Gaz Métro reports solid results for the first quarter of its 2009 fiscal year

    MONTREAL, Feb. 4 /CNW Telbec/ - For the first quarter of the 2009 fiscal
year, Gaz Métro Limited Partnership (TSX: GZM.UN, Gaz Métro) reports adjusted
net income of $71.2 million, or $0.59 per unit, which is $3.8 million, or
$0.03 per unit, higher than adjusted net income for the first quarter the
previous year(1).
    This increase is attributable to solid results for the Energy
Distribution Sector (distribution of natural gas in Quebec and natural gas and
electricity in Vermont) as well as improved profitability of the Energy
Services Sector.
    "While no business is immune to the repercussions of an economic slowdown
like the one we are experiencing at present, our investors can take comfort in
Gaz Métro's defensive attributes. The fact its core business, the distribution
of natural gas, is closely tied to heating homes and businesses, provides it
with a certain financial stability. During this turbulent period, Gaz Métro
intends to stay the course, maintain its financial and operational discipline
and continue to manage the funds entrusted to it by its investors with
rigour", said Sophie Brochu, President and Chief Executive Officer.
    "In Quebec, the profitability of the gas distribution activities is not
affected by the decrease in natural gas prices that generally accompanies an
economic slowdown. On the contrary, the reduction in prices results directly
in a lower bill for our customers, thereby improving the competitive position
of natural gas in relation to other energies, which is even more advantageous
at a time when our customers are watching their expenses more closely than
ever", added Sophie Brochu.

    Segmented Analysis

    Net income for the Energy Distribution Sector was $66.8 million during
the first quarter of the current fiscal year, which is $3.8 million higher
than the corresponding quarter the previous year.
    The reason for this, among others, is a $1.8 million(2) increase in net
income from the Vermont distribution activity. An increase in Vermont Gas
Systems' (VGS) deliveries due to relatively colder temperatures than during
the first quarter the previous year, coupled with the appreciation in the
value of the U.S. dollar in relation to the Canadian dollar, increased the net
income of VGS and Green Mountain Power Corporation (GMP). Although net income
for the Quebec distribution activity (Gaz Métro-QDA) was also up $2.0 million,
this should reverse by the end of the 2009 fiscal year because of timing
differences in recognizing revenues and recording costs.
    In addition, net income for the Energy Services Sector was $1.4 million,
which is $1.5 million higher than the corresponding quarter the previous year.
This significant improvement is due to higher net income for some of Gaz Métro
Plus Limited Partnership's subsidiaries, notably Consulgaz Inc. and
Climatisation et Chauffage Urbains de Montréal, s.e.c., and for Aqua-Rehab

    (1) Adjusted net income excludes an unfavourable non-monetary adjustment
        of $0.7 million for the first quarter of the 2009 fiscal year and a
        favourable non-monetary adjustment of $2.2 million for the first
        quarter of the 2008 fiscal year, related to future income taxes.

    (2) Net of financing costs.

    Segmented Results - Net Income
    For the quarters ended December 31          2008        2007  Variations
    (in millions of dollars)
    Energy Distribution
      Gaz Métro - QDA                           60.8        58.8         2.0
      VGS and GMP                                7.3         5.3         2.0
      Financing costs of investments in
       this Sector(1)                           (1.3)       (1.1)       (0.2)
                                                66.8        63.0         3.8
    Transportation of Natural Gas
      TQM(2), PNGTS(2) and Champion              4.5         5.5        (1.0)
      Financing costs of investments in
       this Sector(1)                           (1.2)       (1.1)       (0.1)
                                                 3.3         4.4        (1.1)
    Storage of Natural Gas
      Intragaz                                   1.7         1.5         0.2
      Financing costs of investments in
       this Sector(1)                           (0.6)       (0.7)        0.1
                                                 1.1         0.8         0.3
    Energy Services
      Energy, water and fibre optic              2.0         0.6         1.4
      Financing costs of investments in
       this Sector(1)                           (0.6)       (0.7)        0.1
                                                 1.4        (0.1)        1.5
    Non-allocated Expenses
      Rabaska project                           (1.1)       (0.9)       (0.2)
      Other expenses                            (0.3)        0.2        (0.5)
                                                (1.4)       (0.7)       (0.7)
    Adjusted Net Income                         71.2        67.4         3.8
      Non-monetary impact related to future
       income taxes(3)                          (0.7)        2.2        (2.9)
    Net Income                                  70.5        69.6         0.9
    (1) Financial expenses incurred by the Partnership to finance the
        investments in subsidiaries, joint ventures and companies subject to
        significant influence in each Sector.
    (2) TQM: Trans Québec & Maritimes Pipeline Inc. PNGTS: Portland Natural
        Gas Transmission System
    (3) Future income taxes the Partnership will have to pay during the
        periods after October 1, 2010 and related to Gaz Métro's subsidiaries
        and joint ventures, which do not qualify as rate-regulated
        enterprises within the meaning of the Handbook of the Canadian
        Institute of Chartered Accountants.

    Income Distribution

    Gaz Métro inc., as the General Partner of Gaz Métro, today declared a
distribution of $0.31 per unit payable on April 1, 2009 to Partners of record
at the close of business on March 16, 2009. Gaz Métro expects to maintain this
level of distribution for the remainder of the 2009 fiscal year.

    Conference Call

    The Partnership will hold a telephone conference with financial analysts
on Wednesday, February 4, 2009, at 4:00 p.m. (Eastern time) to discuss its
results for the first quarter ended December 31, 2008. 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 416-644-3414 or toll-free
1-800-733-7560. It will also be Webcast on Gaz Métro's Web site
( 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: 21294929(Number sign)), and for 90
days on Gaz Métro's Web site.

    Gaz Métro Overview

    With nearly $3.6 billion in assets, Gaz Métro is Quebec's natural gas
distribution company. Working in this regulated industry for over 50 years,
Gaz Métro has become the trusted energy provider to over 179,600 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 strong and stable
distributions with a competitive spirit, Gaz Métro is committed to its
customers, unitholders, employees and community.


    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 are 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 December 31, 2008. 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 December 31, 2008, 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.


    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.

                                                  3 months ended December 31
    (in millions of dollars,
    except for per unit data which is in dollars)        2008           2007
                                                   (unaudited)    (unaudited)


    Revenues                                        $   715.8      $   617.8
    Gross margin                                    $   226.7      $   205.8
    Income before interest, taxes and
     amortization                                   $   153.9      $   142.1
    Net income                                      $    70.5      $    69.6
    Adjusted net income(1)                          $    71.2      $    67.4
    Cash flows related to operating activities
     (before working capital)                       $   155.4      $   128.4
    Capital expenditures                            $    36.6      $    35.3
    Variations in deferred charges and credits      $    37.0      $    47.4
    Net income per unit (basic and diluted)         $    0.59      $    0.58
    Adjusted net income per unit
     (basic and diluted)(1)                         $    0.59      $    0.56
    Distributions paid per unit to Partners
     of record on September 15                      $    0.31      $    0.31
    Weighted average number of outstanding
     units (in millions)                                120.5          120.4

     (in millions of cubic metres)(2)

    Industrial                                            725          1,038
    Commercial                                            656            702
    Residential                                           229            223
                                                  ------------   ------------
    Total                                               1,610          1,963


    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/          SR-2/
                                                 STA-2(middle)  STA-2(middle)

    Market prices on Toronto Stock Exchange
     (in dollars):
      High                                          $   14.77      $   16.40
      Low                                           $   10.63      $   13.77
      Close                                         $   13.15      $   16.34
    Public ownership in Partnership
     (non-controlling Partners)                          29.0%          29.0%
    Interest coverage on long-term debt over
     a period of 12 months (times)                       2.51           2.44

                                                  December 31,  September 30,
                                                         2008           2008
                                                 ------------   ------------
                                                   (unaudited)      (audited)

    Total assets                                    $ 3,598.3      $ 3,280.1
    Total debt                                      $ 1,917.7      $ 1,820.5
    Partners' equity                                $ 1,008.3      $   942.0
    Partners' equity per unit                       $    8.37      $    7.82
    (1) Adjusted to exclude a $0.7 million unfavourable non-monetary
        adjustment related to future income taxes for the first quarter of
        the 2009 fiscal year and a $2.2 million favourable non-monetary
        adjustment for the first quarter of the 2008 fiscal year.
    (2) The market allocation method for Quebec volumes was modified as at
        September 30, 2008. Accordingly, comparative volumes were restated to
        reflect the new allocation.
    (3) Including share of productivity gains and excluding 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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