Market Overview

Eversource Energy Reports Second Quarter Results

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Eversource Energy (NYSE:ES) today reported earnings of $242.8 million,
or $0.76 per share, in the second quarter of 2018, compared with
earnings of $230.7 million, or $0.72 per share, in the second quarter of
2017. In the first half of 2018, Eversource Energy earned $512.3
million, or $1.61 per share, compared with earnings of $490.2 million,
or $1.54 per share, in the first half of 2017.

Eversource Energy also today reaffirmed its 2018 earnings per share
(EPS) projection of $3.20 to $3.30 per share and its long-term EPS
growth rate of 5 to 7 percent.

"We had a strong start to the year. Following a number of severe
Nor'easters in March and a highly unusual round of tornadoes in western
Connecticut in mid-May, our employees worked quickly, effectively and
safely to restore electric service to hundreds of thousands of our
customers, many of whom experienced unprecedented damage in their
neighborhoods," said Jim Judge, Eversource chairman, president and chief
executive officer. "Those storms underscore the need for our continued
investment to further improve the reliability and resilience of our
electric grid which has been so tested by Mother Nature again this year."

Electric Transmission

Eversource Energy's transmission segment earned $112.7 million in the
second quarter of 2018 and $220.1 million in the first half of 2018,
compared with earnings of $96.4 million in the second quarter of 2017
and $190.6 million in the first half of 2017. Improved results were due
to a higher level of investment in Eversource's electric transmission
system.

Electric Distribution

Eversource Energy's electric distribution segment earned $101.3 million
in the second quarter of 2018 and $205.5 million in the first half of
2018, compared with earnings of $121.9 million in the second quarter of
2017 and $236 million in the first half of 2017. Lower results were due
primarily to the divestiture of New Hampshire generation assets, higher
property tax expense, and the timing of electric revenues under the
recently implemented revenue decoupling for eastern Massachusetts
customers. These factors were partially offset by distribution rate
adjustments.

Natural Gas Distribution

Eversource Energy's natural gas distribution segment earned $5 million
in the second quarter of 2018 and $62.8 million in the first half of
2018, compared with earnings of $4.5 million in the second quarter of
2017 and $55.3 million in the first half of 2017. Improved results were
primarily due to colder weather in 2018, which increased sales in
Eversource's Connecticut natural gas business, where sales are not
currently decoupled. This factor was partially offset by higher
operation and maintenance costs and depreciation expense. Firm natural
gas sales rose 6.6 percent in the first half of 2018, compared with the
same period of 2017.

Water Distribution

Eversource's Aquarion Water Company subsidiary earned $7.2 million in
the second quarter of 2018 and $8.7 million in the first half of 2018.
Eversource Energy acquired Aquarion Water in December 2017.

Eversource Energy Parent and Other Companies

Eversource Energy parent and other companies earned $16.6 million in the
second quarter of 2018 and $15.2 million in the first half of 2018,
compared with $7.9 million for the second quarter of 2017 and $8.3
million in the first half of 2017. Improved 2018 results were due
primarily to increased gains associated with Eversource's investments in
renewable energy facilities and a lower effective tax rate, partially
offset by higher interest expense.

The following table reconciles 2018 and 2017 second quarter and first
half earnings per share:

           
            Second Quarter     First Six Months
2017     Reported EPS     $0.72     $1.54
      Higher transmission earnings in 2018     0.05     0.09
      Water distribution earnings in 2018     0.02     0.03
      Higher earnings at Eversource parent and other in 2018     0.02     0.01
      Higher natural gas revenues in 2018     0.01     0.02
      Lower non-tracked O&M in 2018     0.01     --
      Lower generation earnings in 2018     (0.02)     (0.04)
      Lower distribution margin in 2018     (0.04)     --
      Higher electric and natural gas depreciation, property

tax and interest expense in 2018

   

(0.02)

   

(0.04)

      Other     0.01     --
2018     Reported EPS     $0.76     $1.61
 

Financial results by segment for the second quarter and first six months
of 2018 and 2017 are noted below:

               

Three months ended:

 

(in millions, except EPS)

   

June 30, 2018

   

June 30, 2017

   

Increase/
(Decrease)

   

2018 EPS1

Electric Transmission     $112.7     $96.4     $16.3     $0.35
Electric Distribution     101.3     121.9     (20.6)     0.32
Natural Gas Distribution     5.0     4.5     0.5     0.02
Water Distribution     7.2     --     7.2     0.02
Eversource Parent and Other Companies     16.6     7.9     8.7     0.05
Reported Earnings     $242.8     $230.7     $12.1     $0.76
 
               

Six months ended:

 

(in millions, except EPS)

   

June 30, 2018

   

June 30, 2017

   

Increase/
(Decrease)

   

2018 EPS1

Electric Transmission     $220.1     $190.6     $29.5     $0.69
Electric Distribution     205.5     236.0     (30.5)     0.65
Natural Gas Distribution     62.8     55.3     7.5     0.20
Water Distribution     8.7     --     8.7     0.03
Eversource Parent and Other Companies     15.2     8.3     6.9     0.04
Reported Earnings     $512.3     $490.2     $22.1     $1.61
 

Retail sales data:

                   
Three months ended:     June 30, 2018     June 30, 2017     % Change
Electric Distribution (Gwh)                  
Traditional     1,803     1,823     (1.1%)
Decoupled     10,330     10,341     (0.1%)
Total Electric Distribution     12,133     12,164     (0.3%)
                   
Natural Gas Distribution (mmcf)                  
Traditional     9,287     7,778     19.4%
Decoupled and Special Contracts     9,645     9,238     4.4%
Total Natural Gas Distribution     18,932     17,016     11.3%
           
                   
Six months ended:     June 30, 2018     June 30, 2017     % Change
Electric Distribution (Gwh)                  
Traditional     5,650     5,522     2.3%
Decoupled     19,704     19,813     (0.6%)
Total Electric Distribution     25,354     25,335     0.1%
                   
Natural Gas Distribution (mmcf)                  
Traditional     29,760     26,683     11.5%
Decoupled and Special Contracts     32,223     31,479     2.4%
Total Natural Gas Distribution     61,983     58,162     6.6%
           

Eversource Energy has approximately 317 million common shares
outstanding and operates New England's largest energy delivery system.
It serves nearly 4 million electric, natural gas and water customers in
Connecticut, Massachusetts and New Hampshire.

 

Note: Eversource Energy will webcast a conference call with
senior management on August 1, 2018, beginning at 9 a.m. Eastern
Time. The webcast and associated slides can be accessed through
Eversource Energy'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 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 second quarter and first half 2018 and 2017 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 common shareholders 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 are based on current
expectations, estimates, assumptions or projections and are not
guarantees of future performance. These expectations, estimates,
assumptions or projections may vary materially from actual results.
Accordingly,
any such statements are qualified in their entirety by reference to, and
are accompanied by, important factors that could cause our actual
results to differ materially from those contained in our forward-looking
statements, including, but not limited to,
cyberattacks or
breaches, including those resulting in the compromise of the
confidentiality of our proprietary information and the personal
information of our customers, acts of war or terrorism, physical attacks
or grid disturbances that may damage and disrupt our transmission and
distribution systems, ability or inability to commence and complete our
major strategic development projects and opportunities, actions or
inaction of local, state and federal regulatory, public policy and
taxing bodies, substandard performance of third-party suppliers and
service providers, fluctuations in weather patterns, including extreme
weather due to climate change, changes in business conditions, which
could include disruptive technology related to our current or future
business model, increased conservation measures of customers and
development of alternative energy sources, contamination of or
disruption in our water supplies, changes in economic conditions,
including impact on interest rates, tax policies, and customer demand
and payment ability, changes in levels or timing of capital
expenditures, disruptions in the capital markets or other events that
make our access to necessary capital more difficult or costly, changes
in laws, regulations or regulatory policy, including compliance with
environmental laws and regulations, 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 Energy's reports filed
with the Securities and Exchange Commission (SEC) and updated as
necessary, and are available on Eversource Energy's website at
www.eversource.com
and 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 many of
which are beyond our control.
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, except as required by federal
securities laws, 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)     As of June 30, 2018     As of December 31, 2017
 

ASSETS

Current Assets:
Cash and Cash Equivalents $ 64,154 $ 38,165
Receivables, Net 967,590 925,083
Unbilled Revenues 160,301 201,361
Taxes Receivable 156,236 18,682
Fuel, Materials, Supplies and Inventory 171,601 223,063
Regulatory Assets 590,898 741,868
Prepayments and Other Current Assets 107,379 119,327
Assets Held for Sale 59,431   219,550  
Total Current Assets 2,277,590   2,487,099  
 
Property, Plant and Equipment, Net 24,476,890   23,617,463  
 
Deferred Debits and Other Assets:
Regulatory Assets 4,805,440 4,497,447
Goodwill 4,427,266 4,427,266
Marketable Securities 576,440 585,419
Other Long-Term Assets 680,718   605,692  
Total Deferred Debits and Other Assets 10,489,864   10,115,824  
 
Total Assets $ 37,244,344   $ 36,220,386  

 

LIABILITIES AND CAPITALIZATION

Current Liabilities:
Notes Payable $ 1,190,810 $ 1,088,087
Long-Term Debt – Current Portion 387,296 549,631
Rate Reduction Bonds – Current Portion 30,727
Accounts Payable 1,010,389 1,085,034
Regulatory Liabilities 247,369 128,071
Other Current Liabilities 662,964   738,222  
Total Current Liabilities 3,529,555   3,589,045  
 
Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes 3,473,870 3,297,518
Regulatory Liabilities 3,689,679 3,637,273
Derivative Liabilities 394,459 377,257
Accrued Pension, SERP and PBOP 1,044,397 1,228,091
Other Long-Term Liabilities 1,069,391   1,073,501  
Total Deferred Credits and Other Liabilities 9,671,796   9,613,640  
 
Long-Term Debt 12,009,264   11,775,889  
 
Rate Reduction Bonds 604,936    
 
Noncontrolling Interest – Preferred Stock of Subsidiaries 155,570   155,570  
 
Common Shareholders' Equity:
Common Shares 1,669,392 1,669,392
Capital Surplus, Paid In 6,229,247 6,239,940
Retained Earnings 3,753,343 3,561,084
Accumulated Other Comprehensive Loss (60,988 ) (66,403 )
Treasury Stock (317,771 ) (317,771 )
Common Shareholders' Equity 11,273,223   11,086,242  
 
Total Liabilities and Capitalization $ 37,244,344   $ 36,220,386  

The data contained in this report is preliminary and is unaudited. This
report is being submitted for the sole purpose of providing information
to 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)     2018     2017     2018     2017
       
Operating Revenues $ 1,853,856   $ 1,762,811   $ 4,141,818   $ 3,867,946
 
Operating Expenses:
Purchased Power, Fuel and Transmission 653,915 549,704 1,600,662 1,303,353
Operations and Maintenance 293,858 310,193 626,406 648,500
Depreciation 199,140 189,881 403,406 376,686
Amortization 36,203 (7,807 ) 81,397 16,210
Energy Efficiency Programs 101,955 116,398 236,196 262,556
Taxes Other Than Income Taxes 177,431   156,234   359,865   311,455
Total Operating Expenses 1,462,502   1,314,603   3,307,932   2,918,760
Operating Income 391,354 448,208 833,886 949,186
Interest Expense 126,404 107,329 247,533 210,758
Other Income, Net 50,149   29,022   83,938   50,641
Income Before Income Tax Expense 315,099 369,901 670,291 789,069
Income Tax Expense 70,452   137,272   154,219   295,103
Net Income 244,647 232,629 516,072 493,966
Net Income Attributable to Noncontrolling Interests 1,880   1,880   3,759   3,759
Net Income Attributable to Common Shareholders $ 242,767   $ 230,749   $ 512,313   $ 490,207
 
Basic and Diluted Earnings Per Common Share $ 0.76   $ 0.72   $ 1.61   $ 1.54
 
Dividends Declared Per Common Share $ 0.51   $ 0.48   $ 1.01   $ 0.95
 
Weighted Average Common Shares Outstanding:
Basic 317,344,596   317,391,365   317,370,825   317,427,258
Diluted 317,885,187   317,947,194   317,939,094   318,035,864
 

The data contained in this report is preliminary and is unaudited. This
report is being submitted for the sole purpose of providing information
to 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)     2018     2017
   
Operating Activities:
Net Income $ 516,072 $ 493,966
Adjustments to Reconcile Net Income to Net Cash Flows Provided by
Operating Activities:
Depreciation 403,406 376,686
Deferred Income Taxes 161,883 269,505
Pension, SERP and PBOP (Income)/Expense, Net (13,436 ) 11,242
Pension and PBOP Contributions (179,002 ) (91,400 )
Regulatory Overrecoveries, Net 36,669 85,792
Amortization 81,397 16,210
Other (57,253 ) (110,355 )
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net (52,923 ) (7,660 )
Fuel, Materials, Supplies and Inventory 65,609 42,425
Taxes Receivable/Accrued, Net (132,999 ) 23,980
Accounts Payable (80,059 ) (168,221 )
Other Current Assets and Liabilities, Net (51,229 ) (47,220 )
Net Cash Flows Provided by Operating Activities 698,135   894,950  
 
Investing Activities:
Investments in Property, Plant and Equipment (1,251,678 ) (1,146,952 )
Proceeds from Sales of Marketable Securities 316,252 373,853
Purchases of Marketable Securities (314,406 ) (394,379 )
Proceeds from the Sale of PSNH Generation Assets 116,809
Other Investing Activities (14,122 ) (20,439 )
Net Cash Flows Used in Investing Activities (1,147,145 ) (1,187,917 )
 
Financing Activities:
Cash Dividends on Common Shares (320,055 ) (301,042 )
Cash Dividends on Preferred Stock (3,759 ) (3,759 )
Decrease in Notes Payable (98,500 ) (211,000 )
Issuance of Rate Reduction Bonds 635,663
Issuance of Long-Term Debt 1,150,000 950,000
Retirements of Long-Term Debt (860,421 ) (150,000 )
Other Financing Activities (17,958 ) (19,254 )
Net Cash Flows Provided by Financing Activities 484,970   264,945  
Net Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash 35,960 (28,022 )
Cash, Cash Equivalents and Restricted Cash - Beginning of Period 85,890   106,750  
Cash, Cash Equivalents and Restricted Cash - End of Period $ 121,850   $ 78,728  
 

The data contained in this report is preliminary and is unaudited. This
report is being submitted for the sole purpose of providing information
to 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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