Eversource 2014 Annual Report Download - page 40

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
NORTHEAST UTILITIES AND SUBSIDIARIES
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 on Form 10-K to "NU," the "Company," "we," "us," and "our" refer to
Northeast Utilities and subsidiaries. Our merger was effective April 10, 2012, and all subsequent results of operations and cash flows include
NSTAR and its subsidiaries throughout this '. On
February 2, 2015, NU, CL&P, NSTAR Electric, PSNH and WMECO commenced doing business as Eversource Energy.
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
combined Annual Report on Form 10-K for abbreviations and acronyms used throughout this '
.
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 of 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 2014, 2013 and 2012 earnings and EPS excluding certain integration and merger costs related to NU's
merger with NSTAR. 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 2014, 2013 and 2012 results without including the impact of these 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" and
"Financial Condition and Business Analysis –Overview –Regulated Companies" in '
, herein.
Financial Condition and Business Analysis
Executive Summary
The following items in this executive summary are explained in more detail in this '
:

We earned $819.5 million, or $2.58 per share, in 2014, compared with $786 million, or $2.49 per share, in 2013. Excluding integration
costs, we earned $841.6 million, or $2.65 per share, in 2014 and $799.8 million, or $2.53 per share, in 2013.
Our electric distribution segment, which includes generation, earned $462.4 million, or $1.45 per share, in 2014, compared with $427
million, or $1.35 per share, in 2013. Our transmission segment earned $295.4 million, or $0.93 per share, in 2014, compared with $287
million, or $0.91 per share, in 2013. Our natural gas distribution segment earned $72.3 million, or $0.23 per share, in 2014, compared with
$60.9 million, or $0.19 per share, in 2013.
NU parent and other companies had a net loss of $10.6 million, or $0.03 per share, in 2014, compared with earnings of $11.1 million, or
$0.04 per share, in 2013. The 2014 and 2013 results reflect $22.1 million, or $0.07 per share, and $13.8 million, or $0.04 per share,
respectively, of integration costs.

Pursuant to the FERC orders issued and other developments in the pending base ROE complaint proceedings further described in the
"FERC Regulatory Issues –FERC Base ROE Complaints" section of this '
 the Company recorded reserves at its electric subsidiaries to recognize the potential financial impact of these
rulings and developments in both 2014 and 2013. The net aggregate after-tax charge to earnings totaled $22.4 million and $14.3 million in
2014 and 2013, respectively.
On September 16, 2014, NU and Spectra Energy Corp announced Access Northeast, a natural gas pipeline expansion project. Access
Northeast will enhance the Algonquin and Maritimes pipeline systems using existing routes. NU and Spectra Energy Corp will have equal
ownership interest in the project. On February 18, 2015, NU, Spectra Energy Corp and National Grid announced the addition of National
Grid as a co-developer in the project for a total ownership interest of 20 percent, with NU and Spectra Energy Corp each owning 40
percent. The total project cost, subject to FERC approval, is expected to be approximately $3 billion and has an anticipated in-service date
of November 2018.