Eversource 2015 Annual Report Download - page 40

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
EVERSOURCE ENERGY AND SUBSIDIARIES
The following discussion and analysis should be read in conjunction with our consolidated financial statements and related combined notes included
in this combined Annual Report on Form 10-K. References in this Annual Report on Form 10-K to “Eversource,” the “Company,” “we,” “us,” and
“our” refer to Eversource Energy and its consolidated subsidiaries. All per share amounts are reported on a diluted basis. The consolidated financial
statements of Eversource, NSTAR Electric and PSNH and the financial statements of CL&P and WMECO are herein collectively referred to as the
“financial statements.”
On April 30, 2015, the Company’s legal name was changed from Northeast Utilities to Eversource Energy. CL&P, NSTAR Electric, PSNH and
WMECO are each doing business as Eversource Energy.
Refer to the Glossary of Terms included in this combined Annual Report on Form 10-K for abbreviations and acronyms used throughout this
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The only common equity securities that are publicly traded are common shares of Eversource. 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 Common Shareholders of each business by the weighted average diluted Eversource common shares outstanding for the period. The discussion
below also includes non-GAAP financial measures referencing our 2015, 2014 and 2013 earnings and EPS excluding certain integration costs
incurred by Eversource parent and our Regulated companies. 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 2015, 2014 and 2013 results without including the impact of these items. Due to the
nature and significance of these items on Net Income Attributable to Common Shareholders, 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
Common Shareholders 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 Common Shareholders are included under “Financial Condition and Business Analysis – Overview – Consolidated” and
“Financial Condition and Business Analysis – Overview – Regulated Companies” in Management’s Discussion and Analysis of Financial Condition
and Results of Operations, herein.
Financial Condition and Business Analysis
Executive Summary
Results:
• We earned $878.5 million, or $2.76 per share, in 2015, compared with $819.5 million, or $2.58 per share, in 2014. Excluding integration
costs, we earned $894.3 million, or $2.81 per share, in 2015 and $841.6 million, or $2.65 per share, in 2014.
• Our electric distribution segment, which includes generation, earned $507.9 million, or $1.59 per share, in 2015, compared with $462.4
million, or $1.45 per share, in 2014. Our electric transmission segment earned $304.5 million, or $0.96 per share, in 2015, compared with
$295.4 million, or $0.93 per share, in 2014. Our natural gas distribution segment earned $72.4 million, or $0.23 per share, in 2015,
compared with $72.3 million, or $0.23 per share, in 2014. The 2015 electric and natural gas distribution results exclude $0.8 million of
after-tax integration costs.
• Eversource parent and other companies earned $9.5 million, or $0.03 per share, in 2015, compared with $11.5 million, or $0.04 per share,
in 2014. The 2015 and 2014 results exclude $15 million, or $0.05 per share, and $22.1 million, or $0.07 per share, respectively, of after-tax
integration costs.
Liquidity:
• Cash flows provided by operating activities totaled $1.4 billion in 2015, compared with $1.6 billion in 2014. Investments in property, plant
and equipment totaled $1.7 billion in 2015 and $1.6 billion in 2014. Cash and cash equivalents totaled $23.9 million as of December 31,
2015, compared with $38.7 million as of December 31, 2014.
• In 2015, we issued approximately $1.23 billion of new long-term debt consisting of $450 million by Eversource parent, $350 million by
CL&P, $250 million by NSTAR Electric, $100 million by NSTAR Gas, and $75 million by Yankee Gas. In 2015, we repaid $212 million
of existing long-term debt consisting of $162 million by CL&P and $50 million by WMECO.
• In 2015, we paid cash dividends on common shares of $529.8 million, compared with $475.2 million in 2014. On February 3, 2016, our
Board of Trustees approved a common share dividend payment of $0.445 per share, payable on March 31, 2016 to shareholders of record
as of March 2, 2016. The 2016 dividend represented an increase of 6.6 percent over the dividend paid in December 2015, and is the
equivalent to dividends on common shares of approximately $565 million on an annual basis.