Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Gas Natural Inc. | d415801d8k.htm |
| EX-99.1 - EX-99.1 - Gas Natural Inc. | d415801dex991.htm |
 Western New
York Investors Conference
September 28, 2012
Kevin J. Degenstein
President & COO
Thomas J. Smith
Vice President •
CFO & Director
Exhibit 99.2 |
 Safe Harbor
Statement These slides contain (and the accompanying oral discussion will contain)
“forward- looking statements”
within the meaning of the Private Securities Litigation Reform Act
of
1995.
Such
statements
involve
known
and
unknown
risks,
uncertainties
and
other
factors that could cause the actual results of the Company to differ materially from
the
results
expressed
or
implied
by
such
statements,
including
but
not
limited
to
the
Company's continued ability to make dividend payments, the company's ability to
implement
its
business
plan,
the
company's
ability
to
consummate
its
pending
acquisitions
and
to
successfully
integrate
the
operations
of
the
acquired
companies;
fluctuating energy commodity prices, the possibility that regulators may not permit
the company to pass through all of its increased costs to its customers, changes in the
utility regulatory environment, wholesale and retail competition, weather conditions,
litigation risks, risks associated with contracts accounted for as derivatives, and other
factors disclosed in the Company’s periodic reports filed with the Securities and
Exchange Commission. Consequently such forward looking statements should be
regarded as the Company’s current plans, estimates and beliefs. The Company
does not undertake and specifically declines any obligation to publicly release the
results of any revisions to these forward-looking statements that may be made to
reflect any future
events
or
circumstances
after
the
date
of
such
statements
or
to
reflect
the
occurrence of anticipated or unanticipated events.
2 |
 Market data
as of September 20, 2012 [Source: Bloomberg L.P.], Common Shares Outstanding as of June 30, 2012;
Ownership as of most recent filing
Gas Natural Inc.
Market Capitalization
$81.8 million
AVG Daily Volume (3 mos.)
17,034
Recent Closing Price
$10.03
Ownership:
Retail
Institutional
Insider
77%
7%
16%
52 Week High-Low
$9.54 -
$11.68
Shares Outstanding
8.2 million
Founded:
1909 IPO: 1986 NYSE MKT: EGAS
Our vision is to be a
growing natural gas
utility that provides
responsive, reliable
customer service at
fair and reasonable rates,
resulting in solid profitability.
3 |
 Revenue
Q2 2012 TTM: $88.7 million
Utility operations in Montana, Wyoming, Ohio, Pennsylvania, Maine,
North Carolina and Kentucky
Market and distribute natural gas and conduct interstate pipeline
operations in Montana and Wyoming
Natural Gas
All Other Operating Segments, Net
Operating Income
Q2 2012 TTM: $8.1 million
Natural Gas Utility Focus
4
0.4%
99.6%
12.9%
87.1% |
 Diversified
Utility Operations Approximately
70,000
LDC
customers
[1]
in
seven
states
Transports
&
distributes
~32.0
Bcf
of
natural
gas
annually
[2]
Geographically diverse customer base enhances stability of
operations
[1] As of December 31, 2011
[2] As of June 30, 2012
5 |
 Driving
Operational Excellence 6
Operations
Safety
Responsive
Customer
Service
Fair and
Reasonable
Rates
Culture of
Change
Focus on
Productivity
Profitable
Management
Empowered
Employees
Employee
Ownership
Quality and
Experienced
Leadership
Drive
Cultural
Change
Motivated
Fair, Honest
and Open |
 Growth
Strategy 7
Focus on cost controls and efficiency
Build rate base around core operations
Bolt
-on acquisition strategy
-
create critical mass: add rate base near existing utility operations
New market acquisition strategy
-
target areas with low saturation rates for natural gas
Major acquisitions
-
provide step change to operational efficiencies and customer counts
|
 Geographically
Diverse Customer Base Maine
2,400 customers
135 miles of transmission
and distribution pipeline
Market penetration rates
of < 3%
Market-based rates
North Carolina
1,600 customers
411 miles of transmission
and distribution pipeline
Market penetration rates
of < 3%
Market-based rates
Ohio
24,400 customers
1,056 miles of transmission
and distribution pipeline
No exclusive territories
Wyoming
6,600 customers
620 miles of transmission
and distribution pipeline
Montana
30,600 customers
572 miles of transmission
and distribution pipeline
Kentucky
~ 1,600 customers in
eight eastern counties
60 miles of pipeline
right-of-way
Pennsylvania
8 |
 Acquisitions
Expand Capabilities Acquired LDCs
in NC & ME
$5 million
Acquired North
Montana LDC
~1,500
customers
$0.5 million
Acquired OH
& PA LDCs
~23,000
customers
$38 million
Acquired
pipeline and
rights-of-way
in OH & KY
$3.3 million
Acquired
propane
operations
in NC & VA
~4,500
customers
$1.6 million
Acquired LDC
in eastern KY
~1,600
customers
$1.6 million
9
Successful
bidder for
pipeline
easement &
land in ME
$4.5 million
Oct & Dec
2007
Nov
2009
Jan
2010
Apr
2011
Aug
2011
Apr
2012
June
2012 |
 Driving Growth
Through Investment (in
billion
cubic
feet
-
Bcf)
Throughput
(in thousands)
Customers
10
* Fiscal Year = January 1 -
December 31; TTM = July 1 -
June 30
23.0
29.0
30.0
32.0
32.2
2008
2009
2010
2011
Q2 TTM
2012*
36.0
62.0
63.5
70.0
2008
2009
2010
2011 |
 Marketing
& Production Operations in MT & WY
Markets ~1.2 Bcf annually for C&I customers
Natural gas production: 43% net revenue interest in 160 natural gas wells
Pipeline Operations
Glacier Gathering System: 30 miles of FERC-regulated interstate pipeline
in MT & WY
Shoshone Transmission: FERC-regulated interstate pipeline
Propane Operations
Deliver liquid propane, heating oil and kerosene to ~4,300 customers
in NC & VA
Opportunity to strengthen presence in NC and convert customers to
natural gas
Other Operations Support Utility Efforts
11 |
 Financial
Highlights |
 Operating
Income ($ in millions)
Fourth quarter 2009 added
Cut Bank in Montana
First quarter 2010 added
Ohio and Pennsylvania
Improved operational
efficiencies
Disciplined cost
management
Investing in infrastructure
for future growth
* 2008 calendar year unaudited
13
* TTM
=
July
1
-
June
30
$6.9
$9.1
$11.1
$10.2
$8.1
2008*
2009
2010
2011
Q2 2012
TTM* |
 Net
Income Acquisitions and rate
base investments lead to:
–
Increased volume
–
Increased customer count
Focused on cost control
Positioned to earn allowed
returns
Second half of 2011 and
2012 YTD Natural Gas
segment performance
dampened by warmer
weather
$6.8
($ in millions)
* 2008 calendar year unaudited
14
* TTM
=
July
1
-
June
30
$3.3
$4.3
$5.8
$5.4
$3.3
$2.5
2008*
2009
2010
2011
Q2 2012
TTM*
Net Income
Deferred Tax Benefit |
 Flexible
Balance Sheet * 2008 calendar year unaudited
Cash & Cash Equivalents
($ in millions, except per share)
Capital Expenditures
Book Value per Share
15
$18.5
YTD
Budget
$1.1
$2.8
$13.0
$10.5
$2.5
12/31/2008*
12/31/2009
12/31/2010
12/31/2011
6/30/2012
$7.00
$8.16
$9.04
$9.17
$9.21
12/31/2008*
12/31/2009
12/31/2010
12/31/2011
6/30/2012
$7.0
$8.9
$8.5
$23.2
$8.8
2009
2010
2011
2012
2008* |
 Funded Debt and
Equity Total Capitalization
16
$43.1
$48.7 $95.7 $106.1
$106.5
6/30/2012
12/31/2011
12/31/2010
12/31/2009
12/31/2008
Long-Term Debt
Equity
$13.0
$30.1
$13.0
$35.7
$22.0
$31.3
$31.3
$74.7
$75.2
$73.7
($ in millions) |
 Regular Cash
Dividends Monthly cash dividend,
currently $0.045 per share
Current dividend yield is
5.35%, which is 114 bps
higher than the peer group
average of 4.21%
Dividend yield as of August 21, 2012
Peer group consists of CV, CHG, CPK,
CNIG, DGAS, LG, RGCO, UIL, UTL
* 2008 calendar year unaudited
** January-June 2012
Cash Dividends Paid
17
$0.46
$0.53
$0.56
$0.54
$0.27
2008*
2009
2010
2011
2012
Y-T-D** |
 Company
Highlights Growth-Oriented Utilities
Focused Acquisition Strategy
Geographically Diverse Customer Base
Experienced Leadership Team
18 |
 Western New
York Investors Conference
September 28, 2012 |