Algonquin Power & Utilities Corp. 2018 Earnings & 2019 Price Target
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Algonquin Power & Utilities Corp (AQN) operations include two North American business units consisting of: the Liberty Power Group, which owns and operates a portfolio of non-regulated renewable and thermal electric generation facilities; and the Liberty Utilities Group, which owns and operates a portfolio of 40 regulated electric, natural gas, water distribution and wastewater collection utility systems, and transmission operations primarily in the US. APUC also owns a 41.5% share of Atlantica Yield PLC (NYSE: AY) acquired during 2018 for $984.M. Atlantica acquires, owns and manages a diversified international portfolio of contracted renewable energy, power generation, electric transmission, and water assets. Excluding the acquisition of Atlantica, approximately 70% of income is from the utilities segment with the balance from power generation. Utilities Group earns 35% of revenues from regulated electric distribution, 44% from natural gas utilities and water utilities-21%. The power generation segment is 75% wind powered with the balance split equally between solar, hydro and thermal generation. Assets total $9.4B as of Dec-31-2018, liabilities are $5.7B; the 5 year capital program is $6.4B. Operating results are subject to seasonal fluctuations that materially impact quarter-to-quarter operating results.
The Liberty Utilities Group operates a portfolio of regulated utility systems throughout the United States serving 768,000 connections. The Liberty Utilities Group's regulated electrical distribution utility systems and related generation assets are located in California, New Hampshire, Missouri, Kansas, Oklahoma, and Arkansas. The electric utility systems have 266,000 electric connections and operate a fleet of generation assets with a net capacity of 1.7 GW. The Liberty Utilities Group's regulated natural gas distribution utility systems are located in Georgia, Illinois, Iowa, Massachusetts, New Hampshire and Missouri serving 338,000 natural gas connections. The Liberty Utilities Group's regulated water distribution and wastewater collection utility systems are located in Arizona, Arkansas, California, Illinois, Missouri, and Texas which together serve approximately 164,000 connections. With the closing of the Empire acquisition on Jan-1-2017 this added $4B in assets, materially expanding utility operations in the U.S.
The Liberty Power Group generates and sells electrical energy produced by its diverse portfolio of non-regulated renewable power generation and clean power generation facilities located across North America. The Liberty Power Group seeks to deliver continuing growth through development of new greenfield power generation projects and accretive acquisitions of additional electrical energy generation facilities. Approximately 88% of the electrical output from the hydroelectric, wind, and solar generating facilities is sold pursuant to long term contractual arrangements which as of Dec-31-2018 had a production-weighted average remaining contract life of approximately 14 years.
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