Eversource 2004 Annual Report Download - page 5

3NORTHEAST UTILITIES 2004 ANNUAL REPORT
Building value for shareholders
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.
We remain stewards of a healthy balance sheet with ready access to capital to execute our growth
strategy. That strategy will serve three purposes: deliver results and value to shareholders, minimize
corporate risk and meet the reliability needs of our customers.
Consistent with our strategy, in 2004 we:
fIncreased our dividend for the fourth consecutive year, with our rate of increases above average
in the utility industry.
fGrew regulated business earnings by $23.1 million or 17 percent.
fResolved a number of regulatory issues, providing the company with more ratemaking certainty
than we have had in several years.
fStepped into the future with world-class technological advances in transmission line engineering.
fHeld steadfast to the ethics and values fundamental to our business.
For the year, NU earned $116.6 million, or 91 cents per share, compared with $116.4 million, or 91 cents
per share, in 2003. While this earnings level is steady from 2003, it falls far short of our original $1.30 per
share target. Nonetheless, consistent with our dividend policy, we increased the quarterly dividend
8percent in 2004, the fourth consecutive year of above-average growth. During that time the quarterly
dividend has risen 62.5 percent, from 10 cents per share to 16.25 cents per share.
Staying the course with our regulated businesses to serve customers
For morethan a century, NU’s regulated businesses havebeen an integral part of the region,
demonstrating the highest commitment toserving our customers. In our second century, we continue
tohonor that commitment.
Our core, regulated businesses delivered powerful performance with earnings growth that surpassed
the previous year. PSNH, WMECO and Yankee Gas reached rate case settlements in 2004, and CL&P
concluded a fully litigated outcome at the end of 2003. Needed rate increases position us to invest
considerable capital to enhance reliability for customers and to continue growing the company.
Over the next five years, our regulated companies plan to invest approximately $3.7 billion in electric
and natural gas infrastructure improvements to meet customer needs. The bulk of these investments
will be in transmission, with substantial investments also being made at each of our regulated
subsidiaries.
The transmission system is overburdened in certain areas of our region, with a critical electricity
bottleneck in southwest Connecticut where demand has outpaced supply. We are addressing this with
plans toinvestmorethan $1.5 billion over the next five years in transmission infrastructure improvements,
which are aligned with federal policy direction promoting expansion to ensure reliability.
The 345-kV Bethel toNorwalk, Connecticut, transmission upgrade project has broken ground and is
expected to be in service by December 2006. Along with United Illuminating, we have also applied to
build a second 345-kV transmission upgrade between Middletown and Norwalk, Connecticut, with
completion expected in 2009. This project reflects advanced engineering plans to bury 24 miles of the
69-mile line, while fully maintaining system reliability. The underground portion is the most ambitious
project of its type in North America and puts us at the very leading edge of technology.
Further, we are enhancing the distribution system that delivers electricity and natural gas to
neighborhoods, businesses and industry. At CL&P alone, a $900 million, four-year upgrade and
expansion of the distribution system is under way.