RICHMOND, Va., May 4, 2016 /PRNewswire/ -- Dominion
Resources (NYSE: D) today announced operating earnings for the
three months ended March 31, 2016, of
$572 million ($0.96 per share), compared to operating earnings
of $584 million ($0.99 per share) for the same period in
2015. 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 three months ended
March 31, 2016, were $524 million ($0.88
per share) compared with earnings of $536
million ($0.91 per share) for
the same period in 2015.
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 difference between GAAP earnings and operating
earnings for the quarter was due to charges associated with an
organizational design initiative.
Business segment results and detailed descriptions of items
included in 2016 and 2015 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:
"Our first-quarter operating earnings were in the middle of our
guidance range of $0.90 to $1.05 per
share.
"We continue to execute with strong operational and safety
performance while also investing in an array of clean energy
infrastructure. Brunswick
County, the 1,358-megawatt natural gas combined-cycle
facility, was placed in commercial operation last week ahead of
schedule. Our request for a Certificate of Public Convenience
and Necessity (CPCN) and rate rider for the proposed 1,588-megawatt
Greensville County project was
recently approved by the Virginia State Corporation
Commission. We continued our commitment to increase the
renewable energy in Virginia by
signing solar agreements with the Commonwealth of Virginia and
Microsoft.
"Our Cove Point liquefaction project is also progressing on time
and on budget. The project overall is about 64 percent
complete and engineering 99 percent complete as we are on schedule
for a late 2017 in-service date."
FIRST-QUARTER 2016 OPERATING EARNINGS COMPARED TO
2015
The decrease in first-quarter 2016 operating
earnings per share as compared to first-quarter 2015 operating
earnings per share is primarily attributable to milder weather and
the absence of a farmout agreement offset by higher anticipated
renewable energy investment tax credits.
Details of first-quarter 2016 operating earnings as compared to
2015 may be found on Schedule 4 of this release.
SECOND-QUARTER 2016 OPERATING EARNINGS
GUIDANCE
Dominion expects second-quarter 2016 operating
earnings in the range of $0.65-$0.75
per share, compared to second-quarter 2015 operating earnings of
$0.73 per share. Positive
drivers as compared to the same period of the prior year include an
increase in revenues from our growth projects, lower capacity
expenses and higher anticipated investment tax credits from our
solar facilities. Offsetting factors include a planned
refueling outage at Millstone Power Station, higher depreciation,
interest costs and share dilution. Reconciliation of
operating and GAAP earnings for the second quarter of 2015 can be
found on Schedule 3 of this release.
In providing its second-quarter and full-year 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, acquisitions, 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.
CONFERENCE CALL TODAY
Dominion will host its
first-quarter earnings conference call at 10
a.m. ET on Wednesday, May 4,
2016. Management will discuss first-quarter financial results
and other matters of interest to the financial community.
Domestic callers should dial (877) 410-5657.
International callers should dial (334) 323-9872.
The passcode for the conference call is "Dominion."
Participants should dial in 10 to 15 minutes prior to the scheduled
start time. Members of the media also are invited to
listen.
A live webcast of the conference call, including accompanying
slides, and other financial information will be available on the
investor information pages at www.dom.com/investors and
www.dommidstream.com/investors.
A replay of the conference call will be available beginning
about 1 p.m. ET May 4 and lasting until 11
p.m. ET May 11. Domestic callers may access the
recording by dialing (877) 919-4059. International callers
should dial (334) 323-0140. The PIN for the replay is
13190640. Additionally, a replay of the webcast will be
available on the investor information pages by the end of the day
May 4.
Dominion is one of the nation's largest producers and
transporters of energy, with a portfolio of approximately 25,700
megawatts of generation, 12,200 miles of natural gas transmission,
gathering and storage pipeline, and 6,500 miles of electric
transmission lines. Dominion operates one of the nation's
largest natural gas storage systems with 933 billion cubic feet of
storage capacity and serves more than 5 million utility and retail
energy customers in 14 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 second-quarter and
full-year 2016 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 expected timing and likelihood of completion of the
proposed acquisition of Questar, including the ability to obtain
the requisite approvals of Questar's shareholders and timing,
receipt and terms and conditions of required regulatory approvals,
the receipt of regulatory approvals for, and timing of, other
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, changes in enforcement practices
of regulators relating to environmental standards and litigation
exposure for remedial activities, 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
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Preliminary,
Unaudited
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(millions, except
earnings per share)
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Three months ended
March 31,
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2016
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2015
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Change
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Earnings:
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|
|
|
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Dominion Virginia
Power
|
$
120
|
|
$
140
|
|
$
(20)
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|
Dominion
Energy*
|
186
|
|
227
|
|
(41)
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|
Dominion
Generation*
|
245
|
|
262
|
|
(17)
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Corporate and
Other
|
21
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|
(45)
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|
66
|
|
OPERATING
EARNINGS
|
$
572
|
|
$
584
|
|
$
(12)
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|
Items excluded from
operating earnings2, 3
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(48)
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|
(48)
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|
-
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REPORTED EARNINGS
1
|
$
524
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|
$
536
|
|
$
(12)
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|
|
|
|
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|
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|
Common Shares
Outstanding (average, diluted)
|
598.2
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|
589.9
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|
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|
Earnings Per Share
(EPS):
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|
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|
Dominion Virginia
Power
|
$
0.20
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|
$
0.24
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|
$
(0.04)
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|
Dominion
Energy*
|
0.31
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|
0.39
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|
(0.08)
|
|
Dominion
Generation*
|
0.41
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|
0.44
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|
(0.03)
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|
Corporate and
Other
|
0.04
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|
(0.08)
|
|
0.12
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|
OPERATING
EARNINGS
|
$
0.96
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|
$
0.99
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|
$
(0.03)
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|
Items excluded from
operating earnings2
|
(0.08)
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|
(0.08)
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|
-
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REPORTED EARNINGS
1
|
$
0.88
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|
$
0.91
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|
$
(0.03)
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1)
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Determined in
accordance with Generally Accepted Accounting Principles
(GAAP).
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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.
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3)
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Pre-tax amounts for
the current period and the prior period are ($67) million and ($76)
million, respectively.
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*2015 amounts have
been recast to reflect non-regulated retail energy marketing
operations in the Dominion Energy segment.
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Schedule 2 - Reconciliation of 2016 Operating Earnings to
Reported Earnings
2016 Earnings (Three months ended March 31, 2016)
The net effects of the following items, all shown on an
after-tax basis, are included in 2016 reported earnings, but are
excluded from operating earnings:
- $43 million charge associated
with an organizational design initiative, primarily comprised of
employee severance benefits.
- $5 million net expense related to
other items.
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(millions,
except per share amounts)
|
1Q16
|
2Q16
|
3Q16
|
4Q16
|
YTD
2016
|
Operating
earnings
|
$572
|
|
|
|
$572
|
Items excluded
from operating earnings (after-tax):
|
|
|
|
|
|
|
Organizational design
initiative
|
(43)
|
|
|
|
(43)
|
|
Other
items
|
(5)
|
|
|
|
(5)
|
|
Total items excluded
from operating earnings (after-tax) 1
|
(48)
|
|
|
|
(48)
|
Reported net
income
|
$524
|
|
|
|
$524
|
Common shares
outstanding (average, diluted)
|
598.2
|
|
|
|
598.2
|
Operating earnings
per share
|
$0.96
|
|
|
|
$0.96
|
Items excluded from
operating earnings (after-tax)
|
(0.08)
|
|
|
|
(0.08)
|
Reported earnings
per share
|
$0.88
|
|
|
|
$0.88
|
|
|
|
|
|
|
|
1)
|
Pre-tax amounts
for items excluded from operating earnings are reflected in the
following table:
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|
|
|
Items excluded from
operating earnings:
|
1Q16
|
2Q16
|
3Q16
|
4Q16
|
YTD
2016
|
|
|
|
|
|
|
|
|
Organizational design
initiative
|
(70)
|
|
|
|
(70)
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|
Other
items
|
3
|
|
|
|
3
|
|
Total items excluded
from operating earnings
|
($67)
|
$0
|
$0
|
$0
|
($67)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 3 - Reconciliation of 2015 Operating Earnings to
Reported Earnings
2015 Earnings (Twelve months ended December 31, 2015)
The net effects of the following items, all shown on an
after-tax basis, are included in 2015 reported earnings, but are
excluded from operating earnings:
- $52 million charge associated
with Virginia legislation enacted in February that required the
write-off of Virginia Power
prior-period deferred fuel costs during the first quarter of
2015.
- $60 million charge associated
with the asset retirement obligations for ash ponds and landfills
at certain utility generation facilities in connection with the
enactment of EPA coal combustion residuals rules in the second
quarter of 2015.
- $17 million net charge in
connection with the Virginia Commission's final ruling associated
with its biennial review of Virginia
Power's base rates for 2013-2014 test years.
- $12 million net expense related
to other items.
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|
|
|
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|
(millions,
except per share amounts)
|
1Q15
|
2Q15
|
3Q15
|
4Q15
|
YTD
20152
|
|
Operating
earnings
|
$584
|
$429
|
$611
|
$416
|
$2,040
|
|
Items excluded
from operating earnings (after-tax):
|
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|
|
|
|
|
|
Write-off of deferred
fuel costs
|
(52)
|
|
|
|
(52)
|
|
|
Future ash pond and
landfill closure costs
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|
(28)
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|
(32)
|
(60)
|
|
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Impact of Virginia
Power biennial review
|
|
|
|
(17)
|
(17)
|
|
|
Other
items
|
4
|
12
|
(18)
|
(10)
|
(12)
|
|
|
Total items excluded
from operating earnings (after-tax) 1
|
(48)
|
(16)
|
(18)
|
(59)
|
(141)
|
|
Reported net
income
|
$536
|
$413
|
$593
|
$357
|
$1,899
|
|
Common shares
outstanding (average, diluted)
|
589.9
|
592.5
|
595.5
|
596.7
|
593.7
|
|
Operating earnings
per share
|
$0.99
|
$0.73
|
$1.03
|
$0.70
|
$3.44
|
|
Items excluded from
operating earnings (after-tax)
|
(0.08)
|
(0.03)
|
(0.03)
|
(0.10)
|
(0.24)
|
|
Reported earnings
per share
|
$0.91
|
$0.70
|
$1.00
|
$0.60
|
$3.20
|
|
|
|
|
|
|
|
|
|
1)
|
Pre-tax amounts
for items excluded from operating earnings are reflected in the
following table:
|
|
|
|
|
Items excluded from
operating earnings:
|
1Q15
|
2Q15
|
3Q15
|
4Q15
|
YTD
2015
|
|
|
|
|
|
|
|
|
|
|
Write-off of deferred
fuel costs
|
(85)
|
|
|
|
(85)
|
|
|
Future ash pond and
landfill closure costs
|
|
(45)
|
|
(54)
|
(99)
|
|
|
Impact of Virginia
Power biennial review
|
|
|
|
(28)
|
(28)
|
|
|
Other
items
|
9
|
18
|
(19)
|
(16)
|
(8)
|
|
|
Total items excluded
from operating earnings
|
($76)
|
($27)
|
($19)
|
($98)
|
($220)
|
|
|
|
|
|
|
|
|
|
2)
|
YTD EPS may not
equal sum of quarters due to share count
differences
|
|
|
|
Schedule 4 -
Reconciliation of 1Q16 Earnings to 1Q15
|
|
|
|
|
|
|
Preliminary,
unaudited
|
Three Months
Ended
|
(millions,
except EPS)
|
March
31,
|
|
|
2016 vs.
2015
|
|
|
Increase /
(Decrease)
|
Reconciling
Items
|
Amount
|
EPS
|
|
|
|
|
Dominion
Virginia Power
|
|
|
|
Regulated electric
sales:
|
|
|
|
Weather
|
($15)
|
($0.03)
|
|
Other
|
(5)
|
(0.01)
|
|
FERC Transmission
equity return
|
11
|
0.02
|
|
Other
|
(11)
|
(0.02)
|
|
Change in
contribution to operating earnings
|
($20)
|
($0.04)
|
|
|
|
|
Dominion
Energy
|
|
|
|
Gas Distribution
margin
|
($3)
|
($0.01)
|
|
Farmout
transactions
|
(41)
|
(0.08)
|
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Other
|
3
|
0.01
|
|
Change in
contribution to operating earnings
|
($41)
|
($0.08)
|
|
|
|
|
Dominion
Generation
|
|
|
|
Regulated electric
sales:
|
|
|
|
Weather
|
($31)
|
($0.05)
|
|
Other
|
(3)
|
(0.01)
|
|
Merchant generation
margin
|
(8)
|
(0.02)
|
|
Rate adjustment
clause equity return
|
6
|
0.01
|
|
Capacity related
expenses
|
14
|
0.03
|
|
Depreciation
|
(6)
|
(0.01)
|
|
Other
|
11
|
0.02
|
|
Change in
contribution to operating earnings
|
($17)
|
($0.03)
|
|
|
|
|
|
|
|
|
Corporate and
Other
|
|
|
|
Renewable energy
investment tax credits
|
75
|
0.13
|
|
Other
|
(9)
|
(0.01)
|
|
Change in
contribution to operating earnings
|
$66
|
$0.12
|
|
|
|
|
Change in
consolidated operating earnings
|
($12)
|
($0.03)
|
|
|
|
|
Change in items
excluded from operating
earnings1
|
$0
|
$0.00
|
|
|
|
|
Change in
reported earnings (GAAP)
|
($12)
|
($0.03)
|
|
|
|
|
|
|
|
|
1)
|
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.
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Note: Figures may
not add due to rounding
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To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/dominion-announces-first-quarter-earnings-300262011.html
SOURCE Dominion Resources, Inc.