01—Abstract
Summary
Summary of the 10-Q filed November 6, 2024. Cited figures are marked; the original filing is the authoritative source.
Eversource reported a third-quarter 2024 net loss attributable to common shareholders of $118.1 milliona, or $0.33 per diluted share, compared with earnings of $339.7 million, or $0.97 per share, a year earlier.
The swing was driven by a $524.0 millionb after-tax loss on the sale of its offshore wind investments (Sunrise Wind, South Fork Wind and Revolution Wind). Excluding that loss, the company reported third-quarter non-GAAP earnings of $405.9 million, or $1.13 per share. For the first nine months of 2024, GAAP earnings were $739.1 million, or $2.08 per share, and non-GAAP earnings were $1.26 billion, or $3.56 per share.
Management updated 2024 non-GAAP EPS guidance to $4.52 to $4.60c and reaffirmed a 5 to 7 percent long-term EPS growth rate through 2028. The regulated business continued to grow. Electric transmission and electric distribution earnings rose on higher rate base and base rate increases at NSTAR Electric and PSNH.
Capital plans were raised to $23.1 to $23.7 billiond for 2024 to 2028, reflecting Massachusetts' approved Electric Sector Modernization Plan. Operating cash flow improved to $1.52 billion in the first nine months, from $1.17 billion. Capital investment was $3.29 billion.
Eversource issued $4.4 billion of long-term debt and raised $830 million through its at-the-market equity program, while using proceeds from the offshore wind sales to repay parent-company debt. Key open items include a $365 million liability for post-closing adjustment payments to GIP on Revolution Wind, which management says could increase, pending FERC base ROE complaint proceedings with a $39.1 million reserve, and a pending Connecticut AMI cost-recovery decision. The company is also exploring a sale of its Aquarion water business.
02—Key points
Key Highlights
- Q3 2024 GAAP net loss of $118.1 million ($0.33 per share), driven by a $524.0 million after-tax loss on the sale of offshore wind investments; Q3 non-GAAP EPS was $1.13, up from $0.97 a year earlier
- Nine-month 2024 GAAP EPS of $2.08 vs. $2.42 in 2023; non-GAAP EPS of $3.56 vs. $3.38, excluding offshore wind charges
- 2024 non-GAAP EPS guidance updated to $4.52 to $4.60; long-term EPS growth of 5 to 7 percent through 2028 reaffirmed
- Five-year capital plan raised to $23.1 to $23.7 billion (2024 to 2028), including the Massachusetts ESMP approval
- Offshore wind exit completed: Sunrise Wind sold for $152 million adjusted proceeds, and South Fork and Revolution Wind sold to GIP for $745 million, with a $365 million liability recorded for post-closing obligations
- Operating cash flow rose to $1.52 billion (nine months) from $1.17 billion; $4.4 billion of new long-term debt issued and $830 million of common equity raised via ATM program
- Ongoing risk items: FERC base ROE complaints (reserve of $39.1 million) and CL&P AMI cost-recovery decision expected around November 20, 2024
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed November 6, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $3.07B$2.83B | +8.3% |
| Operating Expenses | $2.45B$2.26B | +8.4% |
| Operating Income | $612.40M$530.55M | +15.4% |
| Interest Expense | $300.60M$222.30M | +35.2% |
| Net Income | -$116.18M$339.66M | −134.2% |
| EPS (Basic) | $-0.33$0.97 | −134.0% |
| EPS (Diluted) | $-0.33$0.97 | −134.0% |
| Shares Outstanding (Basic) | 359.52M349.70M | +2.8% |
| Shares Outstanding (Diluted) | 359.82M349.85M | +2.8% |
05—Questions
Frequently Asked Questions
Why did Eversource report a net loss in the third quarter of 2024?
The loss was driven by an after-tax loss of $524.0 million on the sale of its 50 percent interests in offshore wind projects. The loss includes a lower-than-expected sale price for South Fork and Revolution Wind, higher forecasted construction costs at Revolution Wind, and a net $60 million increase in income tax expense. It was partly offset by a $377 million pre-tax gain on the Sunrise Wind sale. Excluding these items, Q3 non-GAAP EPS was $1.13.
Is Eversource still exposed to the offshore wind projects it sold?
Yes, to a limited extent. Eversource recorded a $365 million liability for expected post-closing adjustment payments to GIP, mainly tied to Revolution Wind cost overruns and internal rate of return obligations. Management says incremental exposure is possible but cannot estimate a range beyond the recorded amount. It also has guarantees of up to $1.62 billion for prior offshore wind obligations, and a commitment to contingently provide up to $850 million in credit support for Revolution Wind tax equity financing. Eversource still holds a noncontrolling tax equity interest in South Fork Wind.
How is Eversource funding its growing capital program?
Eversource funded capital spending of $3.29 billion in the first nine months with operating cash flow of $1.52 billion, $4.4 billion of new long-term debt, and $830 million of common equity sold through its at-the-market program. It used offshore wind sale proceeds to repay parent-company debt. Commercial paper availability was $1.79 billion as of September 30, 2024. The company expects its operating cash flows, borrowing capacity and capital market access to be sufficient to meet its requirements.
What regulatory decisions could affect future earnings?
Several pending matters could affect results. FERC base ROE complaints remain unresolved, with a $39.1 million reserve for the second complaint period. A 10 basis point change in base ROE would affect annual after-tax earnings by about $6 million going forward. Connecticut PURA is expected to issue a final decision on AMI cost recovery around November 20, 2024. PSNH has a permanent rate case seeking a $181.9 million increase, with a decision expected by August 1, 2025. Aquarion Water Company of Connecticut's rate case appeal is also pending.
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