July 28, 2016 - 4:15 PM EDT
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Eversource Energy Reports Second Quarter 2016 Results

Eversource Energy (NYSE: ES) today reported earnings of $203.6 million, or $0.64 per share, in the second quarter of 2016, compared with earnings of $207.5 million, or $0.65 per share, in the second quarter of 2015. In the first half of 2016, Eversource Energy earned $447.8 million, or $1.41 per share, compared with earnings of $460.8 million, or $1.45 per share, in the first half of 2015.

“We have completed a very solid first half of 2016 that was consistent with both this year’s projected earnings of $2.90 to $3.05 per share and our 5 to 7 percent long-term EPS growth rate,” said James J. Judge, Eversource Energy president and chief executive officer. “We also are progressing with development of the long-term solutions that New England requires to make its energy sources cleaner, more reliable and cost competitive.”

Electric Transmission

Eversource Energy’s transmission segment earned $92.5 million in the second quarter of 2016 and $178.2 million in the first half of 2016, compared with earnings of $80.4 million in the second quarter of 2015 and $147 million in the first half of 2015. The improved results were primarily due to an increased level of investment in Eversource Energy’s transmission system, as well as the absence in 2016 of a first-quarter 2015 charge related to an order issued by the Federal Energy Regulatory Commission concerning the return on equity allowed New England transmission owners.

Electric Distribution and Generation

Eversource Energy’s electric distribution and generation segment earned $102.8 million in the second quarter of 2016 and $211.3 million in the first half of 2016, compared with earnings of $120.9 million in the second quarter of 2015 and $251.4 million in the first half of 2015. The lower year-to-date results primarily reflect the absence in 2016 of the benefits associated with resolving several regulatory issues at NSTAR Electric in the first quarter of 2015. Lower results in both the second quarter and first half of 2016, compared with the same periods of 2015, are attributable in part to lower retail sales, as well as higher depreciation and property tax expense due to an increased level of investment in Eversource Energy’s electricity delivery systems.

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

                     
          2016         2015
CL&P         $81.5         $77.4
NSTAR Electric         $67.7         $81.5
PSNH         $31.3         $28.0
WMECO         $13.3         $14.2
               

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

                     
          2016         2015
CL&P         $167.1         $145.2
NSTAR Electric         $121.7         $164.5
PSNH         $67.3         $60.0
WMECO         $30.1         $27.4
               

Natural Gas Distribution

Eversource Energy’s natural gas distribution segment earned $8 million in the second quarter of 2016 and $58.9 million in the first half of 2016, compared with earnings of $5.3 million in the second quarter of 2015 and $61 million in the first half of 2015. Improved second quarter results were due primarily to increased retail revenues, while lower six-month results in 2016 were due to the impact on firm sales of a much milder winter in 2016. Firm natural gas sales fell 15.1 percent in the first half of 2016, compared with the first half of 2015, due to milder winter weather, though firm sales were up by 6.3 percent in the second quarter of 2016, compared with the same period of 2015.

Parent and other companies

Eversource Energy parent and other companies earned $0.3 million in the second quarter of 2016 and had a net loss of $0.6 million in the first half of 2016, compared with earnings of $0.9 million in the second quarter of 2015 and $1.4 million in the first half of 2015.

The following table reconciles 2016 and 2015 second quarter and first six months earnings per share:

             
        Second Quarter   First Six Months
2015   Reported EPS   $0.65   $1.45
    Higher transmission earnings in 2016   $0.04   $0.10
    Higher/(lower) retail electric revenues in 2016   $0.01   ($0.04)
    Higher/(lower) firm natural gas sales in 2016   $0.01   ($0.03)
    Higher non-tracked O&M in 2016   ($0.01)   ($0.01)
   

Higher property tax, depreciation, and amortization expense in 2016

 

($0.02)

 

($0.04)

    Other, inc. higher effective tax rate, higher interest   ($0.04)   ($0.02)
2016   Reported EPS   $0.64   $1.41
     

Financial results for the second quarter and first half of 2016 and 2015 are noted below:

Three months ended:

               

(in millions, except EPS)

 

June 30, 2016

 

June 30, 2015

  Increase/

(Decrease)

 

2016 EPS1

Electric Distribution/Generation   $102.8   $120.9   ($18.1)   $0.32
Natural Gas Distribution   $8.0   $5.3   $2.7   $0.03
Electric Transmission   $92.5   $80.4   $12.1   $0.29
Eversource Parent and Other Companies   $0.3   $0.9   ($0.6)   -
Reported Earnings   $203.6   $207.5   ($3.9)   $0.64
       

Six months ended:

               

(in millions, except EPS)

 

June 30, 2016

 

June 30, 2015

  Increase/

(Decrease)

 

2016 EPS1

Electric Distribution/Generation   $211.3   $251.4   ($40.1)   $0.66
Natural Gas Distribution   $58.9   $61.0   ($2.1)   $0.19
Electric Transmission   $178.2   $147.0   $31.2   $0.56
Eversource Parent and Other Companies   ($0.6)   $1.4   ($2.0)   -
Reported Earnings   $447.8   $460.8   ($13.0)   $1.41
       

Retail sales data:

             
Three months ended:   June 30, 2016   June 30, 2015   % Change
Electric Distribution (Gwh)            
Traditional   6,605   6,671   (1.0%)
Decoupled   5,798   5,848   (0.8%)
Total Electric Distribution   12,403   12,519   (0.9%)
             
Natural Gas Distribution (mmcf)            
Traditional   8,315   7,823   6.3%
Decoupled and Special Contracts   9,521   8,958   6.3%
Total Natural Gas Distribution   17,836   16,781   6.3%
     
             
Six months ended:   June 30, 2016   June 30, 2015   % Change
Electric Distribution (Gwh)            
Traditional   13,601   14,172   (4.0%)
Decoupled   12,022   12,796   (6.0%)
Total Electric Distribution   25,623   26,968   (5.0%)
             
Natural Gas Distribution (mmcf)            
Traditional   26,300   30,906   (14.9%)
Decoupled and Special Contracts   30,884   36,447   (15.3%)
Total Natural Gas Distribution   57,184   67,353   (15.1%)
     

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 July 29, 2016, beginning at 9 a.m. Eastern Time. The webcast 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 parent 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 second quarter and first half 2016 and 2015 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 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’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’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 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. 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 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)
   
June 30, December 31,
(Thousands of Dollars)     2016     2015
 

ASSETS

 
Current Assets:
Cash and Cash Equivalents $ 38,726 $ 23,947
Receivables, Net 806,340 775,480
Unbilled Revenues 203,824 202,647
Taxes Receivable 103,926 305,359
Fuel, Materials, Supplies and Inventory 292,547 336,476
Regulatory Assets 863,360 845,843
Prepayments and Other Current Assets   106,561   129,034
Total Current Assets   2,415,284   2,618,786
 
Property, Plant and Equipment, Net   20,448,475   19,892,441
 
Deferred Debits and Other Assets:
Regulatory Assets 3,661,578 3,737,960
Goodwill 3,519,401 3,519,401
Marketable Securities 518,750 516,478
Other Long-Term Assets   319,175   295,243
Total Deferred Debits and Other Assets   8,018,904   8,069,082
 
Total Assets $ 30,882,663 $ 30,580,309
 

LIABILITIES AND CAPITALIZATION

 
Current Liabilities:
Notes Payable $ 767,000 $ 1,160,953
Long-Term Debt - Current Portion 178,883 228,883
Accounts Payable 631,566 813,646
Obligations to Third Party Suppliers 133,943 128,564
Regulatory Liabilities 119,413 107,759
Other Current Liabilities   472,964   549,985
Total Current Liabilities   2,303,769   2,989,790
 
Deferred Credits and Other Liabilities:
Accumulated Deferred Income Taxes 5,398,926 5,147,678
Regulatory Liabilities 527,678 513,595
Derivative Liabilities 381,572 337,102
Accrued Pension, SERP and PBOP 1,294,548 1,407,288
Other Long-Term Liabilities   875,270   871,499
Total Deferred Credits and Other Liabilities   8,477,994   8,277,162
 
Capitalization:
Long-Term Debt   9,435,924   8,805,574
 
Noncontrolling Interest - Preferred Stock of Subsidiaries   155,568   155,568
 
Equity:
Common Shareholders' Equity:
Common Shares 1,669,392 1,669,313
Capital Surplus, Paid In 6,252,514 6,262,368
Retained Earnings 2,962,843 2,797,355
Accumulated Other Comprehensive Loss (65,364) (66,844)
Treasury Stock   (309,977)   (309,977)
Common Shareholders' Equity   10,509,408   10,352,215
Total Capitalization   20,100,900   19,313,357
 
Total Liabilities and Capitalization $ 30,882,663 $ 30,580,309

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 June 30, For the Six Months Ended June 30,
(Thousands of Dollars, Except Share Information)       2016     2015       2016     2015
 
Operating Revenues $ 1,767,184 $ 1,817,061 $ 3,822,819 $ 4,330,491
 
Operating Expenses:
Purchased Power, Fuel and Transmission 581,260 685,118 1,336,119 1,847,167
Operations and Maintenance 320,714 316,641 640,850 650,024
Depreciation 176,507 163,668 350,492 327,505
Amortization of Regulatory (Liabilities)/Assets, Net (8,716) (1,166) 12,281 59,438
Energy Efficiency Programs 119,667 101,850 256,842 248,452
Taxes Other Than Income Taxes   154,330   138,935   314,277   288,415
Total Operating Expenses   1,343,762   1,405,046   2,910,861   3,421,001
Operating Income 423,422 412,015 911,958 909,490
Interest Expense 100,492 92,259 198,703 187,102
Other Income, Net   8,038   12,899   10,049   18,626
Income Before Income Tax Expense 330,968 332,655 723,304 741,014
Income Tax Expense   125,439   123,268   271,742   276,494
Net Income 205,529 209,387 451,562 464,520
Net Income Attributable to Noncontrolling Interests  

1,880

  1,880   3,759   3,759
Net Income Attributable to Common Shareholders $

203,649

$ 207,507 $ 447,803 $ 460,761
 
Basic and Diluted Earnings Per Common Share $ 0.64 $ 0.65 $ 1.41 $ 1.45
 
Dividends Declared Per Common Share $ 0.45 $ 0.42 $ 0.89 $ 0.84
 
Weighted Average Common Shares Outstanding:
Basic   317,785,495   317,613,166   317,651,319   317,352,004
Diluted   318,476,699   318,559,568   318,478,876   318,525,378

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 Six Months Ended June 30,
(Thousands of Dollars)       2016     2015
 
Operating Activities:
Net Income $ 451,562 $ 464,520
Adjustments to Reconcile Net Income to Net Cash Flows Provided by Operating Activities:
Depreciation 350,492 327,505
Deferred Income Taxes 250,851 176,800
Pension, SERP and PBOP Expense 22,659 48,432
Pension and PBOP Contributions (65,929) (31,032)
Regulatory Underrecoveries, Net (5,768) (73,547)
Amortization of Regulatory Assets, Net 12,281 59,438
Other (10,808) (38,521)
Changes in Current Assets and Liabilities:
Receivables and Unbilled Revenues, Net (76,751) (123,984)
Fuel, Materials, Supplies and Inventory 43,930 60,044
Taxes Receivable/Accrued, Net 230,075 214,577
Accounts Payable (151,996) (228,176)
Other Current Assets and Liabilities, Net   (72,160)   9,226
Net Cash Flows Provided by Operating Activities   978,438   865,282
 
Investing Activities:
Investments in Property, Plant and Equipment (869,168) (740,379)
Proceeds from Sales of Marketable Securities 327,581 427,990
Purchases of Marketable Securities (322,244) (408,242)
Other Investing Activities   (2,991)   4,821
Net Cash Flows Used in Investing Activities   (866,822)   (715,810)
 
Financing Activities:
Cash Dividends on Common Shares (282,314) (264,936)
Cash Dividends on Preferred Stock (3,759) (3,759)
Decrease in Notes Payable (393,953) (449,375)
Issuance of Long-Term Debt 800,000 750,000
Retirements of Long-Term Debt (200,000) (166,577)
Other Financing Activities   (16,811)   (17,059)
Net Cash Flows Used in Financing Activities   (96,837)   (151,706)
Net Increase/(Decrease) in Cash and Cash Equivalents 14,779 (2,234)
Cash and Cash Equivalents - Beginning of Period   23,947   38,703
Cash and Cash Equivalents - End of Period $ 38,726 $ 36,469

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 (July 28, 2016 - 4:15 PM EDT)

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