EX-99 3 nu8kexh99102102.txt NU PRESS RLS. AND FINANCIALS 10-21-02 Exhibit 99 News Release CONTACTS: Jeffrey R. Kotkin Barbara F. Nieman OFFICE: (860) 665-5154 (860) 665-3249 NU ANNOUNCES THIRD-QUARTER RESULTS BERLIN, Connecticut, October 21, 2002-Northeast Utilities (NYSE: NU) today announced earnings of $48.6 million, or $0.38 per share, in the third quarter of 2002, compared with earnings of $34.6 million, or $0.26 per share on a fully diluted basis, during the same period of 2001. For the first nine months of 2002, NU earned $96.1 million, or $0.74 per share, compared with $193.5 million, or $1.41 per share on a fully diluted basis, during the same period of 2001. The 2001 results included an after-tax gain of $124.8 million, or $0.91 per share, associated with the sale of NU's interests in the Millstone nuclear station in Waterford, Connecticut. Michael G. Morris, NU chairman, president and chief executive officer, attributed the year-to-year improvement in third quarter results to a net after-tax gain of $14.5 million, or $0.11 per share, primarily related to the elimination of reserves associated with NU's ownership shares of certain assets at the Seabrook nuclear station. FPL Energy is expected to purchase NU's 40 percent share of Seabrook Station later this year, and NU expects to record additional after-tax gains of between $10 million and $13 million upon closing the sale. The following table reconciles 2002 and 2001 earnings on a reported and adjusted basis. Third Quarter Nine Months 2001 Reported EPS $0.26 $1.41 One-time items Forward Share --- $0.26 Repurchase Millstone Sale --- ($0.91) Adoption of SFAS 133 --- $0.16 2001 Adjusted EPS $0.26 $0.92 Regulated Results $0.01 $0.09 Competitive Business $0.01 ($0.30) Results Lower 2002 Share $0.01 $0.04 Count Other ($0.02) ($0.04) 2002 Adjusted EPS $0.27 $0.71 One-time items Investment --- ($0.08) Write-Offs Seabrook Items $0.11 $0.11 2002 Reported EPS $0.38 $0.74
Aside from the Seabrook items, Morris said NU's regulated electric subsidiaries benefited from an extremely hot summer. Third quarter 2002 residential electric sales were up 10.9 percent and commercial electric sales were up 6.0 percent, compared with the same period of 2001. Third- quarter industrial sales were down 1.6 percent in the quarter due to weaker economic conditions, but overall, retail sales were up 6.4 percent, compared with the same period of 2001. During the first nine months of 2002, regulated electric sales were up 0.6 percent, compared with the same period of 2001. Earnings for common at The Connecticut Light and Power Company totaled $27.9 million in the third quarter of 2002, compared with $17.4 million in the same period of 2001. The increase was largely due to a weather-driven 7.6 percent increase in retail sales in the third quarter of 2002, compared with the same period of 2001. Public Service Company of New Hampshire and North Atlantic Energy Corporation (NAEC) together earned $36.4 million in the third quarter of 2002, compared with $21.8 million in the same period of 2001. The improvement was primarily due to the elimination of the Seabrook reserve at NAEC. Western Massachusetts Electric Company earned $4.7 million in the third quarter of 2002, compared with $4.3 million in the same period of 2001 with the improvement primarily due to hotter weather. Yankee Energy System, Inc. lost $5.8 million in the third quarter of 2002, compared with a profit of $3.2 million in the same period of 2001 when it recorded a property tax settlement. Morris said NU's competitive energy subsidiaries lost $9.0 million, or $0.07 per share, in the third quarter of 2002, compared with a loss of $9.7 million, or $0.07 per share, in the same period of 2001. Morris said Select Energy, Inc., NU's competitive energy marketing subsidiary, continues to be affected by high electricity market volatility. During the first nine months of 2002, NU's competitive businesses lost $39.9 million, compared with essentially break-even results during the same period of 2001. NU expects those businesses to lose another $10 million to $20 million in the fourth quarter of 2002. Earlier this month, NU announced that it expected to earn between $1.10 per share and $1.30 per share in 2002, including the Seabrook gains and $10 million of after-tax investment write-downs in the first quarter. In 2003, NU projects earnings of between $1.10 per share and $1.30 per share. Those earnings include projected profits of between $1.05 per share and $1.15 per share at NU's regulated electric and gas businesses; between $0.15 per share and $0.25 per share at NU's competitive energy businesses; and after-tax costs related to parent company debt and other items of $0.10 per share. Morris said 2003 earnings estimates will be affected by a number of factors, including energy market volatility, weather patterns, and NU's ongoing share repurchase program. NU repurchased approximately 14.3 million shares in 2001 and another 2.3 million shares to date in 2002. Morris noted revenues of NU's competitive energy businesses were reduced significantly as a result of recently released accounting guidance related to the classification of revenues and expenses associated with energy trading contracts. In June 2002, the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board reached a consensus on Issue No. 02-3, "Accounting for Contracts Involved in Energy Trading and Risk Management Activities." The EITF required energy trading companies to record revenues and expenses associated with energy trading contracts on a net basis, rather than recording the gross revenues and expenses. NU adopted the revenue and expense classification required by Issue No. 02-3 as of July 1, 2002. As a result of the adoption, NU's revenues and expenses for the first six months of 2002 have been reduced by $1.2 billion with no change in net income. Through the first nine months of 2002, NU's competitive business revenues totaled approximately $1.1 billion. Northeast Utilities is a Fortune 500 diversified energy company located in Connecticut with operations throughout the Northeast. Through its competitive and regulated subsidiaries, NU provides a full range of energy products and services to millions of residential and business customers from Maine to Maryland. From delivering electricity and natural gas, to marketing energy commodities, to operating and maintaining power plant facilities, NU is committed to safety, reliability and expanding consumers' energy options. For more information on Northeast Utilities and its subsidiaries, visit the NU family of Web sites at www.nu.com. This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements of future expectations and not facts. Actual results or developments might differ materially from those included in the forward- looking statements because of factors such as competition and industry restructuring, changes in economic conditions, changes in historical weather patterns, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments and other presently unknown or unforeseen factors. Other risk factors are detailed from time to time in NU's reports to the Securities and Exchange Commission. - - - - Note: NU will webcast a meeting with investors this morning at 10:30 a.m. Eastern Daylight Time. The call can be accessed through NU's website at www.nu.com. October 21, 2002 NORTHEAST UTILITIES AND SUBSIDIARIES ------------------------------------ FINANCIAL REPORT ----------------
Three Months Ended September 30, --------------------- 2002 2001 ---- ---- (Thousands of Dollars, Except Share Information) Operating Revenues $ 1,361,045 $ 1,530,669 =========== =========== Earnings for Common Shares: Before extraordinary loss and cumulative effect of accounting change, net of tax benefits $ 48,575 $ 34,631 Extraordinary loss, net of tax benefit of $169,562 - - Cumulative effect of accounting change, net of tax benefit of $14,908 - - ----------- ----------- Net Income $ 48,575 $ 34,631 =========== =========== Fully Diluted Earnings Per Common Share: Before extraordinary loss and cumulative effect of accounting change, net of tax benefits $ 0.38 $ 0.26 Extraordinary loss, net of tax benefit - - Cumulative effect of accounting change, net of tax benefit - - ----------- ----------- Fully Diluted Earnings Per Common Share $ 0.38 $ 0.26 =========== =========== Common Shares Outstanding (fully diluted) 129,508,794 133,869,227 =========== ===========
Nine Months Ended September 30, ------------------- 2002 2001 ---- ---- (Thousands of Dollars, Except Share Information) Operating Revenues $ 3,770,092 $ 4,669,663 =========== =========== Earnings for Common Shares: Before extraordinary loss and cumulative effect of accounting change, net of tax benefits $ 96,074 $ 215,958 Extraordinary loss, net of tax benefit of $169,562 - - Cumulative effect of accounting change, net of tax benefit of $14,908 - (22,432) ----------- ----------- Net Income $ 96,074 $ 193,526 =========== =========== Fully Diluted Earnings Per Common Share: Before extraordinary loss and cumulative effect of accounting change, net of tax benefits $ 0.74 $ 1.57 Extraordinary loss, net of tax benefit - - Cumulative effect of accounting change, net of tax benefit - (0.16) ----------- ----------- Fully Diluted Earnings Per Common Share $ 0.74 $ 1.41 =========== =========== Common Shares Outstanding (fully diluted) 129,737,249 137,457,694 =========== ===========
Twelve Months Ended September 30, ------------------- 2002 2001 ---- ---- (Thousands of Dollars, Except Share Information) Operating Revenues $ 5,071,132 $ 6,167,042 =========== =========== Earnings for Common Shares: Before extraordinary loss and cumulative effect of accounting change, net of tax benefits $ 146,057 $ 268,917 Extraordinary loss, net of tax benefit of $169,562 - (233,881) Cumulative effect of accounting change, net of tax benefit of $14,908 - (22,432) ----------- ----------- Net Income $ 146,057 $ 12,604 =========== =========== Fully Diluted Earnings Per Common Share: Before extraordinary loss and cumulative effect of accounting change, net of tax benefits $ 1.12 $ 1.93 Extraordinary loss, net of tax benefit - (1.68) Cumulative effect of accounting change, net of tax benefit - (0.16) ----------- ----------- Fully Diluted Earnings Per Common Share $ 1.12 $ 0.09 =========== =========== Common Shares Outstanding (fully diluted) 130,148,887 139,121,498 =========== ===========
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 ------------------------------------ Consolidated Statements of Income ---------------------------------
Three Months Ended September 30, ------------------- 2002 2001 ---- ---- (Thousands of Dollars, Except Share Information) Operating Revenues $ 1,361,045 $ 1,530,669 ----------- ----------- Operating Expenses: Operation - Fuel, purchased and net interchange power 797,498 985,065 Other 184,110 194,778 Maintenance 68,271 59,733 Depreciation 48,150 43,562 Amortization 97,336 94,505 Taxes other than income taxes 47,585 39,648 Gain on sale of utility plant - - ----------- ----------- Total operating expenses 1,242,950 1,417,291 ----------- ----------- Operating Income 118,095 113,378 Other Income, Net 32,059 17,724 ----------- ----------- Income Before Interest and Income Tax Expense 150,154 131,102 ----------- ----------- Interest Expense: Interest on long-term debt 35,347 30,995 Interest on rate reduction bonds 28,751 30,883 Other interest 3,615 8,404 ----------- ----------- Interest expense, net 67,713 70,282 ----------- ----------- Income Before Income Tax Expense 82,441 60,820 Income Tax Expense 32,476 25,185 ----------- ----------- Income Before Preferred Dividends of Subsidiaries 49,965 35,635 Preferred Dividends of Subsidiaries 1,390 1,004 ----------- ----------- Income Before Extraordinary Loss and Cumulative Effect of Accounting Change 48,575 34,631 Extraordinary loss, net of tax benefit of $169,562 - - Cumulative effect of accounting change, net of tax benefit of $14,908 - - ----------- ----------- Net Income $ 48,575 $ 34,631 =========== =========== Fully Diluted Earnings Per Common Share: Income before extraordinary loss and cumulative effect of accounting change, net of tax benefits $ 0.38 $ 0.26 Extraordinary loss, net of tax benefit - - Cumulative effect of accounting change, net of tax benefit - - ----------- ----------- Fully Diluted Earnings Per Common Share $ 0.38 $ 0.26 =========== =========== Common Shares Outstanding (fully diluted) 129,508,794 133,869,227 =========== ===========
Northeast Utilities and Subsidiaries ------------------------------------ Consolidated Statements of Income ---------------------------------
Nine Months Ended September 30, ------------------- 2002 2001 ---- ---- (Thousands of Dollars, Except Share Information) Operating Revenues $ 3,770,092 $ 4,669,663 ----------- ----------- Operating Expenses: Operation - Fuel, purchased and net interchange power 2,133,833 2,880,938 Other 580,865 592,757 Maintenance 194,032 208,152 Depreciation 146,775 154,082 Amortization 211,112 900,459 Taxes other than income taxes 177,043 170,739 Gain on sale of utility plant - (643,909) ----------- ----------- Total operating expenses 3,443,660 4,263,218 ----------- ----------- Operating Income 326,432 406,445 Other Income, Net 19,715 190,644 ----------- ----------- Income Before Interest and Income Tax Expense 346,147 597,089 ----------- ----------- Interest Expense: Interest on long-term debt 107,105 109,906 Interest on rate reduction bonds 87,539 57,703 Other interest 8,964 41,413 ----------- ----------- Interest expense, net 203,608 209,022 ----------- ----------- Income Before Income Tax Expense 142,539 388,067 Income Tax Expense 42,296 165,964 ----------- ----------- Income Before Preferred Dividends of Subsidiaries 100,243 222,103 Preferred Dividends of Subsidiaries 4,169 6,145 ----------- ----------- Income Before Extraordinary Loss and Cumulative Effect of Accounting Change 96,074 215,958 Extraordinary loss, net of tax benefit of $169,562 - - Cumulative effect of accounting change, net of tax benefit of $14,908 - (22,432) ----------- ----------- Net Income $ 96,074 $ 193,526 =========== =========== Fully Diluted Earnings Per Common Share: Income before extraordinary loss and cumulative effect of accounting change, net of tax benefits $ 0.74 $ 1.57 Extraordinary loss, net of tax benefit - - Cumulative effect of accounting change, net of tax benefit - (0.16) ----------- ----------- Fully Diluted Earnings Per Common Share $ 0.74 $ 1.41 =========== =========== Common Shares Outstanding (fully diluted) 129,737,249 137,457,694 =========== ===========
Northeast Utilities and Subsidiaries ------------------------------------ Consolidated Statements of Income ---------------------------------
Twelve Months Ended September 30, ------------------- 2002 2001 ---- ---- (Thousands of Dollars, Except Share Information) Operating Revenues $ 5,071,132 $ 6,167,042 ----------- ----------- Operating Expenses: Operation - Fuel, purchased and net interchange power 2,891,113 3,693,037 Other 763,120 820,865 Maintenance 244,840 282,698 Depreciation 193,706 216,389 Amortization 307,690 988,138 Taxes other than income taxes 225,502 230,469 Gain on sale of utility plant - (644,078) ----------- ----------- Total operating expenses 4,625,971 5,587,518 ----------- ----------- Operating Income 445,161 579,524 Other Income, Net 3O,698 183,969 ----------- ----------- Income Before Interest and Income Tax Expense 475,859 763,493 ----------- ----------- Interest Expense: Interest on long-term debt 144,248 154,466 Interest on rate reduction bonds 117,452 57,703 Other interest 12,544 72,303 ----------- ----------- Interest expense, net 274,244 284,472 ----------- ----------- Income Before Income Tax Expense 201,615 479,021 Income Tax Expense 50,284 201,221 ----------- ----------- Income Before Preferred Dividends of Subsidiaries 151,331 277,800 Preferred Dividends of Subsidiaries 5,274 8,883 ----------- ----------- Income Before Extraordinary Loss and Cumulative Effect of Accounting Change 146,057 268,917 Extraordinary loss, net of tax benefit of $169,562 - (233,881) Cumulative effect of accounting change, net of tax benefit of $14,908 - (22,432) ----------- ----------- Net Income $ 146,057 $ 12,604 =========== =========== Fully Diluted Earnings Per Common Share: Income before extraordinary loss and cumulative effect of accounting change, net of tax benefits $ 1.12 $ 1.93 Extraordinary loss, net of tax benefit - (1.68) Cumulative effect of accounting change, net of tax benefit - (0.16) ----------- ----------- Fully Diluted Earnings Per Common Share $ 1.12 $ 0.09 =========== =========== Common Shares Outstanding (fully diluted) 130,148,887 139,121,498 =========== ===========
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 ------------------------------------ Consolidated Balance Sheets ---------------------------
September 30, ------------------- 2002 2001 ---- ---- (Thousands of Dollars) ASSETS ------ Current Assets: Cash and cash equivalents $ 70,726 $ 130,913 Investments in securitizable assets 26,797 35,592 Receivables, net 795,205 698,274 Unbilled revenues 96,719 78,959 Fuel, materials, and supplies, at average cost 131,937 103,566 Special deposits 12,702 78,943 Prepayments and other 277,863 138,709 ----------- ----------- 1,411,949 1,264,956 ----------- ----------- Property, Plant and Equipment: Electric utility 5,981,390 5,669,304 Gas utility 666,971 624,256 Competitive energy 995,250 1,055,439 Other 200,418 208,052 ----------- ----------- 7,844,029 7,557,051 Less: Accumulated provision for depreciation 3,531,643 3,466,409 ----------- ----------- 4,312,386 4,090,642 Construction work in progress 308,720 259,024 Nuclear fuel, net 22,797 25,022 ----------- ----------- 4,643,903 4,374,688 ----------- ----------- Deferred Debits and Other Assets: Regulatory assets 3,089,272 3,373,309 Goodwill and other purchased intangible assets, net 343,871 334,657 Prepaid pension 287,834 206,803 Nuclear decommissioning trusts, at market 63,486 59,971 Other 475,886 677,701 ----------- ----------- 4,260,349 4,652,441 ----------- ----------- Total Assets $10,316,201 $10,292,085 =========== ===========
September 30, ------------------- 2002 2001 ---- ---- (Thousands of Dollars) LIABILITIES AND CAPITALIZATION ------------------------------ Current Liabilities: Notes payable to banks $ 315,733 $ 436,500 Long-term debt - current portion 52,439 24,437 Accounts payable 571,550 634,824 Accrued taxes 49,957 112,659 Accrued interest 58,198 93,344 Other 264,365 144,386 ----------- ----------- 1,312,242 1,446,150 ----------- ----------- Rate Reduction Bonds 1,935,467 2,118,400 ----------- ----------- Deferred Credits and Other Liabilities: Accumulated deferred income taxes 1,484,620 1,409,294 Accumulated deferred investment tax credits 110,584 123,246 Deferred contractual obligations 191,117 220,747 Other 699,706 793,577 ----------- ----------- 2,486,027 2,546,864 ----------- ----------- Capitalization: Long-Term Debt 2,272,402 1,930,620 ----------- ----------- Preferered Stock 116,200 116,200 ----------- ----------- Common Shareholders' Equity: Common shares, $5 par value - authorized 225,000,000 shares; 149,375,000 shares issued and 129,257,380 shares outstanding in 2002 and 148,890,640 shares issued and 132,971,030 shares outstanding in 2001 746,875 744,453 Capital surplus, paid in 1,109,798 1,108,455 Deferred contribution plan - employee stock ownership plan (91,982) (105,321) Retained earnings 727,204 644,886 Accumulated other comprehensive income/(loss) 10,707 (32,986) Treasury stock (308,739) (225,636) ----------- ----------- Common Shareholders' Equity 2,193,863 2,133,851 ----------- ----------- Total Capitalization 4,582,465 4,180,671 ----------- ----------- Total Liabilities and Capitalization $10,316,201 $10,292,085 =========== ===========
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.