10-QPeriod: Q2 FY2021

DOMINION ENERGY, INC Quarterly Report for Q2 Ended Jun 30, 2021

Filed August 6, 2021For Securities:D

Summary

Dominion Energy, Inc. (D) reported financial results for the second quarter and the first six months of 2021. For the second quarter, the company reported a net income attributable to Dominion Energy of $285 million, or $0.33 per diluted share, a significant improvement compared to a net loss of $1,169 million, or ($1.52) per diluted share, in the same period of 2020. This turnaround was largely driven by the absence of substantial charges related to discontinued operations, specifically the cancellation of the Atlantic Coast Pipeline Project, which had negatively impacted the prior year's results. Year-to-date, net income attributable to Dominion Energy was $1,293 million, or $1.56 per diluted share, compared to a net loss of $1,439 million, or ($1.83) per diluted share, in the corresponding period of 2020. The year-to-date improvement also reflects the absence of significant charges from discontinued operations and the planned early retirement of certain electric generation facilities. While operating revenue saw a slight decrease year-over-year due to various factors including unfavorable pricing and lower sales to electric utility customers, the company's management of operating expenses, particularly the absence of certain large charges from the prior year, led to the improved net income. Investors should note the ongoing management of capital expenditures and the company's continued focus on its regulatory asset recovery mechanisms and strategic asset dispositions.

Financial Statements
Beta
Revenue$3.04B
Operating Expenses$2.67B
Operating Income$363.00M
Net Income$285.00M
EPS (Basic)$0.33
EPS (Diluted)$0.33
Shares Outstanding (Basic)806.60M
Shares Outstanding (Diluted)806.60M

Key Highlights

  • 1Net income attributable to Dominion Energy improved significantly year-over-year, turning a loss into a profit for both the second quarter and year-to-date periods.
  • 2Diluted EPS for the second quarter was $0.33, up from ($1.52) in the prior year's quarter, and year-to-date EPS was $1.56, compared to ($1.83) in the prior year.
  • 3Operating revenue decreased slightly for both the second quarter and year-to-date periods, primarily due to unfavorable pricing and lower sales to electric utility customers, partially offset by increases from gas utility capital cost riders and other factors.
  • 4Impairment of assets and other charges decreased significantly year-to-date, largely due to the absence of charges related to the planned early retirement of certain electric generation facilities, though offset by charges related to the South Carolina electric base rate case settlement.
  • 5Earnings from equity method investees increased substantially, primarily reflecting improved earnings from Cove Point following the GT&S Transaction.
  • 6The company has $3.3 billion of unused capacity under its joint revolving credit facility, indicating strong liquidity.
  • 7Dominion Energy continues to manage its operations and regulatory matters, with several key regulatory filings and approvals pending in various jurisdictions.

Frequently Asked Questions

The substantial improvement in net income is primarily attributable to the absence of large charges related to discontinued operations, particularly those stemming from the cancellation of the Atlantic Coast Pipeline Project and related Supply Header Project, which significantly impacted the prior year's results. Additionally, the absence of charges related to the planned early retirement of certain electric generation facilities also contributed to the year-over-year improvement.

Operating revenue saw a slight decrease for both the second quarter and year-to-date periods compared to 2020. Key drivers for the decrease included unfavorable pricing impacts at Millstone, lower sales to electric utility customers due to economic and usage factors, and a decrease from Virginia Power riders. These were partially offset by increases from gas utility capital cost riders, the absence of planned outages at Millstone, and increased cooling degree days impacting electric utility sales.

Dominion Energy maintains a strong liquidity position. As of June 30, 2021, the company had $3.3 billion of unused capacity under its joint revolving credit facility, indicating ample resources to meet its short-term and long-term financial obligations.

While the current period benefited from the absence of prior year charges, it did incur certain charges, most notably those associated with the settlement of the South Carolina electric base rate case, which contributed to the 'Impairment of assets and other charges' line item. There was also a charge related to a revision in estimated recovery of spent nuclear fuel costs for the Kewaunee decommissioning.