Eversource Energy Reports Second Quarter 2015 Results

HARTFORD, Conn. & BOSTON--(BUSINESS WIRE)--

Eversource Energy ES today reported earnings of $207.5 million, or $0.65 per share, in the second quarter of 2015, compared with earnings of $127.4 million, or $0.40 per share, in the second quarter of 2014. Second quarter results included after-tax integration costs of $2.1 million in 2015 and $4.5 million in 2014. Excluding those integration costs, Eversource Energy earned $209.6 million, or $0.66 per share¹, in the second quarter of 2015 and $131.9 million, or $0.42 per share¹, in the second quarter of 2014.

In the first half of 2015, Eversource Energy earned $460.8 million, or $1.45 per share, compared with earnings of $363.3 million, or $1.15 per share, in the first half of 2014. Excluding after-tax integration costs, Eversource Energy earned $466.9 million, or $1.47 per share¹, in the first half of 2015, compared with $373.7 million, or $1.18 per share¹, in the first half of 2014.

"We had an excellent first half of 2015 with financial performance consistent with our targeted 6-to-8 percent long-term earnings growth rate and our 2015 projected earnings of $2.75 to $2.90 per share," said Thomas J. May, Eversource Energy chairman, president and chief executive officer. "Additionally, we have continued to improve the service we deliver to our 3.6 million customers and are making solid progress in providing long-term solutions to the severe energy issues that have gripped New England over the past few winters."

Electric Transmission

Eversource Energy's transmission segment earned $80.4 million in the second quarter of 2015 and $147 million in the first half of 2015, compared with earnings of $43.9 million in the second quarter of 2014 and $118.8 million in the first half of 2014. The improved results were primarily the result of the absence in 2015 of a second quarter 2014 charge and an increased level of investment in Eversource Energy's transmission system. Second quarter 2014 results included an after-tax charge of $32.1 million, or $0.10 per share, related to Federal Energy Regulatory Commission orders issued in June 2014 concerning the authorized return on equity for the owners of New England's electric transmission system.

Electric Distribution and Generation

Eversource Energy's electric distribution and generation segment earned $121.6 million in the second quarter of 2015 and $252.1 million in the first half of 2015, compared with earnings of $83.4 million in the second quarter of 2014 and $195.6 million in the first half of 2014. The higher results reflect higher distribution revenues and lower operations and maintenance expense.

The second-quarter earnings of Eversource Energy's electric utility subsidiaries are noted below in millions, net of preferred dividends:

					2015					2014
CL&P					$77.9					$36.0
NSTAR Electric					$81.6					$59.6
PSNH					$28.1					$24.1
WMECO					$14.2					$7.0

The first-half earnings of Eversource Energy's electric utility subsidiaries are noted below in millions, net of preferred dividends:

					2015					2014
CL&P					$145.7					$113.9
NSTAR Electric					$164.6					$117.2
PSNH					$60.1					$56.7
WMECO					$27.4					$25.1

Natural Gas Distribution

Eversource Energy's natural gas distribution segment earned $5.3 million in the second quarter of 2015 and $61 million in the first half of 2015, compared with $2 million in the second quarter of 2014 and $54.1 million in the first half of 2014. Firm natural gas sales rose 5.9 percent in the first half of 2015, compared with the first half of 2014, due to colder first quarter weather and an increased number of heating customers. Firm natural gas sales rose 2.8 percent on a weather-adjusted basis.

Eversource Energy parent and other companies

Excluding integration costs, Eversource Energy parent and other companies earned $2.3 million in the second quarter of 2015 and $6.8 million in the first half of 2015, compared with earnings of $2.6 million in the second quarter of 2014 and $5.2 million in the first half of 2014. Higher results in 2015 compared to 2014 were due in part to lower 2015 income tax expense.

The following table reconciles 2015 and 2014 second quarter and first six months earnings per share:

										Second Quarter						First Six Months
2014					Reported EPS					$0.40						$1.15
					Higher transmission earnings in 2015					$0.11						$0.09
					Higher retail electric revenues in 2015					$0.10						$0.22
					Higher firm natural gas sales in 2015					---						$0.02
					Lower non-tracked O&M in 2015					$0.06						$0.08
					Higher property tax, depreciation, and amortization expense in 2015					($0.06	)					($0.12	)
					Other					$0.03						---
					Lower integration costs in 2015 vs. 2014					$0.01						$0.01
2015					Reported EPS					$0.65						$1.45

Financial results for the second quarter and first half of 2015 and 2014 are noted below:

Three months ended:

(in millions, except EPS)					June 30, 2015						June 30, 2014						Increase/ (Decrease)						2015 EPS1
Electric Distribution/Generation					$121.6						$83.4						$38.2						$0.38
Natural Gas Distribution					$5.3						$2.0						$3.3						$0.02
Electric Transmission					$80.4						$43.9						$36.5						$0.25
Eversource Parent and Other Companies					$2.3						$2.6						($0.3	)					$0.01
Earnings, ex. integration costs					$209.6						$131.9						$77.7						$0.66
Integration costs					($2.1	)					($4.5	)					$2.4						($0.01	)
Reported Earnings					$207.5						$127.4						$80.1						$0.65

Six months ended:

(in millions, except EPS)					June 30, 2015						June 30, 2014						Increase/ (Decrease)					2015 EPS1
Electric Distribution/Generation					$252.1						$195.6						$56.5					$0.80
Natural Gas Distribution					$61.0						$54.1						$6.9					$0.19
Electric Transmission					$147.0						$118.8						$28.2					$0.46
Eversource Parent and Other Companies					$6.8						$5.2						$1.6					$0.02
Earnings, ex. integration costs					$466.9						$373.7						$93.2					$1.47
Integration costs					($6.1	)					($10.4	)					$4.3					($0.02	)
Reported Earnings					$460.8						$363.3						$97.5					$1.45

Retail sales data:

					June 30, 2015					June 30, 2014					% Change Actual
Electric Distribution
Gwh for three months ended					12,519					12,536					(0.1	%)
Gwh for six months ended					26,968					26,884					0.3	%
Natural Gas Distribution
Firm volumes in mmcf for three months ended					15,702					15,895					(1.2	%)
Firm volumes in mmcf for six months ended					65,083					61,445					5.9	%

Eversource Energy has approximately 317 million common shares outstanding. It operates New England's largest energy delivery system, serving approximately 3.6 million customers in Connecticut, Massachusetts and New Hampshire.

Note: Eversource Energy will webcast a conference call with senior management on July 31, 2015, beginning at 9 a.m. Eastern Time. The webcast and accompanying slides can be accessed through Eversource's website at www.eversource.com.

¹ All per share amounts in this news release are reported on a diluted basis. The only common equity securities that are publicly traded are common shares of Eversource Energy. The earnings and EPS of each business do not represent a direct legal interest in the assets and liabilities allocated to such business, but rather represent a direct interest in Eversource Energy's assets and liabilities as a whole. EPS by business is a non-GAAP (not determined using generally accepted accounting principles) measure that is calculated by dividing the net income or loss attributable to controlling interests of each business by the weighted average diluted Eversource Energy parent common shares outstanding for the period. In addition, second quarter and first half 2015 and 2014 earnings and EPS exclude certain integration costs that are non-GAAP financial measures. Management uses these non-GAAP financial measures to evaluate earnings results and to provide details of earnings results by business and to more fully compare and explain our second quarter and first half 2015 and 2014 results without including the impact of the non-recurring integration costs. Management believes that this measurement is useful to investors to evaluate the actual and projected financial performance and contribution of Eversource Energy's businesses. Non-GAAP financial measures should not be considered as alternatives to Eversource Energy consolidated net income attributable to controlling interests or EPS determined in accordance with GAAP as indicators of Eversource Energy's operating performance.

This news release includes statements concerning Eversource Energy's expectations, beliefs, plans, objectives, goals, strategies, assumptions of future events, future financial performance or growth and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, readers can identify these forward-looking statements through the use of words or phrases such as "estimate, "expect," "anticipate," "intend," "plan," "project," "believe," "forecast," "should," "could," and other 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, cyber breaches, acts of war or terrorism, or grid disturbances; actions or inaction of local, state and federal regulatory, public policy, and taxing bodies; changes in business and economic conditions, including their impact on interest rates, bad debt expense and demand for Eversource Energy's products and services, which could include disruptive technology related to our current or future business model; fluctuations in weather patterns; changes in laws, regulations or regulatory policy; changes in levels or timing of capital expenditures; disruptions in the capital markets or other events that make Eversource Energy's access to necessary capital more difficult or costly; developments in legal or public policy doctrines; technological developments; changes in accounting standards and financial reporting regulations; actions of rating agencies; and other presently unknown or unforeseen factors. Other risk factors are detailed from time to time in the company's reports filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which such statement is made, and Eversource Energy undertakes no obligation to update the information contained in any forward-looking statements to reflect developments or circumstances occurring after the statement is made or to reflect the occurrence of unanticipated events.

EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
						June 30,						December 31,
(Thousands of Dollars)						2015						2014
ASSETS
Current Assets:
		Cash and Cash Equivalents				$	36,469					$	38,703
		Receivables, Net					903,578						856,346
		Unbilled Revenues					205,155						211,758
		Taxes Receivable					117,792						337,307
		Fuel, Materials and Supplies					289,561						349,664
		Regulatory Assets					709,660						672,493
		Marketable Securities					124,830						124,173
		Prepayments and Other Current Assets					62,884						102,021
Total Current Assets							2,449,929						2,692,465
Property, Plant and Equipment, Net							19,079,189						18,647,041
Deferred Debits and Other Assets:
		Regulatory Assets					4,016,684						4,054,086
		Goodwill					3,519,401						3,519,401
		Marketable Securities					497,919						515,025
		Other Long-Term Assets					316,817						349,957
Total Deferred Debits and Other Assets							8,350,821						8,438,469
Total Assets						$	29,879,939					$	29,777,975
LIABILITIES AND CAPITALIZATION
Current Liabilities:
	Notes Payable					$	953,700					$	956,825
	Long-Term Debt - Current Portion						278,883						245,583
	Accounts Payable						598,716						868,231
	Regulatory Liabilities						208,510						235,022
	Accumulated Deferred Income Taxes						203,375						160,288
	Other Current Liabilities						595,801						668,432
Total Current Liabilities							2,838,985						3,134,381
Deferred Credits and Other Liabilities:
	Accumulated Deferred Income Taxes						4,606,159						4,467,473
	Regulatory Liabilities						510,807						515,144
	Derivative Liabilities						380,966						409,632
	Accrued Pension, SERP and PBOP						1,636,769						1,638,558
	Other Long-Term Liabilities						875,985						874,387
Total Deferred Credits and Other Liabilities							8,010,686						7,905,194
Capitalization:
	Long-Term Debt						8,689,647						8,606,017
	Noncontrolling Interest - Preferred Stock of Subsidiaries						155,568						155,568
	Equity:
	Common Shareholders' Equity:
		Common Shares					1,669,167						1,666,796
		Capital Surplus, Paid In					6,253,411						6,235,834
		Retained Earnings					2,644,485						2,448,661
		Accumulated Other Comprehensive Loss					(72,033	)					(74,009	)
		Treasury Stock					(309,977	)					(300,467	)
	Common Shareholders' Equity						10,185,053						9,976,815
Total Capitalization							19,030,268						18,738,400
Total Liabilities and Capitalization						$	29,879,939					$	29,777,975

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 Eversource Energy and Subsidiaries and is not a representation, prospectus, or intended for use in connection with any purchase or sale of securities.

EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
									For the Three Months Ended June 30,														For the Six Months Ended June 30,
(Thousands of Dollars, Except Share Information)									2015						2014								2015					2014
Operating Revenues									$	1,817,061					$	1,677,614							$	4,330,491				$	3,968,204
Operating Expenses:
	Purchased Power, Fuel and Transmission									685,118						624,211								1,847,167					1,602,362
	Operations and Maintenance									316,641						373,234								650,024					724,922
	Depreciation									163,668						152,207								327,505					303,014
	Amortization of Regulatory (Liabilities)/Assets, Net									(1,166	)					(3,542	)							59,438					54,356
	Energy Efficiency Programs									101,850						102,711								248,452					241,536
	Taxes Other Than Income Taxes									138,935						134,803								288,415					280,335
			Total Operating Expenses							1,405,046						1,383,624								3,421,001					3,206,525
Operating Income										412,015						293,990								909,490					761,679
Interest Expense:
	Interest on Long-Term Debt									88,021						87,491								175,735					174,868
	Other Interest									4,238						5,004								11,367					7,603
		Interest Expense								92,259						92,495								187,102					182,471
Other Income, Net										12,899						5,526								18,626					7,194
Income Before Income Tax Expense										332,655						207,021								741,014					586,402
Income Tax Expense										123,268						77,774								276,494					219,319
Net Income										209,387						129,247								464,520					367,083
Net Income Attributable to Noncontrolling Interests										1,880						1,880								3,759					3,759
Net Income Attributable to Controlling Interest									$	207,507					$	127,367							$	460,761				$	363,324
Basic and Diluted Earnings Per Common Share									$	0.65					$	0.40							$	1.45				$	1.15
Dividends Declared Per Common Share									$	0.42					$	0.39							$	0.84				$	0.79
Weighted Average Common Shares Outstanding:
	Basic									317,613,166						315,950,510								317,352,004					315,742,511
	Diluted									318,559,568						317,112,801								318,525,378					317,002,461

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 Eversource Energy and Subsidiaries and is not a representation, prospectus, or intended for use in connection with any purchase or sale of securities.

EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
						For the Six Months Ended June 30,
(Thousands of Dollars)						2015						2014
Operating Activities:
	Net Income					$	464,520					$	367,083
	Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
		Depreciation					327,505						303,014
		Deferred Income Taxes					176,800						133,149
		Pension, SERP and PBOP Expense					48,432						47,558
		Pension and PBOP Contributions					(31,032	)					(40,640	)
		Regulatory (Under)/Over Recoveries, Net					(73,547	)					164,388
		Amortization of Regulatory Assets, Net					59,438						54,356
		Proceeds from DOE Damages Claim, Net					-						125,658
		Other					(48,247	)					(9,359	)
	Changes in Current Assets and Liabilities:
		Receivables and Unbilled Revenues, Net					(123,984	)					(57,570	)
		Fuel, Materials and Supplies					60,044						26,633
		Taxes Receivable/Accrued, Net					214,577						(62,900	)
		Accounts Payable					(228,176	)					(112,954	)
		Other Current Assets and Liabilities, Net					9,226						(41,753	)
Net Cash Flows Provided by Operating Activities							855,556						896,663
Investing Activities:
	Investments in Property, Plant and Equipment						(740,379	)					(724,043	)
	Proceeds from Sales of Marketable Securities						427,990						256,309
	Purchases of Marketable Securities						(408,242	)					(257,168	)
	Other Investing Activities						4,821						3,473
Net Cash Flows Used in Investing Activities							(715,810	)					(721,429	)
Financing Activities:
	Cash Dividends on Common Shares						(264,936	)					(237,161	)
	Cash Dividends on Preferred Stock						(3,759	)					(3,759	)
	Decrease in Notes Payable						(449,375	)					(213,000	)
	Issuance of Long-Term Debt						750,000						650,000
	Retirements of Long-Term Debt						(166,577	)					(376,650	)
	Other Financing Activities						(7,333	)					(3,932	)
Net Cash Flows Used in Financing Activities							(141,980	)					(184,502	)
Net Decrease in Cash and Cash Equivalents							(2,234	)					(9,268	)
Cash and Cash Equivalents - Beginning of Period							38,703						43,364
Cash and Cash Equivalents - End of Period						$	36,469					$	34,096

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 Eversource Energy and Subsidiaries and is not a representation, prospectus, or intended for use in connection with any purchase or sale of securities.

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