Central Vermont Public Service (NYSE: CV)
-- Year-to-date earnings of $12.4 million, or $1.04 per diluted share, up
10 cents from last year
- $2.3 million decrease in operating revenue
- $4.0 million decrease in purchased power expense
- $0.7 million increase in equity in earnings of affiliates
- $1.2 million increase in other income, net
-- Second-quarter earnings of $5.5 million, or 46 cents per diluted share,
up 8 cents from last year
- $1.9 million decrease in operating revenue
- $2.7 million decrease in purchased power expense
- $0.4 million increase in equity in earnings of affiliates
- $0.6 million increase in other income, net
-- The impact of the November 2008 stock issuance of 1,190,000 shares
decreased per-diluted-share-earnings by 5 cents for the second quarter
and decreased per-diluted-share earnings by 12 cents for the first six
months of 2009.
-- Reaffirms earnings guidance for 2009 at $1.40 to $1.60 per share
Central Vermont Public Service (NYSE: CV) reported consolidated
earnings of $12.4 million, or $1.04 per diluted share of common
stock, for the first six months of 2009, compared to $9.9 million,
or 94 cents per diluted share of common stock, for the same period
last year.
CV reported second-quarter 2009 consolidated earnings of $5.5
million, or 46 cents per diluted share of common stock, compared to
$4 million, or 38 cents per diluted share of common stock, for the
same period last year.
"Despite the global economic challenges, we continue to make
steady progress and we remain on target to meet our earnings
guidance for the year," President Bob Young said. "We also continue
to provide high-quality service, as evidenced by the most recent J.
D. Power and Associates survey, which ranked CVPS second in the
East for customer satisfaction among midsized utilities.
"CVPS ranked above the regional average for midsized utilities
in all J. D. Power and Associates factors, including customer
service, billing and payment, communications, power quality and
reliability, price and corporate citizenship," Young said. "We
believe that customer satisfaction is the bedrock upon which our
financial health must be built, and we will continue to strive to
serve our customers and shareholders well."
Year-to-Date 2009 results compared to 2008
Operating revenues decreased $2.3 million, including a $3.5
million decrease in retail revenues, and a $0.2 million decrease in
other operating revenues; partially offset by a $1.4 million
increase in resale revenues. The decrease in retail revenues
resulted from lower average usage resulting from a slowing economy
and energy conservation, and the loss of three industrial customers
due to plant closures, partially offset by higher average unit
prices due to customer usage mix. Other operating revenues include
a $1.0 million decrease arising from a provision for rate refunds.
The provision for rate refund is primarily related to the first and
second quarter 2009 deferral of an over-collection of power,
production and transmission costs as defined by the power
adjustment clause of our alternative regulation plan. The power
cost over-collection is being credited to retail customers' bills
in the third and fourth quarters of 2009, in accordance with the
plan. The decrease in other operating revenues was partially offset
by increased sales of transmission rights and an increase in
wholesale rates. Resale revenues increased due to higher volume of
excess power available for resale, partially offset by lower
average market prices.
Purchased power expense decreased $4 million, primarily due to a
reduction of $3.4 million in purchases from Independent Power
Producers. In addition, short-term power purchases decreased by
$1.8 million and other power costs decreased by $0.7 million. These
reductions were partially offset by increased capacity payments of
$1.3 million and increased Hydro-Quebec purchases of $0.6 million.
Other operating expenses decreased less than $0.1 million,
including a $2.6 million decrease in maintenance expenses,
primarily due to lower service restoration costs. There were
several major storms in 2008 and none in 2009. These lower costs
were partially offset by higher reserves for uncollectible accounts
and a $0.5 million increase in transmission expenses due to higher
rates, and higher costs from Vermont Transco LLC ("Transco") for
its capital projects, partially offset by higher NOATT
reimbursements.
Equity in earnings of affiliates increased $0.7 million,
partially due to the $3.1 million investment that we made in
Transco in December 2008. Other income, net increased $1.2 million,
largely due to an increase in the cash surrender value of variable
life insurance policies in trust to fund a supplemental employee
retirement plan, and interest expense increased $0.2 million.
Second quarter 2009 results compared to 2008
Operating revenues decreased $1.9 million for many of the same
reasons described above.
Purchased power expense decreased $2.7 million for the same
reasons described above. Short-term purchases decreased by $1.9
million, IPP purchases decreased by $1.4 million and other
purchases decreased by $0.1 million. These reductions were
partially offset by $0.7 million of increased capacity payments to
ISO-New England.
Other operating expenses increased $0.4 million, including a
$0.2 million increase in transmission for the same reasons
described above. These higher costs were partially offset by lower
maintenance costs for the same reasons as described above.
Equity in earnings of affiliates increased $0.4 million and
other income, net increased $0.6 million, partially offset by a
$0.1 million increase in interest expense, for many of the same
reasons described above.
2008 Common Stock Issuance
Earnings per share for the second quarter and first six months
of 2009 reflect the impact of the November 2008 common stock
issuance. On November 24, 2008, CV issued 1,190,000 shares,
resulting in net proceeds of approximately $21.3 million. The net
proceeds of the offering were used for general corporate purposes,
including the repayment of debt, capital expenditures, investments
in Transco and working capital requirements. The common stock
issuance decreased per-diluted-share earnings by 5 cents for the
second quarter of 2009 and decreased per-diluted-share earnings by
12 cents for the first six months of 2009.
2009 Financial Guidance
CV previously issued 2009 earnings guidance in the range of
$1.40 to $1.60 per diluted share, which we reaffirm. As part of a
rate agreement approved by the Vermont Public Service Board, the
company's allowed rate of return is 9.77 percent.
Webcast
CV will host an earnings teleconference and webcast on August
10, 2009 beginning at 11 a.m. EDT. 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 "CVPS Q2 2009 Earnings 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 later
that day at the same location or by dialing 1-877-660-6853 within
the U.S. or internationally by dialing 1-201-612-7415 and entering
Account 286 and Conference ID 324531.
About CV
CV is Vermont's largest electric utility, serving approximately
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
On Friday, August 7, 2009, the company filed its second-quarter
2009 Form 10-Q with the Securities and Exchange Commission. A copy
of that report is available on our web site, www.cvps.com, under
the "Investor Relations" section. Please refer to it for additional
information regarding our condensed consolidated financial
statements, results of operations, capital resources and
liquidity.
Reconciliation of Earnings Per Diluted Share
First Six Months Second Quarter
2009 vs. 2008 2009 vs. 2008
------------- -------------
2008 Earnings per diluted share $ 0.94 $ 0.38
Lower purchased power expense 0.23 0.16
Higher equity in earnings of affiliates 0.04 0.02
Lower (higher) other operating expenses 0.03 (0.01)
Lower operating revenues (0.13) (0.10)
Impact of common stock issuance (November
2008) - 1,190,000 additional shares (0.12) (0.05)
Higher transmission expense (0.03) (0.01)
Other 0.08 0.07
------------- -------------
2009 Earnings per diluted share (a) $ 1.04 $ 0.46
============= =============
(a) The additional shares from the November 2008 stock issuance
were excluded from the 11,684,149 average shares of common
stock -- diluted for the second quarter and the 11,669,823 average
shares of common stock -- diluted for the first six months, for the
purposes of computing the individual EPS variances shown above in
order to provide comparable information for 2009 vs. 2008.
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, volatility in the financial 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 - Consolidated
Earnings Release (unaudited)
(dollars in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30 June 30
Condensed income statement 2009 2008 2009 2008
---------- ---------- ---------- ----------
Operating revenues:
Retail sales $ 63,382 $ 65,573 $ 137,465 $ 140,979
Resale sales 17,131 16,177 31,064 29,679
Other 2,114 2,737 4,825 5,053
---------- ---------- ---------- ----------
Total operating revenues 82,627 84,487 173,354 175,711
---------- ---------- ---------- ----------
Operating expenses:
Purchased power -
affiliates and other 38,605 41,282 80,215 84,188
Other operating expenses 38,499 38,116 78,117 78,143
Income tax expense 760 846 3,636 2,705
---------- ---------- ---------- ----------
Total operating expense 77,864 80,244 161,968 165,036
---------- ---------- ---------- ----------
Utility operating income 4,763 4,243 11,386 10,675
---------- ---------- ---------- ----------
Other income:
Equity in earnings of
affiliates 4,431 4,014 8,876 8,199
Other, net 621 59 734 (465)
Income tax expense (1,389) (1,458) (2,822) (2,883)
---------- ---------- ---------- ----------
Total other income 3,663 2,615 6,788 4,851
---------- ---------- ---------- ----------
Interest expense 2,929 2,857 5,805 5,617
---------- ---------- ---------- ----------
Net income 5,497 4,001 12,369 9,909
Dividends declared on
preferred stock 92 92 184 184
---------- ---------- ---------- ----------
Earnings available for
common stock $ 5,405 $ 3,909 $ 12,185 $ 9,725
========== ========== ========== ==========
Per common share data
Earnings per share of
common stock - basic $ 0.46 $ 0.38 $ 1.05 $ 0.94
Earnings per share of
common stock - diluted $ 0.46 $ 0.38 $ 1.04 $ 0.94
Average shares of common
stock outstanding - basic 11,660,547 10,337,893 11,631,611 10,306,699
Average shares of common
stock outstanding -
diluted 11,684,149 10,397,675 11,669,823 10,387,289
Dividends declared per
share of common stock $ 0.23 $ 0.23 $ 0.69 $ 0.69
Dividends paid per share of
common stock $ 0.23 $ 0.23 $ 0.46 $ 0.46
Supplemental financial
statement data
Balance sheet
Investments in affiliates $ 105,849 $ 96,902
Total assets $ 617,166 $ 557,145
Notes Payable $ 10,800 $ 10,800
Common stock equity $ 224,758 $ 193,326
Long-term debt
(excluding current
portions) $ 167,500 $ 172,950
Cash Flows
Cash and cash equivalents
at beginning of period $ 6,722 $ 3,803
Cash provided by
operating activities 20,542 15,897
Cash used for investing
activities (13,223) (15,877)
Cash provided by
financing activities (5,083) 2,739
---------- ----------
Cash and cash equivalents
at end of period $ 8,958 $ 6,562
========== ==========
Refer to our second-quarter 2009 Form 10-Q for additional information.
Media Inquiries Steve Costello Director of Public Affairs (802)
747-5427 e-mail: Email Contact (802) 742-3062 (pager) Contact:
Pamela Keefe Senior Vice President, Chief Financial Officer and
Treasurer (802) 747-5435 e-mail: Email Contact
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