HARTFORD, Conn. & BOSTON--(BUSINESS WIRE)--Northeast Utilities (NYSE: NU) today reported first quarter 2013 earnings of $228.1 million, or $0.72 per share, compared with earnings of $99.3 million, or $0.56 per share, in the first quarter of 2012. Results for both years reflect costs related to the April 2012 merger of NU and NSTAR. Those costs totaled $1.8 million, or $0.01 per share, in the first quarter of 2013 and $1.1 million in the first quarter of 2012. NU’s first quarter 2013 results include earnings from NSTAR, while those from the first quarter of 2012 do not.
Thomas J. May, NU president and chief executive officer, said, “These financial results are consistent with our previously announced 2013 recurring earnings guidance of between $2.40 and $2.60 per share and represent a very good start for our first full year as a merged company.”
Electric Transmission
NU’s transmission segment earned $79.9 million in the first quarter of 2013, compared with $46.3 million in the first quarter of 2012. Higher transmission earnings reflect the inclusion of NSTAR Electric transmission earnings and a higher transmission rate base at NU’s other electric subsidiaries. On March 4, 2013, the 345 kV portion of the Greater Springfield Reliability Project (GSRP) was energized, and the entire project is expected to be complete in late 2013.
Electric Distribution and Generation
NU’s electric distribution and generation segment earned $99.5 million in the first quarter of 2013, compared with $42 million in the first quarter of 2012. Improved results primarily reflect the inclusion of NSTAR Electric earnings. Additionally, current year results benefited from colder first quarter weather in 2013 than in 2012. Retail electric sales, including NSTAR Electric for both years, rose 3.2 percent in the first quarter of 2013, compared with the first quarter of 2012, when weather was extremely mild. Retail sales were up nearly 1 percent when adjusted for the colder weather and the absence of a “leap day” in the first quarter of 2013. Economic growth was partially offset by the company’s successful energy conservation programs and the impact of a February 2013 blizzard.
Earnings of Electric Utility Subsidiaries (net of preferred dividends)
The Connecticut Light and Power Company earned $83.6 million after preferred dividends in the first quarter of 2013, compared with $52.6 million in the first quarter of 2012. Improved results were due primarily to higher transmission earnings and a 4.7 percent increase in retail sales in the first quarter of 2013, compared with the first quarter of 2012.
NSTAR Electric earned $47.6 million after preferred dividends in the first quarter of 2013.
Public Service Company of New Hampshire earned $29 million in the first quarter of 2013, compared with $21.3 million in the first quarter of 2012. Improved results reflect higher transmission and generation earnings, a 2.8 percent increase in retail sales in the first quarter of 2013, compared with the first quarter of 2012, and a change in distribution rates that took effect July 1, 2012. Those factors were offset by higher depreciation, property tax and income tax expense.
Western Massachusetts Electric Company (WMECO) earned $18.6 million in the first quarter of 2013, compared with $14.2 million in the first quarter of 2012. WMECO’s 2013 results improved largely as a result of higher transmission earnings, primarily related to GSRP, most of which is being built in the WMECO service territory.
Natural Gas Distribution
NU’s natural gas distribution segment, which includes both Yankee Gas Services Company and NSTAR Gas Company, earned $43.3 million in the first quarter of 2013, compared with $14.7 million in the first quarter of 2012, when it included only Yankee Gas. In addition to the inclusion of NSTAR Gas earnings, first quarter results reflect colder first quarter weather in 2013. Combined sales for NSTAR Gas and Yankee Gas were 21.8 percent higher in the first quarter of 2013 than they were in the first quarter of 2012. They were up nearly 4 percent when adjusted for the colder weather and absence of a “leap day” in the first quarter of 2013.
NU parent and other companies
NU parent and other companies earned $7.2 million in the first quarter of 2013, excluding $1.8 million of merger-related expenses, compared with net expenses of $2.6 million in the first quarter of 2012, excluding $1.1 million of merger-related expenses. The improvement was due to a number of factors, including the addition of earnings from NSTAR Communications, Inc. in 2013, a lower effective tax rate, and lower interest expense. The following table reconciles earnings per share for the first quarters of 2013 and 2012.
| First Quarter | |||||
| 2012 | Reported EPS | $0.56 | |||
| Higher outstanding common shares | ($0.39 | ) | |||
| Higher NU legacy transmission earnings in 2013 | $0.09 | ||||
| Higher NU legacy electric sales in 2013 | $0.05 | ||||
| Higher NU legacy firm natural gas sales in 2013 | $0.04 | ||||
| Lower NU legacy O&M | $0.08 | ||||
|
Higher generation earnings and other distribution income |
$0.04 |
||||
| NSTAR earnings in 2013 | $0.21 | ||||
| Higher NU parent and other in 2013 | $0.05 | ||||
| 2013 merger charges | ($0.01 | ) | |||
| 2013 | Reported EPS | $0.72 | |||
Financial results for the first quarters of 2013 and 2012 for NU’s business segments and NU parent and other companies are noted below:
|
Three months ended: |
||||||||||||
|
(in millions, except EPS) |
March 31, 2013 |
March 31, 2012 |
Increase/ |
2013 EPS1 |
||||||||
| Electric Distribution/Generation | $99.5 | $42.0 | $57.5 | $0.32 | ||||||||
| Natural Gas Distribution | $43.3 | $14.7 | $28.6 | $0.14 | ||||||||
| Electric Transmission | $79.9 | $46.3 | $33.6 | $0.25 | ||||||||
|
NU Parent and Other Companies, ex. merger expenses |
$7.2 |
($2.6 |
) |
$9.8 |
$0.02 |
|||||||
| Earnings, ex. merger impacts | $229.9 | $100.4 | $129.5 | $0.73 | ||||||||
| Merger impacts | ($1.8 | ) | ($1.1 | ) | ($0.7 | ) | ($0.01 | ) | ||||
| Reported Earnings | $228.1 | $99.3 | $128.8 | $0.72 | ||||||||
|
Retail sales data: |
||||||
|
|
March 31, 2013 |
March 31, 2012 |
% Change |
|||
| Electric distribution | ||||||
| Gwh for three months ended* | 13,796 | 13,365 | 3.2 | |||
| Natural Gas Distribution | ||||||
|
Firm volumes in mmcf for three months ended** |
39,422 |
32,377 |
21.8 |
|||
* Pre-merger sales data for NSTAR Electric are included for illustrative
purposes.
** Pre-merger sales data for NSTAR Gas are included for
illustrative purposes.
NU has approximately 315 million common shares outstanding. It operates New England’s largest energy delivery system, serving approximately 3.6 million customers in Connecticut, Massachusetts and New Hampshire.
Note: NU will webcast a conference call with senior management on May 2, 2013, beginning at 9 a.m. Eastern Time. The webcast can be accessed through NU’s website at www.nu.com.
1 All per share amounts in this news release are reported on a 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 diluted NU parent common shares outstanding for the period. In addition, first quarter 2013 and 2012 earnings and EPS excluding certain charges related to the April 10, 2012 closing of the merger between NU and NSTAR are non-GAAP financial measures. Management uses these non-GAAP financial measures to evaluate earnings results and to provide details of earnings results by business and to more fully compare and explain our first quarter 2013 and 2012 results without including the impact of the non-recurring merger-related costs. 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, the possibility that expected merger synergies will not be realized or will not be realized within the expected time period; cyber breaches, acts of war or terrorism, or grid disturbances; 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; actions of rating agencies; 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.
| NORTHEAST UTILITIES AND SUBSIDIARIES | ||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (Unaudited) | ||||||
| March 31, | December 31, | |||||
| (Thousands of Dollars) | 2013 | 2012 | ||||
|
ASSETS |
||||||
| Current Assets: | ||||||
| Cash and Cash Equivalents | $ | 60,817 | $ | 45,748 | ||
| Receivables, Net | 832,989 | 792,822 | ||||
| Unbilled Revenues | 195,870 | 216,040 | ||||
| Fuel, Materials and Supplies | 239,226 | 267,713 | ||||
| Regulatory Assets | 625,542 | 705,025 | ||||
| Marketable Securities | 99,115 | 91,975 | ||||
| Prepayments and Other Current Assets | 104,452 | 107,972 | ||||
| Total Current Assets | 2,158,011 | 2,227,295 | ||||
| Property, Plant and Equipment, Net | 16,737,549 | 16,605,010 | ||||
| Deferred Debits and Other Assets: | ||||||
| Regulatory Assets | 5,015,108 | 5,132,411 | ||||
| Goodwill | 3,519,401 | 3,519,401 | ||||
| Marketable Securities | 492,003 | 400,329 | ||||
| Derivative Assets | 94,970 | 90,612 | ||||
| Other Long-Term Assets | 311,619 | 327,766 | ||||
| Total Deferred Debits and Other Assets | 9,433,101 | 9,470,519 | ||||
| Total Assets | $ | 28,328,661 | $ | 28,302,824 | ||
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 |
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|
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
|
(Unaudited) |
||||||||
|
March 31, |
December 31, |
|||||||
|
(Thousands of Dollars) |
2013 |
2012 |
||||||
|
LIABILITIES AND CAPITALIZATION |
||||||||
|
Current Liabilities: |
||||||||
| Notes Payable | $ | 1,287,000 | $ | 1,120,196 | ||||
| Long-Term Debt - Current Portion | 947,328 | 763,338 | ||||||
| Accounts Payable | 633,458 | 764,350 | ||||||
| Regulatory Liabilities | 191,707 | 134,115 | ||||||
| Derivative Liabilities | 108,964 | 117,194 | ||||||
| Other Current Liabilities | 671,180 | 744,497 | ||||||
| Total Current Liabilities | 3,839,637 | 3,643,690 | ||||||
| Rate Reduction Bonds | 19,610 | 82,139 | ||||||
| Deferred Credits and Other Liabilities: | ||||||||
| Accumulated Deferred Income Taxes | 3,614,278 | 3,463,347 | ||||||
| Regulatory Liabilities | 531,546 | 540,162 | ||||||
| Derivative Liabilities | 840,043 | 882,654 | ||||||
| Accrued Pension, SERP and PBOP | 2,097,550 | 2,130,497 | ||||||
| Other Long-Term Liabilities | 873,637 | 967,561 | ||||||
| Total Deferred Credits and Other Liabilities | 7,957,054 | 7,984,221 | ||||||
| Capitalization: | ||||||||
| Long-Term Debt | 7,011,561 | 7,200,156 | ||||||
| Noncontrolling Interest - Preferred Stock of Subsidiaries | 155,568 | 155,568 | ||||||
| Equity: | ||||||||
| Common Shareholders' Equity: | ||||||||
| Common Shares | 1,664,760 | 1,662,547 | ||||||
| Capital Surplus, Paid In | 6,173,801 | 6,183,267 | ||||||
| Retained Earnings | 1,914,371 | 1,802,714 | ||||||
| Accumulated Other Comprehensive Loss | (70,898 | ) | (72,854 | ) | ||||
| Treasury Stock | (336,803 | ) | (338,624 | ) | ||||
| Common Shareholders' Equity | 9,345,231 | 9,237,050 | ||||||
| Total Capitalization | 16,512,360 | 16,592,774 | ||||||
| Total Liabilities and Capitalization | $ | 28,328,661 | $ | 28,302,824 | ||||
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) | |||||||
| For the Three Months Ended March 31, | |||||||
| (Thousands of Dollars, Except Share Information) | 2013 | 2012 | |||||
| Operating Revenues | $ | 1,995,023 | $ | 1,099,623 | |||
| Operating Expenses: | |||||||
| Purchased Power, Fuel and Transmission | 747,809 | 395,344 | |||||
| Operations and Maintenance | 346,092 | 261,963 | |||||
| Depreciation | 154,977 | 80,839 | |||||
| Amortization of Regulatory Assets, Net | 54,049 | 5,426 | |||||
| Amortization of Rate Reduction Bonds | 34,499 | 18,347 | |||||
| Energy Efficiency Programs | 105,771 | 37,273 | |||||
| Taxes Other Than Income Taxes | 132,881 | 86,038 | |||||
| Total Operating Expenses | 1,576,078 | 885,230 | |||||
| Operating Income | 418,945 | 214,393 | |||||
| Interest Expense: | |||||||
| Interest on Long-Term Debt | 85,295 | 59,968 | |||||
| Interest on Rate Reduction Bonds | 611 | 1,431 | |||||
| Other Interest | (9,651 | ) | 5,048 | ||||
| Interest Expense | 76,255 | 66,447 | |||||
| Other Income, Net | 7,765 | 8,773 | |||||
| Income Before Income Tax Expense | 350,455 | 156,719 | |||||
| Income Tax Expense | 120,487 | 55,964 | |||||
| Net Income | 229,968 | 100,755 | |||||
| Net Income Attributable to Noncontrolling Interests | 1,879 | 1,493 | |||||
| Net Income Attributable to Controlling Interest | $ | 228,089 | $ | 99,262 | |||
| Basic and Diluted Earnings Per Common Share | $ | 0.72 | $ | 0.56 | |||
| Dividends Declared Per Common Share | $ | 0.37 | $ | 0.29 | |||
| Weighted Average Common Shares Outstanding: | |||||||
| Basic | 315,129,782 | 178,055,716 | |||||
| Diluted | 316,002,538 | 178,437,453 | |||||
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) | ||||||||
| For the Three Months Ended March 31, | ||||||||
| (Thousands of Dollars) | 2013 | 2012 | ||||||
| Operating Activities: | ||||||||
| Net Income | $ | 229,968 | $ | 100,755 | ||||
|
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities: |
||||||||
| Depreciation | 154,977 | 80,839 | ||||||
| Deferred Income Taxes | 168,938 | 52,474 | ||||||
| Pension, SERP and PBOP Expense | 53,102 | 42,268 | ||||||
| Pension and PBOP Contributions | (47,048 | ) | (98,910 | ) | ||||
| Regulatory Over/(Under) Recoveries, Net | 39,218 | (27,569 | ) | |||||
| Amortization of Regulatory Assets, Net | 54,049 | 5,426 | ||||||
| Amortization of Rate Reduction Bonds | 34,499 | 18,347 | ||||||
| Proceeds from DOE Damages Claim | 77,936 | - | ||||||
| Other | (51,106 | ) | (5,484 | ) | ||||
| Changes in Current Assets and Liabilities: | ||||||||
| Receivables and Unbilled Revenues, Net | (129,431 | ) | 29,276 | |||||
| Fuel, Materials and Supplies | 28,487 | 30,108 | ||||||
| Taxes Receivable/Accrued, Net | (21,295 | ) | 11,758 | |||||
| Accounts Payable | (86,916 | ) | (190,232 | ) | ||||
| Other Current Assets and Liabilities, Net | (32,235 | ) | (40,240 | ) | ||||
| Net Cash Flows Provided by Operating Activities | 473,143 | 8,816 | ||||||
| Investing Activities: | ||||||||
| Investments in Property, Plant and Equipment | (388,950 | ) | (304,294 | ) | ||||
| Proceeds from Sales of Marketable Securities | 141,500 | 40,947 | ||||||
| Purchases of Marketable Securities | (233,429 | ) | (41,570 | ) | ||||
| Other Investing Activities | 33,966 | 2,448 | ||||||
| Net Cash Flows Used in Investing Activities | (446,913 | ) | (302,469 | ) | ||||
| Financing Activities: | ||||||||
| Cash Dividends on Common Shares | (116,431 | ) | (52,104 | ) | ||||
| Cash Dividends on Preferred Stock | (1,879 | ) | (1,390 | ) | ||||
| Increase/(Decrease) in Short-Term Debt | (228,000 | ) | 343,000 | |||||
| Issuance of Long-Term Debt | 400,000 | 300,000 | ||||||
| Retirements of Rate Reduction Bonds | (62,529 | ) | (17,903 | ) | ||||
| Other Financing Activities | (2,322 | ) | (1,130 | ) | ||||
| Net Cash Flows (Used in)/Provided by Financing Activities | (11,161 | ) | 570,473 | |||||
| Net Increase in Cash and Cash Equivalents | 15,069 | 276,820 | ||||||
| Cash and Cash Equivalents - Beginning of Period | 45,748 | 6,559 | ||||||
| Cash and Cash Equivalents - End of Period | $ | 60,817 | $ | 283,379 | ||||
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.
