01—Abstract
Summary
Summary of the 10-K filed February 26, 2016. Cited figures are marked; the original filing is the authoritative source.
Dominion Energy, Inc. (D) filed its 10-K for the fiscal year ending December 31, 2015, highlighting a strategic shift towards regulated and long-term contracted businesses, with 80-90%a of earnings expected from these segments.
The company is actively investing in expanding its regulated electric generation, transmission, and distribution, as well as regulated natural gas infrastructure. Significant capital investments are planned through 2020 to meet demand growth, upgrade networks, and comply with environmental regulations. Financially, Dominion reported an increase in net income attributable to Dominion of 45% to $1.9 billionb in 2015, primarily due to the absence of charges incurred in the prior year related to legislation, restructuring, and liability management exercises.
The company continues to manage its capital structure, with a focus on maintaining access to capital markets and a stable credit profile. Dominion also announced a proposed acquisition of Questar in February 2016, which is expected to close by the end of 2016, pending regulatory and shareholder approvals.
02—Key points
Key Highlights
- Strategic focus on regulated and long-term contracted businesses, aiming for 80-90% of earnings from these segments.
- Significant capital investment program planned through 2020 ($23 billion estimated total) to upgrade infrastructure and meet demand growth.
- Net income attributable to Dominion increased by 45% to $1.9 billion in 2015, driven by the absence of prior-year charges.
- Announced proposed acquisition of Questar for approximately $4.4 billion, pending regulatory and shareholder approvals, targeting a late 2016 close.
- Dominion Midstream, an MLP formed in March 2014, is growing its portfolio of natural gas assets, with Dominion owning 64.1% of limited partner interests at year-end 2015.
- Investments in renewable generation, including solar projects, continue to be a focus, particularly in meeting environmental requirements.
- The company is navigating evolving environmental regulations, including the Clean Power Plan, and implementing strategies to reduce GHG emissions intensity.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 26, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $11.68B$12.44B | −6.1% |
| Operating Expenses | $8.15B$9.71B | −16.1% |
| Operating Income | $3.54B$2.72B | +30.0% |
| Net Income | $1.90B$1.31B | +45.0% |
| EPS (Basic) | $3.21$2.25 | +42.7% |
| EPS (Diluted) | $3.20$2.24 | +42.9% |
| Shares Outstanding (Basic) | 592.40M582.70M | +1.7% |
| Shares Outstanding (Diluted) | 593.70M584.50M | +1.6% |
05—Questions
Frequently Asked Questions
What is Dominion's primary business strategy as outlined in the 2015 10-K?
Dominion's primary business strategy is to focus on its regulated electric and gas businesses, alongside long-term contracted assets, aiming for 80-90% of its earnings to come from these stable segments. The company is making significant capital investments in regulated infrastructure to meet growing demand, upgrade its systems, and comply with environmental regulations.
How did Dominion's financial performance in 2015 compare to 2014?
In 2015, Dominion reported a substantial increase in net income attributable to Dominion, up 45% to $1.9 billion. This improvement was largely due to the absence of significant charges incurred in 2014 related to legislative impacts, business restructuring, and liability management exercises, which had negatively affected prior-year results.
What major growth initiatives or transactions were highlighted?
Dominion highlighted its ongoing capital investment program focused on regulated infrastructure, the formation and growth of Dominion Midstream (an MLP), and investments in renewable generation projects like solar. A significant strategic development was the announced proposed acquisition of Questar, valued at approximately $4.4 billion, which was pending regulatory and shareholder approvals with an expected closing in late 2016.
What are the key risks Dominion identified in its filing?
Dominion identified several key risks including the impact of weather on operations and sales, regulatory changes affecting rates and operations, environmental regulations (particularly those related to climate change and emissions), operational hazards, cybersecurity threats, and the successful execution of its substantial capital expenditure program and the proposed Questar acquisition. Financial risks such as market fluctuations and access to capital were also noted.
06—Continue