Central Vermont Public Service (NYSE: CV)
-- First-quarter earnings of $4.2 million, or 35 cents per diluted share,
23 cents lower than 2009
-- $0.3 million increase in operating revenue
-- $4.6 million increase in other operating expenses, primarily due to
major storm in February 2010
-- $1.0 million increase in equity in earnings of affiliates
-- Earnings for 2010 are forecasted to be in the range of $1.55 to $1.70
per diluted share.
Central Vermont Public Service (NYSE: CV) reported consolidated
earnings of $4.2 million, or 35 cents per diluted share of common
stock, for the first three months of 2010, compared to $6.9
million, or 58 cents per diluted share of common stock, for the
same period in 2009.
"Much of the change was due to a major storm in February,"
President Bob Young said. "Despite the storm, we're making great
progress. I was particularly pleased by our recent inclusion in
Forbes' list of the 100 most trustworthy companies in America. This
listing highlights the success we have had instilling key, core
values within the company, and working to be open, transparent and
complete in our financial communications, accounting and corporate
governance.
"Going forward, we have several investment opportunities that
will benefit customers and shareholders alike. We plan to invest
more than $43 million in the transmission system and $38 million in
our core distribution system over the course of this year," Young
said. "We will also begin significant investments in CVPS
SmartPower™, our smart-grid program, which will require more than
$60 million over the next few years, about half that money coming
from federal stimulus funds.
"We will also invest in new service territory and new hydro
operations through the purchase of the assets of Vermont Marble
Power Division, for approximately $33 million," Young said.
First quarter 2010 results compared to 2009
First quarter operating revenues increased $0.3 million,
including a $2 million increase in retail revenues, a $0.8 million
increase in other operating revenues, partially offset by a $2.6
million decrease in resale revenue. The increase in retail revenues
primarily resulted from a 5.58 percent base rate increase,
effective January 1, 2010 and $0.9 million from ESAM revenue to
recover 2008 major storm costs, partially offset by lower
residential and commercial customer usage, due to warmer weather in
2010. The provision for rate refund is related to deferrals and
refunds of over-collection of power, production and transmission
costs as required by the power cost adjustment clause within our
alternative regulation plan. This included a $0.6 million refund of
over-collections from the third quarter of 2009, refunded to
customers during the first quarter of 2010, partially offset by a
$0.5 million over-collection of power costs during the first
quarter of 2010 that will be returned to retail customers in the
third quarter of 2010. Other operating revenues increased primarily
due to higher levels of mutual aid for other utilities in 2010 and
the sale of renewable energy credits. Resale revenues decreased due
to lower average market prices despite an increase in volumes
sold.
Purchased power expense increased $0.1 million, due to a $0.4
million increase in purchases from Independent Power Producers,
partially offset by a decrease in other power costs of $0.3
million. The decrease in other power costs was due to lower volume
and capacity costs from Hydro-Quebec, reduced by higher output at
the Vermont Yankee plant in 2010 and higher capacity costs. Other
operating expenses increased $4.6 million, due to a $3.2 million
increase in service restoration costs from a major storm in
February 2010, and a $0.4 million increase in transmission expenses
driven by higher rates from ISO-NE, and reduced by lower VTA
billings due to higher NOATT reimbursements. We also had higher
regulatory amortizations of $0.8 million from the recovery of 2008
major storm costs, and higher property taxes of $0.5 million,
partially offset by lower production costs of $0.3 million, due to
lower Vermont Yankee outage insurance premiums. Operating income
tax expense decreased $1 million as a result of a lower level of
earnings and partially offset by an unfavorable charge of $0.7
million required by the Patient Protection and Affordable Care Act,
as modified by the Health Care and Education Reconciliation
Act.
Equity in earnings of affiliates increased $1 million,
principally due to the $20.8 million investment that we made in
Transco in December 2009.
2010 Financial Guidance
CV anticipates annual 2010 earnings to be in the range of $1.55
to $1.70 per diluted share. As part of the alternative regulation
plan base rate filing approved by the Vermont Public Service Board,
the company's allowed rate of return for 2010 will be 9.59 percent,
down from 9.77 percent for 2009.
Webcast
CV will host an earnings teleconference and webcast on May 7,
2010, beginning at 9 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 the company's long-term strategy.
Interested parties may listen to the conference call live on the
Internet by selecting the "CVPS Qtr 1 2010 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 347698.
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 Thursday, May 6, 2010, the company filed its quarterly 2010
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
2010 vs. 2009
-------------
2009 Earnings per diluted share $ 0.58
Year-over-Year Effects on Earnings:
Higher equity in earnings of affiliates 0.05
Higher operating revenues 0.01
Higher maintenance expense (major storm in February 2010) (0.16)
Higher other operating expenses (0.06)
Health Care Reform/Medicare Part D - Income tax impact (0.06)
Higher transmission expense (0.02)
Higher purchased power expense (0.01)
Other 0.02
-------------
2010 Earnings per diluted share $ 0.35
=============
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
(dollars in thousands, except per share amounts)
Three Months Ended
March 31
Condensed income statement 2010 2009
----------- -----------
Operating revenues:
Retail sales $ 76,062 $ 74,083
Resale sales 11,339 13,933
Provision for rate refund 125 0
Other 3,481 2,711
----------- -----------
Total operating revenues 91,007 90,727
----------- -----------
Operating expenses:
Purchased power - affiliates and other 41,718 41,610
Other operating expenses 44,196 39,618
Income tax expense 1,838 2,876
----------- -----------
Total operating expense 87,752 84,104
----------- -----------
Utility operating income 3,255 6,623
----------- -----------
Other income:
Equity in earnings of affiliates 5,395 4,445
Other, net 36 113
Income tax expense (1,589) (1,433)
----------- -----------
Total other income 3,842 3,125
----------- -----------
Interest expense 2,895 2,876
----------- -----------
Net income 4,202 6,872
Dividends declared on preferred stock 92 92
----------- -----------
Earnings available for common stock $ 4,110 $ 6,780
=========== ===========
Per common share data
Earnings per share of common stock - basic $ 0.35 $ 0.58
Earnings per share of common stock - diluted $ 0.35 $ 0.58
Average shares of common stock outstanding -
basic 11,725,484 11,602,354
Average shares of common stock outstanding -
diluted 11,756,303 11,655,175
Dividends declared per share of common stock $ 0.46 $ 0.46
Dividends paid per share of common stock $ 0.23 $ 0.23
Supplemental financial statement data
Balance sheet
Investments in affiliates $ 132,439 $ 104,158
Total assets $ 627,692 $ 627,496
Notes Payable (reclassified to long-term debt) $ 0 $ 10,827
Common stock equity $ 230,513 $ 221,647
Long-term debt (excluding current portions) $ 188,233 $ 167,500
Cash Flows
Cash and cash equivalents at beginning of
period $ 2,069 $ 6,722
Cash provided by operating activities 24,942 15,128
Cash used for investing activities (6,007) (5,937)
Cash provided by financing activities (15,866) (2,369)
----------- -----------
Cash and cash equivalents at end of period $ 5,138 $ 13,544
=========== ===========
Refer to our first-quarter 2010 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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