Gaz Métro reports third quarter results for 2009 fiscal year



    Diversity of operations continues to support solid financial performance

    MONTREAL, Aug. 6 /CNW Telbec/ - Gaz Métro Limited Partnership (TSX:
GZM.UN, Gaz Métro) ended the first nine months of its 2009 fiscal year with
adjusted net income of $196.3 million, or $1.63 per unit, which is $3.5
million, or $0.03 per unit, higher than the same period for the previous year.
For the third quarter of the 2009 fiscal year, Gaz Métro reports adjusted net
income of $5.5 million, or $0.05 per unit, which is up slightly by $0.7
million compared to the third quarter of the previous fiscal year(1).
    "While the present economic situation is still impacting energy
deliveries, the diversity of our operations coupled with rigorous management
of our operating expenses continue to support our solid financial
performance", said Sophie Brochu, President and Chief Executive Officer.
    "In terms of our growth initiatives, an important milestone was reached
in connection with our wind power projects: the government of Québec issued a
decree for our two Seigneurie de Beaupré wind farms, which will have installed
capacity of 272 MW. This decree, the first to be granted to a project in
connection with Hydro-Québec's call for tenders for 2,000 MW, is excellent
news for Gaz Métro and its partner, Boralex, and clearly shows the
environmental merit and social acceptability of the wind farms on the
Seigneurie de Beaupré land, which is owned by the Séminaire de Québec. We are
enthusiastic about moving ahead with this opportunity with a view to creating
steady, long-term value for our unitholders", said Sophie Brochu.

    Income Distribution

    Gaz Métro inc., as General Partner of Gaz Métro, today declared a
distribution of $0.31 per unit, payable on October 1, 2009, to Partners of
record at the close of business on September 15, 2009. Gaz Métro expects to
maintain this $0.31 per unit distribution level for each quarter of the 2010
fiscal year.

    Segment Analysis

    Overall, the Energy Distribution segment, which includes the natural gas
distribution activities in Quebec and the natural gas and electricity
distribution activities in Vermont, reports net income of $3.6 million for the
third quarter of the 2009 fiscal year, which is $0.4 million higher than for
the third quarter of the 2008 fiscal year, and net income of $174.7 million
for the first nine months of the present fiscal year, up $0.7 million over the
same period the previous fiscal year.
    In spite of the decrease in electricity deliveries by Green Mountain
Power Corporation (GMP), net income for the energy distribution activity in
Vermont is up $0.5 million in the third quarter and $5.3 million for the first
nine months of the present fiscal year(2). This solid performance is due,
among other things, to the strengthening of the U.S. dollar in relation to the
Canadian dollar, the increase in revenues from GMP's interest in Vermont
Transco LLC as well as the increase in natural gas deliveries by Vermont Gas
Systems, Inc. (VGS) as a result of relatively colder temperatures than during
the same periods the previous fiscal year.
    This favourable contribution by the Vermont operations is partially
offset by reductions of $0.1 million in the third quarter and $4.6 million for
the first nine months of the present fiscal year in net income from the gas
distribution activities in Quebec (Gaz Métro-QDA). For the first nine months
of the present fiscal year, the increase in revenues attributable to rate
increases in the different markets was mostly neutralized by the 12.1%
decrease in normalized natural gas deliveries, particularly in the industrial
market. As a result, it could not cover the increases in operating,
maintenance and amortization expenses. The 20.3% decrease in Gaz Métro-QDA's
industrial volumes for the first nine months of the present fiscal year is
mainly due to lighter consumption in the metallurgy and refining sectors,
lower short-term interruptible service sales and the volume losses
attributable to the substantial production cutback by TransCanada Energy Ltd
since the end of the first quarter of the 2008 fiscal year. During the third
quarter of the present fiscal year, Gaz Métro-QDA's volumes are 5.9% lower
than in the third quarter of the previous fiscal year.
    In the Transportation of natural gas segment, Gaz Métro's net income is
up $0.5 million in the third quarter and $1.4 million for the first nine
months of the present fiscal year, mainly on account of the recognition, in
the second quarter, of the favourable retroactive impact of the $6.7 million
rate adjustment the National Energy Board allowed Trans Québec & Maritimes
Pipeline Inc. (TQM) on March 19 for its 2007 and 2008 fiscal years, as well as
interest income of $0.8 million related to that rate adjustment during the
third quarter. In the second quarter of the 2008 fiscal year, Gaz Métro had
recorded a gain of $5.3 million (after tax) in Portland Natural Gas
Transmission System (PNGTS) related to the partial settlement of the Calpine
Corporation bankruptcy.
    Gaz Métro's adjusted net income(3) from the Storage of natural gas
segment is up $0.2 million in the third quarter and $1.0 million for the first
nine months of the present fiscal year, mainly on account of a slight
indexation of rates and a reduction in financing costs, which reflects lower
interest rates.
    The adjusted net loss for the Energy Services segment was up $0.4 million
for the third quarter of the 2009 fiscal year and adjusted net income(3) is up
$1.5 million for the first nine months of the present fiscal year. Excluding
the $1.6 million write-down of Aqua-Rehab Inc.'s goodwill during the third
quarter of the present fiscal year, adjusted net income is up $1.2 million and
$3.1 million for the first nine months of the present fiscal year. These gains
are a result of an increase in net income earned by certain subsidiaries of
Gaz Métro Plus Limited Partnership, including Consulgaz Inc., Climatisation et
Chauffage Urbains de Montréal, s.e.c. and HydroSolution s.e.c.
    In connection with its wind power projects, on July 7, 2009, Gaz Métro
and its partner, Boralex Inc., obtained a decree issued by the government of
Quebec authorizing the two Seigneurie de Beaupré wind farms for total
installed capacity of 272 MW. Having successfully passed the key environmental
approval stage, the consortium may now proceed with the other planned stages
of the projects.

    
    ------------------------
    (1) Adjusted net income excludes an unfavourable non-monetary adjustment
        of $0.2 million related to future income taxes for the third quarter
        of the 2009 fiscal year (no adjustment in the third quarter of the
        2008 fiscal year) and an unfavourable non-monetary adjustment of
        $1.5 million for the first nine months of the 2009 fiscal year
        ($1.7 million favourable for the first nine months of the 2008 fiscal
        year).

    (2) Net of financing costs.

    (3) Adjusted net income (loss) excludes the non-monetary adjustments
        related to future income taxes.


    Segment Results - Net Income

                              3 months ended June 30  9 months ended June 30
    -------------------------------------------------------------------------
    (in millions of dollars)     2009   2008  Change    2009    2008  Change
    -------------------------------------------------------------------------
    Energy distribution
      Gaz Métro-QDA               2.2    2.3    (0.1)  159.4   164.0    (4.6)
      VGS and GMP                 2.5    2.0     0.5    18.8    13.6     5.2
      Financing costs of
       investments in this
       segment(1)                (1.1)  (1.1)    0.0    (3.5)   (3.6)    0.1
    -------------------------------------------------------------------------
      Adjusted net income         3.6    3.2     0.4   174.7   174.0     0.7
    -------------------------------------------------------------------------
    Transportation of natural gas
      TQM, PNGTS and Champion
       Pipe Line Corporation Ltd  3.2    2.9     0.3    20.8    19.9     0.9
      Financing costs of
       investments in this
       segment(1)                (0.9)  (1.1)    0.2    (3.1)   (3.6)    0.5
    -------------------------------------------------------------------------
      Adjusted net income         2.3    1.8     0.5    17.7    16.3     1.4
    -------------------------------------------------------------------------
    Storage of natural gas
      Intragaz Group (Intragaz)   1.7    1.8    (0.1)    4.9     4.6     0.3
      Financing costs of
       investments in this
       segment(1)                (0.3)  (0.6)    0.3    (1.4)   (2.1)    0.7
    -------------------------------------------------------------------------
      Adjusted net income         1.4    1.2     0.2     3.5     2.5     1.0
    -------------------------------------------------------------------------
    Energy services and other
      Energy, water and
       fibreoptic                (0.8)  (0.2)   (0.6)    4.7     3.8     0.9
      Financing costs of
       investments in this
       segment(1)                (0.4)  (0.6)    0.2    (1.4)   (2.0)    0.6
    -------------------------------------------------------------------------
      Adjusted net income (loss) (1.2)  (0.8)   (0.4)    3.3     1.8     1.5
    -------------------------------------------------------------------------
    Non-allocated expenses
      Rabaska project            (0.2)  (0.5)    0.3    (1.6)   (2.0)    0.4
      Other expenses             (0.4)  (0.1)   (0.3)   (1.3)    0.2    (1.5)
    -------------------------------------------------------------------------
                                 (0.6)  (0.6)    0.0    (2.9)   (1.8)   (1.1)
    -------------------------------------------------------------------------
    Adjusted net income           5.5    4.8     0.7   196.3   192.8     3.5
    -------------------------------------------------------------------------
      Non-monetary impact
       related to future income
       taxes(2)                  (0.2)   0.0    (0.2)   (1.5)    1.7    (3.2)
    -------------------------------------------------------------------------
    Net income                    5.3    4.8     0.5   194.8   194.5     0.3
    -------------------------------------------------------------------------
    (1) Financial expenses incurred by the Partnership to finance investments
        in the subsidiaries, joint ventures, and companies subject to
        significant influence of each segment.

    (2) Adjustment related to the future income taxes that the Partnership
        will have to pay in periods after October 1, 2010 with respect to
        Gaz Métro's subsidiaries and joint ventures that do not qualify as
        rate-regulated enterprises as defined in the Handbook of the Canadian
        Institute of Chartered Accountants.
    

    Conference Call

    The Partnership will hold a telephone conference with financial analysts
on Thursday, August 6, 2009, at 4:00 p.m. (Eastern time) to discuss its
results for the third quarter ended June 30, 2009. Sophie Brochu, President
and Chief Executive Officer, and Pierre Despars, Executive Vice President and
Chief Financial Officer, will be the main speakers. This will be followed by a
question period. Media and other interested individuals are invited to listen
in.
    The conference can be accessed live by dialling 416-644-3430 or toll-free
1-800-814-4862. It will also be Webcast on Gaz Métro's Web site
(www.gazmetro.com/investors) in the "Webcasts" section.
    Rebroadcasts can be accessed for 30 days by telephone at 416-640-1917 or
toll-free at 1-877-289-8525 (access code: 21311148#), and for 90 days on Gaz
Métro's Web site.

    Gaz Métro Overview

    With nearly $3.4 billion in assets, Gaz Métro is Quebec's leading natural
gas distribution company. Working in this regulated industry for over 50
years, Gaz Métro has become the trusted energy provider to some 180,000
customers in Quebec and 134,500 customers in Vermont while developing the
skills and expertise needed to diversify beyond natural gas. Gaz Métro's
prudent growth strategy has been met with the successful entry into
electricity distribution in Vermont and in the wind power sector. Offering
historically strong and stable distributions with a competitive spirit, Gaz
Métro is committed to its customers, unitholders, employees and community. Gaz
Métro's units are listed on the Toronto Stock Exchange and trade under the
symbol GZM.UN.www.gazmetro.com

    CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

    Certain statements in this press release may be forward-looking pursuant
to applicable securities laws. Such forward-looking information reflects the
intentions, plans, expectations and opinions of the management of Gaz Métro
inc. (GMi), Gaz Métro's general partner, and is based on information currently
available to management and on assumptions with respect to future events. The
words "plans", "expects", "estimates", "forecasts", "intends", "anticipates"
or "believes", or similar expressions, including the negative of these terms
and future or conditional forms, often identify forward-looking statements.
Forward-looking statements involve known and unknown risks and uncertainties
and other factors outside management's control. A number of factors could
cause actual results of GMi and Gaz Métro to differ materially from the
results discussed in the forward-looking statements, including, but not
limited to, terms of decisions rendered by regulatory bodies, general economic
conditions, the competitiveness of natural gas in relation to other energy
sources, the reliability of natural gas supplies, the integrity of the natural
gas distribution system, exchange rates fluctuations and other factors
described in the 2008 Annual Information Form of each of Gaz Métro and GMi
under the item "Risks", and in the Management's Discussion and Analysis for
the period ended June 30, 2009. Although the forward-looking statements
contained herein are based upon what management believes to be reasonable
assumptions, including assumptions to the effect that no unforeseen changes in
the legislative and operating framework of energy markets in Quebec and in the
State of Vermont will occur, that no significant event occurring outside the
ordinary course of business, such as a natural disaster or other calamity,
will occur, and other assumptions described in the Management's Discussion and
Analysis for the period ended June 30, 2009, management cannot assure
investors that actual results will be consistent with these forward-looking
statements. These forward-looking statements are made as of this date, and
management assumes no obligation to update or revise them to reflect new
events or circumstances, except as required pursuant to applicable securities
laws. Readers are cautioned not to place undue reliance on these
forward-looking statements.

    ADJUSTED INDICATORS NOT STANDARDIZED IN ACCORDANCE WITH GAAP

    In the view of Gaz Métro's management, certain "adjusted" indicators,
such as adjusted net income and adjusted net income per unit provide readers
with information it considers useful for analyzing its financial results.
However, they are not standardized in accordance with Canadian generally
accepted accounting principles (GAAP) and should not be considered in
isolation or as substitutes for other performance measures that are in
accordance with GAAP. The results obtained might not be comparable with
similar indicators used by other issuers and should therefore only be
considered as complementary information.

    
    HIGHLIGHTS

                            3 months ended June 30    9 months ended June 30
    -------------------------------------------------------------------------
    (in millions of dollars,
     except for unit data
     which is in dollars)        2009         2008         2009         2008
    -------------------------------------------------------------------------
                           (unaudited)  (unaudited)  (unaudited)  (unaudited)
    CONSOLIDATED INCOME
     AND CASH FLOWS
    Revenues                 $  388.6     $  409.2    $ 1,959.7    $ 1,839.1
    Gross margin             $  156.1     $  140.1    $   656.0    $   601.4
    Income before interest,
     taxes and amortization  $   83.3     $   73.5    $   441.6    $   415.7
    Net income               $    5.3     $    4.8    $   194.8    $   194.5
    Adjusted net income(1)   $    5.5     $    4.8    $   196.3    $   192.8
    Cash flows related to
     operating activities
     (before working
     capital)                $   63.6     $   84.7    $   422.3    $   387.8
    Capital expenditures     $   38.0     $   30.6    $    99.6    $    90.0
    Changes in deferred
     charges and credits     $   40.1     $   29.9    $    86.5    $   139.8
    Net income per unit
     (basic and diluted)     $   0.05     $   0.03    $    1.62    $    1.61
    Adjusted net income
     per unit (basic and
     diluted)(1)             $   0.05     $   0.03    $    1.63    $    1.60
    Distributions paid per
     unit to Partners of
     record on September 15,
     December 15 and
     March 15                $   0.31     $   0.31    $    0.93    $    0.93
    Weighted average number
     of units outstanding
     (in millions)              120.5        120.5        120.5        120.5
    -------------------------------------------------------------------------
    CONSOLIDATED NORMALIZED
     NATURAL GAS VOLUMES(2)
     (in millions of cubic
      metres)
    MARKETS
    Industrial                    521          583        1,999        2,492
    Commercial                    380          379        1,928        2,028
    Residential                    98           96          646          650
                            ----------   ----------   ----------   ----------
    Total                         999        1,058        4,573        5,170
    -------------------------------------------------------------------------
    OTHER INFORMATION
    Authorized rate of return
     on deemed common equity
     (Quebec distribution
     activity)(3)                                          8.94%        9.52%
    Credit and Stability
     ratings
      Long-term bonds
       (S&P/DBRS)(4)                                        A/A          A/A
      Commercial paper
       (S&P/DBRS)(4)                                    A-1(low)     A-1(low)
                                                       /R-1(low)    /R-1(low)
      Stability of
       distributions (S&P/DBRS)                       SR-2/STA-2   SR-2/STA-2
                                                        (middle)     (middle)
    Market prices on
     Toronto Stock Exchange:
      High                   $  15.18     $  16.30    $   15.46    $   16.40
      Low                    $  13.70     $  14.35    $   10.63    $   13.77
      Close                                           $   14.91    $   15.19
    Public ownership in
     the Partnership
     (non-controlling Partners)                            29.0%        29.0%
    Interest coverage on
     long-term debt over a
     period of 12 months (times)                           2.50         2.61
    -------------------------------------------------------------------------
    CONSOLIDATED BALANCE SHEETS
                                                           June    September
                                                             30,          30,
                                                           2009         2008
                                                     -----------   ----------
                                                     (unaudited)    (audited)

    Total assets                                      $ 3,367.1    $ 3,280.1
    Total debt                                        $ 1,750.5    $ 1,820.5
    Partners' equity                                  $ 1,044.9    $   942.0
    Partners' equity per unit                         $    8.67    $    7.82


    ------------------------
    (1) Adjusted to exclude a $0.2 million unfavourable non-monetary
        adjustment related to future income taxes for the third quarter of
        2009 ($1.5 million unfavourable adjustment for the first nine months
        of fiscal 2009) and no adjustment for the third quarter of 2008
        ($1.7 million favourable adjustment for the first nine months of
        fiscal 2008).
    (2) The market allocation method for Quebec volumes was modified as at
        September 30, 2008; comparative volumes were therefore restated to
        reflect the new allocation method.
    (3) Including the share of anticipated productivity gains and excluding
        the Global Energy Efficiency Plan performance incentive.
    (4) Through its General Partner, Gaz Métro inc.
    




For further information:

For further information: Investors and analysts: Caroline Warren,
Investor Relations, (514) 598-3324; Media: Marie-Noelle Cano, Media and Public
Relations, (514) 598-3449


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