MONTREAL, Aug. 08, 2019 (GLOBE NEWSWIRE) -- Valener Inc. ("Valener") VNR VNR, the public investment vehicle in Énergir, L.P., today reported its 2019 third quarter results. The results of Énergir, L.P., Valener's primary investment, are also presented in this press release.
Update on the arrangement
On March 27, 2019, a definitive arrangement agreement (the "arrangement agreement") was signed wherein Noverco Inc., a private company and indirect controlling partner of Énergir, L.P. ("Noverco"), has committed to acquire all of Valener's issued and outstanding common shares and issued and outstanding Series A preferred shares (the "arrangement"). Since that date, the key events involving the arrangement were as follows:
- Suspension of the dividend reinvestment plan, as required by the arrangement agreement, on March 29, 2019;
- Approval by the Federal Energy Regulatory Commission on May 31, 2019;
- Special Meeting held on June 11, 2019 and during which Valener's common shareholders and Series A preferred shareholders approved the arrangement at over 90% of submitted votes;
- Final order approving the arrangement issued on June 14, 2019 by the Quebec Superior Court; and
- Public hearing before the Vermont Public Utility Commission ("VPUC") held on July 23, 2019. The decision might be issued in the coming weeks.
Detailed information about the arrangement is presented in the arrangement agreement and in the management information circular of Énergir Inc., in its capacity as a General Partner of Énergir, L.P., acting as manager of Valener Inc., dated April 24, 2019. These documents are available on SEDAR at www.sedar.com and on Valener's website at www.valener.com.
Summary of Valener's results
FINANCIAL HIGHLIGHTS
- Adjusted net loss (1), (2) of $1.2 million ($0.03 per common share) for the third quarter of fiscal 2019 compared to adjusted net income of $0.5 million ($0.01 per common share) in the third quarter of fiscal 2018;
- Adjusted net income (1), (2) of $60.7 million ($1.54 per common share) for 9M-2019 compared to $54.4 million ($1.39 per common share) in the same period of fiscal 2018. This growth stems mainly from a favourable regulatory timing difference in the Energy Distribution segment, which is expected to reverse by the end of fiscal 2019, and to a favourable exchange rate impact;
- Normalized operating cash flows (1) of $12.6 million ($0.32 per common share) in the third quarter of fiscal 2019 compared to the third quarter of fiscal 2018; and
- Normalized operating cash flows (1) of $39.3 million ($1.00 per common share) in 9M-2019, a year-over-year increase of 3.1% or $1.2 million ($0.02 per common share).
"Despite a higher loss and the typical seasonality of its investments, Valener had a good third quarter, generating normalized operating cash flows per common share of $0.32, which is a sufficient amount to cover a next dividend," said Pierre Monahan, Chairman of Valener's Board of Directors.
| (1) | Financial measures not defined by U.S. generally accepted accounting principles ("GAAP"). A reconciliation of non-GAAP financial measures is presented hereafter. |
| (2) | Adjusted net income (loss) attributable to common shareholders. |
| (in millions of dollars, unless otherwise indicated) | |||||||||||
| Q3-2019 | Q3-2018 | 9M-2019 | 9M-2018 | ||||||||
| Net income (loss) | (0.9 | ) | 1.7 | 62.3 | 51.1 | ||||||
| Net income (loss) attributable to common shareholders | (2.1 | ) | 0.5 | 58.8 | 47.6 | ||||||
| Per common share (in $) | (0.05 | ) | 0.01 | 1.50 | 1.22 | ||||||
| Adjusted net income (loss) attributable to common shareholders (1) | (1.2 | ) | 0.5 | 60.7 | 54.4 | ||||||
| Per common share (in $) (1) | (0.03 | ) | 0.01 | 1.54 | 1.39 | ||||||
| Normalized operating cash flows (1) | 12.6 | 12.8 | 39.3 | 38.1 | |||||||
| Per common share (in $) (1) | 0.32 | 0.33 | 1.00 | 0.98 | |||||||
| Distributions received from Énergir, L.P. | 15.0 | 15.0 | 44.8 | 44.8 | |||||||
| Distributions received from Beaupré Éole and Beaupré Éole 4 | 1.0 | 0.9 | 4.8 | 3.3 | |||||||
For the third quarter of fiscal 2019, Valener posted a $1.2 million adjusted net loss attributable to common shareholders, a $1.7 million decrease from $0.5 million in adjusted net income attributable to common shareholders in the third quarter of fiscal 2018. This decrease stems mainly from a decrease in the share in the adjusted net income of Énergir, L.P. As a result, for the third quarter of fiscal 2019, the adjusted net loss per common share was $0.03 per share, down $0.04 per share from the third quarter of fiscal 2018.
For the third quarter of fiscal 2019, the net loss attributable to common shareholders stood at $2.1 million compared to $0.5 million in net income for the third quarter of fiscal 2018. This decrease came from a $2.5 million decrease in the share in the net income of Énergir, L.P. combined with $0.6 million in arrangement-related costs.
Valener generated normalized operating cash flows of $12.6 million, a comparable result to that of the third quarter of fiscal 2018.
Seigneurie de Beaupré Wind Farms
During the third quarter of fiscal 2019, the SDB Wind Farms (3) generated a combined 254,428 MWh of electricity, a 5.4% year-over-year decrease explained by the favourable wind conditions in Q3-2018.
As a result, the SDB Wind Farms generated $20.7 million in operating cash flows for the third quarter of fiscal 2019, a $1.4 million or 7.3% year-over-year increase that came mainly from the receipt, in the third quarter of fiscal 2019, of revenues generated by favourable wind conditions in the second quarter of fiscal 2019.
Énergir, L.P.
FINANCIAL HIGHLIGHTS
- Adjusted net loss (1), (4) of $3.5 million ($0.02 per unit) for the third quarter of fiscal 2019, a $7.0 million decrease compared to adjusted net income of $3.5 million ($0.02 per unit) in the third quarter of fiscal 2018;
- Québec Energy Distribution ("QDA"): Net loss was $1.5 million higher during the third quarter of fiscal 2019 compared to the third quarter of fiscal 2018, mainly due to the parameters of the 2019 rate case, which projects a $3.8 million decrease in net income for the same period, partly offset by a favourable regulatory timing difference; and
| (3) | Seigneurie de Beaupré Wind Farms 2 and 3 General Partnership and Seigneurie de Beaupré Wind Farm 4 General Partnership (collectively, the "SDB Wind Farms"). |
| (4) | Adjusted net income attributable to Partners. |
- Vermont Energy Distribution: Net income was down $2.7 million during the third quarter of fiscal 2019 compared to the third quarter of fiscal 2018 as a result of the 2018 and 2019 rate case parameters of Green Mountain Power ("GMP") and to an unfavourable impact of US$1.6 million arising from the amortization of regulatory liabilities related to the U.S. tax reform (favourable impact of US$2.5 million for 9M-2019 will reverse by the end of fiscal 2019).
"The third-quarter results reflect the typical seasonality of Énergir's distribution activities as well as the QDA and GMP rate cases. That said, we expect the growth experienced in QDA's deliveries to help offset the unfavourable impact of the economic statements of the Canadian and Quebec governments last autumn" said Sophie Brochu, President and Chief Executive Officer of Énergir, L.P.
Énergir, L.P.'s segment results – Adjusted net income (loss) attributable to Partners (1)
| (in millions of dollars, unless otherwise indicated) | ||||||||||||||||||||||||||
| Segments | Q3-2019 | Q3-2018 | 9M-2019 | 9M-2018 | ||||||||||||||||||||||
| QDA | (8.3 | ) | (6.8 | ) | 177.1 | 173.9 | ||||||||||||||||||||
| Distribution in Vermont | 12.8 | 15.5 | 92.5 | 78.7 | ||||||||||||||||||||||
| Natural Gas Transportation | 5.0 | 4.5 | 20.9 | 15.5 | ||||||||||||||||||||||
| Electricity Production | (1.1 | ) | 2.4 | 0.3 | 4.4 | |||||||||||||||||||||
| Energy Services, Storage and Other | 2.1 | 1.9 | 8.4 | 5.7 | ||||||||||||||||||||||
| Corporate Affairs | (14.0 | ) | (14.0 | ) | (44.0 | ) | (40.2 | ) | ||||||||||||||||||
| Total | (3.5 | ) | 3.5 | 255.2 | 238.0 | |||||||||||||||||||||
| Basic and diluted weighted average number of units outstanding (in millions) | 171.8 | 171.8 | 171.8 | 171.8 | ||||||||||||||||||||||
| Basic and diluted per unit (in $) | (0.02 | ) | 0.02 | 1.49 | 1.39 | |||||||||||||||||||||
Net income attributable to the Partners of Énergir, L.P.
For the third quarter of fiscal 2019, Énergir, L.P.'s net loss attributable to Partners stood at $3.5 million compared to $5.3 million in net income attributable to Partners in the third quarter of fiscal 2018. This result is explained by the above-mentioned factors. Adjusted net loss (4) was $3.5 million for the third quarter of fiscal 2019, a decrease from $3.5 million in adjusted net income (4) for the third quarter of fiscal 2018, a result that is also explained by the above-mentioned factors.
QUEBEC ENERGY DISTRIBUTION
QDA generated an adjusted net loss of $8.3 million for the third quarter of fiscal 2019, a $1.5 million higher net loss than that of third quarter 2018. This higher loss was essentially due to:
- an unfavourable impact of various parameters in the 2019 rate case; and
- an unfavourable impact inherent to the November and December 2018 economic statements;
partly offset by:
- a favourable impact arising from an increase in normalized natural gas deliveries in the commercial and residential markets, which should help generate a share of overearnings that will, however, be less than the one realized in 2018; and
- a favourable regulatory timing difference that should reverse by the end of fiscal 2019.
ENERGY DISTRIBUTION IN VERMONT
Through GMP and VGS, the Vermont Energy Distribution segment generated adjusted net income attributable to Partners of $12.8 million for the third quarter of fiscal 2019, a $2.7 million decrease compared to the third quarter of fiscal 2018. This decrease was due to an unfavourable impact of US$1.6 million arising from the amortization of GMP's regulatory liabilities related to the U.S. tax reform (favourable impact of US$2.5 million in 9M-2019 that will reverse by the end of fiscal 2019).
The parameters of GMP's 2018 and 2019 rate cases provided for a US$5.1 million increase in net income for fiscal 2019 (US$1.3 million decrease for the third quarter of fiscal 2019), mainly explained by asset growth and a higher authorized rate of return.
GMP – Multiyear regulation plan
In May 2019, the VPUC approved most of GMP's proposal for its new multiyear regulation plan, setting the regulatory framework for three years while making some minor adjustments. This new plan helps GMP to balance the risk and volatility related to its operations and to benefit its customers. The approved plan provides for certain parameters, including adjustment mechanisms for electricity sales revenues and power supply costs, for sharing profits and losses with customers, for exogenous factors and for the continuation of the merger savings plan. The plan also provides for the smoothing of rates over three years, the setting of certain expenses including investments in property, plant and equipment, programs to facilitate innovative projects, and initiatives to counter adverse weather. The rate smoothing adjustor mechanism, based on a three-year forecast, is set at the beginning of the plan and fixes the target average rate increase over the term of the plan. Rate changes will, however, be subject to an annual filing and readjustment with the VPUC, based upon electricity sales revenues and power supply costs forecast updates and the rate of return on common equity indexing, among other items. The new plan will take effect starting October 1, 2019.
GMP – 2020 rate case
In June 2019, GMP filed with the VPUC its 2020 rate case established under the new multiyear regulation plan. In the rate case, GMP proposes a 2.92% increase to its base rate for fiscal 2020, in accordance with the rate smoothing adjustor, and it presents the calculations supporting this average rate increase which will also form the target for the fiscal 2021 and 2022 base rates. This increase reflects all the plan's conditions, including a 9.16% rate of return on common equity based upon the plan's indexing, and a 49.46% common equity ratio. The proposal also involves a rate base of US $1,622 million, up US$64.0 million from the 2019 rate case, due to investments made in property, plant and equipment, in solar farms, and in Transco. Finally, an amount of US$ 18.8 million to be returned to customers has been planned, as a result of the CVPS merger savings plan. A decision is expected in September such that rates will take effect as of October 1, 2019.
VGS – 2020 rate case
In February 2019, VGS filed a cost-of-service proposal for its 2020 fiscal year with the VPUC. The cost of service proposed by VGS provides for a 9.8% rate of return on common equity and a 50% common equity ratio. In its rate case, VGS is proposing an overall decrease in rates of 2.7%, which includes a 16.6% reduction in the rates related to the cost of natural gas and a 5.0% increase in distribution rates. VGS is also proposing to use a US$6.4 million portion of the amounts collected in the System Expansion and Reliability Fund (SERF) and proposing an average rate base of US$266.6 million, an increase of US$11.1 million. A decision is expected this autumn in time for the new rates to take effect as of November 1, 2019.
To see the financial report, click here.
Reconciliation of non-GAAP financial measures
For additional information on non-GAAP financial measures, refer to Valener's MD&A for the three-month and nine-month periods ended June 30, 2019 and 2018.
| Valener Reconciliation of normalized operating cash flows | |||||||||||||||
| (in millions of dollars) | Q3-2019 | Q3-2018 | 9M-2019 | 9M-2018 | |||||||||||
| Cash flows related to operating activities | 13.8 | 14.0 | 42.8 | 41.5 | |||||||||||
| Dividends to preferred shareholders | (1.2 | ) | (1.2 | ) | (3.5 | ) | (3.4 | ) | |||||||
| Normalized operating cash flows | 12.6 | 12.8 | 39.3 | 38.1 | |||||||||||
| Per common share (in $) | 0.32 | 0.33 | 1.00 | 0.98 | |||||||||||
| Valener Reconciliation of adjusted net income (loss) attributable to common shareholders | ||||||||||||||||||||||||||
| (in millions of dollars) | Q3-2019 | Q3-2018 | 9M-2019 | 9M-2018 | ||||||||||||||||||||||
| Net income (loss) | (0.9 | ) | 1.7 | 62.3 | 51.1 | |||||||||||||||||||||
| Arrangement costs (1) | 0.6 | — | 3.5 | — | ||||||||||||||||||||||
| Income taxes related to arrangement costs | (0.1 | ) | — | (0.9 | ) | — | ||||||||||||||||||||
| Share in Énergir, L.P.'s net income adjustments | — | (0.5 | ) | (4.7 | ) | 5.2 | ||||||||||||||||||||
| Income taxes on Énergir, L.P.'s net income adjustments | — | — | — | 0.2 | ||||||||||||||||||||||
| Deferred income taxes related to the outside-basis temporary difference on the interest in Énergir, L.P. | 0.4 | 0.5 | 4.0 | 1.4 | ||||||||||||||||||||||
| Cumulative dividends on Series A preferred shares | (1.2 | ) | (1.2 | ) | (3.5 | ) | (3.5 | ) | ||||||||||||||||||
| Adjusted net income (loss) attributable to common shareholders | (1.2 | ) | 0.5 | 60.7 | 54.4 | |||||||||||||||||||||
| Basic and diluted per common share (in $) | (0.03 | ) | 0.01 | 1.54 | 1.39 | |||||||||||||||||||||
| (1) For additional information, refer to Valener's MD&A for the nine-month period ended June 30, 2019. | ||||||||||||||||||||||||||
| Énergir, L.P. Reconciliation of adjusted net income (loss) attributable to Partners | |||||||||||||||||||
| (in millions of dollars, unless otherwise indicated) | Q3-2019 | ||||||||||||||||||
| Adjustments: | |||||||||||||||||||
| Segments | Net income (loss) attributable to Partners | Other gains | Adjusted net income (loss) attributable to Partners | ||||||||||||||||
| QDA | (8.3 | ) | — | (8.3 | ) | ||||||||||||||
| Distribution in Vermont | 12.8 | — | 12.8 | ||||||||||||||||
| Natural Gas Transportation | 5.0 | — | 5.0 | ||||||||||||||||
| Electricity Production | (1.1 | ) | — | (1.1 | ) | ||||||||||||||
| Energy Services, Storage and Other | 2.1 | — | 2.1 | ||||||||||||||||
| Corporate Affairs | (14.0 | ) | — | (14.0 | ) | ||||||||||||||
| Total | (3.5 | ) | — | (3.5 | ) | ||||||||||||||
| Basic and diluted weighted average number of units outstanding (in millions) | 171.8 | 171.8 | |||||||||||||||||
| Basic and diluted per unit (in $) | (0.02 | ) | (0.02 | ) | |||||||||||||||
| Énergir, L.P. Renconciliation of adjusted net income (loss) attributable to Partners | |||||||||||||||||||||||||||
| (in millions of dollars, unless | |||||||||||||||||||||||||||
| otherwise indicated) | 9M-2019 | ||||||||||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||
| Segments | Net income (loss) attributable to Partners | Impact of the U.S. tax reform (1) | Other gains | Adjusted net income (loss) attributable to Partners | |||||||||||||||||||||||
| QDA | 177.1 | — | — | 177.1 | |||||||||||||||||||||||
| Distribution in Vermont | 92.5 | — | — | 92.5 | |||||||||||||||||||||||
| Natural Gas Transportation | 37.1 | (16.2 | ) | — | 20.9 | ||||||||||||||||||||||
| Electricity Production | 0.3 | — | — | 0.3 | |||||||||||||||||||||||
| Energy Services, Storage and Other | 8.4 | — | — | 8.4 | |||||||||||||||||||||||
| Corporate Affairs | (44.0 | ) | — | — | (44.0 | ) | |||||||||||||||||||||
| Total | 271.4 | (16.2 | ) | — | 255.2 | ||||||||||||||||||||||
| Basic and diluted weighted average number of units outstanding (in millions) | 171.8 | 171.8 | |||||||||||||||||||||||||
| Basic and diluted per unit (in $) | 1.58 | 1.49 | |||||||||||||||||||||||||
| (1) For additional information, refer to Valener's MD&A for the three-month and nine-month period ended June 30, 2019 and for the fiscal year ended September 30, 2018. | |||||||||||||||||||||||||||
| Énergir, L.P. Reconciliation of adjusted net income (loss) attributable to Partners | |||||||||||||
| (in millions of dollars, unless otherwise indicated) | Q3-2018 | ||||||||||||
| Adjustments: | |||||||||||||
| Segments | Net income (loss) attributable to Partners | Impact of the U.S. tax reform (1) | Adjusted net income (loss) attributable to Partners | ||||||||||
| QDA | (6.8 | ) | — | (6.8 | ) | ||||||||
| Distribution in Vermont | 16.0 | (0.5 | ) | 15.5 | |||||||||
| Natural Gas Transportation | 4.5 | — | 4.5 | ||||||||||
| Electricity Production | 2.4 | — | 2.4 | ||||||||||
| Energy Services, Storage and Other | 1.9 | — | 1.9 | ||||||||||
| Corporate Affairs | (12.7 | ) | (1.3 | ) | (14.0 | ) | |||||||
| Total | 5.3 | (1.8 | ) | 3.5 | |||||||||
| Basic and diluted weighted average number of units outstanding (in millions) | 171.8 | 171.8 | |||||||||||
| Basic and diluted per unit (in $) | 0.03 | 0.02 | |||||||||||
| Énergir, L.P. Renconciliation of adjusted net income (loss) attributable to Partners | ||||||||||||||||||||||||||||
| (in millions of dollars, unless | ||||||||||||||||||||||||||||
| otherwise indicated) | 9M-2018 | |||||||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||
| Segments | Net income (loss) attributable to Partners | Impact of the U.S. tax reform (1) | Other gains (2) | Adjusted net income (loss) attributable to Partners | ||||||||||||||||||||||||
| QDA | 173.9 | — | — | 173.9 | ||||||||||||||||||||||||
| Distribution in Vermont | 72.7 | 6.0 | — | 78.7 | ||||||||||||||||||||||||
| Natural Gas Transportation | 18.1 | (2.6 | ) | — | 15.5 | |||||||||||||||||||||||
| Electricity Production | 4.4 | — | — | 4.4 | ||||||||||||||||||||||||
| Energy Services, Storage and Other | 10.1 | — | (4.4 | ) | 5.7 | |||||||||||||||||||||||
| Corporate Affairs | (59.2 | ) | 19.0 | — | (40.2 | ) | ||||||||||||||||||||||
| Total | 220.0 | 22.4 | (4.4 | ) | 238.0 | |||||||||||||||||||||||
| Basic and diluted weighted average number of units outstanding (in millions) | 171.8 | 171.8 | ||||||||||||||||||||||||||
| Basic and diluted per unit (in $) | 1.28 | 1.39 | ||||||||||||||||||||||||||
| (1) | For additional information, refer to Valener's MD&As for the nine-month period ended June 30, 2019 and for the fiscal year ended September 30, 2018. |
| (2) | In Q3-2018, Gaz Métro Plus realized a $4.4 million gain following the sale of its server hosting assets. For additional information, refer to Valener's MD&A for Q3-2018. |
Overview of Valener
Valener is a public company held entirely by its shareholders and serves as the investment vehicle in Énergir, L.P. Through its investment in Énergir, L.P., Valener offers its shareholders a solid investment in a diversified and largely regulated energy portfolio in Québec and Vermont. As a strategic partner, Valener, on the one hand, contributes to the growth of Énergir, L.P., and on the other, invests in wind power production in Québec alongside Énergir, L.P. Valener favours energy sources and uses that are innovative, clean, competitive and profitable. Valener's common and preferred shares are listed on the Toronto Stock Exchange under the "VNR" symbol for common shares and the "VNR.PR.A" symbol for Series A preferred shares. www.valener.com
Overview of Énergir
With more than $7 billion in assets, Énergir, L.P. is a diversified energy company whose mission is to meet the energy needs of some 520,000 customers and the communities it serves in an increasingly sustainable way. Énergir, L.P. is the largest natural gas distribution company in Québec; through its subsidiaries, it also generates electricity from wind power. In the United States, through its subsidiaries, the company operates in nearly fifteen states, where it produces electricity from hydraulic, wind and solar sources, in addition to being the leading electricity distributor and the sole natural gas distributor in Vermont. Énergir, L.P. values energy efficiency and invests both resources and efforts in innovative energy projects such as renewable natural gas and liquefied and compressed natural gas. Through its subsidiaries, it also offers a wide range of energy services. Énergir, L.P. strives to become the partner of choice for those seeking a better energy future. www.energir.com
Cautionary note regarding forward-looking statements
This press release may contain forward-looking information within the meaning of applicable securities laws. Such forward-looking information reflects the intentions, plans, expectations and opinions of the management of Énergir Inc., in its capacity as General Partner of Énergir, L.P., acting as manager of Valener ("the management of the manager"), and is based on information currently available to the management of the manager and assumptions about future events. Forward-looking statements can often be identified by words such as "plans," "expects," "estimates," "seeks," "targets," "forecasts," "intends," "anticipates" or "believes" or similar expressions, including the negative and conjugated forms of these words. Forward-looking statements involve known and unknown risks and uncertainties and other factors beyond the control of the management of the manager. A number of factors could cause the actual results of Valener or of Énergir, L.P. to differ significantly from historical results or current expectations, as described in the forward-looking statements, including but not limited to the general nature of the aforementioned, terms of decisions rendered by regulatory agencies, uncertainty that approvals will be obtained by Énergir, L.P. from regulatory agencies and interested parties to carry out all of its activities and the socio-economic risks associated with such activities, uncertainty related to the implementation of Québec's 2030 Energy Policy, the competitiveness of natural gas in relation to other energy sources in the context of fluctuating global oil prices, the reliability or costs of natural gas supply and electricity supply, the integrity of the natural gas and electricity distribution and transportation systems, the evolution and profitability of the SDB Wind Farms and other development projects, Valener's ability to generate sufficient cash to support its anticipated target annual dividend growth rate on its common shares, the ability to complete attractive acquisitions and the related financing and integration aspects, the ability to complete new development projects, the ability to secure future financing, general economic conditions, exchange rate and interest rate fluctuations, uncertainty surrounding the December 2017 U.S. tax reform commonly referred to as Tax Cuts and Jobs Act, the weather conditions and other factors described in section "A) Overview of Valener and Other" of Valener's MD&A for the quarter ended June 30, 2019, section "E) Risk Factors Relating to Valener," and section "R) Risk Factors Relating to Énergir, L.P." of Valener's MD&A for the fiscal year ended September 30, 2018 and in subsequent Valener quarterly MD&As that might address changes to these risks. Although the forward-looking statements contained in this press release are based on what the management of the manager believes to be reasonable assumptions, in particular assumptions that no unforeseen changes in the legislative and regulatory framework of energy markets in Québec and in the United States will occur; that the applications filed with various regulatory agencies will be approved as submitted; that natural gas prices will remain competitive; that the supply of natural gas and electricity will be maintained or will be available at competitive costs; that no significant event will occur outside the ordinary course of business, such as a natural disaster or any other type of calamity, a major service interruption, or a threat to cybersecurity (or cyberattack); that Énergir, L.P. can continue to distribute substantially all of its adjusted net income; that the SDB Wind Farms will be able to make distribution payments to their partners; that Valener will be able to generate sufficient cash to support its anticipated target annual dividend growth rate on its common shares; that Green Mountain Power Corporation will be able to continue achieving efficiency gains and synergies from the merger with Central Vermont Public Service Corporation; that Valener and Énergir, L.P. will be able to present their information in accordance with U.S. GAAP beyond 2023 or, after 2023, will adopt International Financial Reporting Standards ("IFRS") that permit the recognition of regulatory assets and liabilities; that liquidity needs for Énergir, L.P.'s development projects will be obtained through a combination of operating cash flows, borrowings on credit facilities, capital injections from partners, and issuances of debt securities; and that the subsidiaries will obtain the required authorizations and funds needed to finance their development projects. In addition to the other assumptions described in the Valener MD&A for the quarter ended June 30, 2019, the management of the manager cannot assure investors that actual results will be consistent with these forward-looking statements.
With respect to forward-looking statements and information about the outcome of the arrangement, Valener relied on certain assumptions that it considered reasonable at that time, including assumptions about the capacity of the parties to receive, in a timely fashion and under satisfactory terms, approval by the VPUC, and the capacity of the parties to meet, in a timely fashion, the other arrangement closing conditions, notably the absence of significant unfavourable impacts and other expectations and assumptions about the arrangement.
The inherent risks and uncertainties of the arrangement include an inability by Valener or Noverco to obtain the approvals required by the VPUC or to otherwise satisfy the conditions needed to complete the arrangement or to do so in a timely fashion. If the parties are unable to obtain approval or to otherwise satisfy the conditions needed to complete the arrangement, the arrangement might not be completed or might not be completed according to the proposed conditions. In addition, should the arrangement not be completed or not be completed in accordance with the proposed conditions, there is a risk that the arrangement announcement and the significant costs incurred by Valener to complete the arrangement could have an impact on Valener's operating results and general operations or have a significant unfavourable impact on its activities, financial position, and current and future business prospects. In addition, if Valener is unable to satisfy the terms and conditions of the arrangement agreement, it could, in certain instances, be required to indemnify Noverco, which could have a significant unfavourable impact on its financial position, operating results, and ability to finance growth prospects and current operations. Readers are informed that the preceding list of factors is not exhaustive. In particular, other specifics and a description of these factors and other factors are presented under "Risk Factors" in the management information circular dated April 24, 2019.
These forward-looking statements are made as of this date, and the management of the manager assumes no obligation to update or revise them to reflect new events or circumstances, except as required pursuant to applicable securities laws. These statements do not reflect the potential impact of any unusual item or any business combination or other transaction that may be announced or that may occur after the date hereof. Readers are cautioned to not place undue reliance on these forward-looking statements.
For additional information:
| Investors and Analysts | Media |
| Gabrielle Ricard | Catherine Houde |
| 514-598-3593 | Public Affairs and Communications |
| investors@valener.com | 1-866-598-3449 |
| Twitter: @Energir_ | |
| www.energir.com/en/about/media/news/ |
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