Central Vermont Public Service (NYSE: CV)
-- Year-to-date earnings of $15.6 million, or $1.27 per diluted share,
30 cents lower than 2009
- $1.2 million increase in operating revenue
- $2.1 million increase in purchased power expense
- $1.7 million increase in other operating expenses (includes $3.6
million regulatory deferral)
- $2.7 million increase in equity in earnings of affiliates
-- Third-quarter earnings of $10 million, or 79 cents per diluted
share, 27 cents higher than 2009
- $3.6 million increase in operating revenue
- $3.4 million increase in purchased power expense
- $6.7 million decrease in other operating expenses (includes $3.6
million regulatory deferral)
- $1.0 million increase in equity in earnings of affiliates
-- Earnings forecast for 2010 reaffirmed in the range of $1.50 to
$1.60 per diluted share.
Central Vermont Public Service (NYSE: CV) reported consolidated
earnings of $15.6 million, or $1.27 per diluted share of common
stock, for the first nine months of 2010, compared to $18.6
million, or $1.57 per diluted share of common stock, for the same
period in 2009.
CV reported third-quarter 2010 consolidated earnings of $10
million, or 79 cents per diluted share of common stock, compared to
$6.2 million, or 52 cents per diluted share of common stock, for
the same period last year.
"We continue to make steady progress on achieving our 2010
earnings guidance," President Bob Young said. "Although we had
sustained storm activity throughout the year, unplanned costs of
major storms are deferrable under our Alternative Regulation Plan
so the impact of storms on earnings for the nine months is
tempered. We also saw a resurgence in retail demand in the third
quarter due to warmer weather."
"Based on year-to-date performance, we are reaffirming our
earnings guidance range of $1.50 to $1.60 per diluted share for the
year," Young said.
Year-to-Date 2010 results compared to 2009
Operating revenues increased $1.2 million, including an $11.9
million increase in retail revenues, a $3.5 million increase in
provision for rate refund and a $0.5 million increase in other
operating revenue, largely offset by a $14.6 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 recovery of 2008 major storm costs, in addition to
a weather-related resurgence of retail load in the third quarter of
2010. The provision for rate refund is primarily 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 $2.3 million of net deferrals and refunds in
2010 vs. the unfavorable impact of $1.1 million of net deferrals
and refunds in 2009. Other operating revenues increased primarily
due to higher levels of mutual aid performed for other utilities in
2010 and the sale of renewable energy credits. 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.
Purchased power expense increased $2.1 million, including an
$8.6 million increase in short-term purchases, due to higher retail
load and higher replacement power requirements, largely offset by a
$6.1 million decrease in purchases under long-term contracts, due
to the extended scheduled refueling outage at the Vermont Yankee
plant and lower capacity costs from Hydro-Quebec.
Other operating expenses increased $1.7 million, comprised
principally of a $3.1 million increase in service restoration costs
from a major storm in February 2010, a $1.1 million increase from a
major storm in May 2010, and higher property taxes of $1.5 million.
In 2010, $2.5 million of major storm costs was deferred and
included in the exogenous deferral described below. Other operating
expenses also included a $4.7 million decrease in transmission
expenses, resulting from higher NOATT reimbursements, partially
offset by higher rates from ISO-NE; lower regulatory amortizations
of $1.2 million, mostly from the $3.6 million deferral of 2010
exogenous events recorded in the third quarter, partially offset by
a $0.9 million increase for recovery of 2008 major storm costs and
other regulatory amortizations; $1 million of lower reserves for
uncollectible accounts, primarily due to a customer bankruptcy in
2009 and $1.1 million of higher employee benefit costs. Operating
income tax expense increased $0.9 million, mostly as a result of 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. The
Act also eliminated the tax deduction in 2010.
Equity in earnings of affiliates increased $2.7 million,
principally due to the $20.8 million investment that we made in
Transco in December 2009.
Other income, net decreased $1.2 million, largely due to changes
in the cash surrender value of variable life insurance policies
included in our Rabbi Trust.
Third quarter 2010 results compared to 2009
Third quarter operating revenues increased $3.6 million for many
of the same reasons described above.
Purchased power expense increased $3.4 million over the same
period last year. Short-term purchases increased $4 million due to
higher retail load and higher replacement power requirements at
higher market prices, and purchases under long-term contracts
increased $0.3 million due to higher costs from Vermont Yankee.
Purchases from independent power producers decreased $0.9 million
due to lower output, partially offset by higher average prices.
Other operating expenses decreased $6.7 million, due to the $3.6
million deferral of 2010 exogenous events and for the same reasons
described above.
Equity in earnings of affiliates increased $1 million for the
same reasons described above.
Other income, net decreased $0.3 million for the same reasons
described above.
2010 Common Stock Issuance
On January 15, 2010, we filed a Prospectus Supplement with the
SEC, noting that we entered into an equity distribution agreement
that allowed us to issue up to $45 million of common equity under
an at-the-market ("ATM") continuous offering program.
Earnings per share for 2010 reflect the impact of our ATM
program. From April to September 2010, CV issued 848,057 shares,
yielding net proceeds of approximately $17.1 million. The net
proceeds of the offering were used for general corporate purposes,
including capital expenditures and working capital requirements.
The common stock issuance decreased per-diluted-share earnings by 3
cents for the first nine months of 2010 and by 5 cents for the
third quarter of 2010. We expect to raise $30 million under this
program in 2010.
2010 Earnings Guidance
CV reiterates that it expects annual 2010 earnings to be in the
range of $1.50 to $1.60 per diluted share. As part of the
alternative regulation plan base rate filing approved by the
Vermont Public Service Board last winter, the company's allowed
rate of return on its Vermont regulatory business is 9.59 percent
for 2010, down from 9.77 percent for 2009. Earnings guidance for
2011 will be released in the first quarter of 2011.
Webcast
CV will host an earnings teleconference and webcast on November
9, 2010, beginning at 2 p.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 3 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 357298.
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 Monday, November 8, 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 Nine Third
Months Quarter
2010 vs. 2010 vs.
2009 2009
--------- ---------
2009 Earnings per diluted share $ 1.57 $ 0.52
Year-over-Year Effects on Earnings:
Higher maintenance expenses (0.25) 0.00
Higher other operating expenses (primarily
regulatory amortizations) (0.21) (0.02)
Higher purchased power expense (0.11) (0.17)
Higher taxes other than income (0.09) (0.03)
Lower other income, net (0.08) (0.02)
Health Care Reform/Medicare Part D - Income tax
impact (0.06) 0.00
Common stock issuance (April to September 2010) -
848,057 additional shares (0.03) (0.05)
Lower transmission expenses 0.23 0.23
Regulatory deferral - exogenous costs 0.18 0.18
Higher equity in earnings of affiliates 0.13 0.06
Higher operating revenues 0.06 0.18
Other (various items) (0.07) (0.09)
--------- ---------
2010 Earnings per diluted share $ 1.27 $ 0.79
========= =========
Note: For presentation purposes in the table above, the additional average
shares from the 2010 stock issuance were excluded from the 12,545,987
average shares of common stock - diluted for the third quarter and the
12,140,191 average shares of common stock - diluted for the first nine
months, in order to compute the individual EPS variances and to provide
comparable information for 2010 vs. 2009. The additional shares were
included in the total EPS calculations.
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 Nine Months Ended
September 30 September 30
Condensed income statement 2010 2009 2010 2009
---------- ---------- ---------- ----------
Operating revenues:
Retail sales $ 73,766 $ 68,067 $ 217,413 $ 205,532
Resale sales 8,299 10,188 26,622 41,252
Provision for rate refund 18 (27) 2,344 (1,128)
Other 3,309 3,563 9,957 9,489
---------- ---------- ---------- ----------
Total operating revenues 85,392 81,791 256,336 255,145
---------- ---------- ---------- ----------
Operating expenses:
Purchased power -
affiliates and other 41,109 37,676 120,038 117,891
Other operating expenses 31,247 37,994 117,857 116,111
Income tax (benefit)
expense 4,407 905 5,454 4,541
---------- ---------- ---------- ----------
Total operating expense 76,763 76,575 243,349 238,543
---------- ---------- ---------- ----------
Utility operating income 8,629 5,216 12,987 16,602
---------- ---------- ---------- ----------
Other income:
Equity in earnings of
affiliates 5,347 4,320 15,857 13,196
Other, net 491 774 334 1,508
Income tax expense (1,631) (1,186) (4,934) (4,008)
---------- ---------- ---------- ----------
Total other income 4,207 3,908 11,257 10,696
---------- ---------- ---------- ----------
Interest expense 2,846 2,924 8,607 8,729
---------- ---------- ---------- ----------
Net income 9,990 6,200 15,637 18,569
Dividends declared on
preferred stock 92 92 276 276
---------- ---------- ---------- ----------
Earnings available for
common stock $ 9,898 $ 6,108 $ 15,361 $ 18,293
========== ========== ========== ==========
Per common share data
Earnings per share of
common stock - basic $ 0.79 $ 0.52 $ 1.27 $ 1.57
Earnings per share of
common stock - diluted $ 0.79 $ 0.52 $ 1.27 $ 1.57
Average shares of common
stock outstanding - basic 12,516,488 11,679,133 12,109,796 11,647,626
Average shares of common
stock outstanding -
diluted 12,545,987 11,717,218 12,140,191 11,685,795
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 $ 134,802 $ 107,459
Total assets $ 646,297 $ 622,108
Common stock equity $ 253,966 $ 228,619
Long-term debt (excluding
current portions) $ 158,300 $ 178,300
Cash Flows
Cash and cash equivalents
at beginning of period $ 2,069 $ 6,722
Cash provided by
operating activities 38,042 33,326
Cash used for investing
activities (21,623) (21,970)
Cash provided by
financing activities (14,543) (7,802)
Cash and cash equivalents
at end of period $ 3,945 $ 10,276
========== ==========
Refer to our third-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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