ALGONQUIN POWER & UTILITIES CORP. (Form: 6-K, Received: 09/07/2018 17:17:20)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

Date: September 7 , 2018

Commission File Number: 001-37946

Algonquin Power & Utilities Corp.

(Translation of registrant’s name into English)

354 Davis Road

Oakville, Ontario, L6J 2X1, Canada

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☐ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

Indicate by check mark whether by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ☐ No ☐

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

INCORPORATION BY REFERENCE

This Report on Form 6-K is hereby incorporated by reference into each of the following Registration Statements of Algonquin Power & Utilities Corp.: (i) Forms S-8, File Nos. 333-177418, 333-213648, 333-213650 and 333-218810, (ii) Form F-1, File No. 333-216616, and (ii) Form F-3, File No. 333-220059.

EXHIBIT INDEX

The following exhibits are filed as part of this Form 6-K:

Exhibit		Description

99.1		Information Statement

99.2		Schedule A – Consolidated condensed unaudited interim financial statements of Atlantica Yield plc as of June 30, 2018 and December 31, 2017 and for the six-month periods ended June 30, 2018 and 2017

99.3		Schedule B – Audited consolidated financial statements of Atlantica as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015 (incorporated by reference to Exhibit 99.1 to Algonquin’s Current Report on Form 6-K filed on April 16, 2018).

99.4		Schedule C – Unaudited pro forma consolidated financial statements, including the foreword and the notes thereto, as at and for the year ended December 31, 2017 and as at and for the six months ended June 30, 2018.

99.5		Auditor’s Consent

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ALGONQUIN POWER & UTILITIES CORP.
	(registrant)


Date: September 7, 2018	By:	/s/ David Bronicheski
	Name: David Bronicheski
	Title: Chief Financial Officer

ALGONQUIN POWER & UTILITIES CORP.

INFORMATION STATEMENT

EXPECTED ACQUISITION OF AN ADDITIONAL

EQUITY INTEREST IN ATLANTICA YIELD PLC

September 7, 2018

INFORMATION CONTAINED IN THIS INFORMATION STATEMENT

General Information

This information statement (the “ Informat ion Statement ”) has been filed with the securities regulatory authorities in each of the provinces of Canada by Algonquin Power & Utilities Corp. (“ Algonquin ”, or, the “ Corporation ”) and contains supplemental information regarding the proposed acquisition (the “ Additional Atlantica Investment ”) by the Corporation of an additional approximately 16.5% equity interest in Atlantica Yield plc (“ Atlantica ”), a company whose ordinary shares are listed on the NASDAQ Global Select Market (“ NASDAQ ”) under the symbol “AY”. Th is Informat ion Statement, includ ing the pro forma financ ial informat ion contained here in, is for informat ional purposes only, and supplements the descr iption of the Additional Atlantica Investment pro vided in the Corporation’s management discussion and analysis for the three and six months ended June 30, 2018 filed on SEDAR on August 9, 2018.

Caution Regarding Forward-Looking Information

This Information Statement may contain statements that constitute “forward-looking information” within the meaning of applicable securities laws in each of the provinces of Canada and the respective policies, regulations and rules under such laws and “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 (collectively, “ forward-looking information ”) concerning anticipated future events, results, circumstances, performance or expectations with respect to the Corporation, including information and statements regarding the expected timing for completion of the Additional Atlantica Investment and Algonquin’s plans following closing of the Additional Atlantica Investment. These statements are based on factors or assumptions that were applied in drawing a conclusion or making a forecast or projection, including assumptions based on historical trends, current conditions and expected future developments. Since forward-looking information relates to future events and conditions, by their very nature they require making assumptions and involve inherent risks and uncertainties. The Corporation cautions that although it is believed that the assumptions are reasonable in the circumstances, these risks and uncertainties give rise to the possibility that actual results may differ materially from the expectations set out in the forward-looking information. Material risk factors include those set out in the Corporation’s annual information form for the year ended December 31, 2017 and the Corporation’s most recent management discussion and analysis. Given these risks, undue reliance should not be placed on the forward-looking information, which applies only as of its date. Other than as specifically required by law, the Corporation undertakes no obligation to update any forward-looking information or statements to reflect new information, subsequent or otherwise.

THE ADDITIONAL ATLANTICA INVESTMENT

Overview of the Additional Atlantica Investment

On April 17, 2018, Algonquin entered into an agreement with Abengoa to purchase the Additional Atlantica Investment, subject to certain governmental approvals and other closing conditions. The total purchase price for the Additional Atlantica Investment is approximately US$345 million, based on a price of US$20.90 per ordinary share of Atlantica. As a result of the Additional Atlantica Investment and the 25% equity interest in Atlantica acquired by Algonquin on March 9, 2018, following the closing of the Additional Atlantica Investment Algonquin expects to hold an approximately 41.5% equity interest in Atlantica. The Additional Atlantica Investment is expected to close in the second half of 2018.

The Corporation has no current plans for material changes in its business affairs or the affairs of Atlantica following closing of the Additional Atlantica Investment which may have a significant effect on the results of operations and financial position of the Corporation.

The Additional Atlantica Investment is not with an “informed person” (as such term is defined in Section 1.1 of National Instrument 51-102 – Continuous Disclosure Obligations ), associate or affiliate of the Corporation.

Nature of Atlantica’s Business

Atlantica is a total return company based in the United Kingdom that owns, manages and acquires renewable energy, efficient natural gas power, electric transmission lines and water assets, focused on North America (the United States and Mexico), South America (Peru, Chile and Uruguay) and EMEA (Spain, Algeria and South Africa).

According to Atlantica’s quarterly report for the six-month period ended June 30, 2018 filed with the U.S. Securities and Exchange Commission on August 6, 2018, Atlantica owned or had interests in 22 assets, comprising 1,446 MW of renewable energy generation, 300 MW of efficient natural gas power generation, 10.5 M ft ³ per day of water desalination and 1,099 miles of electric transmission lines. All of Atlantica’s assets have contracted revenues (regulated revenues in the case of Atlantica’s Spanish assets) with low-risk off-takers and collectively have a weighted average remaining contract life of approximately 19 years as of December 31, 2017.

Financing the Additional Atlantica Investment

On April 17, 2018, concurrently with the announcement of the proposed Additional Atlantica Investment , Algonquin also announced that it had entered into an agreement with certain institutional investors under which the investors agreed to buy, and Algonquin agreed to issue and sell, approximately 37.5 million common shares in the capital of Algonquin (“ Common Shares ”) at a price of C$11.85 per Common Share for gross proceeds of approximately C$445 million (the “ Offering ”). On April 24, 2018, Algonquin closed the Offering. The net proceeds from the Offering were expected to be used, in part, to finance the Additional Atlantica Investment .

The purchase price of the Additional Atlantica Investment is expected to be financed at the closing of the Additional Atlantica Investment with a combination of cash on hand and drawing from one or more of Algonquin’s existing credit facilities .

FINANCIAL STATEMENTS

The following financial statements are attached this Information Statement as Schedule “A”, Schedule “B” and Schedule “C”, respectively, and form part of this Information Statement:

(a)

the consolidated condensed unaudited interim financial statements of Atlantica as of June 30, 2018 and December 31, 2017 and for the six-month periods ended June 30, 2018 and 2017, including the related notes thereto;

(b)

the audited consolidated financial statements of Atlantica as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015, together with the notes thereto and the auditors’ report thereon; and

(c)

the unaudited pro forma consolidated financial statements, including the foreword and the notes thereto, as at and for the year ended December 31, 2017 and as at and for the six months ended June 30, 2018.

Exhibit 99.2

Consolidated condensed statements of financial position as of June 30, 2018 and December 31, 2017

Amounts in thousands of U.S. dollars

			As of June 30,		As of December 31,
	Note (1)		2018		2017
Assets
Non-current assets
Contracted concessional assets		6		8,736,368		9,084,270
Investments carried under the equity method		7		53,002		55,784
Financial investments		8&9		51,589		45,242
Deferred tax assets				165,182		165,136

Total non-current assets				9,006,141		9,350,432

Current assets
Inventories				18,534		17,933
Clients and other receivables		12		260,241		244,449
Financial investments		8		215,148		210,138
Cash and cash equivalents				657,212		669,387

Total current assets				1,151,135		1,141,907

Total assets				10,157,276		10,492,339

(1)	Notes 1 to 22 are an integral part of the consolidated condensed interim financial statements.

Consolidated condensed statements of financial position as of June 30, 2018 and December 31, 2017

Amounts in thousands of U.S. dollars

			As of June 30,			As of December 31,
	Note (1)		2018			2017
Equity and liabilities
Equity attributable to the Company
Share capital		13		10,022			10,022
Parent company reserves		13		2,100,092			2,163,229
Other reserves				91,935			80,968
Accumulated currency translation differences				(51,158	)		(18,147	)
Retained earnings		13		(416,767	)		(477,214	)
Non-controlling interest		13		130,110			136,595

Total equity				1,864,234			1,895,453

Non-current liabilities
Long-term corporate debt		14		624,163			574,176
Long-term project debt		15		4,956,811			5,228,917
Grants and other liabilities		16		1,662,379			1,636,060
Related parties		11		80,300			141,031
Derivative liabilities		9		285,985			329,731
Deferred tax liabilities				225,171			186,583

Total non-current liabilities				7,834,809			8,096,498

Current liabilities
Short-term corporate debt		14		14,878			68,907
Short-term project debt		15		262,009			246,291
Trade payables and other current liabilities		17		153,917			155,144
Income and other tax payables				27,429			30,046

Total current liabilities				458,233			500,388

Total equity and liabilities				10,157,276			10,492,339

(1)	Notes 1 to 22 are an integral part of the consolidated condensed interim financial statements.

Consolidated condensed income statements for the six-month periods ended June 30, 2018 and 2017

Amounts in thousands of U.S. dollars

	Note (1)		For the six-month period ended June 30,
			2018			2017
Revenue		4		513,113			483,215
Other operating income		20		85,058			40,313
Raw materials and consumables used				(7,274	)		(7,140	)
Employee benefit expenses				(10,315	)		(8,259	)
Depreciation, amortization, and impairment charges		4		(160,297	)		(155,711	)
Other operating expenses		20		(141,226	)		(128,785	)

Operating profit				279,059			223,633

Financial income		19		36,871			488
Financial expense		19		(206,106	)		(202,696	)
Net exchange differences				1,148			(2,963	)
Other financial income/(expense), net		19		(9,687	)		6,487

Financial expense, net				(177,774	)		(198,684	)

Share of profit/(loss) of associates carried under the equity method				2,909			2,076

Profit/(loss) before income tax				104,194			27,025

Income tax		18		(31,019	)		(12,848	)

Profit/(loss) for the period				73,175			14,177

Loss/(profit) attributable to non-controlling interests				(5,825	)		(1,564	)

Profit/(loss) for the period attributable to the Company				67,350			12,613

Weighted average number of ordinary shares outstanding (thousands)		21		100,217			100,217

Basic earnings per share (U.S. dollar per share)		21		0.67			0.13

(1)	Notes 1 to 22 are an integral part of the consolidated condensed interim financial statements.

Consolidated condensed statements of comprehensive income for the six-month periods ended June 30, 2018 and 2017

Amounts in thousands of U.S. dollars

	For the six-month period ended June 30,
	2018			2017
Profit/(loss) for the period		73,175			14,177
Items that may be subject to transfer to income statement
Change in fair value of cash flow hedges		(9,190	)		(11,093	)
Currency translation differences		(36,336	)		79,754
Tax effect		(848	)		1,877

Net income/(expenses) recognized directly in equity		(46,374	)		70,538

Cash flow hedges		33,899			34,265
Tax effect		(8,475	)		(10,279	)

Transfers to income statement		25,424			23,986

Other comprehensive income/(loss)		(20,950	)		94,524

Total comprehensive income/(loss) for the period		52,225			108,701

Total comprehensive (income)/loss attributable to non-controlling interest		(3,336	)		(9,199	)

Total comprehensive income/(loss) attributable to the Company		48,889			99,502

Consolidated condensed statements of changes in equity for the six-month periods ended June 30, 2018 and 2017

Amounts in thousands of U.S. dollars

	Share Capital		Parent company reserves			Other reserves			Retained earnings			Accumulated currency translation differences			Total equity attributable to the Company			Non- controlling interest			Total equity
Balance as of January 1, 2017		10,022		2,268,457			52,797			(365,410	)		(133,150	)		1,832,716			126,395			1,959,111

Profit/(loss) for the six-month period after taxes		—		—			—			12,613			—			12,613			1,564			14,177
Change in fair value of cash flow hedges		—		—			22,179			—			—			22,179			993			23,172
Currency translation differences		—		—			—			—			72,904			72,904			6,850			79,754
Tax effect		—		—			(8,194	)		—			—			(8,194	)		(208	)		(8,402	)
Other comprehensive income		—		—			13,985			—			72,904			86,889			7,635			94,524

Total comprehensive income		—		—			13,985			12,613			72,904			99,502			9,199			108,701

Dividend distribution		—		(50,109	)		—			—			—			(50,109	)		(4,573	)		(54,682	)

Balance as of June 30, 2017		10,022		2,218,348			66,782			(352,797	)		(60,246	)		1,882,109			131,021			2,013,130

	Share Capital		Parent company reserves			Other reserves			Retained earnings			Accumulated currency translation differences			Total equity attributable to the Company			Non- controlling interest			Total equity
Balance as of December 31, 2017		10,022		2,163,229			80,968			(477,214	)		(18,147	)		1,758,858			136,595			1,895,453

Application of new accounting standards (See Note 2)		—		—			1,326			(11,812	)		—			(10,486	)		—			(10,486	)

Balance as of January 1, 2018		10,022		2,163,229			82,294			(489,026	)		(18,147	)		1,748,372			136,595			1,884,967

Profit/(loss) for the six-month period after taxes		—		—			—			67,350			—			67,350			5,825			73,175
Change in fair value of cash flow hedges		—		—			17,009			6,517			—			23,526			1,183			24,709
Currency translation differences		—		—			—			—			(33,011	)		(33,011	)		(3,325	)		(36,336	)
Tax effect		—		—			(7,368	)		(1,608	)		—			(8,976	)		(347	)		(9,323	)
Other comprehensive income		—		—			9,641			4,909			(33,011	)		(18,461	)		(2,489	)		(20,950	)

Total comprehensive income		—		—			9,641			72,259			(33,011	)		48,889			3,336			52,225

Dividend distribution		—		(63,137	)		—			—			—			(63,137	)		(9,821	)		(72,958	)

Balance as of June 30, 2018		10,022		2,100,092			91,935			(416,767	)		(51,158	)		1,734,124			130,110			1,864,234

Notes 1 to 22 are an integral part of the consolidated condensed interim financial statements.

Consolidated condensed cash flow statements for the six-month periods ended June 30, 2018 and 2017

Amounts in thousands of U.S. dollars

	For the six-month period ended June 30,
	2018			2017
I. Profit/(loss) for the period		73,175			14,177
Financial expense and non-monetary adjustments		297,862			339,761

II. Profit for the period adjusted by financial expense and non-monetary adjustments		371,037			353,938

III. Variations in working capital		(47,227	)		(79,967	)

Net interest and income tax paid		(160,604	)		(169,691	)

A. Net cash provided by operating activities		163,206			104,280

Investment in contracted concessional assets*		62,690			(2,694	)
Other non-current assets/liabilities		(11,362	)		(2,568	)
Acquisitions of subsidiaries		(9,327	)		-
Other investments		2,521			24,675

B. Net cash provided by/(used in) investing activities		44,522			19,413

Proceeds from Project & Corporate debt		73,767			284,675
Repayment of Project & Corporate debt		(211,441	)		(366,050	)
Dividends paid to company´s shareholders		(69,924	)		(42,327	)

C. Net cash provided by/(used in) financing activities		(207,598	)		(123,702	)

Net increase/(decrease) in cash and cash equivalents		130			(9	)

Cash and cash equivalents at beginning of the period		669,387			594,811

Translation differences in cash or cash equivalent		(12,305	)		19,510

Cash and cash equivalents at end of the period		657,212			614,312

* Includes proceeds for $60.8 million (see Note 6).

Notes to the consolidated condensed interim financial statements

Note 1.- Nature of the business	9

Note 2.- Basis of preparation	12

Note 3.- Financial risk management	18

Note 4.- Financial information by segment	18

Note 5.- Changes in the scope of the consolidated condensed interim financial statements	23

Note 6.- Contracted concessional assets	23

Note 7.- Investments carried under the equity method	24

Note 8.- Financial Investments	24

Note 9.- Derivative financial instruments	25

Note 10.- Fair Value of financial instruments	25

Note 11.- Related parties	26

Note 12.- Clients and other receivable	27

Note 13.- Equity	27

Note 14.- Corporate debt	28

Note 15.- Project debt	29

Note 16.- Grants and other liabilities	30

Note 17.-Trade payables and other current liabilities	31

Note 18.- Income tax	31

Note 19.- Financial income and expenses	32

Note 20.- Other operating income and expenses	33

Note 21.- Earnings per share	33

Note 22.- Subsequent events	33

Note 1. - Nature of the business

Atlantica Yield plc (“Atlantica” or the “Company”) was incorporated in England and Wales as a private limited company on December 17, 2013 under the name Abengoa Yield Limited. On March 19, 2014, the Company was re-registered as a public limited company, under the name Abengoa Yield plc. On May 13, 2016, the change of the Company´s registered name to Atlantica Yield plc was filed with the Registrar of Companies in the United Kingdom.

Atlantica is a total return company that owns, manages and acquires renewable energy, efficient natural gas, electric transmission lines and water assets focused on North America (the United States and Mexico), South America (Peru, Chile and Uruguay) and EMEA (Spain, Algeria and South Africa).

On March 9, 2018, Algonquin Power & Utilities (“Algonquin”) announced that it completed the acquisition from Abengoa S.A, (“Abengoa”) of a 25% equity interest in Atlantica, becoming the largest shareholder of the Company. Algonquin does not consolidate the Company in its consolidated financial statements.

On June 18, 2014, Atlantica closed its initial public offering issuing 24,850,000 ordinary shares. The shares were offered at a price of $29 per share, resulting in gross proceeds to the Company of $720,650 thousand. The underwriters further purchased 3,727,500 additional shares from the selling shareholder, a subsidiary wholly owned by Abengoa, at the public offering price less fees and commissions to cover over-allotments (“greenshoe”) driving the total proceeds of the offering to $828,748 thousand.

Prior to the consummation of this offering, Abengoa contributed, through a series of transactions, which we refer to collectively as the “Asset Transfer,” ten concessional assets described below, certain holding companies and a preferred equity investment in Abengoa Concessoes Brasil Holding (“ACBH”). As consideration for the Asset Transfer, Abengoa received a 64.28% interest in Atlantica and $655.3 million in cash, corresponding to the net proceeds of the initial public offering less $30 million retained by Atlantica for liquidity purposes.

Atlantica’s shares began trading on the NASDAQ Global Select Market under the symbol “ABY” on June 13, 2014. The symbol changed to “AY” on November 11, 2017.

On February 28, 2018, the Company completed the acquisition of a 100% stake in a 4 MW hydroelectric power plant in Perú (“Mini-Hydro”) for approximately $9 million.

The following table provides an overview of the concessional assets the Company owned as of June 30, 2018:

Assets	Type	Ownership	Location	Currency ⁽⁸⁾	Capacity (Gross)	Counterparty Credit Ratings ⁽⁹⁾	COD	Contract Years Left ⁽¹²⁾

Solana	Renewable (Solar)	100% Class B ⁽¹⁾	Arizona (USA)	USD	280 MW	A-/A2/A-	4Q 2013	26

Mojave	Renewable (Solar)	100%	California (USA)	USD	280 MW	BBB/A3/BBB+	4Q 2014	22

Solaben 2 & 3	Renewable (Solar)	70% ⁽²⁾	Spain	Euro	2x50 MW	A-/Baa1/A-	3Q 2012 & 2Q 2012	20&19

Solacor 1 & 2	Renewable (Solar)	87% ⁽³⁾	Spain	Euro	2x50 MW	A-/Baa1/A-	1Q 2012 & 1Q 2012	19

PS10/PS20

Renewable

(Solar)

100%

Spain

Euro

31 MW

A-/Baa1/A-

1Q 2007 &

2Q 2009

14&16

Assets	Type	Ownership	Location	Currency ⁽⁸⁾	Capacity (Gross)	Counterparty Credit Ratings ⁽⁹⁾	COD	Contract Years Left ⁽¹²⁾

Helioenergy 1 & 2	Renewable (Solar)	100%	Spain	Euro	2x50 MW	A-/Baa1/A-	3Q 2011& 4Q 2011	19

Helios 1 & 2	Renewable (Solar)	100%	Spain	Euro	2x50 MW	A-/Baa1/A-	3Q 2012& 3Q 2012	20

Solnova 1, 3 & 4	Renewable (Solar)	100%	Spain	Euro	3x50 MW	A-/Baa1/A-	2Q 2010 & 2Q 2010& 3Q 2010	17&17&18

Solaben 1 & 6	Renewable (Solar)	100%	Spain	Euro	2x50 MW	A-/Baa1/A-	3Q 2013	21

Seville PV	Renewable (Solar)	80% ⁽⁷⁾	Spain	Euro	1 MW	A-/Baa1/A-	3Q 2006	18

Kaxu	Renewable (Solar)	51% ⁽⁴⁾	South Africa	Rand	100 MW	BB/Baa3/BB+ ⁽¹⁰⁾	1Q 2015	17

Palmatir	Renewable (Wind)	100%	Uruguay	USD	50 MW	BBB/Baa2/BBB- ⁽¹¹⁾	2Q 2014	16

Cadonal	Renewable (Wind)	100%	Uruguay	USD	50 MW	BBB/Baa2/BBB- ⁽¹¹⁾	4Q 2014	17

Mini-Hydro	Renewable (Hydraulic)	100%	Peru	USD	4 MW	BBB+/A3/BBB+	2Q 2012	15

ACT	Efficient natural gas	100%	Mexico	USD	300 MW	BBB+/Baa3/BBB+	2Q 2013	15

ATN	Transmission line	100%	Peru	USD	362 miles	BBB+/A3/BBB+	1Q 2011	23

ATS	Transmission line	100%	Peru	USD	569 miles	BBB+/A3/BBB+	1Q 2014	26

ATN 2	Transmission line	100%	Peru	USD	81 miles	Not rated	2Q 2015	15

Quadra 1	Transmission line	100%	Chile	USD	49 miles	Not rated	2Q 2014	17

Quadra 2	Transmission line	100%	Chile	USD	32 miles	Not rated	1Q 2014	17

Palmucho	Transmission line	100%	Chile	USD	6 miles	BBB+/Baa1/BBB+	4Q 2007	20

Skikda	Water	34.2% ⁽⁵⁾	Algeria	USD	3.5 M ft3/day	Not rated	1Q 2009	16

Honaine	Water	25.5% ⁽⁶⁾	Algeria	USD	7 M ft3/ day	Not rated	3Q 2012	20

(1)

On September 30, 2013, Liberty Interactive Corporation invested $300,000 thousand in Class A membership interests in exchange for the right to receive between 54.06% and 61.20% of taxable losses and distributions until such time as Liberty reaches a certain rate of return, or the “Flip Date”, and 22.60% of taxable losses and distributions thereafter once certain conditions are met.

(2)	Itochu Corporation, a Japanese trading company, holds 30% of the shares in each of Solaben 2 and Solaben 3.

(3)	JGC, a Japanese engineering company, holds 13% of the shares in each of Solacor 1 and Solacor 2.

(4)	Kaxu is owned by the Company (51%), Industrial Development Corporation of South Africa (29%) and Kaxu Community Trust (20%).

(5)	Algerian Energy Company, SPA owns 49% of Skikda and Sadyt (Sociedad Anónima Depuración y Tratamientos) owns the remaining 16.83%.

(6)	Algerian Energy Company, SPA owns 49% of Honaine and Sadyt (Sociedad Anónima Depuración y Tratamientos) owns the remaining 25.5%.

(7)	Instituto para la Diversificación y Ahorro de la Energía (“IDAE”), a Spanish state owned company, holds 20% of the shares in Seville PV.

(8)	Certain contracts denominated in U.S. dollars are payable in local currency.

(9)	Reflects the counterparty’s credit ratings issued by Standard & Poor’s Ratings Services, or S&P, Moody’s Investors Service Inc., or Moody’s, and Fitch Ratings Ltd, or Fitch.

(10)	Refers to the credit rating of the Republic of South Africa. The offtaker is Eskom, which is a state-owned utility company in South Africa.

(11)	Refers to the credit rating of Uruguay, as UTE (Administración Nacional de Usinas y Transmisoras Eléctricas) is unrated.

(12)	As of December 31, 2017.

On November 27, 2015, Abengoa, reported that, it filed a communication pursuant to article 5 bis of the Spanish Insolvency Law 22/2003 with the Mercantile Court of Seville nº 2. On November 8, 2016, the Judge of the Mercantile Court of Seville declared judicial approval of Abengoa´s restructuring agreement. On March 31, 2017 Abengoa announced the completion of the restructuring. As a result, Atlantica Yield received Abengoa debt and equity instruments in exchange of the guarantee previously provided by Abengoa regarding the preferred equity investment in ACBH.

The financing arrangement of Kaxu contained cross-default provisions related to Abengoa, such that debt defaults by Abengoa, subject to certain threshold amounts and/or a restructuring process, could trigger defaults under such project financing arrangement. In March 2017, the Company signed a waiver which gives clearance to cross-default that might have arisen from Abengoa insolvency and restructuring up to that date, but does not extend to potential future cross-default events.

In addition, the financing arrangements of Kaxu, Solana and Mojave contained a change of ownership clause that would be triggered if Abengoa ceased to own a minimum of Atlantica Yield’s shares. Based on the most recent public information, Abengoa currently owns 16.47% of Atlantica Yield shares, all of which are pledged as guarantee of asset-backed notes. On March 9, 2018 Abengoa announced it made effective the sale of a 25% stake in Atlantica Yield to Algonquin. Additionally, Algonquin announced on April 17, 2018, that it had exercised an option to purchase the 16.47% remaining stake in Atlantica held by Abengoa, subject to approval by the U.S. Department of Energy (the “DOE”) and other conditions precedent. If Abengoa ceases to comply with its obligation to maintain its 16% ownership of Atlantica Yield ‘s shares, such reduced ownership would put the Company in breach of covenants under the applicable project financing arrangements.

In the case of Kaxu in March 2017 the Company signed a waiver, which allows reduction of ownership by Abengoa below the 35% threshold if it is done in the context of restructuring plan.

In the case of Solana and Mojave, a forbearance agreement signed with the DOE in 2016 with respect to these assets allows reductions of Abengoa’s ownership of the shares of the Company if it results from (i) a sale or other disposition at any time pursuant and in connection with a subsequent insolvency proceeding by Abengoa, or (ii) capital increases by the Company. In other events of reduction of ownership by Abengoa below the minimum ownership threshold such as sales of stake in Atlantica Yield by Abengoa, the available DOE remedies will not include debt acceleration, but DOE remedies available could include limitations on distributions to the Company from Solana and Mojave. In addition, the minimum ownership threshold for Abengoa’s ownership of the shares of the Company has been reduced from 35% to 16%. In November 2017, in the context of the agreement reached between Abengoa and Algonquin for the acquisition by Algonquin of 25% of the shares of the Company and based on the obligations of Abengoa under the EPC contract the Company signed a consent with the DOE which reduces this minimum ownership required by Abengoa in Atlantica Yield to 16%, which became effective upon closing of the transaction on March 9, 2018.

These consolidated condensed interim financial statements were approved by the Board of Directors of the Company on July 31, 2018.

Note 2. - Basis of preparation

The accompanying unaudited consolidated condensed interim financial statements represent the consolidated results of the Company and its subsidiaries.

The Company entered into an agreement with Abengoa on June 13, 2014 (the “ROFO Agreement”), as amended and restated on December 9, 2014, that provides the Company with a right of first offer on any proposed sale, transfer or other disposition of any of Abengoa’s contracted renewable energy, efficient natural gas, electric transmission or water assets in operation and located in the United States, Canada, Mexico, Chile, Peru, Uruguay, Brazil, Colombia and the European Union, as well as four assets in selected countries in Africa, the Middle East and Asia.

The Company elected to account for the assets acquisitions under the ROFO Agreement using the Predecessor values as long as Abengoa had control over the Company, given that these were transactions between entities under common control. Any difference between the consideration given and the aggregate book value of the assets and liabilities of the acquired entities as of the date of the transaction has been reflected as an adjustment to equity.

Abengoa has not had control over the Company since December 31, 2015. Therefore, any acquisition from Abengoa is accounted for in the consolidated accounts of Atlantica Yield since December 31, 2015, in accordance with IFRS 3, Business Combinations.

The Company’s annual consolidated financial statements as of December 31, 2017, were approved by the Board of Directors on February 27, 2018.

These consolidated condensed interim financial statements are presented in accordance with International Accounting Standards (“IAS”) 34, “Interim Financial Reporting”. In accordance with IAS 34, interim financial information is prepared solely in order to update the most recent annual consolidated financial statements prepared by the Company, placing emphasis on new activities, occurrences and circumstances that have taken place during the six-month period ended June 30, 2018 and not duplicating the information previously published in the annual consolidated financial statements for the year ended December 31, 2017. Therefore, the consolidated condensed interim financial statements do not include all the information that would be required in complete consolidated financial statements prepared in accordance with the IFRS-IASB (“International Financial Reporting Standards-International Accounting Standards Board”). In view of the above, for an adequate understanding of the information, these consolidated condensed interim financial statements must be read together with Atlantica’s consolidated financial statements for the year ended December 31, 2017 included in the 2017 20-F.

In determining the information to be disclosed in the notes to the consolidated condensed interim financial statements, Atlantica, in accordance with IAS 34, has taken into account its materiality in relation to the consolidated condensed interim financial statements.

The consolidated condensed interim financial statements are presented in U.S. dollars, which is the Company’s functional and presentation currency. Amounts included in these consolidated condensed interim financial statements are all expressed in thousands of U.S. dollars, unless otherwise indicated.

Certain prior period amounts have been reclassified to conform to the current period presentation.

Application of new accounting standards

a)	Standards, interpretations and amendments effective from January 1, 2018 under IFRS-IASB, applied by the Company in the preparation of these consolidated condensed interim financial statements:

IFRS 9 ‘Financial Instruments’

IFRS 15 ‘Revenues from contracts with Customers’

IFRS 15 (Clarifications) ‘Revenues from contracts with Customers’

IFRS 16 ‘Leases’. This Standard is applicable for annual periods beginning on or after January 1, 2019 under IFRS-IASB, earlier application is permitted, but conditioned to the application of IFRS 15.

IFRS 2 (Amendment) ‘Classification and Measurement of Share-based Payment Transactions’.

IFRS 4 (Amendment). Applying IFRS 9 ‘Financial Instruments’ with IFRS 4 ‘Insurance Contracts’.

Annual Improvements to IFRSs 2015-2017 cycles.

IFRIC 22 Foreign Currency Transactions and Advance Consideration.

IAS 40 (Amendment). Transfers of Investment Property. This amendment is mandatory for annual periods beginning on or after January 1, 2018 under IFRS-IASB, earlier application is permitted.

IAS 28 (Amendment). Long-term Interests in Associates and Joint Ventures. This amendment is mandatory for annual periods beginning on or after January 1, 2018 under IFRS-IASB, earlier application is permitted.

The applications of these amendments have not had any material impact on these consolidated condensed interim financial statements.

In relation to IFRS 15, IFRS 9 and IFRS 16, the Company performed following analysis:

IFRS 15 ‘Revenues from contracts with Customers’

In May 2014, the IASB (International Accounting Standards Board) published IFRS 15 “Recognition of Revenue from Contracts with Customers”. This Standard brings together all the applicable requirements and replaces the current standards for recognizing revenue: IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Program, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers and SIC-31 Revenue—Barter Transactions Involving Advertising Services.

The new requirements may lead to changes in the current revenue profile, since the Standard’s main principle is that the Company must recognize its revenue in accordance with the transfer of goods or services to the customers in an amount which reflects the consideration that the Company expects to receive in exchange for these goods or services. The model laid out by the Standard is structured in five steps:

Step 1: Identifying the contract with the customer.

Step 2: Identifying the performance obligations.

Step 3: Determining the transaction price.

Step 4: Assigning the transaction price in the performance obligations identified in the contract.

Step 5: Recognition of revenue when (or as) the Company performs the performance obligations.

Contracted concessional assets and price purchase agreements (PPAs) include fixed assets financed through project debt, related to service concession arrangements recorded in accordance with International Financial Reporting Interpretations Committee 12 (“IFRIC 12”), except for Palmucho, which is recorded in accordance with IAS 17 and PS10, PS20 and Seville PV, which are recorded as tangible assets in accordance with IAS 16. The infrastructures accounted for by the Company as concessions are related to the activities concerning electric transmission lines, solar electricity generation plants, efficient natural gas plants, wind farms and water plants.

Currently, assets recorded in accordance with IFRIC 12 are classified as intangible assets or as financial assets, depending on the nature of the payment entitlements established in the contracts.

According to IFRS 15, the Company should assess the goods and services promised in the contracts with the customers and shall identify as a performance obligation each promise to transfer to the customer a good or service (or a bundle of goods or services).

In the case of contracts related to financial assets, the Company has identified two performance obligations (construction and operation of the asset). The contracts state that each service (construction and operation) has its own transaction price. For this reason, both performance obligations are separately identifiable in the context of the contract. The Company must allocate the total consideration to be received by the contract to each performance obligation. As mentioned above, the different services performed have been identified as two different performance obligations (construction and operation). Each performance obligation has its own transaction price stated in the contract. Such transaction prices are agreed in the contract by the parties in an orderly transaction, with no interrelation between both transaction prices and therefore correspond to the fair value of the goods and services provided in each case. As a result, for IFRS 15 purposes, the total transaction price will be allocated to each performance obligation in accordance with the two transaction prices stated within the contract, as they represent the respective fair values of the identified performance obligations.

For the assets classified as intangible assets, the Company has identified the same performance obligations, (construction and operation), but in this case the consideration received by the Company for the construction services is a license. The grantor makes a non-cash payment for the construction services by giving the operator an intangible asset. When allocating fair value for IFRS 15 purposes, the Company will recognize as revenue for the first performance obligation the fair value of the construction services, and the amount corresponding to the sales of energy as the fair value of second performance obligation (operation).

Additionally, in both cases, the services are satisfied over time. All the concessional assets of the Company are in operation and the Company satisfies the performance obligations and recognizes revenue over time. The same conclusion applies to concessional assets that are classified as tangible assets or leases.

IFRS 15 also incorporates specific criteria to determine which costs relating to a contract should be capitalized by distinguishing between incremental costs of obtaining a contract and costs associated with fulfilling a contract. No significant costs of obtaining a contract or compliance (other than those that are already capitalized) have been identified.

As the practice for revenue recognition applied until December 31, 2017, is consistent with the analysis above under IFRS 15, the Company considers that the adoption of this standard has no impact in the consolidated financial statements of the Company.

Also, the Company adopted IFRS 15 applying the full retrospective method to each prior reporting period presented, but without changes in the comparative reporting periods as the adoption of the standard has no effect in the financial statements.

IFRS 9 ‘Financial Instruments’

IFRS 9 Financial Instruments issued on 24 July 2014 is the IASB’s replacement of IAS 39 Financial Instruments: Recognition and Measurement. The standard addresses the classification, measurement and derecognition of financial assets and financial liabilities, introduces new rules for hedge accounting and a new impairment model for financial assets. The Company adopted the standard as of January 1, 2018, including the new requirements for hedge accounting. The Company adopted retrospectively without re-expressing comparative periods. The analysis performed by the Company is as follows:

-	Classification and measurement of financial instruments:

a) Financial assets IFRS 9 classifies all financial assets that are currently in the scope of IAS 39 into two categories: amortized cost and fair value. Where assets are measured at fair value, gains and losses are either recognized entirely in profit or loss (fair value through profit or loss, “FVTPL”), or recognized in other comprehensive income (fair value through other comprehensive income, “FVTOCI”). The new guidance has no significant impact on the classification and measurement of the financial assets of the Company as the vast majority of financial assets (except for derivatives) are currently measured at amortized cost, and meet the conditions for classification at amortized cost under IFRS 9. As a result, the Company maintained this classification.

b) Financial liabilities: IFRS 9 does not change the basic accounting model for financial liabilities under IAS 39. Two measurement categories continue to exist: FVTPL and amortized cost. Financial liabilities held for trading are measured at FVTPL, and all other financial liabilities are measured at amortized cost unless the fair value option is applied. As a result, the Company concluded that there is no significant impact on the consolidated financial statements.

The new impairment model requires the recognition of impairment provisions based on expected credit losses (“ECL”) rather than only incurred credit losses as is the case under IAS 39. The Company reviewed its portfolio of financial assets subject to the new model of impairment under the new methodology (using credit default swaps, rating from credit agencies and other external inputs in order to estimate the probability of default), and recorded an adjustment to the opening balance sheet of these consolidated financial statements as detailed below in the table showing the adjustments arising from the application of IFRS 9.

The accounting for certain modifications and exchanges of financial liabilities measured at amortized cost (e.g. bank loans and issued bonds) changes on the transition from IAS 39 to IFRS 9. This change arises from a clarification by the IASB in the Basis for Conclusions of IFRS 9. Under IFRS 9 it is now clear that there can be an effect in the income statement for modification and exchanges of financial liabilities that are considered “non-substantial” (when the net present value of the cash flows, including any fees paid net of any fees received, is lower than 10% different from the net present value of the remaining cash flows of the liability prior to the modification, both discounted at the original effective interest rate). The Company reviewed retrospectively these transactions and recorded an adjustment to the opening balance sheet of these consolidated financial statements as detailed below in the table showing the adjustments arising from the application of IFRS 9.

IFRS 9 also introduces changes in hedge accounting. The hedge accounting requirements in IFRS 9 are optional and tend to facilitate the use of hedge accounting by preparers of financial statements. As a result, the Company reviewed its portfolio of derivatives and recorded an adjustment to the opening balance sheet of these consolidated financial statements as detailed below in the table showing the adjustments arising from the application of IFRS 9.

The impact of applying IFRS 9 to the condensed interim financial statements for the six-month period ended June 30, 2018 is not significant.

IFRS 16 ‘Leases’

The IASB issued a new lease accounting standard, IFRS 16, in January 2016, which requires the recognition of lease contracts on the consolidated statement of financial position.

IFRS 16 eliminates the classification of leases as either operating leases or finance leases for a lessee. Instead all leases are treated in a similar way to finance leases applying IAS 17. Leases are ‘capitalized’ by recognizing the present value of the lease payments and showing them either as lease assets (right-of-use of assets) or together with property, plant and equipment. If lease payments are made over time, a company also recognizes a financial liability representing its obligation to make future lease payments.

In the income statement, IFRS 16 replaces the straight-line operating lease expense for those leases applying IAS 17, with a depreciation charge for the lease asset (included within operating expenses) and an interest expense on the lease liability (included within finance expenses). IFRS 16 also impacts the presentation of cash flows related to former off-balance sheet leases.

The Company performed its assessment of the impact on its consolidated financial statements. The most significant impact identified is that the Company recognizes new assets and liabilities for its existing operating leases of land rights, buildings, offices and equipment.

The standard is effective for annual periods beginning on or after January 1, 2019, with earlier application permitted for entities that apply IFRS 15 at or before the date of initial application of IFRS 16. The Company decided to early adopt the standard as of January 1, 2018.

An entity shall apply this standard using one of the following two methods: full retrospectively approach or a modified retrospective approach. The Company has chosen the latter and accounted for assets as an amount equal to liability at the date of initial application. The impact on the opening balance sheet of these consolidated financial statements is shown in the table below.

The impact of applying IFRS 16 to the condensed interim financial statements for the six-month period ended June 30, 2018 is not significant.

Summary of adjustments arising from application of IFRS 9 and IFRS 16 as of December 31, 2017

				IFRS 9 Adjustments
($ in thousands)	As reported			Expected credit losses (*)			Modification of financial liabilities			Hedge accounting			IFRS 16 Adjustments		Restated at December 31, 2017
Contracted concessional assets		9,084,270			(53,048	)		—			—			62,982		9,094,204
Deferred tax assets		165,136			14,866			(3,055	)		—			—		176,947

Long- term project debt		5,228,917			—			(39,599	)		—			—		5,189,318
Grants and other liabilities		1,636,060			—			—			—			62,982		1,699,042
Deferred tax liabilities		186,583			—			8,849			—			—		195,432

Other Reserves		80,968			—			—			1,326			—		82,294
Retained Earnings		(477,214	)		(38,182	)		27,695			(1,326	)		—		(489,027	)

(*) The expected credit losses provision only applies to the concessional assets recorded as financial assets for an amount before provision of $936,004 thousand as of December 31, 2017 (see Note 6).

b)	Standards, interpretations and amendments published by the IASB that will be effective for periods beginning after June 30, 2018:

IFRS 9 (Amendments to IFRS 9): Prepayment Features with Negative Compensation. This Standard is applicable for annual periods beginning on or after January 1, 2019 under IFRS-IASB, earlier application is permitted.

IFRS 17 ‘Insurance Contracts’. This Standard is applicable for annual periods beginning on or after January 1, 2021 under IFRS-IASB, earlier application is permitted.

IAS 19 (Amendment). Amendments to IAS 19: Plan Amendment, Curtailment or Settlement. This amendment is mandatory for annual periods beginning on or after January 1, 2019 under IFRS-IASB, earlier application is permitted.

IFRIC 23: Uncertainty over Income Tax Treatments. This Standard is applicable for annual periods beginning on or after January 1, 2019 under IFRS-IASB.

IAS 28 (Amendment). Long-term Interests in Associates and Joint Ventures. This amendment is mandatory for annual periods beginning on or after January 1, 2019 under IFRS-IASB, earlier application is permitted.

Amendments to References to the Conceptual Frameworks in IFRS Standards. This Standard is applicable for annual periods beginning on or after January 1, 2020 under IFRS-IASB.

The Company does not anticipate any significant impact on the consolidated condensed financial statements derived from the application of the new standards and amendments that will be effective for annual periods beginning after June 30, 2018, although it is currently still in the process of evaluating such application.

Use of estimates

Some of the accounting policies applied require the application of significant judgment by management to select the appropriate assumptions to determine these estimates. These assumptions and estimates are based on the Company´s historical experience, advice from experienced consultants, forecasts and other circumstances and expectations as of the close of the financial period. The assessment is considered in relation to the global economic situation of the industries and regions where the Company operates, taking into account future development of our businesses. By their nature, these judgments are subject to an inherent degree of uncertainty; therefore, actual results could materially differ from the estimates and assumptions used. In such cases, the carrying values of assets and liabilities are adjusted.

The most critical accounting policies, which reflect significant management estimates and judgment to determine amounts in these consolidated condensed interim financial statements, are as follows:

•

Contracted concessional agreements.

•

Impairment of intangible assets and property, plant and equipment.

•

Assessment of control.

•

Derivative financial instruments and fair value estimates.

•

Income taxes and recoverable amount of deferred tax assets.

As of the date of preparation of these consolidated condensed interim financial statements, no relevant changes in the estimates made are anticipated and, therefore, no significant changes in the value of the assets and liabilities recognized at June 30, 2018 are expected.

Although these estimates and assumptions are being made using all available facts and circumstances, it is possible that future events may require management to amend such estimates and assumptions in future periods. Changes in accounting estimates are recognized prospectively, in accordance with IAS 8, in the consolidated income statement of the period in which the change occurs.

Note 3. - Financial risk management

Atlantica’s activities are exposed to various financial risks: market risk (including currency risk and interest rate risk), credit risk and liquidity risk. Risk is managed by the Company’s Risk Finance and Compliance Departments, which are responsible for identifying and evaluating financial risks quantifying them by project, region and company, in accordance with mandatory internal management rules. Written internal policies exist for global risk management, as well as for specific areas of risk. In addition, there are official written management regulations regarding key controls and control procedures for each company and the implementation of these controls is monitored through internal audit procedures.

These consolidated condensed interim financial statements do not include all financial risk management information and disclosures required for annual financial statements, and should be read together with the information included in Note 3 to Atlantica’s annual consolidated financial statements as of December 31, 2017.

Note 4. - Financial information by segment

Atlantica’s segment structure reflects how management currently makes financial decisions and allocates resources. Its operating segments are based on the following geographies where the contracted concessional assets are located:

•

North America

•

South America

•

EMEA

Based on the type of business, as of June 30, 2018, the Company had the following business sectors:

Renewable energy: Renewable energy assets include two solar plants in the United States, Solana and Mojave, each with a gross capacity of 280 MW and located in Arizona and California, respectively. The Company owns eight solar platforms in Spain: Solacor 1 and 2 with a gross capacity of 100 MW, PS10 and PS20 with a gross capacity of 31 MW, Solaben 2 and 3 with a gross capacity of 100 MW, Helioenergy 1 and 2 with a gross capacity of 100 MW, Helios 1 and 2 with a gross capacity of 100 MW, Solnova 1, 3 and 4 with a gross capacity of 150 MW, Solaben 1 and 6 with a gross capacity of 100 MW and Seville PV with a gross capacity of 1 MW. The Company also owns a solar plant in South Africa, Kaxu with a gross capacity of 100 MW. Additionally, the Company owns two wind farms in Uruguay, Palmatir and Cadonal, with a gross capacity of 50 MW each, and a hydraulic plant in Peru with a gross capacity of 4 MW.

Efficient natural gas: The Company´s sole efficient natural gas asset is ACT, a 300 MW cogeneration plant in Mexico, which is party to a 20-year take-or-pay contract with Pemex for the sale of electric power and steam.

Electric transmission lines : Electric transmission assets include (i) three lines in Peru, ATN, ATS and ATN2, spanning a total of 1,012 miles; and (ii) three lines in Chile, Quadra 1, Quadra 2 and Palmucho, spanning a total of 87 miles.

Water: Water assets include a minority interest in two desalination plants in Algeria, Honaine and Skikda with an aggregate capacity of 10.5 M ft ³ per day.

Atlantica Yield’s Chief Operating Decision Maker (CODM) assesses the performance and assignment of resources according to the identified operating segments. The CODM considers the revenues as a measure of the business activity and the Further Adjusted EBITDA as a measure of the performance of each segment. Further Adjusted EBITDA is calculated as profit/(loss) for the period attributable to the parent company, after adding back loss/(profit) attributable to non-controlling interests from continued operations, income tax, share of profit/(loss) of associates carried under the equity method, finance expense net, depreciation, amortization and impairment charges of entities included in these consolidated financial statements, and compensation received from Abengoa in lieu of ACBH dividends (for the period up to the first quarter of 2017 only).

In order to assess performance of the business, the CODM receives reports of each reportable segment using revenues and Further Adjusted EBITDA. Net interest expense evolution is assessed on a consolidated basis. Financial expense and amortization are not taken into consideration by the CODM for the allocation of resources.

In the six-month periods ended June 30, 2018 and June 30, 2017, Atlantica had four customers with revenues representing more than 10% of the total revenues, three in the renewable energy and one in the efficient natural gas business sectors.

The following tables show Revenues and Further Adjusted EBITDA by operating segments and business sectors for the six-month periods ended June 30, 2018 and 2017:

	Revenue				Further Adjusted EBITDA
	For the six-month period ended June 30,				For the six-month period ended June 30,
	($ in thousands)
Geography	2018		2017		2018		2017
North America		172,315		170,457		154,659		151,786
South America		59,881		58,688		49,247		58,615
EMEA		280,917		254,070		235,450		179,326
Total		513,113		483,215		439,356		389,727

	Revenue				Further Adjusted EBITDA
	For the six-month period ended June 30,				For the six-month period ended June 30,
	($ in thousands)
Business sector	2018		2017		2018		2017
Renewable energy		392,213		363,603		345,386		279,263
Efficient natural gas		61,437		59,414		46,982		52,842
Electric transmission lines		47,903		47,617		40,300		49,832
Water		11,560		12,581		6,688		7,790
Total		513,113		483,215		439,356		389,727

The reconciliation of segment Further Adjusted EBITDA with the profit/(loss) attributable to the Company is as follows:

	For the six-month period ended June 30, ($ in thousands)
	2018			2017
Profit/(Loss) attributable to the Company	$	67,350			12,613
(Loss)/Profit attributable to non-controlling interests		5,825			1,564
Income tax		31,019			12,848
Share of (profits)/losses of associates		(2,909	)		(2,076	)
Dividend from exchangeable preferred equity investment in ACBH (see Note 19)		-			10,383
Financial expense, net		177,774			198,684
Depreciation, amortization, and impairment charges		160,297			155,711

Total segment Further Adjusted EBITDA	$	439,356			389,727

The assets and liabilities by operating segments (and business sector) as of June 30, 2018 and December 31, 2017 are as follows:

Assets and liabilities by geography as of June 30, 2018:

	North America		South America		EMEA		Balance as of June 30, 2018
Assets allocated
Contracted concessional assets		3,600,231		1,091,274		4,044,863		8,736,368
Investments carried under the equity method		-		-		53,002		53,002
Current financial investments		118,344		62,020		34,014		214,378
Cash and cash equivalents (project companies)		161,906		41,920		301,115		504,941
Subtotal allocated		3,880,481		1,195,214		4,432,994		9,508,689
Unallocated assets
Other non-current assets								216,771
Other current assets (including cash and cash equivalents at holding company level)								431,816
Subtotal unallocated								648,587
Total assets								10,157,276

	North America		South America		EMEA		Balance as of June 30, 2018
Liabilities allocated
Long-term and short-term project debt		1,755,091		860,051		2,603,678		5,218,820
Grants and other liabilities		1,564,805		5,194		92,380		1,662,379
Subtotal allocated		3,319,896		865,245		2,696,058		6,881,199
Unallocated liabilities
Long-term and short-term corporate debt								639,041
Other non-current liabilities								591,456
Other current liabilities								181,346
Subtotal unallocated								1,411,843
Total liabilities								8,293,042
Equity unallocated								1,864,234
Total liabilities and equity unallocated								3,276,077
Total liabilities and equity								10,157,276

Assets and liabilities by geography as of December 31, 2017:

	North America		South America		EMEA		Balance as of December 31, 2017
Assets allocated
Contracted concessional assets		3,770,169		1,100,778		4,213,323		9,084,270
Investments carried under the equity method		-		-		55,784		55,784
Current financial investments		116,451		59,831		31,263		207,545
Cash and cash equivalents (project companies)		149,236		42,548		329,078		520,862
Subtotal allocated		4,035,856		1,203,157		4,629,448		9,868,461
Unallocated assets
Other non-current assets								210,378
Other current assets (including cash and cash equivalents at holding company level)								413,500
Subtotal unallocated								623,878
Total assets								10,492,339

	North America		South America		EMEA		Balance as of December 31, 2017
Liabilities allocated
Long-term and short-term project debt		1,821,102		876,063		2,778,043		5,475,208
Grants and other liabilities		1,593,048		810		42,202		1,636,060
Subtotal allocated		3,414,150		876,873		2,820,245		7,111,268
Unallocated liabilities
Long-term and short-term corporate debt								643,083
Other non-current liabilities								657,345
Other current liabilities								185,190
Subtotal unallocated								1,485,618
Total liabilities								8,596,886
Equity unallocated								1,895,453
Total liabilities and equity unallocated								3,381,071
Total liabilities and equity								10,492,339

Assets and liabilities by business sector as of June 30, 2018;

	Renewable energy		Efficient natural gas		Electric transmission lines		Water		Balance as of June 30, 2018
	($ in thousands)
Assets allocated
Contracted concessional assets		7,165,843		606,883		876,477		87,165		8,736,368
Investments carried under the equity method		12,088		-		-		40,914		53,002
Current financial investments		20,478		118,323		61,117		14,460		214,378
Cash and cash equivalents (project companies)		455,421		26,560		14,712		8,248		504,941
Subtotal allocated		7,653,830		751,766		952,306		150,787		9,508,689
Unallocated assets
Other non-current assets										216,771
Other current assets (including cash and cash equivalents at holding company level)										431,816
Subtotal unallocated										648,587
Total assets										10,157,276

	Renewable energy		Efficient natural gas		Electric transmission lines		Water		Balance as of June 30, 2018
	($ in thousands)
Liabilities allocated
Long-term and short-term project debt		3,958,261		548,223		680,398		31,938		5,218,820
Grants and other liabilities		1,659,756		788		1,032		803		1,662,379
Subtotal allocated		5,618,017		549,011		681,430		32,741		6,881,199
Unallocated liabilities
Long-term and short-term corporate debt										639,041
Other non-current liabilities										591,456
Other current liabilities										181,346
Subtotal unallocated										1,411,843
Total liabilities										8,293,042
Equity unallocated										1,864,234
Total liabilities and equity unallocated										3,276,077
Total liabilities and equity										10,157,276

Assets and liabilities by business sector as of December 31, 2017;

	Renewable energy		Efficient natural gas		Electric transmission lines		Water		Balance as of December 31, 2017
Assets allocated
Contracted concessional assets		7,436,362		660,387		897,269		90,252		9,084,270
Investments carried under the equity method		12,419		-		-		43,365		55,784
Current financial investments		17,249		116,430		59,289		14,577		207,545
Cash and cash equivalents (project companies)		452,792		39,064		15,325		13,681		520,862
Subtotal allocated		7,918,822		815,881		971,883		161,875		9,868,461
Unallocated assets
Other non-current assets										210,378
Other current assets (including cash and cash equivalents at holding company level)										413,500
Subtotal unallocated										623,878
Total assets										10,492,339

	Renewable energy		Efficient natural gas		Electric transmission lines		Water		Balance as of December 31, 2017
Liabilities allocated
Long-term and short-term project debt		4,162,596		579,173		698,346		35,093		5,475,208
Grants and other liabilities		1,635,508		552		-		-		1,636,060
Subtotal allocated		5,798,104		579,725		698,346		35,093		7,111,268
Unallocated liabilities
Long-term and short-term corporate debt										643,083
Other non-current liabilities										657,345
Other current liabilities										185,190
Subtotal unallocated										1,485,618
Total liabilities										8,596,886
Equity unallocated										1,895,453
Total liabilities and equity unallocated										3,381,071
Total liabilities and equity										10,492,339

The amount of depreciation, amortization and impairment charges recognized for the six-month periods ended June 30, 2018 and 2017 are as follows:

	For the six-month period ended June 30,
Depreciation, amortization and impairment by geography	2018			2017
	($ in thousands)
North America		(59,638	)		(64,276	)
South America		(21,056	)		(20,246	)
EMEA		(79,603	)		(71,189	)
Total		(160,297	)		(155,711	)

	For the six-month period ended June 30,
Depreciation, amortization and impairment by business sector	2018			2017
	($ in thousands)
Renewable energy		(140,491	)		(141,538	)
Electric transmission lines		(14,608	)		(14,173	)
Efficient natural gas		(5,198	)		-
Total		(160,297	)		(155,711	)

Note 5. - Changes in the scope of the consolidated condensed interim financial statements

For the six-month period ended June 30, 2018

On February 28, 2018, the Company completed the acquisition of a 100% stake in Hidrocañete, S.A. (Mini-Hydro). Total purchase price paid for this asset amounted to $9,327 thousand. The purchase has been accounted for in the consolidated accounts of Atlantica Yield, in accordance with IFRS 3, Business Combination.

For the year ended December 31, 2017

There is no change in the scope of the consolidated financial statement in the year 2017.

Note 6. - Contracted concessional assets

The detail of contracted concessional assets included in the heading ‘Contracted concessional assets’ as of June 30, 2018 and December 31, 2017 is as follows:

	Balance as of June 30,			Balance as of December 31,
	2018			2017
	($ in thousands)
Contracted concessional assets cost		10,467,669			10,633,769
Amortization and impairment		(1,731,301	)		(1,549,499	)
Total		8,736,368			9,084,270

Contracted concessional assets include fixed assets financed through project debt, related to service concession arrangements recorded in accordance with IFRIC 12, except for Palmucho, which is recorded in accordance with IAS 17, and PS10, PS20, Seville PV and Mini-Hydro which are recorded as property plant and equipment in accordance with IAS 16. Concessional assets recorded in accordance with IFRIC 12 are either intangible or financial assets. As of June 30, 2018, contracted concessional financial assets amount to $870,336 thousand ($936,004 thousand as of December 31, 2017).

The decrease in the contracted concessional assets cost is primarily due to the lower value of assets denominated in euros since the exchange rate of the euro has dropped against the U.S. dollar since December 31, 2017 and to the payment received from Abengoa by Solana in March 2018 further to Abengoa´s obligation as EPC Contractor (see Note 11). The decrease has been partially offset by the impact of the application of IFRS 16, ´Leases´ from January 1, 2018 (see Note 2).

Amortization and impairment amount includes t he recognition of impairment provisions based on expected credit losses due to the application of IFRS 9, ´Financial instruments´ from January 1, 2018 (see Note 2). No other losses from impairment of contracted concessional assets were recorded during the six-month period ended June 30, 2018 and during the year 2017.

Note 7. - Investments carried under the equity method

The table below shows the breakdown of the investments held in associates as of June 30, 2018 and December 31, 2017:

	Balance as of June 30,		Balance as of December 31,
	2018		2017
	($ in thousands)
Evacuación Valdecaballeros, S.L.		8,957		9,175
Myah Bahr Honaine, S.P.A.(*)		40,914		43,365
Pectonex, R.F. Proprietary Limited		3,131		3,244
Evacuación Villanueva del Rey, S.L		-		-
Total		53,002		55,784

(*) Myah Bahr Honaine, S.P.A., the project entity, is 51% owned by Geida Tlemcen, S.L. which is accounted for using the equity method in these consolidated condensed interim financial statements. Geida Tlemcen, S.L. is 50% owned by Atlantica.

Note 8. - Financial investments

The detail of Non-current and Current financial investments as of June 30, 2018 and December 31, 2017 is as follows:

	Balance as of June 30, 2018		Balance as of December 31, 2017

	($ in thousands)
Fair Value through OCI (Investment in Ten West link)		2,813		2,088
Derivative assets		13,050		8,230
Other receivable accounts at amortized cost		35,726		34,924
Total non-current financial investments		51,589		45,242

Fair value through profit or loss		-		1,715
Contracted concessional financial assets		131,217		131,066
Other receivable accounts at amortized cost		83,931		77,357
Total current financial investments		215,148		210,138

Investment in Ten West Link as of June 30, 2018 is a $2.8 million investment, which was made by the Company for a 12.5% interest in a 114-mile transmission line in the US.

Financial assets at fair value through profit or loss of $1.7 million as of December 31, 2017 fully related to the residual part of the Abengoa debt and equity instruments received in exchange of the guarantee previously provided by Abengoa regarding the preferred equity investment in ACBH. These instruments have been entirely sold.

Note 9. - Derivative financial instruments

The breakdown of the fair value amount of the derivative financial instruments as of June 30, 2018 and December 31, 2017 is as follows:

Balance as of June 30, 2018

Balance as of December 31, 2017

($ in thousands)

Assets

Liabilities

Assets

Liabilities

Derivatives - cash flow hedge

13,050

285,985

8,230

329,731

The derivatives are primarily interest rate cash-flow hedges. All are classified as non-current assets or non-current liabilities, as they hedge long-term financing agreements. These are classified as Level 2 (see Note 10).

Additionally, the Company owns currency options with leading international financial institutions, which guarantee a minimum Euro-U.S. dollar exchange rates for the distributions expected from Spanish solar assets made in euros during the years 2018, 2019 and part of 2020.

The net amount of the fair value of interest rate derivatives designated as cash flow hedges transferred to the consolidated condensed income statement is a loss of $33,899 thousand for the six-month period ended June 30, 2018 (loss of $34,265 thousand in the six-month period ended June 30, 2017).

The after-tax results accumulated in equity in connection with derivatives designated as cash flow hedges as of June 30, 2018 and December 31, 2017 amount to a profit of $91,935 thousand and a profit of $80,968 thousand respectively.

Note 10. - Fair value of financial instruments

Financial instruments measured at fair value are presented in accordance with the following level classification based on the nature of the inputs used for the calculation of fair value:

•

Level 1: Inputs are quoted prices in active markets for identical assets or liabilities.

•

Level 2: Fair value is measured based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

•

Level 3: Fair value is measured based on unobservable inputs for the asset or liability.

As of June 30, 2018, and December 31, 2017, all the financial instruments measured at fair value correspond to derivatives and have been classified as Level 2, except for some of the Abengoa Debt and Equity Instruments received further to the implementation of Abengoa´s restructuring agreement on March 31, 2017, classified as Level 1 (see Note 8), which have been sold as of June 30, 2018.

Details of balances with related parties as of June 30, 2018 and December 31, 2017 are as follows:

	Balance as of June 30,		Balance as of December 31,
	2018		2017
	($ in thousands)
Credit receivables (current)		13,153		10,544
Total current receivables with related parties		13,153		10,544

Trade payables (current)		44,318		63,409
Total current payables with related parties		44,318		63,409

Credit payables (non-current)		80,300		141,031
Total non-current payables with related parties		80,300		141,031

Trade payables (current) primarily relate to payables for Operation and Maintenance services. Credit payables (non-current) primarily relate to project companies’ payables with partners accounted for as non-controlling interests in these consolidated financial statements and payables for Operation and Maintenance services. The operation and maintenance services received in some of the Spanish solar assets of the Company include a variable portion payable in the long term. On April 26, 2018, Atlantica Yield plc purchased from Abengoa the long-term operation and maintenance payable accrued for the period up to December 31, 2017, which was recorded for an amount of $57.3 million at the date of repayment. The Company paid $18.3 million for this extinguishment of debt and accounted for the difference of $39.0 million with the carrying amount of the debt as an income in the profit and loss statement.

The transactions carried out by entities included in these consolidated condensed financial statements with related parties not included in the consolidation perimeter of Atlantica, primarily with Abengoa and with subsidiaries of Abengoa, during the six-month periods ended June 30, 2018 and 2017 have been as follows:

	For the six-month period ended June 30,
	2018			2017
	($ in thousands)
Services rendered		-			2,625
Services received		(56,619	)		(51,086	)
Financial income		1,819			25
Financial expenses		(690	)		(598	)

Services received primarily include operation and maintenance services received by some assets.

The figures detailed in the table above do not include the compensation received from Abengoa in lieu of dividends from ACBH for $10.4 million, recorded as financial income in these consolidated condensed interim financial statements for the six-month period ended June 30, 2017.

In addition, Abengoa maintains a number of obligations under EPC, O&M and other contracts, as well as indemnities covering certain potential risks. Additionally, Abengoa represented that further to the accession to the restructuring agreement, Atlantica Yield would not be a guarantor of any obligation of Abengoa with respect to third parties and agreed to indemnify the Company for any penalty claimed by third parties resulting from any breach in such representations. The Company has contingent assets, which have not been recognized as of June 30, 2018, related to the obligations of Abengoa referred above, which result and amounts will depend on the occurrence of uncertain future events. In particular as of April 26, 2018 Abengoa agreed to pay Atlantica certain amounts subject to conditions which are beyond the control of the Company.

As explained in Note 1, the Company signed a consent in November 2017, which has then been amended during the following months, in relation to the Solana and Mojave projects, which reduced the minimum ownership required by Abengoa in Atlantica Yield to 16%, subject to certain conditions precedent most of which were beyond the control of the Company, including several payments by Abengoa to Solana before December 2017 and May 2018. These payments for a total of $120 million were related to Abengoa’s obligations as EPC contractor in Solana and were used to repay Solana project debt ($95 million) and for a reserve to cover required additional repairs in the plant ($25 million). Additionally, Abengoa has recognized other obligations with Solana for $6.5 million per semester over 8.5 years starting in December 2018. Solana received $42.5 million in December 2017 and $77.5 million in March 2018. The $42.5 million collected in December 2017 and $52.5 million of the amount collected in March 2018 have been used to repay Solana project debt. The aforementioned amounts are based on the EPC Contract guarantee for liquidated damages considering the average production during the first three years of ramp-up period of the plant which is a service-concession arrangement under IFRIC 12 (intangible asset). For the aforementioned amounts, the Company reduced the value of the intangible asset since this amount was a variable consideration. In addition, the amortization of the plant is adjusted accordingly.

The Company entered into a Financial Support Agreement on June 13, 2014 under which Abengoa agreed to maintain any guarantees and letters of credit that have been provided by it on behalf of or for the benefit of Atlantica Yield and its affiliates for a period of five years. As of June 30, 2018, the aforementioned guarantees amounted to $31 million. In the context of that agreement in July 2017, Atlantica replaced guarantees amounting to $112 million previously issued by Abengoa, out of which $55 million were canceled in June 2018.

Note 12. - Clients and other receivable

Clients and other receivable as of June 30, 2018 and December 31, 2017, consist of the following:

	Balance as of June 30, 2018		Balance as of December 31, 2017
	($ in thousands)
Trade receivables		204,223		186,728
Tax receivables		29,685		39,607
Prepayments		12,927		6,375
Other accounts receivable		13,406		11,739
Total		260,241		244,449

As of June 30, 2018, and December 31, 2017, the fair value of clients and other receivable accounts does not differ significantly from its carrying value.

Note 13. - Equity

As of June 30, 2018, the share capital of the Company amounts to $10,021,726 represented by 100,217,260 ordinary shares completely subscribed and disbursed with a nominal value of $0.10 each, all in the same class and series. Each share grants one voting right. Algonquin completed the acquisition from Abengoa of a 25% equity interest in Atlantica on March 9, 2018, becoming the largest shareholder of the Company. Residual equity interest of Abengoa in Atlantica is 16.5%.

Atlantica reserves as of June 30, 2018 are made up of share premium account and distributable reserves.

Retained earnings include results attributable to Atlantica, the impact of the Asset Transfer in equity and the impact of the assets acquisition under the ROFO agreement in equity. The Asset Transfer and the acquisitions under the ROFO agreement were recorded in accordance with the Predecessor accounting principle, given that all these transactions occurred before December 2015, when Abengoa still had control over Atlantica.

Non-controlling interests fully relate to interests held by JGC in Solacor 1 and Solacor 2, by IDAE in Seville PV, by Itochu Corporation in Solaben 2 and Solaben 3, by Algerian Energy Company, SPA and Sadyt in Skikda and by Industrial Development Corporation of South Africa (IDC) and Kaxu Community Trust in Kaxu Solar One (Pty) Ltd.

On February 27, 2018, the Board of Directors declared a dividend of $0.31 per share corresponding to the fourth quarter of 2017. The dividend was paid on March 27, 2018.

On May 11, 2018, the Board of Directors of the Company approved a dividend of $0.32 per share corresponding to the first quarter of 2018. The dividend was paid on June 15, 2018.

In addition, as of June 30, 2018, there was no treasury stock and there have been no transactions with treasury stock during the period then ended.

Note 14. - Corporate debt

The breakdown of the corporate debt as of June 30, 2018 and December 31, 2017 is as follows:

	Balance as of June 30,		Balance as of December 31,
	2018		2017
	($ in thousands)
Non-current		624,163		574,176
Current		14,878		68,907
Total Corporate Debt		639,041		643,083

The repayment schedule for the corporate debt as of June 30, 2018 is as follows:

	Remainder of 2018		Between January and June 2019		Between July and December 2019		2020		2021		2022		Subsequent years		Total
New Revolving Credit Facility		-		-		-		-		57,586		-		-		57,586
Note Issuance Facility		49		-		-		-		-		104,632		208,127		312,808
2017 Credit Facility		11,705		-		-		-		-		-		-		11,705
2019 Notes		3,124		-		253,818		-		-		-		-		256,942
Total		14,878		-		253,818		-		57,586		104,632		208,127		639,041

On November 17, 2014, the Company issued the Senior Notes due 2019 in an aggregate principal amount of $255,000 thousand (the “2019 Notes”). The 2019 Notes accrue annual interest of 7.00% payable semi-annually beginning on May 15, 2015 until their maturity date of November 15, 2019.

On December 3, 2014, the Company entered into a credit facility of up to $125,000 thousand with Banco Santander, S.A., Bank of America, N.A., Citigroup Global Markets Limited, HSBC Bank plc and RBC Capital Markets, as joint lead arrangers and joint bookrunners (the “Former Revolving Credit Facility” or ”Former RCF”). On December 22, 2014, the Company drew down $125,000 thousand under the Former RCF. Loans accrued interest at a rate per annum equal to: (A) for Eurodollar rate loans, LIBOR plus 2.75% and (B) for base rate loans, the highest of (i) the rate per annum equal to the weighted average of the rates on overnight U.S. Federal funds transactions with members of the U.S. Federal Reserve System arranged by U.S. Federal funds brokers on such day plus 1/2 of 1.00%, (ii) the U.S. prime rate and (iii) LIBOR plus 1.00%, in any case, plus 1.75%. $8,000 thousand of the loans under the Former RCF were partially repaid on September 25, 2017 and for $63,000 thousand on December 27, 2017. The remaining $54,000 of nominal of the Former RCF has been entirely repaid on May 16, 2018 and the credit facility canceled.

On February 10, 2017, the Company issued Senior Notes due 2022, 2023, 2024 (the “Note Issuance Facility”), in an aggregate principal amount of €275,000 thousand. The 2022 to 2024 Notes accrue annual interest, equal to the sum of (i) EURIBOR plus (ii) 4.90%, as determined by the Agent. Interest on the Notes will be payable in cash quarterly in arrears on each interest payment date. The Company will make each interest payment to the holders of record on each interest payment date. The interest rate on the Note Issuance Facility is fully hedged by two interest rate swaps contracted with Jefferies Financial Services, Inc. with effective date March 31, 2017 and maturity date December 31, 2022, resulting in the Company paying a net fixed interest rate of 5.5% on the Note Issuance Facility. Changes in fair value of these interest rate swaps have been recorded in the consolidated income statement. The Note Issuance Facility is a € denominated liability for which the Company applies net investment hedge accounting. When converted to US$ at US$/€ closing exchange rate, it contributes to reduce the impact in translation difference reserves generated in the equity of these consolidated financial statements by the conversion of the net assets of the Spanish solar assets into US$.

On July 20, 2017, the Company signed a credit facility (the “Credit Facility 2017”) for up to €10 million, approximately $11.7 million, which is available in euros or US dollars. Amounts drawn accrue interest at a rate per year equal to EURIBOR plus 2.25% or LIBOR plus 2.25%, depending on the currency. As of December 31, 2017, the Company drew down the credit facility in full and used the entire proceeds to prepay a part of the Tranche A of the Credit Facility. The credit facility had an original maturity date of July 20, 2018 and therefore the amounts drawn down were classified as Current as of June 30, 2018. It has been renewed during the month of July 2018 and the new maturity date is July 20, 2019.

On May 10, 2018, the Company entered into a $215 million revolving credit facility (the “Revolving Credit Facility”) with Royal Bank of Canada, as administrative agent and Royal Bank of Canada and Canadian Imperial Bank of Commerce, as issuers of letters of credit. The Company has the option to increase the amount of the Revolving Credit Facility by up to $85 million to $300 million, subject to certain conditions being met. Amounts drawn down accrue interest at a rate per year equal to (A) for Eurodollar rate loans, LIBOR plus a percentage determined by reference to our leverage ratio, ranging between 1.60% and 2.25% and (B) for base rate loans, the highest of (i) the rate per annum equal to the weighted average of the rates on overnight U.S. Federal funds transactions with members of the U.S. Federal Reserve System arranged by U.S. Federal funds brokers on such day plus ½ of 1.00%, (ii) the U.S. prime rate and (iii) LIBOR plus 1.00%, in any case, plus a percentage determined by reference to the leverage ratio of the Company, ranging between 0.60% and 1.00%. Letters of credit may be issued using up to $70 million of the Revolving Credit Facility. The maturity of the Revolving Credit Facility is December 31, 2021. As of June 30, 2018, the Company had drawn down an amount of $58 million (net of debt issuance costs).

Current corporate debt corresponds mainly to the accrued interest on the Notes and to the amount of the 2017 Credit Facility.

Note 15. - Project debt

The main purpose of the Company is the long-term ownership and management of contracted concessional assets, such as renewable energy, efficient natural gas, electric transmission line and water assets, which are financed through project debt. This note shows the project debt linked to the contracted concessional assets included in Note 6 of these consolidated condensed interim financial statements.

Project debt is generally used to finance contracted assets, exclusively using as guarantee the assets and cash flows of the company or group of companies carrying out the activities financed. In most of the cases, the assets and/or contracts are set up as guarantee to ensure the repayment of the related financing.

Compared with corporate debt, project debt has certain key advantages, including a greater leverage and a clearly defined risk profile.

The detail of Project debt of both non-current and current liabilities as of June 30, 2018 and December 31, 2017 is as follows:

	Balance as of June 30,		Balance as of December 31,
	2018		2017
	($ in thousands)
Non-current		4,956,811		5,228,917
Current		262,009		246,291
Total Project debt		5,218,820		5,475,208

The decrease in total project debt is primarily due to contractual payments of debt for the period, the partial repayment of Solana debt using the indemnity received from Abengoa in March 2018 for $52.5 million (see Note 11), the lower value of debts denominated in foreign currencies since their exchange rate has decreased against the U.S. dollars since December 31, 2017 and to the impact of the application of IFRS 9, ´Financial instruments´ from January 1, 2018 (see Note 2).

Additionally, during the second quarter of 2018, the Company refinanced debts of Helios 1/2 and Helioenergy 1/2 on May 18, 2018 and June 26, 2018 respectively. The terms of the new debts are not substantially different from the original debts refinanced and therefore the exchange of debts instruments does not qualify for an extinguishment of the original debts under IFRS 9, ´Financial instruments´. When there is a refinancing with a non-substantial modification of the original debt, there is a gain or loss recorded in the income statement. This gain or loss is equal to the difference between the present value of the cash flows under the original terms of the former financing and the present value of the cash flows under the new financing, discounted both at the original effective interest rate. In this respect, the Company recorded a $36.6 million financial income in the profit and loss statement of the consolidated condensed financial statements (see Note 19).

The repayment schedule for Project debt in accordance with the financing arrangements, as of June 30, 2018 is as follows and is consistent with the projected cash flows of the related projects:

Remainder of 2018
Payment of interests accrued as of June 30, 2018		Nominal repayment		Between January and June 2019		Between July and December 2019		2020		2021		2022		Subsequent Years		Total
($ in thousands)
	21,010		140,526		100,473		147,033		259,552		271,441		301,052		3,977,633		5,218,820

Note 16. - Grants and other liabilities

	Balance as of June 30,		Balance as of December 31,
	2018		2017
	($ in thousands)
Grants		1,182,650		1,225,877
Other Liabilities		479,729		410,183
Grant and other non-current liabilities		1,662,379		1,636,060

As of June 30, 2018, the amount recorded in Grants corresponds primarily to the ITC Grant awarded by the U.S. Department of the Treasury to Solana and Mojave for a total amount of $755 million ($771 million as of December 31, 2017), which was primarily used to fully repay the Solana and Mojave short term tranche of the loan with the Federal Financing Bank. The amount recorded in Grants as a liability is progressively recorded as other income over the useful life of the asset.

The remaining balance of the “Grants” account corresponds to loans with interest rates below market rates for Solana and Mojave for a total amount of $426 million ($452 million as of December 31, 2017). Loans with the Federal Financing Bank guaranteed by the Department of Energy for these projects bear interest at a rate below market rates for these types of projects and terms. The difference between proceeds received from these loans and its fair value, is initially recorded as “Grants” in the consolidated statement of financial position, and subsequently recorded in “Other operating income” starting at the entry into operation of the plants. Total amount of income for these two types of grants for Solana and Mojave is $29.6 million and $29.8 million for the six-month periods ended June 30, 2018 and 2017, respectively.

Other liabilities mainly relate to the investment from Liberty Interactive Corporation (‘Liberty’) made on October 2, 2013 for an amount of $300 million. The investment was made in class A shares of Arizona Solar Holding, the holding of Solana Solar plant in the United States. Such investment was made in a tax equity partnership which permits the partners to have certain tax benefits such as accelerated depreciation and ITC. The investment is recorded as a liability for a total amount of $363 million as of June 30, 2018 ($352 million as of December 31, 2017). Additionally, other liabilities include $57 million of finance lease liabilities, further to the application of IFRS 16, Leases from January 1, 2018 (see Note 2).

Note 17. - Trade payables and other current liabilities

Trade payable and other current liabilities as of June 30, 2018 and December 31, 2017 are as follows:

	Balance as June 30,		Balance as December 31,
	2018		2017
	($ in thousands)
Trade accounts payable		97,970		107,662
Down payments from clients		6,483		6,466
Other accounts payable		49,464		41,016
Total		153,917		155,144

Trade accounts payables mainly relate to the operating and maintenance of the plants.

Nominal values of Trade payables and other current liabilities are considered to approximately equal to fair values and the effect of discounting them is not significant.

Other account payable primarily include subordinated debt of Mojave with Abener Teyma Mojave General Partnership (Abener), a related party, with maturity date on October 2018. The repayment will occur if certain technical conditions are fulfilled.

Note 18. - Income Tax

The effective tax rate for the periods presented has been established based on Management’s best estimates.

In the six-month period ended June 30, 2018, Income tax amounted to a $31,019 thousand expense with respect to a profit before income tax of $104,194 thousand. In the six-month period ended June 30, 2017, Income tax amounted to a $12,848 thousand expense with respect to a profit before income tax of $27,025 thousand. The effective tax rate differs from the nominal tax rate mainly due to permanent differences and treatment of tax credits in some jurisdictions.

Note 19. - Financial income and expenses

Financial income and expenses

The following table sets forth our financial income and expenses for the six-month period ended June 30, 2018 and 2017:

	For the six-month period ended June 30,
Financial income	2018		2017
	($ in thousands)
Interest income from loans and credits		36,871		258
Interest rates benefits derivatives: cash flow hedges		-		230
Total		36,871		488

		For the six-month period ended June 30,
Financial expenses		2018			2017
Expenses due to interest:	($ in thousands)
- Loans from credit entities			(128,838	)		(124,556	)
- Other debts			(42,951	)		(43,218	)
Interest rates losses derivatives: cash flow hedges			(34,317	)		(34,922	)
Total			(206,106	)		(202,696	)

Financial income from loans and credits primarily includes a non-monetary financial income of $36.6 million resulting from the refinancing of the debts of Helios 1&2 and Helioenergy 1&2 in the second quarter of 2018 (see Note 15).

Interests from other debts are primarily interests on the notes issued by ATS, ATN, ATN2, Atlantica Yield and Solaben Luxembourg and interests related to the investment from Liberty (see Note 16). Losses from interest rate derivatives designated as cash flow hedges correspond primarily to transfers from equity to financial expense when the hedged item is impacting the consolidated condensed income statement.

Other net financial income and expenses

The following table sets out ‘Other net financial income and expenses” for the six-month period ended June 30, 2018, and 2017:

	For the six-month period ended June 30,
Other financial income / (expenses)	2018			2017
	($ in thousands)
Dividend from ACBH (Brazil)		-			10,383
Other financial income		5,514			6,774
Other financial losses		(15,201	)		(10,669	)
Total		(9,687	)		6,487

According to the agreement reached with Abengoa in the third quarter of 2016, Abengoa acknowledged that Atlantica Yield was the legal owner of the dividends declared on February 24, 2017 and retained from Abengoa amounting to $10.4 million. As a result, the Company recorded $10.4 million as Other financial income in accordance with the accounting treatment previously given to the ACBH dividend.

Note 20. - Other operating income and expenses

The table below shows the detail of Other operating income and expenses for the six-month periods ended June 30, 2018, and 2017:

Other Operating income	For the six-month period ended June 30,
	2018		2017
	($ in thousands)
Grants (see Note 16)		29,719		29,882
Income from various services and insurance proceeds		16,384		10,431
Income from the purchase of the long-term operation and maintenance payable to Abengoa (see Note 11)		38,955		-
Total		85,058		40,313

Other Operating expenses	For the six-month period ended June 30,
	2018			2017
	($ in thousands)
Leases and fees		(1,033	)		(3,298	)
Operation and maintenance		(71,367	)		(57,191	)
Independent professional services		(15,714	)		(10,540	)
Supplies		(13,152	)		(12,571	)
Insurance		(12,606	)		(11,573	)
Levies and duties		(21,957	)		(31,476	)
Other expenses		(5,397	)		(2,136	)
Total		(141,226	)		(128,785	)

Note 21. - Earnings per share

Basic earnings per share has been calculated by dividing the loss attributable to equity holders by the average number of shares outstanding. Diluted earnings per share equals basic earnings per share for the periods presented.

Item	For the six-month period ended June 30,
	2018		2017
	($ in thousands)
Profit/ (loss) from continuing operations attributable to Atlantica Yield Plc.		67,350		12,613
Average number of ordinary shares outstanding (thousands) - basic and diluted		100,217		100,217
Earnings per share from continuing operations (US dollar per share) - basic and diluted		0.67		0.13
Earnings per share from profit/(loss) for the period (US dollar per share) - basic and diluted		0.67		0.13

Note 22. - Subsequent events

On July 31, the Board of Directors of the Company approved a dividend of $0.34 per share, which is expected to be paid on or about September 15, 2018 to shareholders of record as of August 31, 2018.

Exhibit 99.4

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited pro forma consolidated financial statements give effect to the acquisition by Algonquin Power and Utilities Corp. (“APUC” or the “Company”) of a 25% equity interest in Atlantica Yield plc ("Atlantica") on March 9, 2018 and the proposed acquisition of a further 16.5% equity interest in Atlantica (the “Acquisitions”) accounted under the fair value method. The unaudited pro forma consolidated balance sheet gives effect to the additional 16.5% equity interest in Atlantica as if it had closed on June 30, 2018. The unaudited pro forma consolidated statement of operations for the year ended December 31, 2017 and for the six months ended June 30, 2018 give effect to the Acquisitions as if they had closed on January 1, 2017.

Atlantica is a total return company based in the United Kingdom that owns, manages and acquires renewable energy, efficient natural gas power, electric transmission lines and water assets .

The unaudited pro forma consolidated financial statements are presented for illustrative purposes only. The pro forma adjustments are based upon available information and certain assumptions that Management believes are reasonable in the circumstances, as described in the notes to the unaudited pro forma consolidated financial statements. The unaudited pro forma consolidated financial statements are not intended to present or be indicative of the actual financial position and results of operations that would have occurred if the transactions described above had been effected on the date indicated or the results which may be obtained in the future. The additional 16.5% equity interest in Atlantica will reflect the fair value at the actual purchase date and the aggregate 41.5% equity interest in Atlantica will reflect the fair value at each balance sheet date in the future, which amounts may differ materially from the valuations reflected herein.

Algonquin Power & Utilities Corp

Unaudited Pro Forma Consolidated Balance Sheet

June 30, 2018

(in millions of U.S. dollars)

		APUC	Pro Forma Adjustments		Pro forma Consolidated
Assets
Currents assets:
	Cash and cash equivalents	$38	$(1)	3(c)	$37
	Accounts receivable, net	205			205
	Fuel and natural gas in storage	35			35
	Supplies and consumables inventory	50			50
	Regulatory assets	66			66
	Prepaid expenses	26			26
	Derivative instruments	10			10
	Other current assets	5			5
	Total current assets	435	(1)		434

Property, plant and equipment, net		6,308			6,308
Intangible assets, net		51			51
Goodwill		954			954
Regulatory assets		378			378
Derivative instruments		56			56
Long-term investments carried at fair value		506	345	3(a)	839
			(12)	3(b)
Long-term investments		135			135
Deferred income taxes		65			65
Restricted cash		19			19
Other assets		14			14
Total assets		$8,921	$332		$9,253

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable	$56			$56
	Accrued liabilities	168			168
	Dividends payable	62			62
	Regulatory liabilities	50			50
	Long-term debt	13			13
	Other long-term liabilities and deferred credits	40			40
	Derivative instruments	13			13
	Other liabilities	4			4
	Total current liabilities	406	0		406

Long-term debt		3,434	345	3(f)	3,779
Regulatory liabilities		568			568
Deferred income taxes		421			421
Derivative instruments		69			69
Pension and other post-employment benefits obligation		168			168
Other long-term liabilities		229			229
Preferred shares, Series C		13			13
		4,902	345		5,247
Redeemable non-controlling interest		36			36
Shareholders' equity:
	Preferred shares	184			184
	Common shares	3,397			3,397
	Additional paid-in capital	41			41
	Deficit	(567)	(12)	3(b)	(580)
			(1)	3(c)
	Accumulated other comprehensive loss	(5)			(5)
	Total equity attributable to shareholders of APUC	3,050	(13)		3,037
	Non-controlling interest	527			527
	Total equity	3,577	(13)		3,564
Total liabilities and shareholders equity		$8,921	$332		$9,253

See accompanying notes to unaudited pro forma consolidated financial statements

Algonquin Power & Utilities Corp

Unaudited Pro Forma Consolidated Statement of Operations

Year ended December 31, 2017

(in millions of U.S. dollars)

		APUC	Pro Forma Adjustments		Pro Forma Consolidated
Revenue
	Regulated electricity distribution	$763			$763
	Regulated gas distribution	379			379
	Regulated water reclamation and distribution	140			140
	Non-regulated energy sales	218			218
	Other revenue	24			24
		1,524	.		1,524

Expenses
	Operating expenses	461			461
	Regulated electricity purchased	222			222
	Regulated gas purchased	142			142
	Regulated water purchased	10			10
	Non-regulated energy purchased	20			20
	Administrative expenses	50			50
	Depreciation and amortization	251			251
		1,156	0		1,156
Operating income		368	0		368

Interest expense on long-term debt and others		142	32	3(f)	174
Interest expense on convertible debentures		13			13
Change in value of investments carried at fair value		0	72	3(d)	72
Interest, dividend, equity and other income		(9)	(44)	3(e)	(53)
Other losses		1			1
Acquisition-related costs		48			48
Gain on derivative financial instruments		(2)			(2)
		193	60		253
Earnings before income taxes		175	(60)		115
Income tax expense (recovery)
	Current	7			7
	Deferred	66	(8)	3(h)	58
		73	(8)		65
Net earnings		102	(52)		50
Net effect of non-controlling interests		48	0		48
Net earnings attributable to shareholders of APUC		$150	($52)		$98

Weighted average number of common shares (in millions)
Basic		382			382
Diluted		386			386

Basic net earnings per share		0.37			0.24
Diluted net earnings per share		0.37			0.23

See accompanying notes to unaudited pro forma consolidated financial statements

Algonquin Power & Utilities Corp

Unaudited Pro Forma Consolidated Statement of Operations

Six months ended June 30, 2018

(in millions of U.S. dollars)

		APUC	Pro Forma Adjustments		Pro Forma Consolidated
Revenue
	Regulated electricity distribution	$412			$412
	Regulated gas distribution	258			258
	Regulated water reclamation and distribution	61			61
	Non-regulated energy sales	121			121
	Other revenue	9			9
		861	.		861
Expenses
	Operating expenses	241			241
	Regulated electricity purchased	134			134
	Regulated gas purchased	114			114
	Regulated water purchased	4			4
	Non-regulated energy purchased	14			14
	Administrative expenses	26			26
	Depreciation and amortization	134			134
	Gain on foreign exchange	(1)			(1)
		666	0		666
Operating income		195	0		195

Interest expense on long-term debt and others		74	16	3(f)	83
			(7)	3(f)
Change in value of investments carried at fair value		102	42	3(d)	42
			(102)	3(d)
Interest, dividend, equity and other income		(22)	(26)	3(e)	(32)
			16	3(e)
Pension and post-employment non-service costs		1			1
Other gains		(2)			(2)
Acquisition-related costs		9			9
		162	(61)		101
Earnings before income taxes		33	61		94
Income tax expense (recovery)
	Current	5			5
	Deferred	35	(4)	3(g)	33
			2	3(g)
		40	(2)		38
Net earnings (loss)		(7)	63		56
Net effect of non-controlling interests		90	0		90
Net earnings attributable to shareholders of APUC		$83	$63		146

Weighted average number of common shares (in millions)
Basic		448			448
Diluted		452			452

Basic net earnings per share		0.18			0.32
Diluted net earnings per share		0.17			0.31

See accompanying notes to unaudited pro forma consolidated financial statements

1.	DESCRIPTION OF TRANSACTION

Effective March 9, 2018, Algonquin purchased a 25% equity interest in Atlantica (NASDAQ: AY) for a total purchase price of approximately $608 million, based on a price of $24.25 per ordinary share of Atlantica, plus a contingent payment of up to $0.60 per share, payable two years after closing, subject to certain conditions. The 25% equity interest represents approximately 25 million ordinary shares. On April 17, 2018, APUC announced that it has entered into an agreement to purchase an additional 16.5% equity interest in Atlantica for a total purchase price of approximately $345 million, based on a price of $20.90 per share.

2.	BASIS OF PREPARATION

The accompanying unaudited pro forma consolidated financial statements give effect to the 41.5% equity investment by Algonquin in Atlantica. The Company has elected the fair value option in ASC 825 – Financial Instruments to account for its investment in Atlantica, with changes in fair value reflected in the consolidated statement of operations. The Company has determined that the market price of Atlantica shares multiplied by the number of shares owned by the Company is the most relevant representation of fair value for the periods presented in the pro forma consolidated financial statements.

The accompanying unaudited pro forma consolidated financial statements have been prepared by management of Algonquin using the audited consolidated financial statements of Algonquin as of and for the year ended December 31, 2017, as reissued to reflect the change in reporting currency to the U.S. dollar and the unaudited interim consolidated financial statements of Algonquin as of and for the six months ended June 30, 2018. The accompanying unaudited pro forma consolidated financial statements utilize accounting policies that are consistent with those disclosed in the Company’s audited consolidated financial statements as of December 31, 2017 and were prepared in accordance with accounting principles generally accepted in the United States. The accompanying unaudited pro forma consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures of the Company for the year ended December 31, 2017 and the unaudited interim consolidated financial statements and related disclosures for the six months ended June 30, 2018. The reporting currency used to prepare these unaudited pro forma consolidated financial statements and notes is the U.S. dollars.

The unaudited pro forma consolidated balance sheet gives effect to the additional 16.5% equity interest in Atlantica as if it had closed on June 30, 2018. The unaudited pro forma consolidated statement of operations for the year ended December 31, 2017 and for the six months ended June 30, 2018 give effect to the Acquisitions as if they had closed on January 1, 2017.

The preparation of these unaudited pro forma consolidated financial statements requires management to make estimates and assumptions deemed appropriate. The unaudited pro forma consolidated financial statements are not intended to present or be indicative of the actual financial position and results of operations that would have occurred if the transactions described above had been effected on the date indicated or the results which may be obtained in the future. The additional 16.5% equity interest in Atlantica will reflect the fair value at the actual purchase date and the aggregate 41.5% equity interest in Atlantica will reflect the fair value at each balance sheet date in the future, which amounts may differ materially from the valuations reflected herein.

3.	PRO FORMA ASSUMPTIONS AND ADJUSTMENTS

The purchase price for the first 25% equity investment in Atlantica effective March 9, 2018 was approximately $608 million. This transaction has already been reflected on the unaudited interim consolidated balance sheet as of June 30, 2018; therefore no pro forma adjustment is required.

The purchase price for the additional 16.5% equity investment in Atlantica is approximately $345 million; it has been assumed that this amount will be funded from the Company’s existing credit facilities. The probable purchase would result in an increase in long-term investments of $345 million and an increase in long-term debt of $345 million in the unaudited pro forma consolidated balance sheet.

The investment in Atlantica is accounted for at fair value with changes in fair value reflected in the consolidated statement of operations. On June 30, 2018, the share price of Atlantica was $20.18, resulting in an investment fair value for the additional 16.5% equity investment of $333 million. The difference between the fair value as of June 30, 2018 and the purchase price of $345 million discussed in note 3(a) results in a loss of $12 million which is reflected in deficit on the unaudited pro forma consolidated balance sheet.

The fair value changes for the first 25% equity investment are already reflected in the unaudited interim consolidated balance sheet as at June 30, 2018.

Acquisitions costs for the additional 16.5% equity investment are estimated at approximately $1 million. Acquisitions costs are composed of estimated investment banking fees associated with the completion of the additional equity investment. These costs have been included as a pro forma adjustment to deficit on the unaudited pro forma consolidated balance sheet. The acquisition costs for the first 25% equity investment are already incorporated into the unaudited interim consolidated balance sheets as at June 30, 2018, and therefore no pro forma adjustment was made.

The investment in Atlantica is accounted for at fair value with changes in fair value reflected in the consolidated statement of operations. The accompanying unaudited pro forma consolidated statement of operations has been prepared on the basis that the transactions described above had occurred as of January 1, 2017. On January 1, 2017, the share price of Atlantica was $19.35, resulting in a total investment fair value of $804 million. The difference between the fair value as of January 1, 2017 and the total purchase price of $953 million ($608 million and $345 million) discussed in note 3(a) resulted in a loss of $149 million.

On December 31, 2017, the share price of Atlantica was $21.21, resulting in an investment fair value of $881 million. The difference between the fair value as of December 31, 2017 and the fair value on January 1, 2017 resulted in a gain of $77 million. The net loss of $72 million is reflected on the unaudited pro forma consolidated statement of operations for the year ended December 31, 2017.

On June 30, 2018, the share price of Atlantica was $20.18, resulting in an investment fair value of $839 million. The difference between the fair value as of June 30, 2018 and the fair value on December 31, 2017 resulted in a loss of $42 million. This is reflected on the unaudited pro forma consolidated statement of operations for the six months ended June 30, 2018.

The unaudited interim consolidated statements of operations for the six months ended June 30, 2018 already reflect a $102 million fair value loss for the first 25% equity investment from March 9, 2018 to June 30, 2018. This amount was adjusted out of the unaudited pro forma consolidated statements of operations for the six months ended June 30, 2018, to reflect results as if the transactions had occurred on January 1, 2017.

Dividends were declared by Atlantica during 2017 as follows:

· February 27, 2017

$0.25 per share

· May 12, 2017

$0.25 per share

· July 28, 2017

$0.26 per share

· November 10, 2017

$0.29 per share

This would have resulted in dividend income of $44 million on the unaudited pro forma consolidated statement of operations for the year ended December 31, 2017.

Dividends were declared by Atlantica during 2018 as follows:

· February 27, 2018

$0.31 per share

· May 11, 2018

$0.32 per share

This would have resulted in total dividend income of $26 million on the unaudited pro forma consolidated statement of operations for the six months ended June 30, 2018. Dividend income of $16 million recognized for the first 25% equity investment in Atlantica was adjusted out of the unaudited interim consolidated statement of operations for the six months ended June 30, 2018.

The Company obtained funds for the acquisition of the first 25% equity interest in Atlantica from a term credit facility established on December 21, 2017 in the principal amount of $600 million for a term of one year. The remaining funds of $8 million were obtained from cash on hand available through the Company’s existing credit facilities. This resulted in an increase to long-term debt of $608 million. This is already reflected in the unaudited pro forma consolidated balance sheet as at June 30, 2018. No pro forma adjustment was made.

The Company is expected to obtain funds for the acquisition of the additional 16.5% equity interest in Atlantica from the Company’s existing credit facilities. This will result in an increase to long-term debt of $345 million in the unaudited pro forma consolidated balance sheet.

The interest rate assumed on this debt is 3.5% per annum. The interest expense for the year-ended December 31, 2017 is $32 million, and was adjusted for in the unaudited pro forma consolidated statement of operations for the year ended December 31, 2017. The interest expense for the six months ended June 30, 2018 is $16 million, and was adjusted for in the unaudited pro forma consolidated statement of operations for the six months ended June 30, 2018. Since the $608 million obligation was actually assumed during 2018, the actual interest expense incurred of $7 million was adjusted out of the unaudited pro forma consolidated statement of operations for the six months ended June 30, 2018.

The Canadian enacted tax rate is 26.5%. Only 50% of capital gains and losses are subject to tax such that the effective tax rate on capital gains and losses is 13.25%. Tax effects of the transactions described above were calculated using this enacted tax rate.

Exhibit 99.5

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements Nos. 333-177418, 333-213648, 333-213650 and 333-218810 on Form S-8, 333-216616 on Form F-1 and 333-220059 on Form F-3 of our report dated February 27, 2018, relating to the consolidated financial statements of Atlantica Yield plc and subsidiaries as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015, appearing in the Form 6-K of Algonquin Power & Utilities Corp.

/s/ Deloitte, S.L.

Madrid, Spain

September 7, 2018