What was the primary reason for the significant decrease in net income for the nine months ended September 30, 1999, compared to the same period in 1998?

The primary reason for the decrease was a substantial after-tax charge of $254.8 million recorded in the first quarter of 1999. This charge resulted from Virginia Power discontinuing the application of SFAS No. 71 to its generation operations in anticipation of deregulation, which required the write-off of generation-related assets that were not expected to be recovered.

What is the status of the merger with Consolidated Natural Gas Company (CNG)?

The merger agreement has been approved by the shareholders of both Dominion Resources and CNG. Most regulatory approvals, including those from state commissions and the FTC, have been obtained. However, the final approval from the Securities and Exchange Commission (SEC) is still pending. The companies are also addressing conditions set by FERC.

What divestitures are planned in connection with the CNG merger?

Due to the merger, Dominion Resources will become a registered public utility holding company and must divest its financial services subsidiary, Dominion Capital. Additionally, Dominion Resources and CNG have agreed to divest Virginia Natural Gas, Inc. (VNG), with a plan to either sell it to a third party within one year of the merger's completion or spin it off as an independent company.

How is Dominion Resources preparing for the deregulation of the electric industry in Virginia?

Virginia Power's generation business will be deregulated by 2002. The legislation enacted protects Virginia Power's base rates, keeping them generally unchanged until July 2007. Recovery of generation-related costs will continue through capped rates. The company is also focused on managing potentially stranded costs in this new competitive environment.

D 10-Q Quarterly Report Q3 FY1999 — Revenue, Net Income, EPS

Summary

Dominion Resources, Inc. reported its financial results for the quarter and nine months ended September 30, 1999. The company saw a significant decrease in net income for the nine-month period compared to the prior year, largely due to a substantial after-tax charge of $254.8 million related to the discontinuation of SFAS No. 71 for Virginia Power's generation operations, which involved writing off generation-related assets. This was partially offset by the positive performance of Dominion Generation's energy marketing business and the absence of certain rate settlement impacts recorded in the prior year. Operationally, the company is navigating a period of significant transition, highlighted by the pending merger with Consolidated Natural Gas Company (CNG), which is expected to transform Dominion Resources into a registered public utility holding company. This merger necessitates the divestiture of its financial services subsidiary, Dominion Capital, and the planned divestiture or spin-off of Virginia Natural Gas, Inc. The company is also preparing for the deregulation of the electric utility industry in Virginia, with generation set to be deregulated by 2002. Despite these strategic shifts and a significant one-time charge, core utility operations, particularly the Virginia Power Wires Business, showed resilience. Investors should monitor the progress and regulatory approvals for the CNG merger, as well as the company's strategy for managing potentially stranded generation costs in the evolving regulatory landscape.

Key Highlights

1Net income for the nine months ended September 30, 1999, was $233.2 million, a decrease from $481.4 million in the same period of 1998, primarily due to a $254.8 million after-tax charge from discontinuing SFAS No. 71 for Virginia Power's generation operations.
2The company is pursuing a significant merger with Consolidated Natural Gas Company (CNG), which is progressing through regulatory approvals, with the SEC being the final key approval pending.
3As a result of the pending CNG merger, Dominion Resources plans to divest its financial services subsidiary, Dominion Capital, and also agreed to divest Virginia Natural Gas, Inc. (VNG).
4Virginia Power is preparing for the deregulation of the electric utility industry in Virginia, with generation deregulation scheduled for 2002, while base rates are frozen until July 2007.
5Operating revenues increased for both the three and nine-month periods, driven by improved performance in Dominion Generation's energy marketing business and favorable commodity contract activities.
6The company reported an impairment loss of $18.1 million related to the pending sale of its Latin American generation interests to Duke Energy International.
7Dominion Resources maintained its quarterly dividend of $0.645 per common share.

DOMINION ENERGY, INC Quarterly Report for Q3 Ended Sep 30, 1999

Summary

Key Highlights

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