01—Abstract
Summary
Summary of the 10-K filed February 26, 2010. Cited figures are marked; the original filing is the authoritative source.
Dominion Energy, Inc. (D) reported a net income of $1.287 billiona for the fiscal year ended December 31, 2009, a decrease from $1.834 billion in 2008.
This decline was primarily attributed to a $455 millionb impairment charge related to its E&P properties due to lower gas and oil prices and a significant charge of $435 million related to a proposed settlement of Virginia Power's 2009 rate case proceedings. Despite these headwinds, the company saw some positive performance drivers, including improved margins in its merchant generation operations and a higher contribution from its gas transmission operations following the completion of the Cove Point expansion project. Dominion's strategy to focus on regulated businesses while maintaining upside in non-regulated segments aims to deliver earnings per share growth, a growing dividend, and stable credit ratings.
The company anticipates stable growth in net income on a per share basis for 2010, benefiting from the absence of the prior year's charges and favorable operational factors. Significant capital expenditures are planned for 2010-2012, primarily focused on electric generation, natural gas transmission, and infrastructure improvements.
02—Key points
Key Highlights
- Dominion Energy reported a net income of $1.287 billion for fiscal year 2009, a decrease from $1.834 billion in 2008, impacted by an E&P impairment charge and a large provision for a rate case settlement.
- The company's strategy continues to focus on regulated businesses for stable earnings growth, supplemented by non-regulated operations.
- Dominion anticipates stable earnings growth in 2010, aided by the absence of significant charges from 2009 and planned capital expenditures to support future growth.
- Capital expenditures for 2010-2012 are projected to be substantial, focusing on electric generation, natural gas infrastructure, and transmission/distribution system improvements.
- The company's regulated electric utility, Virginia Power, is subject to ongoing rate case reviews in Virginia, which significantly impacted 2009 results due to a large provision for a settlement.
- Dominion's merchant generation segment showed improved margins, contributing positively despite the overall challenging market conditions.
- The company maintained a strong liquidity position with significant unused capacity under its credit facilities, crucial for funding operations and capital expenditures.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2009filed February 26, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $14.80B$15.89B | −6.9% |
| Operating Expenses | $12.23B$12.41B | −1.5% |
| Operating Income | $2.57B$3.48B | −26.3% |
| Net Income | $1.29B$1.83B | −29.8% |
| EPS (Basic) | $2.17$3.17 | −31.5% |
| EPS (Diluted) | $2.17$3.16 | −31.3% |
| Shares Outstanding (Basic) | 593.30M577.80M | +2.7% |
| Shares Outstanding (Diluted) | 593.70M580.80M | +2.2% |
05—Questions
Frequently Asked Questions
What were the main factors affecting Dominion's net income in 2009?
Dominion's net income decreased in 2009 primarily due to a $455 million impairment charge related to its E&P properties due to declining gas and oil prices, and a significant $435 million charge stemming from a proposed settlement of Virginia Power's 2009 rate case proceedings. These were partially offset by improved margins in merchant generation and higher contributions from gas transmission operations.
How did Dominion's regulated and non-regulated businesses perform in 2009?
Dominion's regulated segments (DVP and Dominion Energy) provided stable contributions, with DVP showing slight growth in net income and Dominion Energy benefiting from its gas transmission operations due to the Cove Point expansion. The Dominion Generation segment, which includes merchant generation, saw improved margins, contributing positively. The Corporate and Other segment experienced a net expense, largely due to the aforementioned impairment and rate case settlement charges.
What is Dominion's outlook for 2010?
Dominion anticipates stable growth in net income on a per share basis for 2010. This outlook is supported by the absence of the significant charges incurred in 2009, expected benefits from rate adjustment clauses for new projects, continued hedging strategies to mitigate commodity price exposure, and efficient cost management. The company plans substantial capital expenditures to support its growth strategy.
What regulatory issues are impacting Virginia Power?
Virginia Power's 2009 financial results were significantly impacted by a large charge related to a proposed settlement of its 2009 rate case proceedings in Virginia. The outcome of this rate review, along with ongoing proceedings for DSM programs and fuel factor adjustments, could materially affect future results of operations, financial condition, and cash flows.
06—Continue