ES 8-K
Eversource Energy (ES)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 4, 2022 (
Commission File Number |
Registrant; State of Incorporation Address; and Telephone Number |
I.R.S. Employer Identification No. |
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Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Securities registered pursuant to Section 12(b) of the Act: | |||
| Registrant | Title of each class | Trading Symbol(s) |
Name of each exchange on which registered |
| Eversource Energy | |||
| The Connecticut Light and Power Company | None | N/A | N/A |
| NSTAR Electric Company | None | N/A | N/A |
| Public Service Company of New Hampshire | None | N/A | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company | |
| Eversource Energy | |
| The Connecticut Light and Power Company | |
| NSTAR Electric Company | |
| Public Service Company of New Hampshire |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
| Eversource Energy | ¨ |
| The Connecticut Light and Power Company | ¨ |
| NSTAR Electric Company | ¨ |
| Public Service Company of New Hampshire | ¨ |
| Section 2 | Financial Information |
| Item 2.02 | Results of Operations and Financial Conditions. |
On May 4, 2022, Eversource Energy (the “Company”) issued a news release announcing its unaudited results of operations for the three months ended March 31, 2022 and related financial information for certain of its subsidiaries as of and for the same period. A copy of the news release and related unaudited financial reports are attached as Exhibits 99.1 and 99.2, and are incorporated herein by reference thereto.
The information contained in this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed “filed” with the Securities and Exchange Commission (“SEC”) nor incorporated by reference in any registration statement filed by Eversource Energy or any subsidiary thereof under the Securities Act of 1933, as amended (the “Securities Act”), unless specified otherwise.
| Section 5 | Corporate Governance and Management |
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On May 4, 2022, the Company announced that Philip J. Lembo is retiring as Executive Vice President and Chief Financial Officer as part of the Company’s leadership succession plan and that John M. Moreira, the Company’s Senior Vice President–Finance and Regulatory and Treasurer, has been elected as Executive Vice President, Chief Financial Officer and Treasurer, effective today.
Mr. Lembo, 66, who has served as the Company’s Chief Financial Officer since May 2016, will continue to serve the Company until later this year as a Senior Strategic Advisor, focusing on strategic options for Eversource’s offshore wind investments.
Mr. Moreira has served as Senior Vice President-Finance and Regulatory and Treasurer of Eversource Energy, The Connecticut Light and Power Company, NSTAR Electric Company, Public Service Company of New Hampshire, Yankee Gas Services Company and Eversource Energy Service Company since September 12, 2018. Previously, Mr. Moreira served as Vice President of Financial Planning and Analysis of Eversource Energy Service Company from March 10, 2015 until September 12, 2018.
It is anticipated Mr. Moreira will also be elected as Executive Vice President, Chief Financial Officer and Treasurer, and a Director of each of The Connecticut Light and Power Company, NSTAR Electric Company, Public Service Company of New Hampshire, Yankee Gas Services Company and Eversource Energy Service Company later this month.
In connection with Mr. Moreira’s election as the Company’s Executive Vice President, Chief Financial Officer and Treasurer on May 4, 2022, his base annual salary will be increased to $625,000, his target award level under the Annual Incentive Plan will be increased to 80 percent of base salary and his target award level under the Long-Term Incentive Program will be increased to 220 percent of base salary.
| Item 5.07 | Submission of Matters to a Vote of Security Holders. |
(a) On May 4, 2022, the Company held its 2022 Annual Meeting.
(b) Shareholders voted on the proposals set forth below. For more information on the following proposals, see the Company’s Proxy Statement dated March 25, 2022. On March 9, 2022, the record date for the Annual Meeting, there were 344,746,087 common shares outstanding and entitled to vote. At the Annual Meeting, 300,178,042 common shares were represented, in person or by proxy, constituting a quorum.
(1) Election of Trustees. The shareholders elected each of the 12 nominees to the Board of Trustees for a one-year term by a majority of the outstanding common shares:
| Trustee | For |
Against | Abstained | Broker Non-Votes | ||||||||||||
| Cotton M. Cleveland | 245,076,673 | 25,097,789 | 929,296 | 29,074,283 | ||||||||||||
| James S. DiStasio | 266,290,091 | 3,854,960 | 958,708 | 29,074,283 | ||||||||||||
| Francis A. Doyle | 266,092,382 | 4,008,354 | 1,003,022 | 29,074,283 | ||||||||||||
| Linda Dorcena Forry | 262,952,218 | 7,231,803 | 919,738 | 29,074,283 | ||||||||||||
| Gregory M. Jones | 268,734,639 | 1,563,549 | 805,570 | 29,074,283 | ||||||||||||
| James J. Judge | 262,935,157 | 7,394,228 | 774,373 | 29,074,283 | ||||||||||||
| John Y. Kim | 267,649,292 | 2,515,799 | 938,667 | 29,074,283 | ||||||||||||
| Kenneth R. Leibler | 258,098,396 | 12,009,865 | 995,498 | 29,074,283 | ||||||||||||
| David H. Long | 260,905,624 | 9,183,330 | 1,014,804 | 29,074,283 | ||||||||||||
| Joseph R. Nolan, Jr. | 268,100,845 | 2,300,960 | 701,953 | 29,074,283 | ||||||||||||
| William C. Van Faasen | 258,542,801 | 11,596,925 | 964,032 | 29,074,283 | ||||||||||||
| Frederica M. Williams | 262,154,592 | 8,032,743 | 916,423 | 29,074,283 | ||||||||||||
(2) The shareholders approved, on an advisory basis, the compensation of the Company’s 2021 Named Executive Officers:
| For | Against | Abstained | Broker Non-Votes | |||||||||||
| 248,319,200 | 20,796,082 | 1,988,476 | 29,074,283 | |||||||||||
(3) The shareholders ratified the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2022:
| For | Against | Abstained | Broker Non-Votes | |||||||||||
| 287,129,599 | 12,034,973 | 1,013,470 | 0 | |||||||||||
| Item 7.01 | Regulation FD Disclosure. |
On May 5, 2022, Eversource Energy will webcast a conference call with financial analysts during which senior management will discuss the Company’s financial performance through the first quarter of 2022. The webcast will be accessible from the Investors section of the Eversource Energy website at www.eversource.com. Attached as Exhibit 99.3 and incorporated herein by reference are the slides to be discussed by Eversource Energy during the conference call.
The information contained in this Item 7.01, including Exhibit 99.3, shall not be deemed “filed” with the SEC nor incorporated by reference into any registration statement filed by Eversource Energy or any subsidiary thereof under the Securities Act, unless specified otherwise.
| Section 9 | Financial Statements and Exhibits |
| Item 9.01 | Financial Statements and Exhibits. |
|
Exhibit Number |
Description |
| 99.1 | News Release of Eversource Energy dated May 4, 2022. |
| 99.2 | Financial Report for the three months ended March 31, 2022. |
| 99.3 | May 5, 2022 presentation slides. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.
|
EVERSOURCE ENERGY THE CONNECTICUT LIGHT AND POWER COMPANY NSTAR ELECTRIC COMPANY PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE (Registrants) | ||
| May 4, 2022 | By: | /s/ Jay S. Buth |
| Jay S. Buth | ||
| Vice President, Controller and Chief Accounting Officer | ||
Exhibit 99.1
Eversource Energy
Reports First Quarter 2022 Results;
Initiates Strategic Review of Offshore Wind Investments
HARTFORD, Conn. and BOSTON, Mass. (May 4, 2022) – Eversource Energy (NYSE: ES) today reported first quarter 2022 earnings of $443.4 million, or $1.28 per share, compared with earnings of $366.1 million, or $1.06 per share, in the first quarter of 2021. Results for the first quarters of both 2022 and 2021 include after-tax costs associated with natural gas and water utility acquisitions. Those costs were $5.3 million, or $0.02 per share, in the first quarter of 2022, and $6.2 million, or $0.02 per share, in the first quarter of 2021.
Additionally, 2021 results reflected an after-tax charge of $24.1 million, or $0.07 per share, associated with customer credits related to an assessment by the Connecticut Public Utilities Regulatory Authority for The Connecticut Light and Power Company (CL&P) resulting from CL&P’s performance restoring power following the catastrophic impact of Tropical Storm Isaias in August 2020.
Also today, the Eversource Energy Board of Trustees approved a common dividend of $0.6375 per share, payable June 30, 2022, to shareholders of record as of May 19, 2022.
Electric Transmission
Eversource Energy’s transmission segment earned $148.5 million in the first quarter of 2022, compared with earnings of $135.4 million in the first quarter of 2021. Higher transmission earnings were primarily due to additional electric transmission system investment.
Electric Distribution
Eversource Energy’s electric distribution segment earned $140.9 million in the first quarter of 2022, compared with earnings of $117.3 million1 in the first quarter of 2021, excluding the CL&P charge noted above. Improved results were due primarily to lower pension costs and higher revenues, partially offset by higher expense related to operations and maintenance (O&M), depreciation, property tax, and interest.
Natural Gas Distribution
Eversource Energy’s natural gas distribution segment earned $164 million in the first quarter of 2022, compared with earnings of $147.6 million in the first quarter of 2021. Improved results were due primarily to higher revenues and lower pension costs, partially offset by higher O&M, property and other taxes, interest and depreciation expense.
Water Distribution
Eversource Energy’s water distribution segment earned $3.7 million in the first quarter of 2022, compared with earnings of $3.6 million in the first quarter of 2021.
Parent and other companies
Parent and other companies, including acquisition and transition costs, had net losses of $13.7 million in both the first quarters of 2022 and 2021. Lower acquisition-related costs were offset by higher interest costs.
The company today reaffirmed its 2022 non-GAAP earnings projection of between $4.00 per share and $4.17 per share, which excludes acquisition- and transition- related costs.
Also today, Eversource announced that it had initiated a strategic review of its offshore wind investment portfolio. As part of that review, the company will explore strategic alternatives that could result in a potential sale of all or part of its 50 percent interest in its offshore wind joint venture with Ørsted. The Eversource Energy Board of Trustees approved this action earlier today.
Joe Nolan, Eversource’s president and chief executive officer, said, “In light of the record-setting prices in the recent federal lease auction for tracts around the New York Bight and an evolving landscape, we are conducting a fulsome review of our interest in the joint venture with Ørsted to assess alternatives that will allow us to create shareholder value and continue building a leading clean energy company that is wholly supportive of our region’s climate change goals. Eversource remains committed to supporting offshore wind with advocacy, transmission investment solutions, and clean energy resource integration. We have seen up close why Ørsted is unquestionably the world leader in engineering, building and operating offshore wind and have no doubt that the joint venture we launched five years ago will be a tremendous source of clean energy and economic development for the Northeast.”
Eversource expects to complete this review during 2022. If the recommended path forward following the strategic review is a sale of all or part of Eversource’s interest in the joint venture, Eversource expects potential proceeds from such transaction would likely be used to support Eversource’s regulated investments in strengthening, modernizing and decarbonizing its regulated energy and water delivery systems. In February 2022, Eversource identified more than $18 billion of regulated investments it plans to make in its systems from 2022 through 2026. Some potential additional initiatives, such as advanced metering infrastructure and additional transmission investments to connect offshore wind projects through Cape Cod, are not yet reflected in its long-term forecast.
Nolan added, “Today, we are reaffirming our target earnings per share growth in the upper half of 5-7 percent through 2026 solely from our regulated businesses. This growth rate could be enhanced by utilizing proceeds from a sale of offshore wind assets to reduce financing needs and/or fund additional regulated investments to serve our 4.4 million customers.”
The joint venture includes three contracted projects with a total capacity of approximately 1,758 MW, as well as up to 175,000 acres of offshore wind area not allocated to a specific project. These existing projects and the open lease area are comprised of:
| ● | South Fork Wind (130 MW): located 35 miles east of Long Island’s Montauk Point, will interconnect into eastern Long Island where it will deliver power to households under a long-term power purchase agreement with the Long Island Power Authority. Construction of South Fork began in early 2022 and the project is expected to be placed into service in late 2023. |
| ● | Revolution Wind (704 MW): located approximately 15 miles south of the Rhode Island coast, will deliver power under long-term contracts to Rhode Island (400 MW) and Connecticut (304 MW). Revolution Wind is expected to be placed in service in 2025. |
| ● | Sunrise Wind (924 MW): located approximately 30 miles east of Long Island’s Montauk Point, will deliver power to New York State under a long-term purchase agreement with NYSERDA. Sunrise Wind is expected to be commissioned in late 2025. |
| ● | Open lease area: Up to 175,000 acres located 25 miles off the Massachusetts South Coast that is open for additional wind development. |
As the strategic review proceeds, Eversource remains committed to continue providing oversight of the siting and construction of onshore elements of the three active projects noted above. Continued strong progress on these three important offshore wind projects will not be affected by Eversource’s strategic review.
Nolan added, “Eversource has solicited Ørsted’s input on the process of our strategic review and will continue to engage with our partner as the process moves forward.”
Eversource has engaged Goldman Sachs and Ropes & Gray as advisors for this strategic review. Eversource cannot provide assurances regarding the outcome of this review.
The following table reconciles consolidated earnings per share for the first quarters of 2022 and 2021:
| First Quarter | ||||||
| 2021 | Reported EPS | $ | 1.06 | |||
| Higher transmission earnings in 2022 | 0.04 | |||||
| Higher electric distribution revenues in 2022 and lower pension costs offset by higher O&M, depreciation, property taxes, and interest | 0.07 | |||||
| Higher natural gas distribution revenues in 2022 and lower pension costs offset by higher O&M, property and other taxes, interest, depreciation | 0.04 | |||||
| Absence of charge related to CL&P customer credits | 0.07 | |||||
| 2022 | Reported EPS | $ | 1.28 | |||
Financial results for the first quarters of 2022 and 2021 for Eversource Energy’s business segments and parent and other companies are noted below:
Three months ended:
| (in millions, except EPS) | March 31, 2022 | March 31, 2021 | Increase/ (Decrease) | 2022 EPS1 | ||||||||||||
| Electric Transmission | $ | 148.5 | $ | 135.4 | $ | 13.1 | $ | 0.43 | ||||||||
| Electric Distribution1 | 140.9 | 117.3 | 23.6 | 0.41 | ||||||||||||
| Natural Gas Distribution | 164.0 | 147.6 | 16.4 | 0.47 | ||||||||||||
| Water Distribution | 3.7 | 3.6 | 0.1 | 0.01 | ||||||||||||
| Parent and Other Companies1 | (8.4 | ) | (7.5 | ) | (0.9 | ) | (0.02 | ) | ||||||||
| Acquisition and transition charges | (5.3 | ) | (6.2 | ) | 0.9 | (0.02 | ) | |||||||||
| CL&P storm performance charge | --- | (24.1 | ) | 24.1 | --- | |||||||||||
| Reported Earnings | $ | 443.4 | $ | 366.1 | $ | 77.3 | $ | 1.28 | ||||||||
Eversource Energy has approximately 345 million common shares outstanding. It operates New England’s largest energy delivery system and serves approximately 4.4 million electric, natural gas and water utility customers in Connecticut, Massachusetts and New Hampshire.
CONTACT:
Jeffrey R. Kotkin
(860) 665-5154
| Note: Eversource Energy will webcast a conference call with senior management on May 5, 2022, beginning at 8:30 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 document 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 of such business, but rather represent a direct interest in Eversource Energy's assets and liabilities as a whole. EPS by business is a financial measure not recognized under generally accepted accounting principles (non-GAAP) that is calculated by dividing the net income or loss attributable to common shareholders of each business by the weighted average diluted Eversource Energy common shares outstanding for the period. Earnings discussions also include non-GAAP financial measures referencing 2022 earnings and EPS excluding certain acquisition and transition costs and 2021 earnings and EPS excluding charges at CL&P related to an October 2021 settlement agreement that included credits to customers and funding of various customer assistance initiatives and a 2021 storm performance penalty imposed on CL&P by the PURA.
Eversource Energy uses these non-GAAP financial measures to evaluate and provide details of earnings results by business and to more fully compare and explain 2022 and 2021 results without including these items. This information is among the primary indicators management uses as a basis for evaluating performance and planning and forecasting of future periods. Management believes the impacts of acquisition and transition costs, the CL&P October 2021 settlement agreement, and the 2021 storm performance penalty imposed on CL&P by the PURA are not indicative of Eversource Energy’s ongoing costs and performance. Management views these charges as not directly related to the ongoing operations of the business and therefore not an indicator of baseline operating performance. Due to the nature and significance of the effect of these items on net income attributable to common shareholders and EPS, management believes that the non-GAAP presentation is a more meaningful representation of Eversource Energy’s financial performance and provides additional and useful information to readers in analyzing historical and future performance of the business. These non-GAAP financial measures should not be considered as alternatives to Eversource Energy’s consolidated net income attributable to common shareholders or EPS determined in accordance with GAAP as indicators of Eversource Energy’s operating performance.
This document 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. Generally, 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. Forward-looking statements are based on the current expectations, estimates, assumptions or projections of management and are not guarantees of future performance. These expectations, estimates, assumptions or projections may vary materially from actual results. Factors that may cause actual results to differ materially from those included in the forward-looking statements include, but are 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; disruptions in the capital markets or other events that make our access to necessary capital more difficult or costly; the negative impacts of the novel coronavirus (COVID-19) pandemic, including any new or emerging variants, on our customers, vendors, employees, regulators, and operations; changes in economic conditions, including impact on interest rates, tax policies, and customer demand and payment ability; ability or inability to commence and complete our major strategic development projects and opportunities, acts of war or terrorism, physical attacks or grid disturbances that may damage and disrupt our electric transmission and electric, natural gas, and water distribution systems; 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 or development of alternative energy sources related to our current or future business model; contamination of, or disruption in, our water supplies; changes in levels or timing of capital expenditures; 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). They are updated as necessary and 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, as 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.
# # #
Exhibit 99.2
EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| For the Three Months Ended March 31, | ||||||||
| (Thousands of Dollars, Except Share Information) | 2022 | 2021 | ||||||
| Operating Revenues | $ | 3,471,310 | $ | 2,825,840 | ||||
| Operating Expenses: | ||||||||
| Purchased Power, Fuel and Transmission | 1,389,696 | 998,491 | ||||||
| Operations and Maintenance | 472,433 | 465,542 | ||||||
| Depreciation | 289,330 | 270,704 | ||||||
| Amortization | 236,948 | 108,013 | ||||||
| Energy Efficiency Programs | 199,484 | 188,063 | ||||||
| Taxes Other Than Income Taxes | 220,364 | 209,459 | ||||||
| Total Operating Expenses | 2,808,255 | 2,240,272 | ||||||
| Operating Income | 663,055 | 585,568 | ||||||
| Interest Expense | 153,245 | 137,766 | ||||||
| Other Income, Net | 71,561 | 34,201 | ||||||
| Income Before Income Tax Expense | 581,371 | 482,003 | ||||||
| Income Tax Expense | 136,045 | 113,980 | ||||||
| Net Income | 445,326 | 368,023 | ||||||
| Net Income Attributable to Noncontrolling Interests | 1,880 | 1,880 | ||||||
| Net Income Attributable to Common Shareholders | $ | 443,446 | $ | 366,143 | ||||
| Basic Earnings Per Common Share | $ | 1.28 | $ | 1.07 | ||||
| Diluted Earnings Per Common Share | $ | 1.28 | $ | 1.06 | ||||
| Weighted Average Common Shares Outstanding: | ||||||||
| Basic | 345,156,346 | 343,678,243 | ||||||
| Diluted | 345,661,133 | 344,334,689 | ||||||
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.
Exhibit 99.3
| EVERSOURCE ENERGY Q1 2022 RESULTS May 5, 2022 2022 First Quarter Results Exhibit 99.3 |
| EVERSOURCE ENERGY Q1 2022 RESULTS Safe Harbor Statement 1 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 interest in the assets and liabilities of such business, but rather represent a direct interest in Eversource Energy's assets and liabilities as a whole. EPS by business is a financial measure not recognized under generally accepted accounting principles (non-GAAP) that is calculated by dividing the net income or loss attributable to common shareholders of each business by the weighted average diluted Eversource Energy common shares outstanding for the period. Earnings discussion also includes non-GAAP financial measures referencing 2022 earnings and EPS excluding certain acquisition and transition costs and 2021 earnings and EPS excluding charges at CL&P related to an October 2021 settlement agreement that included credits to customers and funding of various customer assistance initiatives and a 2021 storm performance penalty imposed on CL&P by the PURA. Eversource Energy uses these non-GAAP financial measures to evaluate and provide details of earnings results by business and to more fully compare and explain 2022 and 2021 results without including these items. This information is among the primary indicators management uses as a basis for evaluating performance and planning and forecasting of future periods. Management believes the impacts of acquisition and transition costs, the CL&P October 2021 settlement agreement, and the 2021 storm performance penalty imposed on CL&P by the PURA are not indicative of Eversource Energy’s ongoing costs and performance. Management views these charges as not directly related to the ongoing operations of the business and therefore not an indicator of baseline operating performance. Due to the nature and significance of the effect of these items on net income attributable to common shareholders and EPS, management believes that the non-GAAP presentation is a more meaningful representation of Eversource Energy’s financial performance and provides additional and useful information to readers in analyzing historical and future performance of the business. These non- GAAP financial measures should not be considered as alternatives to Eversource Energy’s consolidated net income attributable to common shareholders or EPS determined in accordance with GAAP as indicators of Eversource Energy’s operating performance. This document 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. Generally, 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. Forward-looking statements are based on the current expectations, estimates, assumptions or projections of management and are not guarantees of future performance. These expectations, estimates, assumptions or projections may vary materially from actual results. Factors that may cause actual results to differ materially from those included in the forward-looking statements include, but are 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; disruptions in the capital markets or other events that make our access to necessary capital more difficult or costly; the negative impacts of the novel coronavirus (COVID-19) pandemic, including any new or emerging variants, on our customers, vendors, employees, regulators, and operations; changes in economic conditions, including impact on interest rates, tax policies, and customer demand and payment ability; ability or inability to commence and complete our major strategic development projects and opportunities; acts of war or terrorism, physical attacks or grid disturbances that may damage and disrupt our electric transmission and electric, natural gas, and water distribution systems; 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 or development of alternative energy sources related to our current or future business model; contamination of, or disruption in, our water supplies; changes in levels or timing of capital expenditures; 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). They are updated as necessary and 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, as 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 Q1 2022 RESULTS Agenda 2 Joe Nolan President & CEO Phil Lembo Senior Strategic Advisor & Outgoing CFO ▪ Massachusetts Future of Gas Update ▪ Offshore Wind Update ▪ Q1 2022 Financial Results ▪ 2022 – 2026 Guidance & Outlook ▪ Regulatory Update ▪ Equity Issuance Update John Moreira Executive Vice - President, Incoming CFO & Treasurer |
| EVERSOURCE ENERGY Q1 2022 RESULTS 3 Massachusetts Future of Gas Proceeding – Highlights ▪ Proposed a portfolio of initiatives to help achieve the state’s net-zero greenhouse gas by 2050 emission goal, while still providing customers with energy choices ▪ The plan will be updated every three years to incorporate advances in technology, experiences from pilot programs, customer feedback and adoption rates ▪ Gas LDCs are requesting a Net Zero Enablement Tariff to recover our costs ▪ Where possible we will be applying for available research grants and funding from federal sources Portfolio of Initiatives: ▪ Reduce energy demand – Through energy efficiency programs and services ▪ Hybrid electrification – Combine electricity for heating and natural gas as a backup fuel ▪ Strategic electrification – Includes technologies like networked geothermal for heating and cooling as an alternative to natural gas ▪ Decarbonization of our gas network – Includes securing lower-carbon or no carbon gases that can be blended with natural gas or used as an eventual replacement for natural gas, possibly renewable natural gas or hydrogen |
| EVERSOURCE ENERGY Q1 2022 RESULTS ▪ Eversource-Ørsted 50-50 joint venture owns three projects plus open offshore wind lease area – South Fork Wind, Revolution Wind and Sunrise Wind with a total capacity of 1,758 MW – Up to 175,000 acres of offshore wind lease area open for additional development ▪ Strategic review will cover all of Eversource’s offshore interests – Could result in potential sale of all or part of its 50% interest – Review expected to conclude by year-end ▪ Strong pricing for NY Bight parcels in February indicates deep interest in offshore parcels in the Northeast – Eversource-Ørsted tracts are among the best situated in the United States due to strong wind speeds, moderate water depths and proximity to southern New England and NY electric loads ▪ Sale proceeds would be used to support regulated clean energy and infrastructure resilience capital programs and/or reduce financing needs 4 Eversource Commencing Strategic Review of Offshore Wind Joint Venture |
| EVERSOURCE ENERGY Q1 2022 RESULTS 5 South Fork Wind Construction Under Way |
| EVERSOURCE ENERGY Q1 2022 RESULTS 6 Assumptions Feb 2022 May 2022 Costs Locked in for Three Projects 80% 80% Offshore Investment to Date $1.2B $1.3B Expected Spending in 2022 $900M - $1B $900M - $1B Expected Spending 2023 - 2026 $3B - $3.6B $3B - $3.6B Expected Long - Term Average ROE 11 - 13% 11 - 13% South Fork Wind In Service Late 2023 (Under Construction) Late 2023 (Under Construction) Revolution Wind In Service In 2025 In 2025 Sunrise Wind In Service Late 2025 Late 2025 Offshore Wind Updates |
| EVERSOURCE ENERGY Q1 2022 RESULTS 1Q 2022 1Q 2021 Change $0.43 $0.39 $0.04 0.41 0.34 0.07 0.47 0.43 0.04 0.01 0.01 0.00 (0.02) (0.02) 0.00 $1.30 $1.15 $0.15 (0.02) (0.09) 0.07 $1.28 $1.06 $0.22 Natural Gas Distribution Electric Transmission Electric Distribution (Non-GAAP) Water Distribution Reported EPS (GAAP) 7 Parent & Other (Non- GAAP) EPS, Ex. CL&P Settlement and Acquisition/Transition Costs (Non-GAAP) CL&P Settlement & Acquisition/Transition Costs Q1 2022 vs. Q1 2021 Financial Results |
| EVERSOURCE ENERGY Q1 2022 RESULTS 8 Well Performing Core Businesses Drive EPS CAGR to Upper Half of 5 – 7% Through 2026 $2.28 $2.53 $2.65 $2.81 $2.96 $3.11 $3.25 $3.45 $3.64 $3.86 $4.00- $4.17 2012A* 2013A* 2014A* 2015A* 2016A 2017A 2018A 2019A* 2020A* 2021A* 2022E* 2023E 2024E 2025E 2026E * Reflects non-GAAP results, excludes nonrecurring charges |
| EVERSOURCE ENERGY Q1 2022 RESULTS Projected Capital Expenditures For Core Businesses $1,030 $964 $1,115 $1,118 $979 $861 $834 $808 $1,221 $1,189 $1,244 $1,450 $1,469 $1,391 $1,372 $1,338 $453 $545 $799 $921 $849 $926 $895 $938 $110 $127 $144 $154 $163 $176 $190 $206 $239 $239 $239 $254 $224 $208 $203 $214 $3,053 $3,064 $3,541 $3,897 $3,684 $3,562 $3,494 $3,504 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 2019A 2020A 2021A 2022E 2023E 2024E 2025E 2026E Transmission Electric Distribution Natural Gas Distribution Water IT and Facilities $ In Millions $18.1 Billion 2022-2026 9 |
| EVERSOURCE ENERGY Q1 2022 RESULTS 10 AMI Implementation Under Active Review by MA, CT regulators AMI - MA Briefing period ends June 27, 2022 Decision expected Q4 2022 AMI - CT Briefing period ended April 29, 2022 Decision expected Q4 2022 What does AMI do for . . . The Customer? System Performance? |
| EVERSOURCE ENERGY Q1 2022 RESULTS 11 Equity Issuance Update New Shares ▪ $1.2 billion At-The-Market Program expected to commence in Q2 2022 Treasury Shares ▪ Dividend reinvestment, employee equity programs continue with 475,000 shares issued YTD through April 30 |
| EVERSOURCE ENERGY Q1 2022 RESULTS 12 APPENDIX |
| EVERSOURCE ENERGY Q1 2022 RESULTS ▪ Address the Distribution Revenue Deficiency ($89M) – Relates to capital additions, enterprise IT and Storm Fund contribution ▪ Extension of Performance-Based Ratemaking (PBR) – 10-year plan, with enabling rate base roll-in(s) ▪ AMI Tariff Approval – Approval of specific tariff is next step to execute AMI capital investment plan of $575M Key Elements of NSTAR Electric Rate Review 13 Key Revenue Requirement Factors Test Year (12 Months Ended) December 31, 2020 Revenue Deficiency $89M Average Bill Impact (residential customer) 5.7% 2021 Rate Base Roll-In 1/1/23 $46M 2022 Rate Base Roll-In 1/1/24 $47M Return on Equity (Requested) 10.5% Capital Structure 53.8% Equity Filing Date: January 14, 2022 Intervenor Testimony Filed: April 29, 2022 Evidentiary Hearings: June 27 - July 22, 2022 Decision Date: December 1, 2022 Rates Effective: January 1, 2023 |
| EVERSOURCE ENERGY Q1 2022 RESULTS 14 Massachusetts Future of Gas Proceeding Energy Efficiency Reduce the energy demand by maximizing the application of all energy efficiency investments in concert with decarbonization options Initiative 1 – Hybrid Heat Pumps ▪ Develop and propose a hybrid heat pump pilot in an Eversource dual electric and gas territory with electric grid constraints ▪ Assess LNG facilities as a mechanism to shave winter peaks for electrification in constrained electric grid areas ▪ Assess a new combined electric and gas rate structure ▪ Seek Regulatory Approval on pilots and cost recovery mechanism Initiative 2 – Networked Geothermal ▪ Build & operate geothermal pilot program in Framingham, MA ▪ Identify partnerships with new construction developer community ▪ Build & operate second geothermal pilot program in MA targeting new developments ▪ Work within geothermal vendor ecosystem to prepare for increased volume of work ▪ Utilize data obtained to maximize gas/electric planning and peak shaving ▪ Coordinate workforce training and further customer education Initiative 3 – Production Certified Gas (PCG) ▪ Track and collaborate on GTI’s Veritas initiative to develop accepted methodology to measure and verify methane emissions reductions ▪ Assess feasibility of sourcing and procuring PCG and PCG supply potential for Eversource network ▪ Seek regulatory approval for procurement of PCG contracts ▪ Allow Eversource to identify ways to offer PCG solutions to customers requesting them Initiative 4 – Renewable Natural Gas (RNG) ▪ Conduct and validate market assessments for in-state and out-of-state RNG ▪ Procure RNG from at least one locally sourced project ▪ Conduct a feasibility assessment of RNG storage at Eversource LNG sites ▪ Seek regulatory approval for cost recovery of RNG commodity and associated infrastructure investments ▪ Allow Eversource to identify ways to offer RNG solutions to customers requesting them ▪ Continuing exploring other opportunities to inject RNG within Eversource’s pipeline Initiative 5 – Hydrogen ▪ Pursue small scale pilot targeting C&I customer(s) ▪ Identify potential sites for pilot ▪ Engage with stakeholders on hydrogen opportunities and education ▪ Pursue federal funding through DOE IIJA grant funding ▪ Assess safety, feasibility, operational performance and cost effectiveness ▪ Engage in further R&D for hydrogen production for end use Initiative 6 – R&D Innovation ▪ Partner with National Labs and industry players to test and evaluate emerging technologies and end-use applications ▪ Undertake concept studies examining feasibility, pre-engineering, planning, solicitations, etc. ▪ Lead/collaborate on innovative pilots/demonstrations, if applicable Initiatives 2022 2023 2024 2025 |
| EVERSOURCE ENERGY Q1 2022 RESULTS 15 FERC Transmission New England ROE Update ▪ Current base: 10.57%; Cap: 11.74% (2014 Opinion 531A) ▪ October 2018 FERC Order in New England ROE cases proposed a new methodology to address issues raised by Court in vacating Opinion 531A (New England ROE Complaint I) – This new methodology provided a path forward to resolve 2011, 2012, 2014 and 2016 complaints against New England transmission ROEs – Briefs and reply briefs filed in early 2019; timing of decision remains unclear – Original FERC-proposed new methodology averaged DCF, CAPM, risk premium, expected earnings – Illustrative base: 10.41%; Cap: 13.08% (October 2018 proposed new method) – FERC changed methodology in revised May 2020 MISO TO Order and applied only DCF, CAPM and risk premium methodologies. No date given for New England ROE decision – In March 2020, FERC issued a NOPR asking for comments on several items related to incentives, including raising RTO adder from 50 bps to 100 bps and capping incentives at 250 bps – ES incentives now capped at 11.74%, 117 bps above 10.57% base |
| EVERSOURCE ENERGY Q1 2022 RESULTS Lower Generation Capacity Costs Helping to Keep New England Electric Bills In Check $4,000 $3,000 $2,400 $2,100 $1,600 $980 $1,360 $1,040 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 FCA 9 FCA 10 FCA 11 FCA 12 FCA 13 FCA 14 FCA 15 FCA 16 June 2021- May 2022 June 2022- May 2023 June 2023- May 2024 June 2020- May 2021 June 2019- May 2020 June 2018- May 2019 $ In Millions Source – ISO-NE FCA news releases 16 June 2024- May 2025 June 2025- May 2026 |
