RICHMOND, Va., Oct. 31, 2016 /PRNewswire/ -- Dominion
Resources (NYSE: D) today announced unaudited reported earnings
determined in accordance with Generally Accepted Accounting
Principles (reported earnings) for the three months ended
Sept. 30, 2016, of $690 million ($1.10
per share) compared with earnings of $593
million ($1.00 per share) for
the same period in 2015.
Operating earnings for the three months ended Sept. 30, 2016, amounted to $716 million ($1.14
per share), compared to operating earnings of $611 million ($1.03
per share) for the same period in 2015. Operating earnings
are defined as reported earnings adjusted for certain
items.
The principal difference between reported earnings and operating
earnings for the quarter is related to transaction costs associated
with the Dominion Questar combination and our investments in
nuclear decommissioning trust funds.
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.
Thomas F. Farrell II, chairman,
president and chief executive officer, said:
"We are very pleased with our strong third-quarter results that
came in well above our guidance range partially as a result of
warmer weather in our service territory. Our integrated
system of power stations and transmission lines were able to meet
the increased demand reliably and effectively.
"We continue to execute on our growth projects including
starting construction of the 1,588-megawatt Greensville County combined cycle power
station. The project is on-time and on-budget.
"Our large contracted solar farms, Four Brothers and Three
Cedars in Utah, were completed
last month, on time and on budget. We have a number of
solar projects under development in Virginia and North
Carolina and continue to see demand for renewables from our
customers.
"Our Cove Point Liquefaction project is now 75 percent complete
and the facility continues on time and on budget for a late 2017
in-service date. We continue to work toward the construction
of the Atlantic Coast Pipeline and the related Supply Header
project. We expect completion of these projects in late
2019."
THIRD-QUARTER 2016 REPORTED AND OPERATING EARNINGS
COMPARED TO 2015
Reported earnings increased
10 cents per share as compared to
third-quarter 2015. 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.
Operating earnings increased 11
cents per share as compared to third-quarter 2015 operating
earnings. The increase in operating earnings was primarily
attributable to an increase in electric sales from warmer weather,
lower capacity expenses, revenues from our regulated growth
projects, and a lower tax rate. Factors offsetting the
increase include the absence of a farmout transaction and share
dilution. Details of third-quarter 2016 operating earnings as
compared to the same period in 2015 may be found on Schedule 4 of
this release.
FOURTH-QUARTER 2016 OPERATING EARNINGS
GUIDANCE
Dominion expects fourth-quarter 2016 operating
earnings in the range of $0.90-$1.05
per share, compared to fourth-quarter 2015 operating earnings of
$0.70 per share. Positive
drivers include a return to normal weather, increased revenues from
our growth projects, the addition of Dominion Questar, lower
capacity expenses and the absence of a Millstone refueling outage.
Reconciliation of reported and operating earnings for the
fourth quarter of 2015 can be found on Schedule 3 of this
release.
The company is maintaining its previously issued 2016 operating
earnings guidance of $3.60-$4.00 per
share.
In providing its fourth-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
future period reported earnings.
CONFERENCE CALL TODAY
Dominion will host its
third-quarter earnings conference call at 1
p.m. ET on Monday, Oct. 31,
2016. Management will discuss third-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 4 p.m. ET Oct. 31, 2016 and lasting until 11 p.m. ET Nov. 7,
2016. Domestic callers may access the recording by dialing
(877) 919-4059. International callers should dial (334)
323-0140. The PIN for the replay is 85471176.
Additionally, a replay of the webcast will be available on the
investor information pages by the end of the day Oct. 31, 2016.
Dominion is one of the nation's largest producers and
transporters of energy, with a portfolio of approximately 26,000
megawatts of generation, 14,400 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 1 trillion cubic feet of storage
capacity and serves more than 6 million utility and retail energy
customers. 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 fourth-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 receipt of approvals for, and timing of, closing dates
for 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.
DOMINION
RESOURCES, INC.
|
CONSOLIDATED
STATEMENTS OF INCOME*
|
Unaudited (GAAP
Based)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Operating
Revenue
|
|
|
|
|
$
3,132
|
|
$
2,971
|
|
$
8,651
|
|
$
9,127
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Electric fuel and
other energy-related purchases
|
|
|
|
|
606
|
|
636
|
|
1,791
|
|
2,180
|
Purchased (excess)
electric capacity
|
|
|
|
|
(6)
|
|
75
|
|
107
|
|
259
|
Purchased
gas
|
|
|
|
|
77
|
|
85
|
|
252
|
|
446
|
Other operations and
maintenance
|
|
|
|
|
778
|
|
564
|
|
2,146
|
|
1,875
|
Depreciation,
depletion and amortization
|
|
|
|
|
400
|
|
355
|
|
1,112
|
|
1,037
|
Other
taxes
|
|
|
|
|
145
|
|
133
|
|
448
|
|
432
|
Total operating
expenses
|
|
|
|
|
2,000
|
|
1,848
|
|
5,856
|
|
6,229
|
Income from
operations
|
|
|
|
|
1,132
|
|
1,123
|
|
2,795
|
|
2,898
|
Other
income
|
|
|
|
|
63
|
|
11
|
|
189
|
|
127
|
Interest and related
charges
|
|
|
|
|
237
|
|
230
|
|
702
|
|
674
|
Income from
operations including noncontrolling interests before income tax
expense
|
|
|
|
|
958
|
|
904
|
|
2,282
|
|
2,351
|
Income tax
expense
|
|
|
|
|
230
|
|
305
|
|
561
|
|
794
|
Net Income
Including Noncontrolling Interests
|
|
|
|
|
728
|
|
599
|
|
1,721
|
|
1,557
|
Noncontrolling
Interests
|
|
|
|
|
38
|
|
6
|
|
55
|
|
15
|
Net Income
Attributable to Dominion
|
|
|
|
|
$
690
|
|
$
593
|
|
$
1,666
|
|
$
1,542
|
Earnings Per
Common Share – Basic
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Attributable to Dominion
|
|
|
|
|
$
1.10
|
|
$
1.00
|
|
$
2.72
|
|
$
2.61
|
Earnings Per
Common Share – Diluted
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Attributable to Dominion
|
|
|
|
|
$
1.10
|
|
$
1.00
|
|
$
2.71
|
|
$
2.60
|
Dividends declared
per common share
|
|
|
|
|
$
0.7000
|
|
$
0.6475
|
|
$
2.1000
|
|
$
1.9425
|
|
|
|
|
|
|
|
|
|
|
|
|
*The notes contained
in Dominion's most recent quarterly report on Form 10-Q or annual
report on Form 10-K are an integral part of
|
the Consolidated
Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 2 - Reconciliation of 2016 Reported Earnings to
Operating Earnings
2016 Earnings (Nine months ended September 30, 2016)
The $103 million pre-tax net
effect of the adjustments included in 2016 reported earnings, but
excluded from operating earnings, is primarily related to the
following items:
- $65 million charge associated
with an organizational design initiative and primarily comprised of
employee severance benefits.
- $60 million of transaction and
transition costs associated with the Dominion Questar combination,
which was completed in September
2016.
- $29 million net gain related to
our investments in nuclear decommissioning trust funds.
|
|
|
|
|
|
|
|
(millions,
except per share amounts)
|
1Q16
|
2Q16
|
3Q16
|
4Q16
|
YTD
2016
|
2
|
Reported
earnings
|
$524
|
$452
|
$690
|
|
$1,666
|
|
Adjustments to
reported earnings 1:
|
|
|
|
|
|
|
Pre-tax loss (income)
|
|
67
|
(12)
|
48
|
|
103
|
|
Income tax
|
(19)
|
1
|
(22)
|
|
(40)
|
|
|
|
48
|
(11)
|
26
|
|
63
|
|
Operating
earnings
|
$572
|
$441
|
$716
|
|
$1,729
|
|
Common shares
outstanding (average, diluted)
|
598.2
|
617.0
|
626.0
|
|
613.8
|
|
Reported earnings
per share
|
$0.88
|
$0.73
|
$1.10
|
|
$2.71
|
|
Adjustments to
reported earnings (after-tax)
|
|
0.08
|
(0.02)
|
0.04
|
|
0.10
|
|
Operating earnings
per share
|
$0.96
|
$0.71
|
$1.14
|
|
$2.81
|
|
|
|
|
|
|
|
|
|
1) Adjustments to
reported earnings are reflected in the following
table:
|
|
|
|
|
|
1Q16
|
2Q16
|
3Q16
|
4Q16
|
YTD
2016
|
|
Pre-tax loss
(income):
|
|
|
|
|
|
|
Organizational design initiative
|
70
|
(5)
|
|
|
65
|
|
Questar transaction and transition costs
|
2
|
5
|
53
|
|
60
|
|
Net gain in nuclear decommissioning trust funds
|
(2)
|
(11)
|
(16)
|
|
(29)
|
|
Other items
|
(3)
|
(1)
|
11
|
|
7
|
|
|
|
$67
|
($12)
|
$48
|
|
$103
|
|
Income tax expense
(benefit):
|
|
|
|
|
|
|
Tax
effect of above adjustments to reported earnings *
|
(19)
|
1
|
(10)
|
|
(28)
|
|
Divestiture tax settlement
|
|
|
(12)
|
|
(12)
|
|
|
|
($19)
|
$1
|
($22)
|
|
($40)
|
|
|
|
|
|
|
|
|
|
* Income taxes for
individual pre-tax items include current and deferred taxes using a
transactional effective
|
tax rate. For
interim reporting purposes, such amounts may be adjusted in
connection with the calculation of
|
the Company's
year-to-date income tax provision based on its estimated annual
effective tax rate.
|
|
|
|
|
|
|
|
|
2) YTD EPS may not
equal sum of quarters due to share count differences
|
|
|
|
|
|
|
|
|
|
Schedule 3 - Reconciliation of 2015 Reported Earnings to
Operating Earnings
2015 Earnings (Twelve months ended December 31, 2015)
The $220 million pre-tax net
effect of the adjustments included in 2015 reported earnings, but
excluded from operating earnings, is primarily related to the
following items:
- $85 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.
- $99 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.
- $28 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.
|
|
|
|
|
|
|
(millions,
except per share amounts)
|
1Q15
|
2Q15
|
3Q15
|
4Q15
|
YTD
2015
|
2
|
Reported
earnings
|
$536
|
$413
|
$593
|
$357
|
$1,899
|
|
Adjustments to
reported earnings 1:
|
|
|
|
|
|
|
Pre-tax
loss (income)
|
76
|
27
|
19
|
98
|
220
|
|
Income
tax
|
(28)
|
(11)
|
(1)
|
(39)
|
(79)
|
|
|
48
|
16
|
18
|
59
|
141
|
|
Operating
earnings
|
$584
|
$429
|
$611
|
$416
|
$2,040
|
|
Common shares
outstanding (average, diluted)
|
589.9
|
592.5
|
595.5
|
596.7
|
593.7
|
|
Reported earnings
per share
|
$0.91
|
$0.70
|
$1.00
|
$0.60
|
$3.20
|
|
Adjustments to
reported earnings (after-tax)
|
0.08
|
0.03
|
0.03
|
0.10
|
0.24
|
|
Operating earnings
per share
|
$0.99
|
$0.73
|
$1.03
|
$0.70
|
$3.44
|
|
|
|
|
|
|
|
|
1) Adjustments to
reported earnings are reflected in the following
table:
|
|
|
|
|
1Q15
|
2Q15
|
3Q15
|
4Q15
|
YTD
2015
|
|
|
|
|
|
|
|
|
Pre-tax loss
(income):
|
|
|
|
|
|
|
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
|
|
|
$76
|
$27
|
$19
|
$98
|
$220
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit):
|
|
|
|
|
|
|
Tax
effect of above adjustments to reported earnings *
|
(28)
|
(11)
|
(7)
|
(39)
|
(85)
|
|
Deferred taxes refundable to utility customers
|
|
|
6
|
|
6
|
|
|
($28)
|
($11)
|
($1)
|
($39)
|
($79)
|
|
|
|
|
|
|
|
|
* Income taxes for
individual pre-tax items include current and deferred taxes using a
transactional effective
|
|
tax rate. For
interim reporting purposes, such amounts may be adjusted in
connection with the calculation of
|
|
the Company's
year-to-date income tax provision based on its estimated annual
effective tax rate.
|
|
|
|
|
|
|
|
2) YTD EPS may not
equal sum of quarters due to share count differences
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 4 -
Change in Contribution to Reported and Operating
Earnings
|
|
|
|
|
|
|
|
|
Preliminary,
unaudited
|
|
Three Months
Ended
|
|
(millions,
except EPS)
|
|
September
30,
|
|
|
|
|
|
2016 vs.
2015
|
|
|
|
|
|
Increase /
(Decrease)
|
|
|
|
|
|
Amount
|
|
EPS
|
|
|
|
|
|
|
|
|
|
Change in reported
earnings (GAAP)
|
|
$97
|
|
$0.10
|
|
|
|
|
|
|
|
|
|
|
|
Change in Pre-tax
loss (income) 1
|
|
$29
|
|
|
|
|
|
Change in Income tax
1
|
|
(21)
|
|
|
|
Adjustments to
reported earnings
|
|
$8
|
|
$0.01
|
|
|
|
|
|
|
|
|
|
Change in
consolidated operating earnings
|
|
$105
|
|
$0.11
|
|
|
|
|
|
|
|
|
|
Reconciling
Items
|
|
Dominion
Virginia Power
|
|
|
|
|
|
|
|
Regulated electric
sales:
|
|
|
|
|
|
|
|
Weather
|
|
$12
|
|
$0.02
|
|
|
|
Other
|
|
5
|
|
0.01
|
|
|
|
FERC transmission
equity return
|
|
9
|
|
0.01
|
|
|
|
Storm damage and
service restoration
|
|
(5)
|
|
(0.01)
|
|
|
|
Other
|
|
(7)
|
|
(0.01)
|
|
|
|
Share
dilution
|
|
-
|
|
(0.01)
|
|
|
|
Change in
contribution to reported and operating earnings
|
|
$14
|
|
$0.01
|
|
|
|
|
|
|
|
|
|
Dominion
Energy
|
|
|
|
|
|
|
|
Gas Distribution
margin
|
|
$5
|
|
$0.01
|
|
|
|
Farmout
transaction
|
|
(27)
|
|
(0.06)
|
|
|
|
Dominion Questar
combination
|
|
5
|
|
0.01
|
|
|
|
Other
|
|
(1)
|
|
-
|
|
|
|
Share
dilution
|
|
-
|
|
(0.01)
|
|
|
|
Change in
contribution to reported and operating earnings
|
|
($18)
|
|
($0.05)
|
|
|
|
|
|
|
|
|
|
Dominion
Generation
|
|
|
|
|
|
|
|
Regulated electric
sales:
|
|
|
|
|
|
|
|
Weather
|
|
$32
|
|
$0.05
|
|
|
|
Other
|
|
10
|
|
0.02
|
|
|
|
Renewable energy
investment tax credits
|
|
212
|
|
0.35
|
|
|
|
Noncontrolling
interest related to solar partnerhips
|
|
(20)
|
|
(0.03)
|
|
|
|
Merchant generation
margin
|
|
(14)
|
|
(0.02)
|
|
|
|
Capacity related
expenses
|
|
49
|
|
0.08
|
|
|
|
Other
|
|
(9)
|
|
(0.02)
|
|
|
|
Share
dilution
|
|
-
|
|
(0.05)
|
|
|
|
Change in
contribution to reported and operating earnings
|
|
$260
|
|
$0.38
|
|
|
|
|
|
|
|
|
|
Corporate and
Other
|
|
|
|
|
|
|
|
Renewable energy
investment tax credits
|
|
($148)
|
|
($0.23)
|
|
|
|
Other
|
|
(3)
|
|
-
|
|
|
|
Change in
contribution to operating earnings
|
|
($151)
|
|
($0.23)
|
|
|
|
|
|
|
|
|
|
Change in
consolidated operating earnings
|
|
$105
|
|
$0.11
|
|
Change in adjustments
included in reported earnings1
|
|
(8)
|
|
(0.01)
|
|
Change in
consolidated reported earnings
|
|
$97
|
|
$0.10
|
|
|
|
|
|
|
|
|
|
1)
|
Adjustments to
reported earnings are included in Corporate and Other segment
reported GAAP earnings.
|
|
|
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.
|
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-third-quarter-earnings-300353587.html
SOURCE Dominion Resources