Eversource Energy Reports Full-Year Results
- Eversource Energy reported a full-year 2023 loss of $(442.2) million compared to earnings of $1,404.9 million in 2022.
- The company also reported a fourth quarter 2023 loss of $(1,288.5) million compared to earnings of $320.2 million in fourth quarter 2022.
- Eversource plans to exit its offshore wind business with the sale of various assets to Global Infrastructure Partners and Ørsted.
- The company is exploring the potential sale of its water distribution business to reduce equity needs and improve regulatory diversity.
- Eversource Energy projects 2024 non-GAAP earnings of between $4.50 per share and $4.67 per share, with a compound annual earnings per share growth rate of 5 to 7 percent through 2028.
- The company aims to focus on core electric and natural gas distribution and transmission businesses for future growth and value creation.
- None.
Insights
Eversource Energy's reported full-year 2023 loss and the significant impairment charges related to its offshore wind investment are of paramount interest to stakeholders. The impairment charges, accounting for a substantial deviation from the previous year's profit, suggest a major reassessment of the value of this investment. This could indicate broader challenges in the offshore wind sector, such as regulatory hurdles, technological issues, or market competition that may have broader implications for companies with similar investments.
Furthermore, the potential sale of the water distribution business segment is a strategic move that could affect the company's financial structure. The divestiture of this segment, which has been earnings accretive, may improve Eversource's regulatory diversity and reduce equity needs, potentially leading to a more focused investment strategy and possibly better financial metrics. This could be of interest to investors who prefer companies with a more streamlined business model.
The company's projected earnings growth and planned equity issuances provide a glimpse into its future financial planning. The compound annual growth rate projection of 5 to 7 percent through 2028 suggests a stable outlook, which may be reassuring for long-term investors. However, the equity issuances could dilute existing shareholders' stakes, which is a crucial factor for valuation considerations.
The announcement of Eversource Energy's exit from the offshore wind business and the exploration of the sale of its water distribution business could signal a shift in the company's market strategy. By focusing on its core electric and natural gas distribution and transmission businesses, Eversource is aligning with the growing demand for cleaner energy and modernized infrastructure. This strategic realignment may enhance the company's competitive position in the energy market, particularly in New England, where it is a major player.
The operational and financial metrics reported, such as the earnings from the transmission and distribution segments, indicate the company's underlying strength in its core business areas. These segments' performance, with increased earnings despite the overall loss, suggests resilience and the potential for stable revenue streams. The increased investment in the electric transmission system, leading to higher earnings, reflects a commitment to capital improvements that could yield long-term benefits.
The energy sector, particularly the transition to clean energy, is fraught with both opportunities and risks. Eversource Energy's decision to exit the offshore wind business and focus on its core distribution and transmission operations reflects the complex dynamics of the energy transition. It is essential to consider the operational excellence and customer commitment that Eversource has emphasized in its water distribution business, as these qualities are critical in maintaining service reliability and customer satisfaction in the utility sector.
The company's continued investment in transmission and distribution infrastructure to support a clean energy future is indicative of the sector's trend towards sustainability. However, it is also important to consider the regulatory environment, especially in Connecticut, as it can significantly impact the feasibility and profitability of such investments. The company's engagement with stakeholders to improve this environment is a proactive approach that may yield positive regulatory outcomes.
Announces Exploration of Sale of Water Distribution Business
Results for the full year and the fourth quarter of 2023 include after-tax impairment charges of
2023 Non-GAAP EPS of
Excluding the charges noted above, Eversource Energy reported non-GAAP earnings of
Full Exit of Offshore Wind Business
With the announcement today of the sale of South Fork Wind and Revolution Wind to Global Infrastructure Partners, the agreement reached with Ørsted for the sale of Sunrise Wind and the completed sale of the uncommitted lease area last year, we now have the pathway to a full exit of Eversource’s offshore wind business. Eversource will continue to hold its existing tax equity investment in South Fork Wind.
Potential Sale of Water Distribution Business
Eversource’s water distribution business segment comprises a set of valuable, well-performing and well managed assets. Although the business has been earnings accretive to Eversource, a potential sale of the water business is an opportunity to reduce equity needs and improve regulatory diversity. With its
“Aquarion has been a meaningful investment to Eversource, and I appreciate the hard work and dedication of the Aquarion team and its leadership. The company is well recognized and respected for its operational excellence in the water distribution business,” said Joe Nolan, Eversource Energy Chairman, President and Chief Executive Officer. “The Aquarion team truly shares the Eversource values of customer commitment and stewardship of the environment.”
Eversource Energy is focused on building the necessary transmission and distribution infrastructure for the clean energy future that its customers and states desire. We continue to work constructively with stakeholders to improve the regulatory environment in
Also today, Eversource Energy projected 2024 non-GAAP earnings of between
“Although we experienced great challenges over the past year, our core utility operations completed an excellent year owing to the dedication of our 10,000 employees in providing safe and reliable service to our 4.4 million customers,” said Nolan. “Our focus remains on improving our already strong service metrics, making the required investments to modernize the region’s energy delivery system and enabling our clean energy future while enhancing our balance sheet condition.”
Electric Transmission
Eversource Energy’s transmission segment earned
Electric Distribution
Eversource Energy’s electric distribution segment earned
Natural Gas Distribution
Eversource Energy’s natural gas distribution segment earned
Water Distribution
Eversource Energy’s water distribution segment earned
Eversource Parent and Other Companies
Eversource Energy parent and other companies earned
The following table reconciles 2023 and 2022 fourth quarter and full-year GAAP earnings per share:
|
|
Fourth Quarter |
Full Year |
2022 |
Reported EPS |
|
|
|
Higher electric transmission segment earnings in 2023, net of dilution |
0.07 |
0.12 |
|
At the electric distribution segment, higher revenues in 2023, partially offset by higher O&M, interest expense, property taxes, and depreciation, net of dilution |
0.02 |
0.03 |
|
At the natural gas distribution segment in 2023, higher depreciation, interest expense, and a higher effective tax rate, partially offset by higher revenues, net of dilution |
(0.03) |
(0.03) |
|
At the water distribution segment, higher depreciation, O&M and interest expense |
(0.01) |
(0.02) |
|
At Parent and Other companies in 2023, a lower effective tax rate, partially offset by higher interest expense |
(0.02) |
0.15 |
|
Impairment charges of Offshore Wind Investment |
(4.63) |
(5.58) |
|
Lower other non-recurring charges |
- |
0.02 |
2023 |
Reported EPS |
|
|
Three months ended:
(in millions, except EPS) |
December 31,
|
December 31,
|
Increase/
|
2023 EPS1 |
Electric Transmission |
|
|
|
|
Electric Distribution |
103.7 |
97.9 |
5.8 |
0.30 |
Natural Gas Distribution |
76.5 |
87.1 |
(10.6) |
0.22 |
Water Distribution |
5.7 |
7.4 |
(1.7) |
0.01 |
Eversource Parent and Other Companies1 |
(19.4) |
(12.9) |
(6.5) |
(0.05) |
Impairment of Offshore Wind Investment |
(1,622.0) |
- |
(1,622.0) |
(4.63) |
Reported (Loss)/Earnings |
|
|
|
|
Full year ended:
(in millions, except EPS) |
December 31,
|
December 31,
|
Increase/
|
2023 EPS1 |
Electric Transmission |
|
|
|
|
Electric Distribution |
608.0 |
592.8 |
15.2 |
1.74 |
Natural Gas Distribution |
224.8 |
234.2 |
(9.4) |
0.64 |
Water Distribution |
33.1 |
36.8 |
(3.7) |
0.09 |
Eversource Parent and Other Companies1 |
8.4 |
(40.5) |
48.9 |
0.03 |
Transaction and other charges |
(6.9) |
(15.0) |
8.1 |
(0.02) |
Impairments of Offshore Wind Investment |
(1,953.0) |
- |
(1,953.0) |
(5.58) |
Reported (Loss)/Earnings |
|
|
|
|
Eversource Energy has approximately 350 million common shares outstanding and operates New England’s largest energy delivery system. It serves approximately 4.4 million electric, natural gas and water customers in
Note: Eversource Energy will webcast a conference call with senior management on February 14, 2024, beginning at 9 a.m. Eastern Time. The webcast and associated slides can be accessed through Eversource Energy’s website at www.eversource.com. |
1 All per-share amounts in this news release are reported on a diluted basis. The only common equity securities that are publicly traded are common shares of Eversource Energy. The earnings discussion includes financial measures that are not recognized under generally accepted accounting principles (non-GAAP) referencing earnings and EPS excluding the impairment charges for the offshore wind investments and certain transaction, transition and other charges. EPS by business is also a non-GAAP financial measure and is calculated by dividing the net income attributable to common shareholders of each business by the weighted average diluted Eversource Energy common shares outstanding for the period. The earnings and EPS of each business do not represent a direct legal interest in the assets and liabilities of such business, but rather represent a direct interest in Eversource Energy’s assets and liabilities as a whole. Eversource Energy uses these non-GAAP financial measures to evaluate and provide details of earnings results by business and to more fully compare and explain results without including these items. This information is among the primary indicators management uses as a basis for evaluating performance and planning and forecasting of future periods. Management believes the impacts of the impairment charges for the offshore wind investments and transaction, transition and other charges are not indicative of Eversource Energy’s ongoing costs and performance. Management views these charges as not directly related to the ongoing operations of the business and therefore not an indicator of baseline operating performance. Due to the nature and significance of the effect of these items on net income attributable to common shareholders and EPS, management believes that the non-GAAP presentation is a more meaningful representation of Eversource Energy’s financial performance and provides additional and useful information to readers in analyzing historical and future performance of the business. These non-GAAP financial measures should not be considered as alternatives to Eversource Energy’s reported net income attributable to common shareholders or EPS determined in accordance with GAAP as indicators of Eversource Energy’s operating performance. This document includes statements concerning Eversource Energy’s expectations, beliefs, plans, objectives, goals, strategies, assumptions of future events, future financial performance or growth and other statements that are not historical facts. These statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, readers can identify these forward-looking statements through the use of words or phrases such as “estimate,” “expect,” “anticipate,” “intend,” “plan,” “project,” “believe,” “forecast,” “should,” “could” and other similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results or outcomes to differ materially from those included in the forward-looking statements. Forward-looking statements are based on the current expectations, estimates, assumptions or projections of management and are not guarantees of future performance. These expectations, estimates, assumptions or projections may vary materially from actual results. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the following important factors that may cause our actual results or outcomes to differ materially from those contained in our forward-looking statements, including, but not limited to: cyberattacks or breaches, including those resulting in the compromise of the confidentiality of our proprietary information and the personal information of our customers; our ability to complete the offshore wind investments sales process on the timelines, terms and pricing we expect; if we and the counterparties are unable to satisfy all closing conditions and consummate the purchase and sale transactions with respect to our offshore wind assets; if Sunrise Wind does not win in the OREC contract solicitation process; if we are unable to qualify for investment tax credits related to these projects; if we experience variability in the projected construction costs of the offshore wind projects, if there is a deterioration of market conditions in the offshore wind industry; and if the projects do not commence operation as scheduled or within budget or are not completed, disruptions in the capital markets or other events that make our access to necessary capital more difficult or costly; changes in economic conditions, including impact on interest rates, tax policies, and customer demand and payment ability; ability or inability to commence and complete our major strategic development projects and opportunities; acts of war or terrorism, physical attacks or grid disturbances that may damage and disrupt our electric transmission and electric, natural gas, and water distribution systems; actions or inaction of local, state and federal regulatory, public policy and taxing bodies; substandard performance of third-party suppliers and service providers; fluctuations in weather patterns, including extreme weather due to climate change; changes in business conditions, which could include disruptive technology or development of alternative energy sources related to our current or future business model; contamination of, or disruption in, our water supplies; changes in levels or timing of capital expenditures; changes in laws, regulations or regulatory policy, including compliance with environmental laws and regulations; changes in accounting standards and financial reporting regulations; actions of rating agencies; and other presently unknown or unforeseen factors.
Other risk factors are detailed in Eversource Energy’s reports filed with the Securities and Exchange Commission (SEC). They are updated as necessary and available on Eversource Energy’s website at www.eversource.com and on the SEC’s website at www.sec.gov. All such factors are difficult to predict and contain uncertainties that may materially affect Eversource Energy’s actual results, many of which are beyond our control. You should not place undue reliance on the forward-looking statements, as each speaks only as of the date on which such statement is made, and, except as required by federal securities laws, Eversource Energy undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.
EVERSOURCE ENERGY AND SUBSIDIARIES
|
||||||
|
For the Three Months Ended December 31, |
|||||
(Thousands of Dollars, Except Share Information) |
|
2023 |
|
|
|
2022 |
|
|
|
|
|||
Operating Revenues |
$ |
2,694,238 |
|
|
$ |
3,029,740 |
|
|
|
|
|||
Operating Expenses: |
|
|
|
|||
Purchased Power, Purchased Natural Gas and Transmission |
|
935,329 |
|
|
|
1,295,796 |
Operations and Maintenance |
|
513,141 |
|
|
|
486,431 |
Depreciation |
|
343,363 |
|
|
|
308,535 |
Amortization |
|
(51,657 |
) |
|
|
30,248 |
Energy Efficiency Programs |
|
160,145 |
|
|
|
159,342 |
Taxes Other Than Income Taxes |
|
235,370 |
|
|
|
227,150 |
Total Operating Expenses |
|
2,135,691 |
|
|
|
2,507,502 |
Operating Income |
|
558,547 |
|
|
|
522,238 |
Interest Expense |
|
231,300 |
|
|
|
186,765 |
Impairments of Offshore Wind Investments |
|
1,766,000 |
|
|
|
— |
Other Income, Net |
|
85,090 |
|
|
|
90,834 |
(Loss)/Income Before Income Tax Expense |
|
(1,353,663 |
) |
|
|
426,307 |
Income Tax (Benefit)/Expense |
|
(67,058 |
) |
|
|
104,269 |
Net (Loss)/Income |
|
(1,286,605 |
) |
|
|
322,038 |
Net Income Attributable to Noncontrolling Interests |
|
1,880 |
|
|
|
1,880 |
Net (Loss)/Income Attributable to Common Shareholders |
$ |
(1,288,485 |
) |
|
$ |
320,158 |
|
|
|
|
|||
Basic and Diluted (Loss)/Earnings Per Common Share |
$ |
(3.68 |
) |
|
$ |
0.92 |
|
|
|
|
|||
Weighted Average Common Shares Outstanding: |
|
|
|
|||
Basic |
|
349,938,891 |
|
|
|
348,786,307 |
Diluted |
|
350,167,959 |
|
|
|
349,267,768 |
The data contained in this report is preliminary and is unaudited. This report is being submitted for the sole purpose of providing information to shareholders about Eversource Energy and Subsidiaries and is not a representation, prospectus, or intended for use in connection with any purchase or sale of securities.
EVERSOURCE ENERGY AND SUBSIDIARIES
|
|||||||||
|
For the Years Ended December 31, |
||||||||
(Thousands of Dollars, Except Share Information) |
|
2023 |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
||||
Operating Revenues |
$ |
11,910,705 |
|
|
$ |
12,289,336 |
|
$ |
9,863,085 |
|
|
|
|
|
|
||||
Operating Expenses: |
|
|
|
|
|
||||
Purchased Power, Purchased Natural Gas and Transmission |
|
5,168,241 |
|
|
|
5,014,074 |
|
|
3,372,344 |
Operations and Maintenance |
|
1,895,703 |
|
|
|
1,865,328 |
|
|
1,739,685 |
Depreciation |
|
1,305,840 |
|
|
|
1,194,246 |
|
|
1,103,008 |
Amortization |
|
(490,117 |
) |
|
|
448,892 |
|
|
231,965 |
Energy Efficiency Programs |
|
691,344 |
|
|
|
658,051 |
|
|
592,775 |
Taxes Other Than Income Taxes |
|
940,359 |
|
|
|
910,591 |
|
|
829,987 |
Total Operating Expenses |
|
9,511,370 |
|
|
|
10,091,182 |
|
|
7,869,764 |
Operating Income |
|
2,399,335 |
|
|
|
2,198,154 |
|
|
1,993,321 |
Interest Expense |
|
855,441 |
|
|
|
678,274 |
|
|
582,334 |
Impairments of Offshore Wind Investments |
|
2,167,000 |
|
|
|
— |
|
|
— |
Other Income, Net |
|
348,069 |
|
|
|
346,088 |
|
|
161,282 |
(Loss)/Income Before Income Tax Expense |
|
(275,037 |
) |
|
|
1,865,968 |
|
|
1,572,269 |
Income Tax Expense |
|
159,684 |
|
|
|
453,574 |
|
|
344,223 |
Net (Loss)/Income |
|
(434,721 |
) |
|
|
1,412,394 |
|
|
1,228,046 |
Net Income Attributable to Noncontrolling Interests |
|
7,519 |
|
|
|
7,519 |
|
|
7,519 |
Net (Loss)/Income Attributable to Common Shareholders |
$ |
(442,240 |
) |
|
$ |
1,404,875 |
|
$ |
1,220,527 |
|
|
|
|
|
|
||||
Basic (Loss)/Earnings Per Common Share |
$ |
(1.27 |
) |
|
$ |
4.05 |
|
$ |
3.55 |
|
|
|
|
|
|
||||
Diluted (Loss)/Earnings Per Common Share |
$ |
(1.26 |
) |
|
$ |
4.05 |
|
$ |
3.54 |
|
|
|
|
|
|
||||
Weighted Average Common Shares Outstanding: |
|
|
|
|
|
||||
Basic |
|
349,580,638 |
|
|
|
346,783,444 |
|
|
343,972,926 |
Diluted |
|
349,840,481 |
|
|
|
347,246,768 |
|
|
344,631,056 |
The data contained in this report is preliminary and is unaudited. This report is being submitted for the sole purpose of providing information to shareholders about Eversource Energy and Subsidiaries and is not a representation, prospectus, or intended for use in connection with any purchase or sale of securities.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240212627310/en/
Robert S. Becker
(860) 665-3249
Source: Eversource Energy
FAQ
What was Eversource Energy's full-year 2023 loss?
What is Eversource Energy's projected 2024 non-GAAP earnings range?
What business segment is Eversource Energy exploring the sale of?
How does Eversource Energy plan to exit its offshore wind business?
What is Eversource Energy's compound annual earnings per share growth rate through 2028?
