RUTLAND, VT -- 11/06/09 --
Central Vermont Public Service (NYSE: CV)
-- Year-to-date earnings of $18.6 million, or $1.57 per diluted share,
2 cents higher than last year
- $4.3 million decrease in operating revenue
- $6.4 million decrease in purchased power expense
- $4.8 million increase in Other operating expenses
- $1.0 million increase in equity in earnings of affiliates
- $2.4 million increase in other income, net
-- Third-quarter earnings of $6.2 million, or 52 cents per diluted share,
9 cents lower than last year
- $2.0 million decrease in operating revenue
- $2.5 million decrease in purchased power expense
- $4.8 million increase in Other operating expenses
- $0.3 million increase in equity in earnings of affiliates
- $1.2 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 6 cents for the third quarter
and 18 cents for the first nine months of 2009.
-- Raises earnings guidance for 2009 to $1.50 to $1.65 per share from $1.40
to $1.60 per share
Central Vermont Public Service (NYSE: CV) reported consolidated earnings of
$18.6 million, or $1.57 per diluted share of common stock, for the first
nine months of 2009, compared to $16.4 million, or $1.55 per diluted share
of common stock, for the same period last year.
CV reported third-quarter 2009 consolidated earnings of $6.2 million, or 52
cents per diluted share of common stock, compared to $6.5 million, or 61
cents per diluted share of common stock, for the same period last year.
"The economy is clearly having an impact on our business by reducing energy
demand, but thanks to prudent cost controls and hard work, we are
performing even better than we expected," President Bob Young said. "We
have seen demand fall among all classes of customers, from residential to
industrial, but we continue to work with the resources we have, and we
continue to provide exemplary service to our customers. That is the
foundation for everything we do, and we are excelling on that front.
"Three-quarters of the way through the year, we are on our way to meeting
every one of our state-monitored service quality standards," Young said.
"If we maintain that level of quality, which I am confident we will, it
will make 2009 the fifth straight year we have met all standards, which is
the best mark of any utility in Vermont."
Year-to-Date 2009 results compared to 2008
Through the first nine months, operating revenues decreased $4.3 million,
including a $5.8 million decrease in retail revenues, an increase of $1
million from provision for rate refunds, partially offset by a $1.7 million
increase in other operating revenues and a $0.8 million increase in resale
revenue. The decrease in retail revenues resulted from lower average usage
resulting from the sluggish economy, energy conservation, and the loss of
three commercial and industrial customers due to plant closures, partially
offset by higher average unit prices due to customer usage mix. The
provision for rate refund is related to the 2009 deferrals of
over-collection of power, production and transmission costs as required by
the power cost adjustment clause of our alternative regulation plan. The
over-collection of power costs is being returned to retail customers
through the first quarter of 2010. Other operating revenues increased
primarily due to increased sales of transmission rights, renewable energy
credits and increased wholesale rates. Resale revenues increased due to
higher volumes of excess power available for resale, partially offset by
lower average market prices.
Purchased power expense decreased $6.4 million, primarily due to a
reduction of $3.9 million in purchases from Independent Power Producers.
Short-term power purchases decreased $3.8 million and decommissioning costs
decreased $0.7 million. These reductions were partially offset by an
increase in other power costs of $1.7 million, primarily due to increased
capacity payments of $1.2 million, and increased Hydro-Quebec purchases of
$0.3 million. Other operating expenses increased $4.8 million, primarily
due to a $3.2 million increase in transmission expenses due to higher
rates, and higher costs from Vermont Transco LLC ("Transco") for its
capital projects, offset by higher NOATT reimbursements. Other increased
costs included higher regulatory amortizations of $1.5 million, higher
depreciation expense of $0.8 million, higher reserves for uncollectible
accounts of $0.4 million, higher outside services of $0.4 million and
higher property taxes of $0.4 million. These higher costs were partially
offset by a $2.4 million decrease in maintenance expenses, primarily due to
lower service restoration costs. There were several major storms in 2008
and none in the first three-quarters of 2009.
Equity in earnings of affiliates increased $1 million, principally due to
the $3.1 million investment that we made in Transco in December 2008, and
other accumulated adjustments. Other income, net increased $2.4 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 $0.1 million.
Third quarter 2009 results compared to 2008
Operating revenues decreased $2 million for many of the same reasons
described above.
Purchased power expense decreased $2.5 million for the same reasons
described above. Short-term purchases decreased $3.2 million and IPP
purchases decreased $0.5 million, partially offset by an increase in other
purchases of $1 million.
Other operating expenses increased $4.8 million, including a $2.8 million
increase in transmission expenses, and for many of the same reasons
described above. These higher costs were partially offset by lower
maintenance costs for the same reasons described above.
Equity in earnings of affiliates increased $0.3 million and other income,
net increased $1.2 million, for many of the same reasons described above.
2008 Common Stock Issuance
Earnings per share for the third quarter and first nine 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 6 cents for
the third quarter of 2009 and decreased per-diluted-share earnings by 18
cents for the first nine months of 2009.
2009 Financial Guidance
CV previously issued 2009 earnings guidance in the range of $1.40 to $1.60
per diluted share. We are now raising our earnings guidance range to $1.50
to $1.65 per share. As part of a rate agreement approved by the Vermont
Public Service Board, the company's allowed rate of return for 2009 is 9.77
percent.
Webcast
CV will host an earnings teleconference and webcast on Nov. 6, 2009
beginning at 2 p.m. EST. 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 Q3 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 330650.
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, Nov. 6, 2009, the company filed its third-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 Nine
Months Third Quarter
2009 vs. 2008 2009 vs. 2008
---------------- ----------------
2008 Earnings per diluted share $ 1.55 $ 0.61
Year-over-Year Effects on Earnings:
Lower purchased power expense 0.36 0.13
Higher equity in earnings of
affiliates 0.07 0.03
Lower operating revenues (0.25) (0.12)
Higher transmission expense (0.18) (0.15)
Common stock issuance (Nov. 2008) -
1,190,000 additional shares (0.18) (0.06)
Higher other operating expenses (0.04) (0.07)
Other (mostly variable life
insurance) 0.24 0.15
---------------- ----------------
2009 Earnings per diluted share $ 1.57 $ 0.52
================ ================
(a) The additional shares from the November 2008 stock issuance were
excluded from the 11,717,218 average shares of common stock - diluted
for the third quarter and the 11,685,795 average shares of common
stock - diluted for the first nine 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 Nine Months Ended
September 30 September 30
Condensed income statement 2009 2008 2009 2008
---------- ---------- ---------- ----------
Operating revenues:
Retail sales $ 68,067 $ 70,362 $ 205,532 $ 211,341
Resale sales 10,188 10,751 41,252 40,430
Provision for rate
refund (27) 0 (1,128) (62)
Other 3,563 2,654 9,489 7,769
---------- ---------- ---------- ----------
Total operating revenues 81,791 83,767 255,145 259,478
---------- ---------- ---------- ----------
Operating expenses:
Purchased power -
affiliates and other 37,676 40,131 117,891 124,319
Other operating
expenses 37,994 33,201 116,111 111,344
Income tax expense 905 3,120 4,541 5,825
---------- ---------- ---------- ----------
Total operating expense 76,575 76,452 238,543 241,488
---------- ---------- ---------- ----------
Utility operating income 5,216 7,315 16,602 17,990
---------- ---------- ---------- ----------
Other income:
Equity in earnings of
affiliates 4,320 4,043 13,196 12,242
Other, net 774 (427) 1,508 (892)
Income tax expense (1,186) (1,467) (4,008) (4,350)
---------- ---------- ---------- ----------
Total other income 3,908 2,149 10,696 7,000
---------- ---------- ---------- ----------
Interest expense 2,924 2,983 8,729 8,600
---------- ---------- ---------- ----------
Net income 6,200 6,481 18,569 16,390
Dividends declared on
preferred stock 92 92 276 276
Earnings available for
common stock $ 6,108 $ 6,389 $ 18,293 $ 16,114
========== ========== ========== ==========
Per common share data
Earnings per share of
common stock - basic $ 0.52 $ 0.62 $ 1.57 $ 1.56
Earnings per share of
common stock - diluted $ 0.52 $ 0.61 $ 1.57 $ 1.55
Average shares of common
stock outstanding - basic 11,679,133 10,352,262 11,647,626 10,321,998
Average shares of common
stock outstanding -
diluted 11,717,218 10,422,143 11,685,795 10,399,062
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 $ 0.92 $ 0.69
Supplemental financial
statement data
Balance sheet
Investments in
affiliates $ 107,459 $ 97,639
Total assets $ 622,108 $ 559,007
Notes Payable $ 0 $ 8,400
Common stock equity $ 228,619 $ 197,799
Long-term debt
(excluding current
portions) $ 178,300 $ 175,350
Cash Flows
Cash and cash equivalents
at beginning of period $ 6,722 $ 3,803
Cash provided by
operating activities 33,326 32,793
Cash used for investing
activities (21,970) (26,027)
Cash provided by
financing activities (7,802) 159
---------- ----------
Cash and cash
equivalents at end of
period $ 10,276 $ 10,728
========== ==========
Refer to our third-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
