Hydro One Limited · TSX:H
Hydro One — Investor Presentation (December 2009)
19 slides from Hydro One's investor presentation, Dec 2, 2009
Slide 1: Edmonton Investor Luncheon
HYDRO ONE Edmonton Investor Luncheon December 2nd, 2009
Slide 2: Forward Looking Statements
1 Forward Looking Statements This presentation may contain forward-looking statements, including statements regarding the business and anticipated financial performance of Hydro One Inc. Although Hydro One believes that such statements are based on reasonable assumptions, such statements are subject
Slide 3: Hydro One at a Glance
2 Hydro One at a Glance • One of the largest electricity delivery systems in North America • Wholly owned by the Province of Ontario • No commodity (electricity) exposure Transmission Distribution • $7.9B in assets • $5.9B in assets • 29,039 km network - over 96% of • 123,260 km system – spans 75% o
Slide 4: Hydro One – Strategic Objectives
3 Hydro One – Strategic Objectives • Mandate – A commercial enterprise, with an independent Board of Directors, providing the safe, reliable and cost effective transmission and distribution of electricity to Ontario electricity users • Strategic Objectives – Injury-free Workplace – Reliable Transmis
Slide 5: Regulatory Structure
4 Regulatory Structure Licence & Rate Orders Code Conditions Integrated Power System Plan (IPSP) Market Rules Legislation & Regulation Ministry of Energy
Slide 6: Regulatory Developments
5 Regulatory Developments • Green Energy Act • Distribution and Transmission System Code changes • Transmission Rate Application • Distribution Rate Application
Slide 7: Capital Program
6 Capital Program Investment in our system driven by: Capital Expenditures • Sustaining Investments 2000.0 • System Development 1500.0 • Green Energy Act 1000.0 • Smart Meters and Smart Grid 500.0 • Distribution Rationalization 0.0 07 10 11 08 09 20 20 20 20 20
Slide 8: Capital Program: Sustaining Investments
7 Capital Program Sustaining Investments • Increasing sustaining capital expenditures – Aging asset base – Maintain reliability of the system – Examples of sustainment programs include • Wood pole replacement • Station refurbishments • Circuit breaker replacement
Slide 9: Capital Program: System Development
8 Capital Program System Development • System growth and reliability • New and retiring generation • Examples of system development programs include – Load connections – Reliability improvements – Area supply
Slide 10: System Development Project Samples
System Development Project Samples 9 Kenora Pinard 2 1 Nipigon Thunder Bay 2 Wawa 1 2 Algoma Area Sudbury North Bay 1) Load Connections Ottawa 2) Reliability Improvements 1 Cornwall 2 3) Area Supply Barrie 2 1 3 GTA Belleville Hamilton 3 Sarnia London 1 3
Slide 11: Capital Program: Green Energy Projects
10 Capital Program Green Energy Projects • Required to facilitate connection of renewable generation projects in the province. • Expenditures related to: – Network transmission lines – Regional transmission lines – Enabler lines • Timing of expenditures is subject to: – Regulatory and government app
Slide 12: Green Energy Project Samples
Green Energy Project Samples 11 Pickle Lake 2 Kenora Little Jackfish Pinard 2 Nipigon Thunder Bay 1 3 Algoma Area Pembroke Ottawa 1) Network Transmission Lines 3 Sudbury North Bay 2 2) Regional Transmission Lines 3 Cornwall 3) Enabler Lines Barrie 2 Napanee 1 Belleville Goderich GTA Bowmanville 3 Ha
Slide 13: Capital Program: Smart Meters / Smart Grid
12 Capital Program Smart Meters / Smart Grid • Over one million smart meters installed • Expected to be completed in 2010 • Smart Meter Project won the Utility Planning Network’s 2007 metering award. • Smart Grid
Slide 14: Stable Financial Performance
13 Stable Financial Performance • Stable regulatory environment • Continued focus on operations • Organic growth opportunities • Financial metrics supportive of credit quality Net Income FFO/ Interest Coverage 5x 500 4x 400 3x 300 200 2x 100 1x 0 2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 200
Slide 15: 2009 Third Quarter Results
14 2009 Third Quarter Results three months ended nine months ended September 30 September 30 ($M) 2009 2008 2009 2008 Revenues 1,144 1,126 3,537 3,403 Purchased power 547 526 1,731 1,605 Operating costs 406 393 1,183 1,131 Net income 100 112 359 367 Dividends Paid 26 72 161 186
Slide 16: Long-term Debt Maturities
$ millions 0 100 200 300 400 500 600 700 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 Long-term Debt Maturities 2031 2033 2035 2037 2039 2041 2043 2045 15
Slide 17: Financing
16 Financing • Borrowing proceeds used to: – Repay debt maturities – Fund non-core capital expenditures – Maintain liquidity • MTN shelf main platform maturing August 2011 – $2.75B remaining • $1B CP program to bridge requirements Long-term Credit Ratings S&P - A+ Moody’s - Aa3 DBRS - A (high)
Slide 18: Summary
17 Summary • Stable financial performance • Going forward: – Continued focus on core wires business – Organic growth opportunities through infrastructure investments – Increased financing requirements to meet increased capital expenditures – Maintain capital structure, credit quality
Slide 19: Hydro One
HYDRO ONE