Northeast Utilities (NU)

Q1 2012 Earnings Call

May 03, 2012 4:00 pm ET


Unknown Executive -

Jeffrey R. Kotkin - Executive Officer

Thomas J. May - Chief Executive Officer, President, Trustee and Member of Executive Committee

Leon J. Olivier - Chief Operating Officer and executive Vice President

James J. Judge - Chief Financial Officer and Executive Vice President

James J. Judge - Chief Financial Officer and Senior Vice President


Greg Gordon - ISI Group Inc., Research Division

Travis Miller - Morningstar Inc., Research Division

Unknown Analyst

James L. Dobson - Wunderlich Securities Inc., Research Division

Michael J. Lapides - Goldman Sachs Group Inc., Research Division

Paul Patterson - Glenrock Associates LLC

Steven I. Fleishman - BofA Merrill Lynch, Research Division

Jonathan P. Arnold - Deutsche Bank AG, Research Division



Welcome to the Northeast Utilities First Quarter Earnings Conference Call. My name is Christine, and I'll be your operator for today's conference. [Operator Instructions] Please note, today's conference is being recorded.

I will now turn the call over to Jeffrey Kotkin, Vice President, Investor Relations. You may begin.

Unknown Executive

Do we have technical difficulties, gentlemen?

[Technical Difficulty]


Thank you for standing by. Mr. Kotkin, you may begin.

Jeffrey R. Kotkin

All right. Sorry to keep you waiting here. We were having an audio problem back in Hartford. So let me start, and good afternoon, and thank you for joining us today. I'm Jeff Kotkin, NU's Vice President for Investor Relations. Speaking today will be Tom May, NU's President and Chief Executive Officer; Lee Olivier, NU Executive Vice President and Chief Operating Officer; and Jim Judge, NU Executive Vice President and Chief Financial Officer. Also joining us today are Jay Buth, our Controller; and Phil Lembo, our Treasurer.

Before we begin, I'd like to remind you that some of the statements made during this investor call may be forward-looking as defined within the meaning of the Safe Harbor Provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risk and uncertainty, which may cause the actual results to differ materially from forecast and projections.

Some of these factors are set forth in the news release issued yesterday. If you have not yet seen that news release, it is posted on our website at Additional information about the various factors that may cause actual results to differ can be found in our annual report on Form 10-K for the year ended December 31, 2011. Additionally, our explanation of how and why we use certain non-GAAP measures is contained within our news release and in our most recent 10-K.

Now I will turn over the call to Tom.

Thomas J. May

Thanks, Jeff, and thanks, everyone, for joining us this afternoon. Here I am, excited to be the new CEO of NU, 3 weeks on the job. And I can tell you, I'm more excited now that I thought I'd be. We really do have a great opportunity here. And hopefully, I can share some thoughts with you on why I am so excited about this.

This merger between the 2 largest New England-based utilities ensures that 3.5 million electric and gas customers are going to be served by a company whose only roots are here in New England. And as many of you know, I'm a nut about customer service. It means the policymakers in Boston, Hartford, Concord only have to look in their backyards to find the management of the largest regulated utility. And it means that the 3.5 million customers that we serve won't have to look too far to see a Northeast Utilities employee, since you all live right here in New England.

In fact, I've been spending a lot of time going out to the field with town hall meetings talking to my linemen, talking to my troops to make sure they recognize that we are in the customer service business. That's my focus. But I need every one of those 9,000 strong to focus on the customers for us to be successful, and I think we're making some great progress.

But this company is much more than a regional energy provider. We're going to have the scale to manage a highly effective and efficient company, and I think you know I am a nut about efficiency also. And as a $11 billion to $12 billion market cap company, we're going to be able to access the capital markets on very attractive terms, better than we could do individually. But we can continue to make investments in wires and pipes that our customers and our communities need.

We've married one of the nation's most reliable operators of electric distribution systems, with probably the most preeminent planner, designer, builder and operator of electric transmission systems. We also will operate 2 natural gas systems, serving 500,000 customers. But when we look at those franchises and those communities, we think there's probably twice that number of homes and businesses we can serve in the future.

In an era when economic and eventual benefits of converting from heating oil to natural gas has never been greater, we hope to expand our pipeline infrastructure to really save a whole bunch of New Englanders, tens of millions, if not hundreds of millions of dollars annually so that we can put that back into the economies of our states. We have gas at $1.25 a gallon versus $4 heating oil. I think you can appreciate how many of our customers are begging us to expect expand our infrastructure.

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