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