Algonquin Power & Utilities Corp (AQN) 2014 Q2 法說會逐字稿

Good day and welcome to the Algonquin Power and Utilities second-quarter 2014 analyst and investor call. Today's conference is being recorded. At this time I would like to turn the conference over to Ms. Kelly Castledine, please go ahead, ma'am.

Thank you. Good morning everyone. Thanks for joining us on our 2014 second-quarter conference call. With me on the call today are CEO, Ian Robertson, and David Bronicheski, our CFO. For your reference, additional information on the results is available for download from our website at www.algonquinpowerandutilities.com.

I'd like to note that in this call we will provide information that relates to future events and expected financial positions that should be considered forward-looking. I will provide additional details at the end of the call and I direct you to review our full disclosure on forward-looking information and non-GAAP financial measures in our results published yesterday, which are available on the quarterly results page of the investor center on our website.

This morning, Ian will discuss the highlights for the quarter. David will follow with a review of the financial results and then we will open the lines up for questions. I'd ask that you restrict your questions to two and then requeue if you have any additional questions to allow others the opportunity to participate. And now, over to Ian.

Thanks, Kelly, and good morning, everyone. Thanks for taking the time to listen into our call today.

I guess I'll start with what -- if I had to put a headline on the quarter it would be continued successful execution of our growth strategy evidenced by strong financial performance and growing dividends, and hopefully that headline puts into context what you've been able to read in our MD&A and our results. I think they really do demonstrate the continuing positive impacts of the initiatives which we have completed over the past few years. And we're optimistic that the work that's being done currently in 2014 in terms of growth initiatives will deliver similar results going forward for the coming years.

I think we understand that growth can be a source both of enthusiasm and angst for investors, but I'm hoping that people now start to see our lengthening track record of positive results as evidence of the proof of ability on both the APCo and Liberty Utility teams to successfully identify, complete, integrate, and now operate material growth initiatives.

The key takeaways I see from the quarter's results include CAD165 million of EBITDA on a year-to-date basis which represents a close to 40% increase over the first six months of last year. And perhaps most importantly for our investors, the per share results continue to show the upward trajectory that we have identified and tracked to. Our first solar project contributed a full quarter of production this year and I guess I'm pleased that the results are above our long-term forecasted averages, and we're expecting more than CAD6 million of continuing EBITDA from that facility. And lastly, during the quarter we entered into a settlement agreement in Arizona and Georgia which will provide for continuing revenue gains of close to $7 million.

The earnings and growth success has allowed the Board to approve approximately 12% increase in the dividend, and you'll note that its been declared as in US dollars $0.35 on an annualized basis. I think moving to declare our dividend in US dollars really it was intended to align with the profile of our US-based earnings and assets, but I would note that we are preserving an [efficient] mechanism for shareholders to elect to continue receiving their dividend in Canadian dollars, and those dividends would be converted at the Bank of Canada reported exchange rate on the record date.

Our planned trajectory of growth continues as we invest approximately CAD0.5 billion over the course of this year. On the APCo side there's CAD300 million of 2014 growth initiatives, which will increase our installed capacity, generating capacity by over 230 megawatts, and that includes 24 megawatts of wind in Quebec and another 25 megawatts of wind in Saskatchewan, and our next 26-megawatt solar project in California, all of which are currently under construction and tracking on time and on budget.

On the Liberty side, we are continuing to execute against a 2014 CapEx program for approximately CAD180 million, and we are pleased with the continuing progress against our compressed natural gas and liquid natural gas infrastructure in New England, including the development of our first gas liquefaction plant in Massachusetts.

Lastly, to ensure we don't waste a lot of time during the valuable question and answer period, I would like to provide a few comments on our recent involvements with Gas Natural, an Ohio based gas distribution facility. As everybody is probably aware we're always on the lookout for opportunities to create value. Over the first half of this year we reached out privately numerous times to discuss a potential acquisition of Gas Natural by Liberty Utilities with the last proposal of CAD13 per share.

Unfortunately, our interest in Gas Natural has now become the subject of public review. We do continue to believe that the proposed transaction would provide immediate and compelling value to and is in the best interest of all the Gas Natural shareholders. Unfortunately, most recently the Gas Natural Board chose to amend the company's code of regulations to increase the shareholder support threshold needed for a special meeting from 10% to now 25%, intentionally making it extraordinarily difficult for shareholders to express their opinions directly through a special meeting.

Needless to say we're frustrated by the Gas Natural's Board actions to further entrench themselves, in our view of the clear disregard they are demonstrating for maximizing shareholder value, and that's to the shareholders to whom we believe they owe a fiduciary duty. Given recent developments we are evaluating our options.

As you can appreciate we view the relatively small potential acquisition of Gas Natural as simply a nice to have opportunity when viewed against our more than CAD2 billion pipeline of identified growth opportunities. Since we've probably already spent more time on this matter during the call than it deserves I'll now turn things over to David to speak to the Q2 financial results. David?

Thanks, Ian and good morning, everyone. Overall, our adjusted EBITDA in the second quarter was CAD66.4 million, and that represents an 18% increase over the amount reported in the same quarter a year ago, and certainly we believe this is strong evidence of continued success in executing our ongoing growth strategy. In all our revenue in the quarter was CAD189.3 million, that compares to CAD148 million a year ago. Our adjusted EBITDA in the quarter was a strong CAD66.4 million, as compared to CAD56.4 million a year ago.

Just like to get into a little bit more detail about our results and our operating subsidiaries. I'll begin first with Algonquin Power Co. During the second quarter, in the renewable energy division overall the division experienced resources sufficient to generate electricity in line with expectations equal to 100% of long-term average projected resources, and that compares to 98% in the same period a year ago. We believe that the results demonstrate the value that our well diversified portfolio provides our shareholders with wind, hydro, and solar assets, basically providing significant diversification.

Net revenue which includes net energy sales and revenue from renewable energy credits totaled CAD39.4 million, that compares to CAD36.9 million in the same period a year ago, and the increase is primarily due to increased market pricing for renewable energy credits in Illinois and Pennsylvania. The operating profit for the second quarter was CAD39.9 million, and that compares favorably to CAD37.4 million during the same period a year ago.

In our thermal energy division with respect to the operating results there, they were above expectations for the quarter. They posted a profit of CAD3.4 million and that was ahead of the CAD1.9 million that we posted a year ago.

Moving on to Liberty Utilities. In the second quarter, Liberty Utilities reported an operating profit of $28 million, which is favorable against last year's $22.7 million. The increase in operating profit is primarily related to the contribution of our newly acquired New England Gas system and increased customer rates at Granite State Electric.

So I'll just go sort of coast to coast through Liberty Utilities beginning in the West, during the second quarter our water distribution, and wastewater treatment revenue was $10.2 million, compared to $9.9 million same period a year ago. It's relatively [anign], but the increased improved performance is due to an increase in rates at a few of the utilities there. Electricity sales for distribution revenue was $17.2 million, compared to $17.1 million in Q2 of 2013.

Moving into the central part of the US, in the second quarter the regions water distribution and wastewater treatment revenue was $4.9 million, and was higher than the $4.6 million that we recorded a year ago due to the addition of the Pine Bluff Water system.

Moving on to the East, net utility sales for both gas and electric totaled $38.5 million during the second quarter of 2014, compared to $22.3 million in the same period a year ago. The year-over-year increase coming from the acquisition of our New England Gas system, as well as increased distribution rates at Granite State Electric in the quarter.

And just before I turn things back over to Ian, just a short update on our financing activities. We note that subsequent to the end of the quarter on July 31, APCo increased the credit available under its senior unsecured credit facility to CAD350 million from the CAD200 million it had previously. This larger facility firmly positions APCo to be able to go over on its growth pipeline over the next four years.

So with that, I'll hand things back over to Ian.

Great, David thanks and appreciate that. Just before we open the lines up for questions, I think I will provide you a little bit of an update on some of the near-term growth and development initiatives we have underway since growth is a fundamental part of the shareholder return proposition that we're advancing.

As I'd mentioned earlier we're going to spend about CAD0.5 billion this year on growth, and it's divided approximately CAD300 million in APCo and approximately CAD200 million in Liberty Utilities. Within that APCo growth envelope we have three projects that are currently under construction right now. In St. Damase, Quebec we're in the midst of construction of our 24-megawatt wind generating station there. We have poured all of the turbine foundations have been constructed and construction and erection of the turbines is currently underway. We do expect that project to be in commercial operation in the first quarter of next year.

We are planning to submit a follow-up proposal for a second 100-megawatt phase of the St. Damase project into the current Hydro-Quebec request for proposals, and we believe that this first phase that's currently under construction will qualify as Canadian renewable and conservation expense, or CRCE as it's otherwise known, and the project therefore will be entitled to a refundable tax credit of approximately CAD16.5 million.

In the US, construction of our second solar generating station in Bakersfield, California is now underway. We did conclude a partnership arrangement with a third-party tax investor who will contribute approximately CAD22 million toward the total CAD58 million capital cost of the project. And in return, the tax investor will receive the majority of the tax attributes associated with the project which is expected to commence operations late this year or early next.

Lastly, construction at our 23-megawatt Morse Wind generating station in Saskatchewan commenced in the quarter with the signing of the turbine supply and balance of the plant's EPC agreements. And commencement of commercial operations of that project is expected to occur early next year.

Switching over to what's happening in the Liberty Utilities from a growth perspective. I think we are pleased that our regulatory affairs team has successfully achieved approval of rate increases at our Litchfield Park Water and Peach State Natural Gas Utilities, which represent more than CAD6.5 million of additional revenue. Additionally we are awaiting orders which are expected early next year regarding CAD12 million of currently filed rate case requests. And lastly, we recently filed rate cases for Pine Bluff Water and EnergyNorth Gas, which represent more than CAD18.5 million of additional revenue requirements. We have included a detailed table in our Q2 report for your review with the specifics of those rate cases.

Also during the quarter, Liberty was pleased to have completed an arrangement with the city of White Hall in Arkansas to acquire their water distribution and wastewater treatment utility assets. This tuck-in acquisition serves approximately 4,300 customers, and the total purchase price for the White Hall assets was approximately CAD4.5 million. We think that this model could serve as a great paradigm for small municipalities like White Hall to unlock capital, at the same time protecting their rate payers through a relationship with a locally focused utility operator like Liberty Utilities.

Just to sum up before we go to questions, we're well into our CAD0.5 billion 2014 capital program that we are confident will contribute to providing near-term accretive growth in the business and underpin further dividend growth and capital appreciation. These investments I will point out are part of a more than CAD2 billion pipeline of clearly identified growth opportunities which will allow us to continue to deliver growing value to our shareholders over the coming years.

And so with that, operator I'd like to open up the lines for our question and answer session.

(Operator Instructions)

Your first question comes from the line of Nelson Ng of RBC Capital Markets.

Great, thanks. Good morning everyone.

Hi, Nelson.

Good morning, Nelson.

Quick question on the acquisition side. Can you talk about any potential US wind acquisitions you're involved in and just provide any color you have on that?

Well when you say wind acquisitions, Nelson, are you thinking of development projects or operating projects?

Development projects. I think you've been kind of more involved on the late stage development side.

And I think that's a totally fair observation that we think the value for our shareholders is created through our participation in the development of projects rather than acquiring them once they're done.

I have mentioned a number of times during presentations that we are actively interested in finding a number of projects to participate in the current 2015 PTC, or production tax credit cycle, which at least is currently slated to come to a close December 31 of next year.

We have two projects that we're actively interested in. We haven't got to the stage where we are committed to those projects. They do represent a significant install capacity, close to 400 megawatts. But as I said, we think that it's a great way for us to add value by stepping in and participating in the development of these projects that are really quite near term, given the sunset on the production tax credits.

So yes, Nelson, we are actively pursuing some, and we're hoping to get something to the stage that we'll be announcing in relatively short order.

Okay, thanks. And then just switching to Canada, in terms of Amherst Island, did you get the REA yet, and if so is that currently being appealed?

As we've mentioned in the past, the timetable for approval of our renewable energy application by the Ministry of the Environment was sort of notionally came to a close based on their own timetables, the MOE timetables, on July 2. We are not in receipt of the reapplication approval yet, and so by definition, aren't in, it hasn't been appealed, though I think there's, given that the history of these, that's a reasonable expectation. Having said that, we are in continuing contact with the Ministry of the Environment. We understand we've answered all their questions, and we're hopeful that within the next six weeks we'll have the approved (inaudible).

Okay, thanks. I'll get back in the queue.

Thanks Nelson.

Your next question comes from the line of Rupert Merer of National Bank Financial.

Good morning, Rupert.

Can you talk a little more about the M&A market for regulated utilities? How do the multiples look on acquisitions today, have they evolved, and are you seeing discounts on the orphans today?

I think that it's not an unfair observation to say that the M&A market in the US is very robust right now and I think the valuations reflect that. Having said that, I think it's our perspective collectively that the cost of capital environment is really what is supporting and driving those valuations, as opposed to a kind of an unnatural act on behalf of the acquirer of those assets.

So I guess my first comment is that the valuations have not subsided from some of the valuation levels that have been evidenced by Laclede's acquisition of Alagasco and Missouri Gas Energy and Teco's acquisition of New Mexico Gas. So Rupert, the market remains strong, but as I said I think there's the underlying proposition for paying those kind of prices really is what's supported by the cost of capital in the current market.

With respect to the Liberty Utilities orphan strategy, fortunately or unfortunately, the value of an orphan if you will hasn't dropped, and I don't think -- or has continued to rise if you want to think of it that way. I think we were pleased to be able to have built a portfolio of about 0.5 million customers at relatively modest acquisition premiums, but that you can imagine that any utility who would be considering the sale of an orphan is looking at the prices that are being paid albeit for larger and perhaps fully standalone utilities and saying well gosh I'd really like to get that price.

So while we are continuing our dialogue with the sellers and potential sellers of orphan utilities, as I said I think it's probably fair to say that the prices that we were able to build a portfolio out of right now in the cycle are probably not achievable going forward.

Okay, thanks. And a quick follow-up, on St. Damase have you negotiated the final ownership structure with your partner on that project yet?

Yes, we have, and when you say our partner, our partner in St. Damase is actually the town of St. Damase. And the short answer is yes, we have all the partnership agreements signed and in fact held last quarter our groundbreaking with all of the town officials, so it's all steam ahead on that one, Rupert.

Okay that's a 50/50 partnership, is it?

It is a 50/50 partnership except that under the arrangement to the extent that the town is unable to fund their share of the 50/50, we are obviously willing and interested in making sure that we support the capital needs of our partner as well, which would perhaps increase our effective economic exposure to the project beyond the 50/50, but we are 50/50 partners.

Okay, great thank you.

Thanks, Rupert.

Your next question comes from the line of Matthew Akman of Scotia Bank.

Thank you good morning.

Good morning, Matthew.

Hi guys. Can you please update us on your plans for solar power in the West in two areas? One, of development of utility scale projects following what seems to be good progress at Bakersfield. And two, initiation of some type of retail/commercial business.

Yes, sure, Matthew. Obviously, those are in my opinion two very different undertakings if you want to think of it that way. We are committed to the utility scale solar sector as evidenced by Cornwall and Bakersfield and are continuing to hunt similar projects.

I think I've mentioned on previous calls that we are extremely bullish notwithstanding the DOJ's duty imposition on Chinese panels that the economics of solar continue to improve and the cost competitiveness of it increases, and therefore, as a generating source going forward, I think it is something that it very much behooves Algonquin to have a significant interest in and are continuing to find the follow on to Bakersfield.

I think the economics of distributed commercial and industrial solar, it's a really very different proposition obviously, it's much more retail notwithstanding the fact that it's C&I, or commercial and industrial. The projects tend to be smaller and while I think the returns tend to be larger, I think what Algonquin is in the midst of doing is really kind of developing its strategy on how to attack those marketplaces. And I think we look at with enthusiasm at some of the things that are happening to the prices of solar RECs in markets such as Massachusetts.

You're now able to execute a seven-year forward agreement for solar RECs in the CAD0.15 to CAD0.20 kilowatt hour basis, and that obviously has a material impact on the economics of a C&I solar facility. And so I guess in summary, Matthew, to answer your question, we are committed to the utility scale and still thinking about the distributed solar sector.

Okay, thanks for that. And also on the development front, there's been a lot of activity in the last quarter from a lot of companies on trying to figure out how to get more energy into the Northeast one way or another, and we are talking on the Emera call for example, about electricity transmission, small power, renewable, as well as gas pipeline. Now that you guys have utility out there, do you see yourself as in the mix on potential development opportunities in the Northeast to assist in ensuring that they take some peaks off some of the commodity prices, especially in extreme weather?

Thanks for that question. Yes to both your comments. I think I would suggest that with over 130,000 customers in the Northeast from natural gas that we very much see ourselves as having arguably a responsibility to make sure that we are obtaining that commodity at as a reasonable price as possible, and are very much interested in seeing can we facilitate the development of pipelines by bringing some capital to bear and potentially participating in some of those pipelines. So very much interested that longer-term solution.

In the nearer-term solution we've generally disclosed that we are in active development of a small scale LNG facility, so that liquefaction would be used specifically under long-term contract to the LDCs who populate the Northeast to help them shave the peaks off, and so it provides that temporal shift of gas from the lower price and higher availability period in the summer to obviously the tighter periods in the winter, and see that that would be a great way for us to participate in that.

So very much I think our interests are probably aligned with Emera's as we see great opportunity in the Northeast, and for us it's primarily focused on participating in the natural gas solution.

Great, thank you very much. Those are my questions.

Thanks, Matthew.

(Operator Instructions)

Your next question comes from the line of Sean Steuart of TD Securities.

Thanks, good morning everyone.

Hi, Sean.

Good morning, Sean.

Couple questions, further to one of the previous questions just with respect to interest in US utilities. You are rumored to be I guess a potential or interested bidder in Traverse City Light and Power, which would be a small scale acquisition. To the extent that you are looking for M&A opportunities in the states still on the utilities side, can you just speak to the scale of what the opportunity set looks like versus some of the opportunities you've moved on over the last few years?

Sure. I think the Traverse City opportunity, and it's really always unfortunate when kind of M&A discussions get into the public market or public domain long before there's really anything to speak of.

I think we look at something like Traverse City in the same way as we looked at the acquisition of the White Hall water and wastewater distribution system. I think it's a great way for us to participate in unlocking capital and value in smaller municipalities, arguably across the US. At the same time given the local and responsive approach that Liberty Utilities brings to managing its relationships with its customers, those utilities aren't turning over control and oversight of their assets to the big bad national utility.

So we actually have a fairly, we're fairly optimistic that the proposition will resonate with municipalities other than White Hall, and I will say that the pursuit of those opportunities -- we really look almost as much as organic growth. I think you'd probably agree, it's the acquisition of the White Hall utility at CAD4.5 million sort of hardly constitutes the strategic investment opportunity, but it is a nice way to increase the footprint in a particular state and add efficiencies and economies of scale to existing operations.

So I guess to be responsive to your question about scale, obviously, or maybe not so obviously, where our pursuit tends to be focused on the smaller utilities or municipalities who might be more capital constrained, but we do look at that activity as an organic growth activity rather than strategic M&A activity, and consequently are okay if you will with the smaller scale of those opportunities. I don't know if that's answers your question, Sean.

That helps for the context, thanks Ian. And then second question on the power side, can you guys speak to where you stand with respect to the Ontario RFQ for the coming procurement here?

Well, I guess in short while it's obviously in our backyard and we're keen on moving projects into that, I don't think we've actually committed to anything right now in terms of Ontario.

I think it's not an unfair observation to say that the development under the Ontario paradigm is an expensive proposition which has significant risks because of the requirement to complete the majority of your design even before you've gotten through the permitting process. And I think Amherst Island from everybody's perspective is just evidence of the all-in commitment you need to make to a project sort of before you have the certainty that the project's going to go ahead.

So while we obviously do want to support and participate our local jurisdiction, I will say that our enthusiasm in Ontario is certainly colored by I don't think an unfairly tough experience. But having said all that, I wouldn't want you to walk away and say that we should have discounted Ontario, but man if you look at the pipeline of opportunities we have in front of us right now, it's hard to say that we're starving for places to put capital and grow the business.

Fair point. Thanks, Ian.

Thanks, Sean.

Your next question comes from the line of Ben Pham of BMO Capital Markets.

Okay, thank you and good morning everybody.

Good morning, Ben.

I just want to go back to Sean's question on scale and on the acquisition and on the utility side. Are you finding that that scale, that CAD100 million and below, the pricing is a bit more rational than what you see on some of the larger-scale transactions that you've done in the past?

I would say that the pricing for almost any regulated utility asset has definitely increased from over the past three or four years. I think that's a totally fair observation.

I think it would be also fair to say though that the larger utilities have attracted a frothier and more robust process than the smaller ones, and consequently the prices are at the upper end of the range. But this is not to say that almost irrespective of size that the utilities aren't going for healthy valuations.

I will say though and what I was trying to allude to is that those valuations and you use the word rational sort of implying that there was irrationality, if you will, to some of the prices that are getting paid, and while I think you always have to be mindful of value accretion to shareholders. When you look at the proposition today in terms of the capital markets, the way the rating agencies are looking at the capital markets in the regulated utility space, you might look at an acquisition, and say oh, my god that price is irrational, but when you actually parse your way through the economics of it and the impacts from a credit metrics perspective and earnings per share perspective, you can actually understand the thesis behind it.

We obviously haven't to date participated in those kind of levels. I will say that we are at our Investor Day, we're pleased to rollout CAD1 billion pipeline over the next three or four years of growth on the utility side which is not founded on additional acquisitions going forward, so therefore the general commitments we make to grow our business around the 15% assets and EBITDA, and the 50% CAGR basis can continue to be met just with the pipeline of growth opportunities we have right now.

And I think we continue to keep our eyes open and we're obviously want to create shareholder value, and to the extent that an opportunity exists to do that in an acquisition that at a price that happens to be higher than what we've paid in the past, I don't think we would naturally just throw that opportunity out because it happens to be at a higher price. It's really all about creating shareholder value.

Okay, so you're more comfortable paying a bit of a higher premium to rate base than you have in the past because your cost of capital has also improved the last three or four years?

I don't think that's an unfair statement.

Great. And my second question is on the rate case front. Is there anything that we should be keeping an eye on beyond EnergyNorth as we head into 2015 over the next 12 months?

We have a table in the MD&A which sort of gives, sets out the forecast for these rate cases going forward. But having said that, I think that EnergyNorth rate case and the Pine Bluff Water rate case, it's pretty significant. We're talking I want to say close to CAD20 million, and I think given our success in Granite State and our recent success in concluding a rate case in Arizona, I'm hoping that the investment community get increasingly comfortable with the organization's ability to deliver on its results from a rate perspective, and that the proposition we're advancing for, as I said, it's kind of local and responsive utility relationships with regulators is actually paying dividends.

And so as we continue to move forward on all of the investment in all of our utilities, obviously rate cases are just a natural part of that Ben. But I'm hoping as I said people see it as us having a core competency in being able to achieve our reasonable outcomes in those processes.

Okay, great. Thanks again. That's it for me.

Thanks, Ben.

There are no further questions at this time. I would like to hand the call back over to Mr. Ian Robertson for closing remarks.

Thanks, everyone. Do appreciate you taking the time today, and we look forward to speaking to you next quarter. So I'd ask everybody to stay on the line for Kelly's always riveting disclaimer with respect to forward-looking information. Kelly take it away.

Certain written and oral statements contained in this call are forward-looking within the meaning of certain securities laws, and reflect the views of Algonquin Power & Utilities Corp with respect to future events, based upon assumptions relating to among others, the performance of the Company's assets and the business, financial, and regulatory climates in which it operates. These forward-looking statements include among others perspectives to the expected performance of the Company, its future plans, and its dividends to shareholders.

These forward-looking statements relate to future events and conditions; by their very nature they require us to make assumptions that involve inherent risks and uncertainties. We caution that although we believe our assumptions are reasonable (inaudible) these risks and uncertainties give rise to the possibility that our actual results may differ materially from the expectations set out in the forward-looking statements. Material risk factors include those presented in the Company's most recent annual and financial results, the annual information forms, and most recent quarterly Management discussion and analysis.

Given these risks, undue reliance should not be placed on these forward-looking statements. In addition such statements are made based on information available, and expectations as of the date of this call and such expectations may change after this date. (inaudible) material forward-looking information that is presented not much frequently than a quarterly basis. APIF is not obligated to nor does it intend to update or revise any forward-looking statements whether as a result of new information, future developments, or otherwise except as required by law.

With respect to non-GAAP financial measures, the terms adjusted net earnings, adjusted earnings before interest, taxes, depreciation, and amortization, or adjusted EBITDA, adjusted funds from operations per share, cash provided by adjusted funds from operation, per share cash provided by operating activities, net energy sales, and net utility sales, collectively the financial measures are used on this call and throughout the Company's financial disclosures. The financial measures are not recognized measures under Generally Accepted Accounting Principles, or GAAP. There is no standardized measure of these financial measures. Consequently, APIF's method of calculating these may differ from the methods used by other companies, and therefore may not be comparable to similar measures presented by other companies.

Calculation and analysis of the financial measures and a description of these non-GAAP financial measures can be found in the most recently published Management discussion and analysis available on our website and on www.SEDAR.com. Per share cash provided by operating activities is not a substitute measure of performance for earnings per share. Amounts represented by per share cash provided by operating activities do not represent amounts available for distribution to shareholders and should be considered in light of the various charges and claims against APUC. Thank you.

Ladies and gentlemen this concludes the conference call for today. We thank you for your participation. You may now disconnect your line and have a great day.