2015 American Gas Association Financial Forum May 18, 2015
AGL Resources: Leading natural gas-only utility in U.S. Distribution Operations Largest U.S. gas-only LDC, serving 4.5 million customers across 7 states Investment in infrastructure replacement and system improvement supported by…
Corporate strategy in place to generate predictable, attractive earnings stream Invest in utility projects that drive rate base growth with minimal regulatory lag Invest in interstate pipelines supported by long-term contracts…
Clear path to deliver 5-year EPS CAGR of 6% - 9% Growth driven by investment in Wholesale business well-positioned to regulated utilities and interstate contribute average annual EBIT of 50 pipelines with long-term contracts…
Utility and pipeline capital investment are foundations for growth 95% of capital investment dedicated to regulated utilities and pipelines Utility and pipeline investments result in doubling of regulated rate base over 10- year…
Pipeline investments support utility supply needs and result in attractive shareholder returns Investment in three major interstate pipelines connected to AGLs utilities expected to result in aggregate annual EPS of 0.18 once…
Leading natural gas utility in U.S. KEY STATISTICS Largest gas-only LDC in U.S. - 4.5 million customers - Approximately 1 out of every 16 meters in U.S. served by an AGL utility - 80,700 miles of pipeline - 4,500 employees…
Well-defined capital investment plan 90% of capital investment not subject to regulatory lag 50% of investment related to infrastructure riders or new business 75% of base capital covered by depreciation expense, allowing rate base…
Capital investment drives rate base growth 2014-2019 rate base CAGR forecast: 7% - 9% In 2014, 30% of rate base related to Nicor Gas and 44% to Atlanta Gas Light Accelerating capex in Illinois, combined with lower depreciation rate…
Existing rider programs support forecast Illinois Georgia New Jersey Virginia Investing in Illinois Multiple programs: AIR program: SAVE program: program: 4-8 year programs 4-year program (expires 5-year program (expires 9-year…
Leading provider of natural gas commodity and related services SouthStar Provider of natural gas commodity to residential, commercial, industrial, CNG/LNG transportation fuel and power generation customers Pivotal Home…
Deliver results via organic growth and accretive acquisitions Purchased additional 15% equity interest Acquired Increased from Piedmont NiSource and 160 Retail AGLs earnings Illinois retail businesses 140 Operations share to…
Organic growth and opportunistic M&A drive 4% - 6% CAGR forecast Organic growth Opportunistic M&A could provide additional support Maintain strong margin contribution Track record of selective, opportunistic , from Georgia and…
Diverse set of storage and LNG assets Focused on high deliverability salt dome storage and depleted reservoir storage Storage facilities provide customers with firm, interruptible, wheeling, and park and loan services Customers…
Midstream results expected to improve as legacy contract roll-off cycle ends EBIT decline driven by roll-off of legacy storage contracts at above-market rates 5-year plan assumes EBIT contribution of 5 million - 10 million in 2019,…
Expect modest near-term improvement in midstream segment performance Expect segment EBIT of approximately 70 million 6% of corporate total by 2019 driven by: Completion of pipeline construction Modest recovery in storage rates…
Wholesale services business provides option on volatility while enhancing utility operations Wholesale services business Sequent is a leading natural gas and logistics services business Base economic earnings forecast of 50 million…
Record 2014 wholesale results delivered significant value to utility customers and shareholders 2014 EBIT of 422 million and economic earnings of 277 million best in companys 14 Wholesale EBIT and Economic Earnings (millions) year…
Asset management is Sequents core business Long-held market asset management agreements, primarily awarded by utilities, make up a majority of Sequents pipeline positions Producer asset management is a growing segment as…
Strong balance sheet supports long-term growth goals Strongest balance sheet in a decade provides Debt-to-Capitalization Ratios significant opportunity to fund capital 62% requirements 60% 59% Further strengthened by cash generated…
Key takeaways 1 2 3 AGL offers a low-risk investment in Five-year capital investment Expect to invest more than 5 predominantly regulated assets program drives improved earnings billion over a 5-year period, with growth rate…
Q&A 24
Appendix 25
Increasing 2015 guidance to reflect strong start to the year 2015 EPS 3.20 (consolidated) 3.00 2.85 - 3.10 2015 GUIDANCE 2.70 - 2.90 2.80 (REVISED HIGHER 3/25/15) 2.98 2.80 Midpoint Increasing both core earnings 2.60 Midpoint…
Debt Maturity Schedule Average interest rate on long-term debt: 4.9% Average maturity: 14.5 years 800 700 Redeemed 600 millions 500 400 300 200 100 - Senior Notes Medium Term Notes Gas Facility Revenue Bonds…
Utility Rate Case History Utility Last Rate Case Key Outcomes Nicor Gas March 2009 80 million rate increase (Stay out ended Bad debt rider approved in February 2010 providing recovery from (or credit to) December 2014) customers…
Regulatory protections in place for customers and shareholders Conservation Weather Bad Debt Infrastructure Utility Rate Decoupling Program Normalization Recovery Programs Recovery (1) Nicor Gas (70% Fixed) Atlanta Gas Light…
Solid performance relative to allowed ROE Capital investment and anticipated increases in operating costs expected to drive rate case filings in multiple jurisdictions over the next several years 14.00% Performance 12.00%…
Demonstrated track record of constructive regulatory and legislative outcomes August 2013 ETG AIR approved Nicor depreciation study effective February 2015 AGL PRP true-up filed January 2015 December 2013 Investing in AGL…
PRP True-Up Filing in Georgia True-up filing made in February in accordance with Georgia Public Service Commission orders PRP allowed for the replacement of 2,700+ miles of bare steel and cast iron pipe and over 45,000 bare steel…
Asset management agreements deliver significant value to AGL utilities AMAs with Sequent (AGL Resources wholesale marketer) have resulted in over 270 million in gas cost savings for customers since 2001 In 2014, utility AMAs with…
Pipeline investments of 655 million to drive enhanced earnings growth Dalton PennEast Atlantic Coast Total Project Cost Estimate 400 million 1.1 billion 4.7 billion AGL Resources Investment 200 million 220 million 235 million…
Current and forecasted contracted capacity rates AS OF MARCH 31, 2015 AS OF APRIL 1, 2015 CONTRACTED RATE Per CONTRACTED RATE Per COUNTERPARTY CAPACITY (Bcf) Dth/Month STARTS EXPIRES CAPACITY (Bcf) Dth/Month STARTS EXPIRES Jefferson…
Wholesale Services - Economic Earnings Economic earnings adjusts wholesale services EBIT by adjusting for mark-to-market accounting recorded during the current period, offset by mark-to-market accounting adjustments reported in…
Reconciliation to Adjusted EPS Year ended December 31, per share 2014 2013 2012 2011 2010 Diluted earnings per share from 4.71 2.45 2.20 2.04 3.00 continuing operations Additional accrual for Nicor Gas PBR - - 0.04 - - issue…
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