TD Securities London Energy Conference January 2018
AltaGas & WGL Strategic Combination Acquisition supports AltaGas long-term vision and strategy 18 Strong 7.5% Billion Accretion Dividend Yield3 to both EPS and 8-10% dividend growth Total Enterprise Value1 FFO/share2 metrics (2019…
AltaGas & WGL Significant Infrastructure Platform High-quality, contracted assets with attractive organic growth 2 Bcf/d1 1,078 MW3 4.5B4 of Natural Gas of Power Generation Utility Rate base transacted 70,000 Bbls/d liquids 422 MW…
Leading North American Diversified Energy Company Premier footprint in Canada and the U.S. Segment normalized EBITDA1 (2018F) Balanced Long-Term Gas Power Utilities Target Business Mix 30% 35% 35% All three business segments Fee /…
WGL Overview WGL is a leading diversified U.S. energy company EBIT Contribution By Segment5 Seen as a preferred source of clean and efficient energy solutions that produce value for customers, investors and Utility 60% communities…
Larger Scale Enhances AltaGas Competitive Position TSX: ALA Today CAD Peer Group Enterprise Value ( billions) Common shares outstanding1 173 million Common share trading price2 28.95 50 52-week trading range2 35.15-26.87 45 Market…
Attractive Platform for Growth Through 2021 C7 billion of identified capital investment opportunities Energy U.S. Midstream Storage Marcellus / Utica Footprint Canadian Midstream Canadian Montney Utilities System Betterment…
Transaction Timeline Update Anticipate additional positive milestones into 2018 Q1-17 Q2-17 Q3-17 Q4-17 H1-18 Transaction Announcement Expected close WGL Shareholder Approval received Vote May 10, 2017 FERC approval Virginia…
Key Takeaways Near-term catalysts Q1/Q2 2018 Regulatory outcome for MD expected on or before April 4, 2018 Regulatory outcome for DC expected in 1H 2018 Debt/Hybrid Financing Various asset sale initiatives Potential new Gas and…
Combined Midstream in North Americas Most Prolific Gas Plays Strategic infrastructure provides producers with global market access Unique opportunity providing critical infrastructure for energy exports at three sites on both the…
AltaGas Northeast B.C. Strategy Provides new market access for Western Canadian propane producers to Asia Truck Terminal Expected to be Canadas first Blair Creek Raw gas propane export terminal, located on B.Cs west coast Liquids…
Marcellus Pipelines Connecting low cost producers with U.S. consumption markets and exports ME VT NH NY Stonewall Currently in service MI US135 Million Designed to gather 1.4 Bcf/d from MA 30% Ownership West Virginia CT RI PA…
Combined Utility Business High quality assets underpinned by regulated, low-risk cash flow Delivering clean and affordable natural gas to homes and businesses in 8 jurisdictions Estimated combined rate base more than doubles and…
Customer Growth and Accelerated Replacements Drive Growth High near-term growth Projected Rate Base Growth (C billions) Expected near-term growth driven by AltaGas WGL customer additions, accelerated New business Replacements…
Combined Power Business1 Generating clean energy with natural gas and renewable sources Diversified Power Portfolio 1,078 MW of power generation 2% Storage 3% Biomass Power generation in over 20 states and provinces Contracts with…
Governing Financial Principles Delivering growth and security Principles Targets 50 - 60% FFO1 payout ratio 1 Dividend Sustainability Expect over 90% of 2019 dividends to be underpinned by Regulated Utilities and Northwest Hydro…
Highly Contracted, Low-Risk Business Model Managed Commodity Exposure1 Highly Contracted1,2 2019E (First full year including WGL) 2019E (First full year including WGL) 9% 9% 0% 6% 91% 85% Stable EBITDA Commodity Based…
Financing Strategy Acquisition financing Future growth financing Long-term financing plan structured to maintain strong Future growth investments to be financed in a manner investment grade credit profile consistent with AltaGas' past…
Strong Investment Grade Credit Rating Prudent deal financing enhances balance sheet strength over the long-term FFO1/Debt 15% Target Combined larger platform and financing plan reinforce a path to improved credit metrics and a…
Valuation Multiple Attractive value for AltaGas, combined with sustainable dividend payment. AltaGas has one of the lowest multiples in the entire sector. 2018F Payout Ratios vs. P/AFFO1 Energy infrastructure group yield and growth2…
Appendix
AltaGas Key Focus Areas Greenhouse Gas Total Recordable Injury Emissions* Frequency 1.50 4 3 1.00 2 0.50 1 0.00 0 2013 2014 2015 2016 2013 2014 2015 2016 Million tonnes of CO2 equivalent * Gas Division CDP Scores 2016…
Consistent and Diversified EBITDA1 Growth Successful track record of delivering EBITDA1 growth over time Millions 800 Low double digit growth2 600 400 200 0 2010 2011 2012 2013 2014 2015 2016 2017F Non-commodity %…
Contracted EBITDA1 Substantial increase in long-term contracted and Regulated Gas Distribution EBITDA Breakdown of Midstream EBITDA1 2010 2018F2 47% Fixed / Take-or-pay No volume or commodity price exposure Average contract length…
Delivering Growth and Security Payout ratio balances company growth and investor return and positions ALA for further dividend growth Dividend growth 2.10 2.19 Dividend payout as a % of 2018F AFFO3 1.98 1.77 1.53 100% 1.32 1.38…
Managing Counterparty Credit Exposure Counterparties are assessed for the level of risk Total exposure by rating to AltaGas and exposures are actively monitored across the business segments B category 2% Gas 65% Investment grade…
U.S. Tax Reform Major impacts of the U.S. tax reform on AltaGas are: Corporate tax rate reduction from 35% to 21% Decrease in tax expense is: Positive impact to earnings for non-regulated businesses Slight negative impact…
Gas
Building Infrastructure to Serve New Markets From wellhead to markets Existing assets Growth projects North Pine NGL NGL Fort Sask. Rail, North facility and other truck & American new processing hub2 pipelines2 Markets…
Stable Production Volumes & Throughput Core plants in sustainable plays Blair Creek 2016 66 Mmcf/d 2017E 50 55 Mmcf/d Gross Annual Throughput 2018E 65 75 Mmcf/d Mmcf/d 1,600 2018F FG&P: Gordondale 520 Mmcf/d * 2016 90 Mmcf/d…
Montney Competitive at Current Prices USD/Mcfe Competitive Canadian Production1,2 2.50 Painted Pony field cash cost estimated at 1.10 USD/Mcfe3 2.00 Avg. CDN producer cash cost 1.50 1.00 0.50 0.00 TOU BNP PNE ARX…
Painted Pony Strategic Alliance Townsend Facility anchor tenant with 20 year take-or-pay Painted Pony actively markets the vast majority Low cost producer2 of natural gas volumes away from Station 2 Best in class F&D costs in 2016…
Doubling the Townsend Gas Processing Complex Received regulatory approval for the doubling of the Townsend Facility to 396 Mmcf/d and to retrofit the existing 198 Mmcf/d shallow-cut Townsend Facility to a deep-cut facility at a future…
North Pine NGL Separation Facility to Serve Montney Producers NGL facility to serve Montney producers in northeast British Columbia, near Fort St. John On-stream December 1, 2017 First train capable of producing up to 10,000 Bbls/d…
AltaGas Northeast B.C. and Energy Export Strategy Provides new market access for Western Canadian propane producers to Asia Truck Blair Creek Terminal AltaGas propane export terminal at RIPET is poised to create a hub for North…
Ridley Island Propane Export Terminal First mover competitive advantage Expected to be Canadas first West Coast propane export terminal Construction is underway and is expected to be in service by Q1 2019 Facility designed for 40,000…
Clear LPG Shipping Cost Advantage to Asia Terminal Cost Rail Cost North Ft. Saskatchewan America 1 10 days Prince Rupert Demand: Supply: Rail Cost Ocean Freight Cost Japan / Korea 1 Demand: Supply: Ocean Freight Cost…
Utilities
Utilities Portfolio - AltaGas1 System betterment program and upgrades underway at Utilities SEMCO Main replacement program (MRP) continues to 2020 with associated average spend of US10 MM annually MRP-1 was first of its kind…
Michigan Growth Opportunity Marquette Connector Pipeline (MCP) Proposed pipeline that will connect the Great Lakes Gas Transmission pipeline to the Northern Gas pipeline in Marquette, Michigan Approximately 42 miles mainly with 20…
Supportive Regulatory Environment for Regulated Gas Utilities Allowed ROE and Utility Location Regulatory Equity Thickness Rate case filed in November 2017 for 2018 and 2019 British 9.40%1 Protected from weather related volatility…
Washington Gas Regulatory Environment Utility Location Regulatory Rate case was filed in June 2016 with a stipulation issued in April 2017; final Commission Virginia approval issued June 30 approving stipulation for 34 million…
Power
Northwest B.C. Hydro Stable Long-Term Financial Returns Forrest Kerr 195 MW fully contracted to 2074 McLymont Creek 66 MW fully contracted to 2075 Volcano Creek 16 MW fully contracted to 2074 60 Year PPA with high quality credit (BC…
Existing Permitted Gas Plants in California Have Embedded Value Which Can Grow Over Time High barriers to entry for new gas fired generation. Steel in the ground has significant value New builds are difficult to permit, expensive to…
Energy Storage Pomona Energy Storage Renewable Integration & Flexibility 10 year Energy Storage Agreement (ESA) with California legislators continue to move towards reducing Southern California Edison (SCE) for 20 MW energy fossil…
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