10-QPeriod: Q1 FY2011

EVERSOURCE ENERGY Quarterly Report for Q1 Ended Mar 31, 2011

Filed May 6, 2011For Securities:ES

Summary

Eversource Energy (ES), formerly Northeast Utilities, filed its first quarter 2011 10-Q report on May 6, 2011. The report highlights a significant increase in net income attributable to controlling interests, rising to $114.2 million ($0.64 per share) from $86.2 million ($0.49 per share) in the prior year's quarter. This improvement was driven by favorable rate case decisions across its regulated utility subsidiaries (CL&P, PSNH, WMECO), colder weather conditions boosting energy sales, and increased earnings from the transmission segment. The company also affirmed its full-year 2011 earnings guidance, signaling continued operational strength. A major development discussed is the proposed merger with NSTAR, which shareholders of both companies approved by March 2011. The transaction is structured as a merger of equals, with Eversource Energy shareholders expected to own approximately 56% of the combined entity post-merger. Regulatory approvals remain a key hurdle, with various state commissions in Massachusetts, Connecticut, New Hampshire, and Maine providing differing opinions on jurisdiction and approving the merger. The integration of NSTAR is anticipated to lead to substantial cost savings and potential dividend increases.

Financial Highlights

25 data points
Beta

Revenue

$1.24B

Net Income

$115.60M

9.4% Net Margin

EPS (Diluted)

$0.64

Total Assets

$14.42B

Cash & Equivalents

$15.36M

Free Cash Flow

$136.08M

Financial Statements
Beta
Revenue$1.24B
Operating Expenses$1.01B
Operating Income$227.40M
Interest Expense$58.55M
Net Income$115.60M
EPS (Basic)$0.64
Shares Outstanding (Basic)177.19M
Shares Outstanding (Diluted)177.48M

Key Highlights

  • 1Net income attributable to controlling interests increased by 32.4% to $114.2 million ($0.64 per share) in Q1 2011, compared to $86.2 million ($0.49 per share) in Q1 2010.
  • 2Revenue growth was observed across most segments, with operating revenues totaling $1.24 billion in Q1 2011, a slight decrease from $1.34 billion in Q1 2010, largely due to lower fuel costs.
  • 3The company affirmed its 2011 full-year EPS guidance of $2.25 to $2.40 per share, excluding anticipated merger-related costs.
  • 4The proposed merger with NSTAR received shareholder approval from both companies by March 2011, with the transaction expected to close in the second half of 2011.
  • 5Capital expenditures increased to $236.7 million in Q1 2011 from $202.5 million in Q1 2010, reflecting ongoing investments in infrastructure and regulated projects like NEEWS.
  • 6Eversource Energy (formerly Northeast Utilities) is actively managing its regulatory environment, with several rate cases settled or pending across its operating subsidiaries in Connecticut, Massachusetts, and New Hampshire.

Frequently Asked Questions

Both Eversource Energy (formerly Northeast Utilities) and NSTAR shareholders approved the merger agreement by March 2011. The transaction is structured as a merger of equals, expected to close in the second half of 2011. Key regulatory approvals from various state commissions are still pending, with some showing differing opinions on jurisdiction and approval conditions. The combined entity is projected to deliver significant customer benefits and cost savings.

The company reported a substantial increase in net income attributable to controlling interests, rising to $114.2 million ($0.64 per share) from $86.2 million ($0.49 per share) in the first quarter of 2010. This improvement was driven by rate case decisions, colder weather, and increased transmission segment earnings. Operating revenues saw a slight decrease primarily due to lower fuel costs, but core business performance remained strong.

Eversource Energy is making significant investments in infrastructure, with capital expenditures totaling $236.7 million in Q1 2011. Major projects include the NEEWS (New England East-West Solution) initiative, involving several large transmission line constructions like GSRP, Interstate Reliability Project, and Central Connecticut Reliability Project. The Northern Pass transmission project, a joint venture, is also a significant undertaking with an estimated total cost of approximately $1.1 billion.

Eversource Energy reaffirmed its full-year 2011 earnings per share guidance between $2.25 and $2.40, excluding merger-related costs. This outlook is supported by expected earnings from its regulated distribution and transmission segments and assumes successful outcomes in ongoing rate cases. The company projects approximately $1.2 billion in capital expenditures for its regulated utilities in 2011.