Published: March 15, 2010
Central Vermont Reports 2009 Fourth Quarter Earnings
Central Vermont Public Service (NYSE: CV)
-- 2009 earnings of $20.4 million, or $1.74 per diluted share,
22 cents higher than 2008
-- $0.1 million decrease in operating revenue
-- $7.5 million decrease in purchased power expense
-- $6.8 million increase in other operating expenses
-- $1.2 million increase in equity in earnings of affiliates
-- $2.4 million increase in other income, net
-- Fourth-quarter earnings of $2.1 million, or 18 cents per diluted
share, 19 cents higher than 2008
-- $4.3 million increase in operating revenue
-- $1.0 million decrease in purchased power expense
-- $2.0 million increase in other operating expenses
-- $0.3 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
$20.4 million, or $1.74 per diluted share of common stock, for the 12
months of 2009, compared to $16 million, or $1.52 per diluted share of
common stock, for the same period in 2008.
CV reported fourth-quarter 2009 consolidated earnings of $2.1 million, or
18 cents per diluted share of common stock, compared to a loss of $0.1
million, or 1 cent per diluted share of common stock, for the same period
last year.
"Perhaps most significant, Moody's Investors Service rated the company at
investment grade in the fourth quarter, markedly improving our borrowing
capability," President Bob Young said. "These ratings will allow CVPS to
borrow short-term capital at lower rates than we could otherwise expect to
receive, and will reduce or eliminate collateral requirements in many power
purchase and power sales contracts, so this expands our options as we look
to secure new power supply in the future.
"We also plan to continue to make significant capital investments in our
company and Vermont's transmission system through Transco, providing
customers with good reliability and investors with a solid return," Young
said.
2009 results compared to 2008
Operating revenues decreased $0.1 million year-over-year, including a $5.5
million decrease in retail revenues, an increase of $1.4 million in the
provision for rate refunds, partially offset by a $1.2 million increase in
other operating revenues, and a $5.6 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 within our alternative regulation
plan. The
over-collection of power costs is being returned to retail customers
through the second quarter of 2010. Other operating revenues increased
primarily due to increased sales of transmission rights and 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 $7.5 million, primarily due to a $9.7
million reduction of short-term power purchases and a $3.9 million decrease
in purchases from Independent Power Producers. These reductions were
partially offset by an increase in other power costs of $6.1 million. This
was primarily due to higher output at the Vermont Yankee plant in 2009 and
because there were no refueling outages at the Vermont Yankee or Millstone
III plants in 2009. Other operating expenses increased $6.8 million,
primarily due to a $5.7 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 $2.2 million, primarily
related to the recovery of 2008 major storm costs, higher depreciation
expense of $1.3 million, higher property taxes of $1.3 million and higher
reserves for uncollectible accounts of $0.5 million. These higher costs
were partially offset by a $3.8 million decrease in maintenance expenses,
primarily due to lower service restoration costs. There were several major
storms in 2008, but just one major storm in 2009.
Equity in earnings of affiliates increased $1.2 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 held in trust to fund a supplemental employee retirement
plan.
Fourth quarter 2009 results compared to 2008
Fourth quarter operating revenues increased $4.3 million for many of the
same reasons described above.
Purchased power expense decreased $1 million for the same reasons described
above. Short-term purchases decreased $5.9 million, partially offset by an
increase in other purchases of $4.8 million.
Other operating expenses increased $2 million, including a $2.4 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 for the same
reasons described above.
2008 Common Stock Issuance
Earnings per share for 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 18 cents in 2009. There was no significant impact to
per-diluted-share earnings for the fourth quarter of 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 March 15, 2010,
beginning at 2 p.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 Q4 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 341962.
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-K
On Monday, March 15, 2010, the company filed its annual 2009 Form 10-K 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
Twelve Months Fourth Quarter
2009 vs. 2008 2009 vs. 2008
-------------- --------------
2008 Earnings per diluted share $ 1.52 $ (0.01)
Year-over-Year Effects on Earnings:
Lower purchased power expense 0.42 0.06
Higher equity in earnings of
affiliates 0.09 0.02
Higher operating revenues 0.00 0.25
Higher transmission expense (0.32) (0.14)
Common stock issuance (Nov. 2008) -
1,190,000 additional shares (0.18) 0.00
(Higher) lower other operating
expenses (0.02) 0.01
Other (mostly variable life
insurance) 0.23 (0.01)
-------------- --------------
2009 Earnings per diluted share $ 1.74 $ 0.18
============== ==============
(a) The additional shares from the November 2008 stock issuance were
excluded from the 11,764,277 average shares of common stock - diluted
for the fourth quarter and the 11,705,518 average shares of common
stock - diluted for the twelve 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
(dollars in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31 December 31
Condensed income statement 2009 2008 2009 2008
---------- ---------- ---------- ----------
Operating revenues:
Retail sales $ 71,997 $ 71,732 $ 277,529 $ 283,073
Resale sales 13,027 8,211 54,279 48,641
Provision for rate refund (561) (234) (1,689) (296)
Other 2,490 2,975 11,979 10,744
---------- ---------- ---------- ----------
Total operating revenues 86,953 82,684 342,098 342,162
---------- ---------- ---------- ----------
Operating expenses:
Purchased power -
affiliates and other 40,091 41,132 157,982 165,451
Other operating expenses 44,084 42,059 160,195 153,403
Income tax expense 492 (947) 5,033 4,878
---------- ---------- ---------- ----------
Total operating expense 84,667 82,244 323,210 323,732
---------- ---------- ---------- ----------
Utility operating income 2,286 440 18,888 18,430
---------- ---------- ---------- ----------
Other income:
Equity in earnings of
affiliates 4,276 4,022 17,472 16,264
Other, net 3 13 1,511 (879)
Income tax expense (1,632) (1,512) (5,640) (5,862)
---------- ---------- ---------- ----------
Total other income 2,647 2,523 13,343 9,523
---------- ---------- ---------- ----------
Interest expense 2,753 2,968 11,482 11,568
---------- ---------- ---------- ----------
Net income 2,180 (5) 20,749 16,385
Dividends declared on
preferred stock 92 92 368 368
---------- ---------- ---------- ----------
Earnings available for
common stock $ 2,088 $ (97) $ 20,381 $ 16,017
========== ========== ========== ==========
Per common share data
Earnings per share of
common stock - basic $ 0.18 $ (0.01) $ 1.75 $ 1.53
Earnings per share of
common stock - diluted $ 0.18 $ (0.01) $ 1.74 $ 1.52
Average shares of common
stock outstanding - basic 11,697,392 10,863,926 11,660,170 10,458,220
Average shares of common
stock outstanding -
diluted 11,764,277 10,863,926 11,705,518 10,536,131
Dividends declared per
share of common stock $ 0.00 $ 0.00 $ 0.92 $ 0.92
Dividends paid per share of
common stock $ 0.23 $ 0.23 $ 0.92 $ 0.92
Supplemental financial
statement data
Balance sheet
Investments in affiliates $ 129,733 $ 102,232
Total assets $ 632,152 $ 626,126
Notes Payable (reclassified
to long-term debt) $ 0 $ 10,800
Common stock equity $ 231,423 $ 219,479
Long-term debt (excluding
current portions) $ 201,611 $ 167,500
Cash Flows
Cash and cash equivalents
at beginning of period $ 6,722 $ 3,803
Cash provided by operating
activities 42,042 28,400
Cash used for investing
activities (52,931) (40,498)
Cash provided by financing
activities 6,236 15,017
---------- ----------
Cash and cash equivalents
at end of period $ 2,069 $ 6,722
========== ==========
Refer to our annual 2009 Form 10-K for additional information.
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