UIL Holdings' Earnings Consistent With Earnings Guidance.Business & Energy Editors NEW HAVEN New Haven, city (1990 pop. 130,474), New Haven co., S Conn., a port of entry where the Quinnipiac and other small rivers enter Long Island Sound; inc. 1784. Firearms and ammunition, clocks and watches, tools, rubber and paper products, and textiles are among the many , Conn.--(BUSINESS WIRE)--April 23, 2001 UIL UIL - User Interface Language Holdings Corporation today reported that operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before for the first quarter of 2001 were $9.5 million or $.67 per share. This result is in the middle of the publicly released earnings estimate of $.65-$.70 per share. As previously disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). , the quarterly earnings pattern has changed from that of 2000. The earnings pattern change is due to a combination of factors, including increased charges at the regulated reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. business unit that will be evenly distributed throughout the year, resulting in lower earnings from the regulated business, and little or no earnings sharing. Earnings for the first quarter of 2001 decreased by $.53 per share from first quarter 2000 earnings of $1.20 per share for the reasons stated above. It is anticipated that earnings in the second quarter will also be lower than the previous year's second quarter, but the absence of earnings sharing in 2001, which usually occurs in the third and fourth quarters of the year, is expected to increase the earnings in the third and fourth quarters of 2001 compared to the same periods in 2000. United Illuminating The United Illuminating Holdings Corporation (UI) is an electricity distributor for southern Connecticut. It currently serves roughly 320,000 customers in 17 municipalities in the Greater Bridgeport, New Haven, and Lower Naugatuck Valley regions. Earnings Remain Strong Earnings from the regulated utility business, United Illuminating (UI), totaled $10.9 million or $.77 per share, compared to $16.8 million or $1.19 per share for the first quarter of 2000. The decrease was due primarily to the increased amortization of regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. assets that was set in UI's rate plan and decreased pension fund earnings. Extended outages at the Seabrook Seabrook may refer to: Australian locations
Either of two flat, round stones used for grinding grain to make flour. The stationary bottom stone is carved with shallow grooved channels that radiate from the centre. The upper stone rotates horizontally, and has a central hole through which grain is poured. nuclear generating plants further reduced first quarter earnings, but were partially offset by decreased operation and maintenance expenses. "UI had a solid first quarter," said UIL's Chairman and Chief Executive Officer Nathaniel D. Woodson Woodson may refer to: People
Non-Regulated Businesses Positioned to Grow United Resources, Inc. (URI Uri, in the Bible Uri (y  `rī), in the Bible.1 Father of Bezaleel (1.) 2 Father of Geber (2.) 3 Porter. ), the parent for the non-regulated businesses, lost $1.5 million or $.10 per share in the first quarter of 2001 compared to earnings of $0.1 million or $.01 per share in 2000, resulting in a reduction of $.11 per share. The operating companies operating company A business that engages in transactions with outsiders. of URI, Xcelecom, Inc. and American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Payment Systems, Inc., accounted for $.02 per share of the decline and the passive business units and expenses at the parent accounted for the remaining decline of $.09 per share. Xcelecom, Inc. earned $.01 per share in the first quarter of 2001, an increase of $.03 per share over the same period last year. Earnings per share from normal operations Generally and collectively, the broad functions that a combatant commander undertakes when assigned responsibility for a given geographic or functional area. Except as otherwise qualified in certain unified command plan paragraphs that relate to particular commands, "normal operations" of at Xcelecom amounted to $.12 per share, but were offset by the write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of contracts that reduced earnings by $.11 per share. "We had a management problem at one of the operating companies in the first quarter and have taken the proper steps to correct it," said Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. L. Fiscus fiscus (Latin; “basket”) Treasury of the Roman emperor, so-called because the money was stored in baskets. Funds were also stored in the public treasury, the aerarium. , UIL's Chief Financial Officer. "In addition to the write-down of contracts, we have replaced management in that operating company. We have positioned ourselves to move forward for the remainder of the year." American Payment Systems, Inc. broke even in the first quarter of 2001 compared to earning $.05 per share in the first quarter of 2000. The decrease was expected and is due primarily to APS' commitment to making strategic investments in its non-contracted financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. distribution business. The passive business units, which include United Capital Investments (UCI UCI University of California, Irvine UCI Union Cycliste Internationale (International Cycling Union) UCI Unidad de Cuidados Intensivos UCI United Cinemas International (UK) ) and United Bridgeport Bridgeport, city (1990 pop. 141,686), Fairfield co., SW Conn., on Long Island Sound; inc. 1836. Long a chief industrial city in Connecticut, it makes electrical appliances, transportation equipment, clothing, ammunition, metal products, wiring devices, machinery, Energy and the financing and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. associated with the parent, URI, lost $.11 per share in the first quarter of 2001 compared to a loss of $.02 per share for the first quarter of 2000. The primary reason for the decline is a $.12 per share decline in UCI's earnings due to start-up Start-up The earliest stage of a new business venture. costs associated with its investment in the Long Island cable project and the performance of passive investments made by UCI, reflecting unfavorable market conditions in the first quarter of 2001. Looking Forward The Company is currently revising its earnings guidance for the year 2001 to $4.15-$4.25 per share from the previously disclosed earnings guidance of $4.40-$4.50 per share. The current estimate includes non-regulated business earnings of $0.25 to $0.30 per share. UIL's guidance includes earnings that are dependent on strategic or planned initiatives that are outlined below. "The current guidance of $4.15-$4.25 per share reflects the previously described issues at Xcelecom and UCI in the first quarter of 2001 and a delayed schedule for future Xcelecom acquisitions," said Fiscus. "The current economy has changed the playing field for acquiring new companies and we intend to maintain the rigor rigor /rig·or/ (rig´er) [L.] chill; rigidity. rigor mor´tis the stiffening of a dead body accompanying depletion of adenosine triphosphate in the muscle fibers. of our acquisition decision process. We also continue to watch the economic trends as they may impact our operations going forward." The current earnings estimate anticipates favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. outcomes in the following areas: -- Survival of an order by the Federal Energy Regulatory Commission reinstating installed capacity revenues that are included in the earnings of United Bridgeport Energy. -- A reduction of operating expenses at the regulated company resulting from reengineering efforts. -- The continued execution of the Xcelecom strategy of organic growth and acquisitions of accretive companies. -- The continued growth of APS' traditional base business, which will be more than offset by expenses that will be incurred to improve the future earnings potential for the non-contracted business segment. UIL Holdings Corporation is the holding company for The United Illuminating Company (UI) and United Resources. UI is a New Haven-based regional distribution utility that provides electricity and energy-related services to more than 318,000 customers in municipalities in the Greater New Haven Greater New Haven is the metropolitan area whose extent includes those towns in the U.S. state of Connecticut that share an economic, social, political, and historical focus on the city of New Haven. It occupies the south-central portion of the state in a radius around New Haven. and Greater Bridgeport Greater Bridgeport is the metropolitan area centered on the city of Bridgeport in the U.S. state of Connecticut. The area is located in Southwestern Connecticut and consists of the city of Bridgeport and five other adjacent towns – Easton, Fairfield, Monroe, Stratford, and areas. URI is the umbrella umbrella, a small canopy used as a protection against the sun in China, Egypt, and elsewhere in remote antiquity. It was often an emblem of rank. During the Middle Ages the umbrella became almost extinct in Europe; its usefulness was not rediscovered until the late for UIL Holdings' non-regulated business units, including Xcelecom, American Payment Systems, United Capital and United Bridgeport Energy. UIL Holdings World Wide Web address is http://www.uil.com and the company is traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol UIL. Certain statements contained herein, regarding matters that are not historical facts, 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. (as defined in 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). Such forward-looking statements include risks and uncertainties; consequently, actual results may differ materially from those expressed or implied thereby, including, but not limited to general economic conditions, legislative and regulatory changes, demand for electricity and other products and services, changes in accounting principles, policies or guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. , and other economic, competitive, governmental, and technological factors affecting the operations, markets, products, services and prices of the subsidiaries. Forward-looking statements included herein speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" and the company undertakes no obligation to revise or update such 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 hereof or to reflect the occurrence of unanticipated events or circumstances.
UIL HOLDINGS CORPORATION
Consolidated Income Statement Detail (Unaudited)
(Thousands except per share amounts)
Quarter Ended
March 31,
2001 2000
---- ----
Operating revenues
Retail $149,347 $148,941
Wholesale 10,616 18,614
Non-regulated businesses 76,984 23,263
Other 5,251 13,422
------ ------
Total operating revenues 242,198 204,240
-------- -------
Operating expenses
Fuel and energy: retail 64,333 63,051
wholesale 4,049 4,418
Gross earnings tax 6,003 6,388
Purchased capacity 929 1,447
Operation & maintenance 113,456 61,508
Other taxes 5,080 5,555
Depreciation 9,227 7,969
Amortization of regulatory assets 10,275 15,804
Income taxes 9,454 13,312
------ ------
Total operating expenses 222,806 179,452
-------- -------
Operating income 19,392 24,788
------- ------
Other income (deductions)
AFUDC 538 592
Other net 686 2,165
Other income tax (expense) benefits 12 (535)
--- -----
Total other income(deductions) 1,236 2,222
------ -----
Interest charges
Long-term debt 10,182 9,606
Interest on UI owned bonds (1,580) (1,618)
Short-term debt 1,582 312
Other 418 79
---- --
Subtotal 10,602 8,379
Amortization: debt expense,
redemption premiums 550 563
---- ---
Net interest charges 11,152 8,942
------- -----
Dividend requirement-mandatorily
redeemable securities 1,203
-----
Net income 9,476 16,865
Preferred dividends 0 0
Total earnings for common stock $9,476 $16,865
Earnings per share - Basic & Diluted $0.67 $1.20
------ -----
Book value per share $33.96 $33.07
Average number of shares
outstanding-Basic (000's) 14,084 14,069
Average number of shares
outstanding-Diluted (000's) 14,137 14,072
Retail GWH sales 1,408 1,402
UIL HOLDINGS CORPORATION RESULTS OF OPERATIONS As a result of the formation of UIL Holdings, all subsidiary results are consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: . All periods reported herein have been reclassified for consolidated reporting, with no impact on earnings. First Quarter 2001 vs. First Quarter 2000 First quarter 2001 results for UIL Holdings reflect the change in the quarterly earnings pattern compared to 2000 that was predicted in the Company's 10K for 2000, and achieved the middle of the estimated range of earnings for the first quarter of 2001.
UIL Holdings Corporation Results of Operations: First Quarter 2001
vs. First Quarter 2000
----------------------------------------------------------------------
2001 more
Quarter Ended Quarter Ended (less) than
($000 except EPS) March 31, 2001 March 31, 2000 2000
Amount Percent
----------------------------------------------------------------------
Operating Revenue
United Illuminating $165,214 $180,978 $(15,764) (9)%
United Resources $77,048 $23,338 $53,710 230%
Eliminations $(64) $(76) $12 16%
Total Operating
Revenue $242,198 $204,240 $37,958 19%
Total Earnings for
Common Stock $9,476 $16,865 $(7,389) (44)%
Earnings per Share (Basic)
United Illuminating $0.77 $1.19 $(0.42) (35)%
United Resources $(0.10) $0.01 $(0.11)(1100)%
Total EPS from
operations $0.67 $1.20 $(0.53) (44)%
EPS from one-time items $0.00 $0.00 $0.00 --
Dilution $0.00 $0.00 $0.00 --
Total EPS (Diluted) $0.67 $1.20 $(0.53) (44)%
----------------------------------------------------------------------
United Illuminating (UI) Results of Operations: First Quarter 2001
vs. First Quarter 2000
First quarter results for UI reflect the change in the quarterly
earnings pattern compared to 2000 that was predicted in the Company's
10K for 2000.
----------------------------------------------------------------------
2001 more
Quarter Ended Quarter Ended (less) than
($000 except EPS) March 31, 2001 March 31, 2000 2000
Amount Percent
----------------------------------------------------------------------
Total Operating
Revenue $165,214 $180,978 $(15,764) (9)%
Total Earnings for
Common Stock $10,927 $16,741 $(5,814) (35)%
EPS from operations (Basic)
UI excluding Nuclear
Division $0.77 $.97 $(0.20) (21)%
Nuclear Division $0.00 $0.22 $(0.22)(100)%
Total UI EPS from
operations $0.77 $1.19 $(0.42) (35)%
GWH Sales (thousands of MWH) 1,408 1,402 6 0.4%
----------------------------------------------------------------------
UI excluding the Nuclear Division Excluding the Nuclear Division, UI's earnings were $0.77 per share in the first quarter of 2001, compared to $0.97 per share in the first quarter of 2000. The $0.20 per share decrease was due primarily to the $2.0 million increase (after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. ) in accelerated amortization expense that went into effect on January January: see month. 1, 2001 as part of the Company's rate plan, and to a $2.9 million decrease in the pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta earnings of the Company's pension fund. The increase in accelerated amortization will be repeated, and pension fund earnings will produce somewhat similar results in the remaining three quarters of 2001. Both changes have been anticipated in UIL's earnings guidance for 2001. See the Looking Forward section for more details. The details below explain the variances for all of UI excluding the nuclear division. It should be noted that changes to income and expense items in the Distribution Division have an immediate net income impact, while changes to those items in "other unbundled utility divisions" do not. Those divisions include the Competitive Transition Assessment and the Systems Benefits Charge, both of which earn an 11.5% return on the equity portion of their respective rate bases. That return is achieved by either accruing additional amortization expenses, or by deferring such expenses as required. Amortization expenses in those divisions impact earnings indirectly through changes to rate base. The other unbundled divisions include the Generation Service Charge, the Conservation and Load Management (C&LM) charge, and the Renewables renewables npl → erneuerbare Energien pl charge. Those are pass-through pass-through n. 1. An opening between two rooms, especially a shelved space between a kitchen and dining room that is used for passing food. 2. A route through which something is permitted to pass. 3. charges. Except for a small management fee earned in the C&LM division, expenses are either accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. or deferred such that there is no net income associated with those divisions. Overall, UI retail revenue increased by $0.4 million in the first quarter of 2001, to $149.3 million, compared to the first quarter of 2000.
$ millions
----------------------------------------------------------------------
Increase/
Retail Revenues from Operations (Decrease)
----------------------------------------------------------------------
Revenue from Distribution Division:
----------------------------------------------------------------------
Estimate of operating Distribution Division component
of "weather corrected" retail sales growth, (0.5)% (0.3)
----------------------------------------------------------------------
Estimate of operating Distribution Division component
of weather effect on retail sales, 0.9% 0.5
----------------------------------------------------------------------
Impact of mix of sales on average price and other 0.4
----------------------------------------------------------------------
Total Retail Revenue from Distribution Division 0.6
----------------------------------------------------------------------
Revenue from other unbundled utility divisions (0.2)
----------------------------------------------------------------------
Total UI Retail Revenue 0.4
----------------------------------------------------------------------
Other 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. decreased by $8.2 million in the first quarter of 2001 compared to the first quarter of 2000. A decrease of $9.5 million was mostly offset by a decrease of $7.4 million of amortization expense for truing-up earnings shortfalls in the Competitive Transition Assessment and the Systems Benefits Charge. See the amortization section below for the offsetting 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 . Other operating revenues also include transmission revenues from the New England New England, name applied to the region comprising six states of the NE United States—Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut. The region is thought to have been so named by Capt. Power Pool (NEPOOL NEPOOL New England Power Pool ), which increased by $0.9 million in the first quarter of 2001 compared to the first quarter of 2000 and were partially offset by an increase of $0.4 million in transmission operation expense. Other revenue items increased by $0.3 million. Retail fuel and energy expense increased by $1.3 million in the first quarter of 2001 compared to the first quarter of 2000. UI receives, and will receive through 2003, electricity to satisfy its standard offer retail customer service requirements through fixed-price purchased power agreements. These costs are recovered through the Generation Service Charge (GSC GSC gas-solid chromatography. ) portion of UI's unbundled retail customer rates. It should be noted that a small number of customers have elected e·lect v. e·lect·ed, e·lect·ing, e·lects v.tr. 1. To select by vote for an office or for membership. 2. To pick out; select: elect an art course. to get their generation services from alternate alternate /al·ter·nate/ (awl´ter-nit) 1. following in turns. 2. pertaining to every other one in a series. 3. occurring in place of another; acting as a substitute. suppliers, but such switching has no effect on UI's financial results. UI's operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for operation, maintenance and purchased capacity increased by $1.5 million in the first quarter of 2001 compared to the first quarter of 2000. The principal components of these expense changes included:
$millions
----------------------------------------------------------------------
Increase/
Operating Distribution Division: (Decrease)
----------------------------------------------------------------------
Pension fund earnings and employee benefits costs 3.1
----------------------------------------------------------------------
NEPOOL transmission expense 0.7
----------------------------------------------------------------------
Other transmission (0.4)
----------------------------------------------------------------------
Other (0.2)
----------------------------------------------------------------------
Total operating Distribution Division 3.2
----------------------------------------------------------------------
O&M and Capacity from other unbundled
utility divisions (1.7)
----------------------------------------------------------------------
Total O&M expense 1.5
----------------------------------------------------------------------
Other taxes for UI decreased by $0.5 million in the first quarter of 2001 compared to the first quarter of 2000, due to a $0.3 million reduction in property taxes for the Distribution Division, and a $0.2 million reduction in property taxes for the CTA An abbreviation for cum testamento annexo, Latin for "with the will annexed." . Depreciation expense for UI increased by $0.3 million in the first quarter of 2001 compared to the first quarter of 2000. On December December: see month. 31, 1996, the DPUC DPUC Department of Public Utility Control (Connecticut) issued an order that implemented a five-year Rate Plan to reduce UI's regulated retail prices and accelerate the recovery of certain "regulatory assets." According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the Rate Plan, under which UI is currently operating, "accelerated" amortization of past regulated utility investments is scheduled for every year that the Rate Plan is in effect, contingent upon Adj. 1. contingent upon - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress" contingent on, dependant on, dependant upon, dependent on, dependent upon, depending on, contingent UI earning a 10.5% return on regulated utility common equity. Beginning in 2000, these accelerated amortizations are charged to, and impact directly the earnings of, the operating Distribution Division. They impact the earnings of the CTA only indirectly through changes to the CTA rate base. Additionally, any "sharing" amortization required as a result of the Distribution Division exceeding an 11.5% return on the equity portion of its rate base impacts the Distribution Division earnings but reduces CTA rate base. UI is allowed to earn an 11.5% return, no more and no less, on the equity portion of the CTA rate base that includes all stranded strand 1 n. The land bordering a body of water; a beach. v. strand·ed, strand·ing, strands v.tr. 1. To drive or run ashore or aground. 2. assets. If CTA revenues and various costs included in the CTA do not produce an 11.5% return, then plant amortizations are either accelerated or deferred accordingly. A similar mechanism is in place to deal with Systems Benefits Charges (SBC (1) (SBC Communications Inc., San Antonio, TX, www.sbc.com) A large, national telecommunications company that grew from a multitude of local and regional companies, including Southwestern Bell, Pacific Bell and Nevada Bell, into a single, unified brand by 2002. ), but the impact is immaterial Not essential or necessary; not important or pertinent; not decisive; of no substantial consequence; without weight; of no material significance. immaterial adj. . The table below shows the increases and decreases in the first quarter of 2001 compared to the first quarter of 2000. "Accelerated" amortization is spread evenly throughout the year, assuming the 10.5% return is maintained, but "sharing" amortization will only take place once the Distribution Division achieves an 11.5% return on the common equity portion of its rate base on a year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. basis. This usually will not occur until at least the third quarter, and all positive earnings of the Distribution Division from that point to the end of the year will be "shared". Amortization of regulatory assets decreased in the first quarter of 2001 compared to the first quarter of 2000 by $5.5 million. The principle components of this change were:
$ millions
----------------------------------------------------------------------
Amortization of regulatory assets: As Booked After-tax
----------------------------------------------------------------------
Distribution Division:
----------------------------------------------------------------------
Accelerated amortization 2.0 2.0
----------------------------------------------------------------------
"Sharing" from operations 0.0 0.0
----------------------------------------------------------------------
Other (0.1) (0.1)
----------------------------------------------------------------------
Total Distribution Division 1.9 1.9
----------------------------------------------------------------------
Amortization in CTA and SBC (7.4) (4.4)
----------------------------------------------------------------------
Total Amortization of regulatory assets (5.5) (2.5)
----------------------------------------------------------------------
Interest charges for UI, including the "Dividend requirement of mandatorily redeemable Redeemable Eligible for redemption under the terms of an indenture. securities," decreased by $0.8 million in the first quarter of 2001 compared to the first quarter of 2000. Nuclear Division The Nuclear Division broke even in the first quarter of 2001 compared to earnings of $0.22 per share in the first quarter of 2000. Much, but not all, of the decline in the earnings was anticipated in UIL's earnings guidance. About $0.14 per share was due to anticipated outages, and $0.12 per share was due to unscheduled unscheduled Adjective not planned or intended Adj. 1. unscheduled - not scheduled or not on a regular schedule; "an unscheduled meeting"; "the plane made an unscheduled stop at Gander for refueling" outages. Seabrook 1 has been operating normally since early April, and the Millstone 3 generating unit was sold on March 31, 2001. See the Looking Forward section for the impact of the sale of the Company's ownership share of the Millstone 3 generating unit on the Company's financial results. There was no material impact on the Company's financial results in the first quarter of 2001 from the sale. Wholesale sales margin decreased by $7.6 million in the first quarter of 2001 compared to the first quarter of 2000 due to the scheduled and unscheduled outages at the units. Nuclear Division operation and maintenance expense decreased by $2.2 million in the first quarter of 2001 compared to the first quarter of 2000.
United Resources (URI) Results of Operations:
First Quarter of 2001 vs. First Quarter of 2000
----------------------------------------------------------------------
2001 more
Quarter Ended Quarter Ended (less) than
($000 except EPS) March 31, 2001 March 31, 2000 2000
----------------------------------------------------------------------
Amount Percent
----------------------------------------------------------------------
Total Operating Revenue $77,048 $23,338 $53,710 230%
Total Earnings for
Common Stock $(1,451) $124 $(1,575) (1270)%
EPS from operations (Basic
and Diluted)
Operating Businesses
American Payment
Systems, Inc. $0.00 $0.05 $(0.05) (100)%
Xcelecom, Inc. $0.01 $(0.02) $0.03 (150)%
Subtotal $0.01 $0.03 $(0.02) (67)%
Passive Investments
United Bridgeport
Energy, Inc. $0.00 $(0.07) $0.07 100%
United Capital
Investments, Inc. $(0.05) $0.07 $(0.12) (171)%
Subtotal $(0.05) $0.00 $(0.05) --
URI Headquarters (Note A) $(0.06) $(0.02) $(0.04) (200)%
Total Non-Regulated
EPS from Operations $(0.10) $0.01 $(0.11) (1100)%
----------------------------------------------------------------------
Note (A): Includes financial leveraging, strategic and administrative costs for the holding company of the non-regulated business units. Overall, the consolidated non-regulated businesses operating under the parent, URI, after corporate parent-allocated interest, lost approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.5 million, or $0.10 per share, in the first quarter of 2001, compared to earnings of about $0.1 million, or $0.01 per share, in the first quarter of 2000. Expenses for the URI businesses, including cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold , selling and administrative expenses, increased by $52 million in the first quarter of 2001 compared to the first quarter of 2000, almost entirely as the result of incorporating acquired companies. Other taxes for URI increased by $0.1 million. Depreciation and amortization expense for the URI businesses increased by $1.0 million. Additionally, there was a $0.8 million recognition of start-up costs in the first quarter of 2001. Interest charges for URI increased by a net $1.8 million in the first quarter of 2001, compared to the first quarter of 2000. The results of each of the subsidiaries of URI for the first quarter of 2001, as presented below, reflect the allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of debt costs from the parent based on a capital structure, including an equity component, and an interest rate deemed to be appropriate for that type of business. URI Operating Businesses American Payment Systems, Inc. (APS) APS broke even in the first quarter of 2001 compared to earnings of $0.05 per share in the first quarter of 2000. Earnings from continuous operations were about $.03 per share, but these were offset by business development and selling expenses associated with the Company's growth plans. Higher bank fees and other expenses reduced earnings by about $.02 per share. Xcelecom, Inc. Xcelecom, Inc. earned $.01 per share in the first quarter of 2001 compared to a $.02 per share loss in the first quarter of 2000. Xcelecom actually earned $.12 per share from normal operations but, in connection with its overall construction management process, the Company established loss reserves relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc projects at certain of its subsidiaries. The effect of these charges was approximately $.11 per share. Operating revenue increased by $53 million to $67 million in the first quarter of 2001, due primarily but not entirely to acquisitions completed in 2000. URI Passive Investments United Bridgeport Energy, Inc. (UBE Ube ( `bā), city (1990 pop. 175,053), Yamaguchi prefecture, SW Honshu, Japan, on the Inland Sea. It has a modern harbor and an important chemical industry. )UBE broke even in the first quarter of 2001, compared to a loss of $0.07 per share in the first quarter of 2000. The losses in the first quarter of 2000 were due to a shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down of the Bridgeport Energy generating facility to repair the steam turbine Steam turbine A machine for generating mechanical power in rotary motion from the energy of steam at temperature and pressure above that of an available sink. By far the most widely used and most powerful turbines are those driven by steam. and to make modifications to the combustion combustion, rapid chemical reaction of two or more substances with a characteristic liberation of heat and light; it is commonly called burning. The burning of a fuel (e.g., wood, coal, oil, or natural gas) in air is a familiar example of combustion. turbine turbine, rotary engine that uses a continuous stream of fluid (gas or liquid) to turn a shaft that can drive machinery. A water, or hydraulic, turbine is used to drive electric generators in hydroelectric power stations. . See the "Looking Forward" section for more information on issues involving Installed Capacity (ICAP (1) (Internet Content Adaptation Protocol) A high-level protocol for requesting services from an Internet-based server. iCAP provides a common format for requesting services using standard HTTP messaging. ) revenues and on the Company's plans to reduce the risk of the UBE investment and ensure positive earnings. United Capital Investments, Inc. (UCI) UCI lost $0.05 per share in the first quarter of 2001, compared to earnings of $0.07 per share in the first quarter of 2000. The loss in 2001 was due to valuation losses on passive investments, reflecting prevailing market conditions, and start-up expenses for an investment in a cable project. The earnings in 2000 were due to unrealized gains Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. on passive investments. URI Headquarters URI, the holding company for all non-regulated businesses, lost $0.06 per share in the first quarter of 2001 compared to a loss of $0.02 per share in the first quarter of 2000. The results of each of the subsidiaries of URI, as presented above, reflect interest expense on allocated debt from URI, based on a capital structure, including an equity component, and an interest rate deemed to be appropriate for that type of business. Some financial leveraging, and strategic and administrative costs for the subsidiaries of URI, are retained by the parent URI. The earnings decrease at URI Headquarters reflects additional leveraging in 2001. LOOKING FORWARD Certain statements contained herein, regarding matters that are not historical facts, are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements include risks and uncertainties; consequently, actual results may differ materially from those expressed or implied thereby, due to important factors including, but not limited to, general economic conditions, legislative and regulatory changes, demand for electricity and other products and services, changes in accounting principles, policies or guidelines, and other economic, competitive, governmental, and technological factors affecting the operations, markets, products, services and prices of the subsidiaries. Forward-looking statements included herein speak only as of the date hereof and UIL Holdings undertakes no obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances. A look at 2001: Revised Estimates Revised estimate The third estimate of GDP released about three months after the measurement period. UIL Holdings expects that its 2001 earnings will be $4.15-$4.25 per share. This range reflects a $0.25 per share reduction from the previous estimate of $4.40-$4.50 per share and reflects the previously described issues at Xcelecom and UCI in the first quarter of 2001 and a delayed schedule for future Xcelecom acquisitions. See below for further details. The United Illuminating Company (UI) Five-year Rate Plan On December 31, 1996, the 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). Department of Public Utility Control (DPUC) issued an order (the Order) that implemented a five-year regulatory framework (Rate Plan) to reduce UI's regulated retail prices and accelerate the recovery of certain "regulatory assets," beginning with deferred conservation costs. UI has operated under the terms of this Order since January 1, 1997. The Order's schedule of price reductions and accelerated amortizations was based on a DPUC pro-forma financial analysis that anticipated UI would be able to implement such changes and earn an allowed annual return on common equity invested in regulated utility assets of 11.5% over the period 1997 through 2001. The Order established a set formula to share any regulated utility income that would produce a return above the 11.5% level: one-third to be applied to customer price reductions, one-third to be applied to additional amortization of regulatory assets, and one-third to be retained by shareowners (see "Sharing Implementation" below). Regulated utility income for this purpose is inclusive of inclusive of prep. Taking into consideration or account; including. earnings from operations and one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. items. Sharing Implementation "Sharing" in 2001 will result only if UI's regulated operating Distribution Division exceeds its allowed return of 11.5% on its portion of regulated utility common equity. Earnings subject to sharing does not include the Competitive Transition Assessment (CTA) and other unbundled utility components. UI is allowed to earn an 11.5% return, no more and no less, on the equity portion of the CTA rate base that includes all stranded assets. The CTA return, therefore, is not subject to "sharing." Distribution Division earnings will not likely exceed the sharing level before the third quarter of 2001. Assuming the sharing level of earnings is exceeded in the third quarter of 2001, then earnings in the third quarter that exceed that level and all positive regulated Distribution Division earnings recorded in the fourth quarter of 2001 will be subject to "sharing." The framework of the current Rate Plan, including the "sharing" mechanism, is expected to continue at least through 2001. UI Earnings Estimates for 2001 Overall, UI, including the Nuclear Division, is expected to contribute $3.85-$3.95 to UIL Holdings' earnings per share in 2001. If UI were to earn 11.5% on regulated utility equity, excluding the Nuclear Division, that level of earnings would generate $3.35-$3.45 per share for UIL Holdings. UI is allowed to earn an 11.5% return on the equity portions of CTA and the SBC rate base (the latter is minimal), no more and no less. For the most part, the regulatory assets that are being recovered through the CTA are being amortized on a straight-line straight-line adj. 1. Lying in a straight line. 2. Relating to a device whose linkage produces or copies motion in straight lines. 3. basis. If CTA revenues and expenses produce a return more or less than the allowed return, then deferred accounting or accelerated amortization is used to "true-up" to the allowed return. This true-up adjusts for sales volume fluctuations as well as pricing factors. A similar adjustment, on a much less significant scale, applies to the SBC component. The generation service, conservation and renewables charges are pass-through charges, based on rates that were set for the standard offer period through 2003. In the case of generation service, UI has contracted with Enron Enron A U.S. energy-trading and utilities company that housed one of the biggest accounting frauds in history. Enron's executives employed accounting practices that falsely inflated the company's revenues, which, at the height of the scandal, made the firm become the seventh Power Marketing, Inc., a subsidiary of Enron Corp., for all of UI's retail customer standard offer service requirements, through 2003, on a fixed-price basis. This agreement protects UIL Holdings' shareowners and UI's retail customers from the type of market and pricing volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the that is being experienced in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , regardless of demand and volume requirements. The only retail electricity sales volume fluctuations that directly impact UI's net income are those that apply to the operating Distribution Division component of rates. Thus, a 1% sales volume increase will produce additional sales margin of about $2.4 million in 2001. The Distribution Division was impacted negatively in 2000 by a 0.9% sales decrease, due to mild summer weather. A mandated increase in Distribution Division accelerated amortization expense, the absence of a significant one-time gain that occurred in 2000, a reduction in pension fund earnings and other 2001 cost increases relative to 2000 will likely prevent Distribution Division earnings from exceeding the 11.5% allowed return level in 2001. Nuclear Division Earnings Estimates for 2001 The Nuclear Division contributed $0.45 per share to UIL Holdings' results for 2000. Assuming Seabrook operates normally for the last three quarters of 2001, the contribution to earnings in 2001 of the Seabrook unit should be about the same as the 2000 earnings. It is possible for earnings to improve slightly from that level if the unit operates at near full capacity as it did in 2000 before the fourth quarter refueling outage out·age n. 1. A quantity or portion of something lacking after delivery or storage. 2. A temporary suspension of operation, especially of electric power. began. The Company's share of the Millstone 3 nuclear generating unit was sold on March 31, 2001. There was no direct impact on the Company's financial results in the first quarter, and net-of-tax proceeds from the sale that were in excess of the market value of the plant, as set by the DPUC, are credited to the Competitive Transition Assessment plant balances and rate base. That amount has been estimated to be about $14 million and is subject to true-up. URI Earnings Estimates UIL Holdings' non-regulated businesses, under the parent URI, are expected to earn $0.25-$0.35 per share in 2001. This is a reduction of $0.35 per share from the previous estimate of $0.60-$0.70 per share and reflect actions taken by Xcelecom and the performance of passive investments in the first quarter. See the discussion below for details. APS is expected to break even in 2001, although its base business is expected to contribute about 15% more than the $0.15 per share earned in 2000. The expected reduction in total earnings reflects anticipated strategic expenses designed to produce future earnings enhancements in the non-contracted payment segment of its business. Management's experience with Xcelecom indicates that incurring in·cur tr.v. in·curred, in·cur·ring, in·curs 1. To acquire or come into (something usually undesirable); sustain: incurred substantial losses during the stock market crash. 2. 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. strategic expenses to build an appropriate management team and processes that are necessary to grow through acquisitions and product and service enhancements will increase shareowner share·own·er n. See shareholder. Noun 1. shareowner - someone who holds shares of stock in a corporation shareholder, stockholder investor - someone who commits capital in order to gain financial returns value in the longer term. Management believes that experience will be equally applicable to APS. Earnings for Xcelecom are expected to grow to $0.35-$0.40 per share in 2001 from the $0.15 per share earned in 2000. This is $0.20 per share less than the previous estimate of $0.55-$0.60 per share because of the project write-downs taken in the first quarter of 2001 and because of a delay in the acquisition schedule. The Company will continue to watch economic trends as they may impact its operations going forward. Earnings from URI's passive investments offset by headquarters' costs are expected to lose $(0.10)-$(0.05) per share in 2001. This estimate incorporates the $0.07 per share valuation loss at UCI in the first quarter of 2001. These investments include United Bridgeport Energy, Inc. (UBE), which is expected to contribute about $0.20 per share in 2001. UBE's expected contribution assumes the favorable outcome of an important pending matter that management is confident will come about, although there can be no assurance that it will occur. The assumption is the anticipated recording of UBE's portion of ICAP revenues in 2001, producing about $0.25 per share for UBE. The Federal Energy Regulatory Commission The Federal Energy Regulatory Commission (FERC) is the United States federal agency with jurisdiction over electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates. (FERC FERC Federal Energy Regulatory Commission FERC FEMA Emergency Response Capability ), in a ruling in 2000, affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the value of the ICAP market in New England, thereby validating val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. a pre-existing Adj. 1. pre-existing - existing previously or before something; "variations on pre-existent musical themes" pre-existent, preexistent, preexisting antecedent - preceding in time or order contract of Bridgeport Energy for ICAP revenues. However, the FERC ICAP order is the subject of appeal to the FERC by some other entities, and, as a result, the FERC has temporarily stayed its order pending a hearing. DETM DETM Drilling Energy Transfer Member (flexible shaft) DETM Diabetes Error Test Model DETM Digital Elevation Terrain Model may be able to book some ICAP revenues, in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the stay, if, as anticipated, the customer continues to pay for its contracted ICAP. As stated previously, as a result of management's continued confidence in the potential of the non-regulated businesses, UIL Holdings is evaluating further investments in this area. Near-term near-term adj. Of, for, or involving a short period of time in the near future. losses could be incurred due to these new growth initiatives, if the potential for future earnings is deemed to warrant such losses. Quarterly Earnings Pattern for 2001 The 2001 quarterly earnings pattern for UI is expected to be different than the 2000 pattern. Nuclear Division outages in the first quarter of 2001 reduced earnings compared to the first quarter of 2000. Higher mandated amortization expense for the Distribution Division will be spread evenly throughout the year, and reduced pension fund earnings will affect every quarter. These cost increases will further reduce earnings relative to 2000 in the first two quarters of 2001. Since UI is not projecting any significant "sharing" in 2001 at this time, primarily because of the cost increases mentioned and also because of the absence of a one-time item that occurred in 2000, the third and fourth quarters of 2001 should show an improvement compared to the corresponding quarters in 2000. "Sharing", resulting in earnings reductions, do not take place until at least the third quarter of any year. UIL Holdings makes every effort to incorporate such impacts, including the sharing impact, in its earnings estimates as each quarter is reported. Actual 2001 results may vary from estimates depending on changes due to weather, economic conditions, sales mix sales mix See product mix. (the usage pattern of the Distribution Division's retail customers), the ability to control expenses, and other unanticipated events. These factors can change from quarter to quarter. UIL Holdings' current overall estimate of earnings per share from operations for 2001 is $4.15-$4.25 and the estimates of quarterly results are as follows:
Earnings per share from operations:
Estimated Actual Actual
Quarter 2001 Range(1) 2001 2000
------- ----------- ---- ----
1 $0.65 - $0.70 $ 0.67 $1.20
2 $0.85 - $0.90 1.41
3 $1.55 - $1.60 1.19
4 $1.05 - $1.10 0.46
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$4.26
(1) Quarterly range estimates are not additive additive In foods, any of various chemical substances added to produce desirable effects. Additives include such substances as artificial or natural colourings and flavourings; stabilizers, emulsifiers, and thickeners; preservatives and humectants (moisture-retainers); and , that is, adding the low range numbers produces a result that is lower than UIL Holdings' low estimate for the year, and adding the high range numbers produces a result that is higher than UIL Holdings' high estimate for the year. The sums of the low and high range values should not be construed to represent any estimate other than UIL Holdings' annual estimate of $4.15-$4.25 per share. The quarterly range estimates do not add to the total UIL Holdings' range for the year because impacts in one quarter can affect the results of other quarters through the sharing mechanism and through timing of activities. |
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