MICHAEL R. WINTER CHAIRMAN OF THE BOARD OF DIRECTORS Welcome Review of Proposals 2015 Gas Natural Inc. 2
GREGORY J. OSBORNE PRESIDENT & CHIEF EXECUTIVE OFFICER Corporate Overview 2015 Gas Natural Inc. 3
Distribute 26 billion cubic feet of gas 68,000 customers Natural gas utility operations in Montana, Ohio, Maine, North Carolina Founded: 1909 Map excludes Pennsylvania assets, which are being sold to Utility Headquarters:…
Gas Natural Inc. Our VISION: To be a premier natural gas company recognized as the benchmark in the natural gas utility industry by customers, peers and investors Our MISSION: To provide safe, reliable, cost-effective natural gas…
Gas Natural Transformation New management New board Rationalizing assets Improving regulatory relationships Addressing past operational and control issues 2015 Gas Natural Inc. 7
Driving Value: 12-18 Months Restructure organization Reinstate EWI dividend to parent Recapitalization of debt SAP implementation Phase I Phase II Rationalize assets Divest Wyoming assets Divest Pennsylvania assets Divest…
Improving Operations and Performance Fixing capital structure Recapitalization Organizational structure Managing operating costs Right-sized Ohio operations New ERP system In-house legal counsel Improving control structure…
Improving Regulatory Relations Montana Public Service Commission EWI regular and special dividend approved Public Utilities Commission of Ohio Stipulation agreement in process Maine Public Utilities Commission Seven year…
Invest in Organic Growth Customers [1] (in thousands) 68.0 65.4 62.5 Rapidly expanding market 57.2 59.0 share in ME and NC Midstream pipeline 2010 2011 2012 2013 2014 opportunities Full Service Distribution Geographically…
Capitalize on Hidden Assets Maine/North Carolina Utility Assets: Purchase price: 5 million 161 million of pipe investment by previous owner 52 million additional investment Underserved markets with market-based rates Market…
Future Growth Through Acquisition Bolt-On New Market Transformational Create critical Target areas New level of mass; add rate with low operational base near saturation rates efficiencies and existing utility for natural gas…
Improving Corporate Governance New Slate of Directors Proactively increased Michael R. Winter transparency with Recently retired partner from the Energy regulators & Utilities practice of PricewaterhouseCoopers LLP Enhanced…
JAMES E. SPRAGUE, CPA VICE PRESIDENT & CFO Financial Highlights 2015 Gas Natural Inc. 15
Earnings Power Book Value per Share[1] 9.52 9.33 9.12 9.18 Growing shareholders equity Focused on achieving 2012 2013 2014 3/31/2015 highest allowed returns Return on Equity[2]* Implies much greater 7.5% 6.0% 5.7% earnings…
Q1 2015 Financial Results Gross Margin[1] Adjusted Operating Income[1]* (in millions) (in millions) 17.4 17.6 8.7 8.3 28.3% 32.7% 14% 15% Q1 2014 Q1 2015 Q1 2014 Q1 2015 Adjusted Net Income [1]* & EPS [1]* Increased gross…
Cash and Capital Investments CapEx[1] vs. D&A[1] (in millions) 23.5 21.6 18.4 17.7 2015 CapEx: 9 million 5.6 6.6 6.8 4.3 Add more services to 2012 2013 2014 Q1 2015 TTM installed mainlines CapEx D&A Investing in growth…
Recapitalize to Support Growth Total Debt[1] & Equity[1] Leverage[2] (in millions) 97.5 96.3 99.9 5.8x 76.3 71.1 71.1 71.1 67.0 3.8x 3.7x 3.5x 2012 2013 2014 3/31/2015 2012 2013 2014 Q1 2015 TTM Debt Equity Equity as a % of…
GREGORY J. OSBORNE PRESIDENT & CHIEF EXECUTIVE OFFICER Outlook 2015 Gas Natural Inc. 21
Key Success Factors Drive customer growth by 4%-5% Increase throughput Proactively improve regulatory transparency Continue pipeline investments in utility assets for growth Rationalize assets to generate highest allowable…
MICHAEL R. WINTER CHAIRMAN OF THE BOARD OF DIRECTORS Review Vote Results 2015 Gas Natural Inc. 23
2015 Annual Shareholders Meeting July 29, 2015 24
SUPPLEMENTAL INFORMATION 2015 Gas Natural Inc. 25
Risk Mitigation Through Geographic Diversification Maine Montana Ohio North Carolina 8,300 customers, up 28,900 customers, up 31,200 customers 18.6% 5.1% 638 miles of distribution 250 miles of transmission 1,344 miles of…
Heating Degree Days Heating Degree Days Three Months Ended Percent Colder (Warmer) March 31, 2015 Compared to Normal 2015 2014 Normal 2014 Great Falls, MT 3,211 2,778 3,590 (13.48%) (22.62%) Bangor, ME 3,576 4,453 4,039 24.52% 10.25%…
Income Statement (in thousands, except share and per share data) Year Ended December 31, Three Months Ended March 31, 2010 2011 2012 2013 2014 2015 2014 REVENUES Natural gas operations 75,202 80,575 73,901 97,233 123,053 51,280 56,807…
Adjusted EBITDA Reconciliation (in thousands) For Years Ended Three Months Ended December 31, March 31, 2011 2012 2013 2014 2015 2014 GAAP Income from continuing operations 4,065 3,195 5,852 2,729 4,417 4,537 +Interest expense 2,032…
Adjusted Operating Income, Net Income & EPS For Years Ended Three Months Ended (in thousands) December 31, March 31, 2011 2012 2013 2014 2015 2014 GAAP Operating Income 9,147 8,743 11,752 7,099 7,675 8,011 +Customer bankruptcy…
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