Uil Co. Ltd. · KRX:049520
Uil — Investor Presentation (May 2006)
30 slides from Uil's investor presentation, May 16, 2006
Slide 1: UIL Holdings Corporation
Exhibit 99.1 UIL Holdings Corporation May
Slide 2: Safe Harbor Provisions
Safe Harbor Provisions 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 o
Slide 3: Executive Summary
Executive Summary Corporate Structure Key Developments - Continuing Business Key Developments The United Illuminating Company Xcelecom, Inc. Financing Plan Earnings 2006 and Beyond Strategic Direction
Slide 4: UIL Holdings Structure
UIL Holdings Structure Retail Distribution Commercial, Industrial, Institutional Mechanical Contracting Operations United Illuminating United Illuminating Wholesale Transmission Xcelecom * Systems Integration CTA UIL Holdings Corporation * Announced intent to divest 4/26/06 High Quality, High Yieldi
Slide 5: Executive Summary
Executive Summary Corporate Structure Key Developments - Continuing Business Key Developments The United Illuminating Company Xcelecom, Inc. Financing Plan Earnings 2006 and Beyond Strategic Direction
Slide 6: Key Developments – Continuing Business
Key Developments – Continuing Business 4-Year Distribution Rate Case Decision q Return on Equity - 9.75% q Capital Structure – 48% equity, 52% debt q Sales Forecast – 1% per year q Earnings sharing 50/50 from first dollar q Approved Central Facility plan Transmission q Approved Middletown/Norwalk (M
Slide 7: Executive Summary
Executive Summary Corporate Structure Key Developments -Continuing Business Key Developments The United Illuminating Company Xcelecom, Inc. Financing Plan Earnings 2006 and Beyond Strategic Direction
Slide 8: Key Developments in 2006
Key Developments in 2006 Why now? Stock is trading at 52-week high Current strong financial condition Future predictability Infrastructure Divestitures q UBE – SOLD March 28, 2006 § Interest in BE sold for $71 million, net proceeds approximately $65 million § Resolves certain matters in dispute q Cr
Slide 9: What it Means Going Forward
What it Means Going Forward “Back to Basics” with earnings growth Distribution revenue predictability for next 4 years Transmission q Major investment growth q Investment Incentives q Enhanced regulatory diversity q Market providing higher P/E Significant financial flexibility through planned divest
Slide 10: Strategic Management Guidelines
Strategic Management Guidelines Continue to support Dividend UIL will stay on course q Invest in Regulated Utility Business Cash to be managed q Support equity base of utility q Develop maximum shareholder return
Slide 11: Executive Summary
Executive Summary Corporate Structure Key Developments - Continuing Business Key Developments The United Illuminating Company Xcelecom, Inc. Financial Assumptions Earnings 2006 and Beyond Strategic Direction
Slide 12: Capital Expenditure Program 2006 – 2009
Capital Expenditure Program 2006 – 2009 q Distribution - Recloser program - Maintenance; transformers, cables, poles, substations, etc. q Transmission - Middletown/Norwalk project - Transmission substations, switch replacements, etc. Total Distribution $79.2 $77.4 $70.1 $52.0 $278.8 Transmission 20.
Slide 13: Average Rate Base 2005-2009
Average Rate Base 2005-2009 Distribution, Transmission & CTA q Invest in aging distribution infrastructure q M/N project is key to tripling investment in transmission § Expected growth in Transmission rate base $245 - $275 million q CTA expected to be fully amortized between 2013-2015 § Provides ste
Slide 14: Middletown/Norwalk (M/N) Transmission Project
Middletown Middletown Scovill Rock S/S East Devon S/S Singer S/S Norwalk S/S Beseck S/S ~ ~ ~ ~ Norwalk Norwalk Miles of 345kV OH Miles of - 345kV Miles of - 345kV Miles of 345kV OH Miles of 345kV OH Miles of 345kV OH UI to Own, Construct & Operate 345kV Singer Substation and 5.9 Miles of 345kV Midd
Slide 15: Transmission
Transmission Transmission tariff fully tracks the FERC-approved transmission revenue requirements q Rates are looking forward q Adjusted every 6 months, trued-up annually 50% of CWIP in rate base – approved q Allows earlier recovery of investment Attractive RTO ROE q 12.8% plus 50 basis point partic
Slide 16: Energy Procurement Strategy – 2007 and Beyond
Energy Procurement Strategy – 2007 and Beyond Current Transitional Standard Offer service is available through December ’06 q All power costs are fully recoverable q Benefited in’06 against rising energy costs and beyond – requires new contract q Prior successful auctions q Open docket with CT DPUC
Slide 17: Executive Summary
Executive Summary Corporate Structure Key Developments - Continuing Business Key Developments The United Illuminating Company Xcelecom, Inc. Financing Plan Earnings 2006 and Beyond Strategic Direction
Slide 18: Xcelecom, Inc.
Founded in 1992 and headquartered in Hamden, CT Leading provider of Specialty Contracting and Systems Integrations Solutions Operates along I-95 corridor from Boston to Florida, an area representing more than 25% of the nation’s commerce Approximately $401 million in annual revenue: q Specialty Cont
Slide 19: Xcelecom, Inc.
Xcelecom, Inc. Announced intent to divest on April 26, 2006 q Concludes Strategic Realignment – focus on utility Non-cash goodwill impairment charge of $85 million taken in 1Q ‘06 q Moved to discontinued operations beginning 2Q ’06 q Unique ability to obtain additional cash tax benefit from impairme
Slide 20: Executive Summary
Executive Summary Corporate Structure Key Developments - Continuing Business 2006 Key Developments The United Illuminating Company Xcelecom, Inc. Financing Plan Earnings 2006 and Beyond Strategic Direction
Slide 21: Financing Plans
Financing Plans Proceeds from divestitures of UBE, CSC and Xcelecom q Payoff short-term debt q Provide equity infusion to UI q Anticipation of 2011 pay-off of UIL Senior Notes M/N transmission project funding q No new equity issuance q Combination of short-term bank borrowings and q Long-term debt U
Slide 22: Executive Summary
Executive Summary Corporate Structure Key Developments – Continuing Business Key Developments The United Illuminating Company Xcelecom, Inc. Financing Plan Earnings 2006 and Beyond Strategic Direction
Slide 23: Proforma YTD 1Q 2006 Earnings Results
Proforma YTD 1Q 2006 Earnings Results Continuing Operations 1Q 2006 Actual UI (Total) $0.52 Distribution 0.12 CTA 0.20 Other 0.01 Transmission 0.19 Corporate (0.08) Subtotal Continuing Ops. w/o Xcelecom $0.44 Xcelecom* (3.74) Divested Businesses in Continuing Operations CSC 0.72 UBE (0.01) Subtotal
Slide 24: Disclaimer
Disclaimer The following information reflects management’s forecasts using information that is available at the time of this presentation. There are regulations pending at FERC, which could change transmission earnings estimates. Other factors that may affect future earnings estimates include, but a
Slide 25: Earnings Guidance and Beyond
Earnings Guidance and Beyond Continuing Operations Actual (1) Forecast - 2009 CAGR ** UI (Total) $3.08 $2.90 - $3.10 Distribution 1.64 $1.40 - $1.55 CTA 0.88 $0.78 Other 0.19 $0.19 Transmission 0.38 $0.50 - $0.60 Corporate (0.31) $(0.25) - $(0.15) Subtotal Continuing Ops. w/o Xcelecom $2.77 $2.75 -
Slide 26: Executive Summary
Executive Summary Corporate Structure Key Developments - Continuing Business Key Developments The United Illuminating Company Xcelecom, Inc. Financing Plan Earnings 2006 and Beyond Strategic Direction
Slide 27: Strategic Direction
Strategic Direction Invest in Regulated Utility Business Pay the Dividend Grow Earnings q Earn allowed ROEs q Execute capital expenditure program Seek out additional Transmission investment opportunities
Slide 28: Why Invest in UIL?
Why Invest in UIL? * Morgan Stanley research estimates UIL continues to seek maximum shareholder value from all of its investments Consistent Dividend Policy, currently $2.88 per share q Cash to support the dividend q Strong Dividend Yield at 4/30/06, 5.2% Other “Back to Basic” Utility statistics* q
Slide 29: UIL vs. Key Indices
UIL vs. Key Indices * Assumes that the value of the investment in UIL Holdings’ common stock and each index was $100 on December 31, 2000 and that all dividends were reinvested. For purposes of this graph, the yearly change in cumulative shareowner return is measured by dividing (i) the sum of (A) t
Slide 30: Q&A
Q&A