CONNECTICUT LIGHT & POWER CO

Previous wording

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and related combined notes included in this combined Quarterly Report on Form 10-Q, the combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, as well as the Eversource 2023 combined Annual Report on Form 10-K. References in this combined Quarterly Report on Form 10-Q to "Eversource," the "Company," "we," "us," and "our" refer to Eversource Energy and its consolidated subsidiaries. All per-share amounts are reported on a diluted basis. The unaudited condensed consolidated financial statements of Eversource, NSTAR Electric and PSNH and the unaudited condensed financial statements of CL&P are herein collectively referred to as the "financial statements."

Current wording

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and related combined notes included in this combined Quarterly Report on Form 10-Q, the combined Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024, as well as the Eversource 2023 combined Annual Report on Form 10-K. References in this combined Quarterly Report on Form 10-Q to "Eversource," the "Company," "we," "us," and "our" refer to Eversource Energy and its consolidated subsidiaries. All per-share amounts are reported on a diluted basis. The unaudited condensed consolidated financial statements of Eversource, NSTAR Electric and PSNH and the unaudited condensed financial statements of CL&P are herein collectively referred to as the "financial statements."

Previous wording

The only common equity securities that are publicly traded are common shares of Eversource. Our earnings discussion includes financial measures that are not recognized under GAAP (non-GAAP) referencing our earnings and EPS excluding the impairment charge for the offshore wind investments, a loss on the disposition of land that was initially acquired to construct the Northern Pass Transmission project and was subsequently abandoned, and certain transaction and transition costs. EPS by business is also a non-GAAP financial measure and is calculated by dividing the Net Income Attributable to Common Shareholders of each business by the weighted average diluted Eversource common shares outstanding for the period. 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 our assets and liabilities as a whole.

Current wording

The only common equity securities that are publicly traded are common shares of Eversource. Our earnings discussion includes financial measures that are not recognized under GAAP (non-GAAP) referencing our earnings and EPS excluding the losses on the offshore wind investments, a loss on the disposition of land that was initially acquired to construct the Northern Pass Transmission project and was subsequently abandoned, and certain transaction and transition costs. EPS by business is also a non-GAAP financial measure and is calculated by dividing the Net Income Attributable to Common Shareholders of each business by the weighted average diluted Eversource common shares outstanding for the period. 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 our assets and liabilities as a whole.

Previous wording

We use these non-GAAP financial measures to evaluate and provide details of earnings results by business and to more fully compare and explain our results without including these items. This information is among the primary indicators we use as a basis for evaluating performance and planning and forecasting of future periods. We believe the impacts of the impairment charge for the offshore wind investments, the loss on the disposition of land associated with an abandoned project, and transaction and transition costs are not indicative of our ongoing costs and performance. We view 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, we believe that the non-GAAP presentation is a more meaningful representation of our financial performance and provides additional and useful information to readers of this report in analyzing historical and future performance of our business. These non-GAAP financial measures should not be considered as alternatives to reported Net Income Attributable to Common Shareholders or EPS determined in accordance with GAAP as indicators of operating performance.

Current wording

We use these non-GAAP financial measures to evaluate and provide details of earnings results by business and to more fully compare and explain our results without including these items. This information is among the primary indicators we use as a basis for evaluating performance and planning and forecasting of future periods. We believe the impacts of the losses on the offshore wind investments, the loss on the disposition of land associated with an abandoned project, and transaction and transition costs are not indicative of our ongoing costs and performance. We view 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, we believe that the non-GAAP presentation is a more meaningful representation of our financial performance and provides additional and useful information to readers of this report in analyzing historical and future performance of our business. These non-GAAP financial measures should not be considered as alternatives to reported Net Income Attributable to Common Shareholders or EPS determined in accordance with GAAP as indicators of operating performance.

Previous wording

•We earned $335.3 million, or $0.95 per share, in the second quarter of 2024, compared with $15.4 million, or $0.04 per share, in the second quarter of 2023. We earned $857.2 million, or $2.43 per share, in the first half of 2024, compared with $506.6 million, or $1.45 per share, in the first half of 2023. Our results for the second quarter and first half of 2023 include an after-tax impairment charge of $331.0 million, or $0.95 per share, recorded within Eversource Parent and Other Companies to reflect our estimate of the fair value of the offshore wind projects. Our 2023 results also include after-tax land abandonment and other charges recorded within Eversource Parent and Other Companies of $6.2 million, or $0.01 per share, in the second quarter of 2023 and $6.7 million, or $0.01 per share, in the first half of 2023. Excluding the offshore wind impairment and these other charges, our 2023 non-GAAP earnings were $352.6 million, or $1.00 per share, in the second quarter of 2023 and $844.3 million, or $2.41 per share, in the first half of 2023.

Current wording

•Our 2024 results include an after-tax loss on the sale of our offshore wind investments of $524.0 million, or $1.48 per share on a year-to-date basis. Our results for the first nine months of 2023 include an after-tax impairment charge on our offshore wind investments of $331.0 million, or $0.95 per share. Our results for the first nine months of 2023 also include after-tax land abandonment and other charges recorded of $6.9 million, or $0.01 per share. These 2024 and 2023 charges were recorded within Eversource Parent and Other Companies. Excluding these charges, our 2024 non-GAAP earnings were $405.9 million, or $1.13 per share, in the third quarter of 2024 and $1.26 billion, or $3.56 per share, in the first nine months of 2024, and our 2023 non-GAAP earnings were $1.18 billion, or $3.38 per share, in the first nine months of 2023.

Previous wording

•We reaffirmed our projection to earn within a 2024 non-GAAP earnings guidance range of between $4.50 per share and $4.67 per share, which excludes the impact of the sales of our 50 percent interests in the three jointly-owned offshore wind projects and related transaction costs. We also reaffirmed our projection of our long-term EPS growth rate through 2028 within a 5 to 7 percent range.

Current wording

•We updated our projection to earn within a 2024 non-GAAP earnings guidance range of between $4.52 per share and $4.60 per share, which excludes the impact of the sales of our 50 percent interests in the three jointly-owned offshore wind projects and related transaction costs. We also reaffirmed our projection of our long-term EPS growth rate through 2028 within a 5 to 7 percent range, and increased our previously forecasted capital investments of $23.1 billion to $23.7 billion for the period 2024 to 2028, as a result of the recently approved Electric Sector Modernization Plan (ESMP) in Massachusetts.

Previous wording

•Cash flows provided by operating activities totaled $962.0 million in the first half of 2024, compared with $647.3 million in the first half of 2023. Investments in property, plant and equipment totaled $2.22 billion in the first half of 2024, compared with $2.04 billion in the first half of 2023.

Current wording

•Cash flows provided by operating activities totaled $1.52 billion in the first nine months of 2024, compared with $1.17 billion in the first nine months of 2023. Investments in property, plant and equipment totaled $3.29 billion in the first nine months of 2024, compared with $3.13 billion in the first nine months of 2023.

Previous wording

•Cash totaled $33.4 million as of June 30, 2024, compared with $53.9 million as of December 31, 2023. Our available borrowing capacity under our commercial paper programs totaled $1.21 billion as of June 30, 2024.

Current wording

•Cash and Cash Equivalents totaled $97.9 million as of September 30, 2024, compared with $53.9 million as of December 31, 2023. Our available borrowing capacity under our commercial paper programs totaled $1.79 billion as of September 30, 2024.

Previous wording

•In the first half of 2024, we issued $3.85 billion of new long-term debt and we repaid $900 million of long-term debt.

Current wording

•In the first nine months of 2024, we issued $4.40 billion of new long-term debt and we repaid $1.26 billion of long-term debt.

Previous wording

Consolidated: Below is a summary of our earnings by business, which also reconciles the non-GAAP financial measures of consolidated non-GAAP earnings and EPS, as well as EPS by business, to the most directly comparable GAAP measures of consolidated Net Income Attributable to Common Shareholders and diluted EPS.

Current wording

Consolidated: Below is a summary of our earnings/(loss) by business, which also reconciles the non-GAAP financial measures of consolidated non-GAAP earnings and EPS, as well as EPS by business, to the most directly comparable GAAP measures of consolidated Net (Loss)/Income Attributable to Common Shareholders and diluted EPS.

Previous wording

(1)In the second quarter of 2023, we recorded an impairment charge resulting from the expected sales of our offshore wind investments and to reflect the estimate of the fair value of the offshore wind projects at that time. For further information, see "Business Development and Capital Expenditures – Offshore Wind Business" included in this Management's Discussion and Analysis of Financial Condition and Results of Operations.

Current wording

(1)In the third quarter of 2024, we recorded a loss on the sales of our offshore wind investments. In the second quarter of 2023, we recorded an impairment charge resulting from the expected sales of these offshore wind investments. For further information, see "Business Development and Capital Expenditures – Offshore Wind Business" included in this Management's Discussion and Analysis of Financial Condition and Results of Operations.

Previous wording

(2)The 2023 charges primarily include a loss on the disposition of land. The land was initially acquired to construct the Northern Pass Transmission project and was subsequently abandoned.

Current wording

(2)The 2023 charges primarily include a loss on the disposition of previously abandoned land intended to be used for the cancelled Northern Pass Transmission project.

Previous wording

Our electric distribution segment earnings decreased $15.8 million and $13.1 million in the second quarter and the first half of 2024, respectively, as compared to the second quarter and the first half of 2023, due primarily to higher operations and maintenance expense driven by higher storm restoration costs, the absence of a prior year benefit at PSNH related to the establishment of a new regulatory tracking mechanism that allowed for the recovery of previously incurred operating expenses associated with poles acquired on May 1, 2023, higher interest expense, higher depreciation expense, and higher property tax expense. Those earnings decreases were partially offset by higher revenues from a base distribution rate increase at NSTAR Electric effective January 1, 2024 and from CL&P's capital tracking mechanism due to increased electric system improvements, and an increase in interest income primarily on regulatory deferrals.

Current wording

Our electric distribution segment earnings increased $17.0 million in the first nine months of 2024, as compared to the first nine months of 2023, due primarily to higher revenues from base distribution rate increases at NSTAR Electric effective January 1, 2024 and at PSNH effective August 1, 2024 and from CL&P's capital tracking mechanism due to increased electric system improvements, and an increase in interest income primarily on regulatory deferrals. Those earnings increases were partially offset by higher interest expense, higher operations and maintenance expense, higher depreciation expense, the absence of a prior year benefit at PSNH related to the establishment of a new regulatory tracking mechanism that allowed for the recovery of previously incurred operating expenses associated with poles acquired on May 1, 2023, and higher property tax expense.

Previous wording

Our electric transmission segment earnings increased $28.0 million and $49.6 million in the second quarter and the first half of 2024, respectively, as compared to the second quarter and the first half of 2023, due primarily to a higher transmission rate base as a result of our continued investment in our transmission infrastructure, the impact of the annual billing and cost reconciliation filing with FERC, and higher AFUDC equity income.

Current wording

Our electric transmission segment earnings increased $14.6 million and $64.2 million in the third quarter and the first nine months of 2024, respectively, as compared to the third quarter and the first nine months of 2023, due primarily to a higher transmission rate base as a result of our continued investment in our transmission infrastructure. Additionally, the earnings benefit in the nine month period was due to the impact of the annual rate reconciliation filing with FERC.

Previous wording

Our natural gas distribution segment earnings increased $15.4 million and $35.7 million in the second quarter and the first half of 2024, respectively, as compared to the second quarter and the first half of 2023, due primarily to higher revenues from capital tracking mechanisms due to continued investments in natural gas infrastructure and a base distribution rate increase effective November 1, 2023 at NSTAR Gas, and lower operations and maintenance expense. Those earnings increases were partially offset by higher depreciation expense and higher interest expense.

Current wording

Our natural gas distribution segment earnings increased $39.2 million in the first nine months of 2024, as compared to the first nine months of 2023, due primarily to higher revenues from capital tracking mechanisms due to continued investments in natural gas infrastructure and a base distribution rate increase effective November 1, 2023 at NSTAR Gas, lower operations and maintenance expense, the absence of a prior year unfavorable regulatory adjustment resulting from NSTAR Gas’ GSEP reconciliation filing, and a lower effective tax rate. Those earnings increases were partially offset by higher depreciation expense, higher interest expense, and higher property tax expense.

Previous wording

Our water distribution segment earnings increased $2.6 million in the first half of 2024, as compared to the first half of 2023, due primarily to an after-tax benefit of $6.3 million recorded to recognize the impacts of the Aquarion Water Company of Connecticut’s rate case decision from PURA from the effective date of the order on March 15, 2023 through June 30, 2024. The adjustment was recorded as a result of the State of Connecticut Superior Court’s decision on the rate case appeal on March 25, 2024. The impacts primarily include a reduction to depreciation expense to reflect lower depreciation rates ordered by PURA in its final decision, partially offset by a reserve recorded for revenues subject to refund as a result of the lower authorized revenues not yet reflected in current rates. The earnings increase was partially offset by higher interest expense, higher depreciation expense, and higher operations and maintenance expense.

Current wording

Our water distribution segment earnings increased $7.1 million and $9.7 million in the third quarter and the first nine months of 2024, respectively, as compared to the third quarter and the first nine months of 2023, due primarily to after-tax benefits of $3.4 million and $9.7 million recorded in the third quarter and first nine months of 2024, respectively, to recognize the impacts of the Aquarion Water Company of Connecticut’s rate case decision from PURA. The impacts of PURA’s rate case decision on March 15, 2023 were recorded beginning in March 2024 as a result of the State of Connecticut Superior Court’s decision on the rate case appeal on March 25, 2024. The impacts primarily include a reduction to depreciation expense to reflect lower depreciation rates ordered by PURA in its final decision, partially offset by lower authorized revenues. The earnings increase in both periods was also due to revenues from a water company acquisition, partially offset by higher year-to-date operations and maintenance expense.

Previous wording

Eversource Parent and Other Companies: Eversource parent and other companies’ losses improved by $293.6 million and $275.8 million in the second quarter and the first half of 2024, respectively, as compared to the second quarter and the first half of 2023, due primarily to the absence of the impairment of Eversource parent’s offshore wind investments in the second quarter of 2023, which resulted in an after-tax charge of $331.0 million, or $0.95 per share and the absence of a loss on the disposition of land in the second quarter of 2023 that was initially acquired to construct the Northern Pass Transmission project and was subsequently abandoned. These earnings improvements were partially offset by higher interest expense in both periods. Additionally, earnings in the second quarter were negatively impacted by a higher effective tax rate.

Current wording

Eversource Parent and Other Companies: Eversource parent and other companies’ losses increased by $513.2 million and $237.2 million in the third quarter and the first nine months of 2024, respectively, as compared to the third quarter and the first nine months of 2023, due primarily to the loss on the sale of Eversource parent’s offshore wind investments in the third quarter of 2024, which resulted in an after-tax charge of $524.0 million, as compared to an impairment charge on these investments in the second quarter of 2023 of $331.0 million. Results for the first nine months of 2023 also include a loss on the disposition of land that was initially acquired to construct the Northern Pass Transmission project and was subsequently abandoned and other charges recorded of $6.9 million.

Previous wording

Eversource, CL&P, NSTAR Electric and PSNH each uses its available capital resources to fund its respective construction expenditures, meet debt requirements, pay operating costs, including storm-related costs, pay dividends, and fund other corporate obligations, such as pension contributions. Eversource's regulated companies recover their electric, natural gas and water distribution construction expenditures as the related project costs are depreciated over the life of the assets. This impacts the timing of the revenue stream designed to fully recover the total investment plus a return on the equity and debt used to finance the investments. Eversource's regulated companies spend a significant amount of cash on capital improvements and construction projects that have a long-term return on investment and recovery period. In addition, Eversource uses its capital resources to fund investments in its offshore wind business, which are recognized as long-term assets.

Current wording

Eversource, CL&P, NSTAR Electric and PSNH each uses its available capital resources to fund its respective construction expenditures, meet debt requirements, pay operating costs, including storm-related costs, pay dividends, and fund corporate obligations. Eversource's regulated companies recover their electric, natural gas and water distribution construction expenditures as the related project costs are depreciated over the life of the assets. This impacts the timing of the revenue stream designed to fully recover the total investment plus a return on the equity and debt used to finance the investments. Eversource's regulated companies spend a significant amount of cash on capital improvements and construction projects that have a long-term return on investment and recovery period.

Previous wording

Cash totaled $33.4 million as of June 30, 2024, compared with $53.9 million as of December 31, 2023.

Current wording

Cash and Cash Equivalents totaled $97.9 million as of September 30, 2024, compared with $53.9 million as of December 31, 2023.

Previous wording

Amounts outstanding under the commercial paper programs are included in Notes Payable and classified in current liabilities on the Eversource and NSTAR Electric balance sheets, as all borrowings are outstanding for no more than 364 days at one time. As a result of the CL&P long-term debt issuance in January 2024, $207.3 million of commercial paper borrowings under the Eversource parent commercial paper program were reclassified to Long-Term Debt on Eversource parent’s balance sheet as of December 31, 2023. As a result of the Yankee Gas long-term debt issuances in July 2024, $37.9 million of commercial paper borrowings under the Eversource parent commercial paper program were reclassified to Long-Term Debt on Eversource parent’s balance sheet as of June 30, 2024.

Current wording

Amounts outstanding under the commercial paper programs are included in Notes Payable and classified in current liabilities on the Eversource and NSTAR Electric balance sheets, as all borrowings are outstanding for no more than 364 days at one time. As a result of the CL&P long-term debt issuance in January 2024, $207.3 million of commercial paper borrowings under the Eversource parent commercial paper program were reclassified to Long-Term Debt on Eversource parent’s balance sheet as of December 31, 2023. As a result of the EGMA long-term debt issuance in October 2024, $100.0 million of commercial paper borrowings under the Eversource parent commercial paper program were reclassified to Long-Term Debt on Eversource parent’s balance sheet as of September 30, 2024.

Previous wording

Intercompany Borrowings: Eversource parent uses its available capital resources to provide loans to its subsidiaries to assist in meeting their short-term borrowing needs. Eversource parent records intercompany interest income from its loans to subsidiaries, which is eliminated in consolidation. Intercompany loans from Eversource parent to its subsidiaries are eliminated in consolidation on Eversource's balance sheets. As of June 30, 2024, there were intercompany loans from Eversource parent to CL&P of $407.8 million and to PSNH of $132.0 million. As of December 31, 2023, there were intercompany loans from Eversource parent to CL&P of $457.0 million and to PSNH of $233.0 million. Eversource parent charges interest on these intercompany loans at the same weighted-average interest rate as its commercial paper program. Intercompany loans from Eversource parent are included in Notes Payable to Eversource Parent and classified in current liabilities on the respective subsidiary's balance sheets, as these intercompany borrowings are outstanding for no more than 364 days at one time. As a result of the CL&P long-term debt issuance in January 2024, $207.3 million of CL&P’s intercompany borrowings were reclassified to Long-Term Debt on CL&P’s balance sheet as of December 31, 2023.

Current wording

Intercompany Borrowings: Eversource parent uses its available capital resources to provide loans to its subsidiaries to assist in meeting their short-term borrowing needs. Eversource parent records intercompany interest income from its loans to subsidiaries, which is eliminated in consolidation. Intercompany loans from Eversource parent to its subsidiaries are eliminated in consolidation on Eversource's balance sheets. As of September 30, 2024, there were intercompany loans from Eversource parent to CL&P of $135.0 million and to PSNH of $89.3 million. As of December 31, 2023, there were intercompany loans from Eversource parent to CL&P of $457.0 million and to PSNH of $233.0 million. Eversource parent charges interest on these intercompany loans at the same weighted-average interest rate as its commercial paper program. Intercompany loans from Eversource parent are included in Notes Payable to Eversource Parent and classified in current liabilities on the respective subsidiary's balance sheets, as these intercompany borrowings are outstanding for no more than 364 days at one time. As a result of the CL&P long-term debt issuance in January 2024, $207.3 million of CL&P’s intercompany borrowings were reclassified to Long-Term Debt on CL&P’s balance sheet as of December 31, 2023.

Previous wording

Long-Term Debt Issuance Authorizations: On February 8, 2024, the NHPUC approved PSNH’s request for authorization to issue up to $300 million in long-term debt through December 31, 2024. On May 1, 2024, the DPU approved NSTAR Electric’s request for authorization to issue up to $2.4 billion in long-term debt through December 31, 2026. On July 24, 2024, PURA approved CL&P’s request for authorization to issue up to $1.0 billion in long-term debt through December 31, 2025.

Current wording

Long-Term Debt Issuance Authorizations: On February 8, 2024, the NHPUC approved PSNH’s request for authorization to issue up to $300 million in long-term debt through December 31, 2024. On May 1, 2024, the DPU approved NSTAR Electric’s request for authorization to issue up to $2.4 billion in long-term debt through December 31, 2026. On July 24, 2024, PURA approved CL&P’s request for authorization to issue up to $1.0 billion in long-term debt through December 31, 2025. On August 12, 2024, the DPU approved EGMA’s request for authorization to issue up to $325 million in long-term debt through December 31, 2026.

Previous wording

Rate Reduction Bonds: PSNH's RRB payments consist of principal and interest and are paid semi-annually. PSNH paid $21.6 million of RRB principal payments and $7.6 million of interest payments in the first half of 2024, and paid $21.6 million of RRB principal payments and $8.3 million of interest payments in the first half of 2023.

Current wording

Rate Reduction Bonds: PSNH's RRB payments consist of principal and interest and are paid semi-annually. PSNH paid $43.2 million of RRB principal payments and $14.9 million of interest payments in the first nine months of 2024, and paid $43.2 million of RRB principal payments and $16.2 million of interest payments in the first nine months of 2023.

Previous wording

Common Share Issuances and Equity Distribution Agreement: On May 11, 2022, Eversource entered into an equity distribution agreement pursuant to which it may offer and sell up to $1.2 billion of its common shares from time to time through an “at-the-market” (ATM) equity offering program. In the first six months of 2024, Eversource issued 4,206,649 common shares, which resulted in proceeds of $248.2 million, net of issuance costs. Eversource used the net proceeds received for general corporate purposes.

Current wording

Common Share Issuances: Eversource has an equity distribution agreement pursuant to which it may offer and sell up to $1.2 billion of its common shares from time to time through an “at-the-market” (ATM) equity offering program. In the first nine months of 2024, Eversource issued 13.3 million common shares, which resulted in proceeds of $830.2 million, net of issuance costs. Eversource used the net proceeds received for general corporate purposes.

Previous wording

Cash Flows: Cash flows from operating activities primarily result from the transmission and distribution of electricity, and the distribution of natural gas and water. Cash flows provided by operating activities totaled $962.0 million in the first half of 2024, compared with $647.3 million in the first half of 2023. Operating cash flows were favorably impacted by the timing of cash payments made on our accounts payable, the timing of other working capital items, a decrease in cost of removal expenditures, a $48.8 million increase in income tax refunds received in 2024 compared to 2023, and a $42.6 million decrease in cash payments to vendors for storm costs. These favorable impacts were partially offset by the timing of cash collections on our accounts receivable and an increase in regulatory under-recoveries driven primarily by the timing of collections for energy and natural gas supply costs and other regulatory tracking mechanisms. The impacts of regulatory collections are included in both Regulatory Recoveries and Amortization on the statements of cash flows.

Current wording

Cash Flows: Cash flows from operating activities primarily result from the transmission and distribution of electricity, and the distribution of natural gas and water. Cash flows provided by operating activities totaled $1.52 billion in the first nine months of 2024, compared with $1.17 billion in the first nine months of 2023. Operating cash flows were favorably impacted by the timing of cash payments made on our accounts payable, an improvement in regulatory recoveries driven primarily by the timing of collections for CL&P’s non-bypassable FMCC and other regulatory tracking mechanisms, a $47.6 million increase in income tax refunds received in 2024 compared to 2023, a $45.3 million decrease in cash payments to vendors for storm costs, and a decrease in cost of removal expenditures. The impacts of regulatory collections are included in both Regulatory Recoveries and Amortization on the statements of cash flows. These favorable impacts were partially offset by the timing of cash collections on our accounts receivable and the timing of other working capital items.

Previous wording

On May 1, 2024, our Board of Trustees approved a common share dividend payment of $0.715 per share, paid on June 28, 2024 to shareholders of record as of May 16, 2024. In the first half of 2024, we paid cash dividends of $490.9 million and issued non-cash dividends of $12.0 million in the form of treasury shares, totaling dividends of $502.9 million. In the first half of 2023, we paid cash dividends of $459.0 million and issued non-cash dividends of $11.8 million in the form of treasury shares, totaling dividends of $470.8 million.

Current wording

On September 12, 2024, our Board of Trustees approved a common share dividend payment of $0.715 per share, paid on September 30, 2024 to shareholders of record as of September 23, 2024. In the first nine months of 2024, we paid cash dividends of $745.2 million and issued non-cash dividends of $17.8 million in the form of treasury shares, totaling dividends of $763.0 million. In the first nine months of 2023, we paid cash dividends of $688.9 million and issued non-cash dividends of $17.6 million in the form of treasury shares, totaling dividends of $706.5 million.

Previous wording

In the first half of 2024, CL&P, NSTAR Electric and PSNH paid $82.5 million, $393.9 million and $62.0 million respectively, in common stock dividends to Eversource parent.

Current wording

In the first nine months of 2024, CL&P, NSTAR Electric and PSNH paid $247.6 million, $643.9 million and $62.0 million respectively, in common stock dividends to Eversource parent.

Previous wording

Investments in Property, Plant and Equipment on the statements of cash flows do not include amounts incurred on capital projects but not yet paid, cost of removal, AFUDC related to equity funds, and the capitalized and deferred portions of pension and PBOP income/expense. In the first half of 2024, investments for Eversource, CL&P, NSTAR Electric, and PSNH were $2.22 billion, $532.2 million, $729.8 million, and $289.7 million, respectively. Capital expenditures were primarily for continuing projects to maintain and improve infrastructure and operations, including enhancing reliability to the transmission and distribution systems.

Current wording

Investments in Property, Plant and Equipment on the statements of cash flows do not include amounts incurred on capital projects but not yet paid, cost of removal, AFUDC related to equity funds, and the capitalized and deferred portions of pension and PBOP income/expense. In the first nine months of 2024, investments for Eversource, CL&P, NSTAR Electric, and PSNH were $3.29 billion, $759.0 million, $1.07 billion, and $461.4 million, respectively. Capital expenditures were primarily for continuing projects to maintain and improve infrastructure and operations, including enhancing reliability to the transmission and distribution systems.

Previous wording

Our consolidated capital expenditures, including amounts incurred but not paid, cost of removal, AFUDC, and the capitalized and deferred portions of pension and PBOP income/expense (all of which are non-cash factors), totaled $2.26 billion in the first half of 2024, compared to $1.98 billion in the first half of 2023. These amounts included$152.7 million and $119.1 million in the first half of 2024 and 2023, respectively, related to information technology and facilities upgrades and enhancements, primarily at Eversource Service and The Rocky River Realty Company.

Current wording

Our consolidated capital expenditures, including amounts incurred but not paid, cost of removal, AFUDC, and the capitalized and deferred portions of pension and PBOP income/expense (all of which are non-cash factors), totaled $3.40 billion in the first nine months of 2024, compared to $3.21 billion in the first nine months of 2023. These amounts included$209.4 million and $172.3 million in the first nine months of 2024 and 2023, respectively, related to information technology and facilities upgrades and enhancements, primarily at Eversource Service and The Rocky River Realty Company.

Previous wording

Electric Transmission Business: Our consolidated electric transmission business capital expenditures increased by $135.6 million in the first half of 2024, as compared to the first half of 2023. A summary of electric transmission capital expenditures by company is as follows:

Current wording

Electric Transmission Business: Our consolidated electric transmission business capital expenditures increased by $44.8 million in the first nine months of 2024, as compared to the first nine months of 2023. A summary of electric transmission capital expenditures by company is as follows:

Previous wording

In September of 2023, Eversource made a contribution of $528 million using the proceeds from the lease area sale to invest in a tax equity interest for South Fork Wind. South Fork Wind was restructured as a tax equity investment, with Eversource purchasing 100 percent ownership of a new Class A tax equity membership interest. This investment will result in Eversource receiving cash flow benefits from investment tax credits (ITC) and other future cash flow benefits as well. As of June 30 2024, all twelve South Fork Wind turbines met the requirements to qualify for the investment tax credits. As a result, $385 million of expected investment tax credits were reclassified from the South Fork Wind tax equity investment balance reported in Investments in Unconsolidated Affiliates as a reduction in current taxes payable of $54 million and an increase in deferred tax assets of $331 million on the Eversource balance sheet as of June 30, 2024.

Current wording

In September of 2023, Eversource made a contribution of $528 million to invest in a tax equity interest for South Fork Wind. South Fork Wind was restructured as a tax equity investment, with Eversource purchasing 100 percent ownership of a new Class A tax equity membership interest. This investment will result in Eversource receiving cash flow benefits from investment tax credits (ITC) and other future cash flow benefits as well. As of September 30, 2024, $459 million of expected investment tax credits and other expected tax benefits were reclassified from the South Fork Wind tax equity investment balance reported in Investments in Unconsolidated Affiliates as a reduction in current taxes payable of $54 million and a decrease in Accumulated Deferred Income Taxes of $405 million on the Eversource balance sheet as of September 30, 2024. As a result of these investment tax credits, Eversource expects lower federal income tax payments between 2024 through 2026. As of September 30, 2024, the tax equity interest in South Fork Wind totaled $22.2 million.

Previous wording

•On April 18, 2024, Eversource and Ørsted executed the equity and asset purchase agreement to sell Eversource’s 50 percent interest in Sunrise Wind to Ørsted for a gross purchase price of $230 million. The purchase price was subject to reduction for actual capital spending less than forecasted spending between signing the agreement in January and closing of the transaction. On July 9, 2024, Eversource completed the sale of its 50 percent ownership share of Sunrise Wind to Ørsted. In accordance with the equity and asset purchase agreement and after adjustment for the reduction in capital spending compared to forecasted, Ørsted paid Eversource $118 million at the closing of the sale transaction, and the remaining proceeds of $34 million will be paid after onshore construction is completed and certain other construction milestones are achieved.

Current wording

On January 24, 2024, Eversource signed an agreement with Ørsted to sell Eversource’s 50 percent share of Sunrise Wind, subject to certain conditions and regulatory approvals. On April 18, 2024, Eversource and Ørsted executed an equity and asset purchase agreement for a gross purchase price of $230 million. The purchase price was subject to reduction for actual capital spending less than forecasted spending between signing the agreement in January and closing of the transaction. On July 9, 2024, Eversource completed the sale of its 50 percent ownership share of Sunrise Wind to Ørsted. In accordance with the equity and asset purchase agreement and after adjustment for the reduction in capital spending compared to forecasted amounts, adjusted proceeds totaled $152 million. Ørsted paid Eversource $118 million at the closing of the sale transaction, which was used to pay off parent company debt. Remaining proceeds of $34 million will be paid after onshore construction is completed and certain other construction milestones are achieved. The remaining expected proceeds have been recorded in Other Long-Term Assets on Eversource’s balance sheet as of September 30, 2024. Eversource recorded a pre-tax gain on the sale of Sunrise Wind of $377 million in the third quarter of 2024. With completion of the sale, Eversource will not have any ongoing financial obligations associated with Sunrise Wind.

Previous wording

The post-closing purchase price adjustment payments include cost sharing obligations that provide Eversource will share equally with GIP in GIP’s funding obligations for up to approximately $240 million of incremental capital expenditure overruns incurred during the construction phase for Revolution Wind, after which obligations for any additional capital expenditure overruns would be shared equally by Eversource and Ørsted. The purchase price is also subject to post-closing adjustments as a result of final project economics, which includes Eversource’s obligation to maintain GIP’s internal rate of return for each project as specified in the agreement. Post-closing purchase price adjustment payments will be made following the sale closing date for South Fork and following the commercial operation of Revolution Wind. South Fork Wind construction has been completed, and Eversource does not expect any material cost sharing or other purchase price adjustment payments for South Fork Wind.

Current wording

As part of the Revolution Wind and South Fork Wind sale, Eversource and GIP agreed to make certain post-closing purchase price adjustment payments, which could further impact the final purchase price. The post-closing purchase price adjustment payments include cost sharing obligations that provide Eversource will share equally with GIP in GIP’s funding obligations up to an effective cap of approximately $240 million of incremental capital expenditure overruns incurred during the construction phase for Revolution Wind, after which Eversource will have responsibility for GIP’s obligations for any additional capital expenditure overruns in excess of the capped amount. The purchase price is also subject to post-closing adjustments as a result of final project economics, which includes Eversource’s obligation to maintain GIP’s internal rate of return for each project as specified in the agreement. Post-closing purchase price adjustment payments will be made following the commercial operation of Revolution Wind.

Previous wording

On February 13, 2024, Eversource executed an agreement to sell its existing 50 percent interests in the South Fork Wind and Revolution Wind projects to Global Infrastructure Partners (GIP) for $1.1 billion of cash proceeds to be received upon closing, subject to adjustment. The purchase price is inclusive of the sales value related to a 40 percent level of federal investment tax credits, 10 percent of which is the energy community ITC adder of approximately $170 million related to Revolution Wind. The purchase price is subject to adjustments based on, among other things, the progress, timing and the construction cost of Revolution Wind, including changes in actual versus forecasted capital spending between signing the agreement and closing of the transaction. Factors that could result in Eversource’s total net proceeds from the transaction to be lower, resulting in post-closing adjustment payments owed to GIP, include the ultimate cost of construction and extent of cost overruns for Revolution Wind, delays in constructing Revolution Wind, which would impact the economics associated with the purchase price adjustment, and Revolution Wind’s eligibility for federal investment tax credits at less than the value included in the purchase price. Total net proceeds could also be adjusted for a benefit due to Eversource if there are lower operation costs or higher availability of the projects through the period that is four years following the commercial operation date of the Revolution Wind project.

Current wording

Factors that could increase the post-closing adjustment payments owed to GIP include the ultimate cost of construction and extent of cost overruns for Revolution Wind, delays in constructing Revolution Wind, which would impact the economics associated with the purchase price adjustment, and Revolution Wind’s eligibility for federal investment tax credits at less than the value included in the purchase price. The purchase price included the sales value related to a 40 percent level of federal investment tax credits, 10 percent of which is the energy community ITC adder of approximately $170 million related to Revolution Wind. It is possible that new information or future developments could require a reassessment of the potential exposure of the estimated liability for the post-closing adjustment payments. As this information becomes available, Eversource will continue to assess the potential exposure and adjust the liability if needed. Incremental exposure of this estimated liability remains possible, but management cannot reasonably estimate a range of loss beyond the amount recorded at this time. Total net proceeds could also be adjusted for a benefit due to Eversource if there are lower operation costs or higher availability of the projects through the period that is four years following the commercial operation of Revolution Wind. South Fork Wind has achieved commercial operation and, as a result, Eversource does not expect any material cost sharing or other purchase price adjustment payments related to this project.

Previous wording

With the completion of the sale, Eversource has divested all of its ownership interest in Sunrise Wind and will not have any ongoing ownership interest in the project, nor any ongoing financial obligations associated with project costs. Eversource’s existing credit support obligations were either terminated or indemnified by Ørsted as a result of the sale. Eversource has entered into a separate amended and restated construction management agreement to manage Sunrise Wind’s onshore construction through completion. In this role, Eversource will solely be a service provider to Sunrise Wind.

Current wording

Under the agreement with GIP, Eversource’s existing and certain additional credit support obligations for Revolution Wind are expected to roll off as the project completes construction. Under the agreement with Ørsted, Eversource’s existing credit support obligations for Sunrise Wind were either terminated or indemnified by Ørsted as a result of the sale. Eversource has entered into separate construction management agreements to manage Sunrise Wind’s and Revolution Wind’s onshore construction through completion. In this role, Eversource will be solely a service provider to Sunrise Wind and Revolution Wind.

Previous wording

In the second quarter of 2023, in connection with the process to divest its offshore wind business, Eversource identified indicators for impairment. In the impairment assessment, Eversource evaluated its investments and determined that the carrying value of the equity method offshore wind investments exceeded the fair value of the investments and that the decline in fair value was other-than-temporary. The completion of the strategic review in the second quarter of 2023 resulted in Eversource recording a pre-tax other-than-temporary impairment charge of $401 million ($331 million after-tax) to reflect the investment at estimated fair value based on the expected purchase price at that time. In the fourth quarter of 2023, Eversource recognized an additional pre-tax other-than-temporary impairment charge of $1.77 billion ($1.62 billion after-tax) in its offshore wind investments and established a new cost basis in the investments as of December 31, 2023. The impairment charges were non-cash charges and did not impact Eversource’s cash position.

Current wording

Impairments: In the second quarter of 2023, in connection with the process to divest its offshore wind business, Eversource identified indicators for impairment. In the impairment assessment, Eversource evaluated its investments and determined that the carrying value of the equity method offshore wind investments exceeded the fair value of the investments and that the decline in fair value was other-than-temporary. The completion of the strategic review in the second quarter of 2023 resulted in Eversource recording a pre-tax other-than-temporary impairment charge of $401 million ($331 million after-tax) to reflect the investment at estimated fair value based on the expected purchase price at that time. In the fourth quarter of 2023, Eversource recognized an additional pre-tax other-than-temporary impairment charge of $1.77 billion ($1.62 billion after-tax) in its offshore wind investments and established a new cost basis in the investments as of December 31, 2023. The impairment charges were non-cash charges and did not impact Eversource’s cash position. In the third quarter of 2024, Eversource sold its interest in its offshore wind investments.

Previous wording

On November 21, 2019, FERC issued Opinion No. 569 affecting the two pending transmission ROE complaints against the Midcontinent ISO (MISO) transmission owners, in which FERC adopted a new methodology for determining base ROEs. Various parties sought rehearing. On December 23, 2019, the NETOs filed supplementary materials in the NETOs' four pending cases to respond to this new methodology because of the uncertainty of the applicability to the NETOs' cases. On May 21, 2020, the FERC issued its order in Opinion No. 569-A on the rehearing of the MISO transmission owners' cases, in which FERC again changed its methodology for determining the MISO transmission owners' base ROEs. On November 19, 2020, the FERC issued Opinion No. 569-B denying rehearing of Opinion No. 569-A and reaffirmed the methodology previously adopted in Opinion No. 569-A. The new methodology differs significantly from the methodology proposed by FERC in its October 16, 2018 order to determine the NETOs' base ROEs in its four pending cases. FERC Opinion Nos. 569-A and 569-B were appealed to the Court. On August 9, 2022, the Court issued its decision vacating MISO ROE FERC Opinion Nos. 569, 569-A and 569-B and remanded to FERC to reopen the proceedings. The Court found that FERC’s development of the new return methodology was arbitrary and capricious due to FERC’s failure to offer a reasonable explanation for its decision to reintroduce the risk-premium financial model in its new methodology for calculating a just and reasonable return. At this time, Eversource cannot predict how and when FERC will address the Court’s findings on the remand of the MISO FERC opinions or any potential associated impact on the NETOs’ four pending ROE complaint cases.

Current wording

On November 21, 2019, FERC issued Opinion No. 569 affecting the two pending transmission ROE complaints against the Midcontinent ISO (MISO) transmission owners, in which FERC adopted a new methodology for determining base ROEs. Various parties sought rehearing. On December 23, 2019, the NETOs filed supplementary materials in the NETOs' four pending cases to respond to this new methodology because of the uncertainty of the applicability to the NETOs' cases. On May 21, 2020, the FERC issued its order in Opinion No. 569-A on the rehearing of the MISO transmission owners' cases, in which FERC again changed its methodology for determining the MISO transmission owners' base ROEs. On November 19, 2020, the FERC issued Opinion No. 569-B denying rehearing of Opinion No. 569-A and reaffirmed the methodology previously adopted in Opinion No. 569-A. The new methodology differs significantly from the methodology proposed by FERC in its October 16, 2018 order to determine the NETOs' base ROEs in its four pending cases. FERC Opinion Nos. 569-A and 569-B were appealed to the Court. On August 9, 2022, the Court issued its decision vacating MISO ROE FERC Opinion Nos. 569, 569-A and 569-B and remanded to FERC to reopen the proceedings. The Court found that FERC’s development of the new return methodology was arbitrary and capricious due to FERC’s failure to offer a reasonable explanation for its decision to reintroduce the risk-premium financial model in its new methodology for calculating a just and reasonable return.

Previous wording

Given the significant uncertainty regarding the applicability of the FERC opinions in the MISO transmission owners’ two complaint cases to the NETOs’ pending four complaint cases, Eversource concluded that there is no reasonable basis for a change to the reserve or recognized ROEs for any of the complaint periods at this time. As well, Eversource cannot reasonably estimate a range of loss for any of the four complaint proceedings at this time. Eversource, CL&P, NSTAR Electric and PSNH currently record revenues at the 10.57 percent base ROE and incentive cap at 11.74 percent established in the October 16, 2014 FERC order.

Current wording

Given the significant uncertainty regarding the applicability of the FERC order in the MISO transmission owners’ two complaint cases to the NETOs’ pending four complaint cases due to the complex differences between the cases, Eversource concluded that there is no reasonable basis for a change to the reserve or recognized ROEs for any of the complaints or subsequent periods at this time and Eversource cannot reasonably estimate a range of loss for any of the four complaint proceedings at this time. The resolution of these proceedings could have a material impact on the results of operations, financial condition and cash flows.

Previous wording

A change of 10 basis points to the base ROE used to establish the reserves would impact Eversource’s after-tax earnings by an average of approximately $3 million for each of the four 15-month complaint periods. Prospectively from the date of a final FERC order implementing a new base ROE, based off of 2023 rate base, a change of 10 basis points to the base ROE would impact Eversource’s future annual after-tax earnings by approximately $5.5 million per year, and will increase slightly over time as we continue to invest in our transmission infrastructure.

Current wording

A change of 10 basis points to the base ROE used to establish the reserves would impact Eversource’s after-tax earnings by an average of approximately $3 million for each of the four 15-month complaint periods. Prospectively from the date of a final FERC order implementing a new base ROE, based off of estimated 2024 rate base, a change of 10 basis points to the base ROE would impact Eversource’s future annual after-tax earnings by approximately $6 million per year, and will increase slightly over time as we continue to invest in our transmission infrastructure.

Previous wording

On April 15, 2021, FERC issued a Supplemental NOPR that proposes to eliminate the existing 50 basis point return on equity for utilities that have been participating in a regional transmission organization (RTO ROE incentive) for more than three years. On June 25, 2021, the NETOs jointly filed comments strongly opposing FERC’s proposal. On July 26, 2021, the NETOs filed Supplemental NOPR reply comments responding to various parties advocating for the elimination of the RTO Adder. If FERC issues a final order eliminating the RTO ROE incentive as proposed in the Supplemental NOPR, the estimated annual impact (using 2023 rate base) on Eversource's after-tax earnings is approximately $20 million. The Supplemental NOPR contemplates an effective date 30 days from the final order.

Current wording

On April 15, 2021, FERC issued a Supplemental NOPR that proposes to eliminate the existing 50 basis point return on equity for utilities that have been participating in a regional transmission organization (RTO ROE incentive) for more than three years. On June 25, 2021, the NETOs jointly filed comments strongly opposing FERC’s proposal. On July 26, 2021, the NETOs filed Supplemental NOPR reply comments responding to various parties advocating for the elimination of the RTO Adder. If FERC issues a final order eliminating the RTO ROE incentive as proposed in the Supplemental NOPR, the estimated annual impact (using estimated 2024 rate base) on Eversource's after-tax earnings is approximately $23 million. The Supplemental NOPR contemplates an effective date 30 days from the final order.

Previous wording

Electric, Natural Gas and Water Utility Base Distribution Rates: The regulated companies’ distribution rates are set by their respective state regulatory commissions, and their tariffs include mechanisms for periodically adjusting their rates for the recovery of specific incurred costs. Other than as described below, for the first half of 2024, changes made to the regulated companies’ rates did not have a material impact on their earnings. For further information, see "Financial Condition and Business Analysis – Regulatory Developments and Rate Matters" included in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," of the Eversource 2023 Form 10-K.

Current wording

Electric, Natural Gas and Water Utility Base Distribution Rates: The regulated companies’ distribution rates are set by their respective state regulatory commissions, and their tariffs include mechanisms for periodically adjusting their rates for the recovery of specific incurred costs. Other than as described below, for the first nine months of 2024, changes made to the regulated companies’ rates did not have a material impact on their earnings. For further information, see "Financial Condition and Business Analysis – Regulatory Developments and Rate Matters" included in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," of the Eversource 2023 Form 10-K.