Algonquin Power & Utilities (Algonquin Power & Utilities) Free Cash Flow

: $-397 Mil (TTM As of Dec. 2023)

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Algonquin Power & Utilities's total free cash flow for the months ended in Dec. 2023 was $-131 Mil. Its total free cash flow for the trailing twelve months (TTM) ended in Dec. 2023 was $-397 Mil.

Algonquin Power & Utilities's Free Cash Flow per Share for the months ended in Dec. 2023 was $-0.19. Its free cash flow per share for the trailing twelve months (TTM) ended in Dec. 2023 was $-0.57.

During the past 3 years, the average Free Cash Flow per Share Growth Rate was -6.70% per year. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Free Cash Flow Growth Rate using Free Cash Flow per Share data.

During the past 13 years, Algonquin Power & Utilities's highest 3-Year average Free Cash Flow per Share Growth Rate was 171.40% per year. The lowest was -71.40% per year. And the median was -6.70% per year.

Algonquin Power & Utilities Free Cash Flow Historical Data

The historical data trend for Algonquin Power & Utilities's Free Cash Flow can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Algonquin Power & Utilities Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Free Cash Flow

29.93

-280.81

-1,187.58

-469.93

-398.14

Algonquin Power & Utilities Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Free Cash Flow																22.80	-135.53	16.20	-146.46	-131.39

Algonquin Power & Utilities Free Cash Flow Calculation

Free Cash Flow is considered one of the most important parameters to measure a company's earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year's Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.

Algonquin Power & Utilities's Free Cash Flow for the fiscal year that ended in Dec. 2023 is calculated as

Free Cash Flow (A: Dec. 2023 )	=	Cash Flow from Operations	+	Capital Expenditure
	=	628.034	+	-1026.171
	=	-398

Algonquin Power & Utilities's Free Cash Flow for the quarter that ended in Dec. 2023 is calculated as

Free Cash Flow (Q: Dec. 2023 )	=	Cash Flow from Operations	+	Capital Expenditure
	=	200.73	+	-332.124
	=	-131

Free Cash Flow for the trailing twelve months (TTM) ended in Dec. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $-397 Mil.

Algonquin Power & Utilities (NYSE:AQN) Free Cash Flow Explanation

Free Cash Flow is very close to Warren Buffett's definition of Owner's Earnings, except that in Warren Buffett's Owner's Earnings, the spending for Property, Plant, and Equipment is only for maintenance (replacement), while in the Free Cash Flow calculation, the cost of new Property, Plant, and Equipment due to business expansion is also deducted. There, Free Cash Flow is more conservative than Owner's Earnings.

In Don Yacktman's calculation of forward rate of return, he uses Free Cash Flow for the calculation. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation.

This is what Yacktman said in his March 2012 interview - when the S&P 500 was at 1400:

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over seven years. The reason we use seven years is because research shows that seven years is the length of the typical business cycle.

Therefore, as of Dec23, Algonquin Power & Utilities's Forward Rate of Return (Yacktman) % is

Forward Rate of Return (Yacktman) % (Dec23)	=	Normalized Free Cash Flow	/	Price	+	5-Year EBITDA Growth Rate
	=	-0.6712381	/	6.32	+	-0.173
	=	-27.92 %

Be Aware

Free Cash Flow within a report period can be affected by management's decisions of capital spending. Therefore, it is important to look at long term when it comes to Free Cash Flow.

Algonquin Power & Utilities Free Cash Flow Related Terms

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Algonquin Power & Utilities (Algonquin Power & Utilities) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Independent Power Producers » Algonquin Power & Utilities Corp (NYSE:AQN) » Definitions » Free Cash Flow

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Traded in Other Exchanges

AQNU:USA AGQPF.PFD:USA 751:Germany AQN.PR.D.PFD:Canada AQN.PR.A.PFD:Canada AQN:Canada

Address

354 Davis Road, Oakville, ON, CAN, L6J 2X1

Website

https://www.algonquinpower.com

Algonquin Power & Utilities Corp, a parent company of Liberty, is a diversified international generation, transmission, and distribution utility with over $16 billion of total assets. Through its two business groups, the Regulated Services Group and the Renewable Energy Group, AQN is committed to providing safe, secure, reliable, cost-effective, and sustainable energy and water solutions through its portfolio of electric generation, transmission, and distribution utility investments to over one million customer connections, largely in the United States and Canada. AQN provides renewable energy through its portfolio of long-term contracted wind, solar, and hydroelectric generating facilities.