Eversource Energy Q4 FY2025 earnings call

• 2025 was a year of strong execution with excellent operational performance, critical infrastructure advancement, and focus on safe, reliable, and affordable service.
• Delivered non-GAAP earnings per share of $4.76, paid dividends up 5.2% to $3.01 per share.
• Top decile performance for MAIFI and SAIDI metrics, high service reliability.
• Deployed over $4 billion in capital investments in 2025, advanced grid modernization, energy efficiency programs, and decarbonization goals.
• Advanced metering infrastructure program reached over 100,000 smart meter installations in Massachusetts.
• Obtained regulatory decisions supporting infrastructure needs, worked on rate relief for Massachusetts customers.
• Strengthened balance sheet with over 400 basis points improvement in FFO-to-debt ratio at Moody's.
• 2026 priorities include top-tier operational performance, advancing infrastructure investment program, active engagement with regulators, and using AI to optimize operations.

In 2025, segment performance was as follows: Electric transmission earned $2.09 per share, down from $2.30 in 2024. Electric distribution had $1.80 per share, up from $1.77 in 2024. Natural gas distribution earned $0.97 per share, up from $0.81 in 2024. Eversource Energy Parent and Other had a GAAP loss of $0.42 per share in 2025, compared to a GAAP loss of $2.46 per share in 2024. On a non-GAAP basis, Parent and Other loss was $0.22 per share in 2025 vs $0.16 per share in 2024.

• 2026 EPS guidance ranges from $4.80 to $4.95, with 2026 growth moderated by timing of key regulatory outcomes but viewed as transitory.
• Long-term earnings per share growth target of 5% to 7%, aiming for upper half by 2028.
• 2027 and beyond expected to see inflection in earnings growth driven by improved regulatory outcomes, storm cost recoveries, completion of alternative financing, and distribution rate adjustments.

• Uncertainty around the Aquarion Water Company sale and regulatory proceedings related to it.
• Potential impacts of weather events on infrastructure projects like Revolution Wind.
• Regulatory uncertainty in obtaining storm cost recoveries and other rate case outcomes.
• Risks associated with executing on large capital investment plans and ensuring regulatory approval and cost recovery.

Q: Shahriar Pourreza asked about growth trajectory predicated on balance sheet and funding, including impact of Aquarion sale and storm cost recoveries on equity needs and earnings growth.

A: Joseph R. Nolan and John M. Moreira responded that equity needs are $800M to $1.1B regardless of Aquarion sale, but flexibility exists in debt and alternative financing, with storm cost recoveries expected in 2027 but securitization likely in Q3 2027.

Q: Carly S. Davenport inquired about sources and uses of cash, minority interest sale structuring, and Connecticut AMI timing.

A: John M. Moreira said minority interest sale is a tool in the toolkit, with discussions ongoing in Connecticut regarding AMI and a meeting next week for clarity on investment recovery mechanisms.

Q: Bill Apicelli asked about tax benefits from South Fork and drivers into 2027.

A: John M. Moreira explained IT credits from South Fork have no P&L impact, and 2027 drivers include Aquarion transaction, storm case, Aquarion rate case, securitization, and Revolution Wind completion.

Q: Sophie Karp asked about COD timeline for Revolution Wind.

A: John M. Moreira stated targeting second half of 2026 for COD, with progress ongoing and weather being the main uncertainty.

Q: Paul Patterson asked about impact of Aquarion sale on equity hybrids and Eversource Gas benefit.

A: John M. Moreira clarified no change to equity needs, and Eversource Gas benefit relates to EGMA integration costs incurred by the parent company and recovered from EGMA customers.