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4Q and FY 2019 Earnings Presentation – Altagas Limited

Altagas Limited · Feb 28, 2020 · 43 slides

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Slides

  1. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 1
    Fourth Quarter and Full Year 2019 Results Presentation February 28, 2020
  2. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 2
    Our Business Strategies are Straightforward Low-Risk, High-Growth Utilities and Midstream Company Low-Risk Regulated Utilities Opportunity-Rich Integrated Midstream Utilities Global Distribution Export Leveraging our Core…
  3. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 3
    2019 Financial Results Summary 2019 Normalized EBITDA1 2019 Normalized FFO1 ( millions) ( millions) 1600 1200 26% 36% increase increase 1200 800 800 1,009 1,271 400 657 895 400 0 0 2018 2019 2018 2019 Achieved results…
  4. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 4
    Q4 2019 Financial Results Summary Strong performance from core business delivers results at the top end of 2019 guidance range Normalized EBITDA1 of 425M in Q4 2019 and full-year of 1.3B Normalized Net Income1 of 186M in Q4 2019…
  5. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 5
    2019 Key Accomplishments Setting the stage for attractive growth in 2020 and beyond Operational Priorities Financial Priorities Completed key infrastructure projects Executed 2.2 billion2 of non-core asset sales RIPET De-levered the…
  6. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 6
    2019 Achievements: Launched our Inaugural ESG Report To earn the right to grow, we must continue to integrate ESG considerations into the execution of our strategy At AltaGas, we are writing a bright story for a future where energy…
  7. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 7
    Delivering Clean Energy to Asia and Building Social and Economic Value at Home RIPET demonstrates our unwavering commitment to the environment, safety and partnerships with our stakeholders Connecting low-carbon Canadian energy to…
  8. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 8
    Our Utilities: Building and Contributing to our Communities Weatherization We are committed to supporting those in activities resulted in a need by developing and funding programs that provide clean and affordable energy 25%…
  9. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 9
    Midstream Update 10
  10. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 10
    Our Midstream Strategy is Straightforward Maximize utilization of existing assets and pursue capital efficient high-return expansions Invest Continue to build upon our export competency Midstream Diversify and grow our customer base…
  11. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 11
    Premier Midstream Business Connecting Canadian Producers to Global Markets Leverage RIPET and our integrated value chain to attract volumes Montney Basin Key Assets: Strategic Benefits: Ridley Island Propane Global demand market…
  12. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 12
    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…
  13. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 13
    Abundant North American Natural Gas Supply Excess propane supports development of incremental export capacity Abundance of Natural Gas in North America Propane supply continues to outpace demand Production expected to grow 30% by 2023…
  14. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 14
    Demand in Asia Supports Export Capacity Growth Opportunity to grow Canadas West Coast LPG export capacity Increasing demand in Asia Supply/demand imbalance supports strong spreads Asias appetite for cleaner energy such as propane…
  15. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 15
    RIPET Connecting local producers to premium pricing in Asia The RIPET advantage results in a significant increase in our producers realized price Alberta3 US11.38/bbl Ft. Saskatchewan RIPET AFEI2 10 US31.72/bbl days…
  16. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 16
    RIPET 2020 Operational Overview Strong performance; positioned for growth Increased utilization - strong interest from producers supports volumes ramping up to exit 2020 at 50,000 bbl/d RIPET 2020e 92% of expected 2020 volumes…
  17. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 17
    Processing 2020 Operational Overview Increased utilization and expansions drive growth Operational Capacity (Fractionation and NEBC Processing Facilities) Processing 800 70,000 700 60,000 Projects coming online in 2020 add…
  18. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 18
    Petrogas Energy Corp. Strategic assets support AltaGas energy export and Midstream strategy About Petrogas Owns and operates the Ferndale Terminal (only operating LPG export terminal on the US Pacific Coast) 50,000 bbl/d export…
  19. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 19
    Midstream Commercial Agreements Continue to grow take-or-pay contracts and diversify the customer base 60% of 2020e Normalized EBITDA from Expect 10% increase to take-or-pay investment grade customers contracts as compared to 2019…
  20. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 20
    RIPET Site Overview 5 2 1 6 5 1 2 6 3 4 3 4 1 Storage Tank 2 Compressor 3 Propane Storage 4 Rail Offloading 5 Condensers 6 Control Room/ Building Bullets Modules Admin 21
  21. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 21
    Utilities Update 22
  22. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 22
    Utilities Strategy - Drive Operational Excellence Priorities Maintain safe and reliable infrastructure Enhance overall returns via complementary Utilities businesses and cost-reduction initiatives Distribution Attract and retain…
  23. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 23
    Our Utilities Business Operating Model Safe and reliable, high-growth competitive strategy Opportunities Improve business processes and drive down leak remediation costs, reinvesting savings into improving the customer…
  24. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 24
    Utilities 2020 Growth Drivers Grow earnings through rate base investment Investment in aging infrastructure and attracting new customers is expected to drive strong rate base growth of 8 - 10% Rate Base Growth (US millions)…
  25. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 25
    WGL ROE Strategy Path to earning our allowed returns at WGL Strategy in place with a clear line of sight to allowed returns in 2021 Key initiatives to achieving allowed returns: Anticipated Return On Equity 1. Capital Discipline: &…
  26. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 26
    Utilities Segment Capital Spend Disciplined approach to capital focused on strategic projects and Accelerated Replacement Programs Designed to earn immediate returns and increase capital efficiency through approximately 25% growth in…
  27. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 27
    Summary of Recent Rate Case Filings Focused on timely recovery of capital Most Recent Revenue ROE Equity Thickness Rate Case Filed SEMCO (Michigan) Filed May 31, 2019 Received: US19.9 MM Received: 9.87% Received: 54%1 WGL…
  28. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 28
    2020 Outlook 29
  29. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 29
    2020: Outlook Unchanged Strong growth in base business underpins 2020 outlook 2020 Normalized EBITDA1 Guidance2 2020 Normalized EPS Guidance2 ( millions) (per share) 1600 1.20 - 1.30 1,275 - 1,325 1200 800 400 0…
  30. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 30
    Strong Growth in Base Business Underpins 2020 Outlook Growth in core business more than offsets lost EBITDA from asset sales Utilities: Leveraging our core distribution footprint 2020 Normalized EBITDA1,2 Growth ( millions) Increase…
  31. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 31
    2020 Normalized EBITDA1 Drivers Normalized 2020E EBITDA1 Growth Drivers 2020 Normalized EBITDA1 Guidance2 ( millions) Rate base growth through disciplined investment in aging infrastructure 1,275 - 1,325 Achieving higher returns on…
  32. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 32
    2020 Disciplined Capital Allocation Strong organic growth drives robust risk adjusted returns 9001 million in top-quality projects drive earnings growth Power Corporate Capital Allocation Criteria: 2% 2% Identified Projects:…
  33. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 33
    Maintain Investment Grade Credit Rating Entering 2020 with significantly stronger financial footing Solid foundation to capitalize on significant organic growth opportunities 10.1x Commitment to investment grade credit rating…
  34. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 34
    2020: Self-Funded Model Growth in cash flow eliminates need for common equity and provides funding flexibility 2020 capital plan funded internally and focused on projects with near-term returns 2020e Sources and Uses1 ( millions)…
  35. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 35
    AltaGas Segments Redefined To reflect managements strategic view of the business Management will assess performance and allocate resources between the core business segments of Utilities and Midstream 2020e Normalized EBITDA 2020e…
  36. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 36
    Appendix 37
  37. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 37
    Q4 Normalized EBITDA1 2019 Q4 Actuals vs. 2018 Q4 Actuals Normalized EBITDA1 ( millions) 11 17 (7) 95 425 (85) 394 Q4 2018 Q4 2019 Midstream Utilities Power Corporate Asset Sales Actual Actual RIPET Maryland & Virginia…
  38. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 38
    2019 Normalized EBITDA1 2019 Actuals vs. 2018 Actuals Normalized EBITDA1 ( millions) 55 254 (27) 295 1,271 (317) 1,009 2018 2019 Utilities Midstream Power Corporate Asset Sales Actual Actual WGL acquisition RIPET WGL…
  39. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 39
    Q4 & FY 2019 Normalized EBITDA1 Variance Q4 Q4 FY FY ( millions) 2019 2018 Variance 2019 2018 Variance 2019 vs 2018 EBITDA Drivers + WGL acquisition + ARP and Maryland Rate Case Utilities 244 232 12 657 426 231 - ACI IPO - Virginia…
  40. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 40
    Supportive Regulatory Environment for Utilities 2019 YE Allowed ROE Average Utility Rate Base and Equity Regulatory Update Customers (US) Thickness Distribution rates approved under cost of service model. Projected test year used…
  41. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 41
    Supportive Regulatory Environment for Utilities 2019 YE Average Allowed ROE and Utility Rate Base Regulatory Update Customers Equity Thickness (US) Distribution rates approved under cost of service model. Rate case filed in July 31,…
  42. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 42
    Accelerated Replacement Program Utility Location Program Main Replacement Program (MRP) expires in 2020. 2019 rate case settlement provides for a renewed MRP for 2021-2025 with total spending of US60 million, and the introduction of a…
  43. 4Q and FY 2019 Earnings Presentation – Altagas Limited – slide 43
    2020 Normalized EBITDA Seasonality Utilities seasonality driving quarterly EBITDA profile Consolidated Normalized 2020e Midstream Normalized 2020e Utilities Normalized 2020e EBITDA1 By Quarter EBITDA1 By Quarter EBITDA1 By…

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