What is an at-the-market (ATM) equity offering program?

An at-the-market (ATM) equity offering program allows a company to sell shares of its stock over a period of time directly into the existing stock market, typically at prevailing market prices. This provides flexibility for the company to raise capital as needed rather than issuing a large block of shares at once.

What is the purpose of the forward sale agreements mentioned?

The forward sale agreements involve a forward purchaser who borrows shares from third parties and sells them into the market on behalf of Dominion Energy. This helps hedge the forward purchaser's risk. Dominion Energy will receive proceeds upon the future settlement of these agreements, typically through a physical settlement where the company delivers its own shares.

What are the implications for existing shareholders?

The establishment of an ATM program means that Dominion Energy may issue new shares of common stock over time, which can dilute the ownership stake of existing shareholders. However, the company will only issue shares strategically up to the $1.8 billion limit, and the proceeds are likely intended for strategic investments or debt reduction, which could benefit the company's long-term financial health.

Under what conditions might Dominion Energy not receive proceeds from the forward sale agreements?

Dominion Energy may not receive proceeds if it elects to cash settle or net share settle a forward sale agreement, rather than the expected full physical settlement. In a cash settlement, the company might owe cash to the forward purchaser. In a net share settlement, the company would deliver shares and not receive any cash proceeds.

D 8-K SEC Disclosure — May 3, 2024

01—Abstract

Summary

Summary of the 8-K filed May 3, 2024. Cited figures are marked; the original filing is the authoritative source.

Dominion Energy, Inc. has announced the establishment of an at-the-market (ATM) equity offering program with an aggregate offering amount of up to $1.8 billion^a.

This program allows the company to issue and sell shares of its common stock over time through a syndicate of ten sales agents and forward purchasers, including major financial institutions. The primary goal of this initiative is to provide Dominion Energy with flexible access to capital, enabling it to manage its equity issuance strategically as market conditions and the company's financing needs dictate.

02—Key points

Key Highlights

Dominion Energy established an at-the-market (ATM) equity program with a maximum offering size of $1.8 billion.
The program allows for the issuance and sale of common stock through ten named sales agents and forward purchasers.
Shares can be sold through various methods permitted for ATM offerings, including broker transactions and on the NYSE.
The program involves forward sale agreements, where forward purchasers may borrow and sell shares to hedge their exposure.
Dominion Energy will receive proceeds from the future physical settlement of forward sale agreements.
The company may elect cash or net share settlement for forward agreements, which could result in no proceeds or an obligation to pay cash/deliver shares.
The offering is being conducted under the company's effective Form S-3 registration statement filed in February 2023.

03—Questions

Frequently Asked Questions

What is an at-the-market (ATM) equity offering program?
An at-the-market (ATM) equity offering program allows a company to sell shares of its stock over a period of time directly into the existing stock market, typically at prevailing market prices. This provides flexibility for the company to raise capital as needed rather than issuing a large block of shares at once.
What is the purpose of the forward sale agreements mentioned?
The forward sale agreements involve a forward purchaser who borrows shares from third parties and sells them into the market on behalf of Dominion Energy. This helps hedge the forward purchaser's risk. Dominion Energy will receive proceeds upon the future settlement of these agreements, typically through a physical settlement where the company delivers its own shares.
What are the implications for existing shareholders?
The establishment of an ATM program means that Dominion Energy may issue new shares of common stock over time, which can dilute the ownership stake of existing shareholders. However, the company will only issue shares strategically up to the $1.8 billion limit, and the proceeds are likely intended for strategic investments or debt reduction, which could benefit the company's long-term financial health.
Under what conditions might Dominion Energy not receive proceeds from the forward sale agreements?
Dominion Energy may not receive proceeds if it elects to cash settle or net share settle a forward sale agreement, rather than the expected full physical settlement. In a cash settlement, the company might owe cash to the forward purchaser. In a net share settlement, the company would deliver shares and not receive any cash proceeds.

04—Continue

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