Eversource 2012 Annual Report Download - page 5

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CEO’s Message
Dear Shareholder,
The year was defi ned by the successful closing of the Northeast Utilities and NSTAR merger. We successfully negotiated
multi-year merger settlement agreements with Connecticut and Massachusetts regulators, ensuring continued high quality
service to our customers and strong value for our shareholders.
In 2012, a year when utility stocks signifi cantly lagged the broader market, we provided our shareholders with a total return
of 12.1 percent, about six times better than the 2.1 percent average total return for the 51 companies included in the Edison
Electric Institute Index. We raised our common dividend twice in 2012—a 6.8 percent increase in the fi rst quarter was
followed by a 16.8 percent increase after the merger closed in the second quarter. More recently, we announced another
increase in February 2013. Our annualized dividend rate is now $1.47 per share, compared with $1.10 per share in 2011.
We expect fi scal discipline and execution of our strategic business plan will enable us to grow earnings per share by 6 to 9
percent annually for several years; our earnings per share in 2012 was $2.28, excluding merger expenses. We expect our
dividend to keep pace with earnings growth.
As a result of improved regulatory diversity, a stronger balance sheet and improved cash fl ows, Northeast Utilities’ credit
rating at Standard & Poors was raised to A-. This rating is among the highest in the industry; in fact, only one family of
companies in the industry has a higher credit rating. Likewise, timely and effective refi nancing is expected to result in
annualized interest cost savings of approximately $30 million, savings that benefi t customers and shareholders.
As one company, we are capturing cost savings by implementing a
shared services operating model, with customers at the center of
our work. To that end, in 2012, the operational performance of our
distribution, transmission and generation systems was on target, and,
in many instances, exceeded the stretch goals we had established for
operations managers.
The year’s strong operational performance was best showcased by our
successful response to Hurricane Sandy, the region’s third signifi cant
storm over a period of just fourteen months. Since the epic storms of
2011, we have dramatically improved our storm response plans. These
improved emergency plans were thoroughly tested through practice
drills involving employees, communities and state offi cials, and
ultimately put to the test when Hurricane Sandy arrived at our doorstep
late last October. Hurricane Sandy interrupted service to about 1.5
million of our Connecticut, Massachusetts, and New Hampshire
customers for multiple days. Given the magnitude of devastation
caused by the hurricane, especially in southern Connecticut, our
3