Altagas Ltd. · TSX:ALA
Altagas — 2019 Scotiabank Washington Forum
25 slides from Altagas's conference presentation, September 2019
Slide 1: 2019 Scotiabank Washington Forum
2019 Scotiabank Washington Forum September, 2019
Slide 2: Forward-Looking Information
Forward-Looking Information This presentation contains forward-looking statements. When used in this presentation, the words “will”, “intend”, “plan”, ”potential”, “generate”, "grow", “deliver”, “can”, “continue”, “drive”, “anticipate”, “target”, “come”, “create”, “position”, “achieve”, “seek”, “pro
Slide 3: Our Strategy
Our Strategy We leverage the strength of our assets and expertise along the energy value chain to connect customers with premier energy solutions – from the wellsites of upstream producers to the doorsteps of homes and businesses, to new markets around the world. 3
Slide 4: Low-Risk, High-Growth Utility and Midstream Company
Low-Risk, High-Growth Utility and Midstream Company Steady and predictable Utility business and high growth integrated Midstream assets provide a strong foundation to deliver attractive risk adjusted returns Opportunity-Rich Integrated Low-Risk Midstream Business Regulated Utilities See "forward-loo
Slide 5: Repositioning the Business
Repositioning the Business Transition to a low-risk, high-growth Utilities and Midstream Company; EBITDA 70% U.S. 2017 Normalized EBITDA1 2019E Normalized EBITDA1 2 Power 12% Power Utilities 37% 36% Midstream Utilities 37% 51% Midstream 27% ~90% of 2019 EBITDA from Midstream and Utilities 1 Non-GAAP
Slide 6: U.S. Utilities Provide Stable and Predictable Returns
U.S. Utilities Provide Stable and Predictable Returns Economically strong and high-growth jurisdictions: District of Columbia, Maryland, Virginia, Michigan and Alaska Low-risk, growing cash flows Rate Base (US$ billions) US$3.7 billion rate base with mid-to-high single digit rate base growth S
Slide 7: Premier Midstream Business Connecting Canadian Producers to Global Markets
Premier Midstream Business Connecting Canadian Producers to Global Markets Fully integrated midstream offering leveraging the entire value chain and Canada’s first propane export terminal Montney Basin Key Assets: Strategic Benefits: Ridley Island Propane Global demand market access Export Termi
Slide 8: Near-Term Operational Priorities
Near-Term Operational Priorities Priorities Actions First cargo out of Complete construction and initiate operational phase RIPET early Q2 2019 Introduce feedstock to fill the LPG tank First cargo in May 2019 Volumes increased to current 40,000 bbl/d capacity Capitalize on structural advanta
Slide 9: De-leveraging Program on Track
De-leveraging Program on Track ~$2 billion reduction in net debt year-to-date Net Debt1 ($ billions) ~$3 billion 2019 Plan Supports in debt repayment Lower debt and stronger balance sheet $10.1 Improving net debt/EBITDA Retained cash flow net metrics to ~5.5x at year-end2 of dividends and DRIP N
Slide 10: Announced $1.3 Billion of Non-Core Asset Sales
Announced $1.3 Billion of Non-Core Asset Sales Well-positioned to achieve 2019 asset sales target of $1.5 - $2 billion Distributed Generation Assets Stonewall Gas Gathering System Included 322 MW of contracted 1.4 Bcf/d, 67-mile gathering system distributed generation assets transporting from va
Slide 11: Midstream Segment
Midstream Segment 11
Slide 12: Our Midstream Strategy is Straightforward
Our Midstream Strategy is Straightforward Leverage RIPET and our integrated value Midstream chain to attract volumes Continue to build upon our export competency Capitalize on growing Canadian supply Global Export Leverage our first mover advantage Increase throughput at existing facilities
Slide 13: RIPET: Canada's First West Coast Propane Export Terminal
RIPET: Canada’s First West Coast Propane Export Terminal Improving western Canadian producers netbacks by providing access to premium Asian markets Attracts additional volumes through AltaGas’ midstream value chain, maximizing integrated economics First mover advantage establishes strong relat
Slide 14: RIPET Netback Advantage
RIPET Netback Advantage RIPET provides enhanced netbacks to producers – At current propane prices1 the RIPET advantage is ~80% increase in realized price Alberta3 RIPET Advantage (US$/bbl) US $6.20/bbl 2019 FWD AFEI1 ~$29.90 Transport & Terminalling4 ~$18.30 Ft. Saskatchewan RIPET Netback ~$11.60 RI
Slide 15: Montney Midstream Assets Set the Stage for Organic EBITDA Growth
Initial Investment in Montney Midstream Assets Sets the Stage for Significant Organic EBITDA Growth Opportunities Montney Operating Capacity Canadian Midstream Normalized EBITDA1 800 24,000 ($ millions) BASE GAS PROCESSING TOWNSEND GAS PROCESSING 700 21,000 AITKEN GAS PROCESSING NORTH PINE FRACTIONA
Slide 16: Utilities Segment
Utilities Segment 16
Slide 17: Utilities Strategy - Drive Operational Excellence
Utilities Strategy - Drive Operational Excellence Utility Maintain safe and reliable infrastructure Enhance overall returns via complementary business Utilities Distribution Leverage scale of distribution footprint Attract and retain customers Utility asset management profit sharing a win-
Slide 18: Our Utility Business Operating Model
Our Utility Business Operating Model Safe and reliable, high-growth competitive strategy Opportunities Improve business processes and drive down operating costs; reinvest O&M savings into improving the customer experience Operational Excellence Utilization of the Accelerated Replacement Programs
Slide 19: Rate Case Update - Focused on Timely Recovery of Capital
Rate Case Update – Focused on Timely Recovery of Capital Maryland CINGSA August 30th settlement agreement for $27 Rate case decision issued August 2019 million increase in base rates ROE lowered from 11.875% to 10.25% Commission decision expected towards the Equity thickness increased from
Slide 20: Rate Case Status
Rate Case Status 2018 2019 2020 2021 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 – Q4 Q1 – Q4 APR. Aug. Sept. Nov. Maryland Rate Case Filed Settlement Final New ($36M1, 10.4% ROE) Reached Decision Rates JUL. JAN. LATE 2019 Virginia Rate Case Filed Interim Final ($38M2, 10.3% ROE) Rates Decision Washington DEC. Date TBD
Slide 21: Appendix
AltaGas Appendix
Slide 22: Supportive Regulatory Environment for Utilities
Supportive Regulatory Environment for Utilities 2018 YE Allowed ROE Average Utility Rate Base and Equity Regulatory Update Customers ($US) Thickness Distribution rates approved under cost of service model. Projected test year used for rate cases with 10 month limit to issue a rate order. SEMCO 1
Slide 23: Supportive Regulatory Environment for Utilities
Supportive Regulatory Environment for Utilities 2018 YE Average Allowed ROE and Utility Rate Base Regulatory Update Customers Equity Thickness ($US) Distribution rates approved under cost of service model. Rate case filed in July 31, 2018 seeking rate increase of US$37.6M, including transfer of
Slide 24: Accelerated Replacement Program
Accelerated Replacement Program Utility Location Program Main Replacement Program (MRP) expires in 2020. Rate case filed in May seeks approval for MRP extension for 2021-2025 with total spending to be ~US$60M, and introduction of a new Michigan Infrastructure Reliability Improvement Program (IRIP)
Slide 25: 2019 Scotiabank Washington Forum
2019 Scotiabank Washington Forum September, 2019