Algonquin Power & Utilities Corp. · TSX:AQN
Algonquin Power & Utilities — IPO Roadshow (October 2021)
16 slides from Algonquin Power & Utilities's IPO roadshow presentation, Oct 27, 2021
Slide 1: Algonquin to Acquire Kentucky Power Company & AEP Kentucky Transmission Company, Inc.
October 26, 2021 Algonquin to Acquire Kentucky Power Company & AEP Kentucky Transmission Company, Inc. An amended and restated preliminary short form prospectus containing important information relating to the securities and the acquisition described in this presentation has not yet been filed with
Slide 2: Disclosure: Forward-Looking Statements
2 2 Disclosure Forward-Looking StatementsCertain written statements included herein and/or oral statements made in connection with the presentation contained herein constitute “forward-looking information” within the meaning of applicable securities laws in each of the provinces of Canada and the re
Slide 3: Agenda and Presenters
Agenda and Presenters Arun BanskotaPresident and Chief Executive Officer Jeffery NormanChief Development Officer Arthur KacprzakChief Financial Officer 4 Kentucky Power & Kentucky TransCo Overview 7 Combined Business Profile 6 Greening the Fleet Opportunity 1 Transaction Overview 2 Strategic Rationa
Slide 4: Transaction Overview
Transaction Overview 4 Transaction and Purchase Price Liberty Utilities Co., an indirect subsidiary of Algonquin, agreed to acquire Kentucky Power Company (“Kentucky Power”) and AEP Kentucky Transmission Company, Inc. (“Kentucky TransCo” and collectively, the “Acquired Entities”) from American Elect
Slide 5: Strategic Rationale
Strategic Rationale 5 Consistent with Algonquin’s strategy of completing accretive add-on regulated acquisitions at attractive valuesIncreases pro forma regulated rate base to approximately $9 billion1 and overall pro forma business mix to nearly 80%1 regulated businessesIncreases pro forma electric
Slide 6: M&A Track Record
5 utility acquisitions successfully integrated since 2017, New York American Water closing pending, and acquisition of Kentucky Power and Kentucky TransCo expected to close in mid-2022Expertise in integrating utilities of scale (Empire District Electric Company (“Empire”), California Pacific Electri
Slide 7: Kentucky Power & Kentucky TransCo: Fully Regulated Electric Utilities
Kentucky Power & Kentucky TransCo: Fully Regulated Electric Utilities 7 Residential Industrial and Other Commercial Energy Sales (2020) Rate Base (Mid-Year 2022E) Kentucky Public Service Commission FERC Company Head Office Ashland, Kentucky Regulated Asset Rate Base(Mid-Year 2022E) $2.2B2 Infrastruc
Slide 8: KPSC Regulatory Environment
KPSC Regulatory Environment 8 8 Rated Average/1 by S&P Global; top third of all states rankedCommissioners appointed by Governor for 4 year terms; provides continuityMerger approval standard "consistent with public interest"; maximum four months to issue orderStrong regulatory regime with attractive
Slide 9: Earned ROEs for Kentucky Utilities and Time Between Rate Cases
Earned ROEs for Kentucky Utilities1,2,5 9 9 Time Between Rate Case Applications4 (months) 33 24 24 24 1 – Average Earned ROE from 2016-2020.2 – Earned ROE calculated Net Income/Total Proprietary Capital from FERC Form 1.3 – Reflects authorized ROE made effective in January 2021; authorized ROE for r
Slide 10: Rockport UPA Termination and Mitchell Coal Plant
10 Rockport UPA Termination 393 MW leased coal capacity under a Unit Power Agreement (“UPA”) that expires in 2022Algonquin does not intend for the UPA to be renewed by Kentucky Power Mitchell Operating Agreement Operation of the Mitchell coal plant expected to be transferred to a subsidiary of AEP u
Slide 11: Greening the Fleet Track Record
11 Transaction Details Acquired in January 2017Fully regulated electric, gas, and water utility based in Missouri serving electric customers in the Midwest (Missouri, Kansas, Oklahoma and Arkansas) Energy Transition Highlights Owned primarily coal- and gas-fired power plants with limited renewables
Slide 12: Enhances Algonquin's Scale and Regulated Business Mix
Enhances Algonquin’s Scale and Regulated Business Mix 12 Algonquin (Pre-Transaction) Acquired Entities Algonquin (Pro Forma)6 % Increase Total Generation Capacity 5.7 GW1 1.1 GW2 6.8 GW Rate Base (Rate Base 2022E Mid-Year) $6.8 B5 $2.2 B $9.0 B Transmission & Distribution Line Miles 29,8183 11,152 4
Slide 13: Indicative Financing Plan
13 Assumed debt (~$1.2B) ~$2.8B ~$1.6B ~$0.7B - $0.8B ~$0.8B - $0.9B Multiple Options Hybrid debt and equity unitsMonetization of non-regulated assets or investments 13 Indicative Financing Plan ($B) 1 – Subject to customary closing adjustments. 1 Financing Plan Designed to Maintain Investment Grade
Slide 14: Illustrative Transaction Timeline
Q4 2021 Q1 2022 Q2 2022 14 Announcement (Transaction and Underwritten Public Offering) Secure Approvals from FERC, CFIUS, and State Commissions in Kentucky & West Virginia Commence Regulatory Filings with U.S. Federal + State Regulatory Agencies Department of Justice HSR Order Supplemental Financing
Slide 15: Closing Remarks
15 Closing Remarks Significant growth in regulated electric utility operationsLeverages greening the fleet thesis and re-confirms leadership in the energy transition Expected to be accretive to Adjusted Net EPS and supportive of long-term growth outlook¹Financing plan designed to maintain investment
Slide 16: Thank you
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