Uil Co. Ltd. · KRX:049520
Uil — Northeast Utilities Seminar 2006
30 slides from Uil's conference presentation, Feb 28, 2006
Slide 1: Northeast Utilities Seminar February 28, 2006
Northeast Utilities Seminar February 28, 2006 Exhibit 99.1 UIL HOLDINGS CORPORATION
Slide 2: 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 or forecasts for the fut
Slide 3: Today's Topics
Corporate Structure 2005 Consolidated Financial Results Key Developments The United Illuminating Company Infrastructure Xcelecom, Inc. Financial Assumptions Earnings 2006 and Beyond Strategic Direction Today’s Topics Presented by Nathaniel D. Woodson - Chairman & CEO and Richard J. Nicholas – Execut
Slide 4: UIL Holdings Structure
A project and service based business Operating Businesses Minority Interest Investment Divestiture Pending * UIL Holdings Wholesale Distribution (Transmission) Operations CTA United Illuminating Retail Distribution United Illuminating Xcelecom Electrical Contracting Systems Integration Energy Infras
Slide 5: Financial Results (EPS)
Distribution $ 1.64 CTA $ 0.88 Transmission $ 0.38 Other $ 0.19 Project loss $(0.39) All Other $ 0.24 Interest $(0.25) Administrative $(0.06) United Capital Investments $(0.03) United Bridgeport Energy $(0.43) The United Illuminating Company (Total) $ 3.08 Xcelecom (Total) $(0.15) UIL Corporate Expe
Slide 6: Key Developments in 2005
4-Year Distribution Rate Case Decision Return on Equity - 9.75% Capital Structure – 48% equity, 52% debt Sales Forecast – 1% per year Earnings sharing 50/50 from first dollar Approved Central Facility Plan Transmission Approved Middletown/Norwalk (M/N) Transmission project Transmission Tracker mecha
Slide 7: Key Developments in 2005 (cont.)
Infrastructure Divestitures UBE Interest in BE to be sold for $71 million, net proceeds approximately $65 million Resolves certain matters in dispute Expected to close first quarter 2006, subject to FERC approval Cross-Sound Cable Sold for $53.25 million, net proceeds approximately $46 million Sale
Slide 8: What it Means Going Forward
Distribution revenue predictability for next 4 years Transmission Investment Incentives Enhanced regulatory diversity Market providing higher P/E Significant financial flexibility through planned divestitures Labor stability for the next 6 years What it Means Going Forward
Slide 9: Strategic Management Guidelines
Continue to support Dividend UIL will stay on course Invest in Regulated Utility Business Cash to be managed Support equity base of utility Develop maximum shareholder return Strategic Management Guidelines
Slide 10: Today's Topics
The United Illuminating Company Infrastructure Xcelecom, Inc. Financial Assumptions Earnings 2006 and Beyond Strategic Direction Today’s Topics Corporate Structure Consolidated Financial Results Key Developments
Slide 11: Average Rate Base 2005-2009: Distribution, Transmission & CTA
§ Invest in aging distribution infrastructure § M/N project expected to triple investment in transmission • Expected growth in Transmission rate base -$245 to $275 million § CTA expected to be fully amortized between 2013-2015 • Provides steady cash flow Average Rate Base 2005 - 2009 Distribution, T
Slide 12: Middletown/Norwalk Transmission Project
UI to own, construct and operate approximately 20% of total project UI’s portion is all underground Expected Growth in Transmission Rate Base - $245 to $275 million Middletown Middletown Scovill Scovill Rock Rock S/S S/S East Devon East Devon S/S S/S Singer Singer S/S S/S Norwalk Norwalk S/S S/S Bes
Slide 13: Transmission
Transmission tariff fully tracks the FERC-approved transmission revenue requirements Rates are looking forward Adjusted every 6 months, trued-up annually 50% of CWIP in rate base – approved Allows earlier recovery of investment Attractive RTO ROE 12.8% plus 50 basis point participation adder, pendin
Slide 14: Today's Topics
Infrastructure Xcelecom, Inc. Financial Assumptions Earnings 2006 and Beyond Strategic Direction Today’s Topics Corporate Structure Consolidated Financial Results Key Developments The United Illuminating Company
Slide 15: Strategic Objective: United Bridgeport Energy & Cross-Sound Cable
Strategic Objective United Bridgeport Energy & Cross-Sound Cable
Slide 16: United Bridgeport Energy, Inc. (UBE)
UBE – To be divested 33 1/3% ownership interest in Bridgeport Energy, LLC, a 520 MW gas-fired, combined cycle electric generating facility located in Bridgeport, Connecticut Interest in BE to be sold for $71 million, approximate book value Net proceeds approximately $65 million Resolves all matters
Slide 17: United Capital Investments, Inc. (UCI)
Expected Total Cash from BE and CSC – approx. $111 million Provides Financial Flexibility to Execute Strategy Cross-Sound Cable – Divested 25% ownership interest in Cross-Sound Cable Company LLC, an important transmission line connecting Connecticut to Long Island under the Long Island Sound Sold fo
Slide 18: Today's Topics
Xcelecom, Inc. Financial Assumptions Earnings 2006 and Beyond Strategic Direction Today’s Topics Corporate Structure Consolidated Financial Results Key Developments The United Illuminating Company Infrastructure
Slide 19: 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: Specialty Contra
Slide 20: Xcelecom, Inc. - Overview
Operates in a cyclical industry Disappointing results in 2005, loss of $2.1 million Net project loss at Allan/Briteway $5.9 million All other – net income of $3.8 million We have the right scale, right management team in place Even with 2005 project loss, cash exposure to UIL was only $5 million Xce
Slide 21: Xcelecom, Inc. - Strategy
Build on strong performers – address weak performers Protect and improve operating margins Reduce operating risk Reduce earnings volatility Enhance earnings visibility Focused on Operations, Continuing to Eye Value Xcelecom, Inc. - Strategy
Slide 22: Today's Topics
Financial Assumptions Earnings 2006 and Beyond Strategic Direction Today’s Topics Corporate Structure Consolidated Financial Results Key Developments The United Illuminating Company Infrastructure Xcelecom, Inc.
Slide 23: Financing Options
No new equity issuance to fund M/N project Proceeds from divestitures of BE & CSC to be used to pay off short-term debt and support UI equity additions Free cash flow at the parent expected to earn 3% after-tax Financing Options
Slide 24: Today's Topics
Earnings 2006 and Beyond Strategic Direction Today’s Topics Corporate Structure Consolidated Financial Results Key Developments The United Illuminating Company Infrastructure Xcelecom, Inc. Financial Assumptions
Slide 25: 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 are not limi
Slide 26: 2006 and Beyond
2005 Actual 2006 Forecast* 2007-2009 CAGR** UI (Total) $ 3.08 $ 2.90 - $ 3.10 4 % - 5% Distribution $ 1.64 $1.40 - $1.55 CTA $ 0.88 $0.78 (7)% - (5)% Other $ 0.19 $0.19 Transmission $ 0.38 $0.50 - $0.60 32% - 36% Xcelecom Project loss $(0.39) $0 All Other $ 0.24 $0.10 - $ 0.25 1% - 3% Corporate $(0.
Slide 27: Today's Topics
Strategic Direction Today’s Topics Corporate Structure Consolidated Financial Results Key Developments The United Illuminating Company Infrastructure Xcelecom Financing Plan Earnings 2006 and Beyond
Slide 28: Strategic Direction
Pay the Dividend Earn allowed ROEs Produce predictable T&D earnings Seek out additional Transmission investment opportunities Realize value in remaining non-utility investments Strategic Direction Invest in Regulated Utility Business
Slide 29: Why Invest in UIL?
UIL continues to seek maximum shareholder value from all of its investments Consistent Dividend Policy, $2.88 per share Cash to support the dividend Strong Dividend Yield at 2/17/06 of 5.75% 2006 Payout Ratio, 96% to 99%, excluding divestitures Earnings growth will lower P/O ratio consistent with a
Slide 30: Q&A
Q&A