Uil Co. Ltd. · KRX:049520
Uil — Northeast Utilities Conference 2007
30 slides from Uil's conference presentation, Mar 12, 2007
Slide 1: UIL Holdings Corporation – Northeast Utilities Conference
UIL Holdings Corporation Northeast Utilities Conference Richard Nicholas – Executive VP and Chief Financial Officer Susan Allen – VP Investor Relations, Secretary and Treasurer March 12, 2007 Boston
Slide 2: Safe Harbor Provision
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 forecasts for the fut
Slide 3: Today's Topics
Today’s Topics Corporate Structure Consolidated Financial Results & Key Developments The United Illuminating Company Financing Plan Earnings Guidance and Beyond Strategic Direction
Slide 4: UIL Holdings Structure
Xcelecom United Illuminating Cross-Sound Cable Bridgeport Energy Wholesale Transmission Systems Integration Electrical Contracting UIL Holdings Corporation CTA Retail Distribution Operations UIL Holdings Structure
Slide 5: Financial Results (EPS)
* Includes impact of IRS private letter ruling, $0.27 per share Financial Results (EPS)
Slide 6: Key Developments in 2006
Key Developments in 2006 Non-utility divestitures – total 2006 proceeds $143 million q Bridgeport Energy – proceeds of $71 million q Cross-Sound Cable – proceeds of $53 million q Xcelecom – proceeds of $19 million (excluding tax benefit) Tax benefit of $38 million from taxes paid on prior capital ga
Slide 7: The United Illuminating Company
The United Illuminating Company
Slide 8: Capital Expenditure Program 2006-2009
Capital Expenditure Program 2006-2009
Slide 9: Capital Expenditure and Average Rate Base 2006-2009
Total $747 $890 $1,002 $1,024 Average Rate Base 2006-2009 Invest in aging distribution infrastructure M/N project triples investment in transmission q Expected rate base growth $255 - $285 million CTA expected to be fully amortized between 2013-2015 q Provides steady cash flow
Slide 10: Energy Procurement
Energy Procurement Transitional Standard Offer Service through December ’06 and Beyond q Standard Service • Requires series of laddered contracts • Procured requirement for first half of 2007 and a portion of the requirement for second half of 2007 and 2008 • March 5 th – RFPs issued. Bids are due b
Slide 11: Potential CT Legislation
Potential CT Legislation UI’s view q Electricity prices are too high q Bills represent solutions which recognize CT must intervene in the wholesale electric market by encouraging the building of new generation facilities • Facilities of the right type, in the right place, with the right fuel q Fully
Slide 12: Potential CT Legislation - Continued
Potential CT Legislation - Continued q UI strongly supports increased funding for conservation • At a minimum, 3 mills/kWh should be available q Hurdles must be overcome to build new generation • Financing and siting • Non-utility generation can play an important role in the electric supply of CT •
Slide 13: Transmission
Transmission Approved Middletown/Norwalk transmission project to be complete by q $230 - $260 million commitment q $255 - $285 million increase in transmission rate base Transmission tracker q Tracks FERC-approved transmission revenue requirements q Rates are looking forward q Adjusted every six mon
Slide 14: Transmission - Continued
Transmission - Continued In the process of applying for additional FERC incentives (order #679) for M/N project q Increase of CWIP in rate base to 100% q Additional ROE incentives – 50 basis points FERC New England Transmission Owner ROE (order #489) q Estimating an overall weighted average ROE of 1
Slide 15: Transmission - Continued
Transmission - Continued Transmission Business Unit formed in 2006 q Charged to explore future transmission opportunities q Pursue FERC incentives q Influence ISO-NE planning process q Working with Black & Veatch, LLP. on long-term plan Capital expenditure program of $291 million 2007 through q $226
Slide 16: Distribution
Distribution Rate case decision through 2009 Allowed ROE 9.75%, achieved 9.88% after sharing in 2006 Capital structure – 48% equity, 52% debt Sales forecast – 1% growth per year Earnings sharing 50/50 from first dollar Approved capital expenditure program through
Slide 17: Distribution - Continued
Distribution - Continued Capital expenditure program of $242 million 2007 through q Aging infrastructure maintenance; transformers, cables, substations q Recloser program q Central facility Average year-end 2006 rate base of $398 million q Growing to $482 million, or 21% by 2009
Slide 18: Competitive Transition Assessment
Competitive Transition Assessment Earnings of $11.4 million, or $0.465 per share in ’06 Earns allowed ROE of 9.75%, no more, no less Expected to be fully amortized between 2013-2015 Year-end 2006 rate base, $237 million q Declining to $166 million by 2009 Cash flow from operations in 2006, $26 milli
Slide 19: Other UI
Other UI Other UI or below the line earnings consist of: q Non-operating interest income / expense q Conservation and Load Management incentive q AFUDC q GSC Procurement fee • No GSC procurement fee and incentive beginning January 1, 2007 • 2004, 2005 & 2006 incentive yet to be approved by DPUC q IS
Slide 20: Financing Plan
Financing Plan
Slide 21: Financing Plan
Financing Plan Consolidated cash on hand at UIL at year-end $62 million Proceeds from non-utility divestitures q Paid off short-term debt q Provide equity infusion to UI q Anticipation of 2011 payoff of UIL Senior Notes M/N transmission project q No new equity issuance by UIL is expected q Combinati
Slide 22: Earnings Guidance
Earnings Guidance
Slide 23: Disclaimer
Disclaimer The following information reflects management’s forecasts using information that is available at the time of this presentation. Factors that may affect future earnings estimates include, but are not limited to, inflation, the level of capital spending in the wires distribution and transmi
Slide 24: Earnings Guidance and Beyond
(1) Business unit expectations are not intended to be additive. Also, expectations do not include any earnings or losses from Xcelecom that would need to be included in continuing operations. (2) CAGR based on actual 2006 results, excluding the impact of IRS private letter ruling, $0.27 per share. E
Slide 25: Guidance Drivers
Guidance Drivers UI q Distribution • Will manage to 9.75% allowed ROE • Maintain allowed capital structure of 48% equity / 52% debt q Transmission • Earn allowed ROE based on current composition of rate base and projected capital spending • Does not assume additional FERC incentives • M/N transmissi
Slide 26: Guidance Drivers - Continued
Guidance Drivers - Continued UIL Corporate, including remaining UCI investments q Administrative costs q Interest charges q Results from remaining UCI investments q Assumes no additional investments in 2007
Slide 27: Strategic Direction
Strategic Direction
Slide 28: UIL - Positioned for Success
UIL - Positioned for Success Seeks maximum shareholder value Investing in the regulated utility business through capital spending, $533 million 2007 through 2009 q Large commitment for a company our size q Pure T&D company with earnings growth Consistent dividend policy q $1.72 per share paid for mo
Slide 29: Why Invest in UIL?
Ranked #1 among EEI listed companies with a 2006 total shareowner return, including dividends, of 60.4% Why Invest in UIL? Stock Appreciation – Jan. ‘06 – March ‘07
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