EVERSOURCE ENERGY Q1 2025 EARNINGS REPORT May 2, 2025 EVERSOURCE ENERGY Q1 2025 EARNINGS REPORT EVERSOURCE ENERGY Q1 2025 EARNINGS REPORT 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 first quarters 2025 and 2024 earnings discussion includes a financial measure, EPS by business, that is not recognized under generally accepted accounting principles (non-GA ...

分组1 - Eversource Energy reported quarterly earnings of $1.50 per share, matching the Zacks Consensus Estimate, and showing a slight increase from $1.49 per share a year ago [1] - The company posted revenues of $4.12 billion for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 12.74%, compared to $3.33 billion in the same quarter last year [2] - Eversource shares have increased approximately 3.6% since the beginning of the year, contrasting with a decline of 5.3% in the S&P 500 [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.99 on revenues of $2.91 billion, and for the current fiscal year, it is $4.73 on revenues of $12.93 billion [7] - The Utility - Electric Power industry, to which Eversource belongs, is currently ranked in the top 14% of over 250 Zacks industries, indicating a favorable outlook [8]

Trust Governance and Management - Eversource Energy's Declaration of Trust was amended to allow annual meetings of Shareholders to be held in person or virtually[1] - The amendment also revised provisions requiring more than a majority vote to a majority-only vote[1] - The amendment was approved by more than two-thirds of the outstanding Common Shares at the 2025 Annual Meeting[1] - The Declaration of Trust has been amended multiple times since its original date of January 15, 1927, with the latest amendment on May 1, 2025[4] - The Trustees are responsible for managing and controlling the trust estate for the benefit of Shareholders[7] - The number of Trustees can be fixed at each annual meeting by a majority vote of the outstanding shares[10] - Trustees have the power to manage the trust estate, including acquiring and selling securities and borrowing money[51][55] - The Trustees are responsible for converting the trust estate into cash before the termination of the trust, with no specific property interest granted to Shareholders[49] - The Trustees have the authority to purchase, acquire, and hold shares, bonds, and other obligations, but these shares will not have voting rights or dividends while held[63] - The annual meeting of the Trustees is held immediately after the annual meeting of the Shareholders, with a quorum requiring a majority of the full board present[66] - The Treasurer is responsible for the custody of all funds belonging to the trust estate and must keep accurate financial records[71] - The Trustees may declare and pay dividends as they see fit, with all holders of a class receiving the same amount per share[96] - The Trustees are not liable for acts or defaults of co-Trustees or other representatives, provided they act in good faith[103] - The association will indemnify its Trustees and officers against losses incurred while in office, except in cases of bad faith actions[106] - Trustees may consult with various experts at the expense of the trust estate, ensuring actions taken in good faith are protected[110] - The trust may be terminated or amended by a majority vote of the Trustees, requiring consent from a majority of shareholders for any changes affecting preferred shares[118] - Upon termination, the Trustees are required to convert all property into cash and distribute it among shareholders according to their respective shares[120] - The rights of indemnification for Trustees and officers are not exclusive and may include additional rights under Massachusetts law[109] Shareholder Rights and Responsibilities - Shareholders must own at least 3% of the outstanding common shares for three years to qualify as an Eligible Shareholder for proxy access[14] - The association will include Shareholder Nominees in its proxy statement if eligibility requirements are met[13] - The Required Information for Shareholder Nominees will be disclosed in the association's proxy statement[20] - The association reserves the right to omit any information it believes is untrue or misleading from its proxy materials[21] - The maximum number of Shareholder Nominees that can be included in the association's proxy materials is capped at the greater of two or twenty percent of the number of Trustees in office[35] - Eligible Shareholders must provide a written statement certifying the number of common shares they have owned continuously for at least three years as of the date of the Shareholder Notice[28] - The association may omit any Shareholder Nominee from its proxy materials if the nominee does not meet independence standards or has been involved in certain legal issues[34] - Shareholder Notices must be delivered no later than the Close of Business on the 20th day or earlier than the Close of Business on the 150th day prior to the first anniversary of the previous year's annual meeting[26] - Eligible Shareholders must notify the association immediately if they cease to own any of the Required Shares prior to the annual meeting[25] - A written agreement from the Eligible Shareholder must include representations regarding the acquisition of Required Shares in the ordinary course of business[25] - The association requires a copy of the Schedule 14N to be filed with the Securities and Exchange Commission[24] - Shareholder Nominees must consent to being named in the association's proxy statement and agree to serve as a Trustee if elected[30] - The association may disregard any nomination if it receives notice of another candidate for election that exceeds the number of Trustees to be elected[34] - Eligible Shareholders must provide documentation demonstrating that the number of Shareholders in a group does not exceed twenty[28] - The association's proxy materials will include Shareholder Nominees based on the ranking specified by Eligible Shareholders, with the highest-ranking nominees selected until the Permitted Number is reached[37] - If the number of Shareholder Nominees exceeds the Permitted Number, the selection process will continue until the Permitted Number is achieved, prioritizing the largest disclosed share ownership[37] - Shareholder Nominees who withdraw or become ineligible for election will be ineligible for the next two annual meetings[38] - The Board has the authority to interpret the provisions regarding Shareholder Nominees and determine compliance with eligibility requirements[40] - If a Shareholder does not present their nominee at the annual meeting, the nomination will be disregarded[40] - Trustees must qualify by submitting a written acceptance within twenty days after election, or their election will be null and void[42] - Trustees can resign, with the resignation taking effect upon acceptance or after twenty days[43] - Vacancies on the Board of Trustees can be filled by remaining Trustees, even if they are less than a majority[45] Shareholder Meetings and Voting - The annual meeting of shareholders will be held in April, May, or June, with the exact date and time determined by the Trustees[90] - Shareholders holding one-tenth (1/10) of the outstanding shares can request special meetings, which can address any business that could have been transacted at the annual meeting[90] - Shareholders have the right to vote in person or by proxy, with each common share granting one vote[91] - The Trustees can fix a record date for determining shareholders entitled to notice and to vote at meetings[91] - Electronic transmission is considered valid for notices and voting, ensuring modern communication methods are utilized[91] - A majority of shares present constitutes a quorum for conducting business at meetings[91] Share Issuance and Transfer - Common shares may be issued for cash, property, or services, and require a majority vote from Shareholders for issuance[78] - Every Shareholder is entitled to receive a certificate specifying the number and kind of shares held, which must be signed by designated officers[79] - A register of Shareholders must be maintained, containing names, addresses, and the number of shares held[81] - Transfers of shares must be in writing and accompanied by the existing certificate for registration[82] - All shares issued are full-paid and non-assessable, meaning Shareholders are not personally liable for any debts incurred by the Trustees[87] Legal and Compliance - The trust created shall continue without limitation of time unless terminated as provided in Article (39) with a maximum duration of twenty (20) years from the death of the last survivor of specified individuals[113] - The trust's provisions are subject to the laws of the Commonwealth of Massachusetts, ensuring compliance with local regulations[125] - Amendments to the trust do not invalidate actions taken prior to the effective date of such amendments[125] - Expenses incurred by Trustees or officers in legal actions may be advanced by the association prior to final disposition[116] - The signature of any Trustee or officer may be authorized to be facsimile, along with the association's seal[122] - The trust allows for the distribution of assets in kind, including stocks, bonds, or obligations, as deemed appropriate by the Trustees[120]

Core Viewpoint - Eversource Energy (ES) is expected to report its first-quarter 2025 results on May 1, with a focus on its performance as a regulated utility and the impact of new rates and investments on earnings [1][2][4]. Group 1: Factors Impacting Q1 Performance - The company's earnings are anticipated to benefit from its strategy as a pure-play regulated utility aimed at facilitating clean energy transitions for customers [2]. - New electric and gas rates in the Massachusetts region, effective January 2025 and November 2024 respectively, are likely to contribute positively to quarterly earnings [2]. - Increased transmission investments are expected to enhance service reliability, while lower operation and maintenance expenses and capital recovery mechanisms may also positively influence earnings [3]. Group 2: Expected Financial Metrics - The Zacks Consensus Estimate for earnings per share is projected at $1.50, reflecting a year-over-year increase of 0.7% [4]. - Revenue estimates are set at $3.65 billion, indicating a year-over-year improvement of 9.6% [4]. Group 3: Earnings Prediction Model - The company's Earnings ESP is currently at 0.00%, suggesting that an earnings beat is not predicted for this reporting cycle [5]. - Eversource Energy holds a Zacks Rank of 3, indicating a neutral outlook [6]. Group 4: Industry Comparisons - Other companies in the industry, such as Dominion Energy, Evergy, and Alliant Energy, are expected to report earnings beats, with respective Earnings ESPs of +1.74%, +5.70%, and +3.57% [7][8][9].

Core Viewpoint - The market anticipates Eversource Energy (ES) will report a year-over-year increase in earnings driven by higher revenues when it releases its quarterly results for March 2025, with actual results being crucial for stock price movement [1][2]. Company Summary - Eversource is expected to report quarterly earnings of $1.50 per share, reflecting a year-over-year increase of 0.7%, with revenues projected at $3.88 billion, a 16.5% increase from the previous year [3]. - The consensus EPS estimate has been revised down by 1% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for Eversource matches the Zacks Consensus Estimate, resulting in an Earnings ESP of 0%, and the stock currently holds a Zacks Rank of 4, complicating predictions for an earnings beat [10][11]. Earnings Surprise History - In the last reported quarter, Eversource was expected to post earnings of $0.99 per share but exceeded expectations with earnings of $1.01, resulting in a surprise of +2.02% [12]. - Over the past four quarters, Eversource has beaten consensus EPS estimates three times [13]. Industry Context - In the Zacks Utility - Electric Power industry, PSEG (PEG) is expected to report earnings of $1.44 per share for the same quarter, indicating a year-over-year change of +9.9%, with revenues projected at $2.85 billion, a 3.2% increase from the previous year [17]. - The consensus EPS estimate for PSEG has been revised down by 3.3% over the last 30 days, but it currently has an Earnings ESP of 3.99%, suggesting a likelihood of beating the consensus EPS estimate [18].

Group 1 - The investment landscape for retirement income has become more complex, moving away from broad diversification through the S&P 500 at reasonable valuations [2] - There is a focus on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] Group 2 - The service offered by iREIT+HOYA Capital is centered on income-focused investing, targeting opportunities in various asset classes [1] - The emphasis is on defensive stocks with a medium- to long-term investment horizon [2]

Investment Strategy Overview - The investment style is termed "Fundamental Options," which combines fundamental analysis with options trading [1] - The approach includes various strategies such as income-oriented investments, growth at a reasonable price, deep value, and dividend aristocrats [1] Investment Focus Areas - Income-oriented investments focus on Business Development Companies (BDCs) and Utilities [1] - Growth investments are primarily in the Technology sector, leveraging a background in Software Development [1] - Deep value investments are based on Discounted Cash Flow and other industry-specific valuation methods [1] - Dividend Aristocrats are also a key focus area [1] Options Trading Strategies - The company employs 20-25 different options strategies for various purposes, including hedging, bullish substitutes, neutral trades, trading volatility, and earnings-related trades [1] Educational Initiatives - There is a passion for teaching, with experience in both formal and informal educational roles, including authoring a free local investing newsletter [1]

Core Insights - Eversource Energy has been streamlining its operations by moving away from offshore wind projects and divesting its water business to focus on its core electric and natural gas services [1] Group 1 - Eversource Energy is strengthening its core services by divesting non-core operations [1] - The company is shifting its focus from offshore wind to enhance its electric and natural gas offerings [1]

Customer Base and Service Areas - Eversource Energy's electric distribution segment serves approximately 1.30 million customers in Connecticut as of December 31, 2024[35]. - NSTAR Electric's distribution business serves approximately 1.58 million customers in Massachusetts as of December 31, 2024[46]. - NSTAR Gas distributed natural gas to approximately 315,000 customers, EGMA to about 332,000 customers, and Yankee Gas to around 254,000 customers in their respective service areas[75]. - Aquarion provides water services to approximately 248,000 customers across 73 towns and cities in Connecticut, Massachusetts, and New Hampshire[91]. - Approximately 91% of Aquarion's customers were based in Connecticut as of December 31, 2024[91]. Regulatory Environment - Eversource is subject to regulation by the Federal Energy Regulatory Commission (FERC) and various state regulatory bodies, impacting its operational and financial strategies[31]. - Aquarion's water utilities are regulated by PURA, DPU, and NHPUC, which oversee rates and service standards[92]. - NSTAR Electric's basic service rates are reset every six months, with costs reconciled annually, impacting approximately 26% of residential and 14% of small commercial customers[53]. - NSTAR Gas distribution rates were established in an October 2020 DPU-approved rate case, effective November 1, 2020, with a 10-year PBR plan through November 1, 2030[80]. - EGMA's distribution rates were established in a DPU-approved October 2020 rate settlement agreement, with rate base resets occurring on November 1, 2024, and November 1, 2027[81]. Financial Performance and Rate Structures - CL&P's retail rates include a supply component, local delivery component, and public benefits charges, with costs adjusted periodically and reconciled annually[38]. - CL&P supplied approximately 45% of its customer load at standard service rates while 55% migrated to competitive energy suppliers in 2024[44]. - NSTAR Electric achieved results at or above target for all service quality metrics in 2024, avoiding a potential SQ charge of up to 2.5% of annual revenues[52]. - PSNH's distribution rates were established in a 2020 NHPUC-approved rate case, with step increases reflecting plant additions in 2019, 2020, and 2021[61]. - PSNH filed for a temporary annual base distribution rate increase effective August 1, 2024, and a permanent rate increase proposed for August 1, 2025[62]. Renewable Energy and Sustainability Initiatives - Eversource aims to achieve carbon neutrality by 2030, with a 30% reduction in Scope 1 and 2 emissions from 2018 to 2023[119]. - Connecticut's Renewable Portfolio Standards (RPS) obligation for 2024 is set at 37.0%, increasing to 48.0% by 2030[104]. - Massachusetts' RPS and Clean Energy Standard requirements for 2024 are 62.3%, reaching 63.1% in 2025[105]. - New Hampshire's RPS obligation for 2024 is 24.3%, with a target of 25.2% in 2025[106]. - Eversource's Electric Sector Modernization Plan (ESMP) was approved in 2024, detailing steps for clean energy integration and resiliency initiatives[113]. Infrastructure and Technology - Eversource's electric distribution segments include electric distribution, electric transmission, natural gas distribution, and water distribution, representing substantially all of its total consolidated revenues[32]. - The estimated transmission rate base at the end of 2024 was approximately $10.8 billion, with $4.4 billion attributed to NSTAR Electric[68]. - Eversource has implemented a grid modernization plan to enhance electric distribution infrastructure and improve resiliency[116]. - Eversource is exploring alternative technologies like networked geothermal for heating and cooling to reduce carbon intensity[116]. Employee and Safety Metrics - As of December 31, 2024, Eversource Energy employed a total of 10,680 employees, with 48% being members of various labor unions[124]. - Eversource's DART safety performance was 0.76 in 2024, indicating days away, restricted or transferred per 100 workers[125]. - The company emphasizes merit-based hiring practices and employee engagement to foster a diverse and skilled workforce[126]. - Eversource's Board of Trustees oversees human capital management and employee engagement activities, receiving regular updates on progress[128]. Environmental and Risk Management - As of December 31, 2024, the recorded liability for environmental remediation costs is $128.0 million, covering 65 sites[109]. - Eversource's Enterprise Risk Management (ERM) program identifies and mitigates principal risks, integrating with compliance, auditing, and insurance functions[460]. - Eversource's investments in energy efficiency solutions and electric vehicle infrastructure aim to minimize climate-related impacts for customers[120]. - The company actively supports local, state, and federal emission reduction goals to address climate change while improving shareholder value[120]. Business Operations and Investments - Eversource is in the process of selling its Aquarion water distribution business, which serves customers in Connecticut, Massachusetts, and New Hampshire[34]. - Eversource's current offshore wind business consists of a noncontrolling tax equity investment in South Fork Wind after selling its interests in Revolution Wind and South Fork Wind projects in Q3 2024[33]. - NSTAR Electric operates 70 MW of solar power facilities, selling energy into the ISO-NE market, with proceeds credited to customers[47]. - NSTAR Electric does not own generation assets, purchasing energy supply from competitive sources, with contracts for basic service established twice per year[53].

Financial Data and Key Metrics Changes - Eversource Energy reported earnings per share (EPS) of $2.27 for 2024, compared to a GAAP loss of $1.26 per share in 2023, reflecting a significant turnaround [34] - Non-GAAP earnings were $4.57 per share in 2024, up from $4.34 per share in 2023, marking a year-over-year growth rate of 5.3% [34] - The company ended 2024 with over 5% growth in earnings and increased its first quarter 2025 dividend by 5.2% on an annualized basis [20] Business Line Data and Key Metrics Changes - Electric transmission earned $2.03 per share in 2024, up from $1.84 per share in 2023, driven by investments in service reliability [35] - Electric distribution earnings were $1.77 per share in 2024, slightly up from $1.74 per share in 2023, due to increased revenues from base distribution rate increases [36] - Natural gas distribution earned $0.81 per share in 2024, compared to $0.64 per share in 2023, attributed to higher base distribution rate increases [36] - Water distribution segment earned $0.12 per share in 2024, up from $0.09 per share in 2023, primarily due to lower depreciation expenses [37] Market Data and Key Metrics Changes - The company received approval for a $77 million revenue increase effective November 1, 2024, in Massachusetts, with additional increases planned [40] - In New Hampshire, a rate review filing requested a $182 million increase effective August 1, 2025, with an interim increase of $61 million approved [43] Company Strategy and Development Direction - Eversource is focused on enhancing operational efficiency, investing in regulated opportunities, and delivering value to shareholders and customers [62] - The company plans to increase its five-year capital investment plan by nearly 10%, primarily aimed at transmission investments to address aging infrastructure [21] - Eversource aims to maintain a strong focus on customer satisfaction and reliability while expanding its diverse energy initiatives [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a long-term earnings growth rate of 5% to 7%, despite headwinds in 2025 [60] - The company is committed to improving its balance sheet and expects significant improvement in cash flows from operations in 2025 [57] - Management highlighted the importance of regulatory relationships and constructive rate mechanisms to support future growth [26] Other Important Information - Eversource announced the sale of Aquarion Water for approximately $2.4 billion, which will help reduce debt and strengthen the balance sheet [32] - The company was recognized as one of America's most responsible companies by Newsweek for its commitments to environmental, social, and corporate governance [14] Q&A Session Summary Question: Support for PURA expansion in Connecticut - Management stated they are indifferent to whether PURA has three or five commissioners, emphasizing the need for a fair and transparent process [69] Question: FFO to debt target for 2025-2029 - Management confirmed that the focus remains on improving the FFO to debt ratio, aiming to maintain it well above the Moody's downgrade threshold of 13% [76] Question: Timing and methodology for equity financing - Management indicated that they plan to utilize the ATM program for future equity needs, allowing for controlled market entry [83] Question: Impact of gas line extension proposals in Massachusetts - Management noted that it is premature to discuss the implications of the DPU's proposal to end most gas line extensions, as they are still formulating their response [130] Question: Timeline for the lawsuit against PURA - Management stated there is no set timeline for the court's decision regarding the lawsuit filed for transparency from PURA [100] Question: Drivers for long-term growth rate - Management highlighted the recovery of deferred storm costs and constructive rate mechanisms as key drivers for achieving the 5% to 7% growth rate in the future [108]