Uil Co. Ltd. · KRX:049520
Uil — J.P. Morgan SMid Cap Conference 2010
32 slides from Uil's conference presentation, Dec 2, 2010
Slide 1: J.P. Morgan SMid Cap Conference
J.P. Morgan SMid Cap Conference December 3, 2010 EXHBIT 99.1
Slide 2: Important Note to Investors
Important Note to Investors James P. Torgerson President and Chief Executive Officer, UIL Holdings Corporation Richard J. Nicholas Executive Vice President and Chief Financial Officer, UIL Holdings Corporation Safe Harbor Provision Certain statements contained herein, regarding matters that are not
Slide 3: Today's Topics
Today’s Topics Ø YTD Accomplishments Ø Gas Companies - Acquisition, Integration & Outlook Ø Near-term Capital Expenditures Forecast Ø Electric Base 10-year Capital Expenditure Forecast Ø NEEWS Ø Gas Base 2011 Capital Expenditure Forecast Ø GenConn Ø Near-term Average Rate Base Forecast Ø UI Transmis
Slide 4: UIL - Corporate Structure
UIL - Corporate Structure The United Illuminating Company (UI) UIL Holdings Corporation Service Area Key › Service territory: 335 sq miles › ~324,000 customers › 1,066 employees › Allowed Distribution ROE of 8.75% › Allowed ’09 Transmission ROE (composite) of 12.52% › 50% interest in GenConn Energy
Slide 5: Investment Highlights
Investment Highlights Attractive Dividend (5.8% Yield) (2) Visible Regulated Growth Opportunities Conservative Financial Strategy FERC-Regulated Electric Transmission Attractive Regulated Electric and Gas Utility › Current annual dividend of $1.728 per share › Core regulated earnings combined with t
Slide 6: YTD Accomplishments/Milestones
YTD Accomplishments/Milestones (1) The revenue decoupling mechanism was allowed to continue until the Department issues its final ruling in 2011 on the evaluation of this adjustment mechanism. ü Transformative Acquisition of Three Gas Companies ü Successful Execution of Financing Plan ü Executing on
Slide 7: UIL Becomes A Stronger, More Diverse Energy Company
UIL Becomes A Stronger, More Diverse Energy Company Acquisition of SCG, CNG & Berkshire Closed on Acquisition on November 16, 2010 › $1.296B less net debt of approximately $331.1M and a preliminary working capital adjustment of approximately $47M, resulting in cash consideration at closing of approx
Slide 8: 2011 Will Be A Transition Year
2011 Will Be A Transition Year - Financially and Operationally Integration of SCG, CNG & Berkshire Implementing Transition Plan › Day 1 focus during planning phase paid off with no significant Day 1 issues encountered › Turning our attention to internalizing the Transition Services Agreement (TSA) »
Slide 9: Gas Companies Outlook Beyond 2011
Gas Companies Outlook Beyond 2011 Realizing Savings Opportunities - Quantified › 2009 allocated corporate overheads, support costs and shared services totaled $23M at the gas LDCs » Opportunity to realize savings of roughly half of the allocated amount is expected to help the LDCs earn their allowed
Slide 10: UIL Near-Term Regulated Capital Investment
Total Capex ($M) 2011P - 2015P UIL Near-Term Regulated Capital Investment Identified Projects With Clear Need Electric Distribution $695 Electric Transmission Gas Distribution (1) GenConn UIL (Total) $1,395 ($M) Electric Distribution GenConn Electric Transmission Gas Distribution Note: (1) Gas Distr
Slide 11: Base 10-yr CapEx Forecast
Identified projects with clear need and regulatory support Base 10-yr CapEx Forecast Note: (1) Gas Distribution projected capex provided by Iberdrola, USA prior to closing on the acquisition. * Gas Distribution projected capex provided by Iberdrola, USA ** Equity investment - Devon plant now operati
Slide 12: Electric Base 10-Year T&D Capital Investment Program
Electric Transmission Investments Electric Distribution Investments Electric Base 10-Year T&D Capital Investment Program Approximately $2.1B (1) of Regulated Electric Investment in Base Program for 2010P - 2019P 2010P - 2019P: $1,366M 2010P - 2019P: $593M Capacity $320M Aging Infrastructure $547M Sy
Slide 13: UI Transmission - Participation in NEEWS
UI Transmission - Participation in NEEWS » UI’s portion - increased to the greater of $69M or 8.4% of CL&P’s costs for the CT portions UI’s Investment increased from $60M to $69M * Based on NU's projection as of 10/31/10 of UI's Investment in CL&P's portion of the NEEWS Projects.
Slide 14: Gas Base 2011 Distribution Capital Investment
2011P Gas LDC Investments 2011P Gas Distribution Investments Gas Base 2011 Distribution Capital Investment Details Approximately $316M of Regulated Gas Investment in Base Program for 2011P - 2015P 2011P: $63M Replacement & Reliability $29M New Business $14M Meters & Regulators $8M System Improvement
Slide 15: GenConn Energy: 50/50 Joint Venture between UI and NRG
50/50 Joint Venture between UI and NRG UI GenConn Energy Devon Facility › Operating › Contractual requirements met on 9/10/10 Middletown Facility › 84.5% complete as of week ending 12/4 › Expected to be operational in June 2011
Slide 16: Near-Term Average Rate Base Profile
Near-Term Average Rate Base Profile (Excluding GenConn Equity Investments) Attractive Rate Base Growth Even With a Declining CTA Balance ($M) 48% 40% 12% 29% 21% 5% 35% 3% 41% 1% 23% 38% 38% 39% 45% 21% 38% 23% 37% 40% 23% * Gas Distribution rate base projections provided by Iberdrola, USA prior to
Slide 17: Electric Transmission Growth
Electric Transmission Growth Renewable Requirement, Potential Solution Need Statement Potential Solution Assessment Vast majority of potential onshore renewables (wind) are in northern NE › Renewable Portfolio Standard (RPS) Requirement is ~3x current renewables level › CT requirement is > than UI’s
Slide 18: Liquidity Outlook
Liquidity outlook Solid liquidity position enabling future CapEx plans Near-Term Debt Maturities Debt Maturity and Liquidity Profile UI Equity Bridge Loan Other Short-term › UIL & Operating Companies $400M joint credit facility » Established on 11/17/10 » Full amount available to UIL with sub-limits
Slide 19: 2010 Earnings Guidance
2010 Earnings Guidance as of November 1, 2010 Guidance Assumptions › Better than anticipated Distribution, CTA & Other earnings performance for first nine months of 2010 with updated projections for 4Q ’10 O&M expenses › Increase in Transmission Allowance for Funds Used During Construction › Earning
Slide 20: Looking Forward to 2011
Looking Forward to 2011 › Gas companies acquisition » Transition year - work through Transitional Services Agreement › Driving to earn allowed returns on all regulated businesses › Continual management of O&M expenses › Executing on capital expenditure plan à realizing rate base growth › GenConn Mid
Slide 21: Attractive Dividend
Attractive Dividend › UIL has paid a consecutive quarterly dividend for over 100 years (1) › Dividend has been set at current annual level of $1.728 per share for more than 14 years › Management is focused on maintaining the dividend and reducing the payout ratio over time through earnings growth No
Slide 22: Investment Highlights
Investment Highlights Attractive Dividend (5.8% Yield) (2) Visible Regulated Growth Opportunities Conservative Financial Strategy FERC-Regulated Electric Transmission Attractive Regulated Electric and Gas Utility › Current annual dividend of $1.728 per share › Core regulated earnings combined with t
Slide 23: UIL Holdings Corporation
BIL UIL HOLDINGS CORPORATION
Slide 24: UIL Holdings Corporation
BIL UIL HOLDINGS CORPORATION
Slide 25: Acquisition of SCG, CNG and Berkshire
Acquisition of SCG, CNG and Berkshire Description Purchase Price Tax Treatment Financing Plan Status Update ü Acquisition of three regulated gas LDCs owned by Iberdrola USA with approximately 366,000 customers (1) completed on November 16, 2010 » Southern Connecticut Gas - 173,000 customers (1) » Co
Slide 26: Regulatory Overview
› Connecticut Department of Public Utility Control (DPUC) › Distribution currently operating under 2 year rate plan with full revenue decoupling pilot* › Allowed ROE of 8.75%, based on a capital structure of 50.0% equity › Federal Energy Regulatory Commission (FERC) › Transmission trued up on an ann
Slide 27: Summary Pro Forma Financials
2009 9 Months Ended Sept 30, 2010 ($M) UIL Target Pro Forma (1) UIL Target Pro Forma (1) Gross Margin $563 $323 $887 $469 $236 $706 Adjusted EBITDA (2) $220 $128 $348 $176 $97 $286 Adjusted Net Income (2) $54 $37 $79 $42 $29 $70 Average Basic Shares Outstanding (000s) 28,027 48,382 30,743 50,427 Adj
Slide 28: Net Income to Adjusted EBITDA Reconciliation
Net Income to Adjusted EBITDA Reconciliation UIL Holdings Target Pro Forma ($M) FY 2009 9 Months Ended Sep 30, 2010 FY 2009 9 Months Ended Sep 30, 2010 FY 2009 9 Months Ended Sep 30, 2010 Net Income (GAAP) $54 $42 $25 ($240) $67 ($199) Adjustments Interest Expense, Net $40 $33 $35 $25 $95 $73 Income
Slide 29: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation UIL Holdings Target Pro Forma ($M) FY 2009 9 Months Ended Sep 30, 2010 FY 2009 9 Months Ended Sep 30, 2010 FY 2009 9 Months Ended Sep 30, 2010 Net Income (GAAP) $54 $42 $25 ($240) $67 ($199) One-Time Adjustments Goodwill Impairment $- $- $- $271 $- $271 Workforce S
Slide 30: GenConn Energy LLC
GenConn Energy LLC › 50/50 debt/equity Status › On 7/30/10, the 2011 revenue requirement application for both the Devon and Middletown facilities was filed with the DPUC › Final regulatory review of construction costs will be part of 2013 revenue requirement proceeding Financing
Slide 31: GenConn Avg Equity Rate Base 2010 - 2015
GenConn Avg Equity Rate Base 2010 - 2015 Current Forecast vs. Previous (EEI) Forecast Bridge Explanations › Updated accumulated deferred income tax rate base offsets to reflect the extension of the 50% bonus depreciation election › Rate base impact from updated capital expenditure projection
Slide 32: CT RPS Requirements
CT RPS Requirements Connecticut RPS Requirements (Percentage of Retail Load) Class 1 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