UIL Holdings Corporation (NYSE: UIL) today reported consolidated net
income of $99.7 million, or $1.95 per diluted share, for 2011, an
increase of $44.8 million, or $0.43 per diluted share, compared to 2010.
For the fourth quarter of 2011, UIL's consolidated net income was $21.3
million, or $0.42 per diluted share, compared to $10.5 million, or $0.20
per diluted share, for the same period in 2010. The results for 2010
include the results of the gas distribution businesses for the
post-acquisition period of November 17, 2010 through December 31, 2010
only.
"2011 was a very productive year," said James P. Torgerson, UIL's
president and chief executive officer. "Much of our focus was on the
integration of the gas companies, electric company and UIL. This
integration has progressed as planned. Our strategic initiative of
converting businesses and households in our service territory to natural
gas started successfully and we are well on our way to reaching our goal
of 30,000-35,000 new gas heating customers by the end of 2013. In 2011,
we converted approximately 8,300 businesses and households to natural
gas, a 22% increase over 2010 levels."
"In addition, we executed on our capital expenditure program at each of
the regulated subsidiaries, completed the second GenConn peaking
generating plant, and settled all pending issues with the Connecticut
Public Utilities Regulatory Authority relating to the gas companies rate
case appeals," added Torgerson.
The following table provides earnings per diluted share for the fourth
quarter and full year of 2011, compared to the same periods in 2010.
Quarter Ended December 31,
Year Ended December 31,
2011
2010
Difference
2011
2010
Difference
EPS
UIL excl. acquisition & transition related activities
$
0.34
$
0.28
$
0.06
$
2.24
$
2.02
$
0.22
Gas distribution
$
0.28
$
0.25
$
0.03
$
0.86
$
0.36
$
0.50
Interest expense related to $450M debt issuance
$
(0.06
)
$
(0.06
)
$
-
$
(0.25
)
$
(0.09
)
$
(0.16
)
September 2010 equity issuance
$
(0.14
)
$
(0.12
)
$
(0.02
)
$
(0.90
)
$
(0.33
)
$
(0.57
)
Acquisition related expenses
$
-
$
(0.15
)
$
0.15
$
-
$
(0.44
)
$
0.44
UIL Consolidated as reported
$
0.42
$
0.20
$
0.22
$
1.95
$
1.52
$
0.43
This table has been presented for illustrative purposes only and is not
necessarily indicative of results of operations that would have been
achieved had the acquisition not taken place.
Electric distribution, CTA & other
Earnings from the electric distribution business in 2011 were $37.6
million, or $0.74 per diluted share, compared to $35.5 million, or $0.98
per diluted share, for the same period in 2010. For the fourth quarter
of 2011, the electric distribution business had total earnings of $2.7
million, or $0.05 per diluted share, compared to $1.1 million, or $0.02
per diluted share, for the same period in 2010. The increase in earnings
for both periods of 2011 was primarily attributable to increased income
from the investment in GenConn, partially offset by lower CTA rate base
and increased outside services expenses primarily relating to line
maintenance.
Pre-tax earnings from UI's equity investment in GenConn in 2011 were
$11.3 million, compared to pre-tax earnings of $1.2 million in 2010. For
the fourth quarter of 2011, pre-tax earnings from UI's equity investment
in GenConn were $3.1 million, compared to pre-tax earnings of $1.8
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 2011.
Electric transmission
Earnings from the electric transmission business in 2011 were $31.3
million, or $0.61 per diluted share, compared to $28.3 million, or $0.78
per diluted share, for the same period in 2010. For the fourth quarter
of 2011, total transmission earnings were $8.1 million, or $0.16 per
diluted share, compared to $8.8 million, or $0.17 per diluted share, for
the same period in 2010. Earnings were favorably impacted in both
periods due to an increase in the allowance for funds used during
construction, due to an increase in construction work in progress and
earnings on deposits made in the New England East West Solution
projects. The favorable impact of these factors is not apparent on a
quarter over quarter basis, however, because the fourth quarter 2010 was
favorably impacted by effective income tax rate adjustments made in 2010.
Gas distribution
Earnings from the gas distribution businesses in 2011 were $43.8
million, or $0.86 per diluted share in 2011. For the fourth quarter of
2011, earnings from the gas distribution businesses were $14.1 million,
or $0.28 per diluted share, compared to $12.9 million, or $0.25 per
diluted share, for the six weeks following the acquisition of the gas
companies in mid-November of 2010. Earnings for both the full year and
fourth quarter of 2011 were negatively impacted by warmer than normal
weather, which was partially offset by weather insurance. Heating degree
days were less than normal by an average of 6.9% and 16.7% for the year
and fourth quarter, respectively.
In addition, full year 2011 earnings include pre-tax earnings of $2.2
million from the recovery of carrying charges relating to the settlement
of the gas companies' rate case appeals.
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
$13.0 million, or $0.26 per diluted share, in 2011, compared to net
after-tax costs of $21.8 million, or $0.60 per diluted share, in the
same period of 2010.
For the fourth quarter of 2011, UIL Corporate incurred net after-tax
costs of $3.6 million, or $0.07 per diluted share, compared to $12.3
million, or $0.24 per diluted share, in the same period in 2010. The
decrease for both periods of 2011 was primarily attributable to the
absence in 2011 of after-tax acquisition related costs incurred in 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's consolidated earnings estimate for 2012 is $2.00-$2.20 per diluted
share. Components of the 2012 earnings estimates are summarized as
follows:
Category
Approximate Net Income(2)
EPS - diluted(3)
Electric distribution, CTA & other
$43 - $51
$0.85 - $1.00
Electric transmission
$26 - $31
$0.52 - $0.62
Total UI(1)
$71 - $81
$1.40 - $1.60
Gas distribution
$38 - $46
$0.75 - $0.90
UIL Corporate
($14) - ($13)
($0.27) - ($0.25)
Total UIL(1)
$102 - $112
$2.00 - $2.20
(1) Expectations are not expected to be additive
(2) Rounded to the nearest million
(3) Assumes approximately 51.1 million average shares
outstanding
UIL's objective is for its regulated businesses to earn the allowed
return on an aggregate basis. Major factors impacting the earnings per
share estimates for 2012 are as follows:
Integration savings of $11.6 million, compared to Iberdrola USA's $23
million of allocated corporate overheads, support costs and shared
services in 2009.
Remaining on track for converting 30,000-35,000 businesses and
households to natural gas heat by the end of 2013. The goal for 2012
is to convert approximately 10,200 customers, a 50% increase over 2010
levels.
CTA earnings are expected to decline by $0.04 per diluted share in
2012 compared to 2011, as rate base continues to be amortized.
Bonus depreciation is expected to have a negative impact on earnings
of $0.12 per share, an additional $0.05 per share, compared to 2011.
Execution of capital expenditure plan at each of our regulated
businesses.
Continued focus on management of O&M expenses at each of our regulated
businesses.
Fourth Quarter and Full Year 2011 Earnings
Conference Call
In conjunction with this earnings release, UIL will conduct a webcast
conference call with financial analysts on Thursday, February 23, 2012,
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 699,000
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 1,861
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
2011 net income for each line of business by the 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 fourth quarter and full years of 2011 and
2010:
UIL HOLDINGS CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(In Thousands except per share amounts)
(Unaudited)
Years Ended
December 31,
2011
2010
Operating Revenues
$
1,570,447
$
997,666
Operating Expenses
Operation
Purchased power
180,149
242,268
Natural gas purchased
429,079
81,428
Operation and maintenance
382,167
258,282
Transmission wholesale
77,997
72,169
Depreciation and amortization
167,462
113,946
Taxes - other than income taxes
114,211
78,702
Acquisition and closing related expenses
-
25,572
Total Operating Expenses
1,351,065
872,367
Operating Income
219,382
125,299
Other Income and (Deductions), net
26,932
17,262
Interest Charges, net
Interest on long-term debt
87,394
50,357
Other interest, net
5,216
1,553
92,610
51,910
Amortization of debt expense and redemption premiums
2,775
1,788
Total Interest Charges, net
95,385
53,698
Income Before Income Taxes, Equity Earnings
150,929
88,863
Income Taxes
62,501
35,284
Income Before Equity Earnings
88,428
53,579
Income from Equity Investments
11,282
1,278
Net Income
99,710
54,857
Less:
Preferred Stock Dividends of
Subsidiary, Noncontrolling Interests
54
3
Net Income attributable to UIL Holdings
$
99,656
$
54,854
Average Number of Common Shares Outstanding - Basic
50,609
35,722
Average Number of Common Shares Outstanding - Diluted
50,926
36,083
Earnings Per Share of Common Stock - Basic:
$
1.96
$
1.53
Earnings Per Share of Common Stock - Diluted:
$
1.95
$
1.52
Cash Dividends Declared per share of Common Stock
$
1.728
$
1.728
UIL HOLDINGS CORPORATION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Years Ended December 31, 2011 and 2010
(Thousands of Dollars)
(Unaudited)
2011
2010
Net Income
$
99,710
$
54,857
Other Comprehensive Income (Loss)
(541
)
166
Less:
Preferred Stock Dividends of
Subsidiary, Noncontrolling Interests
54
3
Comprehensive Income
$
99,115
$
55,020
UIL HOLDINGS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
December 31,
December 31,
(thousands of dollars)
2011
2010
ASSETS
Current assets
$
667,228
$
723,826
Other investments
153,653
85,717
Net property, plant and equipment
2,570,355
2,327,450
Regulatory assets
983,222
925,889
Goodwill
266,797
298,890
Deferred charges and other assets
103,354
120,066
Total Assets
$
4,744,609
$
4,481,838
LIABILITIES AND CAPITALIZATION
Current liabilities
$
641,868
$
579,339
Noncurrent liabilities
650,555
577,231
Deferred income taxes
388,553
354,164
Regulatory liabilities
420,175
382,366
Total Liabilities
2,101,151
1,893,100
Long-term debt, net of unamortized discount and premium
1,548,347
1,511,768
Preferred stock of subsidiary
750
828
Net common stock equity
1,094,361
1,076,142
Total Capitalization
2,643,458
2,588,738
Total Liabilities and Capitalization
$
4,744,609
$
4,481,838
UIL Holdings Corporation Analysts: Susan Allen, 203-499-2409 or Media: Michael
West Jr., 203-499-3858
Recommend:
