What was Dominion's financial performance in 2005?

In 2005, Dominion reported operating revenue of $18.04 billion, a substantial increase from $13.99 billion in 2004. However, net income decreased to $1.03 billion from $1.25 billion in the prior year, largely due to significant charges related to hurricane disruptions impacting derivative hedging activities and prior year losses from discontinued operations. The company generated robust operating cash flow of $2.62 billion.

How is Dominion's balance sheet structured, and what are the key liability concerns?

Dominion's balance sheet shows total assets of $52.66 billion as of December 31, 2005. The largest asset category is Property, Plant, and Equipment, valued at $28.94 billion net of depreciation. On the liabilities side, the company has significant long-term debt of $14.65 billion. While operating revenue and cash flow are strong, investors should monitor the level of long-term debt and its associated interest expenses.

What impact did the 2005 hurricanes have on Dominion's financial results?

The hurricanes in 2005 (Katrina and Rita) had a significant negative impact on Dominion's financial results. The company was forced to discontinue hedge accounting for certain gas and oil derivatives due to production interruptions, leading to a substantial after-tax loss of $357 million in the third quarter of 2005. This highlights the financial risks associated with managing commodity price volatility through derivatives, especially in the face of unpredictable events.

Are there any material legal or regulatory matters that investors should be aware of?

The filing mentions that Dominion is involved in various legal, tax, and regulatory proceedings. While the company states that the ultimate disposition of these proceedings is not expected to have a material adverse effect on its financial position, liquidity, or results of operations, investors should be aware of potential contingent liabilities. Specific issues noted include Superfund site liabilities, ongoing environmental remediation, and nuclear insurance matters, including potential retrospective premium assessments.

D 10-K FY2005 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K/A filed March 7, 2006. Cited figures are marked; the original filing is the authoritative source.

Dominion Resources, Inc. (now Dominion Energy) filed an amendment to its 2005 10-K report primarily to correct minor typographical errors.

The financial statements for the year ended December 31, 2005, show strong operating revenue growth to $18.04 billion^a, an increase from $13.99 billion in 2004. Net income for 2005 was $1.03 billion, a decrease from $1.25 billion in 2004, impacted by significant charges related to hurricane disruptions on derivative hedges and a loss from discontinued operations. The company's balance sheet shows total assets of $52.66 billion, with substantial investments in Property, Plant, and Equipment ($28.94 billion) and significant long-term debt of $14.65 billion.

The company also reported strong operating cash flow of $2.62 billion^b in 2005. Key areas of focus for investors include the company's significant investments in infrastructure, its diverse energy portfolio (including regulated utilities and non-regulated generation), and its proactive risk management through derivative instruments.

While revenues are growing, the company experienced increased expenses and net income decline in 2005, partly due to natural disasters impacting its hedging strategies and a large loss from discontinued telecommunications operations in prior years affecting comparability. Investors should note the company's substantial long-term debt obligations and its ongoing efforts to manage these and its operational risks.

02—Key points

Key Highlights

Total operating revenue increased significantly to $18.04 billion in 2005, up from $13.99 billion in 2004.
Net income for 2005 was $1.03 billion, a decrease from $1.25 billion in 2004, impacted by significant charges and losses.
The company generated strong operating cash flow of $2.62 billion in 2005.
Property, Plant, and Equipment represent a substantial portion of the company's assets, valued at $28.94 billion net of depreciation.
Total long-term debt stood at $14.65 billion as of December 31, 2005.
The company actively uses derivative instruments for hedging, but this also exposed it to significant losses during 2005 due to natural disasters.
Significant charges were incurred due to hurricane disruptions (Katrina and Rita) impacting derivative hedge accounting for oil and gas production.

03—Questions

Frequently Asked Questions

What was Dominion's financial performance in 2005?
In 2005, Dominion reported operating revenue of $18.04 billion, a substantial increase from $13.99 billion in 2004. However, net income decreased to $1.03 billion from $1.25 billion in the prior year, largely due to significant charges related to hurricane disruptions impacting derivative hedging activities and prior year losses from discontinued operations. The company generated robust operating cash flow of $2.62 billion.
How is Dominion's balance sheet structured, and what are the key liability concerns?
Dominion's balance sheet shows total assets of $52.66 billion as of December 31, 2005. The largest asset category is Property, Plant, and Equipment, valued at $28.94 billion net of depreciation. On the liabilities side, the company has significant long-term debt of $14.65 billion. While operating revenue and cash flow are strong, investors should monitor the level of long-term debt and its associated interest expenses.
What impact did the 2005 hurricanes have on Dominion's financial results?
The hurricanes in 2005 (Katrina and Rita) had a significant negative impact on Dominion's financial results. The company was forced to discontinue hedge accounting for certain gas and oil derivatives due to production interruptions, leading to a substantial after-tax loss of $357 million in the third quarter of 2005. This highlights the financial risks associated with managing commodity price volatility through derivatives, especially in the face of unpredictable events.
Are there any material legal or regulatory matters that investors should be aware of?
The filing mentions that Dominion is involved in various legal, tax, and regulatory proceedings. While the company states that the ultimate disposition of these proceedings is not expected to have a material adverse effect on its financial position, liquidity, or results of operations, investors should be aware of potential contingent liabilities. Specific issues noted include Superfund site liabilities, ongoing environmental remediation, and nuclear insurance matters, including potential retrospective premium assessments.

04—Continue

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