Altagas Ltd. · TSX:ALA
Altagas — Investor Presentation (April 2023)
36 slides from Altagas's investor presentation, April 2023
Slide 1: Fundamentally Focused Investor Presentation
Fundamentally Focused Investor Presentation
Slide 2: Forward-Looking Information
Forward-Looking Information This presentation contains forward-looking information (forward-looking statements). Words such as “guidance”, "may", "can", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "aim", "seek", "propose", "contemplate", "estimate", "focus", "striv
Slide 3: Our Vision, Mission and Values
OUR VISION A leading North American energy infrastructure company that connects customers and markets to affordable and reliable sources of energy. OUR MISSION To improve quality of life by safely and reliably connecting customers to affordable sources of energy for today and tomorrow. OUR VALUES Ev
Slide 4: Our Corporate Strategy
Earnings Model Per Share Growth Durability Check Points What we FFO Per Share Growth Durability Focus on Medium-term Long-term Leverage Ratios / Our Corporate Strategy Margin of Safety <5.0x ~4.5x Net Debt/EBITDA1 Net Debt/EBITDA1 Invest in and operate long-life infrastructure assets that provide Fo
Slide 5: One Strong Platform Focused on Connecting Customers and Markets
One Strong Platform Focused on Connecting Customers and Markets Investing for the Benefit of our Customers, Investors and the Environment Integrated Midstream Business – from wellhead to global markets Gas Gathering NGL Extraction Transportation, Global Wellhead & Processing Export Markets & Fractio
Slide 6: Diversified, Lower-Risk Model
Diversified, Lower-Risk Model Focused on Durability and Steady Growth Diversified Asset Mix1 Investment Grade Credit Rating Strong Commercial Constructs Diversified model that operates long-life Credit Ratings Commercial Contract Type2 infrastructure assets that provide durable and growing EPS and F
Slide 7: Rate Regulated Utilities Platform
Rate Regulated Utilities Platform Stable and Predictable Results Regulated distribution rates approved under cost-of-service model Utilities Breakdown 1.5 million customers in stable and growing jurisdictions US$4.9 billion regulated rate base Rate Base Allowed Customers1 (US$MM)1 ROE ~70% o
Slide 8: Fully Integrated Midstream Business
Fully Integrated Midstream Business Visible multi-year growth through optimization, expansions and new development. Wellhead Gas Gathering Fractionation & Liquids Handling Global Export Global & Processing Extraction Markets NGLs C3 & C4 C3 & C4 C3 & C4 GAS VLGC to Asia & Global Markets Sales: Local
Slide 9: Premier Midstream Business
Premier Midstream Business Leveraging Core Export Strategy and Structural Advantage to Markets in Asia Strong long-term fundamentals and commodity prices underpin supply growth Leverage core export strategy and access to premium global pricing to attract volumes ~78% from investment grade customers
Slide 10: Our Value Proposition
Our Value Proposition A Continuous Focus on Compounding A Diversified Infrastructure Company with a Robust Pipeline of Lower-risk Growth Opportunities Streamlined platform with Top-quartile utilities track record of delivering. rate base growth. Industry Leading EPS per share growth and stock perfor
Slide 11: Dividend Philosophy and Expected Growth Trajectory
Dividend Philosophy and Expected Growth Trajectory We believe returning capital to As AltaGas executes on its Philosophically, we view dividends shareholders through regular strategic plan, the company as an output of our business model DIVIDEND and sustainable dividends is expects to be posit
Slide 12: Capital Allocation Priorities
Capital Allocation Priorities Acute Focus on Balancing the Multiple Items Needed to Achieve Corporate Priorities We maintain a disciplined approach to capital allocation Delivers steady and sustainable growth that compounds value and meets the within a self-funding model needs of AltaGas’ broader
Slide 13: Growth Criteria
Growth Criteria Strenuous Internal Process for Capital Deployment Any growth capital at AltaGas, organic or inorganic, faces the Strong risk-adjusted returns Long-term earnings and Position for where the same framework and criteria exceeding hurdle rates and cash flow durability market is heading,
Slide 14: Our Governance Philosophy and Commitment
Our Governance Philosophy and Commitment Robust governance and strong leadership are core to achieving our strategy and delivering sustained value for our stakeholders. As the ultimate steward for AltaGas, the Board has a fiduciary responsibility to ensure it’s providing the proper foresight, over
Slide 15: ESG Highlights
ESG Highlights 15 Notes: 1) As of December 31, 2021; 2) Senior leadership includes VP and above; and 3) Under-represented groups include people who identify as racial and ethnically diverse, Indigenous peoples, LGBTQIA2S+, veterans and people with disabilities.
Slide 16: ESG Goals and Progress
ESG Goals and Progress Notes: NEW GOAL; 1) Expect to achieve goal with RNG and hydrogen as the market develops, depending on further clarity into legislative policy, our regulators approach and our customers’ preferences; 2) Senior leadership includes VP and above, enterprise-wide; 3) Under-represen
Slide 17: ESG Strategy
ESG Strategy Providing safe, reliable, and affordable energy and meeting the energy needs of our customers WGL Climate Goals 10% Delivery of all energy sourced from low carbon fuels by 2030 reducing Scope 3 emissions at WGL and our carbon footprint 30% Absolute Reduction in Scope 1 & 2 Emissions at
Slide 18: Utilities
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Slide 19: Our Utilities Strategy
Our Utilities Strategy Operate a safety-focused, digitally- Strong focus on organic opportunities enabled and high-growth utility centered on safety and reliability, that exceeds our customers' better customer outcomes and expectations and excels in the environmental benefits, which also emerging en
Slide 20: Focus within the Utilities
Focus within the Utilities Progress in Journey 25% 50% 75% 100% Focus: Maintain the strong Today Maintaining Strong Financial improvement that has been Performance shown in operational and financial performance since 2019. Near-term Focus: Upgrade platform with Today Upgrade Assets for Improved focu
Slide 21: Natural Gas will Remain a Critical Transition Fuel
Natural Gas will Remain a Critical Transition Fuel Economic and Emission Reductions Are Aligned; Affordability will be a key Variable in the Energy Evolution Full-Cycle Energy Consumption vs. CO2 Impact1 2021 Average Energy Prices for Typical U.S. Home1 ($/MMBtu) 160 10 $39.83 Through the energy 120
Slide 22: Affordability is Paramount Through the Energy Evolution
Affordability is Paramount Through the Energy Evolution Affordability must be prioritized in regions where demand is high and cost is prohibitive Average U.S. Household Fuel Prices1 2021 Total Household Energy Affordability (Cost as % of Income)2,3 Advocating for our customers is $39.83 5% paramou
Slide 23: U.S. Energy Consumption
U.S. Energy Consumption Natural Gas remains a critical source of energy across for households and Household Energy Consumption (Therms per Home per Month)1,2 business across North American due to its abundant supply; ease of 160 transportation and storability; and Nat Gas Consumption per Home Elec
Slide 24: Forward Rate Base Growth
Forward Rate Base Growth Positioned for Strong Long-term Growth Long-term capital plan maintains a disciplined approach to capital allocation prioritizing safety Rate Base Growth and reliability; maintaining customer affordability and minimizing regulatory lag. Alaskan Utilities Divested on March
Slide 25: Rate Regulated Utilities
Rate Regulated Utilties Utilities Modeling Parameters Rate Base Allowed APR Recent Utility Jurisdiction Regulatory (US$) ROE/Equity Programs Rate Case Rate Filings: Historical test year that allows for known and measurable changes with 180 plus 45 STRIDE 9.7% day to issue an order. Maryland (2019-
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Slide 27: Our Midstream Strategy
Our Midstream Strategy Operate long-life midstream assets that Operate a world class Midstream are positioned for where the market is platform that safely connects producers headed. This includes providing global to domestic and global markets and is connectivity, improved customer positioned for th
Slide 28: Focus within Midstream
Focus within Midstream Progress in Journey 25% 50% 75% 100% Focus: Maximize facility utilization and flows for ideal Today Optimize Existing Asset Base for AltaGas and industry Appropriate Rates of Return outcomes. Invest in new core infrastructure to connect Continue Provide services customers and
Slide 29: Global LPG Export Facilities
Global LPG Export Facilities Connecting Western Canada to Global Markets AltaGas exclusively ships from the RIPET and Ferndale terminals using VLGCs, which provide the strongest economies of scale and the safest, most RIPET efficient and lowest carbon transportation vessel. VLGCs are also the most i
Slide 30: Strong Asian Demand Pull From Investment Grade Partners
Strong Asian Demand Pull From Investment Grade Partners Robust LPG Demand from Key Asian Markets; Canada Represents an Important Supply Diversification RIPET represents Japan Approximately ~11% RIPET exports primarily land in Japan where propane is principally used for home heating and serves as a m
Slide 31: The West Coast Structural Advantage
The West Coast Structural Advantage West Coast Positioned for Long-term Structural Advantage The RIPET and Ferndale Advantages results in significant increases in producers’ realized prices and tailwinds for the broader energy industry. Global Export Growth 120 Average Global Exports (MBbl/d) 100 10
Slide 32: New Ships Provide Strategic Advantages
New Ships Provide Strategic Advantages Extending Value Chain to Connect Downstream, While De-risking, Improving Economics and Lowering Emissions Agreement 91,000 cbm Very Large Gas Carriers (VLGC) Signed 7-year agreements with 3-year extension options for two 91,000 cubic meter (cbm) LPG VLGCs.
Slide 33: 2023 Financial Guidance Highlights
2023 Financial Guidance Highlights ($CAD unless otherwise noted) Our corporate priorities are on delivering, de-levering, de-risking, investing and executing across all business segments. 6% $1.85 - 2.05 $1.5 - 1.6B $930MM Annual Dividend Anticipated Anticipated Planned Capital Increase Normalized E
Slide 34: 2023 Guidance
2023 Guidance Growth in Base Business Underpins Strong EPS Growth Normalized EBITDA1,2 Puts and Takes Normalized EPS1,3 Guidance ($ millions) 1,500 – 1,600 $1.85-$2.05 1,500 – 1,550 $1.89 2022 Corp/ 2023 Asset Sales Midstream Utilities Guidance Other Guidance ▼ Alaska Utility ▲ Global Exports ▲ Rate
Slide 35: 2023 Normalized EBITDA Drivers
2023 Normalized EBITDA Drivers Utilities ▲ Rate Cases: DC and VA ▲ Continued ARP investment 2023 Normalized EBITDA Breakdown ▲ Customer growth (~1% - 2%) ▼ ENSTAR/CINGSA sale (Q1/2023) Utilities ▼ Lower Asset Optimization revenues ▼ Higher Pension costs ▼ Lower Retail Energy Marketing revenues Utili
Slide 36: 2023 Capital Allocation
2023 Capital Allocation Discipline Capital Growth Drives Strong Risk-adjusted Returns ~$930 million of invested capital expenditures1,2 focused on high-quality Utilities and Midstream projects driving strong risk-adjusted returns and long-term earnings growth, with additional $90 million of 2022 Mid