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TVA Reports Net Income of $54 Million in Second Quarter 2013
The Tennessee Valley Authority reported Friday net income of $54 million on operating revenues of $2.74 billion in the second quarter of 2013. This compares with a net loss of $94 million on operating revenues of $2.60 billion in the same period last year.
“We ended the second quarter 2013 essentially on plan,” President and CEO Bill Johnson said. “More normal weather had a favorable impact, as did employee efforts to reduce costs.
“We are focused on controllable factors that improve cost management and drive operational performance as we work to keep rates low. This is particularly important as we enter the summer months, when customer usage and sales typically are at the highest levels,” he said.
Sales to local power companies that distribute TVA electricity were 9 percent higher in the second quarter and 5 percent higher in the first six months of 2013, compared with the same periods last year. Higher off-system sales as a result of excess generation also contributed to higher sales. Offsetting these increases were lower sales to directly served industrial customers, TVA said in its quarterly filing to the U.S. Securities and Exchange Commission for the quarter ended March 31, 2013.
Total revenues increased 5 percent in the second quarter and 3 percent year to date, compared with the same periods last year. The increases were driven by higher fuel cost recovery due to higher fuel rates and an increase in electricity sales. Base revenue was $36 million higher in the second quarter due to an increase in electricity sales, but was down $49 million in the first six months of 2013 in part from a decrease in the effective base rate as distributors selected new wholesale rate structures.
Fuel expense was $148 million higher in the second quarter and $302 million higher in the first six months of 2013, compared with the same periods last year primarily due to more nuclear outages in 2013, which resulted in more generation from higher-cost sources, particularly natural gas and coal-fired generation.
“We were pleased to be able to hold our average power rates steady for customers, despite the increases in fuel and commodity costs,” Chief Financial Officer John Thomas said. “To further improve TVA’s power rates, we will continue developing a more balanced generation portfolio through effective asset management.”
Operating and maintenance expense increased by $13 million in the second quarter and was $52 million higher in the first half of this year compared with the same periods last year. During the first six months of 2013, TVA completed three nuclear refueling outages and a steam generator replacement project and began a fourth refueling outage, compared to one nuclear refueling outage in the same period last year.
For the six months ended March 31, 2013, TVA reported a net loss of $191 million on operating revenues of $5.32 billion, compared with a net loss of $267 million on operating revenues of $5.17 billion in the same period a year ago.
TVA executive management will host a second quarter fiscal year 2013 financial conference call at 9:30 a.m. EDT on Friday, May 3, 2013. The conference call can be accessed on TVA’s website via webcast at http://www.tva.com/finance. For quick access to the live conference call, please pre-register now by going to TVA’s website before the scheduled start time and follow the instructions provided. Once pre-registered, the dial-in number will be provided via an email. If you are unable to pre-register, you may access the conference call by dialing toll free (877) 270-2148 in the United States or in Canada, or (412) 902-6510 outside the United States. A replay will be available one hour after the end of the conference call until 5:00 p.m. EDT, May 13, 2013, by calling toll free (877) 344-7529 in the United States or (412) 317-0088 outside the United States and using the conference number 10026404. A webcast replay and transcript will also be available for one year on TVA’s website at http://www.tva.com/finance.
TVA’s quarterly report on Form 10-Q provides additional financial, operational and descriptive information, including unaudited financial statements for the quarter ended March 31, 2013, and is available to investors and the public. TVA SEC reports are also available without charge on TVA’s website at http://www.tva.com/finance or on the SEC’s website at http://www.sec.gov or by calling TVA toll free at (888) 882-4975.
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Last Update on September 23, 2014 17:33 GMT
OVERSEAS TAX BREAKS-COMPANIES
NEW YORK (AP) -- A handful of companies pursuing overseas deals that could lower their tax rates are under pressure after the U.S. unveiled rules that would make those deals less lucrative.
The Treasury Department announced new regulations yesterday that would make it less lucrative to pursue a so-called inversion. Under such a deal, an American company buys a foreign firm, then re-incorporates overseas.
The pharmaceutical company AbbVie, based in Chicago, reached an agreement to buy Dublin-based Shire in July for $54 billion. Shares of both companies sank in Tuesday trading. AbbVie lost 2 percent in New York trading, while Shire sank 2 percent in London.
Among other companies getting hit in Tuesday trading, Minneapolis-based Medtronic Inc., which plans to buy Dublin-based Covidien Plc., fell 4 percent. Covidien lost 3 percent. The British drugmaker AstraZeneca, still considered a likely takeover candidate after it successfully rebuffed overtures from Pfizer Inc. earlier this year, slumped 3 percent.
BERLIN (AP) -- The World Trade Organization has sharply reduced its forecast for global trade growth this year, pointing to uneven economic growth in countries including China and the U.S.
The WTO said Tuesday that its economists are now predicting 3.1 percent growth in world trade this year, down from the 4.7 percent forecast in April. They also cut their outlook for 2015 to 4 percent from the previous 5.3 percent.
The Geneva-based body said global trade stagnated in the first six months of this year as a gradual recovery in demand for imports in developed countries was offset by declines in developing countries.
Its director-general, Roberto Azevedo, said that "uneven growth and continuing geopolitical tensions will remain a risk for both trade and output in the second half of the year."
LONDON (AP) -- Further evidence has emerged to show that the economic momentum across the 18-country eurozone is petering out.
In its monthly survey, financial information company Markit says its purchasing managers' index for the eurozone -- a gauge of business activity -- fell to a nine-month low of 52.3 in September from the previous month's 52.5.
Though anything above 50 indicates expansion, the survey found that France remains a laggard.
It also suggested that growth may slow further in the fourth quarter as new manufacturing orders fell for the first time in 15 months.
Markit's chief economist, Chris Williamson, says the danger is that the European Central Bank's recent efforts to stimulate the eurozone economy will "prove ineffective in the face of such headwinds."
BERLIN (AP) -- Greece's prime minister says his country isn't seeking another international financial rescue and has indicated that a new economic reform plan is coming soon.
Since 2010, Greece has relied on two bailout packages totaling 240 billion euros ($308 billion). Payments from eurozone partners are due to end this year while those from the International Monetary Fund conclude in 2016.
After meeting with German Chancellor Angela Merkel on Tuesday, Greek Prime Minister Antonis Samaras said "Greece can now stand on its own two feet and ... we believe we do not require a new support package."
Samaras added that Greece will soon propose "its own framework to continue reforms in the years to come, beyond the timetable of the (bailout) agreements."
Germany has been the single biggest contributor to Greece's bailouts.
UNITED NATIONS (AP) -- World leaders are promising billions of dollars to take better care of planet Earth at a United Nations summit on climate changes.
The non-binding pledges are coming in response to a challenge from UN Secretary-General Ban Ki-Moon. At the opening of the one-day summit, Ban said the world needs to set a new course for a warming globe and reverse the rise of heat-trapping gases.
By mid-morning, world leaders had made pledges of at least $5 billion to help the world become more sustainable. And the European Union offered a rare proposal -- specific targets beyond 2020.
The EU says its member nations will cut greenhouse gases so that by 2030 they would be 40 percent below the 1990 level. The vow also calls for using renewable energy for 27 percent of the bloc's power needs and to increase energy efficiency by 30 percent.
NEW YORK (AP) -- More than 30 countries are setting the first-ever deadline to halt deforestation by 2030 to curb global warming.
The United States, Canada and the entire European Union were among 32 countries signing on to a declaration to halve forest loss by 2020 and stop it by 2030 at the U.N. climate summit Tuesday.
But the enthusiasm for the pledge was tempered when Brazil, home to wide swaths of Amazon rainforest, said it would not join.
If the goal is met, the U.N. says it would be the equivalent of taking every car off the road in the world. The group also pledged to restore more than one million square miles of forest worldwide by 2030. Norway vowed to spend $350 million to protect forests in Peru and another $100 million in Liberia.
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