1.1 |
1.2 |
2.1 |
2.2 |
99.1 |
▪ | In late January, AltaGas initiated emergency response efforts to plan for and mitigate the impacts of the rapidly changing COVID-19 global pandemic. The executive team and cross-functional response teams continue to meet regularly to align response strategy and efforts within all areas of the Corporation. AltaGas' approach has been, and will continue to be, risk-based and guided by its core values. The health and safety of AltaGas' employees and the communities in which it operates is the top priority and is integrated into each aspect of AltaGas' response efforts; |
▪ | On March 31, 2020, the Public Sector Pension Investment Board and the Alberta Teachers' Retirement Fund Board acquired all the issued and outstanding common shares of AltaGas Canada Inc. (ACI) for $33.50 per share. AltaGas owned 11,025,000 (approximately 37 percent) of ACI's common shares and received cash proceeds of approximately $369 million upon close. A pre-tax gain on disposition of approximately $206 million was recorded in the first quarter of 2020; |
▪ | On January 13, 2020, Washington Gas filed a rate case in the District of Columbia requesting a US$35 million increase in base rates, including US$9 million of annual PROJECTpipes surcharges currently paid by customers for accelerated pipeline replacement. Washington Gas has also requested approval for a Revenue Normalization Adjustment mechanism to reduce customer bill fluctuations due to weather-related usage variations, similar to existing mechanisms in both Maryland and Virginia; |
▪ | On January 16, 2020, AltaGas received approval from the California Public Utilities Commission for the recontracting of the Blythe facility to Southern California Edison (SCE). Under the tolling agreement, SCE has exclusive rights to all capacity, energy, ancillary services, and resource adequacy benefits from August 1, 2020 to December 31, 2023; |
▪ | On January 9, 2020, AltaGas announced the appointment of two new independent Directors - Linda Sullivan and Nancy Tower to its Board of Directors. In addition, AltaGas announced the retirement of Daryl Gilbert from the Board of Directors, to be effective following the conclusion of AltaGas' next annual meeting of shareholders in May 2020; |
▪ | On January 2, 2020, AltaGas advised that AltaGas Idemitsu Joint Venture Limited Partnership (AIJVLP) had received notice (the Put Notice) from SAM Holdings Ltd. (SAM) of its exercise of a put option (the Put Option) with respect to SAM's interest in Petrogas Energy Corp. (Petrogas). AIJVLP, a limited partnership owned 50 percent by AltaGas and 50 percent by Idemitsu Kosan Co., Ltd. (Idemitsu), owns the remaining outstanding common shares of Petrogas. Pursuant to the Petrogas unanimous shareholders agreement, a valid exercise of the Put Option by SAM after October 1, 2019, triggers a requirement for AIJVLP to purchase SAM's interest in Petrogas at the fair market value thereof, as determined by third-party valuators. AltaGas anticipates funding its portion of any such obligation with internal cash flow, the sale of remaining non-core assets, and debt. Valuations are underway; |
▪ | In the first quarter of 2020, AltaGas revised its reportable segments to align with the structure of its business following asset sales completed as part of its 2019 asset monetization program. As a result of these changes, AltaGas has refocused on its core Utilities and Midstream segments. Consistent with Management’s strategic view of the business and the basis on which it assesses performance and allocates resources, beginning in 2020, AltaGas has two operating segments: Utilities (which now includes the WGL retail marketing business) and Midstream. These operating segments have not been aggregated in the determination of AltaGas' reportable segments. All other assets are included in the Corporate/Other segment. Prior period segment information has been restated to conform to the current reporting segment presentation; |
▪ | On February 14, 2020, WGL Midstream executed an Asset Management Agreement (AMA) with Consolidated Edison Company of New York, Inc. (ConEd) that gives ConEd the rights to use WGL Midstream’s 50,000 Dth per day of transportation capacity on the MarketLink Expansion Project for the period from April 1, 2020 through April 1, 2035; |
▪ | Normalized EBITDA was $499 million compared to $482 million in the first quarter of 2019; |
▪ | Cash from operations was $475 million ($1.70 per share) compared to cash from operations of $427 million ($1.55 per share) in the first quarter of 2019; |
▪ | Normalized funds from operations were $420 million ($1.51 per share) compared to $376 million ($1.36 per share) in the first quarter of 2019; |
▪ | Net income applicable to common shares was $464 million ($1.66 per share) compared to $809 million ($2.93 per share) in the first quarter of 2019; |
▪ | Normalized net income was $220 million ($0.79 per share) compared to $214 million ($0.78 per share) in the first quarter of 2019; |
▪ | Net debt was $7.0 billion as at March 31, 2020, compared to $7.2 billion at December 31, 2019; and |
▪ | Net debt-to-total capitalization ratio was 45 percent as at March 31, 2020, compared to 49 percent as at December 31, 2019. |
▪ | On April 1, 2020, AltaGas announced it will donate $1 million to help community partners in its operating regions respond to the COVID-19 pandemic. The assistance funds, provided by AltaGas, will be distributed to partner organizations on the front lines supporting local communities and providing critical support to our health care workers addressing the health crisis; |
▪ | In April 2020, the Alaskan legislature passed legislation and the regulatory commissions of the District of Columbia, Maryland, and Michigan issued orders allowing utilities to establish regulatory assets to record incremental COVID-19 related costs that will be evaluated for recovery in future proceedings; and |
▪ | On April 21, 2020, SEMCO completed the private placement of US$450 million of first mortgage bonds, in two tranches of US$225 million each. One of the tranches has a term of ten years with a coupon rate of 2.45 percent, and the other has a term of 30 years with a coupon rate of 3.15 percent. The proceeds were used to repay debt drawn on credit facilities and the US$300 million notes that matured in April 2020. |
§ | Utilities, which serves approximately 1.7 million customers with a rate base of approximately US$4.1 billion through ownership of regulated natural gas distribution utilities across five jurisdictions in the United States and two regulated natural gas storage utilities in the United States, delivering clean and affordable natural gas to homes and businesses. The Utilities business also includes storage facilities and contracts for interstate natural gas transportation and storage services, as well as the affiliated retail energy marketing business, which serves approximately 0.5 million customers; and |
§ | Midstream, which includes a 70 percent interest in the recently completed Ridley Island Propane Export Terminal, allowing AltaGas to leverage its assets along the energy value chain in Western Canada including natural gas gathering and processing, NGL extraction and fractionation, and natural gas and NGL marketing. The Midstream segment also includes transmission, storage, an interest in a regulated pipeline in the Marcellus/Utica gas formation in the northeastern United States, the Corporation’s 50 percent interest in AIJVLP, and an indirectly held investment in Petrogas Energy Corp. (Petrogas), through which AltaGas’ interest in the Ferndale terminal is held. |
Three Months Ended March 31 | ||||
($ millions, except normalized effective income tax rate) | 2020 | 2019 | ||
Revenue | 1,869 | 1,898 | ||
Normalized EBITDA (1) (2) | 499 | 482 | ||
Net income applicable to common shares | 464 | 809 | ||
Normalized net income (1) (2) | 220 | 214 | ||
Total assets | 21,133 | 21,563 | ||
Total long-term liabilities | 10,003 | 10,374 | ||
Net additions (dispositions) of property, plant and equipment | 200 | (1,201 | ) | |
Dividends declared (3) | 67 | 66 | ||
Cash from operations | 475 | 427 | ||
Normalized funds from operations (1) | 420 | 376 | ||
Normalized adjusted funds from operations (1) | 382 | 367 | ||
Normalized utility adjusted funds from operations (1) | 308 | 294 | ||
Normalized effective income tax rate (%) (1) | 25.3 | 13.8 |
Three Months Ended March 31 | ||||
($ per share, except shares outstanding) | 2020 | 2019 | ||
Net income per common share - basic | 1.66 | 2.93 | ||
Net income per common share - diluted | 1.66 | 2.93 | ||
Normalized net income - basic (1) | 0.79 | 0.78 | ||
Normalized net income - diluted (1) | 0.79 | 0.78 | ||
Dividends declared (3) | 0.24 | 0.24 | ||
Cash from operations | 1.70 | 1.55 | ||
Normalized funds from operations (1) | 1.51 | 1.36 | ||
Normalized adjusted funds from operations (1) | 1.37 | 1.33 | ||
Normalized utility adjusted funds from operations (1) | 1.10 | 1.07 | ||
Shares outstanding - basic (millions) | ||||
During the period (4) | 279 | 276 | ||
End of period | 279 | 276 |
(1) | Non‑GAAP financial measure; see discussion in Non-GAAP Financial Measures section of this MD&A. |
(2) | Beginning in 2020, Management no longer adjusts normalized EBITDA or normalized net income for changes in the fair value of natural gas optimization inventory. Please see the Non-GAAP Financial Measures section of this MD&A for additional detail. As such, comparative periods have been adjusted to reflect the before and after-tax impacts of this change to normalized EBITDA and normalized net income, respectively. |
(3) | Dividends declared per common share per month: $0.08 beginning on December 27, 2018. |
(4) | Weighted average. |
Factor | Increase or decrease | Approximate impact on normalized annual EBITDA ($ millions) | ||
Degree day variance from normal - Utilities (1) | 5 percent | 9 | ||
Change in Canadian dollar per U.S. dollar exchange rate | 0.05 | 35 | ||
RIPET Propane Far East Index to Mont Belvieu spread (2) | US$1/Bbl | 4 | ||
Pension discount rate | 1 percent | 17 |
(1) | Degree days – Utilities relate to SEMCO Gas, ENSTAR, and Washington Gas service areas. Degree days are a measure of coldness determined daily as the numbers of degrees the average temperature during the day in question is below 65 degrees Fahrenheit. Degree days for a particular period are the average of degree days during the prior 15 years for SEMCO Gas, during the prior 10 years for ENSTAR, and during the prior 30 years for Washington Gas. |
(2) | The impact on EBITDA due to changes in the spread will vary and is being managed through an active hedging program. |
Project | AltaGas' Ownership Interest | Estimated Cost (1) | Expenditures to Date (2) | Status | Expected In-Service Date | |||
Midstream Projects | ||||||||
Northeast B.C. Pipeline Projects | 33% to 100% | $83 million | $71 million | The Northeast B.C. Pipeline projects consist of four pipelines; the Inga gas gathering pipeline (33% ownership), the Townsend East NGL pipeline (100% ownership), the Aitken Connector NGL pipeline (100% ownership), and the Gundy lateral pipeline (100% ownership). In the first quarter of 2020, construction was completed on the Aitken Connector and it has been placed in-service. The Gundy lateral pipeline is also complete and will be placed in-service after the completion of the Townsend East NGL pipeline which is expected to be commissioned in the second quarter of 2020 together with the Inga gas gathering pipeline. | In-service Q1 and Q2 2020 | |||
Townsend 2B Expansion and Mercaptan Treating | 100% | $165 million | $150 million | Townsend 2B was under commissioning in the first quarter of 2020 and began flowing gas in early April. For the Mercaptan treating facility, construction and commissioning activities were completed in the first quarter. The facility is now in-service and operating as per design. AltaGas expects increased volumes from producers in the area when all pipelines are in service. | In-service Q1 and early Q2 2020 | |||
North Pine Expansion | 100% | $58 million | $53 million | Construction and commissioning activities are now complete. The second 10,000 Bbls/d train is in-service with additional capacity for the rail terminal to handle the increased produced volumes. | In-service Q1 2020 | |||
Mountain Valley Pipeline | 10% | US$352 million | US$352 million | As at March 31, 2020, approximately 90 percent of the project is complete, which includes construction of all original interconnects and compressor stations. In the third quarter of 2019 there was a voluntary suspension of construction activities in a section of the pipeline and the Federal Energy Regulatory Commission (FERC) issued an order to suspend all construction. As a result, the in-service date is expected to be late 2020. Despite the delays, AltaGas' exposure is contractually capped to the original estimated contributions of approximately US$352 million. | Late 2020 due to ongoing legal and regulatory challenges | |||
MVP Southgate Project | 5% | US$20 million | US$3 million | Construction is expected to begin in the first quarter of 2021. Expenditures to date relate to land surveys, land acquisition, and obtaining permits and regulatory approvals. | Late 2021 |
Project | AltaGas' Ownership Interest | Estimated Cost (1) | Expenditures to Date (2) | Status | Expected In-Service Date | ||||
Utilities Projects | |||||||||
Accelerated Utility Pipe Replacement Programs – District of Columbia | 100% | Estimated US$374 million over the period from October 2020 to December 2025, plus additional expenditures in subsequent periods. | $nil (3) | Washington Gas has submitted an application for the second phase of PROJECTpipes to the Public Service Commission of the District of Columbia (PSC of DC). In the interim, in March 2020, the PSC of DC approved an additional extension of the plan for the six month period from April 1, 2020 to September 30, 2020 for an amount not to exceed US$12.5 million. On April 23, 2020, the PSC of DC established a procedural schedule for the case, with hearings scheduled for August 18-19, 2020 and a decision expected in October 2020. | Individual assets are placed into service throughout the program. | ||||
Accelerated Utility Pipe Replacement Programs – Maryland | 100% | Estimated US$350 million over the five year period from January 2019 to December 2023, plus additional expenditures in subsequent periods. | US$66 million (3) | The second phase of the accelerated utility pipe replacement programs in Maryland (STRIDE 2.0) began in January 2019. | Individual assets are placed into service throughout the program. | ||||
Accelerated Utility Pipe Replacement Programs – Virginia | 100% | Estimated US$500 million over the five year period from January 2018 to December 2022, plus additional expenditures in subsequent periods. | US$189 million (3) | The second phase of the accelerated pipe replacement programs in Virginia (SAVE 2.0) began in January 2018. | Individual assets are placed into service throughout the program. | ||||
Accelerated Mains Replacement Programs – Michigan | 100% | Estimated US$50 million over five year period from 2015 to 2020. | US$38 million (3) | The third phase of the Accelerated Mains Replacement Program (MRP3) in Michigan expires in May 2020. A new MRP program was agreed to in SEMCO’s recently settled rate case. The new five-year MRP program begins in 2021 with a total spend of approximately US$60 million. In addition to the new MRP program, SEMCO was also granted a new Infrastructure Reliability Improvement Program (IRIP) which is also a five-year program with a total spend of approximately US$55 million beginning in 2021. | Individual assets are placed into service throughout the program. |
(1) | These amounts are estimates and are subject to change based on various factors. Where appropriate, the amounts reflect AltaGas’ share of the various projects. |
(2) | Expenditures to date reflect total cumulative expenditures incurred from inception of the projects to March 31, 2020. For WGL projects, this also includes any expenditures prior to the close of the WGL Acquisition on July 6, 2018. |
(3) | The utility accelerated replacement programs are long-term projects with multiple phases for which expenditures are approved by the regulators and managed in five year increments. Expenditures to date only include amounts for the current programs described above, and exclude any expenditures made under prior increments of the programs. Actual regulatory filings may differ from reported amounts. |
Three Months Ended March 31 | ||||||
($ millions) | 2020 | 2019 (1) | ||||
Net income after taxes (GAAP financial measure) | $ | 486 | $ | 822 | ||
Add: | ||||||
Depreciation and amortization | 105 | 118 | ||||
Interest expense | 70 | 93 | ||||
Income tax expense | 132 | 127 | ||||
EBITDA | $ | 793 | $ | 1,160 | ||
Add (deduct): | ||||||
Transaction costs related to acquisitions and dispositions | 9 | 12 | ||||
Merger commitment recoveries | — | (5 | ) | |||
Unrealized gains on risk management contracts | (115 | ) | (7 | ) | ||
Non-controlling interest related to HLBV investments | — | 5 | ||||
Losses (gains) on investments | 3 | (1 | ) | |||
Gain on sale of assets | (212 | ) | (686 | ) | ||
Restructuring costs | 1 | — | ||||
Dilution loss on equity investment | 16 | — | ||||
COVID-19 related costs | 1 | — | ||||
Provisions on assets | 2 | — | ||||
Investment tax credits related to distributed generation assets | — | 2 | ||||
Accretion expenses | 1 | 2 | ||||
Normalized EBITDA | $ | 499 | $ | 482 |
(1) | In prior periods, normalized EBITDA also included adjustments for changes in fair value of natural gas optimization inventory; however, beginning in 2020, this is no longer adjusted for as Management believes this more accurately represents AltaGas' operating profitability. Instead, normalized EBITDA is now adjusted for unrealized gains or losses on hedges related to this optimization inventory which is included in unrealized gains on risk management contracts. Comparative periods have been restated to reflect this change. |
Three Months Ended March 31 | ||||||
($ millions) | 2020 | 2019 (1) | ||||
Net income applicable to common shares (GAAP financial measure) | $ | 464 | $ | 809 | ||
Add (deduct) after-tax: | ||||||
Transaction costs related to acquisitions and dispositions | 8 | 10 | ||||
Merger commitment recoveries | — | (5 | ) | |||
Unrealized gains on risk management contracts | (88 | ) | (6 | ) | ||
Losses (gains) on investments | 3 | (1 | ) | |||
Gain on sale of assets | (185 | ) | (593 | ) | ||
Restructuring costs | 1 | — | ||||
Dilution loss on equity investment | 16 | — | ||||
COVID-19 related costs | 1 | — | ||||
Normalized net income | $ | 220 | $ | 214 |
(1) | In prior periods, normalized net income also included adjustments for after-tax changes in fair value of natural gas optimization inventory; however, beginning in 2020, this is no longer adjusted for as Management believes this more accurately represents AltaGas' operating profitability. Instead, normalized net income is now adjusted for after-tax unrealized gains or losses on hedges related to this optimization inventory which is included in unrealized gains on risk management contracts. Comparative periods have been restated to reflect this change. |
Three Months Ended March 31 | ||||||
($ millions) | 2020 | 2019 | ||||
Cash from operations (GAAP financial measure) | $ | 475 | $ | 427 | ||
Add (deduct): | ||||||
Net change in operating assets and liabilities | (61 | ) | (63 | ) | ||
Asset retirement obligations settled | 1 | 5 | ||||
Funds from operations | $ | 415 | $ | 369 | ||
Add (deduct): | ||||||
Transaction costs related to acquisitions and dispositions (1) | 3 | 12 | ||||
Restructuring costs | 1 | — | ||||
COVID-19 related costs | 1 | — | ||||
Merger commitment recoveries | — | (5 | ) | |||
Normalized funds from operations | $ | 420 | $ | 376 | ||
Add (deduct): | ||||||
Net cash received from (paid to) non-controlling interests | (7 | ) | 16 | |||
Non-utility maintenance capital | (14 | ) | (8 | ) | ||
Preferred dividends paid | (17 | ) | (17 | ) | ||
Normalized adjusted funds from operations | $ | 382 | $ | 367 | ||
Add (deduct): | ||||||
Utilities depreciation and amortization | (74 | ) | (73 | ) | ||
Normalized utility adjusted funds from operations | $ | 308 | $ | 294 |
(1) | Excluding non-cash amounts. |
Three Months Ended March 31 | ||||||
($ millions) | 2020 | 2019 | ||||
Income tax expense (GAAP financial measure) | $ | 132 | $ | 127 | ||
Add (deduct) tax impact of: | ||||||
Transaction costs related to acquisitions and dispositions | 1 | 2 | ||||
Unrealized gains on risk management contracts | (27 | ) | (1 | ) | ||
Gain on sale of assets | (26 | ) | (93 | ) | ||
Provisions on assets | 2 | — | ||||
Investment tax credits related to distributed generation assets | — | 2 | ||||
Normalized income tax expense | $ | 82 | $ | 37 |
Three Months Ended March 31 | ||||||
($ millions) | 2020 | 2019 | ||||
Normalized EBITDA | $ | 499 | $ | 482 | ||
Add (deduct): | ||||||
Depreciation and amortization | (105 | ) | (118 | ) | ||
Interest expense | (70 | ) | (93 | ) | ||
Income tax expense | (132 | ) | (127 | ) | ||
Normalizing items impacting income tax expense | 51 | 90 | ||||
Accretion expenses | (1 | ) | (2 | ) | ||
Non-controlling interest related to HLBV investments | — | (5 | ) | |||
Net income (loss) applicable to non-controlling interests | (5 | ) | 4 | |||
Preferred share dividends | (17 | ) | (17 | ) | ||
Normalized net income | $ | 220 | $ | 214 |
Three Months Ended March 31 | ||||||
($ millions, except normalized effective income tax rate) | 2020 | 2019 | ||||
Normalized net income | $ | 220 | $ | 214 | ||
Add (deduct): | ||||||
Normalized income tax expense | 82 | 37 | ||||
Net income (loss) applicable to non-controlling interests | 5 | (4 | ) | |||
Non-controlling interest related to HLBV investments | — | 5 | ||||
Preferred share dividends | 17 | 17 | ||||
Normalized net income before taxes | $ | 324 | $ | 269 | ||
Normalized effective income tax rate (%) (1) | 25.3 | 13.8 |
(1) | Calculated as normalized income tax expense divided by normalized net income before taxes. |
Normalized EBITDA (1) (2) | Three Months Ended March 31 | |||||
($ millions) | 2020 | 2019 | ||||
Utilities | $ | 369 | $ | 335 | ||
Midstream | 120 | 128 | ||||
Sub-total: Operating Segments | $ | 489 | $ | 463 | ||
Corporate/Other | 10 | 19 | ||||
$ | 499 | $ | 482 |
(1) | Non‑GAAP financial measure; See discussion in Non‑GAAP Financial Measures section of this MD&A. |
(2) | Beginning in 2020, Management no longer adjusts normalized EBITDA or normalized net income for changes in the fair value of natural gas optimization inventory. Please see the Non-GAAP Financial Measures section of this MD&A for additional detail. As such, comparative periods have been adjusted to reflect the before and after-tax impacts of this change to normalized EBITDA and normalized net income, respectively. |
Revenue | Three Months Ended March 31 | |||||
($ millions) | 2020 | 2019 | ||||
Utilities | $ | 1,405 | $ | 1,532 | ||
Midstream | 450 | 296 | ||||
Sub-total: Operating Segments | $ | 1,855 | $ | 1,828 | ||
Corporate/Other | 26 | 71 | ||||
Intersegment eliminations | (12 | ) | (1 | ) | ||
$ | 1,869 | $ | 1,898 |
Three Months Ended March 31 | ||||
2020 | 2019 | |||
Natural gas deliveries - end-use (Bcf) (1) | 66.6 | 75.4 | ||
Natural gas deliveries - transportation (Bcf) (1) | 40.5 | 47.6 | ||
Service sites (thousands) (2) | 1,661 | 1,647 | ||
Degree day variance from normal - SEMCO Gas (%) (3) | (11.4 | ) | 5.7 | |
Degree day variance from normal - ENSTAR (%) (3) | 16.1 | (9.4 | ) | |
Degree day variance from normal - Washington Gas (%) (3) (4) | (17.1 | ) | (1.1 | ) |
Retail energy marketing - gas sales volumes (Mmcf) | 21,916 | 27,411 | ||
Retail energy marketing - electricity sales volumes (GWh) | 3,511 | 3,080 |
(1) | Bcf is one billion cubic feet. |
(2) | Service sites reflect all of the service sites of the utilities, including transportation and non‑regulated business lines. |
(3) | A degree day is a measure of coldness determined daily as the number of degrees the average temperature during the day in question is below 65 degrees Fahrenheit. Degree days for a particular period are determined by adding the degree days incurred during each day of the period. Normal degree days for a particular period are the average of degree days during the prior 15 years for SEMCO Gas, during the prior 10 years for ENSTAR, and during the prior 30 years for Washington Gas. |
(4) | In certain of Washington Gas’ jurisdictions (Virginia and Maryland) there are billing mechanisms in place which are designed to eliminate the effects of variance in customer usage caused by weather and other factors such as conservation. In the District of Columbia, there is no weather normalization billing mechanism nor does Washington Gas hedge to offset the effects of weather. As a result, colder or warmer weather will result in variances to financial results. |
Utility/Jurisdiction | Date Filed | Request | Status | Expected Timing of Decision |
Washington Gas - District of Columbia | January 2020 | US$35 million increase in base rates, including US$9 million of annual PROJECTpipes surcharges currently paid by customers for accelerated pipeline replacement. Therefore, the incremental amount of the base rate increase requested is approximately US$26 million. | Washington Gas filed this rate case on January 13, 2020. Washington Gas has also requested approval for a Revenue Normalization Adjustment mechanism to reduce customer bill fluctuations due to weather-related usage variations, similar to existing mechanisms in both Maryland and Virginia. On April 29, 2020, the PSC of DC issued an Order which established a procedural schedule and identified issues to be addressed in the Washington Gas' supplemental direct testimony to be filed May 15, 2020. Hearings are scheduled for October 6-9, 2020, and a decision is expected to be issued by February 16, 2021. | Not yet known |
Three Months Ended March 31 | ||||
2020 | 2019 | |||
RIPET export volumes (Bbls/d) (1) | 35,141 | — | ||
Total inlet gas processed (Mmcf/d) (2) | 1,393 | 1,481 | ||
Extracted ethane volumes (Bbls/d) (2) | 29,932 | 23,431 | ||
Extracted NGL volumes (Bbls/d) (2) (3) | 32,495 | 37,643 | ||
Fractionation volumes (Bbls/d) (2) (4) | 21,079 | 16,828 | ||
Frac spread - realized ($/Bbl) (2) (5) | 11.76 | 16.84 | ||
Frac spread - average spot price ($/Bbl) (2) (6) | 2.04 | 11.79 | ||
Propane Far East Index (FEI) to Mont Belvieu spread (US$/Bbl) (7) | 16.23 | — | ||
Natural gas optimization inventory (Bcf) | 34.3 | 13.2 |
(1) | Represents propane volumes exported at RIPET since facility was placed into service in May 2019. |
(2) | Average for the period. |
(3) | NGL volumes refer to propane, butane and condensate. |
(4) | Represents fractionation volumes at Harmattan, Younger and North Pine. |
(5) | Realized frac spread or NGL margin, expressed in dollars per barrel of NGL, is derived from sales recorded by the segment during the period for frac exposed volumes plus the settlement value of frac hedges settled in the period less extraction premiums, divided by the total frac exposed volumes produced during the period. |
(6) | Average spot frac spread or NGL margin, expressed in dollars per barrel of NGL, is indicative of the average sales price that AltaGas receives for propane, butane and condensate less extraction premiums, before accounting for hedges, divided by the respective frac exposed volumes for the period. |
(7) | Average propane price spread between Argus Far East Index and Mont Belvieu TET commercial index for the period beginning May 2019. |
Three Months Ended March 31, 2020 | ||||||||||||
($ millions) | Utilities | Midstream | Corporate/Other | Total | ||||||||
Invested capital: | ||||||||||||
Property, plant and equipment | $ | 144 | $ | 42 | $ | 17 | $ | 203 | ||||
Intangible assets | — | — | 1 | 1 | ||||||||
Long-term investments | — | 64 | — | 64 | ||||||||
Contributions from non-controlling interest | — | (3 | ) | — | (3 | ) | ||||||
Invested capital | 144 | 103 | 18 | 265 | ||||||||
Disposals: | ||||||||||||
Property, plant and equipment | — | — | (4 | ) | (4 | ) | ||||||
Equity method investments | (369 | ) | (7 | ) | — | (376 | ) | |||||
Invested capital, net of disposals | $ | (225 | ) | $ | 96 | $ | 14 | $ | (115 | ) |
Three Months Ended March 31, 2019 | ||||||||||||
($ millions) | Utilities | Midstream | Corporate/ Other | Total | ||||||||
Invested capital: | ||||||||||||
Property, plant and equipment | $ | 140 | $ | 74 | $ | 14 | $ | 228 | ||||
Intangible assets | — | 1 | 3 | 4 | ||||||||
Long-term investments | — | 85 | — | 85 | ||||||||
Contributions from non-controlling interest | — | (16 | ) | — | (16 | ) | ||||||
Invested capital | 140 | 144 | 17 | 301 | ||||||||
Disposals: | ||||||||||||
Property, plant and equipment | — | (88 | ) | (1,341 | ) | (1,429 | ) | |||||
Invested capital, net of disposals | $ | 140 | $ | 56 | $ | (1,324 | ) | $ | (1,128 | ) |
▪ | Key employees and personnel: AltaGas' ability to keep essential operating personnel in place may be challenged as a result of potential COVID-19 outbreaks or quarantines. Widespread inability of AltaGas' workforce or that of the Corporation's contractors to perform their duties would have an adverse impact on AltaGas' ability to continue normal operations in the Utilities, Midstream and Corporate/Other segments. Also, AltaGas may face allegations of liability to the extent that it is unable to effectively protect its workforce against the transmission of the virus; |
▪ | Adverse impacts on market fundamentals: In the Utilities segment, COVID-19 impacts gas demand through business closures and supply as a result of decreased production forecasts. In the Midstream segment, lower NGL pricing, lower demand in Asia and lower production in the Western Canada Sedimentary Basin (WCSB) could all have an adverse impact on AltaGas’ financial results and business operations; |
▪ | Counterparty and supplier risk: Increased exposure that contract counterparties and suppliers could fail to meet their obligations to AltaGas. Such non-performance by a significant counterparty or supplier could adversely affect AltaGas' operations and financial results; |
▪ | Share price: Global financial conditions continue to be subject to volatility arising from international geopolitical developments and the significant recent market reaction to COVID-19, resulting in a significant reduction in many major market indices and in AltaGas’ share price. Such decline may negatively impact the Corporation's ability to access the public markets; |
▪ | Privacy and cyber security: Increased volume and sophistication of targeted cyber attacks have been seen since the declaration of the global pandemic. Pandemic-adjusted operations, such as work from home arrangements and remote access to the Corporation's systems, may pose heightened risk of cyber security and privacy breaches; |
▪ | Access to capital: The uncertainty in the global financial markets could make capital increasingly hard to access; and |
▪ | IT infrastructure: Pandemic-adjusted operations, such as work from home arrangements, have put additional stress on the Corporation's IT infrastructure as a result of remote access demands and online meetings. A failure of such infrastructure could severely limit AltaGas' ability to conduct ordinary operations. |
($ millions) | March 31, 2020 | December 31, 2019 | ||||
Natural gas | $ | (59 | ) | $ | (77 | ) |
Energy exports | 15 | (75 | ) | |||
NGL frac spread | 13 | (2 | ) | |||
Power | (7 | ) | (12 | ) | ||
Net derivative liability | $ | (38 | ) | $ | (166 | ) |
▪ | The average indicative spot NGL frac spread for the three months ended March 31, 2020 was approximately $2/Bbl (2019 – $12/Bbl), inclusive of basis differentials. The average NGL frac spread realized by AltaGas (based on average spot price and realized hedge price inclusive of basis differentials) for the three months ended March 31, 2020 was approximately $12/Bbl inclusive of basis differentials (2019 - $17/Bbl). |
▪ | For 2020, AltaGas estimates an average of approximately 10,000 Bbls/d of NGL will be exposed to frac spreads prior to hedging activities. Hedges are in place for approximately 93 percent of frac exposed NGL volumes including internal hedges. |
▪ | At RIPET, propane price margins are protected through AltaGas' comprehensive hedging program. Approximately one third of 2020 volumes are contracted under tolling arrangements. For the remaining volumes, approximately 80 percent are financially hedged at a similar FEI to Mont Belvieu spread compared to 2019. Collectively, approximately 86 percent of RIPET’s propane export volumes are hedged for 2020. |
▪ | As at March 31, 2020, management has designated US$680 million of outstanding U.S. dollar denominated long-term debt to hedge against the currency translation effect of its foreign investments (December 31, 2019 - US$300 million). |
▪ | For the three months ended March 31, 2020, AltaGas recognized after-tax unrealized losses of $42 million arising from the translation of debt in other comprehensive income (2019 - unrealized gains of $39 million). |
▪ | For the three months ended March 31, 2020, pre-tax losses of $3 million (2019 - pre-tax gains of less than $1 million) were recorded related to heating degree day (HDD) and cooling degree day (CDD) instruments. |
Three Months Ended March 31 | ||||||
($ millions) | 2020 | 2019 | ||||
Natural gas | $ | 16 | $ | 12 | ||
Energy exports | 86 | — | ||||
NGL frac spread | 14 | (11 | ) | |||
Power | (1 | ) | 5 | |||
Foreign exchange | — | 1 | ||||
$ | 115 | $ | 7 |
Three Months Ended March 31 | ||||||
($ millions) | 2020 | 2019 | ||||
Cash from operations | $ | 475 | $ | 427 | ||
Investing activities | 127 | 1,180 | ||||
Financing activities | (338 | ) | (1,627 | ) | ||
Increase (decrease) in cash, cash equivalents, and restricted cash | $ | 264 | $ | (20 | ) |
($ millions, except working capital ratio) | March 31, 2020 | December 31, 2019 | ||||
Current assets | $ | 2,338 | $ | 2,196 | ||
Current liabilities | 2,699 | 3,125 | ||||
Working deficiency | $ | (361 | ) | $ | (929 | ) |
Working capital ratio (1) | 0.87 | 0.70 |
(1) | Calculated as current assets divided by current liabilities. |
($ millions, except net debt-to-total capitalization) | March 31, 2020 | December 31, 2019 | ||||
Short-term debt (1) | $ | 65 | $ | 389 | ||
Current portion of long-term debt | 1,061 | 923 | ||||
Long-term debt (2) | 6,238 | 5,928 | ||||
Total debt | 7,364 | 7,240 | ||||
Less: cash and cash equivalents | (335 | ) | (57 | ) | ||
Net debt | $ | 7,029 | $ | 7,183 | ||
Shareholders' equity | 8,279 | 7,215 | ||||
Non-controlling interests | 152 | 154 | ||||
Total capitalization | $ | 15,460 | $ | 14,552 | ||
Net debt-to-total capitalization (%) | 45 | 49 |
(1) | For the purposes of the net debt calculation, short-term debt excludes third-party project financing obtained on behalf of the United States federal government to provide funds for the construction of certain energy management services projects. As this debt was obtained on behalf of the U.S. government, AltaGas would only need to repay in the event that the project is not completed or accepted by the government. See Note 15 of the 2019 Annual Consolidated Financial Statements for additional details. At March 31, 2020, the project financing balance excluded from short-term debt in above table was $77 million (December 31, 2019 - $71 million). |
(2) | Net of debt issuance costs of $39 million as at March 31, 2020 (December 31, 2019- $36 million). |
Credit Facilities | Drawn at | Drawn at | |||||||
($ millions) | Borrowing capacity | March 31, 2020 | December 31, 2019 | ||||||
AltaGas unsecured demand credit facilities (1) (2) | $ | 70 | $ | — | $ | 156 | |||
AltaGas unsecured extendible revolving letter of credit facilities (1) (2) | — | — | 150 | ||||||
AltaGas unsecured revolving credit facilities (1) (2) (4) | 3,678 | 695 | 90 | ||||||
AltaGas unsecured term credit facility (1) (2) | 426 | 426 | 390 | ||||||
SEMCO Energy US$150 million unsecured credit facilities (1) (2) | 213 | 100 | 164 | ||||||
WGL US$250 million unsecured revolving credit facility (2) (3) | 355 | 197 | — | ||||||
Washington Gas US$450 million unsecured revolving credit facility (2) (3) | 638 | 207 | — | ||||||
$ | 5,380 | $ | 1,625 | $ | 950 |
(1) | Amount drawn at March 31, 2020 converted at the month‑end rate of 1 U.S. dollar = 1.4187 Canadian dollar (December 31, 2019 - 1 U.S. dollar = 1.2988 Canadian dollar). |
(2) | All US$ borrowing capacity was converted at the March 31, 2020 U.S./Canadian dollar month-end exchange rate. |
(3) | WGL and Washington Gas have the right to request additional borrowings of up to US$100 million with the bank’s approval, for a total of US$350 million and US$550 million on their respective facilities. |
(4) | AltaGas also has demand Letter of Credit facilities of $709 million (US$500 million). At March 31, 2020, there were letters of credit for $298 million (December 31, 2019 - $281 million) issued on these facilities and an additional $23 million (December 31, 2019 - $25 million) issued on the company's revolving credit facilities). |
Ratios | Debt covenant requirements | As at March 31, 2020 | |
Bank debt-to-capitalization (1) (2) | not greater than 65% | less than 50 | % |
Bank EBITDA-to-interest expense (1) (2) | not less than 2.5x | greater than 3.5x | |
Bank debt-to-capitalization (SEMCO) (2) (3) | not greater than 60% | less than 37 | % |
Bank EBITDA-to-interest expense (SEMCO) (2) (3) | not less than 2.25x | greater than 8.0x | |
Bank debt-to-capitalization (WGL) (4) | not greater than 65% | less than 44 | % |
Bank debt-to-capitalization (Washington Gas) (4) | not greater than 65% | less than 46 | % |
(1) | Calculated in accordance with the Corporation’s US$1.2 billion credit facility agreement, which is available on SEDAR at www.sedar.com. The covenants are equivalent and applicable to all the Corporation’s committed credit facilities. |
(2) | Estimated, subject to final adjustments. |
(3) | Bank EBITDA-to-interest expense (SEMCO) and Bank debt-to-capitalization (SEMCO) are calculated based on SEMCO’s consolidated financial statements and are calculated similar to Bank debt-to-capitalization and Bank EBITDA-to-interest expense. |
(4) | WGL’s bank debt-to-capitalization ratio is calculated based on WGL’s consolidated financial statements. |
As at April 24, 2020 | ||
Issued and outstanding | ||
Common shares | 279,445,083 | |
Preferred Shares | ||
Series A | 5,511,220 | |
Series B | 2,488,780 | |
Series C | 8,000,000 | |
Series E | 8,000,000 | |
Series G | 6,885,823 | |
Series H | 1,114,177 | |
Series I | 8,000,000 | |
Series K | 12,000,000 | |
Issued | ||
Share options | 9,178,002 | |
Share options exercisable | 3,064,865 |
Common Share Dividends | ||||||
Year ended December 31 | ||||||
($ per common share) | 2020 | 2019 | ||||
First quarter | $ | 0.240000 | $ | 0.240000 | ||
Second quarter | — | 0.240000 | ||||
Third quarter | — | 0.240000 | ||||
Fourth quarter | — | 0.240000 | ||||
Total | $ | 0.240000 | $ | 0.960000 |
Series A Preferred Share Dividends | ||||||
Year ended December 31 | ||||||
($ per preferred share) | 2020 | 2019 | ||||
First quarter | $ | 0.211250 | $ | 0.211250 | ||
Second quarter | — | 0.211250 | ||||
Third quarter | — | 0.211250 | ||||
Fourth quarter | — | 0.211250 | ||||
Total | $ | 0.211250 | $ | 0.845000 |
Series B Preferred Share Dividends | ||||||
Year ended December 31 | ||||||
($ per preferred share) | 2020 | 2019 | ||||
First quarter | $ | 0.268030 | $ | 0.269380 | ||
Second quarter | — | 0.270510 | ||||
Third quarter | — | 0.273921 | ||||
Fourth quarter | — | 0.270830 | ||||
Total | $ | 0.268030 | $ | 1.084641 |
Series C Preferred Share Dividends | ||||||
Year ended December 31 | ||||||
(US$ per preferred share) | 2020 | 2019 | ||||
First quarter | $ | 0.330625 | $ | 0.330625 | ||
Second quarter | — | 0.330625 | ||||
Third quarter | — | 0.330625 | ||||
Fourth quarter | — | 0.330625 | ||||
Total | $ | 0.330625 | $ | 1.322500 |
Series E Preferred Share Dividends | ||||||
Year ended December 31 | ||||||
($ per preferred share) | 2020 | 2019 | ||||
First quarter | $ | 0.337063 | $ | 0.337063 | ||
Second quarter | — | 0.337063 | ||||
Third quarter | — | 0.337063 | ||||
Fourth quarter | — | 0.337063 | ||||
Total | $ | 0.337063 | $ | 1.348252 |
Series G Preferred Share Dividends | ||||||
Year ended December 31 | ||||||
($ per preferred share) | 2020 | 2019 | ||||
First quarter | $ | 0.265125 | $ | 0.296875 | ||
Second quarter | — | 0.296875 | ||||
Third quarter | — | 0.296875 | ||||
Fourth quarter | — | 0.265125 | ||||
Total | $ | 0.265125 | $ | 1.155750 |
Series H Preferred Share Dividends | ||||||
Year ended December 31 | ||||||
($ per preferred share) | 2020 | 2019 | ||||
First quarter | $ | 0.292890 | $ | — | ||
Second quarter | — | — | ||||
Third quarter | — | — | ||||
Fourth quarter | — | 0.296040 | ||||
Total | $ | 0.292890 | $ | 0.296040 |
Series I Preferred Share Dividends | ||||||
Year ended December 31 | ||||||
($ per preferred share) | 2020 | 2019 | ||||
First quarter | $ | 0.328125 | $ | 0.328125 | ||
Second quarter | — | 0.328125 | ||||
Third quarter | — | 0.328125 | ||||
Fourth quarter | — | 0.328125 | ||||
Total | $ | 0.328125 | $ | 1.312500 |
Series K Preferred Share Dividends | ||||||
Year ended December 31 | ||||||
($ per preferred share) | 2020 | 2019 | ||||
First quarter | $ | 0.312500 | $ | 0.312500 | ||
Second quarter | — | 0.312500 | ||||
Third quarter | — | 0.312500 | ||||
Fourth quarter | — | 0.312500 | ||||
Total | $ | 0.312500 | $ | 1.250000 |
§ | In June 2016, FASB issued ASU No. 2016-13 “Financial Instruments – Credit Losses and all related amendments (collectively "ASC 326"): Measurement of Credit Losses on Financial Instruments”. The ASU replaces the current “incurred loss” impairment methodology with an “expected loss” model for financial assets measured at amortized cost. AltaGas has applied ASC 326 using the modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date of the new standard. Prior periods presented for comparative purposes were not adjusted. Upon adoption of ASC 326, "accounts receivable, net of allowances" decreased by $2 million and "long-term investments and other assets" decreased by $5 million, with an offsetting increase to "accumulated deficit". AltaGas has elected to account for its cash equivalents at fair value. Please also refer to Note 14 of the unaudited condensed interim Consolidated Financial Statements as at and for the three months ended March 31, 2020 for further details; |
§ | ASU No. 2018-13 “Fair Value Measurement – Disclosure Framework: Changes to the Disclosure Requirements for Fair Value Measurement”. The amendments in this ASU modify the disclosure requirements on fair value measurements. The adoption of this ASU did not have a material impact on AltaGas’ consolidated financial statements, but resulted in certain minor adjustments to the fair value disclosures. Please also refer to Note 14 of the unaudited condensed interim Consolidated Financial Statements as at and for the three months ended March 31, 2020 for further details; |
§ | ASU No. 2018-17 “Consolidation: Targeted Improvements to Related Party Guidance for Variable Interest Entities”. The amendments in this ASU provide a private-company scope exception to the VIE guidance for certain entities and clarify that indirect interests held through related parties under common control are considered on a proportional basis when determining whether fees paid to decision makers and service providers are variable interests. The adoption of this ASU did not have a material impact on AltaGas’ consolidated financial statements; |
§ | ASU No. 2018-18 "Collaborative Arrangements: Clarifying the Interaction between Topic 808 and Topic 606". The amendments in this ASU clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under ASC 606, adds unit-of-account guidance in ASC 808 to align with the guidance in ASC 606, and requires that a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, is precluded from presenting the transaction together with revenue recognized under ASC 606 if the collaborative arrangement participant is not a customer. The adoption of this ASU did not have a material impact on AltaGas’ consolidated financial statements; |
§ | ASU No. 2019-01 "Leases: Codification Improvements". The amendments in this ASU provide a fair value exception for lessors that are not manufacturers or dealers, clarifies the presentation of principal payments received under sales-type and direct finance leases for depository and lending institutions, and clarifies that interim transition disclosure requirements related to the change on income statement, net income and related per share amounts for the adoption of ASC 842 are not required. The adoption of this ASU did not have a material impact on AltaGas’ consolidated financial statements; and |
§ | ASU No. 2019-04 “Financial Instruments: Codification Improvements". The amendments in this ASU provide clarification and improve the codification in recently issued accounting standards relating to credit losses, hedge accounting, and financial instruments. The amendments related to credit losses were evaluated in conjunction with ASU 2016-13 above. The adoption of this ASU did not have a material impact on AltaGas’ consolidated financial statements. |
($ millions) | Q1-20 | Q4-19 | Q3-19 | Q2-19 | Q1-19 | Q4-18 | Q3-18 | Q2-18 | ||||||||
Total revenue | 1,869 | 1,534 | 888 | 1,174 | 1,898 | 1,727 | 1,041 | 610 | ||||||||
Normalized EBITDA (2) (3) | 499 | 436 | 173 | 211 | 482 | 381 | 229 | 166 | ||||||||
Net income (loss) applicable to common shares | 464 | (103 | ) | 22 | 41 | 809 | 174 | (726 | ) | 1 | ||||||
($ per share) | Q1-20 | Q4-19 | Q3-19 | Q2-19 | Q1-19 | Q4-18 | Q3-18 | Q2-18 | ||||||||
Net income (loss) per common share | ||||||||||||||||
Basic | 1.66 | (0.37 | ) | 0.08 | 0.15 | 2.93 | 0.64 | (2.78 | ) | 0.01 | ||||||
Diluted | 1.66 | (0.37 | ) | 0.08 | 0.15 | 2.93 | 0.64 | (2.78 | ) | 0.01 | ||||||
Dividends declared | 0.24 | 0.24 | 0.24 | 0.24 | 0.24 | 0.45 | 0.55 | 0.55 |
(1) | Amounts may not add due to rounding. |
(2) | Non‑GAAP financial measure. See discussion in the Non‑GAAP Financial Measures section of this MD&A. |
(3) | Beginning in 2020, Management no longer adjusts normalized EBITDA for changes in the fair value of natural gas optimization inventory. Please see the Non-GAAP Financial Measures section of this MD&A for additional detail. Prior periods have been adjusted to reflect the impact of this change. |
§ | Revenue from WGL after the acquisition closed in the third quarter of 2018; |
§ | The weaker U.S. dollar in the second quarter of 2018 on translated results of the U.S. assets; |
§ | The seasonally colder weather experienced at several of the utilities throughout 2018, and the first quarter of 2019; |
§ | Losses on risk management contracts recorded in the second quarter of 2018 related to the foreign currency option contracts entered into to mitigate the foreign exchange risks associated with the cash purchase price of WGL; |
§ | The impact of the sale of non-core U.S. Power assets in the fourth quarter of 2018; |
§ | The impact of the sale of the Canadian utilities to ACI and ACI's IPO in the fourth quarter of 2018; |
§ | The impact of the sale of the Northwest Hydro facilities and non-core Canadian Midstream and Power assets in the first quarter of 2019; |
§ | RIPET entering commercial service in the second quarter of 2019; and |
§ | The impact of the sale of the U.S. distributed generation assets in the third quarter of 2019. |
§ | The impact of WGL income for the period after the close of the acquisition on July 6, 2018; |
§ | Higher depreciation and amortization expense due to new assets placed into service, partially offset by the impact of asset sales; |
§ | After-tax transaction costs of approximately $40 million incurred throughout 2018 predominantly due to the WGL Acquisition; |
§ | After-tax merger commitment costs of $135 million associated with the WGL Acquisition recorded in the second half of 2018; |
§ | After-tax provisions of approximately $562 million recognized in 2018 primarily related to assets held for sale; |
§ | An income tax recovery of approximately $104 million related to the Northwest Hydro facilities held for sale classification at December 31, 2018; |
§ | The impact of the sale of non-core U.S. Power assets in the fourth quarter of 2018; |
§ | The impact of the sale of the Canadian utilities to ACI and ACI's IPO in the fourth quarter of 2018; |
§ | The impact of the sale of the Northwest Hydro facilities and non-core Canadian Midstream and Power assets in the first quarter of 2019; |
§ | The impact of the sale of the U.S. distributed generation assets in the third quarter of 2019; |
§ | The impact of the sale of WGL Midstream's indirect non-operating interest in Central Penn in the fourth quarter of 2019; |
§ | After-tax provisions of approximately $319 million recognized in the fourth quarter of 2019, primarily related to power assets; and |
§ | The impact of the sale of ACI in the first quarter of 2020. |
As at ($ millions) | March 31, 2020 | December 31, 2019 | ||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents (note 21) | $ | 335 | $ | 57 | ||
Accounts receivable (net of credit losses of $35 million) (notes 2 and 14) | 1,108 | 1,222 | ||||
Inventory (note 6) | 358 | 506 | ||||
Restricted cash holdings from customers (note 21) | 4 | 4 | ||||
Regulatory assets | 52 | 13 | ||||
Risk management assets (note 14) | 122 | 87 | ||||
Prepaid expenses and other current assets (note 21) | 283 | 280 | ||||
Assets held for sale (note 4) | 76 | 27 | ||||
2,338 | 2,196 | |||||
Property, plant and equipment | 10,879 | 10,125 | ||||
Intangible assets | 613 | 586 | ||||
Operating right of use assets | 180 | 170 | ||||
Goodwill (note 7) | 4,292 | 3,942 | ||||
Regulatory assets | 464 | 487 | ||||
Risk management assets (note 14) | 69 | 39 | ||||
Restricted cash holdings from customers (note 21) | 2 | 4 | ||||
Prepaid post-retirement benefits | 535 | 487 | ||||
Long-term investments and other assets (net of credit losses of $5 million) (notes 2, 8, 14, and 21) | 332 | 297 | ||||
Investments accounted for by the equity method (note 10) | 1,429 | 1,462 | ||||
$ | 21,133 | $ | 19,795 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Current liabilities | ||||||
Accounts payable and accrued liabilities | $ | 1,167 | $ | 1,325 | ||
Dividends payable | 22 | 22 | ||||
Short-term debt | 142 | 460 | ||||
Current portion of long-term debt (notes 11 and 14) | 1,061 | 923 | ||||
Customer deposits | 64 | 76 | ||||
Regulatory liabilities | 132 | 146 | ||||
Risk management liabilities (note 14) | 65 | 125 | ||||
Operating lease liabilities | 32 | 27 | ||||
Other current liabilities (note 14) | 11 | 17 | ||||
Liabilities associated with assets held for sale (note 4) | 3 | 4 | ||||
2,699 | 3,125 | |||||
Long-term debt (notes 11 and 14) | 6,238 | 5,928 | ||||
Asset retirement obligations | 392 | 362 | ||||
Unamortized investment tax credits | 3 | 4 | ||||
Deferred income taxes | 1,161 | 959 | ||||
Regulatory liabilities | 1,502 | 1,383 | ||||
Risk management liabilities (note 14) | 164 | 167 | ||||
Operating lease liabilities | 166 | 153 | ||||
Other long-term liabilities (note 14) | 109 | 102 | ||||
Future employee obligations | 268 | 243 | ||||
$ | 12,702 | $ | 12,426 | |||
As at ($ millions) | March 31, 2020 | December 31, 2019 | ||||
Shareholders' equity | ||||||
Common shares, no par values, unlimited shares authorized; 2020 - 279.4 million and 2019 - 279.1 million issued and outstanding (note 16) | $ | 6,726 | $ | 6,719 | ||
Preferred shares (note 16) | 1,277 | 1,277 | ||||
Contributed surplus | 378 | 377 | ||||
Accumulated deficit | (1,013 | ) | (1,403 | ) | ||
Accumulated other comprehensive income (AOCI) (note 12) | 911 | 245 | ||||
Total shareholders' equity | 8,279 | 7,215 | ||||
Non-controlling interests | 152 | 154 | ||||
Total equity | $ | 8,431 | $ | 7,369 | ||
$ | 21,133 | $ | 19,795 |
Three months ended March 31 ($ millions except per share amounts) | 2020 | 2019 | ||||
REVENUE (note 13) | $ | 1,869 | $ | 1,898 | ||
EXPENSES | ||||||
Cost of sales, exclusive of items shown separately | 964 | 1,139 | ||||
Operating and administrative | 338 | 350 | ||||
Accretion expenses | 1 | 2 | ||||
Depreciation and amortization | 105 | 118 | ||||
Provisions on assets (note 5) | 2 | — | ||||
1,410 | 1,609 | |||||
Income from equity investments (note 10) | 11 | 55 | ||||
Other income (note 3) | 218 | 697 | ||||
Interest expense | (70 | ) | (93 | ) | ||
Income before income taxes | 618 | 948 | ||||
Income tax expense (note 20) | ||||||
Current | 10 | 7 | ||||
Deferred | 122 | 119 | ||||
Net income after taxes | 486 | 822 | ||||
Net income (loss) applicable to non-controlling interests | 5 | (4 | ) | |||
Net income applicable to controlling interests | 481 | 826 | ||||
Preferred share dividends | (17 | ) | (17 | ) | ||
Net income applicable to common shares | $ | 464 | $ | 809 | ||
Net income per common share (note 17) | ||||||
Basic | $ | 1.66 | $ | 2.93 | ||
Diluted | $ | 1.66 | $ | 2.93 | ||
Weighted average number of common shares outstanding (millions) (note 17) | ||||||
Basic | 279.4 | 275.5 | ||||
Diluted | 279.9 | 275.7 |
Three months ended March 31 ($ millions) | 2020 | 2019 | ||||
Net income after taxes | $ | 486 | $ | 822 | ||
Other comprehensive income (loss), net of taxes | ||||||
Gain (loss) on foreign currency translation | 706 | (179 | ) | |||
Unrealized gain (loss) on net investment hedge (note 14) | (42 | ) | 39 | |||
Reclassification of actuarial gains and prior service credits on defined benefit (DB) and post-retirement benefit plans (PRB) to net income (note 19) | 2 | 1 | ||||
Other comprehensive income from equity investees | — | 1 | ||||
Total other comprehensive income (loss) (OCI), net of taxes (note 12) | 666 | (138 | ) | |||
Comprehensive income attributable to controlling interests and non-controlling interests, net of taxes | $ | 1,152 | $ | 684 | ||
Comprehensive income (loss) attributable to: | ||||||
Non-controlling interests | $ | 5 | $ | (4 | ) | |
Controlling interests | 1,147 | 688 | ||||
$ | 1,152 | $ | 684 |
Three months ended March 31 ($ millions) | 2020 | 2019 | ||||
Common shares (note 16) | ||||||
Balance, beginning of period | $ | 6,719 | $ | 6,654 | ||
Shares issued for cash on exercise of options | 1 | — | ||||
Shares issued under DRIP (1) | 6 | 10 | ||||
Balance, end of period | $ | 6,726 | $ | 6,664 | ||
Preferred shares (note 16) | ||||||
Balance, beginning of period | $ | 1,277 | $ | 1,319 | ||
Balance, end of period | $ | 1,277 | $ | 1,319 | ||
Contributed surplus | ||||||
Balance, beginning of period | $ | 377 | $ | 372 | ||
Share options expense | 1 | 1 | ||||
Balance, end of period | $ | 378 | $ | 373 | ||
Accumulated deficit | ||||||
Balance, beginning of period | $ | (1,403 | ) | $ | (1,906 | ) |
Net income applicable to controlling interests | 481 | 826 | ||||
Common share dividends | (67 | ) | (66 | ) | ||
Preferred share dividends | (17 | ) | (17 | ) | ||
Adoption of ASU 2016-13 (note 2) | (7 | ) | — | |||
Balance, end of period | $ | (1,013 | ) | $ | (1,163 | ) |
AOCI (note 12) | ||||||
Balance, beginning of period | $ | 245 | $ | 579 | ||
Other comprehensive income (loss) | 666 | (138 | ) | |||
Balance, end of period | $ | 911 | $ | 441 | ||
Total shareholders' equity | $ | 8,279 | $ | 7,634 | ||
Non-controlling interests | ||||||
Balance, beginning of period | $ | 154 | $ | 621 | ||
Net income (loss) applicable to non-controlling interests | 5 | (4 | ) | |||
Adjustment on disposition of assets | — | (490 | ) | |||
Contributions from non-controlling interests to subsidiaries | 3 | 17 | ||||
Distributions by subsidiaries to non-controlling interests | (10 | ) | (1 | ) | ||
Balance, end of period | $ | 152 | $ | 143 | ||
Total equity | $ | 8,431 | $ | 7,777 |
(1) | The Dividend Reinvestment and Optional Cash Purchase Plan was suspended in December 2019, with the December dividend (payable January 2020) being the last dividend payment eligible for reinvestment by participating shareholders under the DRIP. |
Three months ended March 31 ($ millions) | 2020 | 2019 | ||||
Cash from operations | ||||||
Net income after taxes | $ | 486 | $ | 822 | ||
Items not involving cash: | ||||||
Depreciation and amortization | 105 | 118 | ||||
Provisions on assets (note 5) | 2 | — | ||||
Accretion expenses | 1 | 2 | ||||
Share-based compensation (note 16) | 2 | 1 | ||||
Deferred income tax expense (note 20) | 122 | 119 | ||||
Gains on sale of assets (note 3) | (212 | ) | (686 | ) | ||
Income from equity investments | (11 | ) | (55 | ) | ||
Unrealized gains on risk management contracts (note 14) | (115 | ) | (7 | ) | ||
Losses (gains) on investments | 3 | (1 | ) | |||
Amortization of deferred financing costs | 2 | 4 | ||||
Provision for doubtful accounts | 9 | 12 | ||||
Change in pension and other post-retirement benefits | 3 | 6 | ||||
Other | 9 | 1 | ||||
Asset retirement obligations settled | (1 | ) | (5 | ) | ||
Distributions from equity investments | 9 | 33 | ||||
Changes in operating assets and liabilities (note 21) | 61 | 63 | ||||
$ | 475 | $ | 427 | |||
Investing activities | ||||||
Capital expenditures - property, plant and equipment | (187 | ) | (233 | ) | ||
Capital expenditures - intangible assets | (2 | ) | (5 | ) | ||
Contributions to equity investments | (64 | ) | (85 | ) | ||
Proceeds from disposition of equity investments (note 10) | 376 | — | ||||
Proceeds from disposition of assets, net of transaction costs (note 3) | 4 | 1,429 | ||||
Proceeds from disposition of financing receivable | — | 74 | ||||
$ | 127 | $ | 1,180 | |||
Financing activities | ||||||
Net repayment of short-term debt | (346 | ) | (158 | ) | ||
Issuance (repayment) of long-term debt, net of debt issuance costs | (1 | ) | 100 | |||
Repayment of long-term debt | (360 | ) | (272 | ) | ||
Net borrowing (repayment) under credit facilities | 454 | (1,240 | ) | |||
Dividends - common shares | (67 | ) | (66 | ) | ||
Dividends - preferred shares | (17 | ) | (17 | ) | ||
Distributions to non-controlling interests | (10 | ) | (1 | ) | ||
Contributions from non-controlling interests | 3 | 17 | ||||
Net proceeds from issuance of common shares | 6 | 10 | ||||
$ | (338 | ) | $ | (1,627 | ) | |
Change in cash, cash equivalents, and restricted cash | 264 | (20 | ) | |||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 11 | (3 | ) | |||
Net change in cash classified within assets held for sale | — | 5 | ||||
Cash, cash equivalents, and restricted cash, beginning of period | 122 | 201 | ||||
Cash, cash equivalents, and restricted cash, end of period (note 21) | $ | 397 | $ | 183 |
§ | Utilities, which serves approximately 1.7 million customers with a rate base of approximately US$4.1 billion through ownership of regulated natural gas distribution utilities across five jurisdictions in the United States and two regulated natural gas storage utilities in the United States, delivering clean and affordable natural gas to homes and businesses. The Utilities business also includes storage facilities and contracts for interstate natural gas transportation and storage services, as well as the affiliated retail energy marketing business, which serves approximately 0.5 million customers; |
§ | Midstream, which includes a 70 percent interest in the recently completed Ridley Island Propane Export Terminal, allowing AltaGas to leverage its assets along the energy value chain in Western Canada including natural gas gathering and processing, NGL extraction and fractionation, and natural gas and NGL marketing. The Midstream segment also includes transmission, storage, an interest in a regulated pipeline in the Marcellus/Utica gas formation in the northeastern United States, the Corporation’s 50 percent interest in AltaGas Idemitsu Joint Venture Limited Partnership (AIJVLP) and an |
§ | In June 2016, FASB issued ASU No. 2016-13 “Financial Instruments – Credit Losses and all related amendments (collectively "ASC 326"): Measurement of Credit Losses on Financial Instruments”. The ASU replaces the current “incurred loss” impairment methodology with an “expected loss” model for financial assets measured at amortized cost. AltaGas has applied ASC 326 using the modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date of the new standard. Prior periods presented for comparative purposes were not adjusted. Upon adoption of ASC 326, "accounts receivable, net of allowances" decreased by $2 million and "long-term investments and other assets" decreased by $5 million, with an offsetting increase to "accumulated deficit". AltaGas has elected to account for its cash equivalents at fair value. Please also refer to Note 14 of the unaudited condensed interim Consolidated Financial Statements as at and for the three months ended March 31, 2020 for further details; |
§ | ASU No. 2018-13 “Fair Value Measurement – Disclosure Framework: Changes to the Disclosure Requirements for Fair Value Measurement”. The amendments in this ASU modify the disclosure requirements on fair value measurements. The adoption of this ASU did not have a material impact on AltaGas’ consolidated financial statements, but resulted in certain minor adjustments to the fair value disclosures. Please also refer to Note 14 of the unaudited condensed interim Consolidated Financial Statements as at and for the three months ended March 31, 2020 for further details; |
§ | ASU No. 2018-17 “Consolidation: Targeted Improvements to Related Party Guidance for Variable Interest Entities”. The amendments in this ASU provide a private-company scope exception to the VIE guidance for certain entities and clarify that indirect interests held through related parties under common control are considered on a proportional basis when determining whether fees paid to decision makers and service providers are variable interests. The adoption of this ASU did not have a material impact on AltaGas’ consolidated financial statements; |
§ | ASU No. 2018-18 "Collaborative Arrangements: Clarifying the Interaction between Topic 808 and Topic 606". The amendments in this ASU clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under ASC 606, adds unit-of-account guidance in ASC 808 to align with the guidance in ASC 606, and requires that a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, is precluded from presenting the transaction together with revenue recognized under ASC 606 if the collaborative arrangement participant is not a customer. The adoption of this ASU did not have a material impact on AltaGas’ consolidated financial statements; |
§ | ASU No. 2019-01 "Leases: Codification Improvements". The amendments in this ASU provide a fair value exception for lessors that are not manufacturers or dealers, clarifies the presentation of principal payments received under sales-type and direct finance leases for depository and lending institutions, and clarifies that interim transition disclosure requirements related to the change on income statement, net income and related per share amounts for the adoption of ASC 842 are not required. The adoption of this ASU did not have a material impact on AltaGas’ consolidated financial statements; and |
§ | ASU No. 2019-04 “Financial Instruments: Codification Improvements". The amendments in this ASU provide clarification and improve the codification in recently issued accounting standards relating to credit losses, hedge accounting, and financial instruments. The amendments related to credit losses were evaluated in conjunction with ASU 2016-13 above. The adoption of this ASU did not have a material impact on AltaGas’ consolidated financial statements. |
As at | March 31, 2020 | December 31, 2019 | ||||
Assets held for sale | ||||||
Property, plant and equipment | $ | 74 | $ | 22 | ||
Operating right of use assets | 1 | 1 | ||||
Goodwill | 1 | 1 | ||||
Other long-term assets | — | 3 | ||||
$ | 76 | $ | 27 | |||
Liabilities associated with assets held for sale | ||||||
Unamortized investment tax credits | $ | 2 | $ | 3 | ||
Operating lease liabilities - long-term | 1 | 1 | ||||
$ | 3 | $ | 4 |
Three Months Ended March 31 | 2020 | 2019 | ||||
Midstream | $ | 2 | $ | — | ||
$ | 2 | $ | — |
As at | March 31, 2020 | December 31, 2019 | ||||
Natural gas held in storage (a) | $ | 216 | $ | 359 | ||
Materials and supplies | 62 | 57 | ||||
Renewable energy credits and emission compliance instruments | 66 | 64 | ||||
Natural gas liquids | 14 | 26 | ||||
$ | 358 | $ | 506 |
(a) | As at March 31, 2020, $100 million of the natural gas held in storage was held by rate-regulated utilities (December 31, 2019 - $214 million). |
As at | March 31, 2020 | December 31, 2019 | ||||
Balance, beginning of period | $ | 3,942 | $ | 4,068 | ||
Adjustment to goodwill on business acquisition | — | 92 | ||||
Goodwill included in dispositions | — | (29 | ) | |||
Reclassified to assets held for sale | — | (1 | ) | |||
Foreign exchange translation | 350 | (188 | ) | |||
Balance, end of period | $ | 4,292 | $ | 3,942 |
As at | March 31, 2020 | December 31, 2019 | ||||
Investments in publicly-traded entities | $ | 1 | $ | 4 | ||
Loan to affiliate (net of credit losses of $1 million) | 44 | 45 | ||||
Deferred lease receivable | 17 | 17 | ||||
Debt issuance costs associated with credit facilities | 6 | 6 | ||||
Refundable deposits | 10 | 9 | ||||
Prepayment on long-term service agreements | 86 | 81 | ||||
Cash calls from joint venture partners | 26 | 10 | ||||
Contract asset (net of credit losses of $1 million) (note 13) | 35 | 30 | ||||
Rabbi trust (notes 19 and 21) | 40 | 32 | ||||
Other long-term receivables (net of credit losses of $3 million) (note 18) | 36 | 33 | ||||
Capitalized contract costs | 5 | — | ||||
Other | 26 | 30 | ||||
$ | 332 | $ | 297 |
As at | March 31, 2020 | December 31, 2019 | |||||
Current assets | $ | 16 | $ | 7 | |||
Property, plant and equipment | 371 | 371 | |||||
Long-term investments and other assets | 53 | 53 | |||||
Current liabilities | (12 | ) | (4 | ) | |||
Asset retirement obligations | (3 | ) | (3 | ) | |||
Net assets | $ | 425 | $ | 424 |
Carrying value as at | Equity income (loss) for the three months ended March 31 | |||||||||||||
Description | Location | Ownership Percentage | March 31, 2020 | December 31, 2019 | 2020 | 2019 | ||||||||
AltaGas Canada Inc. (ACI) (a) | Canada | — | $ | — | $ | 164 | $ | 3 | $ | 8 | ||||
AltaGas Idemitsu Joint Venture LP (AIJVLP) | Canada | 50 | 483 | 431 | (10 | ) | 18 | |||||||
Constitution Pipeline, LLC (Constitution) (b) | USA | — | — | — | — | — | ||||||||
Craven County Wood Energy LP (c) | USA | — | — | — | — | 1 | ||||||||
Eaton Rapids Gas Storage System | USA | 50 | 29 | 27 | — | — | ||||||||
Grayling Generating Station LP (c) | USA | — | — | — | — | 1 | ||||||||
Meade Pipeline Co. LLC (c) | USA | — | — | — | — | 12 | ||||||||
Mountain Valley Pipeline, LLC (d) | USA | 10 | 749 | 672 | 15 | 9 | ||||||||
Sarnia Airport Storage Pool LP | Canada | 50 | 18 | 18 | — | — | ||||||||
Petrogas Preferred Shares | Canada | n/a | 150 | 150 | 3 | 3 | ||||||||
Stonewall Gas Gathering Systems LLC (c) | USA | — | — | — | — | 3 | ||||||||
$ | 1,429 | $ | 1,462 | $ | 11 | $ | 55 |
(a) | ACI was acquired by the Public Sector Pension Investment Board and the Alberta Teachers' Retirement Fund Board on March 31, 2020. |
(b) | The equity method was considered appropriate because Constitution was a Limited Liability Company (LLC) with specific ownership accounts and ownership between five and fifty percent, resulting in WGL Midstream exercising a more than minor influence over the investee's operating and financing policies. In February 2020, the partners of Constitution elected not to proceed with the pipeline project and Constitution was dissolved. |
(c) | Disposed of in 2019. |
(d) | The equity method is considered appropriate because Mountain Valley is an LLC with specific ownership accounts and ownership between five and fifty percent, resulting in WGL Midstream exercising a more than minor influence over the investee's operating and financing policies. |
As at | Maturity date | March 31, 2020 | December 31, 2019 | ||||
Credit facilities | |||||||
$1,400 million unsecured extendible revolving facility (a) | 15-May-2023 | $ | 154 | $ | 90 | ||
US$1,200 million unsecured revolving credit facility (b) | 28-Dec-2021 | 539 | — | ||||
US$300 million unsecured term facility | 27-Feb-2021 | 426 | 390 | ||||
US$150 million unsecured extendible revolving facility | 20-Dec-2023 | 100 | 163 | ||||
US$250 million unsecured revolving credit facility | 19-Jul-2022 | 99 | — | ||||
Commercial paper (c) | Various | 240 | 367 | ||||
Medium-term notes (MTNs) | |||||||
$200 million Senior unsecured - 4.07 percent | 1-Jun-2020 | 200 | 200 | ||||
$350 million Senior unsecured - 3.72 percent | 28-Sep-2021 | 350 | 350 | ||||
$500 million Senior unsecured - 2.61 percent | 16-Dec-2022 | 500 | 500 | ||||
$300 million Senior unsecured - 3.57 percent | 12-Jun-2023 | 300 | 300 | ||||
$200 million Senior unsecured - 4.40 percent | 15-Mar-2024 | 200 | 200 | ||||
$300 million Senior unsecured - 3.84 percent | 15-Jan-2025 | 300 | 300 | ||||
$350 million Senior unsecured - 4.12 percent | 7-Apr-2026 | 350 | 350 | ||||
$200 million Senior unsecured - 3.98 percent | 4-Oct-2027 | 200 | 200 | ||||
$100 million Senior unsecured - 5.16 percent | 13-Jan-2044 | 100 | 100 | ||||
$300 million Senior unsecured - 4.50 percent | 15-Aug-2044 | 300 | 300 | ||||
$250 million Senior unsecured - 4.99 percent | 4-Oct-2047 | 250 | 250 | ||||
WGL and Washington Gas MTNs | |||||||
US$250 million Senior unsecured - 2.44 percent (d) | 12-Mar-2020 | — | 325 | ||||
US$20 million Senior unsecured - 6.65 percent | 20-Mar-2023 | 28 | 26 | ||||
US$41 million Senior unsecured - 5.44 percent | 11-Aug-2025 | 58 | 53 | ||||
US$53 million Senior unsecured - 6.62 to 6.82 percent | Oct 2026 | 75 | 69 | ||||
US$72 million Senior unsecured - 6.40 to 6.57 percent | Feb - Sep 2027 | 102 | 93 | ||||
US$52 million Senior unsecured - 6.57 to 6.85 percent | Jan - Mar 2028 | 74 | 67 | ||||
US$9 million Senior unsecured - 7.50 percent | 1-Apr-2030 | 13 | 11 | ||||
US$50 million Senior unsecured - 5.70 to 5.78 percent | Jan - Mar 2036 | 71 | 65 | ||||
US$75 million Senior unsecured - 5.21 percent | 3-Dec-2040 | 106 | 97 | ||||
US$75 million Senior unsecured - 5.00 percent | 15-Dec-2043 | 106 | 97 | ||||
US$300 million Senior unsecured - 4.22 to 4.60 percent | Sep - Dec 2044 | 426 | 390 | ||||
US$450 million Senior unsecured - 3.80 percent | 15-Sep-2046 | 638 | 584 | ||||
US$300 million Senior unsecured - 3.65 percent | 16-Sep-2049 | 426 | 390 | ||||
SEMCO long-term debt | |||||||
US$300 million SEMCO Senior Secured - 5.15 percent (e) | 21-Apr-2020 | 426 | 390 | ||||
US$82 million SEMCO Senior Secured - 4.48 percent (f) | 2-Mar-2032 | 79 | 76 | ||||
Fair value adjustment on WGL Acquisition | 92 | 84 | |||||
Finance lease liabilities | 10 | 10 | |||||
$ | 7,338 | $ | 6,887 | ||||
Less debt issuance costs | (39 | ) | (36 | ) | |||
$ | 7,299 | $ | 6,851 | ||||
Less current portion | (1,061 | ) | (923 | ) | |||
$ | 6,238 | $ | 5,928 |
(a) | Borrowings on the facility can be by way of prime loans, U.S. base-rate loans, LIBOR loans, bankers' acceptances, or letters of credit. Borrowings on the facility have fees and interest at rates relevant to the nature of the draw made. |
(b) | Borrowings on the facility can be by way of U.S. base-rate loans, U.S. prime loans, or LIBOR loans. |
(c) | Commercial paper is supported by the availability of long-term committed credit facilities with maturity dates ranging from 2022 to 2024. |
(d) | Floating rate per annum reset quarterly based on terms set forth in the prospectus filed by WGL pursuant to Securities Act Rule 424 on March 13, 2018. |
(e) | Collateral for the U.S. dollar MTNs is certain SEMCO assets. |
(f) | Collateral for the CINGSA Senior secured loan is certain CINGSA assets. Alaska Storage Holding Company, LLC, a subsidiary in which AltaGas has a controlling interest, is the non-recourse guarantor of this loan. |
Defined benefit pension and PRB plans | Hedge net investments | Translation foreign operations | Equity investee | Total | |||||||||||
Opening balance, January 1, 2020 | $ | (6 | ) | $ | (149 | ) | $ | 395 | $ | 5 | $ | 245 | |||
OCI before reclassification | — | (48 | ) | 706 | — | 658 | |||||||||
Amounts reclassified from OCI | 3 | — | — | — | 3 | ||||||||||
Current period OCI (pre-tax) | 3 | (48 | ) | 706 | — | 661 | |||||||||
Income tax on amounts retained in AOCI | — | 6 | — | — | 6 | ||||||||||
Income tax on amounts reclassified to earnings | (1 | ) | — | — | — | (1 | ) | ||||||||
Net current period OCI | 2 | (42 | ) | 706 | — | 666 | |||||||||
Ending balance, March 31, 2020 | $ | (4 | ) | $ | (191 | ) | $ | 1,101 | $ | 5 | $ | 911 | |||
Opening balance, January 1, 2019 | $ | (19 | ) | $ | (209 | ) | $ | 801 | $ | 6 | $ | 579 | |||
OCI before reclassification | — | 45 | (179 | ) | 1 | (133 | ) | ||||||||
Amounts reclassified from AOCI | 2 | — | — | — | 2 | ||||||||||
Current period OCI (pre-tax) | 2 | 45 | (179 | ) | 1 | (131 | ) | ||||||||
Income tax on accounts retained in AOCI | — | (6 | ) | — | — | (6 | ) | ||||||||
Income tax on amounts reclassified to earnings | (1 | ) | — | — | — | (1 | ) | ||||||||
Net current period OCI | 1 | 39 | (179 | ) | 1 | (138 | ) | ||||||||
Ending balance, March 31, 2019 | $ | (18 | ) | $ | (170 | ) | $ | 622 | $ | 7 | $ | 441 |
AOCI components reclassified | Income statement line item | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | ||||
Defined benefit pension and PRB plans | Other income | $ | 3 | $ | 2 | ||
Deferred income taxes | Income tax recovery – deferred | (1 | ) | (1 | ) | ||
$ | 2 | $ | 1 |
Three Months Ended March 31, 2020 | ||||||||||||
Utilities | Midstream | Corporate/Other | Total (a) | |||||||||
Revenue from contracts with customers | ||||||||||||
Commodity sales contracts | $ | 384 | $ | 240 | $ | — | $ | 624 | ||||
Midstream service contracts | — | 39 | — | 39 | ||||||||
Gas sales and transportation services | 950 | — | — | 950 | ||||||||
Storage services | 6 | — | — | 6 | ||||||||
Other | 2 | — | 3 | 5 | ||||||||
Total revenue from contracts with customers | $ | 1,342 | $ | 279 | $ | 3 | $ | 1,624 | ||||
Other sources of revenue | ||||||||||||
Revenue from alternative revenue programs (b) | $ | 55 | $ | — | $ | — | $ | 55 | ||||
Leasing revenue (c) | — | 29 | 20 | 49 | ||||||||
Risk management and trading activities (d) (e) | 13 | 126 | (1 | ) | 138 | |||||||
Other | (5 | ) | 4 | 4 | 3 | |||||||
Total revenue from other sources | $ | 63 | $ | 159 | $ | 23 | $ | 245 | ||||
Total revenue | $ | 1,405 | $ | 438 | $ | 26 | $ | 1,869 |
(a) | In the first quarter of 2020, AltaGas revised its reportable segments. Comparative period numbers have been adjusted to reflect this change. Refer to Note 23 - Segmented Information for additional information. |
(b) | A large portion of revenue generated from the Utilities segment is subject to rate regulation and accordingly there are circumstances where the revenue recognized is mandated by the applicable regulators in accordance with ASC 980. |
(c) | Revenue generated from certain of AltaGas’ gas facilities is accounted for as operating leases. For the Corporate/Other segment, a significant amount of revenue earned is through power purchase agreements which are accounted for as operating leases. |
(d) | Risk management activities involve the use of derivative instruments such as physical and financial swaps, forward contracts, and options. These derivatives are accounted for under ASC 815 and ASC 825. A portion of revenue generated by the Utilities segment is from the physical sale and delivery of natural gas and power to end users. |
(e) | Trading margins in the Midstream segment are reported in risk management and trading activities. AltaGas enters into derivative contracts for the purpose of optimizing its storage and transportation capacity as well as managing the transportation and storage assets on behalf of third parties. The trading margins, including unrealized gains and losses on derivative instruments, are netted within revenues. Gross revenues for the three months ended March 31, 2020 of $106 million associated with the GAIL Global (USA) LNG LLC (GAIL) contract, which are in scope of ASC 606, are reported within risk management and trading activities. While the GAIL contract is individually not accounted for as a derivative, it is inseparable from the overall trading portfolio. Revenue is recognized at a point in time based on the actual volumes of the commodity sold at the delivery point, which corresponds to the customer’s monthly invoice amount. The GAIL contract has a term of 20 years and began on March 31, 2018. |
Three Months Ended March 31, 2019 | ||||||||||||
Utilities | Midstream | Corporate/Other | Total (a) | |||||||||
Revenue from contracts with customers | ||||||||||||
Commodity sales contracts | $ | 420 | $ | 96 | $ | 13 | $ | 529 | ||||
Midstream service contracts | — | 38 | — | 38 | ||||||||
Gas sales and transportation services | 1,083 | — | — | 1,083 | ||||||||
Storage services | 8 | — | — | 8 | ||||||||
Other | 2 | — | 10 | 12 | ||||||||
Total revenue from contracts with customers | $ | 1,513 | $ | 134 | $ | 23 | $ | 1,670 | ||||
Other sources of revenue | ||||||||||||
Revenue from alternative revenue programs (b) | $ | 6 | $ | — | $ | — | $ | 6 | ||||
Leasing revenue (c) | — | 33 | 23 | 56 | ||||||||
Risk management and trading activities (d) (e) | 18 | 125 | 23 | 166 | ||||||||
Other | (5 | ) | 3 | 2 | — | |||||||
Total revenue from other sources | $ | 19 | $ | 161 | $ | 48 | $ | 228 | ||||
Total revenue | $ | 1,532 | $ | 295 | $ | 71 | $ | 1,898 |
(a) | In the first quarter of 2020, AltaGas revised its reportable segments. Comparative period numbers have been adjusted to reflect this change. Refer to Note 23 - Segmented Information for additional information. |
(b) | A large portion of revenue generated from the Utilities segment is subject to rate regulation and accordingly there are circumstances where the revenue recognized is mandated by the applicable regulators in accordance with ASC 980. |
(c) | Revenue generated from certain of AltaGas’ gas facilities is accounted for as operating leases. For the Corporate/Other segment, a significant amount of revenue earned is through power purchase agreements which are accounted for as operating leases. |
(d) | Risk management activities involve the use of derivative instruments such as physical and financial swaps, forward contracts, and options. These derivatives are accounted for under ASC 815 and ASC 825. A portion of revenue generated by the Utilities segment is from the physical sale and delivery of natural gas and power to end users. |
(e) | Trading margins in the Midstream segment are reported in risk management and trading activities. AltaGas enters into derivative contracts for the purpose of optimizing its storage and transportation capacity as well as managing the transportation and storage assets on behalf of third parties. The trading margins, including unrealized gains and losses on derivative instruments, are netted within revenues. Gross revenues for the three months ended March 31, 2019 of $161 million associated with the GAIL Global (USA) LNG LLC (GAIL) contract, which are in scope of ASC 606, are reported within risk management and trading activities. While the GAIL contract is individually not accounted for as a derivative, it is inseparable from the overall trading portfolio. Revenue is recognized at a point in time based on the actual volumes of the commodity sold at the delivery point, which corresponds to the customer’s monthly invoice amount. The GAIL contract has a term of 20 years and began on March 31, 2018. |
March 31, 2020 | December 31, 2019 | |||||
As at | ||||||
Balance, beginning of period | $ | 89 | $ | 59 | ||
Additions | 7 | 32 | ||||
Foreign exchange translation | 5 | (2 | ) | |||
Balance, end of period | $ | 101 | $ | 89 |
As at | March 31, 2020 | December 31, 2019 | |||||
Balance, beginning of period | $ | 2 | $ | 2 | |||
Additions | 1 | 2 | |||||
Revenue recognized from contract liabilities (a) | — | (2 | ) | ||||
Balance, end of period | $ | 3 | $ | 2 |
(a) | Recognition of revenue related to performance obligations satisfied in the current period for amounts that were previously included in contract liabilities. |
Remainder of 2020 | 2021 | 2022 | 2023 | 2024 | > 2024 | Total | |||||||||||||||
Midstream service contracts | $ | 94 | $ | 102 | $ | 101 | $ | 99 | $ | 99 | $ | 1,082 | $ | 1,577 | |||||||
Storage services | 20 | 26 | 26 | 25 | 25 | 184 | 306 | ||||||||||||||
Other | 17 | 10 | 2 | 2 | 2 | 13 | 46 | ||||||||||||||
$ | 131 | $ | 138 | $ | 129 | $ | 126 | $ | 126 | $ | 1,279 | $ | 1,929 |
As at | March 31, 2020 | ||||||||||||||
Carrying Amount | Level 1 | Level 2 | Level 3 | Total Fair Value | |||||||||||
Financial assets | |||||||||||||||
Fair value through net income (a) | |||||||||||||||
Risk management assets - current | $ | 112 | $ | — | $ | 51 | $ | 61 | $ | 112 | |||||
Risk management assets - non-current | 56 | — | 3 | 53 | 56 | ||||||||||
Equity securities (b) | 1 | 1 | — | — | 1 | ||||||||||
Fair value through regulatory assets/liabilities (a) | |||||||||||||||
Risk management assets - current | 10 | — | — | 10 | 10 | ||||||||||
Risk management assets - non-current | 13 | — | — | 13 | 13 | ||||||||||
Amortized cost | |||||||||||||||
Loans and receivables (b) | 44 | — | 45 | — | 45 | ||||||||||
$ | 236 | $ | 1 | $ | 99 | $ | 137 | $ | 237 | ||||||
Financial liabilities | |||||||||||||||
Fair value through net income (a) | |||||||||||||||
Risk management liabilities - current | $ | 59 | $ | — | $ | 26 | $ | 33 | $ | 59 | |||||
Risk management liabilities - non-current | 73 | — | 6 | 67 | 73 | ||||||||||
Fair value through regulatory assets/liabilities (a) | |||||||||||||||
Risk management liabilities - current | 6 | — | — | 6 | 6 | ||||||||||
Risk management liabilities - non-current | 91 | — | — | 91 | 91 | ||||||||||
Amortized cost | |||||||||||||||
Current portion of long-term debt | 1,061 | — | 1,061 | — | 1,061 | ||||||||||
Long-term debt | 6,238 | — | 6,245 | — | 6,245 | ||||||||||
Other current liabilities (c) | 8 | — | 8 | — | 8 | ||||||||||
$ | 7,536 | $ | — | $ | 7,346 | $ | 197 | $ | 7,543 |
(a) | To manage price risk associated with acquiring natural gas supply for Maryland, Virginia, and District of Columbia utility customers, Washington Gas, a subsidiary of the Corporation, enters into physical and financial derivative transactions. Any gains and losses associated with these derivatives are recorded as regulatory liabilities or assets, respectively, to reflect the rate treatment for these economic hedging activities. Additionally, as part of its asset optimization program, Washington Gas enters into derivatives with the primary objective of securing operating margins that Washington Gas will ultimately realize. Regulatory sharing mechanisms provide for the annual realized profit from these transactions to be shared between Washington Gas' shareholder and customers; therefore, changes in fair value are recorded through earnings, or as regulatory assets or liabilities to the extent that it is probable that realized gains and losses associated with these derivative transactions will be included in the rates charged to customers when they are realized. |
(b) | Included under the line item "long-term investments and other assets" on the Consolidated Balance Sheets. |
(c) | Excludes non-financial liabilities. |
As at | December 31, 2019 | ||||||||||||||
Carrying Amount | Level 1 | Level 2 | Level 3 | Total Fair Value | |||||||||||
Financial assets | |||||||||||||||
Fair value through net income (a) | |||||||||||||||
Risk management assets - current | $ | 82 | $ | — | $ | 31 | $ | 51 | $ | 82 | |||||
Risk management assets - non-current | 31 | — | 7 | 24 | 31 | ||||||||||
Equity securities (b) | 4 | 4 | — | — | 4 | ||||||||||
Fair value through regulatory assets/liabilities (a) | |||||||||||||||
Risk management assets - current | 5 | — | — | 5 | 5 | ||||||||||
Risk management assets - non-current | 8 | — | — | 8 | 8 | ||||||||||
Amortized cost | |||||||||||||||
Loans and receivables (b) | 45 | — | 46 | — | 46 | ||||||||||
$ | 175 | $ | 4 | $ | 84 | $ | 88 | $ | 176 | ||||||
Financial liabilities | |||||||||||||||
Fair value through net income (a) | |||||||||||||||
Risk management liabilities - current | $ | 121 | $ | — | $ | 99 | $ | 22 | $ | 121 | |||||
Risk management liabilities - non-current | 77 | — | 19 | 58 | 77 | ||||||||||
Fair value through regulatory assets/liabilities (a) | |||||||||||||||
Risk management liabilities - current | 4 | — | — | 4 | 4 | ||||||||||
Risk management liabilities - non-current | 90 | — | — | 90 | 90 | ||||||||||
Amortized cost | |||||||||||||||
Current portion of long-term debt | 923 | — | 923 | — | 923 | ||||||||||
Long-term debt | 5,928 | — | 6,264 | — | 6,264 | ||||||||||
Other current liabilities (c) | 15 | — | 15 | — | 15 | ||||||||||
$ | 7,158 | $ | — | $ | 7,320 | $ | 174 | $ | 7,494 |
(a) | To manage price risk associated with acquiring natural gas supply for Maryland, Virginia, and District of Columbia utility customers, Washington Gas, a subsidiary of the Corporation, enters into physical and financial derivative transactions. Any gains and losses associated with these derivatives are recorded as regulatory liabilities or assets, respectively, to reflect the rate treatment for these economic hedging activities. Additionally, as part of its asset optimization program, Washington Gas enters into derivatives with the primary objective of securing operating margins that Washington Gas will ultimately realize. Regulatory sharing mechanisms provide for the annual realized profit from these transactions to be shared between Washington Gas' shareholder and customers; therefore, changes in fair value are recorded through earnings, or as regulatory assets or liabilities to the extent that it is probable that realized gains and losses associated with these derivative transactions will be included in the rates charged to customers when they are realized. |
(b) | Included under the line item "long-term investments and other assets" on the Consolidated Balance Sheets. |
(c) | Excludes non-financial liabilities. |
Net Fair Value | Valuation Technique | Unobservable Inputs | Range | Weighted Average (a) | |||||||||||
Natural gas | $ | (61 | ) | Discounted Cash Flow | Natural Gas Basis Price (per Dth) | $ | (2.01 | ) | - | $ | 3.02 | $ | (0.45 | ) | |
Natural gas | $ | (1 | ) | Option Model | Natural Gas Basis Price (per Dth) | $ | (1.26 | ) | - | $ | 2.97 | $ | 0.24 | ||
Annualized Volatility of Spot Market Natural Gas | 12 | % | - | 112 | % | 33 | % | ||||||||
Electricity | $ | 2 | Discounted Cash Flow | Electricity Congestion Price (per MWh) | $ | (7.35 | ) | - | $ | 72.07 | $ | 29.13 |
Three Months Ended | March 31, 2020 | March 31, 2019 | ||||||||||||||||
Natural Gas | Electricity | Total | Natural Gas | Electricity | Total | |||||||||||||
Balance, beginning of period | $ | (85 | ) | $ | — | $ | (85 | ) | $ | (149 | ) | $ | (15 | ) | $ | (164 | ) | |
Realized and unrealized gains: | ||||||||||||||||||
Recorded in income | 23 | 10 | 33 | 33 | 7 | 40 | ||||||||||||
Recorded in regulatory assets | 12 | — | 12 | 17 | — | 17 | ||||||||||||
Transfers into Level 3 | — | — | — | (5 | ) | — | (5 | ) | ||||||||||
Transfers out of Level 3 | 1 | — | 1 | 7 | — | 7 | ||||||||||||
Settlements | (7 | ) | (8 | ) | (15 | ) | — | — | — | |||||||||
Foreign exchange translation | (6 | ) | — | (6 | ) | 3 | — | 3 | ||||||||||
Balance, end of period | $ | (62 | ) | $ | 2 | $ | (60 | ) | $ | (94 | ) | $ | (8 | ) | $ | (102 | ) |
Three Months Ended March 31 | 2020 | 2019 | ||||
Natural gas | $ | 16 | $ | 12 | ||
Energy exports | 86 | — | ||||
NGL frac spread | 14 | (11 | ) | |||
Power | (1 | ) | 5 | |||
Foreign exchange | — | 1 | ||||
$ | 115 | $ | 7 |
As at | March 31, 2020 | |||||||||||
Risk management assets (a) | Gross amounts of recognized assets/liabilities | Gross amounts offset in balance sheet | Netting of collateral | Net amounts presented in balance sheet | ||||||||
Natural gas | $ | 129 | $ | (39 | ) | $ | (1 | ) | $ | 89 | ||
Energy exports | 62 | (45 | ) | 10 | 27 | |||||||
NGL frac spread | 14 | (1 | ) | — | 13 | |||||||
Power | 67 | (5 | ) | — | 62 | |||||||
$ | 272 | $ | (90 | ) | $ | 9 | $ | 191 | ||||
Risk management liabilities (b) | ||||||||||||
Natural gas | $ | 205 | $ | (39 | ) | $ | (18 | ) | $ | 148 | ||
Energy exports | 57 | (45 | ) | — | 12 | |||||||
NGL frac spread | 1 | (1 | ) | — | — | |||||||
Power | 84 | (5 | ) | (10 | ) | 69 | ||||||
$ | 347 | $ | (90 | ) | $ | (28 | ) | $ | 229 |
(a) | Net amount of risk management assets on the Balance Sheet is comprised of risk management assets (current) balance of $122 million and risk management assets (non‑current) balance of $69 million. |
(b) | Net amount of risk management liabilities on the Balance Sheet is comprised of risk management liabilities (current) balance of $65 million and risk management liabilities (non‑current) balance of $164 million. |
As at | December 31, 2019 | |||||||||||
Risk management assets (a) | Gross amounts of recognized assets/liabilities | Gross amounts offset in balance sheet | Netting of collateral | Net amounts presented in balance sheet | ||||||||
Natural gas | $ | 121 | $ | (54 | ) | $ | — | $ | 67 | |||
Energy exports | 10 | (3 | ) | 5 | 12 | |||||||
Power | 54 | (7 | ) | — | 47 | |||||||
$ | 185 | $ | (64 | ) | $ | 5 | $ | 126 | ||||
Risk management liabilities (b) | ||||||||||||
Natural gas | $ | 226 | $ | (54 | ) | $ | (28 | ) | $ | 144 | ||
NGL frac spread | 90 | (3 | ) | — | 87 | |||||||
Power | 2 | — | — | 2 | ||||||||
Foreign exchange | 69 | (7 | ) | (3 | ) | 59 | ||||||
$ | 387 | $ | (64 | ) | $ | (31 | ) | $ | 292 |
(a) | Net amount of risk management assets on the Balance Sheet is comprised of risk management assets (current) balance of $87 million and risk management assets (non‑current) balance of $39 million. |
(b) | Net amount of risk management liabilities on the Balance Sheet is comprised of risk management liabilities (current) balance of $125 million and risk management liabilities (non‑current) balance of $167 million. |
As at | March 31, 2020 | December 31, 2019 | ||||
Collateral posted with counterparties | $ | 32 | $ | 29 | ||
Cash collateral held representing an obligation | $ | 1 | $ | — |
As at | March 31, 2020 | December 31, 2019 | ||||
Risk management liabilities with credit-risk-contingent features | $ | 61 | $ | 42 | ||
Maximum potential collateral requirements | $ | 42 | $ | 29 |
As at | March 31, 2020 | December 31, 2019 | |
Natural Gas | |||
Sales | 680,329,559 | GJ | 698,126,985 GJ |
Purchases | 1,329,838,482 | GJ | 1,406,991,689 GJ |
Swaps | 644,231,814 | GJ | 541,652,374 GJ |
Energy Exports | |||
Swaps | 4,785,600 | Bbl | 9,374,826 Bbl |
NGL Frac Spread | |||
Butane swaps | 149,821 | Bbl | 346,852 Bbl |
Crude oil swaps | 491,818 | Bbl | 212,587 Bbl |
Natural gas swaps | 11,510,418 | GJ | 3,883,992 GJ |
Power | |||
Sales | 7,128,603 | MWh | 8,034,024 MWh |
Purchases | 7,683,312 | MWh | 8,552,467 MWh |
Swaps | 20,991,898 | MWh | 25,058,577 MWh |
Three Months Ended March 31, 2020 | ||||||||||||
Accounts Receivable | Contract Assets (a) | Other long-term investments and other assets (b) | Total | |||||||||
Utilities | ||||||||||||
Balance, beginning of period | $ | 31 | $ | — | $ | — | $ | 31 | ||||
Adjustment upon adoption of ASC 326 (c) | 2 | — | — | 2 | ||||||||
Foreign exchange translation | 3 | — | — | 3 | ||||||||
New allowance | 9 | — | — | 9 | ||||||||
Written off | (14 | ) | — | — | (14 | ) | ||||||
Recoveries collected | 1 | — | — | 1 | ||||||||
Balance, end of period | $ | 32 | $ | — | $ | — | $ | 32 | ||||
Midstream | ||||||||||||
Balance, beginning of period | $ | 1 | $ | — | $ | — | $ | 1 | ||||
Adjustment upon adoption of ASC 326 | — | 1 | 3 | 4 | ||||||||
Balance, end of period | $ | 1 | $ | 1 | $ | 3 | $ | 5 | ||||
Corporate/Other | ||||||||||||
Balance, beginning of period | $ | 2 | $ | — | $ | — | $ | 2 | ||||
Adjustment upon adoption of ASC 326 | — | — | 1 | 1 | ||||||||
Balance, end of period | $ | 2 | $ | — | $ | 1 | $ | 3 | ||||
Total | $ | 35 | $ | 1 | $ | 4 | $ | 40 |
(a) | An allowance for credit loss is assessed quarterly and is recorded based on historical default rates published by external credit rating agencies and a rate associated with the estimated time frame that the contract asset will be billed to the customer. |
(b) | Includes loan to affiliate and other long-term receivables (Notes 8 and 18). An allowance for credit loss is assessed quarterly and is recorded based on historical default rates published by external credit rating agencies and a rate commensurate with the period in which the receivable is expected to be collected. |
(c) | Based on previous collection experience, AltaGas did not record an allowance for credit losses for its contract assets associated with its energy management services projects with the U.S. federal government. |
Common Shares Issued and Outstanding | Number of shares | Amount | |||
January 1, 2019 | 275,224,066 | $ | 6,654 | ||
Shares issued for cash on exercise of options | 76,177 | 1 | |||
Deferred taxes on share issuance cost | — | (4 | ) | ||
Shares issued under DRIP | 3,774,442 | 68 | |||
December 31, 2019 | 279,074,685 | $ | 6,719 | ||
Shares issued for cash on exercise of options | 38,866 | 1 | |||
Shares issued under DRIP | 331,532 | 6 | |||
Issued and outstanding at March 31, 2020 | 279,445,083 | $ | 6,726 |
As at | March 31, 2020 | December 31, 2019 | |||||||
Issued and Outstanding | Number of shares | Amount | Number of shares | Amount | |||||
Series A | 5,511,220 | $ | 138 | 5,511,220 | $ | 138 | |||
Series B | 2,488,780 | 62 | 2,488,780 | 62 | |||||
Series C | 8,000,000 | 206 | 8,000,000 | 206 | |||||
Series E | 8,000,000 | 200 | 8,000,000 | 200 | |||||
Series G | 6,885,823 | 172 | 6,885,823 | 172 | |||||
Series H | 1,114,177 | 28 | 1,114,177 | 28 | |||||
Series I | 8,000,000 | 200 | 8,000,000 | 200 | |||||
Series K | 12,000,000 | 300 | 12,000,000 | 300 | |||||
Share issuance costs, net of taxes | (29 | ) | (29 | ) | |||||
52,000,000 | $ | 1,277 | 52,000,000 | $ | 1,277 |
As at | March 31, 2020 | December 31, 2019 | ||||||||
Number of options | Exercise price (a) | Number of options | Exercise price (a) | |||||||
Share options outstanding, beginning of period | 7,043,956 | $ | 22.49 | 6,309,183 | $ | 25.18 | ||||
Granted | 2,421,195 | 19.57 | 2,287,385 | 19.12 | ||||||
Exercised | (38,866 | ) | 15.36 | (76,177 | ) | 14.52 | ||||
Forfeited | (191,289 | ) | 22.71 | (1,165,435 | ) | 27.31 | ||||
Expired | (56,994 | ) | 38.13 | (311,000 | ) | 36.16 | ||||
Share options outstanding, end of period | 9,178,002 | $ | 21.65 | 7,043,956 | $ | 22.49 | ||||
Share options exercisable, end of period | 2,906,042 | $ | 27.67 | 2,921,642 | $ | 27.70 |
(a) | Weighted average. |
Options outstanding | Options exercisable | |||||||||
Price range | Number outstanding | Weighted average exercise price | Weighted average remaining contractual life | Number exercisable | Weighted average exercise price | Weighted average remaining contractual life | ||||
$14.52 to $18.00 | 2,470,825 | $ | 15.21 | 4.73 | 620,892 | $ | 14.71 | 4.54 | ||
$18.01 to $25.08 | 4,319,654 | 19.66 | 5.21 | 299,500 | 21.05 | 0.71 | ||||
$25.09 to $46.70 | 2,387,523 | 31.91 | 2.48 | 1,985,650 | 32.72 | 2.20 | ||||
9,178,002 | $ | 21.65 | 4.37 | 2,906,042 | $ | 27.67 | 2.55 |
PUs, RUs, and DSUs (number of units) | March 31, 2020 | December 31, 2019 | ||
Balance, beginning of period | 6,484,831 | 9,908,154 | ||
Granted | 1,018,639 | 674,971 | ||
Exercised | (28,589 | ) | (113,668 | ) |
Vested and paid out | — | (677,667 | ) | |
Forfeited | (383,013 | ) | (3,377,962 | ) |
Units in lieu of dividends | 22,819 | 71,003 | ||
Outstanding, end of period | 7,114,687 | 6,484,831 |
Three Months Ended March 31 | 2020 | 2019 | ||||
Numerator: | ||||||
Net income applicable to controlling interests | $ | 481 | $ | 826 | ||
Less: Preferred share dividends | (17 | ) | (17 | ) | ||
Net income applicable to common shares | $ | 464 | $ | 809 | ||
Denominator: | ||||||
(millions) | ||||||
Weighted average number of common shares outstanding | 279.4 | 275.5 | ||||
Dilutive equity instruments (a) | 0.5 | 0.2 | ||||
Weighted average number of common shares outstanding - diluted | 279.9 | 275.7 | ||||
Basic net income per common share | $ | 1.66 | $ | 2.93 | ||
Diluted net income per common share | $ | 1.66 | $ | 2.93 |
(a) | Includes all options that have a strike price lower than the average share price of AltaGas' common shares during the periods noted. |
Three Months Ended March 31, 2020 | ||||||||||||||||||
Canada | United States | Total | ||||||||||||||||
Defined Benefit | Post-retirement Benefits | Defined Benefit | Post-retirement Benefits | Defined Benefit | Post-retirement Benefits | |||||||||||||
Current service cost (a) | $ | 1 | $ | — | $ | 7 | $ | 2 | $ | 8 | $ | 2 | ||||||
Interest cost (b) | — | — | 15 | 4 | 15 | 4 | ||||||||||||
Expected return on plan assets (b) | — | — | (19 | ) | (9 | ) | (19 | ) | (9 | ) | ||||||||
Amortization of past service cost (b) | — | — | — | (4 | ) | — | (4 | ) | ||||||||||
Amortization of net actuarial loss (b) | — | — | 5 | — | 5 | — | ||||||||||||
Plan settlements (b) | — | — | 1 | — | 1 | — | ||||||||||||
Net benefit cost (income) recognized | $ | 1 | $ | — | $ | 9 | $ | (7 | ) | $ | 10 | $ | (7 | ) |
(a) | Recorded under the line item “operating and administrative” expenses on the Consolidated Statements of Income. |
(b) | Recorded under the line item “other income” on the Consolidated Statements of Income. |
Three Months Ended March 31, 2019 | ||||||||||||||||||
Canada | United States | Total | ||||||||||||||||
Defined Benefit | Post-retirement Benefits | Defined Benefit | Post-retirement Benefits | Defined Benefit | Post-retirement Benefits | |||||||||||||
Current service cost (a) | $ | 1 | $ | — | $ | 6 | $ | 2 | $ | 7 | $ | 2 | ||||||
Interest cost (b) | — | — | 17 | 5 | 17 | 5 | ||||||||||||
Expected return on plan assets (b) | — | — | (19 | ) | (9 | ) | (19 | ) | (9 | ) | ||||||||
Amortization of past service cost (b) | — | — | — | (5 | ) | — | (5 | ) | ||||||||||
Amortization of net actuarial loss (b) | — | — | 2 | — | 2 | — | ||||||||||||
Amortization of regulatory asset (b) | — | — | 6 | — | 6 | — | ||||||||||||
Net benefit cost (income) recognized | $ | 1 | $ | — | $ | 12 | $ | (7 | ) | $ | 13 | $ | (7 | ) |
(a) | Recorded under the line item “operating and administrative” expenses on the Consolidated Statements of Income. |
(b) | Recorded under the line item “other income” on the Consolidated Statements of Income. |
Three Months Ended March 31 | 2020 | 2019 | ||||
Source (use) of cash: | ||||||
Accounts receivable | $ | 192 | $ | 123 | ||
Inventory | 195 | 246 | ||||
Other current assets | 12 | (16 | ) | |||
Regulatory assets - current | (38 | ) | 3 | |||
Accounts payable and accrued liabilities | (248 | ) | (330 | ) | ||
Customer deposits | (19 | ) | (23 | ) | ||
Regulatory liabilities - current | (29 | ) | 18 | |||
Risk management liabilities - current | (1 | ) | (8 | ) | ||
Other current liabilities | (6 | ) | (9 | ) | ||
Operating lease liability - current | — | 2 | ||||
Other operating assets and liabilities | 3 | 57 | ||||
Changes in operating assets and liabilities | $ | 61 | $ | 63 |
Three Months Ended March 31 | 2020 | 2019 | ||||
Interest paid (net of capitalized interest) | $ | 82 | $ | 101 | ||
Income taxes paid | $ | 9 | $ | 8 |
As at March 31 | 2020 | 2019 | ||||
Cash and cash equivalents | $ | 335 | $ | 109 | ||
Restricted cash holdings from customers - current | 4 | 4 | ||||
Restricted cash holdings from customers - non-current | 2 | 4 | ||||
Restricted cash included in prepaid expenses and other current assets (a) | 16 | 5 | ||||
Restricted cash included in long-term investments and other assets (a) | 40 | 61 | ||||
Cash, cash equivalents, and restricted cash per Consolidated Statements of Cash Flows | $ | 397 | $ | 183 |
(a) | The restricted cash balances included in "prepaid expenses and other current assets" and "long-term investments and other assets" relate to Rabbi trusts associated with WGL’s pension plans (Note 19). |
Utilities | n rate-regulated natural gas distribution assets in Michigan, Alaska, the District of Columbia, Maryland, and Virginia; n rate-regulated natural gas storage in the United States; and n sale of natural gas and power to residential, commercial, and industrial customers in Washington D.C., Maryland, Virginia, Delaware, Pennsylvania, and Ohio. |
Midstream | n NGL processing and extraction plants; n natural gas storage facilities; n liquefied petroleum gas (LPG) terminal; n transmission pipelines to transport natural gas and NGL; n natural gas gathering lines and field processing facilities; n purchase and sale of natural gas; n natural gas and NGL marketing; n equity investment in Petrogas, a North American entity that owns and operates the Ferndale terminal and that is engaged in the marketing, storage and distribution of NGL, drilling fluids, crude oil and condensate diluents; and n interest in a regulated gas pipeline in the Marcellus/Utica basins. |
Corporate/Other | n the cost of providing corporate services, financing and general corporate overhead, investments in certain public and private entities, corporate assets, financing other segments and the effects of changes in the fair value of certain risk management contracts; and n a small portfolio of remaining power assets, certain of which are pending sale. |
Three Months Ended March 31, 2020 | ||||||||||||
Utilities | Midstream | Corporate/Other | Total | |||||||||
External revenue (note 13) | $ | 1,405 | $ | 438 | $ | 26 | $ | 1,869 | ||||
Intersegment revenue | — | 12 | — | 12 | ||||||||
Segment revenue | $ | 1,405 | $ | 450 | $ | 26 | $ | 1,881 |
Three Months Ended March 31, 2019 | ||||||||||||
Utilities | Midstream | Corporate/Other | Total | |||||||||
External revenue (note 13) | $ | 1,532 | $ | 295 | $ | 71 | $ | 1,898 | ||||
Intersegment revenue | — | 1 | — | 1 | ||||||||
Segment revenue | $ | 1,532 | $ | 296 | $ | 71 | $ | 1,899 |
Three Months Ended March 31, 2020 | |||||||||||||||
Utilities | Midstream | Corporate/Other | Intersegment Elimination (a) | Total | |||||||||||
Segment revenue (note 13) | $ | 1,405 | $ | 450 | $ | 26 | $ | (12 | ) | $ | 1,869 | ||||
Cost of sales | (785 | ) | (187 | ) | (4 | ) | 12 | (964 | ) | ||||||
Operating and administrative | (262 | ) | (61 | ) | (15 | ) | — | (338 | ) | ||||||
Accretion expenses | — | (1 | ) | — | — | (1 | ) | ||||||||
Depreciation and amortization | (74 | ) | (24 | ) | (7 | ) | — | (105 | ) | ||||||
Provisions on assets (note 5) | — | (2 | ) | — | — | (2 | ) | ||||||||
Income from equity investments (note 10) | 3 | 8 | — | — | 11 | ||||||||||
Other income | 213 | — | 5 | — | 218 | ||||||||||
Foreign exchange gains (losses) | — | 30 | (30 | ) | — | — | |||||||||
Interest expense | — | — | (70 | ) | — | (70 | ) | ||||||||
Income (loss) before income taxes | $ | 500 | $ | 213 | $ | (95 | ) | $ | — | $ | 618 | ||||
Net additions to: | |||||||||||||||
Property, plant and equipment (b) | $ | 144 | $ | 42 | $ | 13 | $ | — | $ | 199 | |||||
Intangible assets | $ | — | $ | — | $ | 1 | $ | — | $ | 1 |
(a) | Intersegment transactions are recorded at market value. |
(b) | Net additions to property, plant and equipment, and intangible assets may not agree to changes reflected in the Consolidated Statements of Cash Flows due to classification of business acquisition and foreign exchange changes on U.S. assets. |
Three Months Ended March 31, 2019 | |||||||||||||||
Utilities | Midstream | Corporate/Other | Intersegment Elimination (a) | Total | |||||||||||
Segment revenue (note 13) | $ | 1,532 | $ | 296 | $ | 71 | $ | (1 | ) | $ | 1,898 | ||||
Cost of sales | (933 | ) | (181 | ) | (26 | ) | 1 | (1,139 | ) | ||||||
Operating and administrative | (267 | ) | (47 | ) | (36 | ) | — | (350 | ) | ||||||
Accretion expenses | — | (1 | ) | (1 | ) | — | (2 | ) | |||||||
Depreciation and amortization | (73 | ) | (21 | ) | (24 | ) | — | (118 | ) | ||||||
Income from equity investments (note 10) | 8 | 45 | 2 | — | 55 | ||||||||||
Other income | 7 | 5 | 685 | — | 697 | ||||||||||
Interest expense | — | — | (93 | ) | — | (93 | ) | ||||||||
Income before income taxes | $ | 274 | $ | 96 | $ | 578 | $ | — | $ | 948 | |||||
Net additions (reductions) to: | |||||||||||||||
Property, plant and equipment (b) | $ | 140 | $ | (14 | ) | $ | (1,327 | ) | $ | — | $ | (1,201 | ) | ||
Intangible assets | $ | — | $ | 1 | $ | 3 | $ | — | $ | 4 |
(a) | Intersegment transactions are recorded at market value. |
(b) | Net additions to property, plant and equipment, and intangible assets may not agree to changes reflected in the Consolidated Statements of Cash Flows due to classification of business acquisition and foreign exchange changes on U.S. assets. |
Utilities | Midstream | Corporate/Other | Total | |||||||||
As at March 31, 2020 | ||||||||||||
Goodwill | $ | 4,130 | $ | 162 | $ | — | $ | 4,292 | ||||
Segmented assets | $ | 14,655 | $ | 5,404 | $ | 1,074 | $ | 21,133 | ||||
As at December 31, 2019 | ||||||||||||
Goodwill | $ | 3,781 | $ | 161 | $ | — | $ | 3,942 | ||||
Segmented assets | $ | 13,719 | $ | 5,265 | $ | 811 | $ | 19,795 |
Q1-20 | Q4-19 | Q3-19 | Q2-19 | Q1-19 | ||||||
OPERATING HIGHLIGHTS | ||||||||||
UTILITIES | ||||||||||
Natural gas deliveries - end use (Bcf) (1) | 66.6 | 52.2 | 11.1 | 20.7 | 75.4 | |||||
Natural gas deliveries - transportation (Bcf) (1) | 40.5 | 38.3 | 23.3 | 25.2 | 47.6 | |||||
Service sites (thousands) (2) | 1,661 | 1,653 | 1,647 | 1,648 | 1,647 | |||||
Degree day variance from normal - SEMCO Gas (%) (3) | (11.4 | ) | 4.3 | (47.2 | ) | 14.5 | 5.7 | |||
Degree day variance from normal - ENSTAR (%) (3) | 16.1 | (20.6 | ) | (42.8 | ) | (16.1 | ) | (9.4 | ) | |
Degree day variance from normal - Washington Gas (%) (3) (4) | (17.1 | ) | (3.2 | ) | — | (44.5 | ) | (1.1 | ) | |
WGL retail energy marketing - gas sales volumes (Mmcf) | 21,916 | 20,131 | 6,476 | 9,360 | 27,411 | |||||
WGL retail energy marketing - electricity sales volumes (GWh) | 3,511 | 3,291 | 3,723 | 3,125 | 3,080 | |||||
MIDSTREAM | ||||||||||
RIPET export volumes (Bbls/d) (5) | 35,141 | 36,394 | 36,225 | 31,711 | — | |||||
Total inlet gas processed (Mmcf/d) (6) | 1,393 | 1,413 | 1,307 | 1,417 | 1,481 | |||||
Extracted ethane volumes (Bbls/d) (6) | 29,932 | 25,951 | 22,857 | 23,046 | 23,431 | |||||
Extracted NGL volumes (Bbls/d) (6) (7) | 32,495 | 32,313 | 30,933 | 35,420 | 37,643 | |||||
Fractionation volumes (Bbls/d) (6) (8) | 21,079 | 20,310 | 24,026 | 19,391 | 16,828 | |||||
Frac spread - realized ($/Bbl) (6) (9) | 11.76 | 16.54 | 17.12 | 19.50 | 16.84 | |||||
Frac spread - average spot price ($/Bbl) (6) (10) | 2.04 | 8.29 | 9.17 | 15.27 | 11.79 | |||||
Propane Far East Index to Mont Belvieu spread (US$/Bbl) (11) | 16.23 | 17.95 | 12.00 | 14.27 | — | |||||
Natural gas optimization inventory (Bcf) | 34.3 | 41.4 | 35.7 | 31.9 | 13.2 |
(1) | Bcf is one billion cubic feet. |
(2) | Service sites reflect all of the service sites of the utilities, including transportation and non‑regulated business lines. |
(3) | A degree day is a measure of coldness determined daily as the number of degrees the average temperature during the day in question is below 65 degrees Fahrenheit. Degree days for a particular period are determined by adding the degree days incurred during each day of the period. Normal degree days for a particular period are the average of degree days during the prior 15 years for SEMCO Gas, during the prior 10 years for ENSTAR, and during the prior 30 years for Washington Gas. |
(4) | In certain of Washington Gas’ jurisdictions (Virginia and Maryland) there are billing mechanisms in place which are designed to eliminate the effects of variance in customer usage caused by weather and other factors such as conservation. In the District of Columbia, there is no weather normalization billing mechanism nor does Washington Gas hedge to offset the effects of weather. As a result, colder or warmer weather will result in variances to financial results. |
(5) | Represents propane volumes exported at RIPET since facility was placed into service in May 2019. |
(6) | Average for the period. |
(7) | NGL volumes refer to propane, butane and condensate. |
(8) | Represents fractionation volumes at Harmattan, Younger and North Pine. |
(9) | Realized frac spread or NGL margin, expressed in dollars per barrel of NGL, is derived from sales recorded by the segment during the period for frac exposed volumes plus the settlement value of frac hedges settled in the period less extraction premiums, divided by the total frac exposed volumes produced during the period. |
(10) | Average spot frac spread or NGL margin, expressed in dollars per barrel of NGL, is indicative of the average sales price that AltaGas receives for propane, butane and condensate less extraction premiums, before accounting for hedges, divided by the respective frac exposed volumes for the period. |
(11) | Average propane price spread between Argus Far East Index and Mont Belvieu TET commercial index for the period beginning May 2019. |
(a) | The consolidated net income attributable to owners of the parent before interest expense on short-term and long-term debt and income taxes of the Corporation was $787.7 million; and |
(b) | Interest expense of the Corporation on short-term and long-term debt was $334.7 million. |
1. | Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of AltaGas Ltd. (the “issuer”) for the interim period ended March 31, 2020. |
2. | No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. |
3. | Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance, and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. |
4. | Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. |
5. | Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings |
(a) | designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that |
(i) | material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and |
(ii) | information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and |
(b) | designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. |
5.1 | Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the 2013 Internal Control - Integrated Framework issued by the Committee of the Sponsoring Organizations of the Treadway Commission (COSO). |
5.2 | ICFR - material weakness relating to design: N/A |
5.3 | Limitation on scope of design: N/A |
6. | Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2020 and ended on March 31, 2020 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR. |
1. | Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of AltaGas Ltd. (the “issuer”) for the interim period ended March 31, 2020. |
2. | No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. |
3. | Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance, and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. |
4. | Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. |
5. | Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings |
(a) | designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that |
(i) | material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and |
(ii) | information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and |
(b) | designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. |
5.1 | Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the 2013 Internal Control - Integrated Framework issued by the Committee of the Sponsoring Organizations of the Treadway Commission (COSO). |
5.2 | ICFR - material weakness relating to design: N/A |
5.3 | Limitation on scope of design: N/A |
6. | Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2020 and ended on March 31, 2020 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR. |
• | Normalized EBITDA1 was $499 million for the first quarter, an increase of approximately 4 percent over the same period in 2019. Excluding the $34 million reduction in normalized EBITDA as a result of the asset sales in 2019, first quarter normalized EBITDA would have increased 11 percent as compared to the first quarter of 2019. |
• | Normalized net income1 was $220 million ($0.79 per share) in the first quarter of 2020, a 3 percent increase over the first quarter of 2019. |
• | Net income applicable to common shares was $464 million ($1.66 per share) in the first quarter. |
• | First quarter Utilities segment normalized EBITDA increased approximately 10 percent over the first quarter of 2019 underpinned by rate base growth, higher achieved returns through rate case settlements in 2019, increased utilization of accelerated replacement programs and lower operating costs. |
• | Strong first quarter Midstream segment performance was underpinned by contributions from the Ridley Island Propane Export Terminal (RIPET), which continues to see strong demand for Canadian propane from Asia, averaging two ships per month for the quarter. |
• | On March 31, 2020, the Public Sector Pension Investment Board and the Alberta Teachers' Retirement Fund Board closed its previously announced acquisition of AltaGas Canada Inc. (ACI), including the 11,025,000 common shares (approximately 37 percent) held by AltaGas for cash proceeds to AltaGas of approximately $369 million. |
• | In response to the COVID-19 pandemic, AltaGas initiated precautionary and business continuity measures to protect the health and safety of its employees, customers and communities in which it operates. To date, AltaGas has experienced limited disruption to its operations. |
• | On April 1, 2020, AltaGas announced $1 million in donations to help community partners and frontline workers in its operating regions respond to the COVID-19 pandemic. |
• | 2020 outlook remains unchanged with expected normalized EBITDA1 in the range of $1.275 - $1.325 billion and normalized EPS1 of $1.20 - $1.30 per share. |
Three Months Ended March 31 | ||||||
($ millions) | 2020 | 2019 | ||||
Segmented Normalized EBITDA(1) | ||||||
Utilities | $ | 369 | $ | 335 | ||
Midstream | 120 | 128 | ||||
Sub-total: Operating Segments | $ | 489 | $ | 463 | ||
Corporate/Other | 10 | 19 | ||||
Normalized EBITDA (1)(4) | $ | 499 | $ | 482 | ||
Add (deduct): | ||||||
Depreciation and amortization | (105 | ) | (118 | ) | ||
Interest expense | (70 | ) | (93 | ) | ||
Normalized income tax expense | (81 | ) | (37 | ) | ||
Preferred share dividends | (17 | ) | (17 | ) | ||
Other (3) | (6 | ) | (3 | ) | ||
Normalized net income (1)(4) | $ | 220 | $ | 214 | ||
Net income applicable to common shares | $ | 464 | $ | 809 | ||
($ per share, except shares outstanding) | 2020 | 2019 | ||||
Shares outstanding - basic (millions) | ||||||
During the period (2) | 279 | 276 | ||||
End of period | 279 | 276 | ||||
Normalized net income - basic (1) | 0.79 | 0.78 | ||||
Normalized net income - diluted (1) | 0.79 | 0.78 | ||||
Net income per common share - basic | 1.66 | 2.93 | ||||
Net income per common share - diluted | 1.66 | 2.93 |
(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 accretion expense, net income applicable to non-controlling interests, and NCI related to HLBV accounting |
(4) | Beginning in 2020, Management no longer adjusts normalized EBITDA or normalized net income for changes in the fair value of natural gas optimization inventory. Please see the Non-GAAP Financial Measures section of the MD&A for additional detail. As such, comparative periods have been adjusted to reflect the before and after-tax impacts of this change to normalized EBITDA and normalized net income, respectively. |
• | The Board of Directors approved a dividend of $0.08 per common share. The dividend will be paid on June 15, 2020, to common shareholders of record on May 25, 2020. The ex‑dividend date is May 22, 2020. This dividend is an eligible dividend for Canadian income tax purposes; |
• | The Board of Directors approved a dividend of $0.21125 per share for the period commencing March 31, 2020 and ending June 29, 2020, on AltaGas’ outstanding Series A Preferred Shares. The dividend will be paid on June 30, 2020 to shareholders of record on June 16, 2020. The ex‑dividend date is June 15, 2020; |
• | The Board of Directors approved a dividend of $0.26716 per share for the period commencing March 31, 2020 and ending June 29, 2020, on AltaGas’ outstanding Series B Preferred Shares. The dividend will be paid on June 30, 2020 to shareholders of record on June 16, 2020. The ex‑dividend date is June 15, 2020; |
• | The Board of Directors approved a dividend of US$0.330625 per share for the period commencing March 31, 2020 and ending June 29, 2020, on AltaGas’ outstanding Series C Preferred Shares. The dividend will be paid on June 30, 2020 to shareholders of record on June 16, 2020. The ex‑dividend date is June 15, 2020; |
• | The Board of Directors approved a dividend of $0.337063 per share for the period commencing March 31, 2020 and ending June 29, 2020, on AltaGas’ outstanding Series E Preferred Shares. The dividend will be paid on June 30, 2020 to shareholders of record on June 16, 2020. The ex‑dividend date is June 15, 2020; |
• | The Board of Directors approved a dividend of $0.265125 per share for the period commencing March 31, 2020 and ending June 29, 2020, on AltaGas’ outstanding Series G Preferred Shares. The dividend will be paid on June 30, 2020 to shareholders of record on June 16, 2020. The ex-dividend date is June 15, 2020; |
• | The Board of Directors approved a dividend of $0.29202 per share for the period commencing March 31, 2020 and ending June 29, 2020, on AltaGas’ outstanding Series H Preferred Shares. The dividend will be paid on June 30, 2020 to shareholders of record on June 16, 2020. The ex-dividend date is June 15, 2020; |
• | The Board of Directors approved a dividend of $0.328125 per share for the period commencing March 31, 2020 and ending June 29, 2020, on AltaGas’ outstanding Series I Preferred Shares. The dividend will be paid on June 30, 2020 to shareholders of record on June 16, 2020. The ex‑dividend date is June 15, 2020; and |
• | The Board of Directors approved a dividend of $0.3125 per share for the period commencing March 31, 2020 and ending June 29, 2020, on AltaGas’ outstanding Series K Preferred Shares. The dividend will be paid on June 30, 2020 to shareholders of record on June 16, 2020. The ex-dividend date is June 15, 2020. |
Three Months Ended March 31 | ||||
($ millions, except normalized effective income tax rate) | 2020 | 2019 | ||
Revenue | 1,869 | 1,898 | ||
Normalized EBITDA (1) (2) | 499 | 482 | ||
Net income applicable to common shares | 464 | 809 | ||
Normalized net income (1) (2) | 220 | 214 | ||
Total assets | 21,133 | 21,563 | ||
Total long-term liabilities | 10,003 | 10,374 | ||
Net additions (dispositions) of property, plant and equipment | 200 | (1,201 | ) | |
Dividends declared (3) | 67 | 66 | ||
Cash from operations | 475 | 427 | ||
Normalized funds from operations (1) | 420 | 376 | ||
Normalized adjusted funds from operations (1) | 382 | 367 | ||
Normalized utility adjusted funds from operations (1) | 308 | 294 | ||
Normalized effective income tax rate (%) (1) | 25.3 | 13.8 |
Three Months Ended March 31 | ||||
($ per share, except shares outstanding) | 2020 | 2019 | ||
Net income per common share - basic | 1.66 | 2.93 | ||
Net income per common share - diluted | 1.66 | 2.93 | ||
Normalized net income - basic (1) | 0.79 | 0.78 | ||
Normalized net income - diluted (1) | 0.79 | 0.78 | ||
Dividends declared (3) | 0.24 | 0.24 | ||
Cash from operations | 1.70 | 1.55 | ||
Normalized funds from operations (1) | 1.51 | 1.36 | ||
Normalized adjusted funds from operations (1) | 1.37 | 1.33 | ||
Normalized utility adjusted funds from operations (1) | 1.10 | 1.07 | ||
Shares outstanding - basic (millions) | ||||
During the period (4) | 279 | 276 | ||
End of period | 279 | 276 |
(1) | Non‑GAAP financial measure; see discussion in Non-GAAP Financial Measures section of this news release. |
(2) | Beginning in 2020, Management no longer adjusts normalized EBITDA or normalized net income for changes in the fair value of natural gas optimization inventory. Please see the Non-GAAP Financial Measures section of the MD&A for additional detail. As such, comparative periods have been adjusted to reflect the before and after-tax impacts of this change to normalized EBITDA and normalized net income, respectively. |
(3) | Dividends declared per common share per month: $0.08 beginning on December 27, 2018. |
(4) | Weighted average. |
Investor Inquiries: 1-877-691-7199 investor.relations@altagas.ca | Media Inquiries: 1-587-955-4519 media.relations@altagas.ca |
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