Uil Co. Ltd. · KRX:049520
Uil — 48th Annual EEI Financial Conference 2013
49 slides from Uil's conference presentation, Nov 8, 2013
Slide 1: 48th Annual EEI Financial Conference
48" Annual EEI Financial C onference November 2013 UIL HOLDINGS CORPORATION
Slide 2: Note to Investors
Note to Investors 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 for
Slide 3: UIL service territories and utilities
EEI Nov. 2013 * EEI Nov. 2013 Service territory: 335 sq miles ~321,000 customers Allowed Distribution ROE of 9.15% Earned ‘12 Transmission ROE (composite) of 12.3% 50% interest in GenConn Energy LLC Service territory: 512 sq miles from Westport, CT to Old Saybrook, CT ~184,000 customers 2,300 miles
Slide 4: Why UIL?
EEI Nov. 2013 Why UIL? * Pure Play Electric & Gas Utilities High Probability Growth Financial & Dividend Philosophy Virtually 100% regulated Complementary earnings patterns Acquisition in ‘10 more than doubled the size of UIL Disciplined capital investment program Natural gas expansion through custo
Slide 5: Strategic Objectives
EEI Nov. 2013 Strategic Objectives * Pure Play Electric & Gas Utilities Strategy Growth Strategy Financial & Dividend Philosophy Investment in electric and gas regulated businesses…… Ensuring safety and reliability for customers Satisfying responsibilities as a public utility company Providing custo
Slide 6: Valuation and Shareholder Return Proposition
Valuation and Shareholder Return Proposition Share price ($) +39% Market Cap ($B) +175% +142% Rate base ($B) +101% Dividend yield (%) Dividend payout (%) (37%) (63%) (60%) (40%) What We’ve Accomplished Capex ($B) * * Current as of 11/4/13 ** Following equity issuance (based on mid-point of ‘13 EPS g
Slide 7: Long-Term Organic Growth: 10-yr Capex Forecast
EEI Nov. 2013 Long-Term Organic Growth 10-yr Capex Forecast (2014-2023) * * Includes Renewables - $47M ’14 - ’18 ** EEI ‘12 Amounts may not add due to rounding
Slide 8: Rate Base Growth (2014-2018)
EEI Nov. 2013 Previous Forecast (1) $2,210 $2,381 $2,604 $2,857 $3,088 Rate Base Growth (2014-2018) * (1) EEI ‘12 * Gas forecast includes 338 (h)(10) election ** Per ‘14 proposed revenue requirements in DN 13-06-38 *** Represents investments at UIL Corporate Amounts may not add due to rounding $M *
Slide 9: CT Regulatory Calendar
EEI Nov. 2013 CT Regulatory Calendar EEI Nov. 2013 CT Regulatory Calendar* (Fall ‘13 – Winter ‘14) * Regulatory page on UIL website – contains up-to-date regulatory information PURA Docket numbers: Renewable Connections Program 12-01-05RE01 Electric Distribution RC Reconsideration 13-01-19RE01 Gas E
Slide 10: CT Regulatory Calendar (Fall '13 - Winter '14)
CT Regulatory Calendar* (Fall ‘13 - Winter ‘14) <q el ‘eo ed De se & eu o Ry Ry es oe oe “ os a » ra) on a\ AV w Final Draft Draft Final Final Draft Final Draft Final Decision Decision Decision Decision Decision Decision Decision Decision Decision Renewable Gas GenConn Gas GenConn CNG CNG Electric E
Slide 11: Gas Distribution Comprehensive Energy Strategy (CES)
EEI Nov. 2013 Gas Distribution EEI Nov. 2013 Comprehensive Energy Strategy (CES) (Natural Gas) * Support gas growth through initiating change at the State policy and regulatory level to increase infrastructure expansion CT Gas LDCs filed joint plan with DEEP & PURA Provides for converting ~ 280,000
Slide 12: Comprehensive Energy Strategy (CES)
Comprehensive Energy Strategy (CES) <q (Natural Gas) Support gas growth through initiating change at the State policy and regulatory level to increase infrastructure expansion CT Gas LDCs filed joint plan with DEEP & PURA > Provides for converting ~ 280,000new gas customers state-wide over 10 years
Slide 13: Gas Conversions Growth and Capacity
EEI Nov. 2013 * Ability to achieve projected conversions growth in CT is based on CT CES providing tools as filed, not modified versions ** As of 10/31/13 Gas Conversions Growth CES* Plan & Berkshire * Converted 12,958** - 106% of this year’s target of 12,200 conversions Converted 32,438** relative
Slide 14: Capacity for Gas Growth
Capacity for Gas Growth <q > Strategy involves 3 interstate gas transmission pipelines and expansion of 2 on-system LNG peaking plants » Increased access to Marcellus (and Utica) shale areas » Reliable, costeffective » Well suited to where demand is projected to grow on-system » Current* pipeline ca
Slide 15: Gas Distribution Capex Expansion Plans
EEI Nov. 2013 Gas Distribution- Capex Expansion plans – consistent with CES Accelerated replacement program for cast iron and unprotected steel pipe with modern plastic Incremental new business Capex consistent with CNG rate case request * * EEI ’12 Amounts may not add due to rounding
Slide 16: CNG Rate Case
» » » » Consistent with CES Hi CNG Rate Case >» Filed with PURA on 7/8/13 lights of Request Revenue request >» $20.1M for Rate Year ending 12/31/14 10.25% ROE 52.52% equity, 47.48% debt Introduction of: > Decoupling mechanism > Infrastructure tracking mechanism > System expansion rate Current timeli
Slide 17: Electric Transmission
EEI Nov. 2013 Electric Transmission
Slide 18: Electric Transmission Capex
EEI Nov. 2013 Electric Transmission Capex * Storm preparedness Substation flood mitigation Infrastructure replacement Timing – substation rebuilds moved to outer years * EEI ’12 Amounts may not add due to rounding
Slide 19: FERC ROE Complaint
EEI Nov. 2013 FERC ROE Complaint Challenge to Regional Transmission Base ROE: “206” complaint filed at the FERC claiming that current approved base ROE of 11.14% on transmission investments is not just and reasonable ALJ decision – 10.6% for the refund period (10/1/11-12/31/12) – recorded a charge o
Slide 20: FERC Approved ROEs - Transmission
EEI Nov. 2013 FERC Approved ROEs - Transmission * (1) Assumes no change to ROE for either refund period in the ROE 206 complaints filed at the FERC and excludes reserve recorded in 3Q ‘13 * ~60% of the Middletown-Norwalk project is advanced technology equipment ** Incentive will provide a risk premi
Slide 21: Electric Distribution
EEI Nov. 2013 Electric Distribution
Slide 22: Electric Distribution Capex
EEI Nov. 2013 Electric Distribution Capex Capex per final electric distribution rate case outcome Storm preparedness Enhanced communication Line clearance Pole strengthening Includes renewables * * EEI ’12 Amounts may not add due to rounding EEI Nov. 2013 Petition for Reconsideration filed & PURA gr
Slide 23: Electric Distribution Rate Case Reconsideration
Electric Distribution Rate Case <q Reconsideration » Petition for Reconsideration filed & PURA granted petition to review - includes: » Reduction of $7.2Minstorm cost disallowances » Reduction of $2.7M in disallowances on newly constructed facilities » Increase in the rev. req. of $2.176M in rate ye
Slide 24: Other Investments
EEI Nov. 2013 Other Investments
Slide 25: Renewable Connections Program
EEI Nov. 2013 Renewable Connections Program PURA approved 2 projects totaling 7.8MW (allowed up to 10MW) Bridgeport: 2.2MW solar & 2.8MW fuel cell New Haven: 2.8MW fuel cell Spend included in 10-yr capex forecast as follows: Approved projects totaling 7.8MW - $25.3M in ‘14, $11.7M in ’15 Opportunity
Slide 26: Renewable Connections Program
Renewable Connections Program < > PURA approved 2 projects totaling 7.8MW (allowed up to 1OMW) » Bridgeport: 2.2MW solar & 2.8MW fuel cell » New Haven: 2.8MW fuel cell > Spend included in 10-yr capex forecast as follows: » Approved projects totaling 7.8MW -$25.3M in ‘14, $11.7Min 15 » Opportunity 2.
Slide 27: Financial Overview YTD 9/30/13 vs. YTD 9/30/12
EEI Nov. 2013 Financial Overview EEI Nov. 2013 YTD 9/30/13 vs. YTD 9/30/12 Financial Results by Segment * * The final decision in UI’s distribution rate case disallowed approximately $22M related to deferred storm costs and capital costs related to UI’s recently constructed administrative and operat
Slide 28: Prudent Financial Management
EEI Nov. 2013 Prudent Financial Management * Pro forma Liquidity as of 10/31/13 Debt Maturities ($M) Amounts may not add due to rounding * Refinanced as of 10/25/13 ** Remarket $27.5M of UI tax exempt bonds Common Stock/Debt Issuances On 9/26/13, UIL’s public offering of 5,000,000 shares of common s
Slide 29: '13 Earnings Guidance
EEI Nov. 2013 ‘13 Earnings Guidance – as of 11/5/13 * Major Assumptions: Reflects the issuance of 5,750,000 shares of common stock on October 2nd Includes disallowances and other adjustments related to the final decision in the electric distribution rate proceeding Includes YTD ‘13 results through 9
Slide 30: '13 Earnings Guidance
‘13 Earnings Guidance - as of 11/5/13 <q Electric distribution, CTA & other Electric transmission 14 earnings guidance Total Electric” $82- $90 siss-si7 & assumptions will be Gas distribution $35- S41 sos7-s077 discussed on the 4Q ‘13 UIL Corporate (s12)-($10) (60.23) - ($0.19) 5 earnings conference
Slide 31: Conclusion
EEI Nov. 2013 Conclusion
Slide 32: Why UIL?
EEI Nov. 2013 Why UIL? * Pure Play Electric & Gas Utilities High Probability Growth Financial & Dividend Philosophy Virtually 100% regulated Complementary earnings patterns Acquisition in ‘10 more than doubled the size of UIL Disciplined capital investment program Natural gas expansion through custo
Slide 33: Questions
EEI Nov. 2013 Questions
Slide 34: Appendix
EEI Nov. 2013 Appendix
Slide 35: Capex Forecast Summary Current vs. Prior
EEI Nov. 2013 Capex Forecast Summary Current vs. Prior* * * EEI ‘12 Amounts may not add due to rounding *
Slide 36: Gas Distribution Capex & Rate Base Forecasts by Company
EEI Nov. 2013 Gas Distribution Capex & Rate Base Forecasts by Company * Current Capex Forecast Current Rate Base Forecast** $M * EEI ‘12 ** Rate Base forecast includes 338 (h)(10) election Amounts may not add due to rounding Previous * Rate Base Forecast ** $M
Slide 37: Previous Avg. Rate Base Forecast
EEI Nov. 2013 Previous Avg. Rate Base Forecast(1) (2012-2017) Excluding GenConn Equity $M (1) EEI ‘12 * Gas forecast includes 338 (h)(10) election Amounts may not add due to rounding * *
Slide 38: Gas Distribution – Major Projects
EEI Nov. 2013 Gas Distribution – Major Projects Main and Service Replacement Programs New Business Program LNG Modernization Program Infrastructure program to replace cast iron and bare steel gas mains and services for all 3 gas distribution companies In progress Annual program for 20-25 years ~ $55
Slide 39: Gas Sales
EEI Nov. 2013 Gas Sales NUPC** not at rate case levels – CNG down 4.4%, SCG down 7.4% Seeing slight uptick from year-end ’12 * * Per CT Gas LDC joint natural gas infrastructure expansion plan ** As of 9/30/13 Normalized usage per customer (NUPC) has been declining nationwide since 1980* Rate of decl
Slide 40: Gas Conversions
EEI Nov. 2013 Gas Conversions Each new residential customer conversion is anticipated to generate approximately $280-$315 of distribution net income annually – based on an anticipated conversion mix (low use, on-main, off-main) Average approximate annual usage per conversion – 90-125 thousand cubic
Slide 41: Electric Transmission - Major Projects
EEI Nov. 2013 Electric Transmission - Major Projects Shelton 115/13.8kV Substation Meets Greater Shelton area load growth Detailed design phase Planned in-service 2015 ~ $40M* Substation Upgrades; North Haven, Bridgeport & Stratford Addresses condition of infrastructure; upgrades capacity and increa
Slide 42: Electric Distribution - Major Projects
EEI Nov. 2013 Electric Distribution - Major Projects * Distribution Transformer Replacement Program Distribution Network Replacement Program Splice Chamber Remediation Program Infrastructure program to replace transformers due to physical condition, capacity, or potentially high levels of PCBs In pr
Slide 43: Electric Distribution Rate Case
EEI Nov. 2013 Final decision issued by PURA on 8/14/13 Revenue - $20M year 1, $25.8M year 2 9.15% ROE, 50% equity, 50% debt capital structure Continuation of existing decoupling mechanism Recovery of $36.8M of storm-related costs over 10 years; establishment of $2M per year storm reserve for major s
Slide 44: 3Q & YTD '13 Financial Results - Details
3Q & YTD* ‘13 Financial Results - Details Consolidated UIL earnings 3Q & YTD ’13 consolidated earnings of $5.1M and $74.9M, respectively Includes regulatory disallowances and other adjustments of $10.5M, after-tax The following discussion on Consolidated UIL earnings excludes the impact of the regul
Slide 45: Electric distribution, CTA, GenConn & Other results
3Q & YTD* ‘13 Financial Results - Details Electric distribution, CTA, GenConn & Other 3Q & YTD ‘13 earnings of $7.1M and $33.7M, respectively Includes regulatory disallowances and other adjustments of $10.5M, after-tax The following discussion of Electric distribution, CTA, GenConn & Other excludes
Slide 46: Electric transmission and gas distribution results
3Q & YTD* ‘13 Financial Results - Details Electric transmission 3Q ‘13 earnings of $7.1M, or $0.14 per diluted share, a decrease of $1.1M, or $0.02 per diluted share, compared to 3Q ’12 -- decrease primarily due to: A charge of $1.5M, after-tax, recorded in 3Q ‘13, discussed earlier Partially offset
Slide 47: Gas distribution results (cont.)
3Q & YTD* ‘13 Financial Results - Details Gas distribution (cont.) YTD ’13 weighted average heating degree days compared to normal & the same period in ‘12 Impact of weather, normalized usage per customer and customer growth – 3Q & YTD ‘13 compared to the same periods in ’12 Preliminary average ROEs
Slide 48: Gas distribution results (cont.)
3Q & YTD* ‘13 Financial Results - Details <q Gas distribution (cont.) >» YTD ’13 weighted average heating degree days compared to normal & the same period in 12 Heating Degree Days YTD 13 Weighted Avg Weighted Avg. Colder (warmer) Colder (warmer) than normal than '12 0.8% 24.6% >» Impact of weather,
Slide 49: Corporate Costs
3Q & YTD* ’13 Financial Results – Details Corporate Costs decreased by $0.6M and $2.0M for the 3Q & YTD ‘13, respectively, compared to the same periods in ’12, primarily due to tax benefits associated with unitary filing requirements for Massachusetts state income taxes * * As of 9/30/13 EEI Nov. 20
UIL Holdings — 48th Annual EEI Financial Conference 2013 on 6ix