BOSTON & HARTFORD, Conn.--(BUSINESS WIRE)-- Northeast Utilities (NYSE: NU) today reported earnings of $207.6 million, or $0.66 per share, in the third quarter of 2012, compared with earnings of $90 million, or $0.51 per share, in the same period of 2011. Third quarter 2012 results included approximately $12.9 million, or $0.04 per share, of after-tax charges related to the April 2012 closing of the merger between NU and NSTAR. Excluding merger and related settlement costs, NU earned $220.5 million1, or $0.70 per share1, in the third quarter of 2012, compared with earnings of $90.6 million1, or $0.51 per share1, in the third quarter of 2011.
For the nine-month period ended September 30, 2012, NU earned $351.2 million, or $1.32 per share, compared with earnings of $281.4 million, or $1.58 per share, for the same period of 2011. Excluding merger and related settlement costs of $105.5 million, or $0.40 per share, NU earned $456.7 million1, or $1.72 per share1, in the nine-month period ended September 30, 2012, compared with earnings of $291.5 million1, or $1.64 per share1, in the same period of 2011. NSTAR’s results are included in NU’s results, effective as of April 2012.
Thomas J. May, NU president and chief executive officer, said, “These financial results are in-line with our recently announced 2012 recurring earnings guidance of between $2.25 and $2.30 per share1 and speak well of our efforts to create a high performing, successful, customer-focused company.”
May said he was extremely proud with the company’s response to Hurricane Sandy. “Our 9,000 employees, supported by thousands of additional contract employees from throughout the country, continue to perform heroically, working around the clock to restore power to customers in three states who depend on us for a critical service. We deeply appreciate the patience and support our customers have shown this week, and, with what we’ve seen this week, we are even more confident that our merger will provide them and their communities with significant long-term benefits. This storm recovery illustrates one of the most visible benefits of the merger. As we complete work in some of the less impacted areas, we are able to redeploy hundreds of line and tree workers to the most damaged areas with the greatest number of power outages.”
Dividend Declaration
NU also announced today that its Board of Trustees has declared a regular common dividend of $0.343 per share, payable December 31, 2012, to shareholders of record as of November 30, 2012.
Electric Transmission
NU’s transmission segment earned $71.1 million in the third quarter of 2012 and $181.1 million for the nine-month period ended September 30, 2012, compared with $41.5 million for the third quarter of 2011 and $128.4 million in the nine-month period ended September 30, 2011. The earnings improvement primarily reflects continued investment in NU’s transmission system, including the $718 million Greater Springfield Reliability Project (GSRP), as well as the addition of NSTAR Electric Company transmission results as of April 2012.
Electric Distribution and Generation
NU’s electric distribution and generation segment earned $150.7 million in the third quarter of 2012 and $263.1 million for the nine-month period ended September 30, 2012, compared with $58 million for the third quarter of 2011 and $152.8 million for the nine-month period ended September 30, 2011. The 2012 results exclude $0.2 million of third-quarter and $51 million of year-to-date after-tax merger and related settlement costs.
The distribution and generation segment results benefited in the third quarter and the nine-month period ended September 30, 2012 from the addition of NSTAR Electric distribution results effective in April 2012, as well as higher retail sales. These impacts were partially offset by higher costs related to pension and health care benefits and higher depreciation and property taxes.
Earnings of Electric Utility Subsidiaries
The Connecticut Light and Power Company (CL&P) earned $73.5 million for the third quarter of 2012. It earned $170.1 million for the nine-month period ended September 30, 2012, excluding $38.4 million of year-to-date merger and related settlement costs. That compares with earnings of $65.1 million in the third quarter of 2011 and $179.4 million for the nine-month period ended September 30, 2011. The improved third quarter results were due primarily to higher transmission earnings. For the year-to-date period, results were lower due primarily to higher pension, tree trimming and system maintenance costs.
NSTAR Electric earned $106.5 million in the third quarter of 2012. It earned a total of $162 million in the second and third quarters of 2012, excluding $10.8 million of after-tax merger and settlement related charges.
CL&P and NSTAR Electric’s earnings are net of preferred dividends.
Public Service Company of New Hampshire earned $27.2 million for the third quarter of 2012 and $69.8 million for the nine-month period ended September 30, 2012, compared with earnings of $25.7 million in the third quarter of 2011 and $74.7 million for the nine-month period ended September 30, 2011. The improved third quarter results were due primarily to higher transmission earnings, while year-to-date results for 2012 were lower due primarily to higher depreciation, property tax and income tax expense.
Western Massachusetts Electric Company (WMECO) earned $14.1 million in the third quarter of 2012. It earned $41.2 million for the nine-month period ended September 30, 2012, excluding $1.8 million of year-to-date merger and related settlement costs, compared with earnings of $8.4 million in the third quarter of 2011 and $26.6 million for the nine-month period ended September 30, 2011. WMECO’s results in 2012 improved largely as a result of higher transmission earnings, which were primarily related to GSRP. The project is being built primarily in the WMECO service territory and was approximately 85 percent complete as of September 30, 2012.
Natural Gas Distribution
NU’s natural gas distribution segment, which now includes both Yankee Gas Services Company and NSTAR Gas Company, lost $4.4 million in the third quarter of 2012, compared with a loss of $3 million in the third quarter of 2011 when it included only Yankee Gas. For the nine-month period ended September 30, 2012, NU’s natural gas distribution segment earned $10.4 million, excluding $2.1 million of merger and related settlement costs at NSTAR Gas, compared with earnings of $20.7 million in the nine-month period ended September 30, 2011. The lower year-to-date results in 2012 largely reflect the impact of mild temperatures in the first quarter of 2012, which significantly reduced the heating demand of Yankee Gas customers, compared with the first quarter of 2011 when temperatures were colder than normal.
NU parent and other businesses
Excluding $12.7 million of after-tax merger and related settlement costs in the third quarter of 2012 and $0.6 million in the third quarter of 2011, NU parent and other businesses had net earnings of $3.1 million in the third quarter of 2012, compared with net expenses of $5.9 million in the third quarter of 2011. Excluding $52.4 million of merger and related settlement costs in the nine-month period ended September 30, 2012 and $10.1 million in the nine-month period ended September 30, 2011, NU parent and other businesses had net earnings of $2.1 million in 2012, compared with net expenses of $10.4 million in the first nine months of 2011. The improvement was driven by a number of factors, including the addition of earnings from NSTAR Communications, Inc., and lower interest expense. The following table reconciles earnings per share for the third-quarter and the nine-month period ended September 30, 2012 and 2011.
Third Quarter | First Nine Months | ||||||||
2011 | Reported EPS | $0.51 | $1.58 | ||||||
2011 merger-related charges | $0.00 | $0.06 | |||||||
2011 EPS before merger-related charges | $0.51 | $1.64 | |||||||
NSTAR earnings contribution in 2012 | $0.33 | $0.61 | |||||||
Higher transmission earnings in 2012 | $0.08 | $0.13 | |||||||
Higher/(lower) electric sales in 2012 | $0.03 | ($0.03) | |||||||
Higher/(lower) firm natural gas sales in 2012 | $0.01 | ($0.03) | |||||||
Higher O&M, including untracked pension and health care costs in 2012 | ($0.03) | ($0.04) | |||||||
Other, primarily lower income tax expense | $0.05 | ($0.01) | |||||||
Higher outstanding common shares | ($0.28) | ($0.55) | |||||||
2012 EPS before merger-related settlements and other merger-related charges | $0.70 | $1.72 | |||||||
2012 merger and related settlement charges | ($0.04) | ($0.40) | |||||||
2012 | Reported EPS | $0.66 | $1.32 | ||||||
Financial results for the third quarter and nine-month period ended September 30, 2012 and 2011 are noted below:
Three months ended: | ||||||||||||||||
(in millions, except EPS) | September 30,
2012 | September 30,
2011 | Increase/
(Decrease) | 2012 EPS1 | ||||||||||||
Electric Distribution/Generation | $150.7 | $58.0 | $92.7 | $0.48 | ||||||||||||
Natural Gas Distribution | ($4.4) | ($3.0) | ($1.4) | ($0.02) | ||||||||||||
Electric Transmission | $71.1 | $41.5 | $29.6 | $0.23 | ||||||||||||
NU Parent and Other Companies,
ex. merger expenses | $3.1 | ($5.9) | $9.0 | $0.01 | ||||||||||||
Earnings, ex. merger impacts | $220.5 | $90.6 | $129.9 | $0.70 | ||||||||||||
Merger impacts | ($12.9) | ($0.6) | ($12.3) | ($0.04) | ||||||||||||
Reported Earnings | $207.6 | $90.0 | $117.6 | $0.66 | ||||||||||||
Nine months ended: | ||||||||||||||||
(in millions, except EPS) | September 30,
2012 | September 30,
2011 | Increase/
(Decrease) | 2012 EPS1 | ||||||||||||
Electric Distribution/Generation,
ex. rate credits, storm cost write-down |
$263.1 |
$152.8 |
$110.3 |
$0.99 | ||||||||||||
Natural Gas Distribution, ex. rate
Credits | $10.4 | $20.7 | ($10.3) | $0.04 | ||||||||||||
Electric Transmission | $181.1 | $128.4 | $52.7 | $0.68 | ||||||||||||
NU Parent and Other Companies,
ex. merger settlement, expenses | $2.1 | ($10.4) | $12.5 | $0.01 | ||||||||||||
Earnings, ex. merger impacts | $456.7 | $291.5 | $165.2 | $1.72 | ||||||||||||
Merger impacts | ($105.5) | ($10.1) | ($95.4) | ($0.40) | ||||||||||||
Reported Earnings | $351.2 | $281.4 | $69.8 | $1.32 | ||||||||||||
Retail sales data: | ||||||||||||||||
| September 30,
2012 | September 30,
2011 | % Change
Actual | % Change
Weather Norm. | ||||||||||||
Electric distribution | ||||||||||||||||
Gwh for three months ended* | 15,502 | 15,302 | 1.3 | 1.1 | ||||||||||||
Gwh for nine months ended* | 41,697 | 42,356 | (1.6) | (0.3) | ||||||||||||
Natural Gas Distribution | ||||||||||||||||
Firm volumes in mmcf for three
months ended** | 10,696 | 10,688 | 0.1 | 0.0 | ||||||||||||
Firm volumes in mmcf for nine
months ended** | 60,035 | 67,408 | (10.9) | 2.9 | ||||||||||||
NORTHEAST UTILITIES AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
(Thousands of Dollars) | September 30, 2012 | December 31, | ||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and Cash Equivalents | $ | 73,449 | $ | 6,559 | ||||
Receivables, Net | 773,415 | 488,002 | ||||||
Unbilled Revenues | 182,643 | 175,207 | ||||||
Fuel, Materials and Supplies | 267,281 | 248,958 | ||||||
Regulatory Assets | 647,615 | 255,144 | ||||||
Marketable Securities | 81,618 | 70,970 | ||||||
Prepayments and Other Current Assets | 112,965 | 112,632 | ||||||
Total Current Assets | 2,138,986 | 1,357,472 | ||||||
Property, Plant and Equipment, Net | 16,303,805 | 10,403,065 | ||||||
Deferred Debits and Other Assets: | ||||||||
Regulatory Assets | 5,008,034 | 3,267,710 | ||||||
Goodwill | 3,518,454 | 287,591 | ||||||
Marketable Securities | 394,207 | 60,311 | ||||||
Derivative Assets | 93,256 | 98,357 | ||||||
Other Long-Term Assets | 300,820 | 172,560 | ||||||
Total Deferred Debits and Other Assets | 9,314,771 | 3,886,529 | ||||||
Total Assets | $ | 27,757,562 | $ | 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) | September 30, | December 31, | ||||||||
LIABILITIES AND CAPITALIZATION | ||||||||||
Current Liabilities: | ||||||||||
Notes Payable | $ | 1,359,250 | $ | 317,000 | ||||||
Long-Term Debt - Current Portion | 879,746 | 331,582 | ||||||||
Accounts Payable | 542,691 | 633,282 | ||||||||
Regulatory Liabilities | 226,606 | 167,844 | ||||||||
Derivative Liabilities | 113,907 | 107,558 | ||||||||
Other Current Liabilities | 678,523 | 390,416 | ||||||||
Total Current Liabilities | 3,800,723 | 1,947,682 | ||||||||
Rate Reduction Bonds | 101,347 | 112,260 | ||||||||
Deferred Credits and Other Liabilities: | ||||||||||
Accumulated Deferred Income Taxes | 3,429,538 | 1,868,316 | ||||||||
Regulatory Liabilities | 561,555 | 266,145 | ||||||||
Derivative Liabilities | 912,352 | 959,876 | ||||||||
Accrued Pension, SERP and PBOP | 2,015,649 | 1,326,037 | ||||||||
Other Long-Term Liabilities | 871,428 | 420,011 | ||||||||
Total Deferred Credits and Other Liabilities | 7,790,522 | 4,840,385 | ||||||||
Capitalization: | ||||||||||
Long-Term Debt | 6,732,536 | 4,614,913 | ||||||||
Noncontrolling Interest - Preferred Stock of Subsidiaries | 155,568 | 116,200 | ||||||||
Equity: | ||||||||||
Common Shareholders' Equity: | ||||||||||
Common Shares | 1,662,358 | 980,264 | ||||||||
Capital Surplus, Paid In | 6,183,715 | 1,797,884 | ||||||||
Retained Earnings | 1,735,690 | 1,651,875 | ||||||||
Accumulated Other Comprehensive Loss | (64,209 | ) | (70,686 | ) | ||||||
Treasury Stock | (340,688 | ) | (346,667 | ) | ||||||
Common Shareholders' Equity | 9,176,866 | 4,012,670 | ||||||||
Noncontrolling Interests | - | 2,956 | ||||||||
Total Equity | 9,176,866 | 4,015,626 | ||||||||
Total Capitalization | 16,064,970 | 8,746,739 | ||||||||
Total Liabilities and Capitalization | $ | 27,757,562 | $ | 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 STATEMENTS OF INCOME | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(Thousands of Dollars, Except Share Information) | 2012 | 2011 | 2012 | 2011 | ||||||||||||
Operating Revenues | $ | 1,861,529 | $ | 1,114,892 | $ | 4,589,835 | $ | 3,397,624 | ||||||||
Operating Expenses: | ||||||||||||||||
Purchased Power, Fuel and Transmission | 602,751 | 406,237 | 1,540,110 | 1,285,483 | ||||||||||||
Operations and Maintenance | 395,531 | 255,551 | 1,187,471 | 788,875 | ||||||||||||
Depreciation | 144,475 | 75,196 | 369,798 | 222,784 | ||||||||||||
Amortization of Regulatory Assets, Net | 43,835 | 36,163 | 74,851 | 86,653 | ||||||||||||
Amortization of Rate Reduction Bonds | 43,044 | 17,680 | 102,144 | 52,047 | ||||||||||||
Energy Efficiency Programs | 98,326 | 35,255 | 209,089 | 99,658 | ||||||||||||
Taxes Other Than Income Taxes | 120,662 | 84,994 | 319,559 | 252,817 | ||||||||||||
Total Operating Expenses | 1,448,624 | 911,076 | 3,803,022 | 2,788,317 | ||||||||||||
Operating Income | 412,905 | 203,816 | 786,813 | 609,307 | ||||||||||||
Interest Expense: | ||||||||||||||||
Interest on Long-Term Debt | 86,459 | 57,461 | 233,352 | 171,905 | ||||||||||||
Interest on Rate Reduction Bonds | 1,681 | 2,018 | 5,168 | 6,889 | ||||||||||||
Other Interest | 2,221 | 4,453 | 7,336 | 5,922 | ||||||||||||
Interest Expense | 90,361 | 63,932 | 245,856 | 184,716 | ||||||||||||
Other Income, Net | 4,324 | 1,430 | 14,904 | 19,077 | ||||||||||||
Income Before Income Tax Expense | 326,868 | 141,314 | 555,861 | 443,668 | ||||||||||||
Income Tax Expense | 117,360 | 49,883 | 199,379 | 157,934 | ||||||||||||
Net Income | 209,508 | 91,431 | 356,482 | 285,734 | ||||||||||||
Net Income Attributable to Noncontrolling Interests | 1,880 | 1,470 | 5,253 | 4,340 | ||||||||||||
Net Income Attributable to Controlling Interest | $ | 207,628 | $ | 89,961 | $ | 351,229 | $ | 281,394 | ||||||||
Basic Earnings Per Common Share | $ | 0.66 | $ | 0.51 | $ | 1.33 | $ | 1.59 | ||||||||
Diluted Earnings Per Common Share | $ | 0.66 | $ | 0.51 | $ | 1.32 | $ | 1.58 | ||||||||
Dividends Declared Per Common Share | $ | 0.34 | $ | 0.28 | $ | 0.97 | $ | 0.83 | ||||||||
Weighted Average Common Shares Outstanding: | ||||||||||||||||
Basic | 314,806,441 | 177,497,862 | 264,636,636 | 177,344,481 | ||||||||||||
Diluted | 315,805,796 | 177,835,348 | 265,353,377 | 177,647,694 |
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) | ||||||||
Nine Months Ended September 30, | ||||||||
(Thousands of Dollars) | 2012 | 2011 | ||||||
Operating Activities: | ||||||||
Net Income | $ | 356,482 | $ | 285,734 | ||||
Adjustments to Reconcile Net Income to Net Cash Flows | ||||||||
Provided by Operating Activities: | ||||||||
Bad Debt Expense | 24,249 | 12,435 | ||||||
Depreciation | 369,798 | 222,784 | ||||||
Deferred Income Taxes | 186,181 | 133,528 | ||||||
Pension, SERP and PBOP Expense | 160,209 | 103,106 | ||||||
Pension and PBOP Contributions | (237,123) | (159,220) | ||||||
Regulatory Underrecoveries, Net | (26,236) | (24,245) | ||||||
Amortization of Regulatory Assets, Net | 74,851 | 86,653 | ||||||
Amortization of Rate Reduction Bonds | 102,144 | 52,047 | ||||||
Derivative Assets and Liabilities | (7,907) | (33,767) | ||||||
Other | (9,702) | (14,802) | ||||||
Changes in Current Assets and Liabilities: | ||||||||
Receivables and Unbilled Revenues, Net | (27,677) | 61,657 | ||||||
Fuel, Materials and Supplies | 32,887 | (4,072) | ||||||
Taxes Receivable/Accrued, Net | 26,302 | 109,410 | ||||||
Accounts Payable | (208,308) | 66,618 | ||||||
Other Current Assets and Liabilities, Net | (20,145) | (9,419) | ||||||
Net Cash Flows Provided by Operating Activities | 796,005 | 888,447 | ||||||
Investing Activities: | ||||||||
Investments in Property, Plant and Equipment | (1,081,750) | (749,060) | ||||||
Proceeds from Sales of Marketable Securities | 232,911 | 116,463 | ||||||
Purchases of Marketable Securities | (252,762) | (118,251) | ||||||
Proceeds from Sale of Assets | - | 46,841 | ||||||
Other Investing Activities | 40,265 | (5,849) | ||||||
Net Cash Flows Used in Investing Activities | (1,061,336) | (709,856) | ||||||
Financing Activities: | ||||||||
Cash Dividends on Common Shares | (267,356) | (145,865) | ||||||
Cash Dividends on Preferred Stock | (5,149) | (4,169) | ||||||
Increase/(Decrease) in Short-Term Debt | 654,250 | (237,000) | ||||||
Issuance of Long-Term Debt | 300,000 | 382,000 | ||||||
Retirements of Long-Term Debt | (267,561) | (124,086) | ||||||
Retirements of Rate Reduction Bonds | (95,225) | (51,198) | ||||||
Other Financing Activities | 13,262 | (4,947) | ||||||
Net Cash Flows Provided by/(Used in) Financing Activities | 332,221 | (185,265) | ||||||
Net Increase/(Decrease) in Cash and Cash Equivalents | 66,890 | (6,674) | ||||||
Cash and Cash Equivalents - Beginning of Period | 6,559 | 23,395 | ||||||
Cash and Cash Equivalents - End of Period | $ | 73,449 | $ | 16,721 |
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
Source: Northeast Utilities