Hydro One Limited · TSX:H
Hydro One — Scotia Capital Montreal Investor Luncheon (October 2006)
16 slides from Hydro One's conference presentation, Oct 24, 2006
Slide 1: Scotia Capital - Montreal Investor Luncheon
HYDRO ONE Scotia Capital - Montreal Investor Luncheon October 24, 2006
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation may contain forward-looking statements, including statements regarding the business and anticipated financial performance of Hydro One Inc. Although Hydro One believes that such statements are based on reasonable assumptions, such statements are subject t
Slide 3: Hydro One at a Glance
Hydro One at a Glance • Own and operate one of the largest electricity delivery systems in North America Transmission Distribution • $6.8B in assets ~ 70% of net income • $4.9B in assets ~ 30% of net income • 28,500 km network - over 97% of • 122,100 km system – spans 75% of capacity in Ontario Onta
Slide 4: Hydro One 2010
Hydro One 2010 • Best transmission and distribution business in North America • Best safety record in the world • Top quartile reliability • Customer satisfaction: 90% across all segments • Shareholder returns: – Top quartile employee productivity – Top quartile capital/operating efficiency – Full r
Slide 5: Key Regulatory Decisions
Key Regulatory Decisions Recent: • Distribution rate decision - program levels approved as submitted • Transmission earnings sharing Near future: • Distribution cost of capital review • Transmission rate hearing 5
Slide 6: Investment Drivers
Investment Drivers • Ongoing core capital expenditures • Transmission system development – System growth and reliability – New and retiring generation facilities – Interconnections • Conservation & Demand Management (CDM) • Rationalization of Ontario electricity distribution sector 6
Slide 7: Transmission System Development - Overview
Transmission System Development - Overview Generation Commitments Area Supply North/South Congestion Manitoba Relief Interconnection Hydro Quebec Intertie Simcoe Area Bruce Area Congestion Relief Lambton Switchyard Woodstock GTA West & Area City of Nanticoke Toronto Windsor Area Voltage Support 7
Slide 8: CDM & Distribution Rationalization
CDM & Distribution Rationalization • Conservation and demand management (CDM) – Smart meter technology – Conservation initiatives • Distribution rationalization – Transfer tax exemption / lifting of moratorium 8
Slide 9: Capital Expenditures
Capital Expenditures • Planned to exceed $1.2 B in 2007 & 2008 – Core capital expenditures of $750 M – Balance on system development / smart meters • Up to $5 B over next 10 yrs on non-core capital expenditures • Likelihood and timing driven by: – Ontario Power Authority’s Integrated Power System Pl
Slide 10: Stable Financial Performance
Stable Financial Performance Net Income 500 • Stabilizing regulatory environment 400 • Continued focus on operations $ millions 300 200 • Organic growth opportunities 100 0 • Financial metrics support credit 2001 2002 2003 2004 2005 ratings FFO Interest Coverage 5x 4x 3x 2x 1x 2001 2002 2003 2004 20
Slide 11: 2006 Second Quarter Results
2006 Second Quarter Results six months ended June 30 ($M) 2006 2005 Change Revenues 2,238 2,212 +1% Purchased power 1,103 1,102 - Operating costs 664 611 +9% Net income 251 246 +2% 11
Slide 12: Financing
Financing • Borrowing requirements driven by: Long-term – Debt maturities Credit Ratings S&P A – Non-core capital expenditures Moody’s Aa3 DBRS A (high) • MTN shelf main platform maturing July/07 – $1.7B remaining • $1B CP program to bridge requirements 12
Slide 13: Long-term Debt Maturities and Financing Objectives
Long-term Debt Maturities 700 Financing Objectives • Avg. term 10-15 yrs 600 • Cost effectiveness • Maturity smoothing 500 $ millions 400 300 200 100 0 0 0 2006 2044 2045 2046 2043 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2030 2031 2032 2033 2034 2035 2036 Note: 2006 maturities for the rema
Slide 14: Summary
Summary • 99% regulated – experienced and supportive regulator • Stable financial performance • Going forward: – Continued focus on core wires business – Organic growth opportunities through infrastructure investments – Maintain credit quality 14
Slide 15: Hydro One Contacts
Hydro One Contacts Beth Summers Ali R. Suleman CFO Vice President & Treasurer Tel. – (416) 345-4008 Tel. – (416) 345-6126 Email – beth.summers@hydroone.com Email – a.suleman@hydroone.com William Paolucci Steve Hirano Assistant Treasurer Manager, Investor Relations Tel. – (416) 345-6131 Tel. – (416)
Slide 16: Hydro One
HYDRO ONE
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