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.