AltaGas Announces Third Quarter Results and Framework for Balanced Funding Plan to Build Long-term Shareholder Value
Press Release
CALGARY, Oct. 30, 2018 –
Highlights
Delivered $226 million in Normalized EBITDA1 and Advancing Midstream Business
- Closed the $9 billion acquisition of WGL Holdings, Inc. (WGL), creating a North American leader in the clean energy economy
- Strengthened Northeast B.C. Gas franchise by connecting Montney producers to Asian energy exports
- Recorded third quarter 2018 normalized Funds from Operations1 of $117 million
- Exceeded the company’s initial target of planned asset sales related to the repayment of the bridge facility, achieving approximately $2.4 billion2 in announced assets sales – $400 million greater than the initial target
- Made significant progress on the repayment of the bridge facility associated with the acquisition of WGL. With the completed and announced asset sales, the balance of the bridge facility – US $1.2 billion – is expected to be repaid by year end
Strengthening Financial Position and Framework for Balanced Funding Plan
- AltaGas’ significant growth opportunities in Gas and U.S. Utilities will be balanced with a prudent funding plan and a commitment to an investment grade credit rating
- To fund capital projects as well as align the underlying assets of the business to its strategic focus on Gas and U.S. Utilities, AltaGas will undertake further asset sales of $1.5 to $2.0 billion in the near term. The asset sales are expected to include the monetization of an additional interest in the Northwest Hydro Facilities
- As part of AltaGas’ plan to optimize cost of capital, the Premium Dividend Reinvestment Plan (“PDRIP”) will be suspended at year end
- AltaGas plans to provide an update on its 2019 outlook to balance prudent financial management with investment in opportunities in Gas and U.S. Utilities prior to year end
AltaGas Ltd. (AltaGas) (TSX:ALA) today reported third quarter results and discussed its framework for a balanced financial strategy to take advantage of the capital investment and growth opportunities in Gas and U.S. Utilities; surface the value of its asset base; and improve its credit metrics. AltaGas plans to provide a further update later in the fourth quarter on its business, operational and financial outlook, capital plan and overall funding plan for 2019.
“AltaGas has tremendous assets and a strong pipeline of opportunities in Gas and U.S. Utilities,” stated David Cornhill, Chairman and interim co-CEO of AltaGas. “As we complete our funding plan for the acquisition of WGL in the fourth quarter, we look to 2019 and beyond, and plan to take the necessary steps to ensure long-term value creation for all stakeholders.
“AltaGas has gone through significant transformation over the past 18 months. As we sharpen our focus on opportunities in Gas and U.S. Utilities, we are also refining our funding plan, which includes additional asset sales, and evaluating our future capital programs. We are committed to optimizing per share cash flow and earnings growth,” continued Mr. Cornhill.
Financial & Operational Results
With normalized EBITDA of $226 million, and normalized Funds from Operations of $117 million, AltaGas remains well positioned to fund its 2018 capital program through internally generated cash flow, its dividend reinvestment program, and normal course borrowings under its credit facilities. AltaGas’ net loss applicable to common shares for the quarter was $726 million ($2.78 per share), mainly due to provisions for assets. Normalized net loss for the third quarter was $17 million or $0.07 per share.
As previously disclosed, commencing in the third quarter of 2018, and effective as of the close of the WGL Acquisition, WGL’s activities will continue to be carried out through three business segments: Gas, Power, and Utilities, and will be reflected in each of AltaGas’ segments, respectively.
In the third quarter of 2018, WGL generated $32 million in normalized EBITDA – $8 million in the Gas segment, $32 million in the Power segment, and a loss of $7 million in the Utilities segment. This was lower than the Company’s previous expectations as a result of timing and seasonality of WGL earnings, higher WGL utility leak remediation expenses, and delays to the Central Penn Pipeline in-service date. EBITDA contribution from WGL is expected to increase in the fourth quarter of 2018 as compared to the third quarter, following the completion of Central Penn Pipeline and seasonally colder weather at the utilities.
IBF4
