Approval Positions Transaction to Close During
the First Quarter of 2023.
CALGARY,
AB, Dec. 22, 2022 /CNW/ - AltaGas Ltd.
("AltaGas" or the "Company") (TSX: ALA) announced
that the Regulatory Commission of Alaska (the "RCA") approved the joint
application of its wholly-owned subsidiary, SEMCO Energy, Inc.
("SEMCO") and Alaska Utility Holdings Inc. ("AUHI"), a wholly-owned
subsidiary of TriSummit Utilities Inc. ("TriSummit"), for AUHI to
acquire AltaGas' Alaskan Utilities from SEMCO. (the
"Divestiture").
As previously disclosed on May 26,
2022, AltaGas announced an agreement to sell its Alaskan
Utilities to TriSummit for US$800
million (approximately CAD$1.1
billion), subject to customary closing
conditions, including State regulatory approvals.
The RCA approval was the last remaining material regulatory
closing condition to be satisfied in connection with the
Divestiture. The Divestiture remains subject to other customary
closing conditions and is expected to close during the first
quarter of 2023.
The sale will include AltaGas' 100% interest in ENSTAR
Natural Gas, the largest local gas distribution company in
Alaska with approximately 150,000
customers; the Alaska Pipeline Company, which operates transmission
and distribution pipelines for ENSTAR; the Company's 65% indirect
interest in Cook Inlet Natural Gas Storage Alaska ("CINGSA"), which
is the only commercial state-regulated natural gas storage
facility; and other ancillary unregulated operations. ENSTAR and
CINGSA will continue to operate as standalone utilities and remain
headquartered in Alaska with all
ENSTAR employees joining TriSummit concurrent with
closing.
AltaGas remains steadfast in the Company's capital
allocation framework, including balancing AltaGas' desire to fund
its strong long-term growth opportunities, reduce leverage ratios
over the medium- to- long-term, and increase returns of capital to
shareholders through steady and consistent dividend growth. The
Alaskan sale, which represented 2.3x 2021 rate base and 29x 2021
allowed earnings, is a continuation of this emphasis and the
capital recycling focus that has been part of AltaGas' DNA in
recent years. This strategy provides AltaGas the ability to
successfully reduce debt while simultaneously fund growth through
investments in our Utilities and across our industry-leading Global
Exports and Midstream platform. AltaGas' total near-term
deleveraging from the Alaskan monetization is estimated to exceed
CAD$1 billion, net of expected cash
taxes. Sale proceeds will initially be used to reduce debt while
providing AltaGas with the financial flexibility to advance the
Company's strong growth opportunities across the Utilities and
Midstream platforms over the coming years.
The expected closing date is aligned with AltaGas'
expectations and is embedded within the Company's 2023 guidance
expectations of Normalized EPS guidance
of $1.85 - $2.05 and 2023 Normalized EBITDA guidance
of $1.5 billion - $1.6 billion.
ABOUT
ALTAGAS
A Leading North American infrastructure company that
connects customers and markets to affordable and reliable sources
of energy. 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 "guidance", "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 Company or any affiliate of the Company, 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: the
anticipated timeline for closing of the sale of AltaGas'
Alaskan Utilities; satisfaction of customary closing
conditions,; expected future use of capital,
including funding Utilities infrastructure programs and Global
Exports and Midstream platforms; expected impact on AltaGas'
balance sheet; AltaGas' de-leveraging strategy in the near-,
medium- and long-term; future increases in returns of capital and
dividend growth; expected use of sale proceeds; expected 2022
Normalized EPS guidance of $1.85 -
$2.05 per share; and expected
2023 Normalized EBITDA guidance of
$1.5 billion - $1.6 billion.
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: assumptions regarding asset
sales anticipated to close in 2023, effective tax rates, the
U.S./Canadian dollar exchange rate, the expected impact of the
COVID-19 pandemic, inflation, the performance of the businesses
underlying each sector, access to capital, timing and receipt of
regulatory approvals, acquisition and divestiture activities,
operational expenses, returns on investments, dividend levels, and
transaction costs.
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 pandemics, epidemics or disease
outbreaks, including COVID -19; health and
safety risks; risk; natural gas supply risks;
infrastructure; service interruptions; cyber security,
information, and control systems; climate-related risks,
including carbon pricing; regulatory risks; litigation
risk; changes in law; reputation risk; capital
market and liquidity risks; general economic conditions;
internal credit risk; foreign exchange risk; debt financing,
refinancing, and debt service risk; interest rates;
counterparty and supplier risk; dependence
on certain partners; growth strategy risk;
underinsured and uninsured losses; impact
of competition in AltaGas' businesses; counterparty credit risk;
market risk; composition risk; collateral; rep agreements;
variability of dividends; risk management costs and
limitations; and the other factors discussed under the
heading "Risk Factors" in the Corporation's Annual
Information Form for the year ended December
31, 2021 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, 2022. 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.
SOURCE AltaGas Ltd.