
|
Fair
value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||
Long-term investment carried at fair value
|
$
|
1,294,147
|
$
|
1,294,147
|
$
|
1,178,581
|
$
|
27,072
|
$
|
88,494
|
|||||||||
Development loans and other receivables
|
37,050
|
37,984
|
—
|
37,984
|
—
|
||||||||||||||
Derivative instruments:
|
|||||||||||||||||||
Energy contracts designated as a cash flow hedge
|
65,304
|
65,304
|
—
|
—
|
65,304
|
||||||||||||||
Energy contracts not designated as a cash flow hedge
|
20,384
|
20,384
|
—
|
—
|
20,384
|
||||||||||||||
Commodity contracts for regulatory operations
|
16
|
16
|
—
|
16
|
—
|
||||||||||||||
Total derivative instruments
|
85,704
|
85,704
|
—
|
16
|
85,688
|
||||||||||||||
Total financial assets
|
$
|
1,416,901
|
$
|
1,417,835
|
$
|
1,178,581
|
$
|
65,072
|
$
|
174,182
|
|||||||||
Long-term debt
|
$
|
3,931,868
|
$
|
4,284,068
|
$
|
1,495,153
|
$
|
2,788,915
|
$
|
—
|
|||||||||
Convertible debentures
|
342
|
623
|
623
|
—
|
—
|
||||||||||||||
Preferred shares, Series C
|
13,793
|
15,120
|
—
|
15,120
|
—
|
||||||||||||||
Derivative instruments:
|
|||||||||||||||||||
Energy contracts designated as a cash flow hedge
|
789
|
789
|
—
|
—
|
789
|
||||||||||||||
Energy contracts not designated as a cash flow hedge
|
38
|
38
|
—
|
—
|
38
|
||||||||||||||
Cross-currency swap designated as a net investment hedge
|
81,765
|
81,765
|
—
|
81,765
|
—
|
||||||||||||||
Commodity contracts for regulated operations
|
2,072
|
2,072
|
—
|
2,072
|
—
|
||||||||||||||
Total derivative instruments
|
84,664
|
84,664
|
—
|
83,837
|
827
|
||||||||||||||
Total financial liabilities
|
$
|
4,030,667
|
$
|
4,384,475
|
$
|
1,495,776
|
$
|
2,887,872
|
$
|
827
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
24. |
Financial instruments (continued)
|
(a) |
Fair value of financial instruments (continued)
|
(b) |
Derivative instruments
|
(i) |
Commodity derivatives – regulated accounting
|
2020
|
|||
Financial contracts:
|
Swaps |
1,830,852
|
|
Options |
479,692
|
||
Forward contracts |
1,500,000
|
||
3,810,544
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
24. |
Financial instruments (continued)
|
(b) |
Derivative instruments (continued)
|
(i) |
Commodity derivatives – regulated accounting (continued)
|
2020
|
2019
|
|||||||
Regulatory assets:
|
||||||||
Swap contracts
|
$
|
228
|
$
|
28
|
||||
Option contracts
|
50
|
38
|
||||||
Forward contracts
|
$
|
693
|
$
|
1,830
|
||||
Regulatory liabilities:
|
||||||||
Swap contracts
|
$
|
271
|
$
|
743
|
||||
Option contracts
|
$
|
76
|
$
|
—
|
(ii) |
Cash flow hedges
|
Notional quantity
(MW-hrs)
|
Expiry
|
Receive average
prices (per MW-hr)
|
Pay floating price
(per MW-hr)
|
||||
2,479,234
|
December 2031
|
$23.50
|
NI HUB
|
||||
642,280
|
December 2028
|
$34.02
|
PJM Western HUB
|
||||
2,953,751
|
December 2027
|
$24.76
|
NI HUB
|
||||
2,330,995
|
December 2027
|
$36.46
|
ERCOT North HUB
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
24. |
Financial instruments (continued)
|
(b) |
Derivative instruments (continued)
|
(ii) |
Cash flow hedges (continued)
|
2020
|
2019
|
|||||||
Effective portion of cash flow hedge
|
$
|
(13,418)
|
$
|
19,177
|
||||
Amortization of cash flow hedge
|
(1,248)
|
(33)
|
||||||
Amounts reclassified from AOCI
|
(9,616)
|
(8,564)
|
||||||
OCI attributable to shareholders of AQN
|
$
|
(24,282)
|
$
|
10,580
|
(iii) |
Foreign exchange hedge of net investment in foreign operation
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
24. |
Financial instruments (continued)
|
(b) |
Derivative instruments (continued)
|
(iii) |
Foreign exchange hedge of net investment in foreign operation (continued)
|
(iv) |
Other derivatives
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
24. |
Financial instruments (continued)
|
(b) |
Derivative instruments (continued)
|
(iv) |
Other derivatives (continued)
|
2020
|
2019
|
|||||||
Change in unrealized gain (loss) on derivative financial instruments:
|
||||||||
Energy derivative contracts
|
$
|
(901)
|
$
|
530
|
||||
Currency forward contract
|
—
|
(904)
|
||||||
Total change in unrealized gain (loss) on derivative financial instruments
|
$
|
(901)
|
$
|
(374)
|
||||
Realized gain (loss) on derivative financial instruments:
|
||||||||
Energy derivative contracts
|
(1,145)
|
(227)
|
||||||
Currency forward contract
|
2,363
|
147
|
||||||
Total realized gain (loss) on derivative financial instruments
|
$
|
1,218
|
$
|
(80)
|
||||
Gain (loss) on derivative financial instruments not accounted for as hedges
|
317
|
(454)
|
||||||
Amortization of AOCI gains frozen as a result of hedge dedesignation
|
3,009
|
15,810
|
||||||
$
|
3,326
|
$
|
15,356
|
|||||
Amounts recognized in the consolidated statements of operations consist of:
|
||||||||
Gain on derivative financial instruments
|
$
|
964
|
$
|
16,113
|
||||
Gain (loss) on foreign exchange
|
2,362
|
(757)
|
||||||
$
|
3,326
|
$
|
15,356
|
(c) |
Risk management
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
24. |
Financial instruments (continued)
|
(c) |
Risk management (continued)
|
2020
|
|||
Cash and cash equivalents and restricted cash
|
$
|
130,018
|
|
Accounts receivable
|
355,151
|
||
Allowance for doubtful accounts
|
(29,506)
|
||
Notes receivable
|
23,804
|
||
$
|
479,467
|
Due less
than 1 year
|
Due 2 to 3
years
|
Due 4 to 5
years
|
Due after
5 years
|
Total
|
|||||||||||||||
Long-term debt obligations
|
$
|
334,352
|
$
|
821,535
|
$
|
285,600
|
$
|
3,092,544
|
$
|
4,534,031
|
|||||||||
Interest on long-term debt
|
195,876
|
337,199
|
267,112
|
1,084,022
|
1,884,209
|
||||||||||||||
Purchase obligations
|
561,690
|
—
|
—
|
—
|
561,690
|
||||||||||||||
Environmental obligation
|
16,955
|
26,409
|
1,251
|
21,518
|
66,133
|
||||||||||||||
Advances in aid of construction
|
1,236
|
—
|
—
|
78,628
|
79,864
|
||||||||||||||
Derivative financial instruments:
|
|||||||||||||||||||
Cross-currency swap
|
37,338
|
29,999
|
19,875
|
(2,670)
|
84,542
|
||||||||||||||
Interest rate swaps
|
2,725
|
4,346
|
4,369
|
7,885
|
19,325
|
||||||||||||||
Energy derivative and commodity contracts
|
1,917
|
(233)
|
919
|
3,940
|
6,543
|
||||||||||||||
Other obligations
|
79,219
|
6,601
|
5,232
|
125,209
|
216,261
|
||||||||||||||
Total obligations
|
$
|
1,231,308
|
$
|
1,225,856
|
$
|
584,358
|
$
|
4,411,076
|
$
|
7,452,598
|
Algonquin Power & Utilities Corp.
|
Notes to the Consolidated Financial Statements
|
December 31, 2020 and 2019
|
(in thousands of U.S. dollars, except as noted and per share amounts)
|
25. |
Comparative figures
|
26. |
Subsequent Event
|