Uil Co. Ltd. · KRX:049520
Uil — Morgan Stanley Utilities Conference 2011
37 slides from Uil's conference presentation, Mar 10, 2011
Slide 1: Morgan Stanley Utilities Conference
EXHIBIT 99 Morgan Stanley Utilities Conference March 10, 2011 1 Morgan Stanley Conference
Slide 2: Important Note to Investors
Important Note to Investors Safe Harbor Provision 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, pla
Slide 3: UIL - Corporate Structure, Service Areas
UIL - Corporate Structure, Service Areas UIL Holdings Corporation Service Area Key UI SCG CNG Berkshire Overlapping Territory The United Illuminating Southern Connecticut Gas Connecticut Natural Gas Berkshire Gas Company Company (UI) (SCG) (CNG) (Berkshire) › Service territory: 335 sq › Service terr
Slide 4: Investment Highlights
Investment Highlights Attractive Regulated › Proven ability to earn allowed electric returns Electric and Gas › Highly experienced with Connecticut regulatory proceedings Utility › Constructive long-term rate plan for Berkshire in Massachusetts FERC-Regulated › 2010 earned composite return on equity
Slide 5: 2010 Accomplishments/Milestones
2010 Accomplishments/Milestones ü 13% increase in 2010 net income, excluding acquisition & transition related activities, compared to 2009 ü Transformative gas companies acquisition completed within six months of announcement ü GenConn Devon became operational ü GenConn Middletown - 92.4% complete a
Slide 6: Gas Company Integration
Gas Company Integration Closed on acquisition of Southern Connecticut Gas, Connecticut Natural Gas and Berkshire Gas Company on November 16, 2010 Working diligently internalizing the Transition Services Agreement (TSA) › Support services such as IT, Finance and Human Resources provided by Iberdrola,
Slide 7: 2012 Shared Services Identified Savings
2012 Shared Services Identified Savings Expected $11.6M of Identified Savings net 7 Morgan Stanley Conference
Slide 8: Regulatory proceedings and rate case appeals
SCG Potential Overearnings Generic ROE Proceeding › DPUC docket opened 12/28/10 › Scheduled: draft - 3/21/11, final - 4/13/11 › Scheduled: draft - 3/25/11, final - 4/13/11 SCG/CNG Rate Case Appeals UI Electric Decoupling › Pending at the CT Supreme Court › Continued until final decision on pilot to
Slide 9: 2011 Capex Update
2011 Capex Update ($ millions) Major Variance Explanations Central Facility New business main & services, system improvements, fleet, IT Capital costs relating to the integration of the gas companies, mainly IT-related The annual long-term capital spending update will be presented at the Fall EEI Fi
Slide 10: 2011 Electric Distribution & Transmission Capex Detail
2011 Electric Distribution & Transmission Capex Detail Electric distribution investments Electric transmission investments 12% 20% 19% 27% 4% 26% 31% 50% 11% 10 Morgan Stanley Conference
Slide 11: 2011 Gas Distribution Capex Detail
2011 Gas Distribution Capex Detail Gas distribution investments 3% 8% 22% 8% 12% 47% 11 Morgan Stanley Conference
Slide 12: Examples of Current Distribution Projects
Examples of Current Distribution Projects Central Facility - UI Office & Splice Chamber Remediation Operations Building › Consolidate all UI “Work Centers” onto a single › Rebuild deteriorated underground splicing chambers site referred to as the Central Facility › Under construction › Under constru
Slide 13: Near-term Electric Transmission Reliability Upgrades
Near-term Electric Transmission Reliability Upgrades Grand Avenue 115 kV Switching New Shelton 115/ 13.8 kV Station Rebuild Substation › Addresses short circuit capability issues and › Meets Greater Shelton area load growth aged/obsolete infrastructure › In Planning › Under construction › Planned in
Slide 14: UI Transmission - NEEWS Investment
UI Transmission - NEEWS Investment UI Participation in CL&P Project: › UI’s portion of investment: greater of $60M or 8.4% of CL&P’s costs for the CT portions … › 8.4% currently estimated at approximately $69M (increased from original estimate of $60M) › First deposit made in December 2010 Refreshed
Slide 15: Renewable-Enabling Transmission
Renewable-Enabling Transmission Significant Region-Wide Need: Potential Solutions Under Study › RPS requirement > 3x current › Need will likely be satisfied by a portfolio available renewables* of projects › CT requirement is > UI’s entire load › One promising example is shown below › Gap will be fi
Slide 16: UI GenConn Energy
UI GenConn Energy 50/50 Joint Venture between UI and NRG Devon Facility › Operating › Contractual requirements met on 9/10/10 Middletown Facility › 95% complete as of 2/28/11 › Expected to be operational in June 2011 16 Morgan Stanley Conference
Slide 17: Updated Near-Term Average Rate Base Profile
Updated Near-Term Average Rate Base Profile Rate Base (Excluding GenConn Equity Investments): 36% 38% 37% 40% 42% 43% 1% 3% 24% 24% 23% 7% 5% 22% 23% 22% 39% 40% 35% 38% 28% 30% Electric distribution Electric transmission CTA Gas distribution* GenConn Equity Investments: UI’s 50% Share ($M): 2010A 2
Slide 18: Financial Results
Financial Results 18 Morgan Stanley Conference
Slide 19: 2010 vs. 2009 Financial Results
2010 vs. 2009 Financial Results $M Amounts may not add due to rounding. 19 Morgan Stanley Conference
Slide 20: 2010 Financial Results - Details
2010 Financial Results - Details Electric distribution, CTA & other › 12% increase in net income compared to ’09 » Increased operating income due to rate increase effective 1/1/10, partially offset by lower CTA rate base » Earnings of $1.2M from UI’s equity investment in GenConn » Average earned ROE
Slide 21: Bonus Depreciation 2010 & 2011
Bonus Depreciation 2010 & 2011 Cash* EPS* 2010A 2011P $97 million $ (0.05) Efficient use of cash benefits from bonus depreciation › Expected pension contributions of $65-$75M to the electric and gas pension plans in 2011 › Reduces pension costs and increases rate base Expect no need for external equ
Slide 22: Debt Maturity and Liquidity Profile
Debt Maturity and Liquidity Profile Near-Term Debt Maturities Liquidity Overview (12/31/10) ($M) ($M) * UI Equity Bridge Loan UIL Debt retired 2/15/11 No Expect no need for external equity for at least the next 3 years * To be remarketed Amounts may not add due to rounding. 22 Morgan Stanley Confere
Slide 23: Credit Ratings
Credit Ratings Issuer S&P Moody’s BBB Baa3 UIL Holdings (Stable) (Stable) United BBB Baa2 Illuminating (Stable) (Stable) BBB Baa2 SCG (Stable) (Stable) BBB Baa1 CNG (Stable) (Stable) BBB Baa2 Berkshire (Stable) (Stable) Maintenance of investment grade credit ratings is an important objective 23 Morg
Slide 24: Assumptions; 2011 Operational Snapshot
Assumptions › Bonus depreciation is expected to have a net impact of ($0.05) per share › Includes one-time costs for the transition of the gas distribution business support services from IUSA, as well as the on-going integration costs 2011 Operational Snapshot › Integration of all of the regulated b
Slide 25: Assumptions; 2012 Operational Snapshot
Assumptions › Bonus depreciation is expected to have a net impact of ($0.10) per share 2012 Operational Snapshot › Integration of all of the regulated businesses with an emphasis on process integration initiatives and best practices › Completely exiting the TSA › Continued focus on management of O&M
Slide 26: Closing Remarks
Closing Remarks Ø Closed on gas company acquisitions & moving forward with integration activities with 2011 being a transition year Ø GenConn Devon operational - Middletown expected to be fully operational by June 2011 Ø Expecting to earn allowed returns on all regulated businesses on an aggregate b
Slide 27: Q&A
Q&A 27 Morgan Stanley Conference
Slide 28: Appendix
Appendix 28 Morgan Stanley Conference
Slide 29: Morgan Stanley Conference
29 Morgan Stanley Conference
Slide 30: Regulatory Overview
Regulatory Overview › Connecticut Department of Public Utility Control (DPUC) › Currently operating under rates established in 2009* Distribution › Allowed ROE of 8.75%, based on a capital structure of 50.0% equity › Federal Energy Regulatory Commission (FERC) › Transmission trued up on an annual ba
Slide 31: UIL Base 2011-2019 CapEx Forecast
UIL Base 2011-2019 CapEx Forcast * Updated - February 23, 2011 ** Per November ’10 EEI presentation. UI base 10-yr (2010-2019) capex forecast, including GenConn - $2.1B. Amounts may not add due to rounding. 31 Morgan Stanley Conference
Slide 32: Average Rate Base 2010 - 2015 Current Forecast vs. EEI Forecast
Average Rate Base 2010 - 2015 Current Forecast vs. EEI Forecast ($M) $2,326 $2,404 $2,246 $2,246 $2,500 $2,087 $2,093 $2,166 $1,920 $1,930 $1,791 $2,000 $1,777 $882 $811 $885 $788 $869 $799 $777 $863 $1,500 $751 $766 $857 $1,025 $514 $538 $529 $561 $1,000 $496 $511 $422 $435 $405 $405 $401 $407 $500
Slide 33: Expected Impacts of Bonus Depreciation - 2010 & 2011
Expected Impacts of Bonus Depreciation - 2010 & 2011 Amounts may not add due to rounding. 33 Morgan Stanley Conference
Slide 34: Final 338(h)(10) Cash Value
Final 338(h)(10) Cash Value ($ Millions) 34 Morgan Stanley Conference
Slide 35: Region-Wide RPS Obligations
Region-Wide RPS* Obligations Region-Wide RPS Obligation thru 2020: Region-Wide Compliance Gap (v. “existing” renewable resources**) forecasted/estimated at ~ 18,000GWh › Unlikely to be satisfied by renewables currently in the ISO-NE queue › Will require significant additional transmission Satisfacti
Slide 36: CT RPS Requirements
CT RPS Requirements Connecticut RPS Requirements (Percentage of Retail Load) Class I resources include energy derived from solar, wind, fuel cell, methane gas from landfills, ocean thermal, wave, tidal, run-of-river hydropower (<5MW, began operation after July 1, 2003), sustainable biomass (NOx emis
Slide 37: Slide 37
UIL Holdings — Morgan Stanley Utilities Conference 2011 on 6ix