10-QPeriod: Q1 FY2009

EVERSOURCE ENERGY Quarterly Report for Q1 Ended Mar 31, 2009

Filed May 8, 2009For Securities:ES

Summary

Eversource Energy (ES), operating as Northeast Utilities, reported improved financial results for the first quarter of 2009 compared to the same period in 2008. Net income attributable to controlling interests surged to $97.7 million ($0.60 per share) from $58.4 million ($0.38 per share) in Q1 2008. Excluding a significant litigation settlement charge in the prior year, adjusted earnings for Q1 2008 were $88.2 million ($0.57 per share). The company's regulated operations, comprising its electric and gas distribution and transmission segments, drove this performance, with transmission segment earnings notably higher due to increased investment in infrastructure. The company also successfully accessed capital markets, issuing common shares and bonds to fund its capital programs. Despite ongoing economic uncertainties, Eversource Energy maintained its full-year 2009 earnings guidance, albeit projecting to be at the lower end of the range.

Key Highlights

  • 1Net income attributable to controlling interests increased by 67% to $97.7 million ($0.60 per share) in Q1 2009, up from $58.4 million ($0.38 per share) in Q1 2008.
  • 2Regulated operations, particularly the transmission segment, showed strong performance, with earnings up due to increased infrastructure investment.
  • 3The company raised substantial capital in Q1 2009 through a common share issuance ($370.8 million net proceeds) and CL&P's bond issuance ($250 million), strengthening its liquidity.
  • 4Cash capital expenditures decreased year-over-year to $208.9 million from $288.1 million, primarily due to the completion of major transmission projects.
  • 5Eversource Energy reiterated its full-year 2009 earnings guidance of $1.80 to $2.00 per share, but anticipates results at the lower end of this range.
  • 6The company's credit ratings remain stable across major agencies (Moody's, S&P, Fitch) for NU Parent and its key subsidiaries.
  • 7Despite market volatility, the company believes it has adequate liquidity and access to funding sources to meet its capital investment needs.

Frequently Asked Questions

The improved financial performance was primarily driven by higher earnings from the company's regulated operations, particularly within the transmission segment, which benefited from increased infrastructure investment. Higher residential sales in the distribution segment also contributed positively.

Eversource Energy successfully accessed capital markets by issuing approximately $370.8 million in common shares and completing a $250 million bond issuance by its subsidiary, CL&P. These actions strengthened the company's liquidity and provided funding for its capital investment programs.

The company maintained its full-year 2009 earnings per share guidance of $1.80 to $2.00, but expects to achieve results at the lower end of this range. This guidance reflects ongoing economic uncertainties but assumes continued access to capital markets and recovery of costs through regulatory mechanisms.

Key regulatory matters include rate filings by PSNH for temporary distribution rate increases and recovery of storm costs, as well as ongoing reviews of transmission projects and energy initiatives in Connecticut, New Hampshire, and Massachusetts. While some legislative actions related to environmental standards and capital cost recovery were rejected, the company continues to monitor environmental regulations.