AltaGas Ltd. · TSX:ALA
AltaGas — Shareholder Meeting (April 2003)
28 slides from AltaGas's shareholder meeting presentation, April 2003
Slide 1: April 2003
April 2003
Slide 2: An Overview of AltaGas
An Overview of AltaGas Canada’s only publicly-traded pure-play midstream energy company (Symbol: ALA) Exceptional growth through acquisition and internal expansion Total assets at year-end: $889 million Market capitalization at year-end: approximately $476 million Shares outstanding: 45.2 million Di
Slide 3: 2002 Operational Highlights
2002 Operational Highlights Invested $163 million Acquired two natural gas transmission pipelines at Suffield Acquired eight gathering and processing facilities at Wabasca Constructed and commissioned the Joffre ethane extraction plant Successfully integrated the Sundance B power purchase arrangemen
Slide 4: 2002 Organizational Highlights
2002 Organizational Highlights Closing chapter on AltaGas as a startup company Started change process to support larger, dynamic AltaGas Focus on improving: 0 operational performance 0 attention to detail and communication 0 environment for employees 0 returns to shareholders Organizational changes
Slide 5: 2002 Financial Highlights
2002 Financial Highlights Raised $58.8 million in equity Increased quarterly dividend to $0.08 from $0.06 per share Increased bank lines by $100 million Confirmed credit ratings at BBB (low) Reduced debt component of capital structure to 56% from 60% at year end 2001 5
Slide 6: Net Revenue (CAGR from 1998 = 37%)
Net Revenue (CAGR from 1998 = 37%) ($ Millions) g $34.9 MM or 26% increase in 3.0 6.1 10.2 22.2 47.8 85.9 116.3 135.0 169.9 2002 94 95 96 97 98 99 00 01 02 6
Slide 7: Total Assets (CAGR from 1998 = 29%)
Total Assets (CAGR from 1998 = 29%) ($ Millions) g $180.2 MM or 25% increase in 3.5 11.4 55.0 83.1 322.8 429.2 571.4 709.0 889.2 2002 94 95 96 97 98 99 00 01 02 7
Slide 8: Cash Flow per Share (CAGR from 1998 = 23%)
Cash Flow per Share (CAGR from 1998 = 23%) (Diluted) ($ / share) g $0.35 or 27% increase in 0.20 0.40 0.46 0.55 0.72 0.92 1.06 1.31 1.66 2002 94 95 96 97 98 99 00 01 02 8
Slide 9: Net Income per Share (CAGR from 1998 = 21%)
Net Income per Share (CAGR from 1998 = 21%) (Diluted) ($ / share) g $0.18 or 37% increase in 0.15 0.25 0.15 0.27 0.31 0.35 0.45 0.49 0.67 2002 94 95 96 97 98 99 00 01 02 9
Slide 10: Return on Average Equity
Return on Average Equity (above 1998 levels) (%) g 1.3% improvement in 2002 18.7 7.3 14.2 16.0 9.3 6.7 7.1 7.3 9.6 g Steady improvement over the last four years 94 95 96 97 98 99 00 01 02 10
Slide 11: Consistent Strategy for Growth
Consistent Strategy for Growth Over the past 9 years AltaGas has: Focused on energy infrastructure based assets Delivered growth through internal expansion and strategic acquisitions Diversified and extended cash flows Managed risk Strived for operational excellence Maintained financial strength and
Slide 12: Building a Diverse Portfolio of Assets and Services
Building a Diverse Portfolio of Assets and Services CAPITAL INVESTMENT Approximately ($ Millions) $900 million 800 Disciplined growth through Energy Services successful execution of strategies Natural Gas 600 Distribution Transmission 400 Field gathering 200 and processing Extraction 0 1994 1995 199
Slide 13: Creating Predictable Earnings and Cash Flow: 1996
Creating Predictable Earnings and Cash Flow CASH FLOW HORIZON 1996 100 Field gathering and processing NET BOOK VALUE (%) 80 60 40 20 Extraction 0 0 5 10 15 20 25 30 YEARS 13
Slide 14: Creating Predictable Earnings and Cash Flow: 1998
Creating Predictable Earnings and Cash Flow CASH FLOW HORIZON 1998 100 Field gathering and processing NET BOOK VALUE (%) 80 60 Transmission Extraction 40 Natural Gas Distribution 20 0 0 5 10 15 20 25 30 YEARS 14
Slide 15: Creating Predictable Earnings and Cash Flow: 2000
Creating Predictable Earnings and Cash Flow CASH FLOW HORIZON 2000 100 Field gathering and processing NET BOOK VALUE (%) 80 60 40 Transmission Extraction 20 Natural Gas Distribution 0 0 5 10 15 20 25 30 YEARS 15
Slide 16: Creating Predictable Earnings and Cash Flow: 2002
Creating Predictable Earnings and Cash Flow CASH FLOW HORIZON 2002 100 Field gathering and processing NET BOOK VALUE (%) 80 60 Power Services 40 Transmission 20 Extraction Natural Gas 0 Distribution 0 5 10 15 20 25 30 YEARS 16
Slide 17: Our Energy Portfolio
Our Energy Portfolio Gathering Energy Natural Gas and Processing Services Distribution Field gathering Gas Services AltaGas Utilities Inc. and processing Power Services Inuvik Gas Extraction Oil and natural Heritage Gas Transmission gas production 17
Slide 18: Premier Midstream Assets
Alberta Saskatchewan Premier Midstream Assets Inuvik g Extraction plant g Gathering and processing facility Northwest Territories g Natural gas n • Edmonton distribution nΕ Leduc — Transmission pipeline g n Power purchase Halifax g arrangements Î • Calgary g g Î Gas services offices Nova Scotia 18
Slide 19: AltaGas Today: Strong and Diversified
AltaGas Today: Strong and Diversified ASSETS OPERATING INCOME At December 31, 2002 For the year ended December 31, 2002 $ 889.2 million $ 59.9 million 15% 15% 45% 20% 65% 40% Gathering and Processing Gathering and Processing Energy Services Energy Services Natural Gas Distribution Natural Gas Distri
Slide 20: 2003 Outlook – Established Growth
2003 Outlook – Established Growth Seasonality with NET INCOME BY QUARTER consistent growth ($ Millions) 2001 2002 Q1 03: 12 Wabasca and Suffield acquisitions 10 Joffre extraction plant 8 commissioning 6 Q2 03: 4 Genesee strip acquisition 2 (100 MW) 0 Q1 Q2 Q3 Q4 2001 5.4 3.4 2.9 6.9 2002 7.4 4.8
Slide 21: 2003 Opportunities: Gathering and Processing
2003 Opportunities Gathering and Processing TOTAL WELL COMPLETIONS IN THE WCSB Internal growth opportunities with minimal additional investment in 18,000 infrastructure Stronger than expected recovery in E&P activity in Q1 03 16,000 Acquisition opportunities Increased extraction 14,000 opportunities
Slide 22: 2003 Opportunities: Energy Services
2003 Opportunities Energy Services Expansion of power capacity in Q1/03 by 28% 0 453 megawatts of power capacity 0 4 generation sources Power sales to existing customer base Power opportunities at field gathering and processing facilities 22
Slide 23: 2003 Opportunities: Natural Gas Distribution
2003 Opportunities Natural Gas Distribution Expansion of existing franchise customer base Establishment of new franchise areas Heritage Gas 23
Slide 24: Strong Performance Relative to Peers
Strong Performance Relative to Peers Canadian Pipelines/Utilities Price Price / EPS Dividend 03E EPS CAGR Apr 17/03 2003E 2004E Yield Payout ‘98-‘02 Ratio ATCO $41.30 9.2 x 8.6 x 3.1% 28.5% 9% BC Gas $37.45 14.3 x 13.4 x 3.8% 55.2% 8% Canadian Utilities $47.35 12.2 x 11.7 x 4.3% 52.4% 5% Enbridge $4
Slide 25: Creating Value for Shareholders
Creating Value for Shareholders 2002 TOTAL RETURN Normalized daily closing values 145 35.2% (December 31, 2001 = 100) 120 12.4% 95 (12.3%) — AltaGas 70 23-Apr-03 31-May-02 31-Mar-02 30-Nov-02 31-Mar-03 — S&P/TSX Comp 31-Jan-02 30-Apr-02 30-Jun-02 31-Aug-02 31-Jan-03 31-Jul-02 31-Dec-01 28-Feb-02 30-
Slide 26: Goal - AltaGas will be one of the largest infrastructure based companies
Goal - AltaGas will be one of the largest infrastructure based companies in Canada’s energy sector Grow and optimize each of our businesses Pursue opportunities that extend cash flows and diversify revenue sources Geographical reach is Canada and the northern United States Embed operational excellen
Slide 27: AltaGas Alberta Canada
AltaGas Alberta 0 18th fastest growing company 0 55th largest company (2002) Canada 0 28th in top 100 fastest growing companies 0 225th on 2001 revenue (367th in 2000) 0 235th on profit 0 120th on 1 year returns One of Canada’s top 100 employers 27
Slide 28: www.altagas.ca
www.altagas.ca