AP NEWS
Press release content from Business Wire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Business Wire
Press release content from Business Wire. The AP news staff was not involved in its creation.

Eversource Energy Reports Third Quarter Results

November 5, 2019

HARTFORD, Conn. & BOSTON--(BUSINESS WIRE)--Nov 5, 2019--

Eversource Energy (NYSE: ES) today reported earnings of $318.9 million, or $0.98 per share, in the third quarter of 2019, compared with earnings of $289.4 million, or $0.91 per share, in the third quarter of 2018. In the first nine months of 2019, Eversource Energy earned $659 million, or $2.05 per share, compared with earnings of $801.7 million, or $2.52 per share, in the first nine months of 2018. Results for the first nine months of 2019 include a second quarter after-tax impairment charge of $204.4 million, or $0.64 per share, related to Eversource Energy’s investment in the Northern Pass Transmission (NPT) project. Excluding that impairment, Eversource Energy earned $863.4 million 1, or $2.69 per share, in the first nine months of 2019.

Eversource Energy also today reaffirmed its 2019 earnings per share (EPS) projection of $3.40 1 to $3.50 1 per share, excluding the NPT impairment charge noted above, and its long-term EPS growth rate of 5 to 7 percent.

Jim Judge, Eversource chairman, president and chief executive officer, said the company was pleased with its financial performance to date, but most thankful for the exceptionally difficult, around-the-clock work employees undertook in mid-October after a severe Nor’easter struck large sections of our electric service territory, particularly southeast Massachusetts and eastern Connecticut. Wind gusts near Cape Cod were clocked at more than 90 miles per hour, causing extensive damage to tree cover and distribution lines. Another severe windstorm struck New England on Halloween night, causing extensive damage, particularly in Connecticut.

“We thank our employees for safely and promptly restoring service to our customers and we thank our customers for the patience they showed as we went about our work,” Judge said. “Rising to the challenge posed by extreme weather is a key element of providing the top-tier service our nearly 4 million customers expect from us.”

Electric Distribution

Eversource Energy’s electric distribution segment earned $197.3 million in the third quarter of 2019 and $422.7 million in the first nine months of 2019, compared with earnings of $173.8 million in the third quarter of 2018 and $379.3 million in the first nine months of 2018. Improved third quarter and year-to-date results were due primarily to higher distribution revenues and lower operation and maintenance (O&M) expense, partially offset by higher depreciation expense. Year-to-date results were also negatively affected by the absence of New Hampshire generation earnings in 2019.

Electric Transmission

Eversource Energy’s electric transmission segment earned $107.5 million in the third quarter of 2019 and $342.8 million 1 in the first nine months of 2019, excluding the NPT charge noted above, compared with earnings of $109.5 million in the third quarter of 2018 and $329.6 million in the first nine months of 2018. Lower third quarter earnings in 2019 resulted in part from the absence of benefits from capitalizing interest and equity costs related to the canceled NPT project. Higher full-year results are primarily due to a higher level of investment in Eversource’s transmission facilities.

Natural Gas Distribution

Eversource Energy’s natural gas distribution segment lost $17.1 million in the third quarter of 2019 and earned $57.6 million in the first nine months of 2019, compared with a loss of $12.6 million in the third quarter of 2018 and earnings of $50.2 million in the first nine months of 2018. Lower third quarter results were due in part to the timing of distribution revenues, which, as disclosed previously, will be lower than in past years in non-heating months and higher during heating months. Improved year-to-date results were primarily due to higher earnings from capital tracking mechanisms on higher levels of investment.

Water Distribution

Eversource’s Aquarion Water Company subsidiary earned $17.5 million in the third quarter of 2019 and $26.3 million in the first nine months of 2019, compared with earnings of $17.6 million in the third quarter of 2018 and $26.3 million in the first nine months of 2018. For the third quarter, higher revenues and lower depreciation expense in 2019 were offset by the absence of a gain Aquarion recorded in 2018 on the sale of land.

Eversource Parent and Other Companies

Eversource parent and other companies earned $13.7 million in the third quarter of 2019 and $14 million in the first nine months of 2019, compared with earnings of $1.1 million in the third quarter of 2018 and $16.3 million in the first nine months of 2018. Higher third quarter earnings were due primarily to the absence of the Access Northeast impairment charge in 2018, partially offset by the absence in 2019 of non-recurring benefits related to federal tax reform. Lower nine-month results were due in part to higher interest expense.

The following table reconciles 2019 and 2018 third quarter and year-to-date earnings per share:

 

 

 

 

Third Quarter

 

First Nine Months

2018

 

Reported EPS

 

$0.91

 

 

$2.52

 

 

 

Higher electric distribution revenues in 2019

 

0.06

 

 

0.15

 

 

 

Higher level of electric and natural gas distribution investment mechanisms in 2019

 

0.02

 

 

0.07

 

 

 

(Lower)/higher electric transmission earnings in 2019, excluding NPT impairment

 

(0.01

)

 

0.03

 

 

 

(Lower)/higher natural gas revenues in 2019

 

(0.01

)

 

0.03

 

 

 

Lower non-tracked O&M in 2019

 

0.04

 

 

0.03

 

 

 

Lower/(higher) depreciation and property tax expense

 

0.01

 

 

(0.06

)

 

 

Higher interest expense in 2019

 

(0.01

)

 

(0.04

)

 

 

Absence of New Hampshire generation earnings

 

---

 

(0.02

)

 

 

Other

 

(0.02

)

 

(0.01

)

 

 

Share dilution

 

(0.01

)

 

(0.01

)

 

 

NPT impairment charge

 

---

 

(0.64

)

2019

 

Reported EPS

 

$0.98

 

 

$2.05

 

Financial results by segment for the third quarter and first nine months of 2019 and 2018 are noted below:

Three months ended:

 

(in millions, except EPS)

September 30, 2019

September 30, 2018

Increase/
(Decrease)

2019 EPS

Electric Distribution

$197.3

 

$173.8

 

$23.5

 

$0.61

 

Electric Transmission

107.5

 

109.5

 

(2.0

)

0.33

 

Natural Gas Distribution

(17.1

)

(12.6

)

(4.5

)

(0.05

)

Water Distribution

17.5

 

17.6

 

(0.1

)

0.06

 

Eversource Parent and Other Companies

13.7

 

1.1

 

12.6

 

0.03

 

Reported Earnings

$318.9

 

$289.4

 

$29.5

 

$0.98

 

Nine months ended:

 

(in millions, except EPS)

September 30, 2019

September 30, 2018

Increase/
(Decrease)

2019 EPS 1

Electric Distribution

$422.7

 

$379.3

$43.4

 

$1.32

 

Electric Transmission

342.8

 

329.6

13.2

 

1.07

 

Natural Gas Distribution

57.6

 

50.2

7.4

 

0.18

 

Water Distribution

26.3

 

26.3

---

 

0.08

 

Eversource Parent and Other Companies

14.0

 

16.3

(2.3

)

0.04

 

NPT impairment charge

(204.4

)

---

(204.4

)

(0.64

)

Reported Earnings

$659.0

 

$801.7

($142.7

)

$2.05

 

Retail sales data:

Three months ended:

September 30, 2019

September 30, 2018

% Change

Electric Distribution (Gwh)

 

 

Traditional

2,078

2,206

(5.8

%)

Decoupled

12,261

13,110

(6.5

%)

Total Electric Distribution

14,339

15,316

(6.4

%)

 

 

 

 

Natural Gas Distribution (mmcf)

 

 

 

All Decoupled

11,557

11,342

1.9

%

 

 

 

 

Water Distribution (MG)

 

 

 

Traditional

695

732

(5.1

%)

Decoupled

6,961

7,118

(2.2

%)

Total Water Distribution

7,656

7,850

(2.5

%)

Nine months ended:

September 30, 2019

September 30, 2018

% Change

Electric Distribution (Gwh)

 

 

Traditional

5,803

5,981

(3.0

%)

Decoupled

33,298

34,690

(4.0

%)

Total Electric Distribution

39,101

40,671

(3.9

%)

 

 

 

 

Natural Gas Distribution (mmcf)

 

 

 

All Decoupled

74,915

73,325

2.2

%

 

 

 

 

Water Distribution (MG)

 

 

 

Traditional

1,604

1,684

(4.8

%)

Decoupled

16,173

16,491

(1.9

%)

Total Water Distribution

17,777

18,175

(2.2

%)

Eversource Energy has approximately 324 million common shares outstanding and operates New England’s largest energy delivery system. It serves approximately 4 million electric, natural gas and water customers in Connecticut, Massachusetts and New Hampshire.

 

Note: Eversource Energy will webcast a conference call with senior management on November 6, 2019, beginning at 9 a.m. Eastern Time. The webcast and associated slides can be accessed through Eversource Energy’s website at www.eversource.com.

1 All per-share amounts in this news release are reported on a diluted basis. The only common equity securities that are publicly traded are common shares of Eversource Energy. The earnings and EPS of each business do not represent a direct legal interest in the assets and liabilities allocated to such business, but rather represent a direct interest in Eversource Energy’s assets and liabilities as a whole. EPS by business is a non-GAAP (not determined using generally accepted accounting principles) measure that is calculated by dividing the net income or loss attributable to common shareholders of each business by the weighted average diluted Eversource Energy common shares outstanding for the period. Earnings discussions also include a non-GAAP financial measure referencing 2019 earnings and EPS excluding the impairment charge for the NPT project.

Eversource Energy uses these non-GAAP financial measures to evaluate and provide details of earnings results by business and to more fully compare and explain 2019 results without including the impact of the NPT impairment charge. Management believes the NPT impairment charge is not indicative of Eversource Energy’s ongoing performance. Due to the nature and significance of the impairment charge on net income attributable to common shareholders, management believes that the non-GAAP presentation is a more meaningful representation of Eversource Energy’s financial performance and provides additional and useful information to readers in analyzing historical and future performance of the business. Non-GAAP financial measures should not be considered as alternatives to Eversource Energy’s consolidated net income attributable to common shareholders or EPS determined in accordance with GAAP as indicators of Eversource Energy’s operating performance.

This news release includes statements concerning Eversource Energy’s expectations, beliefs, plans, objectives, goals, strategies, assumptions of future events, future financial performance or growth and other statements that are not historical facts. These statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, readers can identify these forward-looking statements through the use of words or phrases such as “estimate,” “expect,” “anticipate,” “intend,” “plan,” “project,” “believe,” “forecast,” “should,” “could” and other similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results or outcomes to differ materially from those included in the forward-looking statements. Factors that may cause actual results to differ materially from those included in the forward-looking statements include, but are not limited to: cyberattacks or breaches, including those resulting in the compromise of the confidentiality of our proprietary information and the personal information of our customers; acts of war or terrorism, physical attacks or grid disturbances that may damage and disrupt our transmission and distribution systems; ability or inability to commence and complete our major strategic development projects and opportunities; actions or inaction of local, state and federal regulatory, public policy and taxing bodies; substandard performance of third-party suppliers and service providers; fluctuations in weather patterns, including extreme weather due to climate change; changes in business conditions, which could include disruptive technology related to our current or future business model; increased conservation measures of customers and development of alternative energy sources; contamination of, or disruption in, our water supplies; changes in economic conditions, including impact on interest rates, tax policies, and customer demand and payment ability; changes in levels or timing of capital expenditures; disruptions in the capital markets or other events that make our access to necessary capital more difficult or costly; changes in laws, regulations or regulatory policy, including compliance with environmental laws and regulations; changes in accounting standards and financial reporting regulations; actions of rating agencies; and other presently unknown or unforeseen factors.

Other risk factors are detailed in Eversource Energy’s reports filed with the Securities and Exchange Commission (SEC) and updated as necessary, and are available on Eversource Energy’s website at www.eversource.com and on the SEC’s website at www.sec.gov. All such factors are difficult to predict and contain uncertainties that may materially affect Eversource Energy’s actual results, many of which are beyond our control. You should not place undue reliance on the forward-looking statements; each speaks only as of the date on which such statement is made, except as required by federal securities laws, and Eversource Energy undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.

EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

(Thousands of Dollars)

As of September 30, 2019

 

As of December 31, 2018

 

 

 

 

ASSETS

 

 

 

Current Assets:

 

 

 

Cash

$

22,688

 

 

$

108,068

 

Receivables, Net

993,396

 

 

994,055

 

Unbilled Revenues

150,394

 

 

176,285

 

Fuel, Materials, Supplies and REC Inventory

204,012

 

 

238,042

 

Regulatory Assets

538,162

 

 

514,779

 

Prepayments and Other Current Assets

312,253

 

 

260,995

 

Total Current Assets

2,220,905

 

 

2,292,224

 

 

 

 

 

Property, Plant and Equipment, Net

26,911,877

 

 

25,610,428

 

 

 

 

 

Deferred Debits and Other Assets:

 

 

 

Regulatory Assets

4,292,560

 

 

4,631,137

 

Goodwill

4,427,266

 

 

4,427,266

 

Investments in Unconsolidated Affiliates

861,687

 

 

464,286

 

Marketable Securities

404,804

 

 

417,508

 

Other Long-Term Assets

606,295

 

 

398,407

 

Total Deferred Debits and Other Assets

10,592,612

 

 

10,338,604

 

 

 

 

 

Total Assets

$

39,725,394

 

 

$

38,241,256

 

 

 

 

 

LIABILITIES AND CAPITALIZATION

 

 

 

Current Liabilities:

 

 

 

Notes Payable

$

712,500

 

 

$

910,000

 

Long-Term Debt – Current Portion

853,066

 

 

837,319

 

Rate Reduction Bonds – Current Portion

43,210

 

 

52,332

 

Accounts Payable

892,106

 

 

1,119,995

 

Regulatory Liabilities

441,189

 

 

370,230

 

Other Current Liabilities

806,839

 

 

823,006

 

Total Current Liabilities

3,748,910

 

 

4,112,882

 

 

 

 

 

Deferred Credits and Other Liabilities:

 

 

 

Accumulated Deferred Income Taxes

3,604,791

 

 

3,506,030

 

Regulatory Liabilities

3,644,477

 

 

3,609,475

 

Derivative Liabilities

357,869

 

 

379,562

 

Accrued Pension, SERP and PBOP

821,172

 

 

962,510

 

Other Long-Term Liabilities

1,290,704

 

 

1,196,336

 

Total Deferred Credits and Other Liabilities

9,719,013

 

 

9,653,913

 

 

 

 

 

Long-Term Debt

13,440,165

 

 

12,248,743

 

 

 

 

 

Rate Reduction Bonds

540,122

 

 

583,331

 

 

 

 

 

Noncontrolling Interest – Preferred Stock of Subsidiaries

155,570

 

 

155,570

 

 

 

 

 

Common Shareholders' Equity:

 

 

 

Common Shares

1,699,292

 

 

1,669,392

 

Capital Surplus, Paid In

6,675,889

 

 

6,241,222

 

Retained Earnings

4,100,220

 

 

3,953,974

 

Accumulated Other Comprehensive Loss

(52,017

)

 

(60,000

)

Treasury Stock

(301,770

)

 

(317,771

)

Common Shareholders' Equity

12,121,614

 

 

11,486,817

 

 

 

 

 

Total Liabilities and Capitalization

$

39,725,394

 

 

$

38,241,256

 

The data contained in this report is preliminary and is unaudited. This report is being submitted for the sole purpose of providing information to shareholders about Eversource Energy and Subsidiaries and is not a representation, prospectus, or intended for use in connection with any purchase or sale of securities.

EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

 

 

 

 

 

For the Three Months Ended September 30,

 

For the Nine Months Ended September 30,

(Thousands of Dollars, Except Share Information)

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

Operating Revenues

$

2,175,797

 

 

$

2,271,425

 

 

$

6,476,084

 

 

$

6,413,243

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

Purchased Power, Fuel and Transmission

730,255

 

 

842,291

 

 

2,326,041

 

 

2,442,953

 

Operations and Maintenance

331,054

 

 

344,475

 

 

994,660

 

 

970,881

 

Depreciation

222,599

 

 

208,671

 

 

656,632

 

 

612,077

 

Amortization

73,854

 

 

92,711

 

 

183,760

 

 

174,108

 

Energy Efficiency Programs

136,832

 

 

129,965

 

 

382,785

 

 

366,162

 

Taxes Other Than Income Taxes

171,965

 

 

187,291

 

 

537,636

 

 

547,155

 

Impairment of Northern Pass Transmission

 

 

 

 

239,644

 

 

 

Total Operating Expenses

1,666,559

 

 

1,805,404

 

 

5,321,158

 

 

5,113,336

 

Operating Income

509,238

 

 

466,021

 

 

1,154,926

 

 

1,299,907

 

Interest Expense

135,216

 

 

125,201

 

 

399,654

 

 

372,734

 

Other Income, Net

26,968

 

 

16,718

 

 

103,818

 

 

100,656

 

Income Before Income Tax Expense

400,990

 

 

357,538

 

 

859,090

 

 

1,027,829

 

Income Tax Expense

80,226

 

 

66,278

 

 

194,435

 

 

220,497

 

Net Income

320,764

 

 

291,260

 

 

664,655

 

 

807,332

 

Net Income Attributable to Noncontrolling Interests

1,880

 

 

1,880

 

 

5,639

 

 

5,639

 

Net Income Attributable to Common Shareholders

$

318,884

 

 

$

289,380

 

 

$

659,016

 

 

$

801,693

 

 

 

 

 

 

 

 

 

Basic Earnings Per Common Share

$

0.98

 

 

$

0.91

 

 

$

2.06

 

 

$

2.53

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding:

 

 

 

 

 

 

 

Basic

324,037,169

 

 

317,360,110

 

 

320,442,253

 

 

317,367,252

 

Diluted

326,008,342

 

 

317,967,311

 

 

321,570,926

 

 

317,948,498

 

The data contained in this report is preliminary and is unaudited. This report is being submitted for the sole purpose of providing information to shareholders about Eversource Energy and Subsidiaries and is not a representation, prospectus, or intended for use in connection with any purchase or sale of securities.

View source version on businesswire.com:https://www.businesswire.com/news/home/20191105006022/en/

CONTACT: Jeffrey R. Kotkin

(860) 665-5154

KEYWORD: UNITED STATES NORTH AMERICA MASSACHUSETTS CONNECTICUT

INDUSTRY KEYWORD: ENERGY UTILITIES OIL/GAS

SOURCE: Eversource Energy

Copyright Business Wire 2019.

PUB: 11/05/2019 04:15 PM/DISC: 11/05/2019 04:15 PM

http://www.businesswire.com/news/home/20191105006022/en