NU Reports Third Quarter Results

This is a test header.

---

HARTFORD, Conn.--(BUSINESS WIRE)-- Northeast Utilities (NYSE: NU) today reported earnings of $90 million, or $0.51 per share, in the third quarter of 2011, down from $100.5 million, or $0.57 per share, earned in the third quarter of 2010. Third quarter results for 2011 reflect after-tax expenses of $0.6 million associated with NU’s pending merger with NSTAR. Excluding those expenses, NU earned $90.6 million, or $0.51 per share1, in the third quarter of 2011.

NU attributed the lower operating results in the third quarter of 2011 to several factors, including a 2.1 percent decline in retail electric sales compared with the third quarter of 2010, which resulted from milder weather in the third quarter of 2011 and the impact of Tropical Storm Irene. Lower results also reflect higher pension and other employee benefit costs in the third quarter of 2011, as well as a higher effective tax rate in the third quarter of 2011, compared with the third quarter of 2010.

Transmission

NU’s transmission segment earned $41.5 million in the third quarter of 2011, compared with $45.2 million in the third quarter of 2010. Lower third quarter 2011 earnings primarily reflect a higher effective tax rate and certain higher employee benefit costs, partially offset by a higher transmission rate base.

Distribution and Generation

NU’s distribution and generation segment earned $55 million in the third quarter of 2011, compared with $55.7 million in the third quarter of 2010. The Connecticut Light and Power Company’s (CL&P) distribution segment earned $34.6 million in the third quarter of 2011, compared with $31.5 million in the third quarter of 2010. Public Service Company of New Hampshire’s (PSNH) distribution and generation segment earned $20.6 million in the third quarter of 2011, compared with $23.4 million in the third quarter of 2010.

Western Massachusetts Electric Company’s (WMECO) distribution and generation segment earned $2.8 million in the third quarter of 2011, compared with $3.7 million in the third quarter of 2010. Lower third quarter 2011 results were due to a $3.2 million non-recurring charge to establish a billing adjustment reserve, as well as higher depreciation expense.

Yankee Gas Services Company lost $3 million in the third quarter of 2011, compared with a loss of $2.9 million in the third quarter of 2010. On a weather-adjusted basis, Yankee Gas’ firm natural gas sales in 2011 were up 5.2 percent in the third quarter, compared with the same period of 2010. The sales increases were due in large part to more conversions by commercial and industrial customers from interruptible to firm service and increased use of distributed generation fueled by natural gas.

NU parent and other companies

NU parent and other companies had net after-tax expenses of $6.5 million in the third quarter of 2011, compared with after-tax expenses of $0.4 million in the third quarter of 2010. Third quarter 2011 results include $0.6 million of after-tax expenses related to NU’s pending merger with NSTAR. Excluding merger expenses, NU parent and other companies recorded net expenses of $5.9 million in the third quarter of 2011. No merger expenses were recorded in the third quarter of 2010.

2011 earnings guidance

NU today reiterated its 2011 stand-alone full-year consolidated earnings guidance of between $2.30 per share1 and $2.40 per share1, excluding projected after-tax expenses of approximately $0.20 per share related to the NSTAR merger. Including the merger expenses, NU projects earnings of between $2.10 per share and $2.20 per share. Those estimates reflect distribution and generation segment earnings guidance of between $1.30 per share1 and $1.35 per share1, transmission segment earnings guidance of between $1.05 per share1 and $1.10 per share1, and NU parent and other companies net expenses of $0.05 per share1, excluding merger expenses.

The following table reconciles 2011 and 2010 third-quarter results.

						Third Quarter
2010			Reported EPS			$0.57
			Change in transmission earnings in 2011			($0.03	)
			Change in distribution and generation earnings in2011			---
			Change in Parent/Other results in 2011, excludingmerger expenses			($0.03	)
			Merger expenses			---
2011			Reported EPS			$0.51

Financial results for the third quarter and first nine months of 2011 and 2010 are noted below:

Three months ended:
(in millions, except EPS)			September 30, 2011				September 30, 2010				Increase/(Decrease)				2011 EPS1
CL&P Distribution			$34.6				$31.5				$3.1				$0.19
PSNH Distribution/Generation			$20.6				$23.4				($2.8	)			$0.12
WMECO Distribution/Generation			$2.8				$3.7				($0.9	)			$0.02
Yankee Gas			($3.0	)			($2.9	)			($0.1	)			($0.02	)
Total—Distribution/Generation			$55.0				$55.7				($0.7	)			$0.31
CL&P Transmission			$30.5				$36.1				($5.6	)			$0.17
PSNH Transmission			$5.1				$5.3				($0.2	)			$0.03
WMECO Transmission			$5.6				$3.7				$1.9				$0.03
NU Transmission Ventures			$0.3				$0.1				$0.2				---
Total—Transmission			$41.5				$45.2				($3.7	)			$0.23
Total—Regulated			$96.5				$100.9				($4.4	)			$0.54
NU Parent and Other Companies,excluding merger expenses			($5.9	)			($0.4	)			($5.5	)			($0.03	)
Merger expenses			($0.6	)			---				($0.6	)			---
Reported Earnings			$90.0				$100.5				($10.5	)			$0.51

Nine months ended:
(in millions, except EPS)			September 30, 2011				September 30, 2010			Increase/(Decrease)				2011 EPS1
CL&P Distribution			$82.2				$54.2			$28.0				$0.46
PSNH Distribution/Generation			$58.1				$51.5			$6.6				$0.33
WMECO Distribution/Generation			$12.5				$8.9			$3.6				$0.07
Yankee Gas			$20.7				$16.1			$4.6				$0.12
Total—Distribution/Generation			$173.5				$130.7			$42.8				$0.98
CL&P Transmission			$97.2				$103.1			($5.9	)			$0.55
PSNH Transmission			$16.6				$14.7			$1.9				$0.09
WMECO Transmission			$14.1				$9.4			$4.7				$0.08
NU Transmission Ventures			$0.5				$0.1			$0.4				---
Total—Transmission			$128.4				$127.3			$1.1				$0.72
Total—Regulated			$301.9				$258.0			$43.9				$1.70
NU Parent and Other Companies,excluding merger expenses			($10.4	)			$0.7			($11.1	)			($0.06	)
Merger expenses			($10.1	)			---			($10.1	)			($0.06	)
Reported Earnings			$281.4				$258.7			$22.7				$1.58

Retail sales data:
Gwh for three months ended			September 30, 2011			September 30, 2010			% ChangeActual				% ChangeWeather Norm.
CL&P			6,159			6,293			(2.1	)			2.3
PSNH			2,091			2,147			(2.6	)			2.3
WMECO			999			1,009			(1.1	)			2.6
Total NU			9,246			9,444			(2.1	)			2.3
Gwh for nine months ended
CL&P			17,185			17,221			(0.2	)			0.4
PSNH			5,924			5,934			(0.2	)			0.6
WMECO			2,817			2,818			0.0				0.5
Total NU			25,917			25,961			(0.2	)			0.5
Yankee Gas firm volumes in mmcffor three months ended			6,351			6,031			5.3				5.2
Yankee Gas firm volumes in mmcffor nine months ended			34,215			29,560			15.7				6.3

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. In addition, earnings per share excluding merger expenses is a non-GAAP measure. Management believes that these measures are 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 third quarter 2011 results and other financial topics on Monday, November 7, 2011 at 7 a.m. Eastern Time. The webcast can be accessed through NU’s website at www.nu.com.

NORTHEAST UTILITIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
		September 30,			December 31,
(Thousands of Dollars)			2011			2010
ASSETS
Current Assets:
Cash and Cash Equivalents		$	16,721		$	23,395
Receivables, Net			494,552			523,644
Unbilled Revenues			138,110			208,834
Taxes Receivable			203			89,638
Fuel, Materials and Supplies			237,794			244,043
Regulatory Assets			235,460			238,699
Marketable Securities			74,525			78,306
Prepayments and Other Current Assets			130,010			100,441
Total Current Assets			1,327,375			1,507,000
Property, Plant and Equipment, Net			10,096,063			9,567,726
Deferred Debits and Other Assets:
Regulatory Assets			2,706,053			2,756,580
Goodwill			287,591			287,591
Marketable Securities			52,181			51,201
Derivative Assets			91,430			123,242
Other Long-Term Assets			168,024			179,261
Total Deferred Debits and Other Assets			3,305,279			3,397,875
Total Assets		$	14,728,717		$	14,472,601
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)
		September 30,				December 31,
(Thousands of Dollars)			2011				2010
LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable to Banks		$	30,000			$	267,000
Long-Term Debt - Current Portion			334,327				66,286
Accounts Payable			476,214				417,285
Obligations to Third Party Suppliers			77,760				74,659
Accrued Taxes			115,285				107,067
Accrued Interest			77,319				74,740
Regulatory Liabilities			174,562				99,403
Derivative Liabilities			110,653				71,501
Other Current Liabilities			139,187				167,206
Total Current Liabilities			1,535,307				1,345,147
Rate Reduction Bonds			130,374				181,572
Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes			1,814,976				1,636,750
Regulatory Liabilities			276,222				339,655
Derivative Liabilities			909,252				909,668
Accrued Pension			701,993				802,195
Other Long-Term Liabilities			671,046				695,915
Total Deferred Credits and Other Liabilities			4,373,489				4,384,183
Capitalization:
Long-Term Debt			4,614,697				4,632,866
Noncontrolling Interest in Consolidated Subsidiary:
Preferred Stock Not Subject to Mandatory Redemption			116,200				116,200
Equity:
Common Shareholders' Equity:
Common Shares			980,054				978,909
Capital Surplus, Paid In			1,792,593				1,777,592
Retained Earnings			1,587,528				1,452,777
Accumulated Other Comprehensive Loss			(55,214	)			(43,370	)
Treasury Stock			(348,764	)			(354,732	)
Common Shareholders' Equity			3,956,197				3,811,176
Noncontrolling Interests			2,453				1,457
Total Equity			3,958,650				3,812,633
Total Capitalization			8,689,547				8,561,699
Total Liabilities and Capitalization		$	14,728,717			$	14,472,601
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)			2011			2010			2011			2010
Operating Revenues		$	1,114,892		$	1,243,337		$	3,397,624		$	3,694,182
Operating Expenses:
Fuel, Purchased and Net Interchange Power			399,941			494,125			1,214,350			1,539,703
Other Operating Expenses			237,576			233,472			752,372			688,409
Maintenance			58,949			49,951			205,538			162,405
Depreciation			75,196			70,954			222,784			228,685
Amortization of Regulatory Assets, Net			36,740			50,341			88,409			50,908
Amortization of Rate Reduction Bonds			17,680			60,434			52,047			175,000
Taxes Other Than Income Taxes			84,994			84,427			252,817			244,431
Total Operating Expenses			911,076			1,043,704			2,788,317			3,089,541
Operating Income			203,816			199,633			609,307			604,641
Interest Expense:
Interest on Long-Term Debt			57,461			57,802			171,905			173,594
Interest on Rate Reduction Bonds			2,018			4,661			6,889			16,985
Other Interest			4,453			3,435			5,922			9,778
Interest Expense			63,932			65,898			184,716			200,357
Other Income, Net			1,430			10,118			19,077			19,726
Income Before Income Tax Expense			141,314			143,853			443,668			424,010
Income Tax Expense			49,883			41,918			157,934			161,126
Net Income			91,431			101,935			285,734			262,884
Net Income Attributable to Noncontrolling Interests			1,470			1,411			4,340			4,204
Net Income Attributable to Controlling Interests		$	89,961		$	100,524		$	281,394		$	258,680
Basic Earnings Per Common Share		$	0.51		$	0.57		$	1.59		$	1.47
Diluted Earnings Per Common Share		$	0.51		$	0.57		$	1.58		$	1.46
Dividends Declared Per Common Share		$	0.28		$	0.26		$	0.83		$	0.77
Weighted Average Common Shares Outstanding:
Basic			177,497,862			176,752,714			177,344,481			176,557,889
Diluted			177,835,348			177,012,278			177,647,694			176,762,088
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)			2011				2010
Operating Activities:
Net Income		$	285,734			$	262,884
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Bad Debt Expense			12,435				24,632
Depreciation			222,784				228,685
Deferred Income Taxes			133,528				105,070
Pension and PBOP Expense			103,106				74,744
Pension and PBOP Contributions			(159,220	)			(78,035	)
Regulatory (Underrecoveries)/Overrecoveries, Net			(26,001	)			44,479
Amortization of Regulatory Assets, Net			88,409				50,908
Amortization of Rate Reduction Bonds			52,047				175,000
Derivative Assets and Liabilities			(33,767	)			(9,228	)
Other			(14,802	)			(46,190	)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net			61,657				20,905
Fuel, Materials and Supplies			(4,072	)			33,337
Taxes Receivable/Accrued			109,410				(12,904	)
Accounts Payable			66,618				(59,601	)
Other Current Assets and Liabilities			(9,419	)			28,961
Net Cash Flows Provided by Operating Activities			888,447				843,647
Investing Activities:
Investments in Property, Plant and Equipment			(749,060	)			(677,579	)
Proceeds from Sales of Marketable Securities			116,463				146,305
Purchases of Marketable Securities			(118,251	)			(148,075	)
Proceeds from Sale of Assets			46,841				-
Other Investing Activities			(5,849	)			(10,412	)
Net Cash Flows Used in Investing Activities			(709,856	)			(689,761	)
Financing Activities:
Cash Dividends on Common Shares			(145,865	)			(135,349	)
Cash Dividends on Preferred Stock			(4,169	)			(4,169	)
(Decrease)/Increase in Short-Term Debt			(237,000	)			55,687
Issuance of Long-Term Debt			382,000				145,000
Retirements of Long-Term Debt			(124,086	)			(4,286	)
Retirements of Rate Reduction Bonds			(51,198	)			(195,724	)
Other Financing Activities			(4,947	)			(818	)
Net Cash Flows Used in Financing Activities			(185,265	)			(139,659	)
Net (Decrease)/Increase in Cash and Cash Equivalents			(6,674	)			14,227
Cash and Cash Equivalents - Beginning of Period			23,395				26,952
Cash and Cash Equivalents - End of Period		$	16,721			$	41,179
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 UtilitiesJeffrey R. Kotkin, 860-728-4650

Source: Northeast Utilities

---

Are you missing key trading opportunities? Upgrade to StreetInsider Premium and get a step ahead of the market - FREE TRIAL!