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35
Overview
Consolidated: 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 Interest and diluted EPS, for 2012, 2011 and 2010 is as follows:
For the Years Ended December 31,
2012 (1)
2011
2010
(Millions of Dollars, Except Per Share Amounts)
Amount
Per Share
Amount
Per Share
Amount
Per Share
Net Income Attributable to Controlling Interest (GAAP)
$
525.9
$
1.89
$
394.7
$
2.22
$
387.9
$
2.19
Regulated Companies
$
626.0
$
2.25
$
438.3
$
2.46
$
384.0
$
2.16
NU Parent and Other Companies
7.5
0.03
(14.4)
(0.08)
(2.4)
(0.00)
Non-GAAP Earnings
633.5
2.28
423.9
2.38
381.6
2.16
Merger and Related Costs (after-tax)
(107.6)
(0.39)
(11.3)
(0.06)
(9.4)
(0.06)
Storm Fund Reserve
-
-
(17.9)
(0.10)
-
-
Non-Recurring Tax Settlements
-
-
-
-
15.7
0.09
Net Income Attributable to Controlling Interest (GAAP)
$
525.9
$
1.89
$
394.7
$
2.22
$
387.9
$
2.19
(1) Results include the operations of NSTAR from the date of merger, April 10, 2012, through December 31, 2012.
The after-tax merger and related costs for 2012 consisted of the following charges:
Transaction and integration-related costs of $34 million at NU parent related to investment advisory fees, attorney fees, and
consulting costs;
Change in control costs and other compensation costs of $13.5 million at NU parent and NSTAR;
A $23.6 million charge at CL&P related to the Connecticut settlement agreement, pursuant to which CL&P agreed to forego
recovery of $40 million (pre-tax) of deferred storm restoration costs associated with Tropical Storm Irene and the October 2011
snowstorm;
A $14.8 million charge at CL&P for customer bill credits related to the Connecticut settlement agreement;
An aggregate of $12.8 million of charges at NSTAR Electric, NSTAR Gas, and WMECO for customer bill credits related to the
Massachusetts settlement agreement; and
An $8.9 million charge at NU parent for the establishment of a fund to advance Connecticut energy goals related to the
Connecticut settlement agreement.
Excluding the impacts of the 2012 and 2011 merger and related settlement agreement costs and the 2011 storm fund reserve, our 2012
earnings increased by $209.6 million, as compared to 2011, due primarily to the inclusion of NSTAR effective April 10, 2012, and higher
transmission segment earnings as a result of increased investments in the transmission infrastructure. On an earnings per share basis,
the 2012 NSTAR earnings contribution of $182.9 million ($204.5 million in non-GAAP earnings) was partially offset by the issuance of
approximately 136 million common shares to close the merger. Offsetting these favorable earnings impacts were lower retail electric
and firm natural gas sales due primarily to significantly milder weather in the first quarter of 2012, compared with the first quarter of
2011, higher pension and healthcare costs, higher depreciation and property taxes.
Regulated Companies: Our Regulated companies consist of the electric distribution, natural gas distribution, and transmission
segments. Generation activities of PSNH and WMECO are included in our electric distribution segment. A summary of our segment
earnings for 2012, 2011 and 2010 is as follows:
For the Years Ended December 31,
(Millions of Dollars)
2012 (1)
2011
2010
Net Income - Regulated Companies (GAAP)
$
572.8
$
420.4
$
384.0
Electric Distribution
$
343.4
$
207.0
$
173.5
Transmission
249.7
199.6
177.8
Natural Gas Distribution
32.9
31.7
32.7
Net Income - Regulated Companies (Non-GAAP)
626.0
438.3
384.0
Merger Settlement Agreement Costs (after-tax) (2)
(53.2)
-
-
Storm Fund Reserve
(3)
-
(17.9)
-
Net Income - Regulated Companies (GAAP)
$
572.8
$
420.4
$
384.0
(1) Results include NSTAR Electric and NSTAR Gas earnings from the date of merger, April 10, 2012, through December 31, 2012.
(2) Merger settlement agreement costs are attributable to the electric distribution segment ($51.1 million) and the natural gas
distribution segment ($2.1 million).
(3) The storm fund reserve is attributable to the electric distribution segment.