10-KPeriod: FY2014

DOMINION ENERGY, INC Annual Report, Year Ended Dec 31, 2014

Filed February 27, 2015For Securities:D

Summary

Dominion Energy, Inc. (D) filed its 2014 Form 10-K on February 26, 2015. The report details the company's financial performance and strategic direction for the year ended December 31, 2014. Dominion continues its strategy to focus on regulated electric and natural gas infrastructure, expecting 80-90% of future earnings to come from these stable, contracted businesses. Significant capital investments are planned for grid modernization, natural gas infrastructure expansion (including the Atlantic Coast Pipeline), and meeting environmental requirements. The company also completed the sale of its electric retail energy marketing business in March 2014. Financially, Dominion reported a decrease in net income attributable to the company in 2014 compared to 2013, primarily due to charges related to Virginia legislation for new nuclear and offshore wind projects, restructuring costs, and a liability management exercise. Despite these charges, the company maintained its focus on growth projects and operational efficiency. The company's financial health appears stable, with sufficient liquidity and unused capacity under its credit facilities. Dominion reiterated its commitment to growing its dividend.

Financial Highlights

52 data points
Beta

Revenue

$12.44B

Net Income

$1.31B

10.5% Net Margin

EPS (Diluted)

$2.24

Total Assets

$54.33B

Cash & Equivalents

$318.00M

Free Cash Flow

-$1.91B

Financial Statements
Beta
Revenue$12.44B
Operating Expenses$9.71B
Operating Income$2.72B
Net Income$1.31B
EPS (Basic)$2.25
EPS (Diluted)$2.24
Shares Outstanding (Basic)582.70M
Shares Outstanding (Diluted)584.50M

Key Highlights

  • 1Dominion's strategy is to focus on regulated electric and natural gas businesses, targeting 80-90% of future earnings from these segments.
  • 2The company plans significant capital investments of approximately $5.8 billion in 2015, $5.6 billion in 2016, and $4.6 billion in 2017 for growth projects.
  • 3Dominion completed the sale of its electric retail energy marketing business in March 2014.
  • 4The company experienced a decrease in net income attributable to Dominion in 2014 compared to 2013, mainly due to various charges including those related to Virginia legislation for nuclear and offshore wind projects.
  • 5Dominion Midstream launched its initial public offering in October 2014, with Dominion retaining a 68.5% limited partner interest.
  • 6The company plans to continue growing its dividend, targeting a payout ratio of 70-75% and increasing the annual dividend rate for 2015 by 8%.
  • 7Dominion is subject to extensive government regulation across its electric and gas operations, with ongoing reviews and compliance requirements.

Frequently Asked Questions

In 2014, Dominion reported a net income attributable to Dominion of $1.31 billion, or $2.24 per diluted share. This was a decrease compared to $1.697 billion, or $2.93 per diluted share, in 2013. The decrease was primarily due to significant charges including those related to Virginia legislation for new nuclear and offshore wind projects, charges associated with a liability management exercise, and the repositioning of its producer services business.

Dominion's primary strategic priority is to focus on its regulated electric and natural gas businesses, aiming for 80-90% of future earnings to come from these stable, long-term contracted segments. Key initiatives include significant capital investments in regulated infrastructure upgrades, expansion of natural gas infrastructure such as the Atlantic Coast Pipeline, and development of renewable energy projects, particularly solar in Virginia.

Yes, Dominion completed the sale of its electric retail energy marketing business in March 2014 for approximately $187 million. The company also continued to acquire solar development projects throughout 2014. Additionally, in October 2014, Dominion launched its initial public offering for Dominion Midstream, an MLP formed to hold certain midstream natural gas assets.

Dominion anticipates an increase in net income on a per share basis in 2015 compared to 2014. This is expected due to a return to normal weather patterns, growth in regulated businesses, the absence of certain charges incurred in 2014, and continued construction of growth projects. However, higher depreciation, increased operating and maintenance expenses, and a higher effective tax rate are expected to partially offset these positive factors.