10-QPeriod: Q1 FY2021

DOMINION ENERGY, INC Quarterly Report for Q1 Ended Mar 31, 2021

Filed May 4, 2021For Securities:D

Summary

Dominion Energy reported a significant turnaround in the first quarter of 2021 compared to the same period in 2020. Net income attributable to Dominion Energy surged to $1,008 million, or $1.23 per diluted share, a substantial improvement from a net loss of $270 million, or ($0.34) per diluted share, in Q1 2020. This dramatic increase was largely driven by the absence of substantial charges related to early retirement of electric generation facilities and favorable investment earnings on nuclear decommissioning trust funds. Operationally, the company saw a slight decrease in total operating revenue to $3,870 million from $3,938 million year-over-year, influenced by factors such as unbilled revenue reductions and unfavorable pricing at Millstone. However, key operational expenses like electric fuel and other energy-related purchases saw a notable decrease. The company continues to navigate its strategic divestitures, particularly the Q-Pipe transaction, which is expected to result in a pre-tax gain upon closing in 2021. Investors should monitor the progress of these divestitures and the ongoing regulatory matters, especially concerning base rate cases and environmental regulations.

Financial Highlights

46 data points
Beta

Revenue

$3.87B

Net Income

$1.01B

26.0% Net Margin

EPS (Diluted)

$1.23

Total Assets

$96.70B

Cash & Equivalents

$477.00M

Free Cash Flow

$1.45B

Financial Statements
Beta
Revenue$3.87B
Operating Expenses$2.99B
Operating Income$878.00M
Net Income$1.01B
EPS (Basic)$1.23
EPS (Diluted)$1.23
Shares Outstanding (Basic)805.90M
Shares Outstanding (Diluted)805.90M

Key Highlights

  • 1Dominion Energy reported a significant year-over-year increase in net income, swinging from a loss of $270 million in Q1 2020 to a profit of $1,008 million in Q1 2021.
  • 2Diluted EPS improved dramatically from $(0.34) in Q1 2020 to $1.23 in Q1 2021.
  • 3Total operating revenue decreased slightly by $68 million to $3,870 million in Q1 2021 compared to $3,938 million in Q1 2020, mainly due to unbilled revenue reductions and unfavorable pricing.
  • 4Operating expenses, particularly electric fuel and other energy-related purchases, decreased significantly by $107 million.
  • 5The company recorded a substantial decrease in 'Impairment of assets and other charges,' largely due to the absence of charges from early retirement of electric generation facilities in Virginia.
  • 6Other income significantly increased by $821 million, primarily driven by net investment gains on nuclear decommissioning trust funds and increased equity method earnings from Cove Point.
  • 7The Q-Pipe Transaction is expected to close in 2021 and is projected to result in a pre-tax gain of approximately $450 million.

Frequently Asked Questions

The primary driver for the substantial increase in net income was the absence of significant charges incurred in the first quarter of 2020 related to the planned early retirements of certain electric generation facilities in Virginia. Additionally, favorable investment earnings on nuclear decommissioning trust funds and a decrease in 'Impairment of assets and other charges' contributed to the improved profitability.

Dominion Energy's total operating revenue decreased slightly by 2% to $3,870 million in the first quarter of 2021, down from $3,938 million in the same period of 2020. This decrease was attributed to several factors, including an unbilled revenue reduction at Virginia Power, unfavorable pricing at Millstone, and the contribution of certain non-regulated natural gas retail energy contracts to Wrangler.

The Q-Pipe Transaction is expected to close in 2021, contingent upon regulatory approvals. Based on the recorded balances as of March 31, 2021, Dominion Energy anticipates recognizing a pre-tax gain of approximately $450 million upon closing, which includes the write-off of $191 million of goodwill.

Yes, investors should monitor ongoing regulatory matters, including Virginia Power's 2021 Triennial Review for base rates and various rider approvals. Environmental matters, such as regulations concerning air and GHG emissions (ACE Rule, Carbon Regulations) and water quality (Regulation 316(b), Effluent Limitations Guidelines), continue to be areas of focus, although the company believes existing regulatory frameworks in its primary operating regions provide rate recovery mechanisms that could mitigate potential impacts for its regulated utilities.