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DOMINION ENERGY, INC Annual Report, Year Ended Dec 31, 2001

Filing Date
Filed March 11, 2002
Period End
December 31, 2001
Security
D
In the record · 2016–202610-K1110-Q328-K223

D filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 223 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Jan ’17Jan ’17
  2. Material agreement8-K · Mar ’19Mar ’19
  3. Material agreement8-K · Jul ’21Jul ’21
  4. Leadership change8-K · Jul ’25Jul ’25

01—Abstract

Summary

Summary of the 10-K filed March 11, 2002. Cited figures are marked; the original filing is the authoritative source.

Dominion Resources, Inc. (Richmond, VA) reported 2001 net income of $544 milliona, or $2.15 per diluted share, up from $436 million ($1.85) in 2000, on operating revenue of $10.6 billion (up 14% from $9.2 billion).

Growth was driven mainly by a full year of Consolidated Natural Gas (CNG) operations, the March 2001 Millstone nuclear acquisition ($1.3 billionb), and the November 2001 Louis Dreyfus Natural Gas acquisition ($1.8 billion, adding roughly 60% to proved gas and oil reserves). Results were held back by milder weather, a $281 million pre-tax impairment of DCI (Dominion Capital) investments, a $151 million pre-tax charge tied to Enron's bankruptcy, $105 million of restructuring costs, and a $220 million charge on the purchase of three non-utility generators. Dominion Energy, Delivery and Exploration & Production contributed $723 million, $366 million and $320 million of net income, respectively, while Corporate and Other absorbed $851 million of net expense.

Balance sheet and cash flow strengthened on an operating basis: operating cash flow rose to $2.4 billionc from $1.3 billion, and total assets grew to $34.4 billion from $29.3 billion, driven largely by acquisitions. Debt rose sharply, with long-term debt reaching $12.1 billion and short-term debt falling to $1.9 billion, and common equity increased to $8.4 billion. Credit ratings remain investment grade (S&P BBB+ and Moody's Baa1 at the holding company; Virginia Power at A/A2).

Management plans capital expenditures of roughly $2.5 billiond in 2002, $3.2 billion in 2003 and $3.3 billion in 2004. Key regulatory and risk items for investors include the end of cost-based rate regulation for Virginia generation effective January 1, 2002, with capped base rates through July 2007; uncertainty over the Virginia Commission's order on generation separation, which Dominion has appealed; FERC's rejection of the Alliance RTO; the pending repeal debate over the 1935 Act; and exposure to Enron-related counterparty losses, litigation, and environmental compliance costs, including a planned $1.2 billion program for coal plants.

02—Key points

Key Highlights

  1. 2001 net income rose 25% to $544 million ($2.15 diluted EPS) from $436 million ($1.85) in 2000, despite a $281 million pre-tax DCI impairment and a $151 million Enron-related charge.
  2. Operating revenue increased 14% to $10.6 billion, reflecting a full year of CNG, the Millstone nuclear acquisition, and two months of Louis Dreyfus operations.
  3. Dominion Energy was the largest earnings contributor at $723 million ($2.86 per share), while Dominion E&P earned $320 million on realized gas and oil prices of $3.85 per mcfe, up 16%.
  4. Louis Dreyfus acquisition ($1.8 billion, closed November 2001) increased proved gas and oil reserves by about 60%; Millstone (March 2001, $1.3 billion, 1,954 MW) added nuclear generation.
  5. Operating cash flow nearly doubled to $2.4 billion, but total debt increased substantially, with long-term debt reaching $12.1 billion; ratings remain investment grade.
  6. Virginia generation was deregulated effective January 1, 2002 with capped base rates through July 2007; the Virginia Commission's separation order is under appeal and retail choice phases in by January 2003.

03—Questions

Frequently Asked Questions

  1. How did Dominion's 2001 earnings compare with 2000, and what drove the change?

    Net income rose to $544 million ($2.15 diluted EPS) from $436 million ($1.85). The increase came mainly from a full year of CNG operations, the Millstone acquisition, and higher realized gas and oil prices, partially offset by milder weather, DCI impairments, Enron-related credit charges, and restructuring costs.

  2. What were the largest one-time charges in 2001?

    The largest items were a $281 million pre-tax impairment of DCI investments, a $151 million pre-tax provision for Enron bankruptcy exposure, $105 million of restructuring costs, and a $220 million charge (about $136 million after tax) on purchasing three non-utility generating plants and terminating related power purchase contracts.

  3. How is the company's debt and liquidity position?

    Long-term debt rose to $12.1 billion from $10.1 billion, and short-term debt declined to $1.9 billion. Operating cash flow of $2.4 billion and $2.3 billion of remaining shelf registration capacity support liquidity. Credit ratings are BBB+ (S&P) and Baa1 (Moody's) at the holding company, and management says there were no covenant defaults.

  4. What regulatory risks could affect future earnings?

    Virginia generation is no longer under cost-based rate regulation, and base rates are capped until July 2007. Dominion has appealed the Virginia Commission's separation order, and its RTO plans were set back when FERC rejected the Alliance RTO. Stranded-cost recovery, environmental compliance costs, and possible repeal of the 1935 Act also remain uncertain.

  5. What growth plans does Dominion have for the coming years?

    Planned capital expenditures are about $2.5 billion in 2002, $3.2 billion in 2003, and $3.3 billion in 2004. Projects include more than 6,000 MW of capacity expansion through 2006, the pending $182 million State Line coal plant purchase, the $497 million Greenbrier Pipeline, and the Devils Tower deepwater oil development expected to start production in mid-2003.

04—Continue

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