Eversource Energy (d/b/a) · NYSE:ES
Eversource Energy (d/b/a) — Eversource Energy — FY2018 Earnings Presentation
32 slides from Eversource Energy (d/b/a)'s earnings presentation, Feb 20, 2019
Slide 1: 2018 Year-End Results Investor Call
@ O85 © O60CCOO0C08® © °0000000° 0 EVERS=SURCE ENERGY 2018 Year-End Results Investor Call February 21, 2019
Slide 2: Safe Harbor Statement
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 earings and EPS of each business do not represent a direct legal interest in the assets and liabili
Slide 3: Agenda
__380000080000000000000) Agenda Jim Judge Chairman, President & CEO Phil Lembo Executive Vice President and CFO. ™ 2018 Successes ™ Shareholder Value ™ Clean Energy Leadership = 2018 Performance = Regulatory Update = 2019 Outlook = Long-Term Forecast & Growth Rate EVERSSURCE ENERGY
Slide 4: Jim Judge, Chairman, President & CEO
EVERSSURCE | ENERGY Jim Judge Chairman, President & Chief Executive Officer
Slide 5: 2018 Successes
2018 Successes Resolution of multi-year CT distribution rate reviews Excellent reliability and safety performance Completion of PSNH generation divestiture, MA solar build-out Approval of MA grid modernization investments Strong recognition of Eversource industry-leading ESG initiatives Strong total
Slide 6: Eversource's Total Return Has Outperformed in Both the Short and Long Term
Eversource’s Total Return Has Outperformed in Both the Short and Long Term Total Shareholder Return 2018 3-Year 5-Year 10-Year EEI Index 3.7% 36.0% 68.5% 176.4% S&P 500 4.4% 30.4% 50.3% 243.0% EVERSSURCE ENERGY 5
Slide 7: Annualized Dividend
__ 99000080 Annualized Dividend $2.50 $2.14 es $2.02 1.67 $1.57 : $1.50 $1.00 $0.50 2014 2015 2017 2018 2019 599 61% 62% EVERSSURCE ENERGY.
Slide 8: EPS growth 2012A-2023E
2012A* 2013A* 2014A* 2015A* 2016A 2017A 2018A 2019E 2020E 2021E 2022E 2023E *Excludes merger and integration costs EVERSSURCE ENERGY. 7
Slide 9: Creating the Leading Offshore Wind Platform in the Northeast
Creating the Leading Offshore Wind Platform in the Northeast v Acquired 50% of Orsted’s ay eS Deepwater Wind Northeast portfolio on February 8t New Connecticut : VY 4,000 MW of development mace potential with Bay State Wind wuts ee ¥ 830 MW of awarded PPA at Loose eo ot seas prices that exceed recen
Slide 10: Phil Lembo, Executive Vice President & CFO
: e°e o@ ee0eeeee® ©00@ 8 G0000 4 EVERS=URCE 2 , ENERGY Phil Lembo Executive Vice President & Chief Financial Officer
Slide 11: 2018 vs. 2017 Financial Results
_____ 90008000000000000000) 2018 vs. 2017 Financial Results Full Year Full Year 2018 2017 Q4 2018 Q42017 Change Change Electric Distribution $0.24 $0.33 ($0.09) $1.44 $1.57 ($0.13) Electric Transmission $0.31 $0.32 ($0.01) $1.34 $1.23 $0.11 Natural Gas Distribution $0.14 $0.08 $0.06 $0.29 $0.23 $0.0
Slide 12: 2018 Distribution Rate Decisions
2018 Distribution Rate Decisions CL&P Rate Settlement ™ Effective Date: 5/1/18 ™ Authorized ROE: 9.25% = Term: 3 years ™ Base rate increases of $64.3 million on 5/1/18, $31.1 million on 5/1/19 and $29.2 million on 5/1/20 = Tracking mechanism for capex over $270 million Yankee Gas Rate Settlement Eff
Slide 13: FERC Transmission ROE Update
_ 90 0000080009090000000) FERC Transmission ROE Update + Order issued: 10/16/18 + Current base: 10.57%; Cap: 11.74% + Illustrative base: 10.41%; Cap: 13.08% + New methodology that averages DCF, CAPM, risk premium, expected earnings + Provides path forward to resolve 2011, 2012, 2014 and 2016 complai
Slide 14: 2019 Guidance
2019 Guidance S Range $3. $3 Key Drivers Compared to 2018 Results + Distribution rate increases + Transmission rate base growth + Lower non-tracked O&M + Growth in distribution capital tracking programs + Higher depreciation and property taxes + Higher interest expense EVERSSURCE ENERGY 13
Slide 15: Projected Capital Expenditures For Core Businesses
$ in Millions Projected Capital Expenditures For Core Businesses $12.75 Billion 2019-2023 $3,500 $3,000 $2,599 $2,401 $2,346 $2,500 $2,168 $2,000 $1,500 $1,000 $500 $80 20164, 20174, 20184, 2019E 2020E, 2021E 2022E 20236, Transmission = Electric Distribution and MA Solar = Gas Distribution © =Water
Slide 16: Nearly $1.5 Billion Increase in 2019-2021 Core Business Capex
Nearly $1.5 Billion Increase in 2019-2021 Core Business Capex Since February 2018 Plan $ in Millions $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $ Ss Ea $558 Ea $2,306 $1,748 ; Electric Transmission Up $593 million $3,480 $2,887 $1,194 Up $12 | milion Ea $17 Ea $1,371 $335 $347 Up $120 mil
Slide 17: Rate Base by Core Business — Current and Future
Rate Base by Core Business — Current and Future $16.6 billion Note: Excludes NPT and rate base investments through equity interest: (e.g. Bay State Wind) 2017 Year-End Rate Base Projected 2023 Year-End Rate Base Mi Transmission,exNPT [lj Electric Distribution &MASolar | NaturalGas Distribution §™l W
Slide 18: Progress on Major Transmission Reliability Projects
Progress on Major Transmission Reliability Projects Greater Boston Reliability Solution Greater Hartford Central Connecticut eT (GHCC) + 28 upgrades including seven new transmission lines, new substations and substation expansion projects + 16 projects in service; 9 under construction; 1 expected to
Slide 19: Projected Investment in Pipe Replacements 2016-2023
Projected Investment in Pipe Replacements 2016-2023 All With Timely Cost Recovery $228 Consistent with our sustainability strategy, we replaced 59 miles of call cast iron and steel pipe with safer, $199 more durable plastic in 2018. $179 $162 S17 S117 5115 su7 $ in Millions ct) 20168 20178 20184 201
Slide 20: Incremental Investments Expected to Grow Aquarion Rate Base
Incremental Investments Expected to Grow Aquarion Rate Base Nearly 3 Times Faster Than Before Eversource Acquisition $1,200 40% Overall Growth $1,110 $1,030 rs $950 ay $890 $820 Tl TIT : 20144 = 2015A = 2016A_— 2017A. 2018A =. 2019E 2020E 2021E 2022E 2023E Year- End Rate Base $ in Millions EVERSSURC
Slide 21: Aquarion Water's $200 Million Plan to Improve SW CT Supplies
Aquarion Water’s $200 Million Plan to Improve SW CT Supplies Transmission Main Improvements Supply Improvements + Phase 1—Water mains complete $10 million + Cannondale Well Diversion Permit Application + Phase 2— Stamford mains projected $14 million filed with DEEP (Additional 1 MGD) + Project compl
Slide 22: What Would be Additive to the Cap Ex Forecast?
9 0800000009090000000) What Would be Additive to the Cap Ex Forecast? ¢ Grid modernization at CL&P, PSNH + AMI ¢ New off-shore wind RFP success = EVERSSURCE ENERGY 21
Slide 23: NSTAR Electric Clean Energy and Grid Modernization Initiatives
_ 90 0000080009090000000) NSTAR Electric Clean Energy and Grid Modernization Initiatives Solar: + Completed construction on 62 MW; total cost to be approximately $170 million + 17 of 19 sites now in service “A Storage: + Planning and permitting under way on $55 million of projects on Cape Cod and Ma
Slide 24: Sources of Funds to Execute Our Five-Year Plan
Sources of Funds to Execute Our Five-Year Plan > Operating cash flows > New debt financings > Approximately $2 billion of new equity > Using $100 million/year of Treasury shares to fund dividend reinvestment and employee stock plans We expect our core business to grow EPS around the midpoint of our
Slide 25: We Continue to Meet or Exceed Our Commitments to Investors
We Continue to Meet or Exceed Our Commitments to Investors Our Commitments: 1. Exceed industry EPS and dividend growth 2. Reduce spending — Target 3-4%/yr. 3. Maintain strong financial condition 4. Deliver top-tier service quality and reliability 5. Continue to grow our transmission, natural gas and
Slide 26: Appendix
APPENDIX EVERSSURCE ENERGY
Slide 27: Projected Transmission Capital Expenditures
Projected Transmission Capital Expenditures $1,200 Pe $994 $987 $746 $800 $573 $548 $600 | $491 $n Millions $400 $200 -— $0 - 2016A 2017A 2018A 4 2019EF 2020E 2021E 2022E 2023E = CLEP |NSTAR Electric = PSNH EVERSSURCE ENERGY
Slide 28: Transmission Rate Base Growth Projections
$ in Millions Transmission Rate Base Growth Projections $9,000 $8,000 ~ $7,000 $6,000 $5,534 $5,000 $4,000 $3,000 — $2,000 $1,000 ~ $0 2016A 2017A 2018E 2019E 2020E 2021E 2022E 2023E =CL&P | NSTAR Electric = PSNH EVERSSURCE ENERGY 27
Slide 29: Status of Grid Modernization and Advanced Metering Infrastructure
Status of Grid Modernization and Advanced Metering Infrastructure (AMI) in Massachusetts and Connecticut Massachusetts (D.P.U. 15-122) Connecticut (Docket # 17-12-03) - May 2018 decision approved $133 - PURA currently reviewing distribution million in grid facing investments in company planning and
Slide 30: Status of Northern Pass
Status of Northern Pass Regulatory Hurdles Cleared: New Hampshire = Departments of Environmental Services and Transportation = NHPUC authorization to commence business as a public utility and to cross public lands and waters = NHPUC approval of PSNH — NPT lease settlement Federal = DOE Presidential
Slide 31: Summary of ADIT-Related Regulatory Activity
_ 90 0000080009090000000) Summary of ADIT-Related Regulatory Activity Eversource Utility & Jurisdiction Connecticut cLap Yankee Gas Massachusetts NSTAR Electric NSTAR Gas New Hampshire PSNH Transmission CL8P, NSTAR Electric & PSNH Excess ADIT Refund Timing Refunds will be incorporated into May 1, 20
Slide 32: More Than $1 Billion of Higher Cost Debt Matures Through 2020
More Than $1 Billion of Higher Cost Debt Matures Through 2020 2019 Maturities Issuer Size Rate Maturity (in millions) CL&P. $250 5.50% 2/1/19 Yankee Gas $50 5.26% 11/1/19 ES Parent $350 4.50% 11/15/19 PSNH $150 4.50% 12/1/19 2020 Maturities Issuer (in oes} Rate Maturity NSTAR Gas $125 4.46% 1/1/20 N