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CRIUS ENERGY | ANALYST DAY | JANUARY 2018 2
FORWARD-LOOKING STATEMENTS AND NON-IFRS MEASURESFORWARD-LOOKING STATEMENTS
This presentation contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") that involve substantial known and unknown risks and uncertainties, most of which are beyond the
control of Crius Energy Trust (the "Trust"), including, without limitation, statements pertaining to the objectives of the Trust (including to grow distributions to unitholders, increase valuation, grow customer base, increase customer
lifetime value and reduce costs), the undervaluation/upside of the Trust, forecasted electricity demand, the value/growth proposition of deregulated energy, the future/success of solar energy, the value/growth proposition of solar
energy, the impact of the restructuring transaction on the Trust, access to capital, scalable platform, diversified portfolio, customer churn, Xfinity relationship in 2018, customer revenues and margins, customer additions and
renewals, customer consumption levels, non-IFRS financial measures (including, EBITDA, Adjusted EBITDA, Distributable Cash and payout ratio), Total Shareholder Returns, revenue, cash availability, embedded margin, gross
margin, selling expenses, general and administrative expenses, public float, current yield, annualized distribution, sufficiency of capital, stability of distributions, market penetration, cost-effective growth strategies, growth forecasts,
risk management, accretiveness of acquisitions/transactions, tax treatment of the Trust, impact of U.S. tax reform, treatment under governmental regulatory regimes and expected opening of energy markets. A statement may be
considered a forward-looking statement when it uses what the Trust knows or expects today to make a statement about the future. Forward-looking statements may be identified by words such as anticipate, assume, believe, could,
expect, goal, guidance, intend, may, objective, outlook, plan, seek, should, strive, target, will or other similar expressions. Statements that are not historical facts may be considered forward-looking statements and may involve
estimates, assumptions and uncertainties, which could cause actual results or outcomes to differ materially from those expressed in such forward-looking statements. While these statements are based on current expectations,
forward-looking statements inherently involve a number of risks and uncertainties which could cause actual results to differ from those anticipated. These risks include, but are not limited to, impact of weather, levels of customer
natural gas and electricity consumption, rates of customer additions and renewals, fluctuations in natural gas and electricity prices, changes in regulatory regimes and decisions by regulatory authorities, competition, growth of the
U.S. energy industry, dependence on certain suppliers, financial performance, and other business and economic conditions. Additional information on these factors and other factors that could affect the Trust's operations, financial
results or distribution levels are described in (i) the annual information form of the Trust for the fiscal year ended December 31, 2016 (dated March 16, 2017), and (ii) the management's discussion and analysis of the Trust for the
three and nine months ended September 30, 2017 (dated November 13, 2017), which are available on SEDAR under the Trust's issuer profile at www.sedar.com. No assurance can be given that the expectations set forth in this
presentation will ultimately prove to be accurate and, accordingly, such forward-looking statements should not be unduly relied upon. It is not possible for Management to predict new factors that may emerge from time to time, or to
assess in advance the impact of each such factor on the Trust's business, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in forward-looking statements.
These forward-looking statements are given only as of the date of this presentation and the Trust does not assume any obligation to update or revise any forward-looking statement to reflect new events or circumstances, except as
may be expressly required by applicable securities laws.
This presentation is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy securities of the Trust, and is being provided to interested parties to assist them in their evaluation of the
Trust.
NON-IFRS FINANCIAL MEASURES
Statements throughout this presentation may make reference to EBITDA, Adjusted EBITDA, Distributable Cash and payout ratio, which are non-IFRS financial measures commonly used by financial analysts in evaluating the
financial performance of companies, including companies in the energy industry. Accordingly, Management believes EBITDA, Adjusted EBITDA, Distributable Cash and payout ratio may be useful metrics for evaluating the Trust's
financial performance, as they are measures that Management uses internally to assess performance, in addition to IFRS measures. As there is no generally accepted method of calculating EBITDA, Adjusted EBITDA,
Distributable Cash and payout ratio, these terms as used herein are not necessarily comparable to similarly titled measures of other companies. EBITDA, Adjusted EBITDA, Distributable Cash and payout ratio have limitations as
analytical tools and should not be considered in isolation from, or as an alternative to, net (loss) income or other data prepared in accordance with IFRS. EBITDA is calculated as earnings before interest, taxes, depreciation and
amortization. Adjusted EBITDA is calculated as EBITDA adjusted to exclude any change in the fair value of derivative instruments, change in fair value of non-controlling interest, change in fair value of warrant liability, unit-based
compensation, goodwill impairment and distributions to non-controlling interest. The items excluded from EBITDA and Adjusted EBITDA are significant in assessing the Trust's operating results and liquidity. See the section
entitled "Reconciliation of Net (Loss) Income and Total Comprehensive (Loss) Income to EBITDA and Adjusted EBITDA" in the management's discussion and analysis of the Trust to which such financial information relates for a
reconciliation of EBITDA and Adjusted EBITDA to net loss and comprehensive loss as calculated under IFRS for the relevant periods, the most directly comparable measure in the Trust's consolidated financial statements. See the
section entitled "Distributable Cash and Payout Ratio" in the management's discussion and analysis of the Trust to which such financial information relates for a reconciliation of Distributable Cash to cash flows provided by (used
in) operating activities as calculated under IFRS, the most directly comparable measure in the Trust's consolidated financial statements. Other financial data has been prepared in accordance with IFRS.
All figures in this presentation are presented in U.S. Dollars and are reflective of information available as of September 30, 2017, unless otherwise noted.
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 3
Michael Fallquist
Chief Executive Officer
Roop Bhullar
Chief Financial Officer
Pat McCamley
EVP, Corporate Development
Chaitu Parikh
Chief Operating Officer
Christian McArthur
EVP, Energy Supply & Pricing
Rob Cantrell
EVP, Commercial Energy
Kevin McMinn
EVP, Mass Market Energy
Ravi Thuraisingham
EVP, Solar Energy
TODAY’S SPEAKERS
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 5
2017: THE YEAR IN REVIEW
2%
Distribution
Increase
Q1
2017
JANUARY
MARCH
Q4 2016
Results
Adjusted
EBITDA:
$13.6 million
RCEs: 982,000
Q2
2017
MARCH
APRIL
2%
Distribution
Increase
MAY
Q1 2017
Results
Adjusted
EBITDA:
$14.5 million
RCEs:
1,003,000
Rise
Broadband
joins the
IEP
2%
Distribution
Increase
JULY
U.S. Gas &
Electric
acquisition
successfully
closes
U.S. Gas &
Electric
acquisition and
C$100 million
bought deal
announced
MAY
Q4
2017
2%
Distribution
Increase
OCTOBER
Q2 2017
Results
Adjusted
EBITDA:
$14.1 million
RCEs:
1,028,000
Q3 2017
Results
Adjusted
EBITDA:
$18.3 million
RCEs:
1,446,000
AUGUST
JULY
Q3
2017
NOVEMBER
CREDO
Mobile
joins the IEP
NOVEMBER
U.S. Gas &
Electric wins
Leadership &
Integrity award
SEPTEMBER
Received
$8.0M
forgivable loan
from CT DECD
as incentive to
expand
operations in
Connecticut
JANUARY MARCH
Crius and Comcast
extend exclusive
partnership thru 2022
Crius and Comcast
partner in the
Integrated Energy
Platform (IEP)
Verengo Solar acquisition
successfully closes
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 6
OUR HISTORY
States
Products
Channels
Segments
2009
Launches Viridian
Energy
CT
Network
Marketing
Residential
2016
Acquires SunEdison
U.S. direct
residential solar
business
C$72.5M equity
offering plus equity
exchange for 100%
LLC ownership
2011
Partners with
Cincinnati Bell
+ Strategic
Partnerships
+ IL, NY and OH
2013
Partners with
SolarCity
+ Indiana and
Virginia
2014
Acquires Superior
Plus Energy
Services
Acquires HOP
Energy
+ California
2012
Partners with
FairPoint
Communications
Acquires Public
Power
C$100M IPO to
purchase 27% of
Crius Energy LLC
+ DC, DE, ME
and NH
Acquires USG&E
Acquires
Verengo Solar
C$125.5M equity
offering to fund the
USG&E acquisition
2017
+ Michigan and
Kentucky
+ Direct-to-Consumer
2010
Enters into credit
facility with
Macquarie Energy
+ MA, MD, NJ
and PA
+ Small
Commercial
Partners with
Comcast
Acquires TriEagle
Energy
C$46.1M equity
raise to increase
Crius Energy LLC
ownership to 43%
2015
+ Rhode Island
and Texas
+ Broker Network and
Online Sales
+ Large Commercial and
Municipal Aggregations
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 7
146%
99%
58% 58% 61%
2013 2014 2015 2016 LTM
$103
$129
$164 $159
$0
$50
$100
$150
$200
$250
2013 2014 2015 2016 LTM
2013 2014 2015 2016 LTM
$507
$601
$267$247
$279$300
$472
2013 2014 2015 2016 LTM
$32$38
$53
$61
2013 2014 2015 2016 LTM
$27$29
$35
$39
2013 2014 2015 2016 LTM
KEY METRICS: FINANCIALSADJUSTED EBITDAREVENUE
PAYOUT RATIO
DISTRIBUTABLE CASH(in millions) (in millions) (in millions)
GROSS MARGIN(in millions)
EMBEDDED MARGIN(in millions)
Pro-Forma USG&E results for Q4 2016, Q1 2017 and Q2 2017 (excluding synergies)
$686$744
$1,004
Q3 2017
*LTM represents the last twelve months ending September 30, 2017.
$91$54
$229
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 8
• 250% increase in customer base through consistent organic growth and accretive acquisitions,
supported by improvements in attrition
• Approximately 75% of gross customer adds from organic sales channels
KEY METRICS: CUSTOMER GROWTH AND ATTRITION
265 375 389
525 55
202 75
350
363 320
577
464
875
615 569
819
982
1,446
2013 2014 2015 2016 YTD Q3 2017Acquisition Growth Total Cumulative Customer Count
NEW AND CUMULATIVE CUSTOMER GROWTH
(RCEs in 000s)
AVERAGE MONTHLY ATTRITION
3.3%
3.9%
3.2%
2.4%
2.8%
2013 2014 2015 2016 LTM Q3 2017Organic
Growth
(gross
adds)
(gross adds)
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 9
AN AWARD-WINNING FAMILY OF BRANDS
CORPORATE SOCIAL
RESPONSIBILITY4,360,159,531POUNDS OF CO2 EMISSIONS
AVOIDED SINCE 2016
423,498 PASSENGER VEHICLES OFF THE ROAD FOR A YEAR
51,255,268TREE SEEDLINGS FOR TEN YEARS
USG&E ranked by Inc. magazine in the Top
10 fastest growing energy companies
USG&E receives key to the City of Doral,
Florida
Crius creates market for affordable,
responsible energy; helps consumers avoid
46 Million pounds of harmful CO2 through its
Viridian Energy brand
2009
2010
Verengo Solar completes its 1,000th
residential solar installation
USG&E ranked by Inc. magazine as the 3rd
fastest growing private energy marketer
USG&E co-founds ACCES, a consumer
advocacy organization focused on energy
choice
2011
Crius ranks #50 on Direct Selling News
Global 100 list through its Viridian Energy
brand
2012
Verengo Solar is ranked #69 of Top
100 U.S. Job Creators by Hire Power
Awards; earns Angie’s List Super
Service Award
USG&E receives “Good to Great” award
from Greater Miami Chamber of
Commerce
2013
CEO Michael Fallquist named Ernst &
Young Entrepreneur Of The Year® -
Cleantech category, New York
Crius wins Ethos Rising Star Award from
Direct Selling News for its Viridian Energy
brand
USG&E recognized as a Top Workplace by
the South Florida Business Journal and
Florida Trend Magazine
USG&E receives Bronze American Business
Award for “Company of the Year”
Verengo Solar marks 10,000th residential
solar install
2014
Crius ranks #45 on Direct Selling News Global
100 list through its Viridian Energy brand
Crius named Energy Supplier of the Year by
the Energy Marketing Conference
Careerbuilder names Verengo Top Workplace in
Arizona
Verengo ranked in the Top 5 U.S. residential solar
installers by GTM/SEIA
2015
Crius ranked #1 in Customer Satisfaction in
Massachusetts by J.D. Power through its
Viridian Energy brand; USG&E ranked #2 in
Massachusetts by J.D. Power
2015
Crius awarded $10 Million incentive package from
the State of Connecticut
USG&E ranked #1 in Customer Satisfaction by
J.D. Power in Maryland and New Jersey
USG&E brands rank in the Top 3 for Customer
Satisfaction by J.D. Power in CT, MA and NY
Crius ranked #6 in Texas by J.D. Power through
its TriEagle Energy brand
2017
Crius commercial breaks the Energy Research
Top 10 in Broker Satisfaction through TriEagle
USG&E receives the 2016 Energy Marketing
Conferences Leadership and Integrity Award
2013
Source: www.epa.gov/energy/greenhouse-gas-equivalencies-calculator
USG&E ranked #1 in Customer Satisfaction by
J.D. Power in New Jersey
USG&E ranked #2 in Customer Satisfaction by
J.D. Power in Connecticut
2016
9
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 10
PUBLIC MARKET VALUATION BENCHMARKS
(1) Company filings, CapitalIQ and Bloomberg as at January 15, 2018 .
(2) Select US Utilities and Select US IPP’s include companies with energy retail operations
Note: Energy Retailers comprised of Just Energy and Spark Energy; Canadian Home / Energy Services comprised of Enercare, Park land, Superior Plus ; Canadian Utilities comprised of Algonquin, AltaGas, Canadian Utilities, Emera, Enbridge, Fortis, Hydro One, TransCanada; US Utilities
comprised of American Electric Power, CenterPoint Energy, Dominion Resources, Exelon, FirstEnergy, NextEra Energy, South Jersey, The Southern Company; Canadian Contracted IPP’s comprised of Boralex, Brookfield Renewable Partners, Innergex, Northland Power, TransAlta
Renewables; US IPP’s comprised of Calpine, Dynegy, NRG Energy; Integrated Solar comprised of Canadian Solar, First Solar, SunPower Corporation
EV / 2018E EBITDA(1)
Dividend Yield(1)
Crius
Average
Crius
Average
(2) (2)
(2) (2)
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 11
9.2%9.6%
6.4%
2.7%
1.8%2.2%
4.4%
1.4%
2.1%
3.3%
0.8%
1.5%
0.8%
5.5%
4.1% 4.3%
Cri
us
Ju
st
En
erg
y
Sp
ark
En
erg
y
S&
P T
SX
S&
P 5
00
TS
X S
ma
ll-C
ap
TS
X D
ivid
en
dA
risto
cra
ts
Con
su
me
r
En
erg
y
Fin
an
cia
ls
Hea
lth
Care
Indu
str
ial
Mate
rials
RE
IT
Tele
co
m
Utilit
ies
CRIUS DIVIDEND YIELD
(1) Bloomberg as at January 15, 2018
(2) TSX Dividend Aristocrats measures the performance of companies included in the S&P Canada BMI that have followed a policy of consistently increasing dividends every year for at least five years
(2)
S&P TSX Sub-Indexes
CRIUS DIVIDEND YIELD VS. INDEXES(1)
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 12
DISTRIBUTION UP 8.2% IN 2017; UNIT PRICE UP JUST 11.6% YOY
DISTRIBUTION PER UNIT KWH.UN
$0.175$0.179
$0.182$0.186
$0.190$0.193
$0.197$0.201
$0.205$0.209
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
(quarterly distribution, C$ per unit) (unit price in C$ per unit)
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 13
CRIUS OBJECTIVES
• Crius has delivered a Total Shareholder Return of more than 25% since January 1, 2016 through distribution
increases and unit price appreciation
• Given relative valuation of Crius versus our peer group and strength of our business, management are focused on
improving unit price appreciation over the next few years while remaining committed to our distributions
Customer Growth
INCREASE DISTRIBUTABLE CASH
MARGIN GROWTH
Increase Customer
Lifetime Value
Achieve USG&E
Synergies
REDUCE COSTS
Continuous Cost
Optimization
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 14
Portfolio Optimization Mergers & Acquisitions Customer EngagementResidential Integrated
Energy
Commercial Integrated
Energy
Description
• Segment new and existing
customers to provide
differentiated product offers
and service levels
• Acquire U.S. and
international energy
retailers
• Engage customer
continuously throughout life
of relationship
• Develop residential
integrated energy product
strategy
• Develop commercial
integrated energy product
strategy
Business
Drivers
• Increase margin, increase
retention
• Reduce risk profile (scale,
diversity), lower costs
(operating leverage),
expand sales channels, new
products or geographies
• Increase retention, enable
cross-sell, customer
acquisition, reduce cost-to-
serve
• Improve customer value
proposition, increase
retention, increase margin,
enhance sales
• Improve customer value
proposition, increase
retention, increase margin,
enhance sales
Activities
• Customer segmentation to
calculate individual
customer lifetime value
• Individualized customer
offers to meet minimum
margin requirements
• Customer service, renewal
and retention segmented on
CLV
• Customer book acquisitions
• Strategic business
acquisitions
• USG&E Integration
• Identify technologies /
strategies to facilitate
ongoing customer
interaction
• Integrate electricity and
natural gas products with
adjacent energy
management products (e.g.
demand response)
• Priority to integrate solar
and retail electricity
• Integrate electricity and
natural gas products with
adjacent energy products
(e.g. demand response,
energy efficiency)
KEY STRATEGIC PRIORITIES TO ACHIEVE MARGIN GROWTH
AND REDUCE COST
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 15
CAPITAL ALLOCATION
Uses of Capital Comments
Growth Initiatives Investments in organic customer growth and accretive
acquisitions
Unit Purchases Board has authorized the repurchase of up to 4.4M units
via Normal Course Issuer Bid
Debt Reduction Accelerate repayment of debt where prudent and
accretive to unitholders
Distribution Growth Board has authorized an annualized distribution of
C$0.84 per unit for 2018
1
2
3
4
• Reprioritization of our uses of cash flow with a commitment to maintaining our current distribution levels
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 17
Payout RatioBaseline
Distribution
Distributable Cash Flow
Growth Initiatives
Debt Reduction
Unit Repurchases
Distribution Increases
Baseline distribution hedged for next three years
to December 2020 at floor of C$1.25 and cap of
C$1.40 per US$1.00
Baseline distribution of C$0.8368/unit, or
~C$48M/year, represents a return of ~C$143M in
cash to unitholders over a 3 year period
or ~27% of’ current market cap
Provides flexibility to apply the excess
cashflows we generate in a way that
maximizes unitholder value
Payout ratio provides buffer to allow for
variations, one-time items, working capital
investment and other requirements
CAPITAL ALLOCATIONReprioritization of capital allocation to provide more flexibility in how capital return growth is provided to
unitholders, while maintaining commitment to current baseline distribution.
Discretionary Cash Flow
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 18
DEBT• Capital structure remains conservative following the increase in leverage as part of the USG&E acquisition
• As of Q3 2017 ~$80M of net debt representing <1x net debt / Adj. EBTIDA on a pro-forma basis
• Interest coverage of ~5x, on a pro-forma basis, using Adj. EBITDA
• Further debt capacity remains, management comfortable with up to 2x leverage
MACQUARIE CREDIT FACILITY
($56M, Q3 2017)
USG&E SELLERS NOTES
($43M, Q3 2017)
CT DECD LOAN
($6M, Q3 2017)
• Received from Connecticut Department
of Economic Development & Community
Development
• Part of an incentive package for
corporate headquarters lease
• Term of up to 10 years
• 2.0% interest rate
• Repayment of principal deferred for first
four years
• Debt forgiveness or early redemption
based on CT headcount growth targets
• Notional value of loan received of $8.0M
reduced by $1.7M due to accounting
treatment of government grants
• 8-year non-amortizing notes
• 9.5% interest rate
• Initial face value of $47.5M reduced
by expected NWC adjustment
• Ability to partially apply
indemnification claims under the
acquisition agreements against
amounts owing
• Crius facility: $250M limit, $60M working
capital sub-limit, 5.5% plus LIBOR and
volumetric energy fees currently
averaging ~$8.50/RCE per year,
maturity date of Jan 2019
• USG&E facility: $85M limit, 5.5% plus
LIBOR and volumetric energy fees
currently averaging ~$12.50/RCE per
year, maturity date of Dec 2018
• Consolidating the two facilities with
target date of Q1 2018
• Expect to generate synergies via
improved trading terms and improved
pricing
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 19
$119.1
$159.3 $154.3 $160.2
$227.3
GROSS MARGIN ($M)
GROSS MARGIN
• Unit margins trended lower from 2015 to 2017 following the
acquisition of TriEagle Energy primarily as a result of the changing
sales channel mix as the portfolio now has a higher proportion of
lower-margin commercial / municipal aggregation customers
• Improved margin profile post-USG&E acquisition due to the
higher-margin, residential and small commercial customer base of
USG&E, which historically generated margins of over $200/RCE
per year
• Management expect the past declining margin trend to moderate
and for margins to remain near current levels, due to:
o Higher margin residential-focused USG&E channels
o Increased focus on small commercial segment
o Strategic initiatives focused on margin enhancement
including portfolio optimization and increased customer
engagement
Management expect a reversal of channel-mix-driven declining unit margin trends, due to focus on
higher-margin residential and commercial customers and strategic initiatives.
$201
$229
$171 $158
$178
GROSS MARGIN ($/RCE, PER YEAR)
FY 2014 FY 2015 FY 2016 LTM Q3 2017* PF LTM 2017**
*LTM figures represent ‘as reported’ i.e., Q4 2016 through Q2 2017 Crius Energy-only and Q3 2017 including USG&E results.
** Pro-Forma figures represent Crius Energy and USG&E unaudited results, excluding synergies.FY 2014 FY 2015 FY 2016 LTM Q3 2017* PF LTM 2017**
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 20
SG&A EXPENSES
COST TO SERVE(Fixed G&A* per RCE)
COST TO ACQUIRE(Upfront selling expenses* per RCE)
Positive downward trends
continue and will further benefit from USG&E cost-synergies
Continue to drive fixed G&A / RCE lower
• Focus on cost-control over last several
years, including various restructurings
and workforce rationalizations
• Target USG&E cost synergies expected
to result in savings of $8/RCE
• Operating leverage as fixed costs are
spread over a larger customer base
Upfront CTA trends driven by channel mix
• Downward trend from 2014 to 2017
driven by channel mix for new sales, with
strong growth in commercial and
municipal aggregations, which typically
have minimal upfront CTA
• Pro-forma USG&E blended CTA
increases to ~$40/RCE, due to higher-
upfront CTA channels, such as door-to-
door and telemarketing
$72
$85
$56$51 $50
FY 2014 FY 2015 FY 2016 LTM Q32017
PF LTMQ3 2017
$46
$34
$21
$16
$38
FY 2014 FY 2015 FY 2016 LTM Q32017
PF LTMQ3 2017
Note: * Cost to serve calculated as Fixed G&A (total G&A less variable G&A items, namely, POR fees / bad debt, GRT & other taxes and assessments, per average RCE, deregulated energy only.
** Cost to acquire (CTA) calculated as upfront selling costs per average RCE, deregulated energy only.
Upfront CTA remains low, despite
uptick in pro-forma CTA due to USG&E higher-margin residential sales channels
$42
USG&E
synergies
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 21
U.S. TAX REFORM
KEY U.S. CORPORATE TAX LAW CHANGES POTENTIAL IMPLICATIONS FOR CRIUS
• The new law reduces the maximum corporate tax rate of 35% and
replaces it with a flat rate of 21%
• Benefits Crius Distributable Cash, however such benefit is mitigated because of existing tax
shield of cross-border intercompany debt and limitations on interest deductibility (discussed
below)
• Lower federal corporate tax rate reduces federal tax benefit of state tax deduction
• Lower federal corporate tax rate reduces the value of the ~$52M Net Operating Losses (NOLs)
acquired from Verengo from ~$18M to ~$11M
• The deduction for net interest expense will be limited to 30% of an
amount that approximates EBITDA and, beginning in 2022, EBIT
• Reduces the amount of interest that Crius’ U.S. entities can deduct (including intercompany
interest). Based on Management’s preliminary estimates, this is expected to have an immediate
negative impact in 2018
• It is uncertain if states are going to follow the same federal tax treatment
• May reduce the attractiveness of debt financed acquisitions
• Entitled to immediately deduct 100% of the cost of depreciable
tangible assets, including new or used assets acquired in certain
business combinations, for the next 5 years
• Limited impact to Crius as current business and most acquisition opportunities are not capital
asset-intensive
• Investment in capital intensive growth initiatives or asset (vs stock) acquisitions may be more tax
efficient
• It is uncertain if states are going to follow the same federal tax treatment
• A minimum tax imposed on U.S. companies having certain deductible
‘base erosion payments’ made to related foreign companies, such as
interest expense, equal to the excess of 10% of the taxpayer’s
“modified taxable income” (taxable income plus certain ‘base erosion
payments’) over its regular U.S. tax liability
• Theoretically could result in higher U.S. taxes, but based on Management’s preliminary
evaluation and current projections, no material impact expected in the near-term
Note: Based on Managements preliminary understanding of the recent U.S. tax reform changes and is subject to change as Management and its tax advisors continue to evaluate the rule changes and their application to Crius Energy.
Key impacts of recent U.S. tax reform changes based on Management’s preliminary review - benefit of
lower rate mitigated by interest deductibility restriction and reduced value of Verengo NOLs.
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 22
No change to initially
estimated underlying
synergies
USG&E SYNERGIES UPDATE
ESTIMATED AFTER-TAX SYNERGIES TO DISTRIBUTABLE
CASH OF $55M-$60M – AS ANNOUNCED IN NOVEMBER 2017
Midpoint
Synergies
G&A synergies $11.0
Gross margin synergies $2.0
Financing cost synergies $2.5
$15.5
Tax -$6.2
Tax effected synergies $9.3
Tax benefit - debt pushdown $3.9
After-tax synergies $13.2
3-year after-tax synergies $39.6
Tax benefit - Verengo NOLs $18.2
$57.8
Post tax-
reform
$11.0
$2.0
$2.5
$15.5
-$4.3
$11.2
$-
$11.2
$33.5
$10.9
$44.4
$10M-$12M cost-synergies through organizational
restructuring, technology systems transition to single platform
and vendor consolidation
$2M synergies to gross margin from application of Crius energy
procurement / risk management capabilities to USG&E portfolio
and improved operational / trading terms from renegotiated
consolidated credit facility (~$1.50/RCE per year synergies)
One-time cash tax savings of $18M in NOLs of Verengo to
offset taxable income over the next 2-3 years
UPDATED TO $41M-$47M FOR
EST. IMPACT OF US TAX REFORM
Benefit from lower
effective blended rate
from ~40% to ~28%
Interest deductibility
restriction limits benefit
of intercompany loans
Lower tax rate reduces
tax benefit of NOLs
No change to underlying synergy targets, however recent U.S. tax reform reduces target 3-year range.
$2M-$3M reductions in financing costs from improved pricing
on renegotiated consolidated credit facility
$4M in cash tax savings from additional tax shield from push-
down of equity proceeds from 2017 USG&E equity offering as
intercompany debt
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 23
USG&E INTEGRATION UPDATEKey focus of management in 2018 is integration and achievement of target synergies.
Q4 2017
Q1 – Q2 2018
Q2 – Q3 2018
Q4 2017 – Q4 2018
Q1 2018 – Q4 2018
HR & GL System Consolidation
Phase 1: IT System Consolidation
Call Center Consolidation
IT & Ops Vendor
Consolidation
COST REDUCTION INITIATIVES
$2 $2 $2 $2$3
$11
Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 TOTAL
G&A SYNERGIES TIMELINE(ACHIEVEMENT OF RUN-RATE ANNUAL SYNERGIES, $M)
Phase 2: IT
System
Consolidation
Target $10M - $12M run-rate
G&A synergies, made up of:
• Organizational restructuring
and workforce rationalization
• Transition of technology
systems onto single platform
• Vendor consolidation
Tracking 10% ahead of initially
planned $2M annualized run-rate
cost synergies as of year-end
2017
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 24
$7 $6
$3
$1 $2
$19
$27
$21
$4 $5
$2 $1 $2
$14
Billing Customer Care Fulfillment Enrollments Overhead Total
Crius USG&E Current Combined(Pre-Integration)
Future Combined(Post-Integration)
Crius USG&E
USG&E INTEGRATION UPDATE
Current Combined Future State
Consolidation of back-office functions results in material reductions in direct cost-to-serve per
customer, which represents a major component of overall target G&A synergies.
• Back-office integration results in ~32% reduction in direct cost-to-serve
• Direct cost-to-serve savings represent ~50% the $10M-$12M G&A synergy target
• Approximately 60% of the cost-to-serve savings generated from billing and fulfillment consolidation
Billing Customer
Care
Fulfillment Enrollments Overhead
Total
32%
reduction
in direct
CTS
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 25
Insiders Non-Insiders
UNITHOLDER LOCK-UPS
• Lock-up agreements in place primarily with
founding LLC holders and certain USG&E sellers
to ensure orderly trading of units following
transactions in 2016 and 2017
• Upon the closing of the USG&E acquisition,
10.4M units were subject to lock-up (representing
18% of units outstanding)
• As of January 6, 2018 only 3.2M units remain
subject to lock-up (representing 6% of units
outstanding, with only 2% held by non-insiders)
• Final tranche expires on June 24, 2018
13%
2%
7%
4%
2%
Over 6 month period from closing of USG&E acquisition, 7.2M units, representing 13% or ~C$65M of
KWH units, became freely-tradeable with minimal activity and/or impact to the unit price.
* Insiders comprised of >10% holders and Crius Energy CEO
10%
8%
10%
8%
10%
8%
10%
8%
13%
4%
7%
4% 4% 4%4%4% 4%
2% 2%2% 2% 2%
7/17 8/17 9/17 10/17 11/17 12/17 1/18 2/18 3/18 4/18 5/18 6/18
10
8
6
4
2 4% 4%
2% 2%
Units (
M)
LOCK-UP SUMMARY
KWH.UN unit priceC$9
C$8
C$10
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 27
• Energy-Efficiency: Ample supply and low demand
create opportunities for suppliers with products and
services focused on energy-efficiency
• Residential Customer Engagement: Global non-
industry brands poised to enter sector. This is
prompting many established retailers to evolve more
rapidly by using technologies that better engage
customers and protect valuable relationships
• Commercial Sector Competition: Fierce competition
in large commercial and industrial segment weeding
out weaker players / creating barriers to entry
• Grassroots Support for Choice: Widespread
support for expanded energy choice in Colorado and
Virginia may yield another Nevada. Meanwhile,
dockets to consider consolidated supplier billing may
ultimately shift the paradigm in MD & PA
DEREGULATED ENERGY: MARKET UPDATE
U.S. INDUSTRY TRENDS
Data: DNV GL. Retail Energy Outlook, April 2016
WHILE OTHER RETAILERS SLOWED,
CRIUS CONTINUED RAPID GROWTH
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 28
2013 2014 2015 2016 LTM 2013 2014 2015 2016 LTM
FUNDAMENTALLY STRONG DEREGULATED ENERGY BUSINESS
CUSTOMERS*(Deregulated Energy Only)ADJUSTED EBITDA
(Deregulated Energy Only)
ANNUAL ORGANIC CUSTOMER ADDS
363,000
265,000
375,000390,000
*A Residential Customer Equivalent or RCE is a unit of measure used by the energy industry to denote the typical annual commodity consumption by a single-family residential customer.
A single RCE represents 100 MMBtu of natural gas or 10 MWh of electricity. Pro-forma USG&E results for Q4 2016, Q1 2017 and Q2 2017.
2013 2014 2015 2016 LTM
615,000569,000
819,000
982,000
1,446,000
$31.7
525,000
$35.1
$55.8
$65.5
$95.0
Q3 2017 YTD Q3
2017
(Deregulated Energy Only)
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 30
COMMERCIAL ENERGY
Customer Type
• Focus on small commercial and municipal aggregations in 2018 as large commercial margins are
expected to be negatively impacted by competitive pressures
Competitive
Advantages
Channels
• Awarded the Mass CEA contract,
the largest community aggregation
program in Massachusetts (2nd
largest in the U.S.)
• Launched proprietary, broker portal
in June 2017 focused on small
commercial customer segment
• Recognized with a Top 10 ranking
by independent brokers for ease of
doing business / satisfaction
Commercial
2017 Accomplishments• Small
Commercial
• Municipal
Aggregations
• Large
Commercial
• Telemarketing• Aggregators &
Consultants• Brokers
• Proprietary, web-
based broker
portal
• 5-year track
record of
success with
Muni Aggs
• More than 800
broker
relationships
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 31
2018 SALES PRIORITIES: SMALL COMMERCIAL
Commercial Customers
Complexity
Competition
RiskMa
rgin
Customer Size / Usage
• 71% increase in active partners
• 123% increase in RCEs
• 152% increase in total volumes
• 122% increase in gross margin
• 59% increase in number of
contracts
• 40% increase in average
customer size
• Focus on small commercial customer segment will result in higher margins
• Launch of online broker portal in mid 2016 was a catalyst for success in the small commercial
segment
Small Commercial
2017 Accomplishments
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 32
2018 SALES PRIORITIES: MUNICIPAL AGGREGATIONS
SUPPLIER
LOCAL
GRID
• 174% increase in RCEs
• 183% increase in volumes served
• 217% increase in booked gross
margin
• Executed deals with 3 new
channel partners
• Large volume opportunities with expected margins greater than large commercial segment
• Strong track record of success – over 80+ communities since 2013 – resulted in record growth in
FY 2017
• Largest community electricity aggregation program in Massachusetts, second
largest in the country
• 23 municipalities participated
• 3-year term starting in January 2018
Municipal Aggregations
2017 AccomplishmentsAcushnet
Attleboro
Carver
Dartmouth
Dedham
Dighton
Douglas
Dracut
Fairhaven
Fall River
Freetown
Marion
Mattapoisett
New Bedford
Northbridge
Norton
Plainville
Rehoboth
Seekonk
Somerset
Swansea
Westford
Westport
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 33
COMMERCIAL — KEY INITIATIVES
Relocated
commercial
customer service
function to Texas
to better service
customers
and improve
retention
Customer Service
& Retention
New Product
Development
Expand product
portfolio beyond
core electricity
and natural gas
products
Pricing & Product
Structuring
Dedicated pricing
& supply team
focused on
commercial
customer
segment
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 35
MASS MARKET ENERGY
Customer Type
• Mass market growth is a priority in 2018 to enhance portfolio margins
• Expansion of U.S. Gas & Electric sales channels and exclusive partnership contributions (Comcast
relaunch, CREDO Mobile launch) will enhance sales performance versus 2017
• Residential
Competitive
Advantages
• Full suite of
sales channels
and family of
brands strategy
• Access to
millions of
“warm”
customers
• Top rankings
by J.D. Power
for customer
satisfaction
Channels
• Exclusive Partnerships
• Door-To-Door• Online / Digital Marketing
• Telemarketing
• Expanded direct-to-consumer sales
channels through U.S. Gas &
Electric acquisition
• Entered into 5-year extension of
exclusive partnership with Comcast
• Launched Integrated Energy
Platform strategy and added 2
partners
• Received Integrity and Leadership
Award
Mass Market
2017 Accomplishments
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 36
2018 SALES PRIORITIES: DOOR-TO-DOOR
• Established a presence in 8
states
• 3 more markets going live in Q1,
including TX, plus 4 more
markets in Q3
• Targeting affluent
neighborhoods for optimal
cross-sell opportunity
DOOR-TO-DOOR2017 Accomplishments:
D2D Program live as of Q3 2017SALES AGENTS
• BACKGROUND CHECKS
• COMPLIANCE AND SALES TRAINING
• RESULTS ARE TRACKED BY REP
• REGULAR FIELD VISITS BY MANAGER
PRODUCTS SOLD
• PROMOTE CROSS-SELLING
• CUSTOM-DESIGNED FOR TARGETS
• ATTRACTIVE TO FIRST-TIME SWITCHERS
CONSUMER REACTION
• CRIUS MAKES WELCOME CALLS
• AVERAGE POST-SALE FEEDBACK
SCORE IS 4.65 / 5
• REGULAR REPORTING OF ANY ISSUES
SALES TACTICS
• TARGETED APPROACH (NIELSEN DATA)
• CONSULTATIVE, TECHNOLOGY-ENABLED
APPROACH (iPADS ETC.)
• TPV CONFIRMATIONS
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 37
MASS MARKET - KEY INITIATIVES
• Differentiated products and
service levels based on
customer lifetime value
Customer Segmentation
• Increase frequency
and effectiveness
of customer interactions
Customer Engagement
• Use third party data (e.g. Neilsen)
to target high value customers
and energy consumption data to
improve cross-selling (e.g. solar)
Data Analytics
• Expand product portfolio
beyond core electricity &
natural gas products
• Integrate electricity & solar
New Product
Development
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 39
MERGERS & ACQUISITIONS
• Completed 11 acquisitions in the retail energy and solar industries over past 5 years with all
acquisitions (except U.S. Gas & Electric) funded from available cash
In addition to the above transactions, Crius Energy acquired customer portfolios from PNE in February 2014, HOP Energy in June 2014, Gulf Energy in June 2015, and Big Sky Gas in July 2017.
All retail energy brands are expected to be consolidated
onto one common technology platform by the end of 2018
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 40
MARKET CONSOLIDATION
• Merger & Acquisition activity declined in 2017 following a very active period of consolidation, however
“weather bomb” in late Q4 & early Q1 2018 may create acquisition opportunities
• Focus on acquisitions that are accretive to our current market position
• Increase diversification and/or enable / enhance growth in customer segment, geography (e.g. international), channels or products
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 42
EXCLUSIVE PARTNERSHIP – BUSINESS CASE
FOR CRIUS: FOR PARTNER:
• Fits with “own the home” strategy to
expand products beyond core offerings
• Reduced churn and increased customer
satisfaction due to bundling
• Opportunity to attract new customers
• Material growth in revenue stream
• Access to millions of quality potential
customers through a “warm” relationship
• Low upfront cost-to-acquire, plus revenue
share based on customer usage
• Low customer attrition rates
• Access to first-time “switchers”
• Reduced cost-to-serve / increased
operational efficiency
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 43
EXCLUSIVE PARTNERSHIPS
We provide “white label” energy products to strategic partners who sell under their brand name
to their customers through their sales channels. Crius owns all energy customer relationships.
• Electricity
• Natural Gas
• Solar
• Energy
Operations
• 100% ownership
• Electricity
• Natural Gas
• Energy
Operations
CUSTOMERS
COMMISSIONS
• Licensed to provide
energy service by
PUCO (OH)
• Utility-tested with
Duke Energy
• Acquires customers for CBE
by cross-selling to Cincinnati
Bell customer base under
CBE name
• Cincinnati Bell licenses use of
name and trademarks to CBE
• 100%
ownership
• Licensed to provide energy
service in CA, CT, DC, DE, GA,
IL, IN, MA, MD, MI, NH, NJ, NY,
OH, PA, TX
• Utility-tested in CA, CT, IL, IN,
MA, MD, NH, NJ, NY, OH, PA, TX
• Acquires customers for ER by
cross-selling to IEP Partner
customer base under IEP Partner
Rewards name
• IEP Partner licenses use of name
and trademarks to Crius
• iControl Connected
Home
• Smart Thermostat
• EcoSaver
Franchise
Partner
DIRECT PARTNER MODEL
(formerly FairPoint
Communications)
INTEGRATED ENERGY PLATFORM MODEL
(for direct energy sales)
CUSTOMERS
COMMISSIONS
Evolution of Partner strategy from
Direct to Integrated Energy
Platform model to:
• Increase speed to market and
reduce cost to onboard
• Enhance customer value with
integrated energy product
suite
• Increase operational efficiency
• Reduce risk through upfront
set-up fee structure
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 44
PARTNERSHIP ROLES AND RESPONSIBILITIES
RESPONSIBILITIES Crius Comcast IEP Partner
Marketing | Retail Supply X X
Marketing | Solar X X
Thermostat HW cost/install X X
iControl Connected Home
(EcoSaver)
X X
Integrated Energy Platform X
Sales/enroll | Retail Supply X
Sales | Solar X
Design/install | Solar X
Energy Management X
Demand Response X
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 46
PARTNERSHIP BENEFITS: HIGH-POTENTIAL CUSTOMERS
• Integrated Energy customers are over-indexed in all defined categories with Single Family Homes representing 1.5x average user profile
• Usage benchmarks are higher than current Crius Energy customer portfolio comps
HIGH VALUE CUSTOMERS
60%+ from top 5 customer segments(1)2x
WEALTHIER
HOME TECHNOLOGY ENTHUSIAST
65% of home technology enthusiasts expressed interest to switch providers, 2x the general population265%
1) Service provider partner energy customer profile with 15 total company wide segments. Their top segments are the most valuable customers with energy strengthening the relationship
2) Shelton Group Energy Pulse Survey, 2015
Consumers who have a security service are 7x more likely to purchase an integrated energy product
(e.g., solar)7x
SECURITY
45% of customers with >$100k annual income$100k
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 47
CURRENT PARTNERS
PartnerPartnership
Start Date
Total
Customer
Base
Total StatesPartnership
Type
June 2011 ~500,000 1 Direct
June 2012; 2017
expansion from
acquisition
~1,000,000 6 Direct
March 2015 ~29,000,000 11 Direct
June 2017 ~200,000 3 IEP
October 2017 ~3,000,000 19 IEP
• Starting in 2018, Management expect to onboard 1-2 new IEP partners annually
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 48
COMCAST PARTNERSHIP UPDATE
Massachusetts and New
Hampshire licenses
secured
Executed a 3-year
exclusive agreement for
natural gas and electricity
California supplier license
secured
2015 2016 2017
January
PA and IL launch; first
customer enrolled in PA
May
Retail; Digital
SALES
CHANNELS
NJ market entry
August
CA market entry
October
Outbound Telesales
Lead Capture
Texas market entry
February
CT market entry
Delaware and Maryland
licenses secured
June
MA market entry
December
Announce 5-year extension to
exclusive agreement for natural
gas and electricity
Announce 5-year agreement to
offer Integrated Energy Platform
March
Pennsylvania supplier
licenses secured
March
Connecticut supplier
license secured
September
D.C. supplier licenses
secured; 10,000th customer
enrollment
December
Michigan supplier
license secured
March
April
Aug
2016
Georgia
license
secured
August
Xfinity Home integration
2018
Relaunch of direct sales effort
April
Apr
2018 Multi-Channel Relaunch
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 50
• Consistent growth expected in residential
solar market in 2018 and beyond
• Tariffs on modules (Section 201 case)
already absorbed into pricing increases
• Residential market able to absorb price
increases better than utility scale as other
costs higher on a $/W basis
• Tax equity investors expected to increase
focus on residential market as economics in
utility scale projects in light of tariffs will limit
opportunities
SOLAR ENERGY: MARKET UPDATE
U.S. INDUSTRY TRENDS
Continued growth forecasted in residential segment which aligns with Crius’ solar strategy.
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 51
SOLAR ENERGY – OVERVIEW & COMPETITIVE ADVANTAGES
Direct
Marketing
Indirect
Sales
Partner
Sales
Crius Solar
Origination
Crius Solar Origination
generates solar leads and
sales through multiple
channels
Financing
Crius Solar Origination
has relationships with
multiple financing
partners
Crius Solar
Fulfillment
Crius Solar Origination pays Crius
Solar Fulfillment to install projects
New
Home
Retrofit
Home builders pay
Crius Solar Fulfillment
to install projects
Other solar companies pay Crius
Solar Fulfillment to install projects
Verengo
Solar
3rd Party
Install
Partners
Crius Solar Fulfillment uses in-
house installation capacity
(Verengo) or installation partners
TIGER - Proprietary Solar Platform
• TIGER, our proprietary technology
platform, manages a customer from
prospect through to installation and
enables third party users
• In-house installation capability in
largest solar market in the U.S.
• “Broker” strategy for financing
products allows us to maximize
customer value proposition
• Future integration with retail energy
operations reduces cost-to-acquire
Competitive Advantages
• Origination and Fulfillment are each structured to be profitable on a stand-alone basis
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 52
SOLAR – RECAP OF PROGRESS MADE IN 2017
• Completion of Best-In-Class Solar Platform (TIGER)
• Expanded from one 3rd party PPA to multiple loan, PPA, and cash products in 6 states
• Launched home energy bundle including solar, retail energy, thermostat, and customer engagement reporting
• Established Crius Solar Sales Organization
• Successfully onboarded multiple 3rd party sales companies as originators
• Piloted multiple lead generation partners including internal energy cross-promotions
• Launched first Crius Direct Sales organization from ground-up at end of 2017 in CA
• Launch of Solar Fulfillment Business
• Acquired and fully integrated experienced California installer (Verengo) into Crius Solar
• Obtained contractor licensing and launched installation capabilities in 6 different markets
• Successfully onboarded multiple 3rd party installation partners
• Drove sharp improvements in installation speed and quality across all markets
• Expanded monthly new home installation volume by 30%
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 53
SOLAR ENERGY - KEY INITIATIVES
• Crius Solar Origination – focus
solar sales efforts in California
and Massachusetts which have
(1) strong customer value
proposition versus utility price;
and (2) in California, enhanced
margin by utilizing Verengo
installation capability
• Crius Solar Fulfillment – expand
new home business and new
EPC partners
Achieve Profitability Expand Sales Channels
• Immediate opportunities to launch door-to-door
canvassing in Massachusetts and offer solar
through CREDO Mobile (significant California
customer base)
Integrate With Retail Energy Business
• Increase sales opportunities generated from
retail energy business
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 55
PORTFOLIO OPTIMIZATIONThe goal is increasing Customer Lifetime Value (CLV).
Key Initiatives:
1. Optimization of existing book by identifying high/low value customers
2. Develop product strategies that target new, high CLV customers
3. Implement Customer Experience plan that aligns service levels with customer CLV
Contract
Gross
Margin
Cost to
Acquire /
Serve
Value
over
LifetimeCLV
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 56
PRICE DRIVERS ARE CHANGINGEnergy-based costs are declining while fixed COGS are increasing.
• In PJM (which makes up about 50% of Crius Energy’s customer portfolio) fixed costs now make up 50% of the cost stack vs. 25% 4 years ago
PJM, ISONE, NYISO, MISO PJM Only
►These changes alter how we think about customer product and value.
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 57
PROFITABILITY VARIES BY SEASONMargin variability will drive seasonal changes in unit margins.
• Crius customer book is mostly comprised of
fixed rate products where revenue is a
function of usage
• With significant rise in fixed costs, unit
margins will vary with changes in customer
volume
• Weather departure from normal will result in
variance in margin from forecast (ex. summer
2017)
$-
$5
$10
$15
$20
$25
$-
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
600 700 800 900 1,000
Rep
ort
ed
Unit M
arg
in (
$/M
Wh)
Mo
nth
ly R
eve
nu
e a
nd
CO
GS
Monthly RCE Load (kWh)
Impact of Higher Fixed Cost on Customer Margin
Fixed Cogs Variable Cogs Revenue Unit Margin
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 58
HOW FIXED COSTS ARE DETERMINEDFixed costs are based on customers’ capacity and transmission obligation in most markets
• Obligations are based on individual
customer’s peak hour usage behavior from
prior year
• Individual obligations result in significant
fixed cost distribution within customer
population
• Increase in market rates for capacity and
transmission driving greater dispersion in
customer fixed COGS distribution
0%
10%
20%
30%
40%
$- $0.02 $0.04 $0.06 $0.08 $0.10Pro
ba
bili
ty D
istr
ibu
tio
n
Unitized Fixed Cost ($/kWh)
Distribution of Fixed Cost in PPL Customer Base
2018 PD 2014 PD
Pennsylvania Power and Light (PPL) is a utility in the PJM ISO.
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 59
PROFITABILITY VARIES BY CUSTOMER
• High fixed components and individual
customer obligations drive large cost
differential from customer to customer
• Utilities (and most retail suppliers) currently
socialize cost across the customer base
resulting in massive cross-subsidization
• Dispersion in individualized customer pricing
represents massive market opportunity
0%
5%
10%
15%
20%
25%
30%
$- $0.02 $0.04 $0.06 $0.08 $0.10Pro
ba
bili
ty D
istr
ibu
tio
n
Unitized Fixed Cost ($/kWh)
Distribution of Fixed Cost in PPL Customer Base
2018 PD
Pennsylvania Power and Light (PPL) is a utility in the PJM ISO.
Annual
Customer
Margin
Annual
Customer
Margin
►Portfolio Optimization: Keep Customer A and Drive Customer B to Profitable
Product
$350
($50)
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 60
HOW WE CONTINUOUSLY IMPROVE CLV
Passive Marketing
Active
Marketing
Ongoing Book Management
• “Wide Net”
acquisition
strategy
• Only enroll customers that
meet minimum requirements
for profitability and customer
value proposition
• Engage
customers to
drive behavior
that enables
higher CLV
• Use demographic
analysis to avoid
areas with high
likelihood of low-
value customers
• Post acquisition,
customers will be
optimized within
“Ongoing Book
Management” strategy
• Develop products that
actively filter customers at
time of acquisition
• Rank all customers based
on cost profiles
Be willing to drop customers that will
never be profitable
• Base future customer pricing and
product offers on value ranking
• Customer experience driven based
on customer value ranking
• Products designed
to limit exposure
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 61
KEY INTIATIVES TO DRIVE CLV
Value Quadrant for Retail Customers:Performance: relative value of current contracts
Potential: relative cost to serve based on customer attributes
High
potential
customers
High-value
Customers
Low-value
customers
Over-
performing
customers
Performance
Po
ten
tia
l
• Ranking-based pricing, renewals and customer experience
• Products which require customer to apply for rate
• Products with fixed revenue components
• Device-enabled products that drive favorable customer behavior characteristics
• Modelling correlation against demographics (Nielsen)
APPLICATION-BASED PRODUCT EXAMPLE
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 62
• Optimization on customer book is expected yield significant improvement in customer margins over time
• As the customer portfolio is optimized, attrition expected to increase in short-term but show improvement as book
becomes concentrated to higher value customers
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2018 2019 2020 2021 2022 2023
% Im
pro
vem
ent
Quart
erly C
hurn
Impact on Attrition
Forecast Churn (qtr) Baseline Churn
Improvement
0%
5%
10%
15%
20%
25%
30%
35%
$0
$5
$10
$15
$20
$25
2018 2019 2020 2021 2022 2023%
Im
pro
vem
ent
$/M
Wh
Impact on Unit Margin
Baseline Unit Margin Optimization value
Improvement
EXPECTED IMPACT
Below are illustrative examples only:
(illustrative) (illustrative)
Attrition Attrition
Qu
art
erl
y A
ttri
tio
n
$ / M
Wh
CRIUS ENERGY | ANALYST DAY | JANUARY 2018 64
CRIUS OBJECTIVES
Customer Growth
INCREASE DISTRIBUTABLE CASH
MARGIN GROWTH
Increase Customer
Lifetime Value
Achieve USG&E
Synergies
REDUCE COSTS
Continuous Cost
Optimization
PORTFOLIO OPTIMIZATION
MERGERS & ACQUISTIONS
CUSTOMER ENGAGEMENT
RESIDENTIAL
INTEGRATED ENERGY
COMMERCIAL
INTEGRATED ENERGY