Attached files
| file | filename |
|---|---|
| 8-K - UIL HOLDINGS CORPORATION 8-K 5-3-2012 - UIL HOLDINGS CORP | form8k.htm |
| EX-99.1 - EXHIBIT 99.1 - UIL HOLDINGS CORP | ex99_1.htm |
1Q 2012 Earnings Presentation
May 4, 2012
Exhibit 99.2
2
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 forecasts for the future. Such forward-looking statements are based on UIL Holdings’ expectations and involve risks
and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements. Such risks and
uncertainties include, but are not limited to, general economic conditions, legislative and regulatory changes, changes in demand for
electricity, gas and other products and services, unanticipated weather conditions, changes in accounting principles, policies or
guidelines, and other economic, competitive, governmental, and technological factors affecting the operations, markets, products and
services of UIL Holdings’ subsidiaries, The United Illuminating Company, The Southern Connecticut Gas Company, Connecticut
Natural Gas Corporation and The Berkshire Gas Company. The foregoing and other factors are discussed and should be reviewed in
UIL Holdings’ most recent Annual Report on Form 10-K and other subsequent periodic filings with the Securities and Exchange
Commission. Forward-looking statements included herein speak only as of the date hereof and UIL Holdings undertakes no obligation
to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated
events or circumstances.
James Torgerson
President and Chief Executive Officer
Richard Nicholas
Executive Vice President and Chief Financial Officer
1Q 2012 Earnings Highlights
q Consolidated net income in 1Q ‘12 of $47.1M or $0.92 per diluted earnings per share -
a decrease of $4.9M or $0.10 per diluted share for the same time period in 2011 due to
lower net income at the gas companies
a decrease of $4.9M or $0.10 per diluted share for the same time period in 2011 due to
lower net income at the gas companies
§ Net income from the gas companies declined $8.9M or $0.18 per diluted share in 2012 compared to
2011 primarily due to weather
2011 primarily due to weather
q Decreased margin partially offset by weather insurance
§ 1Q ‘12 heating degree days were 20% below normal, 23% below the heating degree days in 1Q ‘11
§ Full revenue decoupling mechanism is in place for electric distribution - no weather impact
q GenConn earnings increased $2.4M in 1Q ‘12 compared to 1Q ’11
§ Middletown plant became fully operational in June ’11
q Continue to invest in the Connecticut portion of the New England East West Solution
projects
projects
§ Invested $13M through April 30, 2012
q Continued progress on gas conversion growth initiative
§ Converted 28% more customers in the 1Q ‘12 compared to the 1Q ‘11
3
Gas Conversions
q Converted 2,797 customers as of mid-April ’12 - 29% increase over the same period in ‘11
q 2012 goal is to convert approximately 10,200 customers to natural gas heat, a 50% increase
over 2010 levels of 6,800 additions
over 2010 levels of 6,800 additions
§ Converted approximately 8,300 customers in 2011 - 22% above the 2010 level
§ Target is to convert 30,000-35,000 gas heating customers for the period 2011-2013
4
As of April 2012 -
30% ahead of 2011
customer conversions
pace
30% ahead of 2011
customer conversions
pace
Gas Conversions - cont.
q Consumer interest in converting remains strong
§ Financing options have been expanded to assist customers with up-front conversion
costs
costs
§ Natural gas supply prices are low and projected to remain low for the foreseeable
future
future
§ Delivered natural gas price for heating customers is approximately half the cost of
heating oil on an equivalent basis
heating oil on an equivalent basis
q Each new residential customer is anticipated to generate approximately $280-
$315 of distribution net operating income annually
$315 of distribution net operating income annually
5
State Regulatory Update
6
Utility Company Storm Response
q Investigation of Public Service Companies’
response to 2011 Storms (DN 11-09-09)
response to 2011 Storms (DN 11-09-09)
q Hearings for Electric - 4/23/12 - 5/4/12
q Draft decision expected 6/12/12, final decision
expected 6/27/12
expected 6/27/12
Renewable Energy
q On 1/18/12, UI filed proposal with PURA
outlining framework for approval of UI’s
renewable connections program under which UI
would develop up to 10MW of renewable
generation for recovery on a cost of service basis
outlining framework for approval of UI’s
renewable connections program under which UI
would develop up to 10MW of renewable
generation for recovery on a cost of service basis
q UI expects PURA to issue a final decision in the
third quarter of 2012
third quarter of 2012
UI Electric Distribution Rate Case
q Evaluating timing of distribution rate case to
reflect significant investments in distribution
infrastructure
reflect significant investments in distribution
infrastructure
Berkshire Gas Rate Plan
q 10-yr rate plan expired on 1/31/12
q Current rates remain in effect
UI Electric Decoupling
q On 4/2/12, UI filed the results of the decoupling
rider for the 2011-2012 rate year
rider for the 2011-2012 rate year
q Approximately $5.1M owed by customers
q UI’s decoupling mechanism is allowed to
operate under its current structure until a PURA
decision in UI’s next rate case proceeding
operate under its current structure until a PURA
decision in UI’s next rate case proceeding
q On 4/24/12, Governor Malloy nominated Arthur
House(D) as a director of PURA
House(D) as a director of PURA
§ House recently served as Chief of the Communications
Group for National Geospatial-Intelligence Agency
Group for National Geospatial-Intelligence Agency
§ Replaces position held by Anna Ficeto(D), who was
recently sworn in as a Superior Court judge
recently sworn in as a Superior Court judge
q On 4/25/12, Governor Malloy re-nominated Jack
Betkoski(D) as a director of PURA
Betkoski(D) as a director of PURA
q Kevin DelGobbo(R) declined the Governor’s offer
for re-nomination as a PURA director and will
leave on 5/11/12
for re-nomination as a PURA director and will
leave on 5/11/12
Pubic Utilities Regulatory Authority
State Legislative Update
as of May 1, 2012
as of May 1, 2012
q CT legislative session ends May 9th
§ Various bills have moved through Energy & Technology Committee dealing with utility storm
performance, system reliability and resiliency, renewable energy and expansion of gas
infrastructure
performance, system reliability and resiliency, renewable energy and expansion of gas
infrastructure
q Senate Bill (SB) 23 - An Act Enhancing Emergency Preparedness and Response
§ Governor Malloy’s bill in response to 2011 weather events
§ Requires PURA to establish minimum standards of performance for utilities in storm emergency
preparation & response
preparation & response
§ Requires a request for proposal for micro-grid pilots, including electric distribution company
participation
participation
q Bills dealing primarily with gas expansion opportunities
§ SB 450 - An Act Concerning Energy Conservation and Renewable Energy
q Requires Department of Energy and Environmental Protection to study opportunities for natural gas line
extensions
§ SB 451 - An Act Concerning the Establishment of a Heating Furnace and Boiler Replacement Program
q This bill requires each electric distribution company to establish and administer a loan program to help
consumers finance higher efficiency furnace or boiler replacements. The costs of the loans would be
recovered on the customer's electric bill. The electric distribution company’s cost for administering
the program is recovered through the Systems Benefits Charge.
7
Economic Update
8
q State’s unemployment rate decreased for the eighth consecutive month - the
lowest rate in three years (1)
lowest rate in three years (1)
q Seasonally adjusted unemployment rates as of March 2012(2)
§ CT - 7.7%
§ MA - 6.5%
§ National - 8.2%
q Unemployment rates in the largest service areas and cities as of March 2012(3)
§ Bridgeport labor market areas (LMAs) 7.6%, (City of Bridgeport 12.4%)
§ New Haven LMAs 8.5%, (City of New Haven 11.9%)
§ Hartford LMAs 8.1%, (City of Hartford 14.7%)
(1) State of Connecticut website
(2) U.S. Bureau of Labor Statistics
(3) CT Department of Labor
1Q 2012 Financial Results by Business
Net Income ($M)
Net Income ($M)
9
1Q ‘12 vs. 1Q ‘11
1Q 2012 Financial Results - Details
10
Electric distribution, CTA, GenConn & Other
q 32% increase in 1Q ‘12 net income over the same period in 2011
§ GenConn contributed pre-tax earnings of $4.5M to UIL for the 1Q ‘12 compared to $2.1M for the same
period in 2011 - Middletown plant became fully operational in June 2011
period in 2011 - Middletown plant became fully operational in June 2011
q Average D & CTA ROE as of 3/31/12: 8.88%
Electric transmission
q Net income of $7.4M in 1Q ‘12, compared to $7.7M in 1Q ‘11
Gas distribution
q 23% decrease in 1Q ‘12 net income over the same period in 2011
§ Decline primarily due to warmer than normal weather, which was only partially offset by weather
insurance
insurance
§ $14.6M decrease in margin, offset by $3.5M of weather insurance - resulting in pre-tax weather impact
of $11.1M in the 1Q ‘12
of $11.1M in the 1Q ‘12
§ 1Q ‘12 impact due to warmer weather - ($0.13) per diluted share compared to 1Q ‘11, ($0.10) per
diluted share compared to normal weather, both partially offset by weather insurance
diluted share compared to normal weather, both partially offset by weather insurance
q Preliminary average ROEs as of 3/31/12: SCG 4.80%-5.00%, CNG 6.85%-7.05%
q Preliminary average weather normalized ROEs as of 3/31/12: SCG 6.75%-6.95%, CNG 9.65%-
9.85%
9.85%
Corporate
q 1Q ‘12 after-tax costs of $3M compared to $3.8M in 1Q ‘11
§ The reduction of costs were due to a decrease in interest expense resulting from lower short-term
borrowings
borrowings
CapEX
q 2012 CapEx projections reduced by $25M, mainly in electric distribution
Debt Maturities, Liquidity & Credit Ratings
11
|
Issuer
|
S&P
|
Moody’s
|
|
UIL
Holdings |
BBB
(Stable) |
Baa3
(Stable) |
|
United
Illuminating |
BBB
(Stable) |
Baa2
(Stable) |
|
SCG
|
BBB
(Stable) |
Baa2
(Stable) |
|
CNG
|
BBB
(Stable) |
Baa1
(Stable) |
|
Berkshire
|
BBB
(Stable) |
Baa2
(Stable) |
Based on current plans - expect no need for
external equity at least through 2013
external equity at least through 2013
*
Available Liquidity
* Completed 2/1/12
Debt Maturities ($M)
Credit Ratings
Amounts may not add due to rounding.
Does not include $100M long-term debt priced in January 2012, which closed in
early April
early April
12
q Consolidated earnings guidance of $2.00-$2.15 per diluted share
§ Primarily due to warmer than normal weather during the winter heating season, which significantly
impacted gas distribution earnings
impacted gas distribution earnings
q Electric company earnings guidance of $1.50-$1.65 per diluted share
§ Increased the low end of the range for electric distribution, CTA & other to $0.90-$1.00 per diluted share
§ Increased transmission guidance to $0.55-$0.65 per diluted share
q Revised gas distribution range to $0.70-$0.80 per diluted share
q Earnings guidance for UIL Corporate remains unchanged
Q&A
Appendix
Segmented 1Q ‘12 Earnings
Information
Information
15
2011-2016 Average Rate Base
GenConn Equity Investments:
Rate Base $M (Excluding GenConn Equity Investments):
$2,062
$2,235
$2,388
$2,535
$2,731
1%
41%
22%
36%
40%
22%
38%
40%
22%
38%
38%
24%
38%
Amounts may not add due to rounding.
16
2011-2016
CAGR 6.9%
Gas
Distribution:
3.6%
Electric
Transmission:
10.2%
Electric
Distribution:
11.1%
2%
43%
22%
33%
4%
42%
21%
33%
$1,956