Altagas Ltd. · TSX:ALA
Altagas — Q1 2024 Earnings Presentation
26 slides from Altagas's earnings presentation, May 2, 2024
Slide 1: Q1 2024 Financial Results and Corporate Update
Q1 2024 Financial Results and Corporate Update May 2, 2024
Slide 2: Forward-Looking Information
Forward-Looking Information This presentation contains forward-looking information (forward-looking statements). Words such as "may", "can", "would", "could", "should", "likely", "will", "intend", "contemplate", "plan", "anticipate", "believe", "aim", "seek", "future", "commit", "propose", "contempl
Slide 3: Agenda
Agenda 1• First Quarter Highlights 2• Macro Outlook • 3 REEF Project Update • 4 2024 Priorities •5 First Quarter Financial Results •6 MVP Update •7 2024 Outlook and Guidance 3
Slide 4: Q1 2024 Operation and Financial Highlights
1 Q1 2024 Operation and Financial Highlights Financial Performance Growth and Execution Normalized EBITDA1 Normalized EPS1 REEF ($MM) 1 Pipestone II 2 $1.14 On schedule; first acid gas injection Clear path to Q2/24 FID; currently $582 $660 $0.99 (“AGI”) well drilled, second underway finalizing engin
Slide 5: Natural Gas and Gas Utilities Remain Critical in the U.S.
2 Natural Gas and Gas Utilities Remain Critical in the U.S. U.S. Natural Gas Demand U.S. CO2 Savings from Coal-to-Gas U.S. Gas-Fired Electrical Generation 90 Switching petroleum and other 0 4,000 85 renewables 3,000 nuclear 80 Billion KWh natural gas Metric Tonnes 75 -200 2,000 coal Growing Bcf/d Ro
Slide 6: Rising Data Centers Usage Reiterates Demand Durability
2 Rising Data Centers Usage Reiterates Demand Durability Northern Virginia is the Epicenter for AI and Global Data Centers U.S. Electricity Demand Gas-fired Power Demand & Load Growth Largest Global Data Center Markets 4.50 45.0 GWH per year (millions) Data Center demand 9,000 Operational Load Under
Slide 7: Canadian Midstream Outlook is Compelling
2 Canadian Midstream Outlook is Compelling Canadian Natural Gas Prices and Development Canadian Natural Gas Production (2020-2030) WCSB NGL Outlook, by Product (2020-2030) $8.00 AECO Gas Prices 25 2,000 Ethane Propane Price ($C/mcf) Cardium Deep Basin Duvernay Butane Natural Gasoline $6.00 Strip ($C
Slide 8: REEF: A Multi-Phased Growth Project
3 REEF: A Multi-Phased Growth Project Large-scale LPG and bulk liquids marine export terminal F Phased construction for a capital-efficient build-out E C B Phase 1: LPG and Dock A A Facility & balance of plant C Rail Offloading and Yard ~55,000 Bbl/d of initial 10 x dual sided rail offloading
Slide 9: Trigon Watson Island New 4-6 Loop Rail Track
Watson Island Trigon Pembina Prince Rupert Terminal New 4-6 Loop Rail Track 25km total track 9
Slide 10: Logistical Advantages
3 Logistical Advantages Marine Deepest natural harbour in North America Ice free port year-round Easy VLGC access and movement Long-term multi vessel loading capabilities Shortest shipping distance to Japan and South Korea Rail Comprehensive logistics network 10 dual sided rail offload
Slide 11: Project Status: Site Clearing and Geotechnical
3 Project Status: Site Clearing and Geotechnical As of April 30, 2024: 85% of site preparation is complete. • Logging and clearing work completed, expect early site drainage work to be completed by end of May. • No geotechnical surprises. Site Clearing Progressing as Expected; Q2 Completion 11
Slide 12: Update on Key Gating Items
3 Update on Key Gating Items Project Design & Engineering Project Execution Commercial >95% • Ready to award: Facility design, procurement, fabrication and FEED critical long leads Minimized Onsite Work Reduces 56% of AltaGas’ global exports will Completion • Ready to commence: Earthworks operate un
Slide 13: 2024 Priorities
4 2024 Priorities Corporate Utilities Midstream Equity Self-funding Improve Returns Integrate Pipestone Self-funding model employed in 2024; fifth year of Continue to close ROE gap; acute focus on costs. Assumed operations execution. Evaluating 2024 rate case needs to close ROE gap Balance Sheet Man
Slide 14: Midstream – Q1/24 Performance
5 Midstream – Q1/24 Performance Strong Q1/24 Midstream results supported by record first quarter global exports. Normalized Midstream Global Exports Gathering & Processing EBITDA1 +16% Strong global exports Strong 12% Y/Y Montney +35% +2% Record Q1 volumes. performance including ship volume gr
Slide 15: Utilities – Q1/24 Performance
5 Utilities – Q1/24 Performance Q1/24 Utilities results were in line with expectations despite warmer weather. Normalized Utilities Customer Additions Regulatory EBITDA2 Strong Retail performance Modernization program extension +9% Rate base growth through modernization investments. +8k ~1% Mi
Slide 16: MVP Update: Target June Completion
6 MVP Update: Target June Completion The Project Progress • Interstate natural gas pipeline that spans Total Pipeline Progress Since Congress Provided >300 miles from Northwestern West Support to Complete – August 2023 Virginia to Southern Virginia, connecting to Pipeline Installation Aug ‘23 Transc
Slide 17: 2024 Guidance Puts and Takes
7 2024 Guidance Puts and Takes Well-positioned to achieve our 2024 guidance figures of 2024 Guidance Intact Normalized EPS1 of $2.05 - $2.25 and Normalized EBITDA of $1.675 billion to $1.775 billion. Normalized EBITDA1 Guidance ($ millions) Changes Since Guidance was Set $1,675 - $1,775 $1,575 Stron
Slide 18: 2024 Guidance Seasonality Update
7 2024 Guidance Seasonality Update Following a strong Q1/24, AltaGas is reiterating its 2024 guidance; modest adjustments in seasonality. Normalized EBITDA1 Guidance 2024 Guidance Update ($ millions) $1,675 – $1,775 $1,675 – $1,775 2024 full year normalized EBITDA1 guidance ($1.675B - $1.775B) reite
Slide 19: Value Proposition
Value Proposition Diversified, Low-Risk Business Model with Visible Growth and Disciplined Capital Allocation Low Risk Energy Infrastructure Visible, Industry- Disciplined Capital 1 Platform Providing Stable and 2 3 Leading Growth Allocation Growing Earnings / Cash Flows Robust energy fundamentals U
Slide 20: Appendix: Q1 2024 Variances
Appendix: Q1 2024 Variances 20
Slide 21: Consolidated: Q1/24 vs. Q1/23 Normalized EBITDA
Q2/23 vs. Consolidated: Q1/24 vs. Q1/23 Q2/22 Normalized EBITDA1,2 ($ millions) -22 52 660 64 -16 582 566 Q1 2023 Asset Sales & Corp/ Q1 2024 Midstream Utilities Actual One-Time Items Other Actual ▼ Sale of Alaska Utilities in ▲ Global Exports performance ▲ ARP modernization ▼ Blythe turnaround Q1/2
Slide 22: Consolidated: Q1/24 vs. Q1/23
Consolidated: Q1/24 vs. Q1/23 Income (Loss) Before Income Taxes1 ($ millions) 159 -206 619 -31 541 Q1 2023 Corp/ Q1 2024 Midstream Utilities Actual Other Actual ▲ Primarily same factors impacting ▼ Absence of gain on sale of Alaska ▼ Primarily same factors impacting normalized EBITDA Utilities norma
Slide 23: Midstream: Q1/24 vs. Q1/23
Midstream: Q1/24 vs. Q1/23 Normalized EBITDA1,2 ($ millions) 247 -18 64 -11 183 Q1 2023 Q1 2024 Midstream Actual Actual ▲ Stronger Global Exports performance ▲ MVP AFUDC ▲ Higher marketing margins ▲ Addition of Pipestone ▲ Hedging gains ▲ Gain on settlement of ARO ▼ Contingency/commercial settlement
Slide 24: Utilities: Q1/24 vs. Q1/23
Utilities: Q1/24 vs. Q1/23 Normalized EBITDA1,2 ($ millions) 437 52 401 -16 385 Q1 2023 Asset Sales & Q1 2024 Utilities Actual One-Time Items Actual ▼ Sale of Alaska Utilities in Q1/23 ▲ ARP modernization investments ▲ DC and MD rate cases ▲ Customer growth ▲ Higher gas and electric profitability ▲
Slide 25: Corporate/Other: Q1/24 vs. Q1/23
Corporate/Other: Q1/24 vs. Q1/23 Normalized EBITDA1,2 ($ millions) -2 -22 -24 Q1 2023 Q1 2024 Corporate Actual Actual ▼ Blythe turnaround ▼ Higher G&A due to LTIP accruals on AltaGas’ rising stock price 1) Non-GAAP financial measure; see discussion in the advisories; 2) Numbers may not add due to ro
Slide 26: Contact Information
Contact Information For more information visit www.altagas.ca or reach out to one of the following: Jon Morrison Aaron Swanson Adam McKnight Senior Vice President, Corporate Vice President, Investor Relations Director, Investor Relations Development and Investor Relations [email protected] Ad