10-QPeriod: Q2 FY2020

EVERSOURCE ENERGY Quarterly Report for Q2 Ended Jun 30, 2020

Filed August 7, 2020For Securities:ES

Summary

Eversource Energy's (ES) Q2 2020 10-Q filing indicates no material changes in market risk disclosures or internal controls compared to their 2019 10-K. The company's regulated entities are largely insulated from commodity price risk as costs are passed through to customers. Management actively manages interest rate and credit risks through established policies. A significant portion of the filing focuses on the potential impacts of the COVID-19 pandemic, which has led to increased cybersecurity threats, potential access-to-capital concerns, and delays in strategic development opportunities, particularly offshore wind projects due to permitting restrictions. While mitigation plans are in place, the full financial impact of the pandemic remains uncertain.

Financial Highlights

46 data points
Beta

Revenue

$1.95B

Net Income

$254.11M

13.0% Net Margin

EPS (Diluted)

$0.75

Total Assets

$42.04B

Cash & Equivalents

$64.89M

Free Cash Flow

-$89.61M

Financial Statements
Beta
Revenue$1.95B
Operating Expenses$1.52B
Operating Income$433.65M
Interest Expense$134.28M
Net Income$254.11M
EPS (Basic)$0.75
EPS (Diluted)$0.75
Shares Outstanding (Basic)337.95M
Shares Outstanding (Diluted)338.56M

Key Highlights

  • 1Regulated companies are shielded from commodity price risk as costs are passed through to customers.
  • 2Active management of interest rate and credit risks is conducted in accordance with established policies and procedures.
  • 3Collateral of $15.0 million was held from counterparties as of June 30, 2020, related to standard service contracts.
  • 4Eversource posted $29.6 million in cash with ISO-NE as of June 30, 2020, for energy transactions.
  • 5No material changes were reported in legal proceedings or risk factors compared to the 2019 10-K, other than the impact of COVID-19.
  • 6Increased cybersecurity threats (scanning and phishing attempts) have been observed due to the pandemic.
  • 7COVID-19-related work restrictions have caused delays in offshore wind project development, specifically impacting permitting and siting timelines in New York.

Frequently Asked Questions

Eversource's regulated companies have minimal direct exposure to commodity price risk. The economic impacts of energy contracts used to serve customers are generally passed through to customers, insulating the regulated entities from losses in future earnings or fair values related to these instruments.

The primary risks highlighted are the potential impacts of the COVID-19 pandemic. These include increased cybersecurity threats, potential disruptions in access to capital markets, delays in strategic development projects (like offshore wind), supply chain vulnerabilities, workforce challenges, and potential impacts on benefit plans. The company is implementing mitigation strategies for these risks.

No. The filing states that there have been no material legal proceedings identified and no material changes regarding previously disclosed legal proceedings. Similarly, management concluded that disclosure controls and procedures are effective, and there have been no changes in internal controls over financial reporting during the quarter that materially affected them.

Eversource manages credit risk by serving a diverse range of customers and transacting with various suppliers. They monitor contracting risks and have established credit risk practices. As of June 30, 2020, their regulated companies held $15.0 million in collateral from counterparties for standard service contracts.