AltaGas Reports Third Quarter Results

AltaGas Reports Third Quarter Results 
CALGARY, ALBERTA -- (Marketwire) -- 11/01/12 -- In third quarter,
AltaGas Ltd. (AltaGas) (TSX:ALA) (TSX:ALA.PR.A) (TSX:ALA.PR.U)
achieved several milestones toward adding $1.8 billion in new and
expanded assets in 2012. On August 30, 2012, AltaGas closed the
acquisition of SEMCO Holding Corporation (SEMCO), the largest
acquisition in its eighteen-year history. The acquisition increased
Utility customers from just over 100,000 to over 540,000 along with
more than a two-fold increase in rate base. During the quarter,
construction of the Busch Ranch wind project (Busch Ranch) in
southern Colorado was completed successfully ahead of schedule and on
budget. In addition, AltaGas commissioned the 50 Mmcf/d expansion of
the Blair Creek facility and completed construction of the Gordondale
Gas Processing Facility (Gordondale), both of which provide services
to producers in the Montney area. As well, the Corporation completed
construction of the Harmattan Co-stream project (Co-stream Project).
The new and expanded assets in 2012 are underpinned by regulated
returns or long-term contracts. 
Normalized net income applicable to common shares for the three
months ended September 30, 2012 was $12.3 million ($0.13 per share),
compared to $14.1 million ($0.17 per share) for the same period 2011.
Net income applicable to common shares was $8.0 million ($0.08 per
share) for the three months ended September 30, 2012, compared to
$11.1 million ($0.13 per share) for the same period 2011. Third
quarter results reflect the increased seasonality of earnings from
the addition of new natural gas distribution utilities in British
Columbia and in the United States. Earnings per share was also
impacted by 13.9 million more shares issued to fund the SEMCO
acquisition. 
Normalized net income for the nine months ended September 30, 2012
was $62.9 million, a six percent increase compared to $59.4 million
for the same period 2011. Normalized earnings per share for the nine
months ended September 30, 2012 was $0.69, compared to $0.71 for the
same period 2011.  
Results for the three months ended September 30, 2012 were marked by
strong cash flows. Normalized EBITDA was $65.3 million, 16 percent
higher compared to $56.3 million for the same quarter 2011. 
Normalized funds from operations was $54.1 million, 24 percent higher
compared to $43.5 million reported for the same quarter 2011.  
"This has been a milestone quarter for AltaGas as we added more
assets than any other quarter in our history," said David Cornhill,
Chairman and CEO of AltaGas. "We remain on track to add approximately
$1.8 billion in new assets in 2012 which is expected to add stable
earnings from long-term contracts and regulated returns. We continue
to be well positioned to deliver long-term earnings, cash flow and
sustainable dividend growth into the future. In September we were
pleased to announce a 4.3 percent increase in our common share
dividend." 
The US$1.156 billion acquisition of SEMCO was successfully closed on
August 30, 2012. The addition of SEMCO represents a significant step
in the execution of AltaGas' strategy and increases stable, regulated
cash flows to further support both its dividend and capital growth
projects in Canada and the United States.  
Construction of the 195 MW Forrest Kerr run-of-river project (Forrest
Kerr Project) is progressing well and remains ahead of schedule and
on budget. The total project is approximately 70 percent complete.
Construction of the intake structure is complete, with powerhouse and
in-river work well underway. Forrest Kerr Project construction is
expected to be completed by the end of 2013, with commissioning to
follow based on the availability of the Northwest Transmission Line.
During the third quarter progress continued as expected on the
additional Northwest hydroelectric projects, McLymont Creek and
Volcano Creek. The two smaller projects are expected to be in service
in late 2015. AltaGas has 60-year Electricity Purchase Agreements
(EPAs) with BC Hydro which are fully indexed to the Consumer Price
Index (CPI) as well as Impact Benefit Agreements (IBAs) with the
Tahltan First Nation.  
Busch Ranch in southern Colorado was commissioned ahead of schedule
and on budget. AltaGas owns a 50 percent interest in the 29 MW wind
project with the local utility Black Hills/Colorado Electric Utility
Company LP (Black Hills Energy). The power generated is sold pursuant
to a 25-year renewable energy purchase agreement with Black Hills
Energy. AltaGas added 65 MW of new power assets in 2012, increasing
total power generation capacity by 13 percent. 
The Co-stream Project, which will use 250 Mmcf/d of existing spare
capacity at the Harmattan Complex, is in the final commissioning
stages and performance testing is in progress. The project is
underpinned by a 20-year cost-of-service contract with NOVA Chemicals
Corporation. Construction on AltaGas' 120 Mmcf/d Gordondale deep-cut,
natural gas processing facility is complete and AltaGas successfully
commenced processing gas on October 28, 2012. The plant is located in
the Montney resource area, one of the largest, low-cost, liquids-rich
resource plays in the Western Canadian Sedimentary Basin. This plant
will allow AltaGas to provide a midstream solution to a number of
producers in the area and is underpinned by a long-term natural gas
supply contract with Encana. The 50 Mmcf/d expansion at the Blair
Creek facility was successfully commissioned and producer gas is
being processed. The expansion is underpinned by long-term contracts
with three producers.  
Monthly Common Share Dividend and Quarterly Preferred Share Dividend 


 
--  AltaGas announced that the November common share dividend will be paid
    on December 17, 2012, to holders of record on November 26, 2012. The ex-
    dividend date is November 22, 2012. The amount of the dividend will be
    $0.12 for each common share. This dividend is an eligible dividend for
    Canadian income tax purposes.  
--  The Board approved a preferred share dividend of $0.3125 per share for
    the period commencing October 1, 2012, and ending December 30, 2012, on
    AltaGas' outstanding Series A Preferred Shares. The dividend will be
    paid on December 31, 2012, to preferred shareholders of record on
    December 13, 2012. The ex-dividend date is December 11, 2012. 
--  The Board approved a preferred share dividend of US$0.275 per share for
    the period commencing October 1, 2012, and ending December 30, 2012, on
    AltaGas' outstanding Series C Preferred Shares. The dividend will be
    paid on December 31, 2012, to preferred shareholders of record on
    December 13, 2012. The ex-dividend date is December 11, 2012.  

 
Financial Highlights (1) 
Effective January 1, 2012, AltaGas follows United States Generally
Accepted Accounting Principles (US GAAP). All prior comparative
information has been restated to US GAAP. 


 
--  Net income applicable to common shares for third quarter 2012 was $8.0
    million, compared to $11.1 million for same quarter 2011. 
--  Net income applicable to common shares for third quarter 2012 was
    adjusted for $5.1 million of after-tax mark-to-market gains and $9.4
    million of after-tax transaction costs and foreign exchange losses
    related to the acquisition of SEMCO, resulting in normalized net income
    of $12.3 million for third quarter 2012. 
--  Normalized EBITDA was $65.3 million for third quarter 2012, compared to
    $56.3 million for same quarter 2011. 
--  Normali
zed Funds from operations was $54.1 million ($0.57 per share) for
    third quarter 2012, compared to $43.5 million ($0.52 per share) for same
    quarter 2011. 
--  Net debt as at September 30, 2012 was $2,527.9 million, compared to
    $1,063.0 million as at September 30, 2011 and $1,334.2 million as at
    December 31, 2011. AltaGas' debt-to-total capitalization ratio as at
    September 30, 2012 was 56.0 percent, versus 46.9 percent as at September
    30, 2011 and 49.5 percent as at December 31, 2011. 
--  On August 30, 2012 AltaGas issued 13,915,000 common shares for net
    proceeds of $378.4 million. 
--  On September 28, 2012 AltaGas issued $350 million of senior unsecured
    medium term notes. The notes carry a coupon rate of 3.72 percent and
    mature on September 28, 2021.  

 
(1) Includes Non-GAAP financial measures. See public disclosures
available at www.altagas.ca or www.sedar.com for definitions. 
CONSOLIDATED FINANCIAL RESULTS 


 
                                   Three Months Ended     Nine Months Ended 
                                         September 30          September 30 
(unaudited)($ millions)                2012      2011        2012      2011 
                                            (restated)            (restated)
----------------------------------------------------------------------------
                                                                            
Revenue                               311.3     339.2       959.5   1,046.5 
Net revenue(1)                        147.3     116.5       459.7     359.9 
Normalized operating income(1)         38.5      35.0       138.3     127.9 
Normalized EBITDA(1)                   65.3      56.3       210.3     190.5 
Net income applicable to common                                             
 shares                                 8.0      11.1        75.1      51.1 
Normalized net income(1)               12.3      14.1        62.9      59.4 
Total assets                        5,696.8   2,975.8     5,696.8   2,975.8 
Total long-term liabilities         3,239.8   1,323.3     3,239.8   1,323.3 
Net additions to property, plant                                            
 and equipment                      1,041.8     112.2     1,365.6     241.4 
Dividends declared(2)                  33.4      27.6        95.4      82.4 
Cash flows Normalized funds from                                            
 operations(1)                         54.1      43.5       171.2     151.7 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                   Three Months Ended     Nine Months Ended 
                                         September 30          September 30 
($ per share)                          2012      2011        2012      2011 
                                            (restated)            (restated)
----------------------------------------------------------------------------
Normalized EBITDA(1)                   0.69      0.67        2.30      2.29 
Net income - basic                     0.08      0.13        0.82      0.61 
Net income - diluted                   0.08      0.13        0.81      0.61 
Normalized net income(1)               0.13      0.17        0.69      0.71 
Dividends declared(2)                  0.35      0.33        1.04      0.99 
Cash flows Normalized funds from                                            
 operations(1)                         0.57      0.52        1.87      1.82 
Shares outstanding - basic                                                  
 (millions)                                                                 
During the period(3)                   95.3      83.6        91.6      83.2 
End of period                         104.7      83.8       104.7      83.8 
----------------------------------------------------------------------------
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(1) Non-GAAP financial measure; see discussion in Non-GAAP Financial        
    Measures section of the third quarter 2012 MD&A.                        
(2) Dividends declared of $0.11 per common share per month from January 1   
    until October 27, 2011, $0.115 commencing October 27, 2011 and $0.12 per
    common share per month commencing September 10, 2012.                   
(3) Weighted average.                                                       

 
CONFERENCE CALL AND WEBCAST DETAILS: 
AltaGas will hold a conference call today at 9:00 a.m. MT (11:00 a.m.
ET) to discuss third quarter 2012 financial and operating results and
other general issues and developments concerning AltaGas.  
Members of the media, investment communities and other interested
parties may dial (416) 340-8061 or call toll free at 1 866 225 0198.
There is no passcode. Please note that the conference call will also
be webcast. To listen, please go to
http://www.altagas.ca/investors/presentations_and_events. The webcast
will be archived for one year. 
Shortly after the conclusion of the call, a replay will be available
by dialing (905) 694-9451 or 1-800-408-3053. The passcode is 8916823.
The replay expires at midnight (Eastern) on November 8, 2012.  
The complete third quarter 2012 report, including Management's
Discussion and Analysis and unaudited financial statements, is
available on www.altagas.ca in the Investors/Financial Reporting
section of its website. 
AltaGas is an energy infrastructure business with a focus on natural
gas, power and regulated utilities. The Corporation creates value by
acquiring, growing and optimizing its energy infrastructure,
including a focus on renewable energy sources. For more information
visit: www.altagas.ca. 
This news release contains forward-looking statements. When used in
this news release, the words "may", "would", "could", "will",
"intend", "plan", "anticipate", "believe", "seek", "propose",
"estimate", "expect", and similar expressions, as they relate to
AltaGas or an affiliate of AltaGas, are intended to identify
forward-looking statements. In particular, this news release contains
forward-looking statements with respect to, among other things,
business objectives, expected growth, results of operations,
performance, business projects and opportunities and financial
results. These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking statements. Such statements reflect AltaGas' current
views with respect to future events based on certain material factors
and assumptions and are subject to certain risks and uncertainties,
including without limitation, changes in market, competition,
governmental or regulatory developments, general economic conditions
and other factors set out in AltaGas' public disclosure documents.
Many factors could cause AltaGas' actual results, performance or
achievements to vary from those described in this news release,
including without limitation those listed above. These factors should
not be construed as exhaustive. Should one or more of these risks or
uncertainties materialize, or should assumptions underlying
forward-looking statements prove incorrect, actual results may vary
materially from those described in this news release as intended,
planned, anticipated, believed, sought, proposed, estimated or
expected, and such forward-looking statements included in, or
incorporated by reference in this news release, should not be unduly
relied upon. Such statements speak only as of the date of this news
release. AltaGas does not intend, and does not assume any obligation,
to update these forward-looking statements. The forward-looking
statements contained in this news release are expressly qualified by
this cautionary statement. 
Contacts:
AltaGas Ltd.
Investment Community
1-877-691-7199
investor.relations@altagas.ca 
AltaGas Ltd.
Media
(403) 691-7194
media.relations@altagas.ca
 
 
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