Northeast Utilities (NU, Financial) filed Annual Report for the period ended 2011-12-31.
Northeast Util has a market cap of $6.39 billion; its shares were traded at around $35.86 with a P/E ratio of 15.2 and P/S ratio of 1.3. The dividend yield of Northeast Util stocks is 3.1%. Northeast Util had an annual average earning growth of 8.9% over the past 5 years.
Cash flows provided by operating activities in 2011 totaled $901.1 million, compared with operating cash flows of $832.6 million in 2010 and $745 million in 2009 (all amounts are net of RRB payments, which are included in financing activities on the accompanying consolidated statements of cash flows). The improved cash flows were due primarily to the impact of the CL&P and PSNH 2010 distribution rate case decisions that were effective July 1, 2010 (the CL&P July 1, 2010 rate increase was deferred from customer bills until January 1, 2011), the WMECO distribution rate case decision that was effective February 1, 2011, and income tax refunds of $76.6 million in 2011 largely attributable to accelerated depreciation tax benefits, compared to income tax payments of $84.5 million in 2010. Offsetting these benefits was a contribution of $143.6 million made into our Pension Plan in 2011, compared to $45 million in 2010, and approximately $157 million of cash disbursements made in 2011 associated with Tropical Storm Irene and the October snowstorm. The increase in operating cash flows from 2009 to 2010 was due primarily to the absence in 2010 of costs incurred at PSNH and WMECO related to the major ice storm in December 2008 that were paid in the first quarter of 2009, a decrease in Fuel, Materials and Supplies attributable to a $31.8 million reduction in coal inventory levels at the PSNH generation business as ordered by the NHPUC, and increases in amortization on regulatory deferrals primarily attributable to 2009 activity within PSNHs ES and CL&Ps CTA tracking mechanisms where such costs exceeded revenues resulting in an unfavorable cash flow impact in 2009. Offsetting these favorable cash flow impacts was a $45 million contribution made into our Pension Plan in September 2010.
Transmission - Wholesale Rates: Our transmission rates recover our total transmission revenue requirements, ensuring that we recover all regional and local revenue requirements for providing transmission service. These rates provide for annual reconciliations to actual costs. The difference between billed and actual costs is deferred for future recovery from, or refund to, customers. As of December 31, 2011, we were in a total net overrecovery position of $31.4 million, which will be refunded to customers in June 2012. Of this amount, the transmission segments of CL&P, PSNH and WMECO were in an overrecovery position of $18.6 million, $1.7 million and $11.1 million, respectively.
CTA and SBC Reconciliation and Rates: On March 31, 2011, CL&P filed with the PURA its 2010 CTA and SBC reconciliation, which compared CTA and SBC revenues to revenue requirements. For the 12 months ended December 31, 2010, total CTA revenue requirements exceeded CTA revenues by $4.5 million. For the 12 months ended December 31, 2010, the SBC revenues exceeded SBC revenue requirements by $19.8 million. On October 12, 2011, PURA approved the 2010 CTA and SBC reconciliations as filed. The decision allowed a CTA rate, effective January 1, 2012, that would recover $26.1 million during 2012, and requires CL&P to provide updated actual and projected costs when it files its requested rate adjustments for January 1, 2012. The decision also allowed an SBC rate, effective January 1, 2012, that would collect $23.7 million during 2012.
FMCC Filing: On February 4, 2011, CL&P filed with the PURA its semi-annual filing, which reconciled actual FMCC revenues and charges and GSC revenues and expenses, for the period July 1, 2010 through December 31, 2010, and also included the previously filed revenues and expenses for the January 1, 2010 through June 30, 2010 period. The filing identified a total net overrecovery of $0.3 million, which includes the remaining uncollected or non-refunded portions from previous filings. A hearing was held during the second quarter of 2011 and on June 29, 2011, the PURA issued a final decision accepting CL&Ps calculations of GSC, bypassable FMCC and nonbypassable FMCC revenues and expenses for the period July 1, 2010 through December 31, 2010. On August 1, 2011, CL&P filed with the PURA its semi-annual FMCC filing for the period January 1, 2011 through June 30, 2011. The filing identified a total net overrecovery of $10.9 million for the period, which includes the remaining uncollected or non-refunded portions from previous filings. A hearing was held during the fourth quarter of 2011 and on December 28, 2011, the PURA issued a final decision accepting CL&Ps calculations of GSC, bypassable FMCC and nonbypassable FMCC actual revenues and expenses for the six months reviewed in the proceeding. On February 2, 2012, CL&P filed with the PURA its semi-annual FMCC filing for the period July 1, 2011 through December 31, 2011, and also included the previously filed revenues and expenses for the January 1, 2011 through June 30, 2011 period. The filing identified a total net overrecovery of $18.7 million, which includes the remaining uncollected or non-refunded portions from previous filings. PURA has not yet set a schedule to review this filing, but we do not expect the outcome of the PURA's review to have a material adverse impact on CL&P's financial position, results of operations or cash flows.
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Northeast Util has a market cap of $6.39 billion; its shares were traded at around $35.86 with a P/E ratio of 15.2 and P/S ratio of 1.3. The dividend yield of Northeast Util stocks is 3.1%. Northeast Util had an annual average earning growth of 8.9% over the past 5 years.
Highlight of Business Operations:
WMECOs 2011 distribution segment earnings were $10.1 million higher than 2010 due primarily to the impact of the distribution rate case decision effective February 1, 2011 and lower operations and maintenance costs, partially offset by a $5.3 million pre-tax charge to establish a reserve related to a wholesale billing adjustment, and higher depreciation and amortization. WMECOs distribution segment regulatory ROE was 9 percent in 2011, as compared to 4.6 percent in 2010.Cash flows provided by operating activities in 2011 totaled $901.1 million, compared with operating cash flows of $832.6 million in 2010 and $745 million in 2009 (all amounts are net of RRB payments, which are included in financing activities on the accompanying consolidated statements of cash flows). The improved cash flows were due primarily to the impact of the CL&P and PSNH 2010 distribution rate case decisions that were effective July 1, 2010 (the CL&P July 1, 2010 rate increase was deferred from customer bills until January 1, 2011), the WMECO distribution rate case decision that was effective February 1, 2011, and income tax refunds of $76.6 million in 2011 largely attributable to accelerated depreciation tax benefits, compared to income tax payments of $84.5 million in 2010. Offsetting these benefits was a contribution of $143.6 million made into our Pension Plan in 2011, compared to $45 million in 2010, and approximately $157 million of cash disbursements made in 2011 associated with Tropical Storm Irene and the October snowstorm. The increase in operating cash flows from 2009 to 2010 was due primarily to the absence in 2010 of costs incurred at PSNH and WMECO related to the major ice storm in December 2008 that were paid in the first quarter of 2009, a decrease in Fuel, Materials and Supplies attributable to a $31.8 million reduction in coal inventory levels at the PSNH generation business as ordered by the NHPUC, and increases in amortization on regulatory deferrals primarily attributable to 2009 activity within PSNHs ES and CL&Ps CTA tracking mechanisms where such costs exceeded revenues resulting in an unfavorable cash flow impact in 2009. Offsetting these favorable cash flow impacts was a $45 million contribution made into our Pension Plan in September 2010.
Transmission - Wholesale Rates: Our transmission rates recover our total transmission revenue requirements, ensuring that we recover all regional and local revenue requirements for providing transmission service. These rates provide for annual reconciliations to actual costs. The difference between billed and actual costs is deferred for future recovery from, or refund to, customers. As of December 31, 2011, we were in a total net overrecovery position of $31.4 million, which will be refunded to customers in June 2012. Of this amount, the transmission segments of CL&P, PSNH and WMECO were in an overrecovery position of $18.6 million, $1.7 million and $11.1 million, respectively.
CTA and SBC Reconciliation and Rates: On March 31, 2011, CL&P filed with the PURA its 2010 CTA and SBC reconciliation, which compared CTA and SBC revenues to revenue requirements. For the 12 months ended December 31, 2010, total CTA revenue requirements exceeded CTA revenues by $4.5 million. For the 12 months ended December 31, 2010, the SBC revenues exceeded SBC revenue requirements by $19.8 million. On October 12, 2011, PURA approved the 2010 CTA and SBC reconciliations as filed. The decision allowed a CTA rate, effective January 1, 2012, that would recover $26.1 million during 2012, and requires CL&P to provide updated actual and projected costs when it files its requested rate adjustments for January 1, 2012. The decision also allowed an SBC rate, effective January 1, 2012, that would collect $23.7 million during 2012.
FMCC Filing: On February 4, 2011, CL&P filed with the PURA its semi-annual filing, which reconciled actual FMCC revenues and charges and GSC revenues and expenses, for the period July 1, 2010 through December 31, 2010, and also included the previously filed revenues and expenses for the January 1, 2010 through June 30, 2010 period. The filing identified a total net overrecovery of $0.3 million, which includes the remaining uncollected or non-refunded portions from previous filings. A hearing was held during the second quarter of 2011 and on June 29, 2011, the PURA issued a final decision accepting CL&Ps calculations of GSC, bypassable FMCC and nonbypassable FMCC revenues and expenses for the period July 1, 2010 through December 31, 2010. On August 1, 2011, CL&P filed with the PURA its semi-annual FMCC filing for the period January 1, 2011 through June 30, 2011. The filing identified a total net overrecovery of $10.9 million for the period, which includes the remaining uncollected or non-refunded portions from previous filings. A hearing was held during the fourth quarter of 2011 and on December 28, 2011, the PURA issued a final decision accepting CL&Ps calculations of GSC, bypassable FMCC and nonbypassable FMCC actual revenues and expenses for the six months reviewed in the proceeding. On February 2, 2012, CL&P filed with the PURA its semi-annual FMCC filing for the period July 1, 2011 through December 31, 2011, and also included the previously filed revenues and expenses for the January 1, 2011 through June 30, 2011 period. The filing identified a total net overrecovery of $18.7 million, which includes the remaining uncollected or non-refunded portions from previous filings. PURA has not yet set a schedule to review this filing, but we do not expect the outcome of the PURA's review to have a material adverse impact on CL&P's financial position, results of operations or cash flows.
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