SCANA Corporation (NYSE: SCG) today announced earnings for the first quarter of 2015 of $400 million, or earnings per share of $2.80, compared to $193 million, or earnings per share of $1.37, for the first quarter of 2014.
“The first quarter was very unique,” said Jimmy Addison, Executive Vice President and Chief Financial Officer. “We saw the successful closing of the sales of two subsidiaries, Carolina Gas Transmission (CGT) and SCANA Communications (SCI), and while the weather was not as extreme as we experienced in the first quarter of 2014, it was still colder than normal. In addition, we continue to experience improving economic conditions in our service territories and resulting customer growth.”
FINANCIAL RESULTS BY MAJOR LINES OF BUSINESS
South Carolina Electric & Gas Company
Reported earnings for the first quarter of 2015 at SCE&G, SCANA’s principal subsidiary, were $126 million, or earnings per share of 89 cents, unchanged from the first quarter of 2014. Electric margins were higher due primarily to a Base Load Review Act rate increase and customer growth, partially offset by milder weather during the first quarter of 2015 when compared to the prior year. A decrease in operations and maintenance expenses also positively contributed to SCE&G’s earnings when compared to last year. These items were offset by a decrease in gas margins, as well as increases in expenses related to our capital program including interest expense, property taxes, depreciation and share dilution. Colder than normal weather increased earnings by 5 cents per share in the first quarter of 2015, compared to 10 cents per share in the first quarter of 2014. At March 31, 2015, SCE&G was serving approximately 692,000 electric customers and 342,000 natural gas customers, an increase of 1.5 and 2.9 percent, respectively, over the previous year.
PSNC Energy
PSNC Energy, the Company’s North Carolina-based retail natural gas distribution subsidiary, reported first quarter 2015 earnings of $34 million, or earnings per share of 24 cents, compared to $33 million, or earnings per share of 24 cents, in 2014. At March 31, 2015, PSNC Energy was serving approximately 525,000 customers, an increase of 2.6 percent over the previous year.
SCANA Energy – Georgia
SCANA Energy, the Company’s retail natural gas marketing business in Georgia, reported first quarter 2015 earnings of $27 million, or 19 cents per share, compared to $22 million, or 16 cents per share, in the first quarter of 2014. This improvement was primarily attributable to increased margins.
Corporate and Other, Net
SCANA’s corporate and other businesses, which include SCANA Energy Marketing, the holding company, and prior to their sales, CGT and SCI, reported earnings of $212 million, or $1.48 per share in 2015, which includes the gains on those sales, compared to earnings of $11 million, or earnings per share of 8 cents in the first quarter of 2014. As previously announced, SCANA successfully closed the sales of CGT and SCI on January 31st and February 20th of 2015, respectively. The gain on the sale of CGT was $136 million, or 95 cents per share, net of taxes, and the gain on the sale of SCI was $66 million, or 46 cents per share, net of taxes. Outside of these gains, lower interest expense at the holding company was offset by lower incremental margins in the marketing business and forgone earnings from the subsidiaries which were sold.
EARNINGS OUTLOOK
The Company reaffirms its guidance for 2015 GAAP-adjusted weather-normalized earnings per share of $3.60 to $3.80, with an internal target of $3.70 per share. The Company’s targeted average annual growth rate for GAAP-adjusted weather-normalized earnings per share is 3 to 6 percent over the next 3 to 5 years. The Company previously reset its base year to 2014 GAAP-adjusted weather-normalized earnings per share of $3.58 (reflecting a downward adjustment of 21 cents per share to normalize weather in the electric business). Excluded from estimated 2015 GAAP-adjusted weather-normalized earnings per share is the effect of the aggregate gains of $1.41 per share recorded in the first quarter of 2015 from the sales of CGT and SCI.
The following information is provided in accordance with SEC Regulation G. For 2015, the Company estimates that GAAP earnings per share will be in the range of $5.00 to $5.20, with an internal target of $5.10. This estimate includes the effect of the item discussed in the preceding paragraph with respect to the sales of CGT and SCI. Based on 2014 GAAP earnings per share of $3.79, the Company’s targeted average annual earnings per share growth rate is 1 to 5 percent over the next 3 to 5 years.
The Company’s management believes that these non-GAAP earnings and earnings growth measures provide a meaningful representation of the Company’s fundamental earnings power and can aid in performing period-over-period financial analysis and comparison with peer group data. In management’s opinion, these non-GAAP measures serve as useful indicators of the financial results of the Company’s primary businesses and as a basis for management’s provision of earnings guidance and growth projections. In addition, management uses these non-GAAP measures in making resource allocation and other budgetary and operational decisions. These non-GAAP measures are not intended to replace the GAAP measures of earnings per share or average annual earnings per share growth rate, but are offered as supplements to those GAAP measures.
Factors and risks that could impact future earnings are discussed in the Company’s filings with the Securities and Exchange Commission and below under the Safe Harbor Statement.
CONFERENCE CALL NOTICE
SCANA will host its quarterly conference call for security analysts at 3:00 p.m. ET on Thursday, April 30, 2015. The call-in numbers for the conference call are 1-888-347-3258 (US), 1-855-669-9657 (Canada) and 1-412-902-4279 (International). Participants should call in 5 to 10 minutes prior to the scheduled start time. A replay of the conference call will be available through May 14, 2015. The telephone replay numbers are 1-877-344-7529 (US), 1-855-669-9658 (Canada), and 1-412-317-0088 (International). The event code for the telephone replay is 10061988.
All interested persons, including investors, media and the general public, may listen to a live webcast and access related presentation materials of the conference call at the Company’s website at www.scana.com. Participants should go to the website at least 5 to 10 minutes prior to the call start time and follow the instructions. A replay of the conference call will also be available on the website through May 14, 2015.
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 692,000 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.
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