10-KPeriod: FY2007

DOMINION ENERGY, INC Annual Report, Year Ended Dec 31, 2007

Filed February 28, 2008For Securities:D

Summary

Dominion Energy, Inc. (D) is a major energy provider with a diversified portfolio of generation, transmission, and distribution assets primarily serving the eastern United States. In 2007, the company significantly reshaped its business by completing the sale of its non-Appalachian natural gas and oil exploration and production (E&P) operations for approximately $13.9 billion. This strategic divestiture allowed Dominion to focus on its core regulated utility and generation businesses. The company also completed several strategic acquisitions in prior years, including nuclear and fossil fuel power stations, and made significant investments in renewable energy projects. Financially, 2007 was a transformative year, marked by a substantial increase in net income driven by the E&P divestiture, alongside higher realized prices for energy production and improved margins in its merchant generation segment. The company also navigated regulatory changes in Virginia regarding electricity rate recovery and managed its operations through an evolving energy market. Dominion continues to invest in infrastructure upgrades and generation capacity to meet growing demand and regulatory requirements.

Financial Highlights

24 data points
Beta

Revenue

$14.82B

Net Income

$2.54B

17.1% Net Margin

EPS (Diluted)

$3.88

Free Cash Flow

-$2.41B

Financial Statements
Beta
Revenue$14.82B
Operating Expenses$9.25B
Operating Income$5.57B
Net Income$2.54B
EPS (Basic)$3.90
EPS (Diluted)$3.88

Key Highlights

  • 1Completed the sale of non-Appalachian natural gas and oil E&P operations for $13.9 billion, significantly altering the company's asset mix.
  • 2Reported a substantial increase in net income for 2007, largely due to the gain from the E&P divestiture.
  • 3Navigated a new regulatory framework for its Virginia utility generation operations following legislative changes in April 2007, including a modified cost-of-service rate model and fuel factor adjustments.
  • 4Continued to invest in new generation capacity through the 'Powering Virginia' program, including natural gas-fired units and a proposed clean coal facility.
  • 5Actively pursuing renewable energy development, with investments in wind farm projects.
  • 6Repurchased approximately $5.8 billion of common stock in 2007, including shares acquired through a tender offer.
  • 7Announced a two-for-one stock split in November 2007 and increased its quarterly dividend.

Frequently Asked Questions

The most significant strategic move was the completion of the sale of its non-Appalachian natural gas and oil exploration and production (E&P) operations for approximately $13.9 billion. This divestiture allowed the company to focus on its core utility and generation businesses.

The sale generated a substantial gain, significantly boosting net income and earnings per share for the year. It also led to a considerable increase in cash flow from investing activities and a reduction in outstanding debt and shares outstanding due to stock repurchases.

Dominion is focusing on strengthening its regulated utility operations, including investments in electric transmission and distribution infrastructure, and expanding its generation capacity through programs like 'Powering Virginia'. The company is also committed to developing renewable energy sources, such as wind power.

Legislation enacted in April 2007 returned Dominion's Virginia utility generation operations to a modified cost-of-service rate model, subject to rate caps through December 2008. Fuel cost recovery mechanisms were also adjusted, with deferred accounting for over- or under-recoveries, which began impacting results in the second half of the year.