Algonquin Power & Utilities Corp T.AQN

For those that don’t understand accounting- dividend

[CANCDN]

I rarely post on Stockhouse, but thought I would educate those who don't understand financial statements. 

Operating cash flows INCLUDE depreciation. For example, if you make 200 million and have 100 million of depreciation, your operating cash flow is 100 million. If your dividend payout is 100 million, you would think your payout is 100%. But this is so wrong.

The MOST important metric for asset heavy industries like Reits and Utilties is Adjusted Funds from Operations (AFFO).

The example above, the AFFO would be about 200 million because DEPRECIATION is an accounting expense to LOWER taxes, but doesn't remove a CENT from the bank. You still have 200 million in cash in the bank. 

if you think AQN is going to cut when the payout of actual AFFO is 55%, then keep selling.

[RayDonovan78]

I am not a accountant nor a CFO but I have been an investor for over 30 years, the writing is on the wall. The dividend will be cut it only a matter of time and when it happens AQN will go sub $10. Then I may take a gamble as a long term hold.

[CANCDN]

Good thing your not an accountant because you don't understand that depreciation on operating cash flows doesn't actually cost you anything. It is regaining the value from an intial capital investment. Zero cash is lost when you record depreciation on operating cash flows. That 80+ million that was deducted from 'operating cash flows' is still sitting in the bank. Want to know

[CANCDN]

For example for the board and all the shorts and those trying to get cheaper shares... if you own a busienss and you invest 100 dollars into capital plant or equipment. Let's use a truck as an example.  when your accountant does his work, he takes your cash flows and then subtract a government mandated depreciation amount on that truck annually. Let's say 30% a year (for a truck

[CANCDN]

I was just made aware of a simpler explanation. Depreciation is an expense, but that expense was paid up front when you invest in capital plant or equipment. So you previously paid thsi expense (potentially years and year even decades ago).  so to explain for the '30 yr investors' NO CASH leaves the bank for a depreciation expense that is removed from operating cash flows...