Unaudited reported GAAP earnings for the three months ended Dec. 31, 2015, were $357 million ($0.60 per share) compared with earnings of $243 million ($0.42 per share) for the same period in 2014.
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.
The principal differences between GAAP earnings and operating earnings for the quarter were charges associated with the State Corporation Commission of Virginia’s final ruling associated with its biennial review of Virginia Power’s base rates and charges associated with future ash pond and landfill closures.
Thomas F. Farrell II, chairman, president and chief executive officer, said:
“Our fourth-quarter operating earnings were below our guidance range of $0.85 to $0.95 per share. The impact of warm temperatures accounted for at least 8 cents per share.
“We continue to execute with strong operational and safety performance and all major projects in our infrastructure growth plan are on time and on budget. Construction on Brunswick County, the 1,358-megawatt natural gas combined-cycle facility is about 96 percent complete with all three combustion turbines successfully firing on natural gas in December. The hearing on our request for a CPCN and rate rider for the proposed 1,588-megawatt Greensville County project was held in January. The facility is expected to achieve commercial operation in late 2018.
“In Electric Transmission we have a number of projects at various stages of regulatory approval and construction.
“Our Cove Point liquefaction project is also progressing on time and on budget. The project overall is about 56 percent complete and engineering 97 percent complete as we are on schedule for a late 2017 in-service date.
“We are continuing to work toward the commencement of construction on the Atlantic Coast Pipeline and expect to execute construction contracts soon. Construction is anticipated to begin in the fourth quarter of this year.
“In December, our Board of Directors established a 2016 dividend rate of $2.80 per share of common stock, up from $2.59 per share in 2015, or an 8.1 percent increase, subject to quarterly declaration and determination. The board also affirmed the dividend policy it set in February 2015 to pay out to shareholders approximately 70 percent to 75 percent of operating earnings. The board recently declared a first-quarter dividend of 70 cents per share of common stock.”