Rgc Resources Inc. · NASDAQ:RGCO

Rgc Resources — Non-Deal Roadshow (December 2016)

15 slides from Rgc Resources's roadshow presentation, Dec 13, 2016

  1. Slide 1: RGC Resources, Inc. Investor Presentation December 2016

    RGC Resources, Inc. | NASDAQ: RGCO Investor Presentation December 2016

  2. Slide 2: Forward-Looking Statements

    1 Forward-Looking Statements: The statements in this presentation by RGC Resources, Inc. (the "company") that are not historical facts constitute “forward-looking statements” made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 that involve risks and unc

  3. Slide 3: Key investment highlights

    2 Key investment highlights Demonstrated track record of delivering shareholder value  Total shareholder return of 195% since 2006, compared with 98% for the S&P 500  Announced record earnings for FY 2016, attributable to:  Improved utility margins associated with infrastructure replacement progr

  4. Slide 4: Overview of RGC Resources and Roanoke Gas

    3 Overview of RGC Resources and Roanoke Gas Business description  Local distribution company (LDC) located in Roanoke, VA, founded in 1883, that transports natural gas to residential and commercial/industrial end users  Publically listed on Nasdaq in 1994  98% earnings from Roanoke Gas – regulate

  5. Slide 5: Natural gas is an increasingly attractive fuel source

    Residential 21% Commercial 14% Industrial 31% Electricity Generation 34% 4 Natural gas is an increasingly attractive fuel source At tr a c ti v e e c o n o m ic b a c k dro p At tr a c ti v e e c o n o m ic b a c k dro p  After years of decline, new reserve discoveries and technological advances ha

  6. Slide 6: Utility cost recovery and return on rate base

    5 Utility cost recovery and return on rate base St a b le b u s in e s s m o d e l  Utility base rates recover operating costs and investment in fixed assets, allowing the utility to earn a reasonable rate of return on equity  Infrastructure riders – Steps to Advance Virginia’s Energy (SAVE)  A m

  7. Slide 7: Stable regulation environment for gas utility segment

    $17.9 $20.3 $18.7 $18.0 $18.4 $16.9 $0 $5 $10 $15 $20 $25 2016A 2017E 2018E 2019E 2020E 2021E $ mill io n s Utility Maintenance Customer Growth SAVE Rider & Station Replacement Advanced Metering 6 Stable regulation environment for gas utility segment  Established, productive relationships with VA S

  8. Slide 8: RGC's service area is enjoying an uptick in economic growth

    7 RGC’s service area is enjoying an uptick in economic growth Focus on innovation: Virginia Tech and Carilion to build research hub in Roanoke The Roanoke Times – 3.19.16 Eldor Corp. picks Botetourt as a new site for business The Roanoke Times – 3.15.16 UPS announces plans to deploy new CNG vehicles

  9. Slide 9: Mountain Valley Pipeline (MVP) – project overview & timeline

    8 Mountain Valley Pipeline (MVP) – project overview & timeline  RGCO is a 1% owner of the $3.5bn MVP  300 miles of 42” underground natural gas open-access pipeline spanning from northwestern West Virginia to southern Virginia  MVP expected to provide up to two billion cubic feet (Bcf) of natural

  10. Slide 10: MVP – benefits to Roanoke Gas

    $18 $20 $19 $18 $18 $17 $2 $5 $25 $4 $19 $25 $44 $22 $18 $17 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 2016A 2017E 2018E 2019E 2020E 2021E ($ m m ) Roanoke Gas CapEx Mountain Valley Pipeline 9 MVP – benefits to Roanoke Gas  Provide a third source

  11. Slide 11: Financial highlights

    $0.91 $1.00 $1.08 $1.22 $0.72 $0.74 $0.77 $0.81 $0.50 $0.60 $0.70 $0.80 $0.90 $1.00 $1.10 $1.20 $1.30 $1.40 2013 2014 2015 2016 Dividends/Share 21.4x 19.9x 18.7x 20.6x 0.0x 5.0x 10.0x 15.0x 20.0x 25.0x 2013 2014 2015 2016Current 10 Financial highlights EPS Trailing P/E ROE Net plant growth 20.2x 4yr

  12. Slide 12: Comparable company benchmarking

    3.54% 3.21% 3.05% 2.86% 2.52% 1.79% 0.00% 1.00% 2.00% 3.00% 4.00% RGCO SJI DGAS NJR WGL CPK 11 Comparable company benchmarking F in a n c ia l pro fi le Current dividend yield Source: Bloomberg Notes: Current dividend yield as of 12/8/16. 2016 EPS represents FYE actual or Bloomberg consensus estimat

  13. Slide 13: Comparable company benchmarking

    12 Comparable company benchmarking F in a n c ia l pro fi le Total debt / 2016 EBITDA Source: Company filings as of 9/30/16. RGCO maturity profile reflects the $7 million term loan closed on November 1, 2016, due in 2021, and related revolver reduction. Debt / book capital RGCO maturity profile - 5,

  14. Slide 14: RGC Resources has delivered significant shareholder value

    $0.45 $0.50 $0.55 $0.60 $0.65 $0.70 $0.75 $0.80 $0.85 $0.90 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 $18.00 $20.00 $22.00 $24.00 $26.00 Divi de nd s p er sh ar e ( $) Sh ar e p rice ($ ) Share price Dividends/share 13 RGC Resources has delivered significant shareholder value D e m o n s tr at e d t r

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