10-KPeriod: FY2019

DOMINION ENERGY, INC Annual Report, Year Ended Dec 31, 2019

Filed February 28, 2020For Securities:D

Summary

Dominion Energy, Inc. reported a net income of $1.36 billion for the year ended December 31, 2019, a decrease from $2.45 billion in 2018. This decline was primarily attributed to significant charges related to the SCANA acquisition, including customer refunds for the NND Project, litigation costs, and voluntary retirement programs. Excluding these one-time items, the company's adjusted earnings would show a more stable performance, reflecting the integration of SCANA's operations and ongoing capital investments. The company continues to execute its growth capital plan, focusing on modernizing its electric and gas infrastructure and transitioning towards cleaner energy sources. Key investments are directed towards renewable generation facilities, including solar and offshore wind projects, as well as pipeline infrastructure to support natural gas demand. Approximately 95% of the company's earnings are expected to derive from regulated and long-term contracted businesses, providing a degree of earnings stability and predictability for investors.

Financial Highlights

51 data points
Beta

Revenue

$14.40B

Net Income

$1.36B

9.4% Net Margin

EPS (Diluted)

$1.62

Total Assets

$103.82B

Cash & Equivalents

$135.00M

Free Cash Flow

$224.00M

Financial Statements
Beta
Revenue$14.40B
Operating Expenses$12.86B
Operating Income$1.54B
Net Income$1.36B
EPS (Basic)$1.66
EPS (Diluted)$1.62
Shares Outstanding (Basic)808.80M
Shares Outstanding (Diluted)808.90M

Key Highlights

  • 1The acquisition of SCANA in January 2019 for $13.4 billion significantly expanded Dominion Energy's operational footprint, particularly in South Carolina and North Carolina, but also resulted in substantial integration costs and one-time charges impacting 2019 net income.
  • 2Net income attributable to Dominion Energy decreased by 45% to $1.36 billion in 2019, primarily due to significant charges related to the SCANA acquisition, including customer refunds for the NND Project ($1.0 billion after-tax), litigation acquired in the SCANA Combination ($641 million), and a voluntary retirement program ($427 million).
  • 3Dominion Energy is advancing its growth capital plan, with approximately $26 billion allocated for 2019-2023, focused on regulated electric and natural gas infrastructure upgrades, renewable generation (solar and offshore wind), and natural gas pipeline expansion.
  • 4The company is strategically shifting its earnings mix towards regulated and long-term contracted businesses, with an expectation that approximately 95% of earnings will originate from these stable sources.
  • 5Dominion Energy Virginia is undertaking significant transmission and distribution infrastructure upgrades, including a ten-year plan to modernize its electric grid and investments in renewable generation and undergrounding of distribution lines.
  • 6The Gas Transmission & Storage segment plans to invest approximately $4 billion from 2019-2023 in upgrading infrastructure, with a notable focus on the Atlantic Coast Pipeline project, which experienced delays and cost overruns.
  • 7Dominion Energy declared a quarterly dividend of $0.94 per share, payable in March 2020, representing a 2.5% increase over the 2019 rate, signaling continued commitment to returning capital to shareholders.

Frequently Asked Questions

The acquisition of SCANA in January 2019 had a significant impact, contributing to expanded operations but also leading to substantial charges. These included customer refunds related to the NND Project, litigation costs assumed from SCANA, and merger integration expenses, all of which led to a reported decrease in net income for 2019 compared to 2018.

Dominion Energy's capital plan prioritizes the modernization of its regulated electric and natural gas infrastructure. This includes significant investments in renewable energy generation (solar and offshore wind), upgrades to electric transmission and distribution networks, and expansion of natural gas pipeline infrastructure to meet growing demand. The company aims to increase its portfolio of stable, regulated, and long-term contracted assets.

Dominion Energy is actively pursuing a cleaner energy future through investments in renewable generation, such as large-scale solar projects and offshore wind development. Additionally, the company has committed to reducing its greenhouse gas emissions, targeting net-zero emissions from its electric generation and natural gas infrastructure operations by 2050. It is also focusing on energy infrastructure modernization and energy efficiency programs.

The Atlantic Coast Pipeline project, a significant natural gas pipeline, continued to experience delays due to judicial actions and permitting issues, impacting its cost and schedule. Project construction was expected to be completed by the end of 2021 with an in-service date in early 2022, with estimated costs around $8 billion. Agreements with customers were being amended to share delay costs, but project execution remained subject to legal and regulatory uncertainties.