Dominion Energy today announced unaudited reported earnings for the three months ended Dec. 31, 2018 of $641 million ($0.97 per share) compared with earnings of $1.3 billion ($2.04 per share) for the same period in 2017.
Reported earnings for the twelve months ended Dec. 31, 2018 were $2.4 billion ($3.74 per share) compared with earnings of $3.0 billion ($4.72 per share) for the same period in 2017.
Operating earnings for the three months ended Dec. 31, 2018, were $592 million ($0.89 per share), compared with operating earnings of $585 million ($0.91 per share) for the same period in 2017. The difference was primarily attributable to lower renewable energy investment tax credits, higher storm restoration expense and higher interest expense partially offset by the Cove Point liquefaction project and the benefit of tax reform.
Operating earnings for the twelve months ended Dec. 31, 2018 were $2.7 billion ($4.05 per share) compared with operating earnings of $2.3 billion ($3.60 per share) for the same period in 2017. The difference was primarily attributable to the Cove Point liquefaction project, the benefit of tax reform, favorable weather in our regulated service territory, growth projects, and one fewer refueling outage at Millstone Power Station, partially offset by lower renewable energy investment tax credits, higher storm restoration expense, higher electric capacity expense, higher interest expense and share dilution.
Operating earnings are defined as reported earnings adjusted for certain items. Details of operating earnings as compared to prior periods, business segment results and detailed descriptions of items included in reported earnings but excluded from operating earnings can be found on schedules 1, 2, 3 and 4 of this release.
Thomas F. Farrell, II, chairman, president and chief executive officer, said:
“Our full-year 2018 operating earnings per share grew 12.5% compared to 2017 and exceeded our guidance range midpoint. During 2018 we completed several important initiatives that position us for success in 2019 including the commercial in-service of both the Cove Point liquefaction project and the Greensville Power Station, the sale of non-core assets, the reduction of approximately $8 billion of parent-level debt, and the improvement of our credit metrics. We also set a company record for safety for the second straight year with a recordable injury rate that is roughly half that of our peers.
“In addition we obtained all regulatory approvals necessary to complete our merger with SCANA which occurred on Jan. 1, 2019. As a result, we added several high-quality businesses to our existing best-in-class portfolio of state regulated businesses. We have created a new operating segment, known as the Southeast Energy Group, that comprises all former SCANA operations. We will continue to build trust with customers, employees, regulators, and elected representatives by being a responsible corporate citizen.
“In less than a year since the Grid Transformation and Security Act became law in Virginia, we have received approval from the Virginia State Corporation Commission for over $1 billion of capital investment. This bipartisan law provides a path to a sustainable and reliable energy future in the Commonwealth.
“Finally, on Jan. 28, 2019, we completed the merger of Dominion Energy Midstream Partners into Dominion Energy.”
Operating earnings guidance
Dominion Energy expects 2019 operating earnings in the range of $4.05 to $4.40 per share, compared to full-year 2018 operating earnings of $4.05 per share. Positive drivers include the Cove Point liquefaction project, the addition of the Southeast Energy Group operating segment, and growth from regulated investment. The company expects negative drivers for the year to include the loss of earnings from 2018 non-core asset sales, share dilution, higher pension expense, and a return to normal weather.
First-quarter 2019 operating earnings are expected to be in the range of $1.05 to $1.25 per share.
Atlantic Coast Pipeline update
Dominion Energy also provided cost and schedule updates on the Atlantic Coast Pipeline project. The company currently expects that construction could recommence on the full route during the third quarter of 2019 with partial in-service in late 2020 and full in-service in early 2021. Based on that schedule, the company now expects the project cost to be between $7.0 and $7.5 billion, excluding financing costs. Similarly, the company currently expects the Supply Header project to enter commercial service in late 2020 at a project cost of $650 to $700 million.
Said Farrell:
“We remain highly confident in the successful and timely resolution of all outstanding permit issues as well as the ultimate completion of the entire project. We are actively pursuing multiple paths to resolve all outstanding permit issues including judicial, legislative, and administrative avenues. We will continue to accrue AFUDC equity earnings and expect ACP to contribute to our operating earnings in 2019, 2020 and for decades to come.”
Additional information regarding the Atlantic Coast Pipeline project will be provided on the fourth quarter 2018 earnings call today.
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