Attached files
| file | filename |
|---|---|
| 8-K - UIL HOLDINGS CORPORATION 8-K 4-30-2015 - UIL HOLDINGS CORP | form8k.htm |
| EX-99.2 - EXHIBIT 99.2 - UIL HOLDINGS CORP | ex99_2.htm |
Exhibit 99.1
UIL Holdings Corporation
157 Church Street
P.O. Box 1564
New Haven, CT 06506-0901
NEWS RELEASE
|
April 30, 2015
|
Analyst Contact:
|
Susan Allen
|
203-499-2409
|
|
|
Media Contact:
|
Michael West Jr.
|
203-499-3858
|
UIL Reports First Quarter 2015 Earnings and Updates 2015 Earnings Guidance
Today, UIL Holdings Corporation (NYSE: UIL) reported consolidated net income of $57.6 million, or $1.01 per diluted share, in the first quarter 2015, compared to $55.5 million, or $0.97 per diluted share, in the first quarter 2014.
Consolidated earnings for the first quarter 2015 and first quarter 2014 reflect certain non-recurring after-tax items, which are explained below.
|
·
|
Merger-related expenses associated with the pending merger of UIL and a subsidiary of Iberdrola USA recorded in the first quarter 2015
|
|
·
|
Acquisition-related expenses recorded in the first quarter 2014 associated with the now-terminated proposed acquisition of Philadelphia Gas Works |
|
·
|
Reserves recorded in the first quarter 2015 related to the transmission return on equity (ROE) proceedings pending at the Federal Energy Regulatory Commission (FERC) |
Consolidated earnings, excluding the non-recurring items, for the quarter ended March 31 were:
|
Quarter ended March 31,
|
||||||||||||||||||||||||
|
Net Income (Loss) - $M
|
Earnings (Loss) per Share - Diluted
|
|||||||||||||||||||||||
|
2015
|
2014
|
'15 vs '14
|
2015
|
2014
|
'15 vs '14
|
|||||||||||||||||||
|
Consolidated Earnings
|
$
|
57.6
|
$
|
55.5
|
$
|
2.1
|
$
|
1.01
|
$
|
0.97
|
$
|
0.04
|
||||||||||||
|
Non-recurring items:
|
||||||||||||||||||||||||
|
Merger/Acquisition-related expenses
|
4.0
|
6.9
|
(2.9
|
)
|
$
|
0.07
|
0.12
|
(0.05
|
)
|
|||||||||||||||
|
FERC ROE reserves
|
2.2
|
-
|
2.2
|
0.04
|
-
|
0.04
|
||||||||||||||||||
|
Consolidated Earnings, excl. non-recurring items
|
$
|
63.8
|
$
|
62.4
|
$
|
1.4
|
$
|
1.12
|
$
|
1.09
|
$
|
0.03
|
||||||||||||
“Earnings per share, excluding non-recurring items related to M&A expenses and FERC ROE reserves, were up 2.75%. The increase in earnings was led by our gas companies as their earnings increased in the first quarter 2015 by almost 6% when compared to the same period in 2014,” commented James P. Torgerson, UIL’s president and chief executive officer. “Although colder weather played a large role, we saw increased earnings due to customer growth resulting from our strategic initiative of converting households and businesses to natural gas heat. We added another 2,002 customers in the first quarter 2015 and are on target to meet our 2015 goal of 12,000 conversions,” added Torgerson.
“Consistent with our long term strategy, in late February, we announced an agreement under which UIL will merge with a subsidiary of Iberdrola USA, with Iberdrola USA becoming a newly listed U.S. publicly-traded company, subject to
- more -
regulatory and UIL shareholder approvals and other customary closing conditions,” added Torgerson. “The proposed transaction brings together two premier companies to create a large, diversified power and utility company with seven highly regarded regulated electric and gas utilities in complementary geographies. Iberdrola USA is an ideal long-term partner for our customers, our employees and the communities we serve. We are excited for what the future holds and expect the transaction to close by year-end 2015.”
Electric Distribution
The electric distribution business earned $11.3 million, or $0.20 per diluted share, in the first quarter 2015, compared to $14.0 million, or $0.25 per diluted share, in the first quarter 2014. The decrease in earnings for the first quarter 2015 was mainly due to higher employee expenses, outside services and depreciation and amortization expenses.
Electric Transmission
The electric transmission business earned $6.5 million, or $0.11 per diluted share, in first quarter 2015, compared to $8.6 million, or $0.15 per diluted share, in the first quarter 2014.
Excluding the non-recurring FERC ROE reserves discussed above, the electric transmission earnings were:
|
Quarter ended March 31,
|
||||||||||||||||||||||||
|
Net Income (Loss) - $M
|
Earnings (Loss) per Share - Diluted
|
|||||||||||||||||||||||
|
2015
|
2014
|
'15 vs '14
|
2015
|
2014
|
'15 vs '14
|
|||||||||||||||||||
|
Electric Transmission
|
$
|
6.5
|
$
|
8.6
|
$
|
(2.1
|
)
|
$
|
0.11
|
$
|
0.15
|
$
|
(0.04
|
)
|
||||||||||
|
FERC ROE reserves
|
2.2
|
-
|
2.2
|
0.04
|
-
|
0.04
|
||||||||||||||||||
|
Electric Transmission, excl. non-recurring item
|
$
|
8.7
|
$
|
8.6
|
$
|
0.1
|
$
|
0.15
|
$
|
0.15
|
$
|
-
|
||||||||||||
Gas Distribution
The gas distribution businesses earned $41.2 million, or $0.72 per diluted share, in the first quarter 2015, compared to $39.0 million, or $0.68 per diluted share, in the first quarter 2014. The increase in earnings for the first quarter 2015 was primarily due to colder weather and customer growth.
The gross margin impacts from weather, normalized usage per customer and customer growth are presented in the table below:
|
Impact of Weather, NUPC and Customer Growth
|
||||
|
(In Thousands)
|
||||
|
1Q '15 vs. 1Q '14
Gross Margin |
||||
|
Weather(1)
|
$
|
6,665
|
||
|
Normalized usage per customer
|
(881
|
)
|
||
|
Decoupling adjustment
|
(2,317
|
)
|
||
|
Subtotal
|
$
|
3,467
|
||
|
Customer Growth
|
2,032
|
|||
|
Total
|
$
|
5,499
|
||
|
(1)
|
Excluding weather insurance payout of $1.7M, pre-tax, recorded in 1Q '14; including the weather insurance payout, impact would be $8,365
|
- more -
2
Corporate
Corporate costs were $1.4 million, after-tax, or $0.02 per diluted share, in the first quarter 2015, compared to costs of $6.1 million, after-tax, or $0.11 per diluted share, in the first quarter 2014. Corporate costs for the first quarter 2015 included after-tax merger-related expenses of $4.0 million, or $0.07 per diluted share, and Corporate costs for the first quarter 2014 included acquisition-related expenses of $6.9 million, or $0.12 per diluted share.
Excluding the non-recurring expenses discussed above, Corporate earnings were:
|
Quarter ended March 31,
|
||||||||||||||||||||||||
|
Net Income (Loss) - $M
|
Earnings (Loss) per Share - Diluted
|
|||||||||||||||||||||||
|
2015
|
2014
|
'15 vs '14
|
2015
|
2014
|
'15 vs '14
|
|||||||||||||||||||
|
Corporate
|
$
|
(1.4
|
)
|
$
|
(6.1
|
)
|
$
|
4.7
|
$
|
(0.02
|
)
|
$
|
(0.11
|
)
|
$
|
0.09
|
||||||||
|
Merger/Acquisition-related expenses
|
4.0
|
6.9
|
(2.9
|
)
|
0.07
|
0.12
|
(0.05
|
)
|
||||||||||||||||
|
Corporate, excl. non-recurring item
|
$
|
2.6
|
$
|
0.8
|
$
|
1.8
|
$
|
0.05
|
$
|
0.01
|
$
|
0.04
|
||||||||||||
The first quarter of each year reflect interim tax benefits recognized at the UIL corporate level, which will reverse over the year as each segment reflects its seasonal activity. The increase in earnings shown above reflect these interim tax benefits and an increase in earnings primarily due to increased returns on shared capital assets.
Segment details for UIL Holdings Corporation’s results for the first quarter 2015, compared to the same period in 2014, are presented in the table below:
|
Net Income (Loss) - $M
|
||||||||||||
|
Quarter ended March 31,
|
||||||||||||
|
2015
|
2014
|
'15 vs '14
|
||||||||||
|
Electric Distribution
|
$
|
11.3
|
$
|
14.0
|
$
|
(2.7
|
)
|
|||||
|
Electric Transmission
|
8.7
|
8.6
|
0.1
|
|||||||||
|
Gas Distribution
|
41.2
|
39.0
|
2.2
|
|||||||||
|
Operating Companies
|
61.2
|
61.6
|
(0.4
|
)
|
||||||||
|
Corporate
|
2.6
|
0.8
|
1.8
|
|||||||||
|
Subtotal
|
$
|
63.8
|
$
|
62.4
|
$
|
1.4
|
||||||
|
Merger and acquisition-related expenses
|
(4.0
|
)
|
(6.9
|
)
|
2.9
|
|||||||
|
FERC ROE reserves
|
(2.2
|
)
|
-
|
(2.2
|
)
|
|||||||
|
Consolidated Earnings
|
$
|
57.6
|
$
|
55.5
|
$
|
2.1
|
||||||
|
Earnings (Loss) Per Share - Diluted
|
||||||||||||
|
Quarter ended March 31,
|
||||||||||||
|
2015
|
2014
|
'15 vs '14
|
||||||||||
|
Electric Distribution
|
$
|
0.20
|
$
|
0.25
|
$
|
(0.05
|
)
|
|||||
|
Electric Transmission
|
0.15
|
0.15
|
-
|
|||||||||
|
Gas Distribution
|
0.72
|
0.68
|
0.04
|
|||||||||
|
Operating Companies
|
1.07
|
1.08
|
(0.01
|
)
|
||||||||
|
Corporate
|
0.05
|
0.01
|
0.04
|
|||||||||
|
Subtotal
|
$
|
1.12
|
$
|
1.09
|
$
|
0.03
|
||||||
|
Merger and acquisition-related expenses
|
(0.07
|
)
|
(0.12
|
)
|
0.05
|
|||||||
|
FERC ROE reserves
|
(0.04
|
)
|
-
|
(0.04
|
)
|
|||||||
|
Consolidated Earnings
|
$
|
1.01
|
$
|
0.97
|
$
|
0.04
|
||||||
|
Avg. Shares - diluted (M)
|
57.2
|
57.0
|
||||||||||
|
Amounts may not add due to rounding
|
- more -
3
Looking Forward
UIL’s consolidated earnings for 2015 are expected to be in the range of $126-$137 million, or $2.19-$2.39 per diluted share. Excluding the non-recurring items, 2015 consolidated earnings are expected to be in the range of $132-$143 million, or $2.30-$2.50 per diluted share. While consolidated earnings guidance excluding non-recurring items is unchanged, UIL has updated earnings guidance for the following business segments:
|
·
|
Earnings for the electric distribution business have been revised to $0.80-$0.95 per diluted share, compared to the previously reported estimate of $0.85-$1.00 per diluted share. Earnings for total electric have been revised to $1.40-$1.60 per diluted share, compared to the previously reported estimate of $1.45-$1.65 per diluted share. The revision is primarily due to increased depreciation expense resulting from the timing of when UI distribution capital projects were closed to plant in service in 2014.
|
|
·
|
Earnings for the gas distribution business have been revised to $0.95-$1.05 per diluted share, compared to the previously reported estimate of $0.90-$1.00 per diluted share. The revision is primarily due to the earnings impact related to the increased margin from customer growth and from the colder weather.
|
Guidance for all other business segments remains unchanged.
|
Category
|
Approximate Net Income(1)
|
EPS - diluted(2)
|
|
|
|
|
|
Electric Distribution
|
$46 - $54
|
$0.80 - $0.95
|
|
Electric Transmission(3)
|
$33 - $38
|
$0.57 - $0.67
|
|
|
|
|
|
Total Electric
|
$80 - $92
|
$1.40 - $1.60
|
|
|
|
|
|
Gas Distribution
|
$54 - $60
|
$0.95 - $1.05
|
|
|
|
|
|
Operating Companies
|
$135- $146
|
$2.35 - $2.55
|
|
|
|
|
|
UIL Corporate
|
($7) - ($5)
|
($0.13) - ($0.08)
|
|
|
|
|
|
Total UIL Holdings, excl. non-recurring items
|
$132 - $143
|
$2.30 - $2.50
|
|
|
|
|
|
Non-recurring item - Merger-related expenses(4)
|
($4) - ($4)
|
($0.07) - ($0.07)
|
|
|
|
|
|
Non-recurring item - Regulatory reserves
|
($2) - ($2)
|
($0.04) - ($0.04)
|
|
|
|
|
|
Total UIL Holdings(5)
|
$126 - $137
|
$2.19 - $2.39
|
| (1) | Rounded to the nearest million |
| (2) | Assumes approximately 57.3 million average shares outstanding |
| (3) | Excludes any adjustments that may result from the FERC ROE complaints |
| (4) | Merger-related expenses through March 31, 2015; projected merger-related expenses excluded |
| (5) | Expectations are not expected to be additive |
First quarter 2015 earnings conference call
UIL Holdings will conduct a webcast conference call with financial analysts on Friday, May 1, 2015, beginning at 1:00 p.m. eastern time. UIL Holdings’ executive management will present an overview of the financial results followed by a question and answer session. Interested parties, including analysts, investors and the media, may listen
- more -
4
live via the internet by logging onto the Investors section of UIL Holdings’ website at http://www.uil.com. Institutional investors can access the call via Thomson Street Events (www.streetevents.com), a password-protected event management site.
Headquartered in New Haven, Connecticut, UIL Holdings Corporation (NYSE:UIL) is a diversified energy delivery company serving a total of approximately 727,000 electric and natural gas utility customers in 67 communities across two states, with combined total assets of over $5 billion.
UIL Holdings is the parent company for The United Illuminating Company (UI), Connecticut Natural Gas Corporation (CNG), The Southern Connecticut Gas Company (SCG), and The Berkshire Gas Company (Berkshire), each more than 100 years old. UI provides for the transmission and delivery of electricity and other energy related services for Connecticut’s Greater New Haven and Bridgeport areas. SCG and CNG are natural gas distribution companies that serve customers in Connecticut, while Berkshire serves natural gas customers in western Massachusetts. UIL Holdings employs more than 1,900 people in the New England region. For more information on UIL Holdings, visit http://www.uil.com.
Use of Non-GAAP Measures
UIL Holdings believes that a breakdown presented on a net income and per share basis is useful in understanding the change in the consolidated results of operations for UIL Holdings from one reporting period to another. UIL Holdings presents such per share amounts by taking the net income determined in accordance with generally accepted accounting principles (GAAP), and then dividing the results by the average number of diluted shares of UIL Holdings common stock outstanding for the periods presented. Any such amounts provided are provided for informational purposes only and are not intended to be used to calculate "Pro-forma" amounts.
UIL Holdings also believes presenting earnings excluding certain non-recurring items, as well as earnings per share (EPS) information by line of business, including as presented above
5
in the net income discussion and in the earnings guidance section, are useful in understanding and evaluating actual and projected financial performance and contribution of UIL’s businesses. EPS by business is calculated by taking the pre-tax amounts determined in accordance with GAAP of each line of business, and applying the effective statutory federal and state tax rate and then dividing the results by the average number of diluted shares of UIL common stock outstanding for the periods presented. Total consolidated EPS is a GAAP-basis presentation.
Forward-Looking Statements
Certain statements contained in this communication regarding matters that are not historical facts, are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). These include statements regarding management’s intentions, plans, beliefs, expectations or forecasts for the future. Such forward-looking statements are based on our expectations and involve risks and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements. In addition, risks and uncertainties related to the proposed merger with a subsidiary of Iberdrola USA include, but are not limited to, the expected timing and likelihood of completion of the pending merger, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the pending merger that could reduce anticipated benefits or cause the parties to abandon the transaction, the ability to successfully integrate the businesses, the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, the possibility that UIL’s shareowners may not approve the merger agreement, the risk that the parties may not be able to satisfy the conditions to the proposed merger in a timely manner or at all, risks related to disruption of management time from ongoing business operations due to the proposed merger, the risk that any announcements relating to the proposed merger could have adverse effects on the market price of UIL’s common stock, and the risk that the proposed transaction and its announcement could have an adverse effect on the ability of UIL to retain and hire key personnel and maintain relationships with its suppliers, and on its operating results and businesses generally.
New factors emerge from time to time and it is not possible for us to predict all such factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. These risks, as well as other risks associated with the merger, will be more fully discussed in the joint proxy statement/prospectus that will be included in the Registration Statement on Form S-4 that will be filed with the Securities and Exchange Commission (SEC) in connection with the merger. Additional risks and uncertainties are identified and discussed in UIL’s reports filed with the SEC and available at the SEC’s website at www.sec.gov. Forward-looking statements included in this release speak only as of the date of this release. UIL does not undertake any obligation to update its forward-looking statements to reflect events or circumstances after the date of this release.
The following are summaries of UIL Holdings’ unaudited consolidated financial information for the first quarter 2015:
6
UIL HOLDINGS CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(In Thousands except per share amounts)
(Unaudited)
|
Three Months Ended
March 31, |
||||||||
|
2015
|
2014
|
|||||||
|
Operating Revenues
|
$
|
584,053
|
$
|
571,162
|
||||
|
Operating Expenses
|
||||||||
|
Operation
|
||||||||
|
Purchased power
|
97,102
|
53,130
|
||||||
|
Natural gas purchased
|
174,520
|
214,925
|
||||||
|
Operation and maintenance
|
101,347
|
92,877
|
||||||
|
Transmission wholesale
|
19,709
|
20,911
|
||||||
|
Depreciation and amortization
|
43,284
|
40,318
|
||||||
|
Taxes - other than income taxes
|
41,315
|
39,536
|
||||||
|
Merger and acquisition-related expenses
|
6,702
|
5,051
|
||||||
|
Total Operating Expenses
|
483,979
|
466,748
|
||||||
|
Operating Income
|
100,074
|
104,414
|
||||||
|
Other Income and (Deductions), net
|
||||||||
|
Acquisition-related bridge facility fees
|
-
|
(6,413
|
)
|
|||||
|
Other income and (deductions)
|
4,368
|
3,862
|
||||||
|
Total Other Income and (Deductions), net
|
4,368
|
(2,551
|
)
|
|||||
|
Interest Charges, net
|
||||||||
|
Interest on long-term debt
|
22,225
|
22,452
|
||||||
|
Other interest, net
|
1,232
|
175
|
||||||
|
23,457
|
22,627
|
|||||||
|
Amortization of debt expense and redemption premiums
|
607
|
607
|
||||||
|
Total Interest Charges, net
|
24,064
|
23,234
|
||||||
|
Income from Equity Investments
|
2,936
|
3,386
|
||||||
|
Income Before Income Taxes
|
83,314
|
82,015
|
||||||
|
Income Taxes
|
25,705
|
26,550
|
||||||
|
Net Income
|
57,609
|
55,465
|
||||||
|
Less:
|
||||||||
|
Preferred Stock Dividends of
|
||||||||
|
Subsidiary, Noncontrolling Interests
|
7
|
13
|
||||||
|
Net Income attributable to UIL Holdings
|
$
|
57,602
|
$
|
55,452
|
||||
|
Average Number of Common Shares Outstanding - Basic
|
56,881
|
56,779
|
||||||
|
Average Number of Common Shares Outstanding - Diluted
|
57,184
|
57,043
|
||||||
|
Earnings Per Share of Common Stock - Basic:
|
$
|
1.01
|
$
|
0.98
|
||||
|
Earnings Per Share of Common Stock - Diluted:
|
$
|
1.01
|
$
|
0.97
|
||||
|
Cash Dividends Declared per share of Common Stock
|
$
|
0.432
|
$
|
0.432
|
||||
UIL HOLDINGS CORPORATION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Thousands of Dollars)
(Unaudited)
|
Three Months Ended
March 31, |
||||||||
|
2015
|
2014
|
|||||||
|
Net Income
|
$
|
57,609
|
$
|
55,465
|
||||
|
Other Comprehensive Income (Loss), net of deferred income taxes
|
||||||||
|
Changes in unrealized gains (losses) related to pension and other post-retirement benefit plans
|
273
|
61
|
||||||
|
Other
|
7
|
12
|
||||||
|
Total Other Comprehensive Income (Loss), net of deferred income taxes
|
280
|
73
|
||||||
|
Comprehensive Income
|
57,889
|
55,538
|
||||||
|
Less:
|
||||||||
|
Preferred Stock Dividends of Subsidiary, Noncontrolling Interests
|
7
|
13
|
||||||
|
Comprehensive Income Attributable to UIL Holdings
|
$
|
57,882
|
$
|
55,525
|
||||
7
UIL HOLDINGS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
|
(thousands of dollars)
|
March 31,
2015 |
December 31,
2014 |
||||||
|
ASSETS
|
||||||||
|
Current assets
|
$
|
647,714
|
$
|
670,096
|
||||
|
Other investments
|
140,127
|
139,972
|
||||||
|
Net property, plant and equipment
|
3,316,841
|
3,292,690
|
||||||
|
Regulatory assets
|
700,321
|
687,198
|
||||||
|
Goodwill
|
266,205
|
266,205
|
||||||
|
Deferred charges and other assets
|
57,140
|
55,774
|
||||||
|
Total Assets
|
$
|
5,128,348
|
$
|
5,111,935
|
||||
|
LIABILITIES AND CAPITALIZATION
|
||||||||
|
Current liabilities
|
$
|
444,650
|
$
|
495,558
|
||||
|
Deferred income taxes
|
604,160
|
585,335
|
||||||
|
Regulatory liabilities
|
491,155
|
491,896
|
||||||
|
Other noncurrent liabilities
|
474,574
|
459,476
|
||||||
|
Total Liabilities
|
2,014,539
|
2,032,265
|
||||||
|
Long-term debt, net of unamortized discount and premium
|
1,710,168
|
1,711,349
|
||||||
|
Preferred stock of subsidiary
|
119
|
119
|
||||||
|
Net common stock equity
|
1,403,522
|
1,368,202
|
||||||
|
Total Capitalization
|
3,113,809
|
3,079,670
|
||||||
|
Total Liabilities and Capitalization
|
$
|
5,128,348
|
$
|
5,111,935
|
||||
8