Eversource 2013 Annual Report Download - page 46

34
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 2013, 2012 and 2011 is as follows:
For the Years Ended December 31,
(Millions of Dollars, Except Per Share Amounts)
2013
2012 (1)
2011
Amount
Per Share
Amount
Per Share
Amount
Per Share
Net Income Attributable to Controlling Interest (GAAP)
$
786.0
$
2.49
$
525.9
$
1.89
$
394.7
$
2.22
Regulated Companies
$
774.9
$
2.45
$
626.0
$
2.25
$
438.3
$
2.46
NU Parent and Other Companies
24.9
0.08
7.5
0.03
(14.4)
(0.08)
Non-GAAP Earnings
799.8
2.53
633.5
2.28
423.9
2.38
Integration and Merger-Related Costs (after-tax)
(13.8)
(0.04)
(107.6)
(0.39)
(11.3)
(0.06)
Storm Fund Reserve
-
-
-
-
(17.9)
(0.10)
Net Income Attributable to Controlling Interest (GAAP)
$
786.0
$
2.49
$
525.9
$
1.89
$
394.7
$
2.22
(1) Results include the operations of NSTAR beginning April 10, 2012.
The 2013 after-tax integration-related costs consisted of costs incurred for employee severance in connection with ongoing integration,
and consulting and retention costs. The 2012 after-tax merger-related costs consisted of Regulated companies’ charges of $53.2
million (for further information, see the Regulated Companies portion of this Overview section), costs of $34 million at NU parent related
to investment advisory fees, attorney fees, and consulting costs, an $11.5 million charge related to change in control costs and other
compensation costs at NU parent, and an $8.9 million charge at NU parent for the establishment of a fund to advance Connecticut
energy goals related to the Connecticut merger settlement agreement.
Excluding the impact of the integration and merger-related costs, our 2013 earnings increased by $166.3 million, as compared to 2012,
due primarily to the inclusion of NSTAR beginning April 10, 2012, lower overall operations and maintenance costs, higher retail electric
and firm natural gas sales, higher transmission segment earnings as a result of increased investments in the transmission
infrastructure, and the favorable impact of a lower effective tax rate in 2013 at NU parent. Partially offsetting these favorable earnings
impacts were higher depreciation and property tax expense and the establishment of an after-tax reserve of $14.3 million for a potential
customer refund related to an August 2013 initial decision from the FERC ALJ. For further information, see "FERC Regulatory Issues -
FERC Base ROE Complaint" in this Management's Discussion and Analysis.
Regulated Companies: Our Regulated companies consist of the electric distribution, transmission, and natural gas distribution
segments. Generation activities of PSNH and WMECO are included in our electric distribution segment. A summary of our segment
earnings for 2013, 2012 and 2011 is as follows:
For the Years Ended December 31,
(Millions of Dollars)
2013
2012 (1)
2011
Net Income – Regulated Companies (GAAP)
$
774.9
$
572.8
$
420.4
Electric Distribution
$
427.0
$
343.4
$
207.0
Transmission
287.0
249.7
199.6
Natural Gas Distribution
60.9
32.9
31.7
Net Income – Regulated Companies (Non-GAAP)
774.9
626.0
438.3
Merger-Related Costs (after-tax) (2)
-
(53.2)
-
Storm Fund Reserve (3)
-
-
(17.9)
Net Income - Regulated Companies (GAAP)
$
774.9
$
572.8
$
420.4
(1) Results include the operations of NSTAR beginning April 10, 2012.
(2) Merger-related 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.
The 2012 after-tax merger-related costs consisted of $27.6 million ($46 million pre-tax) in charges at CL&P, NSTAR Electric, NSTAR
Gas and WMECO for customer bill credits related to the Connecticut and Massachusetts merger settlement agreements, a $23.6 million
($40 million pre-tax) charge related to the Connecticut merger settlement agreement, whereby CL&P agreed to forego recovery of
previously deferred storm restoration costs associated with Tropical Storm Irene and the October 2011 snowstorm, and a $2 million
charge related to change in control costs and other compensation costs.
Excluding the impact of the merger-related costs, our electric distribution segment earnings increased in 2013, as compared to 2012, due
primarily to the inclusion of NSTAR Electric distribution business’ earnings, lower overall operations and maintenance costs and higher retail
electric sales due primarily to colder weather in the first and fourth quarters of 2013, as compared to the same periods in 2012. The 2013
results were also favorably impacted by PSNH rate increases effective July 1, 2012 and July 1, 2013 as a result of the 2010 distribution rate
case settlement. Partially offsetting these favorable earnings impacts were higher depreciation and property tax expense.