Dominion Energy announced unaudited reported earnings determined in accordance with Generally Accepted Accounting Principles (reported earnings) for the three months ended March 31, 2018, of $503 million ($0.77 per share) compared with earnings of $632 million ($1.01 per share) for the same period in 2017.
Operating earnings for the three months ended March 31, 2018, were $741 million ($1.14 per share), compared to operating earnings of $611 million ($0.97 per share) for the same period in 2017. Operating earnings are defined as reported earnings adjusted for certain items.
The principal differences between reported earnings and operating earnings for the quarter were a charge associated with Virginia legislation enacted in March that requires one-time rate credits to utility customers and a market loss on our nuclear decommissioning trusts.
Dominion Energy uses operating earnings as the primary performance measurement of its earnings guidance and results for public communications with analysts and investors. Dominion Energy 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 Energy management believes operating earnings provide a more meaningful representation of the company’s fundamental earnings power.
Thomas F. Farrell, II, chairman, president and chief executive officer, said:
“Our first quarter results were very strong and came in at the top end of our guidance range of $0.95 to $1.15. Given the strong results for the first quarter, we now expect to produce results that are above the midpoint of our guidance range for the year.
“We are pleased to report outstanding operational and record-setting safety results at each of our business segments.
“Construction of the 1,588-megawatt Greensville County combined cycle power station continues on time and on budget. The project is 84 percent complete and is expected to begin commercial operations in late 2018.
“We continue to make progress on the Atlantic Coast Pipeline and the Supply Header Project, including construction of compressor stations in West Virginia, Pennsylvania and North Carolina. Both projects remain on schedule for completion in late 2019.
“The Cove Point Liquefaction facility, with a capacity of 5.25 million tons per annum of LNG, was placed into commercial service earlier this month representing the successful completion of a $4 billion, multi-year construction project.
“Finally, we have reviewed our dividend growth rate assumptions with our Board and reconfirm our policy to increase the dividend 10% annually in 2018 and 2019. The growth rate in 2020 is expected to be between 6% and 10%, depending on the viability of Master Limited Partnership capital markets at that time.”
First-Quarter 2018 Reported and Operating Earnings Compared to 2017
Reported earnings decreased 24 cents per share as compared to first-quarter 2017. Business segment results and detailed descriptions of items included in reported earnings but excluded from operating earnings can be found on schedules 1, 2, and 3 of this release.
Operating earnings increased 17 cents per share as compared to first-quarter 2017 per share operating earnings. The increase is primarily attributable to the benefits of higher merchant generation margins, farmout transactions, normal weather in our regulated service territory and the impact of tax reform. Factors offsetting the increase include lower renewable energy investment tax credits and higher financing and share count.
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Chris Graham
