TVA’s Operating Revenues Increase During First Quarter of 2004
Mar. 30, 2004
A slight increase in power sales resulting from economic growth coupled with rate actions effective at the beginning of the 2004 fiscal year resulted in a 5.6-percent increase in operating revenues for TVA during the quarter ending Dec. 31, 2003, compared with the same three months of 2002.
Operating revenues for the first quarter of the 2004 fiscal year totaled $1.78 billion, compared to $1.68 billion for the same period the previous fiscal year. Operating expenses were almost $1.4 billion, an increase of nearly 11 percent from the first three months of the 2003 fiscal year.
TVA reduced its interest expense during the 2004 first quarter to $333 million, down from $346 million for the first quarter of the 2003 fiscal year. The reduction reflected lower average interest rates and a lower total debt level.
“Sales for the first quarter of 2004 were slightly better than the same period last year, due largely to increased production by certain industrial customers as a result of a stronger economy,” the TVA Board said in a letter to stakeholders. “An increase in TVA electric rates that took effect at the beginning of the fiscal year also contributed to an increase in total operating revenues for the quarter.”
During the first quarter of 2004, TVA reduced the outstanding balance of its bonds and notes by $1.5 billion by applying the proceeds of a prepayment arrangement with its largest customer, Memphis Light, Gas and Water, and recorded an equivalent liability in the form of deferred revenue. Under the arrangement, TVA has a 15-year, $1.5-billion obligation to provide MLGW with a monthly credit on a portion of its electricity needs.
TVA reported operating income of $399 million for the three-month period ending Dec. 31, 2003, compared with $440 million for the same period the previous year. Net income for the first quarter of 2004 was $70 million, compared with $314 million in net income for the same three months of 2003. A significant portion of the decrease relates to two non-cash accounting changes implemented during the first quarter of 2003.
TVA also released its 2003 Annual Report. Operating revenues for the 2003 fiscal year totaled nearly $7 billion, up 2 percent from 2002. Power sales for 2003 were also up 2 percent (2.9 billion kwh) from the previous year.
Net income for 2003 was $456 million, compared to $73 million in net income for the previous fiscal year. The difference was mainly due to the non-cash accounting changes implemented during the first quarter of 2003, and because TVA recognized a loss in 2002 resulting from the cancellation of a gas-fired plant. Interest expense for 2003 was down 6 percent from the previous year, dropping from $1.43 billion to $1.35 billion.
Complete financial statements and related disclosure information are available on the TVA website.
TVA is the nation’s largest public power provider and is completely self-financed. TVA provides power to large industries and 158 power distributors that serve approximately 8.5 million consumers in seven southeastern states.
Media Contact:
John Moulton, Knoxville, (865) 632-8048 or TVA News Bureau, Knoxville, (865) 632-6000
