10-QPeriod: Q2 FY2010

DOMINION ENERGY, INC Quarterly Report for Q2 Ended Jun 30, 2010

Filed August 2, 2010For Securities:D

Summary

Dominion Energy, Inc. (D) reported its second quarter and year-to-date results for 2010, marked by significant strategic divestitures and improved operational performance. The company completed the sale of substantially all of its Appalachian E&P operations in April 2010, generating a substantial after-tax gain of approximately $1.4 billion and after-tax proceeds of $2.2 billion. This divestiture significantly impacts the company's operational profile, shifting its focus away from exploration and production. Financially, net income attributable to Dominion saw a substantial increase compared to the prior year, largely driven by the gain on the E&P sale. Revenue experienced a slight decrease, influenced by lower margins in merchant generation and the divestiture of E&P operations, but this was partially offset by growth in electric utility operations. The company also highlighted progress in various regulatory matters and continued investments in transmission projects.

Financial Highlights

47 data points
Beta

Revenue

$3.33B

Net Income

$1.76B

52.8% Net Margin

EPS (Diluted)

$2.98

Total Assets

$41.79B

Cash & Equivalents

$411.00M

Free Cash Flow

-$994.00M

Financial Statements
Beta
Revenue$3.33B
Operating Expenses$2.69B
Operating Income$3.11B
Net Income$1.76B
EPS (Basic)$2.98
EPS (Diluted)$2.98
Shares Outstanding (Basic)590.40M
Shares Outstanding (Diluted)591.40M

Key Highlights

  • 1Significant financial impact from the sale of Appalachian E&P operations, resulting in a substantial gain and substantial proceeds.
  • 2Net income attributable to Dominion increased significantly, driven by the E&P sale gain.
  • 3Operating revenue saw a slight decrease year-over-year, primarily due to lower merchant generation margins and the E&P divestiture, partially offset by growth in electric utility operations.
  • 4Progress made on key regulatory filings and approvals, including fuel expenses, generation riders, and transmission projects.
  • 5Strategic focus shifting away from E&P operations towards core utility and generation businesses.
  • 6Company is managing market risk through commodity derivative instruments and interest rate hedges.

Frequently Asked Questions

The primary driver for the substantial increase in net income for Dominion was the significant after-tax gain of approximately $1.4 billion recognized from the sale of substantially all of its Appalachian E&P operations in April 2010.

While the sale of the Appalachian E&P operations contributed to a decrease in overall revenue due to the divestiture of those operations, Dominion's electric utility operations saw an increase, partially offsetting this decline. The company also experienced lower margins in its merchant generation operations.

Dominion's strategy appears to be shifting away from exploration and production towards its core utility and generation businesses. The company is actively involved in various regulatory processes for fuel expenses, generation riders, and transmission projects, indicating a focus on regulated and contracted generation assets.

Dominion utilizes commodity derivative instruments to manage price risk associated with its energy marketing and trading activities, as well as its utility operations. They also employ interest rate derivatives to manage interest rate risk on their debt.