DISCLOSURES No Offer: This presentation is being communicated solely in connection with the proposed acquisition of EPE by IIF. Accordingly, this presentation is not, and should not be construed as, an offer to invest in IIF. The material herein is for informational purposes only. Nothing herein constitutes or forms a part of any offer for sale or subscription of, or any invitation to offer to buy or subscribe for, any securities, nor should it or any part of it form the basis of, or be relied upon in any connection with any contract or commitment whatsoever. The material is not to be construed as an offer or a recommendation to buy or sell a security. IIF and its portfolio companies are not registered or regulated under the U.S. federal securities laws, the securities laws of any state, or the laws of any other jurisdiction. Additionally, the material accessible through this presentation does not constitute a representation that the investments described herein are suitable or appropriate for any person. The information contained herein is believed to be accurate as of the dates expressly stated herein, and no implication is being made that there has been no change in such information subsequent to such dates.
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FORWARD-LOOKING STATEMENTS This presentation includes statements that are forward-looking statements made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the proposed acquisition of El Paso Electric Company (“EE” or the “Company”) by an affiliate of the Infrastructure Investments Fund (the “Merger”), regulatory approvals, and the expected timetable for completing the proposed Merger and for obtaining such regulatory approvals. This information may involve risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These risks and uncertainties include, but are not limited to: the timing to consummate the proposed Merger; satisfaction of the conditions to closing of the proposed Merger may not be satisfied; the risk that a regulatory approval that may be required for the proposed Merger is not obtained or is obtained subject to conditions that are not anticipated; and the diversion of management’s time on Merger-related issues. Additional information concerning factors that could cause actual results to differ materially from those expressed in forwardlooking statements is contained in EE’s most recently filed periodic reports and in other filings made by EE with the U.S. Securities and Exchange Commission (the "SEC"). EE’s filings are available from the SEC or may be obtained through EE’s website, http://www.epelectric.com. Any such forward-looking statement is qualified by reference to these risks and factors. EE cautions that these risks and factors are not exclusive. Management cautions against putting undue reliance on forward-looking statements or projecting any future results based on such statements or present or prior earnings levels. Forward-looking statements speak only as of the date of this presentation, and EE does not undertake to update any forward-looking statement contained herein.
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WELCOME
Dr. Norma Mendoza Moderator
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EL PASO ELECTRIC (EPE)
Adrian J. Rodriguez Interim CEO
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ABOUT EL PASO ELECTRIC 1901 El Paso Electric first began serving customers on August 30, 1901. At that time, it was known as the El Paso Electric Railway Company, with the primary business of providing transportation via mule-drawn streetcars.
2020 Today, EPE is a public utility providing generation, transmission, and distribution service to approximately 431,000 retail and wholesale customers and employs more than 1,100 employees.
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7
8
IIF’S COMMITMENT AND BENEFITS TO EPE – Independent, Stand-alone Company: Headquarters remains in El Paso, TX 1 – Job Retention: No jobs eliminated as a result of the transaction 2 – Investment in Renewables: Comprehensive study to help integration of renewable 3
resources onto the grid including third party access and supply contracts – Expertise: Provide EPE with a global network of experts through IIF portfolio 4 companies and relationships to share best practices
– Affiliate Restrictions: Strict limits on EPE engaging in transactions with other IIF 5 companies or J.P. Morgan
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PARTNERSHIP BETWEEN EPE AND IIF Why EPE Chose IIF
Why IIF Chose EPE
✓ IIF’s long-term view provides
✓ EPE operates in a dynamic, fast
stability and alignment
✓ IIF’s commitment to the community, including job retention and growth
✓ Alignment of values, including integrity and accountability
✓ Expertise and resources of IIF
enhance EPE’s ability to fulfill commitments to customers and communities
growing region with an attractive long-term outlook
✓ Opportunity for a long-term partnership
✓ EPE’s talented, diverse employees and community
✓ Significant potential for renewable energy development
✓ Technological change supports a forward-looking utility model
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INFRASTRUCTURE INVESTMENTS FUND (IIF)
Landy Gilbert Managing Director, J.P. Morgan Investment Management
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WHO IS IIF? ▪ $12 billion long-term investment fund founded in 2006 ▪ Over 500 pension, insurance, Taft-Hartley and other plans provide the equity capital invested through IIF and are the owners of the fund
▪ The IIF investors are responsible for the retirement savings of over 40 million families around the world, including 2 million individuals in TX and NM
▪ IIF invests in companies, like EPE, that provide essential services to customers and communities (renewable energy, utilities, transportation)
▪ The IIF portfolio includes 19 companies with ~9,000 employees serving 20 million customers
▪ The IIF investors have hired a dedicated group within J.P. Morgan to advise IIF on its portfolio
Data as of September 30, 2019
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WHO ARE THE INVESTORS IN IIF? Over 500 pension, insurance, Taft-Hartley and other plans, who are responsible for the retirement savings of over 40 million families around the world, including 2 million individuals in TX and NM Endowments, Foundations and Unions/multi-employer Other** 6% plans 7% Corporations 11%
Governmentsponsored pension plans 36%
Insurance 10%
Corporate pension plans 30% Data as of September 30, 2019 ** Other includes fund of funds, international organizations and High Net Worth Investors
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IIF’S PORTFOLIO COMPANIES Utilities
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Renewables & Energy
Transportation
IIF’S COMMITMENT TO SUSTAINABILITY ▪ Ranked #2 out of 107 infrastructure funds in environmental, social and governance (ESG) performance1 – Novatus, Sonnedix and Ventient each ranked #1 in respective peer groups
▪ Developed IIF ESG Leadership Group with representatives from the various portfolio companies to share best practices
▪ 2041 ClimateForce / Explorers Committee Expedition
1 2019 Global Real Estate Sustainability Benchmark (GRESB) Results
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IIF’S SUPPORT FOR RENEWABLE ENERGY ▪ $4.4bn+ invested in renewables ▪ 5.5 GW of renewable capacity, enough to power 5 million homes ▪ 3.7mm of GHG emissions avoided, equivalent to 780,000 cars taken off the road for a year U.S. (13 States + Puerto Rico) 2.1 GW 29 Solar and 10 Wind Projects
Rest of World (10 Countries) 3.4 GW 242 Solar and 103 Wind Projects Italy Belgium Germany UK 4 projects 12 projects 106 projects 35 projects France 71 projects Spain 87 projects Portugal 4 projects
Japan 17 projects
Solar Wind Data as of September 30, 2019 *IIF is in the process of divesting assets in non-OECD geographies
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Chile 9 projects
South Africa* 1 project
SONNEDIX
Carlos Guinand Chairman
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SONNEDIX | A LEADING GLOBAL SOLAR COMPANY 200+ Solar Power Plants
8 Countries
250+ Employees
1.856 GW Controlled Capacity (As of December 2019)
955 MW Operational
431 MW Construction
470 MW Development
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$3 billion+ invested globally
SONNEDIX | SIGNIFICANT GROWTH OVER THE PAST DECADE 4,500
Since 2014, IIF invested $1.8bn into Sonnedix (~$315mm/yr), including $475mm in 2019 258 250
4,000 852
2016 IIF acquires the remainder of Sonnedix
3,500
204 200
3,000
1,740 164 1,641
2,500
Operational Capacity (MW) In Construction (MW) Controlled Capacity (MW)
2,000
150
2014 IIF enters into 50% joint venture
1,359 120
Greenfield Development (MW) 100
Employees
1,500
71
61 1,000
718 44 37 18 4
0
2 2009
22 3 2010
124 26 29 2011
242
559
201 804
881
50
690
519
26
500
399
816
33
218 74
86
98
92
101
119
153
2012
2013
2014
2015
65
Data as of September 30, 2019
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363 0 2016
2017
2018
2019
NEXT STEPS
Adrian J. Rodriguez Interim CEO
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APPROVAL PROCESS The regulatory review process will consider both the agreement and its benefits. The agreement with IIF is subject to shareholder and regulatory approvals and other customary closing conditions. This process takes time, and we expect to complete the closing in the first half of 2020.
• EPE shareholders
Confirmed Approvals
• Federal Communications Commission (FCC) • Hart-Scott-Rodino clearance (Federal Trade Commission / Department of Justice) • City of El Paso, TX
Required Approvals
• Public Utility Commission of Texas (PUCT) • New Mexico Public Regulation Commission (NMPRC)
• Federal Energy Regulatory Commission (FERC) • U.S. Nuclear Regulatory Commission (NRC)
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CLOSING REMARKS The Transaction represents a significant long-term investment to support the success of EPE, its employees, customers and communities
✓ Enhances EPE’s ability to meet growing service area needs, including renewable energy and sustainability initiatives
✓ Contains meaningful commitments to ensure EPE’s workforce will remain in place
✓ EPE to remain independently-operated, regulated utility with headquarters in El Paso, TX
✓ TX customers to receive $21 million in rate credits over 3 years ✓ $80 million invested over 15 years in TX towards economic development with a total of $100 million invested in EPE’s service territory
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Q&A
Dr. Norma Mendoza Moderator
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