CAYCE, S.C., April 26, 2018 /PRNewswire/ -- SCANA
Corporation (NYSE: SCG) today announced earnings for the first
quarter of 2018 of $169 million, or
$1.18 per share, compared to earnings
of $171 million, or $1.19 per share, for the first quarter of
2017. The decrease in earnings is primarily attributable to
higher legal costs
and financial advisory fees, as well as the impact of
tax reform at the holding company, partially offset by higher gas
revenues at its subsidiaries in North
Carolina and South Carolina
and a net 20 cents per share
favorable variance in electric revenues due to the quarter over
quarter impact of abnormal weather. During the quarter,
electric and gas revenues in the regulated businesses were reduced
to reflect estimated amounts to be refunded to customers as a
result of the change in the Federal tax rate.
FINANCIAL RESULTS BY MAJOR LINES OF BUSINESS
South Carolina Electric & Gas Company
South Carolina Electric & Gas Company (SCE&G), SCANA's
principal subsidiary, reported first quarter 2018 earnings of
$128 million, or 89 cents per share, compared to earnings of
$112 million, or 78 cents per share for the first quarter of 2017.
Abnormally mild winter weather decreased electric revenues by
4 cents per share in the first
quarter of 2018, compared to a decrease of 24 cents per share in the first quarter of
2017. Other than the 20 cents per share increase from
weather, this increase is primarily attributable to higher gas
margins partially offset by lower AFUDC, as well as higher
depreciation, and other taxes. Additionally, SCE&G
settled interest rate swaps during the first quarter of 2018 and
used the associated gains to offset fuel cost recovery. This
resulted in a decrease in electric revenue offset by an equivalent
increase in other income. SCE&G also recognized an
impairment loss of approximately $4
million to further reduce the carrying value of nuclear fuel
acquired for use in VC Summer Units 2 and 3 to its estimated fair
value. As of March 31,
2018, SCE&G was serving approximately 723,000 electric
customers and 371,000 natural gas customers, up 1.4 and 2.9
percent, respectively, over 2017.
PSNC Energy
PSNC Energy, the Company's North
Carolina-based retail natural gas distribution subsidiary,
reported earnings in the first quarter of 2018 of $49 million, or 34
cents per share, compared to $43
million, or 30 cents per share
for the first quarter of 2017. This increase is primarily
attributable to higher gas revenues arising from customer growth
and an integrity management tracker, partially offset by increases
in depreciation and interest expense. At March 31, 2018, PSNC Energy was serving
approximately 566,000 customers, an increase of 2.6 percent over
the previous year.
SCANA Energy Marketing
SCANA Energy Marketing, which markets natural gas in deregulated
energy markets, including Georgia
where the Company does business as SCANA Energy, reported earnings
in the first quarter of 2018 of $17
million, or 12 cents per
share, compared to $15 million, or
11 cents per share, in first quarter
of 2017. This increase is primarily due to lower income taxes
due to Federal tax reform, partially offset by the higher cost of
gas during the colder than normal weather in January of
2018.
Corporate and Other, Net
SCANA's corporate and other businesses, which include the
holding company, reported a loss of $25
million, or 17 cents per share
in the first quarter of 2018, compared to near break-even results
for the same quarter of 2017. This increased loss is
primarily due to the anticipated loss of certain tax deductions as
a result of Federal tax reform, as well as higher legal and
financial advisory expenses.
DIVIDENDS
A decision regarding the Company's regular quarterly dividend
for the quarter ending June 30, 2018
will be made by SCANA's Board of Directors closer to the record
date. Dividends declared would be
payable July 1, 2018 to
shareholders of record on June 11,
2018. As previously noticed, the payment of dividends will be
evaluated quarterly by SCANA's Board of Directors.
EARNINGS OUTLOOK / CONFERENCE CALL
Consistent with the fourth quarter of 2017, SCANA will not be
providing 2018 or long-term earnings guidance or hosting a
conference call due to the pending combination with Dominion
Energy. In lieu of hosting a conference call, earnings
presentation materials will be made available at the Company's
website at www.scana.com.
PROFILE
SCANA Corporation, headquartered in Cayce, S.C., is an energy-based holding
company principally engaged, through subsidiaries, in electric and
natural gas utility operations and other energy-related businesses.
The Company serves approximately 723,000 electric customers in
South Carolina and approximately
1.3 million natural gas customers in South Carolina, North Carolina and Georgia. Information about SCANA and its
businesses is available on the Company's website at
www.scana.com.
SAFE HARBOR STATEMENT
Statements included in this press release which are not
statements of historical fact are intended to be, and are hereby
identified as, "forward-looking statements" for purposes of
Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements include, but are not
limited to, statements concerning the proposed merger with Dominion
Energy, recovery of Nuclear Project abandonment costs, key earnings
drivers, customer growth, environmental regulations and
expenditures, leverage ratio, projections for pension fund
contributions, financing activities, access to sources of capital,
impacts of the adoption of new accounting
rules and estimated capital and other
expenditures. In some cases, forward-looking statements
can be identified by terminology such as "may," "will," "could,"
"should," "expects," "forecasts," "plans," "targets,"
"anticipates," "believes," "estimates," "projects," "predicts,"
"potential" or "continue" or the negative of these terms or other
similar terminology. Readers are cautioned that any such
forward-looking statements are not guarantees of future performance
and involve a number of risks and uncertainties, and that actual
results could differ materially from those indicated by such
forward-looking statements due to the information being of a
preliminary nature and subject to further and/or continuing review
and adjustment. Other important factors that could cause such
material differences include, but are not limited to, the
following: (1) the occurrence of any event, change or other
circumstances that could give rise to the failure by SCANA to
consummate the proposed merger with Dominion Energy; (2) the
ability of SCE&G to recover through rates the costs expended on
Unit 2 and Unit 3, and a reasonable return on those costs, under
the abandonment provisions of the BLRA or through other means; (3)
uncertainties relating to the bankruptcy filing by WEC and WECTEC;
(4) further changes in tax laws and realization of tax benefits and
credits, and the ability or inability to realize credits and
deductions, particularly in light of the abandonment of Unit 2 and
Unit 3; (5) legislative and regulatory actions, particularly
changes related to electric and gas services, rate regulation,
regulations governing electric grid reliability and pipeline
integrity, environmental regulations including any imposition of
fees or taxes on carbon emitting generating facilities, the BLRA,
and any actions affecting the abandonment of Unit 2 and Unit 3; (6)
current and future litigation, including particularly litigation or
government investigations or actions involving or arising from the
construction or abandonment of Unit 2 and Unit 3 or arising from
the proposed merger with Dominion Energy; (7) The impact of any decision by the Company to
pay quarterly dividends to its shareholders or the reduction,
suspension or elimination of the amount thereof; (8)
the results of short- and long-term financing efforts, including
prospects for obtaining access to capital markets and other sources
of liquidity, and the effect of rating agency actions on the cost
of and access to capital and sources of liquidity of SCANA and its
subsidiaries (the Company); (9) the ability of suppliers, both
domestic and international, to timely provide the labor, secure
processes, components, parts, tools, equipment and other supplies
needed which may be highly specialized or in short supply, at
agreed upon quality and prices, for our construction program,
operations and maintenance; (10) the results of efforts to ensure
the physical and cyber security of key assets and processes; (11)
changes in the economy, especially in areas served by subsidiaries
of SCANA; (12) the impact of competition from other energy
suppliers, including competition from alternate fuels in industrial
markets; (13) the impact of conservation and demand side management
efforts and/or technological advances on customer usage; (14) the
loss of electricity sales to distributed generation, such as solar
photovoltaic systems or energy storage systems; (15) growth
opportunities for SCANA's regulated and other subsidiaries; (16)
the effects of weather, especially in areas where the generation
and transmission facilities of SCANA and its subsidiaries are
located and in areas served by SCANA's subsidiaries; (17) changes
in SCANA's or its subsidiaries' accounting rules and
accounting policies; (18) payment and performance by counterparties
and customers as contracted and when due; (19) the results of
efforts to license, site, construct and finance facilities, and to
receive related rate recovery, for generation and transmission;
(20) the results of efforts to operate the Company's electric and
gas systems and assets in accordance with acceptable performance
standards, including the impact of additional distributed
generation; (21) the availability of fuels such as coal, natural
gas and enriched uranium used to produce electricity; the
availability of purchased power and natural gas for
distribution; the level and volatility of future market prices
for such fuels and purchased power; and the ability to recover
the costs for such fuels and purchased power; (22) the availability
of skilled, licensed and experienced human resources to properly
manage, operate, and grow the Company's businesses, particularly in
light of uncertainties with respect to legislative and regulatory
actions surrounding recovery of Nuclear Project costs and the
announced potential merger; (23) labor disputes; (24) performance
of SCANA's pension plan assets and the effect(s) of associated
discount rates; (25) inflation or deflation; (26) changes in
interest rates; (27) compliance with regulations; (28) natural
disasters, man-made mishaps and acts of terrorism that directly
affect our operations or the regulations governing them; and (29)
the other risks and uncertainties described from time to time in
the reports filed by SCANA or SCE&G with the SEC.
SCANA and SCE&G disclaim any obligation to update any
forward-looking statements.
Capitalized terms not otherwise defined herein have the meanings
as set forth in the Company's most recent periodic report filed
with the Securities and Exchange Commission.
FINANCIAL AND
OPERATING INFORMATION
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Income
|
|
|
|
|
(Millions, except per
share amounts) (Unaudited)
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
March 31,
|
|
|
|
2018
|
|
2017
|
Operating
Revenues:
|
|
|
|
|
|
Electric
(1,2)
|
|
|
$546
|
|
$577
|
Gas-Regulated
|
|
|
361
|
|
322
|
Gas-Nonregulated
|
|
|
273
|
|
274
|
Total Operating
Revenues
|
|
|
1,180
|
|
1,173
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
Fuel
Used in Electric Generation
|
|
|
159
|
|
136
|
Purchased Power
|
|
|
52
|
|
11
|
Gas
Purchased for Resale
|
|
|
406
|
|
370
|
Other
Operation and Maintenance
|
|
|
201
|
|
175
|
Impairment Loss (3)
|
|
|
4
|
|
-
|
Depreciation and Amortization
|
|
|
99
|
|
95
|
Other
Taxes
|
|
|
70
|
|
66
|
Total Operating
Expenses
|
|
|
991
|
|
853
|
Operating Income
(Loss)
|
|
|
189
|
|
320
|
|
|
|
|
|
|
Other Income
(Expense)
|
|
|
|
|
|
Other
Income (1)
|
|
|
134
|
|
17
|
Other
Expense
|
|
|
(10)
|
|
(14)
|
Interest
Charges, Net
|
|
|
(97)
|
|
(87)
|
Allowance for Equity Funds Used During Construction
|
|
|
4
|
|
9
|
Total Other Income
(Expense)
|
|
|
31
|
|
(75)
|
|
|
|
|
|
|
Income (Loss) Before
Income Tax Expense
|
|
|
220
|
|
245
|
Income Tax Expense
(Benefit)
|
|
|
51
|
|
74
|
|
|
|
|
|
|
Net Income
(Loss)
|
|
|
$ 169
|
|
$ 171
|
|
|
|
|
|
|
Earnings (Loss) Per
Share of Common Stock
|
|
|
$1.18
|
|
$1.19
|
Weighted Average
Shares Outstanding (Millions):
|
|
|
143
|
|
143
|
Dividends Declared
Per Share of Common Stock
|
|
|
$0.6125
|
|
$0.6125
|
Note (1): Pursuant to approval of the Public Service Commission
of South Carolina, during the
first quarter of 2018, SCE&G's electric revenues were adjusted
downward by $114 million
(61 cents per share) in connection
with fuel cost recovery and SCE&G concurrently recognized,
within other income, $114 million
(61 cents per share) of gains
realized upon the settlement of certain interest rate derivative
contracts. The impact of these events had no effect on net
income.
Note (2): Abnormally mild weather decreased electric earnings by
4 cents per share in the first
quarter of 2018, compared to significantly abnormally mild weather
decreasing earnings by 24 cents per
share in the first quarter of 2017, for a quarter over quarter
increase of 20 cents per
share.
Note (3): Impairment loss represents a further write-down of
nuclear fuel which had been acquired for use in VC Summer Unit 2
and Unit 3 to its estimated fair value.
Earnings (Loss)
per Share by Company:
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
March 31,
|
|
|
2018
|
|
2017
|
SC Electric & Gas
(1,2,3)
|
|
$0.89
|
|
$0.78
|
PSNC
Energy
|
|
0.34
|
|
0.30
|
SCANA
Energy
|
|
0.12
|
|
0.11
|
Corporate and
Other
|
|
(0.17)
|
|
0.00
|
Earnings
per Share
|
|
$1.18
|
|
$1.19
|
|
|
|
|
|
Variances in
Earnings per Share:
|
|
(Unaudited)
|
|
|
Quarter
Ended
|
|
March 31,
|
2017 Earnings per
Share
|
$1.19
|
|
|
Variances:
|
|
Electric Revenue (1,2)
|
(0.17)
|
Fuel/Purchased Power
|
(0.34)
|
Natural Gas Revenue
|
0.20
|
Gas for Resale
|
(0.19)
|
Operations & Maintenance Expense
|
(0.14)
|
Interest Expense (Net of AFUDC)
|
(0.07)
|
Depreciation
|
(0.03)
|
Property Taxes
|
(0.02)
|
Other Income (1)
|
0.65
|
Effective Tax Rate Change
|
0.12
|
Impairment Loss (3)
|
(0.02)
|
Variances in
Earnings per Share
|
(0.01)
|
|
|
2018 Earnings per
Share
|
$1.18
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
|
(Millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2018
|
|
December 31,
2017
|
|
ASSETS
|
|
|
|
|
|
Utility Plant,
Net
|
|
|
|
|
|
Cost,
Net of Accumulated Depreciation and
Amortization
|
|
$10,484
|
|
$10,438
|
|
Goodwill
|
|
210
|
|
210
|
|
Total Utility Plan,
Net
|
|
10,694
|
|
10,648
|
|
Nonutility
Property and Investments, Net
|
|
575
|
|
474
|
|
Current
Assets
|
|
|
|
|
|
Cash and
Cash Equivalents
|
|
199
|
|
409
|
|
Receivables (net allowance for uncollectible accounts of $6 and
$6)
|
|
864
|
|
968
|
|
Inventories
|
|
284
|
|
304
|
|
Other
|
|
100
|
|
170
|
|
Total Current
Assets
|
|
1,447
|
|
1,851
|
|
Deferred Debits
and Other Assets
|
|
5,868
|
|
5,766
|
|
TOTAL
ASSETS
|
|
$18,584
|
|
$18,739
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Common
Equity
|
|
|
|
|
|
Common
Stock – no par value, 143 million shares outstanding for all
periods presented
|
|
$ 2,389
|
|
$ 2,390
|
|
Retained
Earnings
|
|
2,997
|
|
2,915
|
|
Accumulated Other Comprehensive Loss
|
|
(42)
|
|
(50)
|
|
Total Common
Equity
|
|
5,344
|
|
5,255
|
|
Long-Term Debt,
Net
|
|
6,001
|
|
5,906
|
|
Current
Liabilities
|
|
|
|
|
|
Accounts
Payable
|
|
266
|
|
438
|
|
Short-Term Borrowings
|
|
248
|
|
350
|
|
Current
Portion of Long-Term Debt
|
|
727
|
|
727
|
|
Taxes
Accrued
|
|
64
|
|
214
|
|
Interest
Accrued
|
|
94
|
|
87
|
|
Customer
Deposits and Customer Prepayments
|
|
206
|
|
112
|
|
Other
|
|
170
|
|
185
|
|
Total Current
Liabilities
|
|
1,775
|
|
2,113
|
|
Deferred Credits
and Other Liabilities
|
|
|
|
|
|
Deferred
Income Taxes, net
|
|
1,315
|
|
1,261
|
|
Asset
Retirement Obligations
|
|
572
|
|
568
|
|
Regulatory Liabilities
|
|
3,008
|
|
3,059
|
|
Pension
and Postretirement Benefits
|
|
359
|
|
360
|
|
Other
|
|
210
|
|
217
|
|
Total Other
Noncurrent Liabilities
|
|
5,464
|
|
5,465
|
|
Commitments and
Contingencies
|
|
-
|
|
-
|
|
TOTAL LIABILITIES
AND EQUITY
|
|
$18,584
|
|
$18,739
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
|
|
|
|
(Millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
Cash Flows From
Operating Activities
|
|
|
|
|
|
Net
Income
|
|
$
169
|
|
$
171
|
|
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities
|
|
(76)
|
|
138
|
|
Net Cash Provided From
Operating Activities
|
|
93
|
|
309
|
|
|
|
|
|
|
|
Cash Flows From
Investing Activities
|
|
|
|
|
|
Net Cash (Used For)
Used For Investing Activities
|
|
(206)
|
|
(343)
|
|
|
|
|
|
|
|
Cash Flows From
Financing Activities
|
|
|
|
|
|
Net Cash (Used For)
Provided From Financing Activities
|
|
(97)
|
|
(162)
|
|
|
|
|
|
|
|
Net Increase in
Cash and Cash Equivalents
|
|
(210)
|
|
(196)
|
|
Cash and Cash
Equivalents, January 1
|
|
409
|
|
208
|
|
Cash and Cash
Equivalents, March 31
|
|
$
199
|
|
$
12
|
|
|
|
|
|
|
|
|
|
|
|
|
Media
Contact:
|
|
|
|
Analyst
Contact:
|
|
Eric
Boomhower
|
|
|
|
Bryant
Potter
|
|
(800)
562-9308
|
|
|
|
(803)
217-6916
|
|
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SOURCE SCANA Corporation