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 Second Quarter 2003
Columbia, SC, July 25, 2003...SCANA Corporation (NYSE: SCG) announced today that
reported earnings for the three months ended June 30, 2003 were $74 million, or
67 cents per share. These results include a net after-tax gain of $32 million,
or 29 cents per share, related to the continued monetization and valuation of
the Company's telecommunications assets. By comparison, reported earnings for
the second quarter of 2002 were $40 million, or 38 cents per share. Those prior
period results included a net after-tax gain of $2 million, or 2 cents per
share, related to the monetization and valuation of telecommunications assets.
Excluding from reported earnings the effects of the monetization and valuation
of telecommunications assets, GAAP-adjusted net earnings from operations for the
second quarter of 2003 were $42 million, or 38 cents per share, compared to $38
million, or 36 cents per share, in the same quarter of 2002.
Reported earnings (loss) are prepared in accordance with Generally Accepted
Accounting Principles (GAAP). SCANA's management believes that, in addition to
reported earnings (loss) under GAAP, the GAAP-adjusted net earnings from
operations provides a meaningful representation of the Company's fundamental
earnings power and improves comparability of period-over-period financial
performance. A reconciliation of reported (GAAP) earnings (loss) per share to
GAAP-adjusted net earnings from operations per share for the three months and
six months ended June 30, 2003 and 2002 is provided in the following table:
3 Months Ended June 30, 6 Months Ended June 30,
2003 2002 2003 2002
---- ---- ---- ----
Reported (GAAP) Earnings (Loss) per Share $.67 $.38 $1.42 $(2.50)
Add:
Impairment Charge on Knology Investment .04 - .04 -
Impairment Charge on ITC^DeltaCom Investment - .07 - .07
Impairment Charge on Deutsche Telekom Investment - - - 1.52
Cumulative Effect of Accounting Change re: Goodwill - - - 2.20
Deduct:
Gain on Sale of ITC Holding Company Investment .33 - .33 -
Gain on Sale of Radio Network - .09 - .09
Gain on Sale of Deutsche Telekom Stock - - - .10
Net Earnings From Operations per Share $.38 $.36 $1.13 $1.10
"We are pleased with our second quarter financial performance, especially given
the unfavorable impact that milder weather had on our electric margins," said
Kevin Marsh, senior vice president and chief financial officer. "Average
temperatures across our electric service territory during the second quarter, as
measured by cooling degree days, were 16 percent cooler than the second quarter
of last year and 10 percent cooler than normal. The milder weather reduced
second quarter earnings by 4 cents per share compared to the second quarter of
last year."
SCANA's reported earnings for the first six months of 2003 were $158 million, or
$1.42 per share, compared to a reported loss of $262 million, or $2.50 per
share, for the same period in 2002. GAAP-adjusted net earnings from operations,
which exclude from reported earnings the cumulative effects of mandated changes
in accounting principles and the effects of sales and impairment charges related
to telecommunications investments, were $126 million, or $1.13 per share, for
the first six months of 2003 compared to $115 million, or $1.10 per share, for
the same period last year.
"Through the first six months of this year, net earnings from operations are 3
cents per share ahead of results at the same time last year," said Marsh. "As we
begin the second half of the year, our commitment is to execute our strategic
plan to achieve the financial, operational and customer service goals we set for
the year by continuing to focus on the fundamentals that have made us
successful."
REGULATED OPERATIONS
South Carolina Electric & Gas Company
Reported earnings in the second quarter of 2003 at South Carolina Electric & Gas
Company (SCE&G), SCANA's principal subsidiary, were $40 million, or 36 cents per
share, compared to $39 million, or 37 cents per share, in the same quarter last
year. The favorable impact of the retail electric rate increase that was
effective in February 2003 was offset by related increases in operating and
maintenance expenses, depreciation expense, interest expense and property taxes,
and by milder weather.
The milder weather, combined with a lackluster economy, resulted in a 1.6
percent decline in total kilowatt-hour sales of electricity in the second
quarter of 2003 compared to the same quarter last year. Residential sales
increased 1.5 percent, commercial sales were down less than 1 percent and
industrial sales declined 2.9 percent.
"The slight increase in residential electricity sales for the quarter is
attributable to the solid customer growth we have experienced over the past 12
months," said Marsh. At June 30, 2003, SCE&G was serving approximately 563,000
electric customers, an increase of about 2.0 percent over the past year.
PSNC Energy
PSNC Energy, the Company's North Carolina-based retail natural gas distribution
subsidiary, had a seasonal reported loss of $2 million, or 2 cents per share, in
the second quarter of 2003, unchanged compared to the second quarter of 2002.
Higher sales margins, driven by good customer growth and cooler weather early in
the quarter, were offset by higher operating and maintenance expenses. At June
30, 2003, PSNC Energy was serving approximately 377,000 customers, an increase
of 2.8 percent over the last twelve months.
South Carolina Pipeline Corporation
South Carolina Pipeline, SCANA's gas transmission subsidiary, had reported
earnings of $1 million, or 1 cent per share, in the second quarter of 2003, down
from $3 million, or 3 cents per share in the same quarter last year. That
decline primarily reflects the negative impact on sales margins of high
wholesale natural gas prices, which resulted in intense competition with
alternative fuels in industrial interruptible markets. Pipeline's earnings were
also negatively affected by reduced demand for natural gas for electric
generation as a result of milder weather.
NON-REGULATED OPERATIONS
SCANA Energy - Georgia
SCANA Energy, the Company's retail natural gas marketing business in Georgia,
had reported earnings of $3 million, or 3 cents per share, in the second quarter
of 2003, compared to breakeven results in the same quarter last year. More
favorable market conditions resulted in higher sales margins, which more than
offset higher operating and customer service expenses.
At June 30, 2003, SCANA Energy was serving approximately 386,000 customers,
maintaining its position as the second largest natural gas marketer in Georgia
with about a 25 percent market share.
Corporate and Other Non-Regulated
SCANA's other non-regulated businesses had combined reported earnings of $31
million, or 29 cents per share, in the second quarter of 2003. That compares to
breakeven results in the second quarter of 2002. Excluding from reported
earnings the effects of the monetization and valuation of telecommunications
assets in both quarters, GAAP-adjusted net earnings from operations were
breakeven in the second quarter of 2003, compared to a GAAP-adjusted net loss
from operations in the second quarter of 2002 of $2 million, or 2 cents per
share. That improvement was due primarily to lower interest expense.
On May 9, 2003, West Corporation (Nasdaq: WSTC), a communications company
headquartered in Omaha, Nebraska, completed the acquisition of InterCall from
ITC Holding Company, a communications company headquartered in West Point,
Georgia, in a $400 million cash transaction. InterCall, based in Chicago, is a
provider of audio, web and video conferencing solutions. Based on its
proportionate equity ownership in ITC Holding Company, SCANA Communications
Holdings, Inc., an indirect, wholly-owned subsidiary of SCANA Corporation,
recorded an after-tax gain of $37 million, or 33 cents per share, in the second
quarter of 2003. The cash proceeds have been applied to debt reduction at SCANA.
In the second quarter of 2003, SCANA Communications Holdings, Inc. also recorded
an impairment charge on its investment in Knology, Inc. of $5 million, or 4
cents per share. Headquartered in West Point, Georgia, Knology is a leading
provider of interactive voice, video and data services, including cable TV, in
the Southeast.
2003 OUTLOOK
The Company reaffirms its previous guidance that GAAP-adjusted net earnings from
operations in 2003 will be in the range of $2.50 - $2.60 per share. The
Company's long-term goal is to achieve a 6 - 8% average annual growth in
GAAP-adjusted net earnings from operations per share over the next 3-5 years.
Taking into consideration the effects of the monetization and valuation of
telecommunications investments during the first half of 2003, the Company
anticipates that reported (GAAP) earnings in 2003 will be 29 cents per share
higher than the GAAP-adjusted net earnings from operations. The 2003 guidance
assumes normal weather in the Company's electric and natural gas service areas
for the remainder of the year and excludes any potential gains or losses from
investing activities or sales of certain 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 August 8, 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 1575871. A live,
listen-only webcast of the conference call will be available online at
www.scana.com or at www.videonewswire.com/SCG/072503. 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 August 8, 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 Operations
(Millions, except per share amounts) (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
Operating Revenues:
Electric $356 $349 $ 692 $ 651
Gas-Regulated 193 155 620 451
Gas-Non-regulated 177 145 483 369
Total Operating Revenues 726 649 1,795 1,471
Operating Expenses:
Fuel and purchased power 96 108 187 187
Gas purchased for resale 293 234 865 613
Other operation and maintenance 141 131 285 258
Depreciation and amortization 60 55 120 108
Other taxes 36 32 70 63
Total Operating Expenses 626 560 1,527 1,229
Operating Income 100 89 268 242
Other Income (Expense), Net 66 24 82 (187)
Interest Charges, Net 51 51 102 102
Income Tax Expense (Benefit) 38 19 84 (21)
Preferred Dividend Requirement
of SCE&G - Mandatorily Redeemable
Preferred Securities (1) (1) (2) (2)
Preferred Stock Cash Dividends
of SCE&G (2) (2) (4) (4)
Net Income (Loss) Before Cumulative
Effect of Accounting Change 74 40 158 (32)
Cumulative Effect of Accounting Change,
Net of Taxes - - - (230)
Net Income (Loss) $ 74 $ 40 $ 158 $ (262)
Common Stock Data:
Earnings (Loss) Per Share Before
Cumulative Effect of Accounting Change $.67 $ .38 $1.42 $ (.30)
Cumulative Effect of Accounting Change - - - (2.20)
Reported Earnings (Loss) Per Share $.67 $ .38 $1.42 $(2.50)
Wtg. Avg. Common Shares Outstanding 110.8 104.7 110.8 104.7
Consolidated Condensed Balance Sheets
(Millions) (Unaudited)
June 30, December 31,
2003 2002
ASSETS
Utility Plant, Net $5,784 $5,474
Other Property and Investments 310 326
Current Assets 904 1,160
Deferred Debits 795 794
Total Assets $ 7,793 $7,754
CAPITALIZATION AND LIABILITIES
Capitalization:
Common Equity $2,258 $2,177
Preferred Stock 115 115
SCE&G Obligated Mandatorily Redeemable Preferred Stock - 50
Long-term Debt, Net 2,930 2,834
Total Capitalization 5,303 5,176
Current Liabilities:
Short-Term Borrowings 212 209
Current Portion of Long-Term Debt 403 413
Other Current Liabilities 510 651
Total Current Liabilities 1,125 1,273
Deferred Credits 1,365 1,305
Total Capitalization and Liabilities $7,793 $7,754
Reported (GAAP) Earnings (Loss) per Share by Company:
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2003 2002 2003 2002
SC Electric & Gas $.36 $.37 $ .78 $ .86
PSNC Energy (.02) (.02) .20 (2.02)
SC Pipeline .01 .03 .04 (.02)
SCANA Energy-Georgia (1) .03 .00 .15 .13
Corporate and Other Non-regulated, Net (1) .29 .00 .25 (1.45)
Reported (GAAP) Earnings (Loss) per Share $.67 $.38 $1.42 $(2.50)
GAAP-Adjusted Net Earnings (Loss) From Operations per Share by Company:
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2003 2002 2003 2002
SC Electric & Gas $.36 $.37 $.78 $ .86
PSNC Energy (.02) (.02) .20 .18
SC Pipeline .01 .03 .04 (.02)
SCANA Energy-Georgia (1) .03 .00 .15 .13
Corporate and Other Non-regulated, Net (1) .00 (.02) (.04) (.05)
GAAP-Adjusted Net Earnings from Operations per Share $.38 $.36 $1.13 $1.10
(1) Current and prior period results reflect a reclassification of certain
interruptible operations from SCANA Energy-Georgia to SCANA Energy Marketing
Variances in Reported (GAAP) Earnings (Loss) per Share:
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
2002 Reported (GAAP) Earnings (Loss) Per Share $.38 $(2.50)
Variances:
Electric Margin:
Change in Rates .12 .16
Customer Growth .04 .09
Weather (.04) (.01)
----- -----
Total Electric Margin .12 .24
Gas Margin .06 .18
O&M Expense (.06) (.16)
Depreciation Expense (.03) (.07)
Property Taxes (.02) (.04)
Interest Expense (net of AFDC) - -
Additional Shares Outstanding (Dilution) (.04) (.08)
Other, Net (.01) (.04)
----- -----
Variance in GAAP-Adjusted Net Earnings From Operations per Share .02 .03
Gain on Sale of ITC Holding Company Investment .33 .33
Impairment Charge on Knology Investment (.04) (.04)
Gain on Sale of Radio Network (.09) (.09)
Impairment Charge on ITC^DeltaCom Investment .07 .07
Cumulative Effect of Accounting Change re: Goodwill - 2.20
Impairment Charge on Deutsche Telekom Investment - 1.52
Gain on Sale of Deutsche Telekom Stock - (.10)
Variance in Reported (GAAP) Earnings per Share .29 3.92
2003 Reported (GAAP) Earnings Per Share $.67 $1.42
Consolidated Operating Statistics
Three Months Ended June 30, Six Months Ended June 30,
2003 2002 % Change 2003 2002 % Change
Electric Operations:
Sales (Million KWH):
Residential 1,604 1,581 1.5 3,312 3,229 2.6
Commercial 1,652 1,658 (0.4) 3,127 3,065 2.0
Industrial 1,656 1,705 (2.9) 3,236 3,238 (0.1)
Other 124 138 (10.1) 253 258 (1.9)
Total Retail 5,036 5,082 (0.9) 9,928 9,790 1.4
Wholesale 426 471 (9.6) 947 1,111 (14.8)
Total Sales 5,462 5,553 (1.6) 10,875 10,901 (0.2)
Customers (Period-End) 563,411 552,702 1.9
Natural Gas Operations:
Sales (MillionTherms):
Residential 72 59 22.0 398 343 16.0
Commercial 67 58 15.5 222 187 18.7
Industrial 266 310 (14.2) 551 634 (13.1)
Total Retail 405 427 (5.2) 1,171 1,164 0.6
Sales for Resale 19 80 (76.3) 94 160 (41.3)
Transportation Volumes 93 73 27.4 170 157 8.3
Total Sales 517 580 (10.9) 1,435 1,481 (3.1)
Customers (Period-End) (2) 1,033,271 991,426 4.2
(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 June 30, Six Months Ended June 30,
Actual Percent Change Actual Percent Change
2003 vs 2002 vs Normal 2003 vs 2002 vs Normal
Heating Degree Days 98 32.4 (18.0) 1,383 13.7 4.2
Cooling Degree Days 685 (15.8) (9.9) 713 (18.8) (10.8)
Security Credit Ratings (as of 07/25/03):
Standard & Poor's Moody's
Rating Outlook Rating Outlook
SCANA Corporation:
Corporate/Issuer Rating A- Stable A3 Stable
Senior Unsecured BBB+ Stable A3 Stable
South Carolina
Electric & Gas Company:
Corporate/Issuer Rating A- Stable A2 Stable
Senior Secured A- Stable A1 Stable
Commercial Paper A-2 Stable P-1 Stable
PSNC Energy:
Senior Unsecured A- Stable A2 Stable
Commercial Paper A-2 Stable P-1 Stable