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NORTHEAST UTILS
Symbol	NU
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NU Reports First Quarter Results

2012-05-02 17:52 ET - News Release

HARTFORD, Conn. & BOSTON -- (Business Wire)

Northeast Utilities (NYSE: NU) today reported first quarter 2012 earnings of $99.3 million, or $0.56 per share, compared with earnings of $114.2 million, or $0.64 per share, in the first quarter of 2011. NU results for the first quarter of 2012 do not incorporate the financial results of NSTAR and there were no material merger-related impacts in the quarter. NU’s merger with NSTAR closed on April 10, 2012.

Thomas J. May, NU president and chief executive officer, said that NU’s lower results in the first quarter of 2012 were expected given the exceptionally mild weather and higher pension costs. However, he noted that the merger should provide significant benefits to both customers and investors in the years ahead.

“I am extremely pleased that the merger has been completed, and we look forward to realizing the many benefits from this great business combination. With our resources now combined, our operating companies will be better positioned to implement the best practices of the two companies to achieve top-tier levels of customer service and reliability, while also reducing costs,” May said.

Transmission results

NU’s transmission earnings in the first quarter of 2012 were $46.3 million, or $0.26 per share¹, compared with $44.7 million, or $0.25 per share¹, in the first quarter of 2011. The improved results primarily reflected a higher level of investment in the Greater Springfield Reliability Project, now under construction in western Massachusetts and northern Connecticut.

Distribution and generation results

The Connecticut Light and Power Company’s (CL&P) distribution earnings were $20.8 million in the first quarter of 2012, compared with $28.5 million in the first quarter of 2011. Lower results reflect the impact of a 6 percent decline in retail sales in 2012, compared with the first quarter of 2011, and higher pension and health care costs, partially offset by a distribution rate increase that was effective July 1, 2011.

Public Service Company of New Hampshire’s (PSNH) distribution and generation earnings were $15.1 million in the first quarter of 2012, compared with $21.5 million in the first quarter of 2011. Lower results reflect the impact of a 2.4 percent decline in retail sales in 2012, compared with the first quarter of 2011, as well as higher pension and health care costs.

Western Massachusetts Electric Company’s (WMECO) distribution and generation earnings were $6.1 million in the first quarter of 2012, compared with $5.7 million in the first quarter of 2011. WMECO benefited from higher generation earnings as the second of its solar facilities came on line in late 2011. Also, since WMECO operates under a decoupling mechanism, it is not subject to the same weather-related fluctuations in distribution revenue as CL&P and PSNH.

Overall, NU’s retail electric sales were down 5 percent in the first quarter of 2012, compared with the first quarter of 2011. They were up 0.1 percent on a weather-adjusted basis.

Yankee Gas Services Company earned $14.7 million in the first quarter of 2012, compared with $22.5 million in the first quarter of 2011. The lower earnings primarily reflect a 13.2 percent reduction in firm natural gas sales in the first quarter of 2012 due to much milder weather in the first quarter of 2012, compared with the first quarter of 2011. First quarter firm natural gas sales were up 5 percent in 2012 on a weather-adjusted basis, compared with 2011.

Parent and other affiliates

NU parent and other companies recorded a loss of $3.7 million in the first quarter of 2012, compared with a loss of $8.7 million in the first quarter of 2011. This improvement reflected primarily lower merger-related expenses. In the first quarter of 2012, NU parent and other companies recorded after-tax, merger-related expenses of $1.1 million, compared with after-tax, merger-related expenses of $8.3 million in the first quarter of 2011.

The following table reconciles 2012 and 2011 first quarter results:


		First Quarter
2011	Reported EPS	$0.64
	Higher transmission earnings in 2012	$0.01
	Lower distribution and generation earnings in 2012	($0.12)
	Higher parent and other company expenses in 2012, excluding impact of merger	($0.02)
	Lower expenses in 2012 related to NSTAR merger	$0.05
2012	Reported EPS	$0.56

Financial results for the first quarters of 2012 and 2011 for NU’s business segments and parent and other companies are noted below:


Three months ended:
(in millions, except EPS)	March 31, 2012	March 31, 2011	Increase (Decrease)	2012 EPS¹
CL&P Distribution	$20.8	$28.5	($7.7)	$0.12
PSNH Distribution/Generation	$15.1	$21.5	($6.4)	$0.09
WMECO Distribution/Generation	$6.1	$5.7	$0.4	$0.03
Yankee Gas	$14.7	$22.5	($7.8)	$0.08
Total—Distribution/Generation	$56.7	$78.2	($21.5)	$0.32
CL&P Transmission	$31.8	$34.4	($2.6)	$0.18
PSNH Transmission	$6.2	$6.0	$0.2	$0.03
WMECO Transmission	$8.1	$4.2	$3.9	$0.05
NU Transmission Ventures	$0.2	$0.1	$0.1	---
Total—Transmission	$46.3	$44.7	$1.6	$0.26
Total—Operating Company Earnings	$103.0	$122.9	($19.9)	$0.58
NU Parent and Other Companies, excluding merger expenses	($2.6)	($0.4)	($2.2)	($0.02)
Merger expenses	($1.1)	($8.3)	$7.2	---
Reported Earnings	$99.3	$114.2	($14.9)	$0.56

Retail sales data:

Gwh for three months ended

March 31, 2012

March 31, 2011

% Change
Actual

% Change
Weather Norm.

CL&P

5,427

5,776

(6.0)

(0.1)

PSNH

1,937

1,984

(2.4)

0.5

WMECO

911

948

(4.0)

(0.1)

Total NU

8,271

8,705

(5.0)

0.1

Yankee Gas firm volumes in mmcf
for three months ended

16,819

19,384

(13.2)

5.0

NU completed its stock-for-stock merger with NSTAR on April 10, 2012. The combined entity operates New England’s largest energy delivery system, serving 3.5 million customers in Connecticut, New Hampshire and Massachusetts. NU now has approximately 314 million common shares outstanding.

¹All per share amounts in this news release are reported on a fully diluted basis as of March 31, 2012.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; the effects and outcomes of our merger with NSTAR; actions of rating agencies and other presently unknown or unforeseen factors. Other risk factors are detailed in NU’s and NSTAR’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 2012 results tomorrow, May 3, 2012, at 4 p.m. Eastern Daylight Time. The webcast can be accessed through NU’s website at www.nu.com.

NORTHEAST UTILITIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)


(Thousands of Dollars)		March 31, 2012		December 31, 2011

ASSETS

Current Assets:
	Cash and Cash Equivalents	$	283,379	$	6,559
	Receivables, Net		485,770		488,002
	Unbilled Revenues		135,887		175,207
	Fuel, Materials and Supplies		219,091		248,958
	Regulatory Assets		241,902		255,144
	Marketable Securities		62,700		70,970
	Prepayments and Other Current Assets		94,737		112,632
Total Current Assets			1,523,466		1,357,472

Property, Plant and Equipment, Net			10,613,199		10,403,065

Deferred Debits and Other Assets:
	Regulatory Assets		3,214,208		3,267,710
	Goodwill		287,591		287,591
	Marketable Securities		74,050		60,311
	Derivative Assets		94,258		98,357
	Other Long-Term Assets		171,582		172,560
Total Deferred Debits and Other Assets			3,841,689		3,886,529



Total Assets		$	15,978,354	$	15,647,066

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 BALANCE SHEETS
(Unaudited)


(Thousands of Dollars)	March 31, 2012			December 31, 2011

LIABILITIES AND CAPITALIZATION

Current Liabilities:
Notes Payable to Banks	$	660,000		$	317,000
Long-Term Debt - Current Portion		267,286			331,582
Accounts Payable		412,884			633,282
Regulatory Liabilities		149,755			167,844
Derivative Liabilities		108,253			107,558
Other Current Liabilities		369,503			390,416
Total Current Liabilities		1,967,681			1,947,682

Rate Reduction Bonds		94,357			112,260

Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes		1,923,266			1,868,316
Regulatory Liabilities		248,314			266,145
Derivative Liabilities		924,308			959,876
Accrued Pension, SERP and PBOP		1,241,433			1,326,037
Other Long-Term Liabilities		414,004			420,011
Total Deferred Credits and Other Liabilities		4,751,325			4,840,385

Capitalization:
Long-Term Debt		4,977,131			4,614,913

Noncontrolling Interest in Consolidated Subsidiary:
Preferred Stock Not Subject to Mandatory Redemption		116,200			116,200

Equity:
Common Shareholders' Equity:
Common Shares		981,592			980,264
Capital Surplus, Paid In		1,801,752			1,797,884
Retained Earnings		1,698,553			1,651,875
Accumulated Other Comprehensive Loss		(68,822	)		(70,686	)
Treasury Stock		(344,774	)		(346,667	)
Common Shareholders' Equity		4,068,301			4,012,670
Noncontrolling Interests		3,359			2,956
Total Equity		4,071,660			4,015,626
Total Capitalization		9,164,991			8,746,739


Total Liabilities and Capitalization	$	15,978,354		$	15,647,066



NORTHEAST UTILITIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	Three Months Ended March 31,
(Thousands of Dollars, Except Share Information)	2012		2011

Operating Revenues	$	1,099,623	$	1,235,251

Operating Expenses:
Fuel, Purchased and Net Interchange Power		398,013		474,109
Other Operating Expenses		225,958		251,978
Maintenance		69,826		67,764
Depreciation		80,839		73,951
Amortization of Regulatory Assets, Net		6,209		34,407
Amortization of Rate Reduction Bonds		18,347		17,282
Taxes Other Than Income Taxes		86,038		88,403
Total Operating Expenses		885,230		1,007,894
Operating Income		214,393		227,357

Interest Expense:
Interest on Long-Term Debt		59,968		57,399
Interest on Rate Reduction Bonds		1,431		2,578
Other Interest		5,048		(1,428	)
Interest Expense		66,447		58,549
Other Income, Net		8,773		10,313
Income Before Income Tax Expense		156,719		179,121
Income Tax Expense		55,964		63,537
Net Income		100,755		115,584
Net Income Attributable to Noncontrolling Interests		1,493		1,429
Net Income Attributable to Controlling Interests	$	99,262	$	114,155

Basic and Diluted Earnings Per Common Share	$	0.56	$	0.64

Dividends Declared Per Common Share	$	0.29	$	0.28

Weighted Average Common Shares Outstanding:
Basic		178,055,716		177,188,207
Diluted		178,437,453		177,480,996



NORTHEAST UTILITIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)


	Three Months Ended March 31,
(Thousands of Dollars)	2012			2011

Operating Activities:
Net Income	$	100,755		$	115,584
Adjustments to Reconcile Net Income to Net Cash Flows
Provided by Operating Activities:
Bad Debt Expense		3,657			4,947
Depreciation		80,839			73,951
Deferred Income Taxes		52,474			52,429
Pension, SERP and PBOP Expense		42,268			34,163
Pension and PBOP Contributions		(98,910	)		(5,932	)
Regulatory (Under)/Over Recoveries, Net		(28,352	)		44,420
Amortization of Regulatory Assets, Net		6,209			34,407
Amortization of Rate Reduction Bonds		18,347			17,282
Derivative Assets and Liabilities		(1,770	)		(3,651	)
Other		(7,371	)		(1,776	)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net		29,276			8,199
Fuel, Materials and Supplies		30,108			42,990
Taxes Receivable/Accrued, Net		11,758			18,312
Accounts Payable		(190,232	)		(29,278	)
Other Current Assets and Liabilities, Net		(40,240	)		(33,281	)
Net Cash Flows Provided by Operating Activities		8,816			372,766

Investing Activities:
Investments in Property, Plant and Equipment		(304,294	)		(236,689	)
Proceeds from Sales of Marketable Securities		40,947			38,646
Purchases of Marketable Securities		(41,570	)		(39,230	)
Other Investing Activities		2,448			328
Net Cash Flows Used in Investing Activities		(302,469	)		(236,945	)

Financing Activities:
Cash Dividends on Common Shares		(52,104	)		(48,588	)
Cash Dividends on Preferred Stock		(1,390	)		(1,390	)
Increase/(Decrease) in Short-Term Debt		343,000			(78,000	)
Issuance of Long-Term Debt		300,000			-
Retirements of Rate Reduction Bonds		(17,903	)		(16,868	)
Other Financing Activities		(1,130	)		989
Net Cash Flows Provided by/(Used in) Financing Activities		570,473			(143,857	)
Net Increase/(Decrease) in Cash and Cash Equivalents		276,820			(8,036	)
Cash and Cash Equivalents - Beginning of Period		6,559			23,395
Cash and Cash Equivalents - End of Period	$	283,379		$	15,359

Contacts:

Northeast Utilities
Jeffrey R. Kotkin, 860-728-4650

Source: Northeast Utilities