Summary
Dominion Energy, Inc. (D) reported its financial results for the second quarter and the first six months of 2006. For the second quarter, net income significantly decreased to $161 million from $332 million in the prior year, primarily due to the absence of Hurricane Ivan insurance proceeds received in 2005 and an impairment charge related to a DCI investment. Year-to-date net income also saw a decrease, falling by 9% to $695 million from $761 million in the same period of 2005, impacted by similar factors, along with higher fuel expenses and charges related to the pending sale of gas distribution subsidiaries. The company is undergoing strategic changes, including the planned divestiture of certain gas distribution subsidiaries and a review of its merchant generation assets. Despite the decline in net income, the company's operational segments, particularly Dominion Delivery, Dominion Energy, and Dominion Generation, showed resilience or slight improvements. However, the Dominion E&P segment experienced a notable decline in net income due to business interruption insurance impacts and increased DD&A expenses.
Key Highlights
- 1Net income for the second quarter of 2006 was $161 million, a significant decrease from $332 million in the second quarter of 2005, largely due to the absence of Hurricane Ivan insurance proceeds and an impairment charge.
- 2Year-to-date net income for the first six months of 2006 was $695 million, down from $761 million in the same period of 2005, reflecting a 9% decrease.
- 3The company is in the process of selling its regulated gas distribution subsidiaries, The Peoples Natural Gas Company and Hope Gas, Inc., with an expected closing by the first quarter of 2007.
- 4Dominion E&P experienced a substantial decrease in net income due to business interruption insurance impacts and higher depreciation, depletion, and amortization (DD&A) expenses.
- 5Operating revenue for the second quarter decreased slightly to $3.56 billion from $3.65 billion, while year-to-date operating revenue increased to $8.51 billion from $8.38 billion.
- 6The company's financial flexibility remains supported by approximately $3.4 billion in unused capacity under its credit facilities as of June 30, 2006.
- 7Dominion is evaluating the potential sale of four merchant generation facilities: State Line, Armstrong, Troy, and Pleasants.