Central Vermont Public Service (NYSE: CV) reported consolidated
2006 earnings of $18.4 million, or $1.66 per diluted share of
common stock. This compares to 2005 earnings of $6.3 million, or 48
cents per diluted share of common stock, which included a $21.8
million pre-tax charge to earnings, or 91 cents per diluted share
of common stock, related to the 2005 Rate Order. For the fourth
quarter of 2006, CV reported consolidated earnings of $6.3 million,
or 59 cents per diluted share of common stock. This compares to
fourth-quarter 2005 earnings of $6.2 million, or 48 cents per
diluted share of common stock. Earnings from continuing operations
were $18.1 million in 2006, or $1.64 per diluted share of common
stock, and $6.0 million, or 57 cents per diluted share of common
stock in the fourth quarter. This compares to earnings from
continuing operations of $1.4 million in 2005, or 8 cents per
diluted share of common stock, and $0.8 million, or 5 cents per
diluted share of common stock, in the fourth quarter. Earnings from
discontinued operations are related to Catamount Energy Corporation
("Catamount"), which was sold in December 2005 as described in a
separately captioned section below. "We continue to make steady
progress toward restoring the company's financial strength,
supported by the Vermont Public Service Board's approval of our
4.07 percent rate increase, which became effective January 1,
2007," said CV President and CEO Bob Young. "We believe that our
long-term strategy to increase capital investments will result in
improved service and reliability for customers and will drive
earnings growth for our shareholders," he said. Quarterly
Performance Summary - 2006 versus 2005 Utility Business -
continuing operations Operating revenues decreased $1.0 million in
the fourth quarter compared to 2005, as a result of less excess
power available for resale and milder winter weather. Purchased
power costs decreased $8.9 million largely due to the high cost of
replacement energy during the fourth-quarter 2005 scheduled
refueling outage at the Vermont Yankee plant, with no comparable
purchases for the same period in 2006. Other operating costs
decreased $0.3 million resulting from storm restoration costs that
were higher in 2005 due to a major storm and lower fuel costs for
some of our joint-owned generating units. These were partially
offset by higher employee-related costs and bad debt expense
associated with a customer bankruptcy in the fourth quarter of
2006. Our equity investment in Vermont Transco LLC ("Transco"), a
Vermont limited liability company, added $1.2 million pre-tax to
fourth-quarter 2006 earnings. Transco was formed in June 2006 by
Vermont Electric Power Company Inc. and its owners, including CV,
for construction, maintenance and operation of transmission
facilities in Vermont. Year-To-Date Performance Summary - 2006
versus 2005 Utility Business - continuing operations Operating
revenues increased $14.4 million resulting from the sale of excess
power into the wholesale energy market, partially offset by lower
retail sales revenue due to milder weather compared to 2005 and a
2.75 percent rate reduction that began in April 2005. The excess
power resulted primarily from CV's share of increased Vermont
Yankee plant output including uprate power, increased deliveries
under the long-term contract with Hydro-Quebec and increased output
from independent power producers and CV's own hydro facilities.
Additionally, 2005 operating revenues included a first-quarter $6.2
million 2005 Rate Order-required customer refund. Purchased power
costs decreased $2.2 million compared to 2005 as a result of fewer
short-term purchases due to excess power from the sources described
above, and the high cost of replacement energy for the
fourth-quarter 2005 Vermont Yankee scheduled refueling outage. The
reduction in short-term purchases was largely offset by the cost to
purchase the excess power. Purchased power costs in 2005 also
included first quarter 2005 Rate Order-required charges of $2.5
million. Other operating costs decreased $7.0 million compared to
2005, which included first-quarter 2005 Rate Order-required charges
of $10.7 million. The remaining $3.7 million increase included
higher costs associated with employee benefits (pension, medical,
long-term disability, and incentive and stock-based compensation),
external audit fees, bad debt expense and other costs. These were
partially offset by the favorable impact of regulatory
amortizations that began in April 2005, lower transmission expense,
and decreased reserves for estimated environmental remediation
costs. Our equity investment in Transco added $1.5 million pre-tax
to 2006 earnings. Also, in 2005 an investment impairment and
realized losses of $0.6 million pre-tax contributed favorably when
comparing 2006 to 2005. 2005 Rate Order: The 2005 Rate Order
resulted in a $21.8 million pre-tax charge to utility earnings in
the first quarter of 2005. The primary components of the charge
included: 1) a revised calculation of overearnings for the period
2001 - 2003; 2) application of the gain resulting from the
termination of the power contract with Connecticut Valley Electric
Company Inc. to reduce costs; 3) a customer refund for the period
April 7, 2004 through March 31, 2005; and 4) amortization of costs
and other adjustments. Income Taxes: Income taxes fluctuate with
the level of pre-tax earnings in relation to permanent differences,
tax credits, tax settlements and changes in valuation allowances
for the periods. Taxes on income in 2005 reflect the effect of
losses resulting from the 2005 Rate Order-required charges in the
first quarter of 2005. Non-utility Business - continuing operations
CV's non-regulated wholly owned subsidiary Catamount Resources
Corporation ("CRC") owns Eversant Corporation and owned Catamount
until it was sold in December 2005. CRC's earnings were $0.8
million in 2006 and $0.1 million in 2005. The increase is primarily
related to interest earned on cash proceeds from the Catamount
sale. Discontinued Operations - 2006 versus 2005 Earnings from
discontinued operations were $0.3 million, or 2 cents per diluted
share of common stock, for the fourth quarter and year end 2006.
These earnings resulted from a true-up of federal income taxes
related to the 2005 gain on the sale of Catamount. This compares to
earnings from discontinued operations of $4.9 million in 2005, or
40 cents per diluted share of common stock, and $5.4 million, or 43
cents per diluted share of common stock, in the quarter. Both
periods in 2005 included a $5.6 million after-tax gain on the
Catamount sale. 2006 Stock Buyback Earnings per share reflect the
impact of the April 2006 stock buyback. CV purchased 2.2 million
shares of its common stock for $22.50 per share using cash proceeds
from the Dec. 20, 2005 sale of Catamount. The stock buyback
decreased common shares outstanding by about 18 percent, resulting
in a favorable impact of 22 cents per diluted common share for the
year and 7 cents in the fourth quarter when comparing 2006 to 2005.
2007 Financial Guidance As previously disclosed, CV anticipates
2007 earnings in the range of $1.60 to $1.70 per diluted share. As
part of CV's 2006 rate agreement approved by the Vermont Public
Service Board, the company's allowed rate of return is capped at
10.75 percent for 2007, which equates to approximately $1.70 per
diluted share. Webcast CV will host an earnings teleconference and
webcast on March 14, 2007 beginning at 2 p.m. At that time, CV
President and CEO Robert Young and CV Chief Financial Officer
Pamela Keefe will discuss the company's financial results, as well
as progress made toward achieving its long-term strategy.
Interested parties may listen to the conference call live on the
Internet by selecting the "Year-end 2006 Central Vermont Public
Service Earnings Conference Call" link on the company's homepage at
www.cvps.com. An audio archive of the call will be available March
14 at approximately 4 p.m. EST at the same location or by dialing
1-888-286-8010 and entering passcode 66213152. About CV CV is
Vermont's largest electric utility, serving more than 155,000
customers statewide. CV's non-regulated subsidiary, Catamount
Resources Corporation, sells and rents electric water heaters
through a subsidiary, SmartEnergy Water Heating Services.
Forward-Looking Statements Statements contained in this report that
are not historical fact are forward-looking statements within the
meaning of the safe-harbor provisions of the Private Securities
Litigation Reform Act of 1995. Statements made that are not
historical facts are forward-looking and, accordingly, involve
estimates, assumptions, risks and uncertainties that could cause
actual results or outcomes to differ materially from those
expressed in the forward-looking statements. Actual results will
depend, among other things, upon the actions of regulators,
performance of the Vermont Yankee nuclear power plant, effects of
and changes in weather and economic conditions, volatility in
wholesale electric markets and our ability to maintain our current
credit ratings. These and other risk factors are detailed in CV's
Securities and Exchange Commission filings. CV cannot predict the
outcome of any of these matters; accordingly, there can be no
assurance that such indicated results will be realized. Readers are
cautioned not to place undue reliance on these forward-looking
statements that speak only as of the date of this press release. CV
does not undertake any obligation to publicly release any revision
to these forward-looking statements to reflect events or
circumstances after the date of this press release. Central Vermont
Public Service Corporation Reconciliations of Earnings per Diluted
Share Fourth-quarter 2006 vs. Fourth-quarter 2005: 2005 earnings
per diluted share $.48� � Year-over-Year Effects on Earnings: Lower
purchased power costs .48� Higher equity in earnings from
Transco�������������� .09� Lower operating revenue (.05) Other
variances (.07) Discontinued operations (.41) Impact of 2006 stock
buyback .07� 2006 Earnings per diluted share $.59� Twelve months
2006 vs. twelve months 2005: 2005 earnings per diluted share $.48�
� Year-over-Year Effects on Earnings: Higher resale revenue .60�
Higher equity in earnings from Transco .10� Decrease in
environmental reserves .09� Higher CRC earnings .06� Other
variances (a) (.03) Lower retail sales (a) (.17) Higher
employee-related costs (.22) Discontinued operations (.38) Net
impact of first-quarter 2005 Rate Order charge .91� Impact of 2006
stock buyback .22� 2006 Earnings per diluted share $1.66� � (a)
Excludes 2005 Rate Order charges which is listed separately. �
Central Vermont Public Service Corporation - ConsolidatedEarnings
Release (unaudited)(dollars in thousands, except per share amounts)
� Three Months Ended December 31, Twelve Months Ended December 31,
2006� 2005� 2006� 2005� Utility Operating Data Retail sales (mWh)
581,672� 590,536� 2,284,465� 2,300,102� � Operating revenues:
Retail sales $68,031� $68,284� $264,772� $267,992� Customer refund
-� -� -� (6,194) Resale sales 14,556� 15,175� 53,149� 41,457� Other
operating revenue 1,992� 2,085� 7,817� 8,104� Total operating
revenue $84,579� $85,544� $325,738� $311,359� � Operating expenses:
Purchased power $42,799� $51,692� $169,448� $171,643� Other 32,706�
32,999� 126,398� 133,412� Income tax expense (benefit) 2,397�
(1,114) 8,569� (2,264) Total operating expense $77,902� $83,577�
$304,415� $302,791� � Net Income and Common Stock Income from
continuing operations $6,005� $802� $18,101� $1,410� Income from
discontinued operations 251� 5,360� 251� 4,936� Net Income 6,256�
6,162� $18,352� 6,346� Preferred stock dividend requirements 92�
92� 368� 368� Earnings available for common stock $6,164� $6,070�
$17,984� $5,978� � Weighted average shares of common stock
outstanding: � Basic 10,353,568� 12,280,635� 10,756,027�
12,258,508� Diluted 10,443,931� 12,352,381� 10,827,182� 12,366,315�
� Earnings per share of common stock - basic: Continuing operations
$.58� $.06� $1.65� $.09� Discontinued operations .02� .43� .02�
.40� Basic earnings per share $.60� $.49� $1.67� $.49� � Earnings
per share of common stock - diluted: � Continuing operations $.57�
$.05� $1.64� $.08� Discontinued operations .02� .43� .02� .40�
Diluted earnings per share $.59� $.48� $1.66� $.48� � � � �
Dividends declared per share of common stock $.00� $.23� $.69�
$1.15� � Catamount Resources Corporation Earnings per basic and
diluted share of common stock $.01� $.01� $.07� $.01�
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