RICHMOND, Va., Feb. 6, 2015 /PRNewswire/ -- Dominion (NYSE:
D) today announced operating earnings for the 12 months ended
Dec. 31, 2014, of $2.0 billion ($3.43
per share), compared to operating earnings of $1.9 billion ($3.25
per share) for the same period in 2013. Operating earnings
are defined as reported earnings, determined in accordance with
Generally Accepted Accounting Principles (GAAP), adjusted for
certain items.
Unaudited reported (GAAP) earnings for the 12 months ended
Dec. 31, 2014 were $1.3 billion ($2.24
per share), compared with earnings of $1.7
billion ($2.93 per share) for
the same period in 2013.
Dominion uses operating earnings as the primary performance
measurement of its earnings guidance and results for public
communications with analysts and investors. Dominion also
uses operating earnings internally for budgeting, for reporting to
the Board of Directors, for the company's incentive compensation
plans and for its targeted dividend payouts and other purposes.
Dominion management believes operating earnings provide a more
meaningful representation of the company's fundamental earnings
power.
The principal differences between GAAP earnings and operating
earnings for the full year 2014 include a charge associated with
Virginia legislation permitting recovery of costs related to the
development of a third nuclear unit at North Anna and offshore wind
facilities through base rates; call premiums on early debt
redemptions associated with our liability management exercise; a
charge related to a settlement offer to incur future ash pond
closure costs at certain utility generation facilities; and charges
related to the repositioning of our Producer Services business.
Business segment results and detailed descriptions of items
included in 2014 and 2013 reported earnings but excluded from
operating earnings can be found on Schedules 1, 2 and 3 of this
release.
Thomas F. Farrell II, chairman,
president and chief executive officer, said:
"2014 was a year of significant accomplishments for Dominion as
we completed several major capital projects and made significant
progress to advance the next round of infrastructure growth.
Excluding five cents per share impact
of mild weather, full year operating earnings were in the middle of
our guidance range.
"During the year, we continued to move forward with our
infrastructure growth plan. We secured all regulatory
approvals for and began construction on the Cove Point liquefaction
project. We announced the development of the Atlantic Coast
Pipeline, a transformational infrastructure project designed to
bring new supplies of natural gas to the Southeast. We also
announced the acquisition, which closed last month, of Carolina Gas
Transmission, a 1,500-mile FERC-regulated pipeline in South Carolina and Georgia.
"We placed into commercial operation, on schedule and on budget,
the 1,342-megawatt, gas-fired power station in Warren County, Va. Progress continues on
construction of a 1,358-megawatt, gas fired power station in
Brunswick County, Va. We
also placed into commercial operation 211 megawatts of solar
generation. In addition, we successfully completed the
initial public offering of Limited Partner common units in Dominion
Midstream Partners."
FULL-YEAR 2014 OPERATING EARNINGS COMPARED TO
2013
The increase in 2014 operating earnings per share as compared to
2013 operating earnings per share is primarily attributable to
growth in our regulated gas and electric businesses, earnings from
Marcellus farmouts, higher merchant generation margins, and
benefits from investment tax credits. Negative factors for
the year include a planned outage at Millstone Power Station and
the absence of contributions from unregulated electric retail
operations.
Details of 2014 operating earnings as compared to 2013 can be
found on Schedule 4 of this release.
FIRST-QUARTER 2015 OPERATING EARNINGS GUIDANCE
Dominion expects first-quarter 2015 operating earnings in the
range of $0.85 per share to
$1.00 per share, compared to
first-quarter 2014 operating earnings of $1.04 per share. Positive factors for the
first-quarter of 2015 compared to the same period of the prior year
include higher revenues from growth projects and higher merchant
generation margins. Negative factors for the quarter include
a return to normal weather, the absence of an asset drop into our
Blue Racer joint venture and higher operating and depreciation
expenses. GAAP earnings for the first quarter of 2014 were
$0.65 per share. A
reconciliation between operating and GAAP earnings for the first
quarter of 2014 can be found on Schedule 3 of this release.
In providing its first-quarter 2015 operating earnings guidance,
the company notes that there could be differences between expected
reported earnings and estimated operating earnings for matters such
as, but not limited to, divestitures or changes in accounting
principles. At this time, Dominion management is not able to
estimate the aggregate impact of these items on reported
earnings. Accordingly, Dominion is not able to provide a
corresponding GAAP equivalent for its operating earnings
guidance.
ANALYST MEETING
Dominion Resources and Dominion Midstream Partners (NYSE: DM)
will also host an analyst meeting at The Waldorf Astoria in
New York on Monday, Feb. 9, 2015, from 9:00 a.m. to 11:30 a.m. ET. Management will
discuss its long-term growth for Dominion Resources and Dominion
Midstream and provide details about 2015 operating earnings
guidance, dividend and distribution policies and other matters of
interest to the financial community. Following the formal
presentation management will be available to those in attendance
for questions. A live webcast, including accompanying slides,
will be available on the company's investor information page at
www.dom.com/investors.
Dominion is one of the nation's largest producers and
transporters of energy, with a portfolio of approximately 24,600
megawatts of generation, 12,400 miles of natural gas transmission,
gathering and storage pipeline, and 6,455 miles of electric
transmission lines. Dominion operates one of the nation's
largest natural gas storage systems with 949 billion cubic feet of
storage capacity and serves utility and retail energy customers in
12 states. For more information about Dominion, visit the company's
website at www.dom.com/.
This release contains certain forward-looking statements,
including forecasted operating earnings for first-quarter 2015
which is subject to various risks and uncertainties. Factors
that could cause actual results to differ materially from
management's projections, forecasts, estimates and expectations may
include factors that are beyond the company's ability to control or
estimate precisely, including fluctuations in energy-related
commodity prices, estimates of future market conditions, additional
competition in our industries, changes in the demand for Dominion's
services, access to and costs of capital, fluctuations in the value
of our pension assets and assets held in our decommissioning
trusts, impacts of acquisitions, divestitures, transfers of assets
to joint ventures or Dominion Midstream and retirements of assets
based on asset portfolio reviews, the receipt of regulatory
approvals for, and timing of, planned projects, acquisitions and
divestitures, the timing and execution of Dominion Midstream's
growth strategy, and the ability to complete planned construction
or expansion projects at all or within the terms and
timeframes initially anticipated. Other factors include, but
are not limited to, weather conditions and other events, including
the effects of hurricanes, earthquakes, high winds, major storms
and changes in water temperatures on operations, the risk
associated with the operation of nuclear facilities, unplanned
outages at facilities in which Dominion has an ownership interest,
the impact of operational hazards and catastrophic events, state
and federal legislative and regulatory developments, including
changes in federal and state tax laws and changes to environmental
and other laws and regulations, including those related to climate
change, greenhouse gases and other emissions to which we are
subject, political and economic conditions, industrial, commercial
and residential growth or decline in Dominion's service area, risks
of operating businesses in regulated industries that are subject to
changing regulatory structures, changes to regulated gas and
electric rates collected by Dominion, changes to rating agency
requirements and ratings, changing financial accounting standards,
fluctuations in interest rates, employee workforce factors,
including collective bargaining, counter-party credit and
performance risks, adverse outcomes in litigation matters or
regulatory proceedings, the risk of hostile cyber intrusions and
other uncertainties. Other risk factors are detailed from
time to time in Dominion's quarterly reports on Form 10-Q or most
recent annual report on Form 10-K filed with the Securities and
Exchange Commission.
Schedule 1 -
Segment Operating Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preliminary,
Unaudited
|
|
|
|
|
|
(millions, except
earnings per share)
|
Three months ended
December 31,
|
|
|
|
|
2014
|
|
2013
|
|
Change
|
Earnings:
|
|
|
|
|
|
|
|
Dominion Virginia
Power
|
$
136
|
|
$
126
|
|
$
10
|
|
Dominion
Energy
|
195
|
|
171
|
|
24
|
|
Dominion
Generation
|
307
|
|
252
|
|
55
|
|
Corporate and
Other
|
(148)
|
|
(82)
|
|
(66)
|
|
OPERATING
EARNINGS
|
$
490
|
|
$
467
|
|
$
23
|
|
Items excluded from
operating earnings2, 3
|
(247)
|
|
(36)
|
|
(211)
|
|
REPORTED EARNINGS
1
|
$
243
|
|
$
431
|
|
$
(188)
|
|
|
|
|
|
|
|
|
|
Common Shares
Outstanding (average, diluted)
|
586.5
|
|
581.3
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
(EPS):
|
|
|
|
|
|
|
Dominion Virginia
Power
|
$
0.23
|
|
$
0.22
|
|
$
0.01
|
|
Dominion
Energy
|
0.34
|
|
0.29
|
|
0.05
|
|
Dominion
Generation
|
0.52
|
|
0.43
|
|
0.09
|
|
Corporate and
Other
|
(0.25)
|
|
(0.14)
|
|
(0.11)
|
|
OPERATING
EARNINGS
|
$
0.84
|
|
$
0.80
|
|
$
0.04
|
|
Items excluded from
operating earnings2
|
(0.42)
|
|
(0.06)
|
|
(0.36)
|
|
REPORTED EARNINGS
1
|
$
0.42
|
|
$
0.74
|
|
$
(0.32)
|
|
|
|
|
|
|
|
|
|
(millions, except
earnings per share)
|
Twelve months
ended December 31,
|
|
|
|
|
2014
|
|
2013
|
|
Change
|
Earnings:
|
|
|
|
|
|
|
|
Dominion Virginia
Power
|
$
502
|
|
$
475
|
|
$
27
|
|
Dominion
Energy
|
677
|
|
643
|
|
34
|
|
Dominion
Generation
|
1,101
|
|
1,031
|
|
70
|
|
Corporate and
Other
|
(277)
|
|
(268)
|
|
(9)
|
|
OPERATING
EARNINGS
|
$
2,003
|
|
$
1,881
|
|
$
122
|
|
Items excluded from
operating earnings2, 4
|
(693)
|
|
(184)
|
|
(509)
|
|
REPORTED EARNINGS
1
|
$
1,310
|
|
$
1,697
|
|
$
(387)
|
|
|
|
|
|
|
|
|
|
Common Shares
Outstanding (average, diluted)
|
584.5
|
|
579.5
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
(EPS):
|
|
|
|
|
|
|
Dominion Virginia
Power
|
$
0.86
|
|
$
0.82
|
|
$
0.04
|
|
Dominion
Energy
|
1.16
|
|
1.11
|
|
0.05
|
|
Dominion
Generation
|
1.88
|
|
1.78
|
|
0.10
|
|
Corporate and
Other
|
(0.47)
|
|
(0.46)
|
|
(0.01)
|
|
OPERATING
EARNINGS
|
$
3.43
|
|
$
3.25
|
|
$
0.18
|
|
Items excluded from
operating earnings2
|
(1.19)
|
|
(0.32)
|
|
(0.87)
|
|
REPORTED EARNINGS
1
|
$
2.24
|
|
$
2.93
|
|
$
(0.69)
|
1)
|
Determined in
accordance with Generally Accepted Accounting Principles
(GAAP).
|
2)
|
Items excluded
from operating earnings are reported in Corporate and Other
segment. Refer to Schedules 2 and 3 for details, or find "GAAP
Reconciliation" in the Earnings Release Kit on Dominion's website
at www.dom.com/investors.
|
3)
|
Pre-tax amounts
for the current period and the prior period are ($458) million and
($56) million, respectively.
|
4)
|
Pre-tax amounts
for the current period and the prior period are ($1.166) billion
and ($284) million, respectively.
|
Schedule 2 - Reconciliation of 2014 Operating Earnings to
Reported Earnings
2014 Earnings (Twelve months ended December 31, 2014)
The net effects of the following items, all shown on an
after-tax basis, are included in 2014 reported earnings, but are
excluded from operating earnings:
- $248 million charge associated
with Virginia legislation enacted in April that permits
Virginia Power to recover 70% of the
costs previously deferred or capitalized through Dec. 31, 2013 relating to the development of a
third nuclear unit located at North Anna and offshore wind
facilities as part of the 2013 and 2014 base rates.
- $193 million net charge related
to the repositioning of our Producer Services business, reflecting
the termination of natural gas trading and certain energy marketing
activities.
- $174 million charge associated
with our liability management exercise, mainly reflecting the call
premiums on our early debt redemptions in the fourth quarter.
- $74 million charge related to a
settlement offer to incur future ash pond closure costs at certain
utility generation facilities.
- $31 million goodwill write-off
associated with the company exiting the unregulated electric retail
energy marketing business.
- $27
million net benefit related to other items.
|
|
|
|
|
|
|
|
(millions,
except per share amounts)
|
1Q14
|
2Q14
|
3Q14
|
4Q14
|
YTD
2014
|
2
|
Operating
earnings
|
$607
|
$361
|
$545
|
$490
|
$2,003
|
|
Items excluded
from operating earnings (after-tax):
|
|
|
|
|
|
|
|
North Anna and
offshore wind facilities
|
|
(191)
|
(28)
|
(29)
|
(248)
|
|
|
Producer Services
repositioning
|
(193)
|
|
|
|
(193)
|
|
|
Charges associated
with liability management exercise
|
|
|
(2)
|
(172)
|
(174)
|
|
|
Future ash pond
closure costs
|
|
|
|
(74)
|
(74)
|
|
|
Goodwill write-off at
unregulated electric retail
|
(31)
|
|
|
|
(31)
|
|
|
Other
items
|
(4)
|
(11)
|
14
|
28
|
27
|
|
|
Total items excluded
from operating earnings (after-tax) 1
|
(228)
|
(202)
|
(16)
|
(247)
|
(693)
|
|
Reported net
income
|
$379
|
$159
|
$529
|
$243
|
$1,310
|
|
Common shares
outstanding (average, diluted)
|
582.9
|
583.9
|
584.6
|
586.5
|
584.5
|
|
Operating earnings
per share
|
$1.04
|
$0.62
|
$0.93
|
$0.84
|
$3.43
|
|
Items excluded from
operating earnings (after-tax)
|
(0.39)
|
(0.35)
|
(0.03)
|
(0.42)
|
(1.19)
|
|
Reported earnings
per share
|
$0.65
|
$0.27
|
$0.90
|
$0.42
|
$2.24
|
|
|
|
|
|
|
|
|
|
1)
|
Pre-tax amounts
for items excluded from operating earnings are reflected in the
following table:
|
|
Items excluded from
operating earnings:
|
1Q14
|
2Q14
|
3Q14
|
4Q14
|
YTD
2014
|
|
|
|
|
|
|
|
|
|
|
North Anna and
offshore wind facilities
|
|
(287)
|
(43)
|
(44)
|
(374)
|
|
|
Producer Services
repositioning
|
(319)
|
|
|
|
(319)
|
|
|
Charges associated
with liability management exercise
|
|
|
(3)
|
(281)
|
(284)
|
|
|
Future ash pond
closure costs
|
|
|
|
(121)
|
(121)
|
|
|
Goodwill write-off at
unregulated electric retail
|
(31)
|
|
|
|
(31)
|
|
|
Other
items
|
(2)
|
(15)
|
(8)
|
(12)
|
(37)
|
|
|
Total items excluded
from operating earnings
|
($352)
|
($302)
|
($54)
|
($458)
|
($1,166)
|
|
|
|
|
|
|
|
|
|
2)
|
YTD EPS may not
equal sum of quarters due to share count
differences.
|
|
Schedule 3 - Reconciliation of 2013 Operating Earnings to
Reported Earnings
2013 Earnings (Twelve months ended December 31, 2013)
The net effects of the following items, all shown on an
after-tax basis, are included in 2013 reported earnings, but are
excluded from operating earnings:
- $92 million net loss from
discontinued operations of two merchant power stations
(Brayton Point & Kincaid) which
were sold in third quarter 2013.
- $109 million net charge related
to an impairment of certain natural gas infrastructure assets and
the repositioning of Producer Services.
- $28 million charge in connection
with the Virginia Commission's final ruling associated with its
biennial review of Virginia Power's
base rates for 2011-2012 test years.
- $17 million charge associated
with our operating expense reduction initiative, primarily
reflecting severance pay and other employee-related costs.
- $39 million net gain related to
our investments in nuclear decommissioning trust funds.
- $30 million benefit due to a
downward revision in the nuclear decommissioning asset retirement
obligations (ARO) for certain merchant nuclear units that are no
longer in service.
- $7 million net expense related to
other items.
|
|
|
|
|
|
|
|
(millions,
except per share amounts)
|
1Q13
|
2Q13
|
3Q13
|
4Q13
|
YTD
2013
|
2
|
Operating
earnings
|
$476
|
$355
|
$583
|
$467
|
$1,881
|
|
Items excluded
from operating earnings (after-tax):
|
|
|
|
|
|
|
|
Discontinued
operations - Brayton Point & Kincaid
|
1
|
(70)
|
(23)
|
|
(92)
|
|
|
Gas infrastructure
& repositioning
|
|
(57)
|
(17)
|
(35)
|
(109)
|
|
|
Impact of Virginia
Power biennial review order
|
|
|
|
(28)
|
(28)
|
|
|
O&M expense
reduction initiative
|
|
(17)
|
|
|
(17)
|
|
|
Net gain in nuclear
decommissioning trust funds
|
20
|
1
|
9
|
9
|
39
|
|
|
ARO
revision
|
|
|
|
30
|
30
|
|
|
Other
items
|
(2)
|
(10)
|
17
|
(12)
|
(7)
|
|
|
Total items excluded
from operating earnings (after-tax) 1
|
19
|
(153)
|
(14)
|
(36)
|
(184)
|
|
Reported net
income
|
$495
|
$202
|
$569
|
$431
|
$1,697
|
|
Common shares
outstanding (average, diluted)
|
577.5
|
578.9
|
580.1
|
581.3
|
579.5
|
|
Operating earnings
per share
|
$0.83
|
$0.62
|
$1.00
|
$0.80
|
$3.25
|
|
Items excluded from
operating earnings (after-tax)
|
0.03
|
(0.27)
|
(0.02)
|
(0.06)
|
(0.32)
|
|
Reported earnings
per share
|
$0.86
|
$0.35
|
$0.98
|
$0.74
|
$2.93
|
|
|
|
|
|
|
|
|
|
1)
|
Pre-tax amounts
for items excluded from operating earnings are reflected in the
following table:
|
|
Items excluded from
operating earnings:
|
1Q13
|
2Q13
|
3Q13
|
4Q13
|
YTD
2013
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations - Brayton Point & Kincaid
|
1
|
(119)
|
(17)
|
|
(135)
|
|
|
Gas infrastructure
& repositioning
|
|
(107)
|
(23)
|
(52)
|
(182)
|
|
|
Impact of Virginia
Power biennial review order
|
|
|
|
(40)
|
(40)
|
|
|
O&M expense
reduction initiative
|
|
(28)
|
|
|
(28)
|
|
|
Net gain in nuclear
decommissioning trust funds
|
34
|
1
|
15
|
15
|
65
|
|
|
ARO
revision
|
|
|
|
47
|
47
|
|
|
Other
items
|
(4)
|
(10)
|
29
|
(26)
|
(11)
|
|
|
Total items excluded
from operating earnings
|
$31
|
($263)
|
$4
|
($56)
|
($284)
|
|
|
|
|
|
|
|
|
|
2)
|
YTD EPS may not
equal sum of quarters due to share count
differences.
|
|
Schedule 4 -
Reconciliation of 2014 Earnings to 2013
|
|
|
|
|
|
|
|
|
|
|
|
Preliminary,
unaudited
|
Three Months
Ended
|
|
Twelve Months
Ended
|
(millions,
except EPS)
|
December
31,
|
|
December
31,
|
|
|
2014 vs.
2013
|
|
2014 vs.
2013
|
|
|
Increase /
(Decrease)
|
|
Increase /
(Decrease)
|
Reconciling
Items
|
Amount
|
EPS
|
|
Amount
|
EPS
|
|
|
|
|
|
|
|
Dominion
Virginia Power
|
|
|
|
|
|
|
Regulated electric
sales:
|
|
|
|
|
|
|
Weather
|
($2)
|
$0.00
|
|
$8
|
$0.01
|
|
FERC Transmission
equity return
|
11
|
0.02
|
|
27
|
0.04
|
|
Storm damage and
service restoration
|
3
|
0.00
|
|
13
|
0.02
|
|
Depreciation
|
(2)
|
0.00
|
|
(8)
|
(0.01)
|
|
Other
|
0
|
0.00
|
|
(13)
|
(0.02)
|
|
Change in
contribution to operating earnings
|
$10
|
$0.01
|
|
$27
|
$0.04
|
|
|
|
|
|
|
|
Dominion
Energy
|
|
|
|
|
|
|
Gas Distribution
margin
|
$6
|
$0.01
|
|
$24
|
$0.04
|
|
Marcellus
Farmouts
|
26
|
0.05
|
|
31
|
0.05
|
|
Blue Racer Midstream
JV
|
8
|
0.01
|
|
(1)
|
0.00
|
|
Depreciation
|
(11)
|
(0.02)
|
|
(8)
|
(0.01)
|
|
Other
|
(5)
|
0.00
|
|
(12)
|
(0.03)
|
|
Change in
contribution to operating earnings
|
$24
|
$0.05
|
|
$34
|
$0.05
|
|
|
|
|
|
|
|
Dominion
Generation
|
|
|
|
|
|
|
Regulated electric
sales:
|
|
|
|
|
|
|
Weather
|
($3)
|
$0.00
|
|
$13
|
$0.02
|
|
Other
|
(7)
|
(0.01)
|
|
(7)
|
(0.01)
|
|
Merchant generation
margin
|
(2)
|
0.00
|
|
64
|
0.11
|
|
Retail operations
1
|
(2)
|
0.00
|
|
(20)
|
(0.04)
|
|
Rate adjustment
clause equity return
|
8
|
0.01
|
|
(8)
|
(0.01)
|
|
PJM ancillary
services
|
3
|
0.00
|
|
24
|
0.04
|
|
Outage
costs
|
(29)
|
(0.05)
|
|
(40)
|
(0.07)
|
|
Salaries and
benefits
|
0
|
0.00
|
|
(11)
|
(0.03)
|
|
AFUDC equity
return
|
(1)
|
0.00
|
|
(17)
|
(0.04)
|
|
Renewable energy
investment tax credits
|
97
|
0.17
|
|
97
|
0.17
|
|
Other
|
(9)
|
(0.02)
|
|
(25)
|
(0.04)
|
|
Change in
contribution to operating earnings
|
$55
|
$0.09
|
|
$70
|
$0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and
Other
|
|
|
|
|
|
|
Change in
contribution to operating earnings
|
($66)
|
($0.11)
|
|
($9)
|
($0.01)
|
|
|
|
|
|
|
|
Change in
consolidated operating earnings
|
$23
|
$0.04
|
|
$122
|
$0.18
|
|
|
|
|
|
|
|
Change in items
excluded from operating
earnings2
|
($211)
|
($0.36)
|
|
($509)
|
($0.87)
|
|
|
|
|
|
|
|
Change in
reported earnings (GAAP)
|
($188)
|
($0.32)
|
|
($387)
|
($0.69)
|
1) Excludes earnings from Retail
electric energy marketing, which was sold in March
2014
|
2) Refer to Schedules 2 and 3 for
details of items excluded from operating earnings, or find "GAAP
Reconciliation" on Dominion's website at
www.dom.com/investors.
|
|
Note: Figures may
not add due to rounding
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/dominion-announces-2014-earnings-300032326.html
SOURCE Dominion