Cash on hand medians increased for public power utilities, reflecting strong industry wide liquidity, according to the 10th annual U.S. Public Power Peer Study, released today by Fitch Ratings.
Fitch is also publishing a Peer Study Addendum in an interactive Excel based format.
According to the study, debt service coverage in 2011 was slightly lower for wholesale systems and slightly higher for retail systems, reflecting lower revenues from off-system sales and wholesale rate increases that have lagged increasing debt service costs.
Ratios of capital expenditures to depreciation continued to decline, particularly for wholesale systems. This trend, together with the increased medians for cash on hand, is likely due to the deferral of certain capital expenditures.
Leverage metrics also normalized between 'AA' and 'A' rated systems, with ratios for 'A' rated systems ending the year weaker than comparable 'AA' rated systems.
The study contains operating and financial data for 128 Fitch-rated public power issuers including retail and wholesale utility systems, and rural electric cooperatives. It provides updated statistics and metrics for utilities with fiscal years ending Dec. 31, 2011, as well as revised medians to reflect updated statistics and rating actions taken through June 1, 2012.
The study utilizes eight financial ratios that are calculated from the most recent annual audits. The ratios are presented by utility type, rating category, and region.
A utility's financial measures, relative to an appropriate Fitch-designated regional and national peer group, constitute an important component of Fitch's credit analysis.
The Addendum features a dynamic charting application that allows the user to generate a quick graphic representation of how a utility's selected financial metrics compare to the respective medians. It also offers tools for comparing a utility's key financial metrics to median calculations on a notch-specific rating basis for comparable entities rated within the same rating category (i.e. 'AA', 'A', 'BBB'), and against the entire portfolio of Fitch-rated issuers.
Fitch's 2012 edition of its annual 'U.S. Public Power Peer Study' and 'U.S. Public Power Peer Study Excel Addendum' are available on the company's website, at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: U.S. Public Power Peer Study -- June 2012
U.S Public Power Peer Study Addendum: June 2012
Michael Mohammed Murad, +1-212-908-0757
One State Street Plaza
New York, NY 10004
Dennis Pidherny, +1-212-908-0738
Elizabeth Fogerty, +1-212-908-0526
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