8-KOther Events

EVERSOURCE ENERGY 8-K Report (Jan 23, 2002)

Filed January 23, 2002For Securities:ES

Summary

Northeast Utilities (NU) reported a significant turnaround in its financial performance for the fourth quarter and full year of 2001 compared to 2000. The company posted a net income of $50.0 million ($0.38 per share) in Q4 2001, a substantial improvement from a loss of $180.9 million ($1.26 per share) in Q4 2000. For the full year 2001, NU generated $243.5 million ($1.79 per share) in net income, a stark contrast to a net loss of $28.6 million ($0.20 per share) in 2000. These improved results were influenced by several key strategic initiatives and nonrecurring items. Notably, the sale of the Millstone nuclear generating station contributed an after-tax gain of $115.6 million ($0.85 per share) in 2001. The company also benefited from a reduced share count due to significant share repurchases funded by asset sales and securitization bonds, which in turn led to credit upgrades. Despite these positive developments, earnings from regulated electric companies were lower, impacted by the loss of wholesale revenue from Millstone and industry restructuring in New Hampshire.

Key Highlights

  • 1Northeast Utilities (NU) reported a net income of $50.0 million ($0.38/share) for Q4 2001, a significant improvement from a net loss of $180.9 million ($1.26/share) in Q4 2000.
  • 2Full-year 2001 net income was $243.5 million ($1.79/share), a substantial recovery from a full-year 2000 net loss of $28.6 million ($0.20/share).
  • 3The sale of the Millstone nuclear generating station in 2001 resulted in an after-tax gain of $115.6 million ($0.85/share).
  • 4NU repurchased approximately 10% of its outstanding common shares in 2001, utilizing proceeds from asset sales and securitization, leading to a lower share count and credit upgrades.
  • 5Excluding nonrecurring items, 2001 earnings were $1.37 per share, and excluding extraordinary charges, 2000 earnings were $0.37 per share for Q4 and $1.45 per share for the full year.
  • 6The company projects 2002 earnings to be between $1.40 and $1.65 per share, with performance heavily influenced by its competitive energy businesses.
  • 7NU's regulated electric companies experienced lower earnings in 2001, primarily due to the loss of wholesale revenue from Millstone and industry restructuring in New Hampshire.

Frequently Asked Questions

The primary driver was the successful sale of the Millstone nuclear generating station, which generated a significant after-tax gain of $115.6 million ($0.85 per share) in 2001. Additionally, strategic initiatives like the issuance of securitization bonds and industry restructuring in New Hampshire, coupled with significant share repurchases, contributed to improved financial stability and credit ratings.

In 2001, nonrecurring items included an $115.6 million after-tax gain from the Millstone sale, a $35.4 million after-tax mark-to-market charge for share repurchases, and a $22.4 million charge related to SFAS 133 adoption. Excluding these, the adjusted earnings per share for 2001 were $1.37.

Northeast Utilities projects earnings per share for 2002 to be in the range of $1.40 to $1.65, excluding significant nonrecurring charges. The performance of the company's competitive energy businesses is expected to be a key variable in achieving this outlook.

The regulated electric companies faced lower earnings due to the loss of wholesale revenue from the sale of Millstone Station. Additionally, industry restructuring in New Hampshire, which included an 11% retail rate decrease, also negatively impacted combined earnings for Public Service Company of New Hampshire and North Atlantic Energy Corporation.