Eversource Energy (d/b/a) · NYSE:ES
Eversource Energy (d/b/a) — Northeast Utilities — Merger or Acquisition (October 2010)
24 slides from Eversource Energy (d/b/a)'s merger presentation, Oct 18, 2010
Slide 1: Chuck Shivery and Tom May
Chuck Shivery Chairman, President, and CEO, Northeast Utilities Tom May Chairman, President, and CEO, NSTAR
Slide 2: Safe Harbor: Forward-Looking Statements
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, bel
Slide 3: Safe Harbor: Additional Information and Where To Find It
Safe Harbor Additional Information and Where To Find It In connection with the proposed merger between Northeast Utilities and NSTAR, Northeast Utilities will file with the SEC a Registration Statement on Form S-4 that will include a joint proxy statement of Northeast Utilities and NSTAR that also c
Slide 4: Agenda
Agenda Merger Rationale / Key Terms Financial Highlights Regulatory Timeline & Approvals Summary
Slide 5: Merger Rationale / Key Terms
Merger Rationale / Key Terms
Slide 6: A Compelling Combination – Creates Largest Utility Company in New England
ME NY VT NH M A RI 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 rene
Slide 7: A New England Based Utility Supporting the Regional Economy
A New England Based Utility Supporting the Regional Economy Ranking by Market Capitalization ($ in billions) (1) Combined Statistics Ranking by Electric Customers (in millions) (1) 2009 Revenue ($bn) $8.5 Regulated Utilities Regulated States Electric Customers 3,000,000 Gas Customers 500,000 Electri
Slide 8: Excellent Transmission Opportunities into Largest New England Load Centers
1 3 5 4 2 Southwest Connecticut Reliability: Projects Complete Connecticut Borders (MA, RI): NEEWS Projects Under Way Renewables & Clean Energy (ME/NH/VT): Projects in Development/ High Wind potential areas Excellent Transmission Opportunities into Largest New England Load Centers HVDC Line between
Slide 9: Key Merger Terms
Key Merger Terms Timing / Approvals: Expected to close within 9 – 12 months Shareholders, federal, and state 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: 5
Slide 10: Northeast Utilities Merger Rationale
Northeast Utilities Merger Rationale Creates immediate value upon close Elimination of previously planned 2012 equity issuance Dividend uplift of ~20% based on Northeast Utilities’ current dividend Enhanced pro forma credit profile Scale and financial capabilities to enable future larger scale proje
Slide 11: NSTAR Merger Rationale
NSTAR Merger Rationale Opportunity to enhance earnings and dividend growth by applying the Company’s strong balance sheet and cash flow to attractive investment opportunities Substantial transmission investment provides enhanced returns and an attractive regulatory construct Merger diversifies NSTAR
Slide 12: Executive Management Organization
Christine Carmody Human Resources Greg Butler General Counsel Jim Judge Chief Financial Officer David McHale Chief Administrative Officer Joe Nolan Corporate Relations Lee Olivier Chief Operating Officer Chuck Shivery Non-Executive Chairman Tom May President & Chief Executive Officer Executive Manag
Slide 13: Financial Highlights
Financial Highlights
Slide 14: Proven Record of Delivering Superior Value
Proven Record of Delivering Superior Value (1) 3 years 5 years 10 years (18.7) 10.2 (7.6) 25.7 86.3 19.4 98.6 112.5 29.0 85.2 206.3 3.2 -30 -10 S&P 500 UTY Northeast Utilities NSTAR (2) (3) Source: Factset. 1. Total returns as of 10/15/10. Assumes reinvestment of dividends. 2. Total returns calculat
Slide 15: Building A Larger, More Diverse and Better Positioned Regulated Utility Business
Building A Larger, More Diverse and Better Positioned Regulated Utility Business Rate Base By State / Federal Electric Generation 4% Electric Distribution 54% Gas Distribution 11% Electric Transmission 31% Rate Base By Business Combined 2009 Rate Base: $10.8 billion FERC 31% CT 26% NH 11% MA 32%
Slide 16: Pro Forma Earnings Profile
Pro Forma Earnings Profile Accretive to earnings of both Northeast Utilities and NSTAR in first full year and in the longer term Accretion supported by financial benefits and efficiencies of combined company Further supportive of targeted long term 6% – 9% earnings growth rate Rule of thumb - every
Slide 17: Common Stock Dividends
Common Stock Dividends Both companies to continue existing dividend policy through closing Pro forma dividend policy expected to retain focus on growing the dividend in-line with earnings Northeast Utilities to increase dividend to provide parity with NSTAR dividend upon closing Note: Dividends are
Slide 18: Dividend Parity – Illustrative Example
Dividend Parity – Illustrative Example Per Share NSTAR current dividend $1.60 ÷ Exchange ratio 1.312x Implied Northeast Utilities exchange ratio adjusted dividend $1.22 Current Northeast Utilities dividend $1.025 Northeast Utilities dividend uplift for parity $0.195 or ~20.0% Example calculation of
Slide 19: Value Uplift Potential
Value Uplift Potential • Significant future rate base growth prospects • Strong dividend growth prospects • Diversification • Top tier management • No future equity issuance 13.0x 14.3x Northeast Utilities NSTAR Pro Forma (1) (1) “Best-In-Class” P/E Potential 1. Based on I/B/E/S consensus EPS estima
Slide 20: Enhanced Credit Quality
Enhanced Credit Quality Strong balance sheet and cash flows position NU to fund rate base growth program principally through internally generated funds Combined company and operating subsidiaries will have an enhanced credit profile Highest quality business profile Highly diversified earnings and ca
Slide 21: Regulatory Timeline and Next Steps
Regulatory Timeline and Next Steps
Slide 22: Regulatory Timeline
Oct 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Regulatory Timeline Closing Expected in 9 – 12 months Merger Announced Make Regulatory Filings File Joint Proxy Statement Secure Regulatory Approvals FERC, SEC, NRC, DOJ, MDPU Northeast Utilities and NSTAR Shareholder Meetings Develop Transition Implementatio
Slide 23: Summary
Summary
Slide 24: Creates New England's premier energy provider
Creates New England’s premier energy provider More diverse, stable and higher earnings growth profile than could be achieved standalone Highly experienced management teams with proven track records of success Combined company will have one of the most attractive total return profiles in the industry
Northeast Utilities — Merger or Acquisition (October 2010) on 6ix