Fourth Quarter and 2013 Highlights
-- 31 percent increase in normalized earnings per share in 2013, compared
to 2012;
-- A record $508.9 million in normalized EBITDA in 2013, a 51 percent
increase compared to 2012;
-- Normalized earnings per share increased by 11 percent and normalized
EBITDA increased by 18 percent in fourth quarter 2013, compared to
fourth quarter 2012;
-- A record $402.7 million, a 43 percent increase, in normalized funds from
operations in 2013; $117.1 million in fourth quarter 2013;
-- Increased dividend by 6.25 percent; payout ratio of 43 percent of
normalized funds from operations;
-- The 195 MW Forrest Kerr hydro project is in commissioning and on track
to be in service in mid-2014; 16 MW Volcano hydro project advanced to
2014 - two years ahead of schedule; and
-- Strategic relationships in place to execute on LPG and LNG export
initiatives.
AltaGas Ltd. (AltaGas) (TSX:ALA)(TSX:ALA.PR.A)(TSX:ALA.PR.U)(TSX:ALA.PR.E) today
reported significant earnings and cash flow growth for 2013. Normalized net
income increased to $175.8 million ($1.51 per share), compared to $109.5 million
($1.15 per share) in 2012. Net income applicable to common shares was $181.5
million ($1.56 per share) for 2013, compared to $101.8 million ($1.07 per share)
in 2012.
Normalized EBITDA for 2013 increased 51 percent to $508.9 million, compared to
$336.9 million for 2012. Normalized funds from operations was $402.7 million
($3.47 per share) for 2013, compared to $281.0 million ($2.96 per share) in
2012.
"AltaGas achieved outstanding results in 2013, delivering growth of over 30
percent in earnings per share and 17 percent in FFO per share. On the growth
front, we successfully positioned ourselves for energy exports with the
expansion of our gas business and we established a significant footprint in the
US power market," said David Cornhill, Chairman and CEO of AltaGas. "We also
achieved EBITDA of over half a billion for the first time - a great achievement
in the company's twenty-year history. 2014 will be another exciting year for
AltaGas as we commission our Forrest Kerr and Volcano projects. These projects
are marquee projects that will bring another step change to our already strong
portfolio of energy infrastructure assets."
The increase in earnings and cash flow were the result of the strength of
AltaGas' operations and the positive growth across all business segments in the
year. Full year results from SEMCO, Gordondale and Harmattan Co-stream as well
as the expansion of Blair Creek and other smaller assets contributed significant
incremental earnings in 2013 compared to 2012. In 2013, AltaGas continued to
execute its strategy of adding clean energy to its portfolio and moving its
energy export initiatives forward. The acquisition of Blythe and the 25 percent
interest in Petrogas Energy Corp. (Petrogas) also contributed to the strong
growth in earnings and cash flow. AltaGas also benefited from higher realized
power prices in Alberta, colder weather in Michigan, Alberta and Nova Scotia and
lower income taxes. Earnings in the year were partially offset by lower realized
frac prices, higher general and administrative costs, and higher interest
expense as a result of AltaGas' growth.
Fourth quarter normalized net income was $59.9 million ($0.49 per share),
compared to $46.6 million ($0.44 per share) in fourth quarter 2012. Net income
applicable to common shares was $53.2 million ($0.44 per share) in fourth
quarter 2013, compared to $26.7 million ($0.25 per share) for same period 2012.
Normalized EBITDA was $153.3 million in fourth quarter 2013, compared to $129.4
million in fourth quarter 2012. Normalized funds from operations was $117.1
million ($0.96 per share) in fourth quarter 2013, compared to $112.0 million
($1.07 per share) in fourth quarter 2012. The lower normalized funds from
operations on a per share basis was due to the timing of cash distributions from
equity-owned investments.
The solid earnings delivered in fourth quarter 2013 were due to the
contributions from Blythe and a 25 percent interest in Petrogas which were
acquired in 2013, higher volumes of natural gas processed, stronger earnings
from NGL sales, higher production at Bear Mountain, higher volumes delivered and
higher rate base at the utilities, and lower taxes. Earnings in the quarter were
negatively impacted by weaker power prices in Alberta, higher interest expense
and higher general and administrative costs compared to the same quarter last
year.
Project Updates
Northwest Run-of-river Projects
AltaGas continues to make solid progress on its three Northwest run-of-river
hydro projects. The 195 MW Forrest Kerr project is mechanically complete and
commissioning is ongoing. The nine turbine generator units have been assembled,
aligned and grouted into position. Based on progress made over the past six
months, AltaGas expects the Northwest Transmission Line to be available in time
to enable Forrest Kerr to be in service by mid-2014.
At the 16 MW Volcano Creek project, intake construction, weir installation,
powerhouse building, turbine foundations, and powerhouse crane installation have
been completed. The penstock excavation is also complete with the penstock
installation to commence in the spring of 2014. The project is expected to be in
service in late 2014.
At the 66 MW McLymont Creek project, construction of the 7-kilometre intake
access road is complete. Excavation of the McLymont power portal has been
completed and approximately 50 percent of the 2,800 metre power tunnel has been
excavated. Excavation of the powerhouse foundation is complete and installation
of the powerhouse foundation has commenced. The project is expected to be in
service in mid-2015.
Energy Exports
AltaGas has significantly advanced its liquefied petroleum gas (LPG) export
project. On October 1, 2013 AltaGas closed the acquisition of a 25 percent
interest in Petrogas, a privately held leading North American integrated
midstream company. Petrogas provides key infrastructure as well as supply
logistics and marketing expertise required to pursue LPG exports.
On October 24, 2013, AltaGas announced it will increase its effective ownership
of Petrogas to one-third and will transfer its current 25 percent ownership to
AltaGas Idemitsu Joint Venture Limited Partnership (AIJVLP). AIJVLP will acquire
an additional 41 2/3 percent interest in Petrogas. As a result of the
transaction, Petrogas will be effectively owned one third by each of AltaGas,
Idemitsu Kosan Co., Ltd., and Petrogas' current majority shareholder. The
acquisition is expected to be accretive to AltaGas' earnings per share by
approximately $0.10 in 2015. All regulatory approvals have been obtained and the
transaction is expected to close on March 1, 2014.
AIJVLP is also preparing preliminary engineering designs for the construction of
the refrigeration facilities and is in negotiations for potential site
locations. The proposed LPG export business is subject to consultations with
First Nations, and the completion of the feasibility study, permitting,
regulatory approvals and facility construction. Based on progress to date,
AltaGas expects LPG exports to begin as early as 2016.
AltaGas continues to advance its liquefied natural gas export (LNG) initiative.
On October 29, 2013 Triton LNG Limited Partnership (Triton LNG), a subsidiary of
AIJVLP, filed an application with the National Energy Board for approval to
export up to 2.3 million tonnes of LNG per year. The application is an important
step required in the project's progress. Triton LNG is also preparing
preliminary engineering designs for the construction of the liquefaction
facilities and is pursuing potential site locations. The proposed LNG business
is subject to consultations with First Nations, and the completion of the
feasibility study, permitting, regulatory approvals and facility construction.
Monthly Common Share Dividend and Quarterly Preferred Share Dividend
-- The Board of Directors approved the March 2014 dividend of $0.1275 per
common share. The dividend will be paid on April 15, 2014, to common
shareholders of record on March 25, 2014. The ex-dividend date is March
21, 2014. This dividend is an eligible dividend for Canadian income tax
purposes;
-- The Board of Directors approved a dividend of $0.3125 per share for the
period commencing January 1, 2014 and ending March 31, 2014, on AltaGas'
outstanding Series A Preferred Shares. The dividend will be paid on
March 31, 2014 to shareholders of record on March 18, 2014. The ex-
dividend date is March 14, 2014;
-- The Board of Directors approved a dividend of US$0.275 per share for the
period commencing January 1, 2014 and ending March 31, 2014, on AltaGas'
outstanding Series C Preferred Shares. The dividend will be paid on
March 31, 2014 to shareholders of record on March 18, 2014. The ex-
dividend date is March 14, 2014; and
-- The Board of Directors also approved a dividend of $0.3699 per share for
the period commencing December 13, 2013, and ending March 31, 2014, on
AltaGas' outstanding Series E Preferred Shares. The dividend will be
paid on March 31, 2014 to shareholders of record on March 18, 2014. The
ex-dividend date is March 14, 2014.
CONSOLIDATED FINANCIAL REVIEW
Three months ended Year ended
(unaudited) December 31 December 31
($ millions) 2013 2012 2013 2012
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Revenue 581.2 525.8 2,042.9 1,449.7
Net revenue(1) 264.6 207.6 960.2 664.4
Normalized operating income(1) 111.9 96.4 352.7 234.6
Normalized EBITDA(1) 153.3 129.4 508.9 336.9
Net income applicable to common shares 53.2 26.7 181.5 101.8
Normalized net income(1) 59.9 46.6 175.8 109.5
Total assets 7,281.3 5,932.4 7,281.3 5,932.4
Total long-term liabilities 3,727.4 3,357.4 3,727.4 3,357.4
Net additions to property, plant and
equipment 223.4 166.5 1,144.6 1,532.1
Dividends declared(2) 46.7 37.4 173.6 132.8
Cash flows
Normalized funds from operations(1) 117.1 112.0 402.7 281.0
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Three months ended Year ended
December 31 December 31
($ per share, except shares outstanding) 2013 2012 2013 2012
----------------------------------------------------------------------------
Normalized EBITDA(1) 1.26 1.23 4.38 3.55
Net income - basic 0.44 0.25 1.56 1.07
Net income - diluted 0.43 0.25 1.52 1.06
Normalized net income(1) 0.49 0.44 1.51 1.15
Dividends declared(2) 0.38 0.36 1.50 1.40
Cash flows
Normalized funds from operations(1) 0.96 1.07 3.47 2.96
Shares outstanding - basic (millions)
During the period(3) 122.0 105.0 116.1 95.0
End of period 122.3 105.3 122.3 105.3
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(1) Non-GAAP financial measure; see discussion in Non-GAAP Financial
Measures section of the 2013 annual MD&A.
(2) Dividends declared per common share per month of $0.115 beginning
October 27, 2011, $0.12 beginning September 10, 2012, $0.125 beginning
April 24, 2013 and $0.1275 beginning July 31, 2013.
(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 fourth quarter and 2013 financial results, progress on construction
projects and other corporate developments.
Members of the media, investment communities and other interested parties may
dial (416) 340-2219 or call toll free at 1-866-226-1798. 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 5334017. The replay expires at
midnight (Eastern) on March 6, 2014.
AltaGas is an energy infrastructure business with a focus on natural gas, power
and regulated utilities. AltaGas creates value by acquiring, growing and
optimizing its energy infrastructure, including a focus on clean 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
AltaGas Ltd.
Investment Community
1-877-691-7199
investor.relations@altagas.ca
AltaGas Ltd.
Media
(403) 269-5701
media.relations@altagas.ca
www.altagas.ca
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