Eversource 2013 Annual Report Download - page 44

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our consolidated financial statements and related combined
notes included in this Annual Report on Form 10-K. References in this Annual Report to "NU," the "Company," "we," "us," and "our"
refer to Northeast Utilities and its consolidated subsidiaries. All per share amounts are reported on a diluted basis. The consolidated
financial statements of NU, NSTAR Electric and PSNH and the financial statements of CL&P and WMECO are herein collectively
referred to as the "financial statements."
Refer to the Glossary of Terms included in this Annual Report on Form 10-K for abbreviations and acronyms used throughout this
Management's Discussion and Analysis of Financial Condition and Results of Operations.
The only common equity securities that are publicly traded are common shares of NU. The earnings and EPS of each business
discussed below do not represent a direct legal interest in the assets and liabilities allocated to such business but rather represent a
direct interest in our assets and liabilities as a whole. EPS by business is a financial measure not recognized under GAAP that is
calculated by dividing the Net Income Attributable to Controlling Interest of each business by the weighted average diluted NU common
shares outstanding for the year. The discussion below also includes non-GAAP financial measures referencing our 2013, 2012 and
2011 earnings and EPS excluding certain integration and merger costs related to NU's merger with NSTAR and a 2011 non-recurring
charge at CL&P for the establishment of a reserve to provide bill credits to its residential customers and donations to charitable
organizations. We use these non-GAAP financial measures to evaluate and to provide details of earnings by business and to more fully
compare and explain our 2013, 2012 and 2011 results without including the impact of these non-recurring items. Due to the nature and
significance of these items on Net Income Attributable to Controlling Interest, we believe that the non-GAAP presentation is more
representative of our financial performance and provides additional and useful information to readers of this report in analyzing
historical and future performance by business. These non-GAAP financial measures should not be considered as an alternative to
reported Net Income Attributable to Controlling Interest or EPS determined in accordance with GAAP as an indicator of operating
performance.
Reconciliations of the above non-GAAP financial measures to the most directly comparable GAAP measures of consolidated diluted
EPS and Net Income Attributable to Controlling Interest are included under "Financial Condition and Business Analysis – Overview –
Consolidated" in Management's Discussion and Analysis, herein.
Financial Condition and Business Analysis
Merger with NSTAR:
On April 10, 2012, we completed our merger with NSTAR. Unless otherwise noted, the results of NSTAR and its subsidiaries,
hereinafter referred to as "NSTAR," are included in NU’s financial position, results of operations and cash flows as of December 31,
2013 and 2012, for the full year ended December 31, 2013, and for the period beginning April 10, 2012 through December 31, 2012
throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations.
Executive Summary
The following items in this executive summary are explained in more detail in this Annual Report:
Results:
• We earned $786 million, or $2.49 per share, in 2013, compared with $525.9 million, or $1.89 per share, in 2012. Excluding
after-tax integration and merger-related costs of $13.8 million, or $0.04 per share, in 2013 and $107.6 million, or $0.39 per
share, in 2012, we earned $799.8 million, or $2.53 per share, in 2013 and $633.5 million, or $2.28 per share, in 2012.
• Our electric distribution segment, which includes generation, earned $427 million, or $1.35 per share, in 2013, compared with
$292.3 million, or $1.04 per share, in 2012. The 2012 results include $51.1 million, or $0.19 per share, of after-tax merger
settlement agreement costs.
• Our transmission segment earned $287 million, or $0.91 per share, in 2013, compared with $249.7 million, or $0.90 per share,
in 2012.
• Our natural gas distribution segment earned $60.9 million, or $0.19 per share, in 2013, compared with $30.8 million, or $0.11
per share, in 2012. The 2012 results include $2.1 million, or $0.01 per share, of after-tax merger settlement agreement costs.
• NU parent and other companies recorded earnings of $11.1 million, or $0.04 per share, in 2013, compared with net losses of
$46.9 million, or $0.16 per share, in 2012. The 2013 and 2012 results include $13.8 million, or $0.04 per share, and $54.4
million, or $0.19 per share, respectively, of after-tax integration and merger-related costs.
• We project to make capital expenditures of approximately $7.6 billion from 2014 through 2017. Of the $7.6 billion, we expect
to invest approximately $3.5 billion in our electric and natural gas distribution segments and $3.7 billion in our electric
transmission segment. In addition, we project to invest approximately $400 million for our corporate service companies.