Central Vermont Public Service (NYSE: CV)
- Year-to-date earnings of $9.2 million, or 67
cents per diluted share, 21 cents higher than 2010
- $10.4 million increase in operating
revenues
- $ 2.6 million decrease in service restoration
costs
- $ 2.6 million increase in transmission
costs
- $ 3.4 million increase in equity in earnings
of affiliates
- $ 3.1 million in merger-related
costs
- Second-quarter earnings of $0.7 million, or 5
cents per diluted share, 6 cents lower than 2010
- $4.3 million increase in operating
revenues
- $0.8 million decrease in service restoration
costs
- $1.9 million increase in transmission
costs
- $1.9 million increase in equity in earnings of
affiliates
- $3.1 million in merger-related costs
- Due to pending merger, earnings guidance is
discontinued
Central Vermont Public Service (NYSE: CV) reported consolidated
earnings of $9.2 million, or 67 cents per diluted share of common
stock, for the first six months of 2011 compared to $5.6 million,
or 46 cents per diluted share of common stock, for the same period
in 2010. Second-quarter earnings were $0.7 million or 5 cents per
common share, 6 cents lower than in 2010. The improved earnings
overall were driven in part by increases in operating revenue and
decreases in operating expenses and storm restoration costs
compared to the first six months of 2010, reduced in the second
quarter by costs associated with the company's pending sale to a
subsidiary of Gaz Metro Limited Partnership, Northern New England
Energy Corporation, which also owns Green Mountain Power
Corporation, the second largest utility in Vermont.
"The sale and ultimate merger with Green Mountain Power will
provide exceptional benefits to shareholders, customers,
stakeholders and the state of Vermont," CVPS President and CEO
Larry Reilly said. "In the short term, expenses associated with the
sale have had, and will continue to have a negative effect on
earnings; however, the sale agreement allows the Company to
continue to pay a quarterly dividend of 23 cents per share. Beyond
merger expenses, we continue to make steady progress as evidenced
by the improved overall earnings, and the sale will ultimately
provide shareholders a significant premium."
"Pending the sale, we will continue to focus on high-quality
customer service and reliability, which are the cornerstones of our
success for customers and shareholders alike," Reilly said. "The
sale will provide economic strength to the new, merged company that
will create an even greater value proposition for customers in the
years ahead."
Year-to-Date 2011 results compared to 2010
Operating revenues increased $10.4 million, including a $11.2
million increase in retail revenues, a $1.2 million increase due to
a reduction in the provision for rate refund, partially offset by a
$1.2 million decrease in other operating revenues, and a $0.9
million decrease in resale revenue.
The increase in retail revenues primarily resulted from a 7.46
percent base rate increase, effective January 1, 2011 and higher
customer usage, due to colder weather in 2011. The provision for
rate refund is related to deferrals and refunds as required by the
power cost adjustment component of our alternative regulation plan.
Other operating revenues decreased primarily due to less mutual aid
provided to other utilities in 2011. Resale revenues decreased due
to lower 2011 contract prices associated with the sale of our
excess energy, and lower volume available for resale due to higher
retail load.
Purchased power expense increased $2.2 million, comprised of an
increase of $7.8 million due to higher output at the Vermont Yankee
plant in 2011 and higher related capacity costs, an increase of
$1.1 million due to higher output and market rates from independent
power producers, partially offset by a decrease of $6.2 million
from lower capacity costs and lower volumes from ISO-NE and a $0.5
million decrease from lower output from Hydro-Quebec.
Other operating expenses increased $3.1 million. This included a
$2 million increase in regulatory amortizations, including $4.2
million of 2010 exogenous costs related to major storms and tax law
changes, partially offset by $1.7 million of 2008 major storm costs
recovered in 2010. Also included were a $2.6 million increase in
transmission expenses driven by higher rates from ISO-NE, and
higher Vermont Transmission Agreement billings, partially offset by
higher NEPOOL Open Access Transmission Tariff reimbursements, and a
$1.3 million increase in operating income tax expense as a result
of a higher level of earnings. These increases were partially
offset by an unfavorable charge of $0.7 million in the first
quarter of 2010 required by health care reform legislation and $3.1
million in service restoration costs incurred for a major storm in
February 2010.
Equity in earnings of affiliates increased $3.4 million due to
the return on the $34.9 million investment that we made in Transco
in December 2010.
Other, net decreased $2.7 million primarily due to $3.1 million
of merger-related costs, partially offset by $0.4 million of higher
income from variable life insurance policies.
Second quarter 2011 results compared to
2010 Second quarter operating revenues increased $4.3 million
for many of the same reasons cited above.
Purchased power expense increased $2.6 million for many of the
same reasons cited above.
Other operating expenses increased $1.3 million due to a $1.9
million increase in transmission expenses driven by higher rates
from ISO-NE, and higher Vermont Transmission Agreement billings,
partially offset by higher NEPOOL Open Access Transmission Tariff
reimbursements; and a $0.3 million increase in operating income tax
expense as a result of a higher level of earnings, partially offset
by a $1 million decrease from lower regulatory amortizations
including $0.8 million of 2008 major storm costs recovered in
2010.
Equity in earnings of affiliates increased $1.9 million for the
same reason cited above.
Other, net decreased $2.7 million for the same reasons cited
above.
2010 Common Stock Issuance Earnings per
share for 2011 reflect the impact of shares issued under our
at-the-market program. From April to December 2010, CV sold an
aggregate of 1,498,745 shares in open market trading and direct
placements under this program for aggregate gross proceeds of
approximately $30.6 million. The net proceeds of the offering were
used for general corporate purposes. No equity issues are
anticipated in 2011.
2011 Earnings Guidance Due to the pending
merger, the Company is discontinuing earnings guidance.
Webcast CV will host an earnings
teleconference and webcast on August 9, 2011, beginning at 11 a.m.
Eastern Time. At that time, CV President and CEO Larry Reilly and
Chief Financial Officer Pamela Keefe will discuss the company's
financial results and recent developments in the company's planned
sale and merger.
Interested parties may listen to the conference call live on the
Internet by selecting the "CVPS 2011 2nd Quarter 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 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
374944.
About CV CV is Vermont's largest electric
utility, serving more than 160,000 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, August 8, 2011, the
company filed its quarterly 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
2011 vs. 2010 2011 vs. 2010
----------------- -----------------
2010 Earnings per diluted share $ 0.46 $ 0.11
Major Income Statement Variances:
---------------------------------------
Higher operating revenue - customer
rate mix 0.05 0.06
Higher operating revenue - retail
sales volume 0.05 0.00
Lower medical expense 0.04 0.00
Variable life insurance 0.03 0.03
Merger-related fees (0.14) (0.14)
Other (includes income tax
adjustments, impact of additional
common shares and various items) 0.18 (0.01)
----------------- -----------------
2011 Earnings per diluted share $ 0.67 $ 0.05
================= =================
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 June
30 Six months ended June 30
Condensed Income
statement 2011 2010 2011 2010
------------------------ ----------- ----------- ----------- -----------
Operating revenues:
Retail sales $ 71,638 $ 67,585 $ 154,896 $ 143,647
Resale sales 9,744 6,984 17,439 18,323
Provision for rate
refund 167 2,201 3,558 2,326
Other 2,719 3,167 5,460 6,648
----------- ----------- ----------- -----------
Total operating revenues 84,268 79,937 181,353 170,944
----------- ----------- ----------- -----------
Operating expenses:
Purchased power -
affiliates and other 39,778 37,211 81,130 78,929
Other operating
expenses 43,744 42,414 89,692 86,610
Income tax expense (481) (791) 2,376 1,047
----------- ----------- ----------- -----------
Total operating
expense 83,041 78,834 173,198 166,586
----------- ----------- ----------- -----------
Utility operating income 1,227 1,103 8,155 4,358
----------- ----------- ----------- -----------
Other income:
Equity in earnings of
affiliates 6,987 5,115 13,928 10,510
Other, net (2,919) (193) (2,814) (157)
Income tax expense (1,222) (1,714) (3,524) (3,303)
----------- ----------- ----------- -----------
Total other income 2,846 3,208 7,590 7,050
----------- ----------- ----------- -----------
Interest expense 3,337 2,866 6,584 5,761
----------- ----------- ----------- -----------
Net income 736 1,445 9,161 5,647
Dividends declared on
preferred stock 92 92 184 184
----------- ----------- ----------- -----------
Earnings available for
common stock $ 644 $ 1,353 $ 8,977 $ 5,463
=========== =========== =========== ===========
Per common share data
------------------------
Earnings per share of
common stock - basic $ 0.05 $ 0.11 $ 0.67 $ 0.46
Earnings per share of
common stock - diluted $ 0.05 $ 0.11 $ 0.67 $ 0.46
Average shares of common
stock outstanding -
basic 13,399,128 12,078,724 13,376,675 11,903,080
Average shares of common
stock outstanding -
diluted 13,482,185 12,109,591 13,444,680 11,933,923
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 $ 176,981 $ 133,604
Total assets $ 713,579 $ 623,084
Common stock equity $ 273,899 $ 241,338
Long-term debt
(excluding current
portions) $ 228,300 $ 160,869
Cash Flows
Cash and cash
equivalents at
beginning of period $ 2,676 $ 2,069
Cash provided by
operating activities 31,468 27,251
Cash used for
investing activities (8,035) (12,333)
Cash provided by (used
for) financing
activities 233 (14,343)
----------- ----------- ----------- -----------
Cash and cash
equivalents at end of
period $ 26,342 $ 2,644
=========== =========== =========== ===========
Refer to our 2011 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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