Exhibit 99.1
PRESS RELEASE DATED FEBRUARY 11, 2005
For Immediate Release
Media Contact: Investor Contact:
Eric Boomhower John Winn
(803) 217-7701 (803) 217-9240
eboomhower@scana.com jwinn@scana.com
SCANA Reports Results for Fourth Quarter and Full Year 2004,
Announces 2005 Earnings Guidance
Columbia, SC, February 11, 2005...SCANA Corporation (NYSE: SCG) today reported
financial results for the fourth quarter and full year 2004 and announced
earnings guidance for 2005.
FULL YEAR RESULTS
For the year ended December 31, 2004, SCANA's reported earnings were $257
million, or $2.30 per share, compared to $282 million, or $2.54 per share, for
2003. Excluding certain items listed in the table below, SCANA's GAAP-adjusted
net earnings from operations for 2004 were $298 million, or $2.67 per share,
compared to $278 million, or $2.50 per share, in 2003.
SCANA's reported earnings are prepared in accordance with Generally Accepted
Accounting Principles (GAAP). SCANA's management believes that, in addition to
reported earnings under GAAP, the GAAP-adjusted net earnings from operations
provides a meaningful representation of the Company's fundamental earnings power
and can aid in performing period-over-period financial analysis and comparison
with peer group data. In management's opinion, the GAAP-adjusted net earnings
from operations is a useful indicator of the financial results of the Company's
primary businesses. This measure is also a basis for management's provision of
earnings guidance and growth projections, and it is used by management in making
resource allocation and other budgetary and operational decisions. This non-GAAP
performance measure is not intended to replace the GAAP measure of net earnings,
but is offered as a supplement to it. A reconciliation of reported (GAAP)
earnings per share to GAAP-adjusted net earnings from operations per share for
the three months and twelve months ended December 31, 2004 and 2003 is provided
in the following table:
3 Months Ended 12 Months Ended
December 31, December 31,
2004 2003 2004 2003
---- ---- ---- ----
Reported (GAAP) Earnings per Share $.37 $.36 $2.30 $2.54
Add:
Impairment Charge on Knology Investment -- .27 .13 .31
Loss on Sale of Knology Investment .08 -- .08 -
Loss on Sale of ITC^DeltaCom Investment .06 -- .06 --
Charge Related to Pending Litigation -- -- .10 --
Deduct::
Gain on Sale of ITC Holding Company Investment -- -- -- .35
GAAP-Adjusted Net Earnings From Operations per Share $.51 $.63 $2.67 $2.50
"We are pleased with the financial results we achieved in 2004," said Kevin
Marsh, senior vice president and chief financial officer. "The Company's 2004
GAAP-adjusted net earnings from operations of $2.67 per share were up 6.8
percent from $2.50 per share in 2003 and in-line with our expectations."
The improvement in SCANA's 2004 GAAP-adjusted net earnings from operations per
share was attributable to higher margins on sales of electricity and natural
gas, which more than offset increases in operation and maintenance expenses,
depreciation and property taxes. The higher electric margin was primarily
attributable to an increase in kilowatt-hour sales of electricity driven by
off-system sales, more favorable weather and solid customer growth. The higher
natural gas margin was primarily attributable to improved results in SCANA's
retail natural gas marketing business in Georgia.
Total kilowatt-hour (KWH) sales of electricity in 2004 were up about 11 percent
compared to 2003. Residential sales were up 6.6 percent, commercial sales
increased 4.4 percent and industrial sales were up about 3.5 percent. Wholesale,
or off-system, sales were up nearly 81 percent, principally reflecting sales
under long-term contracts that began in January 2004. The Company's electric
customer base totaled approximately 585,000 at December 31, 2004, a 2.5 percent
increase compared to year-end 2003.
Total dekatherm sales of natural gas in 2004 were up about 15 percent compared
to 2003. Residential and commercial sales were each up 1.4 percent while
industrial sales rose 11 percent. Transportation volumes were up about 77
percent, reflecting increased throughput at the Company's two transmission
pipeline companies. The number of natural gas customers in the Company's
three-state service area increased 7.1 percent to approximately 1.2 million at
year-end 2004. That growth reflected the acquisition of 47,000 new customers
from Energy America in Georgia in the first quarter of 2004.
"Financially, we continued to grow our businesses profitably, improve our
overall financial position and to increase our annual common dividend in 2004,"
said Marsh. "These factors contributed to a solid total return to our
shareholders."
With the sale of its ITC^DeltaCom and Knology investments late in the year, the
Company has monetized substantially all of its remaining telecommunications
investments. "After-tax cash proceeds from these sales and related tax benefits
totaling approximately $121 million will be used to repay outstanding debt,
improving the Company's overall financial strength," said Marsh.
Marsh noted that SCANA also achieved a number of significant operational
milestones in 2004. "Our generation facilities performed safely and efficiently
and we continued to provide nationally-recognized service to our customers. With
completion of the 875-megawatt Jasper Generating Station, which began commercial
operation on May 1, and the Nuclear Regulatory Commission's approval in April of
a 20-year license extension for the V.C. Summer Nuclear Station, we have helped
ensure the availability of reliable, economically-priced power for our customers
for many years to come. We also completed pipeline expansion projects in South
Carolina and North Carolina that will bring additional supplies of natural gas
to support future growth in both states. As a result of the outstanding efforts
of our employees, we were able to respond in a timely manner to power outages
following a major ice storm in January of 2004 and an unprecedented four
hurricanes and one tropical storm during the summer hurricane season.
Substantially all of the costs associated with power restoration following these
storms was covered by our storm damage reserve mechanism."
In December 2004, the Public Service Commission of South Carolina approved a
$41.4 million, or 2.89 percent, increase in the Company's retail electric base
rates, effective on January 6, 2005. That order included full recovery of the
capital and operating costs related to the Jasper Plant and authorized a return
on common equity of 10.7 percent within an approved range of 10.4 percent to
11.4 percent.
"In 2005, we will continue to focus our efforts on those activities that have
made us successful, including providing safe, reliable supplies of electricity
and natural gas, outstanding customer service and increased value for our
shareholders," said Marsh.
FOURTH QUARTER RESULTS
For the fourth quarter of 2004, SCANA's reported earnings were $42 million, or
$.37 per share, compared to $40 million, or $.36 per share, for the fourth
quarter of 2003. GAAP-adjusted net earnings from operations for the fourth
quarter of 2004 were $57 million, or $.51 per share, compared to $70 million, or
$.63 per share, in 2003.
"The $.12 per share decrease in GAAP-adjusted net earnings per share from
operations was primarily attributable to increases in operation and maintenance
expenses and depreciation expense, including costs associated with operations at
our new Jasper Plant," said Marsh. "The higher expenses more than offset
improved margins on sales of electricity and natural gas."
Despite milder weather, retail sales of electricity were up 2.4 percent compared
to the fourth quarter of 2003. Residential sales were up 1.9 percent while
commercial and industrial sales each rose 2.7 percent. Driven by the long-term,
off-system contract sales that began in January 2004, total sales of electricity
for the quarter were up 9.8 percent.
Retail dekatherm sales of natural gas to ultimate consumers in the fourth
quarter of 2004 were relatively unchanged compared to the same quarter last
year. Lower residential and commercial sales principally reflecting the milder
weather offset higher industrial sales. As a result of improved sales for resale
and transportation volumes, total dekatherm sales of natural gas in the fourth
quarter of 2004 were up about 12 percent compared to the same quarter in 2003.
RESULTS BY MAJOR LINES OF BUSINESS
South Carolina Electric & Gas Company
SCANA's principal subsidiary reported 2004 earnings of $235 million, or $2.11
per share, compared to $221 million, or $1.99 per share, in 2003. The
improvement was due primarily to the higher electric margin, which more than
offset higher expenses. For the fourth quarter of 2004, SCE&G reported earnings
of $40 million, or $.36 per share, compared to $46 million, or $.42 per share in
the same quarter of 2003. Higher expenses and a lower margin on natural gas
sales more than offset an improved electric margin.
PSNC Energy
SCANA's North Carolina-based natural gas distribution business reported earnings
in 2004 of $24 million, or $.21 per share, compared to $31 million, or $.28 per
share, in 2003. Reported earnings in the fourth quarter of 2004 were $11
million, or $.10 per share, compared to $15 million, or $.14 per share, in the
fourth quarter of 2003. The earnings decline in both periods was primarily
attributable to increased expenses and a lower natural gas sales margin
reflecting milder weather.
South Carolina Pipeline Corporation
The Company's intrastate natural gas transmission business reported earnings in
2004 of $10 million, or $.09 per share, compared to $7 million, or $.06 per
share in 2003. That improvement was due primarily to higher margins from
increased transportation volumes. Reported earnings for the fourth quarter of
2004 were $2 million, or $.02 per share, unchanged compared to the fourth
quarter of 2003.
SCANA Energy - Georgia
In 2004, SCANA's retail natural gas business in Georgia reported earnings of $29
million, or $.26 per share, compared to $20 million, or $.18 per share, in 2003.
Earnings in the fourth quarter of 2004 were $6 million, or $.05 per share,
compared to $3 million, or $.03 per share in 2003. The earnings improvement in
both periods was driven by a higher sales margin reflecting more favorable
market conditions and customer growth for the year of nearly 14 percent.
Corporate and Other
SCANA's corporate and other businesses, which include Primesouth, SCANA
Communications, ServiceCare, SCANA Energy Marketing, SCG Pipeline, SCANA
Services and the holding company, recorded a combined loss of $41 million, or
$.37 per share, in 2004 compared to earnings of $3 million, or $.03 per share,
in 2003. Excluding from reported earnings the impact of the monetization and
valuation of the Company's telecommunications investments in both periods and
the charge in 2004 related to pending litigation associated with the sale of the
Company's propane assets in 1999, these companies recorded breakeven results in
2004 compared to a GAAP-adjusted net loss from operations of $1 million, or $.01
per share, in 2003.
For the fourth quarter of 2004, these businesses reported a loss of $18 million,
or $.16 per share, compared to a reported loss of $27 million, or $.25 per
share, in the same quarter in 2003. Excluding from reported earnings the impact
of the monetization and valuation of the Company's telecommunications
investments in both periods, this group recorded a GAAP-adjusted net loss from
operations in the fourth quarter of 2004 of $3 million, or $.02 per share,
compared to earnings of $3 million, or $.02 per share, in 2003. That $.04 per
share decline reflected less favorable results in the Company's energy marketing
business and higher expenses at the holding company.
EXPLANATION OF ITEMS INCLUDED IN REPORTED (GAAP) EARNINGS BUT EXCLUDED FROM
GAAP-ADJUSTED NET EARNINGS FROM OPERATIONS
In the third quarter of 2004, the Company recorded an after-tax, non-cash
impairment of approximately $15 million, or 13 cents per share, related to the
valuation of its investment in Knology, a regional telecommunications provider
headquartered in West Point, Georgia, and an after-tax charge of $11 million, or
10 cents per share, related to pending litigation associated with the sale of
the Company's propane assets in 1999. In the fourth quarter of 2004, the Company
recorded a loss of approximately $9 million, or $.08 cents per share, on the
sale of its investment in Knology, and a loss of approximately $6 million, or
$.06 cents per share, from the sale of its investment in ITC^DeltaCom, a
provider of telecommunications services in the Southeast.
During 2003, the Company recorded after-tax, non-cash impairments totaling $35
million, or $.31 per share, on its investment in Knology, and an after-tax gain
of $39 million, or $.35 per share, from the sale of the Company's investment in
ITC Holding Company.
2005 EARNINGS OUTLOOK
For 2005, the Company estimates that earnings will be in the range of $2.65 -
$2.85 per share.
This guidance assumes normal weather in the Company's electric and natural gas
service areas and excludes any potential gains or losses from litigation or
sales of certain assets. Other factors that may impact future earnings are
discussed in the Company's Securities and Exchange Commission filings. The
Company's goal is to achieve average annual earnings growth of 4-6 percent over
the next 3-5 years.
CONFERENCE CALL NOTICE
SCANA will host its quarterly conference call for security analysts at 10:00
a.m. Eastern Time today. The call-in numbers for the conference call are
1-800-884-5695 (US/Canada) and 1-617-786-2960 (International). The event code is
55963920. 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 February 25, 2005.
The telephone replay numbers are 1-888-286-8010 (US/Canada) and 1-617-801-6888
(International). The event code for the telephone replay is 82509137.
All interested persons, including investors, media and the general public, may
listen to a live web cast of the conference call at the Company's web site at
www.scana.com . Participants should go to the web site at least 5 to 10 minutes
prior to the call start time and follow the instructions. A replay of the web
cast will be available on the Company's web site approximately 2 hours after
conclusion of the call through February 25, 2004.
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 and other energy-related businesses.
The Company serves approximately 585,000 electric customers in South Carolina
and more than one million natural gas customers in South Carolina, North
Carolina and Georgia. Information about SCANA and its businesses is available on
the Company's website at www.scana.com.
SAFE HARBOR STATEMENT
Statements included in this press release which are not statements of historical
fact are intended to be, and are hereby identified as, "forward-looking
statements" for purposes of the safe harbor provided by Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. 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) regulatory actions or changes in
the utility and non-utility regulatory environment, (3) current and future
litigation, (4) changes in the economy, especially in areas served by the
Company's subsidiaries, (5) the impact of competition from other energy
suppliers, including competition from alternate fuels in industrial
interruptible markets, (6) growth opportunities for the Company's regulated and
diversified subsidiaries, (7) the results of financing efforts, (8) changes in
the Company's accounting policies, (9) weather conditions, especially in areas
served by the Company's subsidiaries, (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 United States 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 Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
---- ---- ---- ----
Operating Revenues:
Electric $381 $345 $1,688 $1,466
Gas-Regulated 350 311 1,126 1,086
Gas-Non-regulated 322 214 1,071 864
--- --- ----- ---
Total Operating Revenues 1,053 870 3,885 3,416
----- --- ----- -----
Operating Expenses:
Fuel and purchased power 120 101 518 398
Gas purchased for resale 548 404 1,753 1,532
Other operation and maintenance 167 138 608 558
Depreciation and amortization 67 58 265 238
Other taxes 33 36 145 139
-- -- --- ---
Total Operating Expenses 935 737 3,289 2,865
--- --- ----- -----
Operating Income 118 133 596 551
--- --- --- ---
Other Income (Expense), Net (9) (26) (7) 75
Interest Charges, Net 51 50 202 200
Income Tax Expense 14 15 123 135
Preferred Dividend Requirement
of SCE&G - Mandatorily Redeemable
Preferred Securities - - - (2)
Preferred Stock Cash Dividends
of SCE&G (2) (2) (7) (7)
--- --- --- --- -- ---
Net Income $42 $40 $257 $282
--- --- ---- ----
Common Stock Data:
Wgt. Avg. Common Shares Outstanding 112.4 110.8 111.6 110.8
Basic & Diluted Reported Earnings Per Share $.37 $.36 $2.30 $2.54
Consolidated Condensed Balance Sheets
(Millions) (Unaudited)
December 31,
2004 2003
ASSETS:
Utility Plant, Net $6,762 $6,417
Other Property and Investments 216 318
Current Assets 1,149 893
Regulatory Assets and Deferred Debits 869 830
--- ---
Total Assets $8,996 $8,458
------ -----
CAPITALIZATION AND LIABILITIES
Capitalization:
Common Equity $2,451 $2,306
Preferred Stock 115 115
Long-term Debt, Net 3,186 3,225
----- -----
Total Capitalization 5,752 5,646
----- -- -----
Current Liabilities:
Short-Term Borrowings 211 195
Current Portion of Long-Term Debt 204 202
Other Current Liabilities 775 626
--- ---
Total Current Liabilities 1,190 1,023
----- -----
Regulatory Liabilities and Deferred Credits 2,054 1,789
----- -----
Total Capitalization and Liabilities $8,996 $8,458
------ -----
Reported (GAAP) Earnings (Loss) per Share by Company:
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
---- ---- ---- ----
SC Electric & Gas $.36 $.42 $2.11 $1.99
PSNC Energy .10 .14 .21 .28
SC Pipeline .02 .02 .09 .06
SCANA Energy-Georgia .05 .03 .26 .18
Corporate and Other, Net (.16) (.25) (.37) .03
----- ---- ----- - ---
Reported (GAAP) Earnings per Share $.37 $.36 $2.30 $2.54
---- ---- ----- ----
GAAP-Adjusted Net Earnings (Loss) per Share From Operations by Company:
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
---- ---- ---- ----
SC Electric & Gas .36 $.42 $2.11 $1.99
PSNC Energy .10 .14 .21 .28
SC Pipeline .02 .02 .09 .06
SCANA Energy-Georgia .05 .03 .26 .18
Corporate and Other, Net (.02) .02 .00 (.01)
----- --- --- - -----
GAAP-Adjusted Net Earnings from Operations per Share $.51 $.63 $2.67 $2.50
---- ---- ----- -----
Variances in Reported (GAAP) Earnings (Loss) per Share:
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2003 Basic & Diluted Reported (GAAP) Earnings Per Share .36 2.54
Variances:
Electric Margin .10 .56
Gas Margin .03 .15
O&M Expense (.16) (.27)
Depreciation Expense (.05) (.15)
Property Taxes .01 (.04)
Interest Expense (net of AFUDC) (.01) (.01)
Additional Shares Outstanding (Dilution) (.01) (.01)
Other, Net (.03) (.06)
----- -----
Variance in GAAP-Adjusted Net Earnings From Operations per Share (.12) .17
Gain on Sale of ITC Holding Company Investment .00 (.35)
Impairment Charge on Knology Investment .27 .18
Loss on Sale of Knology Investment (.08) (.08)
Loss on Sale of ITC^DeltaCom Investment (.06) (.06)
Charge Related to Pending Litigation .00 (.10)
--- -----
Variance in Reported (GAAP) Earnings per Share .01 (.24)
--- -----
2004 Basic & Diluted Reported (GAAP) Earnings Per Share .37 2.30
--- ----
Consolidated Operating Statistics:
Three Months Ended December 31, Twelve Months Ended December 31,
2004 2003 % Change 2004 2003 % Change
Electric Operations:
Sales (Million KWH):
Residential 1,645 1,615 1.9 7,460 6,998 6.6
Commercial 1,616 1,574 2.7 6,900 6,607 4.4
Industrial 1,653 1,610 2.7 6,775 6,548 3.5
Other 123 118 4.2 526 500 5.2
--- --- --- --- ---
Total Retail 5,037 4,917 2.4 21,661 20,653 4.9
Wholesale 801 399 100.8 3,370 1,863 80.9
--- --- --- ----- -----
Total Sales 5,838 5,316 9.8 25,031 22,516 11.2
----- ----- ------ ------
Customers (Period-End) 585,264 570,940 2.5
Natural Gas Operations:
Sales (Thousand Dekatherms):
Residential 21,045 21,520 (2.2) 66,452 65,515 1.4
Commercial 12,115 12,428 (2.5) 40,855 40,274 1.4
Industrial 27,323 26,137 4.5 122,358 110,183 11.0
------ ------ ------- -------
Sales to Ultimate Consumers 60,483 60,085 0.7 229,665 215,972 6.3
Sales for Resale 5,141 2,355 118.3 12,519 13,817 (9.4)
Transportation Volumes 16,334 10,793 51.3 64,023 36,214 76.8
------ ------ ------ ------
Total Sales 81,958 73,233 11.9 306,207 266,003 15.1
------ ------ ------- -------
Customers (Period-End) 1,164,492 1,087,255 7.1
Weather Data - Electric Service Territory:
Three Months Ended December 31, Twelve Months Ended December 31,
Actual Percent Change Actual Percent Change
2004 vs 2003 vs Normal 2004 vs 2003 vs Normal
Heating Degree Days 816 (5.7) (0.9) 2,284 1.3 6.0
Cooling Degree Days 183 52.1 20.8 2,414 14.7 3.5
Security Credit Ratings (as of 02/11/05):
Standard & Poor's Moody's Fitch
Rating Outlook Rating Outlook Rating Outlook
SCANA Corporation:
Corporate / Issuer Rating A- Stable A3 Negative - -
Senior Unsecured BBB+ Stable A3 Negative A- Stable
South Carolina
Electric & Gas Company:
Corporate / Issuer Rating A- Stable A2 Negative - -
Senior Secured A- Stable A1 Negative A+ Stable
Senior Unsecured BBB+ Stable A2 Negative A Stable
Commercial Paper A-2 Stable P-1 Negative F1 Stable
PSNC Energy:
Senior Unsecured A- Stable A2 Stable NR -
Commercial Paper A-2 Stable P-1 Stable NR -
NR = Not Rated