CAYCE, S.C., Aug. 2, 2018 /PRNewswire/ -- SCANA Corporation
(NYSE: SCG) today announced earnings for the second quarter of 2018
of $8 million, or 6 cents per share, compared to earnings of
$121 million, or 85 cents per share, for the second quarter of
2017. The decrease in earnings is primarily attributable to
rate-reduction credits for billed and unbilled electric revenues
for the period of April 1, 2018
through June 30, 2018. These
credits accounted for a decrease in the quarter of $109 million, or 61
cents per share, and are a result of the order issued by the
Public Service Commission of South
Carolina (SCPSC) in response to the passage of Act 258 by
the South Carolina General Assembly. Higher legal costs and
financial advisory fees, as well as the impact of tax reform at the
holding company due to the non-deductibility of interest expense
also had a negative impact on earnings for the quarter.
For the first six months of 2018, SCANA reported earnings of
$177 million, or earnings per share
of $1.24, compared to $292 million, or earnings per share of
$2.04, for the same period in
2017.
FINANCIAL RESULTS BY MAJOR LINES OF BUSINESS
South Carolina Electric & Gas Company
South Carolina Electric & Gas Company (SCE&G), SCANA's
principal subsidiary, reported second quarter 2018 earnings of
$31 million, or 22 cents per share, compared to earnings of
$126 million, or 88 cents per share for the second quarter of
2017. As mentioned above, the decrease in earnings is
primarily attributable to rate-reduction credits associated with
the order issued by the SCPSC in response to the passage of Act 258
by the South Carolina General Assembly. SCE&G has filed a
lawsuit in federal court to seek a declaration that the law is
unconstitutional and to ask the court to issue a preliminary
injunction to allow for SCE&G to continue to collect the rates
associated with the Base Load Review Act until the court has issued
its final judgment. Additionally, electric and gas revenues
were reduced to reflect estimated amounts subject to refunds to
customers as a result of tax reform, with such reductions generally
offset by lower income taxes. Abnormal weather
increased electric revenues by 11
cents per share in the second quarter of 2018, compared to
an increase of 4 cents per share in
the second quarter of 2017. As of June
30, 2018, SCE&G was serving approximately 727,000
electric customers and 373,000 natural gas customers, up 1.3 and
2.9 percent, respectively, over 2017.
For the six months ended June 30,
2018, SCE&G reported earnings of $159 million, or earnings per share of
$1.11, compared to $238 million, or earnings per share of
$1.67, for the same period in
2017. Abnormal weather increased electric revenues by
7 cents per share during the first
six months of 2018, compared to a decrease of 20 cents per share for the same period of
2017.
PSNC Energy
PSNC Energy, the Company's North
Carolina-based retail natural gas distribution subsidiary,
reported a seasonal loss of $1
million, or 1 cent per share
in the second quarter of 2018, compared to earnings of $2 million, or 1
cent per share for the second quarter of 2017.
Increases primarily attributable to higher gas revenues
arising from customer growth and the Company's pipeline integrity
management tracker were more than offset by increases in
depreciation, interest expense, and other expenses. PSNC's gas
revenues were reduced to reflect estimated amounts subject to
refund to customers as a result of tax reform, with such reductions
generally offset by lower income taxes. At June 30, 2018, PSNC Energy was serving
approximately 563,000 customers, an increase of 2.6 percent over
the previous year.
For the first six months of 2018, PSNC Energy reported earnings
of $47 million, or earnings per share
of 33 cents, compared to $45 million, or earnings per share of
31 cents, for the same period in
2017.
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 second quarter of 2018 of $4
million, or 3 cents per share,
compared to $1 million, or
1 cent per share, in second quarter
of 2017. This increase is primarily due to higher margins
attributable to favorable weather over the same quarter of the
previous year and lower income taxes due to tax
reform.
For the six months ended June 30,
2018, SCANA Energy Marketing reported earnings of
$21 million, or earnings per share of
14 cents, compared to $16 million, or earnings per share of
11 cents, for the same period in
2017.
Corporate and Other, Net
SCANA's corporate and other businesses, which include the
holding company, reported a loss of $25
million, or 18 cents per share
in the second quarter of 2018, compared to a loss of $7 million, or 5
cents per share for the same quarter of 2017. This
increased loss is primarily due to the anticipated loss of certain
tax deductions as a result of tax reform, as well as higher legal
expenses.
For the first six months of 2018, SCANA's corporate and other
businesses reported a loss of $49
million, or 34 cents per
share, compared to a loss of $7
million, or 5 cents per share,
for the same period in 2017.
DIVIDENDS
A decision regarding the Company's dividend for the quarter
ending September 30, 2018 will be
made by SCANA's Board of Directors later during the quarter.
As previously noticed, the payment of dividends will be evaluated
quarterly by SCANA's Board of Directors.
EARNINGS OUTLOOK / CONFERENCE CALL
Consistent with the previous two quarters, 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 727,000 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
the Nuclear Project, 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 to realize or
maintain tax credits and deductions, particularly in light of the
abandonment of the Nuclear Project; (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, involving or
arising from the abandonment of the Nuclear Project; (6) current
and future litigation, including particularly litigation or
government investigations or any actions involving or arising from
the construction or abandonment of the Nuclear Project or arising
from the proposed merger with Dominion Energy, including the
possible impacts on liquidity and other financial impacts
therefrom; (7) the impact of any decision by SCANA 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 the Company 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; merger with
Dominion Energy; (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
|
|
Six Months
Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Operating
Revenues:
|
|
|
|
|
|
|
|
|
Electric
(1,2,3)
|
|
$552
|
|
$ 679
|
|
$1,098
|
|
$1,256
|
Gas-Regulated
|
|
148
|
|
140
|
|
509
|
|
461
|
Gas-Nonregulated
|
|
143
|
|
182
|
|
416
|
|
456
|
Total Operating
Revenues
|
|
843
|
|
1,001
|
|
2,023
|
|
2,173
|
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
Fuel
Used in Electric Generation
|
|
155
|
|
161
|
|
315
|
|
297
|
Purchased Power
|
|
15
|
|
21
|
|
67
|
|
32
|
Gas
Purchased for Resale
|
|
192
|
|
227
|
|
598
|
|
597
|
Other
Operation and Maintenance
|
|
198
|
|
179
|
|
399
|
|
354
|
Impairment Loss (4)
|
|
-
|
|
-
|
|
4
|
|
-
|
Depreciation and Amortization
|
|
100
|
|
95
|
|
199
|
|
189
|
Other
Taxes
|
|
70
|
|
67
|
|
140
|
|
133
|
Total Operating
Expenses
|
|
730
|
|
750
|
|
1,722
|
|
1,602
|
Operating Income
(Loss)
|
|
113
|
|
251
|
|
301
|
|
571
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense)
|
|
|
|
|
|
|
|
|
Other
Income (Expense), net (2)
|
|
(6)
|
|
14
|
|
122
|
|
27
|
Interest
Charges, net of allowance for borrowed funds
used
during construction
|
|
(95)
|
|
(88)
|
|
(192)
|
|
(175)
|
Total Other Income
(Expense)
|
|
(101)
|
|
(74)
|
|
(70)
|
|
(148)
|
|
|
|
|
|
|
|
|
|
Income Before Income
Tax Expense
|
|
12
|
|
177
|
|
231
|
|
423
|
Income Tax Expense
(Benefit)
|
|
4
|
|
56
|
|
54
|
|
131
|
|
|
|
|
|
|
|
|
|
Net Income
(Loss)
|
|
$8
|
|
$ 121
|
|
$177
|
|
$ 292
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per
Share of Common Stock
|
|
$0.06
|
|
$0.85
|
|
$1.24
|
|
$2.04
|
Weighted Average
Shares Outstanding (Millions):
|
|
143
|
|
143
|
|
143
|
|
143
|
Dividends Declared
Per Share of Common Stock
|
|
$0.1237
|
|
$0.6125
|
|
$0.7362
|
|
$1.225
|
Note (1): On June 27, 2018,
the South Carolina General Assembly adopted Act 258, which became
effective June 28, 2018, to
temporarily reduce the amount SCE&G can collect from customers
under the Base Load Review Act. Act 258 requires the SCPSC to
order a reduction in the portion of SCE&G's electric rates
associated with the V.C. Summer nuclear construction project from
approximately 18% of the average residential electric customer's
bill to approximately 3.2%, retroactive to April 1, 2018. Pursuant to the order issued
by the SCPSC, rate-refund credits for billed and unbilled amounts
for the period April 1, 2018 through
June 30, 2018, totaling approximately
$109.3 million (61 cents per share), have been deferred as
revenue subject to refund on the condensed consolidated balance
sheet as of June 30, 2018.
Note (2): Pursuant to a previously issued order by the SCPSC,
during the first quarter of 2018, SCE&G's electric revenues
were adjusted downward by $114
million (63 cents per share)
in connection with fuel cost recovery and SCE&G concurrently
recognized, within other income, $114
million (63 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 (3): Abnormal weather increased electric earnings by
11 cents per share in the second
quarter of 2018, compared to abnormal weather increasing earnings
by 4 cents per share in the second
quarter of 2017, for a quarter over quarter increase of
7 cents per share. Abnormal
weather increased electric earnings by 7
cents per share for the year-to-date period ended
June 30, 2018, compared to abnormal
weather decreasing earnings by 20
cents per share in the same period of 2017, for a year over
year increase of 27 cents per
share.
Note (4): Impairment loss represents a first quarter of 2018
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
|
|
Six Months
Ended
|
|
June 30,
|
|
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
SC Electric & Gas
(1,2,3,4)
|
$0.22
|
|
$0.88
|
|
$1.11
|
|
$1.67
|
PSNC
Energy
|
(0.01)
|
|
0.01
|
|
0.33
|
|
0.31
|
SCANA
Energy
|
0.03
|
|
0.01
|
|
0.14
|
|
0.11
|
Corporate and
Other
|
(0.18)
|
|
(0.05)
|
|
(0.34)
|
|
(0.05)
|
Earnings
per Share
|
$0.06
|
|
$0.85
|
|
$1.24
|
|
$2.04
|
Variances in
Earnings per Share:
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
June 30,
|
|
June 30,
|
2017 Earnings per
Share
|
|
$0.85
|
|
|
|
$2.04
|
|
|
|
|
|
|
|
|
|
Variances:
|
|
|
|
|
|
|
|
Electric Revenue (1,2,3)
|
|
(0.68)
|
|
|
|
(0.84)
|
|
Fuel/Purchased Power
|
|
0.06
|
|
|
|
(0.28)
|
|
Natural Gas Revenue
|
|
(0.16)
|
|
|
|
0.03
|
|
Gas for Resale
|
|
0.19
|
|
|
|
-
|
|
Operations & Maintenance Expense
|
|
(0.11)
|
|
|
|
(0.24)
|
|
Interest Expense (Net of AFUDC)
|
|
(0.07)
|
|
|
|
(0.15)
|
|
Depreciation
|
|
(0.03)
|
|
|
|
(0.05)
|
|
Property Taxes
|
|
(0.01)
|
|
|
|
(0.04)
|
|
Other Income (2)
|
|
(0.08)
|
|
|
|
0.57
|
|
Effective Tax Rate Change
|
|
0.10
|
|
|
|
0.22
|
|
Impairment Loss (4)
|
|
-
|
|
|
|
(0.02)
|
|
Variances in
Earnings per Share
|
|
(0.79)
|
|
|
|
(0.80)
|
|
|
|
|
|
|
|
|
|
2018 Earnings per
Share
|
|
$0.06
|
|
|
|
$1.24
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
|
(Millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2018
|
|
December
31,
2017
|
|
ASSETS
|
|
|
|
|
|
Utility Plant,
Net
|
|
|
|
|
|
Cost,
Net of Accumulated Depreciation and
Amortization
|
|
$10,594
|
|
$10,438
|
|
Goodwill
|
|
210
|
|
210
|
|
Total Utility Plan,
Net
|
|
10,804
|
|
10,648
|
|
Nonutility
Property and Investments, Net
|
|
542
|
|
474
|
|
Current
Assets
|
|
|
|
|
|
Cash and
Cash Equivalents
|
|
238
|
|
409
|
|
Receivables (net allowance for uncollectible accounts of $6 and
$6)
|
|
822
|
|
968
|
|
Inventories
|
|
286
|
|
304
|
|
Other
|
|
148
|
|
170
|
|
Total Current
Assets
|
|
1,494
|
|
1,851
|
|
Deferred Debits
and Other Assets
|
|
6,061
|
|
5,766
|
|
TOTAL
ASSETS
|
|
$18,901
|
|
$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
|
|
2,987
|
|
2,915
|
|
Accumulated Other Comprehensive Loss
|
|
(39)
|
|
(50)
|
|
Total Common
Equity
|
|
5,337
|
|
5,255
|
|
Long-Term Debt,
Net
|
|
6,098
|
|
5,906
|
|
Current
Liabilities
|
|
|
|
|
|
Accounts
Payable
|
|
263
|
|
438
|
|
Short-Term Borrowings
|
|
517
|
|
350
|
|
Current
Portion of Long-Term Debt
|
|
568
|
|
727
|
|
Taxes
Accrued
|
|
123
|
|
214
|
|
Interest
Accrued
|
|
88
|
|
87
|
|
Customer
Deposits and Customer Prepayments
|
|
151
|
|
112
|
|
Revenue
Subject to Refund (1)
|
|
164
|
|
-
|
|
Other
|
|
91
|
|
185
|
|
Total Current
Liabilities
|
|
1,965
|
|
2,113
|
|
Deferred Credits
and Other Liabilities
|
|
|
|
|
|
Deferred
Income Taxes, net
|
|
1,333
|
|
1,261
|
|
Asset
Retirement Obligations
|
|
578
|
|
568
|
|
Regulatory Liabilities
|
|
3,019
|
|
3,059
|
|
Pension
and Postretirement Benefits
|
|
360
|
|
360
|
|
Other
|
|
211
|
|
217
|
|
Total Other
Noncurrent Liabilities
|
|
5,501
|
|
5,465
|
|
Commitments and
Contingencies
|
|
-
|
|
-
|
|
TOTAL LIABILITIES
AND EQUITY
|
|
$18,901
|
|
$18,739
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
|
|
|
|
(Millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
Cash Flows From
Operating Activities
|
|
|
|
|
|
Net
Income
|
|
$177
|
|
$292
|
|
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities
|
|
175
|
|
221
|
|
Net Cash Provided From
Operating Activities
|
|
352
|
|
513
|
|
|
|
|
|
|
|
Cash Flows From
Investing Activities
|
|
|
|
|
|
Net Cash (Used For)
Used For Investing Activities
|
|
(543)
|
|
(784)
|
|
|
|
|
|
|
|
Cash Flows From
Financing Activities
|
|
|
|
|
|
Net Cash (Used For)
Provided From Financing Activities
|
|
20
|
|
154
|
|
|
|
|
|
|
|
Net Increase in
Cash and Cash Equivalents
|
|
(171)
|
|
(117)
|
|
Cash and Cash
Equivalents, January 1
|
|
409
|
|
208
|
|
Cash and Cash
Equivalents, June 30
|
|
$238
|
|
$91
|
|
|
|
|
|
|
|
|
|
|
|
|
Media
Contact:
|
|
|
|
Analyst
Contact:
|
|
Eric
Boomhower
|
|
|
|
Bryant
Potter
|
|
(800)
562-9308
|
|
|
|
(803)
217-6916
|
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/scana-reports-financial-results-for-second-quarter-2018-300690417.html
SOURCE SCANA Corporation