AltaGas Income Trust
TSX : ALA.UN

AltaGas Income Trust

May 07, 2009 08:00 ET

AltaGas Reports Solid First Quarter Earnings

CALGARY, ALBERTA--(Marketwire - May 7, 2009) - AltaGas Income Trust (AltaGas or the Trust) (TSX:ALA.UN) today announced net income of $37.5 million ($0.50 per unit - basic) for the three months ended March 31, 2009, compared to $37.6 million ($0.58 per unit - basic) for the same period of 2008.

"Our solid first quarter earnings reflect the stability of our operations, the benefits of our diversified portfolio of assets and our disciplined risk management," said David Cornhill, Chairman and CEO of the Trust. "We expect 2009 to be another strong year for AltaGas. The majority of revenue is underpinned by long-term contracts and a disciplined hedging program. In addition, we are benefiting from the capital invested in 2008 and this year, which have delivered new volumes and earnings."

"We made significant strides earlier this year to further strengthen our balance sheet and increase our financial flexibility through various financing initiatives. Today we have the financial flexibility to pursue projects that support our strategy of growing and operating long-term energy infrastructure assets."

AltaGas declared a distribution of $0.18 per trust unit and exchangeable unit payable on June 15, 2009 to unitholders of record on May 25, 2009. The Trust declared total cash distributions of $0.54 per unit in first quarter 2009.

The Trust continues to optimize existing operations and develop new assets. AltaGas recently submitted its application for the Harmattan Co-stream Project. The project would allow 250 Mmcf/d of rich sweet natural gas to be processed, using spare capacity at the Harmattan Complex, in order to recover ethane and natural gas liquids. The Bear Mountain Wind Park remains on schedule to be in-service in November 2009. The turbines and towers are currently being transported from Germany and Saskatoon, respectively. Turbine erection will commence in June and management expects that power will be delivered to the electrical grid during the summer as part of the commissioning process.

The unaudited interim Consolidated Financial Statements and Management's Discussion and Analysis, which contains additional notes and disclosures, are available on the AltaGas website (www.AltaGas.ca).

FINANCIAL HIGHLIGHTS(1):

- Earnings before interest, taxes, depreciation and amortization (EBITDA) were $62.3 million ($0.82 per unit) for first quarter 2009, compared to $63.6 million ($0.98 per unit) for the same quarter in 2008.

- Funds from operations were $57.0 million ($0.75 per unit) for first quarter 2009, compared to $56.3 million ($0.87 per unit) for the same period in 2008.

- Total debt on March 31, 2009 was $540.2 million, compared to $582.0 million at December 31, 2008. The Trust's debt-to-total capitalization ratio as at March 31, 2009 was 33.6 percent versus 37.8 percent at the end of 2008 and 45.1 percent as at March 31, 2008.

(1) Includes Non-GAAP financial measures. Please see previous public disclosures available at www.altagas.ca or www.sedar.com for definitions.

IN THE FIRST QUARTER:

- On January 7, 2009, AltaGas acquired a wind development project for approximately $2 million. The development assets are located near Medicine Hat, Alberta and provides AltaGas with the potential to develop approximately 100 MW of wind power generation.

- On January 15, 2009, AltaGas invested $10 million to acquire a five percent equity position in Magma Energy Corp. (Magma), a private company focused on the exploration, development and operation of geothermal energy projects. AltaGas also received the right to acquire a direct interest in certain future geothermal projects developed or acquired by the company. Magma currently owns and operates an 8-MW geothermal energy plant in Nevada, as well as a portfolio of geothermal exploration and development projects in the western United States, Argentina, Chile, Nicaragua and Peru.

- On February 10, 2009, AltaGas successfully completed an equity offering of 6,100,000 Trust units at a price of $16.50 per Trust unit, representing gross proceeds of approximately $100 million. The proceeds from this issue were used to repay indebtedness.

- On March 10, 2009, AltaGas secured a new $250 million credit facility with a syndicate of eight banks. The credit facility was used to retire an existing $250 million credit facility that would have matured in September 2009. The facility has an 18-month term expiring on August 13, 2010. Under the terms of this facility, 50 percent of any term debt issued by the Trust would reduce the amount of the facility by a maximum of $100 million.

SUBSEQUENT TO THE FIRST QUARTER:

- On April 21, 2009, Standard & Poor's (S&P) upgraded the Trust's credit rating from BBB- positive to BBB stable. S&P indicated that the upgrade reflects AltaGas' increased exposure to long-term contracted gas infrastructure business, prudent financial practices, and effective strategy execution.

- On April 23, 2009, AltaGas submitted its application for the Harmattan Co-stream Project to the Alberta Energy Resources Conservation Board (ERCB). The Co-stream Project would allow 250 Mmcf/d of rich, sweet natural gas sourced from the NGTL Western Alberta System to be processed using spare capacity at the Harmattan Complex in order to recover ethane and natural gas liquids. Upon approval from the ERCB, construction of the project would take approximately 14 months to complete. The project is expected to commence operations and contribute to operating income in late 2010. Capital cost estimates for the project range between $100 and $120 million.

- On April 29, 2009, AltaGas completed a $200 million issue of senior unsecured medium-term notes. The notes carry a coupon rate of 7.42 percent and mature on April 29, 2014.

AltaGas will hold a conference call today at 9 a.m. MT (11 a.m. ET) to discuss the first quarter 2009 financial and operating results and other general issues and developments concerning the Trust.

Members of the media, investment community and other interested parties may dial 416-406-6419 or call toll-free at 1-888-575-8232. No pass code is required. Please note that the conference call will also be webcast. To listen, please connect here: http://events.onlinebroadcasting.com/altagas/050709/index.php.

Shortly after the conclusion of the call, a replay will be available by dialing 416-695-5800 or 1-800-408-3053. The passcode is 4814605. The replay expires at midnight (ET) on May 14, 2009. The webcast will be archived for one year.

FORWARD-LOOKING INFORMATION

This release contains forward-looking statements. When used, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "seek", "propose", "estimate", "expect", and similar expressions, as they relate to the Trust or an affiliate of the Trust, are intended to identify forward-looking statements. In particular, this release contains forward-looking statements with respect to, among others things, business objectives, expected growth, results of operations, performance, business projects and opportunities and financial results. Specifically, such forward-looking statements are set forth under: "Consolidated Outlook" and "Capital Projects".

These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Such statements reflect the Trust's current views with respect to future events based on certain material factors and assumptions and are subject to certain risks and uncertainties including without limitation, changes in market competition, governmental or regulatory developments, changes in tax legislation, general economic conditions and other factors set out in the Trust's public disclosure documents.

Many factors could cause the Trust's or any of its business segment's actual results, performance or achievements to vary from those described in this release, including without limitation those listed above as well as the assumptions upon which they are based proving incorrect. These factors should not be construed as exhaustive. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this release as intended, planned, anticipated, believed, sought, proposed, estimated or expected, and such forward-looking statements included in this release herein should not be unduly relied upon. These statements speak only as of the date of this release. The Trust does not intend, and does not assume any obligation, to update these forward-looking statements except as required by law. The forward-looking statements contained in this release are expressly qualified as cautionary statements.

Financial outlook information contained in this release about prospective results of operations, financial position or cash flows is based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available. Readers are cautioned that such financial outlook information contained in this release should not be used for the purposes other for which it is disclosed herein.

Additional information relating to AltaGas can be found on its website at www.altagas.ca. The continuous disclosure materials of the Trust, including its annual release and Consolidated Financial Statements, Annual Information Form, Information Circular, and Proxy Statement, material change reports and press releases issued by the Trust, are also available through the Trust's website or directly through the SEDAR system at www.sedar.com.

ALTAGAS INCOME TRUST

The material businesses of the Trust are operated by AltaGas Ltd., AltaGas Operating Partnership, AltaGas Limited Partnership and AltaGas Pipeline Partnership, Taylor NGL Limited Partnership (Taylor), as well as AltaGas Energy Limited Partnership, ECNG Energy L.P. (collectively the operating subsidiaries), AltaGas Renewable Energy Inc. (AREI) and AltaGas Renewable Energy Limited Partnership Inc. (ARELP). The cash flow of the Trust is solely dependent on the results of the operating subsidiaries and is predominantly derived from interest earned on loans to the operating subsidiaries and from dividends or returns of capital from equity interests held within the Trust structure.

AltaGas General Partner Inc., through its Board of Directors, the members of which are elected by the Trust at the direction of the holders of the units, has been delegated by the trustee of the Trust to manage or supervise the business and affairs of the Trust. AltaGas Ltd. provides all management, administrative and operating services to the Trust and its subsidiaries.



CONSOLIDATED FINANCIAL RESULTS

Three months ended
March 31
($ millions) 2009 2008
----------------------------------------------------------------------------

Revenue 354.6 444.5
Unrealized gain on risk management 0.6 0.6
Net revenue(1) 112.1 110.7
EBITDA(1) 62.3 63.6
EBITDA before unrealized gain on risk
management(1) 61.7 63.0
Operating income(1) 44.7 47.6
Operating income before unrealized gain
on risk management(1) 44.1 47.0
Net income 37.5 37.6
Net income before tax-adjusted unrealized
gain on risk management(1) 37.0 37.3
Net income before tax(1) 39.0 40.6
Total assets 2,157.1 1,995.7
Total long-term liabilities 824.3 898.8
Net additions to capital assets 25.8 647.3
Distributions declared(2) 41.3 34.6
Cash flows
Cash from operations 30.7 36.9
Funds from operations(1) 57.0 56.3
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Three months ended
March 31
($ per unit) 2009 2008
----------------------------------------------------------------------------

EBITDA(1) 0.82 0.98
EBITDA before unrealized gain on risk
management(1) 0.82 0.97
Net income - basic 0.50 0.58
Net income - diluted 0.49 0.57
Net income before tax-adjusted unrealized
gain on risk management(1) 0.49 0.57
Net income before tax(1) 0.52 0.62
Distributions declared(2) 0.540 0.525
Cash flows
Cash from operations 0.41 0.57
Funds from operations(1) 0.75 0.87
Units outstanding - basic (millions)
During the period(3) 75.6 65.1
End of period 78.7 66.2
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(1) Non-GAAP financial measure. Please see previous public disclosures.
(2) Distributions declared of $0.18 per unit per month commenced in August
2008. January 2008 to July 2008 distributions of $0.175 per unit per
month were declared.
(3) Weighted average.


CONSOLIDATED FINANCIAL REVIEW

Net income for the three months ended March 31, 2009 was $37.5 million ($0.50 per unit - basic) consistent with net income from the same period in 2008 of $37.6 million ($0.58 per unit - basic). During the quarter, the gas business performed well despite lower commodity prices and activity in the Western Canada Sedimentary Basin. The power business reported lower results primarily due to lower spot power prices, but benefited from strong hedge prices, lower gas prices and lower environmental compliance costs in the quarter. The Trust also reported lower interest and tax expense in the current quarter.

Operating income from the gas business was $28.4 million in first quarter 2009 compared to $28.9 million in same quarter 2008. Results were relatively flat in spite of the challenging economic environment faced by the gas business. Operating income decreased primarily due to lower NGL frac spreads and lower throughput in certain Field Gathering and Processing (FG&P) areas. These decreases were partially offset by higher extraction volumes processed, higher FG&P rates and an adjustment to Energy Services liabilities.

In the power business, operating income was $24.1 million in first quarter 2009 compared to $25.9 million in first quarter 2008. Operating income decreased due to lower power prices and higher PPA costs, partially offset by lower transmission costs and lower environmental compliance costs. The power business benefited from fixed-rate hedges that were higher than the spot prices for power during the quarter, as well as lower environmental compliance costs and the contribution from new gas-fired peaking generation capacity.

The operating loss incurred by the Corporate segment decreased primarily due to lower interest expense, partially offset by no investment revenue from Taylor given that Taylor has been fully consolidated since January 10, 2008.

On a consolidated basis, net revenue for the quarter ended March 31, 2009 was $112.1 million compared to $110.7 million in same quarter 2008. In the gas business, net revenue increased due to higher extraction volumes, higher FG&P rates and incremental revenue from the adjustment to Energy Services liabilities. These increases were partially offset by lower spot commodity prices and lower throughput in certain FG&P areas. In the power business, net revenue decreased due to lower power prices and higher PPA costs. Furthermore, the Corporate segment reported lower revenue of $0.6 million due to lower investment income.

Operating and administrative expense for first quarter 2009 was $49.8 million, up from $47.1 million in same quarter in 2008. The increase was primarily a result of incremental administration costs associated with the businesses acquired by the Trust during 2008.

Amortization expense for first quarter 2009 was $17.6 million compared to $16.0 million in the same quarter last year. The increase was due to the growth in AltaGas' asset base from acquisition and construction activities.

Interest expense for first quarter 2009 was $5.7 million compared to $7.0 million in same quarter 2008. The decrease was due to lower average debt balances of $568.6 million compared to $577.2 million for the same period in 2008, and lower average interest rates. The average borrowing rate was 4.7 percent in first quarter 2009 compared to 5.1 percent for first quarter 2008.

Income tax expense in first quarter 2009 was $1.5 million compared to income tax expense of $3.0 in the same period 2008. The decrease was primarily due to lower income subject to tax and lower applicable tax rates.

Consolidated Outlook

AltaGas is well positioned to deliver another year of strong results in 2009, despite a challenging economic environment. The majority of the Trust's earnings are underpinned by long-term, fee-for-service, cost-of-service or minimum volume commitment contracts. To the extent that the Trust is exposed to NGL frac spreads and power prices in Alberta, the Trust has a disciplined hedging strategy which mitigates the impact of NGL frac spread and power price volatility. In 2009, approximately 60 percent of NGL volumes exposed to frac spreads and two-thirds of power generation exposed to spot power prices have been hedged at prices similar to hedged prices in 2008. Gas business results are expected to be relatively unchanged in 2009 compared to 2008 since revenue contributions from completed capital projects and fewer turnarounds are expected to offset lower NGL frac spreads. The power business results are expected to be lower based on the current forward spot price for power. Lower power prices are expected to be partially offset by the contribution from the new peaking plants, which came on line in late 2008, and the Bear Mountain Wind Park, which is expected to be in commercial service in November 2009.

GLOBAL MARKET CONDITIONS

Global financial markets have recently experienced severe turmoil; however AltaGas' financial position and ability to generate cash from its operations in the short and long terms remain strong. The Trust also has good access to capital markets. In February 2009, the Trust issued trust units for gross proceeds of approximately $100 million and secured a new $250 million revolving and term credit facility. On April 29, 2009, the Trust issued $200 million in medium-term notes (MTN) with a coupon rate of 7.42 percent which mature in April 2014. In addition, trust units issued under the Trust's Distribution Reinvestment and Optional Unit Purchase Plan (DRIP) are expected to raise approximately $40 million in 2009.

The Trust's liquidity position remains sound, underpinned by highly predictable cash flow from operations, as well as revolving bank lines of $750 million, of which $363.6 million was available as at March 31, 2009 and strong participation in the DRIP. Subsequent to the MTN issue and use of funds to repay a portion of revolving bank lines, at March 31, 2009, the trust would have had $463.6 million available on its adjusted bank lines of $650 million.

CAPITAL PROJECTS

The outlook for 2009 capital expenditures is approximately $250 million with committed spending of approximately $210 million. The total of $250 million is expected to be split approximately 30 percent for gas and 70 percent for power projects. The majority of the $210 million of committed spending is to complete the construction of the Bear Mountain Wind Park.

Based on projects currently under review, AltaGas expects that capital expenditures for 2010 to be approximately $150 million, 80 percent for gas and 20 percent for power. To date, no commitments have been made for capital projects in 2010.

Harmattan Co-stream Project

On April 23, 2009, AltaGas submitted its application for the Harmattan Co-stream Project to the Alberta Energy Resources Conservation Board. Upon approval, construction of the project would require approximately 14 months to complete. The project, as currently designed, is expected to cost in the range of $100 million to $120 million and would begin contributing to operating income in late 2010. The project will allow 250 Mmcf/d of rich, sweet natural gas sourced from the Nova Gas Transmission Ltd. Western Alberta System to be processed using spare capacity at the Harmattan Complex to recover ethane and NGL.



RESULTS OF OPERATIONS BY SEGMENT

Operating Income Three months ended
March 31
($ millions) 2009 2008
----------------------------------------------------------------------------
Gas Business
Extraction and Transmission 22.7 24.8
Field Gathering and Processing 3.2 4.3
Energy Services 2.5 (0.2)
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28.4 28.9
Power Generation 24.1 25.9
Corporate (7.8) (7.2)
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44.7 47.6
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INVESTED CAPITAL

During first quarter 2009, AltaGas acquired capital assets, long-term investments and other assets for $36.0 million compared to $653.3 million in 2008 which was primarily due to the Taylor acquisition.



Net Invested Capital - Investment Type Three Months Ended
March 31, 2009

Field
Extraction Gathering
and and Energy Power
($ millions) Transmission Processing Services Generation Corporate Total
----------------------------------------------------------------------------
Invested
capital:
Capital
assets 6.1 2.4 4.2 11.9 1.2 25.8
Long-term
investments
and
other assets - - - 9.6 0.6 10.2
----------------------------------------------------------------------------
Net invested
capital 6.1 2.4 4.2 21.5 1.8 36.0
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----------------------------------------------------------------------------


Net Invested Capital - Investment Type Three Months Ended
March 31, 2008
Field
Extraction Gathering
and and Energy Power
($ millions) Transmission Processing Services Generation Corporate Total
----------------------------------------------------------------------------
Invested
capital:
Capital
assets 559.2 31.0 1.1 55.3 0.7 647.3
Long-term
investments
and
other assets - - - 4.8 1.2 6.0
----------------------------------------------------------------------------
559.2 31.0 1.1 60.1 1.9 653.3

Disposals:
Long-term
investments
and
other assets - - - - (48.2)(48.2)
----------------------------------------------------------------------------
Net invested
capital 559.2 31.0 1.1 60.1 (46.3)605.1
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----------------------------------------------------------------------------


The Trust categorizes its invested capital into maintenance, growth and administration.

Growth capital of $33.5 million was incurred in first quarter 2009 (first quarter 2008 - $650.7 million) which included $10.0 million for the acquisition of an interest in Magma Energy Corp., $8.4 million for the construction of Bear Mountain Wind Park, $6.1 million for various E&T projects, $4.2 million for the development of the Sarnia Storage Project, $2.8 million in advanced renewable energy projects, $0.9 million for FG&P projects and $0.3 million for gas-fired peaking plants. The growth capital has been financed through increased long-term debt. Maintenance capital expenditures were $0.6 million in first quarter 2009 and 2008. Administrative capital for the first quarter was largely unchanged from the same period of 2008.



Invested Capital - Use Three Months Ended
March 31, 2009
Field
Extraction Gathering
and and Energy Power
($ millions) Transmission Processing Services Generation Corporate Total
----------------------------------------------------------------------------
Invested
capital:
Maintenance - 0.6 - - - 0.6
Growth 6.1 1.7 4.2 21.5 - 33.5
Administrative - 0.1 - - 1.8 1.9
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Invested
capital 6.1 2.4 4.2 21.5 1.8 36.0
----------------------------------------------------------------------------
----------------------------------------------------------------------------


Invested Capital - Use Three Months Ended
March 31, 2008
Field
Extraction Gathering
and and Energy Power
($ millions) Transmission Processing Services Generation Corporate Total
----------------------------------------------------------------------------
Invested
capital:
Maintenance 0.6 - - - - 0.6
Growth 558.6 30.9 1.1 60.1 - 650.7
Administrative - 0.1 - - 1.9 2.0
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Invested
capital 559.2 31.0 1.1 60.1 1.9 653.3
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Consolidated Balance Sheets
(unaudited)

March 31 December 31
($ thousands) 2009 2008
----------------------------------------------------------------------------

ASSETS
Current assets
Cash and cash equivalents $ 24,009 $ 18,304
Accounts receivable 197,514 220,280
Inventory 1,135 775
Restricted cash holdings from customers 27,940 24,017
Risk management 101,257 92,842
Other current assets 7,642 7,705
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359,497 363,923
Capital assets 1,449,381 1,436,686
Energy arrangements, contracts and relationships 136,422 138,913
Goodwill 143,840 143,840
Risk management 39,943 31,147
Long-term investments and other assets 27,997 17,744
----------------------------------------------------------------------------
$ 2,157,080 $ 2,132,253
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LIABILITIES AND UNITHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 144,765 $ 198,232
Distributions payable to unitholders 14,162 12,943
Short-term debt 1,079 4,493
Current portion of long-term debt 1,381 1,363
Customer deposits 27,940 24,017
Deferred revenue 3,049 2,777
Risk management 61,767 57,423
Other current liabilities 13,359 21,927
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267,502 323,175
Long-term debt 521,076 559,412
Asset retirement obligations 44,317 41,708
Future income taxes 214,253 211,256
Risk management 21,992 16,745
Convertible debentures 16,648 16,682
Other long-term liabilities 6,046 5,833
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1,091,834 1,174,811
Unitholders' equity 1,065,246 957,442
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$ 2,157,080 $ 2,132,253
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Consolidated Statements of Income
and Accumulated Earnings
(unaudited)

For the three months ended March 31 March 31
($ thousands except per unit amounts) 2009 2008
----------------------------------------------------------------------------

REVENUE
Operating $ 353,453 $ 442,462
Unrealized gain on risk management 635 628
Other 469 1,361
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354,557 444,451
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EXPENSES
Cost of sales 242,410 333,703
Operating and administrative 49,847 47,147
Amortization: 17,550 16,001
Capital assets 15,059 13,517
Energy arrangements, contracts and
relationships 2,491 2,484
----------------------------------------------------------------------------
309,807 396,851
----------------------------------------------------------------------------
44,750 47,600
Interest expense
Short-term debt 193 784
Long-term debt 5,511 6,215
----------------------------------------------------------------------------
Total interest 5,704 6,999
Income before income taxes 39,046 40,601
Income tax expense
Current income tax 87 19
Future income tax 1,424 3,003
----------------------------------------------------------------------------
Net income 37,535 37,579
Accumulated earnings, beginning of period 673,736 510,412
----------------------------------------------------------------------------
Accumulated earnings, end of period $ 711,271 $ 547,991
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Net income per unit
Basic $ 0.50 $ 0.58
Diluted $ 0.49 $ 0.57

Weighted average number of units outstanding
(thousands)
Basic 75,602 65,064
Diluted 76,517 66,006


Consolidated Statements of Comprehensive Income
and Accumulated Other Comprehensive Income
(unaudited)


For the three months ended March 31 March 31
($ thousands) 2009 2008
----------------------------------------------------------------------------

Net income $ 37,535 $ 37,579

Other comprehensive income (loss), net of tax
Unrealized net gain on derivatives designated as
cash flow hedges 9,696 (3,386)
Reclassification of available-for-sale financial
assets as a result of business acquisition - (17,873)
Reclassification to net income of net gain on
derivatives designated as cash flow hedges
pertaining to prior periods (4,459) (2,900)
----------------------------------------------------------------------------
5,237 (24,159)
----------------------------------------------------------------------------
Comprehensive income $ 42,772 $ 13,420
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----------------------------------------------------------------------------

Accumulated other comprehensive income,
beginning of period $ 31,569 $ 27,169
Other comprehensive income, net of tax 5,237 (24,159)
----------------------------------------------------------------------------
Accumulated other comprehensive income,
end of period $ 36,806 $ 3,010
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Consolidated Statements of Cash Flows
(unaudited)

For the three months ended March 31 March 31
($ thousands) 2009 2008
----------------------------------------------------------------------------
Cash from operations
Net income $ 37,535 $ 37,579
Items not involving cash:
Amortization 17,550 16,001
Accretion of asset retirement obligations 766 457
Unit-based compensation 49 100
Future income tax expense 1,424 3,003
Gain on sale of assets - (7)
Equity income (606) (533)
Unrealized gain on risk management (635) (628)
Other 906 280
Funds from operations 56,989 56,252
Asset retirement obligations settled (149) (56)
Net change in non-cash working
capital (26,175) (19,282)
----------------------------------------------------------------------------
30,665 36,914
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Investing activities
Increase (decrease) in customer deposits (3,923) 6,376
Capital expenditures (34,362) (51,688)
Distributions from equity investments 218 64
Acquisition of long-term investments and other
assets (10,000) (260,606)
----------------------------------------------------------------------------
(48,067) (305,854)
----------------------------------------------------------------------------
Financing activities
Increase in short-term debt (3,413) 6,008
Net issuance (repayment) of revolving
long-term debt (38,584) 281,345
Repayment of long-term debt (337) (314)
Distributions to unitholders (40,034) (33,198)
Net proceeds from issuance of units 105,475 7,711
Net proceeds from issuance of warrants - 4,500
----------------------------------------------------------------------------
23,107 266,052
----------------------------------------------------------------------------
Change in cash and cash equivalents 5,705 (2,888)
Cash and cash equivalents, beginning of period 18,304 12,451
----------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 24,009 $ 9,563
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Supplementary Quarterly Financial Information

($ millions unless otherwise
indicated) Q1-09 Q4-08 Q3-08 Q2-08 Q1-08
----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS(1)
Net Revenue(2)
Gas business
Extraction and Transmission 44.6 42.7 43.8 44.1 45.6
Field Gathering and Processing 33.4 33.6 38.1 40.6 31.6
Energy Services 6.1 3.3 4.4 3.0 3.4
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84.1 79.6 86.3 87.7 80.6
Power Generation 27.5 35.9 32.8 31.9 28.4
Corporate 1.2 10.1 3.6 (2.8) 2.0
Intersegment Elimination (0.7) 0.2 - 0.5 (0.3)
----------------------------------------------------------------------------
112.1 125.8 122.7 117.3 110.7
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EBITDA(2)
Gas Business
Extraction and Transmission 29.9 29.0 25.4 25.7 31.0
Field Gathering and Processing 10.5 10.3 14.2 12.8 11.2
Energy Services 3.0 0.1 1.4 (0.4) 0.3
----------------------------------------------------------------------------
43.4 39.4 41.0 38.1 42.5
Power Generation 26.0 34.4 31.8 31.4 27.7
Corporate (7.1) (2.9) (4.7) (15.7) (6.6)
----------------------------------------------------------------------------
62.3 70.9 68.1 53.8 63.6
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Operating Income (Loss)(2)
Gas Business
Extraction and Transmission 22.7 22.2 18.0 18.8 24.8
Field Gathering and Processing 3.2 3.1 7.2 5.8 4.3
Energy Services 2.5 (0.3) 0.8 (0.9) (0.2)
----------------------------------------------------------------------------
28.4 25.0 26.0 23.7 28.9
Power Generation 24.1 32.5 30.1 29.4 25.9
Corporate (7.8) (3.4) (5.4) (16.1) (7.2)
----------------------------------------------------------------------------
44.7 54.1 50.7 37.0 47.6
----------------------------------------------------------------------------
(1) Columns may not add due to rounding.
(2) Non-GAAP financial measure.


Supplementary Quarterly Operating Information

Q1-09 Q4-08 Q3-08 Q2-08 Q1-08
----------------------------------------------------------------------------
OPERATING HIGHLIGHTS
Extraction and Transmission
Extraction inlet gas processed
(Mmcf/d)(1) 882 790 781 759 864
Extraction volumes (Bbls/d)(1) 42,898 35,426 35,591 35,335 41,443
Transmission volumes (Mmcf/d)(1)(3) 348 367 381 390 379
Frac spread - realized
($/Bbl)(1)(4) 25.29 28.41 26.02 27.61 27.02
Frac spread - average spot price
($/Bbl)(1)(4) 15.20 18.58 36.92 30.32 29.70
Field Gathering and Processing
Capacity (gross Mmcf/d)(2) 1,172 1,172 1,178 1,178 1,178
Throughput (gross Mmcf/d)(1) 480 521 545 554 542
Capacity utilization (%)(1) 41 44 46 47 46
Energy Services
Energy management service
Contracts (2) 1,707 1,711 1,572 1,514 1,499
Average volumes transacted
(GJ/d)(1) 374,113 291,353 298,608 303,212 324,758
Power Generation
Volume of power sold (GWh)(1) 664 664 651 648 660
Average price realized on sale of
power ($/MWh)(1) 74.33 87.30 83.10 89.46 78.24
Alberta Power Pool average spot
price ($/MWh)(1) 63.01 95.18 80.36 107.56 76.69
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(1) Average for the period.
(2) As at period end.
(3) Excludes natural gas liquids pipeline volumes.
(4) AltaGas reports an indicative frac spread or NGL margin, expressed in
dollars per barrel of NGL, which is derived from Edmonton postings for
propane, butane and condensate and the daily AECO natural gas price.


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DEFINITIONS

Bbls/d barrels per day
Bcf billion cubic feet
GJ gigajoule
GWh gigawatt-hour
Mcf thousand cubic feet
Mmcf/d million cubic feet per day
MW megawatt
MWh megawatt-hour


ABOUT ALTAGAS

AltaGas Income Trust is one of Canada's largest and fastest growing integrated energy infrastructure organizations. The Trust creates value by growing and optimizing gas and power infrastructure, including a focus on renewable energy sources.

AltaGas Income Trust's units are listed on the Toronto Stock Exchange under the symbol ALA.UN. The Trust is included in the S&P/TSX Composite Index, the S&P/TSX Income Trust Index and the S&P/TSX Capped Energy Trust Index.

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