10-QPeriod: Q1 FY2012

DOMINION ENERGY, INC Quarterly Report for Q1 Ended Mar 31, 2012

Filed April 26, 2012For Securities:D

Summary

Dominion Energy, Inc. (D) reported its first quarter 2012 financial results, showing a slight increase in net income attributable to Dominion to $494 million, or $0.86 per diluted share, compared to $479 million, or $0.82 per diluted share, in the first quarter of 2011. This improvement was driven by the absence of a significant impairment charge recorded in the prior year and a lower effective income tax rate, partially offset by decreased margins from merchant generation operations and less favorable weather impacting electric utility operations. Operationally, revenue saw a notable decrease of $565 million, primarily due to lower energy-related purchases and decreased wholesale energy prices. The company continues to invest in its infrastructure, with net cash used in investing activities increasing due to higher capital expenditures. Management remains confident in the company's liquidity, supported by substantial unused capacity under its credit facilities.

Financial Highlights

48 data points
Beta

Revenue

$3.40B

Net Income

$494.00M

14.5% Net Margin

EPS (Diluted)

$0.86

Total Assets

$46.09B

Cash & Equivalents

$133.00M

Free Cash Flow

$642.00M

Financial Statements
Beta
Revenue$3.40B
Operating Expenses$2.48B
Operating Income$918.00M
Net Income$494.00M
EPS (Basic)$0.86
EPS (Diluted)$0.86
Shares Outstanding (Basic)570.50M
Shares Outstanding (Diluted)571.90M

Key Highlights

  • 1Net income attributable to Dominion increased by 3% to $494 million ($0.86/share) in Q1 2012, compared to $479 million ($0.82/share) in Q1 2011.
  • 2Operating revenue decreased by $565 million to $3,492 million in Q1 2012, mainly due to lower energy-related purchases and decreased wholesale energy prices.
  • 3The company's effective income tax rate decreased in Q1 2012, contributing positively to net income.
  • 4Dominion Generation's net income contribution decreased by $75 million, primarily due to lower merchant generation margins and less favorable weather.
  • 5DVP segment (regulated electric distribution and transmission) showed an increase in net income contribution of $17 million, driven by favorable weather, transmission equity returns, and retail energy marketing operations.
  • 6Cash flow from operations increased significantly, with net cash provided by operating activities rising to $1,623 million in Q1 2012 from $912 million in Q1 2011.
  • 7Capital expenditures increased, with net cash used in investing activities at $946 million in Q1 2012, up from $752 million in Q1 2011, reflecting investments in growth projects.

Frequently Asked Questions

The increase in net income was primarily driven by the absence of a $55 million impairment charge related to the State Line facility recorded in the first quarter of 2011 and a lower effective income tax rate in the first quarter of 2012.

Dominion Generation's net income contribution decreased by $75 million compared to the prior year. This decline was mainly due to lower merchant generation margins, which decreased by $62 million, and less favorable weather conditions.

Dominion maintains a strong liquidity position with $2.4 billion in unused capacity under its credit facilities as of March 31, 2012. This includes $980 million of unused capacity under joint credit facilities available to Virginia Power, supporting working capital and capital expenditure needs.

The filing mentions several ongoing regulatory matters, including a potential $36 million liability related to PJM ancillary service revenues and ongoing reviews of nuclear safety following the Fukushima event. Environmentally, the company is addressing air emissions regulations like MATS and CSAPR, though the material impact is not yet fully determined. Other matters related to water and waste are also noted, with varying levels of estimated financial impact or uncertainty.