Central Vermont Reports Second Quarter Earnings.RUTLAND Rutland, county, England Rutland, county (1991 pop. 32,400), 152 sq mi (394 sq km), central England. Rutland has a rolling terrain and is a rural upland area largely devoted to tillage and pasturage. , Vt. -- Central Vermont Vermont (vərmŏnt`) [Fr.,=green mountain], New England state of the NE United States. It is bordered by New Hampshire, across the Connecticut R. Public Service (NYSE NYSE See: New York Stock Exchange : CV) reported consolidated second quarter earnings of $1.0 million, or 8 cents per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share of common stock. This compares to second quarter 2005 earnings of $2.1 million, or 17 cents per diluted share of common stock. CV reported consolidated earnings of $5.1 million, or 43 cents per diluted share of common stock, for the first half of 2006. This compares to a consolidated loss of $2.5 million, or 22 cents per diluted share of common stock, for the first half of 2005. The 2005 results included a $21.8 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge to earnings, or 91 cents per diluted share of common stock, due to the Vermont Public Service Board's ("PSB PSB Pet Shop Boys (band) PSB Public Service Broadcasting (radio and television) PSB Public Service Board (Vermont) PSB Public Security Bureau (China) ") Order issued on March 29, 2005 ("2005 Rate Order"). "Our primary focus continues to be on restoring the company's financial health to enable a return to an investment grade credit rating. In May we filed with the PSB for a 6.15 percent retail rate increase. We expect a decision on the case in late January January: see month. 2007," CV President Bob Young said. "Financial discipline and strategic growth opportunities, such as the planned purchase of Rochester Electric Light and Power and the southern Vermont territory of Vermont Electric Cooperative, are keys to our success. These purchases will provide important customer growth while allowing the company to spread fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). over a larger customer base," Young said. Quarterly Performance Summary - 2006 versus 2005 Utility Business Operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. for the second quarter and first half of 2006 include resale resale n. selling again, particularly at retail. In many states a "resale license" or "resale number" is required so that the state can monitor the collection of sales tax on retail sales. RESALE. revenue associated with the additional power that CV purchased under the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. contract ("PPA PPA 1. Palpation, Percussion & Ausculation 2. Pittsburgh pneumonia agent 3. Postpartum amenorrhea 4. Price per accession 5. Pure pulmonary atresia ") with Vermont Yankee Nuclear Power Corporation ("VYNPC VYNPC Vermont Yankee Nuclear Power Corporation "). In mid-March 2006, the Vermont Yankee plant completed an uprate that increased its hourly output by about 20 percent. Under the PPA, CV is required to purchase a share of this uprate energy at market rates, referred to as Vermont Yankee uprate energy. CV has been reselling the energy to ISO-New England at the same market price, since it is not needed to serve our customers. Therefore, the additional sales and related purchases have no effect on net income. Operating revenues increased $3.9 million in the second quarter of 2006 compared to 2005, including $3.9 million related to Vermont Yankee uprate energy. Retail sales decreased due to a drop in residential and commercial customer use primarily driven by weather and by the reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of one large commercial customer to industrial. Other operating revenues decreased due to lower transmission revenue and increased reserves for a proposed pole attachment tariff tariff, tax on imported and, more rarely, exported goods. It is also called a customs duty. Tariffs may be distinguished from other taxes in that their predominant purpose is not financial but economic—not to increase a nation's revenue but to protect domestic settlement. Resale sales increased due to increased deliveries under the long-term power contract with Hydro-Quebec and higher output from our owned generating units and Independent Power Producers ("IPPs") as described below. Since retail sales volume was about the same in both periods, the additional power from these sources was available for resale. Purchased power costs increased $4.5 million pre-tax in the second quarter of 2006 compared to 2005, including $3.9 million related to Vermont Yankee uprate energy. The remaining $0.6 million increase primarily resulted from increased Hydro-Quebec deliveries due to a change in the capacity factor from 65 percent to 80 percent beginning Nov. 1, 2005, and higher output from IPPs due to rainfall in 2006. The additional power from Hydro-Quebec and IPPs reduced short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. purchases and increased resale sales as discussed above. Other operating costs operating costs npl → gastos mpl operacionales increased $3.2 million pre-tax in the second quarter of 2006 compared to 2005. Employee-related costs were higher than last year due to increased pension, medical and long-term disability costs. Storm restoration and transmission costs were also higher when compared to last year. These were partly offset by lower legal and financing costs in 2006. Year-To-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. Performance Summary - 2006 versus 2005 Utility Business Operating revenues increased $10.5 million in the first half of 2006 compared to 2005. 2006 results include $4.3 million related to Vermont Yankee uprate energy. Last year included a first-quarter $6.2 million 2005 Rate Order-required customer refund TO REFUND. To pay back by the party who has received it, to the party who has paid it, money which ought not to have been paid. 2. On a deficiency of assets, executors and administrators cum testamento annexo, are entitled to have refunded to them legacies . The remaining year- over-year variances are similar to those discussed in the quarterly performance summary above. Purchased power costs increased $5.2 million pre-tax in the first half of 2006 compared to 2005. 2006 included $4.3 million related to Vermont Yankee uprate energy. Last year included first quarter 2005 Rate Order- required charges of $2.5 million. The remaining year-over-year variances are similar to those discussed in the quarterly performance summary above. Other operating costs decreased $4.4 million for the first half of 2006 compared to 2005. Last year included first-quarter 2005 Rate Order-required charges of $10.7 million. The remaining $6.3 million increase included higher costs associated with employee benefits (pension, medical and long-term disability), storm restoration, transmission, and external audit fees. These were partly offset by a gain on the sale of non-utility property in 2006 with no comparable item in 2005. 2005 Rate Order: The 2005 Rate Order resulted in a $21.8 million pre-tax charge to utility earnings in the first quarter of 2005. The primary components of the charge included: 1) a revised calculation of overearnings for the period 2001 - 2003; 2) application of the gain resulting from termination of the power contract with Connecticut Connecticut, state, United States Connecticut (kənĕt`ĭkət), southernmost of the New England states of the NE United States. It is bordered by Massachusetts (N), Rhode Island (E), Long Island Sound (S), and New York (W). Valley to reduce costs; 3) a customer refund for the period April 7, 2004 through March 31, 2005; and 4) amortization of costs and other adjustments. This affected various line items on CV's 2005 income statement as described in the variance The discrepancy between what a party to a lawsuit alleges will be proved in pleadings and what the party actually proves at trial. In Zoning law, an official permit to use property in a manner that departs from the way in which other property in the same locality discussion above. The 2005 Rate Order also included, among other things, a 2.75 percent rate reduction beginning April 1, 2005 and a 10 percent return on equity (reduced from 11 percent). Income Taxes: Income taxes fluctuate with the level of pre-tax earnings in relation to permanent differences, tax credits, tax settlements and changes in valuation allowances for the periods. Taxes on income in 2005 reflect the effect of losses resulting from the 2005 Rate Order-required charges in the first quarter of 2005. Non-utility Business CV's non-regulated wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. Catamount catamount: see puma. Resources Corporation ("CRC (Cyclical Redundancy Checking) An error checking technique used to ensure the accuracy of transmitting digital data. The transmitted messages are divided into predetermined lengths which, used as dividends, are divided by a fixed divisor. ") owns Eversant Corporation ("Eversant"), and owned Catamount Energy Corporation ("Catamount") until it was sold in December 2005. CRC's earnings were about $0.1 million in the second quarter of 2006 and $0.6 million in the first half of 2006. This compares to earnings of about $0.1 million in the second quarter of 2005 and $0.2 million in the first half of 2005. The $0.4 million increase in the first half of 2006 is primarily related to interest income on the $59.25 million cash proceeds that CRC received from the Catamount sale. CV began reporting Catamount's results of operations as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. in the fourth quarter of 2005. Discontinued operations had a loss of $0.5 million, or 4 cents per diluted share of common stock, in the second quarter, and $0.2 million, or 2 cents per diluted share of common stock, in the first half of 2005. 2006 Financial Guidance As previously reported, CV's 2006 earnings available for common stock are expected to range from $12.3 million to $13.3 million, or $1.06 to $1.14 per diluted share of common stock. CV invested $8.9 million into Vermont Transco LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ("Transco"), a Vermont limited liability company formed by Vermont Electric Power Company, Inc. and its owners. CV expects to invest another $14.4 million in Transco in the third quarter of 2006. CV's capital expenditures for 2006 are expected to be about $18 million. Webcast CV will host an earnings conference call and webcast on August 10, 2006 beginning at 2 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . At that time, CV President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Robert Young Robert Young or Bob Young may refer to several different people:
Interested parties may listen to the conference call live on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the by selecting the "Q2 2006 Central Vermont Public Service Earnings Conference Call" link on CV's homepage at www.cvps.com. An audio archive of the call will be available at approximately 4:30 p.m. EDT at www.cvps.com or by dialing 1-888-286-8010 and entering passcode 36978185. About CV CV is Vermont's largest electric utility, serving more than 151,000 customers statewide. CV's non-regulated wholly owned subsidiary CRC owns Eversant Corporation, which sells and rents electric water heaters through a wholly owned subsidiary, SmartEnergy Water Heating Water heating is a thermodynamic process using an energy source to heat water above its initial temperature. Typical domestic uses of hot water are for cooking, cleaning, bathing, and space heating. In industry both hot water and water heated to steam have many uses. Services. Forward Looking Statements Statements contained in this report that are not historical fact are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. intended to qualify for the safe-harbors from the liability established by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 Vermont Yankee is a boiling water reactor (BWR) type nuclear power plant currently owned by Entergy Nuclear. It is located in the town of Vernon, Vermont and generates 640 megawatts (MWe) of electricity. The plant began commercial operations in 1972. , effects of and changes in weather and economic conditions, volatility in wholesale electric 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of this press release.
Central Vermont Public Service Corporation
Reconciliation of Earnings per Diluted Share
Second quarter 2006 vs. second quarter 2005
2005 earnings per diluted share $.17
Year-over-Year Effects on Earnings:
-- Higher resale revenue .28
-- CRC higher earnings in 2006 .01
-- Lower other operating revenue (.03)
-- Lower retail revenue (.04)
-- Higher purchased power costs (.25)
-- Other variances, net (.10)
Subtotal (.13)
-- Discontinued operations - 2005 loss .04
-------
2006 Earnings per diluted share $.08
=======
Reconciliation of Earnings (Loss) per Diluted Share
First half of 2006 vs. first half of 2005:
2005 Loss per diluted share $(.22)
Year-over-Year Effects on Earnings:
-- Higher resale revenue .39
-- CRC higher earnings in 2006 .04
-- Lower other operating revenue (.04)
-- Lower retail revenue (a) (.13)
-- Higher purchased power costs (a) (.39)
-- Other variances, net (a) (.15)
-- Net impact of first-quarter 2005 Rate Order charge .91
-- Discontinued operations - 2005 loss .02
-------
2006 Earnings per diluted share $.43
=======
(a) Excludes first-quarter 2005 Rate Order charge
Central Vermont Public Service Corporation - Consolidated
Earnings Release (unaudited)
(dollars in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- --------------------
2006 2005 2006 2005
-------- -------- ------- -------
Utility Operating Data
Retail sales (mWh) 526,606 526,038 1,126,540 1,127,268
Operating revenues:
Retail sales $ 61,434 $ 62,143 $ 130,248 $ 132,878
Customer refund - - - (6,197)
Resale sales 15,757 10,689 27,295 19,660
Other operating
revenue 1,801 2,284 3,704 4,439
-------- -------- ------- -------
Total operating
revenue $ 78,992 $ 75,116 $ 161,247 $ 150,780
=========== =========== =========== ===========
Operating expenses:
Purchased
power $ 42,983 $ 38,465 $ 85,471 $ 80,312
Other
operating
expense 33,523 30,314 66,956 71,338
Income tax
expense
(benefit) 248 2,680 1,962 (3,539)
-------- -------- ------- -------
Total operating
expense $ 76,754 $ 71,459 $ 154,389 $ 148,111
=========== =========== =========== ===========
Net Income (Loss)
and Common Stock
Income (loss)
from continuing
operations $ 995 $ 2,634 $ 5,092 $ (2,281)
Income from
discontinued
operations - (544) - (256)
-------- -------- ------- -------
Net Income (Loss) 995 2,090 $ 5,092 $ (2,537)
Preferred stock
dividend
requirements 92 92 184 184
-------- -------- ------- -------
Earnings (loss)
available for
common stock $ 903 $ 1,998 $ 4,908 $ (2,721)
=========== =========== =========== ===========
Weighted average
shares of common
stock outstanding:
Basic 10,634,854 12,259,428 11,403,213 12,239,390
Diluted 10,682,809 12,393,181 11,460,706 12,239,390
Earnings (loss)
per share of
common stock -
basic:
Continuing
operations $ .08 $ .21 $ .43 $ (.20)
Discontinued
operations - (.04) - (.02)
-------- -------- ------- -------
Earnings (loss)
per share $ .08 $ .17 $ .43 $ (.22)
=========== =========== =========== ===========
Earnings (loss)
per share of
common stock -
diluted:
Continuing
operations $ .08 $ .21 $ .43 $ (.20)
Discontinued
operations - (.04) - (.02)
Earnings (loss) -------- -------- ------- -------
per share $ .08 $ .17 $ .43 $ (.22)
=========== =========== =========== ===========
Dividends declared
per share of
common stock $ .46 $ .23 $ .46 $ .69
Catamount Resources Corporation
Earnings per
basic and
diluted share
of common stock $ .01 $ - $ .05 $ .01
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