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» UIL Holdings Corporation Q3 2008 Earnings Call Transcript
James TorgersonThanks Sue. Good morning everybody. Our second quarter was a pretty challenging one, again due to the weather. And if you look at it in perspective, the April and May degree days are about equal to what we normally see in November. So, it was off quite a bit again, and another factor in the earnings – the earnings for the quarter were $12 million or $0.23 per diluted share versus 2011, where we had $14.2 million or $0.28 a share. And for the year-to-date, we are at $59 million of net income, $1.16 which we reported to $1.30 in 2011. The lower GAAP sales volumes are really the primary driver, but also for the Electric distribution business, we recorded a charge related to sharing. So, once we exceed our allowed return on the distribution business and our expectation is that there will be an amount above that this year, then we record a sharing because we share 50-50 on anything over the allowed return. So, we have that recorded in 2012 in the second quarter and that we didn’t record in 2011. So, that had an impact, and Rich will talk a little bit about that as we move forward. The pre-tax earnings for GenConn increased $1.3 million in the quarter and $3.7 million year-to-date. The Middletown plant went operational in June of 2011. So, we really had it for a little bit of the second quarter in 2011 and small piece for the first half of 2011. Our gas conversions go extremely well. We are on target to meet our goal for 2012 and also the 30,000 to 35,000 referrals of three-year period. Our conversions were up 46% over the year-to-date numbers from 2011. Actually, the mild winter did help in that regard a little bit and allowed us to get a jumpstart on the gas construction business during the February-March timeframe.
The other thing is we are reaffirming our 2012 earnings guidance of $2.00 to $2.15 per share. We are mitigating some of the weather impacts by continuing to maintain our focus on the short-term O&M cost controls that we have in place. So, that is an ongoing function. And so, we feel pretty good about our guidance for the $2.00 to $2.15, and Rich will talk about some of parameters around that.The regulated businesses are expected to earn at or near the allowed returns on a weather-normalized aggregate business. So, in the aggregate, we expect to be at or near our allowed returns. And really the expectations from our acquisition of the gas companies, we believe we are being – you look at the weather normalization. So, we are still very happy with that acquisition and the performance we are driving. On Page 4 of the presentation, and talk a little bit about the gas conversions, we have converted almost 4,700 customers through the end of June, a 46% increase over the same period in 2011. Our target of 30,000 to 35,000 for the three-year period, from 2011 to 2013, we are on track for that. And we are on track to achieve our goal of 10,200 customers using gas for heating this year. We did convert our 8,300 customers in 2011 and you can see from the chart how we are doing, and the one on the left shows the month-to-month, and then the one on the right shows the cumulative. And you can see we are ahead of our target and we are ahead of 2011. Conversion targets for 2014 and beyond, we will talk about that in the fourth quarter of 2012 once we get our budgets and estimates put together. On Page 5, the consumer interest is very strong on our gas conversions, financing options are in place. The natural gas supply prices, I think you know are still low, and not as low as they were, they are up more of closer to $3 range now, but versus the $2 they were earlier this year, but that’s still very attractive. It’s still half the cost of oil and we are seeing considerable amount of interest in people converting. And as you have said before, every customer that converts on average, about $300 of distribution net operating income annually from that. Read the rest of this transcript for free on seekingalpha.com