Eversource Energy Q4 FY2024 earnings call

• Provided top-tier electric, gas, and water service to customers. - Delivered steady financial results with earnings per share up 5.3% year-over-year. - Strengthened balance sheet through constructive rate outcomes, equity issuance, exiting offshore wind business, and selling Aquarion Water. - Recognized as America's most responsible company by Newsweek and one of the world's best companies by Time. - Advanced energy diversification in Massachusetts with initiatives like AMI, ESMP, geothermal pilot, and acquisition of Mystic site. - Completed Greater Cambridge Energy Project with underground substation. - Achieved top decile electric reliability metrics and improved safety metrics by 6%.

Eversource Energy's segment performance for 2024: Electric transmission earned $2.03 per share in 2024 compared to $1.84 per share in 2023. Electric distribution earnings were $1.77 per share in 2024 versus $1.74 per share in 2023. Natural gas distribution business segment earned $0.81 per share in 2024 as compared to $0.64 per share in 2023. Excluding the loss on the pending sale of Aquarion of $0.83 per share, the Water Distribution segment earned $0.12 per share in 2024 compared with $0.09 per share in 2023.

• Projected 2025 earnings per share in the range of $4.67 to $4.82. - Five-year long-term earnings per share growth rate expected to be in the range of 5% to 7%. - Updated five-year capital investment plan with $1.9 billion increase in utility infrastructure investments, focusing on transmission, electric distribution, natural gas, and technology/facilities. - Anticipated significant improvement in cash flows from operations in 2025 driven by regulatory deferrals and distribution rate increases.

• Regulatory uncertainties in Connecticut and other states regarding PURA reforms and rate cases. - Moody's negative outlook on the company's credit, requiring focus on improving FFO to debt ratio. - Potential impacts of legislative changes on the company's operations and transactions. - Challenges in storm cost recovery and ensuring timely recovery of investments through constructive rate mechanisms.

Q: Shahriar Pourreza asked about Connecticut PURA reforms, including support for number of commissioners and pathway for broader reforms.

A: Joe Nolan said they want a fair, transparent, lawful process, indifferent on 3 or 5 commissioners, and process is pending.

Q: Shahriar Pourreza then asked about FFO to debt target and equity for CT storm recovery.

A: John Moreira said nothing has changed on cash flow enhancements, financing plan supports FFO to debt well above Moody's downgrade threshold of 13%, and equity needs are driven by storm cost recovery.

Q: Carly Davenport asked about timing and methodology of equity financing and incremental investments.

A: John Moreira said they'll use ATM program for equity financing, and incremental investments like CT AMI await PURA action.

Q: Steve Fleishman asked about FFO to debt end of 2024 and Revolution timeline.

A: John Moreira said FFO to debt ended in low double digits, and Revolution progress continues.

Q: Steve Fleishman also asked about lawsuit in Connecticut.

A: Joe Nolan said no timeline for court action.

Q: Bill Apicelli asked about cash flow, tax payments, and growth drivers.

A: John Moreira said minimal cash tax payments through 2028 due to tax credits, and growth drivers include storm cost recovery, constructive rate mechanisms, and O&M discipline.

Q: Durgesh Chopra asked about interest rate modeling in long-term growth.

A: John Moreira said they look at market consensus and assume appropriate interest rates.

Q: Ross Fowler asked about Massachusetts gas line extension proposal and Connecticut legislative efforts.

A: Joe Nolan said they'll provide comments on gas line extension proposal, and legislative efforts in Connecticut are ongoing but confident in track.

Q: Andrew Weisel asked about Mystic site investment potential and financing of dividends.

A: Joe Nolan said Mystic site is promising with flexibility, and dividend reinvestment and employee programs are expected to increase slightly.

Q: Angie Storozynski asked about Aquarion sale approval risks.

A: Joe Nolan said they feel good about regulatory process, and taxes will be paid to communities.