Attached files
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| 8-K - UIL HOLDINGS CORPORATION 8-K 11-3-2011 - UIL HOLDINGS CORP | form8-k.htm |
| EX-99.1 - EXHIBIT 99.1 - UIL HOLDINGS CORP | ex99_1.htm |
UIL Holdings Corporation
157 Church Street
P.O. Box 1564
New Haven, CT 06506-0901
203.499.2812 Fax: 203.499.3626
NEWS RELEASE
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November 3, 2011
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Analyst Contact:
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Susan Allen
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203-499-2409
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Media Contact:
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Michael West Jr.
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203-499-3858 |
UIL Holdings Corporation Reports
Third Quarter 2011 Financial Results and Increases 2011 Earnings Guidance
UIL Holdings Corporation (NYSE: UIL) today reported consolidated net income of $12.2 million, or $0.24 per diluted share, for the third quarter of 2011, compared to net income of $17.0 million, or $0.52 per diluted share, for the same period in 2010. For the first nine months of 2011, UIL’s consolidated net income was $78.4 million, or $1.54 per diluted share, compared to $44.4 million, or $1.42 per diluted share, for the same period in 2010. The third quarter and first nine months results for 2011 reflect the earnings impact of the gas distribution operations acquired in the fourth quarter of 2010, the corporate expenses associated with that acquisition and the share dilution resulting from the September 2010 equity issuance as detailed in the table below.
“Our earnings for the third quarter reflect the first full quarter in which both of our new peaking generating plants, GenConn Devon and Middletown were in operation,” said James P. Torgerson, UIL’s president and chief executive officer. “And, with these GenConn plants operating and the integration of the gas companies into UIL well underway, we are seeing the positive impacts of our strategic initiatives.”
“In addition, our growth strategy of converting businesses and households to natural gas continues to attract interest and conversions are ahead of 2010 levels,” added Torgerson.
The following table provides earnings per diluted share for the third quarter and first nine months of 2011, compared to the same periods in 2010.
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Quarter Ended September 30,
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Nine Months Ended September 30,
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2011
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2010
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Difference
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2011
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2010
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Difference
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EPS
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UIL excl. acquisition & transition related activities
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$ | 0.66 | $ | 0.69 | $ | (0.03 | ) | $ | 1.87 | $ | 1.72 | $ | 0.15 | |||||||||||
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Gas distribution
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$ | (0.12 | ) | $ | - | $ | (0.12 | ) | $ | 0.58 | $ | - | $ | 0.58 | ||||||||||
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Interest expense related to $450M debt issuance
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$ | (0.06 | ) | $ | - | $ | (0.06 | ) | $ | (0.19 | ) | $ | (0.19 | ) | ||||||||||
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September 2010 equity issuance
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$ | (0.24 | ) | $ | (0.04 | ) | $ | (0.20 | ) | $ | (0.72 | ) | $ | (0.03 | ) | $ | (0.69 | ) | ||||||
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Acquisition related expenses
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$ | - | $ | (0.13 | ) | $ | 0.13 | $ | - | $ | (0.27 | ) | $ | 0.27 | ||||||||||
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UIL Consolidated
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$ | 0.24 | $ | 0.52 | $ | (0.28 | ) | $ | 1.54 | $ | 1.42 | $ | 0.12 | |||||||||||
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Electric distribution, CTA & other
Earnings from the electric distribution business in the third quarter of 2011 were $13.1 million, or $0.26 per diluted share, compared to $14.9 million, or $0.46 per diluted share, for the same period in 2010. The decrease in earnings for the quarter was primarily attributable to increased operation and maintenance expenses and lower CTA rate base, partially offset by increased income from the investment in GenConn.
For the first nine months of 2011, the electric distribution business had total earnings of $34.9 million, or $0.69 per diluted share, compared to $34.4 million, or $1.11 per diluted share, for the same period in 2010. The increase in net income for the first nine months of 2011 was primarily attributable to increased income from the investment in GenConn, partially offset by lower CTA rate base.
Pre-tax earnings from UI’s equity investment in GenConn in the third quarter of 2011 were $3.5 million compared to pre-tax earnings of $0.4 million in the third quarter of 2010. For the first nine months of 2011, pre-tax earnings from UI’s equity investment in GenConn earned $8.2 million, compared to a pre-tax loss of $0.5 million for the same period in 2010. Both GenConn plants are now operating in the ISO-NE markets. GenConn Devon became operational in the summer of 2010 and GenConn Middletown became operational in June of this year.
Electric transmission
Earnings from the electric transmission business in the third quarter of 2011 were $7.6 million, or $0.15 per diluted share, compared to $6.4 million, or $0.20 per diluted share, for the same period in 2010. For the first nine months of 2011, total transmission earnings were $23.2 million, or $0.46 per diluted share, compared to $19.5 million, or $0.63 per diluted share, for the same period in 2010. The increase in earnings for both the quarter and first nine months of 2011 were primarily attributable to an increase in the allowance for funds used during construction, due to an increase in construction work in progress.
Gas distribution
The gas distribution businesses incurred a loss of $6.2 million, or $0.12 per diluted share in the third quarter of 2011, consistent with the seasonal nature of the gas businesses. For the first nine months of 2011, earnings from the gas distribution businesses were $29.7 million, or $0.58 per diluted share, which reflects colder than normal temperatures in the first quarter of 2011. There were no earnings from the gas distribution businesses for the third quarter and first nine months of 2010 as those businesses were not acquired until November 2010.
The quarter and first nine months of 2011 earnings include an adjustment of $2.2 million, pre-tax, that was recorded in the third quarter of 2011, reflecting the decision by the Public Utilities Regulatory Authority to allow the company to record carrying charges on the excess interim rate decrease over-credited to customers during the stay of the rate case decisions while they were on appeal.
- more -
2
Corporate
UIL Holdings retains certain costs, primarily interest expense, at the holding company, or “corporate” level, which are not allocated to the various subsidiaries. UIL Corporate incurred net after-tax costs of $2.3 million, or $0.05 per diluted share in the third quarter of 2011, compared to net after-tax costs of $4.3 million, or $0.14 per diluted share, in the same period of 2010.
For the first nine months of 2011, UIL Corporate incurred net after-tax costs of $9.4 million, or $0.19 per diluted share, compared to $9.5 million, or $0.32 per diluted share, in the same period in 2010. The decrease for both the quarter and first nine months of 2011 was primarily attributable to the absence in 2011 of after-tax acquisition related costs incurred in the third quarter of 2010, partially offset by interest expense related to the October 2010 issuance of $450 million of public debt, the proceeds of which were used to partially fund the acquisition.
Looking Forward
UIL has revised its consolidated earnings estimate for 2011 upward to $1.90-$2.05 per diluted share compared to the previous guidance of $1.85-$2.00 per diluted share. Details of the 2011 earnings estimates are summarized as follows:
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2011 Earnings Expectations
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Approximate Net Income(2)
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EPS - basic(3)
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Electric distribution, CTA & other
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$39 - $43 | $0.78 - $0.85 | ||||||
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Electric transmission
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$28 - $30 | $0.55 - $0.60 | ||||||
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Total UI (1)
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$68 - $73 | $1.35 - $1.45 | ||||||
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Gas distribution
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$40 - $45 | $0.80 - $0.88 | ||||||
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UIL Corporate
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($14) - ($13) | ($0.27) - ($0.25) | ||||||
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Total UIL (1)
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$96 - $104 | $1.90 - $2.05 | ||||||
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(1) Expectations are not intended to be additive
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(2) Rounded to the nearest million
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(3) Assumes approximately 50.6 million average shares outstanding
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Although the earnings estimate for Total UI was unchanged, the range for the electric distribution business (which includes CTA & other) was narrowed to $0.78-$0.85 per diluted share from $0.78-$0.90 per diluted share, reflecting year to date performance.
The range for gas distribution was also narrowed from $0.78-$0.88 per diluted share to $0.80-$0.88 per diluted share, reflecting year to date performance.
The unallocated net costs for UIL Corporate were reduced from ($0.30)–($0.28) per diluted share to ($0.27)–($0.25) per diluted share primarily to reflect tax savings resulting from the deductibility of certain gas company acquisition costs.
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3
Third Quarter 2011 Earnings Conference Call
In conjunction with this earnings release, UIL will conduct a webcast conference call with financial analysts on Friday, November 4, 2011, beginning at 10:00 a.m. eastern time. UIL’s 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 live via the internet by logging onto the Investors section of UIL’s 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 690,000 electric and natural gas utility customers in 66 communities across two states, with combined total assets of over $4 billion.
UIL 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 (BGC), 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 Gas serves natural gas customers in western Massachusetts. UIL employs more than 1,850 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, of how the acquisition-related financial activities described above contributed to the change in net income is useful in understanding the overall 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 dollar amount of the applicable change for the acquisition activity, booked in accordance with generally accepted accounting principles (GAAP), and applying UIL Holdings' combined effective statutory federal and state tax rate and then dividing by the average number of 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 earnings per share (EPS) information as presented in its earnings guidance is useful in understanding the earnings expectations for the business, as a whole. The amounts presented in the earnings guidance show the EPS for each of UIL Holdings’ lines of business. EPS is calculated by dividing the projected 2011 net income for each line of business by the projected average number of shares of UIL Holdings common stock outstanding for 2011. Total consolidated EPS is a GAAP-basis presentation.
Forward-Looking Statements
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). These include statements regarding management’s intentions, plans, beliefs, expectations or forecasts for the future. Such forward-looking statements are based on UIL Holdings’ expectations and involve risks and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements. Such risks and uncertainties include, but are not limited to, general economic conditions, legislative and regulatory changes, changes in demand for electricity, gas and other products and services, unanticipated weather conditions, changes in accounting principles, policies or guidelines, and other economic, competitive, governmental, and technological factors affecting the operations, markets, products and services of UIL Holdings’ subsidiaries, The United Illuminating Company, The Southern Connecticut Gas Company, Connecticut Natural Gas Corporation and The Berkshire Gas Company. Such risks and uncertainties with respect to UIL Holdings’ recent acquisition of The Southern Connecticut Gas Company, Connecticut Natural Gas Corporation and The Berkshire Gas Company include, but are not limited to, the possibility that the expected benefits will not be realized, or will not be realized within the expected time period. The foregoing and other factors are discussed and should be reviewed in UIL Holdings’ most recent Annual Report on Form 10-K and other subsequent periodic filings with the Securities and Exchange Commission. 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.
The following are summaries of UIL Holdings’ unaudited consolidated financial information for the third quarter and first nine months of 2011 and 2010:
###
4
UIL HOLDINGS CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(In Thousands except per share amounts)
(Unaudited)
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Three Months Ended
September 30,
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Nine Months Ended
September 30,
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2011
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2010
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2011
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2010
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Operating Revenues
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Electric distribution and transmission
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$ | 220,820 | $ | 236,274 | $ | 602,482 | $ | 663,663 | ||||||||
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Gas distribution
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100,579 | - | 594,012 | - | ||||||||||||
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Non-utility
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28 | 3 | 35 | 10 | ||||||||||||
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Total Operating Revenues
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321,427 | 236,277 | 1,196,529 | 663,673 | ||||||||||||
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Operating Expenses
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Operation
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Purchased power
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52,974 | 65,616 | 139,548 | 194,531 | ||||||||||||
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Natural gas purchased
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48,714 | - | 341,594 | - | ||||||||||||
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Operation and maintenance
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95,539 | 57,372 | 284,539 | 171,360 | ||||||||||||
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Transmission wholesale
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25,180 | 23,434 | 59,809 | 54,249 | ||||||||||||
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Depreciation and amortization
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38,368 | 28,383 | 108,941 | 82,672 | ||||||||||||
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Taxes - other than income taxes
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26,399 | 20,238 | 87,806 | 54,534 | ||||||||||||
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Acquisition-related costs
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- | 6,471 | - | 13,171 | ||||||||||||
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Total Operating Expenses
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287,174 | 201,514 | 1,022,237 | 570,517 | ||||||||||||
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Operating Income
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34,253 | 34,763 | 174,292 | 93,156 | ||||||||||||
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Other Income and (Deductions), net
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8,392 | 5,591 | 18,661 | 14,551 | ||||||||||||
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Interest Charges, net
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Interest on long-term debt
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21,052 | 11,039 | 65,059 | 30,844 | ||||||||||||
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Other interest, net
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2,647 | 171 | 4,376 | 590 | ||||||||||||
| 23,699 | 11,210 | 69,435 | 31,434 | |||||||||||||
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Amortization of debt expense and redemption premiums
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644 | 399 | 1,979 | 1,193 | ||||||||||||
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Total Interest Charges, net
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24,343 | 11,609 | 71,414 | 32,627 | ||||||||||||
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Income Before Income Taxes, Equity Earnings
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18,302 | 28,745 | 121,539 | 75,080 | ||||||||||||
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Income Taxes
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9,629 | 12,114 | 51,347 | 30,156 | ||||||||||||
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Income Before Equity Earnings
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8,673 | 16,631 | 70,192 | 44,924 | ||||||||||||
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Income (loss) from Equity Investments
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3,521 | 345 | 8,230 | (544 | ) | |||||||||||
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Net Income
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12,194 | 16,976 | 78,422 | 44,380 | ||||||||||||
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Less:
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Preferred Stock Dividends of
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Subsidiary, Noncontrolling Interests
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14 | - | 42 | - | ||||||||||||
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Net Income attributable to UIL Holdings
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$ | 12,180 | $ | 16,976 | $ | 78,380 | $ | 44,380 | ||||||||
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Average Number of Common Shares Outstanding - Basic
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50,643 | 32,176 | 50,597 | 30,743 | ||||||||||||
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Average Number of Common Shares Outstanding - Diluted
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50,927 | 32,459 | 50,886 | 31,067 | ||||||||||||
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Earnings Per Share of Common Stock - Basic:
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$ | 0.24 | $ | 0.52 | $ | 1.55 | $ | 1.44 | ||||||||
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Earnings Per Share of Common Stock - Diluted:
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$ | 0.24 | $ | 0.52 | $ | 1.54 | $ | 1.42 | ||||||||
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Cash Dividends Declared per share of Common Stock
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$ | 0.432 | $ | 0.432 | $ | 1.296 | $ | 1.296 | ||||||||
UIL HOLDINGS CORPORATION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Three and Nine Months Ended September 30, 2011 and 2010
(Thousands of Dollars)
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Three Months Ended
September 30,
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Nine Months Ended
September 30,
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2011
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2010
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2011
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2010
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Net Income
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$ | 12,194 | $ | 16,976 | $ | 78,422 | $ | 44,380 | ||||||||
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Other Comprehensive Loss
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(1,012 | ) | - | (866 | ) | - | ||||||||||
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Less:
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Preferred Stock Dividends of
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Subsidiary, Noncontrolling Interests
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14 | - | 42 | - | ||||||||||||
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Comprehensive Income
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$ | 11,168 | $ | 16,976 | $ | 77,514 | $ | 44,380 | ||||||||
5
UIL HOLDINGS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
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(thousands of dollars)
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September 30,
2011
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December 31,
2010
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ASSETS
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Current assets
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$ | 564,481 | $ | 697,421 | ||||
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Other investments
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154,289 | 85,717 | ||||||
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Net property, plant and equipment
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2,498,825 | 2,327,450 | ||||||
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Regulatory assets
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956,545 | 925,889 | ||||||
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Goodwill
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302,184 | 298,890 | ||||||
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Deferred charges and other assets
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105,982 | 120,066 | ||||||
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Total Assets
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$ | 4,582,306 | $ | 4,455,433 | ||||
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LIABILITIES AND CAPITALIZATION
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Current liabilities
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$ | 508,691 | $ | 552,934 | ||||
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Noncurrent liabilities
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647,209 | 577,231 | ||||||
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Deferred income taxes
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418,719 | 354,164 | ||||||
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Regulatory liabilities
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362,023 | 382,366 | ||||||
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Total Liabilities
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1,936,642 | 1,866,695 | ||||||
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Long-term debt, net of unamortized discount and premium
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1,551,478 | 1,511,768 | ||||||
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Preferred stock of subsidiary
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750 | 828 | ||||||
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Net common stock equity
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1,093,436 | 1,076,142 | ||||||
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Total Capitalization
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2,645,664 | 2,588,738 | ||||||
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Total Liabilities and Capitalization
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$ | 4,582,306 | $ | 4,455,433 | ||||
6