Central Vermont Public Service (NYSE: CV)
-- Year-to-date earnings of $16.4 million, or $1.55 per diluted share,
up 56 cents from last year
-- Third-quarter earnings of $6.5 million, or 61 cents per diluted share,
up 20 cents from last year
-- Utility operating income up $5.9 million for the year and $2.2 million
for the quarter
-- Increased resale revenues and earnings from affiliates contributing to
favorable results
-- Retail rate increase of 2.3 percent effective Feb. 1, 2008
-- Reaffirming earnings guidance for 2008 of $1.50 to $1.60 per
diluted share
Central Vermont Public Service (NYSE: CV) reported third-quarter
2008 consolidated earnings of $6.5 million, or 61 cents per diluted
share of common stock, up from $4.3 million, or 41 cents per
diluted share of common stock, for the same period last year.
CV reported consolidated earnings of $16.4 million, or $1.55 per
diluted share of common stock, for the first nine months of 2008,
up from $10.5 million, or 99 cents per diluted share of common
stock, for the same period last year.
"Thanks to strong sales of our excess power supply, investments
in Vermont's high-voltage transmission system, and a continued
focus on controlling costs, our third-quarter financial performance
helps position us to meet our 2008 goals," President Bob Young
said.
"Our Alternative Regulation plan has been approved by the Public
Service Board for implementation in 2009," Young said. "The board
will set base rates in the near future. The implementation of this
plan will provide more timely adjustments to power and O&M
costs and send customers clearer price signals, which will better
serve the interests of customers and shareholders alike."
Third-quarter 2008 results compared to 2007
Operating revenues increased $4.6 million, including $2.7
million in resale revenues, $1.3 million in retail revenues and
$0.6 million in other operating revenues. Resale revenues increased
due to higher average prices and an increase in excess power
available for resale. We had more power available for resale
because retail sales volume decreased almost 1.6 percent during the
period and because of increased output from our owned and jointly
owned generating units. Retail revenues increased during the period
because of the 2.3 percent retail rate increase effective February
1, 2008 and customer usage mix, partially offset by the unfavorable
impact of reduced volume. Other operating revenues increased due to
sales of transmission rights, increased revenue from other
third-party work and a 2007 provision for refund to retail
customers.
Purchased power expenses increased $2.1 million due to increased
output from the Vermont Yankee plant and from Independent Power
Producers, partially offset by decreased short-term purchases due
to excess power available to support load requirements. Despite
overall higher output, the Vermont Yankee plant reduced production
levels, referred to as a derate, two times during the third quarter
of 2008, compared to a derate and unplanned outage during the same
period in 2007. Independent Power Producers consist primarily of
hydro facilities and output levels are dependent on weather
conditions.
Other operating expenses decreased $1.2 million.
Transmission-related expenses decreased $0.6 million due to higher
reimbursements under the New England transmission tariff, partially
offset by higher rates under the tariff. Maintenance expenses
decreased $1 million due to lower service restoration costs
resulting from mild storm activity in the third quarter of 2008
versus two large storms during the same period in 2007. Other items
included regulatory amortizations.
Equity in earnings from affiliates increased $2.5 million
largely as a result of the $53 million investment that we made in
Vermont Transco LLC ("Transco") in December 2007. Interest expense
increased $0.8 million largely due to the $60 million first
mortgage bonds issued in May 2008. Also, a $0.6 million decrease in
Other, net was due to a decline in the cash surrender value of
variable life insurance policies held in trust to fund supplemental
retirement plans.
Year-to-Date 2008 results compared to 2007
Operating revenues increased $16.2 million, including $12.7
million in resale revenues, $1.6 million in retail revenues and
$1.9 million in other operating revenues. Resale revenues increased
due to higher average prices and an increase in excess power
available for resale. We had more power available for resale
because retail sales volume decreased almost 2.9 percent, while
output from Vermont Yankee, Independent Power Producers and our
owned and jointly owned generating units increased compared to
2007. The increase in retail revenues included $4.2 million from
the 2.3 percent rate increase and $2.6 million from higher average
unit prices due to customer usage mix, offset by $5.2 million due
to decreased sales volume. The decrease reflects lower average
usage resulting from a slowing economy and energy conservation,
including the effect of the loss of three industrial customers due
to plant closures. Other operating revenues increased for the same
reasons described above.
Purchased power expenses increased $4.2 million due to increased
purchases of output from the Vermont Yankee plant and Independent
Power Producers, partially offset by decreased short-term purchases
and deliveries from Hydro-Quebec. Vermont Yankee operated at nearly
full capacity during 2008 with the exception of a few derates as
described above, while the plant had a scheduled refueling outage
in the second quarter and a derate and unplanned outage in the
third quarter of 2007.
Other operating expenses increased $4.2 million.
Transmission-related expenses increased $4.3 million due to higher
rates under the New England transmission tariff and costs from
Vermont Transco LLC ("Transco") for its capital projects,
administrative and general costs. Maintenance expenses decreased
$2.2 million due to lower service restoration costs. Other items
are the same as those described above.
Other factors impacting 2008 results compared to 2007 include a
$7.4 million increase in equity in earnings from affiliates, a $2.2
million decrease in other, net and a $2.2 million increase in
interest expense. The reasons are the same as those described
above.
2008 Financial Guidance
CV reaffirms its previously issued 2008 earnings guidance in the
range of $1.50 to $1.60 per diluted share. As part of rate
agreements approved by the Vermont Public Service Board, the
company's allowed rate of return was capped at 10.71 percent
effective February 1 through October 31, 2008, and capped at 10.21
percent from November 1 through December 31, 2008. In 2007, the
allowed rate of return was capped at 10.75 percent.
Webcast
CV will host an earnings teleconference and webcast on November
5, 2008 beginning at 2 p.m. EST. 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 "Q3 2008 Central Vermont Public Service
Earnings Conference Call" link on the investor relations section of
the company's website at www.cvps.com. An audio archive of the call
will be available at approximately 4 p.m. EST at the same location
or by dialing 1-888-286-8010 and entering passcode 95400258.
About CV
CV is Vermont's largest electric utility, serving more than
159,000 customers statewide. CV's non-regulated subsidiary,
Catamount Resources Corporation, sells and rents electric water
heaters through a subsidiary, SmartEnergy Water Heating
Services.
Form 10-Q
Today the company filed its third-quarter 2008 Form 10-Q with
the Securities and Exchange Commission. A copy of that report is
available on the investor relations section of our web site,
www.cvps.com. Please refer to it for additional information
regarding our condensed consolidated financial statements, results
of operations, capital resources and liquidity.
Forward-Looking Statements
Statements contained in this press release that are not
historical fact are forward-looking statements intended to qualify
for the safe-harbors from the liability established by 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.
Reconciliation of Earnings Per Diluted Share
Three Months Nine Months
Ended Ended
September 30 September 30
2007 Earnings per diluted share $ 0.41 $ 0.99
Higher operating revenues 0.26 0.92
Higher equity in earnings of affiliates 0.14 0.41
Lower other operating expenses 0.03 0.01
Higher interest expense (0.05) (0.13)
Higher purchased power expense (0.12) (0.24)
Lower (higher) transmission expense 0.03 (0.24)
Other (0.09) (0.17)
------------- -------------
2008 Earnings per diluted share $ 0.61 $ 1.55
============= =============
Central Vermont Public Service Corporation - Consolidated
Earnings Release (unaudited)
(dollars in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30 September 30
2008 2007 2008 2007
---------- ---------- ---------- ----------
Condensed income statement
Operating revenues:
Retail sales $ 70,362 $ 69,053 $ 211,341 $ 209,736
Resale sales 10,751 8,030 40,430 27,681
Other 2,654 2,091 7,707 5,833
---------- ---------- ---------- ----------
Total operating revenues 83,767 79,174 259,478 243,250
---------- ---------- ---------- ----------
Operating expenses:
Purchased power -
affiliates and other 40,131 38,053 124,319 120,132
Other operating
expenses 33,201 34,370 111,344 107,173
Income tax expense 3,120 1,604 5,825 3,848
---------- ---------- ---------- ----------
Total operating expense 76,452 74,027 241,488 231,153
---------- ---------- ---------- ----------
Utility operating income 7,315 5,147 17,990 12,097
---------- ---------- ---------- ----------
Other income:
Equity in earnings of
affiliates 4,043 1,521 12,242 4,812
Other, net (427) 175 (892) 1,287
Income tax expense (1,467) (385) (4,350) (1,275)
---------- ---------- ---------- ----------
Total other income 2,149 1,311 7,000 4,824
---------- ---------- ---------- ----------
Interest expense 2,983 2,137 8,600 6,373
---------- ---------- ---------- ----------
Net income 6,481 4,321 16,390 10,548
Dividends declared on
preferred stock 92 92 276 276
---------- ---------- ---------- ----------
Earnings available for
common stock $ 6,389 $ 4,229 $ 16,114 $ 10,272
========== ========== ========== ==========
Per common share data
Earnings per share of
common stock - basic $ 0.62 $ 0.41 $ 1.56 $ 1.01
Earnings per share of
common stock - diluted $ 0.61 $ 0.41 $ 1.55 $ 0.99
Average shares of common
stock outstanding - basic 10,352,262 10,197,869 10,321,998 10,173,647
Average shares of common
stock outstanding -
diluted 10,422,143 10,380,747 10,402,288 10,337,226
Dividends declared per
share of common stock $ 0.23 $ 0.23 $ 0.92 $ 0.92
Dividends paid per share of
common stock $ 0.23 $ 0.23 $ 0.69 $ 0.69
Supplemental financial
statement data
Balance sheet
Investments in
affiliates $ 97,639 $ 40,201
Total assets $ 559,007 $ 497,544
Notes Payable $ 8,400 $ 13,225
Common stock equity $ 197,799 $ 182,395
Long-term debt (excluding
current portions) $ 175,350 $ 115,950
Cash Flows
Cash and cash
equivalents at
beginning of period $ 3,803 $ 2,799
Cash provided by
operating activities 32,793 21,222
Cash used for investing
activities (26,027) (16,544)
Cash provided by (used)
for financing
activities 159 (3,923)
---------- ----------
Cash and cash
equivalents at end of
period $ 10,728 $ 3,554
========== ==========
Media Inquiries: Steve Costello Director of Public Affairs (802)
747-5427 e-mail: Email Contact (802) 742-3062 (pager) Contact:
Pamela Keefe Vice President, Chief Financial Officer and Treasurer
(802) 747-5435 e-mail: Email Contact
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