10-QPeriod: Q3 FY2021

DOMINION ENERGY, INC Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 5, 2021For Securities:D

Summary

Dominion Energy, Inc. reported strong financial results for the nine months ended September 30, 2021, with net income attributable to Dominion Energy increasing significantly to $1.947 billion from a net loss of $1.083 billion in the same period of 2020. This turnaround was driven by the absence of significant charges incurred in the prior year, including those related to the cancellation of the Atlantic Coast Pipeline, early retirement of electric generation facilities, and impairments of nonregulated solar assets. For the third quarter of 2021, net income attributable to Dominion Energy was $654 million, a substantial increase from $356 million in the third quarter of 2020. The company's operating revenue for the nine months ended September 30, 2021, decreased slightly to $10.084 billion from $10.651 billion in the prior year, primarily reflecting lower operating revenue from its regulated electric sales and the impact of economic hedging activities. Despite the decrease in revenue, improved operational efficiency and the absence of prior-year charges led to a robust increase in profitability. Dominion Energy continues to advance its strategic initiatives, including significant investments in regulated electric utility operations and renewable energy projects. The company's liquidity remains solid, with substantial unused capacity under its credit facilities, enabling it to fund capital expenditures and meet its financial obligations. Investors will be closely watching the progress and execution of major projects like the CVOW Commercial Project, which represents a significant future investment and growth driver.

Financial Highlights

46 data points
Beta

Revenue

$3.18B

Net Income

$654.00M

20.6% Net Margin

EPS (Diluted)

$0.79

Total Assets

$99.80B

Cash & Equivalents

$180.00M

Free Cash Flow

$1.29B

Financial Statements
Beta
Revenue$3.18B
Operating Expenses$2.33B
Operating Income$841.00M
Net Income$654.00M
EPS (Basic)$0.79
EPS (Diluted)$0.79
Shares Outstanding (Basic)808.70M
Shares Outstanding (Diluted)810.00M

Key Highlights

  • 1Dominion Energy reported a significant turnaround in net income, reaching $1.947 billion for the first nine months of 2021, a dramatic improvement from a net loss of $1.083 billion in the same period of 2020.
  • 2Third-quarter 2021 net income attributable to Dominion Energy was $654 million, up from $356 million in the prior year's third quarter.
  • 3Operating revenue for the nine months ended September 30, 2021, decreased slightly to $10.084 billion from $10.651 billion in 2020, primarily due to lower electric sales and hedging impacts.
  • 4The company experienced a substantial decrease in "Impairment of assets and other charges (benefits)" to $194 million year-to-date 2021 from $1.963 billion in the same period of 2020, significantly boosting profitability.
  • 5Dominion Energy continues to invest in its regulated utility operations and growth projects, including significant capital expenditures for infrastructure improvements and renewable energy development.
  • 6Liquidity remains strong, supported by $2.4 billion in unused capacity under its joint revolving credit facility as of September 30, 2021.
  • 7The company is advancing the Coastal Virginia Offshore Wind (CVOW) Commercial Project, a major undertaking estimated at $10 billion, with expected construction to begin in 2023 and service by the end of 2026.

Frequently Asked Questions

The primary drivers for the substantial increase in net income were the absence of significant charges incurred in the prior year. These included charges related to the cancellation of the Atlantic Coast Pipeline Project, early retirement of electric generation facilities, impairments of nonregulated solar assets, and the sale of Fowler Ridge. The company also benefited from reduced charges related to the Virginia Power 2021 Triennial Review and an increase in equity method earnings from Cove Point.

Operating revenue for the nine months ended September 30, 2021, decreased slightly to $10.084 billion from $10.651 billion in the same period of 2020. Key factors contributing to this decrease included lower operating revenue from regulated electric sales, a significant impact from economic hedging activities affecting Millstone, lower sales to electric utility retail customers due to fewer cooling degree days, and a decrease from settlements of economic hedges of certain regulated electric sales at Virginia Power. These were partially offset by increased fuel cost components in utility rates and increased sales to electric utility retail customers due to economic factors and growth.

Dominion Energy is progressing with the CVOW Commercial Project, a significant offshore wind development with an estimated cost of approximately $10 billion. The company has entered into or is finalizing fixed-price contracts for major offshore construction and equipment. While regulatory approvals are still pending from entities like the Virginia Commission, the project is crucial for meeting Virginia's renewable energy goals. Major construction is anticipated to commence in 2023, with an expected in-service date by the end of 2026.

Dominion Energy maintains a strong liquidity position, supported by a $6 billion joint revolving credit facility with $2.4 billion in unused capacity as of September 30, 2021. The company relies on both internal cash flows from operations and external sources, including capital markets, to fund its capital expenditures and working capital requirements. The company also entered into new credit agreements and issued senior notes to manage its financing needs and refinance existing debt.