Central Vermont Public Service (NYSE: CV)
- First-quarter earnings of $9.2 million, or 67
cents per diluted share, 5 cents higher than 2011, excluding
merger-related costs of $0.3 million after-tax, or 2 cents per
diluted share
- $5.3 million increase in retail revenues
(4.78% rate increase effective Jan. 1, 2012 and higher sales due to
new customers, partially offset by lower volume due to warmer
weather)
- $1.0 million decrease in service restoration
(No major storms in 2012)
- $0.5 million increase in merger-related costs
(None in 2011)
- Due to pending merger, earnings guidance has
been discontinued
Central Vermont Public Service (NYSE: CV) reported consolidated
first-quarter earnings of $9.2 million or $0.67 per diluted share,
excluding merger-related costs after-tax of $0.3 million, or $0.02
per diluted share. Including merger-related costs, earnings were
$8.9 million, or 65 cents per diluted share of common stock, for
2012 compared to $8.4 million, or $0.62 per diluted share of common
stock, for 2011.
The $0.5 million increase in earnings in 2012 was primarily due
to lower service restoration costs in the first three months of
2012 and higher income from variable life insurance policies,
partially offset by lower sales due to warmer weather.
"Our first quarter results show that we are off to a solid start
for the year in spite of the extraordinary mild winter we
experienced," CVPS President and CEO Larry Reilly said. "Our first
quarter earnings were only modestly affected by merger-related
costs, and those costs had no impact on our dividend. Our agreement
with Gaz Métro allows us to pay a quarterly dividend of 23 cents
per share until the sale is consummated."
Reilly said the company remains focused on high-quality customer
service and reliability. "In March, we received the Edison Electric
Institute's award for emergency response for the company's
outstanding efforts in the wake of Tropical Storm Irene last year,"
Reilly said. "This is the fourth time CVPS has received that award
in five years. Emergency response and customer service will
continue to be central to our efforts as the closing and merger
draw nearer."
2012 results compared to 2011 The
following is a reconciliation of 2012 net earnings, excluding
merger-related costs:
2012
----------------------------
Earnings Per
Net Income Diluted Share
(in millions)
Net earnings excluding merger-related expenses $ 9.2 $ 0.67
Merger-related expenses, after-tax (0.3) (0.02)
------------- -------------
Net earnings $ 8.9 $ 0.65
============= =============
Operating revenues in 2012 decreased $0.8 million, including a
$4.4 million decrease in the provision for rate refund and a $2
million decrease in resale revenue, partially offset by a $5.3
million increase in retail revenues and a $0.2 million increase in
other operating revenues.
The provision for rate refund is the net impact during the year
of collections and refunds of amounts previously deferred, as
required by the power cost adjustment component of our alternative
regulation plan. In 2011, $4.1 million of revenues included in the
provision for rate refund were offset by higher regulatory
amortizations, included in Other operating expenses, as described
below. Resale revenues decreased due to lower volume available for
resale due to higher retail load, and lower market rates for power.
The increase in retail revenues primarily resulted from a 4.78
percent base rate increase, effective January 1, 2012, which
contributed $3.9 million, and the acquisition of the Vermont Marble
service territory on September 1, 2011, which contributed $3.7
million, partially offset by a $2.2 million decrease from weaker
customer demand in 2012, due to warmer weather. Other operating
revenues increased $0.2 million, primarily due to higher sales of
renewable energy credits in 2012 versus 2011.
Purchased power expense decreased $0.9 million, comprised of a
decrease of $1.8 million from lower output at the Vermont Yankee
plant in 2012 due to the end of the contract on March 21, 2012,
partially offset by $0.4 million of higher volumes from ISO-NE
purchases, a $0.3 million increase due to higher deliveries from
Hydro-Québec, and various items.
Other operating expenses decreased $1.1 million. This included a
$3.9 million decrease in net regulatory amortizations, largely due
to 2011 exogenous costs of $4.1 million, related to major storms
and tax law changes, a $1 million decrease in service restoration
costs due to no major storms in 2012, and lower salary expense due
to fewer employees in 2012 versus 2011. These decreases were
partially offset by an increase of $2 million in transmission
expenses driven by higher rates from ISO-NE; higher Vermont
Transmission Agreement billings and lower NEPOOL Open Access
Transmission Tariff reimbursements due to lower retail loads; an
$0.8 million increase in tree trimming; a $0.3 million increase in
property taxes, principally due to general increases and more
property, related to the acquisition of Vermont Marble; and various
items. We also had a $0.3 million increase in operating income tax
expense as a result of a higher level of earnings in 2012.
Other, net increased $0.3 million, primarily due to $0.2 million
of higher income from variable life insurance policies.
Merger-related expenses included in Other Income were $0.2
million in 2012 versus none in 2011.
Interest expense increased $0.3 million, primarily due to
long-term debt issued in June 2011, partially offset by bond
redemptions in June 2011.
Earnings Guidance Due to the pending
merger, the company has discontinued earnings guidance.
Webcast CV will host an earnings
teleconference and webcast on May 10, 2012, beginning at 11 a.m.
Eastern Time. At that time, CV President and CEO Larry Reilly and
Acting Chief Financial Officer Edmund Ryan 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 2012 1st 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
392463.
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 Wednesday, May 9, 2012, 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
Three Months
2012 vs. 2011
-------------
2011 Earnings per diluted share $0.62
Major Year-over-Year Effects on Earnings:
Lower service restoration due to no major storms in 2012 0.02
Lower salaries expense 0.02
Variable life insurance 0.02
Lower retail revenue sales volume due to weather (0.03)
Merger-related fees (0.02)
Other (includes income tax adjustments, and various items) 0.02
-------------
2012 Earnings per diluted share $0.65
=============
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, 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 March 31
Condensed Income statement 2012 2011
------------- -------------
Operating revenues:
Retail sales $ 88,575 $ 83,258
Resale sales 5,743 7,695
Provision for rate refund (1,047) 3,391
Other 2,971 2,741
------------- -------------
Total operating revenues 96,242 97,085
------------- -------------
Operating expenses:
Purchased power - affiliates and other 40,488 41,352
Other operating expenses 44,871 45,948
Income tax expense 3,138 2,857
------------- -------------
Total operating expense 88,497 90,157
------------- -------------
Utility operating income 7,745 6,928
------------- -------------
Other income:
Equity in earnings of affiliates 6,800 6,941
Other, net 372 105
Merger-related expenses (242) 0
Income tax expense (2,220) (2,302)
------------- -------------
Total other income 4,710 4,744
------------- -------------
Interest expense 3,580 3,247
------------- -------------
Net income 8,875 8,425
Dividends declared on preferred stock 92 92
------------- -------------
Earnings available for common stock $ 8,783 $ 8,333
============= =============
Per common share data
Earnings per share of common stock - basic $ 0.65 $ 0.62
Earnings per share of common stock - diluted $ 0.65 $ 0.62
Average shares of common stock outstanding -
basic 13,491,377 13,353,973
Average shares of common stock outstanding -
diluted 13,570,720 13,406,926
Dividends declared per share of common stock $ 0.23 $ 0.46
Dividends paid per share of common stock $ 0.23 $ 0.23
Supplemental financial statement data
Balance sheet
Investments in affiliates $ 181,832 $ 174,893
Total assets $ 774,630 $ 700,016
Common stock equity $ 276,259 $ 275,248
Long-term debt (excluding current portions) $ 228,448 $ 188,300
Cash Flows
Cash and cash equivalents at beginning of
period $ 1,734 $ 2,676
Cash provided by operating activities 18,164 32,382
Cash used for investing activities (4,978) (2,824)
Cash used for financing activities (13,196) (17,105)
------------- -------------
Cash and cash equivalents at end of period $ 1,724 $ 15,129
============= =============
Refer to our 2012 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:
Edmund Ryan Acting Chief Financial Officer and Treasurer (802)
747-5422 e-mail: Email Contact
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