NU LOGO P. O. Box 270
Hartford, CT 06141-0270
107 Selden Street
Berlin, CT 06037
(860)-665-5000
www.nu.com
Exhibit 99.1
News Release
CONTACT: Jeffrey R. Kotkin
OFFICE: (860) 665-5154
NU ANNOUNCES 2004 FINANCIAL RESULTS
BERLIN, Connecticut, February 4, 2005-Northeast Utilities
(NU-NYSE) earned $116.6 million, or $0.91 per share in 2004,
compared with earnings of $116.4 million or $0.91 per share in
2003. In the fourth quarter of 2004, NU earned $33.1 million, or
$0.26 per share, compared with a loss of $9.9 million, or $0.08
per share, in the fourth quarter of 2003.
Results in both 2004 and 2003 included significant charges.
As previously reported, NU's competitive energy businesses
recorded a charge of $48.3 million, or $0.38 per share, in 2004
associated with certain natural gas contracts. In 2004, NU
recorded a separate after-tax charge of $8.8 million, or $0.07
per share, related to various investments, including a fuel cell
development company and a telecommunications company. Of the
$8.8 million, $4.9 million, or $0.04 per share, was recorded in
the fourth quarter. In 2003, NU companies recorded charges of
$36.9 million, or $0.29 per share, associated with the
establishment of Standard Market Design (SMD) in New England and
$4.7 million, or $0.04 per share, associated with a change in
accounting concerning its investment in a bill collection
company.
Excluding the charges noted above, NU earned $173.7 million,
or $1.36 per share, in 2004, compared with $158 million, or $1.24
per share, in 2003. The following table reconciles fourth
quarter and full year results on a reported and adjusted basis:
Fourth
Quarter Full Year
------- ---------
2003 Reported EPS ($0.08) $0.91
Cumulative effect --- $0.04
of accounting
change
Wholesale SMD $0.29 $0.29
charge
2003 Adjusted EPS $0.21 $1.24
Improved $0.11 $0.16
regulated results
in 2004
Improved --- $0.01
competitive
results in 2004
Other-Net --- ($0.05)
2004 Adjusted EPS $0.32 $1.36
Wholesale gas ($0.02) ($0.38)
mark-to-market
(MTM) charge
Investment ($0.04) ($0.07)
write-downs
2004 Reported EPS $0.26 $0.91
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Page 2 of 4
Regulated businesses
Charles W. Shivery, NU chairman, president and chief
executive officer, said NU's 2004 results benefited from stronger
performance at its regulated utilities. Those utilities earned a
combined $155.6 million, or $1.21 per share, in 2004, compared
with $132.5 million, or $1.05 per share, in 2003.
After the payment of preferred dividends, The Connecticut
Light and Power Company (CL&P) earned $82.5 million in 2004 and
$17.3 million in the fourth quarter of 2004, compared with $63.4
million in 2003 and $4.3 million in the fourth quarter of 2003.
Shivery said CL&P benefited from a retail rate increase that took
effect in January 2004, partially offset by lower pension income
and higher operating expenses. CL&P's fourth quarter 2003
results included a $5 million after-tax charge associated with a
retail rate case decision. CL&P's third quarter 2004 results
included a $6 million after-tax benefit from an August 2004
decision modifying that rate order.
Public Service Company of New Hampshire (PSNH) earned $46.6
million in 2004 and $10.6 million in the fourth quarter of 2004,
compared with $45.6 million in 2003 and $11.1 million in the
fourth quarter of 2003. For PSNH, a 3.1 percent increase in
retail sales and a lower effective tax rate were largely offset
by higher operating expenses and higher pension costs.
Western Massachusetts Electric Company (WMECO) earned $12.4
million in 2004 and $3.7 million in the fourth quarter of 2004,
compared with $16.2 million in 2003 and $2.4 million in the
fourth quarter of 2003. A 1.6 percent increase in WMECO's sales
was more than offset by higher interest and depreciation expense
and lower pension income.
Yankee Gas Services Company earned $14.1 million in 2004 and
$5.6 million in the fourth quarter of 2004, compared with $7.3
million in 2003 and $3.9 million in the fourth quarter of 2003.
Yankee Gas' results in the first and third quarters of 2003
included a total of $6.2 million in after-tax reductions in
estimated unbilled revenues and certain gas cost adjustments.
Competitive businesses
NU's competitive energy businesses lost $15.1 million in
2004, or $0.12 per share, including the $48.3 million mark-to-
market charge associated with certain natural gas contracts. In
2003, the competitive energy businesses lost $3.4 million, or
$0.03 per share, including a $35.6 million charge associated with
SMD.
In the fourth quarter of 2004, the competitive energy
businesses earned $5.1 million, compared with a loss of $27.4
million in 2003. Overall performance benefited in part from
improved results in the retail marketing portion of the merchant
energy business. Retail earned $4.9 million in 2004, compared
with a loss of $1.8 million in 2003. Shivery said the retail
business benefited from increased commercial and industrial
electric and natural gas sales.
Competitive energy services businesses lost $2.3 million in
2004, compared with earnings of approximately $2.6 million in
2003, due primarily to losses on a construction contract.
The following tables provide financial results for NU's
regulated and competitive business lines during the fourth
quarter and full year 2004 and 2003:
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Page 3 of 4
Three months ended December 31
------------------------------
Fourth Fourth Increase
(in millions of dollars) Quarter 2003 Quarter 2004 (Decrease)
------------ ------------ ----------
Merchant energy-wholesale $7.3 $8.0 ($0.7)
Wholesale-SMD charge --- ($35.6) $35.6
Wholesale-gas MTM charge ($2.4) --- ($2.4)
Merchant energy-retail $1.9 ($0.3) $2.2
Total merchant energy $6.8 ($27.9) $34.7
Services ($1.7) $0.5 ($2.2)
Total-Competitive $5.1 ($27.4) $32.5
Businesses
CL&P $17.3 $4.3 $13.0
PSNH $10.6 $11.1 ($0.5)
WMECO $3.7 $2.4 $1.3
Yankee Gas $5.6 $3.9 $1.7
Total-Utility Group $37.2 $21.7 $15.5
Investment write-downs ($4.9) --- ($4.9)
Parent and other ($4.3) ($4.2) ($0.1)
Reported Earnings $33.1 ($9.9) $43.0
Twelve Months Ended December 31
-------------------------------
Twelve Twelve
Months Months Increase
(in millions of ollars) 2004 2003 (Decrease)
------ ----- ----------
Merchant energy-wholesale $31.3 $31.9 ($0.6)
Wholesale-SMD charge --- ($35.6) $35.6
Wholesale-gas MTM charge ($48.3) --- ($48.3)
Merchant energy-retail $4.9 ($1.8) $6.7
Total merchant energy ($12.1) ($5.5) ($6.6)
Services ($2.3) $2.6 ($4.9)
NUEI parent and other ($0.7) ($0.5) ($0.2)
($15.1) ($3.4) ($11.7)
Total-Competitive
Businesses
CL&P $82.5 $63.4 $19.1
PSNH $46.6 $45.6 $1.0
WMECO $12.4 $16.2 ($3.8)
Yankee Gas $14.1 $7.3 $6.8
Total-Utility Group $155.6 $132.5 $23.1
Investment write-downs ($8.8) --- ($8.8)
Cumulative effect of
accounting change --- ($4.7) $4.7
Parent and other ($15.1) ($8.0) ($7.1)
Reported Earnings $116.6 $116.4 $0.2
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Page 4 of 4
Shivery said NU continues to believe that its regulated
companies will earn between $1.22 per share and $1.30 per share
in 2005 and that "Parent and Other" costs, primarily interest
expense, will total between $0.08 per share and $0.13 per share.
The utility business range reflects earnings of between $0.96 per
share and $1.00 per share in the regulated distribution and
generation business and between $0.26 per share and $0.30 per
share in the transmission business. Consistent with prior
statements, Shivery said the company will not provide competitive
business or consolidated guidance until it completes its
comprehensive review of each of its competitive business lines in
which the full range of alternative strategies are being
considered. The company expects to complete that review in the
next several weeks and expects to provide new 2005 earnings
guidance for those businesses and for NU as a whole at that time.
NU has approximately 129 million common shares outstanding.
It operates New England's largest energy delivery system, serving
approximately 2 million customers in Connecticut, New Hampshire
and Massachusetts.
This news release includes statements concerning NU's
expectations, plans, objectives, future financial performance and
other statements that are not historical facts. These statements
are "forward looking statements" within the meaning of the
Private Litigation Reform Act of 1995. In some cases the reader
can identify these forward looking statements by words such as
"estimate", "expect", "anticipate", "intend", "plan", "believe",
"forecast", "should", "could", and 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,
actions by state and federal regulatory bodies, competition and
industry restructuring, changes in economic conditions, changes
in weather patterns, changes in laws, regulations or regulatory
policy, expiration or initiation of significant energy supply
contracts, changes in levels of capital expenditures,
developments in legal or public policy doctrines, technological
developments, volatility in electric and natural gas commodity
markets, effectiveness of our risk management policies and
procedures, changes in accounting standards and financial
reporting regulations, fluctuations in the value of electricity
positions, changes in the ability to sell electricity positions
and close out natural gas positions at anticipated margins,
obtaining new contracts at anticipated volumes and margins,
terrorist attacks on domestic energy facilities, and other
presently unknown or unforeseen factors. Other risk factors are
detailed from time to time in our reports to the Securities and
Exchange Commission. We undertake no obligation to update the
information contained in any forward looking statements to
reflect developments or circumstances occurring after the
statement is made.
# # #
NOTE: NU will webcast an investor meeting this morning at 11:00
a.m. Eastern Standard Time. The call can be accessed through
NU's website at www.nu.com.