Eversource Energy (d/b/a) · NYSE:ES
Eversource Energy (d/b/a) — Northeast Utilities — EEI Financial Conference 2008
55 slides from Eversource Energy (d/b/a)'s conference presentation, Nov 10, 2008
Slide 1: EEI Financial Conference
EEI Financial Conference NOVEMBER 10, 2008 Exhibit 99.3
Slide 2: Safe Harbor Provisions
Safe Harbor Provisions This presentation contains statements concerning NU’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 Securities Litigation Ref
Slide 3: Overview of Today's Presentation
Overview of Today’s Presentation > 2008: Strong, successful year > 2009: Key transition year for initiatives affecting 2010 and beyond > Public policy priorities create additional opportunities
Slide 4: 2008 and 2009 Key Themes
2008 and 2009 Key Themes Strong financial results SW CT transmission projects nearly complete Favorable FERC rulings Initial NEEWS applications filed New legislation that creates new opportunities > > > > > > NEEWS siting > Merrimack Clean Air Project > Northern Solutions transmission > CL&P, PSNH r
Slide 5: e FN
eo e e FN or a Ell) Utilities System’
Slide 6: » Utilities System’
» Utilities System’
Slide 7: State Legislation Shaping Additional Opportunities
State Legislation Shaping Additional Opportunities > 2007 Energy Efficiency Act › Integrated resource plan › Peaking generation › Increased DSM incentives › Required decoupling › Advanced metering › Long-term bilateral contracts › RPS standards increased > 2008 RGGI regulations adopted > 2008 Green
Slide 8: NU: Financial Flexibility and Attractive Opportunities
NU: Financial Flexibility and Attractive Opportunities > 2008 › Financings completed › Strong operational and financial results > 2009 › Reduced financing requirements and minimal debt maturities › Improved cash generation › EPS projection comparable to 2008 > 2009 – 2013 › Attractive future opportu
Slide 9: NU Dividend Policy Will Target 50% Payout Ratio
NU Dividend Policy Will Target 50% Payout Ratio $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 2006 2007 2008 2009 0% 10% 20% 30% 40% 50% 60% 70% EPS Dividends Paid/Declared Per Share Payout Ratios *Excludes impact of competitive businesses, one-time CL&P tax reduction **Excludes litigation settlement charge $
Slide 10: Regulated Investment Strategy – 2009-2013
Regulated Investment Strategy – 2009-2013
Slide 11: Strong Execution, Efficient Operations and Effective Capital Deployment
Strong Execution, Efficient Operations and Effective Capital Deployment are the Cornerstones of Our Regulated Investment Strategy > We continue to focus on strong execution of operations and projects, as we have shown with our transmission build-out > Our capital investment plan continues to address
Slide 12: "Northeast
Mm, "Northeast a) Utilities System’
Slide 13: Northeast
Northeast Utilities System?
Slide 14: Slide 14
Slide 15: Estimated Schedules For Major NEEWS Projects
Estimated Schedules For Major NEEWS Projects 2013 Late 2012 / 2013 Mid-2013 In-service 2011 2010 2010 Construction targeted to start on staggered basis 2010 / Early 2011 Mid / Late 2010 2010 Siting completed 2009 Late 2008 / Early 2009 October 2008 State siting applications filed September 2008 Sept
Slide 16: 2009-2013 Transmission Capital Expenditures Increase By Over 17%
2009-2013 Transmission Capital Expenditures Increase By Over 17% From Previous Five-Year Program $22 million of major SWCT projects in 2009-2013 forecast period; $1.6 billion in total NEEWS projects estimated at $1.4 billion during the 2009-2013 forecast period $1.5 billion of additional forecasted
Slide 17: Merrimack Clean Air Project Construction Underway
Merrimack Clean Air Project Construction Underway • Merrimack a key source of low-cost power for PSNH customers Two coal units supply about 35% of PSNH’s energy requirements PSNH energy costs will remain below region’s rates • Scrubber required by New Hampshire statute to reduce mercury emissions •
Slide 18: Electric Distribution and Generation Capital Expenditures – By Company
292 280 352 338 309 311 101 92 115 117 114 117 Electric Distribution and Generation Capital Expenditures – By Company 2008 2009 2010 2011 2012 2013 PSNH - Generation WMECO - Distribution PSNH - Distribution CL&P - Distribution 2009-2013 Electric Distribution & Generation Projected Capital Spending $
Slide 19: Reallocate and Reduce Electric Distribution Capital
167 160 184 191 188 198 141 140 184 168 155 162 $581 $921 $809 We are Reviewing Flexible Approaches to Reallocate and Reduce Electric Distribution Capital • We are developing a plan for distribution capital spending that provides flexibility in the timing and level of capital expenditures • System r
Slide 20: Projected Yankee Gas Capital Expenditures
Projected Yankee Gas Capital Expenditures 14.7 24.0 23.1 24.3 25.7 26.7 26.3 22.3 24.6 23.6 27.8 28.7 20.6 22.5 15.9 16.5 17.5 18.1 2.6 26.3 27.8 3.0 3.2 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 2008 2009 2010 2011 2012 2013 Expansion Initiatives Peak Load / New Business Basic Business
Slide 21: Yankee Gas Expansion Initiatives
Yankee Gas Expansion Initiatives Wholesale Price of Natural Gas vs. Home Heating Oil [updated Oct 1, 2008] 0.00 5.00 10.00 15.00 20.00 25.00 30.00 Natural Gas Home Heating Oil • The continued price advantage of natural gas over home heating oil creates opportunities to grow earnings through: • Incre
Slide 22: Summary
Summary > Our five-year business plan: › Provides significant value for customers and shareholders › Capitalizes on our strong execution of major projects › Includes flexibility in capital deployment > Opportunities exist beyond what we’ve included in this plan › AMI / SmartGrid › Massachusetts Gree
Slide 23: Financial
Financial
Slide 24: Overview
Overview > Current liquidity position and outlook for 2009 are favorable > Strong 2008 year-to-date results; full year earnings projection on guidance > 2009 earnings guidance comparable to 2008 despite projected lower revenues, higher costs, potential equity issuance > New five-year capital program
Slide 25: Credit and Liquidity
Credit and Liquidity > We have completed our $760 million 2008 financing plan on schedule • Four transactions, weighted average coupon of 5.9% and tenor 8.4 years > We have only one bond maturity between now and 2012 • $50 million at Yankee Gas in April 2009 > Projected capital expenditures for 2009
Slide 26: 2008 Third Quarter Earnings Results - $0.47 Per Share
2008 Third Quarter Earnings Results - $0.47 Per Share $0.7 $20.0 $1.0 $28.5 $50.2 $72.7 $4.6 ($3.3) $35.9 $35.5 ($10) $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 3Q 2007 3Q 2008 Distribution and Generation Transmission Parent/Other Competitive Total 24.6% 79.5% 44.8%
Slide 27: 2008 Earnings Results Through September – $1.40 Per Share
2008 Earnings Results Through September 30 – $1.40 Per Share* $8.1 $57.0 $100.1 $173.8 $8.6 $218.7 $8.7 ($8.5) $103.6 $114.9 ($40) ($20) $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 $220 $240 YTD 2007 YTD 2008 Distribution and Generation Transmission Parent/Other Competitive Total *Excludes $29.
Slide 28: Distribution and Generation Earnings Results Through September 30
Distribution and Generation Earnings Results Through September 30 $10.5 $31.7 $44.3 $13.6 $15.3 $10.1 $32.3 $57.2 $0 $10 $20 $30 $40 $50 $60 $70 YTD 2007 YTD 2008 CL&P PSNH WMECO Yankee Gas 45.7% 29.1% 1.9% 25.7%
Slide 29: 2008 – 2009 EPS Guidance
2008 – 2009 EPS Guidance 2009 Projected 2008 Current 2008 Initial 2007 Actual $1.80 - $2.00 $1.60 - 1.75 $1.65 - $1.95 $1.59 NU Consolidated ------ ($0.19) N/A N/A Litigation charge $1.80 - $2.00 $0.00 - $0.05 ($0.05) $0.85 - $0.90 $1.00 - $1.10 $1.80 - $1.95 $1.65 - $1.95 $1.59 NU Consolidated excl
Slide 30: Capital Expenditures In Millions
In Millions $1,815 1,733 1,31 $1,372 $1,288 $1274 $1247 $1,194 $1,069 $892 $98: w “Northeast Z/)_ Utilities System’
Slide 31: Elements of 2009-2013 Capex Projections
Elements of 2009-2013 Capex Projections $425 million to complete Merrimack Clean Air Project $1.4 billion to complete NEEWS $525 million for transmission to Canada $130 million for Northern NH transmission loop $1.4 billion for additional transmission projects $2.3 billion for electric distribution
Slide 32: Rate Base in Millions
Rate Base in Millions Northeast Utilities System”
Slide 33: Slide 33
Slide 34: Projected Combined Year-End Rate Base
Projected Combined Year-End Rate Base $2,857 $3,212 $3,535 $3,856 $4,133 $4,371 $4,563 $307 $369 $394 $404 $876 $872 $626 $680 $712 $739 $793 $851 $890 $389 Supports EPS CAGR of 8-11% $1,476 $2,189 $2,463 $2,576 $3,378 $4,251 $5,044 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 2007 Actual 2008 200
Slide 35: Northeast
Northeast Utilities System Northeast Utilities System”
Slide 36: Transmission's Share of Earnings Will Continue To Rise
Transmission’s Share of Earnings Will Continue To Rise 47.4% 32.6% 36.1% 25.2% 18.1% 21.2% $103.6 $82.5 $28.2 $28.2 $41.1 $59.8 0% 10% 20% 30% 40% 50% 60% 2003 2004 2005 2006* 2007 2008 YTD $0 $20 $40 $60 $80 $100 $120 *Excludes benefit to CL&P from 2006 tax reduction
Slide 37: Funding The Capital Program and Dividends 2009 - 2013
Funding The Capital Program and Dividends 2009 - 2013 $3.7 $4.1 $0.6 $8.4 Billion Debt Refinancings New Financings • $250 million - $300 million of equity issuance in 2009 • $300 million - $350 million of debt issuance in 2009 Internally generated cash net of Rate Reduction Bond retirements • Approx
Slide 38: Cash Requirements Projected To Be Much Lower in 2009
$1,250 $870 $130 $170 $450 $550 Cash Requirements Projected To Be Much Lower in 2009 $150 $50 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 2008 2009 Cash capex Debt maturities Other $1,080 $540 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 2008 2009 Outside financing net of
Slide 39: Summary
Summary > We continue to successfully execute our strategic plan to the benefit of customers and investors > We are on track to meet our financial objectives for 2008 > We are well positioned to meet the challenging financial and operating environment for 2009; guidance comparable to 2008 > We have
Slide 40: Questions and Answers
Questions and Answers
Slide 41: Appendix
Appendix
Slide 42: Northeast
Northeast Utilities System?
Slide 43: 2007-2013: Projected Capital Expenditures and Depreciation
2007-2013: Projected Capital Expenditures and Depreciation Significant capital spending through 2013 $1,283 $1,288 $1,815 $1,732 $1,194 $1,274 $892 $456 $410 $369 $351 $327 $282 $265 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 2007 Actual 2008 2009 2010 2011 2012 2013 Total Cape
Slide 44: Projected Transmission Capital Expenditures
$577 $119 $128 $267 $322 $160 $85 $69 $177 $400 $273 $154 Projected Transmission Capital Expenditures $45 $39 $121 $308 $306 $83 $20 $95 $205 $205 $0 $200 $400 $600 $800 $1,000 $1,200 2008 2009 2010 2011 2012 2013 CL&P PSNH WMECO Transmission to Canada $707 $1,070 $1,106 $602 $446 $227
Slide 45: Projected Distribution Capital Expenditures
$292 $280 $352 $338 $309 $311 $101 $92 $115 $117 $114 $117 Projected Distribution Capital Expenditures $35 $28 $38 $33 $33 $34 $0 $100 $200 $300 $400 $500 $600 2008 2009 2010 2011 2012 2013 CL&P PSNH WMECO $428 $505 $400 $456 $488 $462
Slide 46: Projected Generation Capital Expenditures
$34 $34 $27 $30 $33 $41 $35 $89 $172 $114 $50 Projected Generation Capital Expenditures $0 $50 $100 $150 $200 $250 2008 2009 2010 2011 2012 2013 Other Clean Air Project $69 $199 $123 $83 $144 $41
Slide 47: Projected Yankee Gas Capital Expenditures
Projected Yankee Gas Capital Expenditures $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 2008 2009 2010 2011 2012 2013 $62 $90 $71 $74 $92 $77
Slide 48: $ Millions
§ Millions Northeast Utilities System”
Slide 49: Slide 49
Slide 50: Projected Distribution and Generation Year-End Rate Base
Projected Distribution and Generation Year-End Rate Base $1,901 $2,123 $2,351 $2,557 $2,724 $2,851 $2,971 $594 $699 $774 $865 $954 $1,042 $1,095 $362 $390 $410 $434 $455 $478 $497 $626 $680 $712 $739 $793 $851 $890 $307 $369 $389 $394 $404 $876 $872 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 2007
Slide 51: $ Millions
§ Millions Northeast Utilities System”
Slide 52: Slide 52
Slide 53: Projected Transmission Year-End Rate Base
Projected Transmission Year-End Rate Base* $1,229 $2,033 $2,224 $2,433 $2,454 $169 $278 $314 $325 $666 $1,089 $1,189 $1,812 $2,024 $78 $99 $125 $218 $488 $876 $729 $525 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 2007 Actual 2008 2009 2010 2011 2012 2013 CL&P PSNH WMECO Tr
Slide 54: Strong Liquidity Position
Strong Liquidity Position $244 $315 $256 $85 $86 $0 $100 $200 $300 $400 $500 $600 Parent Revolver Regulated Revolver Externally Invested Cash Undrawn Drawn/LOCs $54 $4 $4 $267 $305 $0 $50 $100 $150 $200 $250 $300 $350 2009 2010 2011 2012 2013 Liquidity as of November 5, 2008 Long-Term Debt Maturitie
Slide 55: 2006 – 2009 NU Consolidating EPS GAAP / Non-GAAP Reconciliation
2006 – 2009 NU Consolidating EPS GAAP / Non-GAAP Reconciliation 2006 Actual 2007 Actual 2008 Current Guidance 2009 Projected Guidance Distribution / Generation 0.80 $ 0.94 $ $1.05 - $1.10 $1.00 - $1.10 Transmission 0.39 0.53 0.85 - 0.90 0.85 - 0.90 NU Parent / Other (0.03) 0.04 (0.10) (0.05) Total R