Continued Execution on AltaGas' Long-term Strategic Plan
Positions the Company to Deliver on 2021 Financial Guidance and
Drive Further Long-term Stakeholder Value Creation
CALGARY, AB, Oct. 28, 2021 /CNW/ - AltaGas Ltd. ("AltaGas"
or the "Company") (TSX: ALA) today reported third quarter
2021 financial results and provided an update on the Company's
operations.
HIGHLIGHTS
(all financial figures are unaudited and in Canadian dollars
unless otherwise noted)
- Normalized FFO per share1 of $0.61 in the third quarter of 2021 compared to
$0.40 in the third quarter of 2020,
representing 53% year-over-year growth and continues to provide the
foundation for increased returns of capital to shareholders and to
fund ongoing organic expansion.
- Normalized EPS1 of $0.02 in the third quarter of 2021 compared to
$0.04 in the third quarter of 2020
and positions AltaGas well to deliver on 2021 financial
guidance.
- Normalized EBITDA1 of $244
million in the third quarter of 2021 compared to
$213 million in third quarter of
2020, representing 15% year-over-year growth. Results reflected
strong execution across the platform, particularly within the
Midstream segment which demonstrated robust growth across the
business.
- Midstream normalized EBITDA of $186
million in the third quarter of 2021 compared to
$114 million in the third quarter of
2020, representing a 63% year-over-year increase. Performance
included record global export volumes of liquified petroleum gases
(LPGs) that averaged approximately 105,000 Bbls/d to Asia, an 11% year-over-year increase in
gathering and processing volumes, and a 15% year-over-year increase
in fractionation and liquids handling volumes.
- Utilities normalized EBITDA of $62
million in the third quarter of 2021 compared to
$80 million in the third quarter of
2020. The largest factors behind the year-over-year decrease were
the one-time pension accounting adjustment in the third quarter of
2020 and the unfavourable impact of the CAD/USD exchange rate,
partially offset by continued Accelerated Pipeline Replacement
(ARP) investments and the impact of the Maryland and D.C. rate cases.
- Washington Gas received approval from the Maryland Public
Service Commission (PSC) to support the Piscataway Bioenergy
Project, which is AltaGas' first renewable natural gas (RNG)
project in partnership with the Washington Suburban Sanitary
Commission (WSSC Water) to transform biowaste into renewable
energy.
- Subsequent to quarter-end, AltaGas filed an application with
the Canada Energy Regulator for a 25-year butane export license for
40,000 Bbls/d. The application is a proactive step to ensure
AltaGas and its partners are positioned to continue to connect the
growing LPG production volumes from Western Canada that exceed local demand to
global markets, which benefits its upstream and downstream
customers.
1. Non-GAAP measure;
see discussion in the advisories of this news release and
reconciliation to US GAAP financial measures shown in AltaGas'
Management's Discussion and Analysis (MD&A) as at and for the
period ended September 30, 2021, which is available on
www.sedar.com.
|
CEO MESSAGE
"AltaGas' diversified business model delivered another strong
quarter with results underpinned by the Company executing on its
corporate strategy of operating long-life energy infrastructure
assets that connect markets and provide resilient and durable value
for our stakeholders" said Randy
Crawford, President and Chief Executive Officer.
"Normalized EBITDA increased 15% year-over-year, which was
in-line with our expectations, and continued to provide steady
returns that are compounding value for our stakeholders.
"Our Midstream business continued to benefit in the quarter from
our industry-leading LPG export capabilities, our strategic
position in the Montney and our
alignment with leading producers that have long-term development
plans for the basin. The operational synergies of the combined
AltaGas and Petrogas businesses also continued to be demonstrated
in the third quarter, which is driving better outcomes for all our
stakeholders. For the second consecutive quarter we achieved record
global export volumes by shipping approximately 105,000 Bbls/d of
LPGs to Asia, which was spread
over 18 very large gas carriers (VLGCs). As we look ahead, we are
pleased with the pace of the activity recovery that we are
experiencing across the basin and we remain well-positioned to
capitalize on the corresponding growth of LPG's that we expect from
the increasing rig counts.
"Our Utilities operations continue to reflect the regulatory,
capital and cost discipline that we have been focused on instilling
over the past two years. As evidenced by the current global energy
shortage and cascading negative effects that are taking place
across the world, we continue to believe in the role, benefits, and
reliability that responsibly sourced natural gas will provide to
our customers as we embrace the energy evolution. Consistent with
that message, I am excited to share that Washington Gas
received Maryland PSC approval to support the Piscataway Bioenergy
project, which is Washington Gas' first RNG project in partnership
with WSSC Water to transform sewage waste into renewable energy.
Our Utilities are well-positioned to facilitate increased RNG
development and provide access to end market use for these
environmentally responsible and emerging forms of energy."
BUSINESS PERFORMANCE
Utilities
The Utilities segment reported normalized EBITDA of $62 million in the third quarter of 2021 compared
to $80 million in the third quarter
of 2020. Results were reflective of typical seasonality in the
summer and fall when natural gas demand declines during the
shoulder season. During the third quarter of 2021, AltaGas' results
were also reflective of warmer-than-normal weather in Michigan and colder-than-normal weather in
Alaska, where the Company does not
have decoupled rate structures like AltaGas' two larger
jurisdictions in Maryland and
Virginia. Year-over-year
performance was impacted by the $17
million favourable pension accounting change that took place
in the third quarter of 2020 and did not take place in the third
quarter of 2021 as well as the unfavourable move in the CAD/USD
foreign exchange rate which drove a $4
million year-over-year decrease in the third quarter of 2021
results.
AltaGas continued to execute on the Company's various ARPs in
the quarter with an ongoing focus on replacing aging infrastructure
to improve the safety and reliability of the system. Over time,
these investments should reduce operating costs and emissions
through leak reductions, which drive better customer, environmental
and societal outcomes. AltaGas also continues to focus on cost
efficiency and improving customer service. The Utilities segment
also benefited from a strong price environment with higher gas
margins in the Retail business, increased returns on pension
assets, continued customer growth and lower COVID-19 related costs.
These were partially offset by higher G&A and lower power
margins from WGL's retail business.
Midstream
The Midstream segment reported normalized EBITDA of $186 million in the third quarter of 2021, a 63%
year-over-year increase. Robust growth was attributed to solid
execution across the platform, the Company's increased ownership in
Petrogas, record global export volumes, and continued growth in
throughput volumes. Midstream results in the third quarter of 2021
were also positively impacted by approximately $20 million due to recognizing revenue for LPG
export cargos that were loaded at the end of the third quarter at
spot prices with the offsetting hedge not being realized until
delivery at the destination point in the fourth quarter. These
strong results were partially offset by no Allowance for Funds Used
During Construction (AFUDC) being recorded on the Mountain Valley
Pipeline, a blend and extend contract at the Gordondale plant that
was signed in 2018 with the impact of the lower processing fees
being recognized for accounting purposes starting in 2021, and the
loss of contribution from the U.S. Transportation and Storage
business following the monetization that took place on those assets
during the second quarter of 2021, with all of these events having
benefited results in the comparable quarter of 2020.
Global exports contributed $106
million in normalized EBITDA during the quarter
($86 million, prior to the previously
mentioned hedging timing issue) and achieved record volumes of
105,070 Bbls/d of LPGs shipped to Asia, which was spread across 18 VLGCs. This
included the Ridley Island Propane Export Terminal (RIPET) shipping
an average of 58,056 Bbls/d of propane across nine ships and the
Ferndale terminal exporting an
average of 47,014 Bbls/d of combined butane and propane across nine
ships in the quarter. Record global export volumes were underpinned
by strong operating efficiencies across the two terminals, ongoing
operational synergies through sharing best practices, strong demand
for North American LPGs in Asia,
and ongoing growth in throughput volumes in AltaGas' gas processing
and fractionation facilities.
AltaGas' integrated Midstream business is strategically
positioned and supported by the rising global demand for cleaner
burning fuels, including natural gas and LPGs, and the abundant
low-cost supply within the Western Canadian Sedimentary Basin,
which is expected to play a growing role in helping provide
long-term energy security in the growing Asian markets. AltaGas'
gathering and processing volumes increased 11% year-over-year in
the third quarter of 2021 while fractionation and liquids handling
volumes increased 15% year-over-year. Growth within AltaGas'
facilities continued to be more pronounced within Montney facilities compared to facilities
outside this region.
AltaGas' realized frac spread averaged $12.63/Bbl, after transportation costs, as 94% of
AltaGas' frac exposed volumes were hedged at approximately
$26/Bbl in the quarter, prior to
transportation costs. AltaGas remains well hedged through the
remainder 2021 with approximately 95% of fourth quarter of 2021
expected frac exposed volumes hedged at approximately $26/Bbl, prior to transportation costs, and 66%
of fourth quarter 2021 expected global export volumes tolled or
financially hedged. The latter includes an average FEI to North
American financial hedge price average of US$12.64/Bbl, including both propane and butane
for the hedged and non-tolled volumes.
Q3 2021 and Q4 2021 Midstream Hedge Program
|
|
|
Q3
2021
|
Q4
2021
|
Global Exports volume
hedged (%)(1)
|
86
|
66
|
Average
propane/butane FEI to North America Average hedge
(US$/Bbl)(2)
|
12.44
|
12.64
|
Fractionation volume
hedged (%)
|
94
|
95
|
Frac spread hedge
rate - (CAD$/Bbl)(3)
|
25.86
|
25.67
|
(1)
Approximate expected volume hedged, includes contracted tolling
volumes and financial hedges; based on the assumption of average
exports of 90 MBbls/d.
|
(2)
Approximate average for the period; does not include physical
differential to FSK for C3 volumes.
|
(3)
Approximate average for the period.
|
Corporate/Other
The Corporate/Other segment reported a normalized EBITDA loss of
$4 million, compared to $19 million earned in the same quarter of 2020.
The $23 million year-over-year
decrease was driven by the combination of higher expenses related
to employee incentive plans as a result of AltaGas' rising share
price over the course of 2021, the monetization of Pomona Energy
Storage Inc. and AltaGas Ripon Energy Inc. in the third quarter of
2020, and the absence of recoveries related to the Canada Emergency Wage Subsidy that were
present in the third quarter of 2020.
CONSOLIDATED FINANCIAL PERFORMANCE
Normalized EBITDA for the third quarter of 2021 was $244 million, which represented an approximate
15% year-over-year increase compared to $213
million for the same quarter in 2020. The factors leading to
the variance are described in the Business Performance section
above. For the third quarter of 2021, the average CAD/USD foreign
exchange rate decreased to 1.26 from an average of 1.33 in the same
quarter of 2020, resulting in a decrease in normalized EBITDA of
approximately $6 million on a
consolidated basis.
Normalized net income was $5
million or $0.02 per share for
the third quarter of 2021, compared to normalized net income of
$12 million or $0.04 per share reported for the same quarter of
2020. Higher normalized EBITDA was more than offset by higher net
income applicable to non-controlling interests, higher depreciation
and amortization expense and higher normalized income tax expense
due to adjustments to accumulated deferred tax liabilities.
Normalized FFO for the third quarter of 2021 was $170 million ($0.61
per share), compared to $112 million
($0.40 per share) for the same
quarter in 2020. The increase was mainly due to the same previously
referenced factors impacting normalized EBITDA, partially offset by
higher interest expense.
Depreciation and amortization expense for the third quarter of
2021 was $111 million, compared to
$108 million for the same quarter in
2020. The increase was mainly due to new assets placed in-service
and amortization expense on Petrogas assets upon consolidation.
Interest expense for the third quarter of 2021 was $69 million, compared to $65 million for the same quarter in 2020. The
increase in interest expense was mainly due to higher average debt
balances, partially offset by lower average interest rates and a
lower average CAD/USD foreign exchange rate.
Q3 2021 Consolidated Financial Results
|
|
|
Three Months
Ended September 30
|
($
millions)
|
2021
|
2020
|
Segmented
Normalized EBITDA(1)
|
|
|
Utilities
|
62
|
80
|
Midstream
|
186
|
114
|
Sub-total: Operating
Segments
|
$
|
248
|
$
|
194
|
Corporate/Other
|
(4)
|
19
|
Normalized EBITDA
(1)
|
$
|
244
|
$
|
213
|
Add
(deduct):
|
|
|
Depreciation and
amortization
|
(111)
|
(108)
|
Interest
expense
|
(69)
|
(65)
|
Normalized Income Tax
Expense
|
(18)
|
(6)
|
Preferred share
dividends
|
(13)
|
(16)
|
Other
(3)
|
(28)
|
(6)
|
Normalized net
income (1)
|
$
|
5
|
$
|
12
|
|
|
|
Net income (loss)
applicable to common shares
|
$
|
25
|
$
|
(47)
|
|
|
|
($ per share,
except shares outstanding)
|
2021
|
2020
|
Shares outstanding -
basic (millions)
|
|
|
During the period
(2)
|
280
|
279
|
End of
period
|
280
|
279
|
|
|
|
Normalized net income
- basic (1)
|
0.02
|
0.04
|
Normalized net income
- diluted (1)
|
0.02
|
0.04
|
|
|
|
Net income (loss) per
common share - basic
|
0.09
|
(0.17)
|
Net income (loss) per
common share - diluted
|
0.09
|
(0.17)
|
(1)
|
Non–GAAP financial
measure; see discussion in Non–GAAP Financial Measures section at
the end of this news release.
|
(2)
|
Weighted
average.
|
(3)
|
"Other" includes
non-controlling interest portion of non-GAAP adjustments, accretion
expense, net income applicable to non-controlling interests, and
foreign exchange gains (losses).
|
FORWARD FOCUS, GUIDANCE AND FUNDING
Looking ahead, AltaGas continues to be focused on many of the
same priorities the Company has over the past two and half years.
This includes executing on AltaGas' long-term corporate strategy of
building a diversified platform that operates long-life energy
infrastructure assets that are positioned to provide resilient and
durable value for the Company's stakeholders.
AltaGas continues to focus on delivering durable and growing EPS
and FFO per share while targeting lowering leverage ratios and
increasing margins of safety within the business over time. This
strategy should support steady dividend growth and provide the
opportunity for ongoing capital appreciation for its long-term
shareholders.
AltaGas is reiterating its 2021 increased guidance ranges that
were provided in April 2021,
including:
- 2021 Normalized EPS guidance is $1.65 - $1.80 per
share.
- 2021 Normalized EBITDA guidance is $1.475 billion - $1.525
billion.
AltaGas' 2021 capital expenditure plan is being reduced from
$910 million to $850 million, excluding asset retirement
obligations. The largest drivers for the reduction are: 1) a lower
forecasted Utilities spend, which is partially driven by a stronger
CAD/USD foreign exchange rate, which reduces the cost of capital
expenditures in Canadian dollar terms; and 2) select Midstream
spending now expected to rollover into early 2022 instead of 2021.
The capital expenditures program remains heavily weighted towards
the lower-risk Utilities business and is comprised primarily of ARP
and system betterment projects that are anticipated to deliver
stable and transparent rate base growth and strong risk-adjusted
returns. These investments are directed at delivering improved
long-term customer, safety and environmental outcomes.
MONTHLY COMMON SHARE DIVIDEND AND QUARTERLY PREFERRED SHARE
DIVIDENDS
The Board of Directors approved the following schedule of
Dividends:
Type
|
Dividend
(per
share)
|
Period
|
Payment
Date
|
Record
|
Common
Shares1
|
$0.0833
|
n.a.
|
15-Dec-21
|
25-Nov-21
|
Series
A Preferred Shares
|
$0.19125
|
30-Sep-21
to
30-Dec-21
|
31-Dec-21
|
16-Dec-21
|
Series B
Preferred Shares
|
$0.17883
|
30-Sep-21
to
30-Dec-21
|
31-Dec-21
|
16-Dec-21
|
Series
C Preferred Shares
|
US$0.330625
|
30-Sep-21
to
30-Dec-21
|
31-Dec-21
|
16-Dec-21
|
Series E
Preferred Shares
|
$0.337063
|
30-Sep-21
to
30-Dec-21
|
31-Dec-21
|
16-Dec-21
|
Series G
Preferred Shares
|
$0.265125
|
30-Sep-21
to
30-Dec-21
|
31-Dec-21
|
16-Dec-21
|
Series
H Preferred Shares
|
$0.204038
|
30-Sep-21
to
30-Dec-21
|
31-Dec-21
|
16-Dec-21
|
Series
K Preferred Shares
|
$0.3125
|
30-Sep-21
to
30-Dec-21
|
31-Dec-21
|
16-Dec-21
|
(1)
|
Eligible dividend
for Canadian income tax purposes
|
CONSOLIDATED FINANCIAL REVIEW
|
|
|
|
|
Three Months
Ended September 30
|
|
Nine Months
Ended September 30
|
($ millions,
except normalized effective income tax rate)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenue
|
2,339
|
|
969
|
|
7,433
|
|
3,897
|
Normalized EBITDA
(1)
|
244
|
|
213
|
|
1,148
|
|
918
|
Net income (loss)
applicable to common shares
|
25
|
|
(47)
|
|
386
|
|
437
|
Normalized net income
(1)
|
5
|
|
12
|
|
389
|
|
249
|
Total
assets
|
21,303
|
|
19,799
|
|
21,303
|
|
19,799
|
Total long-term
liabilities
|
11,302
|
|
9,886
|
|
11,302
|
|
9,886
|
Net additions of
property, plant and equipment
|
209
|
|
142
|
|
210
|
|
530
|
Dividends declared
(2)
|
70
|
|
67
|
|
211
|
|
201
|
Cash from (used by)
operations
|
209
|
|
(48)
|
|
895
|
|
765
|
Normalized funds from
operations (1)
|
170
|
|
112
|
|
910
|
|
675
|
Normalized effective
income tax rate (%) (1)
|
28.6
|
|
15.8
|
|
21.6
|
|
22.7
|
|
Three Months
Ended September 30
|
|
Nine Months
Ended September 30
|
($ per share,
except shares outstanding)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net income (loss) per
common share - basic
|
0.09
|
|
(0.17)
|
|
1.38
|
|
1.56
|
Net income (loss) per
common share - diluted
|
0.09
|
|
(0.17)
|
|
1.37
|
|
1.56
|
Normalized net income
- basic (1)
|
0.02
|
|
0.04
|
|
1.39
|
|
0.89
|
Normalized net income
- diluted (1)
|
0.02
|
|
0.04
|
|
1.38
|
|
0.89
|
Dividends declared
(2)
|
0.25
|
|
0.24
|
|
0.75
|
|
0.72
|
Cash from (used by)
operations
|
0.75
|
|
(0.17)
|
|
3.20
|
|
2.74
|
Normalized funds from
operations (1)
|
0.61
|
|
0.40
|
|
3.25
|
|
2.42
|
Shares outstanding -
basic (millions)
|
|
|
|
|
|
|
|
During the period
(3)
|
280
|
|
279
|
|
280
|
|
279
|
End of
period
|
280
|
|
279
|
|
280
|
|
279
|
(1) Non–GAAP
financial measure; see discussion in Non-GAAP Financial Measures
section of this MD&A.
|
(2)
Dividends declared per common share per month: $0.08 beginning
on December 27, 2018, increased to $0.0833 per share beginning
December 2020.
|
(3) Weighted
average.
|
CONFERENCE CALL AND WEBCAST DETAILS
AltaGas will hold a conference call today, October 28, at 8:00 a.m.
MT (10:00 a.m. ET and
14:00 BST) to discuss third quarter
results for 2021 and other corporate developments.
Members of the investment community and other interested parties
may dial 1-416-764-8659 or toll free at 1-888-664-6392. Please note
that the conference call will also be webcast. To listen, please go
to http://www.altagas.ca/invest/events-and-presentations. The
webcast will be archived for one year.
Shortly after the conclusion of the third quarter call, a replay
will be available commencing at 10:00 a.m.
MT (12:00 p.m. ET) on
October 28, 2021 by dialing
416-764-8677 or toll free 1-888-390-0541. The passcode is 369978#.
The replay will expire at 9:59 p.m.
MT (11:59 p.m. ET) on
November 4, 2021.
AltaGas' unaudited condensed interim Consolidated Financial
Statements and accompanying notes for the third quarter ended
September 30, 2021, as well as its
related Management's Discussion and Analysis, are now available
online at www.altagas.ca. All documents will be filed with the
Canadian securities regulatory authorities and will be posted under
AltaGas' SEDAR profile at www.sedar.com.
ABOUT ALTAGAS
AltaGas is a leading North American energy infrastructure
Company that connects NGLs and natural gas to domestic and global
markets. The Company operates a diversified, lower-risk,
high-growth Utilities and Midstream business that is focused on
delivering resilient and durable value for its stakeholders.
For more information visit www.altagas.ca or reach out to one of
the following:
Jon Morrison
Senior
Vice President, Investor Relations & Corporate
Development
Jon.Morrison@altagas.ca
Adam McKnight
Director,
Investor Relations
Adam.McKnight@altagas.ca
Investor Inquiries
1-877-691-7199
investor.relations@altagas.ca
Media Inquiries
1-403-206-2841
media.relations@altagas.ca
FORWARD-LOOKING INFORMATION
This news release contains forward-looking information
(forward-looking statements). Words such as "may", "can", "would",
"could", "should", "will", "intend", "plan", "anticipate",
"believe", "aim", "seek", "propose", "contemplate", "estimate",
"focus", "strive", "forecast", "expect", "project", "target",
"potential", "objective", "continue", "outlook", "vision",
"opportunity" and similar expressions suggesting future events or
future performance, as they relate to the Corporation or any
affiliate of the Corporation, 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. Specifically, such forward-looking
statements included in this document include, but are not limited
to, statements with respect to the following: belief that that
natural gas and LPGs will remain critical pieces of the long-term
global energy picture; lower-carbon focus; focus on AltaGas' long
term strategy; expectation for ongoing dividend growth; expected
2021 Normalized EPS guidance of $1.65
- $1.80 per share; expected 2021
Normalized EBITDA guidance of $1.475
billion - $1.525 billion;
expected capital expenditure plan reduction to approximately
$850 million; expectation for certain
Midstream capital expenditures to roll into 2022; planned segment
allocation of 2021 capital expenditures; and expected
dividend payments and dates of payment.
These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results,
events and achievements to differ materially from those expressed
or implied by such statements. Such statements reflect AltaGas'
current expectations, estimates, and projections based on certain
material factors and assumptions at the time the statement was
made. Material assumptions include: number of ships and
export levels from the Ferndale
and RIPET facilities, current forward curves, effective tax rates,
the U.S./Canadian dollar exchange rate, the impact of the COVID-19
pandemic, financing initiatives, propane price differentials,
degree day variance from normal, pension discount rate, the
performance of the businesses underlying each sector, impacts of
the hedging program, commodity prices, weather, frac spread, access
to capital, timing and receipt of regulatory approvals, planned and
unplanned plant outages, timing of in-service dates of new projects
and acquisition and divestiture activities, operational expenses,
returns on investments, and dividend levels.
AltaGas' forward-looking statements are subject to certain
risks and uncertainties which could cause results or events to
differ from current expectations, including, without limitation:
risk related to COVID -19; health and safety risks; risks related
to the integration of Petrogas; operating risks; regulatory risks;
cyber security, information, and control systems; litigation risk;
climate-related risks, including carbon pricing; changes in law;
political uncertainty and civil unrest; infrastructure risks;
service interruptions; decommissioning, abandonment and reclamation
costs; reputation risk; weather data; Indigenous land and rights
claims; crown duty to consult with Indigenous peoples; capital
market and liquidity risks; general economic conditions; internal
credit risk; foreign exchange risk; debt financing, refinancing,
and debt service risk; interest rates; technical systems and
processes incidents; dependence on certain partners; growth
strategy risk; construction and development; transportation of
petroleum products; impact of competition in AltaGas' businesses;
counterparty credit risk; market risk; composition risk;
collateral; rep agreements; delays in U.S. Federal Government
budget appropriations; market value of common shares and other
securities; variability of dividends; potential sales of additional
shares; volume throughput; natural gas supply risk; risk management
costs and limitations; underinsured and uninsured losses;
commitments associated with regulatory approvals for the
acquisition of WGL; securities class action suits and derivative
suits; electricity and resource adequacy prices; cost of providing
retirement plan benefits; labor relations; key personnel; failure
of service providers; compliance with Section 404(a) of
Sarbanes-Oxley Act; and the other factors discussed under the
heading "Risk Factors" in the Corporation's Annual Information Form
for the year ended December 31, 2020
and set out in AltaGas' other continuous disclosure
documents.
Many factors could cause AltaGas' or any particular business
segment's actual results, performance or achievements to vary from
those described in this press release, including, without
limitation, those listed above and the assumptions upon which they
are based proving incorrect. 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, forecasted,
expected, projected or targeted and such forward-looking statements
included in this news release, should not be unduly relied upon.
The impact of any one assumption, risk, uncertainty, or other
factor on a particular forward-looking statement cannot be
determined with certainty because they are interdependent and
AltaGas' future decisions and actions will depend on management's
assessment of all information at the relevant time. 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 except as required by law. The
forward-looking statements contained in this news release are
expressly qualified by these cautionary statements.
Financial outlook information contained in this news release
about prospective financial performance, financial position, or
cash flows is based on assumptions about future events, including
economic conditions and proposed courses of action, based on
AltaGas management's (Management) assessment of the relevant
information currently available. Readers are cautioned that such
financial outlook information contained in this news release should
not be used for purposes other than for which it is disclosed
herein.
Additional information relating to AltaGas, including its
quarterly and annual MD&A and Consolidated Financial
Statements, AIF, and press releases are available through AltaGas'
website at www.altagas.ca or through SEDAR at
www.sedar.com.
NON-GAAP MEASURES
This news release contains references to certain financial
measures that do not have a standardized meaning prescribed by US
GAAP and may not be comparable to similar measures presented by
other entities. The non-GAAP measures and their reconciliation to
US GAAP financial measures are shown in AltaGas' Management's
Discussion and Analysis (MD&A) as at and for the period ended
September 30, 2021. These non-GAAP
measures provide additional information that management believes is
meaningful regarding AltaGas' operational performance, liquidity
and capacity to fund dividends, capital expenditures, and other
investing activities. Readers are cautioned that these non-GAAP
measures should not be construed as alternatives to other measures
of financial performance calculated in accordance with US
GAAP.
EBITDA is a measure of AltaGas' operating profitability prior
to how business activities are financed, assets are amortized, or
earnings are taxed. EBITDA is calculated from the Consolidated
Statements of Income (Loss) using net income (loss) adjusted for
pre–tax depreciation and amortization, interest expense, and income
tax expense (recovery). Normalized EBITDA includes
additional adjustments for transaction costs related to
acquisitions and dispositions, unrealized losses (gains) on risk
management contracts, gains on investments, gains on sale of
assets, restructuring costs, dilution loss on equity investment,
COVID-19 related costs, provisions (reversal of provisions) on
assets, provisions on investments accounted for by the equity
method, foreign exchange gains, and accretion expenses related to
asset retirement obligations. AltaGas presents normalized EBITDA as
a supplemental measure. Normalized EBITDA is used by Management to
enhance the understanding of AltaGas' earnings over periods. The
metric is frequently used by analysts and investors in the
evaluation of entities within the industry as it excludes items
that can vary substantially between entities depending on the
accounting policies chosen, the book value of assets, and the
capital structure.
Normalized EPS is calculated as normalized net income divided
by the average number of shares outstanding during the
period. Normalized net income is calculated from the
Consolidated Statements of Income (Loss) using net income (loss)
applicable to common shares adjusted for transaction costs
related to acquisitions and dispositions, unrealized losses (gains)
on risk management contracts, non-controlling interest portion of
non-GAAP adjustments, gains on investments, gains on sale of
assets, provisions on assets, restructuring costs, dilution loss on
equity investment, COVID-19 related costs, and provisions on
investments accounted for by the equity method. Normalized
net income per share is used by Management to enhance the
comparability of AltaGas' earnings, as these metrics reflect the
underlying performance of AltaGas' business activities.
Funds from operations is calculated from the Consolidated
Statements of Cash Flows and is defined as cash from operations
before net changes in operating assets and liabilities and
expenditures incurred to settle asset retirement obligations.
Normalized funds from operations is calculated based on cash from
operations and adjusted for changes in operating assets and
liabilities in the period and non-operating related expenses (net
of current taxes) such as transaction and financing costs related
to acquisitions and dispositions, COVID-19 related costs, and
restructuring costs. Normalized funds from operations is used to
assist Management and investors in analyzing the liquidity of the
Corporation. Management uses this measure to understand the ability
to generate funds for capital investments, debt repayment, dividend
payments, and other investing activities.
Net debt is used by the Corporation to monitor its capital
structure and financing requirements. It is also used as a measure
of the Corporation's overall financial strength and is presented to
provide this perspective to analysts and investors. Net debt is
defined as short-term debt (excluding third-party project financing
obtained for the construction of certain energy management services
projects), plus current and long-term portions of long-term debt,
less cash and cash equivalents.
SOURCE AltaGas Ltd.