SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 24, 2001
Commission File Number 1-5324
NORTHEAST UTILITIES
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2147929
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
174 BRUSH HILL AVENUE, WEST SPRINGFIELD, MASSACHUSETTS 01090-0010
(Address of principal executive offices) (Zip Code)
(413) 785-5871
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
ITEM 9. REGULATION FD DISCLOSURE
On April 24, 2001, Northeast Utilities issued the following News Release
announcing first quarter 2001 earnings:
NEWS RELEASE
Contact: Jeffrey R. Kotkin
Office: (860) 665-5154
NU ANNOUNCES FIRST-QUARTER EARNINGS
HARTFORD, Connecticut, April 24, 2001-Northeast Utilities (NU) today
announced first-quarter 2001 earnings before the cumulative effect of an
accounting change of $134.6 million, or $0.93 per share, compared with
earnings of $74.6 million, or $0.55 per share, for the same period of 2000.
Including the accounting change, a $22.4 million charge related to the
adoption of SFAS-133 (Accounting for Derivative Instruments and Hedging
Activities), NU earned $112.2 million, or $0.78 per share, in the first
quarter of 2001.
Michael G. Morris, NU chairman, president and chief executive officer,
said the first-quarter results included two major nonrecurring items, in
addition to the adoption of SFAS-133. NU recognized an after-tax gain of
$124.8 million, or 87 cents per share, related to the sale of the Millstone
Nuclear Station to Dominion Resources, Inc. on March 31, 2001. The gain
related primarily to the sale of the Millstone 3 interests of Public Service
Company of New Hampshire (PSNH) and several unaffiliated owners, not to the
Millstone interests of The Connecticut Light and Power Company (CL&P) and
Western Massachusetts Electric Company (WMECO). The net gain from the sale
of the CL&P and WMECO interests in Millstone was used to write down the two
companies' stranded costs. CL&P, WMECO and PSNH are all NU operating
subsidiaries.
Additionally, NU recorded a non-cash charge of $43.4 million, or 30
cents a share, related to the forward purchase of 10.1 million NU common
shares in December 1999 and January 2000. Those shares were purchased at an
average price of $21.26. Under new accounting rules, NU was required to
write down the difference between $21.26 and the price at which NU shares
closed on March 30, 2001 ($17.38), plus carrying charges for the first
quarter. NU is closing out that forward share purchase this week with the
proceeds of the Millstone sale and financing related to industry
restructuring and expects to record a gain or loss in the second quarter of
2001 relating to the difference between $17.38 and the closing price of NU
shares the day the forward purchase is closed.
Absent the nonrecurring gains and losses noted above, NU earned $53.2
million, or $0.36 per share, in the first quarter of the year. There were no
significant nonrecurring items in the first quarter of 2000. Morris said
the earnings of NU's regulated subsidiaries were reduced in 2001 by the
scheduled refueling of the Millstone 3 nuclear plant, which began February 3
and ended March 31. The refueling resulted in higher costs and lower
revenues for CL&P and WMECO, costing NU approximately $19 million after-tax,
or $0.13 per share, compared with the first quarter of 2000. Regulated
business operating earnings also fell by nearly $7 million, or $0.05 per
share, as a result of a 5 percent rate reduction that took effect at PSNH on
October 1, 2000.
On the other hand, Yankee Energy Services, Inc., parent of Connecticut's
largest natural gas distribution company, earned $15.6 million in the first
quarter of 2001. Yankee Energy merged with NU on March 1, 2000 and in March
2000 it earned $1.9 million. The full quarter of Yankee Energy results added
approximately $0.10 per share to earnings.
Operation and maintenance costs for the regulated electric companies
declined slightly, despite an after-tax charge of approximately $4 million,
or $0.03 per share, for NU's Voluntary Separation Program under which
approximately 340 NU employees accepted an early retirement offer. Those
employees are retiring between March 1, 2001 and February 28, 2002 and the
resulting savings are expected to benefit year-over-year financial results
over the next four quarters, Morris said.
Results at NU's unregulated energy companies were also hurt by nuclear
refueling outages. Extended refueling outages at Millstone 3 and the
Seabrook nuclear plant caused Select Energy, Inc., NU's unregulated energy
marketing subsidiary, to have to acquire energy for resale at higher costs.
As a result, NU's unregulated energy businesses lost $4.2 million, or $0.03
per share, in the first quarter of 2001, compared with a profit of $10
million, or $0.07 per share, in the first quarter of 2000.
Morris said NU continues to project operating earnings of between $1.40
per share and $1.60 per share in 2001. That estimate excludes nonrecurring
items.
NU operates New England's largest energy delivery system with
approximately 1.77 million electric customers in Connecticut, New Hampshire
and Massachusetts and 187,000 natural gas customers in Connecticut, and is
one of the largest competitive energy suppliers in New England. With the
closing out of the forward share purchase noted earlier, NU will reduce its
outstanding share count from approximately 144 million shares to
approximately 134 million shares.
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.
April 24, 2001
NORTHEAST UTILITIES AND SUBSIDIARIES
------------------------------------
FINANCIAL REPORT
----------------
Three Months Ended Twelve Months Ended
March 31, March 31,
---------------------------- ---------------------------
2001 2000 2001 2000
------------- -------------- ------------ ------------
(Thousands of Dollars, Except Share Information)
Operating Revenues $1,800,544 $1,382,321 $6,294,843 $4,810,165
============= ============== ============ ============
Earnings for common shares:
Before extraordinary loss and cumulative
effect of accounting changes, net of taxes $134,595 $74,587 $265,303 $90,359
Extraordinary (loss), net of tax benefits
of $169,562 - - (233,881) -
Cumulative effect of accounting changes,
net of tax benefits of $14,908 (22,432) - (22,432) -
------------- -------------- ------------ ------------
Total Net Income $112,163 $74,587 $8,990 $90,359
============= ============== ============ ============
Fully Diluted Earnings Per Common Share:
Before extraordinary loss and cumulative
effect of accounting changes, net of taxes $0.93 $0.55 $1.84 $0.68
Extraordinary (loss), net of taxes - - (1.63) -
Cumulative effect of accounting changes,
net of taxes (0.15) - (0.15) -
------------- -------------- ------------ ------------
Total Fully Diluted Earnings Per Common Share $0.78 $0.55 $0.06 $0.68
============= ============== ============ ============
Common Shares Outstanding
(fully diluted) 144,314,339 136,229,530 144,046,071 133,088,092
============= ============== ============ ============
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 the Northeast Utilities System 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 Twelve Months Ended
March 31, March 31,
------------------------------- --------------------------------
2001 2000 2001 2000
--------------- ------------ --------------- ---------------
(Thousands of Dollars, Except Share Information)
Operating Revenues $1,800,544 $1,382,321 $6,294,843 $4,810,165
--------------- ------------ --------------- ---------------
Operating Expenses:
Operation -
Fuel, purchased and net interchange power 1,166,972 768,372 3,719,825 2,243,670
Other 182,796 201,461 830,952 863,704
Maintenance 88,681 50,768 293,797 294,036
Depreciation 60,629 60,392 240,035 278,349
Amortization of regulatory assets, net 719,856 45,132 950,863 579,043
Federal and state income taxes 54,381 62,425 221,989 220,868
Taxes other than income taxes 75,887 58,362 256,112 249,101
Gain on sale of utility plant (653,872) - (653,297) (308,914)
--------------- ------------ --------------- ---------------
Total operating expenses 1,695,330 1,246,912 5,860,276 4,419,857
--------------- ------------ --------------- ---------------
Operating Income 105,214 135,409 434,567 390,308
--------------- ------------ --------------- ---------------
Other Income:
Gain on sale of utility plant 202,159 - 202,159 -
Loss on share repurchase contracts (43,443) - (43,443) -
Nuclear related costs 2,140 (2,801) (12,966) (72,496)
Other, net (1,333) 7,474 4,091 (19,468)
Minority interest in loss of subsidiary (2,325) (2,325) (9,300) (9,300)
Income taxes (57,918) 7,836 2,552 83,714
--------------- ------------ --------------- ---------------
Other income, net 99,280 10,184 143,093 (17,550)
--------------- ------------ --------------- ---------------
Income before interest charges 204,494 145,593 577,660 372,758
--------------- ------------ --------------- ---------------
Interest Charges:
Interest on long-term debt 43,668 55,884 188,481 246,517
Other interest 23,527 10,364 111,768 14,309
--------------- ------------ --------------- ---------------
Interest charges, net 67,195 66,248 300,249 260,826
--------------- ------------ --------------- ---------------
Income after interest charges 137,299 79,345 277,411 111,932
Preferred Dividends of Subsidiaries 2,704 4,758 12,108 21,573
--------------- ------------ --------------- ---------------
Income before extraordinary loss and cumulative
effect of accounting changes, net of taxes 134,595 74,587 265,303 90,359
Extraordinary (loss), net of tax benefits
of $169,562 - - (233,881) -
Cumulative effect of accounting changes,
net of tax benefits of $14,908 (22,432) - (22,432) -
--------------- ------------ --------------- ---------------
Net Income $112,163 $74,587 $8,990 $90,359
=============== ============ =============== ===============
Fully Diluted Earnings Per Common Share:
Before extraordinary loss, net of taxes $0.93 $0.55 $1.84 $0.68
Extraordinary (loss), net of taxes - - (1.63) -
Cumulative effect of accounting changes,
net of taxes (0.15) - (0.15) -
--------------- ------------ --------------- ---------------
Total Fully Diluted Earnings Per Common Share $0.78 $0.55 $0.06 $0.68
=============== ============ =============== ===============
Common Shares Outstanding
(fully diluted) 144,314,339 136,229,530 144,046,071 133,088,092
=============== ============ =============== ===============
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 the Northeast Utilities System 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
---------------------------
March 31,
----------------------
2001 2000
---------- ----------
(Thousands of Dollars)
ASSETS
------
Utility Plant, at cost:
Electric $6,009,696 $9,237,679
Gas and other 860,351 826,495
----------- -----------
6,870,047 10,064,174
Less: Accumulated provision for depreciation 3,487,588 6,373,365
----------- -----------
3,382,459 3,690,809
Unamortized PSNH acquisition costs - 317,332
Construction work in progress 206,851 179,516
Nuclear fuel, net 29,264 113,378
----------- -----------
Total net utility plant 3,618,574 4,301,035
----------- -----------
Other Property and Investments:
Nuclear decommissioning trusts, at market 57,170 717,246
Investments in regional nuclear generating
companies, at equity 62,480 82,456
Other, at cost 170,980 108,753
----------- -----------
290,630 908,455
----------- -----------
Current Assets:
Cash and cash equivalents 1,472,454 369,738
Investments in securitizable assets 256,431 80,742
Receivables, net 532,573 448,356
Unbilled revenues 118,927 88,918
Fuel, materials and supplies, at average cost 94,195 174,442
Recoverable energy costs, net - current portion 337 85,052
Prepayments and other 139,384 108,338
----------- -----------
2,614,301 1,355,586
----------- -----------
Deferred Charges:
Regulatory assets 4,031,123 3,596,828
Unamortized debt expense 40,735 43,839
Goodwill and other purchased intangible assets 334,512 345,372
Prepaid pension 157,455 63,003
Other 158,605 126,890
----------- -----------
4,722,430 4,175,932
----------- -----------
Total Assets $11,245,935 $10,741,008
=========== ===========
March 31,
----------------------
2001 2000
---------- ----------
(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common shareholders' equity:
Common shares, $5.00 par value - authorized
225,000,000 shares; 148,807,333 shares issued and
143,978,260 shares outstanding in 2001 and
148,546,234 shares issued and 143,150,550 shares
outstanding in 2000 $744,037 $742,731
Capital surplus, paid in 1,086,918 1,102,278
Deferred contribution plan - employee stock
ownership plan (111,264) (124,626)
Retained earnings 593,646 642,092
Accumulated other comprehensive income 5,745 1,524
----------- -----------
Total common shareholders' equity 2,319,082 2,363,999
Preferred stock not subject to mandatory redemption 116,200 136,200
Preferred stock subject to mandatory redemption - 119,789
Long-term debt 2,148,297 2,443,989
----------- -----------
Total capitalization 4,583,579 5,063,977
----------- -----------
Rate reduction bonds 1,438,400 -
----------- -----------
Minority Interest in Consolidated Subsidiary 100,000 100,000
----------- -----------
Obligations Under Capital Leases 17,363 53,126
----------- -----------
Current Liabilities:
Notes payable to banks 1,111,416 984,000
Long-term debt and preferred stock -
current portion 243,859 346,123
Obligations under capital leases -
current portion 144,840 115,285
Accounts payable 653,281 437,492
Payable to Millstone 3 joint owners 84,512 -
Accrued taxes 376,944 130,252
Accrued interest 58,753 56,088
Other 136,163 127,338
----------- -----------
2,809,768 2,196,578
----------- -----------
Deferred Credits and Other Long-term Liabilities:
Accumulated deferred income taxes 1,358,660 1,721,263
Accumulated deferred investment tax credits 131,760 144,882
Decommissioning obligation - Millstone 1 - 686,609
Deferred contractual obligations 237,108 341,983
Other 569,297 432,590
----------- -----------
2,296,825 3,327,327
----------- -----------
Total Capitalization and Liabilities $11,245,935 $10,741,008
=========== ===========
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 the Northeast Utilities System and is not a representation,
prospectus, or intended for use in connection with any purchase or sale of
securities.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NORTHEAST UTILITIES
(registrant)
By: /s/ Cheryl W. Grise
Name: Cheryl W. Grise
Title: Senior Vice President, Secretary
and General Counsel
Date: April 25, 2001