10-QPeriod: Q2 FY2022

EVERSOURCE ENERGY Quarterly Report for Q2 Ended Jun 30, 2022

Filed August 4, 2022For Securities:ES

Summary

Eversource Energy's (ES) second-quarter 2022 10-Q filing indicates a stable operational and risk management environment. The company's regulated entities effectively pass through commodity price risks to customers, thus shielding earnings from energy market volatility. Interest rate and credit risks are managed through established policies, with specific measures like collateral for certain contracts and cash posted with ISO-NE in place to mitigate potential losses. The report confirms no material changes or new risks identified since the 2021 10-K filing, suggesting continuity in risk mitigation strategies. From a corporate governance perspective, management has certified the effectiveness of disclosure controls and procedures, confirming adherence to SEC regulations. Similarly, internal controls over financial reporting remain materially unchanged and effective. The company also disclosed minor share repurchases related to its 401k plan, indicating a continued, albeit limited, program of share buybacks. Overall, the filing suggests a company operating within its established risk parameters with strong internal controls.

Financial Highlights

46 data points
Beta

Revenue

$2.56B

Net Income

$293.74M

11.5% Net Margin

EPS (Diluted)

$0.84

Total Assets

$49.92B

Cash & Equivalents

$156.68M

Free Cash Flow

-$314.61M

Financial Statements
Beta
Revenue$2.56B
Operating Expenses$2.12B
Operating Income$455.57M
Interest Expense$160.09M
Net Income$293.74M
EPS (Basic)$0.84
EPS (Diluted)$0.84
Shares Outstanding (Basic)345.89M
Shares Outstanding (Diluted)346.30M

Key Highlights

  • 1Regulated companies pass commodity price risks directly to customers, insulating earnings from market fluctuations.
  • 2Interest rate risk is managed by maintaining a mix of fixed and variable rate long-term debt.
  • 3Credit risk is actively managed through diverse counterparties and contractual structures. Collateral of $190.4 million was held from counterparties, and $34.7 million in cash was posted with ISO-NE.
  • 4No material changes or new risks identified in market risk, legal proceedings, or risk factors compared to the 2021 10-K.
  • 5Management has concluded that disclosure controls and procedures are effective in ensuring timely and accurate reporting.
  • 6No material changes in internal controls over financial reporting during the quarter.
  • 7Minor share repurchases (2,573 shares) occurred during the quarter, primarily related to 401k plan contributions.

Frequently Asked Questions

Eversource Energy's regulated companies manage commodity price risk by entering into energy contracts where the economic impacts are passed directly to customers. This structure means the regulated entities are not exposed to losses in future earnings or fair values due to these market-sensitive instruments.

Interest rate risk is managed by maintaining a balanced mix of fixed and variable rate long-term debt. Credit risk is managed through a diverse base of customers and suppliers, and by implementing established credit risk practices. For regulated companies, this includes holding collateral such as letters of credit or cash ($190.4 million as of June 30, 2022) from counterparties and posting cash ($34.7 million as of June 30, 2022) with ISO-NE for energy transactions.

According to the filing, there have been no additional risk factors identified and no material changes regarding previously disclosed legal proceedings or risk factors compared to the company's 2021 Form 10-K. This suggests a stable risk profile and legal standing.

Yes, management has evaluated the disclosure controls and procedures and concluded they are effective. Additionally, there have been no changes in internal controls over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, their effectiveness.