Summary
Eversource Energy's (ES) third-quarter 2019 10-Q filing indicates a stable operational environment with no new material risks or changes in internal controls identified compared to their 2018 10-K. The company manages market risks, including commodity prices and interest rates, through established policies. Regulated entities pass commodity price impacts to customers, mitigating direct earnings exposure. Credit risk is managed through diverse counterparty relationships and collateralization, with $10.5 million in letters of credit and $19.2 million in cash posted with ISO-NE as of September 30, 2019.
Financial Highlights
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Financial Statements
Beta
| Revenue | $2.18B |
| Operating Expenses | $1.67B |
| Operating Income | $509.24M |
| Interest Expense | $135.22M |
| Net Income | $320.76M |
| EPS (Basic) | $0.98 |
| EPS (Diluted) | $0.98 |
| Shares Outstanding (Basic) | 324.04M |
| Shares Outstanding (Diluted) | 326.01M |
Key Highlights
- 1No new material risks or changes to internal controls over financial reporting were identified in the quarter.
- 2Commodity price risk for regulated entities is passed through to customers, minimizing earnings exposure.
- 3Interest rate and credit risks are managed according to established policies and procedures.
- 4As of September 30, 2019, $10.5 million in collateral (letters of credit) was held from counterparties to manage credit risk.
- 5Eversource posted $19.2 million in cash with ISO-NE for energy transactions as of September 30, 2019.
- 6A lawsuit filed by Sierra Club and Conservation Law Foundation against PSNH under the Clean Water Act alleges failure to report monitoring data at the Merrimack generation facility, with potential maximum civil penalties of $195 million. PSNH believes the action is without merit but an adverse outcome could be material.
- 7The Yankee Companies received a partial summary judgment and final judgment of $103.2 million in their lawsuits against the U.S. Department of Energy related to spent nuclear fuel disposal, with an additional $0.5 million settlement received in July 2019.
Frequently Asked Questions
For its regulated companies, Eversource Energy passes on the economic impacts of energy contracts directly to customers. Therefore, these regulated entities have no direct exposure to losses in future earnings or fair values due to commodity price fluctuations.
Eversource manages credit risk by transacting with a diverse range of customers and suppliers and employing various contractual structures. The regulated companies also manage credit risk with counterparties through established practices and monitor contracting risks. As of September 30, 2019, they held $10.5 million in letters of credit as collateral and had $19.2 million in cash posted with ISO-NE.
Yes, PSNH is facing a Clean Water Act lawsuit from the Sierra Club and Conservation Law Foundation alleging failure to report monitoring data at the Merrimack generation facility. The potential maximum civil penalties are $195 million. While PSNH intends to defend vigorously and believes the suit is without merit, an adverse outcome could materially impact results of operations, financial condition, and liquidity. Additionally, the Yankee Companies received a favorable judgment of $103.2 million plus a $0.5 million settlement in their lawsuits against the U.S. Department of Energy regarding spent nuclear fuel disposal.
According to the filing, there have been no changes in internal controls over financial reporting during the quarter that materially affected them. Furthermore, no new material risks have been identified, and there are no material changes regarding previously disclosed risk factors or legal proceedings from the 2018 10-K.