KNOXVILLE, Tenn., Nov. 17, 2014 /PRNewswire/ -- The Tennessee Valley Authority reported Monday more than $11 billion in operating revenues in fiscal 2014, resulting in $469 million in net income. TVA overcame a 2.4 percent decline in total sales to record its highest net income year since 2010.
"We had a strong financial year in 2014 highlighted by further improvements in TVA's operating and maintenance costs, an area we have been acutely focused on over the last two years," TVA President and CEO Bill Johnson said.
"We have taken considerable strides in our efforts to reduce our controllable costs, our O&M costs, to align with our revenue and growth expectations for the future," he added.
TVA continued to make investments in its asset portfolio in fiscal year 2014, while also reducing debt using both cash on hand and cash from operations.
"The work we have done the last two years allowed us to continue to make substantial investments that support a reliable, well-balanced asset portfolio while reducing our total debt and obligations," said Chief Financial Officer, John Thomas.
Sales to local power companies were moderately higher in 2014 as compared with 2013, as weather favorably impacted retail demand, particularly in the polar vortex last winter. This increase was also due to some underlying economic activity and a modest general rate increase. Growth in sales to local power companies partially offset lower sales to directly served industrial customers, as TVA saw the final year-over-year impact from the loss of U.S. Enrichment Corp.'s operations in Paducah, Ky., formerly TVA's largest directly served customer.
Total revenues advanced nearly 2 percent in 2014 compared with the prior year. The increase was primarily due to higher base revenues attributable to more sales volume to local power companies and a non-fuel base rate increase that became effective Oct. 1, 2013. Somewhat offsetting the increase were lower fuel revenues resulting from the decrease in sales to directly served industries.
Fuel expense decreased $90 million in 2014 compared with 2013 primarily due to the timing of TVA's fuel cost recovery mechanism and a reduction in sales volume, but was somewhat offset by higher purchased power costs in 2014.
Operating and maintenance expense decreased $87 million in 2014 compared to 2013, largely due a $122 million decrease related to TVA's costs savings initiatives.
TVA reported net income of $469 million in fiscal year 2014, $198 million more than last year, on $11.1 billion in operating revenues for fiscal 2014, compared with net income of $271 million on $11.0 billion in revenues last year.
TVA executive management will host a fiscal year-end 2014 financial conference call at 9:00 a.m. EST on Monday, Nov. 17, 2014. The conference call can be accessed on TVA's website via webcast at http://www.tva.com on the Investor Relations homepage. 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 9 p.m. EST, Nov. 25, 2014, by calling toll free (877) 344-7529 in the United States or (412) 317-0088 outside the United States and using the conference number 10034053. A webcast replay and transcript will also be available for one year on TVA's website at http://www.tva.com/finance.
TVA's annual report on Form 10-K provides additional financial, operational and descriptive information, including audited financial statements for the year-ended Sept. 30, 2014, 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.
(This release may contain forward-looking statements relating to future events and future performance. Although TVA believes that the assumptions underlying these statements are reasonable, numerous factors could cause actual results to differ materially from those in the forward-looking statements. Please refer to TVA's annual report on Form 10-K for a discussion of factors that could cause actual results to differ from those in the forward-looking statements.)
The Tennessee Valley Authority is a corporate agency of the United States that provides electricity for business customers and local power distributors serving 9 million people in parts of seven southeastern states. TVA receives no taxpayer funding, deriving virtually all of its revenues from sales of electricity. In addition to operating and investing its revenues in its electric system, TVA provides flood control, navigation and land management for the Tennessee River system and assists local power companies and state and local governments with economic development and job creation.
SOURCE Tennessee Valley Authority