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4Q and FY 2018 Results Presentation – Altagas Limited

Altagas Limited · Feb 28, 2019 · 31 slides

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Slides

  1. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 1
    Fourth Quarter and Full-Year 2018 Results February 28, 2019
  2. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 2
    Randy Crawford Introduction Randy Crawford President and Chief Executive Officer 3
  3. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 3
    Repositioning the Business Changing earnings mix to a low-risk, high-growth Utilities and Midstream company 2017 Normalized EBITDA1 2019E Normalized EBITDA1 2 Power 12% Power Utilities 37% 36% Midstream Utilities 37% 51%…
  4. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 4
    2018 Operational Highlights Midstream Increased core gas processing volumes in northeast B.C. by 25% Extended NGL footprint through the Aitken Creek transaction with Black Swan Committed to Townsend and North Pine expansions…
  5. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 5
    Near-Term Priorities Financial Priorities Operational Priorities Execute remaining 1.5 2.0 billion 1 1 First cargo out of RIPET early Q2 2019 non-core asset sales Capitalize on structural advantage within De-lever the balance sheet…
  6. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 6
    Asset Sales Drive Focus on Midstream and Utilities Segment Asset Sales ( billions) Phase 3 2019 Targeted Continued de-leveraging 1.5 - 2.0 additional asset sales further focuses the asset base and provides an efficient source of…
  7. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 7
    Tim Watson Q4 and Full-Year 2018 Results Tim Watson Executive Vice President and Chief Financial Officer 8
  8. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 8
    Contributions from WGL Drives Q4 2018 EBITDA Higher 2018 Q4 Actuals vs. 2017 Q4 Actuals EBITDA ( millions) +2 +1 +33 -11 +2 +31 -36 Rate base and Central Penn Additional Higher utility Aitken Creek Stronger ACI IPO customer…
  9. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 9
    2018 Financial Results Summary 2018 Normalized EBITDA1 2018 Normalized FFO1 ( millions) ( millions) 1200 1200 800 800 400 797 1009 400 615 657 0 0 2017 2018 2017 2018 1 Non-GAAP financial measure ; see discussion…
  10. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 10
    Q4 & FY 2018 Normalized EBITDA Variance ( millions) 2018 Normalized Q4 Q4 FY FY EBITDA1 2018 2017 Variance 2018 2017 Variance 2018 vs 2017 EBITDA Drivers + WGL acquisition + Utility rates and rate base growth Utilities 232 90 +142…
  11. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 11
    2019 Balanced Funding Plan Priorities Regain financial strength and flexibility to efficiently fund growth Financial Optimize cost Maintain capital Recapture flexibility + of capital + discipline = share value Accelerate…
  12. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 12
    Capital Allocation Focused on Near-Term Returns 1.3 Billion Top-Quality Projects Identified Projects: Approved system betterment across 2% all Utilities Mountain Accelerated pipe Valley 9% replacement Pipeline programs in…
  13. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 13
    Funding Plan Progressing as Planned with Northwest Hydro Sale Completed 2019 Sources and Uses ( millions) 4,900 4,900 Balanced funding plan eliminates the need 660 Hybrids & Preferreds1 for near-term common equity and provides…
  14. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 14
    De-lever the Balance Sheet Net Debt ( billions) 3 billion in debt repayment 2019 Plan Supports Lower debt and stronger balance sheet 10.1 Improving Debt/EBITDA Retained cash flow net of dividends and drip metrics to 5.5x at…
  15. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 15
    Maintained Investment Grade Credit Rating FFO1/Debt Outlook - Illustrative Unsecured Debt Ratings 16% S&P Fitch Moodys DBRS AltaGas BBB- (Neg) BBB BBB (low) 15% 15% SEMCO BBB- (Neg) Baa1 FFO/Debt Medium-Term WGL Holdings BBB- (Neg)…
  16. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 16
    2019 Outlook 17
  17. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 17
    2019 Outlook Remains Unchanged Segmented EBITDA 2019 EBITDA1 Guidance Normalized 2019 % of Segmented ( millions) EBITDA 2019e EBITDA Growth Drivers + Full year of WGL Utilities 650 - 700 51% + Utility capital and rate base growth…
  18. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 18
    2019 Outlook Remains Unchanged - UAFFO 2019 Guidance ( millions) ( millions) FFO 2019e Maintenance Capital 2019e Normalized EBITDA1 1,200 - 1,300 Midstream Maintenance Capital 14 Cash Interest (330) - (340) Other2 15 - 25 Power…
  19. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 19
    2019 EBITDA Guidance Seasonality Utilities Segment EBITDA Seasonality Midstream Segment EBITDA Seasonality 60% 35% 50% 30% 25% 40% 20% 30% 15% 20% 10% 10% 5% 0% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Non-GAAP financial measure; see…
  20. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 20
    Randy Crawford 2019 Spotlight on Execution Randy Crawford President and Chief Executive Officer 21
  21. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 21
    Midstream Segment
  22. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 22
    RIPET: Canadas First West Coast Propane Export Terminal Improving Western Canadian producers netbacks by providing access to premium Asian markets Attracts additional volumes through AltaGas midstream value chain, maximizing…
  23. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 23
    Integrated Service Offering with Access to Global Markets Increasing returns along the integrated value chain Gas Processing & 9X 10X Gathering Field Fractionation, Liquids Handling Storage and Rail CUMULATIVE CAPEX PER Loading…
  24. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 24
    Initial Investment in Montney Midstream Assets Sets the Stage for Significant Organic EBITDA Growth Opportunities Montney Operating Capacity Canadian Midstream Normalized EBITDA ( millions) 800 24,000 BASE GAS PROCESSING TOWNSEND GAS…
  25. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 25
    Utilities Segment
  26. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 26
    Utilities Provide Base for Growth Growth driven and economically strong jurisdictions: District of Columbia, Maryland, Virginia, Michigan and Alaska Low-risk, growing cash flows Rate Base ( billions) US3.7 billion rate base with…
  27. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 27
    2019: Drive Operational Excellence at the Utilities Focus on accelerated replacement capital will support rate base growth and drive earnings growth 2019 Focus Prudently allocate capital based on infrastructure needs and returns…
  28. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 28
    Conclusion 2018: Transform the Business Focus on Midstream and Utilities 2019: Unlock the Growth Potential of our Assets Strengthen the balance sheet and financial flexibility Leverage the unique value proposition of our Canadian…
  29. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 29
    Additional Slides 30
  30. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 30
    Supportive Regulatory Environment for Utilities 2018 YE Allowed ROE Average Utility Rate Base and Equity Regulatory Update Customers (US) Thickness Distribution rates approved under cost of service model. SEMCO 10.35% Use of…
  31. 4Q and FY 2018 Results Presentation – Altagas Limited – slide 31
    Accelerated Replacement Program Utility Location Program Mains Replacement Program expires in 2020. Renewal expected to be filed in 2019. Michigan Expect to incur approximately US10 million in 2019. Authorized to invest US500…

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