10-QPeriod: Q1 FY2015

EVERSOURCE ENERGY Quarterly Report for Q1 Ended Mar 31, 2015

Filed May 6, 2015For Securities:ES

Summary

Eversource Energy (ES) reported strong first-quarter 2015 results, with net income attributable to controlling interest increasing by 7.3% to $253.3 million, or $0.80 per diluted share, compared to $236.0 million, or $0.74 per diluted share, in the prior year period. This growth was driven by favorable regulatory developments, including resolutions related to NSTAR Electric's basic service bad debt adder and comprehensive settlement agreement, as well as CL&P's base distribution rate increase. These positive impacts were partially offset by a reserve related to a FERC ROE order and increased operations and maintenance expenses. The company's liquidity position remains solid, with cash flows from operations totaling $481.8 million. Eversource successfully issued new senior notes and maintained significant borrowing capacity under its revolving credit facilities. Capital expenditures remain focused on infrastructure investments, with significant progress noted in transmission projects like NEEWS and GHCC, and natural gas expansion plans. The company also announced its name change from Northeast Utilities to Eversource Energy on April 29, 2015.

Financial Highlights

45 data points
Beta

Revenue

$2.51B

Net Income

$255.10M

10.1% Net Margin

EPS (Diluted)

$0.80

Total Assets

$29.95B

Cash & Equivalents

$71.03M

Free Cash Flow

$128.96M

Financial Statements
Beta
Revenue$2.51B
Operating Expenses$2.02B
Operating Income$497.50M
Interest Expense$94.84M
Net Income$255.10M
EPS (Basic)$0.80
EPS (Diluted)$0.80
Shares Outstanding (Basic)317.09M
Shares Outstanding (Diluted)318.49M

Key Highlights

  • 1Net income attributable to controlling interest increased 7.3% to $253.3 million ($0.80/share) in Q1 2015, up from $236.0 million ($0.74/share) in Q1 2014.
  • 2Operating revenues increased by 9.7% to $2,513.4 million, driven by higher electric and natural gas distribution revenues.
  • 3Favorable regulatory outcomes, including NSTAR Electric's basic service bad debt adder resolution and a comprehensive settlement agreement, provided a significant earnings benefit.
  • 4A $12.4 million after-tax charge was recognized due to a FERC ROE order, impacting transmission segment earnings.
  • 5Total capital expenditures were $362.6 million, supporting ongoing investments in transmission and distribution infrastructure.
  • 6The company successfully issued new senior notes totaling $450 million.
  • 7Cash and cash equivalents increased to $71 million as of March 31, 2015, from $38.7 million as of December 31, 2014.

Frequently Asked Questions

The primary driver of the earnings increase was favorable regulatory developments, particularly the resolution of NSTAR Electric's basic service bad debt adder and the comprehensive settlement agreement, along with CL&P's base distribution rate increase. These were partially offset by a reserve related to a FERC ROE order and increased operations and maintenance costs.

The company's liquidity position strengthened. Cash and cash equivalents increased significantly to $71 million as of March 31, 2015, from $38.7 million as of December 31, 2014. Operating cash flows remained robust at $481.8 million, and the company maintained substantial borrowing capacity under its credit facilities.

Eversource is continuing investments in major transmission projects like NEEWS, GHCC, and Northern Pass. Natural gas expansion plans are also underway, including Yankee Gas's infrastructure expansion and NSTAR Gas's Gas System Enhancement Program (GSEP).

Yes, the company recognized a $12.4 million after-tax reserve due to a FERC ROE order impacting transmission earnings. Additionally, the DPU approved a comprehensive settlement agreement for NSTAR Electric and NSTAR Gas, resulting in customer refunds but also a favorable benefit to NSTAR Electric's earnings. PSNH also entered into a settlement term sheet regarding its generation assets.