Eversource 2004 Annual Report Download - page 4

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“When we combine expectations for our competitive generation and retail
businesses with the anticipated performance of our regulated platform, we
are energized by our plans and ability to enhance shareholder value.”
Charles W. Shivery
Chairman, President
and CEO
2
TOOUR SHAREHOLDERS,EMPLOYEES,CUSTOMERS
AND BUSINESS PARTNERS
2004 was a year of mixed results for Northeast Utilities. On the regulated side of our business, results
were very positive and earnings grew $23.1 million. This reflects our commitment to our regulated
growth strategy and significant energy infrastructure investments for our region’s future. Unfortunately,
our competitive businesses had a disappointing year. Overall, they lost $15.1 million in 2004, significantly
lowering NU’s overall earnings from the level we had targeted. We are taking a number of steps to
address these unacceptable results.
After a comprehensive review of our competitive energy businesses early in 2005, we made the decision
that NU Enterprises, Inc. (NUEI), the holding company for NU’s competitive energy investments, will
exit the wholesale marketing business. Our evaluation determined that the wholesale marketing
business will be unable to attain the profit margins necessary to generate acceptable returns and
cash flows.
Wealso determined that NUEI’s competitive energy services businesses are not central to NU’s
long-term strategy and do not meet our expectations of profitability. We are exploring ways to divest
those businesses in a manner that maximizes their value. The services businesses include electrical,
mechanical, telecommunications, commercial plumbing and performance contracting companies.
Our decision reflects a thorough examination of our competitive businesses and the market, as well
as the impact on our valued employees. While difficult, it is clearly the right business decision for
Northeast Utilities — now, and for the future.
We will retain NUEI’s generation and retail energy marketing businesses. We believe that the
generation assets and retail business are competitively positioned to create significant opportunities
over the next several years.