Slide 1: 4Q & FY 2012 Earnings Presentation
4Q & FY 2012 Earnings Presentation February 22, 2013 Exhibit 99.2
Slide 2: Note to Investors
Note to Investors Certain statements contained herein, regarding matters that are not historical facts, are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). These include statements regarding management’s intentions, plans, beliefs, expectations or for
Slide 3: 2012 Accomplishments
Exceeded 2012 target of converting 10,200 customers to natural gas heat Converted 11,180 customers 9% above target, 35% above 2011 level Continued success in executing on 10-year capital expenditure plan Driving long-term earnings growth Received regulatory approval of GenConn’s 2013 revenue require
Slide 4: FY & 4Q '12 Earnings Summary
FY & 4Q ’12 Earnings Summary FY ‘12 net income of $103.6M, or $2.02 per diluted share, an increase of $3.9M, or $0.07 per diluted share, compared to FY ‘11 Gas distribution earnings were significantly affected by warmer weather in ’12 – reduced sales volumes compared to ‘11 Focused on short-term cos
Slide 5: Gas Operations: Sales volume declined due to warmer weather
Gas Operations Sales volume has declined due to warmer weather Weighted average heating degree days in ‘12 were less than normal and the previous year * Amounts may not add due to rounding.
Slide 6: Gas Operations: Sales volume declined due to lower net use per customer
Gas Operations Sales volume has declined due to lower net use per customer The average normalized net use per customer has declined on an average of 1.5% annually since last rate case decision in ’09, when rate structure was established, resulting in a gross margin decline of approximately $0.09 per
Slide 7: Strategic Considerations - Gas Operations
Strategic Considerations - Gas Operations Need to address the declining net use per customer at the Connecticut gas companies Considerations for regulatory actions Request regulatory approval to combine Connecticut gas companies (CNG and SCG) and for approval of a decoupling mechanism as proposed by
Slide 8: Gas Conversions
As of year-end ‘12, converted 19,480 customers Gas Conversions Converted 11,180 customers in ‘12 2011-2013 target is to convert 30,000-35,000 households and businesses to gas heating 2013 target is 12,200 conversions 2014 target is to convert 25% more than 2013 target 2014-2016 target is to convert
Slide 9: Gas Conversions (cont.)
Gas Conversions (cont.) * Each new residential customer conversion is anticipated to generate approximately $280-$315 of distribution net income annually – based on an anticipated conversion mix (low use, on-main, off-main) Average approximate annual usage per conversion – 90-125 thousand cubic feet
Slide 10: Comprehensive Energy Strategy
On February 19, 2013, Governor Malloy and the Department of Energy & Environmental Protection (DEEP) issued the Final CES Document provides a foundation for informed policy, regulatory and legislative decisions Covers all fuels in all sectors with a planning horizon out to the year 2050 Five major p
Slide 11: State Regulatory Update: Electric Distribution Rate Case
State Regulatory Update Electric Distribution Rate Case UI filed with PURA on February 15, 2013 Need for Rate Relief To recover past and fund future capital investments necessary to meet the needs of our customers for safe and reliable service Need for a more competitive return on equity to be more
Slide 12: State Regulatory Update (cont.)
State Regulatory Update (cont.) GenConn PURA approved the 2013 revenue requirements of $33.1M and $40.2M for GenConn Devon and Middletown, respectively In November 2012, PURA opened a docket to investigate performance in restoring services after Superstorm Sandy Hearings scheduled for May 2013 Final
Slide 13: FERC ROE Complaint
FERC ROE Complaint * Challenge to Regional Transmission Base ROE: “206” complaint filed at FERC claiming that current approved base ROE on transmission investment of 11.14% is not just and reasonable FERC has set the matter for hearing In January 2013, FERC trial staff filed testimony supporting a b
Slide 14: Service Territory Economic Update
Service Territory Economic Update * Seasonally adjusted unemployment rates as of December 2012(1) CT – 8.6% MA – 6.7% National – 7.8% (7.9% for January 2013) Unemployment rates in the largest service areas and cities as of December 2012(2) Bridgeport labor market areas (LMAs) 7.2%, (City of Bridgepo
Slide 15: FY & 4Q '12 Financial Results by Business
FY & 4Q ‘12 Financial Results by Business * Amounts may not add due to rounding.
Slide 16: FY & 4Q '12 Financial Results - Details
FY & 4Q ‘12 Financial Results - Details * Consolidated UIL earnings FY ‘12 consolidated earnings of $103.6M, or $2.02 per diluted share, an increase of $3.9M, or 4% year over year 4Q ‘12 consolidated earnings of $28.8M, or $0.56 per diluted share, an increase of $7.5M, or 35% over 4Q ‘11 Electric di
Slide 17: Electric distribution, CTA, GenConn & Other (cont.)
* Electric distribution, CTA, GenConn & Other (cont.) 4Q ’12 earnings of $9.4M, or $0.18 per diluted share, an increase of $6.7M, or 248% over 4Q ’11 Net income increase primarily attributable to: Reduced O&M expenses Lower outside services compared to 4Q ‘11 - additional system restoration costs we
Slide 18: FY & 4Q '12 Financial Results - Gas distribution
FY & 4Q ‘12 Financial Results - Details * Gas distribution FY ‘12 earnings of $32.2M, or $0.63 per diluted share, a decrease of $11.6M, or 26% year over year Net income decrease primarily attributable to: Reduced sales volume, caused by warmer weather and reduced customer usage, slightly offset by c
Slide 19: Gas distribution (cont.) and Corporate
FY & 4Q ‘12 Financial Results - Details * Gas distribution – cont. 4Q ‘12 earnings of $14.3M, or $0.28 per diluted share, an increase of $0.2M, or 2% over 4Q ’11 Increased gross margin attributable to increased sales volume of approximately $6.7M, or $0.08 per diluted share, due to colder weather, w
Slide 20: Debt Maturities & Liquidity
Debt Maturities & Liquidity * Evaluating the impact of CT’s Comprehensive Energy Strategy, regulatory outcomes, current business plans and market conditions to determine potential timing and need for external equity Available Liquidity Debt Maturities ($M) Amounts may not add due to rounding. * Rema
Slide 21: 2013 Earnings Guidance
2013 Earnings Guidance * Assumptions Detailed assumptions for each business unit follow. Below are highlights affecting 2013 guidance: Normal weather – warmer weather in 2012 negatively impacted earnings by $0.14 per diluted share, net of weather insurance Pension expense increase due to higher disc
Slide 22: 2013 Guidance Assumptions: Electric Distribution, CTA & Other
s Guidance Assumptions Electric Distribution, CTA & Other The ability to earn on increasing rate base and increased capital expenditures for infrastructure replacement and system hardening Increased total pension and postretirement costs of approximately $4.2M, pre-tax, or $0.05 per diluted share –
Slide 23: 2013 Earnings Guidance Assumptions: Gas Distribution
2013 Earnings Guidance Assumptions - cont. Gas Distribution ‘11 & ‘12 gas conversions are expected to add approximately $0.10 per diluted share Assumes normal weather in ’13 ‘12 was negatively impacted compared to normal weather, net of weather insurance, of approximately $0.14 per diluted share Inc
Slide 24: 2013 Earnings Guidance Assumptions: Corporate
2013 Earnings Guidance Assumptions - cont. Corporate Improvement is due to the returns on corporate capital assets, primarily software systems used by, and charged to, the operating companies *
Slide 25: Q&A
Q&A