Algonquin Power & Utilities (AQN) - 2024 Q1 - Quarterly Report

Revenue and Operating Performance - Revenue for Q1 2024 decreased to $737.1 million from$778.6 million in Q1 2023, a decline of 5.3%[2] - Operating income for Q1 2024 was $132.6 million, down from$142.5 million in Q1 2023, a decrease of 6.9%[2] - Regulated electricity distribution revenue decreased to $305.9 million in Q1 2024 from$316.0 million in Q1 2023, a decline of 3.2%[2] - Regulated natural gas distribution revenue decreased to $234.0 million in Q1 2024 from$271.1 million in Q1 2023, a decline of 13.7%[2] - Non-regulated energy sales revenue increased to $84.6 million in Q1 2024 from$78.7 million in Q1 2023, an increase of 7.4%[2] - Total revenue for the three months ended March 31, 2024 was $709.407 million, with$624.831 million from the Regulated Services Group and $84.576 million from the Renewable Energy Group[82] - Total revenue for the three months ended March 31, 2024, was$737.1 million, compared to $778.6 million in the same period in 2023, representing a decrease of 5.3$674.5 million, while Renewable Energy Group revenue was $78.7 million[84] - Net revenue for the three months ended March 31, 2024, was$503.7 million, with Regulated Services Group contributing $421.0 million and Renewable Energy Group contributing$82.3 million[84] - Operating income for the three months ended March 31, 2024, was $142.5 million, with Regulated Services Group contributing$138.3 million and Renewable Energy Group contributing $6.3 million[84] Net Income and Losses - Net loss attributable to shareholders for Q1 2024 was$91.6 million, compared to net earnings of $268.0 million in Q1 2023[3] - Comprehensive loss attributable to shareholders for Q1 2024 was$91.3 million, compared to comprehensive income of $303.1 million in Q1 2023[6] - Net earnings for Q1 2024 were a loss of$120.3 million, compared to a profit of $249.6 million in Q1 2023[15] - Net loss attributable to AQN for the three months ended March 31, 2024 was$24.266 million, compared to a net gain of $2.281 million for the same period in 2023[40] - Net loss attributable to common shareholders for the three months ended March 31, 2024 was$91.558 million, compared to net earnings of $268.047 million for the same period in 2023[79] Cash and Liquidity - Cash and cash equivalents increased to$86.3 million as of March 31, 2024, up from $56.1 million as of December 31, 2023[8] - Cash and cash equivalents increased to$108 million at the end of Q1 2024 from $76.1 million at the start of the period[15] - Total liquidity and capital reserves as of March 31, 2024 were$1.895 billion, up from $1.002 billion as of December 31, 2023[48] Debt and Equity - Long-term debt increased to$8.8 billion as of March 31, 2024, compared to $7.9 billion as of December 31, 2023[10] - Total equity decreased to$6.4 billion as of March 31, 2024, from $6.6 billion as of December 31, 2023[10] - Long-term debt increased by$2.04 billion in Q1 2024, compared to $430 million in Q1 2023[15] - Total equity increased to$7.06 billion as of March 31, 2023, from $6.84 billion at the end of 2022[14] - Long-term debt as of March 31, 2024 was$8.849 billion, up from $7.894 billion as of December 31, 2023[45] - Long-term debt increased from$8,516.0 million in December 2023 to $9,089.7 million in March 2024, an increase of 6.7$8,652.9 million in December 2023 to $9,245.2 million in March 2024, an increase of 6.8$955.738 million as of March 31, 2024 from $1.116 billion in December 2023[35] - Fair value loss on investments carried at fair value was$158.332 million for the three months ended March 31, 2024[36] - Dividend and interest income from investments carried at fair value was $25.697 million for the three months ended March 31, 2024[36] - Equity-method investees had a carrying value of$442.906 million as of March 31, 2024, down from $456.393 million in December 2023[38] - The fair value of support provided to equity investees as of March 31, 2024 was$10.788 million, down from $12.666 million as of December 31, 2023[42] - AQN's maximum exposure to VIEs as of March 31, 2024 was$1.127 billion, down from $1.382 billion as of December 31, 2023[43] - Long-term investments carried at fair value decreased from$1,115.7 million in December 2023 to $955.7 million in March 2024, a decline of 14.3$158.1 million in December 2023 to $94.7 million in March 2024, a decline of 40.1$1,357.1 million in December 2023 to $1,163.1 million in March 2024, a decline of 14.3$212.5 million in Q1 2024, up from $169.7 million in Q1 2023[15] - Capital contributions of$9.874 million made to Texas Coastal Wind Facilities and projects under construction during the three months ended March 31, 2024[38] - Capital expenditures for the three months ended March 31, 2024 were $212.546 million, with$183.214 million from the Regulated Services Group and $29.332 million from the Renewable Energy Group[82] - Capital expenditures for the three months ended March 31, 2024, were$169.7 million, with Regulated Services Group accounting for $147.4 million and Renewable Energy Group accounting for$22.4 million[84] Acquisitions and Disposals - The company acquired the remaining 50% ownership in the Sandy Ridge II Wind Facility for $36.6 million in February 2024[23] - Acquired remaining 50$7.859 million[25] - Sold 100% equity interest in the 74.9 MW Windsor Locks Thermal Facility for $17.721 million[25] - The Company acquired the remaining 50$2 million and reimbursement of costs incurred[67] Regulatory and Tax - Regulatory assets totaled $1.234 billion as of March 31, 2024, a decrease from$1.328 billion in December 2023[32] - Securitized costs of $301.463 million related to the Midwest Extreme Weather Event and energy transition costs[34] - Income tax recovery for the three months ended March 31, 2024 was$11.303 million, compared to an expense of $24.701 million for the same period in 2023[72] - The company's net deferred tax asset position related to Canadian attributes increased from$151.759 million to $168.557 million during the three months ended March 31, 2024[75] Shareholder and Compensation - Cash dividends on common shares decreased to$73.7 million in Q1 2024 from $95.9 million in Q1 2023[15] - Share-based compensation expenses rose to$5.1 million in Q1 2024 from $696,000 in Q1 2023[15] - Total share-based compensation expense for the three months ended March 31, 2024, was$5,110 thousand, compared to $696 thousand in the same period in 2023[57] - A total of 737,235 performance share units (PSUs) and restricted share units (RSUs) were granted to employees during the three months ended March 31, 2024[59] - Dividends declared on common shares for the three months ended March 31, 2024, were$75,467 thousand, with a dividend per share of $0.1085[64] Other Financial Metrics - Depreciation and amortization expenses increased to$129.5 million in Q1 2024 from $121.6 million in Q1 2023[15] - The company received$60.5 million in contributions from non-controlling interests in Q1 2024, compared to none in Q1 2023[15] - Accounts receivable as of March 31, 2024 include unbilled revenue of $80.937 million, down from$107.001 million in December 2023[26] - The company recorded an impairment loss of $1.481 million in 2023 due to the sale of equity interests in Liberty Jimena, S.L., Liberty Caparacena, S.L., and Liberty Infrastructuras, S.L. to Atlantica[67] - Net effect attributable to non-controlling interests was$31.159 million for the three months ended March 31, 2024, compared to $20.529 million for the same period in 2023[70] - Renewable energy business sale costs for the three months ended March 31, 2024 were$5.909 million[76] - Total assets as of March 31, 2024 were $18.307 billion, with$12.603 billion from the Regulated Services Group and $5.309 billion from the Renewable Energy Group[82] - Total assets as of March 31, 2024, were$18.4 billion, with Regulated Services Group contributing $12.7 billion and Renewable Energy Group contributing$5.4 billion[84] - The company accrued estimated losses of $66,000 for claims related to the Mountain View Fire, with expected recoveries from insurance of$66,000, resulting in a net charge to earnings of $nil[88] - Total commitments for power purchase, natural gas supply, and service agreements as of March 31, 2024, amounted to$1.8 billion, with the largest portion ($553.7 million) allocated to service agreements[90] - Changes in non-cash operating items for the three months ended March 31, 2024, resulted in a net decrease of$54.5 million, primarily due to a decrease in accounts payable and accrued liabilities[92] - The fair value of energy contracts is determined using internally developed forward market prices ranging from $15.47 to$155.17 with a weighted average of $40.68 as of March 31, 2024[99] - The weighted average forward market prices for energy contracts are based on the quantity of energy expected to be sold monthly and the expected forward price during that month[99] - The significant unobservable inputs used in the fair value measurement of CRRs are recent CRR auction prices ranging from$0.61 to $38.17 with a weighted average of$4.64 as of March 31, 2024[99] - The significant unobservable inputs used in the fair value measurement of the Company's AYES Canada investment include expected cash flows, discount rates ranging from 8.32% to 8.82% with a weighted average of 8.53%, and expected volatility of Atlantica's share price ranging from 27.47% to 33.19% as of March 31, 2024[99] - The Company uses derivative financial instruments to reduce cash flow variability associated with future natural gas purchases, with a strategy to minimize fluctuations in natural gas sale prices to regulated customers[99] - The company has entered into long-term energy derivative contracts to mitigate price risk on the expected future sale of power generation, with notional quantities totaling 3,381,054 MW-hrs, 315,110 MW-hrs, 1,343,841 MW-hrs, and 1,220,525 MW-hrs, expiring between 2027 and 2030[102] - The company expects $36,128 of unrealized losses currently in AOCI to be reclassified into earnings within the next 12 months as underlying hedged transactions settle[106] - A foreign currency gain of$12,588 was recorded in OCI for the three months ended March 31, 2024, compared to a gain of $321 in the same period in 2023[106] - The company is party to a C$300,000 fixed-for-fixed cross-currency interest rate swap to hedge foreign currency exposure of its net investment in U.S. operations, recording a loss of $4,004 for Q1 2024[108] - The company is party to a C$400,000 cross-currency interest rate swap to hedge foreign currency exposure of its net investment in U.S. operations, recording a loss of $6,974 for Q1 2024[108] - The company has an interest rate cap agreement in the amount of C$390,000 for the period between January 15, 2024 and June 17, 2024[110] - The company has a long-term energy derivative contract with a notional quantity of 336,444 MW-hours at $25.15 per MW-hr, expiring in August 2030, to hedge price risk on expected future power generation sales[110] - Unrealized losses on energy derivative contracts and commodity contracts totaled$696 and $890, respectively, for Q1 2024[111] - Realized losses on energy derivative contracts totaled$2,293 for Q1 2024[111] - The company has CRRs with a notional quantity of 1,969,065 MW-hours at prices ranging from $0.84 to$19.06 per MW-hr to mitigate energy congestion charge volatility[108] - Accounts payable include confirmed invoices from designated suppliers of $67,230 as of March 31, 2024, compared to$62,173 as of December 31, 2023[112] - The company's supplier financing programs allow suppliers to voluntarily sell their receivables, with payment terms consistent with customary industry practice[112] - Certain comparative figures have been reclassified to conform to the unaudited interim condensed consolidated financial statement presentation adopted in the current period[113]