Exhibit 99
SLIDE 1
EEI FALL FINANCIAL CONFERENCE
PALM SPRINGS, CALIFORNIA
OCTOBER 21, 2002
NORTHEAST
UTILITIES
SYSTEM
SLIDE 2
This presentation contains forward-looking statements, which
are statements of future expectations and not facts. Actual
results or developments might differ materially from those
included in the forward-looking statements because of
factors such as competition and industry restructuring,
changes in economic conditions, changes in weather patterns,
changes in laws, regulations or regulatory policies,
developments in legal or public policy doctrines,
technological developments, volatility in electric and
natural gas commodity markets, and other presently unknown
or unforeseen factors. Other risk factors are detailed from
time to time in the company's SEC reports.
SLIDE 3
TOPICS TO COVER TODAY
Strategic overview
Regulated businesses
Competitive businesses
Liquidity and financing requirements
SLIDE 4
STRATEGIC VISION UPDATED
Focus Unchanged
Reduce exposure to higher risk regulated assets
Sell nuclear units
Securitize regulatory assets, other stranded costs
Build out CL&P transmission system to remedy critical
SW Connecticut supply situation
Improve CL&P, PSNH and WMECO distribution reliability
through extensive capital upgrades
Expand Yankee distribution system to offer more fuel
choice and build LNG terminal to reduce winter fuel
costs
Dedicate resources to improve energy marketing business
Add niche energy services businesses to grow profitable
business
Maintain strong balance sheet
SLIDE 5
STRATEGIC VISION UPDATED
Elements Under Review
Buy additional generation to serve NY and PJM markets
Build merchant cable to Long Island
Pursue competitive retail business throughout the 11
state region
Aggressive share repurchase
SLIDE 6
CRITICAL REVIEW INVOLVES WHOLESALE ELECTRIC BUSINESS
Earnings continue to be negatively affected by CL&P
contract
Expires December 31, 2003
Efforts to raise price have failed thus far
Competitors changing
Enron, Dynegy gone
Duke, Constellation still there
Dominion, FPL entering
Financial institutions increasing presence
Heavy dependence on providing full requirements service
Need to better manage volume risk
Trading activities reduced to reflect changing marketplace
SLIDE 7
M&A REMAINS PART OF
NU'S VISION
Acquire regulated utilities
PSNH
Yankee Energy
Divest regulated generation assets
Nuclear
Fossil
Acquire niche energy firms
E.S. Boulos, Woods (electrical)
Niagara Mohawk Energy Marketing (marketing)
HEC, Denron (energy service)
Review all M&A opportunities
SLIDE 8
2002 RESULTS HAVE BEEN DISAPPOINTING
Graph showing reported and/or estimated earnings for four
quarters and full year 2002. First quarter reported
earnings were $0.14 per share, $0.22 reported for the second
quarter, $0.38 reported for the third quarter, $0.36
to $0.56 estimated for the fourth quarter and $1.10
to $1.30 estimated for the full year.
SLIDE 9
SIMILAR CONSOLIDATED EARNINGS PROJECTED FOR 2003
EPS Range
Regulated Businesses $1.05 to $1.15
Competitive Businesses $0.15 to $0.25
Parent Company & Eliminations ($0.10)
2003 Earnings Range $1.10 to $1.30
SLIDE 10
REGULATED BUSINESSES
Northeast Utilities
System
SLIDE 11
RETAIL ELECTRIC SALES STABLE DESPITE WEAK INDUSTRIAL SECTOR
Chart showing percentage change from January through
September 2002 vs. 2001 - percent change net for each business.
Residential Commercial Industrial Total
CL&P 2.0 2.8 -2.5 1.6
PSNH 4.7 3.3 -16.6 -1.5
WMECO 2.6 1.3 -2.9 0.8
NU Consolidated 2.6 2.7 -7.8 0.6
SLIDE 12
REGULATED BUSINESSES:
CL&P HIGHLIGHTS
Seabrook sale will complete total generation
divestiture
Allowed 10.3% ROE with 50-50 sharing - next rate case
effective 1/1/04
Significant T&D investment projected for next several
years
Overrecovering purchased power costs - extra proceeds
used by CL&P to amortize stranded costs
Operating performance good
SLIDE 13
CL&P CAPITAL SPENDING RISES TO MEET SW CONNECTICUT
RELIABILITY NEEDS
Picture of map of lower New York State, Connecticut and Long
Island with arrows pointing to lines representing proposed
expansion of systems for:
Middletown to Norwalk 345kV Transmission
Bethel to Norwalk 345kV Transmission
Long Island Sound Replacement Cable
Caption to the right of the picture:
Expanding the 345 kV transmission system into SW-CT
Phase 1, Bethel to Norwalk ($135mm)*
Phase 2, Norwalk to Middletown ($400mm)
Replacing the CT - Long Island Cable ($80mm)*
* Now under regulatory review
SLIDE 14
RELIABILITY SPENDING EXPECTED TO RAISE INVESTMENT BASE
Graph showing capital expenditures and net utility plant (in millions).
Capital Expenditures Net Utility Plant
2001 $237 $2,029
2002 (est.) $256 $2,090*
2003 (est.) $317 $2,372
2004 (est.) $423 $2,688
2005 (est.) $363 $2,936
2006 (est.) $366 $3,177
2007 (est.) $373 $3,416
*Actual as of 6/30/02
SLIDE 15
REGULATED BUSINESSES:
YANKEE OVERVIEW
Rates fixed until 2006, except for annual infrastructure review
11% ROE with sharing
$4 million rate cut on April 1
Endorsement of capital expansion
SLIDE 16
YANKEE EXPANSION EXPECTED TO
ENLARGE SYSTEM CONSIDERABLY
Graph showing capital expenditures and net utility plant (in
millions).
Capital Expenditures Net Utility Plant
2001 $48 $406
2002 (est.) $73 $416*
2003 (est.) $87 $521
2004 (est.) $107 $602
2005 (est.) $75 $647
2006 (est.) $50 $665
2007 (est.) $50 $681
*Actual as of 6/30/02
SLIDE 17
REGULATED BUSINESS:
WMECO HIGHLIGHTS
No rate case in near term
Much lower capital needs than other subsidiaries, slower growth
Allowed ROE 11 percent on stranded costs; uncapped on T&D
Capital expenditures, balance sheet stable
All generation sold
All purchased power contracts renegotiated
Standard Offer supply re-bid annually
Default service re-bid semiannually
SLIDE 18
REGULATED BUSINESS:
PSNH HIGHLIGHTS
Rates fixed until February 2004
Allowed return 8 percent on regulatory assets; 11 percent on
generation, uncapped on T&D
Seabrook sale ends power purchase, decommissioning obligations
No current plans to auction non-nuclear generation
Large decline in industrial sales; continued growth elsewhere
SLIDE 19
COMPETITIVE BUSINESSES
Northeast Utilities System
SLIDE 20
NUEI ORGANIZATION
NUEI
Select Energy Generation & Marketing
Business
Select NGC HWP Select Energy NGS
Energy Services
- -Wholesale -Generation -Generation -Energy Engineering -M & OS
Marketing Assets Assets Services -Electrical
- -Retail *Northfield *Mt Tom -Performance Contracting
Marketing (1,080 MW) (147 MW) Contracting -Industrial
- -Trading *Hydros -Design, Build, Services
(191 MW) Operate & Maintain -Engineering &
*Gas Turbine Energy Projects Consulting
(21 MW) -HVAC and Services
Electrical Services
SLIDE 21
COMPETITIVE ENERGY BUSINESSES HAVE A WEAK EARNINGS RECORD
Graph showing net income excluding accounting change (in
millions).
1999 ($37)
2000 $14
2001 $5
2002 (9 months) ($40)
SLIDE 22
2002 COMPETITIVE BUSINESS PERFORMANCE BELOW 2001
(In Millions)
2001 Actual 2002 Projected
Wholesale
(including NGC) ($13) ($15 - $19)
Retail* ($ 8) ($25 - $28)
Trading $19 ($16 - $19)
Services $7 $5
* Excluding cumulative effect of accounting change resulting in
$22.4 million charge in 2001
SLIDE 23
WHERE HAVE THE PROBLEMS
BEEN IN 2002?
Wholesale: 1) Continued losses on CL&P contract
2) Some profitable 2001 contracts were not renewed
3) High summer demand and higher prices
Retail: 1) Extremely mild winter
2) Write-downs of older out-of-the-money contracts
Trading: March, April losses from sharp increase in natural
gas prices
SLIDE 24
WHAT ARE THE FIXES?
Wholesale:
Achieve better supply pricing on 2003 CL&P requirements
Manage position better
Achieve successful renewal of full-requirements contracts with
acceptable margins
SLIDE 25
WHAT ARE THE FIXES?
Retail:
Several money-losing contracts are expiring
Higher margins required before signing new agreements
"Rightsize" organization for current marketplace
Better plan to manage volumetric weather risk
SLIDE 26
WHAT ARE THE FIXES?
Trading:
Sharply reduced capital at risk
Changed personnel
Changed focus
SLIDE 27
2003 EARNINGS PROSPECTS
Wholesale: Modest profits, including NGC and CL&P contract
Retail: Break-even
Trading: Modest profits
Services: Improving profits as range of services grows
SLIDE 28
WHOLESALE CONTRACTS
Contracts continuing at same level in 2003
CL&P Standard Offer $500mm/annually
Municipal/Co-ops/Small IOUs $120mm/annually
12-Month contracts continuing into 2003 with renewal
possible
NJ Basic Generation Service $475mm 8/1/02 to 7/31/03
Maine Utilities $ 90mm 3/1/02 to 2/28/02
Other opportunities
WMECO Default $13mm 7/1/02 to 12/31/02
WMECO Standard Offer $0 in `02; $150mm plus
being bid for 2003
Contracts with other suppliers
Contracts Not Renewed for 2003
NStar, Nat. Grid $135mm in 2002
SLIDE 29
2003 RISKS
Not achieving sales volumes at anticipated margins
Weak economy slows service business growth
Lack of counterparties continues to reduce trading opportunities
Down from 50 to 15 already
Execution risks
Sourcing supply requirements
Weather-related volume risks
Credit risks
SLIDE 30
LIQUIDITY AND FINANCING REQUIREMENTS
Northeast Utilities System
SLIDE 31
STRONG BALANCE SHEETS ARE A CENTRAL FOCUS (AS OF 9/30/02)
Rate
Reduction
(In Millions) Common Equity Preferred Total Debt* Bonds
NU Consolidated $2,193.9 44.3% $116.2 2.4% $2,640.5 53.3% $1,935.5
CL&P $739.3 43.9% $116.2 6.9% $827.1 49.2% $1,271.8
PSNH/NAEC $418.6 42.4% N/A $569.5 57.6% $518.7
WMECO $151.3 44.8% N/A $186.5 55.2% $145.0
Yankee Energy $229.0** 50.6% N/A $223.6 49.4% N/A
NGC $438.7 50.6% N/A $428.0 49.4% N/A
*Total debt excludes rate reduction bonds
**Excludes equity associated with goodwill
SLIDE 32
RISING CREDIT RATINGS REFLECT STRENGTHENING FINANCIALS
Ratings As Of 1/1/01 Ratings Today
Moody's/S&P/Fitch Moody's/S&P/Fitch
NU Notes Ba1/BB+/BB- NU Notes Baa1/BBB/BBB
CL&P Bonds Baa3/BBB-/BBB- CL&P Bonds A2/A-/A-
PSNH Bonds Ba1/BBB-/BB PSNH Bonds A3/BBB+/BBB
WMECO Notes Ba1/BB+/BB+ WMECO Notes A3/BBB+BBB+
NGC Bonds N/A NGC Bonds Baa2/BBB-/BBB
(BBB- long-term)
SLIDE 33
NU SYSTEM REMAINS EXTREMELY LIQUID
Graph showing net system cash as of 9/30/02 is $103M. $350M
Regulated Company Revolver: borrowed is $150M, available is
$200M. $300M parent/competitive business line: borrowed is
$75M, letters of credit is $70M and available is $155.
$100M CL&P accounts receivable borrowed: is $40M and
available is $60M.
SLIDE 34
SEABROOK SALE PROJECTED TO BRING NU $400M OF CASH
Schematic chart showing flow of cash. 9/30/02 estimate
$38M (4.1% share) from FPL to CL&P. CL&P to use $19M for
capital needs and $19M for decom., taxes and other.
$21M (Great Bay share) from FPL to NU. NU to use $7M for taxes.
$343M (36.0% share) from FPL to NAEC. $42M in cash at NAEC.
$55M from NAEC to NU. $106M from NAEC to PSNH. $42M from PSNH to NU.
NAEC to use $90M to pay off debt and $134M for decom., taxes and other.
SLIDE 35
BALANCE SHEET EASILY SUSTAINS RISING ELECTRIC T&D CAPITAL
SPENDING
Graph showing total capital spending on distribution,
transmission and customer service (in millions).
WMECO PSNH CL&P
2000 $23 $55 $193
2001 $28 $80 $220
2002 (projection) $23 $84 $252
SLIDE 36
WE PROJECT CONTINUING PRESSURE FROM REDUCED PENSION CREDITS
Graph showing pension costs in millions of dollars.
1998 ($ 44)
1999 ($ 52)
2000 ($ 93)
2001 ($101)
2002 (projected) ($ 73)
2003 (projected) ($ 34)
SLIDE 37
MATURITIES, SINKING FUNDS, VERY MODEST; NONE AT CL&P, PSNH, WMECO*
Graph showing dollars(in millions).
NGC NU ESOP Other Yankee
2002 $24 $23 $3 $1
2003 $27 $23 $3 $1
2004 $31 $24 $2 $1
2005 $38 $26 $2 $21
2006 $21 $2 $1
2007 $4 $1 $1
*Excludes rate reduction bond maturities.
SLIDE 38
MODEST FINANCINGS AHEAD
Renew $650 million of revolvers
Possibly refinance spent fuel obligations at CL&P, WMECO
Issue Yankee debt to repay short-term debt
Considering initiating credit ratings for Yankee
SLIDE 39
DIVIDEND INCREASE AND SHARE REPURCHASES CONTINUE
Dividend rose 10 percent in September to 55 cents/share annualized
rate
Targeting 10 percent annual increases
Bought back 2.3 million shares in 2002
Repurchase of another 9 million allowed by 6/30/03 under board
resolution
SLIDE 40
SUMMARY
High degree of financial flexibility and liquidity
Balanced growth initiatives
Rising dividend and ongoing share repurchases
Healthy regulated businesses with rising capital investments
in T&D
Competitive businesses that must make a meaningful
earnings contribution