Hydro One Limited · TSX:H
Hydro One — Debt Investor Presentation (September 2020)
27 slides from Hydro One's debt investor presentation, Sep 22, 2020
Slide 1: Hydro One Limited Fixed Income Investor Presentation
Hydro One Limited Fixed Income Investor Presentation September 22, 2020 A final base shelf prospectus containing important information relating to the securities described in this document has been filed with the securities regulatory authorities in each of the provinces and territories of Canada. A
Slide 2: Disclaimers
DISCLAIMERS General • In this presentation, all amounts are in Canadian dollars, unless otherwise indicated. Any graphs, tables or other information in this presentation demonstrating the historical performance of the Company or any other entity contained in this presentation are intended only to il
Slide 3: Disclaimers - continued
DISCLAIMERS ‐ continued • Hydro One Limited does not undertake or assume any obligation to update or revise any forward‐looking information for any reason, except as required by applicable securities laws. • In this presentation, Hydro One presents information about future rate base growth and poten
Slide 4: Presenting from Hydro One
PRESENTING FROM HYDRO ONE • Chris Lopez Chief Financial Officer • Ali Suleman Vice President & Treasurer • William Paolucci Assistant Treasurer 4
Slide 5: Transaction Overview
TRANSACTION OVERVIEW • Hydro One Limited (“HOL”), through its wholly‐owned subsidiaries, is Ontario’s largest electricity transmission and distribution provider • HOL is pursuing an inaugural offering of senior unsecured notes to optimize its capital structure and cost of funding • Targeting $425 mi
Slide 6: Why Invest in Hydro One
WHY INVEST IN HYDRO ONE A unique low‐risk opportunity to participate in the transformation of a premium, large scale regulated electric utility • Unique combination of pure‐play electric power transmission and local distribution, with no generation or material exposure to commodity prices. • Stable
Slide 7: The Value of Hydro One
THE VALUE OF HYDRO ONE ABOUT THE COMPANY HOW WE DID IN 2019 WHY INVEST Transmission & Distribution Stable Operations Transmission Distribution Other ~30,000 circuit KMs of transmission lines Revenue Net of Purchased Power Total Assets Stable and growing cash flows with 1% 99% of overall business ful
Slide 8: A Look at the Organization
A LOOK AT THE ORGANIZATION Corporate Structure ~47%2 Province of Borrower Hydro One Limited Ontario Issuer Credit Ratings: A / A‐ Public Company (TSX: H) Operating Credit Facility: nil1 Public Preferred Shares: $418mm1 ~53%2 Shareholders Hydro One Inc. Public Debt Issuer Issuer Credit Ratings: AH /
Slide 9: Executive Leadership Team
EXECUTIVE LEADERSHIP TEAM A leadership team with strong operational experience committed to achieving efficiencies at Hydro One Mark Poweska President and CEO Brad Bowness Darlene Bradley Jason Fitzsimmons Paul Harricks David Lebeter Chris Lopez Megan Telford Chief Information Officer Chief Safety O
Slide 10: Hydro One's Strategy
HYDRO ONE’S STRATEGY Plan, design and build a Be the safest and most Be a trusted partner Advocate for our customers Innovate and grow the Strategic Priorities grid for the future efficient utility and help them make business informed decisions We will plan, design and build a We will transform and
Slide 11: Hydro One's Strategy
HYDRO ONE’S STRATEGY An Ontario focus, and a plan to enhance value Strategic Priorities Business Outcomes Plan, design and build a grid for the future Improved safety culture where Hydro One employees go home safely every single day Be the safest and most efficient utility Improved reliability above
Slide 12: The Regulated Business
THE REGULATED BUSINESS Transmission & Distribution Transmission Transmission Numbers at a Glance1 98% OF ONTARIO’S TRANSMISSION CAPACITY2 • Hydro One received a decision on 3‐year Custom IR application for Transmission from 2020‐ 2022 LDC Customers 38 • Hydro One owns and operates 98% of Ontario’s t
Slide 13: Electric Local Distribution Company Consolidation
ELECTRIC LOCAL DISTRIBUTION COMPANY CONSOLIDATION Orillia Power Distribution Corporation Key Points • ~$41 million purchase price, including approximately $15 million of assumed debt and regulatory liabilities, subject to closing adjustments • Completed September 1, 2020 Peterborough Distribution In
Slide 14: Sustainability at Hydro One
SUSTAINABILITY AT HYDRO ONE For Hydro One, sustainability means that we are committed to operating safely in an environmentally and socially responsible manner and to partnering with our customers and community stakeholders to build a brighter future for all Approach to Sustainability A Matrix of 10
Slide 15: $10B of Capital Investment Driving Rate Base Growth
$10B OF CAPITAL INVESTMENT DRIVING RATE BASE GROWTH Consistent and predictable organic growth profile underpinned by required replacement of aging infrastructure Projected Regulated Capital Investments* ($M) Projected Rate Base Growth* $25,977 $24,849 $2,121 $2,136 $23,587 $1,855 $1,776 $22,579 $1,8
Slide 16: Top Transmission Capital Projects Underway
TOP TRANSMISSION CAPITAL PROJECTS UNDERWAY Anticipated Estimated Capital Cost Development Project Name Location Type In‐Service Date Cost To‐Date1 Wataynikaneyap Power LP Line Connection Pickle Lake New stations and 2021 $24 million $2 million Northwestern Ontario transmission connection East‐West T
Slide 17: Hydro One Responds to COVID-19
HYDRO ONE RESPONDS TO COVID‐19 • Company's decisions and actions have been guided by two priorities: • to protect Hydro One's employees • to maintain the safe and reliable supply of electricity to Hydro One's customers. • Company has continued to adapt its operating procedures to ensure continued em
Slide 18: Constructive Rate Regulator (OEB)
CONSTRUCTIVE RATE REGULATOR (OEB) Consistent, independent regulator with a transparent rate‐setting process • Transmission and Distribution businesses rate‐regulated by the Ontario Energy Board (OEB) • Deemed debt / equity ratio of 60% / 40% for both transmission and distribution segments • Reduced
Slide 19: Recent Developments
RECENT DEVELOPMENTS Organization Priorities Second Quarter Highlights • Second quarter earnings per share (EPS) was $1.84 and adjusted EPS was $0.39, compared to EPS of $0.26 and adjusted EPS of $0.26 for the same period in 2019. The change in EPS was driven by the Ontario Divisional Court’s decisio
Slide 20: Q2 2020 Financial Summary
Q2 2020 FINANCIAL SUMMARY Second Quarter YTD (millions of dollars, except EPS) 2020 2019 % Change 2020 2019 % Change Revenue Transmission $459 $374 22.7% $859 $802 7.1% Distribution 1,201 1,029 16.7% 2,640 2,350 12.3% Distribution (Net of Purchased Power) 393 376 4.5% 825 890 (7.3%) Other 10 10 ‐ 21
Slide 21: Strong Balance Sheet and Liquidity
STRONG BALANCE SHEET AND LIQUIDITY (as at June 30, 2020, except where noted) Investment grade balance sheet Significant Available Liquidity ($M) Strong Investment Grade Credit Ratings (LT/ST/Outlook) Shelf Registrations 250 Hydro One Limited Hydro One Inc. (HOI) Hydro One Ltd. (HOL) HOL: Hydro One I
Slide 22: Summary of the Offering
SUMMARY OF THE OFFERING The following is a summary only and is qualified in its entirety by, and should be read in conjunction with, the Base Shelf Prospectus, the Prospectus Supplement (when available), and the Term Sheet (when available) that sets out the terms of the Notes. Issuer: Hydro One Limi
Slide 23: Investment Highlights
INVESTMENT HIGHLIGHTS • Low‐risk regulated utility with 99% of business fully rate‐regulated • Significant scale and leadership position across Canada’s most populated province • Unique combination of pure‐play electric power transmission and local distribution • No generation or material exposure t
Slide 24: Appendix
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Slide 25: Regulatory Stakeholders
REGULATORY STAKEHOLDERS Who: Provincial Government, Ministry of Energy What: Policy, legislation, regulations Who: Ontario Energy Board (OEB) What: Independent electric utility price and service quality regulation Who: Independent Electricity System Operator What: Wholesale power market rules, inter
Slide 26: Independent Board of Directors
INDEPENDENT BOARD OF DIRECTORS Timothy Hodgson, MBA, FCPA, ICD.D Stacey Mowbray, Corporate Director, Chair of Hydro One Ltd, Chair of Sagicor Financial Corporation Limited, Director Public Corporate Director, Former President North America WW International (formerly Weight Watchers), Sector Pension
Slide 27: Contact
CONTACT Ali Suleman Vice President and Treasurer a.suleman@HydroOne.com (416) 345‐6126 William Paolucci Assistant Treasurer w.paolucci@HydroOne.com (416) 345‐6131 27 29 27
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