10-KPeriod: FY2008

DOMINION ENERGY, INC Annual Report, Year Ended Dec 31, 2008

Filed February 26, 2009For Securities:D

Summary

Dominion Energy, Inc.'s 2008 Form 10-K reveals a year of significant strategic shifts and operational performance. The company successfully navigated a challenging economic environment, reporting net income of $1.83 billion, a decrease from the previous year primarily due to the absence of a substantial gain from the sale of its non-Appalachian E&P operations in 2007. Despite this, Dominion Energy demonstrated resilience, with its regulated utility segments providing stable earnings and its merchant generation operations showing improved performance. The company also made progress on its long-term strategic goals, including investments in generation capacity and renewable energy projects. Key financial highlights for 2008 include operating revenue of $16.29 billion and diluted EPS of $3.16. Management focused on capital discipline, reducing planned capital expenditures and enhancing its liquidity position. The company continued to return value to shareholders through dividends, which were increased in late 2008, signaling confidence in its future financial strength. Looking ahead, Dominion Energy anticipates moderate growth driven by its regulated businesses and strategic initiatives, while remaining mindful of economic uncertainties and regulatory developments.

Financial Highlights

49 data points
Beta

Revenue

$15.89B

Net Income

$1.83B

11.5% Net Margin

EPS (Diluted)

$3.16

Total Assets

$42.05B

Cash & Equivalents

$71.00M

Free Cash Flow

-$639.00M

Financial Statements
Beta
Revenue$15.89B
Operating Expenses$12.41B
Operating Income$3.48B
Net Income$1.83B
EPS (Basic)$3.17
EPS (Diluted)$3.16
Shares Outstanding (Basic)577.80M
Shares Outstanding (Diluted)580.80M

Key Highlights

  • 1Net income for 2008 was $1.83 billion, down from $2.54 billion in 2007, largely due to the absence of a large gain from the sale of non-Appalachian E&P operations.
  • 2Diluted Earnings Per Share (EPS) decreased to $3.16 from $3.88 in 2007.
  • 3Operating revenue increased by 10% to $16.29 billion in 2008, driven by higher revenues in utility operations, merchant generation, and producer services.
  • 4The company completed the sale of its non-Appalachian E&P operations in 2007, generating significant proceeds used to reduce debt and repurchase shares.
  • 5Dominion Energy's strategy focused on regulated businesses ('regulated plus' model) for earnings growth, dividends, and stable credit ratings.
  • 6The company announced an increase in its quarterly dividend in December 2008, signaling confidence in its financial stability.
  • 7Planned capital expenditures were reduced by approximately $350 million for 2009 to conserve cash and lower financing requirements amidst a challenging credit market.

Frequently Asked Questions

Dominion Energy reported net income of $1.83 billion in 2008, a decrease from $2.54 billion in 2007. This decline was primarily attributable to the absence of a significant gain from the sale of its non-Appalachian E&P business in 2007. However, this was partially offset by favorable factors such as higher contributions from merchant generation, the reinstatement of annual fuel rate adjustments in Virginia, and the reversal of deferred tax liabilities related to planned asset sales.

In response to the challenging credit markets of 2008, Dominion Energy focused on conserving cash and reducing financing requirements. This included selectively reducing operating and maintenance expenses and cutting planned capital expenditures by approximately $350 million for 2009. The company maintained sufficient access to liquidity through its credit facilities and did not change its dividend policy, even increasing the quarterly dividend in late 2008.

Dominion Energy's strategy is centered on its regulated businesses, aiming for earnings per share growth, a growing dividend, and stable credit ratings. The company's 'regulated plus' model leverages the stability of its regulated utility operations while seeking upside from its merchant generation and other non-regulated businesses. In 2008, the Dominion Virginia Power (DVP) segment contributed $380 million to net income, Dominion Energy contributed $468 million, and Dominion Generation was the strongest performer, contributing $1.23 billion to net income. The Corporate and Other segment experienced a net expense of $241 million.