SHAREHOLDERS MEETING 2010 WATERFURNACE RENEWABLE ENERGY, INC.
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SHAREHOLDERS MEETING 2010 WATERFURNACE RENEWABLE ENERGY, INC.
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Transcript of SHAREHOLDERS MEETING 2010 WATERFURNACE RENEWABLE ENERGY, INC.
SHAREHOLDERS MEETING 2010
WATERFURNACE RENEWABLE ENERGY, INC.
SHAREHOLDERS MEETING 2010
WATERFURNACE RENEWABLE ENERGY, INC.
SHAREHOLDERS MEETING 2010
WATERFURNACE RENEWABLE ENERGY, INC.
TOPICS FOR THIS MEETING
WATERFURNACE RENEWABLE ENERGY, INC.
2009 Activities & Results
First Quarter 2010
A Changing Industry and a Look Forward
2009 ACTIVITIES & RESULTS
WATERFURNACE RENEWABLE ENERGY, INC.
2009 ACTIVITIES & RESULTS
WATERFURNACE RENEWABLE ENERGY, INC.
Record earnings on slightly lower sales
Successfully tapped two replacement marketsa) Traditional HVAC equipment change-outsb) Mining of old data bases to upgrade old
geothermal installations
STATE OF WATERFURNACE
WATERFURNACE RENEWABLE ENERGY, INC.
Closed at $28.59 March 31, 2010
High of $32.15 April 16, 2010
FIRST QUARTER 2010 vs 2009
WATERFURNACE RENEWABLE ENERGY, INC.
Q1 EVENTS & ACTIVITIES
WATERFURNACE RENEWABLE ENERGY, INC.
Net sales increased by 9.8% YOY
Some large expenses pulled forward from Q2
Great Dealer Meeting
Operating favorably relative to our 2010 operating plan
Earnings per share were $0.05 vs. $0.07 prior year
STATE OF WATERFURNACE
WATERFURNACE RENEWABLE ENERGY, INC.
Water Furnace Renewable Energy, Inc. Geothermal 330 shipments are up 13% 2010 March YTD compared to 2009 March YTD.
Take a proactive approach on shaping public policy
Develop Public Relations campaigns for awareness & education
Create consumer confidence by promoting standards, training, and certification/accreditation programs
GEO’s MISSION
WATERFURNACE RENEWABLE ENERGY, INC.
GEOTHERMAL EXISTING RESIDENTIAL TAX INCENTIVES
WATERFURNACE RENEWABLE ENERGY, INC.
Federal Income Tax Credit:30% of total GHP system costNo cap on maximum credit Can be used to offset AMT taxCan be combined with other tax credits Can be used in more than one year
GEOTHERMAL EXISTING RESIDENTIAL TAX INCENTIVES
WATERFURNACE RENEWABLE ENERGY, INC.
Eligibility:Home must be located in the U.S.Includes houses, cooperatives, condos, mobile homesDoes not have to be your main homeGHP must meet Energy Star requirementsPlaced in service before 2017
GEOTHERMAL EXISTING BUSINESS TAX INCENTIVES
WATERFURNACE RENEWABLE ENERGY, INC.
Federal Income Tax Credit:10% of total GHP system costNo cap on maximum creditCan be used to offset AMT taxCan be used in combination with subsidized financing Can be used in more than one year
GEOTHERMAL EXISTING BUSINESS TAX INCENTIVES
WATERFURNACE RENEWABLE ENERGY, INC.
Accelerated Depreciation:5 year MACR depreciation for entire GHP systemEligible for bonus depreciation in 2009 (50% write-off in first year)
Eligibility:Building located in the U.S.Original use begins with taxpayerPlaced in service before 2017Can be used by regulated utilitiesMust be claimed by the owner of the property
GEOTHERMAL EXISTING STATE INCENTIVES
WATERFURNACE RENEWABLE ENERGY, INC.
37 States have Financial Incentives for GHPs• Many are new • Sales tax and property tax exemptions, income tax
credits, grants• 17 States have tax credits or grants
28 States have Regulatory Incentives for GHPs• Green public building requirements
36 States have Utility Incentives for GHPs• Voluntary DSM• loans and rebates
GEOTHERMAL OVERVIEW
WATERFURNACE RENEWABLE ENERGY, INC.
GHPs are not geothermal steam power generation
50 state technology
Uniquely address one of the largest components of US energy consumption
Incremental cost is the underground heat exchange piping• Cannot be imported from China• Local skilled job creation
GHPs do not fit neatly into existing policy “boxes”• Renewable and Energy Efficiency• Geothermal Technology and Building Technology
CURRENT FEDERAL POLICY INITIATIVES JOBS-RELATED BILLS
WATERFURNACE RENEWABLE ENERGY, INC.
Home Star (Cash for Caulkers)• Silver Star would provide up to $3,000 in instant rebates• GHPs are eligible
• Gold Star would provide up to $8,000 in instant rebates• GHPs are eligible
Rural Energy Savings Program • Administered through electric co-ops• 10 yr very low interest (max 3%) financing for EE retrofits• Paid on electric bill• Strong bipartisan and bicameral support• GHPs are eligible
NORTH AMERICAN GEOTHERMAL INDUSTRY SHIPMENTS
WATERFURNACE RENEWABLE ENERGY, INC.
0,000
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
16% Increase
Single Family Residential - 63% of TotalNew Homes 65%Existing Homes 35%
Commercial – 37% of TotalSchools and UniversitiesPublic and Government Religious BuildingsMulti-family HousingOffice BuildingsRetail
GEOTHERMAL DOE INDUSTRY ROADMAP GROWTH GOAL
WATERFURNACE RENEWABLE ENERGY, INC.
1 Million GHPs Annually by 2017 (39% CAGR)
Results in 3.3 million cumulative GHP installations by 2017• 26 MMT annual CO2 reduction• 520 MMT lifecycle CO2 reduction over 20 yr GHP life
Creates 100,000 new jobs
Conventional A/C and heat pump market is 6 to 8 million units annually
GOOD NEWS
WATERFURNACE RENEWABLE ENERGY, INC.
Federal tax credit of 30% uncapped should remain in place until 2016
Many other pieces of legislation are in the works – mostly positive for geothermal
Mainstream dealers and distributors looking to branch out into geothermal
BAD NEWS
WATERFURNACE RENEWABLE ENERGY, INC.
Residential new construction will be below 1 million starts in 2010
By 2012 most forecasts are for an industry that is between 1.2 million to 1.5 million
The Wild Card: Fuel Costs
SUMMARY
WATERFURNACE RENEWABLE ENERGY, INC.
2009 was our highest earnings year on record despite lower sales
First quarter 2010 better than internal plan
As new construction gains traction, WaterFurnace’s performance should accelerate
WATERFURNACE RENEWABLE ENERGY, INC.
QUESTIONS & ANSWERS
SHAREHOLDERS MEETING 2010
SHAREHOLDERS MEETING 2010
WATERFURNACE RENEWABLE ENERGY, INC.
