10-QPeriod: Q3 FY2018

DOMINION ENERGY, INC Quarterly Report for Q3 Ended Sep 30, 2018

Filed November 2, 2018For Securities:D

Summary

Dominion Energy, Inc. (D) reported solid financial results for the nine months ended September 30, 2018. The company saw a 7% increase in net income attributable to Dominion Energy compared to the same period in 2017, reaching $1.8 billion, and diluted Earnings Per Share (EPS) grew to $2.77 from $2.66. This growth was primarily driven by the commencement of commercial operations at its Liquefaction Project at Cove Point and increased net investment earnings on nuclear decommissioning trust funds. The company also made progress on its strategic acquisition of SCANA Corporation, targeting closing by the end of 2018, subject to regulatory approvals. Operationally, the company experienced increased electricity delivered and a rise in net revenue, partly due to favorable weather conditions and growth projects. However, specific charges related to Virginia legislation for customer rate credits and provisions for future ash pond and landfill closure costs impacted net income. Despite these, Dominion Energy's strong operating cash flow generation supports its capital expenditures and dividend payments, indicating a stable financial outlook for investors.

Financial Highlights

47 data points
Beta

Revenue

$3.45B

Net Income

$854.00M

24.7% Net Margin

EPS (Diluted)

$1.30

Total Assets

$79.08B

Cash & Equivalents

$310.00M

Free Cash Flow

$221.00M

Financial Statements
Beta
Revenue$3.45B
Operating Expenses$2.30B
Operating Income$1.15B
Net Income$854.00M
EPS (Basic)$1.31
EPS (Diluted)$1.30
Shares Outstanding (Basic)653.90M
Shares Outstanding (Diluted)654.90M

Key Highlights

  • 1Net income attributable to Dominion Energy increased by 7% to $1.806 billion for the nine months ended September 30, 2018, compared to $1.687 billion in the prior year.
  • 2Diluted Earnings Per Share (EPS) for the first nine months of 2018 improved to $2.77 from $2.66 in the same period of 2017.
  • 3The commencement of commercial operations at the Liquefaction Project at Cove Point contributed positively to revenue and net income.
  • 4Net investment earnings on nuclear decommissioning trust funds saw a significant increase, boosting overall other income.
  • 5The company is actively pursuing the acquisition of SCANA Corporation, with a targeted closing by the end of 2018, pending regulatory approvals.
  • 6Operating cash flows increased slightly to $3.711 billion for the nine months ended September 30, 2018, providing a stable source of liquidity.
  • 7A $215 million charge related to Virginia legislation for customer rate credits and an $81 million charge for ash pond and landfill closure costs were recognized, impacting net income.

Frequently Asked Questions

The primary drivers of earnings growth were the commencement of commercial operations at the Liquefaction Project at Cove Point, which added to revenue and net income, and increased net investment earnings on nuclear decommissioning trust funds. These factors contributed to a 7% increase in net income attributable to Dominion Energy and an improvement in diluted EPS.

Dominion Energy is actively pursuing the acquisition of SCANA Corporation. Regulatory approvals from various commissions and the NRC were progressing, and the company targeted closing the transaction by the end of 2018. Certain plans were filed with the South Carolina Public Service Commission that would provide customer bill reductions and exclude specific costs from rate recovery.

Yes, Dominion Energy recognized a $215 million charge related to Virginia legislation enacted in March 2018, which mandates one-time rate credits for utility customers. Additionally, a charge of $81 million was recorded for future ash pond and landfill closure costs, stemming from Virginia legislation in April 2018. These items negatively impacted net income for the period.

Net cash used by financing activities was $140 million for the first nine months of 2018, a significant decrease from net cash provided by financing activities of $1.2 billion in the same period of 2017. This change was primarily due to lower net debt issuances, reduced issuance of common stock, and higher common dividend payments.