Eversource 2005 Annual Report Download - page 87

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Adjustments to accumulated other comprehensive income/(loss) for
NU’s qualified cash flow hedging instruments are as follows:
At December 31,
(Millions of Dollars, Net of Tax) 2005 2004
Balance at beginning of year $(3.5) $24.8
Hedged transactions
recognized to earnings 5.6 (57.8)
Change in fair value 11.0 25.0
Cash flow transactions entered
into for the period 5.1 4.5
Net change associated with the
current period hedging transactions 21.7 (28.3)
Total fair value adjustments
included in accumulated other
comprehensive income $18.2 $(3.5)
16. Earnings Per Share
EPS is computed based upon the weighted-average number of common
shares outstanding, excluding unallocated ESOP shares, during each
year. Diluted EPS is computed on the basis of the weighted-average
number of common shares outstanding plus the potential dilutive
effect if certain securities are converted into common stock. In 2005,
2004 and 2003, 1,122,541 options, 696,994 options and 355,153
options, respectively, were excluded from the following table as
these options were antidilutive. The weighted average common shares
outstanding at December 31, 2005 include the impact of the issuance
of 23 million common shares on December 12, 2005 which were
outstanding for 20 days in 2005. The following table sets forth the
components of basic and diluted EPS:
(Millions of Dollars, except shareinformation) 2005 2004 2003
(Loss)/income from continuing operations $(229.2) $113.0 $116.4
(Loss)/income from discontinued operations (23.3) 3.6 4.7
(Loss)/income before cumulative effects of accounting changes (252.5) 116.6 121.1
Cumulative effects of accounting changes, net of tax benefits (1.0) —(4.7)
Net (loss)/income $(253.5) $116.6 $116.4
Basic EPS common shares outstanding (average) 131,638,953 128,245,860 127,114,743
Dilutive effect of employee stock options —150,216 125,981
Fully diluted EPS common shares outstanding (average) 131,638,953 128,396,076 127,240,724
Basic and fully diluted EPS:
(Loss)/income from continuing operations $(1.74) $0.88 $ 0.91
(Loss)/income from discontinued operations (0.18) 0.03 0.04
Cumulative effects of accounting changes, net of tax benefits (0.01) —(0.04)
Net (loss)/income $(1.93) $0.91 $0.91
17. Segment Information
Presentation: NU is organized between the Utility Group and NU
Enterprises businesses based on a combination of factors, including
the characteristics of each business’ products and services, the
sources of operating revenues and expenses and the regulatory
environment in which they operate. Effective January 1, 2005, the
portion of NGS’sbusiness that supports NGC’s and HWP’s generation
assets was reclassified from the services and other segment to the
merchant energy segment within the NU Enterprises segment.
Effective January 1, 2004, separate detailed information regarding the
Utility Group’stransmission businesses and NU Enterprises’ merchant
energy business is now included in the following segment information.
Segment information for all periods has been restated to conform to
the current presentation except for total asset information for the
transmission business segment as this information is not available.
The Utility Group segment, including both the regulated electric
distribution and transmission businesses, as well as the gas distribution
business comprising Yankee Gas, represents approximately 74.4 percent,
70.1 percent, and 73.1 percent of NU’s total revenues for the years
ended December 31, 2005, 2004 and 2003, respectively, and includes
the operations of the regulated electric utilities, CL&P,PSNH and
WMECO, whose complete financial statements are included in NU’s
report on Form 10-K. PSNH’s distribution segment includes generation
activities. Also included in NU’s reporton Form 10-K is detailed
information regarding CL&P’s, PSNH’s, and WMECO’s transmission
businesses. Utility Group revenues from the sale of electricity and
natural gas areprimarily derived from residential, commercial and
industrial customers and are not dependent on any single customer.
The NU Enterprises merchant energy business segment includes
Select Energy, NGC, NGS, and the generation operations of HWP,
while the NU Enterprises services and other business segment
includes Boulos, Woods Electrical, and NGS Mechanical, Inc., (which
are subsidiaries of NGS), SESI, SECI, HEC/Tobyhanna, HEC/CJTS,
and intercompany eliminations. The results of NU Enterprises parent
arealso included within services and other. On March 9, 2005, NU
announced its decision to exit the wholesale marketing business and
the energy services businesses. On November 7, 2005, NU announced
its decision to also exit its retail marketing and competitive generation
businesses. In November of 2005, NU Enterprises sold SECI-NH (a
division of SECI) and Woods Network. For further information regarding
NU Enterprises’ businesses, which arebeing exited, see Note 2,
“Wholesale Contract Market Changes,” Note 3, “Restructuring and
Impairment Charges,” and Note 4, “Assets Held for Sale and
Discontinued Operations,” to the consolidated financial statements.
NU’sconsolidated statements of (loss)/income for the years ended
December 31, 2005, 2004 and 2003 present the operations for SESI,
SECI-NH, Woods Network, and Woods Electrical as discontinued
operations. For further information, see Note 4, “Assets Held for Sale
and Discontinued Operations,” to the consolidated financial statements.