MGE Energy Inc. · NASDAQ:MGEE
MGE Energy — Q1 2008 Earnings Presentation
20 slides from MGE Energy's earnings presentation, May 8, 2008
Slide 1: 2008 First Quarter Financial Update
2008 First Quarter Financial Update May 8, 8 2008
Slide 2: Disclaimer
Disclaimer All statements in this presentation other than historical facts are forward-looking statements that involve risks and uncertainties which are subject to change at any time. Such statements are based upon management’s expectations at the time they are made. Various factors could cause
Slide 3: Highlights
Highlights g g 1 Highest rated investor-owned electric and gas utility by Moody’s and S&P Record earnings four out of the last five years due to 2 asset growth with fixed returns 3 32 consecutive years of increasing dividends 4 Veryy constructive and supportive pp regulation g 3
Slide 4: Overview – Organizations
Overview – Organizations g Exchange: NASDAQ Ticker Ticker: MGEE MGE MGE Transco Other Madison Gas Power LLC Investment LLC and Electric Co. (Est. 2005) (Est. 2002) (E 1896) (Est. MGE Construct LLC (Est. 2002) MGE Power MGE Power Central Wisconsin Development Elm Road Corp Corp. West Campus (Est. 198
Slide 5: Who we are
Who we are Our Services Our Service Territory MGE Regulated Utility MGEE MGE Parent MGE Transco Company LLC Power Leases Electric Owns Generation Transmission Assets Assets 5
Slide 6: MGE (regulated utility)
MGE ((regulated g utility) y) Sales Our Revenue Growth (First Quarter) (First Quarter) Electric Retail Sales Gas Retail Deliveries (000’s kWh) (000’s Therms) 1.9% increase 12.9% increase $105M $90M 94,761 $82M 812,071 $77M 83,925 796,707 2007 2008 2007 2008 Q1 2007 Q1, Q1 2008 Q1, Total Revenue - El
Slide 7: MGE Energy: Strong Historical Earnings
MGE Energy gy Strong Historical Earnings Earnings Per Share Earnings Per Share (1st Quarter ended Mar 31) (12 months ended Mar 31) $2 31 $2.31 $0.63 $2.09 $0.59 Preliminary Q1 2007 Q1 2008 200 2007 2008 7
Slide 8: MGE Energy: Earnings by Segment – 1Q
MGE Energy gy Earnings by Segment – 1Q 2008 EPS = $0.63 2007 EPS = $0.59 (1st Quarter ended) (1st Quarter ended) Other, $0.01 Other, $0.02 Fixed return assets, Fixed return assets, $0.11 $0.12 Transmission, Transmission, $0.04 $0.04 Utility, $0.45 Utility, $0.43 8
Slide 9: MGE Energy: Consistent Dividend Increases
MGE Energy gy Consistent Dividend Increases Dividends Declared Per Share $1.41 2007 annual dividends paid increased from $1 39 per share to $1.39 $1.41 per share $0.53 Our record is 32 consecutive years 1975 2007 of dividend increases 9
Slide 10: Our results
Our results Highest rated investor-owned electric and gas utility S&P (Utility ratings) Moody’s (Utility ratings) Secured: Aa2 Corporate Credit: AA- Unsecured: Aa3 Com. Paper: A1+ Com. Paper: P-1 Outlook: Stable Outlook: Stable “…MGE’s business risk profile reflects very constructive regulation…, pr
Slide 11: MGE Energy = growth
MGE Energy gy = ggrowth Includes Fixed Return Assets December 2002 March 2008 3% 4% 4% Fixed Return Assets are 20% estimated to be between 20%-25% of MGE Energy’s Total Assets Fixed Return Assets Transmission $21M $41M (i l d other, (includes th net) t) 93% Transmission $27M Fixed Return Assets $221
Slide 12: MGE (regulated utility): Total Asset Growth
MGE ((regulated g utility) y) Total Asset Growth (Dec. 31) (Mar. 31) Capital Expenditures Contributing to Growth: Growth $847 2002 - March 2008 $700 $602 $634 Electric $294 0 million $294.0 $600 Gas $74.5 million $500 $433 $400 $300 $213 $200 $169 $100 March 2008 Assets: $847 million $- Authorized U
Slide 13: Overview – Organizations and authorized returns
Overview – Organizations and authorized returns Madison Gas MGE MGE Transco Other and Electric Co. Power LLC Investment LLC (Est. 2002) (Est. 2005) (Est. 1896) MGE Construct LLC Current ROE: 12.2% (Est. 2002) MGE Power MGE Power Central Wisconsin Current ROE: 10.8% Investment: $41 mil Debt: 43% West
Slide 14: MGE Power LLC: Fixed Return Asset Growth
MGE Power LLC Fixed Return Asset Growth West Campus Cogeneration Facility Elm Road Generating Station Investment: $109 million (our share) Investment: $172 million (est.) = 8.3% owned Fixed ROE: 12.1% Fixed ROE: 12.7% Fixed Equity: q y 53% Fixed Equity: 55% Initial Lease Term: 30 years Initial Lease
Slide 15: MGE Transco Investment LLC
MGE Transco Investment LLC Transmission Asset Growth American Transmission C Company (ATC) Investment: $41 million (our share)) Current ROE: 12.2% Ownership: 3.6% 3 6% Regulator: FERC 15
Slide 16: MGE (regulated utility): Renewables Asset Growth
MGE ((regulated g utility) y) Renewables Asset Growth Top of Iowa III Investment: $57 million (est.) (est ) Current ROE: 10.8% Authorized Equity: 57% Service Date: First-quarter 2008 Capacity: 30 MW 16
Slide 17: Wisconsin regulation
Wisconsin regulation g Very Constructive and Supportive Update for 2008 The PSCW approved a 10.8% ROE and a 57% equity/ 43% debt capital structure in MGE’s most recent rate order (Dec. 2007) The PSCW approved a 4.8% electric rate increase and 2.8% gas rate increase to cover: New wind energy pr
Slide 18: Wisconsin regulation (con't)
Wisconsin regulation g ((con’t)) The PSCW approved a limited reopener for 2009 to cover: Updates to fuel and ATC costs Costs related to commercial operation of the Elm Road G Generating ti StStation ti (U (Unitit 1) 18
Slide 19: Key takeaways
Keyy takeaways y 1 Highest rated investor-owned electric and gas utility by Moody’s and S&P Record earnings four out of the last five years due to 2 asset growth with fixed returns 3 32 consecutive years of increasing dividends 4 Veryy constructive and supportive pp regulation g 19
Slide 20: Contact information
Contact information Exchange: NASDAQ Ticker: MGEE For more information, go to: www.mgeenergy.com Contact information: Ken Frassetto Director – Shareholder Services and Treasury Management P.O. Box 1231 Madison WI 53701 Madison, 53701-1231 1231 Phone: 608-252-4723 Fax: 608-252-7098 E-mail: