Eversource 2010 Annual Report Download - page 46

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Overview
Consolidated: We earned $387.9 million, or $2.19 per share, in 2010, compared with $330 million, or $1.91 per share, in 2009 and
$260.8 million, or $1.67 per share, in 2008. Improved results were due primarily to the impact of the CL&P and PSNH 2010 distribution
rate case decisions that were effective July 1, 2010, higher retail electric sales due to warmer than normal summer weather and colder
than normal December 2010 weather, the non-recurring benefits from the settlement of tax issues in the fourth quarter of 2010, lower
uncollectibles expense, our continued success in managing operation and maintenance costs, and increased earnings in the
transmission segment. These benefits were partially offset by higher pension and storm-related expenses, expenses related to our
proposed merger with NSTAR, charges associated with the enactment of the 2010 Healthcare Act, and lower earnings at our
competitive businesses. Due primarily to weather impacts, retail electric sales were up 1.7 percent in 2010 compared with 2009.
A summary of our earnings by business, which also reconciles the non-GAAP financial measures of consolidated non-GAAP earnings
and EPS, as well as EPS by business, to the most directly comparable GAAP measures of consolidated Net Income Attributable to
Controlling Interests and diluted EPS, for 2010, 2009 and 2008 is as follows:
For the Years Ended December 31,
2010 2009 2008
(Millions of Dollars, except
per share amounts) Amount Per Share Amount Per Share Amount Per Share
Net Income Attributable to
Controlling Interests (GAAP) $ 387.9 $ 2.19 $ 330.0 $ 1.91 $ 260.8 $ 1.67
Regulated Companies $ 384.0 $ 2.16 $ 323.5 $ 1.87 $ 289.1 $ 1.85
Competitive Businesses 8.3 0.05 15.8 0.09 13.1 0.08
NU Parent and Other Companies (10.7) (0.05) (9.3) (0.05) (11.6) (0.07)
Non-GAAP Earnings 381.6 2.16 330.0 1.91 290.6 1.86
Non-Recurring Tax Settlements 15.7 0.09 - - - -
Merger-Related Costs (after-tax) (9.4) (0.06) - - - -
Litigation Charge (after-tax) - - - - (29.8) (0.19)
Net Income Attributable to
Controlling Interests (GAAP) $ 387.9 $ 2.19 $ 330.0 $ 1.91 $ 260.8 $ 1.67
Regulated Companies: Our Regulated companies consist of the distribution and electric transmission segments, with Yankee Gas
natural gas distribution segment and PSNH and WMECO generation activities included in the distribution segment. A summary of our
Regulated companies' earnings by segment for 2010, 2009 and 2008 is as follows:
For the Years Ended December 31,
(Millions of Dollars) 2010 2009 2008
CL&P Transmission $ 143.9 $ 136.8 $ 115.6
PSNH Transmission 20.7 18.0 16.7
WMECO Transmission 13.0 9.5 6.0
NUTV 0.2 - -
Total Transmission $ 177.8 $ 164.3 $ 138.3
CL&P Distribution $ 94.1 $ 74.0 $ 70.0
PSNH Distribution 69.3 47.5 41.4
WMECO Distribution 10.1 16.7 12.3
Yankee Gas 32.7 21.0 27.1
Total Distribution $ 206.2 $ 159.2 $ 150.8
Net Income - Regulated Companies $ 384.0 $ 323.5 $ 289.1
The higher 2010 and 2009 transmission segment earnings reflect increasing investment in transmission infrastructure to meet the
reliability needs of our customers and the region. Our transmission rate base totaled $2.76 billion at the end of 2010, compared with
$2.6 billion at the end of 2009.
CL&P’s 2010 distribution segment earnings were $20.1 million higher than 2009 due primarily to the DPUC distribution rate case
decision that was effective July 1, 2010. The decision allowed CL&P to defer operating and maintenance expenses for the last six
months of 2010 in lieu of cash rate relief until new rates begin on January 1, 2011. CL&P’s 2010 earnings also benefitted from lower
depreciation expense as authorized in the distribution rate case decision, lower interest expense as a result of the favorable resolution
of state tax audits in the fourth quarter of 2010, and lower uncollectibles expenses. Partially offsetting these favorable items were
higher storm restoration costs and higher pension costs. CL&P’s 2010 retail electric sales were 1.8 percent higher than 2009 due
primarily to warmer than normal weather during the summer of 2010. CL&P’s distribution segment regulatory ROE was 7.9 percent in
2010 compared to 7.3 percent in 2009. We expect CL&P’s distribution segment regulatory ROE will be approximately 9 percent in
2011.
PSNH’s 2010 distribution segment earnings were $21.8 million higher than 2009. The improved performance in 2010 was due primarily
to higher revenues as a result of distribution rate increases effective August 1, 2009 and July 1, 2010, higher AFUDC earnings related
to the Clean Air Project capital expenditures, and higher retail electric sales of 1.3 percent due primarily to warmer than normal weather
during the summer of 2010. The permanent distribution rate case settlement approved on June 28, 2010 allowed for certain costs to be