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