Canadian Utilities Limited Class A · TSX:CU

Canadian Utilities Limited Class A — Scotiabank Energy Infrastructure Conference 2017

36 slides from Canadian Utilities Limited Class A's conference presentation, November 2017

  1. Slide 1: Scotiabank Energy Infrastructure Conference

    Scotiabank Energy Infrastructure Conference Toronto November 15 – 16, 2017

  2. Slide 2: Slide 2

  3. 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

  4. Slide 4: Organizational Structure

    ORGANIZATIONAL STRUCTURE SCOTIABANK ENERGY INFRASTRUCTURE CONFERENCE NOVEMBER 2017 2

  5. Slide 5: The ATCO Group of Companies

    THE ATCO GROUP OF COMPANIES With approximately 7,000 Electricity employees and assets of • 88,000 kms of electric $21 billion, ATCO is a power lines diversified corporation • 18 power plants globally delivering service • 2,480 MW power excellence and innovative generating capacity business solutions

  6. Slide 6: Asset Growth

    ASSET GROWTH We have doubled in size since 2009 ATCO Canadian Utilities $3.5B $3.5B $6.2B $20B $6.2B $19B $0.3B $10B $9B 2009 Structures Electricity Pipelines 2016 2011 Electricity Pipelines 2016 2009 & Logistics & Liquids 2016 2009 & Liquids 2016 SCOTIABANK ENERGY INFRASTRUCTURE CONFERENCE NOVEMBER

  7. Slide 7: Regulated Utility Growth

    REGULATED UTILITY GROWTH Regulated Normalized Regulated Capital Investment Mid-Year Rate Base Adjusted Earnings $1.1B $12.3B $292M $11.7B $1.5B $10.3B $252M $2.2B $225M $8.9B $198M $7.6B $168M $2.3B $2.2B 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 SCOTIABANK ENERGY IN

  8. Slide 8: Growing a High Quality Earnings Base

    GROWING A HIGH QUALITY EARNINGS BASE ATCO Canadian Utilities Regulated Adjusted Earnings Regulated Adjusted Earnings 93% 81% 46% 37% 2009 2016 2009 2016 SCOTIABANK ENERGY INFRASTRUCTURE CONFERENCE NOVEMBER 2017 6

  9. Slide 9: Continued Dividend Growth

    CONTINUED DIVIDEND GROWTH ATCO $0.3275 Canadian Utilities $0.3575 per share per share 24 year track record of Longest track record of increasing common annual dividend increases share dividends* of any Canadian publicly traded company* 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 1

  10. Slide 10: First Nine Months 2017 Adjusted Earnings

    FIRST NINE MONTHS 2017 ADJUSTED EARNINGS ATCO Canadian Utilities $266M $440M $243M $424M 9 Months 2016 9 Months 2017 9 Months 2016 9 Months 2017 SCOTIABANK ENERGY INFRASTRUCTURE CONFERENCE NOVEMBER 2017 8

  11. Slide 11: Growing Earnings in 2017

    GROWING EARNINGS IN 2017 ATCO Canadian Utilities Global Business Unit Earnings Global Business Unit Earnings $163M $155M $309M $291M $92M $95M $174M $179M $37M $4M 9 Months 9 Months 9 Months 9 Months 9 Months 9 Months 9 Months 9 Months 9 Months 9 Months 2016 2017 2016 2017 2016 2017 2016 2017 2016 2

  12. Slide 12: Financial Focus for the Future

    FINANCIAL FOCUS FOR THE FUTURE We are taking a focused and disciplined approach to purse cost savings and efficiencies in every part of the organization to ensure we deliver the most competitive solution to our customers FINANCIAL PRIORITIES FOR 2017 AND BEYOND OPERATIONAL CONTINUED CAPITAL FINANCIA

  13. Slide 13: Operational Excellence: Structures & Logistics

    OPERATIONAL EXCELLENCE: STRUCTURES & LOGISTICS Department of Education & Training 130-student dormitory Manufacturing facility Victoria, Australia Langley, Canada Santiago, Chile Offering complete infrastructure solutions worldwide Diversifying the global Adding projects for workforce Acquiring asse

  14. Slide 14: Continued Capital Investment

    CONTINUED CAPITAL INVESTMENT ELECTRIC DISTRIBUTION NATURAL GAS DISTRIBUTION STRUCTURES & LOGISTICS WATER INFRASTRUCTURE ELECTRIC TRANSMISSION NATURAL GAS TRANSMISSION ELECTRICITY GENERATION HYDROCARBON STORAGE REGULATED UTILITY LONG-TERM CONTRACTS SCOTIABANK ENERGY INFRASTRUCTURE CONFERENCE NOVEMBER

  15. Slide 15: Continued Capital Investment

    CONTINUED CAPITAL INVESTMENT $1.8B $1.7B $1.6B Long-term Contracted Capital International Natural Gas Distribution Natural Gas Transmission Natural Gas Distribution Electricity Transmission Electricity Distribution 2017 2018 2019 SCOTIABANK ENERGY INFRASTRUCTURE CONFERENCE NOVEMBER 2017 13

  16. Slide 16: Regulated Utility Capital Investment $3.8 Billion (2017–2019)

    REGULATED UTILITY CAPITAL INVESTMENT NATURAL GAS NATURAL GAS ELECTRIC DISTRIBUTION ELECTRIC TRANSMISSION DISTRIBUTION TRANSMISSION $3.8 BILLION (2017–2019) SCOTIABANK ENERGY INFRASTRUCTURE CONFERENCE NOVEMBER 2017 14

  17. Slide 17: Rate Base Growth

    RATE BASE GROWTH Regulated Capital Investment Mid-Year Rate Base $1.3B $1.2B $1.3B $12.3B $11.7B $1.1B $10.3B $1.5B $8.9B $2.2B $7.6B $2.3B $2.2B 2012 2013 2014 2015 2016 2017 2018 2019 2012 2013 2014 2015 2016 2017 2018 2019 SCOTIABANK ENERGY INFRASTRUCTURE CONFERENCE NOVEMBER 2017 15

  18. Slide 18: Long-Term Contracted Capital Investment $1.3 Billion (2017–2019)

    LONG-TERM CONTRACTED CAPITAL INVESTMENT FORT MCMURRAY WEST HYDROCARBON STORAGE DISTRIBUTED GENERATION 500 KV TRANSMISSION $1.3 BILLION (2017–2019) SCOTIABANK ENERGY INFRASTRUCTURE CONFERENCE NOVEMBER 2017 16

  19. Slide 19: Alberta PowerLine

    ALBERTA POWERLINE Fort McMurray West 500 kV Transmission Project  The Alberta Electric System Operator (AESO) undertook a competitive process to develop, design, build, finance, own, operate and maintain the Fort McMurray West 500 kV Transmission Project with a total distance of 500 kms Fort McMurr

  20. Slide 20: Financial Strength: Funding Sources

    FINANCIAL STRENGTH: FUNDING SOURCES Canadian Utilities Funding Sources 2011 – 2016 5% 29% 2% 3% 61% Funds Generated Dividend Capital Debt Issues Preferred by Operations Reinvestment Redeployment (net of repayment) Shares (DRIP) SCOTIABANK ENERGY INFRASTRUCTURE CONFERENCE NOVEMBER 2017 18

  21. Slide 21: Financial Strength: Balance Sheet

    FINANCIAL STRENGTH: BALANCE SHEET 11% • Strong financial position supports access to capital 52% 37% • “A-” credit rating • $3 billion of credit facilities, of which $2.2 billion is available Debt (net of cash) Preferred Shares Equity SCOTIABANK ENERGY INFRASTRUCTURE CONFERENCE NOVEMBER 2017 19

  22. Slide 22: Alberta Power Market Developments

    ALBERTA POWER MARKET DEVELOPMENTS IMPROVING MINIMAL RISK WELL POSITIONED CLARITY EXPOSURE Capacity Market in Alberta Phase-in of Renewable Generation Carbon Tax  Market design discussions  under  75MW Solar NRFP  awaiting response  Compliance costs  recovered through way with the AESO from the

  23. Slide 23: Regulatory Update

    REGULATORY UPDATE Getting back to prospective rate making 2017 2018 2019 2020 2018 to 2020 Generic Decision Decision Decision Cost of Capital (GCOC) Expected Expected Expected 2017 2018 2019 2020 Gas and Electric Distribution Decision Decision Decision 2018 to 2020 Performance Expected Expected Expe

  24. Slide 24: PBR 2.0 Highlights

    PBR 2.0 HIGHLIGHTS PBR PBR 2.0 Productivity Adjuster 1.16% 0.30% (X Factor) Based on the lowest annual actual O&M level during 2013-2016, O&M Based on approved 2012 forecast O&M levels; adjusted for anomalies, inflation and growth to 2017 dollars; inflated by I-X thereafter over the PBR term inflate

  25. Slide 25: Global Expansion Potential

    GLOBAL EXPANSION POTENTIAL CURRENT OPERATIONS TARGET MARKETS Structures & Logistics Electricity Pipelines & Liquids POTENTIAL TARGETS Bolt-on Structures & Logistics acquisitions Canada Distributed generation expansion Electricity utility acquisitions Australia Natural gas utility acquisitions Cogen

  26. Slide 26: Summary

    SUMMARY GROWING A HIGH CONTINUED FUTURE CAPITAL FINANCIAL QUALITY EARNINGS DIVIDEND GROWTH INVESTMENT STRENGTH BASE SCOTIABANK ENERGY INFRASTRUCTURE CONFERENCE NOVEMBER 2017 24

  27. Slide 27: Appendix

    APPENDIX 25

  28. Slide 28: Structures & Logistics

    STRUCTURES & LOGISTICS We offer workforce housing, innovative modular facilities, construction, site support services, and logistics and operations management  7 manufacturing plants globally  Nearly 1,000,000 sq ft of manufacturing space  Subsidiary: Sustainable Communities SCOTIABANK ENERGY INF

  29. Slide 29: Electricity Distribution & Transmission

    ELECTRICITY DISTRIBUTION & TRANSMISSION We build, own and operate electrical distribution and transmission facilities  224,000 farm, business and residential customers in 245 Alberta communities  Approximately 12,000 km of transmission lines and 72,000 km of distribution lines  Subsidiaries:  AT

  30. Slide 30: Electricity Generation

    ELECTRICITY GENERATION We have an ownership position in 16 power generation plants in Alberta, British Columbia, Saskatchewan, Ontario and Mexico  Electricity Market Exposure Portfolio:  1,570 MW Contract (68%)  734 MW Merchant (32%) SCOTIABANK ENERGY INFRASTRUCTURE CONFERENCE NOVEMBER 2017 28

  31. Slide 31: Electricity Generation

    ELECTRICITY GENERATION We operate two power generation facilities with a combined capacity share of 176 MW  Provides energy infrastructure for thousands of public sector, domestic and industrial clients across Australia  Electricity Market Exposure Portfolio:  176 MW Contract (100%) SCOTIABANK EN

  32. Slide 32: Natural Gas Distribution

    NATURAL GAS DISTRIBUTION We build, own and operate natural gas distribution facilities in Alberta  Alberta’s largest natural gas distribution company  Serves more than 1.1 million customers in nearly 300 Alberta communities  We build, maintain, and operate 41,000 km of natural gas distribution pi

  33. Slide 33: Natural Gas Transmission

    NATURAL GAS TRANSMISSION We build, own and operate key high-pressure natural gas transmission facilities in Alberta  Transports clean, efficient energy from producers and other pipelines to utilities, power generators and major industries  Owns and operates 9,400 km of pipeline  Delivers a peak o

  34. Slide 34: Storage & Industrial Water

    STORAGE & INDUSTRIAL WATER We build, own and operate non- regulated industrial water, natural gas storage, hydrocarbon storage, and NGL related infrastructure  85,200 m3/day water infrastructure capacity  200,000 m3 hydrocarbon storage capacity  52 PJ natural gas storage capacity  ~ 300 km pipel

  35. Slide 35: International Natural Gas Distribution

    INTERNATIONAL NATURAL GAS DISTRIBUTION We provide safe and reliable natural gas service to the Perth metropolitan area and the wider Western Australian community  Approximately 741,000 customers  14,000 km of gas distribution pipelines SCOTIABANK ENERGY INFRASTRUCTURE CONFERENCE NOVEMBER 2017 33

  36. Slide 36: Investor Relations Contact

    www.ATCO.com www.canadianutilities.com Tel: 403.292.7500 Investor Relations 1500, 909 11 Avenue SW Calgary, Alberta T2R 1N6 Canada 34

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