01—Abstract
Summary
Summary of the 10-K filed February 28, 2019. Cited figures are marked; the original filing is the authoritative source.
Dominion Energy, Inc. (D) reported its 2018 fiscal year results, marked by a significant strategic move with the completion of the SCANA merger in January 2019, valued at $13.4 billiona.
This combination significantly expands Dominion's operational footprint, serving approximately 7.5 million customers across its expanded service territories. The company continues its strategic focus on regulated and long-term contracted businesses, anticipating approximately 95%b of its earnings to stem from these more stable segments. Key capital investment plans for 2019-2023 highlight a commitment to modernizing its electric grid through renewable energy investments, strategic undergrounding, and smart grid technologies, alongside necessary infrastructure upgrades for its natural gas operations.
Financially, the company generated significant operating revenue and net income in 2018, though net income saw a decrease compared to 2017 primarily due to the absence of tax benefits from deferred income taxes related to the 2017 Tax Reform Act and impairment charges. The company also reported substantial progress on its debt management and refinancing activities throughout the year. The integration of SCANA presents both opportunities for growth and potential integration challenges, which management is actively addressing.
02—Key points
Key Highlights
- Completed a $13.4 billion merger with SCANA Corporation in January 2019, significantly expanding customer base and operational scale.
- Strategic shift towards a more regulated and long-term contracted earnings mix, with approximately 95% of earnings expected from these segments.
- Significant capital investment planned for 2019-2023, focusing on electric grid modernization, renewable energy (solar and offshore wind), and natural gas infrastructure upgrades.
- Net income decreased in 2018 compared to 2017, impacted by the absence of 2017 Tax Reform Act benefits and asset impairment charges, partially offset by gains on asset sales.
- Maintained substantial liquidity with $5.6 billion in unused capacity under its credit facility as of December 31, 2018.
- Announced a 10% increase in its annual dividend rate for 2019 to $3.67 per share, indicating confidence in future earnings.
- Navigated regulatory environments across multiple states for its electric and gas utility operations, with ongoing impacts from the 2017 Tax Reform Act being passed through to customers.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2018filed February 28, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $11.20B$12.59B | −11.0% |
| Operating Expenses | $8.19B$8.65B | −5.4% |
| Operating Income | $3.01B$3.94B | −23.5% |
| Net Income | $2.45B$3.00B | −18.4% |
| EPS (Basic) | $3.74$4.72 | −20.8% |
| EPS (Diluted) | $3.74$4.72 | −20.8% |
| Shares Outstanding (Basic) | 654.20M636.00M | +2.9% |
| Shares Outstanding (Diluted) | 654.90M636.00M | +3.0% |
05—Questions
Frequently Asked Questions
What were the key financial results for Dominion Energy in 2018?
In 2018, Dominion Energy reported operating revenue of $13.4 billion and net income attributable to Dominion Energy of $2.4 billion, or $3.74 per diluted share. While revenue increased compared to 2017, net income decreased primarily due to the absence of tax benefits from the 2017 Tax Reform Act and asset impairment charges, partially offset by gains from asset sales and the commencement of operations at the Liquefaction Project.
What is the strategic significance of the SCANA acquisition?
The acquisition of SCANA, completed in January 2019, significantly expands Dominion Energy's regulated electric generation, transmission, distribution, and natural gas distribution operations. This merger is expected to create a more diversified and larger regulated utility business, serving approximately 7.5 million customers and reinforcing the company's strategy to focus on stable, regulated earnings.
How is Dominion Energy investing for the future?
Dominion Energy plans significant capital investments from 2019 through 2023, focusing on upgrading its electric grid with renewable generation (solar and offshore wind), strategic undergrounding, and smart grid technologies. Investments also target natural gas infrastructure modernization and expansion to meet growing demand and environmental standards.
What is the company's outlook regarding dividends?
Dominion Energy's Board of Directors established an annual dividend rate for 2019 of $3.67 per share, representing a 10.0% increase over the 2018 rate. This reflects management's confidence in the company's financial health and ability to generate consistent earnings.
06—Continue