Atco Ltd. Class I · TSX:ACO.X
Atco Ltd. Class I — Investor Presentation (April 2020)
21 slides from Atco Ltd. Class I's investor presentation, April 2020
Slide 1: Disclaimer
DISCLAIMER Due to uncertainty surrounding the application of recent amendments to the Competition Act (Canada), the documents incorporated by reference herein are referenced for historical information purposes only and do not constitute active or current representations of ATCO Ltd. or any of its re
Slide 2: Investor Presentation April 2020
INVESTOR PRESENTATION APRIL 2020
Slide 3: Legal Disclaimer
LEGAL DISCLAIMER Statements made by representatives for ATCO Ltd. and Canadian Utilities Limited and information provided in this presentation may be considered forward-looking statements. By their nature, such statements are subject to numerous known and unknown risks and uncertainties and therefor
Slide 4: Organizational Structure
ORGANIZATIONAL STRUCTURE ATCO (TSX: ACO.X / ACO.Y) STRUCTURE & LOGISTICS ENERGY PORTS AND TRANSPORTATION REAL ESTATE Canadian Utilities (TSX: CU / CU.X) INVESTOR PRESENTATION APRIL 2020 3
Slide 5: Financial Strength & Resiliency
FINANCIAL STRENGTH & RESILIENCY
Slide 6: Investment Grade Ratings (DBRS, S&P)
INVESTMENT GRADE RATINGS DBRS S&P INVESTOR PRESENTATION APRIL 2020 5
Slide 7: Investment Grade Ratings
INVESTMENT GRADE RATINGS “DBRS expects ATCO’s ATCO Ltd. A (low) Stable consolidated metrics to remain stable over the medium term, as Canadian Utilities Limited (CU) A Stable cash flow at CU is expected to improve in line with the growing rate base at CU’s regulated CU Inc. A (high) Stable businesse
Slide 8: Financial Strength & Liquidity
FINANCIAL STRENGTH & LIQUIDITY LINES OF CREDIT 2020 CAPITAL INVESTMENT & FUNDING ($ MILLIONS) ($ MILLIONS) at December 31, 2019 2020 Cash Flow Net of Interest and $3,574 Dividends Additional Liquidity Cash $2,548 at Dec. 31, 2019 ($1,026) CU Inc. $1,300 Debt Maturities Available Credit Lines CU & CU
Slide 9: Debt Maturity Profile
DEBT MATURITY PROFILE $200M $220M $200M $200M $185M $160M $160M $150M $125M $120M $125M $100M $100M 2020 2021 2022 2023 2024 2028 2034 2035 2036 2037 2038 2039 CU Inc. CU INVESTOR PRESENTATION APRIL 2020 8
Slide 10: Investment Grade Counterparties
INVESTMENT GRADE COUNTERPARTIES ATCO CONSOLIDATED ATCO CONSOLIDATED TOTAL NET EXPOSURE TOP 20 CUSTOMERS NET EXPOSURE 60% of total net exposure 19% 12% Investment Grade Investment Grade 9% Below Investment Grade Below Investment Grade Non-Rated 18% 79% Non-Rated 64% Diversified Customer Base Not-rate
Slide 11: Investment Grade Counterparties
INVESTMENT GRADE COUNTERPARTIES CANADIAN UTILITIES CANADIAN UTILITIES TOTAL NET EXPOSURE TOP 20 CUSTOMERS NET EXPOSURE 65% of total net exposure 2% 12% Investment Grade Investment Grade Below Investment Grade Below Investment Grade 13% Non-Rated 16% 72% 85% Non-Rated Diversified Customer Base Not-ra
Slide 12: Regulatory Update
REGULATORY UPDATE (% of 2019 Consolidated Mid-Year Rate Base) ATCO Electric Transmission (38%) and ATCO Pipelines (14%) Rates are spread across all customers in the province. Changes in customers’ demand and use are reflected in customer transmission rates over time. We do not expect material change
Slide 13: General Cost of Capital Proceeding
GENERAL COST OF CAPITAL PROCEEDING CANADIAN UTILITIES’ POSITION Three Parts of a Fair Return Standard: 1. Comparable Investments Canadian Utilities’ application is for 40% equity thickness and 10% ROE • Current capital structure and ROE does not satisfy comparable returns component • Approved ROE’s
Slide 14: High Quality Earnings
HIGH QUALITY EARNINGS 2019 ADJUSTED EARNINGS $608 Million 95% Regulated Earnings 5% Long-term Contracted Earnings INVESTOR PRESENTATION APRIL 2020 13
Slide 15: Utilities Achieve Top Tier Returns on Equity
UTILITIES ACHIEVE TOP TIER RETURNS ON EQUITY 11.2% 10.9% CU Inc.’s average ROE +2.3% above average AUC approved over last 10 years 8.7% 8.7% (+2.8% over last 3 years) 8.6% 8.4% 10-Year Average 3-Year Average (2009 - 2018) (2016 - 2018) CU Inc. Average Alberta Utility Average (excluding CU) AUC Appro
Slide 16: Structures and Logistics
STRUCTURES AND LOGISTICS Infrastructure • Since 2015, on-going diversification of customer base into new market segments such as infrastructure projects, public education facilities, high density residential housing, Rentals Hotels hotels and correctional facilities. • Not reliant on O&G sector. Edu
Slide 17: Neltume Ports Operations
NELTUME PORTS OPERATIONS DIVERSIFIED BY CARGO TYPE AND GEOGRAPHY BY CARGO TYPE IN 2019 BY GEOGRAPHY IN 2019 5% 13% 29% Brazil Container Break Bulk Approx. Uruguay Approx. 18% Bulk 46 M 46 M Chile Tonnes 50% Tonnes Argentina 21% 64% *Based on 100% of volumes of ports where Neltume Ports has an owners
Slide 18: Track Record of Earnings
TRACK RECORD OF EARNINGS $608 million $365 million ATCO in 2019 Canadian Utilities 2016 Alberta wildfires 2015 GCOC decision and in 2019 2016 Alberta wildfires global commodity price declines 2015 GCOC decision and 2013 Calgary Floods global commodity price declines Long track record of earnings gro
Slide 19: Track Record of Dividends
TRACK RECORD OF DIVIDENDS ATCO $1.74 Canadian Utilities $1.74 27 years of annual dividend increases* per share 48 years of annual dividend increases* per share Longest track record of annual dividend increases of any Canadian publicly traded company 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
Slide 20: Financial Strength & Resiliency Summary
FINANCIAL STRENGTH & RESILIENCY SUMMARY 95% Regulated Earnings 5% AUC AB Contracted Earnings AUC Peers CU CUInc. Inc. ROE Peers UTILITIES ACHIEVE CANADIAN UTILITIES LONG TRACK RECORD OF TOP TIER RETURNS ON EQUITY HIGH QUALITY EARNINGS EARNINGS & DIVIDEND GROWTH INVESTOR PRESENTATION APRIL 2020 19
Slide 21: Investor Relations Contact
www.ATCO.com www.canadianutilities.com Tel: 403.292.7500 Investor Relations 5302 Forand Street SW Calgary, Alberta T3E 8B4 Canada