Rgc Resources Inc. · NASDAQ:RGCO

Rgc Resources — Investor Presentation (December 2018)

26 slides from Rgc Resources's investor presentation, Dec 6, 2018

  1. Slide 1: Investor Presentation

    Investor Presentation John S. D’Orazio, CEO December 2018 Paul W. Nester, CFO

  2. Slide 2: Forward-Looking Statements

    Forward-Looking Statements The statements in this presentation by RGC Resources, Inc. (the "company") that are not historical facts constitute “forward- looking statements” made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 that involve risks and uncer

  3. Slide 3: Agenda

    Agenda  Company Overview  Key Highlights  Financial Highlights  Operational Highlights  Growth Strategy  Outlook 2

  4. Slide 4: Organizational Structure

    Organizational Structure NASDAQ: RGCO Regulated Non-Utility Local Distribution Company (LDC), Partner in Mountain Valley Pipeline located in Roanoke, VA, founded (MVP) in 1883 Partner in proposed MVP Southgate Provided 98% of earnings in fiscal project 2018 3

  5. Slide 5: Roanoke Gas Service Territory

    Roanoke Gas Service Territory  Serve over 60,800 natural gas customers  Customer Count breakdown:  Residential 90%  C&I 10%  Volume breakdown:  Residential 40%  C&I 60% Note: Number of customers based on rolling 12-month average. Volume breakdown per most recent fiscal year end. 4

  6. Slide 6: Key Highlights

    Key Highlights  Total shareholder return of 297% since 2008  75 years of consecutive dividend payments  Demonstrated Track 15 years of consecutive dividend increases Record of Delivering Shareholder Value  6.5% annual dividend increase to $0.66 per share  4th consecutive year of record earnings

  7. Slide 7: Key Highlights

    Key Highlights Updated through market close, November 28, 2018. $0.67 special dividend, paid in 2012, excluded from graph, but included in total returns. 6

  8. Slide 8: Key Highlights

    Key Highlights Infrastructure Riders System Expansion Weather Normalization Revenue Sharing  Regulated by VA State Corporate Commission (SCC)  VA regulatory climate ranked among best states for business1  9.75% authorized ROE  Attractive cost of recovery mechanisms Highly Stable  Business Model

  9. Slide 9: Earnings Per Share

    Earnings Per Share $1.00 $0.95 $0.90 Fiscal Year ended $0.86 $0.80 September 30: $0.81 $0.70 $0.72 2018 2017 Basic: $0.95 $0.86 $0.60 Diluted: $0.95 $0.86 $0.62 $0.58 $0.50 $0.54 $0.51 $0.40 2015 2016 2017 2018 Dividends/Share 8

  10. Slide 10: Key Financial Metrics: Return on Equity

    Key Financial Metrics Return on Equity Fiscal Year ended September 30: 11.0% 10.0% 10.7% 10.8% 9.0% 10.5% 9.7% 8.0% 7.0% 2015 2016 2017 2018 9

  11. Slide 11: Key Financial Metrics: Roanoke Gas CapEx

    Key Financial Metrics Roanoke Gas CapEx ($000’s) Fiscal Year ended September 30: $24,000 $23,300 $22,000 $20,800 $20,000 $18,000 $17,900 $16,000 $14,000 $13,800 $12,000 $10,000 2015 2016 2017 2018 10

  12. Slide 12: Growth Strategy

    Growth Strategy  Regulated Utility Investment  CapEx  Ongoing Regulated Utility Growth  Volumes Delivered  Customer Growth  Non-Utility Investments  MVP  MVP Southgate  Strategic Opportunities 11

  13. Slide 13: Regulated Utility Investment: CapEx

    Regulated Utility Investment: CapEx Fiscal Year ending September 30: $25.5 $20.5 Millions Other Capital $3.6 $15.5 SAVE Rider 2018 $10.5 2017 $8.6 Customer $5.5 Growth & System $0.5 Expansion $11.1 $2.5 million or 12% increase 12

  14. Slide 14: Regulated Utility Growth: Volumes

    Regulated Utility Growth: Volumes Volumes Delivered (DTH) Fiscal Year ending September 30: 5,000 4,000 3,000 Thousands 2,000 1,000 - Residential Commercial Industrial 2017 2018 2018 vs 2017 Commercial 20% Industrial 4% Top 10 Customers 7% 13

  15. Slide 15: Regulated Utility Growth: Customers

    Regulated Utility Growth: Customers Average Customers (twelve-months ended September 30) 60,800 60,600 60,400 60,200 60,000 59,800 59,600 59,400 59,200 59,000 58,800 2015 2016 2017 2018  Consistent customer growth year over year since 2015  108 new customers in fiscal Q4  597 total new customers

  16. Slide 16: Regulated Utility Growth: Economy

    Regulated Utility Growth: Economy Ballast Point’s industrial-scale brewery for its East Coast General Shale recently converted operations from 66% coal operations is up and brewing in Roanoke, VA to 100% natural gas The Roanoke Times – 8.9.17 Ballast Point entered Roanoke Gas’ Top 30 General Shale i

  17. Slide 17: MVP Update

    Update . RGC Midstream investment up to $46 million . FERC approved and construction in progress . Targeted in-service late calendar 2019 . Estimated $4.4 million annual EBITDA contribution RGC Midstream CapEx $25 $20 $15 $10 $23 ($mm) $17 $5 $6 $0 Thru 2018A 2019E 2020E 16

  18. Slide 18: Outlook

    Outlook  Rate Case Update  Economic Development and System Expansion  CapEx Forecast  EPS 17

  19. Slide 19: Outlook: Rate Case

    Outlook: Rate Case  Last rate case 2013  Primary drivers:  Incorporate tax reform  Recover non-SAVE CapEx investments through 2018  Embed SAVE surcharges into base rates  Filed October 2018  Prospective rate year Calendar 2019 18

  20. Slide 20: Outlook: Economic Development

    Outlook: Economic Development Eldor began production last week on its ignition systems, electronic control units and hybrid and electric vehicle systems that will be shipped to its customers around the world. The company has hired about 120 people with plans to grow to 350 in the next four to five y

  21. Slide 21: Outlook: Economic Development

    Outlook: Economic Development Economist says Tech, Carilion Roanoke campus will contribute at least $465 million to economy within 8 years. The addition of a second building for the research institute alone will create 828 new jobs and generate $150 million in additional spending by 2026. The Roanok

  22. Slide 22: Outlook: System Expansion

    Outlook: System Expansion Franklin County Expansion:  MVP Summit View Business Park  500 acre industrial along MVP path  City of Roanoke RGC interconnect and distribution system under construction  Potential to add 1,500 new customers  Rate base growth of $10 million Summit View Business Park R

  23. Slide 23: Outlook: Roanoke Gas Capital Budget

    Outlook: Roanoke Gas Capital Budget $25 $23.3 $22.0 $20.0 $19.5 $20 $18.4 $15 $14.3 Millions $10 $5 $0 2018A 2019E 2020E 2021E 2022E 2023E Forecast totals through 2023: SAVE Infrastructure Replacement $42.4 Customer Growth & System Expansion $31.3 Utility Maintenance $20.5 Total $94.2 22

  24. Slide 24: MVP Southgate

    Southgate . 70 mile natural gas pipeline system . 24 and 16 inch steel underground pipe . Starts at TRANSCO 165 and extends into central NC . Anchored by firm capacity commitment from PSNC Energy Schedule . Ongoing: Public Participation . Completed: . May 3, 2018: FERC Pre-filing filed . Nov 6, 2018

  25. Slide 25: Outlook: EPS

    Outlook: EPS  2019: $1.00 to $1.04  2020: $1.07 to $1.11 24

  26. Slide 26: Questions

    Questions

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