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 November 2, 2015 - 4:15 PM EST
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Eversource Energy Reports Third Quarter 2015 Results

Eversource Energy (NYSE: ES) today reported earnings of $235.9 million, or $0.74 per share, in the third quarter of 2015, compared with earnings of $234.6 million, or $0.74 per share, in the third quarter of 2014. Third quarter results included after-tax integration costs of $1.7 million in 2015 and $3 million in 2014. Excluding those integration costs, Eversource Energy earned $237.6 million, or $0.75 per share1, in both the third quarter of 2015 and the third quarter of 2014.

In the first nine months of 2015, Eversource Energy earned $696.7 million, or $2.19 per share, compared with earnings of $597.9 million, or $1.89 per share, in the first nine months of 2014. Excluding after-tax integration costs, Eversource Energy earned $704.5 million, or $2.21 per share1, in the first nine months of 2015, compared with $611.3 million, or $1.93 per share1, in the first nine months of 2014.

“We’re having a very successful year exceeding our financial and operational targets and advancing key initiatives to provide our region with long-term sources of low-cost, clean energy,” said Thomas J. May, Eversource Energy chairman, president and chief executive officer. “Additionally, today we narrowed our 2015 earnings guidance to $2.80 to $2.85 per share, a range that is very consistent with our projected long-term EPS growth rate of 6 to 8 percent.”

Electric Distribution and Generation

Eversource Energy’s electric distribution and generation segment earned $167.7 million in the third quarter of 2015 and $419.8 million in the first nine months of 2015, compared with earnings of $153.4 million in the third quarter of 2014 and $349.1 million in the first nine months of 2014. The higher results reflect higher distribution revenues and lower operations and maintenance expense.

Electric Transmission

Eversource Energy’s transmission segment earned $78 million in the third quarter of 2015 and $225 million in the first nine months of 2015, compared with earnings of $88.1 million in the third quarter of 2014 and $206.8 million in the first nine months of 2014. Lower third-quarter 2015 results were due to the absence of state tax benefits that occurred in the third quarter of 2014. Higher year-to-date results in 2015 were due to a higher level of investment, as well as lower charges in 2015 related to the Federal Energy Regulatory Commission’s reviews of the authorized return on equity for the owners of New England’s electric transmission system.

Natural Gas Distribution

Eversource Energy’s natural gas distribution segment lost $3.5 million in the third quarter of 2015 and earned $57.5 million in the first nine months of 2015, compared with a loss of $9.9 million in the third quarter of 2014 and earnings of $44.2 million in the first nine months of 2014. Improved results are due largely to higher revenues and a lower effective tax rate. Firm natural gas sales rose 4.8 percent in the first nine months of 2015, compared with the first nine months of 2014, due to colder first quarter weather and an increased number of heating customers. Year-to-date firm natural gas sales rose 2.5 percent on a weather-adjusted basis.

Eversource Energy parent and other companies

Excluding integration costs, Eversource Energy parent and other companies lost $4.6 million in the third quarter of 2015 and earned $2.2 million in the first nine months of 2015, compared with earnings of $6 million in the third quarter of 2014 and $11.2 million in the first nine months of 2014. Lower third quarter results in 2015 compared to 2014 were due primarily to a higher effective tax rate.

Lower income tax expense at Eversource’s natural gas segment and higher income tax expense at Eversource Energy parent both reflect the impact of reconciling estimated tax expense to the amounts that were actually reflected when the company filed its consolidated tax return in the third quarter of 2015.

The following table reconciles 2015 and 2014 third quarter and first nine months earnings per share:

                   
            Third Quarter     First Nine Months
2014     Reported EPS     $ 0.74       $ 1.89  
      Higher retail electric revenues in 2015     $ 0.12       $ 0.34  
     

Higher/(lower) transmission earnings in 2015

      ($0.04 )     $ 0.05  
      Higher firm natural gas sales in 2015       --       $ 0.02  
      Lower non-tracked O&M in 2015     $ 0.02       $ 0.10  
      Higher property tax, depreciation, and

amortization expense in 2015

     

($0.06

)

     

($0.19

)

      Other, primarily higher effective tax rate at Parent       ($0.04 )       ($0.04 )
      Lower integration costs in 2015 vs. 2014       --       $ 0.02  
2015     Reported EPS     $ 0.74       $ 2.19  
           

Financial results for the third quarter and first nine months of 2015 and 2014 are noted below:

Three months ended:

                         

(in millions, except EPS)

    September 30,

2015

    September 30,

2014

    Increase/

(Decrease)

    2015 EPS1
Electric Distribution/Generation     $ 167.7       $ 153.4       $ 14.3       $ 0.53  
Natural Gas Distribution       ($3.5 )       ($9.9 )     $ 6.4         ($0.01 )
Electric Transmission     $ 78.0       $ 88.1         ($10.1 )     $ 0.24  
Eversource Parent and Other Companies       ($4.6 )     $ 6.0         ($10.6 )       ($0.01 )
Earnings, ex. integration costs     $ 237.6       $ 237.6         --       $ 0.75  
Integration costs       ($1.7 )       ($3.0 )     $ 1.3         ($0.01 )
Reported Earnings     $ 235.9       $ 234.6       $ 1.3       $ 0.74  
               

Nine months ended:

                         

(in millions, except EPS)

    September 30,

2015

    September 30,

2014

    Increase/

(Decrease)

    2015 EPS1
Electric Distribution/Generation     $ 419.8       $ 349.1       $ 70.7       $ 1.32  
Natural Gas Distribution     $ 57.5       $ 44.2       $ 13.3       $ 0.18  
Electric Transmission     $ 225.0       $ 206.8       $ 18.2       $ 0.70  
Eversource Parent and Other Companies     $ 2.2       $ 11.2         ($9.0 )     $ 0.01  
Earnings, ex. integration costs     $ 704.5       $ 611.3       $ 93.2       $ 2.21  
Integration costs       ($7.8 )       ($13.4 )     $ 5.6         ($0.02 )
Reported Earnings     $ 696.7       $ 597.9       $ 98.8       $ 2.19  
               

The third quarter earnings of Eversource Energy’s electric utility subsidiaries are noted below in millions, net of preferred dividends:

             
      2015     2014
CL&P     $ 78.8     $ 82.5
NSTAR Electric     $ 118.1     $ 115.1
PSNH     $ 32.5     $ 28.2
WMECO     $ 15.0     $ 14.7
       

The first nine months of earnings of Eversource Energy’s electric utility subsidiaries are noted below in millions, net of preferred dividends:

             
      2015     2014
CL&P     $ 224.0     $ 196.4
NSTAR Electric     $ 282.7     $ 232.3
PSNH     $ 92.5     $ 85.0
WMECO     $ 42.4     $ 39.8
       

Retail sales data:

                   

 

   

September 30, 2015

   

September 30, 2014

    % Change

Actual

Electric Distribution                  
Gwh for three months ended     15,206     14,555     4.5 %
Gwh for nine months ended     42,174     41,439     1.8 %
                   
Natural Gas Distribution                  
Firm volumes in mmcf for three

months ended

   

10,022

   

10,200

   

(1.7

%)

Firm volumes in mmcf for nine

months ended

   

75,106

   

71,645

   

4.8

%

           

Eversource Energy has approximately 317 million common shares outstanding. It operates New England’s largest energy delivery system, serving approximately 3.6 million customers in Connecticut, Massachusetts and New Hampshire.

 
Note: Eversource Energy will webcast a conference call with senior management on November 3, 2015, beginning at 9 a.m. Eastern Time. The webcast and accompanying 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 parent common shares outstanding for the period. In addition, third quarter and first nine months 2015 and 2014 earnings and EPS excluding certain integration costs are non-GAAP financial measures. Management uses these non-GAAP financial measures to evaluate earnings results and to provide details of earnings results by business and to more fully compare and explain our third quarter and first nine months 2015 and 2014 results without including the impact of the non-recurring integration costs. 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 and economic conditions, including their impact on interest rates, bad debt expense and demand for Eversource Energy’s products and services, which could include disruptive technology related to our current or future business model; 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 from time to time in the company’s reports filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which such statement is made, and Eversource Energy undertakes no obligation to update the information contained in any forward-looking statements to reflect developments or circumstances occurring after the statement is made or to reflect the occurrence of unanticipated events.

 
EVERSOURCE ENERGY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
      September 30,       December 31,
(Thousands of Dollars)       2015         2014  
 

ASSETS

 
Current Assets:
Cash and Cash Equivalents $ 35,781 $ 38,703
Receivables, Net 928,064 856,346
Unbilled Revenues 197,920 211,758
Taxes Receivable 12,247 337,307
Fuel, Materials and Supplies 302,225 349,664
Regulatory Assets 653,892 672,493
Marketable Securities 119,702 124,173
Prepayments and Other Current Assets   117,857     102,021  
Total Current Assets   2,367,688     2,692,465  
 
Property, Plant and Equipment, Net   19,406,025     18,647,041  
 
Deferred Debits and Other Assets:
Regulatory Assets 3,951,752 4,054,086
Goodwill 3,519,401 3,519,401
Marketable Securities 476,778 515,025
Other Long-Term Assets   324,382     349,957  
Total Deferred Debits and Other Assets   8,272,313     8,438,469  
 
Total Assets $ 30,046,026   $ 29,777,975  
 

LIABILITIES AND CAPITALIZATION

 
Current Liabilities:
Notes Payable $ 1,015,500 $ 956,825
Long-Term Debt - Current Portion 228,883 245,583
Accounts Payable 610,753 868,231
Obligations to Third Party Suppliers 157,798 115,632
Regulatory Liabilities 226,061 235,022
Accumulated Deferred Income Taxes 169,272 160,288
Other Current Liabilities   563,426     552,800  
Total Current Liabilities   2,971,693     3,134,381  
 
Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes 4,612,828 4,467,473
Regulatory Liabilities 517,595 515,144
Derivative Liabilities 365,692 409,632
Accrued Pension, SERP and PBOP 1,498,346 1,638,558
Other Long-Term Liabilities   872,376     874,387  
Total Deferred Credits and Other Liabilities   7,866,837     7,905,194  
 
Capitalization:
Long-Term Debt   8,757,498     8,606,017  
 
Noncontrolling Interest - Preferred Stock of Subsidiaries   155,568     155,568  
 
Equity:
Common Shareholders' Equity:
Common Shares 1,669,313 1,666,796
Capital Surplus, Paid In 6,260,663 6,235,834
Retained Earnings 2,747,977 2,448,661
Accumulated Other Comprehensive Loss (73,546 ) (74,009 )
Treasury Stock   (309,977 )   (300,467 )
Common Shareholders' Equity   10,294,430     9,976,815  
Total Capitalization   19,207,496     18,738,400  
 
Total Liabilities and Capitalization $ 30,046,026   $ 29,777,975  

The data contained in this report is preliminary and is unaudited. This report is being submitted for the sole purpose of providing information to present 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)       2015       2014       2015       2014
 
Operating Revenues $ 1,933,105       $ 1,892,532 $ 6,263,597       $ 5,860,736
 
Operating Expenses:
Purchased Power, Fuel and Transmission 702,640 716,631 2,549,807 2,318,993
Operations and Maintenance 327,283 344,092 977,306 1,069,015
Depreciation 167,884 153,210 495,389 456,224
Amortization of Regulatory (Liabilities)/Assets, Net (16,851) (22,531) 42,587 31,826
Energy Efficiency Programs 132,107 118,693 380,559 360,228
Taxes Other Than Income Taxes   150,804   141,527   439,221   421,862
Total Operating Expenses   1,463,867   1,451,622   4,884,869   4,658,148
Operating Income 469,238 440,910 1,378,728 1,202,588
Interest Expense 92,534 89,738 279,635 272,208
Other Income, Net   5,241   11,860   23,866   19,054
Income Before Income Tax Expense 381,945 363,032 1,122,959 949,434
Income Tax Expense   144,146   126,539   420,640   345,858
Net Income 237,799 236,493 702,319 603,576
Net Income Attributable to Noncontrolling Interests   1,879   1,879   5,639   5,639
Net Income Attributable to Common Shareholders $ 235,920 $ 234,614 $ 696,680 $ 597,937
 
Basic Earnings Per Common Share $ 0.74 $ 0.74 $ 2.20 $ 1.89
 
Diluted Earnings Per Common Share $ 0.74 $ 0.74 $ 2.19 $ 1.89
 
Dividends Declared Per Common Share $ 0.41 $ 0.39 $ 1.29 $ 1.18
 
Weighted Average Common Shares Outstanding:
Basic   317,452,212   316,340,691   317,296,107   315,941,904
Diluted   318,405,269   317,554,925   318,396,042   317,186,490

 

The data contained in this report is preliminary and is unaudited. This report is being submitted for the sole purpose of providing information to present 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)       2015      

 

2014

     
Operating Activities:
Net Income $ 702,319 $ 603,576
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation 495,389 456,224
Deferred Income Taxes 153,353 64,755
Pension, SERP and PBOP Expense 71,802 74,296
Pension and PBOP Contributions (162,880) (74,681)
Regulatory Overrecoveries, Net 31,874 290,111
Amortization of Regulatory Assets, Net 42,587 31,826
Proceeds from DOE Damages Claim, Net - 132,138
Other (49,548) (17,096)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net (148,442) (66,463)
Fuel, Materials and Supplies 47,380 (27,147)
Taxes Receivable/Accrued, Net 383,047 26,533
Accounts Payable (233,660) (69,448)
Other Current Assets and Liabilities, Net   8,370   (20,607)
Net Cash Flows Provided by Operating Activities   1,341,591   1,404,017
 
Investing Activities:
Investments in Property, Plant and Equipment (1,177,285) (1,117,493)
Proceeds from Sales of Marketable Securities 556,582 388,352
Purchases of Marketable Securities (535,044) (389,406)
Other Investing Activities   (2,769)   (4,669)
Net Cash Flows Used in Investing Activities   (1,158,516)   (1,123,216)
 
Financing Activities:
Cash Dividends on Common Shares (397,363) (356,080)
Cash Dividends on Preferred Stock (5,639) (5,639)
(Decrease)/Increase in Notes Payable (387,575) 6,000
Issuance of Long-Term Debt 825,000 650,000
Retirements of Long-Term Debt (216,700) (576,650)
Other Financing Activities   (3,720)   (90)
Net Cash Flows Used in Financing Activities   (185,997)   (282,459)
Net Decrease in Cash and Cash Equivalents (2,922) (1,658)
Cash and Cash Equivalents - Beginning of Period   38,703   43,364
Cash and Cash Equivalents - End of Period $ 35,781 $ 41,706

The data contained in this report is preliminary and is unaudited. This report is being submitted for the sole purpose of providing information to present 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
Jeffrey R. Kotkin, 860-665-5154


Source: Business Wire (November 2, 2015 - 4:15 PM EST)

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