Uil Co. Ltd. · KRX:049520
Uil — 45th Annual EEI Financial Conference (October 2010)
41 slides from Uil's conference presentation, Oct 29, 2010
Slide 1: 45th Annual EEI Financial Conference
45 th Annual EEI Financial Conference November 2010 EXHIBIT 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 Gas Companies Acquisition Update Ø UI Transmission Growth Ø YTD Accomplishments Ø UI Base 10-year Capital Expenditure Forecast Ø Near-term Capital Expenditures including Gas Companies Ø GenConn Ø NEEWS Ø Near-term Average Rate Base Forecast Ø Energy Conservation & Smart System Ø 3Q
Slide 4: Investment Highlights
Investment Highlights Attractive Dividend (6% Yield) (2) Visible Regulated Growth Opportunities Conservative Financial Strategy FERC-Regulated Electric Transmission Attractive Regulated Utility › Current annual dividend of $1.728 per share › Core regulated earnings combined with the enhanced cash fl
Slide 5: UIL - Current Corporate Structure
UIL - Current Corporate Structure Retail Distribution ~60% of rate base ~53% of ’09 Net Income (4) Transmission ~40% of rate base ~47% of ’09 Net Income UIL Holdings Corporation GenConn Energy LLC The United Illuminating Company › 2009 Distribution Avg. Rate Base $492M › 2009 CTA (5) Avg. Rate Base
Slide 6: Pending Acquisition of SCG, CNG & Berkshire
Pending Acquisition of SCG, CNG & Berkshire › Connecticut Department of Public Utility Control (DPUC) » Draft decision received » Final decision expected 11/10 › Massachusetts Department of Public Utilities (DPU) » Order issued 8/31 stating no approval required under MA Law » MA AG filed petition fo
Slide 7: UIL - Post-acquisition Corporate Structure
UIL - Post-acquisition Corporate Structure The United Illuminating Company (UI) UIL Holdings Corporation Service Area Key › Service territory: 512 sq miles from Westport, CT to Old Saybrook, CT › ~173,000 customers › 324 employees › 2,269 miles of mains with ~131,000 services › 2009 rate case allowe
Slide 8: UI Transmission Growth
UI 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 entir
Slide 9: 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 Gas Companies Acquisition Underway ü Successful Execution of Financing Plan ü Executing on
Slide 10: Updated UI Base 10-yr CapEx Forecast
Indentified projects with clear need and regulatory support Updated UI Base 10-yr CapEx Forecast * Equity investment - Devon plant now operating, Middletown expected operation June 2011. Amounts may not add due to rounding. Explanations to Previous Plan › Distribution » 2 additional substation rebui
Slide 11: UI Base 10-Year T&D Capital Investment Program
Transmission Investments Distribution Investments UI Base 10-Year T&D Capital Investment Program Approximately $2.1B (1) of Regulated Investment in Base Program for 2010P - 2019P 2010P - 2019P: $1,366M 2010P - 2019P: $593M Capacity $320M Aging Infrastructure $547M System Operations $130M Core Suppor
Slide 12: UIL Near-Term Regulated Capital Investment Pipeline
Total Capex ($M) 2011P - 2015P Distribution $695 Transmission 314 GenConn 63 UIL Near-Term Regulated Capital Investment Pipeline Identified Projects With Clear Need ($M) Distribution GenConn Transmission To be Acquired Utilities (1) Note: (1) 2011 projections include to be Acquired Utilities’ full-y
Slide 13: GenConn Energy
50/50 Joint Venture between UI and NRG GenConn Energy Devon Facility › Operating › Contractual requirements met on 9/10/10 Middletown Facility › 55% complete as of week ending 10/22 › Expected to be operational in June 2011
Slide 14: 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 $69M ($ in millions) Potential UI Investment* 2010P 2011P 2012P 2013P 2014P 2015P 2016P Total Current Projection $ $ $ $ $ $ $
Slide 15: 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 UI’s 50% Share ($M): 2010P 2011P 2012P 2013P 2014P 2015P ($M) 48% 40% 12% 29% 21% 5% 35% 3% 41% 1% 23% 38% 38% 39% 45% 21% 38% 23% Avg. GenConn RB Equivalent $153
Slide 16: Energy Conservation
Energy Conservation
Slide 17: Leader in Conservation & Demand Response Programs
UI has been a leader in energy efficiency programs for more than 2 decades Leader in Conservation & Demand Response Programs CT Energy Efficiency Fund Activities in 2009 UI approximately 20% › Nationally and internationally recognized for its programs › Small Business Energy Advantage Program incorp
Slide 18: UI is a leading demand response provider throughout New England
UI is a leading demand response provider throughout New England Leader in Conservation & Demand Response Programs › Home Depot, Walmart and Kohl’s stores throughout New England participate in UI’s Load Response Program › In total, UI enrolls over 600 individual customer assets and over 80 MW of load
Slide 19: UI's Smart System
UI’s Smart System Source: U.S. Department of Energy End-Use Customers › Home Area Networks › Electric Vehicles › Distributed Resources Modernization of UI’s Electric System Monitors › SCADA Optimizes the Operation › Voltage Control › Automatic switching & restoration Distribution System › Outage Det
Slide 20: Home Area Network (HAN) Pilot
Home Area Network (HAN) Pilot › UI is currently conducting a one-year HAN pilot with 950 households › Enables two-way communication with the new meter into customer’s home › Customers can access near real-time energy usage information from their homes and on-line › Creates opportunities for customer
Slide 21: Financial Results
Financial Results
Slide 22: 3Q & YTD 2010 Financial Results - Summary
(1) The dilutive effect of the May 2009 equity issuance was $0.15 per share for the first nine months of 2010. 3Q & YTD 2010 Financial Results - Summary Net Income 3Q ’10 vs. 3Q ’09 › Unfavorable variance of $1.3 million, excluding $4.1 million acquisition-related expenses in 3Q ‘10 » Higher Distrib
Slide 23: 3Q & YTD 2010 Financial Results - Details
3Q & YTD 2010 Financial Results - Details * Competitive Transition Assessment
Slide 24: Strong Liquidity Position and Manageable Near-Term Debt Maturities
Pro Forma Near-Term Debt Maturities Standalone Liquidity Overview (9/30/10)* Strong Liquidity Position and Manageable Near-Term Debt Maturities *UIL Plans to Increase Size of Credit Facilities to Provide Adequate Liquidity for Larger Business Amounts may not add due to rounding. ($M) UI Equity Bridg
Slide 25: 2010 Earnings Guidance as of November 1, 2010
2010 Earnings Guidance as of November 1, 2010 Narrowing Range 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 Constr
Slide 26: 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 27: 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 ›
Slide 28: Investment Highlights
Investment Highlights Attractive Dividend (6% Yield) (2) Visible Regulated Growth Opportunities Conservative Financial Strategy FERC-Regulated Electric Transmission Attractive Regulated Utility › Current annual dividend of $1.728 per share › Core regulated earnings combined with the enhanced cash fl
Slide 29: UIL Holdings Corporation
BIL UIL HOLDINGS CORPORATION
Slide 30: UIL Holdings Corporation
BIL UIL HOLDINGS CORPORATION
Slide 31: Pending Acquisition of SCG, CNG and Berkshire
Pending Acquisition of SCG, CNG and Berkshire Description Purchase Price Tax Treatment Financing Plan Status Update › Acquisition of three regulated gas LDCs owned by Iberdrola USA with approximately 366,000 customers (1) announced on May 25, 2010 » Southern Connecticut Gas - 173,000 customers (1) »
Slide 32: Regulatory Overview
Regulatory Overview › Connecticut Department of Public Utility Control (DPUC) › Distribution currently operating under 2 year rate plan with full revenue decoupling pilot* › Allowed ROE of 8.75%, based on a capital structure of 50.0% equity › Federal Energy Regulatory Commission (FERC) › Transmissio
Slide 33: Summary Pro Forma Financials
2009 6 Months Ended June 30, 2010 ($M) UIL Target Pro Forma (1) UIL Target Pro Forma (1) Gross Margin $563 $323 $887 $298 $187 $486 Adjusted EBITDA (2) $220 $128 $348 $113 $92 $212 Adjusted Net Income (2) $54 Average Basic Shares Outstanding (000s) 28,027 45,548 30,037 47,558 Adjusted Net Income per
Slide 34: Net Income to Adjusted EBITDA Reconciliation
Net Income to Adjusted EBITDA Reconciliation UIL Holdings Target Pro Forma ($M) FY 2009 Six Months Ended June 30, 2010 FY 2009 Six Months Ended June 30, 2010 FY 2009 Six Months Ended June 30, 2010 Net Income (GAAP) $54 $26 $25 ($235) $67 ($211) Adjustments Interest Expense, Net $40 $21 $35 $16 $95 $
Slide 35: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation UIL Holdings Target Pro Forma ($M) FY 2009 Six Months Ended June 30, 2010 FY 2009 Six Months Ended June 30, 2010 FY 2009 Six Months Ended June 30, 2010 Net Income (GAAP) $54 $26 $25 ($235) $67 ($211) One-Time Adjustments Goodwill Impairment $- $- $- $271 $- $271 Wo
Slide 36: UI Base 10-yr CapEx Current Plan vs. Previous Plan
Indentified projects with clear need and regulatory support UI Base 10-yr CapEx Current Plan vs. Previous Plan * Equity investment - Devon plant now operating, Middletown expected operation June 2011. Amounts may not add due to rounding. Explanations to Previous Plan › Distribution » 2 additional su
Slide 37: CT RPS Requirements
CT RPS Requirements Connecticut RPS Requirements (Percentage of Retail Load) Class 1 resources include energy derived from solar, wind, fuel cell, methane gas from landfills, ocean thermal, wave, tidal, run-of-river hydropower (<5MW, began operation after July 1, 2003), sustainable biomass (NOx emis
Slide 38: UI Avg Rate Base 2010 - 2015 Current vs. Previous Forecast
UI Avg Rate Base 2010 - 2015 Current Forecast vs. Previous Forecast ($M) * CTA Avg Rate Base figures unchanged from previous forecast -- $128M ’10, $92 ’11, $54M ’12 and $15M ‘13 * $1,025 $1,055 $1,063 $1,123 $1,224 $1,307 $1,377 $1,438 $1,444 $1,505 $1,519 $1,572
Slide 39: UI Distribution Avg Rate Base Forecast Bridge
UI Distribution Avg Rate Base 2010 - 2015 Current Forecast vs. Previous Forecast Bridge Explanations › Shift in IT-related Core Support CapEx timing coupled with increased Aging Infrastructure expenditures › Tax Repairs and Maintenance election - approx. $36M of cash tax benefit in 2010, increased A
Slide 40: UI Transmission Avg Rate Base Forecast Bridge
UI Transmission Avg Rate Base 2010 - 2015 Current Forecast vs. Previous Forecast Bridge ($ in millions) Transmission Average Rate Base Current vs. Previous Forecast Current vs. Previous Current vs. Previous Current vs. Previous Current vs. Previous Current vs. Previous Current vs. Previous Plant In
Slide 41: 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
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