AltaGas & WGL Strategic Combination Acquisition supports AltaGas long-term vision and strategy 18 Strong Accretion 8-10% Billion to both EPS and dividend growth (2019 2021) Total Enterprise Value1 FFO/share2 metrics 6…
AltaGas & WGL Significant Infrastructure Platform High-quality, contracted assets with attractive organic growth 2 Bcf/d1 1,930 MW 5B3 of Natural Gas of Power Generation Utility Rate base transacted 70,000 Bbls/d liquids 1,259 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 /…
Transaction Timeline Update Close of WGL Acquisition continues to track to mid-2018 Q1-17 Q2-17 Q3-17 Q4-17 Mid-18 Remainder of 2018 Transaction Announcement Expected close WGL Shareholder Approval received Vote May 10, 2017…
Financing Strategy Prudent plan achieves acquisition accretion metrics and maximizes shareholder value Acquisition financing - Completed Acquisition financing - Outstanding Long-term financing plan structured to maintain Monetization of…
U.S. Tax Reform Implications for AltaGas Impact of U.S. tax reform on overall business is not expected to be material Regulated Business: Utilities Non-Regulated Business: Midstream and Power Decrease in customer rates will result in…
Attractive Platform for Growth Through 2021 C6 billion of identified capital investment opportunities Energy U.S. Midstream Storage Marcellus / Utica Footprint Canadian Midstream Canadian Montney Utilities System Betterment…
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 Segment normalized EBITDA3 (2019F) 1,930 MW of power generation California Gas-fired Power generation in over 20…
Governing Financial Principles Delivering growth and security Principles Targets 50 - 60% FFO1 payout ratio 1 Dividend Sustainability Expect 85% of 2019 common dividends to be underpinned by Regulated Utilities Enhancing returns on…
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…
Highly Contracted, Low-Risk Business Model Managed Commodity Exposure1 Highly Contracted1,2 2019E (First full year including WGL) 2019E (First full year including WGL) 11% 11% 9% 6% 74% 89% Commodity Exposed Short-term (<…
Valuation Multiple Attractive value for AltaGas, combined with sustainable dividend payment. AltaGas has one of the lowest multiples in the entire sector. 2019E P/AFFO1 Energy infrastructure group yield and growth2 Yield 14 10%…
Key Takeaways Near-term catalysts 2018 Maryland regulatory approval received on April 4, 20181 Regulatory outcome for DC expected mid-2018 Debt/Hybrid Financing Various asset monetization initiatives for a total of over 2B in…
Appendix
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 177 million Common share trading price2 24.51 52-week trading range2 31.70-22.82 50 45 Market…
Successful track record of delivering EBITDA1 growth over time Significant growth in 2018 driven by expected close of WGL Acquisition mid-2018 Millions 1,000 25% 30% growth2 800 600 400 200 0 2010 2011 2012 2013 2014…
Contracted EBITDA1 Substantial increase in long-term contracted and Regulated Gas Distribution EBITDA Breakdown of Midstream EBITDA1,2 2010 2018F2 45% Fixed / Take-or-pay No volume or commodity price exposure Average contract…
Delivering Growth and Security Payout ratio balances company growth and investor return and positions ALA for further dividend growth Dividend growth1 Dividend payout2,3 2.19 2.10 1.98 1.77 58% 55% 57% 1.53 49% 51% 1.38 1.44…
Managing Counterparty Credit Exposure Counterparties are assessed for the level of risk to AltaGas and exposures are actively Total exposure by rating monitored Gas 65% Investment grade B category 1% Power 100% Investment grade…
U.S. Tax Reform State Regulatory Update Michigan Alaska D.C. Virginia Maryland No update from regulators. Regulated utilities All regulated utilities shall track the impact of tax reform and provide for Commission have been…
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…
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 2017 57Mmcf/d Gross Annual Throughput 2018E 60 70 Mmcf/d Mmcf/d 1,600 2018F FG&P: Gordondale 515 Mmcf/d * 2016 90 Mmcf/d 1,200…
Gordondale: New Long-Term Processing Arrangement Maximizing the long-term value and returns of deep cut facility New long-term take-or-pay agreement for at least 15 years Agreement provides stable long-term cash flow by filling the…
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 Painted Pony actively markets the vast majority Townsend Facility anchor tenant with 20 year take-or-pay of natural gas volumes away from Station 2 Low cost producer index pricing and into more profitable…
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 Terminal Blair Creek AltaGas propane export terminal at North Pine RIPET is poised to create a…
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
Increasing optionality at Blythe Blythe Fully contracted with SCE through Q2 Generation increased by 2020 98% Additional flexibility added with tie in to El in 2017 over 2016 Significant increase in generation following El Paso Gas…
Existing Permitted Gas Plants in California Have Embedded Value Which Can Grow Over Time High barriers to entry for new gas generation. Steel in the ground has significant value. New builds are difficult to permit, expensive to build and…
Duck Curve Becoming More Extreme Changing California Supply Mix Results in Market Imbalance and Instability Actual net-load and 3-hour ramps are Solutions are necessary to handle the about four years ahead of ISOs deeper belly and…
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…
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…
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