Exhibit 99.1
PRESS RELEASE DATED APRIL 29, 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 Financial Results for First Quarter 2005
Columbia, SC, April 29, 2005...SCANA Corporation (NYSE: SCG) today reported
consolidated earnings for the three months ended March 31, 2005 of $101 million,
or 89 cents per share, compared to $101 million, or 91 cents per share, for the
same period in 2004. SCANA's reported earnings are prepared in accordance with
Generally Accepted Accounting Principles (GAAP).
"From an operations perspective, higher margins on sales of electricity and
natural gas in the first quarter of 2005 were offset by increases in operating
and maintenance expenses, depreciation and interest expense," said Kevin Marsh,
senior vice president and chief financial officer. "The higher expenses included
costs associated with the 875 megawatt Jasper Electric Generating Station, which
went into commercial operation in May of last year. Earnings per share was
reduced 2 cents per share as a result of dilution from the issuance of common
stock through the Company's stock plans. Proceeds from those sales are being
applied to debt reduction."
The electric sales margin in the first quarter increased 5 cents per share
compared to the same quarter last year, reflecting the 2.89 percent retail
electric rate increase that was effective on January 6, 2005, and customer
growth. However, milder weather, which contributed to a decline in sales of
electricity compared to the first quarter of last year, reduced comparative
quarterly earnings by 3 cents per share and was also a factor in a decrease in
off-system sales of electricity that reduced earnings by 1 cent per share.
The weather across the Company's electric service area during the quarter, as
measured by heating degree days, was 12 percent milder than in the same quarter
of 2004. That contributed to a 1.2 percent decrease in retail kilowatt-hour
sales of electricity. Residential sales were down 2.0 percent, commercial sales
were flat and industrial sales were down 1.4 percent. Wholesale, or off-system,
sales were down 8.5 percent, also due in part to milder weather.
The natural gas sales margin in the first quarter was up 6 cents per share
compared to the first quarter of 2004. "While margins in our regulated natural
gas businesses in South Carolina and North Carolina were up slightly due mainly
to customer growth, most of that total margin increase reflected more favorable
market conditions and customer growth in our natural gas marketing business in
Georgia," said Marsh.
Dekatherm sales of natural gas to ultimate (retail) consumers in the first
quarter of 2004 were relatively unchanged compared to the first quarter of 2004.
Declines in residential and commercial sales of 3.2 percent and 6.6 percent,
respectively, principally reflecting the milder weather, were offset by an
increase in industrial sales of 7.0 percent. As a result of higher sales for
resale and transportation volumes, total dekatherm sales of natural gas in the
first quarter of 2005 were up 8.3 percent. At March 31, 2005, the Company was
serving approximately 1.2 million natural gas customers in South Carolina, North
Carolina and Georgia, up 2.8 percent from the same time last year.
"Our first quarter results represent a solid start to the year and keep us on
track to reach our 2005 targeted earnings of $2.65 - $2.85 per share," said
Marsh. "We will continue to focus our efforts on achieving the highest operating
and customer service standards while providing a competitive total return to our
shareholders."
RESULTS BY MAJOR LINES OF BUSINESS
South Carolina Electric & Gas Company
South Carolina Electric & Gas Company (SCE&G), SCANA's principal subsidiary,
reported earnings in the first quarter of 2005 of $52 million, or 46 cents per
share, down from $54 million, or 49 cents per share, in the same quarter last
year. That decline was due mainly to lower sales of electricity due to milder
weather, and to higher expenses. At March 31, 2005, SCE&G was serving
approximately 590,000 electric customers and 286,000 natural gas customers,
representing increases of 2.8 percent and 2.3 percent, respectively, from the
same date last year.
Construction of the back-up dam at Lake Murray, which was required to comply
with new earthquake safety standards mandated by the Federal Energy Regulatory
Commission, is nearing completion. The $275 million (excluding allowance for
funds used during construction) project is on budget and scheduled for
completion this spring.
PSNC Energy
PSNC Energy, SCANA's retail natural gas subsidiary headquartered in Gastonia,
North Carolina, reported earnings of $24 million, or 21 cents per share, in the
first quarter of 2005, compared to $23 million, or 20 cents per share, in the
first quarter of 2004. The improvement was due primarily to a higher sales
margin driven by customer growth. At March 31, 2005, PSNC Energy was serving
approximately 414,000 natural gas customers, an increase of 4.1 percent from the
same date last year.
South Carolina Pipeline Corporation
South Carolina Pipeline Corporation, SCANA's intrastate natural gas transmission
subsidiary, reported earnings in the first quarter of 2005 of $4 million, or 3
cents per share, compared to earnings of $3 million, or 3 cents per share, in
the first quarter of 2004. Improved margins from higher transportation volumes
were largely offset by increased expenses.
SCANA Energy - Georgia
SCANA Energy, the Company's retail natural gas marketing business in Georgia,
reported earnings of $22 million, or 20 cents per share, in the first quarter of
2005, compared to $21 million, or 19 cents per share, in the first quarter of
2004. An improved sales margin resulting from customer growth and favorable
market conditions more than offset higher operating and customer service
expenses. At March 31, 2005, SCANA Energy was serving more than 470,000
customers, maintaining its position as the number two marketer in Georgia.
Corporate and Other
SCANA's other businesses, which include Primesouth, SCANA Communications,
ServiceCare, SCANA Energy Marketing, SCG Pipeline, SCANA Services and the
holding company, collectively recorded a loss of $1 million, or 1 cent per
share, compared to breakeven results in the first quarter of 2004. Higher
interest expense caused by an increase in interest rates on short-term debt
contributed to that decline.
RETAIL NATURAL GAS RATE FILING IN SOUTH CAROLINA
On April 26, 2005, SCE&G filed an application with the Public Service Commission
of South Carolina requesting a 7.09 percent increase in retail natural gas base
rates. If approved, the new rates would produce approximately $28 million in
additional annual revenues based on an adjusted test year ended December 31,
2004. SCE&G's last natural gas base rate increase was in 1989. If approved, the
new rates would go into effect in November 2005.
2005 OUTLOOK
The Company reaffirms its previous guidance that 2005 earnings are expected to
be in the range of $2.65 - $2.85 per share. The 2005 guidance assumes normal
weather in the Company's electric and natural gas service areas over the rest of
the year. 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
1-800-901-5248 (US/Canada) and 1-617-786-4512 (International). The pass code is
55290548. Participants should call in 5 to 10 minutes prior to the scheduled
start time. A replay of the conference call will be available approximately 2
hours after conclusion of the call through May 13, 2005. The telephone replay
numbers are 1-888-286-8010 (US/Canada) and 1-617-801-6888 (International). The
pass code for the telephone replay is 11595579.
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 also be available on the Company's web site approximately 2 hours
after conclusion of the call through May 13, 2005.
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.
Information about SCANA and its businesses is available on the Company's web
site 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
Condensed Consolidated Statements of Income
(Millions, except per share amounts) (Unaudited)
Three Months Ended
March 31,
2005 2004
Operating Revenues:
Electric $415 $380
Gas-Regulated 460 426
Gas-Non-regulated 391 330
--- ---
Total Operating Revenues 1,266 1,136
----- -----
Operating Expenses:
Fuel used in electric generation 128 95
Purchased power 7 13
Gas purchased for resale 661 577
Other operation and maintenance 158 155
Depreciation and amortization (1) 245 63
Other taxes 39 39
-- --
Total Operating Expenses (1) 1,238 942
----- ---
Operating Income (1) 28 194
-- ---
Other Income, Net 13 13
Interest Charges, Net (54) (50)
Income Tax (Expense) Benefit (1) 179 (55)
Earnings (Losses) from Equity Method Investments (1) (63) 1
Preferred Stock Cash Dividends of SCE&G (2)
---
(2)
Net Income $101 $101
---- ----
Common Stock Data:
Wtg. Avg. Common Shares Outstanding 112.9 110.9
Basic and Diluted Reported Earnings Per Share $.89 $.91
Note (1): In January 2005, the Public Service Commission of South Carolina
approved an accounting method which allows the Company to recover the cost of
the Lake Murray back-up dam project through the application of net synthetic
fuel tax credits generated from its synthetic fuel partnerships. Under this
methodology, beginning January 1, 2005, the Company recognized its accumulated
synthetic fuel tax credits to offset an equal amount of accelerated depreciation
on the dam project, net of partnership losses and income tax benefits.
Recognition of accelerated depreciation related to the back-up dam costs will
continue quarterly to the extent net synthetic fuel tax credits are earned,
which is anticipated to be through 2007. While these entries resulted in a
reduction in operating income for the 3 months ended March 31, 2005, there was
no impact on net income as shown in the Income Statement Impact table below.
Income Statement Impact: Balance Sheet Impact:
Synthetic fuel tax credits recognized $144 Dam costs incurred through 1/1/05, incl. AFC $263
Partnership losses recognized (63) Dam costs incurred for quarter ended 3/31/05 11
Tax benefit of depreciation and Carrying costs capitalized 3
partnership losses 89 Accelerated depreciation recognized (170)
-----
Accelerated depreciation recognized (170) Unrecovered Dam Costs at 3/31/05 $107
----- ----
Impact to Net Income $ 0_
----
Condensed Consolidated Balance Sheets
(Millions) (Unaudited)
March 31, December 31,
2005 2004
---- ----
ASSETS
Utility Plant, Net $6,604 $6,762
Other Property and Investments 216 216
Current Assets 1,283 1,149
Deferred Debits 838 869
----- --- ----- ---
Total Assets $8,941 $8,996
----- -----
CAPITALIZATION AND LIABILITIES
Capitalization:
Common Equity $2,541 $2,451
Preferred Stock 115 115
Long-term Debt, Net 3,373 3,186
-- ----- - -----
Total Capitalization 6,029 5,752
-- ----- - -----
Current Liabilities:
Short-Term Borrowings 185 211
Current Portion of Long-Term Debt 204 204
Other Current Liabilities 573 775
--- ---- ---
Total Current Liabilities 962 1,190
--- - -----
Deferred Credits 1,950 2,054
----- - -----
Total Capitalization and Liabilities $8,941 $8,996
----- -----
Reported Earnings (Loss) per Share by Company (GAAP Basis):
(unaudited)
Three Months Ended March 31,
2005 2004
---- ----
SC Electric & Gas $.46 $.49
PSNC Energy .21 .20
SC Pipeline .03 .03
SCANA Energy-Georgia .20 .19
Corporate and Other (.01) .00
----- ---
Basic and Diluted Reported Earnings per Share $.89 $.91
---- ----
Variances in Reported (GAAP) Earnings (Loss) per Share (2):
(unaudited)
Three Months Ended March 31,
2004 Basic and Diluted Reported (GAAP) Earnings Per Share $.91
Variances:
Electric Margin .05
Gas Margin .06
O&M Expense (.02)
Depreciation Expense (.07)
Interest Expense (net of AFC) (.02)
Dilution (.02)
-----
Variance in Basic and Diluted Reported (GAAP) Earnings per Share (.02)
2005 Basic and Diluted Reported (GAAP) Earnings Per Share $.89
Note (2): This variance analysis reflects earnings per share (EPS) components on
an after-tax basis, with income tax benefits applied as per the January 6, 2005
electric rate order. See Note (1) to the Condensed Consolidated Statements of
Income.
Consolidated Operating Statistics
Three Months Ended March 31,
2005 2004 % Change
Electric Operations:
Sales (Million KWH):
Residential 1,795 1,832 (2.0)
Commercial 1,548 1,547 0.1
Industrial 1,604 1,627 (1.4)
Other 120 124 (3.2)
--- ---
Total Retail 5,067 5,130 (1.2)
Wholesale 836 914 (8.5)
--- --- ---
Total Sales 5,903 6,044 (2.3)
----- -----
Customers
(Period-End, Thousands) 590 574 2.8
Natural Gas Operations:
Three Months Ended March 31,
2005 2004 % Change
Sales (Thousand Dekatherms):
Residential 32,670 33,761 (3.2)
Commercial 14,903 15,962 (6.6)
Industrial 31,016 28,985 7.0
------ ------
Sales to Ultimate Consumers 78,589 78,708 (.2)
Sales for Resale 5,180 2,337 121.7
Transportation Volumes 20,482 15,228 34.5
------ ------
Total Sales 104,251 96,273 8.3
------- ------
Customers
(Period-End, Thousands) 1,184 1,152 2.8
Weather Data - Electric Service Territory:
Three Months Ended March 31,
Actual Percent Change
2005 vs 2004 vs Normal
Heating Degree Days 1,205 (11.6) 5.4
Cooling Degree Days 19 (43.3) (51.8)
Security Credit Ratings (as of 04/29/05):
Standard & Poor's Moody's Fitch
SCANA Corporation:
Corporate / Issuer Rating A- A3 -
Senior Unsecured BBB+ A3 A-
Outlook Stable Negative Stable
South Carolina
Electric & Gas Company:
Corporate / Issuer Rating A- A2 -
Senior Secured A- A1 A+
Senior Unsecured BBB+ A2 A
Commercial Paper A-2 P-1 F1
Outlook Stable Negative Stable
PSNC Energy:
Senior Unsecured A- A2 NR
Commercial Paper A-2 P-1 NR
Outlook Stable Stable NR
NR = Not Rated