8-KOther Events

EVERSOURCE ENERGY 8-K Report, Corporate Update (Mar 19, 2008)

Filed March 19, 2008For Securities:ES

Summary

Eversource Energy (formerly Northeast Utilities) announced on March 13, 2008, that it has entered into a settlement agreement with Consolidated Edison, Inc. (Con Edison) to resolve all claims related to their previously terminated 1999 merger agreement. Under the terms of the settlement, Northeast Utilities (NU) will pay Con Edison $49.5 million. This settlement will result in an after-tax charge of approximately $30 million, or $0.19 per share, impacting NU's first-quarter 2008 financial results. As a consequence of this settlement charge, NU has revised its full-year 2008 earnings per share (EPS) guidance downwards. The company now projects a consolidated EPS range of $1.45 to $1.70, compared to previous guidance that excluded this charge. Despite this adjustment, NU reaffirmed its projected five-year compound annual EPS growth rate of 8% to 11%, based on its 2007 EPS of $1.59, contingent on achieving capital investment and rate base projections with appropriate regulatory approvals.

Key Highlights

  • 1Northeast Utilities (NU) settled all claims with Consolidated Edison, Inc. (Con Edison) related to a 1999 merger agreement.
  • 2NU will pay Con Edison $49.5 million as part of the settlement.
  • 3The settlement will result in an after-tax charge of approximately $30 million, or $0.19 per share, for NU.
  • 4The settlement charge will be reflected in NU's first-quarter 2008 financial results.
  • 5NU revised its 2008 consolidated EPS guidance downwards to a range of $1.45 to $1.70 per share.
  • 6Excluding the settlement charge, NU's 2008 consolidated earnings guidance remains between $1.65 and $1.90 per share.
  • 7NU maintained its projected five-year compound annual EPS growth rate of 8% to 11%.

Frequently Asked Questions

The settlement resolves all claims between NU and Con Edison stemming from their October 13, 1999, Agreement and Plan of Merger. This agreement was the basis for a civil lawsuit between the two companies.

NU agreed to pay Con Edison $49.5 million. This payment will result in an after-tax charge of approximately $30 million, or $0.19 per diluted share, which will be recognized in NU's first-quarter 2008 financial results.

Due to the $0.19 per share settlement charge, NU has lowered its projected 2008 consolidated earnings per share (EPS) to a range of $1.45 to $1.70. Prior to this charge, the company's guidance was higher, and excluding the charge, the guidance for 2008 remains between $1.65 and $1.90 per share.

No, NU has reaffirmed its projected five-year compound annual EPS growth rate of between 8% and 11%. This projection is based on the company's 2007 EPS of $1.59 and assumes successful execution of capital investment plans and favorable regulatory outcomes.