10-QPeriod: Q2 FY2021

EVERSOURCE ENERGY Quarterly Report for Q2 Ended Jun 30, 2021

Filed August 6, 2021For Securities:ES

Summary

This 10-Q filing for Eversource Energy (ES) as of August 6, 2021, indicates a stable operational and regulatory environment with no new material risks or changes identified compared to the 2020 10-K. The company's regulated entities effectively pass on commodity price impacts to customers, mitigating earnings exposure. Management has affirmed the effectiveness of internal controls and disclosure procedures, suggesting operational integrity. While no new legal proceedings were reported, the company continues to navigate regulatory processes, with a significant focus on rate-setting and cost recovery, particularly concerning electric, natural gas, and water utilities. Potential adverse decisions from regulatory bodies or FERC, especially concerning allowed rates of return and transmission project competition, remain key areas of vigilance for investors.

Financial Highlights

46 data points
Beta

Revenue

$2.14B

Net Income

$266.40M

12.4% Net Margin

EPS (Diluted)

$0.77

Total Assets

$47.23B

Cash & Equivalents

$217.40M

Free Cash Flow

-$338.21M

Financial Statements
Beta
Revenue$2.14B
Operating Expenses$1.67B
Operating Income$451.61M
Interest Expense$145.44M
Net Income$266.40M
EPS (Basic)$0.77
EPS (Diluted)$0.77
Shares Outstanding (Basic)343.84M
Shares Outstanding (Diluted)344.44M

Key Highlights

  • 1Regulated entities shield earnings from commodity price fluctuations by passing costs to customers.
  • 2Management confirms the effectiveness of internal controls and disclosure procedures.
  • 3No new material legal proceedings or risk factors have been identified since the prior 10-K filing.
  • 4Key risks revolve around regulatory and legislative actions impacting rates, cost recovery, and allowed rates of return (ROE).
  • 5FERC is reviewing complaints regarding the reasonableness of allowed ROEs for electric companies under ISO-NE jurisdiction.
  • 6Eversource's regulated companies hold $20.5 million in collateral from counterparties for supply contracts as of June 30, 2021.
  • 7The company repurchased a small number of common shares (2,566) in May and June 2021, primarily related to 401k plan contributions.

Frequently Asked Questions

Eversource's regulated companies manage commodity price risk by entering into energy contracts, with the economic impacts of these contracts being passed on to customers. This structure ensures that the regulated entities themselves have no exposure to loss of future earnings or fair values due to these market risk-sensitive instruments.

No new material risk factors or legal proceedings have been identified in this filing. The company refers investors to its 2020 Form 10-K for previously disclosed risks and legal matters, stating there have been no material changes or additional risks identified since that filing.

The primary regulatory risks include potential adverse outcomes from state regulatory commissions and the FERC, which determine customer rates and oversee operations. These risks involve challenges to current or future rates, potential disallowances of incurred costs (including storm restoration), downward adjustments in allowed rates of return (ROE), penalties, and fines. Additionally, FERC's policies on transmission projects could introduce competition and regulatory complexities.

Yes, Eversource repurchased a total of 2,566 shares in May and June 2021 at an average price of $80.64. These purchases were part of matching contributions made under the Eversource 401k Plan.