Atco Ltd. Class I · TSX:ACO.X
Atco Ltd. Class I — BMO 11th Annual Infrastructure & Utilities Conference 2014
24 slides from Atco Ltd. Class I's conference presentation, February 2014
Slide 1: BMO 11th Annual Infrastructure & Utilities Conference Investor Presentation
BMO 11th Annual Infrastructure & Utilities Conference Investor Presentation Chad Gareau Vice President, Finance & Treasury February 2014
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER Statements made by representatives for ATCO Ltd. and information provided in this presentation may be considered forward-looking statements. By their nature, such statements are subject to numerous known and unknown risks and uncertainties and therefore actual results may differ mat
Slide 3: The ATCO Group of Companies
THE ATCO GROUP OF COMPANIES Alberta-based ATCO Group is a $16 billion enterprise engaged in: • Utilities (pipelines, natural gas and electricity transmission and distribution) • More than $7 billion of rate base in 2012 • Energy (power generation, natural gas gathering, processing, storage and liqui
Slide 4: Organizational Structure
ORGANIZATIONAL STRUCTURE ATCO ~$6 billion (ACO.X / ACO.Y) equity capitalization Canadian Utilities ~$10 billion 53.1% (CU / CU.X) equity capitalization CU Inc. ~$5 billion 100% debt capitalization 100% 100% 100% 24.5% 75.5% Utilities Energy Australia Structures & Logistics 4
Slide 5: Distinct Yet Complementary Businesses
DISTINCT YET COMPLEMENTARY BUSINESSES 5
Slide 6: Delivering Long Term Value
DELIVERING LONG TERM VALUE Business Model and Organizational Structure Track Record of Success and Business Activity Update Finance Plan 6
Slide 7: Track Record of Success: Earnings Growth
TRACK RECORD OF SUCCESS: EARNINGS GROWTH ATCO Canadian Utilities Adjusted Earnings ($millions) Adjusted Earnings ($millions) 7
Slide 8: Structures & Logistics Business Activity
STRUCTURES & LOGISTICS BUSINESS ACTIVITY • Modular Structures continues to experience strong earnings from North America because of higher project activity, higher fleet sales and higher rental rates. • High activity levels in North American Modular Structures operations are expected to continue on
Slide 9: Energy Business Activity
ENERGY BUSINESS ACTIVITY ATCO Power • Focused on continued operational excellence with strong earnings contributions from base load generation in Alberta • Exploring the development of natural gas-fired generating facilities for Alberta, Saskatchewan and British Columbia • Pursuing large-scale hydro
Slide 10: Australia Business Activity
AUSTRALIA BUSINESS ACTIVITY • Focused on building a diversified energy infrastructure and services business in Australia in the same way we built our diversified business in Alberta • 3 power plants with 300 MW net generating capacity • 3 modular structures manufacturing facilities • Western Austral
Slide 11: Utility Business Activity
UTILITY BUSINESS ACTIVITY Utility Capital Expenditure Leads to Earnings Growth Forecast of Approximately $6 Billion 11
Slide 12: Electric Transmission Significant Projects
ELECTRIC TRANSMISSION SIGNIFICANT PROJECTS NW Fort McMurray Transmission Development • 2 new substations and 140km of 240kV line • Construction to commence Q1 2014, estimated completion in 2015 • Estimated project cost $370 million (excluding IDC) North East Region Transmission Development • Numerou
Slide 13: Utilities Segment
UTILITIES SEGMENT ATCO Pipelines provides natural gas transportation services to producers, industrial customers and gas distribution companies with high-pressure pipelines in Alberta. •217 natural gas transmission customers •Delivers 3.8 billion cubic feet of natural gas per day to customers; owns
Slide 14: Delivering Long Term Value
DELIVERING LONG TERM VALUE Business Model and Organizational Structure Track Record of Success and Business Activity Update Finance Plan 14
Slide 15: Financial Strength
FINANCIAL STRENGTH Strong Credit Rating Credit Rating Upgrade • Standard & Poor’s Upgraded Credit Rating to A- in 2013 15
Slide 16: Finance Plan
FINANCE PLAN •Capital growth will be financed with a combination of cash flow, dividend reinvestment program and prudent access to debt and preferred share markets •Approximately ~$3.7 billion in debt and preferred capital markets financings in last 2 ½ years •Canadian Utilities Limited initiated di
Slide 17: Delivering Long Term Value
DELIVERING LONG TERM VALUE 17
Slide 18: Appendix
Investor Presentation Appendix February 2014
Slide 19: Strategy
STRATEGY •Reliable earnings and cash flows with opportunities for premium returns •Growing the business through diversification and global expansion •Conservative financial policies •Commitment to strong investment grade credit ratings ATCO Earnings Mix 2012 Canadian Utilities Earnings Mix 2012 *Bas
Slide 20: Track Record of Success: Dividend Growth
TRACK RECORD OF SUCCESS: DIVIDEND GROWTH ATCO More than 20 Consecutive Years of Dividend Growth Canadian Utilities More than 40 Consecutive Years of Dividend Growth *2014 ATCO and Canadian Utilities dividend is represented at an annualized rate; first quarter dividend of $0.215 and $0.2675, respecti
Slide 21: Utilities Segment: ATCO Electric
UTILITIES SEGMENT •240,000 customers in 245 communities, primarily in Alberta •76,000 km of power lines •8.75% ROE, 37% Equity (Transmission), 39% Equity (Distribution) •2012 Transmission mid-year rate base of ~$2.8 billion, Distribution mid-year rate base of ~$1.1 billion •~$1.3 billion in Transmis
Slide 22: Utilities Segment: ATCO Gas
UTILITIES SEGMENT ATCO Gas provides natural gas distribution to more than one million customers in nearly 300 communities primarily in Alberta •Owns and operates nearly 38,000 km of distribution pipelines •Weather deferral account mitigates volumetric risk •8.75% regulated ROE, 39% Equity •Mid-year
Slide 23: Financial Strength
FINANCIAL STRENGTH •~$1.9 billion in committed corporate credit facilities •Focused on maintaining financial metrics that mirror approved regulated capitalization ratios at CU Inc. Canadian Utilities Inc. Canadian Utilities Balance Sheet Balance Sheet *Based on Third Quarter, 2013 Financial Results
Slide 24: BMO 11th Annual Infrastructure & Utilities Conference
BMO 11th Annual Infrastructure & Utilities Conference Investor Presentation Chad Gareau Vice President, Finance & Treasury February 2014
ATCO — BMO 11th Annual Infrastructure & Utilities Conference 2014 on 6ix