PUR Guide Jeffrey Kotkin, Vice President – Investor Relations APRIL 25, 2012 1 Who Is The Investing Public? Buy Side Sell Side Mutual Funds Investment Banks Pension Funds Brokerage Firms Banks Independent Analysts Investment Advisors Credit Rating Agencies Insurance Companies Nonprofit Trusts Individual Investors Employee Stock Ownership Plans 2 What Do They Have Invested in NU? $116 Preferred Stock $5,264 Short and Long Term Debt $4,013 Common Equity (Book Value) As of 12/31/11 (in millions) 3 Let’s Look At The Common Stock First 9,000 active and retired employees in retirement plan Other individual and institutional holders 10% 38,000 registered holders 3% 470 Institutions that file with the SEC 8% 79% 177 Million Shares As of 12/31/11 4 How Have NU Shares Done vs. the Market? 50% 43% 40% 30% 20% 23% 24% 17% 14%13% 10% 11% 13% 7% 7% 4% 12% 9% 7% 2% 3% 0% -3% -1% -10% -20% -23% -30% -30% -40% -50% -38% 2006 2007 2008 NU 2009 S&P 500 5 2010 2011 Dow Utilities March 2012 Steady Dividend Growth Quarterly Dividends Per Share $0.28 $0.24 $0.04 9/026/03 9/036/04 9/046/05 9/056/06 9/066/07 9/076/08 9/0812/08 $0.275 $0.2125 9/016/02 $0.08 $0.25625 $0.165 12/996/01 $0.12 $0.2375 $0.15 $0.20 $0.1375 $0.1875 $0.125 $0.175 $0.10 $0.16 2009 2010 2011 $0.29375 $0.20 $0.00 6 2012 (Mar.) Major Buy Side Institutions and Related Mutual Funds NU Shares Held 12/31/11 11.1 million 1. Vanguard 2. BlackRock Fund Advisors 10.2 million 3. Wellington Management 10.1 million 4. State Street 9.7 million 5. J.P. Morgan Asset Management 8.4 million 6. BlackRock Advisors 4.3 million 7. Goldman Sachs Asset Management 3.3 million 8. Wells Fargo Advisors 3.3 million 9. Fidelity 2.8 million 10. D. E. Shaw 2.7 million Index Fund Actively Managed Fund Hedge Fund 7 Employee Ownership Of NU Shares • 401(k): 702,000 shares owned by 2,437 employees/retirees choosing NU Common Share Fund as option • ESOP: 4.07 million shares owned by approximately 8,445 employees/retirees through 3% match of 401(k) contributions • TRAESOP/PAYSOP: 688,000 shares owned by 1,800 employees/retirees; 1980’s vintage tax-advantaged stock ownership plan • ESPP II: 1.1 million shares bought by employees since 2001 through 5% discount (originally 15%) on share purchases 8 What Do Analysts Say About NU Shares? Firm Analyst Rating Est. 2012 EPS Est. 2013 EPS Price Target Wells Fargo Neil Kalton Buy $2.40 $2.60 $40.50 BOA/Merrill Lynch Steve Fleishman Buy $2.36 $2.55 $40.00 Williams Capital Chris Ellinghaus Buy $2.46 $2.61 $40.00 UBS Jim von Riesemann Hold $2.52 $2.58 $36.00 Wunderlich Jay Dobson Hold $2.35 $2.54 $37.00 Wellington Shields Maury May Buy $2.37 $2.55 $39.50 BMO Capital Mike Worms Hold $2.44 $2.61 $35.00 Gabelli Tim Winter Buy $2.45 N/A $35.00 Goldman Sachs Michael Lapides Buy $2.46 $2.62 $39.00 Deutsche Bank Jonathan Arnold Hold $2.35 $2.55 $36.50 ISI Group Greg Gordon Hold $2.40 $2.55 $38.50 Macquarie Andrew Weisel Hold $2.36 $2.54 $37.00 US Capital Advisors Dan Fidell Buy $2.45 $2.60 $38.00 Edward Jones Paul Franzen Buy $2.45 N/A N/A Brean Murray Michael Gaugler Buy $2.48 $2.60 $45.00 $2.42 $2.55 $38.36 Average 9 Price/Earnings Ratio: A Common Way To Value Stock Price Divided By Adjusted NU Earnings • 2011 NU Earnings $36.00/$2.38 = 15.1 • 2012 NU Earnings $36.00/$2.42 = 14.9 • 2013 Consensus NU Earnings $36.00/$2.58 = 14.0 • 2014 Consensus NU Earnings $36.00/$2.72 = 13.2 10 $116 Million Of Preferred Stock • • • • • • All at CL&P All perpetual All issued between 1947 and 1968 Interest rates range between 3.80% and 6.48% In times of stress, subordinated to debt, ahead of common Owned by about 1,400 holders, many individual investors 11 Non-Investment Grade Investment Grade How Is Our Debt Rated? Standard & Poor’s/Fitch AAA AA+ AA AAA+ A CL&P Bonds (F), PSNH Bonds (F) ACL&P Bonds (S), PSNH Bonds (S) CL&P Unsecured (S&F), WMECO Unsecured (S&F) BBB+ NU Unsecured (S&F) BBB CL&P Preferred (S&F) Moody’s Aaa Aa1 Aa2 Aa3 A1 A2 A3 PSNH Bonds, CL&P Bonds Baa1 Baa2 CL&P, PSNH, WMECO, NU Unsecured Baa3 CL&P Preferred BB+ BB BBB+ B BCCC+ Ba1 Ba2 Ba3 B1 B2 B3 Caa1 12 What Kind Of Long-Term Debt Do We Have? Tax-exempt bonds, notes at CL&P, PSNH, WMECO Taxable first mortgage bonds at CL&P, PSNH, Yankee Gas $765 $2,981 $513 $301 $390 Parent Company Notes WMECO Unsecured Notes In Millions as of 12/31/11 13 Spent nuclear fuel obligations at CL&P, WMECO Where Is NU’s Credit Access (in millions) Regulated Companies NU $400 $500 $300 CL&P Total = $1.2 Billion 14