Eversource Energy (d/b/a) · NYSE:ES
Eversource Energy (d/b/a) — Eversource Energy — FY2015 Earnings Presentation
36 slides from Eversource Energy (d/b/a)'s earnings presentation, Feb 5, 2016
Slide 1: Eversource Energy Investor Call
Eversource Energy Investor Call February 5, 2016
Slide 2: Safe Harbor
INVESTOR CALL Safe Harbor All per share amounts in 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 interest in the assets and liabili
Slide 3: Agenda
INVESTOR CALL Agenda Tom May Shareholder Value Chairman, President & CEO Regional Leadership Lee Olivier EVP Enterprise Strategy & Northern Pass Business Development Access Northeast Clean Energy Connect Jim Judge 2015 Performance Executive Vice President & CFO Regulatory Update Financial Outlook 2
Slide 4: 2015 Was A Very Productive Year For Eversource
INVESTOR CALL 2015 Was A Very Productive Year For Eversource • Record electric reliability For Customers • Record natural gas heating growth • Stable delivery rates • Progress on addressing critical For the Region infrastructure challenges • Attractive returns and dividend For Investors growth • Cre
Slide 5: We've Delivered Top-Tier Shareholder Returns
INVESTOR CALL We’ve Delivered Top-Tier Shareholder Returns ES outperformed the Philadelphia Utility Index over the 1, 3, 5 and 10 year periods Total Shareholder Return 2015 3-Year 5-Year 10-Year ES -1.3% 44.6% 89.3% 263.1% Philadelphia Utility Index -6.3% 33.5% 57.6% 89.1% S&P 500 1.4% 52.6% 80.8% 1
Slide 6: Eversource is a Regional Leader in Advancing Broad Solutions for New England's Energy Challenges
INVESTOR CALL Eversource is a Regional Leader in Advancing Broad Solutions for New England’s Energy Challenges Winter Pipeline Constraints More Renewable Energy Northern Pass Access Northeast Clean Energy Connect Oil Heat Dependence Energy Efficiency $500 million/year in programs Natural Gas Convers
Slide 7: Lee Olivier
Lee Olivier EVP Enterprise Energy Strategy & Business Development
Slide 8: Transmission – Northern Pass Update
INVESTOR CALL Transmission – Northern Pass Update • 1,090 MW of clean energy • $1.6 billion HVDC line, terminal and AC facilities • Approximately 192 miles of new transmission using HVDC technology with AC/DC converters in Quebec and NH • DOE draft Environmental Impact Statement issued July 21, 2015
Slide 9: Northern Pass Timeline
INVESTOR CALL Northern Pass Timeline July 21, 2015 October 19, 2015 December 2015 Late 2016/ First Half 2019 Dept. of Energy Northern Pass NHSEC Accepted Early 2017 Issued Draft Filed Application Application In-Service Date Environmental with New Hampshire Permits Received --- Impact SEC --- Stateme
Slide 10: Transmission - Clean Energy Connect
INVESTOR CALL Transmission - Clean Energy Connect • Bid includes transmission, wind and hydro generation • Eversource investment is the Massachusetts portion of a 25-mile, 345 kV transmission line • 600 MW capacity • Co-developing with experienced renewable generation developers • Construction expec
Slide 11: Three-State Clean Energy RFP Timeline
INVESTOR CALL Three-State Clean Energy RFP Timeline Action Item Date Proposals Submitted January 28, 2016 Selection of Bidders April 26, 2016 – July 26, 2016 EDCs Execute Contracts June 23, 2016 – September 22, 2016 Submit Contracts for Regulatory Approval July 26, 2016 – October 25, 2016 Regulatory
Slide 12: Access Northeast - Long-Term Solution to New England Natural Gas Supply
INVESTOR CALL Access Northeast - Designed to Provide a Long-Term Solution to Challenge of New England Natural Gas Supply Maritimes Co-developed by Eversource Energy – 40%, & Northeast Spectra Energy – 40%, National Grid – 20% Innovative, cost effective & environmentally responsible approach that wil
Slide 13: 5 of 6 New England States Addressing Natural Gas Capacity Issues
INVESTOR CALL 5 of 6 New England States Addressing Natural Gas Capacity Issues Electric Distribution Co. (EDC) Purchase of Natural Gas Pipeline Capacity Public Act 15-107 enacted June 22, 2015. RFPs under development and allows for CT procurement of up to 375 mmcf/day of natural gas infrastructure.
Slide 14: Jim Judge
Jim Judge Executive Vice President & CFO
Slide 15: What I'll Cover…
INVESTOR CALL What I’ll Cover… Financial and operational results Financial outlook Regulatory developments Delivering on commitments 14
Slide 16: 2015 Results
INVESTOR CALL 2015 Results EPS Full Year Full Year Q4 2015 Q4 2014 Change 2015 2014 Change Electric Distribution and Generation $0.28 $0.35 ($0.07) $1.59 $1.45 $0.14 Electric Transmission $0.25 $0.28 ($0.03) $0.96 $0.93 $0.03 Natural Gas Distribution $0.05 $0.09 ($0.04) $0.23 $0.23 -- Parent & Other
Slide 17: Operating Performance Among the Best in Industry
INVESTOR CALL Operating Performance Among the Best in Industry Overall system reliability in 2015 was the “Best Ever” Reliability Performance Months Between Interruptions Good 16.6 15.4 14.4 11.9 13.4 2011 2012 2013 2014 2015 1st quartile of industry peers Restoration Performance Avg. Restoration Sp
Slide 18: 2016 Guidance
INVESTOR CALL 2016 Guidance EPS Range $2.90- $3.05 Key Drivers Compared to 2015 • Transmission rate base growth • Natural gas customer and infrastructure growth • NSTAR Gas rate increase • Lower O&M • Depreciation and property taxes • Interest costs 17
Slide 19: Long-Term Earnings Growth
INVESTOR CALL Long-Term Earnings Growth $2.90– $2.28 $2.53 $2.65 $2.81 $3.05 $2.81 2012A 2013A 2014A 2015A 2016E 2017E 2018E 2019E Key Drivers for Long Term Guidance: Positive Negative Key Assumptions on Major Projects FERC-regulated electric and Increasing depreciation & natural gas transmission gr
Slide 20: Electric Transmission Investing $4.7 Billion From 2015-2019
INVESTOR CALL Electric Transmission Investing $4.7 Billion From 2015-2019 Actual Forecast Northern Pass HVDC Line $807M $3.9 Billion to Canada US portion estimated at $1,200 $1.5B Clean Energy Connect, other Greater Hartford Central new initiatives Connecticut Projects $1,000 $303M Greenwich / SWCT
Slide 21: Projected Capital Expenditures
INVESTOR CALL Projected Capital Expenditures Projected Capital Expenditures* Estimated ES Access Northeast $9.2 Billion 2016-2019 Investments $2,800 $2,662 $88 $500 $2,458 $2,400 $82 $2,212 $105 $400 $2,000 $1,937 $1,281 $1,835 $101 $1,227 $87 $ in Millions $1,600 $300 $ in Millions $1,196 $1,029 $1
Slide 22: Rate Base by Business – Current and Future
INVESTOR CALL Rate Base by Business – Current and Future Higher Earnings from Transmission Becoming a Growing Share of Rate Base $18.3 billion* Note: Rate Base Excludes 10% Access Northeast and $14.7 billion Clean Energy Connect 5% 9% 48% 51% $2.5 Billion Increase in Transmission Rate Base 35% 42% E
Slide 23: Initiatives to Support Growth Beyond 2019
INVESTOR CALL Initiatives to Support Growth Beyond 2019 Investment Status Amount Time Period Initial pipeline FERC pre-filing started Access Northeast $1.2 billion (ES share) 2018; LNG on November 3 afterward Bid into Clean Energy Clean Energy Connect TBD 2018-2020 RFP Regional initiatives to move a
Slide 24: Customer Growth Has Picked Up for Eversource's Natural Gas Business
INVESTOR CALL Customer Growth Has Picked Up for Eversource’s Natural Gas Business Natural gas heating customer count rising by 2%-3% per year in forecast period (Conversions and new construction) 18,000 16,000 14,000 Actual Customer Additions 12,000 10,000 8,000 6,000 12,500 11,415 10,356 10,625 8,8
Slide 25: Pending Regulatory Dockets
INVESTOR CALL Pending Regulatory Dockets New Hampshire Generation Divestiture FERC ROE Complaints Initial settlement filed in June 2015 ALJ ruling on second and third complaints extended Settlement with staff filed in January 2016 to 3/31/16 Decision expected in March 2016 FERC decision expected in
Slide 26: Rate Case Activity
INVESTOR CALL Rate Case Activity Jurisdiction Company Commentary NSTAR Electric Base rates frozen through 12/31/15 WMECO Base rate cases filed in 2017 Massachusetts NSTAR Gas $15.8M base rate increase effective 1/1/16 CL&P Next case: 2nd half of 2017, effective 12/1/17 Connecticut Yankee Gas Need to
Slide 27: ES Has the Highest Credit Rating in Utility Industry
INVESTOR CALL ES Has the Highest Credit Rating in Utility Industry 2015 Rating Agency Actions S&P raised ES, all subsidiary corporate credit ratings from “A-” to “A” Fitch revised CL&P, PSNH, WMECO outlooks from “Stable” to “Positive” Moody’s revised PSNH, WMECO outlooks from “Stable” to “Positive”
Slide 28: Current $17.5 Billion Market Cap Nearly Double Pre-Merger
INVESTOR CALL Current $17.5 Billion Market Cap Nearly Double Pre- Merger – Creating $8 Billion in Shareholder Value Stock Price Performance Since Merger Announced 88% S&P 500 +73.8% 72% ES +66.4% 56% 40% 24% UTY +27.6% 8% -8% 10/15/10 12/31/15 27
Slide 29: Delivered on Commitments
INVESTOR CALL Delivered on Commitments Our Commitments: Results Delivered: 1. Exceed industry EPS & Dividend Three-year average EPS and dividend growth of growth 7.2% and 8.2%, respectively 2. Reduce spending – Target 3-4%/yr. Three year average O&M reduction over 5% 3. Maintain strong financial con
Slide 30: Appendix
INVESTOR CALL APPENDIX EVERSSURCE * ENERGY
Slide 31: Projected Distribution/Generation Capital Expenditures
INVESTOR CALL Projected Distribution/Generation Capital Expenditures $1,400 $1,281 $1,196 $1,227 $1,197 $1,200 $1,029 $1,000 $941 $ in Millions $800 $963 $888 $840 $892 $600 $726 $783 $400 $20 $200 $21 $33 $318 $339 $357 $284 $194 $213 $0 2014A 2015A 2016E 2017E 2018E 2019E Natural Gas Distribution
Slide 32: Projected Transmission Capital Expenditures
INVESTOR CALL Projected Transmission Capital Expenditures* $1,400 $1,293 $1,149 Clean Energy $1,200 Connect, other new initiatives $1,000 $911 $684 $31 $807 $115 $636 $800 $701 $38 $ in Millions $116 $112 $28 $69 $600 $162 $78 $121 $22 $302 $65 $38 $149 $400 $224 $238 $216 $40 $238 $56 $149 $200 $35
Slide 33: Transmission Rate Base Growth Projections
INVESTOR CALL Transmission Rate Base Growth Projections* Electric transmission accounts for more than 50% of EPS growth through 2019 2015 - 2019 10.2% CAGR $9,000 $7,584 $7,648 $8,000 $6,654 $7,000 $1,478 $1,428 $5,674 $842 $6,000 $ in Millions $769 $781 $5,190 $157 $4,917 $738 $128 $717 $5,000 $91
Slide 34: Progress on Major Massachusetts Transmission Reliability Projects
INVESTOR CALL Progress on Major Massachusetts Transmission Reliability Projects Pittsfield Greenfield Area Solution PGA (PGA) • 12 projects in western Massachusetts • 7 projects are complete, remaining 5 have started the construction phase WS GIS • Siting approval received in July 2015 • Projected c
Slide 35: Progress on Major Connecticut Transmission Reliability Projects
INVESTOR CALL Progress on Major Connecticut Transmission Reliability Projects Greater Hartford Central Connecticut (GHCC) GHCC • 27 projects in five geographic subareas - Greater Hartford, Manchester, Southington, Middletown and Northwest Connecticut • 5 projects completed and in-service, 2 under co
Slide 36: Progress on Major New Hampshire Transmission Reliability Projects
INVESTOR CALL Progress on Major New Hampshire Transmission Reliability Projects Seacoast Reliability Project (SRP) SCRP • New 12.6mi 115-kV line that is built overhead, underground and undersea (Little Bay) • Siting application expected to be filed with MVRP the NH Siting Evaluation Committee (SEC)