Uil Co. Ltd. · KRX:049520
Uil — Shields & Company Midwest Seminar 2009
35 slides from Uil's conference presentation, Apr 7, 2009
Slide 1: Shields & Company Midwest Seminar
Shields & Company Midwest Seminar April 7, 2009 - Chicago TRANSFORMING INVESTMENT INTO FUTURE VALUE EXHIBIT 99.1
Slide 2: Forward-looking statements
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 forecasts for the fut
Slide 3: Who We Are: UI Service Territory in Connecticut
UI Service Territory in Connecticut square miles 21% of Connecticut’s population Who We Are…….. The United Illuminating Company, a wholly owned subsidiary of UIL Holdings Corporation › Electric Transmission and Distribution Utility › 324,000 Customers in Southwest Connecticut › $2.1 Billion Total As
Slide 4: UIL Structure
UIL Holdings Corporation The United Illuminating Company Retail Distribution Wholesale Transmission GenConn Energy LLC 50% UIL Structure
Slide 5: Today's Message
Today’s Message Ш Reduced 2009 capital expenditures due to current market conditions Ш Changed capital plan with shareowners and customers in mind Ш Issuing equity below book value would dilute the Company value, impacting new & existing shareowners Ш Will closely monitor capital markets
Slide 6: Strategic Initiatives
* 2009-2017 Strategic Initiatives Ш Previously announced - plan for $75-$100 million of equity in 2009 › Universal shelf registration in place on March 11, 2009 Ш Significantly reduced 2009 capital expenditures until financial markets improve › Flexibility 4 Allows UIL to issue equity at a time dete
Slide 7: Not Much Has Changed
Not Much Has Changed Ш Transmission & Distribution › Customer, compliance, & standards projects 4 We have to do them › Aging infrastructure projects 4 We will do them 4 Timing issues › Capacity projects 4 We will do them 4 Timing issues - change in peak load forecasts Ш GenConn Peaking Generation ›
Slide 8: Types of Projects Deferred
Types of Projects Deferred : Ш Capacity › New substations › Load relief projects › Substation rebuilds Ш IT Related - software upgrades and hardware refresh Ш Infrastructure › Substation removal › Cable replacement programs › Splice chamber replacements › Pole replacements $ millions
Slide 9: What's Next in Cap Ex? Major Projects on the Horizon
What’s Next in Cap Ex? Major Projects on the Horizon Ш Substations - - New, Rebuild/Expand Existing Substations › New - Shelton, Union Avenue, Orange, Fairfield › Rebuild/Expand - Grand Avenue, Baird, Broadway II Ш Infrastructure › Splice chambers › Cables › Poles › Line transformers Ш Central Facil
Slide 10: Middletown-to-Norwalk 345kV Transmission Project
Miles of 345kV OH Miles of 345kV OH Miles of 2 - 345kV “XLPE” UG Miles of 345kV OH Miles of 345kV OH UI to Own & Operate 345kV Singer Substation and 5.6 Miles of 345kV XLPE UG Cable Miles of 2 - 345kV “XLPE” UG Middletown-to-Norwalk 345kV Transmission Project
Slide 11: Average Rate Base 2007-2009
Note: 2009 average rate base projections based on the current 2009 capital expenditure estimate * Stranded costs - fully amortized by 2013 Blended Allowed ROE: 10.1% - 10.2% Average Rate Base 2007-2009
Slide 12: UI/NRG JV Strategic Alignment
UI/NRG JV Strategic Alignment Regulatory Compliance GenConn Energy LLC Experienced developer/generator Existing sites & projects Queued interconnections Electric distribution company Strong relationship with policy makers Strategic realignment w/ long-term capex program COS regime operations 50% 50%
Slide 13: GenConn Energy - Peaking Generation
Devon & Middletown Locations $400 Million* Approximate Cost Anticipated 1H ‘09 Financing CL&P Off Taker 2010 & 2011 COD 400 MW Capacity GE LM6000 Technology Project Development Highlights Partnership between UI and NRG * GenConn estimates that project costs may increase over the proposal it had orig
Slide 14: Renewable Portfolio Standards
CT Current Class I Standards** ~ 7% by 2010 ~ 12.5% by 2015 ~ 20% by 2020 Plan to Meet Current Standards*** Projects needed to achieve - To Be Determined New England-wide RPS and Efficiency Requirements* ~ 14% by 2012 (20,000 GWh) ~ 21% by 2016 (30,000 GWh) ~ 28% by 2020 (41,000 GWh) * Includes RPS
Slide 15: Distribution Rate Case - Docket #08-07-04
Distribution Rate Case - Docket #08-07-04 Approved : Ш Rates set for 2009 & 2010 Ш Revenue increase : › $6.1 million increase in 2009 4 Coupled with previously implemented $7.2 million increase from our last rate decision, the change is a revenue reduction of $0.97 million, or 0.08% Ш A one-time cus
Slide 16: Distribution Rate Case - cont.
Distribution Rate Case - cont. Ш Favorable Items › Implemented UI’s proposed revenue decoupling methodology › Approved 90% of proposed distribution capital program expenditures › Transferred a portion of uncollectibles and other expense to Generation Services Charge › Established a $10.2 million reg
Slide 17: Financing Plan
Financing Plan Ш Debt › Successfully remarketed $103.5 million in Pollution Control Revenue Bonds › Refinancing $51 million maturing debt in 2009 › DPUC approved an application to afford UI flexibility to market $92 million outstanding tax-exempt bonds - redeem & reissue without insurance › Expect t
Slide 18: Financing Plan - cont.
Financing Plan - cont. Ш Liquidity › UIL & UI have a $175 million joint short-term credit facility due December 2011 4 UI had $148 million outstanding as of December 31, 2008 Ш GenConn financing $40 million - Repayment expected in 1H ‘09 Ш Tax exempt bond $25 million - Remarketed March 2009, paid do
Slide 19: Strong Transmission Earnings in 2008
Ш Strong transmission earnings, increase of 88% over 2007 Ш Distribution earnings continued to be impacted by lower kilowatt hour sales, increased uncollectibles expense, increased interest expense from higher borrowing, and mark-to- market adjustments to non-qualified pension investments Strong Tra
Slide 20: Earnings Guidance - as of March 11, 2009
2008 Actual 2009 EPS Guidance Total United Illuminating Company $2.03 $1.90 - $2.10 Distribution, CTA & Other 1.09 0.90 - 1.10 Transmission 0.94 0.95 - 1.05 Corporate (0.10) (0.12) - (0.07) Total Continuing Operations $1.93 $1.80 - $2.00 Discontinued Operations - Xcelecom (0.01) Total UIL $1.92 expe
Slide 21: Positioned for Success
› Solid enterprise foundation › Attractive investment opportunities in both distribution and transmission › Cost-of-Service generation › Focused on regulated utility › Pure-play utility › Long-term Distribution rate base growth › Long-term Transmission rate base growth › Potential generation opportu
Slide 22: Q&A
Q&A
Slide 23: Appendix
Appendix
Slide 24: 4Q and Full Year 2008 Earnings Details
4Q and Full Year 2008 Earnings Details Compared to the Same Periods in The United Illuminating Company Ш Distribution, CTA & Other › Distribution earnings for both the quarter and full year 2008 continued to be impacted by lower kilowatt hour sales, increased interest expense from higher borrowings
Slide 25: 4Q and FY compared to 2007 - cont.
4Q and FY compared to 2007 - cont. Ш Distribution, CTA & Other - cont. › Increased revenue for the quarter and the year from previously approved increases in distribution rate components › Mark-to-market adjustments for non-qualified pensions (below the line) reduced earnings $0.03 per share in 4Q ’
Slide 26: 4Q and FY compared to 2007 - cont.
4Q and FY compared to 2007 - cont. Ш Depreciation expense increased in 2008 by $0.07 per share, due to capital spending Ш Increased interest expense from higher borrowings, $0.04 per share in 4Q ’08 › FY ’08, $0.21 per share Ш Corporate and Other › The absence of interest income of $0.02 per share r
Slide 27: Rate Case Information - Lower Distribution Sales
Rate Case Information - Lower Distribution Sales GWH * 1% annual sales forecast approved in prior rate case *
Slide 28: Rate Case Information - Higher Distribution Uncollectibles
(6+6) (pre-GSC Allocation) $MM Rate Case Information - Higher Distribution Uncollectibles Distribution Non-Hardship Uncollectibles
Slide 29: Rate Case Information - Uncollectibles cont.
$15.8 $21.3 $MM $23.9 $23.0 Actual Projected Rate Year Rate Year Rate Case Information - Uncollectibles cont. Total Uncollectibles
Slide 30: Rate Case - Favorable Items Detail
Rate Case - Favorable Items Detail Favorable Items Implemented UI’s proposed revenue decoupling methodology › Annual true-up » If revenues < approved, rates will adjust to collect additional revenues » If revenues > approved, excess will be returned to customers › Decoupling will be evaluated after
Slide 31: Rate Case - Favorable Items Detail
Rate Case - Favorable Items Detail Pension tracker › True-up for » Based on year-end valuation, which takes into account changes, if any, in asset values and the discount rate Cost of Debt tracking mechanism › Annual true-up » Provided embedded debt cost after issuances, differs from allowed embedde
Slide 32: Rate Case - detail
Rate Case - detail Unfavorable Items Lower than expected allowed ROE, 8.75% Significant decrease in amount of O&M expenses › $158.6 million requested vs. $134.4 million approved Reconsideration Requests Items for reconsideration › Clarification & Technical errors › Technical session held March 9, 20
Slide 33: 2008 Cap Ex ($M)
2008 Cap Ex ($M) Distribution Distribution System Support Projects Total Distribution Transmission Middletown/Norwalk Transmission - Other Total Transmission Total Capital Expenditures s76 42| $118] $84 10} $93 $211
Slide 34: GenConn Energy Structure
CfD w/ CL&P GenConn Devon LLC GenConn Middletown LLC CfD w/ CL&P ISO-NE (Revenues) Procurement & Construction Contract(s) NRG UI GenConn Energy, LLC Legal, Accounting & Regulatory Agreements Proceeds Offset Revenue Requirements Project Debt 100% Engineering, Procurement & Construction Management, Si
Slide 35: Additional Information 2008 vs. 2007
Additional Information 2008 vs. 2007
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