The Commonwealth Utilities Corporation’s financial performance provides an overview of CUC's activities for the fiscal year ended September 30, 2006 with comparisons to prior fiscal years ended September 30, 2005 and 2004. Total net operating revenues for fiscal year 2006 were $88.3 million, an increase of $9.4 million (12.0 percent) when compared to fiscal year 2005, which had an increase of $14.4 million (22.4 percent) when compared to fiscal year 2004. In addition, Total operating expenses for fiscal year 2006 were $107.7 million, an increase of $12.7 million (13.4 percent) when compared to fiscal year 2005, which had an increase of $15.1 million (18.9 percent) when compared to fiscal year 2004. Increases in total net operating revenues and total net operating expenses were attributable to rising fuel costs.

FINANCIAL HIGHLIGHTS

• Total assets on September 30, 2006, were $139.0 million, an increase of $6.1 million (4.6 percent) when compared to September 30, 2005, which had a decrease of $11.4 million (7.9 percent) when compared to September 30, 2004. This was due primarily to increases in capital assets in 2006 and decreases in both capital and restricted assets in 2005.

• Total liabilities on September 30, 2006, were $204.3 million, an increase of $13.5 million (7.1 percent) when compared to September 30, 2005, which had an increase of $16.3 million (9.3 percent) when compared to September 30, 2004. In both years, the increases were due primarily to accruals for interest payable.

• Total net operating revenues for fiscal year 2006 were $88.3 million, an increase of $9.4 million (12.0 percent) when compared to fiscal year 2005, which had an increase of $14.4 million (22.4 percent) when compared to fiscal year 2004. In both years, the increases were due primarily to the inclusion of a fuel charge in the power rates.

• Total operating expenses for fiscal year 2006 were $107.7 million, an increase of $12.7 million (13.4 percent) when compared to fiscal year 2005, which had an increase of $15.1 million (18.9 percent) when compared to fiscal year 2004. In both years, the increases were attributable to rising fuel costs.

• Non-operating revenues net of non-operating expenses for fiscal year 2006 were $3.6 million or an increase of 135.7 percent compared to fiscal year 2005 non-operating expenses net of non-operating revenues. This was due primarily to the recovery of bad debts totaling $15.3 million. Non-operating expenses net of non-operating revenues for fiscal year 2005 decreased by $448,000 (4.2 percent) when compared to fiscal year 2004, which was due primarily to settlement income.

• In fiscal year 2006, CUC recognized $7.3 million in capital contributions compared to $3.9 million in fiscal year 2005 and $8.7 million in fiscal year 2004. This was an increase of $3.4 million (86.9 percent) when compared to 2005 and a decrease of $4.8 million (55.2 percent) when 2005 is compared to 2004.

• CUC’s net deficiency continued to increase in fiscal year 2006, but at a much lower rate than fiscal year 2005. In 2006, the net deficiency increased $7.4 million (12.8 percent) when compared to 2005, which had an increase of $27.6 million (91.1 percent) when compared to 2004.

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