Northeast Utilities (NU)
Q4 2011 Earnings Call
February 24, 2012 8:00 am ET
Jeffrey R Kotkin -
Previous Statements by NU
» Northeast Utilities' CEO Discusses Q3 2011 Results - Earnings Call Transcript
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» Northeast Utilities' CEO Discusses Q1 2011 Results - Earnings Call Transcript
Charles W. Shivery - Chairman, Chief Executive Officer, President, Chairman of Executive Committee, Chairman of The Connecticut Light & Power Company, Chairman of Public Service Company of New Hampshire and Chairman of Western Massachusetts Electric Company
Leon J. Olivier - Chief Operating Officer, Executive Vice President, Chief Executive Officer of Western Massachusetts Electric Company, Chief Executive Officer of The Connecticut Light & Power Company and Chief Executive Officer of Public Service Company of New Hampshire
David R. McHale - Chief Financial Officer and Executive Vice President
Travis Miller - Morningstar Inc., Research Division
Jonathan P. Arnold - Deutsche Bank AG, Research Division
James L. Dobson - Wunderlich Securities Inc., Research Division
Michael J. Lapides - Goldman Sachs Group Inc., Research Division
Leslie Rich - J.P. Morgan Asset Management, Inc.
David A. Paz - BofA Merrill Lynch, Research Division
Paul Patterson - Glenrock Associates LLC
Maurice E. May - Power Insights
Welcome to the Northeast Utilities Q4 Earnings Call. My name is Sandra, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Mr. Jeffrey Kotkin. Mr. Kotkin, you may begin.
Jeffrey R Kotkin
Thank you, Sandra. Good morning, and thank you for joining us. I'm Jeff Kotkin, NU's Vice President for Investor Relations. Speaking today will be Chuck Shivery, NU's Chairman, President and Chief Executive Officer; Lee Olivier, NU Executive Vice President and Chief Operating Officer; and David McHale, NU's Executive Vice President and Chief Financial Officer. Also joining us today is Jay Buth, our controller.
Before we begin, I'd like to remind you that some of the statements made during this investor call may be forward-looking as defined within the meaning of the Safe Harbor Provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainty, which may cause the actual results to differ materially from forecast and projections.
Some of these factors are set forth in the news release issued yesterday. If you have not yet seen that news release, it is posted on our website at www.nu.com. Additional information about the various factors that may cause actual results to differ can be found in our annual report on Form 10-K for the year ended December 31, 2010, and 10-Q for the third quarter of 2011. Additionally, our explanation of how and why we use certain non-GAAP measure is contained within our news release and in our most recent 10-K and 10-Q.
Now I will turn over the call to Chuck.
Charles W. Shivery
Thank you, Jeff, and good morning, everyone. Before we begin the discussion of NU's financial and operational results, I just like to thank everybody on the call for all the notes and cards and very good wishes that you've expressed to me over the past month and a half. I appreciate your thoughtful words since my heart attack during the second week of January. I just want you to know that it really meant a lot to me.
Now I'd like to turn to our results for last year and our outlook for 2012 and beyond. Last year resulted in many successes. Last year also produced the 2 worst storms in our 45-year history, which hit us 9 weeks apart in August and October. We will discuss some of the measures we have initiated to improve our reliability during major storms, And David will review the impact of storm cost on our financial statement.
But before they do, I again want to thank the NU employees for their dedication and professionalism during these 2 events. Many left their homes, which were often without power to restore power to our customers. For their actions, I am very proud and very grateful.
Those same employees were responsible for last year's many successes. The company delivered solid financial performance for our investors in 2011. Reoccurring earnings and cash flows were higher than in 2010. We made progress on a number of our major capital investment initiatives that will benefit New England energy customers, and we also received all but 2 of the approvals we need to consummate our merger with NSTAR.
From a financial standpoint, 2011 was the fifth consecutive year of attractive earnings growth since we fundamentally restructured our business profile in 2006.
From an operational standpoint, we achieved a number of milestones in 2011. We brought online our Merrimack Scrubber and the WWL natural gas pipeline project and made solid progress on our Greater Springfield Transmission Project. All 3 of those projects will bring significant benefits to our customers and our communities over the years to come.
From a strategic standpoint, our pending merger with NSTAR was approved by both company shareholders as well as by FERC, the Department of Justice, the FCC and, at the end of the year, the NRC. We also believe we are in a good position to secure final regulatory approvals in Connecticut and Massachusetts over the next 6 weeks.
Last week, Massachusetts Governor Deval Patrick announced that we and NSTAR had negotiated 2 settlements that will help ensure that Massachusetts customers of NSTAR and WMECO will see both immediate and long-term benefits from the merger and that the merger will be supportive of the Commonwealth long-term energy goals.
Under the settlement with the Attorney General and the Department of Energy Resources base distribution rates of NSTAR Electric, NSTAR Gas and WMECO will be frozen at current levels through at least 2015. Additionally, customers of the 3 utilities will receive credits on their first bills after the merger is consummated, totaling $21 million, $3 million of which would flow through WMECO customers.