Eversource(ES) - 2022 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION ITEM 1. Financial Statements (Unaudited) Presents the unaudited condensed consolidated financial statements for Eversource Energy and its key subsidiaries EVERSOURCE ENERGY AND SUBSIDIARIES - Condensed Consolidated Financial Statements The company reported increased total assets, equity, and net income year-over-year Balance Sheet Summary | Metric | As of March 31, 2022 (Thousands of Dollars) | As of December 31, 2021 (Thousands of Dollars) | |:---|:---|:---| | Total Assets | $49,289,152 | $48,492,144 | | Total Current Liabilities | $5,601,309 | $5,847,039 | | Long-Term Debt | $17,912,462 | $17,023,577 | | Common Shareholders' Equity | $14,836,690 | $14,599,844 | Income Statement Summary | Metric | For the Three Months Ended March 31, 2022 (Thousands of Dollars) | For the Three Months Ended March 31, 2021 (Thousands of Dollars) | |:---|:---|:---| | Operating Revenues | $3,471,310 | $2,825,840 | | Operating Income | $663,055 | $585,568 | | Net Income Attributable to Common Shareholders | $443,446 | $366,143 | | Basic Earnings Per Common Share | $1.28 | $1.07 | | Diluted Earnings Per Common Share | $1.28 | $1.06 | Cash Flow Summary | Metric | For the Three Months Ended March 31, 2022 (Thousands of Dollars) | For the Three Months Ended March 31, 2021 (Thousands of Dollars) | |:---|:---|:---| | Net Cash Flows Provided by Operating Activities | $371,940 | $411,416 | | Net Cash Flows Used in Investing Activities | $(858,247) | $(704,517) | | Net Cash Flows Provided by Financing Activities | $429,888 | $203,755 | THE CONNECTICUT LIGHT AND POWER COMPANY (Unaudited) - Condensed Financial Statements CL&P reported increased total assets and net income, though operating cash flows declined Balance Sheet Summary | Metric | As of March 31, 2022 (Thousands of Dollars) | As of December 31, 2021 (Thousands of Dollars) | |:---|:---|:---| | Total Assets | $14,138,821 | $13,949,656 | | Total Current Liabilities | $1,540,941 | $1,148,004 | | Long-Term Debt | $3,815,662 | $4,215,379 | | Common Stockholder's Equity | $5,477,953 | $5,299,501 | Income Statement Summary | Metric | For the Three Months Ended March 31, 2022 (Thousands of Dollars) | For the Three Months Ended March 31, 2021 (Thousands of Dollars) | |:---|:---|:---| | Operating Revenues | $1,285,831 | $987,274 | | Operating Income | $222,523 | $165,435 | | Net Income | $152,977 | $98,398 | Cash Flow Summary | Metric | For the Three Months Ended March 31, 2022 (Thousands of Dollars) | For the Three Months Ended March 31, 2021 (Thousands of Dollars) | |:---|:---|:---| | Net Cash Flows Provided by Operating Activities | $135,283 | $156,193 | | Net Cash Flows Used in Investing Activities | $(204,997) | $(197,874) | | Net Cash Flows Provided by/(Used in) Financing Activities | $25,510 | $(39,840) | NSTAR ELECTRIC COMPANY AND SUBSIDIARY (Unaudited) - Condensed Consolidated Financial Statements NSTAR Electric reported increased assets and operating cash flows, while net income slightly decreased Balance Sheet Summary | Metric | As of March 31, 2022 (Thousands of Dollars) | As of December 31, 2021 (Thousands of Dollars) | |:---|:---|:---| | Total Assets | $14,037,723 | $13,799,946 | | Total Current Liabilities | $1,950,625 | $1,712,014 | | Long-Term Debt | $3,586,326 | $3,585,399 | | Common Stockholder's Equity | $4,993,321 | $4,973,019 | Income Statement Summary | Metric | For the Three Months Ended March 31, 2022 (Thousands of Dollars) | For the Three Months Ended March 31, 2021 (Thousands of Dollars) | |:---|:---|:---| | Operating Revenues | $863,176 | $737,043 | | Operating Income | $126,182 | $136,384 | | Net Income | $92,739 | $93,924 | Cash Flow Summary | Metric | For the Three Months Ended March 31, 2022 (Thousands of Dollars) | For the Three Months Ended March 31, 2021 (Thousands of Dollars) | |:---|:---|:---| | Net Cash Flows Provided by Operating Activities | $189,864 | $172,595 | | Net Cash Flows Used in Investing Activities | $(234,024) | $(215,461) | | Net Cash Flows Provided by Financing Activities | $44,125 | $42,829 | PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES (Unaudited) - Condensed Consolidated Financial Statements PSNH reported increased total assets and net income, though operating cash flows decreased Balance Sheet Summary | Metric | As of March 31, 2022 (Thousands of Dollars) | As of December 31, 2021 (Thousands of Dollars) | |:---|:---|:---| | Total Assets | $4,802,376 | $4,740,784 | | Total Current Liabilities | $609,743 | $546,928 | | Long-Term Debt | $1,164,010 | $1,163,833 | | Common Stockholder's Equity | $1,612,251 | $1,592,713 | Income Statement Summary | Metric | For the Three Months Ended March 31, 2022 (Thousands of Dollars) | For the Three Months Ended March 31, 2021 (Thousands of Dollars) | |:---|:---|:---| | Operating Revenues | $339,427 | $293,435 | | Operating Income | $64,420 | $66,650 | | Net Income | $45,586 | $44,676 | Cash Flow Summary | Metric | For the Three Months Ended March 31, 2022 (Thousands of Dollars) | For the Three Months Ended March 31, 2021 (Thousands of Dollars) | |:---|:---|:---| | Net Cash Flows Provided by Operating Activities | $58,083 | $74,901 | | Net Cash Flows Used in Investing Activities | $(107,323) | $(68,141) | | Net Cash Flows Provided by/(Used in) Financing Activities | $38,172 | $(18,327) | Combined Notes to Condensed Financial Statements (Unaudited) Details key accounting policies, regulatory matters, and the strategic review of its offshore wind portfolio - Eversource initiated a strategic review of its offshore wind investment portfolio on May 4, 2022, exploring a potential sale of its 50% interest in the Ørsted partnership[66][213] - CL&P, NSTAR Electric, and PSNH have plant closure and fuel storage cost obligations to the Yankee Companies, funded through litigation proceeds and wholesale rates[157] - The Yankee Companies filed a fifth lawsuit against the DOE seeking $120.4 million in damages for failure to accept spent nuclear fuel from 2017 to 2020[159] Total Regulatory Assets and Liabilities (Millions of Dollars) | Metric | As of March 31, 2022 | As of December 31, 2021 | |:---|:---|:---| | Total Regulatory Assets | $5,701.4 | $5,715.8 | | Total Regulatory Liabilities | $4,547.2 | $4,468.7 | Eversource EPS Components (Millions of Dollars, except per share amounts) | Metric | For the Three Months Ended March 31, 2022 | For the Three Months Ended March 31, 2021 | |:---|:---|:---| | Net Income Attributable to Common Shareholders | $443.4 | $366.1 | | Basic Weighted Average Common Shares Outstanding | 345,156,346 | 343,678,243 | | Diluted Weighted Average Common Shares Outstanding | 345,661,133 | 344,334,689 | | Basic EPS | $1.28 | $1.07 | | Diluted EPS | $1.28 | $1.06 | Eversource Operating Revenues by Segment (Millions of Dollars) | Segment | For the Three Months Ended March 31, 2022 | For the Three Months Ended March 31, 2021 | |:---|:---|:---| | Electric Distribution | $2,386.3 | $1,900.3 | | Natural Gas Distribution | $927.6 | $780.5 | | Electric Transmission | $435.2 | $400.6 | | Water Distribution | $48.5 | $46.4 | | Other | $383.5 | $343.0 | | Eliminations | $(709.8) | $(645.0) | | Total Operating Revenues | $3,471.3 | $2,825.8 | ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management analyzes financial condition, results of operations, liquidity, and key business developments Eversource Energy and Subsidiaries - Management's Discussion and Analysis The company reported strong Q1 2022 earnings, reaffirmed guidance, and initiated a strategic offshore wind review - Eversource reaffirmed its long-term EPS growth rate through 2026 in the upper half of the 5% to 7% range and its 2022 non-GAAP earnings guidance of $4.00 to $4.17 per share[209] - A strategic review of the offshore wind portfolio was initiated on May 4, 2022, to explore a potential sale of its 50% interest in the Ørsted partnership[213] - The South Fork Wind project entered the construction phase in early 2022 and is projected to be in-service by the end of 2023[215][266][267] Consolidated Earnings Overview (Millions of Dollars, Except Per Share Amounts) | Metric | Q1 2022 Amount | Q1 2022 Per Share | Q1 2021 Amount | Q1 2021 Per Share | |:---|:---|:---|:---|:---| | Net Income Attributable to Common Shareholders (GAAP) | $443.4 | $1.28 | $366.1 | $1.06 | | Regulated Companies (Non-GAAP) | $457.1 | $1.32 | $403.9 | $1.17 | | Eversource Parent and Other Companies (Non-GAAP) | $(8.4) | $(0.02) | $(7.5) | $(0.02) | | Non-GAAP Earnings | $448.7 | $1.30 | $396.4 | $1.15 | | CL&P Storm Performance Penalty (after-tax) | — | — | $(24.1) | $(0.07) | | Acquisition and Transition Costs (after-tax) | $(5.3) | $(0.02) | $(6.2) | $(0.02) | Key Liquidity Metrics (Millions of Dollars) | Metric | Q1 2022 | Q1 2021 | |:---|:---|:---| | Cash flows provided by operating activities | $371.9 | $411.4 | | Investments in property, plant and equipment | $764.6 | $689.0 | | Cash (as of period end) | $46.2 | $66.8 | | Available borrowing capacity (commercial paper) | $981.2 | N/A | | Long-term debt issued | $1,300.0 | N/A | | Long-term debt repaid | $770.0 | N/A | Eversource Operating Revenues and Expenses (Millions of Dollars) | Metric | 2022 | 2021 | Increase/ (Decrease) | |:---|:---|:---|:---| | Operating Revenues | $3,471.3 | $2,825.8 | $645.5 | | Purchased Power, Fuel and Transmission | $1,389.7 | $998.5 | $391.2 | | Operations and Maintenance | $472.4 | $465.5 | $6.9 | | Depreciation | $289.3 | $270.7 | $18.6 | | Amortization | $236.9 | $108.0 | $128.9 | | Energy Efficiency Programs | $199.5 | $188.1 | $11.4 | | Taxes Other Than Income Taxes | $220.4 | $209.4 | $11.0 | | Total Operating Expenses | $2,808.2 | $2,240.2 | $568.0 | | Operating Income | $663.1 | $585.6 | $77.5 | | Interest Expense | $153.3 | $137.8 | $15.5 | | Other Income, Net | $71.6 | $34.2 | $37.4 | | Income Before Income Tax Expense | $581.4 | $482.0 | $99.4 | | Income Tax Expense | $136.1 | $114.0 | $22.1 | | Net Income | $445.3 | $368.0 | $77.3 | | Net Income Attributable to Common Shareholders | $443.4 | $366.1 | $77.3 | The Connecticut Light and Power Company, NSTAR Electric Company and Subsidiary, and Public Service Company of New Hampshire and Subsidiaries - Management's Discussion and Analysis Subsidiary earnings varied, with CL&P showing strong growth while NSTAR Electric's earnings slightly decreased - CL&P's earnings increased $54.6 million (YoY) primarily due to the absence of a prior-year storm performance penalty[354] - NSTAR Electric's earnings decreased $1.2 million (YoY) mainly due to higher O&M and depreciation expenses, partially offset by a rate increase[355] - PSNH's earnings increased $0.9 million (YoY) primarily due to higher transmission earnings and a rate increase, offset by higher O&M expenses[356] Operating Revenues and Expenses for Subsidiaries (Millions of Dollars) | Metric | CL&P 2022 | CL&P 2021 | NSTAR Electric 2022 | NSTAR Electric 2021 | PSNH 2022 | PSNH 2021 | |:---|:---|:---|:---|:---|:---|:---| | Operating Revenues | $1,285.8 | $987.3 | $863.2 | $737.0 | $339.4 | $293.4 | | Purchased Power and Transmission | $523.5 | $373.3 | $313.7 | $226.5 | $125.8 | $91.6 | | Operations and Maintenance | $157.1 | $175.4 | $164.9 | $143.2 | $59.6 | $54.7 | | Depreciation | $87.3 | $83.4 | $89.0 | $82.8 | $31.3 | $29.5 | | Amortization of Regulatory Assets, Net | $169.7 | $62.8 | $29.3 | $18.4 | $26.8 | $18.5 | | Energy Efficiency Programs | $35.4 | $35.6 | $80.3 | $75.1 | $8.7 | $10.3 | | Taxes Other Than Income Taxes | $90.3 | $91.4 | $59.8 | $54.6 | $22.8 | $22.2 | | Total Operating Expenses | $1,063.3 | $821.9 | $737.0 | $600.6 | $275.0 | $226.8 | | Operating Income | $222.5 | $165.4 | $126.2 | $136.4 | $64.4 | $66.6 | | Interest Expense | $40.6 | $39.0 | $38.2 | $32.3 | $13.6 | $14.6 | | Other Income, Net | $19.6 | $4.9 | $29.2 | $16.8 | $7.5 | $4.2 | | Income Before Income Tax Expense | $201.5 | $131.3 | $117.2 | $120.9 | $58.3 | $56.2 | | Income Tax Expense | $48.5 | $32.9 | $24.5 | $27.0 | $12.7 | $11.5 | | Net Income | $153.0 | $98.4 | $92.7 | $93.9 | $45.6 | $44.7 | Operating Cash Flows for Subsidiaries (Millions of Dollars) | Company | Q1 2022 Operating Cash Flows | Q1 2021 Operating Cash Flows | |:---|:---|:---| | CL&P | $135.3 | $156.2 | | NSTAR Electric | $189.9 | $172.6 | | PSNH | $58.1 | $74.9 | ITEM 3. Quantitative and Qualitative Disclosures About Market Risk Discusses the company's exposure and management strategies for commodity, interest rate, and credit risks - Regulated companies pass the economic impacts of energy contracts on to customers, eliminating exposure to commodity price risk[363] - Interest rate risk is managed by maintaining a mix of fixed and variable rate long-term debt[364] - Credit risk is managed through established practices and collateral, with $92.7 million held from counterparties as of March 31, 2022[365][366] ITEM 4. Controls and Procedures Management confirms the effectiveness of disclosure controls and procedures as of the quarter's end - Management concluded that the disclosure controls and procedures of Eversource and its subsidiaries were effective as of March 31, 2022[368] - There have been no material changes in internal controls over financial reporting during the quarter ended March 31, 2022[369] PART II – OTHER INFORMATION ITEM 1. Legal Proceedings Reports no material changes or new legal proceedings since the last annual report - No material legal proceedings have been identified, and no material changes have occurred regarding previously disclosed proceedings since the 2021 Form 10-K[372] ITEM 1A. Risk Factors Confirms no material changes or additions to the risk factors disclosed in the 2021 Form 10-K - No additional risk factors have been identified, and no material changes have occurred regarding previously disclosed risks since the 2021 Form 10-K[373] ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds Discloses common share purchases related to the company's 401k plan matching contributions - The common shares purchased were related to matching contributions under the Eversource 401k Plan[374] Common Shares Purchased (March 2022) | Period | Total Number of Shares Purchased | Average Price Paid per Share | |:---|:---|:---| | March 1 - March 31, 2022 | 2,244 | $88.99 | | Total | 2,244 | $88.99 | ITEM 6. Exhibits Lists all exhibits filed with the report, including indentures, certifications, and XBRL data - Exhibits include supplemental indentures and CEO/CFO certifications under Sarbanes-Oxley Act Sections 302 and 906[377] - The filing also includes Inline XBRL documents for Eversource and its subsidiaries[377] SIGNATURES Contains the authorized signatures confirming the filing of the report for all entities - The report is signed by the Vice President, Controller and Chief Accounting Officer on behalf of Eversource and its subsidiaries[381][383][385][386]