Eversource 2002 Annual Report Download - page 6

The year of change and uncertainty in our industry also brought challenges, chief among
them the stock market decline. The Dow Jones Utility Average dropped by nearly 27
percent; by contrast, NU shares fell by just under 14 percent. Our reported earnings
declined to $152.1 million, or $1.18 per fully diluted share in 2002 from $243.5 million,
or $1.79 per fully diluted share, in 2001, due primarily to gains recorded in 2001 related
to the sale of Millstone Station. Our 2002 results were further impacted by disappointing
results in our competitive businesses, as discussed later in this letter.
With our employees as the foundation of every business and customer service success,
NU is poised for further growth and profitability in 2003 and beyond. A six-point
business strategy will serve as our compass to achieve increased market share and
enhance your investment in our company.
Business Ethics and Sound Business Practices
Ethics and integrity are the foundation on which we build NU’s success, and we are
proud of our record. As Congress and the federal Securities and Exchange Commission
introduced changes in corporate governance, accounting and financial reporting, we
scrutinized our operations and management practices based on an in-depth review
we conducted. We certified the completeness and accuracy of our financial reporting,
reflecting our full compliance with both the letter and spirit of the law. We continue
to uphold this standard.
Lasting Partnerships
The energy business plays a unique and critical role in our society, with many touch
points. Our collaborative partnerships with regional officials, community leaders and
environmental organizations afford us a connection to our customers beyond the
physical reach of power and gas lines. These relationships afford us the opportunity to
represent our customers and bring pressing energy issues to the attention of national
and local leaders.
Working regionally with regulators and legislators, NU contributes to workable energy
policy and rules. Locally, we will see a transition from Connecticut’s four-year Standard
Offer period, mandated by 1998 restructuring legislation and ending in 2003. We continue
to support the Connecticut Department of Public Utility Control to ease the transition
to 2004.
Strong Financial Flexibility and Liquidity
NU’s balance sheet is strong. Using the more than $4 billion received from selling most
of our generating plants and securitizing our stranded costs, we paid off roughly half of
the approximately $4.6 billion of debt, preferred stock and lease obligations held since the
end of 1997. Virtually all our short-term debt has been paid as a result of the $384 million
sale of our interest in the Seabrook nuclear units at the end of 2002. With NU securities
remaining stable in 2002 despite hundreds of downgrades of other utilities’credit ratings
and with our required refinancing obligations at a modest level, NU will maintain a strong
balance sheet to retain our financial flexibility.
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98 99 00 01 02
98 99 00 01 02
98 99 00 01 02
$ 1.18
$ 1.79
$ (0.20)
$ 0.26
$ (1.12)
$ 0.53
$ 0.45
$ 0.40
$ 0.10
$ 0.00
$ 5,216
$ 5,968
$ 5,877
$ 4,471
$ 3,768
Dividends per Share
(Dollars)
Earnings per Common Share
(Dollars)
Revenues
(Dollars in Millions)