DOMINION ENERGY, INC Quarterly Report for Q1 Ended Mar 31, 2016

Summary

Dominion Energy, Inc. (D) reported lower net income and earnings per share for the first quarter of 2016 compared to the same period in 2015. This decrease was primarily driven by a reduction in sales due to milder weather, costs associated with an organizational design initiative, and lower gains from conveying shale development rights. These factors were partially offset by the absence of a significant deferred fuel cost write-off in the prior year and an increase in renewable energy investment tax credits. Financially, the company saw a decrease in operating revenue, driven by lower sales volumes and revenue adjustments across its regulated gas distribution, transmission, and merchant generation operations. However, its electric utility operations saw an increase due to the absence of prior-year charges and positive contributions from rate adjustment clauses, despite a decrease in retail sales from reduced heating degree days. The company continues to manage its market risk through derivative instruments and maintains significant liquidity with substantial unused capacity under its credit facilities.

Key Highlights

• 1Net income attributable to Dominion decreased by 2% to $524 million in Q1 2016 compared to $536 million in Q1 2015.
• 2Diluted Earnings Per Share (EPS) declined to $0.88 in Q1 2016 from $0.91 in Q1 2015.
• 3Operating revenue for Dominion decreased by 14% to $2.92 billion in Q1 2016, down from $3.41 billion in Q1 2015.
• 4DVP (Dominion Virginia Power) segment net income decreased by $20 million year-over-year.
• 5Dominion Generation segment's net income decreased by $17 million year-over-year.
• 6Dominion Energy segment's net income decreased by $41 million year-over-year, significantly impacted by lower gains from shale development rights.
• 7The company reported $2.4 billion in unused capacity under its credit facilities as of March 31, 2016, indicating strong liquidity.

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