Business Wire | Jul 30, 2020 04:15PM EDT

Eversource Energy Reports Second Quarter Results

Jul. 30, 2020

HARTFORD, Conn. & BOSTON--(BUSINESS WIRE)--Jul. 30, 2020--Eversource Energy (NYSE: ES) today reported earnings of $252.2 million, or $0.75 per share, in the second quarter of 2020, compared with earnings of $31.5 million, or $0.10 per share, in the second quarter of 2019. In the first half of 2020, Eversource Energy earned $587 million, or $1.75 per share, compared with earnings of $340.1 million, or $1.07 per share, in the first half of 2019.

Results in the second quarter and first half of 2020 included charges of $3.9 million and $7.4 million, respectively, related to Eversource's pending acquisition of the assets of Columbia Gas of Massachusetts. Absent those charges, Eversource earned $256.1 million1, or $0.76 per share, in the second quarter of 2020 and $594.4 million1, or $1.77 per share, in the first half of 2020.

Results in the second quarter and first half of 2019 included an after-tax impairment charge of $204.4 million, or $0.64 per share, related to Eversource Energy's investment in the Northern Pass Transmission (NPT) project. Excluding that impairment charge, Eversource Energy earned $235.9 million1, or $0.74 per share, in the second quarter of 2019 and $544.5 million1, or $1.71 per share, in the first half of 2019.

Eversource Energy also today reaffirmed its 2020 earnings per share (EPS) projection of $3.60 to $3.70 per share and its long-term EPS growth rate from its existing core regulated businesses of 5-7 percent.

"We have had exceptionally strong execution for our customers in the first half of 2020, despite very significant challenges posed by COVID-19," said Jim Judge, Eversource chairman, president and chief executive officer. "Our reliability and safety performance have been excellent. We are executing our $3 billion capital investment plan, and our financial performance is on target half-way through a challenging year. Most importantly, we continue to benefit from the fact that the three states we serve are national leaders in confronting the virus and driving down infection rates."

Electric Transmission

Eversource Energy's transmission segment earned $129.5 million in the second quarter of 2020 and $256.2 million in the first half of 2020, compared with a loss of $87.4 million in the second quarter of 2019 and earnings of $30.9 million in the first half of 2019. Excluding the NPT impairment charge, Eversource Energy's transmission segment earned $117 million1 in the second quarter of 2019 and $235.3 million1 in the first half of 2019. Aside from the NPT impairment charge, transmission segment results improved due to a higher level of investment in Eversource's electric transmission system.

Electric Distribution

Eversource Energy's electric distribution segment earned $115 million in the second quarter of 2020 and $245.1 million in the first half of 2020, compared with earnings of $105.4 million in the second quarter of 2019 and $225.4 million in the first half of 2019. Improved second quarter and year-to-date results were due primarily to higher revenues, partially offset by higher depreciation, operation and maintenance expense, and interest.

Natural Gas Distribution

Eversource Energy's natural gas distribution segment earned $3.3 million in the second quarter of 2020 and $87.8 million in the first half of 2020, compared with a $1.8 million loss in the second quarter of 2019 and earnings of $74.7 million in the first half of 2019. Improved results were due to higher revenues, partially offset by higher operation and maintenance expense and higher depreciation.

Water Distribution

Eversource's Aquarion Water Company subsidiary earned $10.4 million in the second quarter of 2020 and $12.5 million in the first half of 2020, compared with earnings of $8 million in the second quarter of 2019 and $8.8 million in the first half of 2019. Improved results were primarily due to higher revenues and lower depreciation expense.

Eversource Parent and Other Companies

Eversource Energy parent and other companies lost $6 million in the second quarter of 2020 and $14.6 million in the first half of 2020, compared with earnings of $7.3 million in the second quarter of 2019 and $0.3 million in the first half of 2019. The 2020 results include after-tax charges of $3.9 million in the second quarter and $7.4 million in the first half related to Eversource Energy's pending acquisition of the assets of Columbia Gas of Massachusetts. Excluding Columbia Gas impacts, lower 2020 results reflect lower mark-to-market earnings from an unregulated clean energy investment.

The following table reconciles 2020 and 2019 second quarter and first half earnings per share:

Second First Six Quarter Months

2019 Reported EPS $ 0.10 $ 1.07

Higher electric distribution revenues in 2020, offset by

higher depreciation, O&M and interest expense and 0.01 0.02 dilution

Higher electric transmission earnings in 2020, excluding 0.02 0.02 NPT impairment, offset by dilution

Higher natural gas revenues in 2020, offset by higher O&M, depreciation, and property tax expense 0.01 0.03 and dilution

Higher water earnings in 2020, offset by 0.01 0.01 dilution

Lower earnings in 2020 related to clean energy fund investment (0.04 ) (0.04 )

Lower parent interest expense and Other 0.01 0.02

Absence of NPT impairment charge 0.64 0.64

Charges related to pending Columbia Gas of MA asset purchase (0.01 ) (0.02 )

2020 Reported EPS $ 0.75 $ 1.75

Financial results by segment for the second quarter and first six months of 2020 and 2019 are noted below:

Three months ended:

Increase/

(in millions, except EPS) June 30, June 30, (Decrease) 2020 EPS^ 2020 2019 1

Electric Transmission, ex. NPT $ 129.5 $ 117.0 $ 12.5 $ 0.39 charge^1

Electric Distribution 115.0 105.4 9.6 0.34

Natural Gas Distribution 3.3 (1.8 ) 5.1 0.01

Water Distribution 10.4 8.0 2.4 0.03

Eversource Parent and Other (2.1 ) 7.3 (9.4 ) (0.01 )Companies^1

NPT impairment charge 0.0 (204.4 ) 204.4 0.00

Columbia Gas of MA asset (3.9 ) 0.0 (3.9 ) (0.01 )acquisition costs

Reported Earnings $ 252.2 $ 31.5 $ 220.7 $ 0.75

Six months ended:

Increase/

(in millions, except EPS) June 30, June 30, (Decrease) 2020 EPS^ 2020 2019 1

Electric Transmission, ex. NPT $ 256.2 $ 235.3 $ 20.9 $ 0.76 charge^1

Electric Distribution 245.1 225.4 19.7 0.73

Natural Gas Distribution 87.8 74.7 13.1 0.26

Water Distribution 12.5 8.8 3.7 0.04

Eversource Parent and Other (7.2 ) 0.3 (7.5 ) (0.02 )Companies^1

NPT impairment charge 0.0 (204.4 ) 204.4 0.00

Columbia Gas of MA asset (7.4 ) 0.0 (7.4 ) (0.02 )acquisition costs

Reported Earnings $ 587.0 $ 340.1 $ 246.9 $ 1.75

Eversource Energy has approximately 343 million common shares outstanding and operates New England's largest energy delivery system. It serves approximately 4 million electric, natural gas and water customers in Connecticut, Massachusetts and New Hampshire.

Note: Eversource Energy will webcast a conference call with senior management on July 31, 2020, beginning at 9 a.m. Eastern Time. The webcast and associated slides can be accessed through Eversource Energy's website at www.eversource.com.

1All 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 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 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 2020 earnings and EPS excluding certain acquisition costs and Q2 2019 earnings and EPS excluding the NPT impairment charge. 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 2020 and 2019 results without including these items. Management believes the acquisition costs and the NPT impairment charge are not indicative of Eversource Energy's ongoing costs and performance. Due to the nature and significance of these items on net income attributable to common shareholders, 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. 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. 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 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, including the Columbia Gas of Massachusetts asset acquisition; 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 AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)



For the Three Months Ended For the Six Months Ended June June 30, 30,

(Thousands ofDollars, Except 2020 2019 2020 2019ShareInformation)



Operating $ 1,953,128 $ 1,884,495 $ 4,326,854 $ 4,300,287 Revenues



Operating Expenses:

Purchased Power,Fuel and 630,132 620,904 1,506,703 1,595,786 Transmission

Operations and 332,055 328,010 674,117 663,606 Maintenance

Depreciation 240,516 219,084 476,727 434,032

Amortization 23,397 38,945 73,172 109,906

Energy Efficiency 115,354 105,837 263,747 245,953 Programs

Taxes Other Than 178,019 181,083 359,613 365,672 Income Taxes

Impairment ofNorthern Pass - 239,644 - 239,644 Transmission

Total Operating 1,519,473 1,733,507 3,354,079 3,654,599 Expenses

Operating Income 433,655 150,988 972,775 645,688

Interest Expense 134,285 132,705 269,000 264,438

Other Income, Net 30,243 45,866 54,347 76,850

Income BeforeIncome Tax 329,613 64,149 758,122 458,100 Expense

Income Tax 75,501 30,815 167,379 114,209 Expense

Net Income 254,112 33,334 590,743 343,891

Net IncomeAttributable to 1,880 1,880 3,759 3,759 NoncontrollingInterests

Net IncomeAttributable to $ 252,232 $ 31,454 $ 586,984 $ 340,132 CommonShareholders



Basic and DilutedEarnings Per $ 0.75 $ 0.10 $ 1.75 $ 1.07 Common Share



Weighted AverageCommon Shares Outstanding:

Basic 337,946,663 319,664,998 334,524,452 318,644,796

Diluted 338,561,649 320,388,490 335,749,404 319,352,287

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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CONTACT: Jeffrey R. Kotkin (860) 665-5154