Hydro One Limited · TSX:H
Hydro One — BMO Capital Markets Infrastructure and Utilities Conference 2010
21 slides from Hydro One's conference presentation, Feb 18, 2010
Slide 1: BMO Capital Markets Infrastructure and Utilities Conference
BMO Capital Markets Infrastructure and Utilities Conference Sandy Struthers Senior Vice President and Chief Financial Officer February 18th, 2010
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: Outline
2 Outline • Overview of Hydro One • Regulatory Developments • Capital Program • Financial Performance and Financing • Summary
Slide 4: Hydro One at a Glance
3 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 • $9.1B in assets • $6.5B in assets • 28,924 km network - over 96% of • 123,528 km system – spans 75% o
Slide 5: Hydro One – Strategic Objectives
4 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 6: Regulatory Developments
5 Regulatory Developments • Green Energy Act • Distribution and transmission system code changes • Transmission rate application • Distribution rate application • ROE formula
Slide 7: Capital Program
6 Capital Program Investment in our system driven by: Capital Expenditures • Sustaining and other investments 2,000 • System development 1,500 $ millions • Green Energy Act 1,000 • Distribution rationalization 500 0 2007 2008 2009 2010 2011 2012 Sustaining & other System development Green related
Slide 8: Capital Program: Sustaining and Other Investments
7 Capital Program Sustaining and Other 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 • Other expenditures relat
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 • Smart meter and smart grid
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 1 2) Reliability Improvements 2 Cornwall Barrie 3) Area Supply 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: 2009 Financial Results
12 2009 Financial Results ($M) 2009 2008 Revenues 4,744 4,597 Purchased power 2,326 2,181 Operating costs 1,594 1,513 Net income 470 498 Dividends Paid 188 259
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 $ millions 300 200 2x 100 1x 0 2003 2004 2005 2006 2007 2008 2009 2003 20
Slide 15: Financing
14 Financing • Borrowing proceeds used to: – Repay debt maturities – Fund non-core capital expenditures • MTN shelf main platform maturing August 2011 – $2.25B remaining • $1B CP program to bridge requirements Long-term Credit Ratings S&P - A+ Moody’s - Aa3 DBRS - A (high)
Slide 16: Liquidity
15 Liquidity • $750M syndicated bank line maturing Aug 2010 • $500M syndicated bank line maturing Feb 2013 • $250M liquid reserve fund available to 2014 • Liquidity backstopping CP program and increased funding requirements
Slide 17: Funding Objectives
16 Funding Objectives • Cost effectiveness • No foreign exchange risk – fully hedged • Average term • Maturity smoothing
Slide 18: Long-term Debt Maturities
$ millions 0 100 200 300 400 500 600 700 800 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 Long-term Debt Maturities 2033 2035 2037 2039 2041 2043 2045 17
Slide 19: Summary
18 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 20: Contacts
Contacts Sandy Struthers Ali R. Suleman Senior Vice President and Vice President and Chief Financial Officer Treasurer Tel. – (416) 345-6140 Tel. – (416) 345-6126 Email – [email protected] Email – [email protected]
Slide 21: Hydro One
HYDRO ONE
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