Uil Co. Ltd. · KRX:049520
Uil — Q1 2008 Earnings Presentation
24 slides from Uil's earnings presentation, May 6, 2008
Slide 1: First Quarter 2008 Results
.1 UIL Holdings CorporatiEXHIBIT 99on Transforming Investment into Future Value First Quarter 2008 Results James P. Torgerson President and Chief Executive Officer Richard J. Nicholas Executive Vice President and Chief Financial Officer
Slide 2: Forward-looking statements and contacts
Corporation’s most recent Annual Report on Form 10-K and other subsequent periodic filings with the Securities and Exchange Commission. Forward-looking statements included herein speak only as of the date hereof and the Corporation undertakes no obligation to revise or update such statements to refl
Slide 3: 1Q 2008 Results Summary
1Q 2008 Results Summary ‘Net Income (Loss) (4M) UL Distribution, CT Aand Other Transmission Total UI Net Income UIL Corporate ‘Total Continuing Operations Discontinued Operations - Koslecom Total Net Income Eamings (Loss) per Share ($/share) UL Distribution, CTAand Other Transmission Total UI UIL Co
Slide 4: 1Q Earnings Highlights
1Q Earnings Highlights 1Q ’08 consolidated earnings increased 18% compared to 1Q ’07 Distribution earnings continued to be affected by; Lower sales Increased uncollectibles Managing O&M costs Transmission earnings more than doubled Construction work in progress (CWIP) – Middletown-to-Norwalk (M/N) 3
Slide 5: 10 Year Cap Ex Plan
10year Cap Ex Plan $1.66B Cap ex plan 2008-2016 Distribution $938M Transmission $716M 2008 Cap ex forecast - $193M $111M in distribution $82M in transmission M/N 345-kV transmission project Cost - $265M to $285M More than 80% complete Forecasted in-service in early 2009 Transmission cost allocation
Slide 6: 2008 Distribution Regulatory Relief
2008 Distribution Regulatory Relief Anticipate filing by mid-2008 with the DPUC to seek rate relief that provides the opportunity to earn allowed return in 2009 Why now? Not earning allowed return Compared to the numbers previously utilized in setting rates: Lower kWh sales Increased uncollectibles
Slide 7: A New Opportunity: The Hybrid Generation Model
A New Opportunity: The Hybrid Generation Model THE HYBRID GENERATION MODEL CAN PROVIDE THE “BEST OF BOTH WORLDS” 2007 legislation recognized the need for more peaking generation in Connecticut UI/NRG Partnership UI’s cost-of-service expertise and record of delivering customer benefits NRG’s expertis
Slide 8: (or Affiliate)
— Ul (or Affiliate) Legal, Accounting & Regulatory Agreement EPC, O&M, 50%. } CommOps & Site Lease }100% } Agreements (SO-NE
Slide 9: UI/NRG Proposal – GenConn Energy LLC
UI/NRG Proposal – GenConn Energy LLC Filed proposal with the DPUC on March 3, 2008 Base proposal 500 MW 10 GE LM 6000 PC Sprint turbine units 3 NRG sites and infrastructure Regulated cost-of-service approach utilizing a contract for differences Initial ROE of 10.25% with an annual adjustment index (
Slide 10: UI/NRG Proposal – GenConn Energy LLC Financing and Timeline
UI/NRG Proposal – GenConn Energy LLC Project financing will support peaking generation initiative Financed at the project level Lower overall cost of project Flexibility during construction Equity bridge loan – no equity required until commercial operation Timeline Peaking generation proposal to DPU
Slide 11: Competitive Proposals – Costs
Competitive Proposals – Costs Proposal AFRR $/kW-Mo (Estimate from Exhibit B – PRO) BE II – Siemens $ 10.50 PSEG $ 11.25 GenConn 2 – 400 MW $ 11.75 GenConn 1 – 500 MW $ 11.85 GenConn 4 – 200 MW $ 11.95 BE II – GE $ 12.00 CL&P – Card St $ 12.25 GenConn 3 – 300 MW $ 12.25
Slide 12: Competitive Proposals – Benefits
Competitive Proposals – Benefits Portfolio NPV of Net Benefits - from Exhibit F p3 PRO (Millions) I $ 759.8 F $ 738.3 O $705.7 H $ 643.9 C $ 601.4 E $ 598.1 G $ 562.1 B $ 538.7 D $ 433.9 A $ 328.3 GenConn included in six of the top seven rated portfolios (Not in C) GenConn 2 -- 400 MW included in I,
Slide 13: Competitive Overview – cont.
Competitive Overview – cont. Based on the PRO analysis, benefits accrue by The GenConn proposals offer the highest value to all CT ratepayers but not the lowest cost .but the DPUC process accounts for benefits as well as costs .and GenConn 4 – 200 MW was also recommended by the OCC as part of their
Slide 14: ISO-NE Economic Study Request – Transmission Opportunity
ISO-NE Economic Study Request – Transmission Opportunity UI submitted a request for an economic study to ISO-NE on April 1, 2008 Originate in central Maine (alternative: New Brunswick) Tap Maine and/or Canadian renewables and base load (nuclear) Line is almost exclusively submarine Deliver up to 120
Slide 15: 1Q 2008 Results Summary
1Q 2008 Results Summary Quarter Ended March 31, 2008 2007 Net Income (Loss) (4M) UL Distribution, CTA and Other $ 23 $ Transmission 48 Total UINet Income $ 7a 8 UIL Corporate (og) - Total Continuing Operations $ 67 § BS Discontinued Operations - Koelecom (oa) (oa) Total Net Income Earnings (Loss) pe
Slide 16: 1Q 2008 Earnings Details
1Q 2008 Earnings Details Distribution, CTA & Other Lower kWh sales volume – 3.2% lower than 1Q ’07 Higher uncollectibles, $0.02 per share 1Q distribution and CTA combined ROE for the 12 months ending 3/31/08, 8.74% 2,607 heating degree days 245 < 1Q ’07 148 < normal Transmission Significant eps grow
Slide 17: Affirming 2008 Earnings Guidance
Affirming 2008 Earnings Guidance CAGR based on actual 2007 results and earnings projection for 2008. Assumes UI earns its distribution allowed return on equity in 2010. Does not include potential generation opportunities. Assumes UI earns a distribution and CTA combined return on equity of 8.0% to 8
Slide 18: 2008 Guidance Variables
2008 Guidance Variables Assumes the distribution and CTA combined return on equity of 8% to 8.5% in 2008, compared to its allowed return on equity of 9.75% CTA to be fully amortized by 2015 Assumes lower forecasted incentives from Conservation and Energy Independence Act programs (compared to 2007)
Slide 19: Why UIL?
Why UIL ? Competitively positioned for continued success and future growth Solid enterprise foundation Seasoned management team Attractive investment opportunities in both distribution and transmission Exploring generation opportunities beyond our service territory Pure-play utility Focus on regulat
Slide 20: Q&A
Q&A
Slide 21: Appendix
Appendix
Slide 22: Capital Expenditure Detail
Capital Expenditure Detail * Support system and other infrastructure CapEx projections do not include potential generation
Slide 23: Investments for the Customer Results in Returns to our Shareowners
Investments for the Customer Results in Returns to our Shareowners
Slide 24: Peaking Generation – Competitive Overview
Peaking Generation – Competitive Overview GenConn is well positioned as a strong competitor Recommendations DPUC Prosecutorial GenConn Option 2 (400 MW – Devon & Middletown) - > 532 MW in total OCC GenConn Option 4 (200 MW – Devon) - >681 MW in total Ultimate decision is made by the DPUC Commissione