10-QPeriod: Q3 FY2018

EVERSOURCE ENERGY Quarterly Report for Q3 Ended Sep 30, 2018

Filed November 6, 2018For Securities:ES

Summary

This 10-Q filing for Eversource Energy (ES) for the period ending September 30, 2018, indicates stability in key risk management areas. The company continues to manage commodity price risk through its regulated entities, where the economic impacts are passed through to customers, effectively eliminating direct earnings exposure. Interest rate risk is managed by maintaining a mix of fixed and variable rate long-term debt, in line with established policies. Credit risk is actively managed across a diverse customer and supplier base. As of September 30, 2018, the regulated companies held $5 million in collateral from counterparties for standard service contracts, and Eversource had $24.6 million posted with ISO-NE for energy transactions. Management has affirmed the effectiveness of the company's disclosure controls and procedures, with no material changes to internal controls over financial reporting during the quarter. The company also reported modest share repurchases under its incentive and dividend reinvestment plans.

Financial Highlights

46 data points
Beta

Revenue

$2.27B

Net Income

$291.30M

12.8% Net Margin

EPS (Diluted)

$0.91

Total Assets

$37.52B

Cash & Equivalents

$59.09M

Free Cash Flow

$76.12M

Financial Statements
Beta
Revenue$2.27B
Operating Expenses$1.81B
Operating Income$466.00M
Interest Expense$125.20M
Net Income$291.30M
EPS (Basic)$0.91
EPS (Diluted)$0.91
Shares Outstanding (Basic)317.36M
Shares Outstanding (Diluted)317.97M

Key Highlights

  • 1Regulated companies have no direct exposure to commodity price risk as impacts are passed to customers.
  • 2Interest rate risk is managed through a balanced mix of fixed and variable rate long-term debt.
  • 3Credit risk is managed across a diverse customer and supplier base, with collateral in place for certain contracts.
  • 4Disclosure controls and procedures were evaluated and found to be effective by management.
  • 5No material changes to internal controls over financial reporting were noted for the quarter.
  • 6The Yankee Companies' lawsuit against the DOE for approximately $100 million is proceeding, with trial expected in early 2019.
  • 7The company engaged in open market purchases of its common shares under various employee plans during the quarter.

Frequently Asked Questions

Eversource Energy's regulated companies manage commodity price risk by entering into energy contracts to serve customers. The economic impacts of these contracts are passed on to customers, which means the regulated entities do not have direct exposure to losses in future earnings or fair values from these market risk-sensitive instruments. The Energy Supply Risk Committee oversees these transactions.

The Yankee Companies have filed lawsuits against the DOE seeking approximately $100 million in damages related to energy contracts for the years 2013-2016. The trial for this 'DOE Phase IV' case is now expected to begin in early 2019.

According to the filing, there have been no additional material risk factors identified, nor have there been material changes to previously disclosed risk factors from the 2017 Form 10-K. Similarly, other than the previously disclosed Yankee Companies lawsuit, there are no additional material legal proceedings identified and no further material changes to previously disclosed legal proceedings.

Yes, Eversource Energy made open market purchases of its common shares totaling 12,366 shares during the quarter ending September 30, 2018, at an average price of $61.28 per share. These purchases were related to shares awarded under the Company's Incentive Plan and Dividend Reinvestment Plan, as well as matching contributions under the Eversource 401k Plan.