Altagas Ltd. · TSX:ALA
Altagas — Investor Day (December 2021)
102 slides from Altagas's investor day presentation, December 2021
Slide 1: Fundamentally Focused, Geared for Growth
Fundamentally Focused, Geared for Growth 2021 Investor Day
Slide 2: Forward-Looking Information
Forward-Looking Information This presentation contains forward-looking information (forward-looking statements). Words such as “guidance”, "may", "can", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "aim", "seek", "propose", "contemplate", "estimate", "focus", "striv
Slide 3: Focus of the Day
Focus of the Day Revisit the journey that Share our philosophical Discuss the road ahead 1 we have been on 2 views about running the 3 platform A repositioned platform A discussion of guiding principles What you can expect from AltaGas with streamlined asset base. and what we believe matters for in
Slide 4: Agenda and Speakers
Agenda and Speakers Opening Vision and Utilities Midstream Corporate Moderated Remarks Strategic Strategy Strategy ESG Strategy Finance: Q&A from the Overview Capital Board and Return Strategy 8:05 MT 8:10 MT 8:35 MT 8:55 MT 9:15 MT 9:30 MT 10:00 MT Pentti Randy Blue Randy Shaheen James Toone Jon Ka
Slide 5: Pentti Karkkainen
Pentti Karkkainen Chair of the Board and Independent Director
Slide 6: Our Governance Philosophy and Commitment
Our Governance Philosophy and Commitment ▪ Robust governance and strong leadership are core to achieving our strategy and delivering sustained value for our stakeholders. As the ultimate steward for AltaGas, the Board has a fiduciary responsibility to ensure it’s providing the proper foresight, over
Slide 7: Our Commitment to Our Stakeholders
Our Commitment to Our Stakeholders Working with all our stakeholders is engrained in our approach to doing business. It is part of our organizational DNA and has been a foundational principle of our nearly three decades of operations. From initial project development through to operations and reclam
Slide 8: Randy Crawford
Randy Crawford President and Chief Executive Officer
Slide 9: One Strong Platform Focused on Connecting Customers and Markets
One Strong Platform Focused on Connecting Customers and Markets Investing for the Benefit of our Customers, Investors and the Environment Integrated Midstream Business – from wellhead to global markets Gas Gathering NGL Extraction Transportation, Global Wellhead & Processing Export Markets & Fractio
Slide 10: Who We Are
Who We Are Our A Leading North American infrastructure company that connects customers Vision and markets to affordable and reliable sources of energy. Our To improve quality of life by safely and reliably connecting customers Mission to affordable sources of energy for today and tomorrow. Our Every
Slide 11: Focus of the Day
Focus of the Day Revisit the journey that Share our philosophical Discuss the road ahead 1 we have been on 2 views about running the 3 platform 2018 Exit: Where the A discussion of guiding principles What you can expect from AltaGas company was. and what we believe matters for in the days ahead. lon
Slide 12: The Journey We Have Been On
The Journey We Have Been On
Slide 13: 2018 Exit - Where we Were
2018 Exit - Where we Were • Asset base was under- • Three business segments earning Business Utilities • Several non-core Capital • Capex + dividends Focus operations Allocation averaged 1.3x EBITDA Midstream • Multiple non-operated over the previous five and passive investments years, DRIP was dilu
Slide 14: What We Said We Would do in Early 2019
What We Said We Would do in Early 2019 • Instill a disciplined capital • Reposition the platform allocation process Business Utilities • Transition to a lower-risk, Capital • Recycle capital to improve Focus high-growth utilities and Allocation returns and bolster strategic Midstream midstream platf
Slide 15: What We Have Done
What We Have Done ✓ Repositioned the business; ✓ Instilled disciplined capital now operate two core allocation process (self-funding Business Utilities platforms Capital model for four years running) Focus ✓ Focused solely on operated Allocation ✓ Raised no equity, turned off and core utilities and
Slide 16: Execution of the Strategic Plan is Creating Outsized Wins
Execution of the Strategic Plan is Creating Outsized Wins… Normalized Normalized Leverage Ratios / Margin of Safety Earnings FFO Per Share1 $4.50 Per Share1 12.0x $1.90 Normalized Net Debt/EBITDA 10.0x • Execution of the Model $1.70 Normalized FFO/Share $4.00 strategy continues Check $1.50 Normalize
Slide 17: And Driving a Different Forward Trajectory
…And Driving a Different Forward Trajectory Over a three-year period AltaGas has… Market Doubled Cap Cap its Market Net Decreased NetDebt Debt by 21% 2,3 EBITDAEBITDA 50% 1,3 Grown Normalized $1.5B $10.0B $7.1B $7.9B $1.0B $3.6B 2018 2021E 2018 2021E 2018 2021E Cut leverage ratios in half 2,3,4 Reve
Slide 18: Which is Driving Compounding Value for our Stakeholders
…Which is Driving Compounding Value for our Stakeholders ALA Vs. Peers ALA Vs. Peers Expected EPS Growth Since 2018 (Indexed To 100) Expected FFO/Share Growth Since 2018 (Indexed To 100) 230 150 210 140 190 170 130 150 120 130 110 110 90 100 70 50 90 2018 2019 2020 2021E 2018 2019 2020 2021E ALA Mid
Slide 19: The Road Ahead
The Road Ahead
Slide 20: Strategy and ESG Work in Harmony
Strategy and ESG Work in Harmony Leading with Strong ESG Practices is Built into the Fullness of our Process Integrated Midstream Business ▪ Operate a high-quality platform that connects Vision informed by our core values customers and markets and drives better We are committed to operational excell
Slide 21: Our Corporate Strategy
Earnings Model Per Share Growth Durability Check Points What we FFO Per Share Growth Durability Focus on Medium-term Long-term Leverage Ratios / <5.0x ~4.5x Our Corporate Strategy Margin of Safety Net Debt/EBITDA1 Net Debt/EBITDA1 Invest in and operate long-life infrastructure assets that provide Fo
Slide 22: Building a Sustainable Future – Delivering Better Outcomes
Building a Sustainable Future – Delivering Better Outcomes Steps to Reduce our Carbon Footprint in Support of the Low-carbon Economy are Ongoing As the world moves to lower carbon ecosystem, natural gas will help bridge the gap needed to get us there. Investing to Modernize Aging Infrastructure at W
Slide 23: Our Emerging Ecosystem Growth and Focus
Our Emerging Ecosystem Growth and Focus Extending our Footprint into Adjacent Markets Over the Long-term Our emerging ecosystem focus areas are natural extensions to invest in these adjacent energy markets. Utilities Strategy Strong focus on accelerated H2 pipeline replacement and network P2G Operat
Slide 24: The Hydrogen Opportunity
The Hydrogen Opportunity A Potential Fit for all AltaGas’ Assets Flexible approach to the energy evolution that can leverage existing infrastructure today with hydrogen being a common element of future opportunities. Midstream ▪ Logistics, storage and transportation of hydrogen fits within our core
Slide 25: Utilities Strategic Priorities
Utilities Strategic Priorities Strong multi-year growth through investing to benefit customers, investors and the environment Forecasted Rate Base Growth 2022-2026 1. Operate a safe and reliable system to deliver critical energy to customers 2. Invest to modernize our network ▪ Upgrade platform to e
Slide 26: Leveraging Our Core Competency
Leveraging Our Core Competency Connecting Customers and Markets, for Today and Tomorrow Global exports volume CAGR of: 2019 RIPET Commissioned ~37,000 Bbl/d C3 ~10%+ One Export Terminal through 2026. One Product Ferndale Consolidated • Leverage our structural ~100,000 Bbl/d shipping advantage 2022 C
Slide 27: Midstream Strategic Priorities
Midstream Strategic Priorities Strong multi-year growth through optimization, expansion and evolution NEBC Processing Volumes (MMcf/d) 1. Operate a safe and reliable system to deliver critical energy to 800 Expect NEBC processing customers. volume growth 700 ~27% 2020 - 2022 2. Maximize the potentia
Slide 28: The Road Ahead
The Road Ahead Continue to Execute on Long-term Strategic Plan; Large Organic Growth Opportunities on Horizon 2022 2023 2024 2025 2026 2027 2028 2029 2030+ ARP Upgrades Utilities Rate Base Growth CNG & RNG Advancement Utilities Hydrogen Advancement 2022 2023 2024 2025 2026 Optimizing/Filling Capacit
Slide 29: Our Value Proposition
Our Value Proposition A Continuous Focus on Compounding A Diversified Infrastructure Company with a Robust Pipeline of Lower-risk Growth Opportunities Streamlined platform with Top-quartile utilities track record of delivering. rate base growth. Industry Leading EPS and FFO per share growth and stoc
Slide 30: Blue Jenkins
Blue Jenkins Executive Vice President and President, Utilities
Slide 31: Overview of Rate Regulated Platform
Overview of Rate Regulated Platform Stable and Predictable Results ▪ 1.7 million customers in stable and growing jurisdictions ▪ US$4.6 billion regulated rate base 5 2022E Utility Revenues ▪ Limited sensitivity through regulated fixed distribution charges and decoupling ▪ ~70% of revenue derived fro
Slide 32: Our Utilities Strategies
Our Utilities Strategies Utilities Strategy Operate a safety-focused, digitally-enabled and high-growth utility that exceeds our customers' expectations and excels in the Strong focus on organic opportunities centered on safety emerging energy ecosystem. and reliability, better customer outcomes and
Slide 33: Focus for the Day
Focus for the Day Revisit the journey that Share our philosophical Discuss the road ahead 1 we have been on 2 views about running the 3 platform 33
Slide 34: The Journey we Have Been On
The Journey we Have Been On Late 2018 – Where We Were What We Said We Would Do What We Have Done (%) (US$mm) Operational Excellence WGL ROE Strategy Normalized EBITDA Growth 800 10 9.4% ~3% 600 5 400 0 200 Earned Return ROE Gap Allowed Return 2019 2020 2021E ▪ Strong operations at SEMCO, ENSTAR and
Slide 35: Execution of the Utilities Plan is Creating Outsized Wins
Execution of the Utilities Plan is Creating Outsized Wins… WGL Leaks ARP Capex Deployment WGL O&M / Customer 9,500 275 340 ARP Investments (US$MM) WGL O&M Per Customer 9,000 250 WGL Total Leaks 330 Operational 8,500 225 • Execution of the Check Points ($US) 320 Utilities strategy 8,000 200 continues
Slide 36: And Supporting our Corporate Strategy and Results
…And Supporting our Corporate Strategy and Results Utilities Strategy Operate a safety-focused, digitally-enabled and high-growth utility that exceeds our customers' expectations and excels in the emerging energy ecosystem. Our Corporate Strategy Invest and operate in long-life infrastructure assets
Slide 37: Market Realities on Gas Demand and Affordability
Market Realities on Gas Demand and Affordability Natural Gas will be one of the Transition Fuels of the Future
Slide 38: Energy Consumption and Demand Characteristics
Energy Consumption and Demand Characteristics Total Household Energy Consumption – Therms per Home per Month 1,2 Energy demand in 120 our jurisdictions is positive 80 This includes all of our jurisdictions sitting 40 around P50 or above for overall energy - demand per home. Percent of Household Ener
Slide 39: Affordability Remains Key Consideration Through the Energy Evolution
Affordability Remains Key Consideration Through the Energy Evolution 2019 Total Household Energy Affordability (Cost as % of Income)1,2 6.0% Natural Gas Cost as % of Income Electricity as % of Income 4.0% 2.0% 0.0% Cost of Electricity over Natural Gas per Therm 1,2 6.0x 4.0x 2.0x 0.0x 1. U.S. Bureau
Slide 40: Affordability Remains Key Consideration Through the Energy Evolution
Affordability Remains Key Consideration Through the Energy Evolution Average Monthly Cost to Switch to Electricity1,2 $800 $600 $400 $200 $0 Average Cost Increase from Switching to Electricity (Cost as % of Income) 1,2 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 1. U.S. Bureau of Labor Statistics and U.S. Census
Slide 41: Natural Gas will Remain a Critical Transition Fuel
Natural Gas will Remain a Critical Transition Fuel Economic and Emission Reductions Are Aligned; Affordability will be a key Variable in the Energy Evolution Full-Cycle Energy Consumption vs. CO2 Impact1 2019 Average Energy Prices for Typical U.S. Home1 ▪ Through the energy evolution AltaGas will ti
Slide 42: The Utilities Road Ahead
The Utilities Road Ahead
Slide 43: Focus within the Utilities
Focus within the Utilities Progress in Journey 25% 50% 75% Focus: Maintain the strong Today Maintaining Strong Financial improvement that has been shown Performance in operational and financial performance since 2019. Today Near-term Focus: Upgrade platform with focus on safety and reliability, Upgr
Slide 44: Building Resilient Infrastructure Across Jurisdictions
Building Resilient Infrastructure Across Jurisdictions ▪ As one of the pioneering North American gas utilities, with our origins dating back more than 170 years, we are proud to have played a role in helping fuel America into the great nation that it is today. ▪ Our rich history also leaves us opera
Slide 45: Accelerated Replacement Programs
Accelerated Replacement Programs WGL has Substantial Inventory of Future ARP Spend Utility Location Program ▪ 2019 rate case settlement provides for a renewed Mains Replacement Program for 2021-2025 with total spending Michigan ~US$60 million and the introduction of a new Infrastructure Replacement
Slide 46: Utilities Capital
Utilities Capital Disciplined Capital Allocation Provides Strong Risk Adjusted Returns and Minimizes Regulatory Lag ARP Spending % of U.S. Utilities Capital Spending Approximately 50% 80% 45% of the Utility capital plan is immediately recoverable through ARPs (~40%) and along with the majority of ma
Slide 47: Forward Rate Base Growth
Forward Rate Base Growth Positioned for Strong Long-term Growth ▪ Long-term capital plan maintains a disciplined Forecasted Rate Base Growth (2022-2026) approach to capital allocation prioritizing safety and reliability; maintaining customer affordability and minimizing regulatory lag. ▪ Secured cap
Slide 48: Emissions Reduction Goals
Emissions Reduction Goals We have applied our learnings from the D.C. climate business plan and implemented emissions reducing initiatives across our broader organization. We believe natural gas can and will be decarbonized with low- to- no-carbon intensive fuels like RNG and hydrogen, and that alte
Slide 49: Advancing Lower Carbon Fuels
Advancing Lower Carbon Fuels A Focus on Advancing the Fuels of the Future in a Pragmatic and Purposeful Manner H2 Certified Gas Renewable Natural Gas Hydrogen ▪ Blending certified gas into existing supply can ▪ Supporting the Piscataway Bioenergy Project, AltaGas' ▪ Hydrogen is a promising fuel due
Slide 50: Utilities Strategic Priorities
Utilities Strategic Priorities Strong multi-year growth through investing to benefit customers, investors and the environment Forecasted Rate Base Growth 2022-2026 1. Operate a safe and reliable system to deliver critical energy to customers 2. Invest to modernize our network ▪ Upgrade platform to e
Slide 51: Randy Toone
Randy Toone Executive Vice President and President, Midstream
Slide 52: Premier Midstream Business
Premier Midstream Business Leveraging Core Export Strategy Structural Advantage to Markets in Asia Leverage core export strategy and access to premium global pricing to attract volumes ~89% from investment grade customers ~53% from take-or-pay contracts and fee-for-service ~63% of 2022 RIPET volumes
Slide 53: Our Midstream Strategy
Our Midstream Strategy Midstream Strategy Operate a world class Midstream platform that safely connects producers to domestic and global markets and is Operate long-life midstream assets that are positioned for where positioned for the energy evolution. the market is headed. This includes providing
Slide 54: Focus of the Day
Focus of the Day Revisit the journey that Share our philosophical Discuss the road ahead 1 we have been on 2 views about running the 3 platform 54
Slide 55: The Journey We Have Been On
The Journey We Have Been On From Fragmented to Focused with Growing Scale 2015 – Where We Were What We Said We Would Do What We Have Done Since 2018 Exit ▪ Smaller Canadian Midstream platform. ▪ Build a platform positioned for where the market ✓ Significantly advanced our midstream and ▪ Diversified
Slide 56: Execution of the Midstream Plan is Creating Outsized Wins
Execution of the Midstream Plan is Creating Outsized Wins… Global Exports Volumes NEBC Throughput North Pine Throughput • Execution of the 100,000 340 16,000 Midstream strategy 14,000 Throughput (mmcf/d) Global Exports (Bbl/d) 320 80,000 continues to deliver Throughput (bbl/d) 12,000 300 Operational
Slide 57: And Supporting our Corporate Strategy and Results
…And Supporting our Corporate Strategy and Results Midstream Strategy Operate a world class Midstream platform that safely connects producers to domestic and global markets and is positioned for the energy evolution. Our Corporate Strategy Invest in and operate long-life infrastructure assets that p
Slide 58: Focus within Midstream
Focus within Midstream Progress in Journey 25% 50% 75% Today Optimize Existing Asset Base for Focus: Maximize facility utilization Appropriate Rates of Return and flows for ideal AltaGas and industry outcomes. Continue to Provide services increase that align with best throughput in industry outcomes
Slide 59: The West Coast Structural Advantage
The West Coast Structural Advantage West Coast Positioned for Long-term Structural Advantage The RIPET and Ferndale Advantages results in significant increases in producers’ realized prices and tailwinds for the broader energy industry. North American West Coast LPG exports have a RIPET 10 - 11 Fern
Slide 60: Global Export Facilities
Global Export Facilities >44,000 metric tons ~545,000 Bbls of Propane or Rail Line Very Large Gas ~490,000 Bbls of Butane Carriers (VLGC) Ridley Island Propane Export Terminal (RIPET) Large Gas Ridley Island Lulu Island Carriers (LGC) Prince Rupert is the Deepest Natural Harbour in North America Med
Slide 61: Strong Asian Demand Pull From Investment Grade Partners
Strong Asian Demand Pull From Investment Grade Partners Robust LPG Demand from Key Asian Markets; Canada Represents an Important Supply Diversification Approximately Japan RIPET represents 90% ~11% RIPET exports primarily land in Japan where propane is principally used for home heating and serves as
Slide 62: Market Balances will Continue to Support Export Growth
Market Balances will Continue to Support Export Growth North America will Remain Oversupplied While Demand in Asian Remains Robust North American LPG Supply/Demand Asian Demand Remains Robust 4,000 5,250 600 Q3/22 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 Q4
Slide 63: The Midstream Road Ahead
The Midstream Road Ahead
Slide 64: Continued Optimization of Existing Asset Base
Continued Optimization of Existing Asset Base From Wellhead to Tidewater and Beyond, we are Focused on Connecting Customers and Markets for Better Outcomes Global 1 Wellhead 2 Gas Gathering & Processing 3 NGL Extraction & Fractionation 4 Transportation, Storage & 5 Export 6 Markets Rail Logistics GA
Slide 65: Ridley Island: Near-term Optimization and Growth
Ridley Island: Near-term Optimization and Growth Supply and Logistics Rail Delivery to Ridley Island The Export Terminal Export Dock End Market Demand RIPET • CN has been making large investments in Prince George to C3 Prince Rupert corridor; continues Propane • Our partner has • End market demand i
Slide 66: Ridley Island: Medium and Longer-term Growth
Ridley Island: Medium and Longer-term Growth RIPET Optimization Medium-term LPG Diversification Longer-term Alternative Fuel Opportunity C4 C4 Butane C3 C3 Butane C3 Propane Propane Propane NH3 Alternative Ammonia 130,000 • Beyond optimizing the Fuels Increase facility towards 130,000 nameplate capa
Slide 67: Ferndale: Near-term Optimization and Growth
Ferndale: Near-term Optimization and Growth Supply and Logistics Rail Delivery to Ferndale The Export Terminal Export Dock End Market Demand Ferndale C4 Butane • Additional investments C3 expected in the near-term Propane around provide further Capacity • Petrogas owned dock • End market demand is •
Slide 68: Ferndale: Longer-term Growth
Ferndale: Longer-term Growth Longer-term Alternative Fuel Opportunity C3 C4 NH3 Propane Butane Ammonia ▪ Long-term we continue to look at advancing 1,600 Acres of Land Recently AltaGas’ participation in fuels of the future. ▪ This includes pursuing conceptional work Acquired with Multiple Conceptual
Slide 69: Increasing Capabilities, Compounding Throughput
Increasing Capabilities, Compounding Throughput From Wellhead to Tidewater and Beyond, we Connect our Customers to Premium Markets Global exports volume CAGR of: RIPET Commissioned ~10%+ ~37,000 Bbl/d through 2026. 2019 C3 • From Manifest → Unit Trains: Reduced transport One Export Terminal One Prod
Slide 70: New Ships Provide Strategic Advantages
New Ships Provide Strategic Advantages Extending Value Chain to Connect Downstream, While De-risking, Improving Economics and Lowering Emissions Agreement 91,000 cbm Very Large Gas Carriers • Signed 7-year agreements with 3-year extension options for two 91,000 cubic meter (cbm) LPG VLGCs. • AltaGas
Slide 71: Leveraging Footprint for Growth Across the Value Chain
Leveraging Footprint for Growth Across the Value Chain Gas Gathering NGL Extraction Transportation, Storage & Processing and Fractionation and Logistics Advancement of Project Work Across the Value Chain • Continue to advance business development, commercial and engineering work around Our Customers
Slide 72: Midstream Growth
Midstream Growth Significant Pipeline of Growth Opportunities Driving Strong Expansion 3,250 3,000 ▪ Significant pipeline of Organic Expansion Global exports volume CAGR of: 2,750 and Optimization identified growth opportunities 2,500 to potentially be sanctioned over the next five years. ~10%+ 2,25
Slide 73: Our Approach to Reducing Emissions Intensity
Our Approach to Reducing Emissions Intensity Using a Multi-Pronged Approach to Achieving our Targeted 40% Emissions Intensity Reduction by 20301 Increase Utilization of Existing Assets ▪ Fill existing processing capacity Increasing volumes through existing facilities ▪ Grow LPG exports at RIPET make
Slide 74: Midstream Climate Goals
Midstream Climate Goals Aligning our Midstream Business Strategy to Support Meaningful Climate Action Our Midstream 2030 Climate Goals: Scope 1+2 Emissions Breakdown2: 40% Emissions Intensity Reduction1 by 2030 Harmattan 51% Gordondale 15% 15% Absolute Reduction1 in Harmattan Emissions by 2026 2020
Slide 75: Midstream Strategic Priorities
Midstream Strategic Priorities Strong multi-year growth through optimization, expansion and evolution NEBC Processing Volumes (MMcf/d) 1. Operate a safe and reliable system to deliver critical energy to 800 Expect NEBC processing customers volume growth 700 ~27% 2020 - 2022 2. Maximize the potential
Slide 76: Shaheen Amirali
Shaheen Amirali Executive Vice President, Chief External Affairs and Sustainability Officer
Slide 77: Focus of the Day
Focus of the Day ESG Integration ESG Performance ESG Strategy Execution 1 2 and Goals 3 77
Slide 78: ESG Integration
ESG Integration Embedding priorities into our business leads to sustainable value creation ESG Priorities Business Strategy Risk Management Capital Sustainable Allocation Value Creation Operations Business Development Compensation Linked to Performance 78
Slide 79: ESG Performance
ESG Performance 1. Senior Leaders as of Dec 1, 2021; Workforce as of May 31, 2021. Includes Petrogas. See "Forward-looking Information“ 79
Slide 80: ESG Goals
ESG Goals 1. Baseline calculation is adjusted for material changes in our asset base.; 2. Dependent on regulatory support and customer demand. See "Forward-looking Information“ 80
Slide 81: ESG Strategy Execution
ESG Strategy Execution The importance of stakeholder outreach Engaged Workforce Healthy and Safe Communities Successful Trusted Relationships with Indigenous Partners Strategy Execution Energy Partner of Choice for Customers Investor Confidence Mutually beneficial solutions lead to best outcomes 81
Slide 82: James Harbilas
James Harbilas Executive Vice President and Chief Financial Officer
Slide 83: Macro Set Up
Macro Set UP Macro Data Points Interest Rates Inflation Utilities Data Points Utilities Customer Affordability General Unemployment Population Growth Across Relative Energy Demand Across Across Utilities Jurisdictions Utilities Jurisdictions Utilities Jurisdictions High Average Low Cost of Gas Subst
Slide 84: Diversified, Lower-Risk Model
Diversified, Lower-Risk Model Focused on Durability and Steady Growth Diversified Asset Mix1 Investment Grade Credit Rating Strong Commercial Constructs Diversified model that operates long-life infrastructure Credit Ratings Commercial Contract Type2 assets that provide durable and growing EPS and F
Slide 85: The Road will be Paved with Pragmatism
The Road will be Paved with Pragmatism A Simple Our financial plan remains relatively simple. It’s paved with pragmatism, underpinned by Plan a journey of continuous improvement and is fueled by the pursuit of operational excellence. This includes: 1 2 3 4 Leveraging and Strengthening Cycling capita
Slide 86: Capital Allocation Priorities
Capital Allocation Priorities Acute Focus on Balancing the Multiple Items Needed to Achieve Corporate Priorities We maintain a disciplined approach to capital allocation within a self-funding model designed to deliver resilient and durable value for our stakeholders that compounds over time. Our cap
Slide 87: Growth Criteria
Growth Criteria Strenuous Internal Process for Capital Deployment Strong risk-adjusted returns Long-term earnings and Positioned for where the 1 exceeding hurdle rates and required 3 cash flow durability 5 market is heading, including margin of safety the energy evolution ▪ Any growth capital at Alt
Slide 88: Improve Financial Strength and Flexibility
Improve Financial Strength and Flexibility Large Balance Sheet Repair has Unfolded without any Equity Issuances, Focused on Completing the Journey • We continue to focus on further reducing our leverage ratios and increasing the margins of safety within the platform. • Medium-term goal of achieving
Slide 89: Dividend Philosophy and Expected Growth Trajectory
Dividend Philosophy and Expected Growth Trajectory • We believe returning capital to shareholders through regular and sustainable dividends is an important component of total shareholder returns and part of our long-term partnership with shareholders. Dividend • As AltaGas executes on its strategic
Slide 90: Hedging Philosophy and Update
Hedging Philosophy and Update • We believe that continuously and systematically de-risking our business is paramount to driving predictable and durable returns and creating the greatest long-term value for our stakeholders. • From a Midstream perspective we are focused on limiting our commodity expo
Slide 91: Treasury Update
Treasury Update A Strong Focus on Liquidity, Flexibility and a Proper Tenured Maturity Profile • Continuous focus on ensuring that AltaGas operates with a high degree of flexibility, including >$3 billion of liquidity. • Strong emphasis on having a properly tenured maturity ladder with no outsized b
Slide 92: 2021 Review and 2022 Outlook
2021 Review and 2022 Outlook
Slide 93: 2021 Key Accomplishments
2021 Key Accomplishments Strong Execution and Focus Positions AltaGas for Durable Long-term Value Creation Operational Priorities Enterprise and Financial Priorities Utilities On Track to meet the increased guidance ranges that were laid out in April for EBITDA ($1.475 - $1.525 billion) and Normaliz
Slide 94: 2022 Financial Guidance Highlights
2022 Financial Guidance Highlights ($CAD unless otherwise noted) Our corporate priorities are on delivering, de-levering, de-risking, investing and executing across all business segments. 6% 4% $1.45 - 1.55 $1.80-1.95 $1.50 -1.55B ~$995M Anticipated Normalized Annual Dividend Increase Anticipated No
Slide 95: 2022 Guidance – Management Assumptions
2022 Guidance – Management Assumptions Utilities ▪ Annual dividends increase by 6% to $1.06/share ▪ Normalized consolidated effective tax rate ~21% ▪ CAD/USD exchange rate ~1.26x Corporate ▪ Non-core asset sales considered on an opportunistic basis, nothing embedded in base guidance ▪ No common shar
Slide 96: Strong Growth in Base Business Underpins 2022 Outlook
Strong Growth in Base Business Underpins 2022 Outlook Anticipating normalized EBITDA1 and EPS will grow 2% and 9% Y/Y, respectively using the mid-points as growth in core operations offsets the ~$115MM 2021 contribution from abnormal weather in Q1 and the divested U.S. Transportation and Storage bus
Slide 97: Growth Continues in Core Business
Growth Continues in Core Business Utilities and Midstream Platforms Continue to be Positioned for Strong Growth in 2022 2022 Normalized EBITDA1 Puts and Takes ($ millions) 2022 Core Normalized EBITDA1 Growth Core Utilities Growth: ~10% at Midpoint Guidance 2021E 2022E Core Midstream Growth: 2021 Gui
Slide 98: 2022 Disciplined Capital Allocation
2022 Disciplined Capital Allocation Strong Organic Growth Drives Robust Risk-adjusted Returns ~$995 million in high-quality projects anticipated to drive earnings growth Capital Allocation Criteria: Identified Projects: Includes: Corp/Other ▪ Accelerated Pipe ▪ Facility Optimization & 2% Replacement
Slide 99: Illustrative EBITDA Seasonality
Illustrative EBITDA Seasonality Utilities seasonality driving quarterly EBITDA profile Consolidated Normalized Midstream Normalized Utilities Normalized EBITDA1 By Quarter EBITDA1 By Quarter EBITDA1 By Quarter 43% - 45% 35% - 37% 34% - 36% 29% - 31% 25% - 27% 25% - 27% 24% - 26% 22% - 24% 16% - 18%
Slide 100: Appendix: Non-GAAP Reconciliations
Appendix: Non-GAAP Reconciliations Normalized EBITDA1 Normalized Net Income1 Year Ended December 31, 2020 Year Ended December 31, 2020 Net income after taxes (GAAP financial measure) $572 Net income applicable to common shares (GAAP financial measure) $486 Add: Add (deduct) after-tax: Depreciation a
Slide 101: Appendix: Non-GAAP Reconciliations
Appendix: Non-GAAP Reconciliations Normalized Funds From Operations1 Year Ended December 31, 2020 • For reference, below is a reconciliation of normalized FFO for AltaGas’ most Cash from operations (GAAP financial measure) $773 recently completed fiscal year (2020). This reconciliation has been prov
Slide 102: Fundamentally Focused, Geared for Growth
Fundamentally Focused, Geared for Growth 2021 Investor Day