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Eversource Energy Reports Third Quarter 2017 Results

HARTFORD, Conn. & BOSTON--(BUSINESS WIRE)-- Eversource Energy (NYSE: ES) today reported earnings of $260.4 million, or $0.82 per share, in the third quarter of 2017, compared with earnings of $265.3 million, or $0.83 per share, in the third quarter of 2016. In the first nine months of 2017, Eversource Energy earned $750.6 million, or $2.36 per share, compared with earnings of $713.1 million, or $2.24 per share, in the first nine months of 2016.

The company also today reiterated its 2017 earnings per share guidance of $3.05 to $3.20, as well as its long-term EPS growth projection of 5 to 7 percent per year. Jim Judge, Eversource Energy chairman, president and chief executive officer, said the company has recorded solid financial and operating results, despite much milder summer temperatures in 2017, compared with 2016. Third quarter 2017 cooling degree days in Boston were down nearly 34 percent from 2016 levels and nearly 8 percent below average.

“Mild weather reduced both first quarter and third quarter energy use in New England this year,” Judge said. “But while weather patterns are transitory, our commitment on behalf of our customers is not. We continue to execute successfully on our many initiatives to support the environmental and energy cost reduction goals in the states we serve.”

Judge noted significant progress on Eversource Energy’s Northern Pass Transmission (NPT) project in recent months, including the receipt of a favorable final Environmental Impact Statement from the U.S. Department of Energy; the issuance of a positive draft Record of Decision from the U.S. Forest Service; and good overall progress before the New Hampshire Site Evaluation Committee.

“We are making an exceptionally strong case before state and federal regulators as to why NPT is the right project at the right time for a region that is heavily focused on lowering both energy costs and carbon emissions,” Judge said. “Testimony from our witnesses has strongly supported the billions of dollars of benefits our project will bring to New Hampshire in the years ahead.”

Electric Transmission

Eversource Energy’s transmission segment earned $99 million in the third quarter of 2017 and $289.6 million in the first nine months of 2017, compared with earnings of $88.4 million in the third quarter of 2016 and $266.6 million in the first nine months of 2016. The improved third quarter and year-to-date results were primarily due to an increased level of investment in Eversource Energy’s transmission system.

Electric Distribution and Generation

Eversource Energy’s electric distribution and generation segment earned $157.4 million in the third quarter of 2017 and $393.4 million in the first nine months of 2017, compared with earnings of $170.1 million in the third quarter of 2016 and $381.3 million in the first nine months of 2016. Lower third-quarter results were primarily due to the significant impact on sales of milder summer weather. Improved year-to-date results primarily reflect lower operations and maintenance expense, partially offset by higher depreciation and interest expense.

Natural Gas Distribution

Eversource Energy’s natural gas distribution segment had a net loss of $6.2 million in the third quarter of 2017 and earnings of $49.1 million in the first nine months of 2017, compared with a net loss of $7 million in the third quarter of 2016 and earnings of $51.9 million in the first nine months of 2016. Improved third quarter results in 2017 were due primarily to lower non-tracked operations and maintenance expense, while lower year-to-date results reflect higher operations and maintenance expense, higher depreciation expense and a decline in demand revenues due to lower peak usage in 2017 among Connecticut natural gas customers.

Parent and Other Companies

Eversource Energy parent and other companies earned $10.2 million in the third quarter of 2017 and $18.5 million in the first nine months of 2017, compared with $13.8 million in the third quarter of 2016 and $13.3 million in the first nine months of 2016. Lower third-quarter results in 2017 were due primarily to higher interest expense, while higher year-to-date results reflect in part second quarter gains in 2017 from Eversource Energy’s long-time investment in a renewable energy fund.

The following table reconciles 2017 and 2016 third quarter and first nine months earnings per share:

Third Quarter First Nine Months
2016 Reported EPS $0.83 $2.24
Higher transmission earnings in 2017 0.03 0.07
Lower non-tracked O&M in 2017 0.02 0.06
Lower retail electric revenues in 2017 (0.04) ---
Higher property tax, depreciation and

interest expense in 2017

(0.03)

(0.07)

All other, net, including higher Other Income 0.01 0.06
2017 Reported EPS $0.82 $2.36

Financial results for the third quarter and first nine months of 2017 and 2016 are noted below:

Three months ended:
(in millions, except EPS)

September 30,
2017

September 30,
2016

Increase/
(Decrease)

2017 EPS1

Electric Distribution/Generation $157.4 $170.1 $(12.7 ) $0.50
Electric Transmission 99.0 88.4 10.6 0.31
Natural Gas Distribution (6.2 ) (7.0 ) 0.8 (0.02 )
Eversource Parent and Other Companies 10.2 13.8 (3.6 ) 0.03
Reported Earnings $260.4 $265.3 $(4.9 ) $0.82

Nine months ended:
(in millions, except EPS)

September 30,
2017

September 30,
2016

Increase/
(Decrease)

2017 EPS1

Electric Distribution/Generation $393.4 $381.3 $12.1 $1.24
Electric Transmission 289.6 266.6 23.0 0.91
Natural Gas Distribution 49.1 51.9 (2.8 ) 0.15
Eversource Parent and Other Companies 18.5 13.3 5.2 0.06
Reported Earnings $750.6 $713.1 $37.5 $2.36

Retail sales data:

Three months ended: September 30, 2017 September 30, 2016 % Change
Electric Distribution (Gwh)
Traditional 7,545 8,131 (7.2%)
Decoupled 6,551 7,213 (9.2%)
Total Electric Distribution 14,096 15,344 (8.1%)
Natural Gas Distribution (MMcf)
Traditional 5,550 5,270 5.3%
Decoupled and Special Contracts 5,975 5,653 5.7%
Total Natural Gas Distribution 11,525 10,923 5.5%
Nine months ended: September 30, 2017 September 30, 2016

% Change

Electric Distribution (Gwh)
Traditional 21,040 21,731 (3.2%)
Decoupled 18,391 19,235 (4.4%)
Total Electric Distribution 39,431 40,966 (3.7%)
Natural Gas Distribution (MMcf)
Traditional 32,233 31,570 2.1%
Decoupled and Special Contracts 37,453 36,537 2.5%
Total Natural Gas Distribution 69,686 68,107 2.3%

Eversource Energy has approximately 317 million common shares outstanding. It operates New England’s largest energy delivery system, serving approximately 3.7 million customers in Connecticut, Massachusetts and New Hampshire. Eversource Energy is recognized as the top U.S. utility for its energy efficiency programs by the sustainability advocacy organization Ceres.

Note: Eversource Energy will webcast a conference call with senior management on November 2, 2017, 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 controlling interests of each business by the weighted average diluted Eversource Energy common shares outstanding for the period. Management uses this non-GAAP financial measure to evaluate earnings results, provide details of earnings results by business, and more fully compare and explain our third quarter and first nine months 2017 and 2016 results. 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 consolidated net income attributable to controlling interests 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, cyber breaches, acts of war or terrorism, or grid disturbances; actions or inaction of local, state and federal regulatory, public policy and taxing bodies; changes in business conditions, which could include disruptive technology related to Eversource Energy’s current or future business model; changes in economic conditions, including impact on interest rates, tax policies, and customer demand and payment ability; fluctuations in weather patterns; changes in laws, regulations or regulatory policy; changes in levels or timing of capital expenditures; disruptions in the capital markets or other events that make Eversource Energy’s access to necessary capital more difficult or costly; developments in legal or public policy doctrines; technological developments; 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’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 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, and, except as required by federal securities laws, 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, 2017 As of December 31, 2016

ASSETS

Current Assets:
Cash and Cash Equivalents $ 125,761 $ 30,251
Receivables, Net 919,959 847,301
Unbilled Revenues 146,634 168,490
Fuel, Materials, Supplies and Inventory 305,035 328,721
Regulatory Assets 746,142 887,625
Prepayments and Other Current Assets 159,939 215,284
Total Current Assets 2,403,470 2,477,672
Property, Plant and Equipment, Net 22,537,304 21,350,510
Deferred Debits and Other Assets:
Regulatory Assets 3,505,901 3,638,688
Goodwill 3,519,401 3,519,401
Marketable Securities 570,255 544,642
Other Long-Term Assets 627,289 522,260
Total Deferred Debits and Other Assets 8,222,846 8,224,991
Total Assets $ 33,163,620 $ 32,053,173

LIABILITIES AND CAPITALIZATION

Current Liabilities:
Notes Payable $ 18,238 $ 1,148,500
Long-Term Debt – Current Portion 957,697 773,883
Accounts Payable 794,195 884,521
Obligations to Third Party Suppliers 149,789 122,806
Regulatory Liabilities 170,215 146,787
Other Current Liabilities 530,297 562,108
Total Current Liabilities 2,620,431 3,638,605
Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes 6,001,589 5,607,207
Regulatory Liabilities 700,207 702,255
Derivative Liabilities 391,910 413,676
Accrued Pension and SERP 946,629 1,141,514
Other Long-Term Liabilities 881,056 853,260
Total Deferred Credits and Other Liabilities 8,921,391 8,717,912
Capitalization:
Long-Term Debt 10,468,193 8,829,354
Noncontrolling Interest – Preferred Stock of Subsidiaries 155,568 155,568
Equity:
Common Shareholders' Equity:
Common Shares 1,669,392 1,669,392
Capital Surplus, Paid In 6,235,846 6,250,224
Retained Earnings 3,474,185 3,175,171
Accumulated Other Comprehensive Loss (63,615 ) (65,282 )
Treasury Stock (317,771 ) (317,771 )
Common Shareholders' Equity 10,998,037 10,711,734
Total Capitalization 21,621,798 19,696,656
Total Liabilities and Capitalization $ 33,163,620 $ 32,053,173

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) 2017 2016 2017 2016
Operating Revenues $ 1,988,512 $ 2,039,706 $ 5,856,458 $ 5,862,525
Operating Expenses:
Purchased Power, Fuel and Transmission 651,776 665,810 1,955,129 2,001,929
Operations and Maintenance 300,421 324,734 933,400 965,584
Depreciation 194,466 181,288 571,152 531,781
Amortization of Regulatory Assets, Net 41,848 43,942 58,058 56,223
Energy Efficiency Programs 129,205 149,121 391,761 405,962
Taxes Other Than Income Taxes 168,193 164,942 479,648 479,219
Total Operating Expenses 1,485,909 1,529,837 4,389,148 4,440,698
Operating Income 502,603 509,869 1,467,310 1,421,827
Interest Expense 108,719 99,865 319,477 298,568
Other Income, Net 21,184 13,641 56,304 23,689
Income Before Income Tax Expense 415,068 423,645 1,204,137 1,146,948
Income Tax Expense 152,818 156,446 447,921 428,186
Net Income 262,250 267,199 756,216 718,762
Net Income Attributable to Noncontrolling Interests 1,880 1,880 5,639 5,639
Net Income Attributable to Common Shareholders $ 260,370 $ 265,319 $ 750,577 $ 713,123
Basic and Diluted Earnings Per Common Share $ 0.82 $ 0.83 $ 2.36 $ 2.24
Dividends Declared Per Common Share $ 0.48 $ 0.45 $ 1.43 $ 1.34
Weighted Average Common Shares Outstanding:
Basic 317,393,029 317,787,836 317,415,848 317,696,823
Diluted 317,949,396 318,577,079 318,007,042 318,511,609

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 Nine Months Ended September 30,
(Thousands of Dollars) 2017 2016
Operating Activities:
Net Income $ 756,216 $ 718,762
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation 571,152 531,781
Deferred Income Taxes 374,863 301,413
Pension, SERP and PBOP Expense, Net 16,891 31,627
Pension and PBOP Contributions (197,900 ) (121,854 )
Regulatory Overrecoveries, Net 185,952 152,808
Amortization of Regulatory Assets, Net 58,058 56,223
Other

(148,741

) (27,671 )
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net (107,473 ) (191,454 )
Fuel, Materials, Supplies and Inventory 23,686 25,425
Taxes Receivable/Accrued, Net 88,856 347,898
Accounts Payable (96,551 ) (121,513 )
Other Current Assets and Liabilities, Net (32,874 ) (53,077 )
Net Cash Flows Provided by Operating Activities

1,492,135

1,650,368
Investing Activities:
Investments in Property, Plant and Equipment (1,642,280 ) (1,359,171 )
Proceeds from Sales of Marketable Securities

520,664

444,209
Purchases of Marketable Securities

(506,302

) (437,197 )
Other Investing Activities

(10,177

) (9,463 )
Net Cash Flows Used in Investing Activities

(1,638,095

) (1,361,622 )
Financing Activities:
Cash Dividends on Common Shares (451,562 ) (423,471 )
Cash Dividends on Preferred Stock (5,639 ) (5,639 )
Decrease in Notes Payable (231,500 ) (426,453 )
Issuance of Long-Term Debt 1,250,000 800,000
Retirements of Long-Term Debt (320,000 ) (200,000 )
Other Financing Activities 171 (17,074 )
Net Cash Flows Provided by/(Used in) Financing Activities 241,470 (272,637 )
Net Increase in Cash and Cash Equivalents 95,510 16,109
Cash and Cash Equivalents - Beginning of Period 30,251 23,947
Cash and Cash Equivalents - End of Period $ 125,761 $ 40,056

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: http://www.businesswire.com/news/home/20171101006794/en/

Eversource Energy
Jeffrey R. Kotkin, 860-665-5154

Source: Eversource Energy