DOMINION ENERGY, INC Quarterly Report for Q2 Ended Jun 30, 2014

Summary

Dominion Energy, Inc. (D) filed its Form 10-Q for the quarterly period ending June 30, 2014. The report details financial results across its primary operating segments: Dominion Virginia Power (DVP), Dominion Generation, and Dominion Energy (gas operations). For the second quarter of 2014, net income attributable to Dominion was $159 million, a decrease from $202 million in the prior year's second quarter. This decline was primarily due to a significant charge associated with Virginia legislation related to nuclear unit development and offshore wind facilities. Year-to-date net income also saw a decrease, largely attributable to the same legislative charge and the repositioning of the producer services business. Key financial highlights indicate a mixed performance across segments. While DVP showed slight revenue growth and net income improvement, Dominion Generation experienced a decline in net income, impacted by higher outage costs and the sale of its retail energy marketing business. Dominion Energy's gas operations saw improved net income, driven by the absence of prior-year impairment charges and gains from asset sales. The company maintained access to credit facilities, though Virginia Power experienced a temporary sub-limit exceedance. Capital expenditures remain a focus, with significant investments in property, plant, and equipment across the enterprise, particularly in transmission and generation projects.

Key Highlights

• 1Net income attributable to Dominion decreased by 21% to $159 million in Q2 2014 compared to $202 million in Q2 2013, largely due to a $282 million charge related to Virginia legislation concerning nuclear and offshore wind projects.
• 2Year-to-date net income attributable to Dominion was $538 million, down from $697 million in the prior year, primarily due to the aforementioned legislative charge and the repositioning of the producer services business.
• 3Dominion Energy's gas operations saw a significant increase in net income to $93 million in Q2 2014 from $53 million in Q2 2013, benefiting from the absence of prior-year impairment charges.
• 4Virginia Power's net income decreased substantially to $69 million in Q2 2014 from $265 million in Q2 2013, heavily impacted by the Virginia legislative charge and higher maintenance costs.
• 5Total operating revenue for Dominion decreased by $167 million to $2,813 million in Q2 2014 compared to $2,980 million in Q2 2013.
• 6Capital expenditures remain substantial, with Dominion's consolidated investing activities showing $2,186 million used for the six months ended June 30, 2014, primarily for plant construction and property additions.
• 7Dominion maintained access to its credit facilities, with $1.3 billion in unused capacity under its joint revolving credit facilities as of June 30, 2014.

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