ES Eversource Energy

Eversource Energy (NYSE: ES) today reported earnings of $230.7 million, or $0.72 per share, in the second quarter of 2017, compared with earnings of $203.6 million, or $0.64 per share, in the second quarter of 2016. In the first half of 2017, Eversource Energy earned $490.2 million, or $1.54 per share, compared with earnings of $447.8 million, or $1.41 per share, in the first half of 2016.

“We experienced a very solid first half of 2017, delivering efficient, effective and reliable service to our 3.7 million customers and continuing to invest in New England’s clean energy future, “ said Jim Judge, Eversource chairman, president and chief executive officer. “We continue to project 2017 earnings of $3.05 to $3.20 per share, a level that is consistent with our 5-7 percent long-term EPS growth rate.”

Electric Transmission

Eversource Energy’s transmission segment earned $96.4 million in the second quarter of 2017 and $190.6 million in the first half of 2017, compared with earnings of $92.5 million in the second quarter of 2016 and $178.2 million in the first half of 2016. The improved results were primarily due to an increased level of investment in Eversource Energy’s transmission system, partially offset by a lower level of revenue in 2017 related to annual reconciliations under Eversource’s transmission tariffs.

Electric Distribution and Generation

Eversource Energy’s electric distribution and generation segment earned $121.9 million in the second quarter of 2017 and $236 million in the first half of 2017, compared with earnings of $102.8 million in the second quarter of 2016 and $211.3 million in the first half of 2016. The improved year-to-date results primarily reflect lower operation and maintenance expense and higher distribution revenues, partially offset by higher depreciation expense.

Natural Gas Distribution

Eversource Energy’s natural gas distribution segment earned $4.5 million in the second quarter of 2017 and $55.3 million in the first half of 2017, compared with earnings of $8 million in the second quarter of 2016 and $58.9 million in the first half of 2016. Lower second quarter results were due primarily to lower sales due to milder early spring temperatures in 2017, as well as higher depreciation and operation and maintenance expense.

Parent and Other Companies

Eversource Energy parent and other companies earned $7.9 million in the second quarter of 2017 and $8.3 million in the first half of 2017, compared with earnings $0.3 million in the second quarter of 2016 and a net loss of $0.6 million in the first half of 2016. Improved results were due largely to second-quarter 2017 gains related to Eversource Energy’s long-time investment in a fund holding certain renewable energy facilities. That investment historically has had little impact on results.

The following table reconciles 2017 and 2016 second quarter and first six months earnings per share:

                        Second Quarter     First Six Months 2016     Reported EPS     $0.64     $1.41       Higher transmission earnings in 2017     0.01     0.04       Higher retail electric revenues in 2017     0.02     0.04       Lower natural gas revenues in 2017     (0.01)     ---       Lower non-tracked O&M in 2017     0.04     0.04       Higher property tax, depreciation, and

interest expense in 2017

   

(0.02)

   

(0.04)

      All other, net, including higher Other Income     0.04     0.05 2017     Reported EPS     $0.72     $1.54  

Financial results for the second quarter and first half of 2017 and 2016 are noted below:

               

Three months ended:(in millions, except EPS)

   

June 30, 2017

   

June 30, 2016

   

Increase/(Decrease)

   

2017 EPS1

Electric Distribution/Generation     $121.9     $102.8     $19.1     $0.38 Natural Gas Distribution     4.5     8.0     (3.5)     0.01 Electric Transmission     96.4     92.5     3.9     0.30 Eversource Parent and Other Companies     7.9     0.3     7.6     0.03 Reported Earnings     $230.7     $203.6     $27.1     $0.72                  

Six months ended:(in millions, except EPS)

   

June 30, 2017

   

June 30, 2016

   

Increase/(Decrease)

   

2017 EPS1

Electric Distribution/Generation     $236.0     $211.3     $24.7     $0.74 Natural Gas Distribution     55.3     58.9     (3.6)     0.17 Electric Transmission     190.6     178.2     12.4     0.60 Eversource Parent and Other Companies     8.3     (0.6)     8.9     0.03 Reported Earnings     $490.2     $447.8     $42.4     $1.54  

Retail sales data:

            Three months ended:     June 30, 2017     June 30, 2016     % Change Electric Distribution (Gwh)                   Traditional     6,524     6,605     (1.2%) Decoupled     5,640     5,798     (2.7%) Total Electric Distribution     12,164     12,403     (1.9%)                     Natural Gas Distribution (mmcf)                   Traditional     7,778     8,315     (6.5%) Decoupled and Special Contracts     9,238    

9,521

    (3.0%) Total Natural Gas Distribution     17,016     17,836     (4.6%)                                   Six months ended:     June 30, 2017     June 30, 2016     % Change Electric Distribution (Gwh)                   Traditional     13,495     13,601     (0.8%) Decoupled     11,840     12,022     (1.5%) Total Electric Distribution     25,335     25,623     (1.1%)                     Natural Gas Distribution (mmcf)                   Traditional     26,683     26,300     1.5% Decoupled and Special Contracts     31,479     30,884     1.9% Total Natural Gas Distribution     58,162     57,184     1.7%  

Eversource Energy has approximately 317 million common shares outstanding. It operates New England’s largest energy delivery system, serving approximately 3.7 million customers in Connecticut, Massachusetts and New Hampshire. Eversource is recognized as the top U.S. utility for its energy efficiency programs by the sustainability advocacy organization Ceres.

Note: Eversource Energy will webcast a conference call with senior management on July 28, 2017, 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 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 2017 and 2016 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 Eversource Energy’s website at www.eversource.com and 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, 2017     As of December 31, 2016  

ASSETS

Current Assets: Cash and Cash Equivalents $ 24,638 $ 30,251 Receivables, Net 833,945 847,301 Unbilled Revenues 158,183 168,490 Fuel, Materials, Supplies and Inventory 286,296 328,721 Regulatory Assets 870,393 887,625 Prepayments and Other Current Assets 157,359   215,284   Total Current Assets 2,330,814   2,477,672     Property, Plant and Equipment, Net 22,071,496   21,350,510     Deferred Debits and Other Assets: Regulatory Assets 3,580,981 3,638,688 Goodwill 3,519,401 3,519,401 Marketable Securities 565,460 544,642 Other Long-Term Assets 590,688   522,260   Total Deferred Debits and Other Assets 8,256,530   8,224,991     Total Assets $ 32,658,840   $ 32,053,173    

LIABILITIES AND CAPITALIZATION

Current Liabilities: Notes Payable $ 937,500 $ 1,148,500 Long-Term Debt – Current Portion 1,483,883 773,883 Accounts Payable 587,174 884,521 Regulatory Liabilities 185,930 146,787 Other Current Liabilities 591,222   684,914   Total Current Liabilities 3,785,709   3,638,605     Deferred Credits and Other Liabilities: Accumulated Deferred Income Taxes 5,900,052 5,607,207 Regulatory Liabilities 696,740 702,255 Derivative Liabilities 402,138 413,676 Accrued Pension and SERP 1,073,510 1,141,514 Other Long-Term Liabilities 860,579   853,260   Total Deferred Credits and Other Liabilities 8,933,019   8,717,912     Capitalization: Long-Term Debt 8,899,021   8,829,354     Noncontrolling Interest - Preferred Stock of Subsidiaries 155,568   155,568     Equity: Common Shareholders' Equity: Common Shares 1,669,392 1,669,392 Capital Surplus, Paid In 6,232,501 6,250,224 Retained Earnings 3,364,336 3,175,171 Accumulated Other Comprehensive Loss (62,935 ) (65,282 ) Treasury Stock (317,771 ) (317,771 ) Common Shareholders' Equity 10,885,523   10,711,734   Total Capitalization 19,940,112   19,696,656     Total Liabilities and Capitalization $ 32,658,840   $ 32,053,173  

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)     2017     2016     2017     2016         Operating Revenues $ 1,762,811   $ 1,767,184   $ 3,867,946   $ 3,822,819   Operating Expenses: Purchased Power, Fuel and Transmission 549,704 581,260 1,303,353 1,336,119 Operations and Maintenance 302,714 320,714 632,979 640,850 Depreciation 189,881 176,507 376,686 350,492 Amortization of Regulatory (Liabilities)/Assets, Net (7,807 ) (8,716 ) 16,210 12,281 Energy Efficiency Programs 116,398 119,667 262,556 256,842 Taxes Other Than Income Taxes 156,234   154,330   311,455   314,277 Total Operating Expenses 1,307,124   1,343,762   2,903,239   2,910,861 Operating Income 455,687 423,422 964,707 911,958 Interest Expense 107,329 100,492 210,758 198,703 Other Income, Net 21,543   8,038   35,120   10,049 Income Before Income Tax Expense 369,901 330,968 789,069 723,304 Income Tax Expense 137,272   125,439   295,103   271,742 Net Income 232,629 205,529 493,966 451,562 Net Income Attributable to Noncontrolling Interests 1,880   1,880   3,759   3,759 Net Income Attributable to Common Shareholders $ 230,749   $ 203,649   $ 490,207   $ 447,803   Basic and Diluted Earnings Per Common Share $ 0.72   $ 0.64   $ 1.54   $ 1.41   Dividends Declared Per Common Share $ 0.48   $ 0.45   $ 0.95   $ 0.89   Weighted Average Common Shares Outstanding: Basic 317,391,365   317,785,495   317,427,258   317,651,319 Diluted 317,947,194   318,476,699   318,035,864   318,478,876

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)     2017     2016     Operating Activities: Net Income $ 493,966 $ 451,562 Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:

Depreciation

376,686 350,492 Deferred Income Taxes 269,505 250,851 Pension, SERP and PBOP Expense, Net 11,242 22,659 Pension and PBOP Contributions (91,400 ) (65,929 ) Regulatory Over/(Under) Recoveries, Net 74,224 (5,768 ) Amortization of Regulatory Assets, Net 16,210 12,281 Other (94,666 ) (10,808 ) Changes in Current Assets and Liabilities: Receivables and Unbilled Revenues, Net 3,908 (76,751 ) Fuel, Materials, Supplies and Inventory 42,425 43,930 Taxes Receivable/Accrued, Net 23,980 230,075 Accounts Payable (168,221 ) (151,996 ) Other Current Assets and Liabilities, Net (49,889 ) (72,160 ) Net Cash Flows Provided by Operating Activities 907,970   978,438     Investing Activities: Investments in Property, Plant and Equipment (1,146,952 ) (869,168 ) Proceeds from Sales of Marketable Securities 373,853 327,581 Purchases of Marketable Securities (394,379 ) (322,244 ) Other Investing Activities (11,050 ) (2,991 ) Net Cash Flows Used in Investing Activities (1,178,528 ) (866,822 )   Financing Activities: Cash Dividends on Common Shares (301,042 ) (282,314 ) Cash Dividends on Preferred Stock (3,759 ) (3,759 ) Decrease in Notes Payable (211,000 ) (393,953 ) Issuance of Long-Term Debt 950,000 800,000 Retirements of Long-Term Debt (150,000 ) (200,000 ) Other Financing Activities (19,254 ) (16,811 ) Net Cash Flows Provided by/(Used in) Financing Activities 264,945   (96,837 ) Net (Decrease)/Increase in Cash and Cash Equivalents (5,613 ) 14,779 Cash and Cash Equivalents - Beginning of Period 30,251   23,947   Cash and Cash Equivalents - End of Period $ 24,638   $ 38,726  

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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Eversource EnergyJeffrey R. Kotkin, 860-665-5154