Your SlideShare is downloading. ×
Schwarz Investment Banking View (Morgan Stanley)
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Schwarz Investment Banking View (Morgan Stanley)

2,699

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
2,699
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
75
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM1 Investment Banking View of the Utility Industry 21 September 2005
  • 2. Table of Contents L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM2 Section 1 Utility Sector Update Section 2 Perspectives on Recent Strategic Activity Section 3 Energy Policy Act Section 4 Transmission Environment Update Appendix A Bio
    • Timothy R. Schwarz
  • 3. Section 1 Utility Sector Update L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM4
  • 4. Utility Sector Update A Brave New World of Growth is Emerging… L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM5
      • Growth stocks are starting to make a comeback after 5 consecutive years of trailing value stocks
        • Year-to-date performance supports our view, as growth, measured by the Barra indexes, has marginally outperformed value. More telling could be that growth has triumphed over value during each of the last six months
        • However, unlike past rebounds in growth stocks, we expect a GARP orientation to dominate during this cycle
        • Earnings growth and dividend growth have reconnected after the long absence that defined the 1990s
    1 Source S&P, Thomson Financial, Morgan Stanley Research Source S&P, Thomson Financial, Morgan Stanley Research Source Ibbotson, Morgan Stanley Research Source Morgan Stanley Research Apr 77 Oct 84 Jul 94 Nifty Fifty Peak Energy Sector Peak Kuwait/ Recession Tech 2000 Growth Value Growth Value Correlation Between Dividend Growth and Earnings Growth Index of Relative Strength of Growth vs. Value Effectiveness Déjà Vu: We Think Growth Investors Are Looking at Something Akin to the 1994-1997 Period S&P500 Growth Relative to S&P 500 Value Annual Total Return
  • 5. Utility Sector Update Utility Sector Sensitivity to Interest Rates Notes 1. Forecast as of August 8, 2005; all forecast values are for the end of the indicated period L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM6
      • With the Fed tightening 10 consecutive times, U.S. long-term interest rates have not risen in line with expectations
      • U.S. utilities have not been as sensitive to interest rate movements as historically observed
      • Morgan Stanley forecasts that the 10 and 30 year US Treasuries will reach 4.75% and 5.0%, respectively, by the end of the year
    2 Source FactSet and Morgan Stanley Research Source Bloomberg and Morgan Stanley Research and The Wall Street Journal S&P Utility Index FY1 P/E and 30-Year Treasury Yield P/E (x) Yield (%) Interest Rate Outlook (1) %
  • 6. L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM7 Utility Sector Update Utility Sector Valuation Relative to Broader Market 3
      • Current valuations are not compelling as the sector is trading close to one standard deviation above its long-term average on most metrics
      • Valuations also are unattractive relative to the broader market
      • Utility sector trading at 107% of the S&P 500 on a forward P/E basis, above the 5-year historical average of 74%
    Source FactSet, Bloomberg, Morgan Stanley Research Source FactSet, Bloomberg, Morgan Stanley Research
    • Notes
    • Morgan Stanley Research data as of September 6, 2005
    • Market data as of September 6, 2005
    Relative Valuation (S&P Utility Index vs. S&P 500 Index)
  • 7. Utility Sector Update Investor Perception of the Utility Sector L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM8
      • Morgan Stanley recently conducted an informal survey of the top 25 investors in the utility sector asking two fundamental questions on current valuation levels and their sustainability
    4
    • Question #1: “The outperformance of the utility industry relative to other sectors for the past 12-18 months has surprised many in the investment community, what do you think are the principal factors supporting this phenomenon?”
      • Macro Factors
        • Interest rate environment
        • Risk-adjusted growth relative to broader market
        • Lack of direction for broader economy
        • Tax law changes
      • Sector Specific Factors
        • Commodity price environment
        • Constructive regulatory environment
        • PUHCA repeal
    • Question #2: “Looking out over the next 12-24 months, do you think this outperformance will be sustainable?”
      • Macro Factors
        • Interest rate environment (Fed actions and shape of the yield curve)
        • Growth in other sectors (i.e., alternative investment opportunities)
        • Economy (slow-down = sustainability of outperformance / growth = underperformance)
      • Sector Specific Factors
        • Special situation stories can only turn around once
        • M&A / strategic environment
        • Regulatory environment / ability to “pass through” costs to customer
  • 8. Utility Sector Update Analyzing Utilities Based on Commodity Exposure L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM9
      • Utilities with commodity growth “kickers” continue to be in favor, however, fully regulated names have also performed well over the past six months
    5 Source FactSet Source FactSet Low Commodity Exposure High Low Commodity Exposure High (1) (6) (2) (3) (4) (7) (5) (8) (6) (2) (3) (4) (7) (5)
    • Notes
    • Includes RRI, NRG, DYN and CPN
    • Includes D, TXU, WMB, EP
    • Includes DUK, FPL, CEG, SRE, DTE, TE
    • Includes EXC, ETR, EIX, AEE, PNM
    • Includes FE, AEP, PPL, CIN, DPL
    • Includes PNW, PSD, IDA, AVA
    • Includes SO, PCG, ED, PGN, XEL, POM, NU
    • Includes RRI, NRG and DYN. CPN was excluded because its YTD share price change was -25.4%
    2006E P/E (x) YTD Share Price Change (%)
  • 9. Utility Sector Update Does EPS Growth Matter? L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM10
      • Given the spotted track record of the utility sector over the past three years, investors are largely discounting EPS growth rates greater than 5%
      • Taking on greater business risk, in the search for incremental EPS growth, is not necessarily being rewarded appropriately by the investment community for the commensurate risk
        • The market does not see significant value in distinguishing between 4-6% growth for a couple of year period vs. 2-3% long-term growth when visibility is limited to the regulatory treatment of rate base and timing of rate increases
    6 Source FactSet, IBES Projected Beta IBES 2006E P/E Sources FactSet, IBES and S&P Credit Reports IBES 2006E P/E S&P Business Profile Rating Sources FactSet, IBES and Barra Projected Beta vs. Forward P/E 0.4 = Low Risk/1.0 = High Risk Business Profile vs. Forward P/E 2 = Low Risk/7 = High Risk Estimated Growth Rates vs. 2006E P/E
  • 10. Utility Sector Update What is the Market Rewarding? L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM11
      • There continues to be a negative relationship between growth and P/E multiples
        • Market is skeptical of Utilities achieving stated growth objectives above 5%
        • Premium is being placed on lower risk, low growth strategies (i.e., stick to core competencies)
      • The market is also placing premium valuations on companies that are returning cash to shareholders if they don’t have a use for it in their core business
        • High dividend paying stocks are being rewarded by the market
      • Conclusion: Any “growth” investments face a high hurdle rate for investors
    7 Source FactSet and IBES Source FactSet and IBES IBES 2006E P/E Payout Ratio (%) IBES 2006E P/E IBES LT Growth Rate (%) … Estimated Growth Rates Are Not Necessarily Rewarded Higher Dividend Payouts Are Still Being Rewarded…
  • 11. Section 2 Perspectives on Recent Strategic Activity L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM13
  • 12. L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM14 Perspectives on Recent Strategic Activity Key Observations
    • Notes
    • Includes global announced transactions of $100MM or more; excludes terminated transactions
    • Annual amounts based on mean of percentage premiums paid over unaffected stock price which is defined as stock price 4 weeks prior to the earliest of the deal announcement; announcement of a competing bid; and market rumors before 31 March 2005
    • Includes all announced bids irrespective of consideration offered (i.e., includes all cash, all stock and hybrid bids). Excludes outliers
      • M&A activity in 2005 continues to be robust
        • YTD announced global volume up 35% over same period in 2004
    8 Source Thomson Financial as of 9 Sept 2005 Source Thomson Financial
      • Valuation levels provide support to the current M&A environment
        • Acquisition premiums are down as buyers demonstrate increased discipline
    Premiums Paid Have Come Down Significantly M&A Premiums Paid for Global Public Targets (1990–YTD) (%) (2) (3) Volume and Average Deal Size up Significantly (1) Volume ($Bn) Avg. Transaction Size ($MM)
  • 13. L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM15 Perspectives on Recent Strategic Activity The Market Is More Receptive to M&A
    • Note
    • Aftermarket performance compared to acquiror’s unaffected stock price (1-day prior to announcement)
    9
      • Improved market receptivity to announced transactions
    Median Aftermarket Performance of the Acquiror’s Stock Price Following Announcement (1) Largest 20 Announced Deals in the U.S. per Year (1999–YTD)—Change (%) Source Thomson Financial as of 9 Sept 2005 Median Aftermarket Performance of the Acquiror’s Stock Price Following Announcement (1) Largest 20 Announced Deals in the U.S. per Year (1999–YTD)—Change (%) Source Thomson Financial as of 9 Sept 2005
  • 14. Perspectives on Recent Strategic Activity
    • Notes
    • Based on unaffected prices as of 5/6/2005, 12/15/2004, and 5/23/2005, for Duke/Cinergy, Exelon/PSEG, and Scottish Power, respectively
    • Aggregate Value without securitized debt is $25Bn; EV/2005E EBITDA without securitized debt is 10.4x
    • Based on equity research estimates
    • LTM P/E (March ’05) is 20.5x
    • LTM EV/EBITDA (March ’05) is 8.6x
    L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM16 10 (1) (1) (1) (1) (1) (3) (3)
      • Price performance since announcement
    (4) (5) (2) (2) Comparison of Recent M&A Transactions Key Merger Statistics
  • 15. L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM17 Perspectives on Recent Strategic Activity Emergence of Alternative Sources of Capital
    • Note
    • Transactions greater than $400MM. Includes transactions with U.S. based seller or buyer
      • Financial sponsors and hedge funds have emerged as an increasingly important pool of capital
        • Proliferation of $1Bn+ funds
      • Convergence of hedge funds and private equity
      • Growth in number and size of alternative investment funds driven by search for outperformance in low-return environment
        • Traditional strategies generating lower-return prospects
    11 Source 1996–2004 Thomson Financial Source HFR report Financial Sponsor Activity as % of Total U.S. M&A Volume (1) % # of deals Growth in Global Hedge Funds, 1996–2004 Asset ($Bn) Number of Funds
  • 16. Perspectives on Recent Strategic Activity Financial Player Activity in the Power Sector New Financial Players Enter the Project Finance Merchant Energy Sector. . . L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM18
      • Not all financial players are the same. Those actively involved in the power sector include:
        • A mix of private equity partnerships and funds
        • Commercial banks that have reluctantly become owners through foreclosures
        • Hedge funds that have entered the sector by trading distressed debt and equity
        • Financial institutions seeking long-term, stable annuity-like returns, such as pension funds or newly formed infrastructure funds
        • Investment banks looking to expand their commodity positions
    12
  • 17. Perspectives on Recent Strategic Activity CalBear Energy Marketing and Trading Venture L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM19
      • On September 8 th , Bear Stearns and Calpine announced the formation of a new energy marketing and trading venture focused on physical natural gas and power trading
    13 Calpine Corporation Transactions RELATED to Calpine Assets Distribution of Profits Services Fees $350MM Credit Intermediation Agreement for Power & Gas Trades Around Calpine Assets Services Service Fee Equal to 50% of CalBear Profits 100% Ownership Calpine Energy Services, L.P. (CES) Bear Stearns Companies Inc. Transactions NOT RELATED to Calpine Assets CalBear Energy LP (CalBear) Calpine Merchant Services Company (CMSC) Source Factset Sept. 8 th Announcement 1-Aug 10-Aug 19-Aug 30-Aug 12-Sept Overview
      • CalBear Energy LP (“CalBear”)
        • 100% owned by Bear Stearns
        • Bear Stearns will guarantee approved CalBear transactions
        • Actively managed risk and trading limits
      • Calpine Merchant Services Company (“CMSC”)
        • 100% owned by Calpine
        • Calpine, through CMSC will retain CES employees and infrastructure
        • CMSC will act as agent for CalBear and CES
      • Calpine will retain all economics from its generation assets
      • CalBear will provide CES with a $350MM credit intermediation agreement
        • Reduces cash collateral position
        • Nets gas purchases and power sales
        • Limited to transactions less than 61 days out
      • CalBear third-party energy services profits split 50/50
        • 50% to CMSC as a service fee
    Transaction Structure Business Opportunity
      • Fragmented industry with thousands of asset owners
        • Load-serving entities
        • Non-utility generators
        • Retail aggregators
        • Industrials
        • Natural gas producers
        • Pipelines
      • CalBear to provide the expertise to optimize assets
      • Energy market price volatility creates interest from professional investors and end users
      • Market inefficiencies and arbitrage opportunities
    CPN Stock Price ($/share)
  • 18. Section 3 Energy Policy Act L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM21
  • 19. Energy Policy Act The Energy Policy Act Overview of PUHCA Repeal L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM22 14
      • The repeal of PUHCA in the Energy Act will facilitate M&A activity in the utility industry
      • The SEC’s traditional role in reviewing M&A proposals has been removed, as has the requirement for utility combinations to be contiguous or interconnected
      • However, an increase in M&A activity is not assured, as state approval for M&A will still be required and both FERC and the states have been granted additional authority
        • How that authority is implemented will be critical to future consolidation in the industry
      • It is our view that PUHCA repeal will increase strategic activity in the sector over time, however, regulatory hurdles in the utility industry will continue to represent obstacles to mergers and acquisitions
        • State commissions have, and will continue to represent hurdles, particularly to acquisitions by entities not already in the utility business (e.g. rejection of the TPG / Portland General and KKR / Unisource transactions)
        • FERC can be expected to apply its merger guidelines rigorously to protect consumers from the anticompetitive effects of utility mergers and acquisitions that would permit the exercise of horizontal or vertical market power
        • In addition, holding companies will be subject to enhanced information reporting to both FERC and state utility regulators to facilitate rate regulation and protection of ratepayers from abusive company transactions
      • Despite its enhanced regulatory role, FERC’s oversight should not be nearly as intrusive as was the SEC’s under PUHCA
        • The new legislation, which will be implemented through FERC rulemaking, appears to limit the scope of FERC’s review to anti-trust related and cross subsidization issues rather than the wide-ranging review required by the SEC under PUHCA
        • Moreover, congress has limited FERC’s merger review process to 180 days (absent a showing of good cause) in striking contrast to the open-ended SEC process in which some utility mergers simply died from SEC inaction
      • As a consequence, electric and gas utilities may be newly vulnerable to strategic approaches and may have increased pressure to perform financially and therefore may increasingly look to acquisitions as a means to grow and improve financial performance through the potential synergies derived from consolidation
  • 20. Energy Policy Act The Energy Policy Act Potential Implications of PUHCA Repeal L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM23
      • The market is still the driving factor behind transactions, but the Energy Act removes some obstacles that have historically stood in the way of economically sound M&A transactions
    15
      • New entrants
        • Financial players, foreign entities and non-utility energy companies that have historically balked at subjecting themselves to regulation under PUHCA
        • Construction or technology companies (not merely Bechtel or GE, but purveyors of clean coal technology, transmission or even new nuclear facilities) can now take an equity interest in projects they build or design
      • New acquirers
        • Utilities in strong financial positions that are not contiguous to many other utilities (e.g. those in Florida), as well as those in highly integrated pools or RTOs (e.g., PJM), may be particularly well placed for increased M&A activity
      • New targets
        • Small and medium sized utilities will likely enjoy a broader range of potential acquirers
      • Transmission consolidation
        • A utility which knows how to operate a complex electric transmission network can now own electric transmission across the country, without regard to integration of those systems, or in distant states where they cannot be accused of manipulating transmission to benefit their own native generation
      • Restructuring Opportunities
        • “ Flat utilities” that have operations in several states and non-utility subsidiaries will be able to restructure as holding companies with separate state utilities and non-utility businesses held apart from the utility ownership chain without having to register under PUHCA (such a structure may simplify state regulatory issues)
  • 21. Section 4 Transmission Environment Update L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM25
  • 22. Transmission Environment Update The Energy Policy Act Transmission Implications L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM26
      • The Energy Act advances the objective of integrating regional markets for wholesale power by ensuring generator access to increased investment in and streamlined operations of the national transmission grid
    16 Key Provisions
      • Carries forward the integration of the national transmission grid initiated by Energy Policy Act of 1992, removing the remaining constraints on industry integration imposed by the Public Utility Holding Company Act of 1935 (PUHCA) and giving FERC authority it lacked under the 1992 Act to integrate federal and state utilities into an open-access national transmission system
      • Designed to foment investment in transmission infrastructure. Grants FERC the right to issue construction permits and coordinate environmental approvals for transmission projects deemed by the Secretary of Energy to be in the national interest
      • The 2005 Act also grants tax and tariff incentives for investment in transmission infrastructure, and seeks to improve the functioning of the national transmission grid by requiring that its owners, operators and users adhere to federal reliability standards
    Implications for the Utility Sector
      • As regional power markets become increasingly integrated, prices should trend upward in lower-cost regions where nuclear and coal-fired generators predominate, such as the Midwest, while coming under downward pressure in regions such as the Mid-Atlantic, where higher-cost gas-fired generation sets the price
        • Off-peak power prices, which are set by coal in the Midwest but increasingly by gas-fired generators in the Mid-Atlantic, should be particularly affected
      • As in other commodity markets, the beneficiaries of these trends will be the lowest-cost suppliers
        • In particular, as market integration causes off-peak prices in Midwestern power prices to rise, base-load generators in these markets should enjoy a marked improvement in generation gross margin
      • Among the primary beneficiaries of the regional integration of power markets, therefore, will be utilities with large, unregulated nuclear generation fleets: companies like Exelon, Dominion, FirstEnergy, Entergy and Constellation
  • 23. Transmission Environment Update Strategic Trends in Transmission FERC Gives Utilities Incentives to Sell Transmission… L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM27
      • Given the signing of the Energy Policy Act and recent developments with respect to transmission assets, we believe strategic activity in the transmission sector will accelerate over the next 6-12 months
    17
      • Federal regulators, namely FERC and the Department of Energy, have noted a decline in transmission investment, and recognize that a reversal of this pattern is needed to improve reliability, reduce blackouts and lower the cost of electricity
        • The DOE estimates that $50-100 billion of investment is required to modernize the transmission grid
        • FERC has been supportive of the creation of independent transmission companies such as ITC, and has awarded a 100 bps bonus ROE to encourage them
        • In approving ITC’s IPO, FERC has shown its support for independent transmission businesses, as they fall only under FERC’s jurisdiction, and do not have to seek cost recovery from state regulators who may have different agendas
      • FERC recently proposed policy changes to further encourage electric utilities to sell transmission assets, stating that the current policy has led to too few divestitures
        • Policy set in January 2003 allows transmission companies independent of utilities to charge higher rates for the use of their transmission systems
        • Proposed change would allow the higher rates even when a utility retains a stake in the transmission company (utility ownership limited to 5% of voting control and 49% of economic interest)
      • Combined with other incentives, an independent company may qualify for a return as high as 15% on new transmission lines, compared with about 12% for a typical utility
        • In addition, recent tax bill allows utilities to defer taxes on profits from the sale of transmission systems for eight years
  • 24. Transmission Environment Update Strategic Trends in Transmission Case Study: ITC Holdings Corp. $331MM IPO (1)
      • On July 25, 2005, Morgan Stanley, with Lehman and CSFB, priced the $330.6MM IPO of ITC Holdings at $23/share
        • $57.5MM primary shares
        • $273.1MM secondary shares
      • IPO priced above the filing range of $19-21
      • Book was over 17x oversubscribed
      • Implied 2005E P/E of 25.5x on a fully distributed basis
      • Dividend yield of 4.6% at pricing and 4.0% on a fully distributed basis
    Source DealAxis; Morgan Stanley
    • Notes
    • Total IPO proceeds include overallotment
    • Overallotment option of 1.875MM shares consists of 100% secondary shares
    18 Transaction Overview
      • ITC priced at $23.00 per share--$2.00 above the original filing range of $19-21
      • Investors were primarily attracted to ITC's unique business model, combination of high growth potential and dividend yield, earnings visibility (automatic rate recovery through Attachment O mechanism), attractive rate of return and experienced management team
      • An extensive 10-day marketing program was undertaken by management, including 39 one-on-ones, 12 two-on-ones, 2 three-on-ones, 6 conference calls, and 6 group meetings in 17 cities
      • Management achieved a one-on-one hit ratio of over 90%
      • The offering was over 17x oversubscribed (pre-greenshoe) with minimal price sensitivity, with almost 400 institutional investors in the order book, and 79 investors placing orders for 10% of the transaction
      • Retail interest in the offering was almost 16MM shares
      • ITC’s stock began trading on July 26, 2005 and opened at approximately $27. ITC closed the day at $26.40
    L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM28 210.4 Allocation Summary Institutional Demand Build-up (MM Shares) Source DealAxis
  • 25. L:UTILITIES_NYDEPT_ONLYPersonal FoldersBLUXTim SchwarzUtility Industry Presentation.pptA2XP16 SEP 20055:55 PM30 Appendix A Bio
  • 26. Bio Timothy R. Schwarz Timothy R. Schwarz Executive Director 19
    • Global Energy and Utilities Group
    • Tel: (212) 761-6514
    • E-mail: timothy.schwarz@morganstanley.com
      • Timothy is an Executive Director in the Firm’s Global Energy and Utitilies Group. He joined Morgan Stanley in 1989 as a Generalist in the Mergers & Acquisitions Department.
      • Timothy joined the Global Energy and Utilities Group in 1994. Since then he has worked extensively on mergers, restructurings and capital formation strategies for a wide variety of clients both domestically and internationally. He has worked with electric, gas and water utilities. Timothy has spent significant time working with integrated utilities as they develop and execute strategies to address the changing regulatory environment, with particular focus on the generation and transmission segments of the industry
      • Timothy received a B.A. in Economics from Wesleyan University in 1983 and an MBA from Harvard University in 1989.

×