Eversource Energy (NYSE: 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/ |
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: |
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|
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(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 |
||||||||||
(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 |
|||||||||
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 |
||||||||||
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190501005885/en/
Jeffrey R. Kotkin
(860) 665-5154