NU Reports Year-End 2012 Results

  NU Reports Year-End 2012 Results

Business Wire

BOSTON & HARTFORD, Conn. -- February 19, 2013

Northeast Utilities (NYSE: NU) today reported full-year 2012 earnings of
$525.9 million, or $1.89 per share, compared with earnings of $394.7 million
in 2011. Excluding costs related to the April 2012 merger of NU and NSTAR and
related settlement costs, NU earned $633.5 million in 2012, or $2.28 per
share^1. Excluding merger-related costs and a storm fund reserve, NU earned
$423.9 million in 2011. NSTAR’s earnings are included in NU’s results of
operations, effective as of April 2012.

In the fourth quarter of 2012, NU earned $174.7 million, or $0.55 per share,
compared with earnings of $113.3 million in the fourth quarter of 2011.
Results in the fourth quarter of 2012 include after-tax merger-related costs
of $2.1 million, or $0.01 per share. Results in the fourth quarter of 2011
include $19.1 million of after-tax merger-related costs and a storm fund
reserve.

Thomas J. May, NU president and chief executive officer, said, “These
full-year financial results are consistent with our previously announced 2012
recurring earnings guidance of between $2.25 and $2.30 per share^1 and cap a
very successful year for our newly merged company.”

May said NU’s efforts to build a premier New-England-based, highly
customer-focused organization are well under way. “We continue to identify and
implement the best practices of our legacy companies,” May said. “Our 9,000
employees come to work each day, with a singular focus on delivering superior
service to our 3.5 million electric and natural gas customers, which will
allow us to continue to provide attractive returns and dividend growth for our
shareholders.”

2013 Earnings Guidance Affirmed

Also today, NU affirmed its 2013 earnings guidance of between $2.40 per share
and $2.60 per share, as well as its longer term earnings per share growth rate
of 6 percent to 9 percent, using the $2.28 per share earned in 2012 as the
base year.

Electric Transmission

NU’s transmission segment earned $249.7 million for the full year of 2012 and
$68.6 million in the fourth quarter of 2012, compared with earnings of $199.6
million for the full year of 2011 and $71.2 million in the fourth quarter of
2011. The earnings improvement for the full year primarily represents
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. Lower fourth
quarter results primarily reflect a higher effective tax rate in 2012 than in
2011.

Electric Distribution and Generation

NU’s electric distribution and generation segment earned $343.4 million for
the full year of 2012, excluding merger and related settlement costs, compared
with $207 million for the full year of 2011, excluding a $17.9 million
after-tax storm fund reserve at The Connecticut Light and Power Company
(CL&P). In the fourth quarter of 2012, the electric distribution and
generation segment earned $80.3 million, compared with earnings of $54.2
million in the fourth quarter of 2011. Fourth quarter 2011 results exclude the
aforementioned CL&P storm reserve.

The distribution and generation segment results benefited in the fourth
quarter and full-year 2012 from the addition of NSTAR Electric distribution
results, effective in April 2012.

Earnings of Electric Utility Subsidiaries (net of preferred dividends)

CL&P earned $242.6 million for the full year of 2012, excluding $38.4 million
of after-tax merger and related settlement costs, and $72.5 million in the
fourth quarter of 2012. It earned $262.5 million for the full year of 2011 and
$83.1 million in the fourth quarter of 2011, excluding the $17.9 million storm
fund reserve. Lower results reflect a higher effective tax rate and higher
pension, tree trimming and system maintenance costs, partially offset by a
higher transmission rate base.

NSTAR Electric earned $195.7 million for the last three quarters of 2012 and
$33.7 million in the fourth quarter of 2012. Results for the last three
quarters of 2012 exclude $10.9 million of after-tax merger and related
settlement costs.

Public Service Company of New Hampshire earned $96.9 million for the full year
of 2012 and $27.2 million in the fourth quarter of 2012, compared with $100.3
million for the full year of 2011 and $25.5 million in the fourth quarter of
2011. Lower full-year 2012 results were due primarily to higher depreciation,
property tax and income tax expense, while higher fourth quarter 2012 results
were due in part to higher transmission investment levels and a change in
distribution rates effective in the second half of 2012.

Western Massachusetts Electric Company (WMECO) earned $56.3 million for the
full year of 2012 and $15.1 million in the fourth quarter of 2012, compared
with earnings of $43.1 million for the full year of 2012 and $16.5 million in
the fourth quarter of 2011. Full-year 2012 results exclude $1.8 million of
after-tax merger and related settlement costs. WMECO’s 2012 results 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 93 percent complete as of the end of 2012.

Natural Gas Distribution

NU’s natural gas distribution segment, which now includes both Yankee Gas
Services Company and NSTAR Gas Company, earned $32.9 million for the full year
of 2012 and $22.5 million in the fourth quarter of 2012. In 2011, Yankee Gas
earned $31.7 million for the full year and $11 million in the fourth quarter.
NSTAR Gas results are reflected from the date of the merger. Improved fourth
quarter results reflect the addition of NSTAR Gas, as well as colder weather
in the fourth quarter of 2012, compared with the fourth quarter of 2011.

NU parent and other companies

Excluding $54.4 million of after-tax merger and related settlement costs, NU
parent and other companies earned $7.5 million for the full year of 2012,
compared with net expenses of $14.4 million for the full year of 2011,
excluding $11.3 million of merger-related costs. In the fourth quarter of
2012, NU parent and other companies earned $5.4 million, excluding $2 million
of after-tax merger-related costs. In the fourth quarter of 2011, NU parent
and other companies recorded net expenses of $4 million, excluding $1.2
million of after-tax merger-related costs. The improvements were driven by a
number of factors, including the addition of earnings from NSTAR
Communications, Inc. from the date of the merger, as well as lower interest
expense.

The following table reconciles earnings per share for the fourth-quarter and
year ended December 31, 2012 and 2011.

                                            Fourth Quarter   Full Year
2011   Reported EPS                           $0.64            $2.22
      2011 merger-related charges            $0.00            $0.06
      2011 CL&P storm fund                   $0.10            $0.10
      2011 EPS before merger and storm       $0.74            $2.38
         charges
      Higher outstanding common shares       ($0.33)          ($0.87)
         Higher/(lower) NU legacy
      transmission earnings                  ($0.10)          $0.03

         in 2012
      Higher/(lower) NU legacy electric      $0.00            ($0.03)
         sales in 2012
         Higher/(lower) NU legacy firm
      natural gas sales                      $0.02            ($0.01)

         in 2012
      Higher legacy NU O&M, depreciation     ($0.06)          ($0.15)
         and property taxes
         NSTAR earnings in 2012; higher NU
      Parent                                 $0.29            $0.93

         and Other in 2012
         2012 EPS before merger-related
      settlements                            $0.56            $2.28

         and other merger-related charges
      2012 merger and related settlement     ($0.01)          ($0.39)
         charges
2012   Reported EPS                           $0.55            $1.89

Financial results for the fourth quarter and full-year period ended December
31, 2012 and 2011 are noted below:

Three months ended:

                            December      December
(in millions, except      31,         31,          Increase/    2012 EPS^1
EPS)                                      2011           (Decrease)
                            2012
Electric                  $ 80.3     $ 54.2      $  26.1     $ 0.25   
Distribution/Generation
Natural Gas               $ 22.5     $ 11.0      $  11.5     $ 0.07   
Distribution
Electric Transmission     $ 68.6     $ 71.2        ($2.6 )   $ 0.22   
NU Parent and Other
Companies,                $ 5.4       ($4.0  )   $  9.4      $ 0.02   

ex. merger expenses
Earnings, ex. merger      $ 176.8    $ 132.4     $  44.4     $ 0.56   
impacts
Merger impacts             ($2.1 )    ($1.2  )     ($0.9 )    ($0.01 )
CL&P storm fund            ---       ($17.9 )   $  17.9      ---    
Reported Earnings         $ 174.7    $ 113.3     $  61.4     $ 0.55   

12 months ended:

(in millions, except         December        December       Increase/
EPS)                       31,           31,          (Decrease)   2012 EPS^1
                             2012            2011
Electric
Distribution/Generation,
                                                                      
ex. rate credits and                                                     
storm costs                  $ 343.4         $ 207.0        $ 136.4        $ 1.23

write-down
Natural Gas
Distribution, ex. rate     $ 32.9       $ 31.7      $ 1.2       $ 0.12   

Credits
Electric Transmission      $ 249.7      $ 199.6     $ 50.1      $ 0.90   
NU Parent and Other
Companies,                 $ 7.5         ($14.4 )   $ 21.9      $ 0.03   

ex. merger costs
Earnings, ex. merger       $ 633.5      $ 423.9     $ 209.6     $ 2.28   
impacts
Merger impacts              ($107.6 )    ($11.3 )    ($96.3 )    ($0.39 )
CL&P storm fund             ---         ($17.9 )   $ 17.9       ---    
Reported Earnings          $ 525.9      $ 394.7     $ 131.2     $ 1.89   

Retail sales data:

                              December     December     % Change     % Change
                           31,        31,        Actual     Weather
                              2012         2011                      Norm.
Electric distribution                                     
Gwh for three months        13,111     12,958     1.2   %    0.0   %
ended*
Gwh for 12 months ended*    54,808     55,314     (0.9  %)   (0.2  %)
                                                         
Natural Gas Distribution                                  
Firm volumes in mmcf for
three                       27,492     24,955     10.2  %    2.4   %

months ended**
Firm volumes in mmcf for
12                          87,527     92,363     (5.2  %)   2.7   %

months ended**

* 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 314 million common shares outstanding. It operates New
England’s largest energy delivery system, serving more than 3.5 million
customers in Connecticut, Massachusetts and New Hampshire.

Note: NU will webcast a conference call with senior management on February 20,
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, fourth quarter and full year 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 fourth
quarter and full year 2012 and 2011 results without including the impact of
the non-recurring merger and related settlement 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, 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
possibility that expected merger synergies will not be realized or will not be
realized within the expected time period; and other presently unknown or
unforeseen factors. Other risk factors are detailed from time to time 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.

                                                                             
                                                                             
NORTHEAST UTILITIES AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
                                                        
                                             As of December 31,
(Thousands of Dollars)                   2012            2011
                                                                             
ASSETS
                                                                             
Current Assets:
Cash and Cash Equivalents                    $ 45,748           $ 6,559
Receivables, Net                               792,822            488,002
Unbilled Revenues                              216,040            175,207
Fuel, Materials and Supplies                   267,713            248,958
Regulatory Assets                              705,025            255,144
Marketable Securities                          91,975             70,970
Prepayments and Other Current Assets          107,972           112,632
Total Current Assets                          2,227,295         1,357,472
                                                                             
Property, Plant and Equipment, Net            16,605,010        10,403,065
                                                                             
Deferred Debits and Other Assets:
Regulatory Assets                              5,132,411          3,267,710
Goodwill                                       3,519,401          287,591
Marketable Securities                          400,329            60,311
Derivative Assets                              90,612             98,357
Other Long-Term Assets                        327,766           172,560
Total Deferred Debits and Other               9,470,519         3,886,529
Assets
                                                                             
                                                                             
Total Assets                                 $ 28,302,824       $ 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
CONSOLIDATED BALANCE SHEETS
(Unaudited)
                                                                             
                                     As of December 31,
(Thousands of Dollars)               2012              2011
                                                          
LIABILITIES AND CAPITALIZATION
                                                                             
Current Liabilities:
Notes Payable                            $ 1,120,196          $ 317,000
Long-Term Debt - Current Portion           763,338              331,582
Accounts Payable                           764,350              633,282
Regulatory Liabilities                     134,115              167,844
Derivative Liabilities                     117,194              107,558
Other Current Liabilities                 744,497            390,416    
Total Current Liabilities                 3,643,690          1,947,682  
                                                                             
Rate Reduction Bonds                      82,139             112,260    
                                                                             
Deferred Credits and Other
Liabilities:
Accumulated Deferred Income                3,463,347            1,868,316
Taxes
Regulatory Liabilities                     540,162              266,145
Derivative Liabilities                     882,654              959,876
Accrued Pension, SERP and PBOP             2,130,497            1,326,037
Other Long-Term Liabilities               967,561            420,011    
Total Deferred Credits and Other          7,984,221          4,840,385  
Liabilities
                                                                             
Capitalization:
Long-Term Debt                            7,200,156          4,614,913  
                                                                             
Noncontrolling Interest -                 155,568            116,200    
Preferred Stock of Subsidiaries
                                                                             
Equity:
Common Shareholders' Equity:
Common Shares                              1,662,547            980,264
Capital Surplus, Paid In                   6,183,267            1,797,884
Retained Earnings                          1,802,714            1,651,875
Accumulated Other Comprehensive            (72,854    )         (70,686    )
Loss
Treasury Stock                            (338,624   )        (346,667   )
Common Shareholders' Equity                9,237,050            4,012,670
Noncontrolling Interests                  -                  2,956      
Total Equity                              9,237,050          4,015,626  
Total Capitalization                      16,592,774         8,746,739  
                                                                             
                                                                             
Total Liabilities and                    $ 28,302,824        $ 15,647,066 
Capitalization
                                                                             

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

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)
                                
                                     For the Three Months Ended December 31,
(Thousands of Dollars,           2012                   2011
Except Share Information)
                                                           
Operating Revenues                   $  1,683,952             $ 1,068,033
                                                                             
Operating Expenses:
Purchased Power, Fuel and               544,254                  372,431
Transmission
Operations and Maintenance              395,600                  306,484
Depreciation                            149,212                  79,408
Amortization of Regulatory              4,910                    4,427
Assets, Net
Amortization of Rate                    39,875                   17,865
Reduction Bonds
Energy Efficiency Programs              104,060                  31,757
Taxes Other Than Income                114,648                70,792
Taxes
Total Operating Expenses               1,352,559              883,164
Operating Income                        331,393                  184,869
                                                                             
Interest Expense:
Interest on Long-Term Debt              83,636                   59,725
Interest on Rate Reduction              1,000                    1,722
Bonds
Other Interest                         (547         )          4,262
Interest Expense                        84,089                   65,709
Other Income, Net                      4,838                  8,638
Income Before Income Tax                252,142                  127,798
Expense
Income Tax Expense                     75,547                 13,019
Net Income                              176,595                  114,779
Net Income Attributable to             1,879                  1,480
Noncontrolling Interests
Net Income Attributable to           $  174,716               $ 113,299
Controlling Interest
                                                                             
Basic and Diluted Earnings           $  0.55                  $ 0.64
Per Common Share
                                                                             
Dividends Declared Per               $  0.34                  $ 0.28
Common Share
                                                                             
Weighted Average Common
Shares Outstanding:
Basic                                  314,929,366            177,645,092
Diluted                                315,914,389            178,093,879
                                                                             

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
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
                                                                             
                  For the Years Ended December 31,
(Thousands of
Dollars,          2012             2011             2010
Except Share
Information)
                                                      
Operating            $ 6,273,787         $ 4,465,657         $ 4,898,167   
Revenues
                                                                             
Operating
Expenses:
Purchased
Power, Fuel            2,084,364           1,657,914           2,034,501
and
Transmission
Operations and         1,583,070           1,095,358           1,001,349
Maintenance
Depreciation           519,010             302,192             300,737
Amortization
of Regulatory          79,762              91,080              90,054
Assets, Net
Amortization
of Rate                142,019             69,912              232,871
Reduction
Bonds
Energy
Efficiency             313,149             131,415             124,023
Programs
Taxes Other
Than Income           434,207            323,610            314,741     
Taxes
Total
Operating             5,155,581          3,671,481          4,098,276   
Expenses
Operating              1,118,206           794,176             799,891
Income
                                                                             
Interest
Expense:
Interest on            316,987             231,630             231,089
Long-Term Debt
Interest on
Rate Reduction         6,168               8,611               20,573
Bonds
Other Interest        6,790              10,184             (14,371     )
Interest               329,945             250,425             237,291
Expense
Other Income,         19,742             27,715             41,916      
Net
Income Before
Income Tax             808,003             571,466             604,516
Expense
Income Tax            274,926            170,953            210,409     
Expense
Net Income             533,077             400,513             394,107
Net Income
Attributable
to                    7,132              5,820              6,158       
Noncontrolling
Interests
Net Income
Attributable         $ 525,945           $ 394,693           $ 387,949     
to Controlling
Interest
                                                                             
Basic Earnings
Per Common           $ 1.90              $ 2.22              $ 2.20        
Share
                                                                             
Diluted
Earnings Per         $ 1.89              $ 2.22              $ 2.19        
Common Share
                                                                             
Weighted
Average Common
Shares
Outstanding:
Basic                 277,209,819        177,410,167        176,636,086 
Diluted               277,993,631        177,804,568        176,885,387 
                                                                             

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
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
                                                        
                          For the Years Ended December 31,
(Thousands of          2012             2011             2010
Dollars)
                                                                              
Operating
Activities:
Net Income                $ 533,077          $ 400,513          $ 394,107
Adjustments to
Reconcile Net
Income to Net Cash
Flows
Provided by
Operating
Activities:
Bad Debt Expense            36,275             16,420             31,352
Depreciation                519,010            302,192            300,737
Deferred Income             292,000            196,761            210,939
Taxes
Pension, SERP and           218,540            133,000            103,861
PBOP Expense
Pension and PBOP            (295,028   )       (191,101   )       (90,633   )
Contributions
Regulatory
(Under)/Over                (259,853   )       (70,863    )       26,289
Recoveries, Net
Amortization of
Regulatory Assets,          79,762             91,080             90,054
Net
Amortization of
Rate Reduction              142,019            69,912             232,871
Bonds
Derivative Assets           (10,455    )       (35,441    )       (11,812   )
and Liabilities
Other                       17,032             (29,751    )       (72,151   )
Changes in Current
Assets and
Liabilities:
Receivables and
Unbilled Revenues,          (20,214    )       17,570             (51,285   )
Net
Fuel, Materials and         34,321             (11,033    )       38,126
Supplies
Taxes
Receivable/Accrued,         (5,450     )       49,642             (82,103   )
Net
Accounts Payable            (128,339   )       18,916             (44,355   )
Other Current
Assets and                 8,532            12,569           17,466    
Liabilities, Net
Net Cash Flows
Provided by                1,161,229        970,386          1,093,463 
Operating
Activities
                                                                              
Investing
Activities:
Investments in
Property, Plant and         (1,472,272 )       (1,076,730 )       (954,472  )
Equipment
Proceeds from Sales
of Marketable               317,294            149,441            174,865
Securities
Purchases of
Marketable                  (348,629   )       (151,972   )       (177,204  )
Securities
Proceeds from Sale          -                  46,841             -
of Assets
Other Investing            35,683           13,833           (1,157    )
Activities
Net Cash Flows Used
in Investing               (1,467,924 )      (1,018,587 )      (957,968  )
Activities
                                                                              
Financing
Activities:
Cash Dividends on           (375,047   )       (194,555   )       (180,542  )
Common Shares
Cash Dividends on           (7,029     )       (5,559     )       (5,559    )
Preferred Stock
Increase in                 825,000            50,000             166,687
Short-Term Debt
Issuance of                 850,000            627,500            145,000
Long-Term Debt
Retirements of              (839,136   )       (369,586   )       (4,286    )
Long-Term Debt
Retirements of Rate         (114,433   )       (69,312    )       (260,864  )
Reduction Bonds
Other Financing            6,529            (7,123     )      512       
Activities
Net Cash Flows
Provided by/(Used          345,884          31,365           (139,052  )
in) Financing
Activities
Net
Increase/(Decrease)         39,189             (16,836    )       (3,557    )
in Cash and Cash
Equivalents
Cash and Cash
Equivalents -              6,559            23,395           26,952    
Beginning of Year
Cash and Cash
Equivalents - End         $ 45,748          $ 6,559           $ 23,395    
of Year
                                                                              

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.

Contact:

Northeast Utilities
Jeffrey R. Kotkin, 860-728-4650
 
Press spacebar to pause and continue. Press esc to stop.