Eversource Energy (d/b/a) · NYSE:ES
Eversource Energy (d/b/a) — Eversource Energy — FY2017 Earnings Presentation
37 slides from Eversource Energy (d/b/a)'s earnings presentation, Feb 22, 2018
Slide 1: 2017 Year-End Results Investor Call
Exhibit 99.3 2017 Year-End Results Investor Call February 23, 2018
Slide 2: Safe Harbor Statement
EVERSSURCE ENERGY INVESTOR CALL Safe Harbor Statement All per-share amounts in this presentation 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 i
Slide 3: Agenda
INVESTOR CALL Agenda Jim Judge Chairman, President & CEO Lee Olivier EVP Enterprise Energy Strategy & Business Development Phil Lembo EVP and CFO = 2017 Financial and Operational Successes ™ Shareholder Value ™ Clean Energy Leadership = Northern Pass = Bay State Wind ™ New England Natural Gas Supply
Slide 4: Jim Judge
Jim Judge Chairman, President & Chief Executive Officer
Slide 5: Recent Successes
Recent Successes Resolution of key electric distribution rate cases Excellent reliability and safety performance Completion of Aquarion transaction Completion of fossil generation divestiture Progress on numerous clean energy initiatives $100 million investedin Massachusetts solar DPU approval of EV
Slide 6: Strong Long-Term Earnings Growth Expected to Continue
2A Strong Long-Term Earnings Growth Expected to Continue $3.11 $2.28 2012A* 2013A* 2014A* 2015A* 2016A 2017A 2018E 2019E 2020E 2021E *Excludes merger and integration costs
Slide 7: Eversource's Total Return Consistently Outperforms the Industry
INVESTOR CALL Eversource’s Total Return Consistently Outperforms the Industry Total Shareholder Return | 2017 | 3-Year | 5-Year | 10-Year EE! Index 11.7% | 26.1% 83.7% 97.6% S&P 500 21.8% | 38.3% | 108.1% 126.0% (1) TSR for 2017 represents the 8" time in 9 years that ES has achieved double-digit ret
Slide 8: Dividend Growth Continues to Outperform Peers
Dividend Growth Continues to Outperform Peers Annualized Dividend 50 $190 $2.02 $2.00 $1.78 $1.67 $1.10 ag $1.00 . 2 e 2011 2012 2013 2014 2015 2016 2017 2018 * Reflects impact of NU-NSTAR merger PayoutR
Slide 9: Cold snap makes New England the world's priciest gas market
INVESTOR CALL “Cold snap makes New England the ’s prici ” world’s priciest gas market”... nerg (vec. 27,2017) New England experienced the highest prices in the world, even though some of the lowest prices were available just 200 miles away = New England natural gas prices increased more than 300% on
Slide 10: Lee Olivier
Lee Olivier EVP Enterprise Energy Strategy & Business Development
Slide 11: Northern Pass Status
INVESTOR CALL. EVERS: Northern Pass Status Remaining Permits for Construction: = NHSEC permit = Army Corps of Engineers (post-NHSEC decision) = Canadian National Energy Board Regulatory Hurdles Cleared: New Hampshire = Departments of Environmental Services and Transportation = NHPUC authorization to
Slide 12: Bay State Wind
INVESTOR CALL Massachusetts Connecticut BAY STATE WIND. ™ Eversource and @rsted plan to construct a first-of-its-kind, large scale, offshore wind facility in North America ™ 50-50 partnership in Bay State Wind = Proposed offshore wind farm 15-25 miles south of Martha’s Vineyard — 300 square mile oce
Slide 13: Upcoming Off-Shore Wind RFPs
EVERSSURCE ENERGY INVESTOR CALL Upcoming Off-Shore Wind RFPs Massachusetts: 1,600 MWauthorized by legislature in 2016 > Proposals submitted for initial tranche 12/20/17 > Bay State Wind submitted proposals for 400 MW and 800 MW > _ Selection of projects for negotiation by 4/23/18 5 Submission of lon
Slide 14: Polar Vortex and recent cold snap effects on New England gas prices
INVESTOR CALL $100 4 = Polar Vortex (2013/14) increased gas demand, threatened reliability, and drove skyrocketing prices = $3.2Bin extra electricity costs for New England over the course of the winter 3 The recent cold snap created a similar EA disruption in New England's prices, reliability, s and
Slide 15: Natural Gas is an Emissions Reduction Success Story in New England
INVESTOR CALL Natural Gas is an Emissions Reduction Success Story in New England New England has dramatically reduced power sector emissions since 2000, even as demandhas risen 250 2001 2015 200 150 100 NOx & Sox Kilotons/Yr 50 ° NOx Reduction: 73% Source: ISO-NE 60,000 0,000 40,000 30,000 €O2 Kilot
Slide 16: Phil Lembo
Phil Lembo EVP & Chief Financial Officer
Slide 17: 2017 vs. 2016 Results
Q4 2017 INVESTOR CALL 2017 vs. 2016 Results Q4 2016 Change Full Year 2017 Full Year 2016 Change $0.33 $0.26 $0.07 $1.57 $1.46 $0.11 $0.32 $0.33 ($0.01) $1.23 $1.16 $0.07 $0.08 $0.08 $0.00 $0.23 $0.24 ($0.01) $0.02 $0.05 ($0.03) $0.08 $0.10 ($0.02) $0.75 $0.72 $0.03 $3.11 $2.96 $0.15
Slide 18: 2018 Guidance
INVESTOR CALL 2018 Guidance Key Drivers Compared to 2017 + Transmission rate base growth + Aquarion earnings + Electric distribution rate increases + Lower O&M + Higher depreciation and property taxes + Loss of PSNH generation earnings + Higher interest expense
Slide 19: Projected Capital Expenditures
Projected Capital Expenditures $10.8 Billion 2018-2021 $3,500 7 $3,000 $2,500 $1,937 $2,000 $ in Millions $1,500 $1,000 $500 $560 so ~ : : 20154 2016A 2017A 2018E m Transmission =NPT Electric Distribution and MA Solar 2019E » Gas Distribution 2020E 2021E Water = Other, Primarily IT
Slide 20: Estimated 2017 Year-End and Projected 2021 Rate Base
EVERSSURCE ENERGY INVESTOR CALL $22.8 billion $16.7 billion* Note: Excludes rate base investments through equity interest: (e.g. Bay State Wind) Estimated 2017 Year-End Projected 2021 Rate Base Rate Base Mitransmission,exNPT M® NPT Ml Electric Distribution &MASolar | Gas Distribution Water *Excludes
Slide 21: End of 2020 Rate Base Projection Up $2.1 Billion from Prior Forecast
End of 2020 Rate Base Projection Up $2.1 Billion from Prior Forecast - Supporting 5% - 7% 9.7 Billion February 2017 Estimate February 2018 Estimate (Including NPT) (Including NPT) EPS CAGR Reasons for Increase: Aquarion $920M Additional Electric & Gas Cap Ex $583M Tax Reform $575M
Slide 22: Impact of Tax Reform
INVESTOR CALL Impact of Tax Reform Key Takeaways = For utilities, lower corporate tax rate will benefit customers = Refund of excess accumulated deferred federal income tax (ADIT) will slightly reduce cash flows = Normalized portion of excess ADIT to be refunded to customers over the lives of the pr
Slide 23: Regulatory Status of Implementing Tax Reform
INVESTOR CALL Regulatory Status of Implementing Tax Reform ~ FERC >» - Lower tax rate will reconcile through = NSTAR Gas transmission rates - Proposal due to MDPU by - Separate filing to address ADIT 7/118 = NSTAR Electric = Yankee Gas - FIT rate decline to 21% reflected in - Will address all tax ch
Slide 24: Key Elements of MA Electric Rate Decision
INVESTOR CALL Key Elements of MA Electric Rate Decision Increases of $24.8 million for Western Massachusetts and $12.2 million for NSTAR Electric approved, effective 2/1/18 — Later revised to a $16.5 million increase for Western Massachusetts and a $35.4 million reduction at NSTAR Electric to reflec
Slide 25: Key Elements of CT Rate Settlement
Key Elements of CT Rate Settlement = Settlement filed with Office of Consumer Counsel and PURA 1/11/18 = Estimated increases of $97.1 million on 5/1/18; $32.7 million on 5/1/19; and $24.7 million on 5/1/20; final figures to fully reflect FIT decline to 21% ™ ROE of 9.25 percent = Common equity 53 pe
Slide 26: Status of the Four New England Transmission Complaints
INVESTOR CALL Status of the Four New England Transmission Complaints Unclear at FERC First complaint decided in 2014; FERC order resulted in base ROE of 10.57% and project incentive cap of 11.74% Three-judge panel at D.C. Circuit Court of Appeals unanimously vacated and remanded FERC’s order in its
Slide 27: Eversource Enters Water Business With Acquisition of Aquarion
INVESTOR CALL Eversource Enters Water Business With Acquisition of Aquarion EVERSSURCE Service Territory = Transaction completed: 12/04/17 = Seventh largest privately owned water company in US, and largest privately owned in New England = Customers: Nearly 230,000 = 12/31/17 rate base: $770 million
Slide 28: Multiple Rating Agency Upgrades Since Merger
™~ Multiple Rating Agency Upgrades Since Merger SaP: A- Moody's: A3 Fitch: A SaP: A- Moody's: A2 Fitch: A+ SaP: A- Moody's: A3 Fitch: A sap upgrades toA sap upgrades toA Moody upgrades to Baal Moody's upgrades to A2 upgrade: to A2 sap upgrades toA sap upgrades to A+ sap upgrades toA sap upgrades to
Slide 29: We Continue to Meet or Exceed Our Commitments to Investors
INVESTOR CALL. EVERS=URCI EER We Continue to Meet or Exceed Our Commitments to Investors Our Commitments: . Exceed industry EPS and dividend growth . Reduce spending — Target 3-4%/yr. . Maintain strong financial condition . Deliver top-tier service quality and reliability . Continue to grow and leve
Slide 30: Appendix
INVESTOR CALL. EVERSSURCE APPENDIX
Slide 31: $4.1 Billion of Transmission CapEx Forecast from 2018-2021
INVESTOR CALL. EVERSSURC! $4.1 Billion of Transmission CapEx Forecast from 2018-2021 Actual Forecast $932M $4.1 Billion Greenwich / SWCT Reliability $122M NH 10-Yr Study Reliability $62M New Substations and Associated Lines in Boston Area $262M $1.68B Transmission Facilities Replacements and Other F
Slide 32: Projected Transmission Capital Expenditures
INVESTOR CALL Projected Transmission Capital Expenditures $1,600 $593 $1,400 $1,383 development Other concepts $1,200 | $1,172 under $1,000 a7 $932 oa = $800 | rae $600 || a $400 $200 | $0 ; 2015A 2016A 2017A 2018E 2019E 2020E 2021E =CL&P |= NSTAR Electric ™PSNH =| NPT £ o
Slide 33: Transmission Rate Base Growth Projections
$ in Millions $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 if INVESTOR CALL. EVERSSURCE * Transmission Rate Base Growth Projections ENERGY 2017 - 2021 10.2% CAGR $2,520 | $2711 | cele Sas $3,198 $3,183 2017A 2015A 2016E 2018E 2019E 2020E 2021E CLaP |NSTAR Electric =PSNH
Slide 34: Natural Gas Expansion Opportunities Still Strong
INVESTOR CALL EVERSSURCE ENERGY Natural Gas Expansion Opportunities Still Strong Actual Heating Customer Additions 12,000 10,000 8,000 6,000 4,000 2,000 5,575 6,628 8,871 10,356 10,625 11,415 10,770 10,108 2010 2011 2012 2013 2014 2015 2016 2017
Slide 35: Progress on Major Transmission Reliability Projects
EVERSSURCE ENERGY INVESTOR CALL Progress on Major Transmission Reliability Projects Greater Boston Reliability Solutions Greater Hartford Central Connecticut + 28 projects including seven new transmission (GHCC) lines, new substations and substation expansion = projects + 16 projects have been place
Slide 36: Massachusetts Utility Scale Solar On Plan
Massachusetts Utility Scale Solar On Plan = In December 2016, Massachusetts law authorized 62 MW of utility scale solar in addition to our 8 MW of solar presently in- service (rate base assets) = All sites will be in-service by year-end 2018 Montague (5 MW greenfield) = Installations will be both gr
Slide 37: Maturities of Long-Term Debt
2018 Maturities Maturity Size (in millions) $150 $300 2019 Maturities Maturity Size (in milfions) $150 (A) Allissuer secures ratings are for senior secured debt with exception of NSTAR Electric and Eversource Energy which are senior unsecured debt. INVESTOR CALL Maturities of Long-Term Debt Issuer E