Welcome to the Eversource Energy Second Quarter Earnings Conference Call. My name is Ellen and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Jeff Kotkin with Eversource Energy. Mr. Kotkin, you may begin.

Thank you, Ellen. Good morning and thank you for joining us. I'm Jeff Kotkin, Eversource Energy's Vice President for Investor Relations. In addition to the news release, we posted slides on our website last night and will be referring to those slides during our remarks today. As you can see on slide one, some of the statements made during this investor call may be forward-looking as defined within the meaning of the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and are subject to risk and uncertainty, which may cause the actual results to differ materially from forecasts and projections. Some of these factors are set forth in the news release. Additional information about the various factors that may cause actual results to differ can be found in our annual report on Form 10-K for the year ended December 31, 2015 and our Form 10-Q for the three months ended March 31, 2016. Additionally, our explanation of how and why we use certain non-GAAP measures is contained within our news release and on the slides and on our most recent 10-K. Turning to slide two, speaking today will be Phil Lembo, our CFO, and Lee Olivier, our Executive Vice President for Enterprise Energy Strategy and Business Development. Also joining us today are Jay Buth, our Vice President and Controller, and John Moreira, our Vice President of Financial Planning and Analysis. Now, I will turn to slide three and turn over the call to Phil.

Thank you, Jeff, and thank you all for joining us this morning. Today, I'll cover our second quarter and first half financial results, recent legislative and regulatory developments in our three states, an update on certain transmission projects, and a review of recent financing and rating agency activity. So let's start with the quarter and that's on slide four. We earned $203.6 million or $0.64 per share in the second quarter of 2016, compared with earnings of $207.5 million or $0.65 per share in the second quarter of 2015. Our Transmission segment earned $0.29 per share in the second quarter of 2016, compared with $0.25 per share in the second quarter of 2015. The primary factor driving the earnings growth was higher transmission rate base, which is due to our continued investment in the reliability of New England power grid. I'll summarize some of the key reliability-driven transmission projects in a moment. On the Electric Distribution and Generation side, we earned $0.32 per share in the second quarter of 2016, compared with earnings of $0.38 per share in the second quarter of 2015. The primary factors driving this decrease were higher depreciation and property taxes, higher interest expense and the absence this year of a regulatory true-up that CL&P recorded in the second quarter of 2015 as a result of the final Connecticut pure regulatory decision involving deferred taxes. Additionally, O&M was somewhat higher during the second quarter of 2016, compared to the second quarter of last year, but that was primarily due to timing issues attributable to last year's weather impacts. On the Natural Gas side, we earned $0.03 per share in the second quarter of 2016, compared with $0.02 per share in the second quarter of 2015. The primary drivers were higher revenues that resulted from the NSTAR…

Thank you, Lee, and I will return the call to Ellen just to remind you how to enter questions. Ellen?

Thank you. We will now begin the question-and-answer session.

Thank you, Ellen. Our first question this morning is from Jonathan Arnold from Deutsche Bank. Good morning, Jonathan. Jonathan? Yeah, must be on the other call. All right. Let's switch – we'll switch over to Mike Weinstein (27:09) from Credit Suisse. Good morning, Mike (27:11).

Hey, good morning. How are you doing?

All right. How are you?

All right, good. So what would be the implication for Access Northeast if the Massachusetts Supreme Court rule against the DPU authority? Is that the final word or is there another legal regulatory route that could be taken and on the same token, if it's rejected in Massachusetts, does that mean that Maine falls off too?

Yeah. In terms of Massachusetts, Mike (27:40), as we said, we are waiting for the pending decision that's coming out in the summer from the Mass Supreme Court. There's also legislation that is making its way through The House and Senate, right now, to address issues regarding additional wind and additional hydro and gas capacity in the region. So certainly, the legislature would have authority to develop any final legislative requirements in this area. So it's not the end of the game at the end of the day. You asked about Maine. I'm not sure how Maine would really fit into it. So certainly, the Maine PUC approval is contingent upon other states moving forward except for the state of Vermont. So we feel very confident that we're going to move forward in each of these states with the pipeline contracts. Leon J. Olivier - Executive Vice President, Enterprise Energy Strategy & Business Development, Eversource Energy: I would – this is Lee, Mike (28:41). I would just say that the legislators clearly understand the need for additional gas, and clearly, there has been a little bit of a hangover from the Kinder Morgan project, which had great opposition against it being kind of a 400-plus mile Greenfield project. So, there's some emotion there, but in all of our discussions with key legislative leaders, they understand that there needs to be more gas and we expect to have a successful outcome here.

Right. And on Northern Pass, I guess, at this point, what things do you need to do before the September 30 – or September 2017 deadline. Is there anything left? I mean I think there are DOE public meeting still happening, what else is going on? Leon J. Olivier - Executive Vice President, Enterprise Energy Strategy & Business Development, Eversource Energy: Yeah, I mean it's really all of the – for the most part, it's the SEC process, and it is really answering the hundreds if not thousands of intervenor questions associated with the project preparing for the hearings in the projects in the spring period time. So this is a period where really it's all about intervenors and getting timely turnaround of answers for their questions. So that's our main focus and as well, of course, we continue with our outreach in the communities in New Hampshire and also continue with our outreach with key political leaders in the state that by and large have been very supportive of the project.

The governor is still supportive? Leon J. Olivier - Executive Vice President, Enterprise Energy Strategy & Business Development, Eversource Energy: The governor is still supportive. She believes that the project, it's a – there is a process there and we need to follow the process through the SEC, but obviously, that's independent of the governor's decision.

Right. And I'm going to ask one more question only because I think other people might not be on this call, but discuss the – I was going to ask you to discuss new opportunities that might come from the Massachusetts legislation that's pending this weekend, not only from hydro, but also from wind, particularly in wind, going forward and where you see that going? Leon J. Olivier - Executive Vice President, Enterprise Energy Strategy & Business Development, Eversource Energy: Well, I mean clearly, if you have followed the European wind development, the technology there, they've installed about 10,000 megawatts of offshore wind, costs have come down fairly dramatically 30% or 40% reduction and they predict another significant reduction. So we believe that offshore wind will be viable in the region. There is six tracks out there that have been leased by the federal government through the Bureau of Offshore Energy Management, and we have to see what the final legislation says. Clearly, all of that offshore wind, which could be sizeable over a long period of time will need transmission, development to connect it into the grid in Southeast Massachusetts. So we think yes, that will happen into – there is a potential business opportunity there for us.

All right. Thanks a lot guys. Leon J. Olivier - Executive Vice President, Enterprise Energy Strategy & Business Development, Eversource Energy: Thank you.

Thanks Mike (31:58). Next question is from Jerimiah Booream from UBS. Good morning, Jerimiah.

Hey, good morning, guys. Thanks for taking the question here. I guess just first off on Northern Pass, since we've had a bit of a delay here, is there any kind of impact you can speak to on your longer-term EPS CAGR?

Yes, I can address that. This is Phil. No, there isn't. In fact, when you look at the schedule that is out for Northern Pass right now, we expect sort of a net spending move of about $500 million in terms of spending into other periods of time after 2017. We've – I'm very happy about where we are right now to be able to just on an initial preliminary review identify several projects that would be coming in, in 2017 to address that. So one is what I spoke about during my opening remarks which is about $200 million of incremental spending on solar, and that's really in that 2017 time period to build additional capacity of solar in Massachusetts. Also identified approximately $200 million of other transmission projects, either incremental projects or possibly a move of some projects, but essentially, incremental projects to fill in 2017. Also, looking at our gas reliability and expansion programs, there's a $25 million to $50 million incremental spend there, so very happy where we are. We're still working through our operating plans for 2017, but moving these projects into 2017 is a very positive for us at this stage.

Yeah, that makes sense. And also just on a separate note, the renewable RFP going on, I think it just got delayed a little bit, but we should be getting the results soon. Just wondering what are the kind of opportunities that you guys see coming out of that for you specifically? I mean obviously, there's potentially a lot of generation going in, but I'm sure there's something there as well.

Well, in terms of the projects, we have projects that are bidding into the Clean Energy RFP, so certainly, those projects would be evaluated as part of the Clean Energy RFP process. In terms of coming out with additional projects after that, I think the question that was asked about additional opportunities earlier in terms of wind or hydro probably addresses that. Leon J. Olivier - Executive Vice President, Enterprise Energy Strategy & Business Development, Eversource Energy: Yeah, and that would really fall out of the whatever RFP comes out of the Massachusetts legislation. In that legislation, it calls for another RFP for a renewable energy next year. So we have to see what that is, how big that would be, does that include hydro as well. So we have to wait for the outcome of that. But the likelihood is there will be more opportunity there.

Okay, great. That makes sense. Thanks for the questions. Leon J. Olivier - Executive Vice President, Enterprise Energy Strategy & Business Development, Eversource Energy: Thanks a lot.

Thanks, Jerimiah. Next question is from Travis Miller from Morningstar. Good morning, Travis.

Good morning. Thank you. A question very high level, when you look at Northern Pass and Access Northeast and developments this quarter and even first half of the year, which project would you put the most either risk around it or probability of success however you want to think about it, very high level, just wondering? Leon J. Olivier - Executive Vice President, Enterprise Energy Strategy & Business Development, Eversource Energy: Yeah, Travis, this is Lee Olivier. I view both of these projects with a very, very high level of success and high probability. I mean looking at Access Northeast, clearly, there is the need for gas, because without that gas, reliability will be threatened; without that gas, we'll not be able to go forward and bring online the large scale renewable projects, whether it's offshore wind, onshore wind. We won't be able to do that. We won't be able to manage the reliability of the grid without having that kind of fast start, quick following capability that you get with gas-fired combined cycles or simple cycle plants. And of course, if you look at Northern Pass, right now, I mean we have cleared many if not most of the hurdles on Northern Pass, opponents of the project who have litigated have lost. We feel very confident in that project. It is a great deal. There will never be another deal like that, because the way that is bid essentially customers would pay a little approximately about 60% of the cost of the project. The project saves billions of dollars. It reduces 3 million tons to 4 million tons of carbon a year. If you look at Massachusetts which has very aggressive goals in reduction (37:14) material litigation with Conservation Law Foundation with the Massachusetts DPU that now requires that the state put together goals and objectives that demonstrate the reductions of carbon. That's the biggest. If you want to lower carbon reduction, you bring on Canadian hydropower. Again, that's probably the best deal around. There will probably never be another one like it where you have Hydro-Québec willing to pay up to $600 million of their own transmission on their site. So I have very high confidence in both of those projects. They are complex. They have taken lots of twists and turns, but we believe both of them are moving in the right direction.

Okay. Is there one that's ahead – you think is ahead of the other is Northern Pass just because you guys have been working on it? Leon J. Olivier - Executive Vice President, Enterprise Energy Strategy & Business Development, Eversource Energy: Well, I mean clearly, yeah, if you look at the regulatory timeline, Access Northeast, we expect to have agreements approved by the end of this year for Access Northeast filed at FERC by the end of this year and have an outcome of FERC approximately in the May timeframe of 2018. So from that standpoint, just looking at the regulatory schedule, that's a little bit ahead of where Northern Pass is.

Okay. And then, you brought up offshore wind brought a (38:38) couple questions there. The transmission opportunity, is that something that you guys would have first rights to, given just the offshore nature, how that works or would that be the developer who would have the first rights or would you have bidding rights? How would that work in terms of who would get the first rights? Leon J. Olivier - Executive Vice President, Enterprise Energy Strategy & Business Development, Eversource Energy: That would be part of the competitive process. And so, if you're developing transmission offshore, no, you would not have a franchise right there. You would have to, in all likelihood, have a partner which you're working with and/or have a business arrangement with one of the offshore wind developers. So that would not be a franchise right.

Okay. And then, any LCOEs or whisper contract prices that you've seen out there in terms of how the costs have come down for offshore wind? Leon J. Olivier - Executive Vice President, Enterprise Energy Strategy & Business Development, Eversource Energy: Well, we follow this, obviously, very closely, and you've got one company from Denmark. It's called Danish Oil and Natural Gas and they predict offshore wind coming in, all in including transmission somewhere around the $0.14 to $0.15 framework in approximately 2020. So that's a big difference from where Cape Wind was just a few years ago, so and they actually just did a deal recently in Europe, off of Holland that actually came in for around $0.11. So the turbines are getting bigger. They are more efficient and you're getting the economy of scale of larger machines, so it's driving the cost down, plus the supply chain is maturing as well.

Okay great. I appreciate it.

All right. Thanks, Travis. Our next question is from Andrew Weisel from Macquarie. Good morning, Andrew. Andrew Weisel - Macquarie Capital (USA), Inc.: Good morning, guys. First question on Access, would love to hear your thoughts on the FERC proceedings related to giving preferential treatment to nat gas plants and electric utility customers over others such as marketers. I believe the FERC is set to rule in about a month and two proceedings, one from Algonquin and one more broadly from NextEra and PSEG. To what degree could that FERC decision maybe affect the decision to go forward or not with the pipeline? Leon J. Olivier - Executive Vice President, Enterprise Energy Strategy & Business Development, Eversource Energy: Yeah. This is Lee, Andrew. And I guess, first of all, I would say the thesis which we have at FERC here or precedent is no different than what takes place right now for the LDC companies, where the LDC companies pay for pipeline infrastructure that's developed by a pipeline operator and as a result they get first preference on it. And then, whatever capacity they don't use, it goes into the marketplace. So this would work essentially the same. And so, clearly, anyone that has watched a middle of the winter knows that there's not enough gas and that hinders the marketplace and forces a lot of plants offline that would otherwise run should they be gas. Our development of pipeline and having long-term capacity contracts with EDCs, we believe will stimulate the competitive marketplace and do what it's really designed to do, which is to have the older more inefficient more – higher emission plants retire and have new plants come on through the fuller capacity market process. So if you – if for some reason that we don't expect…

Thank you, Andrew. Our next question is from Caroline Bone from Deutsche Bank. Good morning, Caroline.

Hi, good morning, guys. Yeah, most of my questions have been answered, but so maybe just a few clarifications. With regard to Access Northeast, can you just remind us what specifically you need to have in hand before you can file a formal application at the FERC? I'm just wondering like do you just need to have the contract signed or do you need to have them actually approved at the state level? Leon J. Olivier - Executive Vice President, Enterprise Energy Strategy & Business Development, Eversource Energy: Yeah. Well, as part – Caroline, this is Lee. As part of the FERC pre-hearing process, pre-filing process, there is about approximately 14 supplements that we have to complete and provide to FERC. And the whole idea of that process is to get the developers of the pipelines together with those that are impacted by potentially the pipeline. So these are the towns, this is the states, for instance, the Department of Environmental Protection and so forth, it's the folks along the right away. It's getting the Army Corps of Engineers, the EPA (46:59), all of those folks involved, understanding what the scope of the project is, determining collectively if we can, what the mitigation initiatives would be. And then, by the time that you file this thing by the end of the year, you have a document that is very, very complete, that usually causes the FERC process to go along more smoothly. So that's kind of what we're doing. We don't have to have all the precedent agreements signed to submit the filing. Obviously, it's a good thing if you do, because you can demonstrate – they demonstrate the need. So having those are great, but you don't have to have those to do the filing.

Okay. Thanks for that. And then, just on – just going back to what you guys said earlier in the call. I know you mentioned that you've identified several projects to sort of offset the delay that we've now seen in Northern Pass. So I'm just wondering, I know you've also talked about share repurchase capacity before. And so, should we still be expecting a potential share buyback next year or if you're kind of accelerating projects to offset the Northern Pass delay, is that something that might be kind of postponed to a future year?

Yes, Caroline. This is Phil. I think as we've said in the past, really, our focus is to invest dollars in infrastructure needs that provide customers with benefits and address the region's energy needs. If it appears that those investments are not there, certainly, or available to us, certainly share repurchase is something to consider, but as we've said in the past, our focus is to invest the dollars in infrastructure to meet customers and region's energy and reliability needs.

So is it fair to say that at this point you see those investments, you have those investments to make?

Yes. I've identified a certain list of them as we went through this discussion. And we feel comfortable where we are on that.

All right. Thank you.

Thank you, Caroline. Next question is from Praful Mehta from Citi. Good morning, Praful.

Hi, morning. Thanks guys. So just quickly a follow-up on that question on the 2017 earnings and the potential investments. Is solar and renewables one of those buckets and if it is, can you give us ballpark numbers in terms of how you're thinking of dollars and how much you want to deploy into different buckets versus transmission versus renewable versus others?

Well, in terms of the bucket for solar, that specifically is in the $200 million range. That relates specifically to Massachusetts' solar filings for our two Massachusetts utilities. So under new legislation that was passed in Massachusetts recently, it allows 35 megawatts of solar. So the 2017 number that I mentioned, $200 million specifically relates to that activity. In terms of...

And there's no other buckets – sorry go ahead.

No. No. Go ahead.

I was just checking, so there's no plan for investment in solar that is not within the utility at this point?

That's correct.

Fair enough. All right. And secondly, I just wanted to understand you clearly have meaningful debt capacity at this point or you have clearly strong ratings, and with a strong currency as well, given where the market is in terms of M&A activities and just strategic direction, is there any opportunity you see out there that is worth looking at, or how are you looking at I guess strategically at this point in time in the marketplace?

Well, in terms of M&A, I think consistently we've said that we believe that there is likely to be consolidation in the industry and that makes sense. In our case, we've been very selective with respect to what makes sense in terms of benefits to our shareholders, benefits to customers, benefits to the region. We have demonstrated that you can do a deal or do deals that really are beneficial to shareholders, and at the same time, lower cost and become and stay and improve your world-class service. So those are the types of activities that we were involved in right now. We're focused on executing our plan that we've discussed with you. So that's – overall that's our sense of M&A.

Got you. Thank you, guys.

Thank you, Praful. Next question is from David Paz from Wolfe. Good morning, David.

Hey, good morning. Sorry to go back to your previous comments on Northern Pass, but just wanted to make sure I understand this. So what is the CapEx profile for Northern Pass in 2017 through 2019. I think you had about $700 million planned for 2017 and $600 million planned in 2018. What do those look like now?

Well, certainly, as I mentioned, sort of in 2017, the net of that, because even with the delay of obtaining the Site Evaluation Committee approval, et cetera, we still plan to have spending on Northern Pass in 2017, so sort of net – that would probably be in the $125 million to $175 million sort of area there, so that would reduce in 2017. In 2018 and in 2019, obviously, we've announced what the total size of the project would be. So we would develop a schedule to have the bulk of the remaining spending in those years. So there will be a shift out of 2017 and into 2018 and possibly 2019.

Got you. Okay. And just remind me the ROE on Northern Pass spending is 12.56% during construction phase, is that right?

Yes. Leon J. Olivier - Executive Vice President, Enterprise Energy Strategy & Business Development, Eversource Energy: Yes.

Okay, thank you. And so, these other incremental projects that you mentioned previously, that would be somewhere you would expect earned returns somewhere in the 10% range, lower, higher?

Well, certainly, part of the investment that I talk about was continued investment in Northern Pass, so that would be at that rate. The transmission investments would be at the higher transmission rate. The solar, we expect to be in a distribution type level return.

Great. Thank you.

Thanks, David. Next question is from Mike Weinstein (54:22), again from Credit Suisse.

Hey. Just a quick follow-up on a comment you made earlier that you thought that Access Northeast is still a viable project even if FERC rules against the EDCs. And I'm just wondering if – does that mean that there's an actual – do you think there are marketers actually lined up right now to take their place or is it just more of an expression of the need for new gas in the region that you are really referring to? Leon J. Olivier - Executive Vice President, Enterprise Energy Strategy & Business Development, Eversource Energy: Yeah, Michael (54:51) this is Lee. It's more of an expression that the need of new gas, but there's always marketers out there. So if by some chance that, again, FERC ruled against us in this particular case, there's always – if you have a pipeline there, there will be marketers that would want to arbitrage it on a day-to-day basis, so that will always take place. But the gas will show up. The gas will land and there will be a reduction of cost, how much – what that difference is, I really can't tell you, but the gas will be in the market.

Got you.

And Michael (55:30), you know that the application that's in there talks about giving preference to generators, I'm not sure if that's exactly how you're interpreting it.

Right, right. I'm not sure, so. And one final question, with the divestiture in New Hampshire, it looks like it delayed a little bit until late 2017, I guess, that adds another $0.03 or so to the earnings in 2017.

Yeah. It does contribute earnings as the plants are running or under ownership of Public Service of New Hampshire. So depending on the exact timing of the sale and the securitization, that would provide benefit throughout 2017.

Right. Okay. Thank you.

All right. Well, that's the last question that we have today. If you have any follow-ups, please let us know. We're around today. Good luck with the 10 o'clock calls and have a great summer. Thank you very much.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.