Central Vermont Reports 2010 First Quarter Earnings

07.05.2010  |  Marketwired

RUTLAND, VT -- (Marketwire) -- 05/07/10 -- Central Vermont Public Service (NYSE: CV)

-- First-quarter earnings of $4.2 million, or 35 cents per diluted share,
23 cents lower than 2009

-- $0.3 million increase in operating revenue
-- $4.6 million increase in other operating expenses, primarily due to
major storm in February 2010
-- $1.0 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
$4.2 million, or 35 cents per diluted share of common stock, for the first
three months of 2010, compared to $6.9 million, or 58 cents per diluted
share of common stock, for the same period in 2009.

'Much of the change was due to a major storm in February,' President Bob
Young said. 'Despite the storm, we're making great progress. I was
particularly pleased by our recent inclusion in Forbes' list of the 100
most trustworthy companies in America. This listing highlights the success
we have had instilling key, core values within the company, and working to
be open, transparent and complete in our financial communications,
accounting and corporate governance.

'Going forward, we have several investment opportunities that will benefit
customers and shareholders alike. We plan to invest more than $43 million
in the transmission system and $38 million in our core distribution system
over the course of this year,' Young said. 'We will also begin significant
investments in CVPS SmartPower™, our smart-grid program, which will
require more than $60 million over the next few years, about half that
money coming from federal stimulus funds.

'We will also invest in new service territory and new hydro operations
through the purchase of the assets of Vermont Marble Power Division, for
approximately $33 million,' Young said.

First quarter 2010 results compared to 2009

First quarter operating revenues increased $0.3 million, including a $2
million increase in retail revenues, a $0.8 million increase in other
operating revenues, partially offset by a $2.6 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 from
ESAM revenue to recover 2008 major storm costs, partially offset by lower
residential and commercial customer usage, due to warmer weather in 2010.
The provision for rate refund is related to deferrals and refunds of
over-collection of power, production and transmission costs as required by
the power cost adjustment clause within our alternative regulation plan.
This included a $0.6 million refund of over-collections from the third
quarter of 2009, refunded to customers during the first quarter of 2010,
partially offset by a $0.5 million over-collection of power costs during
the first quarter of 2010 that will be returned to retail customers in the
third quarter of 2010. Other operating revenues increased primarily due to
higher levels of mutual aid for other utilities in 2010 and the sale of
renewable energy credits. Resale revenues decreased due to lower average
market prices despite an increase in volumes sold.

Purchased power expense increased $0.1 million, due to a $0.4 million
increase in purchases from Independent Power Producers, partially offset by
a decrease in other power costs of $0.3 million. The decrease in other
power costs was due to lower volume and capacity costs from Hydro-Quebec,
reduced by higher output at the Vermont Yankee plant in 2010 and higher
capacity costs. Other operating expenses increased $4.6 million, due to a
$3.2 million increase in service restoration costs from a major storm in
February 2010, and a $0.4 million increase in transmission expenses driven
by higher rates from ISO-NE, and reduced by lower VTA billings due to
higher NOATT reimbursements. We also had higher regulatory amortizations
of $0.8 million from the recovery of 2008 major storm costs, and higher
property taxes of $0.5 million, partially offset by lower production costs
of $0.3 million, due to lower Vermont Yankee outage insurance premiums.
Operating income tax expense decreased $1 million as a result of a lower
level of earnings and partially offset by 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.

Equity in earnings of affiliates increased $1 million, principally due to
the $20.8 million investment that we made in Transco in December 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 May 7, 2010,
beginning at 9 a.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 Qtr 1 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 347698.

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 Thursday, May 6, 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
2010 vs. 2009
-------------
2009 Earnings per diluted share $ 0.58

Year-over-Year Effects on Earnings:
Higher equity in earnings of affiliates 0.05
Higher operating revenues 0.01
Higher maintenance expense (major storm in February 2010) (0.16)
Higher other operating expenses (0.06)
Health Care Reform/Medicare Part D - Income tax impact (0.06)
Higher transmission expense (0.02)
Higher purchased power expense (0.01)
Other 0.02
-------------
2010 Earnings per diluted share $ 0.35
=============

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
March 31
Condensed income statement 2010 2009
----------- -----------
Operating revenues:
Retail sales $ 76,062 $ 74,083
Resale sales 11,339 13,933
Provision for rate refund 125 0
Other 3,481 2,711
----------- -----------
Total operating revenues 91,007 90,727
----------- -----------

Operating expenses:
Purchased power - affiliates and other 41,718 41,610
Other operating expenses 44,196 39,618
Income tax expense 1,838 2,876
----------- -----------
Total operating expense 87,752 84,104
----------- -----------
Utility operating income 3,255 6,623
----------- -----------

Other income:
Equity in earnings of affiliates 5,395 4,445
Other, net 36 113
Income tax expense (1,589) (1,433)
----------- -----------
Total other income 3,842 3,125
----------- -----------

Interest expense 2,895 2,876
----------- -----------
Net income 4,202 6,872
Dividends declared on preferred stock 92 92
----------- -----------
Earnings available for common stock $ 4,110 $ 6,780
=========== ===========

Per common share data
Earnings per share of common stock - basic $ 0.35 $ 0.58
Earnings per share of common stock - diluted $ 0.35 $ 0.58

Average shares of common stock outstanding -
basic 11,725,484 11,602,354
Average shares of common stock outstanding -
diluted 11,756,303 11,655,175

Dividends declared per share of common stock $ 0.46 $ 0.46
Dividends paid per share of common stock $ 0.23 $ 0.23

Supplemental financial statement data
Balance sheet
Investments in affiliates $ 132,439 $ 104,158
Total assets $ 627,692 $ 627,496
Notes Payable (reclassified to long-term debt) $ 0 $ 10,827
Common stock equity $ 230,513 $ 221,647
Long-term debt (excluding current portions) $ 188,233 $ 167,500

Cash Flows
Cash and cash equivalents at beginning of
period $ 2,069 $ 6,722
Cash provided by operating activities 24,942 15,128
Cash used for investing activities (6,007) (5,937)
Cash provided by financing activities (15,866) (2,369)
----------- -----------
Cash and cash equivalents at end of period $ 5,138 $ 13,544
=========== ===========


Refer to our first-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