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Eversource Energy Reports First Quarter 2019 Results

HARTFORD, Conn. & BOSTON--(BUSINESS WIRE)--

Eversource Energy (ES) today reported first quarter 2019 earnings of $308.7 million, or $0.97 per share, compared with earnings of $269.5 million, or $0.85 per share, in the first quarter of 2018.

Also today, the Eversource Energy Board of Trustees declared a regular quarterly dividend of $0.535 per share, payable June 28, 2019 to shareholders of record as of May 23, 2019. Additionally, the company today reaffirmed its 2019 earnings per share (EPS) guidance of $3.40 to $3.50 and its projected 5 to 7 percent long-term EPS growth rate.

“Our Eversource team has gotten off to a tremendous start in 2019,” said Jim Judge, Eversource Energy chairman, president and chief executive officer. “We are delivering top-quartile reliability and safety performance, as well as financial results that are consistent with both our short-term and long-term projections. We are also executing on a nearly $13 billion, five-year core business capital plan that will greatly help our region address its long-term infrastructure and clean energy needs.”

Electric Transmission

Eversource Energy’s transmission segment earned $118.2 million in the first quarter of 2019, compared with earnings of $107.4 million in the first quarter of 2018. Higher transmission earnings were primarily due to Eversource Energy’s additional investment in its electric transmission system.

Electric Distribution

Eversource Energy’s electric distribution segment earned $120.1 million in the first quarter of 2019, compared with earnings of $104.2 million in the first quarter of 2018. Improved results were due primarily to higher distribution revenues, partially offset by the absence of New Hampshire generation earnings in 2019 and higher depreciation expense.

Natural Gas Distribution

Eversource Energy’s natural gas distribution segment earned $76.5 million in the first quarter of 2019, compared with earnings of $57.8 million in the first quarter of 2018. Improved results were due primarily to the timing of distribution revenues under the recently approved decoupling mechanism for Eversource’s Connecticut natural gas business. Additionally, the natural gas segment benefited from capital tracking mechanisms on higher levels of investment. Those benefits were partially offset by higher operations and maintenance, property tax, and depreciation expense.

Water Distribution

Eversource Energy’s water distribution segment earned $0.9 million in the first quarter of 2019, compared with earnings of $1.5 million in the first quarter of 2018. The modest decline was due primarily to higher pension costs.

Parent and other companies

Parent and other companies had a net loss of $7 million in the first quarter of 2019, compared with a net loss of $1.4 million in the first quarter of 2018. Lower results were due primarily to higher interest expense on short-term and long-term debt.

The following table reconciles consolidated earnings per share for the first quarters of 2019 and 2018:

             
            First Quarter
2018     Reported EPS     $0.85  
      Higher transmission earnings in 2019     0.03  
     

Higher electric distribution revenues in 2019

    0.04  
      Higher natural gas revenues in 2019     0.05  
      Lower non-tracked O&M in 2019     0.02  
      Higher level of electric and natural gas distribution investment trackers in 2019    

0.02

 
      Higher depreciation and property tax expense in 2019     (0.03 )
      Higher interest expense in 2019     (0.02 )
      Other     0.01  
2019     Reported EPS     $0.97  
       

Financial results for the first quarters of 2019 and 2018 for Eversource Energy’s business segments and parent and other companies are noted below:

               

Three months ended:

                       

(in millions, except EPS)

   

March 31, 2019

   

March 31, 2018

   

Increase/
(Decrease)

   

2019 EPS1

Electric Distribution     $120.1       $104.2       $15.9       $0.38  
Electric Transmission     118.2       107.4       10.8       0.37  
Natural Gas Distribution     76.5       57.8       18.7       0.24  
Water Distribution     0.9       1.5       (0.6 )     ---  
Parent and Other Companies     (7.0 )     (1.4 )     (5.6 )     (0.02 )
Reported Earnings     $308.7       $269.5       $39.2       $0.97  
 
           

Retail sales data:

 

                 

(Three months ended)

   

March 31, 2019

   

March 31, 2018

   

% Change

Electric Distribution                  
Traditional     1,968     1,972     (0.2 )%
Decoupled     11,183     11,249     (0.6 )%
Total Electric Distribution     13,151     13,221     (0.5 )%
                   

Natural Gas Distribution (Decoupled) (mmcf)

   

45,376

   

43,179

   

5.1

%

 

Eversource Energy has approximately 317 million common shares outstanding. It operates New England’s largest energy delivery system and serves approximately 4 million electric, natural gas and water utility customers in Connecticut, Massachusetts and New Hampshire.

Note: Eversource Energy will webcast a conference call with senior management on May 2, 2019, beginning at 9 a.m. Eastern Time. The webcast and associated slides can be accessed through Eversource’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. Management believes that this measurement is useful to investors to evaluate the actual and projected financial performance and contribution of Eversource Energy’s businesses. 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. In some cases, 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 March 31, 2019     As of December 31, 2018
 

ASSETS

Current Assets:
Cash $ 35,145 $ 108,068
Receivables, Net 1,140,348 994,055
Unbilled Revenues 159,288 176,285
Fuel, Materials, Supplies and Inventory 277,104 238,042
Regulatory Assets 507,255 514,779
Prepayments and Other Current Assets 181,724   260,995  
Total Current Assets 2,300,864   2,292,224  
 
Property, Plant and Equipment, Net 26,032,781   25,610,428  
 
Deferred Debits and Other Assets:
Regulatory Assets 4,589,427 4,631,137
Goodwill 4,427,266 4,427,266
Investments in Unconsolidated Affiliates 711,476 464,286
Marketable Securities 415,405 417,508
Other Long-Term Assets 463,788   398,407  
Total Deferred Debits and Other Assets 10,607,362   10,338,604  
 
Total Assets $ 38,941,007   $ 38,241,256  
 

LIABILITIES AND CAPITALIZATION

Current Liabilities:
Notes Payable $ 1,477,830 $ 910,000
Long-Term Debt – Current Portion 805,519 837,319
Rate Reduction Bonds – Current Portion 43,210 52,332
Accounts Payable 1,006,774 1,119,995
Regulatory Liabilities 385,442 370,230
Other Current Liabilities 840,587   823,006  
Total Current Liabilities 4,559,362   4,112,882  
 
Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes 3,543,052 3,506,030
Regulatory Liabilities 3,627,389 3,609,475
Derivative Liabilities 372,957 379,562
Accrued Pension, SERP and PBOP 939,786 962,510
Other Long-Term Liabilities 1,259,400   1,196,336  
Total Deferred Credits and Other Liabilities 9,742,584   9,653,913  
 
Long-Term Debt 12,284,330   12,248,743  
 
Rate Reduction Bonds 561,727   583,331  
 
Noncontrolling Interest – Preferred Stock of Subsidiaries 155,570   155,570  
 
Common Shareholders' Equity:
Common Shares 1,669,392 1,669,392
Capital Surplus, Paid In 6,242,089 6,241,222
Retained Earnings 4,092,895 3,953,974
Accumulated Other Comprehensive Loss (57,804 ) (60,000 )
Treasury Stock (309,138 ) (317,771 )
Common Shareholders' Equity 11,637,434   11,486,817  
 
Total Liabilities and Capitalization $ 38,941,007   $ 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 March 31,
(Thousands of Dollars, Except Share Information)     2019     2018
   
Operating Revenues $ 2,415,792   $ 2,287,962
 
Operating Expenses:
Purchased Power, Fuel and Transmission 974,882 946,747
Operations and Maintenance 335,597 332,549
Depreciation 214,948 204,266
Amortization 70,961 45,194
Energy Efficiency Programs 140,116 134,241
Taxes Other Than Income Taxes 184,588   182,433
Total Operating Expenses 1,921,092   1,845,430
Operating Income 494,700 442,532
Interest Expense 131,734 121,129
Other Income, Net 30,985   33,789
Income Before Income Tax Expense 393,951 355,192
Income Tax Expense 83,393   83,766
Net Income 310,558 271,426
Net Income Attributable to Noncontrolling Interests 1,880   1,880
Net Income Attributable to Common Shareholders $ 308,678   $ 269,546
 
Basic and Diluted Earnings Per Common Share $ 0.97   $ 0.85
 
Weighted Average Common Shares Outstanding:
Basic 317,624,593   317,397,052
Diluted 318,316,082   317,992,999
 

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 CASH FLOWS
(Unaudited)

 
For the Three Months Ended March 31,
(Thousands of Dollars)    

2019

    2018
   
Operating Activities:
Net Income $ 310,558 $ 271,426
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation 214,948 204,266
Deferred Income Taxes 18,085 88,481
Uncollectible Expense 18,565 19,613
Pension, SERP and PBOP Expense/(Income), Net 8,428 (1,965 )
Pension and PBOP Contributions (4,700 ) (171,244 )
Regulatory (Under)/Over Recoveries, Net (19,232 ) 70,457
Amortization 70,961 45,194
Other (37,310 ) (74,582 )
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net (155,823 ) (156,888 )
Fuel, Materials, Supplies and Inventory (39,063 ) (26,956 )
Taxes Receivable/Accrued, Net 126,381 (5,061 )
Accounts Payable (69,832 ) (61,571 )
Other Current Assets and Liabilities, Net (70,242 ) (23,456 )
Net Cash Flows Provided by Operating Activities 371,724   177,714  
 
Investing Activities:
Investments in Property, Plant and Equipment (618,418 ) (607,334 )
Proceeds from Sales of Marketable Securities 234,497 145,438
Purchases of Marketable Securities (237,794 ) (143,264 )
Proceeds from the Sale of PSNH Generation Assets 130,641
Investments in Unconsolidated Affiliates (249,138 ) (7,340 )
Other Investing Activities 4,893   2,140  
Net Cash Flows Used in Investing Activities (865,960 ) (479,719 )
 
Financing Activities:
Cash Dividends on Common Shares (169,757 ) (160,027 )
Cash Dividends on Preferred Stock (1,880 ) (1,880 )
Issuance of Treasury Shares 26,109
Increase/(Decrease) in Notes Payable 829,430 (240,005 )
Repayment of Rate Reduction Bonds (30,727 )
Issuance of Long-Term Debt 1,150,000
Retirement of Long-Term Debt (250,215 ) (150,218 )
Other Financing Activities (9,676 ) (19,140 )
Net Cash Flows Provided by Financing Activities 393,284   578,730  
Net (Decrease)/Increase in Cash and Restricted Cash (100,952 ) 276,725
Cash and Restricted Cash - Beginning of Period 209,324   85,890  
Cash and Restricted Cash - End of Period $ 108,372   $ 362,615  
 

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.

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