NU Nu Holdings Ltd

Northeast Utilities (NYSE: NU) today reported first quarter 2014 earnings of $236 million, or $0.74 per share, compared with earnings of $228.1 million, or $0.72 per share, in the first quarter of 2013. Excluding integration costs of $5.8 million in 2014 and $1.8 million in 2013, NU earned $241.8 million, or $0.76 per share, in the first quarter of 2014, compared with earnings of $229.9 million, or $0.73 per share, in the first quarter of 2013.

Thomas J. May, NU chairman, president and chief executive officer, said, “These financial results are consistent with our previously announced recurring earnings guidance of between $2.60 and $2.75 per share for this year and represent a strong start to 2014.”

Also today, the NU Board of Trustees declared a regular quarterly dividend of $0.3925 per share, payable June 30, 2014 to shareholders of record as of May 30, 2014.

Electric Distribution and Generation

NU’s electric distribution and generation segment earned $112.2 million in the first quarter of 2014, compared with earnings of $99.5 million in the first quarter of 2013. Improved results primarily reflect colder weather in the first quarter of 2014, compared with the same period of 2013. First quarter 2014 heating degree days in Boston and Hartford averaged approximately 14 percent higher than 2013 levels and 12 percent above normal. As a result, NU’s retail electric sales in the first quarter of 2014 were 4 percent higher than 2013 levels. They were 1.3 percent higher on a weather adjusted basis.

Electric Transmission

NU’s transmission segment earned $74.9 million in the first quarter of 2014, compared with $79.9 million in the first quarter of 2013. Lower transmission earnings were due primarily to a higher effective tax rate in the first quarter of 2014. A state tax settlement last year resulted in a lower effective tax rate at both The Connecticut Light and Power Company (CL&P) and NU parent in the first quarter of 2013, compared with the same period of 2014.

Earnings of Electric Utility Subsidiaries (net of preferred dividends)

CL&P earned $77.9 million in the first quarter of 2014, compared with earnings of $83.6 million in the first quarter of 2013. Results reflect a higher effective tax rate in the first quarter of 2014 due to the impact last year of the previously mentioned 2013 tax settlement. The higher tax rate was partially offset by a 4.7 percent increase in retail sales in the first quarter of 2014, compared with the first quarter of 2013.

NSTAR Electric earned $57.6 million in the first quarter of 2014, compared with earnings of $47.6 million in the first quarter of 2013. Improved results were due in part to a 3.2 percent increase in retail sales in the first quarter of 2014, compared with the first quarter of 2013, and higher transmission earnings.

Public Service Company of New Hampshire earned $32.6 million in the first quarter of 2014, compared with earnings of $29 million in the first quarter of 2013. Improved results reflect a 4.2 percent increase in retail sales in the first quarter of 2014, compared with the first quarter of 2013.

Western Massachusetts Electric Company earned $18.1 million in the first quarter of 2014, compared with earnings of $18.6 million in the first quarter of 2013.

Natural Gas Distribution

NU’s natural gas distribution segment, which includes both Yankee Gas Services Company and NSTAR Gas Company, earned $52.1 million in the first quarter of 2014, compared with earnings of $43.3 million in the first quarter of 2013. Improved results primarily reflect much colder weather in 2014, which increased firm natural gas sales. NU’s firm natural gas sales were 15.5 percent higher in the first quarter of 2014 as compared to the first quarter of 2013. They rose 3.6 percent on a weather-adjusted basis.

NU parent and other companies

NU parent and other companies earned $2.6 million in the first quarter of 2014, excluding $5.8 million of integration-related expenses, compared with earnings of $7.2 million in the first quarter of 2013, excluding $1.8 million of integration-related expenses. The results primarily reflect a higher effective tax rate in the first quarter of 2014 due to the impact last year of the 2013 tax settlement. The following table reconciles earnings per share for the first quarters of 2014 and 2013.

            First Quarter 2013     Reported EPS     $0.72       Higher electric sales in 2014     $0.03       Higher firm natural gas sales in 2014     $0.04       Lower non-tracked O&M in 2014     $0.02       Higher property tax, depreciation expense in 2014     ($0.02)       Lower transmission earnings in 2014     ($0.02)       Lower NU parent and other in 2014, ex. integration expenses    

($0.01)

      Other     ($0.01)       Higher integration costs in 2014     ($0.01) 2014     Reported EPS     $0.74        

Financial results for the first quarters of 2014 and 2013 for NU’s business segments and NU parent and other companies are noted below:

Three months ended:

(in millions, except EPS)

   

March 31, 2014

   

March 31, 2013

    Increase/

(Decrease)

   

2014 EPS1

Electric Distribution/Generation     $112.2     $99.5     $12.7     $0.35 Natural Gas Distribution     $52.1     $43.3     $8.8     $0.16 Electric Transmission     $74.9     $79.9     ($5.0)     $0.24 NU Parent and Other Companies,

ex. integration expenses

   

$2.6

   

$7.2

   

($4.6)

   

$0.01

Earnings, ex. integration expenses     $241.8     $229.9     $11.9     $0.76 Integration expenses     ($5.8)     ($1.8)     ($4.0)     ($0.02) Reported Earnings     $236.0     $228.1     $7.9     $0.74                

Retail sales data:

 

   

March 31, 2014

   

March 31, 2013

    % Change

Actual

    % Change

Weather Norm.

Electric distribution                         Gwh for three months ended     14,348     13,796     4.0%     1.3%                           Natural Gas Distribution                         Firm volumes in mmcf for three

months ended

   

45,550

   

39,422

   

15.5%

   

3.6%

               

NU has approximately 316 million common shares outstanding. It operates New England’s largest energy delivery system, serving approximately 3.6 million customers in Connecticut, Massachusetts and New Hampshire.

Note: NU will webcast a conference call with senior management on May 2, 2014, beginning at 9 a.m. Eastern Time. The webcast can be accessed through NU’s website at www.nu.com.

1 All per share amounts in this news release are reported on a diluted basis. The only common equity securities that are publicly traded are common shares of NU parent. The earnings and EPS of each business do not represent a direct legal interest in the assets and liabilities allocated to such business, but rather represent a direct interest in NU's assets and liabilities as a whole. EPS by business is a non-GAAP (not determined using generally accepted accounting principles) measure that is calculated by dividing the net income or loss attributable to controlling interests of each business by the weighted average diluted NU parent common shares outstanding for the period. In addition, first quarter 2014 and 2013 earnings and EPS excluding certain integration expenses related to the April 10, 2012 closing of the merger between NU and NSTAR are non-GAAP financial measures. Management uses these non-GAAP financial measures to evaluate earnings results and to provide details of earnings results by business and to more fully compare and explain our first quarter 2014 and 2013 results without including the impact of the non-recurring integration costs. Management believes that this measurement is useful to investors to evaluate the actual and projected financial performance and contribution of NU’s businesses. Non-GAAP financial measures should not be considered as alternatives to NU consolidated net income attributable to controlling interests or EPS determined in accordance with GAAP as indicators of NU’s operating performance.

This news release includes statements concerning NU’s expectations, beliefs, plans, objectives, goals, strategies, assumptions of future events, future financial performance or growth and other statements that are not historical facts. These statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, readers can identify these forward-looking statements through the use of words or phrases such as “estimate, “expect,” “anticipate,” “intend,” “plan,” “project,” “believe,” “forecast,” “should,” “could,” and other similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results or outcomes to differ materially from those included in the forward-looking statements. Factors that may cause actual results to differ materially from those included in the forward-looking statements include, but are not limited to, cyber breaches, acts of war or terrorism, or grid disturbances; actions or inaction of local, state and federal regulatory and taxing bodies; changes in business and economic conditions, including their impact on interest rates, bad debt expense and demand for NU’s products and services; fluctuations in weather patterns; changes in laws, regulations or regulatory policy; changes in levels or timing of capital expenditures; disruptions in the capital markets or other events that make NU’s access to necessary capital more difficult or costly; developments in legal or public policy doctrines; technological developments; changes in accounting standards and financial reporting regulations; actions of rating agencies; and other presently unknown or unforeseen factors. Other risk factors are detailed from time to time in NU’s reports filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which such statement is made, and NU undertakes no obligation to update the information contained in any forward-looking statements to reflect developments or circumstances occurring after the statement is made or to reflect the occurrence of unanticipated events.

NORTHEAST UTILITIES AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)               March 31, December 31, (Thousands of Dollars)       2014     2013  

ASSETS

  Current Assets: Cash and Cash Equivalents $ 89,150 $ 43,364 Receivables, Net 980,033 765,391 Unbilled Revenues 202,867 224,982 Fuel, Materials and Supplies 228,192 303,233 Regulatory Assets 573,028 535,791 Prepayments and Other Current Assets   292,539   214,288 Total Current Assets   2,365,809   2,087,049   Property, Plant and Equipment, Net   17,713,027   17,576,186   Deferred Debits and Other Assets: Regulatory Assets 3,486,645 3,758,694 Goodwill 3,519,401 3,519,401 Marketable Securities 507,931 488,515 Other Long-Term Assets   504,057   365,692 Total Deferred Debits and Other Assets   8,018,034   8,132,302       Total Assets $ 28,096,870 $ 27,795,537  

The data contained in this report is preliminary and is unaudited. This report is being submitted for the sole purpose of providing information to present shareholders about Northeast Utilities and Subsidiaries and is not a representation, prospectus or intended for use in connection with any purchase or sale of securities.

            NORTHEAST UTILITIES AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)       March 31, December 31, (Thousands of Dollars)       2014     2013  

LIABILITIES AND CAPITALIZATION

  Current Liabilities: Notes Payable $ 571,147 $ 1,093,000 Long-Term Debt - Current Portion 530,533 533,346 Accounts Payable 711,594 742,251 Regulatory Liabilities 263,754 204,278 Other Current Liabilities   713,116     702,776   Total Current Liabilities   2,790,144     3,275,651     Deferred Credits and Other Liabilities: Accumulated Deferred Income Taxes 4,209,969 4,029,026 Regulatory Liabilities 591,468 502,984 Derivative Liabilities 546,387 624,050 Accrued Pension, SERP and PBOP 890,019 896,844 Other Long-Term Liabilities   871,050     923,053   Total Deferred Credits and Other Liabilities   7,108,893     6,975,957     Capitalization: Long-Term Debt   8,318,332     7,776,833     Noncontrolling Interest - Preferred Stock of Subsidiaries   155,568     155,568    

Equity:

Common Shareholders' Equity: Common Shares 1,666,580 1,665,351 Capital Surplus, Paid In 6,185,027 6,192,765 Retained Earnings 2,237,710 2,125,980 Accumulated Other Comprehensive Loss (44,321 ) (46,031 ) Treasury Stock   (321,063 )   (326,537 ) Common Shareholders' Equity   9,723,933     9,611,528   Total Capitalization   18,197,833     17,543,929     Total Liabilities and Capitalization $ 28,096,870   $ 27,795,537    

The data contained in this report is preliminary and is unaudited. This report is being submitted for the sole purpose of providing information to present shareholders about Northeast Utilities and Subsidiaries and is not a representation, prospectus or intended for use in connection with any purchase or sale of securities.

            NORTHEAST UTILITIES AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)         For the Three Months Ended March 31, (Thousands of Dollars, Except Share Information)       2014     2013   Operating Revenues $ 2,290,590 $ 1,995,023     Operating Expenses:

Purchased Power, Fuel and Transmission

978,150 747,809 Operations and Maintenance 351,688 346,092 Depreciation 150,807 154,977 Amortization of Regulatory Assets, Net 57,898 54,049 Amortization of Rate Reduction Bonds - 34,499 Energy Efficiency Programs 138,825 105,771 Taxes Other Than Income Taxes   145,533   132,881   Total Operating Expenses   1,822,901   1,576,078  

Operating Income

467,689 418,945   Interest Expense: Interest on Long-Term Debt 87,377 85,906 Other Interest   2,598   (9,651 ) Interest Expense 89,975 76,255 Other Income, Net   1,667   7,765   Income Before Income Tax Expense 379,381 350,455 Income Tax Expense   141,545   120,487   Net Income 237,836 229,968 Net Income Attributable to Noncontrolling Interests   1,879   1,879   Net Income Attributable to Controlling Interest $ 235,957 $ 228,089     Basic Earnings Per Common Share $ 0.75 $ 0.72     Diluted Earnings Per Common Share $ 0.74 $ 0.72     Dividends Declared Per Common Share $ 0.39 $ 0.37     Weighted Average Common Shares Outstanding: Basic   315,534,512   315,129,782   Diluted   316,892,119   316,002,538    

The data contained in this report is preliminary and is unaudited. This report is being submitted for the sole purpose of providing information to present shareholders about Northeast Utilities and Subsidiaries and is not a representation, prospectus or intended for use in connection with any purchase or sale of securities.

    NORTHEAST UTILITIES AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)                   For the Three Months Ended March 31, (Thousands of Dollars)       2014     2013   Operating Activities: Net Income $ 237,836 $ 229,968 Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities: Depreciation 150,807 154,977 Deferred Income Taxes 137,417 168,938 Pension, SERP and PBOP Expense 24,995 53,102 Pension and PBOP Contributions (6,622 ) (47,048 ) Regulatory Overrecoveries, Net 872 39,218 Amortization of Regulatory Assets, Net 57,898 54,049 Amortization of Rate Reduction Bonds - 34,499 Proceeds from DOE Damages Claim 163,300 77,936 Deferred DOE Proceeds (163,300 ) - Other

(7,574

)

(51,106 ) Changes in Current Assets and Liabilities:

Receivables and Unbilled Revenues, Net

(182,221 ) (129,431 ) Fuel, Materials and Supplies 75,041 28,487 Taxes Receivable/Accrued, Net (59,840 ) (21,295 ) Accounts Payable 53,905 (86,916 ) Other Current Assets and Liabilities, Net   11,282     (32,235 ) Net Cash Flows Provided by Operating Activities  

493,796

    473,143     Investing Activities: Investments in Property, Plant and Equipment (348,691 ) (388,950 ) Proceeds from Sales of Marketable Securities

128,505

98,070 Purchases of Marketable Securities

(132,605

)

(184,030 ) Other Investing Activities   1,637     27,997   Net Cash Flows Used in Investing Activities  

(351,154

)

  (446,913 )   Financing Activities: Cash Dividends on Common Shares (118,460 ) (116,431 ) Cash Dividends on Preferred Stock (1,879 ) (1,879 ) Decrease in Short-Term Debt (299,500 ) (228,000 ) Issuance of Long-Term Debt 400,000 400,000 Retirements of Long-Term Debt (75,000 ) - Retirements of Rate Reduction Bonds - (62,529 ) Other Financing Activities   (2,017 )   (2,322 ) Net Cash Flows Used in Financing Activities   (96,856 )   (11,161 ) Net Increase in Cash and Cash Equivalents 45,786 15,069 Cash and Cash Equivalents - Beginning of Period   43,364     45,748   Cash and Cash Equivalents - End of Period $ 89,150   $ 60,817    

The data contained in this report is preliminary and is unaudited. This report is being submitted for the sole purpose of providing information to present shareholders about Northeast Utilities and Subsidiaries and is not a representation, prospectus or intended for use in connection with any purchase or sale of securities.

Northeast UtilitiesJeffrey R. Kotkin, 860-665-5154