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Madison Gas and Electric Company Reports Operating Results (10-Q)

November 05, 2009 | About:
10qk

10qk

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Madison Gas and Electric Company (MGEE) filed Quarterly Report for the period ended 2009-09-30.

MGE Energy is a public utility holding company. Its principal subsidiary MGE generates and distributes electricity to more than 128000 customers in Dane County Wisconsin (250 square miles) and purchases transports and distributes natural gas to nearly 123000 customers in seven south-central and western Wisconsin counties (1375 square miles). (Press Release) Madison Gas And Electric Company has a market cap of $806 million; its shares were traded at around $34.87 with a P/E ratio of 14.9 and P/S ratio of 1.4. The dividend yield of Madison Gas And Electric Company stocks is 4.3%. Madison Gas And Electric Company had an annual average earning growth of 0.5% over the past 10 years. GuruFocus rated Madison Gas And Electric Company the business predictability rank of 2-star.

Highlight of Business Operations:

For the three months ended September 30, 2009, MGE Energy's earnings were $12.7 million or $0.55 per share compared to $17.3 million or $0.78 per share for the same period in the prior year. MGE's earnings for the three months ended September 30, 2009, were $8.8 million compared to $12.4 million for the same period in the prior year.

For the nine months ended September 30, 2009, MGE Energy's earnings were $37.6 million or $1.63 per share compared to $41.7 million or $1.89 per share for the same period in the prior year. MGE's earnings for the nine months ended September 30, 2009, were $26.3 million compared to $29.9 million for the same period in the prior year.

2009 Fuel Credit: In April 2009, MGE filed an application with the PSCW requesting a proposed credit of $0.00204 per kWh, due to a decrease in actual electric fuel costs, when compared to those fuel costs projected in MGE's most recent rate order. MGE estimates this credit would reduce electric revenues by $4.6 million for 2009. In May 2009, the PSCW approved the interim order authorizing MGE to implement the proposed credit, subject to refund with interest at 10.8% effective May 9, 2009, until the final PSCW order. In the three and nine months ended September 30, 2009, this interim credit resulted in a $1.7 million and a $3.7 million reduction to electric revenues, respectively.

For both the three months ended September 30, 2009 and 2008, interest expense, net at the nonregulated energy operations segment was $0.7 million. Interest expense at the nonregulated energy segment for both the three months ended September 30, 2009 and 2008, includes $0.7 million in interest expense incurred on $50 million of long-term, fixed-rate borrowings at MGE Power West Campus.

Also included in the nonregulated interest expense is interdepartmental interest expense and capitalized interest at MGE Power Elm Road. During the three months ended September 30, 2009 and 2008, MGE Power Elm Road was charged $0.8 million and $1.2 million, respectively, in interest expense by Corporate on funds borrowed for the Elm Road project, respectively. This expense is eliminated upon consolidation for MGE Energy only. The interest expense at MGE Power Elm Road is offset by $0.8 million and $1.2 million, respectively, in capitalized interest.

All other interest income, net for both the three months ended September 30, 2009 and 2008, was $0.7 million. Interest income for the three months ended September 30, 2009, represents $0.8 million in interdepartmental interest income from MGE Power Elm Road, partially offset by $0.1 million in interest expense on short-term debt. Interest income for the three months ended September 30, 2008, represents $1.2 million in interdepartmental interest income from MGE Power Elm Road, partially offset by $0.5 million in interest expense on short-term debt. The interdepartmental interest income is eliminated upon consolidation.

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