Algonquin Power & Utilities Corp. Common Shares

Thank you for standing by. This is the conference operator. Welcome to the Algonquin Power and Utilities Corp 2020 first quarter analyst and investor earnings call. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. Due to technical difficulties with the webcast today, we ask that you locate the slide presentation on the company's website and open the presentation to follow along. I would now like to turn the conference over to Christopher Jarrett, Vice Chair of Aldonquin Power and Utilities Corp. Please go ahead, Mr. Jarrett. Pardon me, seems that I need to locate the presenter's line. And it's my pleasure to introduce Mr. Christopher Jarrett, Vice Chair of Algonquin Power and Utilities. Please go ahead, Mr. Jarrett.

Good morning, everyone. Thanks for joining us this morning for our 2020 first quarter earnings conference call. And sorry about the slight delay getting started. As mentioned, my name is Chris Jarrett, and I'm the Vice Chair of Algonquin Power and Utilities Corp. And joining me on the call today are Ian Robertson, our Chief Executive Officer, and David Bronaczewski, our Chief Financial Officer. Also joining on the call and participating in his first quarterly earnings call is Arun Banskada, who joined our organization as president in February of this year. To accompany our earnings call today, we have a supplemental webcast presentation, which I hope you're able to access. from our website, algonquinpowerandutilities.com. Our audited financial statements and management discussion and analysis are also available on the website, as well as on CDAR and EDGAR. Before continuing the call, we would like to remind you that our discussion during the call will include certain forward-looking information, including but not limited to expectations regarding future earnings and capital expenditures, as well as potential impacts of COVID-19. We will also refer to certain non-GAAP financial measures, and at the end of this call, Amelia will read a legal notice regarding both forward-looking information and non-GAAP financial measures. Please also refer to our most recent MD&A for additional information. On this call this morning, Ian will start with a summary of the strategic achievements for Q1 2020, and Arun will speak about the impacts of COVID-19 on our operations. David will follow up with the Q1 financial highlights, and then Ian will conclude with some strategic outlook of the business and some concluding remarks. We then open the lines up for questions, and then as usual, I'd ask you to restrict your questions to two, and then re-queue if you have additional questions. And with that, I will turn things over to Ian to talk about Q1.

Thanks, Chris. And going back to old school, I'm going to be referencing slide four in that slide deck. I welcome everyone who's been able to take the time to join us today. But before I begin my formal remarks regarding the quarter, I did want to touch on what's likely on everyone's mind, which is how we're navigating through the impact of this COVID-19 pandemic. And so hopping to slide five. I'd point out that utilities such as we provide are an essential service, and they do play a unique role in maintaining the fabric of our society. People need to light and heat their homes and need drinking and sewer water services, and we provide these services to over 800,000 customers. It's a commitment we take incredibly seriously. We recognize that people are counting on us more than ever right now. While the majority of our customers continue to regularly pay their bills in a move to help lessen any potential financial hardship that the COVID-19 pandemic is causing for our customers, we've temporarily waived late payment charges, suspended collection activities, and delayed service disconnections for nonpayment of bills across our service territories. We have also recently made a $500,000 donation to support our communities during the COVID-19 pandemic, including our low-income individuals, food banks, and first responders. Additionally, we're helping our local COVID heroes by donating excess personal protective equipment, or PPE as it's referred, by donating already 5,000 masks, and we have plans for providing an additional 20,000 masks in the next few weeks. I was gratified to see how quickly our pre-existing business continuity plans were updated to address COVID specific issues and then rapidly executed in each of our key business units. The team swung into action as we seamlessly transitioned to a work from home model. The safety of our employees and customer remains our top priority. I'm grateful for how our employees have stepped up to ensure we continue to provide essential services in a safe manner. We now have approximately three quarters of our office and field employees either working from home or starting their day from home rather than the office. Out of our 2,500 employees, we're fortunate that we've only had two cases of COVID-19 within our ranks so far. And importantly, no further transmission to other employees due to our social distancing measures. We believe this is a testament to the rapid measures we took early on and our continuing commitment to social distancing protocols. For those who are not able to work remotely, we've implemented preventive measures to help keep them safe on the job. Arun's going to provide more commentary on the operational impacts that COVID-19 has had on our regulated services business. I might point out that at our renewable energy generation facilities, the nature of the business has actually naturally supported social distancing. With the lion's share of our business contracted with creditworthy counterparties, there's been essentially no COVID-19-related impact. Jumping to slide six. First, in terms of the financial results of the quarter, we do view the quarter's financial performance to be below our expectations, but it seems pretty straightforward to attribute the impact to mild winter weather in those service territories which do not yet benefit from volume normalizations. from the MD&A, you might have noted good news on this front with the pending significant expansion of decoupling mechanisms across a number of our service territories. Year over year, we reported Q1 2020 EBITDA of $242 million, which represents a 5% increase as compared to the same quarter in 2019. While Q1 2020 adjusted EPS of 19 cents was in line with last year, you'll hear from David that these warmer than normal winter weather conditions negatively affected our operations and caused our results to miss our budgetary expectations. Nonetheless, we remain confident in the resiliency of our business model. Long-lived assets, providing essential services, operating under business provisions which reduce economic volatility. This business model has consistently produced stable and growing financial results, and we remain highly confident in our plans to continue delivering strong returns to our shareholders. You'll also note that our Board has approved a 10% increase in the dividend, beginning with the Q2 dividend payable on July 15th of this year. This increase marks the 10th year of consistently increasing our dividends as well as demonstrates our collective confidence in the resiliency of our business model. Secondly, we made positive progress on our strategic initiatives. Q1 marks the first full quarter that includes St. Lawrence Gas and New Brunswick Gas into our operations. The transition as expected has been seamless. With respect to our acquisition of Ascendant, the parent company of Bermuda Electric Company, or Belco as we refer to it, the regulatory process continues to move forward. Even though Bermuda, like most countries in the world, have put in place public health measures to deal with COVID-19, the regulatory authority in Bermuda completed its public consultation on May 4th. We remain confident we will receive regulatory approval in the coming months. and are excited about our role in helping implement new renewable energy generation in the country. As for the purchase of American Water's New York assets, the transaction continues to progress as we filed a joint petition with the New York State Public Service Commission in February, and a procedural conference has been scheduled for early June. Later on in the call, I'm going to provide a quick update with respect to our major capital projects. All told, we are executing on our commitment to build the business and bring value to our shareholders. And with that, I'll pass things over to Arun for an update on the current operating environment for our regulated services group and the impact that COVID-19 has had on it. Arun?