Exhibit 99
For Immediate Release
Media Contact: Investor Contact:
Cathy Love John Winn
(803) 217-7777 (803)217-9240
clove@scana.com jwinn@scana.com
SCANA Reports Financial Results for First Quarter 2003
Columbia, SC, April 25, 2003...SCANA Corporation (NYSE: SCG) announced today
that reported earnings for the three months ended March 31, 2003 were $84
million, or 75 cents per share, compared to a reported loss of $302 million, or
$2.88 per share, for the same period in 2002. Reported earnings or loss are
prepared in accordance with Generally Accepted Accounting Principles (GAAP).
The reported loss for the first quarter of 2002 included a non-cash, after-tax
impairment charge of $230 million, or $2.20 per share, related to goodwill
associated with the Company's acquisition of Public Service Company of North
Carolina (PSNC Energy) in 2000. That charge, which was included in the Company's
2002 results announced on February 12, 2003, was recorded as a cumulative effect
of accounting change effective January 1, 2002 in accordance with the accounting
standard SFAS No. 142. The reported loss for the first quarter of 2002 also
included a non-cash, after-tax write-down of $159 million, or $1.52 per share,
and an after-tax gain of $10 million, or 10 cents per share, both of which were
related to the Company's investment in Deutsche Telekom.
SCANA's net earnings from operations (previously referred to as earnings from
ongoing operations), which was calculated by excluding from reported earnings or
loss the cumulative effects of mandated changes in accounting principles and the
effects of sales and impairment charges related to telecommunications
investments, was $84 million, or 75 cents per share in the first quarter of
2003, compared to $77 million, or 74 cents per share in the same quarter of
2002. SCANA's management believes that, in addition to reported earnings or loss
under GAAP, net earnings or loss from operations is a relevant measure in
assessing the Company's fundamental earnings power and improving comparability
of period-over-period performance.
A reconciliation of reported earnings or loss per share to net earnings per
share from operations for the first quarter of 2003 and 2002 is provided in the
following table:
1st Quarter 1st Quarter
2003 2002
---- ----
Reported Earnings (Loss) per Share $.75 $(2.88)
Cumulative Effect of Accounting Change re: Goodwill -- (2.20)
Impairment of Deutsche Telekom Investment -- (1.52)
Gain on Sale of Deutsche Telekom Stock -- .10
Net Earnings Per Share From Operations $.75 $.74
"We are pleased with our first quarter financial performance, particularly given
the volatility we saw in natural gas prices and the continued slowdown in our
service area economy," said Kevin Marsh, senior vice president and chief
financial officer.
Marsh noted that net earnings per share from operations in the first quarter of
2003 were favorably impacted by higher margins on sales of electricity and
natural gas compared to the same quarter in 2002. The increase in the electric
margin (13 cents per share) reflected a 3.9 percent increase in retail
kilowatt-hour sales of electricity driven by colder weather and customer growth,
and an increase in retail electric base rates that was effective February 1,
2003. The higher natural gas margin (12 cents per share) was due in part to a
3.9 percent increase in retail therm sales of natural gas, reflecting the impact
of colder weather across the Company's three-state natural gas service area. The
Company also recorded improved margins on competitive sales of natural gas in
industrial markets compared to the first quarter of 2002. Offsetting the higher
electric and natural gas sales margins were increases in operating and
maintenance expenses (7 cents per share), lower pension income (3 cents per
share), increased depreciation expense (4 cents per share), higher property
taxes (2 cents per share) and an increase in other expenses (3 cents per share).
Net earnings per share from operations in the first quarter of 2003 were also
reduced by 5 cents per share compared to the same period in 2002 due to an
increase in the number of common shares outstanding.
"These first quarter results keep us on track to achieve our guidance for 2003
net earnings from operations of $2.50 to $2.60 per share," said Marsh.
REGULATED OPERATIONS:
South Carolina Electric & Gas Company
Reported earnings in the first quarter of 2003 at South Carolina Electric & Gas
Company (SCE&G), SCANA's principal subsidiary, were $47 million, or 42 cents per
share, compared to $52 million, or 49 cents per share, in the same quarter last
year. That decline was due mainly to increases in operating and maintenance
expenses, depreciation expense, interest expense and property taxes. These
negative factors more than offset the favorable impact of higher electric and
natural gas sales margins.
Total retail sales of electricity in the first quarter of 2003 were up 3.9
percent compared to the same quarter last year. Residential sales were up 3.6
percent, commercial sales were up 4.8 percent and industrial sales rose 3.1
percent. Wholesale, or off-system, sales were down 19 percent, reflecting the
weak economy and increased demand from SCE&G's native load customers. Total
kilowatt-hour sales of electricity were up 1.2 percent compared to the first
quarter of 2002.
"The increase in retail electricity sales reflects the impact of solid customer
growth and colder weather compared to the same quarter last year," said Marsh.
Average temperatures across SCE&G's electric service area during the quarter, as
measured by heating degree days, were about 12 percent colder than the first
quarter of last year and 6 percent colder than normal. SCE&G's electric customer
base grew by about 2.3 percent over the past year to approximately 564,000 at
March 31, 2003.
"We are also encouraged by the increase in commercial and industrial sales,"
said Marsh. "While the state's overall economy has been relatively weak through
the first three months of the year, we believe that the economy is positioned to
begin a rebound later this year, and we are confident that the underlying
strength of the state's economy will support that recovery."
Marsh noted that most of the colder weather for the quarter occurred in January,
prior to the retail electric rate increase that went into effect on February 1,
2003. "Of the 13 cents per share increase in the electric margin for the
quarter, 5 cents was attributable to the rate increase, 3 cents to colder
weather and 5 cents to customer growth" said Marsh.
South Carolina Pipeline Corporation
South Carolina Pipeline had reported earnings of $3 million, or 3 cents per
share, in the first quarter of 2003 compared to a reported loss of $5 million,
or 5 cents per share in the first quarter of 2002. That year-over-year
improvement reflects higher margins on competitive sales of natural gas to
industrial interruptible customers and gas used for electric generation.
Pipeline's unfavorable 2002 first quarter results reflected intense price
competition from alternative fuels in industrial markets.
PSNC Energy
PSNC Energy had reported earnings of $24 million, or 21 cents per share, in the
first quarter of 2003 compared to a reported loss of $209 million, or $2.00 per
share, in the first quarter of 2002. Results for the prior year's quarter
include the previously discussed goodwill impairment charge of $230 million, or
$2.20 per share. Excluding that charge, PSNC Energy's net earnings from
operations in the first quarter of 2002 were $21 million, or 20 cents per share.
The quarterly improvement in PSNC Energy's net earnings from operations was due
primarily to colder weather and customer growth. At March 31, 2003 the company
was serving approximately 386,000 customers, an increase of 3.5 percent over the
past year.
NON-REGULATED OPERATIONS:
SCANA Energy - Georgia
In the first quarter of 2003, SCANA Energy had reported earnings of $13 million,
or 12 cents per share, compared to $14 million, or 13 cents per share, in the
first quarter of 2002. Slightly higher sales margins resulting from colder
weather during the quarter were offset by higher operating and customer service
expenses.
At March 31, 2003, SCANA Energy was serving approximately 386,000 customers,
maintaining its position as the second largest marketer in Georgia with about a
25 percent market share. Included in that total customer number were about
20,000 low income and credit challenged customers who were being served by SCANA
Energy in its role as Georgia's regulated natural gas provider.
Corporate and Other Non-Regulated
SCANA's other non-regulated businesses had a combined reported loss of $3
million, or 3 cents per share in the first quarter of 2003, essentially
unchanged compared to the same quarter of 2002 after excluding the impact on
last year's results of the charges associated with the Company's telecom
investments, which totaled $149 million, or $1.42 per share.
2003 Outlook
For 2003, the Company reaffirms its guidance that net earnings from operations
will be in the range of $2.50 - $2.60 per share. As previously disclosed, the
Company's goal is to achieve a 6 - 8% average annual growth in net earnings per
share from operations over the next 3-5 years. The 2003 guidance reflects the
impact of a 5.8 percent increase in retail electric base rates approved by the
South Carolina Public Service Commission in an order dated January 31, 2003 and
placed into effect on February 1, 2003. The guidance also assumes normal weather
in the Company's electric and natural gas service areas and excludes any
potential gains or losses from investing activities or sales of assets.
Profile
SCANA Corporation, a Fortune 500 company headquartered in Columbia, SC, is an
energy-based holding company principally engaged, through subsidiaries, in
electric and natural gas utility operations, telecommunications and other
energy-related businesses. Information about SCANA and its businesses is
available on the Company's website at www.scana.com.
Conference Call Notice
SCANA will host a conference call for financial analysts and other interested
people at 10:00 a.m. Eastern Time today. The call-in number for the conference
call is 1-800-374-2396. Participants should call in 5 to 10 minutes prior to the
scheduled start time. A tape recording of the conference call will be available
approximately 2 hours after conclusion of the call through May 9, 2003. The
domestic replay call-in number is 1-800-642-1687 and the international replay
call-in number is 1-706-645-9291. The conference I.D. number is 9586066. A live,
listen-only webcast of the conference call will be available online at
www.scana.com or at www.videonewswire.com/SCG/042503. Participants should go to
either of these web sites at least 10 minutes prior to the call start time and
follow the instructions. A replay of the conference call will be available
approximately 2 hours after conclusion of the call through May 9, 2003 on either
of these web sites.
Safe Harbor Statement
This press release includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Those statements include statements
regarding the intent, belief or current expectations of the Company and its
management. Although SCANA Corporation believes that its expectations are based
on reasonable assumptions, it can give no assurance that its goals will be
achieved. 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. Important factors that could cause
actual results to differ materially from those indicated by such forward-looking
statements include, but are not limited to, the following: (1) that the
information is of a preliminary nature and may be subject to further and/or
continuing review and adjustment, (2) changes in the utility and non-utility
regulatory environment, (3) changes in the economy, especially in areas served
by the Company's subsidiaries, (4) the impact of competition from other energy
suppliers, (5) growth opportunities for the Company's regulated and diversified
subsidiaries, (6) the results of financing efforts, (7) changes in the Company's
accounting policies, (8) weather conditions, especially in areas served by the
Company's subsidiaries, (9) performance of and marketability of the Company's
investments in telecommunications companies, (10) performance of the Company's
pension plan assets, (11) inflation, (12) changes in environmental regulations,
(13) volatility in commodity natural gas markets and (14) the other risks and
uncertainties described from time to time in the Company's periodic reports
filed with the Securities and Exchange Commission. The Company disclaims any
obligation to update any forward-looking statements.
# # #
FINANCIAL AND OPERATING INFORMATION
Consolidated Statements of Income
(Millions, except per share amounts) (Unaudited)
Three Months Ended
March 31,
2003 2002
Operating Revenues:
Electric $336 $302
Gas-Regulated 427 296
Gas-Non-regulated 306 224
Total Operating Revenues 1,069 822
Operating Expenses:
Fuel and purchased power 91 79
Gas purchased for resale 571 378
Other operation and maintenance 144 127
Depreciation and amortization 60 54
Other taxes 35 31
Total Operating Expenses 901 669
Operating Income 168 153
Other Income (Expense), Net 16 (210)
Interest Charges, Net 51 51
Income Tax Expense (Benefit) 46 (39)
Preferred Dividend Requirement
of SCE&G - Mandatorily Redeemable
Preferred Securities (1) (1)
Preferred Stock Cash Dividends
of Subsidiary (2) (2)
Net Income (Loss) Before Cumulative
Effect of Accounting Change 84 (72)
Cumulative Effect of Accounting Change,
Net of Taxes - (230)
Net Income (Loss) $84 $(302)
Common Stock Data:
Net Earnings (Loss) Per Share Before
Cumulative Effect of Accounting Change $.75 $ (.68)
Cumulative Effect of Accounting Change - (2.20)
Reported Earnings (Loss) Per Share $.75 $(2.88)
Wtg. Avg. Common Shares Outstanding 110.8 104.7
Consolidated Condensed Balance Sheets
(Millions) (Unaudited)
March 31, December 31,
2003 2002
ASSETS
Utility Plant, Net $5,616 $5,474
Other Property and Investments 328 326
Current Assets 1,107 1,160
Deferred Debits 792 794
Total Assets $7,843 $7,754
CAPITALIZATION AND LIABILITIES
Capitalization:
Common Equity $2,220 $2,177
Preferred Stock 115 115
SCE&G Obligated Mandatorily Redeemable Preferred Stock 50 50
Long-term Debt, Net 2,885 2,834
Total Capitalization 5,270 5,176
Current Liabilities:
Short-Term Borrowings 114 209
Current Portion of Long-Term Debt 503 413
Other Current Liabilities 600 617
Total Current Liabilities 1,217 1,239
Deferred Credits 1,356 1,339
Total Capitalization and Liabilities $7,843 $7,754
Reported Earnings (Loss) per Share by Company (GAAP Basis)
(unaudited)
Three Months Ended March 31,
2003 2002
SC Electric & Gas $.42 $.49
SC Pipeline .03 (.05)
PSNC Energy .21 (2.00)
SCANA Energy-Georgia (1) .12 .13
Corporate and Other Non-regulated, Net (1) (.03) (1.45)
Reported Earnings (Loss) per Share $.75 $(2.88)
Net Earnings (Loss) per Share From Operations by Company
(unaudited)
Three Months Ended March 31,
2003 2002
SC Electric & Gas $.42 $.49
SC Pipeline .03 (.05)
PSNC Energy .21 .20
SCANA Energy-Georgia (1) .12 .13
Corporate and Other Non-regulated, Net (1) (.03) (.03)
Net Earnings per Share from Operations $.75 $.74
(1) Current and prior period results reflect a reclassification of certain
interruptible operations from SCANA Energy-Georgia to SCANA Energy Marketing
Reported Earnings (Loss) per Share Variances
(unaudited)
1st Quarter
2002 Reported Earnings (Loss) Per Share $(2.88)
Variances:
Electric Margin .13
Gas Margin .12
O&M Expense (.10)
Depreciation Expense (.04)
Property Taxes (.02)
Interest Expense (net of AFDC) --
Additional Shares Outstanding (.05)
Other, Net (.03)
Variance in Net Earnings per Share From Operations .01
Cumulative Effect of Accounting Change re: Goodwill 2.20
Impairment of Deutsche Telekom Investment 1.52
Gain on Sale of Deutsche Telekom Stock (.10)
Total Variance 3.63
2003 Reported Earnings Per Share $ .75
Consolidated Operating Statistics
Three Months Ended March 31,
2003 2002 % Change
Electric Operations:
Sales (Million KWH):
Residential 1,708 1,648 3.6
Commercial 1,475 1,408 4.8
Industrial 1,580 1,532 3.1
Other 129 120 7.5
Total Retail 4,892 4,708 3.9
Wholesale 521 640 (18.5)
Total Sales 5,413 5,348 1.2
Customers (Period-End) 563,566 550,627 2.3
Natural Gas Operations:
Sales (MillionTherms):
Residential 326 284 14.8
Commercial 155 130 19.2
Industrial 286 324 (11.7)
Total Retail 767 738 3.9
Sales for Resale 74 79 (6.3)
Transportation Volumes 77 84 (8.3)
Total Sales 918 901 1.9
Customers (Period-End) (2) 1,046,702 1,008,853 3.8
(2) Current and prior period-end natural gas customers reflects a
reclassification of customers at PSNC Energy implemented during 2002.
Weather Data - Electric Service Territory
Three Months Ended March 31,
Actual Percent Change
2003 vs 2002 vs Normal
Heating Degree Days 1,284.5 12.5 6.4
Cooling Degree Days 27.5 (57.0) (29.5)
Security Credit Ratings (as of 04/25/03)
Standard & Poor's Moody's
Rating Outlook Rating Outlook
SCANA
Senior Unsecured BBB+ Stable A3 Stable
South Carolina
Electric & Gas
Senior Secured A- Stable A1 Stable
Commercial Paper A-1 Stable P-1 Stable
PSNC Energy
Senior Unsecured A- Stable A2 Stable
Commercial Paper A-1 Stable P-1 Stable