10-QPeriod: Q3 FY2009

DOMINION ENERGY, INC Quarterly Report for Q3 Ended Sep 30, 2009

Filed November 2, 2009For Securities:D

Summary

Dominion Energy, Inc. reported a net income attributable to Dominion of $594 million for the third quarter of 2009, a 17% increase compared to $508 million in the same period last year. Diluted Earnings Per Share (EPS) rose to $1.00 from $0.87 year-over-year. However, for the nine months ended September 30, 2009, net income decreased by 13% to $1.30 billion ($2.19 diluted EPS) compared to $1.49 billion ($2.56 diluted EPS) in the prior year. The company continues to navigate a challenging economic environment, with revenue impacted by decreased energy sales and lower commodity prices. Key factors influencing the results include higher contributions from gas transmission operations due to expansion projects, a positive impact from merchant nuclear decommissioning trust funds, and the absence of certain one-time charges or benefits seen in the prior year. The company is also progressing with the planned sale of its regulated gas distribution subsidiaries in Pennsylvania and West Virginia, awaiting regulatory approvals.

Financial Highlights

46 data points
Beta

Revenue

$3.63B

Net Income

$594.00M

16.4% Net Margin

EPS (Diluted)

$1.00

Total Assets

$42.09B

Cash & Equivalents

$50.00M

Free Cash Flow

-$16.00M

Financial Statements
Beta
Revenue$3.63B
Operating Expenses$2.54B
Operating Income$1.09B
Net Income$594.00M
EPS (Basic)$1.00
EPS (Diluted)$1.00
Shares Outstanding (Basic)595.90M
Shares Outstanding (Diluted)596.30M

Key Highlights

  • 1Third quarter net income increased 17% year-over-year to $594 million, with diluted EPS rising to $1.00.
  • 2Nine-month net income decreased 13% year-over-year to $1.30 billion ($2.19 diluted EPS) primarily due to an impairment charge related to E&P properties and the absence of prior year tax benefits.
  • 3Operating revenue for the quarter decreased by 16% ($717 million) due to lower producer services, electric utility, and merchant generation revenues.
  • 4Operating expenses decreased by $717 million in the third quarter, largely driven by lower electric fuel and purchased gas expenses.
  • 5The company has $3.8 billion in unused capacity under its credit facilities as of September 30, 2009, indicating solid liquidity.
  • 6Dominion Generation remained the largest contributor to net income, accounting for $459 million in Q3 2009.

Frequently Asked Questions

Dominion Energy reported a net income attributable to Dominion of $594 million for the third quarter of 2009, a significant increase of 17% from $508 million in the same period of 2008. Diluted Earnings Per Share (EPS) also improved to $1.00 from $0.87 year-over-year.

The decrease in net income for the first nine months of 2009 (down 13% to $1.30 billion) was primarily driven by an impairment charge on Exploration and Production (E&P) properties due to lower gas and oil prices. The absence of benefits recognized in 2008 from the reversal of deferred tax liabilities and the re-establishment of a regulatory asset related to the planned sale of its gas distribution subsidiaries also contributed to the decline.

The company is actively involved in regulatory proceedings, particularly concerning electric rates in Virginia, and is awaiting approval for the sale of its Pennsylvania and West Virginia gas distribution operations. There are also ongoing environmental matters and legal proceedings, such as the litigation regarding coal transportation for the Clover power station, though the company states the ultimate resolution of these matters will not have a material adverse effect on its financial position.

Dominion Energy maintained a strong liquidity position with $3.8 billion in unused capacity under its credit facilities as of September 30, 2009. The company actively manages its debt through various financing transactions, including issuing long-term debt and senior notes, and has had no events of default under its debt covenants.