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Eversource Energy 8-K Report, Financial Results (Sep 30, 2024)

Reports
Earnings & Results·Regulation FD·Other Events+1
Filing Date
Filed September 30, 2024
Period End
September 30, 2024
Security
ES
In the record · 2016–202610-K1110-Q338-K126

ES filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 126 current reports (8-K) between 2016 and 2026.

  1. Impairment8-K · Jul ’19Jul ’19
  2. Leadership change8-K · May ’21May ’21
  3. Leadership change8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 8-K filed September 30, 2024. Cited figures are marked; the original filing is the authoritative source.

Eversource Energy (NYSE: ES) announced on September 30, 2024 that it completed the sale of its 50%a interests in the 132-MW South Fork Wind and 704-MW Revolution Wind projects to affiliates of Global Infrastructure Partners (GIP).

Adjusted gross proceeds at closing were $745 millionb, down roughly $375 million from the previously estimated ~$1.12 billion. About $150 million of the reduction reflects lower capital spending between announcement and closing, and about $225 million reflects the delay in Revolution Wind's commercial operations date and related final deal terms. The transaction, combined with the July 2024 sale of the Sunrise Wind stake to Ørsted, leaves Eversource with a aggregate net loss of approximately $520 million on its offshore wind exit, to be recorded in Q3 2024.

That figure includes a ~$370 millionc final gain on Sunrise Wind, offset by the $225 million proceeds reduction, ~$350 million of forecasted higher Revolution Wind construction costs, and ~$315 million of anticipated post-closing adjustments. Eversource also expects to recognize a liability of about $360 million within the loss, with most of it settled in 2026. Management states the company has now fully exited its offshore wind ownership and has no ongoing obligations on Sunrise Wind.

For investors, the key points are the one-time charge, the continuing exposure to Revolution Wind through purchase price adjustments (tied to construction costs, with sharing up to an effective cap of about $240 milliond, and to the project's commercial operation date and potential tax credit eligibility), and the reduced but still-existing credit support obligations that are expected to decline as construction finishes. Management reaffirmed its up-to-$1.3 billion equity issuance plan and said the transaction is not expected to materially affect its FFO/Debt target of 14%-15% by 2025. The sale does not affect its regulated utility operations, and Eversource will keep its tax equity investment in South Fork Wind.

02—Key points

Key Highlights

  1. Closed sale of 50% stakes in South Fork Wind (132 MW) and Revolution Wind (704 MW) to GIP with adjusted gross proceeds of $745 million, versus a prior estimate of about $1.12 billion.
  2. Expects an aggregate net loss of approximately $520 million in Q3 2024 on the completed offshore wind exit, including a ~$370 million final gain on the Sunrise Wind sale.
  3. Recognizing a liability of about $360 million within the $520 million loss, with the majority expected to be settled in 2026.
  4. Key offsets include ~$225 million in lower proceeds, ~$350 million in higher Revolution Wind construction costs from a delayed COD, and ~$315 million in anticipated post-closing adjustments.
  5. Revolution Wind purchase price remains exposed to construction cost sharing (effective cap of ~$240 million), tax credit eligibility (40% ITC assumption), and further schedule delays.
  6. Eversource has now divested all offshore wind ownership interests and has no ongoing financial obligations on Sunrise Wind or South Fork Wind's material performance.
  7. Equity issuance plan of up to $1.3 billion is unchanged, and management says the deal is not expected to materially affect the FFO/Debt target of 14%-15% by 2025.

03—Questions

Frequently Asked Questions

  1. Why did the sale price fall by about $375 million from the original estimate?

    The reduction has two parts: about $150 million from lower capital spending between announcement and closing, and about $225 million from final deal terms, primarily tied to the delay in Revolution Wind's commercial operations date.

  2. How large is the financial hit from exiting offshore wind, and when will it be recorded?

    Eversource expects an aggregate net loss of approximately $520 million, to be recorded in Q3 2024. This is net of a ~$370 million gain on the Sunrise Wind sale and includes offsets for lower proceeds, higher construction costs, and post-closing adjustments. The estimate may change as Q3 results are finalized.

  3. Does Eversource still have exposure to Revolution Wind after closing?

    Yes. Final proceeds may be adjusted based on Revolution Wind's construction costs (with cost sharing up to an effective cap of about $240 million), its eventual commercial operation date, its federal investment tax credit eligibility, and its operating performance over four years after COD. Eversource's existing and certain additional credit support obligations for the project are expected to decline as construction completes.

  4. Will this transaction affect Eversource's equity plans or credit metrics?

    Management said the up-to-$1.3 billion equity issuance plan over several years is unchanged. It also expects the transaction not to have a material impact on its targeted FFO/Debt ratio of 14% to 15% by 2025.

  5. Does the offshore wind exit affect Eversource's regulated utility business?

    No. The filing states the sale of the offshore wind projects has no impact on Eversource's regulated entities. The company also retains its previously announced tax equity investment in South Fork Wind.

04—Continue

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