Eversource Energy Reports Third Quarter 2016 Results

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

Eversource Energy ES today reported earnings of $265.3 million, or $0.83 per share, in the third quarter of 2016, compared with earnings of $235.9 million, or $0.74 per share, in the third quarter of 2015. In the first nine months of 2016, Eversource Energy earned $713.1 million, or $2.24 per share, compared with earnings of $696.7 million, or $2.19 per share, in the first nine months of 2015.

"We look forward to completing a successful 2016," said Jim Judge, Eversource president and chief executive officer. "Our earnings are on track to achieve our full-year guidance of $2.90-$3.05 per share and we continue to be confident in our long-term earnings and dividend growth rate of 5-7 percent. Additionally, our service reliability levels, despite the challenge of a hot summer and increased storm activity, continue to place us in the upper tier of utilities."

Electric Transmission

Eversource Energy's transmission segment earned $88.4 million in the third quarter of 2016 and $266.6 million in the first nine months of 2016, compared with earnings of $78 million in the third quarter of 2015 and $225 million in the first nine months of 2015. The improved results for both periods were primarily due to an increased level of investment in Eversource Energy's transmission system, as well as the absence in 2016 of a $12.4 million first-quarter 2015 charge related to an order issued by the Federal Energy Regulatory Commission concerning the return on equity allowed New England transmission owners.

Electric Distribution and Generation

Eversource Energy's electric distribution and generation segment earned $170.1 million in the third quarter of 2016 and $381.3 million in the first nine months of 2016, compared with earnings of $167.3 million in the third quarter of 2015 and $418.7 million in the first nine months of 2015. Improved third quarter results primarily reflect higher retail revenues, which were partially offset by higher depreciation and property taxes resulting from increased investment in Eversource's electric distribution systems. The lower year-to-date results primarily reflect the absence in 2016 of the benefits associated with resolving several regulatory issues at NSTAR Electric in the first quarter of 2015.

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

					2016					2015
CL&P					$85.2					$78.8
NSTAR Electric					$116.7					$118.1
PSNH					$38.5					$32.5
WMECO					$16.0					$15.0

Earnings of Eversource Energy's electric utility subsidiaries for the first nine months are noted below in millions, net of preferred dividends:

					2016					2015
CL&P					$252.4					$224.0
NSTAR Electric					$238.4					$282.7
PSNH					$105.8					$92.5
WMECO					$46.1					$42.4

Natural Gas Distribution

Eversource Energy's natural gas distribution segment had a loss of $7 million in the third quarter of 2016 and earnings of $51.9 million in the first nine months of 2016, compared with a loss of $3.5 million in the third quarter of 2015 and earnings of $57.5 million in the first nine months of 2015. Lower third quarter results were due primarily to a higher effective tax rate in 2016. Lower nine-month results in 2016 were due primarily to the impact on firm sales of a much milder winter in 2016.

Parent and other companies

Eversource Energy parent and other companies earned $13.8 million in the third quarter of 2016 and $13.3 million in the first nine months of 2016, compared with a net loss of $5.9 million in the third quarter of 2015 and a net loss $4.5 million in the first nine months of 2015. Improved third quarter and year-to-date results were due primarily to a lower effective tax rate and the absence in 2016 of integration costs. Those impacts were partially offset by higher interest costs.

The following table reconciles 2016 and 2015 third quarter and first nine months earnings per share:

									Third Quarter						Nine Months
	2015			Reported EPS					$0.74						$2.19
				Higher transmission earnings in 2016					$0.04						$0.14
				Higher retail electric revenues and generation results in 2016					$0.03						$0.02
				Lower firm natural gas sales in 2016					---						($0.03	)
				Lower non-tracked O&M in 2016					$0.02						$0.02
				Higher property tax, depreciation, and amortization expense in 2016					($0.02	)					($0.05	)
				Higher interest expense					($0.01	)					($0.03	)
				Lower effective tax rate					$0.02						---
				Other					$0.01						($0.02	)
	2016			Reported EPS					$0.83						$2.24

Financial results for the third quarter and first nine months of 2016 and 2015 are noted below:

Three months ended:

	(in millions, except EPS)				September 30, 2016					September 30, 2015					Increase/ (Decrease)					2016 EPS1
	Electric Distribution/Generation				$170.1					$167.3					$2.8					$0.53
	Natural Gas Distribution				($7.0	)				($3.5	)				($3.5	)				($0.02	)
	Electric Transmission				$88.4					$78.0					$10.4					$0.28
	Eversource Parent and Other Companies				$13.8					($5.9	)				$19.7					$0.04
	Reported Earnings/EPS				$265.3					$235.9					$29.4					$0.83

Nine months ended:

	(in millions, except EPS)				September 30, 2016				September 30, 2015					Increase/ (Decrease)					2016 EPS1
	Electric Distribution/Generation				$381.3				$418.7					($37.4	)				$1.20
	Natural Gas Distribution				$51.9				$57.5					($5.6	)				$0.16
	Electric Transmission				$266.6				$225.0					$41.6					$0.84
	Eversource Parent and Other Companies				$13.3				($4.5	)				$17.8					$0.04
	Reported Earnings/EPS				$713.1				$696.7					$16.4					$2.24

Retail sales data:

	Three months ended:				September 30, 2016				September 30, 2015				% Change
	Electric Distribution (Gwh)
	Traditional				8,131				8,136				(0.01	%)
	Decoupled				7,213				7,070				2.0	%
	Total Electric Distribution				15,344				15,206				0.9	%
	Natural Gas Distribution (mmcf)
	Traditional				5,270				5,449				(3.3	%)
	Decoupled and Special Contracts				5,653				5,688				(0.6	%)
	Total Natural Gas Distribution				10,923				11,137				(1.9	%)

Nine months ended:				September 30, 2016				September 30, 2015				% Change
Electric Distribution (Gwh)
Traditional				21,731				22,309				(2.6	%)
Decoupled				19,235				19,865				(3.2	%)
Total Electric Distribution				40,966				42,174				(2.9	%)
Natural Gas Distribution (mmcf)
Traditional				31,570				36,355				(13.2	%)
Decoupled and Special Contracts				36,537				42,134				(13.3	%)
Total Natural Gas Distribution				68,107				78,489				(13.2	%)

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 November 2, 2016, beginning at 9 a.m. Eastern Time. The webcast and associated 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 parent common shares outstanding for the period. Management uses this non-GAAP financial measure to evaluate earnings results, provide details of earnings results by business, and more fully compare and explain our third quarter and year-to-date 2016 and 2015 results. 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 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 conditions, which could include disruptive technology related to Eversource's current or future business model; changes in economic conditions, including impact on interest rates, tax policies, and customer demand and payment ability; 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'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 in Eversource's reports filed with the Securities and Exchange Commission (SEC) and updated as necessary, and are available on the SEC's website at www.sec.gov. All such factors are difficult to predict and contain uncertainties that may materially affect Eversource Energy's actual results. You should not place undue reliance on the forward-looking statements; each speaks only as of the date on which such statement is made, and Eversource Energy undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.

EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Thousands of Dollars)			September 30, 2016					December 31, 2015
ASSETS
Current Assets:
Cash and Cash Equivalents			$	40,056				$	23,947
Receivables, Net			963,279					775,480
Unbilled Revenues			187,749					202,647
Taxes Receivable			4,527					305,359
Fuel, Materials, Supplies and Inventory			311,051					336,476
Regulatory Assets			752,378					845,843
Prepayments and Other Current Assets			155,612					129,034
Total Current Assets			2,414,652					2,618,786
Property, Plant and Equipment, Net			20,807,943					19,892,441
Deferred Debits and Other Assets:
Regulatory Assets			3,469,879					3,737,960
Goodwill			3,519,401					3,519,401
Marketable Securities			525,809					516,478
Other Long-Term Assets			344,653					295,243
Total Deferred Debits and Other Assets			7,859,742					8,069,082
Total Assets			$	31,082,337				$	30,580,309
LIABILITIES AND CAPITALIZATION
Current Liabilities:
Notes Payable			$	734,500				$	1,160,953
Long-Term Debt - Current Portion			373,883					228,883
Accounts Payable			679,505					813,646
Obligations to Third Party Suppliers			166,845					128,564
Regulatory Liabilities			160,442					107,759
Other Current Liabilities			526,853					549,985
Total Current Liabilities			2,642,028					2,989,790
Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes			5,442,856					5,147,678
Regulatory Liabilities			550,162					513,595
Derivative Liabilities			427,382					337,102
Accrued Pension, SERP and PBOP			1,116,240					1,407,288
Other Long-Term Liabilities			875,589					871,499
Total Deferred Credits and Other Liabilities			8,412,229					8,277,162
Capitalization:
Long-Term Debt			9,235,128					8,805,574
Noncontrolling Interest - Preferred Stock of Subsidiaries			155,568					155,568
Equity:
Common Shareholders' Equity:
Common Shares			1,669,392					1,669,313
Capital Surplus, Paid In			6,256,580					6,262,368
Retained Earnings			3,087,006					2,797,355
Accumulated Other Comprehensive Loss			(65,617		)			(66,844		)
Treasury Stock			(309,977		)			(309,977		)
Common Shareholders' Equity			10,637,384					10,352,215
Total Capitalization			20,028,080					19,313,357
Total Liabilities and Capitalization			$	31,082,337				$	30,580,309

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 September 30,										For the Nine Months Ended September 30,
(Thousands of Dollars, Except Share Information)			2016					2015					2016					2015
Operating Revenues			$	2,039,706				$	1,933,105				$	5,862,525				$	6,263,597
Operating Expenses:
Purchased Power, Fuel and Transmission			665,810					702,640					2,001,929					2,549,807
Operations and Maintenance			324,734					327,283					965,584					977,306
Depreciation			181,288					167,884					531,781					495,389
Amortization of Regulatory Assets/(Liabilities), Net			43,942					(16,851		)			56,223					42,587
Energy Efficiency Programs			149,121					132,107					405,962					380,559
Taxes Other Than Income Taxes			164,942					150,804					479,219					439,221
Total Operating Expenses			1,529,837					1,463,867					4,440,698					4,884,869
Operating Income			509,869					469,238					1,421,827					1,378,728
Interest Expense			99,865					92,534					298,568					279,635
Other Income, Net			13,641					5,241					23,689					23,866
Income Before Income Tax Expense			423,645					381,945					1,146,948					1,122,959
Income Tax Expense			156,446					144,146					428,186					420,640
Net Income			267,199					237,799					718,762					702,319
Net Income Attributable to Noncontrolling Interests			1,880					1,879					5,639					5,639
Net Income Attributable to Common Shareholders			$	265,319				$	235,920				$	713,123				$	696,680
Basic Earnings Per Common Share			$	0.83				$	0.74				$	2.24				$	2.20
Diluted Earnings Per Common Share			$	0.83				$	0.74				$	2.24				$	2.19
Dividends Declared Per Common Share			$	0.45				$	0.42				$	1.34				$	1.25
Weighted Average Common Shares Outstanding:
Basic			317,787,836					317,452,212					317,696,823					317,296,107
Diluted			318,577,079					318,405,269					318,511,609					318,396,042

EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
			For the Nine Months Ended September 30,
(Thousands of Dollars)			2016					2015
Operating Activities:
Net Income			$	718,762				$	702,319
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation			531,781					495,389
Deferred Income Taxes			301,413					153,353
Pension, SERP and PBOP Expense			31,627					71,802
Pension and PBOP Contributions			(121,854		)			(162,880		)
Regulatory Overrecoveries, Net			152,808					31,874
Amortization of Regulatory Assets, Net			56,223					42,587
Other			(27,671		)			(39,822		)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net			(191,454		)			(148,442		)
Fuel, Materials, Supplies and Inventory			25,425					47,380
Taxes Receivable/Accrued, Net			347,898					383,047
Accounts Payable			(121,513		)			(233,660		)
Other Current Assets and Liabilities, Net			(53,077		)			8,370
Net Cash Flows Provided by Operating Activities			1,650,368					1,351,317
Investing Activities:
Investments in Property, Plant and Equipment			(1,359,171		)			(1,177,285		)
Proceeds from Sales of Marketable Securities			444,209					556,582
Purchases of Marketable Securities			(437,197		)			(535,044		)
Other Investing Activities			(9,463		)			(2,769		)
Net Cash Flows Used in Investing Activities			(1,361,622		)			(1,158,516		)
Financing Activities:
Cash Dividends on Common Shares			(423,471		)			(397,363		)
Cash Dividends on Preferred Stock			(5,639		)			(5,639		)
Decrease in Notes Payable			(426,453		)			(387,575		)
Issuance of Long-Term Debt			800,000					825,000
Retirements of Long-Term Debt			(200,000		)			(216,700		)
Other Financing Activities			(17,074		)			(13,446		)
Net Cash Flows Used in Financing Activities			(272,637		)			(195,723		)
Net Increase/(Decrease) in Cash and Cash Equivalents			16,109					(2,922		)
Cash and Cash Equivalents - Beginning of Period			23,947					38,703
Cash and Cash Equivalents - End of Period			$	40,056				$	35,781

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