Filed by Northeast Utilities Pursuant to Rule 425
Under the Securities Act of 1933
Subject Company: NSTAR
Commission File No.: 333-170754
 Investor
Meetings MARCH 10-14, 2011 |
 2
This presentation contains statements concerning NU’s expectations, beliefs,
plans, objectives, goals, strategies, assumptions of future events, future
financial performance or growth and other statements that are not historical facts. These statements are “forward-looking
statements”
within the meaning of the Private Securities Litigation Reform Act of 1995.
In some cases, a listener or reader can identify these forward-looking
statements through the use of words or phrases such as “estimate”, “expect”, “anticipate”, “intend”, “plan”, “project”, “believe”,
“forecast”, “should”, “could”, and other similar
expressions. Forward-looking statements are based on the current expectations, estimates,
assumptions or projections of management and are not guarantees of future
performance. These expectations, estimates, assumptions or projections
may vary materially from actual results. Accordingly, any such statements are qualified in their entirety by reference to, and are
accompanied
by,
the
following
important
factors
that
could
cause
our
actual
results
to
differ
materially
from
those
contained
in
our
forward-
looking
statements,
including,
but
not
limited
to,
actions
or
inaction
of
local,
state
and
federal
regulatory
and
taxing
bodies;
changes in
business and economic conditions, including their impact on interest rates, bad
debt expense and demand for our products and services; changes in weather
patterns; changes in laws, regulations or regulatory policy; changes in levels and timing of capital expenditures;
disruptions
in
the
capital
markets
or
other
events
that
make
our
access
to
necessary
capital
more
difficult
or
costly;
developments
in legal or
public policy doctrines; technological developments; changes in accounting
standards and financial reporting regulations; fluctuations in the value of
our remaining competitive contracts; actions of rating agencies; the effects and outcome of our pending merger with NSTAR; 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
(SEC). Any forward-looking statement speaks only as of the date on which such statement is made, and 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 or to reflect the occurrence of unanticipated events.
This presentation references actual and projected EPS by business. EPS by
business is a non-GAAP (not determined using generally accepted
accounting principles) measure that is calculated by dividing the net income or loss attributable to controlling interests of each
business
by
the
weighted
average
diluted
NU
parent
common
shares
outstanding
for
the
period.
Management
uses
this
non-GAAP
financial
measure to evaluate earnings results and to provide details of earnings results and
guidance by business. This presentation also includes non-GAAP
financial measures referencing our 2010 earnings and EPS excluding expenses related to the proposed merger and certain non-
recurring benefits from the settlement of tax issues. In addition, our 2011
earnings guidance excludes certain non-recurring charges related to
merger costs we expect to incur during 2011, which is a non-GAAP financial
measure. Management believes that these non-GAAP financial
measurements are useful to investors to evaluate the actual and projected financial
performance and contribution of NU’s businesses. Non-
GAAP
financial
measures
should
not
be
considered
as
alternatives
to
NU
consolidated
net
income
attributable
to
controlling
interests
or
EPS
determined in accordance with GAAP as indicators of NU’s operating
performance. Safe Harbor Provisions |
 3
Information Concerning Forward-Looking Statements
In addition
to
historical
information,
this
communication
may
contain
a
number
of
“forward-looking
statements”
as
defined
in
the
Private
Securities
Litigation
Reform
Act
of
1995.
Words
such
as
anticipate,
expect,
project,
intend,
plan,
believe,
and
words
and
terms of
similar substance used in connection with any discussion of future plans, actions,
or events identify forward-looking statements. Forward-looking
statements relating to the proposed merger include, but are not limited to: statements about the benefits of the
proposed merger involving NSTAR and Northeast Utilities, including future financial
and operating results; NSTAR’s and Northeast Utilities’
plans, objectives, expectations and intentions; the expected timing of completion
of the transaction; and other statements relating to the merger that are not
historical facts. Forward-looking statements involve estimates, expectations and projections and, as
a result,
are
subject
to
risks
and
uncertainties.
There
can
be
no
assurance
that
actual
results
will
not
materially
differ
from
expectations.
Important factors could cause actual results to differ materially from those
indicated by such forward-looking statements. With respect to
the proposed
merger,
these
factors
include,
but
are
not
limited
to:
the
risk
that
NSTAR
or
Northeast
Utilities
may
be
unable
to
obtain
governmental and regulatory approvals required for the merger, or required
governmental and regulatory approvals may delay the merger
or
result
in
the
imposition
of
conditions
that
could
reduce
the
anticipated
benefits
from
the
merger
or
cause
the
parties to
abandon the merger; the risk that a condition to closing of the merger may not be
satisfied; the length of time necessary to consummate the proposed merger;
the risk that the businesses will not be integrated successfully; the risk that the cost savings and any other
synergies from the transaction may not be fully realized or may take longer to
realize than expected; disruption from the transaction making it more
difficult to maintain relationships with customers, employees or suppliers; the diversion of management time on merger-
related
issues;
the
effect
of
future
regulatory
or
legislative
actions
on
the
companies;
and
the
risk
that
the
credit
ratings
of
the
combined
company
or
its
subsidiaries
may
be
different
from
what
the
companies
expect.
These
risks,
as
well
as
other
risks
associated
with
the
merger, are more fully discussed in the joint proxy statement/prospectus that is
included in the Registration Statement on Form S-4 (Registration No.
333-170754) that was filed by Northeast Utilities with the SEC in connection with the merger. Additional risks and
uncertainties
are
identified
and
discussed
in
NSTAR’s
and
Northeast
Utilities’
reports
filed
with
the
SEC
and
available
at
the
SEC’s
website at www.sec.gov. Forward-looking statements included in this
document speak only as of the date of this document. Neither NSTAR nor
Northeast Utilities undertakes any obligation to update its forward-looking statements to reflect events or circumstances
after the date of this document.
Additional Information and Where To Find It
This communication does not constitute an offer to sell or the solicitation of an
offer to buy any securities or a solicitation of any vote or approval.
In connection with the proposed merger between Northeast Utilities and NSTAR, Northeast Utilities filed with the SEC a
Registration Statement on Form S-4 (Registration No. 333-170754) that
includes a joint proxy statement of Northeast Utilities and NSTAR that also
constitutes a prospectus of Northeast Utilities. Northeast Utilities and
NSTAR mailed the definitive joint proxy statement/prospectus
to
their
respective
shareholders,
on
or
about
January
5,
2011.
Northeast
Utilities
and
NSTAR
urge
investors
and
shareholders to read the joint proxy statement/prospectus regarding the proposed
merger, as well as other documents filed with the SEC, because they contain
important information. You may obtain copies of all documents filed
with the SEC regarding this proposed transaction, free of charge, at the
SEC’s website (www.sec.gov). You may also obtain these documents, free of charge, from Northeast
Utilities’
website (www.nu.com) under the tab “Investors”
and then under the heading "Financial/SEC Reports.”
You may also obtain
these documents, free of charge, from NSTAR’s website (www.nstar.com) under
the tab “Investor Relations.” Please refer to our reports to the
SEC for further details concerning the matters described in this presentation.
Safe Harbor Provisions |
 4
Topics for Today
•
Merger status
•
NU -
2010 results and stand-alone 2011 outlook
•
NU -
Transmission segment
•
NU -
Electric distribution/generation segment
•
NSTAR –
Company update |
 5
A Compelling Combination –
Creates Largest Utility
Company in New England
Significant transmission investment
opportunities combined with balance sheet
strength provides for substantial growth
potential
Larger, more diverse and better positioned
to support economic growth and
renewables
in New England
Accretive to earnings in Year 1 and
provides enhanced total shareholder return
proposition
Enhances service quality capabilities to the
largest customer base in New England
Highly experienced and complementary
leadership team with proven track record
NSTAR Electric Service Area
NSTAR Gas Service Area
Northeast Utilities Electric Service Area
Northeast Utilities Gas Service Area
ME
NY
VT
NH
M
A
RI
Combined Service Territory |
 6
Key Merger Terms
Expected to close in the second half of 2011
Timing / Approvals:
Headquarters:
Dual –
Hartford and Boston
Company Name:
Northeast Utilities
Consideration:
100% stock
Exchange Ratio:
1.312 shares of Northeast Utilities per NSTAR share
Pro Forma Ownership:
56% Northeast Utilities shareholders
44% NSTAR shareholders
Pro Forma Dividend:
At close, dividend increase for Northeast Utilities
shareholders
Dividend parity for NSTAR shareholders
Governance:
Chuck Shivery to be non-executive Chairman
Tom May to be President and CEO
14 Board members
7 nominated by Northeast Utilities including Chuck Shivery
7 nominated by NSTAR including Tom May
Balanced Terms and Governance |
 7
NU-NSTAR Merger Status
•
NU and NSTAR shareholders approved the merger by needed two-thirds votes
on March 4
•
Hart-Scott-Rodino
waiting period expired in February without objection
•
FCC review complete without objection
•
FERC, NRC reviews pending
•
MA DPU
discovery under way, ruling expected soon on standard of review
•
CT DPUC
initially disclaimed jurisdiction. Now awaiting informational session
and final decision |
 8
$27.1
$47.5
$12.3
$41.4
$70.0
$21.0
$16.7
$74.0
$32.7
$10.1
$69.3
$94.1
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
$90.0
$100.0
CL&P
PSNH
WMECO
Yankee Gas
2008
2009
2010
Improving Earnings in Distribution/Generation
Businesses |
 9
2010 Results and Standalone 2011 Guidance
2009
Actual
2010
Actual
2011
Guidance
NU Consolidated EPS
(GAAP)
$1.91
$2.19
$2.10 -
$2.25
Distribution/Generation
$0.92
$1.16
$1.25 -
$1.35
Transmission
$0.95
$1.00
$1.05 –
$1.10
Competitive
$0.09
$0.05
N/A
NU Parent/Other
($0.05)
($0.05)*
($0.05)**
NU Consolidated EPS
(Non-GAAP)
$1.91
$2.16
$2.25 –
$2.40
*
Excludes a $0.09/share fourth quarter non-recurring tax gain at NU Parent and
approximately $0.06 of NU-NSTAR merger related expenses that were
recorded in the fourth quarter. **Excludes $0.15/share of expected
NU-NSTAR merger-related costs. Includes competitive results. |
 10
Final Resolution of All Three Electric Rate Cases
•
Five-year settlement
approved by NHPUC on
6/28/2010
•
$45.5 million increase on
7/1/10 in addition to
8/1/09 temporary increase
of $25.6 million
•
$2.9 million decrease on
7/1/11
•
2012 & 2013 projected
increases of $9.5 million &
$11.1 million
•
Authorized ROE remains
9.67% (2010 distribution/
generation ROE was
10.2%)
•
Recovery of ice storm
costs over 7 years
•
Final decision 6/30/2010
•
$63.4 million increase
effective 7/1/10
•
$38.5 million increase
effective 7/1/11
•
Authorized 9.4% ROE at
6/30/10 (2010 ROE was
7.9%)
•
49.2% equity in capital
structure
•
Deferring initial increase
until 1/1/11
•
Ruling on health care issue
deferred to next rate case
•
Capex plan approved
PSNH
CL&P
•
Final decision 1/31/11
•
$16.8 million increase
effective 2/1/11
•
Authorized 9.6% ROE (2010
ROE was 4.6%)
•
Decoupling approved
•
Capital investment recovery
mechanism rejected
•
$2.1 million write-off taken in
fourth quarter 2010
WMECO |
 11
Southwest Connecticut
Reliability:
Projects Complete
1
Connecticut Borders (MA, RI):
NEEWS Projects Under Way
2
Transmission Business Strategy: Major Initiatives
Expanding Across Wider New England Geography
NPT
HVDC
3
Northern Pass Transmission
(NPT) Line between Quebec and
New Hampshire
Renewables & Clean Energy
(ME/NH/VT)
:
Projects in Development/
High Wind potential areas
4
Potential Wind Sites
´ |
  12
NEEWS Projects Advance
Current Status Report
Greater Springfield Reliability Project
•
Received siting approval in CT and MA
•
Development and Management Plans approved
by CT Siting Council
•
Substation construction commenced in MA in Dec.
2010
•
Commenced overhead construction in MA in
February 2011
•
Commence overhead construction in CT in early
2012
•
Project in-service: late 2013
Interstate Reliability Project
•
Joint project with National Grid (NU in CT; NGrid
in MA & RI)
•
ISO-NE confirmed need date in August 2010
•
File siting application in CT in late 2011
•
Siting decision in CT in mid/late 2013
•
Commence construction: late 2013/early 2014
•
Project in-service: late 2015
SPRINGFIELD
HARTFORD
345-kV Substation
Generation Station
345-kV ROW
115-kV ROW
Central Connecticut
Reliability Project
Interstate
Reliability Project
Greater Springfield
Reliability Project
Central Connecticut Reliability Project
•
Awaiting completion of ISO-NE’s reassessment of need and need
date
•
Project milestones estimated 12 months behind IRP |
 13
Northern Pass Transmission –
a $1.1 Billion Capital
Investment
´
•
To be owned by Northern Pass Transmission
LLC -
NU (75%) and NSTAR (25%)
•
1,200 MW transfer capability
•
Northern terminus at Des Cantons (Québec),
southern terminus in Franklin (New
Hampshire)
•
Québec terminal will convert the power
from AC to DC (rectifier)
•
US terminal will convert the power from
DC to AC (inverter)
•
345kV AC leg from Franklin to Deerfield, NH
•
Capital cost estimate for US segment: $1.1
billion
•
TSA signed in October 2010 and accepted by
FERC on February 11, 2011
•
Permitting process began October 14, 2010
with U.S. DOE application
•
PPAs under discussion
Des Cantons
HVDC Line
HVDC Converter
Station
345-kV Line
Existing Deerfield
Substation
Deerfield
Franklin |
 14
Q4 2011
Begin long lead time material procurement
$ 1.1 Billion
Project cost -
(U.S. side)
Late 2015
In-Service Date
Q1 2013
Complete siting approvals
2013
Begin Construction
Q4 2011
New Hampshire Siting (SEC) application filed
Oct 2010
DOE Presidential Permit application filed
Oct 2010
Transmission Service Agreement (TSA) signed
Q1 2011
Execute Term Sheets for EPC
Feb 2011
FERC accepts TSA
Dec 2010
TSA FERC filing
Oct 2010
ISO Technical Approval application filed
May 2009
FERC declaratory order received
Dec
2008
Initial FERC filing for declaratory order
Milestone Date
Milestone
Northern Pass Transmission -
Project Milestones as of 3/1/11 |
 15
NEEWS projects
ramping up
2001-2015 Transmission Capital Expenditures
$0
$100
$200
$300
$400
$500
$600
$700
$800
Base Reliability
Major Southwest CT
NEEWS
Northern Pass
Historic
Forecast
$2.9 Billion
$2.8 Billion
NU’s share of
NEEWS project
estimated at
$1.449 billion
$845 million of
additional forecasted
projects
$261 Million
Northern Pass
HVDC Line to
Canada
US portion
estimated at $1.1
billion with $830
million NU
ownership share
Successful
completion of
SWCT projects
SWCT projects
total $1.6 billion |
   16
NU Actual and Projected Transmission Year-End
Rate Base
$2,099
$2,178
$2,234
$2,394
$2,552
$315
$341
$360
$406
$406
$505
$183
$269
$459
$650
$730
$803
$2,149
$2,114
$540
$834
$830
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
2009
Actual
2010
Actual
2011
2012
2013
2014
2015
CL&P
PSNH
WMECO
Northern Pass
Transmission
Rate Base
CAGR of 10.5%
$
2,597
$
2,759
$3,234
$3,370
$
3,733
$
4,725
*100% CWIP assumed for NEEWS projects
$
2,933
**NU share of this project is depicted as traditional rate base which
accrues AFUDC during construction
**
*
* |
 17
Efforts Under Way to Bring Northern New England Wind
Generation to Market
•
New England RPS requirements are
21% by 2020, and existing resources
provide only 6%
•
Complement current ISO-NE regional
planning and potential FERC changes
•
Create efficiencies by optimizing
multiple wind sites and required
transmission
•
Get clean renewable energy to New
England’s load sites
•
Utilize
a
“beneficiary-pay”
model
that
provides transparency for customers
and regulators
NU, NSTAR, National Grid, and United Illuminating working
collectively on this model |
 18
$305
$337
$320
$317
$329
$336
$83
$133
$84
$113
$117
$127
$132
$132
$10
$22
$9
$5
$5
$5
$33
$36
$39
$39
$40
$177
$112
$52
$52
$29
$1
$40
$29
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
$550
$600
$650
$700
$750
2010
Actual
2011
2012
2013
2014
2015
PSNH - Generation ($274M total)
WMECO - Distribution ($194M total)
WMECO - Generation ($46M total)
PSNH - Distribution ($621M total)
CL&P - AMI/Smart Grid ($217M total)*
CL&P - Distribution ($1,639M total)
Electric Distribution and Generation Capital
Expenditures –
By Company
2011-2015 Projected Electric Distribution and Generation Spending
$3 Billion
$609
$675
$618
$541
$537
$620
*Total AMI-related capex through 2016 expected to be approximately $300
million 2011 –
2015
Capital Expenditures |
 NU
Generation Strategy WMECO Solar Initiative
PSNH Generation Business Plan
Installation of 6 MW solar projected by
2012
Estimated cost: $41 million
Completed 1.8 MW of solar at first site in
Pittsfield, MA in October 2010
4.2 MW site in Springfield, MA on capped
landfill, identified for second project
Constructive
regulatory
model
–
fully
tracking, segmented rate base
Five-year strategy preserves existing 1,200
MW New Hampshire fleet
Completes the Merrimack Scrubber
Estimated cost reduced from $457
million to $430 million
$296.5 million capitalized at 12/31/10
Ahead of schedule: 82% complete as
of 2/28/11
Assesses additional growth opportunities
in renewables
19 |
 20
Yankee Gas Capital Expenditures
$25
$30
$48
$50
$51
$52
$30
$37
$31
$30
$31
$33
$13
$16
$20
$20
$21
$22
$27
$30
$13
$26
$26
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
$120
$130
$140
$150
2010
Actual
2011
2012
2013
2014
2015
Aging Infrastructure
Basic Business
Peak Load / New Business
WWL
Gas supply infrastructure
2011-2015 Projected Yankee Gas Capital Spending
$587 Million
$95
$120
$129
$126
$99
$113
Investing $587 million, leveraging natural
gas as “the fuel of choice”
Distribution system expansion: $30
million for 16-mile Waterbury to
Wallingford Line (WWL)
Gas supply infrastructure
Sales growth opportunities to supply
renewable generation (fuel cells, DG)
Yankee Gas Strategy |
 21
•
Fills gaps in supply portfolio
•
Eliminates system constraint in
Cheshire area
•
Increases vaporization capacity of
Waterbury LNG project
•
Yankee Gas’
$57.6 million expansion
project began in April 2010
(Waterbury to Wallingford Line
Project); $26.6 million invested in 2010
•
Key elements of current Yankee Gas
rate case
$32.8 million increase effective
7/1/11
$13 million increase effective
7/1/12
Maintain current 10.1% ROE
Waterbury to Wallingford Project to Add
Needed Supply for System Demand |
 22
2009-2015: NU Actual and Projected Capital
Expenditures and Depreciation
$1,036
$1,209
$1,216
$969
$1,407
$1,428
$1,331
$310
$301
$305
$332
$359
$382
$413
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
2009
Actual
2010
Actual
2011
2012
2013
2014
2015
Total Capex (incl. cost of removal and AFUDC)*
Depreciation
Significant
capital
spending
through
2015
*Totals include capex at corporate service companies on behalf of operating
companies of $53 million in 2009 and $69 million in 2010 and estimated at
$32 million in 2011, $28 million in 2012, $35 million in 2013, $34 million in 2014, and $28
million in 2015. |
   23
$2,597
$2,933
$3,234
$3,370
$3,733
$4,725
$3,303
$3,670
$3,912
$4,171
$4,516
$4,893
$407
$405
$758
$773
$773
$763
$691
$682
$743
$756
$790
$2,759
$3,488
$426
$847
$969
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
2009
Actual
2010
Actual
2011E
2012E
2013E
2014E
2015E
Transmission
Distribution
Generation
Yankee Gas
Capital Program Benefits Customers and Produces
Attractive Rate Base Growth
$7,334
$8,660
$7,772
$9,104
Actual and
Projected Total
Rate Base
2009-2015
CAGR of 8.4% (using
2009 as base year)
$6,998
$9,869
Projected Electric
Distribution
CAGR of 6.8%
Projected Transmission
CAGR of 10.5%
$11,350
Projected Generation
CAGR of 11.0%
Projected Natural Gas
Distribution
CAGR of 5.8% |
 NSTAR
Company Update March 10, 2011 |
 25
NSTAR Safe Harbor
Information Concerning Forward-Looking Statements
In addition
to
historical
information,
this
presentation
may
contain
a
number
of
“forward-looking
statements”
as
defined
in
the
Private
Securities
Litigation
Reform Act of 1995. Words such as anticipate, expect, project, intend, plan,
believe, and words and terms of similar substance used in connection with
any discussion of future plans, actions, or events identify forward-looking
statements. Forward-looking statements relating to the proposed merger
include, but are not limited to: statements about the benefits of the proposed
merger involving NSTAR and Northeast Utilities, including future financial
and operating
results;
NSTAR’s
and
Northeast
Utilities’
plans,
objectives,
expectations
and
intentions;
the
expected
timing
of
completion
of
the
transaction; and other statements relating to the merger that are not historical
facts. Forward-looking statements involve estimates, expectations and
projections and, as a result, are subject to risks and uncertainties. There
can be no assurance that actual results will not materially differ from
expectations. Important factors could cause actual results to differ
materially from those indicated by such forward-looking statements. With respect to
the proposed merger, these factors include, but are not limited to: the risk that
NSTAR or Northeast Utilities may be unable to obtain governmental and
regulatory approvals required for the merger, or required governmental and
regulatory approvals may delay the merger or result in the imposition of
conditions that could reduce the anticipated benefits from the merger or cause the
parties to abandon the merger; the risk that a condition to closing of the
merger may not be satisfied; the length of time necessary to consummate the
proposed merger; the risk that the businesses will not be integrated
successfully; the risk that the cost savings and any other synergies from the
transaction may not be fully realized or may take longer to realize than
expected; disruption from the transaction making it more difficult to maintain
relationships with customers, employees or suppliers; the diversion of
management time on merger-related issues; the effect of future regulatory or
legislative actions on the companies; and the risk that the credit ratings of
the combined company or its subsidiaries may be different from what the companies
expect. These risks, as well as other risks associated with the
merger,
are
more
fully
discussed
in
the
joint
proxy
statement/prospectus
that
is
included
in
the
definitive
proxy
statement
that
was
filed
by
NSTAR with
the Securities and Exchange Commission (SEC) on January 5, 2011 and the
Registration Statement on Form S-4 (Registration No. 333-170754) that
was filed
by
Northeast
Utilities
with
the
SEC
in
connection
with
the
merger.
Additional
risks
and
uncertainties
are
identified
and
discussed
in
NSTAR’s
and Northeast Utilities’
reports filed with the SEC and available at the SEC’s website at
www.sec.gov. Forward-looking statements included in this document
speak only as of the date of this document. Neither NSTAR nor Northeast Utilities undertakes any obligation to update its forward-looking
statements to reflect events or circumstances after the date of this
document. Additional Information and Where to Find It
This presentation does not constitute an offer to sell or the solicitation of an
offer to buy any securities. In connection with the proposed merger between
Northeast Utilities and NSTAR, Northeast Utilities filed with the SEC a
Registration Statement on Form S-4 (Registration No. 333-170754) that includes a
joint proxy
statement
of
Northeast
Utilities
and
NSTAR
that
also
constitutes
a
prospectus
of
Northeast
Utilities.
Northeast
Utilities
and
NSTAR
first
mailed
the definitive joint proxy statement/prospectus to their respective shareholders,
on or about January 5, 2011. Northeast Utilities and NSTAR urge investors
and shareholders to read the joint proxy statement/prospectus regarding the proposed merger, as well as other documents filed with the SEC,
because they contain important information. You may obtain copies of all
documents filed with the SEC regarding this proposed transaction, free of
charge,
at
the
SEC’s
website
(www.sec.gov).
You
may
also
obtain
these
documents,
free
of
charge,
from
Northeast
Utilities’
website
(www.nu.com)
under
the
tab
“Investors”
and
then
under
the
heading
"Financial/SEC
Reports.”
You
may
also
obtain
these
documents,
free
of
charge,
from
NSTAR’s
website (www.nstar.com) under the tab “Investor Relations.”
|
    26
Premier Service Territory
•
•
Solid, diverse customer base
Solid, diverse customer base
•
•
Sales growth better than U.S.
Sales growth better than U.S.
overall
overall
•
•
Positive outlook for economy
Positive outlook for economy |
 27
Customer Mix Provides Stability
57% Commercial & Industrial
43% Residential
63% Residential
37% Commercial & Industrial
Electric ($2.5 billion)
Gas ($.5 billion)
•Health Care
•Education
•Biotech
•Government
•Financial |
 28
A Long History of Negotiated, Multi-Year Distribution
Rate Agreements
•
25
years
of
rate
agreements
–
last
litigated
rate
increase
in
1986
•
Fully reconciling pension & post-retirement mechanism and
recovery of energy supply
•
Current electric rate plan through December 31, 2012
•
10.5% ROE with +/-
2% neutral zone
•
Plan to pursue a new rate agreement effective in 2013
|
 History
of Disciplined Cost Control 2006
$431
2007
2008
Total Operations & Maintenance Expense
$447
$ IN MILLIONS
2009
$454
2010
$431
•
Productivity & automation
focus
•
Performance driven
culture
•
Engaged workforce and
constructive union
relations
•
Continuous improvement
philosophy
Key Drivers
$447
29 |
 …20 Consecutive Years of Operating Earnings Growth
$2.37
2007
2008
$2.07
$2.22
2009
2010
$2.56
$2.60 -
$2.75
2011
Guidance
30 |
 Consistent, Above Average Dividend Growth
…13 Consecutive Years of Increase…
$1.30
$1.40
$1.50
2006
2007
$1.60
2008
2009
2010
$1.70
31 |
 32
Solid Results
For 2010
2009 - EPS
2.37
$
Higher electric sales (+3.3%) and performance-based adjustment
0.21
Gas sales (-2.8%)
(0.02)
Higher transmission revenue
0.07
Lower interest costs
0.09
Increase in operations and maintenance
(0.12)
Decline in mitigation incentive revenues - transition costs
(0.03)
Increase in depreciation, amortization and property taxes
(0.04)
Non-utility operations
(0.01)
Lower common shares outstanding
0.04
0.19
2010 - EPS before one-time items
2.56
Tax settlement
(0.20)
Merger-related costs, net
(0.05)
Gain on sale of discontinued operations
1.04
Reported EPS -2010
$3.35 |
 33
1996
2010
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
S&P 500
Utility Index
NSTAR
Only Company in Any
Industry to
Deliver 14 Consecutive Years of
Positive Total Shareholder Return
Total Shareholder Return Outperforms the Industry |
 34
Highest Credit Rating in the Industry
NSTAR
A+
FPL Group, Inc.
A
Southern Company
A
Consolidated Edison, Inc.
A-
Dominion Resources, Inc.
A-
DPL Inc.
A-
Duke Energy Corporation
A-
Energy East Corporation
A-
KeySpan Corp.
A-
Niagara Mohawk Power Corporation
A-
Vectren Corporation
A-
ALLETE, Inc.
BBB+
Alliant Energy Corporation
BBB+
Integrys Energy Group, Inc.
BBB+
Kentucky Utilities Company
BBB+
Louisville Gas and Electric Company
BBB+
MDU Resources Group, Inc.
BBB+
MidAmerican Energy Holdings Company
BBB+
OGE Energy Corp.
BBB+
PG&E Corporation
BBB+
Portland General Electric Company
BBB+
Progress Energy, Inc.
BBB+
SCANA Corporation
BBB+
Sempra Energy
BBB+
Wisconsin Energy Corporation
BBB+
Xcel Energy Inc.
BBB+
American Electric Power Company, Inc.
BBB
CenterPoint Energy, Inc.
BBB
Cleco Corporation
BBB
El Paso Electric Company
BBB
Energy Corporation
BBB
Exelon Corporation
BBB
FirstEnergy Corp.
BBB
Great Plains Energy Inc.
BBB
Green Mountain Power Corporation
BBB
Hawaiian Electric Industries, Inc.
BBB
IDACORP, Inc.
BBB
Northeast Utilities
BBB
North Western Corporation
BBB
Pepco Holdings, Inc.
BBB
PPL Corporation
BBB
Public Service Enterprise Group Inc.
BBB
TECO Energy, Inc.
BBB
UIL Holdings Corporation
BBB
Allegheny Energy, Inc.
BBB-
Ameren Corporation
BBB-
Avista Corporation
BBB-
Black Hills Corporation
BBB-
CMS Energy Corporation
BBB-
Constellation Energy Group, Inc.
BBB-
Duquesne Light Company
BBB-
Edison International
BBB-
Empire District Electric Company
BBB-
IPALCO Enterprises, Inc.
BBB-
NiSource Inc.
BBB-
Otter Tail Corporation
BBB-
Pinnacle West Capital Corporation
BBB-
Westar Energy, Inc. Puget Energy, Inc.
BBB-
Puget Energy, Inc.
BB+
NV Energy, Inc.
BB
PNM Resources, Inc.
BB-
Energy Future Holdings Corp.
B-
#1 NSTAR
A+
*As published by EEI |
 35
NSTAR System Has Significant Transmission
Investment Ahead
•
Transmission Rate Base is expected to double within 5 years
to approximately $1.6 billion
•
Growth/reliability spending averages $100 million per year
•
Incremental Major Projects
•
Cape Cod Line
$120 million
(2011-2012)
•
South Boston Circuit
$45-$50 million
(2014-2015)
•
Mid Cape Line
$25-$30 million
(2013-2014)
•
Northern
Pass
(2012-2015)
$280 million |
 36
JD Power Customer Surveys Recognize Our Efforts
Company L
Company K
Company J
Company I
Company H
Company G
Company F
Company E
Company D
Company C
NSTAR Electric
Company B
Company A
Company M
East Region Average |