AltaGas Income Trust Investor Day September 27, 2007
Forward-looking information Certain information presented today may constitute forward-looking statements. Such statements reflect the Trusts current expectations, estimates, projections and assumptions. These forward-looking…
energy to GROW Our business strategy Optimize existing businesses Double total assets over next five years Equal split between gas and power infrastructure Diversify our business Continue to deliver top total unitholder…
Investing in energy, with a focus on power and natural gas Field Gathering and Processing Extraction and Transmission Power Generation Energy Services 3 energy to GROW our assets Assets anticipated to grow to 2…
energy to DIVERSIFY and GROW our businesses 5 energy to GROW wind power potential Projects underway B.C.: Bear Mountain Wind Park to be in service late 2009 GreenWing Energy Development Limited Partnership Manitoba: 3…
Capital spending 250 FG&P E&T Power Generation Energy Services 200 millions 150 100 50 0 2001 2002 2003 2004 2005 2006 2007E 2008F 2009F *2007-2009 capital spending estimates only include announced spending;…
Alberta power market outlook Tight reserve margins expected Alberta Internal Peak Demand Forecast vs. Alberta Firm Generation Capacity 16,000 15,000 14,000 Generation or Demand (MW) 13,000 12,000 11,000…
WCSB production outlook 18 +/- 5% 15 12 Bcf/d 9 6 3 Actual Forecast 0 2002 2003 2004 2005 2006 2007F 2008 2009 2010 2011 2012 Gas production Source: Historical and 2007 forecast production from Ziff Energy Group;…
energy to DELIVER unitholder value 3.50 3.00 2.50 /unit 2.00 1.50 1.00 0.50 0.00 2002 2003 2004 2005 2006 2007 TTM** Net income* Funds from operations EBITDA * 2006 and 2007 TTM net income adjusted for non-cash tax…
energy to DELIVER unitholder value - Well-positioned for 2011 - As a trust or a corporation Focus on traditional metrics Earnings per unit ROE Conservative payout targets Distributions: 70-80% of funds from operations Grow net…
The Natural Gas Business Connecting Producers to Markets Premiere energy assets and services Diversified and integrated infrastructure and services touching almost 2 Bcf/d of natural gas 73 gas processing facilities with 1.0…
Strategic facilities throughout the WCSB 3 A broad, diversified geographic footprint 4 13
Proven ability to grow gas business cash flow 70 Operating Income ( millions) 60 50 40 30 20 10 0 2002 2003 2004 2005 2006 TTM 2007* * Trailing twelve months ended June 30, 2007 Indicates operating income for…
Integration across AltaGas FIELD ENERGY GATHERING & SERVICES PROCESSING EXTRACTION & POWER TRANSMISSION GENERATION 7 Gas business challenges Market expertise, focus and discipline turn challenges into…
WCSB production 20 18 16 14 12 Bcf/d 10 8 6 4 2 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 FC Conv WCSB prod Sol'n Gas Ladyfrn & NWT CBM Tight Gas Source: Ziff Energy Group 9 FG&P…
Operating cost flowthrough strategy FG&P E&T 60% Not flowthrough Expected to increase to close Flowthrough 50% to 50% by end of 2007 Percent flowthrough 24% 40% 30% 20% 10% 76% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3…
Gas business organic growth Example of cost effective organic growth EEEP Ethane Enhancement Recovery Project Capital = 4.6 million Incremental ethane = 1,600 bbl/d Ratio = 348 bbl/d per 1.0 million 15 Coal bed…
Integration in action EEEP control room Peaking plant locations Edmonton EEEP Calgary Bantry Parkland Taber Burdett Fort Coaldale Macleod 17 Successful integration strategy Cold Lake Consolidated…
Keys to success in the gas business Assets, people, track record well-positioned for success Running our business safely, reliably and responsibly Identification and execution of integration opportunities In-depth market knowledge…
The Power Generation Business Generating Growth Our power business Supplies 5% of Albertas electricity demand Rights to 353 MW of coal-fired generation until 2020 39.4 MW of gas-fired peaking capacity Sells energy and…
Growing cash flow from the power business 105 Operating Income ( millions) 90 75 60 45 30 15 0 2002 2003 2004 2005 2006 TTM 2007* * Trailing twelve months ended June 30, 2007 Indicates operating income for six…
Power generation by fuel type Current Under construction At June 30, 2007 December 31, 2009 7% 11% 9% Coal Natural Gas Wind 93% 80% * Based on power generation capacity 5 Integration of the power…
Power business challenges Long-term focus and market knowledge turn challenges into opportunities Regulatory changes Additional environmental regulation increases PPA costs Impact demand for electricity management services in…
Transmission congestion Generation opportunities in north due to oil sands and access to coal near Edmonton Demand growth generally in south EUB hearings for 500kV upgrade to transmission lines from Edmonton to Calgary moving…
Power price trends in Alberta 200 175 150 Price (/MWh) 125 100 75 50 25 Actual Forward market 0 Jan-05 Apr-05 Jul-05 Jan-06 Apr-06 Jul-06 Jan-07 Apr-07 Jul-07 Jan-08 Apr-08 Jul-08…
Peaking strategy EEEP operators provide 24-hour dispatching services AltaGas operates the peaking plants Prices in Alberta can change by the minute Peaking plants capable of reaching full load in 10 minutes Watch for hours where…
Outage management 2006 and 2007 - excellent examples of strong earnings in spite of lengthy planned outages During outages at Sundance, AltaGas paid rolling average 30-day Pool Price (RAPP) by TransAlta All energy produced by…
Power business outlook Operating results expected to increase over 2006 Higher hedged power prices in 2007 and 2008 New gas-fired assets will be on-line in late 2007 Sales to energy management customers provide additional hedge…
Major Projects Update Delivering Growth Infrastructure growth Gas and power businesses expected to grow Attractive opportunities Plan to double assets over next five years Major Projects group focused on delivering projects on…
Projects underway Significant new projects underway to deliver expected growth Bear Mountain Wind construction expected to commence next month on BC wind farm Acme gas processing plant and gathering lines under construction to…
Bear Mountain Wind Project turbine vendor Enercon E-82 turbines in Germany Cattle grazing under turbines 7 Bear Mountain Wind Project turbine design Enercon turbines incorporate advanced technology Elimination of gear…
Bear Mountain Wind Project Bear Mountain ridge 9 Bear Mountain Wind Project status Key contracts and approvals in place; ready to start construction Project size optimized from 120 MW to 102 MW BC Hydro PPA amended for…
Bear Mountain Wind Project success factors Fixed-price turbine supply and construction with a leading turbine manufacturer BC Hydro 25-year indexed contract Strong BC Government support for renewable power Significant community…
Acme gas processing plant location Main Mannville Mannville Pilot Potential Horseshoe Canyon Acme 13 Acme gas processing plant project status Construction is underway Environmental assessment and landowner…
Acme gas processing plant success factors Strong relationship with producer Strong contractual underpinning Take-or-pay for majority of capacity Dedication of reserves Operating cost flowthrough 90% of capital now committed…
Gas-fired peaking plants Gas-fired peaking units installed in Texas 17 Gas-fired peaking plants Reciprocating engine 18 39
Gas-fired peaking plants location Aerial photograph of AltaGas Bantry gas processing plant east of Calgary Proposed peaking plant location 19 Gas-fired peaking plants project status Equipment purchased; sites…
Gas-fired peaking plants success factors Extension of power business on existing sites Generating units acquired Installation will be on existing FG&P sites Operations integrated with existing peaking power business 21 Noel…
Sarnia Airport Gas Storage Project overview Our first infrastructure investment in Ontario 5.3 Bcf of working capacity 52 Mmcf/day of deliverability 50% ownership Partnering with Market Hub Partners, an affiliate of Spectra…
Sarnia Airport Gas Storage Project status Acquisition of storage interest complete OEB acceptance of market-based rates as part of NGEIR review process Construction by Market Hub Partners (MHP) Injection wells (3 new; upgrade 2…
Pipeline of projects under development Wind power in Manitoba Bid multiple projects on 3 sites into 2007 Manitoba Hydro RFP Proposal responses expected Sept. Oct. 2007 If successful, projects will be on-stream late 2009 Wind…
Finance Disciplined Growth energy to PERFORM 3.50 3.00 2.50 /unit 2.00 1.50 1.00 0.50 0.00 2002 2003 2004 2005 2006 2007 TTM** Net income* Funds from operations EBITDA * 2006 and 2007 TTM net income adjusted for…
energy to PERFORM 120 108.0 108.3 Net income* ( millions) 100 90.3 80 65.8 60 38.3 40 29.4 20 0 2002 2003 2004 2005 2006 2007 TTM** Q1 Q2 Q3 Q4 * 2006 and 2007 TTM net income adjusted for non-cash tax impacts…
energy to PERFORM 25% 20.4% 20.8% 20% 18.4% 15.7% 15% ROE* 10.9% 9.8% 10% 5% 0% 2002 2003 2004 2005 2006 TTM 2007** * 2006 and 2007 TTM net income adjusted for non-cash tax impacts ** Trailing twelve months…
energy to DELIVER unitholder value AltaGas vs. selected Midstream Peers - October 31, 2006 to September 14, 2007 110 September 14, 2007 normalized closing values 105 AltaGas Income Trust (ALA.UN): 96.44 Keyera Facilities Income…
Our finance strategy Minimize cost of capital Ensure liquidity Ensure access to capital markets Maintain optimal financial risk 11 Strong financial metrics Debt as a percentage of total capital* EBITDA to Interest…
energy to GROW Strong liquidity and access to capital markets 425 million in total credit facilities Operating liquidity More than 335 million available (1) Recently re-negotiated credit facility with lower borrowing fees…
Key financial targets Target Target Rationale Description Efficient access to capital markets & credit Credit Rating BBB- to BBB+ support to energy services and power Distribution 70-80% of funds from Underpin AltaGas market…
energy to PERFORM 1. AltaGas management has a strong track record of success Net income per unit growth Funds from operations per unit growth Distribution per unit growth ROE growth 2. AltaGas is well-positioned for growth…
1700, 355-4th Ave S.W. Calgary, AB T2P 0J1 www.altagas.ca
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