Northeast Utilities (NYSE: NU) today reported first quarter 2011
earnings of $114.2 million, or $0.64 per share, compared with earnings
of $86.2 million, or $0.49 per share, in the first quarter of 2010.
Those results include an after-tax charge of $8.3 million, or $0.05 per
share, in 2011 related to NU's pending merger with NSTAR. Excluding that
charge, NU earned $122.5 million, or $0.69 per share, in the first
quarter of 2011. First quarter results in 2010 included a $3 million
after-tax charge related to the passage of national health legislation.
Charles W. Shivery, NU chairman, president, and chief executive officer,
attributed the improved results to much colder weather in the first
quarter of 2011, compared with the first quarter of 2010, a continued
focus on cost control, progress building the infrastructure needed to
serve New England's energy customers, and the effect of electric
distribution rate decisions received over the past 12 months.
2011 earnings guidance
NU also today affirmed its 2011 stand-alone consolidated earnings
guidance of between $2.25 per share and $2.40 per share, excluding
projected after-tax expenses related to the NSTAR merger of
approximately $0.20 per share. Including the merger expenses, NU now
projects earnings of between $2.05 per share and $2.20 per share. That
estimate includes distribution and generation segment earnings of
between $1.25 per share and $1.35 per share1 and transmission
segment earnings of between $1.05 per share and $1.10 per share1.
It also reflects parent and other company net expenses of $0.05 per share1,
excluding merger expenses.
Transmission results
NU's transmission earnings in the first quarter of 2011 were $44.7
million, or $0.25 per share1, compared with earnings of $40.1
million, or $0.23 per share1, in the first quarter of 2010.
The improved results primarily reflected a higher level of transmission
investment.
Distribution and generation results
The Connecticut Light and Power Company's (CL&P) distribution earnings
were $28.5 million in the first quarter of 2011, compared with $14.3
million in the first quarter of 2010. Improved results reflect the
impact of a distribution rate decision effective in mid-2010, a 3.3
percent increase in retail sales, and lower uncollectible expense,
partially offset by higher pension, health care and other operating
costs.
Public Service Company of New Hampshire's (PSNH) distribution and
generation earnings were $21.5 million in the first quarter of 2011,
compared with $11.1 million in the first quarter of 2010. PSNH's results
benefited from a distribution rate decision that took effect in mid-2010
and higher retail sales due primarily to colder weather, partially
offset by higher pension and health care costs.
Western Massachusetts Electric Company's (WMECO) distribution and
generation earnings were $5.7 million in the first quarter of 2011,
compared with $2.9 million in the first quarter of 2010. WMECO's results
benefited from higher retail sales and a distribution rate decision that
took effect February 1, 2011, partially offset by higher operating
expense.
Overall, NU's retail electric sales were up 3.0 percent in the first
quarter of 2011, compared with the first quarter of 2010. They were down
0.2 percent on a weather-adjusted basis.
Yankee Gas Services Company earned $22.5 million in the first quarter of
2011, compared with $19.6 million in the first quarter of 2010. Higher
sales were partially offset by higher pension, health care and other
operating expenses. First quarter firm natural gas sales were up 16.9
percent in 2011, compared with the first quarter of 2010. They rose 3.2
percent on a weather-adjusted basis.
Parent and other affiliates
NU parent and other companies recorded a loss of $8.7 million, including
the $8.3 million of after-tax merger-related expenses, in the first
quarter of 2011. In the first quarter of 2010, NU parent and other
companies, including NU's competitive businesses, recorded a loss of
$1.8 million.
The following table reconciles 2011 and 2010 first-quarter results:
First Quarter
2010
Reported EPS
$0.49
Higher transmission earnings in 2011
$0.02
Higher distribution and generation earnings in 2011
$0.17
Lower parent and other company expenses in 2011, excluding impact of
merger
$0.01
Expenses related to merger with NSTAR
($0.05)
2011
Reported EPS
$0.64
Financial results for the first quarters of 2011 and 2010 for NU's
business segments and parent and other companies are noted below:
Three months ended:
(in millions, except EPS)
March 31, 2011
March 31, 2010
Increase
(Decrease)
2011 EPS1
CL&P Distribution
$28.5
$14.3
$14.2
$0.16
PSNH Distribution/Generation
$21.5
$11.1
$10.4
$0.12
WMECO Distribution
$5.7
$2.9
$2.8
$0.03
Yankee Gas
$22.5
$19.6
$2.9
$0.13
Total--Distribution/Generation
$78.2
$47.9
$30.3
$0.44
CL&P Transmission
$34.4
$32.7
$1.7
$0.20
PSNH Transmission
$6.0
$4.7
$1.3
$0.03
WMECO Transmission
$4.2
$2.7
$1.5
$0.02
NU Transmission Ventures
$0.1
---
$0.1
---
Total--Transmission
$44.7
$40.1
$4.6
$0.25
NU Parent and Other Companies,
excluding merger expenses
($0.4)
($1.8)
$1.4
---
Merger expenses
($8.3)
---
($8.3)
($0.05)
Reported Earnings
$114.2
$86.2
$28.0
$0.64
Retail sales data:
Gwh for three months ended
March 31, 2011
March 31, 2010
% Change
Actual
% Change
Weather Norm.
CL&P
5,776
5,591
3.3
(0.4)
PSNH
1,984
1,932
2.7
0.4
WMECO
948
930
2.0
(0.6)
Total NU
8,705
8,448
3.0
(0.2)
Yankee Gas firm volumes in mmcf for three months ended
19,384
16,589
16.9
3.2
NU has approximately 177 million common shares outstanding. It operates
New England's largest energy delivery system, serving more than 2
million customers in Connecticut, New Hampshire and Massachusetts.
1 All per share amounts in this news release are
reported on a fully diluted basis.The only common equity
securities that are publicly traded are common shares of NU parent.The
earnings and EPS of each business do not represent a direct legal
interest in the assets and liabilities allocated to such business, but
rather represent a direct interest in NU's assets and liabilities as a
whole.EPS by business is a non-GAAP (not determined using
generally accepted accounting principles) measure that is calculated by
dividing the net income or loss attributable to controlling interests of
each business by the weighted average fully diluted NU parent common
shares outstanding for the period.Management uses this non-GAAP
financial measure to evaluate earnings results and to provide details of
earnings results and guidance by business.Management believes
that this measurement is useful to investors to evaluate the actual and
projected financial performance and contribution of NU's businesses.Non-GAAP
financial measures should not be considered as alternatives to NU
consolidated net income attributable to controlling interests or EPS
determined in accordance with GAAP as indicators of NU's operating
performance.
This news release includes statements concerning NU's expectations,
beliefs, plans, objectives, goals, strategies, assumptions of future
events, future financial performance or growth and other statements that
are not historical facts.These statements are "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995.In some cases, readers can identify these
forward-looking statements through the use of words or phrases such as
"estimate", "expect", "anticipate", "intend", "plan", "project,"
"believe", "forecast", "should", "could", and other similar expressions.Forward-looking statements involve risks and uncertainties that may
cause actual results or outcomes to differ materially from those
included in the forward-looking statements.Factors that may
cause actual results to differ materially from those included in the
forward-looking statements include, but are not limited to, actions or
inaction of local, state and federal regulatory and taxing bodies;
changes in business and economic conditions, including their impact on
interest rates, bad debt expense and demand for NU's products and
services; changes in weather patterns; changes in laws, regulations or
regulatory policy; changes in levels or timing of capital expenditures;
disruptions in the capital markets or other events that make NU's access
to necessary capital more difficult or costly; developments in legal or
public policy doctrines; technological developments; changes in
accounting standards and financial reporting regulations; fluctuations
in the value of our remaining competitive contracts; actions of rating
agencies; the effects and outcome of our pending merger with NSTAR, and
other presently unknown or unforeseen factors. Other risk factors are
detailed from time to time in NU's reports filed with the Securities and
Exchange Commission.Any forward-looking statement speaks only as
of the date on which such statement is made, and NU undertakes no
obligation to update the information contained in any forward-looking
statements to reflect developments or circumstances occurring after the
statement is made or to reflect the occurrence of unanticipated events.
Note: NU will webcast a discussion concerning its first quarter
2011 results tomorrow, May 6, 2011, at 1 p.m. Eastern Daylight
Time. The webcast can be accessed through NU's website at www.nu.com.
NORTHEAST UTILITIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended March 31,
(Thousands of Dollars, Except Share Information)
2011
2010
Operating Revenues
$
1,235,251
$
1,339,420
Operating Expenses:
Fuel, Purchased and Net Interchange Power
474,109
603,349
Other Operating Expenses
251,978
248,273
Maintenance
67,764
45,637
Depreciation
73,951
78,656
Amortization of Regulatory Assets/(Liabilities), Net
34,407
(8,327
)
Amortization of Rate Reduction Bonds
17,282
59,570
Taxes Other Than Income Taxes
88,403
85,599
Total Operating Expenses
1,007,894
1,112,757
Operating Income
227,357
226,663
Interest Expense:
Interest on Long-Term Debt
57,399
57,270
Interest on Rate Reduction Bonds
2,578
6,690
Other Interest
(1,428
)
3,302
Interest Expense
58,549
67,262
Other Income, Net
10,313
8,057
Income Before Income Tax Expense
179,121
167,458
Income Tax Expense
63,537
79,857
Net Income
115,584
87,601
Net Income Attributable to Noncontrolling Interests
1,429
1,390
Net Income Attributable to Controlling Interests
$
114,155
$
86,211
Basic and Diluted Earnings Per Common Share
$
0.64
$
0.49
Dividends Declared Per Common Share
$
0.28
$
0.26
Weighted Average Common Shares Outstanding:
Basic
177,188,207
176,349,762
Diluted
177,480,996
176,537,472
The data contained in this report is preliminary and is unaudited.
This report is being submitted for the sole purpose of providing
information to present shareholders about Northeast Utilities and
Subsidiaries and is not a representation, prospectus, or intended
for use in connection with any purchase or sale of securities.
NORTHEAST UTILITIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
(Thousands of Dollars)
2011
2010
Operating Activities:
Net Income
$
115,584
$
87,601
Adjustments to Reconcile Net Income to Net Cash Flows
Provided by Operating Activities:
Bad Debt Expense
4,947
9,556
Depreciation
73,951
78,656
Deferred Income Taxes
52,429
33,248
Pension and PBOP Expense, Net of PBOP Contributions
28,231
23,331
Regulatory Overrecoveries, Net
44,420
6,066
Amortization of Regulatory Assets/(Liabilities), Net
34,407
(8,327
)
Amortization of Rate Reduction Bonds
17,282
59,570
Derivative Assets and Liabilities
(3,651
)
(2,594
)
Other
(1,776
)
(41,434
)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net
8,199
(7,258
)
Fuel, Materials and Supplies
42,990
48,431
Taxes Receivable/Accrued
18,312
4,639
Accounts Payable
(29,278
)
(46,188
)
Other Current Assets and Liabilities
(33,281
)
(19,594
)
Net Cash Flows Provided by Operating Activities
372,766
225,703
Investing Activities:
Investments in Property, Plant and Equipment
(236,689
)
(202,487
)
Proceeds from Sales of Marketable Securities
38,646
21,331
Purchases of Marketable Securities
(39,230
)
(21,825
)
Other Investing Activities
328
(478
)
Net Cash Flows Used in Investing Activities
(236,945
)
(203,459
)
Financing Activities:
Cash Dividends on Common Shares
(48,588
)
(45,088
)
Cash Dividends on Preferred Stock
(1,390
)
(1,390
)
Decrease in Short-Term Debt
(78,000
)
-
Issuance of Long-Term Debt
-
95,000
Retirements of Rate Reduction Bonds
(16,868
)
(66,569
)
Other Financing Activities
989
(1,137
)
Net Cash Flows Used in Financing Activities
(143,857
)
(19,184
)
Net (Decrease)/Increase in Cash and Cash Equivalents
(8,036
)
3,060
Cash and Cash Equivalents - Beginning of Period
23,395
26,952
Cash and Cash Equivalents - End of Period
$
15,359
$
30,012
The data contained in this report is preliminary and is unaudited.
This report is being submitted for the sole purpose of providing
information to present shareholders about Northeast Utilities and
Subsidiaries and is not a representation, prospectus, or intended
for use in connection with any purchase or sale of securities.
Northeast Utilities Jeffrey R. Kotkin, 860-728-4650
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