Eversource 2015 Annual Report Download - page 4

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By remaining faithful to our core mission to safely deliver reliable
energy and superior customer service, Eversource has been able to
consistently provide significant value to our customers, communities
and shareholders.
We have been thoughtful and innovative when it comes to meeting
our customers’ evolving needs, delivering top-quartile reliability and
addressing New England’s energy challenges. Our approach of
smart system investments, customer service excellence and
conservative financial management has enhanced our customer
service, provided strong leadership in the industry, and delivered a
very attractive level of earnings and dividend growth.
In 2015, we reported recurring earnings of $2.81 per share,
compared with recurring earnings of $2.65 in 2014, an increase of
six percent driven largely by higher retail electric and transmission
revenue, and effective cost discipline. That growth is consistent with
our longer term projected annual earnings per share growth rate of
five to seven percent, which is one of the most attractive growth
rates in the electric utility industry.
Our earnings growth also supports solid dividend growth for our
shareholders. In 2015, we raised our common dividend by 6.4
percent to an annualized rate of $1.67 per share, and in February
2016 we announced a 6.6 percent increase in the common dividend
to an annualized rate of $1.78 per share.
Strong earnings and dividend growth have benefited our share price.
Over the past five years, Eversource has provided a cumulative total
return to our shareholders of 89 percent, which compares favorably
to a 71 percent total five-year return for the Edison Electric Institute
Index and an 81 percent total return for the S&P 500.
We are achieving these returns while at the same time effectively
managing our financial and operating risks. In April, Standard and
Poor's Ratings Services raised its corporate credit rating for the
Eversource family of companies to “A” with a stable outlook, the top
rating among our electric utility peers. Also in 2015, Moody’s
Investor Services and Fitch Ratings raised the outlook on multiple
Eversource operating subsidiaries to “positive” from “stable.” Strong
credit ratings lower interest costs, benefiting both customers and
shareholders.
Our strong financial performance has been a direct result of our
outstanding operating performance, highlighted by our best year
ever for electric reliability. Since 2011, Eversource’s frequency of
electric service interruptions, and the amount of time it takes to
restore customers’ power when outages occur, have both decreased
by about 40 percent. We have established an improved
enterprise-wide organizational model for our operations team, and
have successfully implemented a state-of-the-art electric
distribution management platform. This platform automates the
control and operation of our grid using self-healing technology,
enhances customer communication, and enables a consistent
customer experience across all three states. We continue to invest
heavily in our electric distribution system, with capital expenditures
totaling a record $783 million in 2015, up nearly 8 percent from
2014 levels. That level of investment, coupled with our ongoing
implementation of best practices and procedures, is driving our
performance steadily higher within the top quartile of our industry.
This performance was particularly impressive during arguably one of
the worst winters in history. Record-breaking snowstorm after
snowstorm in early 2015 battered Boston, Cape Cod and the island
of Martha’s Vineyard, as well as parts of Connecticut and New
Hampshire. Our dedicated team of employees and “one company”
coordination across all three states served to create an exceptional
storm response.
Shareholder Letter