Eversource 2014 Annual Report Download - page 57

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RESULTS OF OPERATIONS –NORTHEAST UTILITIES AND SUBSIDIARIES
The following provides the amounts and variances in operating revenues and expense line items in the statements of income for NU for the years
ended December 31, 2014, 2013, and 2012 included in this Annual Report on Form 10-K. The year ended December 31, 2012 amounts include the
operations of NSTAR beginning April 10, 2012.
Comparison of 2014to 2013:
For the Years Ended December 31,
Increase/
 2014 2013 (Decrease) Percent
Operating Revenues $7,741.9 $7,301.2 $440.7 6.0 %
Operating Expenses:
Purchased Power, Fuel and Transmission 3,021.6 2,483.0 538.6 21.7
Operations and Maintenance 1,427.6 1,515.0 (87.4) (5.8)
Depreciation 614.7 610.8 3.9 0.6
Amortization of Regulatory Assets, Net 10.7 206.3 (195.6) (94.8)
Amortization of Rate Reduction Bonds -42.6 (42.6) (100.0)
Energy Efficiency Programs 473.1 401.9 71.2 17.7
Taxes Other Than Income Taxes 561.4 512.2 49.2 9.6
Total Operating Expenses 6,109.1 5,771.8 337.3 5.8
Operating Income 1,632.8 1,529.4 103.4 6.8
Interest Expense 362.1 338.7 23.4 6.9
Other Income, Net 24.6 29.9 (5.3) (17.7)
Income Before Income Tax Expense 1,295.3 1,220.6 74.7 6.1
Income Tax Expense 468.3 426.9 41.4 9.7
Net Income
827.0 793.7 33.3 4.2
Net Income Attributable to Noncontrolling Interests
7.5 7.7 (0.2) (2.6)
Net Income Attributable to Controlling Interest
$819.5 $786.0 $33.5 4.3 %
Operating Revenues
For the Years Ended December 31,
Increase /
 2014 2013 (Decrease) Percent
Electric Distribution $5,663.4 $5,362.3 $301.1 5.6 %
Natural Gas Distribution
1,007.3 855.8 151.5 17.7
Transmission 1,018.2 978.7 39.5 4.0
Other and Eliminations 53.0 104.4 (51.4) (49.2)
Total Operating Revenues $7,741.9 $7,301.2 $440.7 6.0 %
A summary of our retail electric sales volumes and firm natural gas sales volumes were as follows:
For the Years Ended December 31,
Increase/
2014 2013 (Decrease) Percent
Retail Electric Sales Volumes in GWh 54,442 55,331 (889) (1.6)%
Firm Natural Gas Sales Volumes in Million Cubic Feet 104,191 98,258 5,933 6.0
Operating Revenues increased $440.7 million in 2014 compared to 2013.
The most significant factor in the increase in revenues relates to cost tracking mechanisms for the recovery of higher costs associated with the
procurement of energy supply, which increased $506.8 million and $126.9 million for electric distribution and natural gas distribution, respectively.
These costs were impacted by the overall New England wholesale energy supply market in which higher natural gas delivery costs had an adverse
impact on the cost of electric energy purchased for our retail electric customers and the cost of natural gas purchased on behalf of our retail natural
gas customers. Energy supply costs are recovered from customers in rates through cost tracking mechanisms and therefore have no impact on
earnings. These costs and related recovery impacts were partially offset by decreases in transition cost recovery revenues, which are recovered
through cost tracking mechanisms, reflecting the full collection in 2013 of previously deferred costs, as well as the full amortization of RRBs.
Firm base natural gas distribution revenues increased $26.3 million in 2014, as compared to 2013, which reflected a 6 percent increase in firm natural
gas sales volumes. The increase in sales volumes was driven primarily by the colder winter weather experienced throughout our service territories in
the first quarter of 2014. The weather conditions experienced were significantly colder than both normal and the same period last year throughout
New England and our service territories in Connecticut and Massachusetts. Weather-normalized total firm natural gas sales volumes (based on 30-
year average temperatures) increased 2.9 percent in 2014, as compared to 2013, due primarily to residential and commercial customer growth.
Base electric distribution revenues decreased $12.1 million in 2014 compared to 2013. This reflected the impact of a 1.6 percent decrease in retail
electric sales volumes. The decrease in sales volumes was driven primarily by the cooler summer weather in 2014 compared to 2013, as well as the
impact of our utility-sponsored energy efficiency programs. Weather-normalized retail electric sales volumes decreased 1 percent in 2014, as
compared to 2013, reflecting the impact of our utility-sponsored energy efficiency programs. The negative sales volume impact was partially offset
by the impact of CL&P's base distribution rate increase effective December 1, 2014.