INVESTOR PRESENTATION FEBRUARY 2020
LEGAL DISCLAIMER Statements made by representatives for ATCO Ltd. and Canadian Utilities Limited 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 materially from those currently anticipated. ATCO Ltd. and Canadian Utilities Limited disclaim any intention or obligation to update or revise such statements. Due to the nature of the Corporation’s operations, quarterly revenues and earnings are not necessarily indicative of annual results. INVESTOR PRESENTATION FEBRUARY 2020
TABLE OF CONTENTS 1 ATCO Group Overview Page 5 2 Canadian Utilities Limited Page 11 Regulated Utility Businesses Page 15 Energy Infrastructure Businesses Page 18 3 Other ATCO Investments Page 27 Structures & Logistics Page 29 Neltume Ports Page 39 Commercial Real Estate Page 47 4 Appendix Page 49 INVESTOR PRESENTATION FEBRUARY 2020
GROUP OVERVIEW 5
ORGANIZATIONAL STRUCTURE (TSX: ACO.X / ACO.Y) ~$6 billion common equity capitalization INVESTOR PRESENTATION FEBRUARY 2020 6
TRACK RECORD OF SUCCESS: EARNINGS GROWTH ATCO Canadian Utilities $607 million $355 million in 2018 in 2018 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 INVESTOR PRESENTATION FEBRUARY 2020 7
CONTINUED DIVIDEND GROWTH ATCO Canadian Utilities $1.74 $1.74 per share per share 48 years of annual dividend increases* 27 years of annual dividend increases* Longest track record of annual dividend increases of any Canadian publicly traded company 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 * On January 9, 2020, ATCO declared a first quarter dividend of $0.4352 per share, or $1.74 per share annualized. *On January 9, 2020, Canadian Utilities declared a fourth quarter dividend of $0.4354 per share, or $1.74 per share annualized. INVESTOR PRESENTATION FEBRUARY 2020 8
ATCO CREDIT RATINGS DBRS S&P INVESTOR PRESENTATION FEBRUARY 2020 9
CANADIAN UTILITIES ENERGY INFRASTRUCTURE 11
ORGANIZATIONAL STRUCTURE Canadian Utilities (TSX: CU / CU.X) CU Inc. ~$11 billion common ~$8 billion equity capitalization debt capitalization INVESTOR PRESENTATION FEBRUARY 2020 12
HIGH QUALITY EARNINGS 2018 ADJUSTED EARNINGS 86% Regulated Earnings 14% Long-term Contracted Earnings INVESTOR PRESENTATION FEBRUARY 2020 13
GROWTH: Q3 2019 YTD EARNINGS $432M $420M Q3 2018 YTD Q3 2019 YTD INVESTOR PRESENTATION FEBRUARY 2020 14
REGULATED UTILITIES ELECTRIC TRANSMISSION ELECTRIC DISTRIBUTION $5.3B Rate Base $2.7B Rate Base NATURAL GAS TRANSMISSION INTERNATIONAL NATURAL GAS NATURAL GAS DISTRIBUTION $1.8B Rate Base DISTRIBUTION $2.8B Rate Base $1.2B Rate Base INVESTOR PRESENTATION FEBRUARY 2020 15
RATE BASE GROWTH Mid-Year Rate Base Regulated Capital Investment Expected to Grow 3%- 4% per year $1.2B $1.2B $1.1B $11.9B $12.5B $12.9B $13.4B $1.1B $1.2B $10.3B $1.1B $8.9B $1.5B $2.2B $2.3B 2013 2014 2015 2016 2017 2018 2019 2020 2021 2013 2014 2015 2016 2017 2018 2019 2020 2021 INVESTOR PRESENTATION FEBRUARY 2020 16
UTILITIES ACHIEVE TOP TIER RETURNS ON EQUITY 11.2% 10.9% CU Inc.’s average ROE +2.3% above average AUC approved over last 10 years (+2.8% over last 3 years) 8.7% 8.7% 8.6% 8.4% 10-Year Average 3-Year Average (2009 - 2018) (2016 - 2018) CU Inc. Average Alberta Utility Average (excluding CU) AUC Approved (1) Alberta Utility Average (excluding CU) is a simple average and includes AltaGas, AltaLink, Enmax Distribution, Enmax Transmission, EPCOR Distribution, EPCOR Transmission, and Fortis Alberta (2) CU Inc. Average is a simple average and includes Electric Distribution, Electric Transmission, Natural Gas Distribution, and Natural Gas Transmission. INVESTOR PRESENTATION FEBRUARY 2020 17
ENERGY INFRASTRUCTURE BUSINESSES ELECTRICITY GENERATION ELECTRICITY GENERATION ELECTRICITY GENERATION CANADA AUSTRALIA MEXICO 24 MW 176 MW 44 MW INDUSTRIAL WATER SERVICES HYDROCARBON STORAGE NATURAL GAS STORAGE CANADA CANADA CANADA 85,200 m 3 /day 400,000 m 3 52 PJ INVESTOR PRESENTATION FEBRUARY 2020 18
CAPITAL RECYCLING: CANADIAN ELECTRICITY GENERATION SALE • Sold our entire Canadian fossil fuel- based power generation portfolio for aggregate proceeds of $821 million in September 2019 • Coal-fired and natural gas-fired electricity generation assets located in Alberta, British Columbia, Saskatchewan and Ontario, with generating capacity of approximately 2,300 MW INVESTOR PRESENTATION FEBRUARY 2020 19
CANADIAN UTILITIES DIRECT GREENHOUSE GAS EMISSIONS INVESTOR PRESENTATION FEBRUARY 2020 20
ELECTRICITY GENERATION POST SALE Highly Contracted Expanding Renewable Portfolio Generation Capabilities Merchant 24 MW (10%) Hydro 59 MW (24%) Long-Term Natural Gas Contracted 185 MW 220 MW (76%) (90%) INVESTOR PRESENTATION FEBRUARY 2020 21
ELECTRICITY GENERATION POST SALE CAPACITY RUN-OF-RIVER HYDRO SHARE (MW) 1 OLDMAN RIVER 24 2 VERACRUZ 35 NATURAL GAS 3 SAN LUIS POTOSI 9 4 KARRATHA 86 5 OSBORNE 90 TOTAL 244 INVESTOR PRESENTATION FEBRUARY 2020 22
CAPITAL RECYCLING: ALBERTA POWERLINE SALE • Sold Alberta PowerLine Limited Partnership (APL) in December 2019 for total proceeds to CU of approximately $220 million (plus assumption of $1.4 billion of APL debt) • Seven Indigenous communities acquired 40 per cent equity interest in APL • Canadian Utilities will remain the operator of APL over its 35-year contract with the Alberta Electric System Operator INVESTOR PRESENTATION FEBRUARY 2020 23
CAPITAL INVESTMENT APPROACH • Disciplined and prudent approach • Utility and utility-like assets: regulated or long-term contracted • “A” range credit rating focus • The ability to leverage our operating model • Geographic diversification: Outside Alberta, North America, Latin America, & Australia INVESTOR PRESENTATION FEBRUARY 2020 24
CANADIAN UTILITIES SUMMARY International Natural Gas Distribution Natural Gas Transmission Natural Gas Distribution Electricity Transmission Electricity Distribution INVESTOR PRESENTATION FEBRUARY 2020 25
OTHER ATCO INVESTMENTS 27
ATCO FOCUS: GLOBAL ESSENTIAL SERVICES INVESTOR PRESENTATION FEBRUARY 2020 28
STRUCTURES & LOGISTICS Modular Structures Workforce Housing & Space Rentals • Permanent modular construction • Mobile office trailers • Relocatable modular buildings Logistics and Facility O&M Services Lodging & Support Services • Facility operations • Lodging, catering • Maintenance services • Maintenance • Emergency management & disaster • Waste management response services INVESTOR PRESENTATION FEBRUARY 2020 29
STRUCTURES & LOGISTICS ADJUSTED EARNINGS $23M $15M $6M 2017 2018 Q3 YTD 2019 INVESTOR PRESENTATION FEBRUARY 2020 30
STRUCTURES & LOGISTICS Modular Structures increased rental utilization by 14 per cent since 2016 71% 70% 63% 57% 2016 2017 2018 Q3 YTD 2019 INVESTOR PRESENTATION FEBRUARY 2020 31
STRUCTURES & LOGISTICS Winning key Modular Structures contracts • LNG Canada Workforce Accommodation 4,500 person camp construction underway to house construction workers on LNG Canada’s facility in Kitimat, B.C. • Coastal Gaslink Pipeline 3 camps serving providing operational and support services for pipeline workers across northern B.C. • Chico, California fire disaster relief 1,500 person camp for fire disaster relief efforts near Paradise, California Tuscan Ridge Lodge, Paradise, California INVESTOR PRESENTATION FEBRUARY 2020 32
STRUCTURES & LOGISTICS Diversifying the global customer base into non-traditional modular markets such as public education facilities, high density urban residential housing, hotels and correctional facilities $65M $44M Dandenong North Primary School Thomastown School Victoria, Australia Victoria, Australia Melbourne Girls Grammar 130-student dormitory Melbourne, Australia Langley, Canada INVESTOR PRESENTATION FEBRUARY 2020 33
ATCO SABINCO (ULTRAMAR PARTNERSHIP) New 100,000 sq. ft. Chilean Manufacturing Facility further cements the business foundation we are re-establishing in South America. Arica Iquique Antofagasta 2% 7% Copiapó Mining 12% Curauma Energy Santiago Infrastructure Construction 47% Ranked #3 in Overall Modular Construction 15% vs Main Competitors Industrial 8 Sales Talcahuano Offices Others Puerto Montt 17% Diversified customer base led by copper mining Ranked #2 in Space Rental Market Share vs Main Competitors INVESTOR PRESENTATION FEBRUARY 2020 34
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