In Inve vestor Pre or Prese sent ntati ation on May 21, 2018
Forward Looking Statements This document contains forward-looking statements within the meaning of the Private Litigation Reform Act of 1995, as amended. Some of these forward-looking statements can be identified by the use of forward- looking words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “projects,” “strategy,” or “anticipates,” or the negative of those words or other comparable terminology. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions including, but not limited to, the following factors: (1) the risk that the conditions to the closing of the transaction are not satisfied, including the risk that required approvals from the shareholders of the Company or the stockholders of SJW Group for the transaction are not obtained; (2) the risk that the regulatory approvals required for the transaction are not obtained, or that in order to obtain such regulatory approvals, conditions are imposed that adversely affect the anticipated benefits from the proposed transaction or cause the parties to abandon the proposed transaction; (3) the risk that the anticipated tax treatment of the transaction is not obtained; (4) the effect of water, utility, environmental and other governmental policies and regulations; (5) litigation relating to the transaction; (6) uncertainties as to the timing of the consummation of the transaction and the ability of each party to consummate the transaction; (7) risks that the proposed transaction disrupts the current plans and operations of SJW Group or the Company; (8) the ability of SJW Group and the Company to retain and hire key personnel; (9) competitive responses to the proposed transaction; (10) unexpected costs, charges or expenses resulting from the transaction; (11) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the transaction; (12) the combined companies’ ability to achieve the growth prospects and synergies expected fr om the transaction, as well as delays, challenges and expenses associated with integrating the combined companies’ existing businesses; and (13) legislative and economic developments. These risks, as well as other risks associated with the proposed transaction, are more fully discussed in the joint proxy statement/prospectus that is included in the Registration Statement on Form S-4 filed by SJW Group with the SEC on April 25, 2018 in connection with the proposed transaction and the Company’s quarterly report on Form 10 -Q for the period ended March 31, 2018 filed with the SEC on May 9, 2018. In addition, actual results are subject to other risks and uncertainties that relate more broadly to the Company’s overall bu siness and financial condition, including those more fully described in the Company’s filings with the SEC including its annual report on Form 10 -K for the fiscal year ended December 31, 2017 and SJW Group’s overall business, including those more fully described in SJW Group’s filings with th e SEC including its annual report on Form 10-K for the fiscal year ended December 31, 2017. Forward looking statements are not guarantees of performance, and speak only as of the date made, and neither the Company or its management nor SJW Group or its management undertakes any obligation to update or revise any forward-looking statements. 2
Agenda The Merger with SJW Group (“SJW”) delivers significant value to Connecticut Water shareholders, both at close and over the long-term, and creates a new company that reflects the investment criteria that our shareholders have said they desire The SJW Merger is the result of an independent process and robust arm’s length negotiations designed to serve the best interests of Connecticut Water shareholders, while also recognizing the stakeholder responsibilities we have as a regulated public utility Eversource's unsolicited acquisition proposal is not a Superior Proposal and would not serve the interests of Connecticut Water shareholders or stakeholders 3
The SJW Merger Delivers Significant Value to CTWS Shareholders – At Close and Over the Long-Term Tax free, stock-for-stock merger provides value at close and opportunity to participate in future growth ◦ Pro forma ownership: 40% CTWS / 60% SJW Immediate value at close ◦ 18% premium to unaffected CTWS share price 1 Premium well in excess of 5% average 2 premium for merger of equals (“MOE”) transactions Immediately accretive to CTWS’ standalone EPS – without need for job cuts or significant cost savings ◦ SJW merger expected to be approximately 5% – 10% annually accretive from 2019 – 2022 compared to CTWS’ stand -alone EPS 3 Immediate uplift to CTWS dividend with path for continued, sustainable dividend increases ◦ Dividend at close expected to be at least equivalent to SJW’s announced 2018 annual dividend of $1.12 per share (equivalent to $1.27 per CTWS share) ◦ SJW and its predecessor have paid a common stock dividend for 74 consecutive years, and its annual dividend amount has increased in each of the last 50 years Leading national platform with significant future growth opportunities ◦ Planned organic investments across combined operations expected to drive significant EPS growth over the next five years compared to standalone CTWS ◦ Increased financial strength of new company to support acquisition-driven growth across a diverse set of geographies 1 Based on 1.1375x exchange-ratio and SJW and CTWS unaffected share prices as of March 14, 2018 of $54.38 and $52.57, respectively 2 Includes the four utility MOE transactions completed or currently pending since 2005, excluding the SJW Merger 3 Estimates reflect March 22, 2018 final decision in SJW’s California Public Utilities Commission cost of capital proceeding Note: The value per share of the SJW Merger is not fixed and fluctuates based on SJW Group’s stock price 4
SJW + CTWS = Third-Largest Pure-Play U.S. Water Utility Larger Scale Increases Access to Capital Markets at Lower Cost, Better Enabling the New Organization to Compete for Attractive Growth Opportunities on a National Level Investor-Owned Water Utilities by Enterprise Value 1 ($B) $22.9 $8.3 $2.7 $2.6 $2.4 $1.6 $1.1 $0.8 $0.5 $0.5 2 AWK WTR Pro Forma CWT AWR SJW CTWS MSEX YORW ARTN.A Investor-Owned Water Utilities by Rate Base 3 ($B) $11.6 $4.1 $1.3 $1.1 $0.8 $0.8 $0.6 $0.5 $0.3 $0.2 AWK WTR Pro Forma CWT AWR SJW MSEX CTWS YORW ARTN.A 1 Source: SEC filings, FactSet as of April 25, 2018, the last of SJW’s unaffected price 2 Pro forma enterprise value based on standalone SJW enterprise value at last unaffected stock price and CTWS enterprise value at the 1.1375x exchange ratio 3 Source: 2017 rate base per company investor presentations and regulatory filings. 2017 net utility plant from SEC filings used in lieu of rate base for MSEX and ARTNA due to lack of recent rate base disclosure 5
Significantly Larger Utility Platform Supports Internal and External Growth Opportunities Enterprise Value 1 ($B) Connections (000s) 379 400 3 $2.7 2.5 300 244 2 $1.6 1.5 200 $1.1 135 1 100 0.5 0 0 Pro Forma Pro Forma Rate Base ($B) Full-Time Employees 1.5 1000 $1.3 ~700 750 1 $0.8 500 ~400 $0.5 ~300 0.5 250 0 0 Pro Forma Pro Forma Note: Enterprise values based on market close as of April 25, 2018; Rate base, connections and employees as of December 31, 2017 1 Pro forma enterprise value based on standalone SJW enterprise value and CTWS enterprise value at the 1.1375x exchange ratio 6
Maintains Benefits of CTWS ’ Regulated Earnings with Enhanced Market Diversity Reducing Our Regulatory Risk National Footprint Earnings Mix Market Mix ME Unregulated TX 5% 7% 5% CT 30% CA Regulated 60% 93% Maintaining a strong New entry into higher regulated company growth regions SJW states of operation CTWS states of operation Corporate headquarters New England headquarters Note: Based on 2017 net income 7
Constructive Regulatory Mechanisms and Market Attributes in Each State Significant economic opportunity with annual GDP growth near 6% 1 Future test year CA CA Balancing and memorandum accounts Cost of capital proceeding outside of general rate case Water Infrastructure and Conservation Adjustment (WICA) CT Water Revenue Adjustment (WRA) mechanism CT` 180-day statutory time frame for rate proceedings Streamlined rate case ME Water Infrastructure Surcharge (WISC) ME Water revenue adjustment mechanism Significant economic opportunity with annual GDP growth near 3% 1 Historical test year TX TX Recovery of reasonable operating costs and a fair rate of return Recently moved to PUCT regulation from Texas Commission on Environmental Quality (TCEQ) 1 Based on 2016 MSA Year-over-Year GDP Growth Source: U.S. Department of Labor 8
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