Central Vermont Public Service (NYSE: CV)
-- Year-to-date earnings of $5.6 million, or 46 cents per diluted share,
58 cents lower than 2009
-- $2.4 million decrease in operating revenue
-- $1.3 million decrease in purchased power expense
-- $8.5 million increase in other operating expenses, primarily due to
major storms in 2010
-- $1.6 million increase in equity in earnings of affiliates
-- $0.9 million decrease in other income, net
-- Second-quarter earnings of $1.4 million, or 11 cents per diluted share,
35 cents lower than 2009
-- $2.7 million decrease in operating revenue
-- $1.4 million decrease in purchased power expense
-- $3.9 million increase in other operating expenses, primarily due to
a major storm in May 2010
-- $0.7 million increase in equity in earnings of affiliates
-- $0.8 million decrease in other income, net
-- Earnings for 2010 are forecasted to be in the range of $1.50 to $1.60
per diluted share.
Central Vermont Public Service (NYSE: CV) reported consolidated
earnings of $5.6 million, or 46 cents per diluted share of common
stock, for the first six months of 2010, compared to $12.4 million,
or $1.04 per diluted share of common stock, for the same period in
2009.
CV reported second-quarter 2010 consolidated earnings of $1.4
million, or 11 cents per diluted share of common stock, compared to
$5.5 million, or 46 cents per diluted share of common stock, for
the same period last year.
"Despite the decrease in earnings, the core business remains
sound," President Bob Young said. "Two major storms that increased
restoration costs by $4.3 million and a decrease in operating
revenue from the resale of excess energy were among the key factors
that hurt year-to-date earnings.
"Looking ahead, we continue to provide excellent service quality
through our focus on customer care, which we believe is critical to
creating value for our shareholders," Young said. "In the latest
J.D. Power and Associates study results, CVPS ranked highest in the
East Midsize segment for customer service, second for corporate
citizenship and third for communications factors.
"CVPS ranked at or above the regional average for midsized
utilities in the East 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.
Year-to-Date 2010 results compared to 2009
Operating revenues decreased $2.4 million, including a $12.7
million decrease in resale revenue, partially offset by a $6.2
million increase in retail revenues, a $3.4 million increase in
provision for rate refund and a $0.7 million increase in other
operating revenue. Resale revenues decreased mostly due to lower
2010 contract prices associated with the sale of our excess energy,
and a decrease in volumes sold due to the scheduled refueling
outages at the Vermont Yankee plant and Millstone Unit #3. The
increase in retail revenues primarily resulted from a 5.58 percent
base rate increase, effective January 1, 2010 and $1.7 million
recovery of 2008 major storm costs, partially offset by lower
residential and commercial customer usage, due to warmer weather in
the winter of 2010. The provision for rate refund is the net
deferrals and refunds of over- or under-collections of power,
production and transmission costs as required by the power cost
adjustment clause within our alternative regulation plan. This
increase included the favorable impact of $0.5 million of net
deferrals in 2010 vs. $1.1 million of net deferrals in 2009 and the
amounts returned to customers increased to $1.8 million in 2010 vs.
none in 2009.
Other operating revenues increased, primarily due to higher
levels of mutual aid for other utilities in 2010 and the sale of
renewable energy credits.
Purchased power expense decreased $1.3 million, including a $6.4
million decrease in other purchases, due to lower output at the
Vermont Yankee plant because of an extended scheduled refueling
outage and lower capacity costs from Hydro-Quebec, partially offset
by a $4.7 million increase in short-term purchases, due to higher
replacement power requirements and a $0.5 million increase in
purchases from Independent Power Producers. Other operating
expenses increased $8.5 million, comprised principally of a $3.1
million increase in service restoration costs from a major storm in
February 2010 and a $1.2 million increase from a major storm in May
2010. Transmission expenses increased $0.1 million, driven by
higher rates from ISO-NE, partially offset by lower VTA billings
due to higher NOATT reimbursements. We also had higher regulatory
amortizations of $2.7 million, mostly from the recovery of 2008
major storm costs, and higher property taxes of $1 million,
partially offset by lower production costs of $0.4 million, mostly
due to lower Vermont Yankee outage insurance premiums. Operating
income tax expense decreased $2.6 million as a result of a lower
level of earnings, 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, in the first quarter of 2010.
Equity in earnings of affiliates increased $1.6 million,
principally due to the $20.8 million investment that we made in
Transco in December 2009.
Other income, net decreased $0.9 million, largely due to changes
in the cash surrender value of variable life insurance policies
included in our Rabbi Trust. In 2010, there were market losses of
$0.4 million versus market gains of $0.1 million in 2009.
Second quarter 2010 results compared to 2009
Second quarter operating revenues decreased $2.7 million for
many of the same reasons described above. The provision for rate
refund includes an increase of $1 million of accrued
under-collections that will be billed to customers during the
fourth quarter of 2010.
Purchased power expense decreased $1.4 million for the same
reasons described above. Other purchases included a decrease of
$6.1 million, due to lower output at the Vermont Yankee plant,
related to an extended scheduled refueling outage, partially offset
by a $4.7 million increase in short-term purchases, due to higher
replacement power and capacity costs. Other operating expenses
increased $3.9 million for many of the same reasons described
above.
Equity in earnings of affiliates increased $0.7 million for the
same reasons described above.
Other income, net decreased $0.8 million for the same reasons
described above.
2010 Financial Guidance
CV anticipates annual 2010 earnings to be in the range of $1.50
to $1.60 per diluted share, down from the previous forecast of
$1.55 to $1.70. Factors leading to the revision include weak retail
demand, certain unforeseen operating expense increases and the
performance of the variable life insurance policies in our Rabbi
Trust. 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 is 9.59 percent, down from 9.77 percent for
2009.
Webcast
CV will host an earnings teleconference and webcast on August 6,
2010, beginning at 11 a.m. Eastern time. 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 2 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 350957.
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 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
First Six Months Second Quarter
2010 vs. 2009 2010 vs. 2009
----------------- -----------------
2009 Earnings per diluted share $ 1.04 $ 0.46
Year-over-Year Effects on Earnings:
Higher maintenance expenses (0.25) (0.09)
Higher other operating expenses (0.19) (0.13)
Lower operating revenues (0.12) (0.13)
Lower other income, net (0.06) (0.07)
Health Care Reform/Medicare Part
D - Income tax impact (0.06) 0.00
Higher equity in earnings of
affiliates 0.07 0.02
Lower purchased power expense 0.06 0.07
Other (0.03) (0.02)
----------------- -----------------
2010 Earnings per diluted share $ 0.46 $ 0.11
================= =================
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 Six Months Ended June
June 30 30
Condensed income statement 2010 2009 2010 2009
----------- ----------- ----------- -----------
Operating revenues:
Retail sales $ 67,585 $ 63,382 $ 143,647 $ 137,465
Resale sales 6,984 17,131 18,323 31,064
Provision for rate
refund 2,201 (1,101) 2,326 (1,101)
Other 3,167 3,215 6,648 5,926
----------- ----------- ----------- -----------
Total operating revenues 79,937 82,627 170,944 173,354
----------- ----------- ----------- -----------
Operating expenses:
Purchased power -
affiliates and other 37,211 38,605 78,929 80,215
Other operating
expenses 42,414 38,499 86,610 78,117
Income tax (benefit)
expense (791) 760 1,047 3,636
----------- ----------- ----------- -----------
Total operating expense 78,834 77,864 166,586 161,968
----------- ----------- ----------- -----------
Utility operating income 1,103 4,763 4,358 11,386
----------- ----------- ----------- -----------
Other income:
Equity in earnings of
affiliates 5,115 4,431 10,510 8,876
Other, net (193) 621 (157) 734
Income tax expense (1,714) (1,389) (3,303) (2,822)
----------- ----------- ----------- -----------
Total other income 3,208 3,663 7,050 6,788
----------- ----------- ----------- -----------
Interest expense 2,866 2,929 5,761 5,805
----------- ----------- ----------- -----------
Net income 1,445 5,497 5,647 12,369
Dividends declared on
preferred stock 92 92 184 184
----------- ----------- ----------- -----------
Earnings available for
common stock $ 1,353 $ 5,405 $ 5,463 $ 12,185
=========== =========== =========== ===========
Per common share data
Earnings per share of
common stock - basic $ 0.11 $ 0.46 $ 0.46 $ 1.05
Earnings per share of
common stock - diluted $ 0.11 $ 0.46 $ 0.46 $ 1.04
Average shares of
common stock
outstanding -
basic 12,078,724 11,660,547 11,903,080 11,631,611
Average shares of
common stock
outstanding -
diluted 12,109,591 11,684,149 11,933,923 11,669,823
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 $ 133,604 $ 105,849
Total assets $ 623,084 $ 617,166
Notes Payable (reclassified
to long-term debt) $ 0 $ 10,800
Common stock equity $ 241,338 $ 224,758
Long-term debt (excluding
current portions) $ 160,869 $ 167,500
Cash Flows
Cash and cash equivalents at
beginning of period $ 2,069 $ 6,722
Cash provided by operating
activities 27,251 20,542
Cash used for investing
activities (12,333) (13,223)
Cash provided by financing
activities (14,343) (5,083)
----------- -----------
Cash and cash equivalents at
end of period $ 2,644 $ 8,958
=========== ===========
Refer to our second-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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