EX-99 3 nu8kexh992111504.txt EXHIBIT 99.2 SLIDES 11-15-04 Exhibit 99.2 SLIDE 1 NU LOGO Northeast Utilities System Wall Street Utility Group New York, NY November 15, 2004 SLIDE 2 Safe Harbor Provisions This presentation includes statements concerning the Company's expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements are "forward looking statements" within the meaning of the Private Litigation Reform Act of 1995. In some cases the reader can identify these forward looking statements by words such as "estimate", "expect", "anticipate", "intend", "plan", "believe", "forecast", "should", "could", and similar expressions. Forward looking statements involve risks and uncertainties that may cause actual results or outcomes to differ materially from those included in the forward looking statements. Factors that may cause actual results to differ materially from those included in the forward looking statements include, but are not limited to, actions by state and federal regulatory bodies, competition and industry restructuring, changes in economic conditions, changes in weather patterns, changes in laws, expiration or initiation of significant energy supply contracts, regulations or regulatory policy, levels of capital expenditures, developments in legal or public policy doctrines, technological developments, volatility in electric and natural gas commodity markets, and other presently unknown or unforeseen factors. Other risk factors are detailed from time to time in our reports to the Securities and Exchange Commission. We undertake no obligation to update the information contained in any forward looking statements to reflect developments or circumstances occurring after the statement is made. SLIDE 3 Topics for Today ---------------- - 2005 earnings guidance and drivers - Competitive businesses - Regulated investment plans - 2004 - Financial results - Earnings guidance SLIDE 4 Projected 2005 Results ---------------------- Key Drivers Regulated Distribution ------------ & Generation $0.96 - $1.00 - Sales Growth - Increased Investment - Rate Increases Transmission $0.26 - $0.30 - Increased Investment Competitive ($0.04) - $0.08 - Lower New England wholesale sales Parent, Other & Cost Initiatives ($0.08) - ($0.13) Total Northeast Utilities $1.10 - $1.25 SLIDE 5 Competitive Businesses ---------------------- Net Income 2003* 2004 2005 ($ Millions) Actual Estimate Estimate Merchant $30 $29 - $31 ($9) - $4 Services $2 $ 1 - $2 $4 - $6 Total $32 $30 - $33 ($5) - $10 * Excludes $36 million SMD write-off SLIDE 6 NU's Regulated Businesses Have More Certainty Today --------------- Distribution/ Regulated Generation Transmission ---------- ------------ - CL&P 4-year rate case Done - FERC rate case Done - PSNH rate case Done - Appeal of Bethel- Norwalk Done - Yankee rate case Settlement - Agreement to Pending replace 1385 Approval line to Long Island In place - PSNH Northern Wood Project Approved - Yankee LNG project Approved SLIDE 7 Summary of Rate Plans --------------------- Allowed Start End Rate Increase ROE ----- --- ------------ --- CL&P 1/1/05 12/31/05 $25.1 M 9.85% Distribution 1/1/06 12/31/06 $11.9 M 1/1/07 12/31/07 $ 7.0 M PSNH Delivery 10/1/04 5/31/05 $ 3.5 M N/A 6/1/05 N/A $10.0 M Yankee Gas Delivery* 1/1/05 Mid 2007 $14.0 M 9.9% Transmission 1/1/05 12/31/05 $18-$20 M 11.0% *Settlement pending SLIDE 8 Regulated Strategic Plan ------------------------ New England customers require: NU shareholders can benefit from: ----------------------------- -------------------------------- - Expanded transmission system - Increased investment opportunities - Upgraded distribution - Solid earnings facilities growth - Increased local natural gas - Strong credit storage profile - Reduced power plant emissions SLIDE 9 Regulated Projects ------------------ On-going Projects [Picture of transmission ----------------- line] - CL&P distribution $225 million/yr. SW CT Transmission $1 billion - PSNH distribution & generation $ 80 million/yr. [Picture of LNG - Transmission $ 60 million/yr. facility] Yankee Gas LNG - Yankee distribution $ 40 million/yr. $100 million - WMECO distribution $ 30 million/yr. [Picture of PSNH --------------------------------------------- facility] Total: $435 million/yr. PSNH Northern Wood $75 million SLIDE 10 Capital Investments Will Exceed Depreciation -------------------------------------------- Bar Chart comparing Capital Expenditures to Depreciation, measured in millions of $ 2003 2004 2005 2006 2007 Actual Projected Projected Projected Projected ------ --------- --------- --------- ---------- Cap Ex $550 $638 $753 $765 $667 Depreciation $204 $239 $242 $261 $283 2008 2009 Projected Projected --------- --------- Cap Ex $822 $729 Depreciation $302 $326 SLIDE 11 Regulated Rate Base ------------------- Bar chart illustrating Regulated Rate Base Cost broken down by Distribution and Generation and Transmission, measured in millions of $ 2004 2005 2006 2007 Projected Projected Projected Projected --------- --------- --------- --------- Distribution and Generation $2551.4 $2794.0 $3081.6 $3448.8 Transmission $ 486.4 $494.7 $ 780.6 $ 859.9 2008 2009 Projected Projected --------- --------- Distribution and Generation $3674.9 $3867.2 Transmission $1033.5 $1686.1 SLIDE 12 Today's Balance Sheet --------------------- Bar chart measuring percentage of leveraged debt, broken down by total debt (excluding RRBs), Preferred and Common Stock, by subsidiaries NU Consol. CL&P PSNH WMECO** ------- ---- ---- ------- Total Debt (Excludes RRBs) 54.6% 54.9% 55.0% 53.8% Preferred 2.2% 5.8% 0.0% 0.0% Common 43.2% 39.3% 45.0% 46.2% Yankee Gas* NGC ---- --- Total Debt (Excludes RRBs) 53.7% 45.4% Preferred 0.0% 0.0% Common 46.3% 54.6% *Excludes acquisition premium **Excludes $50 million issue to fund prior spent nuclear fuel trust SLIDE 13 Cash Requirements 2005-2009 --------------------------- Pie chart showing cash requirements for the period from 2005-2009 (shown in billions of $) Billions $ --------- Net New Financing $ 1.8 Depreciation $ 1.4 Non-RRB $ 0.3 Amortization Earnings Deferred Taxes & Other $ 0.9* Total: $ 4.4 *NU has projected that its competitive businesses will contribute steadily increasing earnings and more than $200 million of dividends to parent company cash needs through 2009. If the 2005 New England wholesale bidding outcome is indicative of lower future cash generation and earnings by those businesses and if NU's regulated investment plans are not changed, future consolidated earnings would be negatively impacted. NU could have to seek additional external financing for its planned expenditures in that period. SLIDE 14 Projected 2004 Results ---------------------- Regulated Distribution & Generation $0.91 - $0.95 Transmission $0.22 - $0.24 Competitive $0.23 - $0.25 Parent & Other ($0.11) - ($0.09) Total Northeast Utilities $1.25 - $1.35 SLIDE 15 NU's Investment Thesis ---------------------- - Unique opportunity to invest in needed energy delivery infrastructure - Balance sheet capable of sustaining major investments - Solid earnings and dividend growth - Competitive businesses that need to rebound after prospects for a disappointing 2005 SLIDE 16 Questions and Answers -------