RICHMOND, Va., May 3, 2019 /PRNewswire/ -- Dominion Energy
(NYSE: D) today announced an unaudited net loss determined in
accordance with Generally Accepted Accounting Principles (reported
earnings) for the three months ended March
31, 2019 of $680 million ($0.86 per share) compared with net income of
$503 million ($0.77 per share) for the same period in
2018.
Operating earnings for the three months ended March 31, 2019, were $873
million ($1.10 per share),
compared with operating earnings of $741
million ($1.14 per share) for
the same period in 2018. The difference between GAAP and
operating earnings was primarily attributable to charges related to
the SCANA merger commitments and the early retirement of certain
cold-reserve Virginia utility
generating units.
Operating earnings are defined as reported earnings adjusted for
certain items. Details of operating earnings as compared to
prior periods, business segment results and detailed descriptions
of items included in reported earnings but excluded from operating
earnings can be found on schedules 1, 2, 3 and 4 of this
release.
Thomas F. Farrell, II, chairman,
president and chief executive officer, said:
"Otherwise strong performance across our businesses was impacted
by unusually mild weather in Virginia and South
Carolina during the first quarter which reduced utility
earnings by about six cents per
share. Adjusted for normal weather, our quarterly results
were above the midpoint of our quarterly guidance range.
"Utility fundamentals across our premier electric and gas
operations continue to be strong in terms of sales volume and
customer growth.
"In recent weeks we celebrated the one year commercial
in-service anniversary of the Cove Point Liquefaction facility as
well as the agreement in Connecticut that will allow our Millstone
power station to continue to deliver critical, zero-carbon energy
for many years to come.
"We are also taking important steps to realize our goal of
having 3,000 megawatts of solar or wind generation in operation or
under development in the state of Virginia by 2022. We recently announced
a 350 megawatt solar agreement with Facebook, we received approval
from the Virginia State Corporation Commission for our 240 megawatt
US-3 cost-of-service solar projects, and in coming weeks we will
begin construction on the Coastal Virginia Offshore Wind
project.
"Finally, we are affirming our annual operating earnings
guidance range of $4.05 to
$4.40 per share for 2019."
Second-quarter operating earnings guidance
Dominion
Energy expects second quarter operating earnings in the range of
$0.70 to $0.80 per share, compared to second-quarter 2018
operating earnings of $0.86 per
share. Positive drivers include growth from regulated
investment across electric and gas utility programs as well as the
contribution from the Southeast Energy Group. The company expects
negative drivers for the quarter to include Millstone refueling
outage timing, the impact of 2018 asset sales, share issuances, and
a return to normal weather.
Conference call today
The company will host its
first-quarter earnings conference call at 10
a.m. ET on Friday, May 3, 2019. Management will
discuss first-quarter financial results and other matters of
interest to the financial community.
Domestic callers should dial (877) 410-5657.
International callers should dial (334) 323-9872. The
passcode for the conference call is "Dominion." Participants
should dial in 10 to 15 minutes prior to the scheduled start
time.
A live webcast of the conference call, including accompanying
slides and other financial information, will be available on the
investor information pages at investors.dominionenergy.com/.
A replay of the conference call will be available beginning
about 2 p.m. ET May 3 and lasting until 11
p.m. ET May 12. Domestic callers may access the
recording by dialing (877) 919-4059. International callers
should dial (334) 323-0140. The PIN for the replay is
75463500. Additionally, a replay of the webcast will be
available on the investor information pages by the end of the day
May 3.
Important note to investors regarding operating and reported
earnings
Dominion Energy uses operating earnings as the
primary performance measurement of its earnings guidance and
results for public communications with analysts and
investors. Dominion Energy also uses operating earnings
internally for budgeting, for reporting to the Board of Directors,
for the company's incentive compensation plans and for its targeted
dividend payouts and other purposes. Dominion Energy management
believes operating earnings provide a more meaningful
representation of the company's fundamental earnings power.
In providing its operating earnings guidance, the company notes
that there could be differences between expected reported earnings
and estimated operating earnings for matters such as, but not
limited to, acquisitions, divestitures or changes in accounting
principles. At this time, Dominion Energy management is not
able to estimate the aggregate impact of these items on future
period reported earnings.
About Dominion Energy
Nearly 7.5 million customers in
18 states energize their homes and businesses with electricity or
natural gas from Dominion Energy (NYSE: D), headquartered in
Richmond, Va. The company is
committed to sustainable, reliable, affordable and safe energy and
is one of the nation's largest producers and transporters of energy
with about $100 billion of assets
providing electric generation, transmission and distribution, as
well as natural gas storage, transmission, distribution and
import/export services. The company expects to cut generating fleet
carbon dioxide emissions 80 percent by 2050 and reduce methane
emissions from its gas assets 50 percent by 2030. Please visit
www.DominionEnergy.com to learn more.
This release contains certain forward-looking statements,
including forecasted operating earnings second-quarter and
full-year 2019 and beyond which are subject to various risks and
uncertainties. Factors that could cause actual results
to differ include, but are not limited to: unusual weather
conditions and their effect on energy sales to customers and energy
commodity prices; extreme weather events and other natural
disasters; federal, state and local legislative and regulatory
developments; changes to federal, state and local environmental
laws and regulations, including proposed carbon regulations; cost
of environmental compliance; changes in enforcement practices of
regulators relating to environmental standards and litigation
exposure for remedial activities; capital market conditions,
including the availability of credit and the ability to obtain
financing on reasonable terms; fluctuations in interest rates;
changes in rating agency requirements or credit ratings and their
effect on availability and cost of capital; impacts of
acquisitions, divestitures, transfers of assets by Dominion Energy
to joint ventures and retirements of assets based on asset
portfolio reviews; receipt of approvals for, and timing of, closing
dates for other acquisitions and divestitures; changes in demand
for Dominion Energy's services; additional competition in Dominion
Energy's industries; changes to regulated rates collected by
Dominion Energy; changes in operating, maintenance and construction
costs; timing and receipt of regulatory approvals necessary for
planned construction or expansion projects and compliance with
conditions associated with such regulatory approvals; adverse
outcomes in litigation matters or regulatory proceedings; and the
inability to complete planned construction projects within time
frames initially anticipated. Other risk factors are
detailed from time to time in Dominion Energy's quarterly reports
on Form 10-Q or most recent annual report on Form 10-K filed with
the Securities and Exchange Commission.
Dominion Energy,
Inc.
|
Consolidated
Statements of Income *
|
Unaudited (GAAP
Based)
|
(millions, except
per share amounts)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
|
|
|
2019
|
|
2018
|
|
|
|
|
|
Operating
Revenue
|
|
$
3,858
|
|
$
3,466
|
Operating
Expenses
|
|
|
|
|
Electric fuel and
other energy-related purchases
|
|
791
|
|
744
|
Purchased electric
capacity
|
|
39
|
|
14
|
Purchased
gas
|
|
730
|
|
340
|
Other operations and
maintenance 1
|
|
1,837
|
|
796
|
Depreciation,
depletion and amortization
|
|
651
|
|
498
|
Other
taxes
|
|
292
|
|
199
|
Total operating
expenses
|
|
4,340
|
|
2,591
|
Income (loss) from
operations
|
|
(482)
|
|
875
|
Other
income
|
|
388
|
|
100
|
Interest and related
charges
|
|
469
|
|
314
|
Income (loss) from
operations including noncontrolling interests before
income tax expense
|
|
(563)
|
|
661
|
Income tax
expense
|
|
114
|
|
135
|
Net Income (Loss)
Including Noncontrolling Interests
|
|
(677)
|
|
526
|
Noncontrolling
Interests
|
|
3
|
|
23
|
Net Income (Loss)
Attributable to Dominion Energy
|
|
$
(680)
|
|
$
503
|
Earnings Per
Common Share
|
|
|
|
|
Net income (loss)
attributable to Dominion Energy - Basic
|
|
$
(0.86)
|
|
$
0.77
|
Net income (loss)
attributable to Dominion Energy - Diluted
|
|
(0.86)
|
|
0.77
|
|
|
|
|
|
1Includes
impairment of assets and other charges.
|
|
|
|
|
|
|
|
|
|
* The notes contained
in Dominion Energy's most recent quarterly report on Form 10-Q or
annual report on Form 10-K are
|
an
integral part of the Consolidated Financial Statements.
|
|
|
|
|
Schedule 1 -
Segment Reported and Operating Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
(millions, except
earnings per share)
|
Three months ended
March 31,
|
|
|
|
|
|
2019
|
|
2018
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
REPORTED EARNINGS
1
|
|
|
$
(680)
|
|
$
503
|
|
$
(1,183)
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax loss (income)
2
|
1,640
|
|
305
|
|
1,335
|
|
|
Income tax
2
|
(87)
|
|
(67)
|
|
(20)
|
|
Adjustments to
reported earnings
|
1,553
|
|
238
|
|
1,315
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EARNINGS
|
$
873
|
|
$
741
|
|
$
132
|
|
|
By
segment:
|
|
|
|
|
|
|
|
Power
Delivery
|
155
|
|
156
|
|
(1)
|
|
|
Power
Generation
|
308
|
|
348
|
|
(40)
|
|
|
Gas
Infrastructure
|
359
|
|
327
|
|
32
|
|
|
Southeast Energy
3
|
132
|
|
-
|
|
132
|
|
|
Corporate and
Other
|
(81)
|
|
(90)
|
|
9
|
|
|
|
|
|
$
873
|
|
$
741
|
|
$
132
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
(EPS):
|
|
|
|
|
|
|
REPORTED EARNINGS
1
|
|
|
$
(0.86)
|
|
$
0.77
|
|
$
(1.63)
|
|
Adjustments to
reported earnings (after tax)
|
1.96
|
|
0.37
|
|
1.59
|
|
OPERATING
EARNINGS
|
$
1.10
|
|
$
1.14
|
|
$
(0.04)
|
|
|
By
segment:
|
|
|
|
|
|
|
|
Power
Delivery
|
0.19
|
|
0.24
|
|
(0.05)
|
|
|
Power
Generation
|
0.39
|
|
0.54
|
|
(0.15)
|
|
|
Gas
Infrastructure
|
0.45
|
|
0.50
|
|
(0.05)
|
|
|
Southeast Energy
3
|
0.17
|
|
-
|
|
0.17
|
|
|
Corporate and
Other
|
(0.10)
|
|
(0.14)
|
|
0.04
|
|
|
|
|
|
$
1.10
|
|
$
1.14
|
|
$
(0.04)
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares
Outstanding (average, diluted)
|
793.1
|
|
650.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1)
|
Determined in
accordance with Generally Accepted Accounting Principles
(GAAP).
|
2)
|
Adjustments to
reported earnings are included in Corporate and Other segment
reported GAAP earnings. Refer to Schedules 2 and 3 for
details, or find "GAAP Reconciliation" in the Earnings Release Kit
on Dominion Energy's website at
www.dominionenergy.com/investors.
|
3)
|
New operating segment
established in January 2019, in connection with Dominion Energy's
merger with SCANA.
|
Schedule 2 -
Reconciliation of 2019 Operating Earnings to Reported
Earnings
|
|
2019 Earnings
(Three months ended March 31, 2019)
|
|
The $1.6 billion
pre-tax net effect of the adjustments included in 2019 reported
earnings, but excluded from operating earnings, is primarily
related to the following items:
|
|
- $1.4 billion of merger and
integration-related costs associated with the SCANA Combination,
including a $1 billion charge for refunds of amounts previously
collected from retail electric customers of Dominion Energy South
Carolina (DESC) for the NND Project, a $105 million charge related
to certain property plant and equipment associated with the NND
Project for which Dominion Energy committed to forgo recovery, and
a $169 million charge related to a settlement agreement of a DESC
ratepayer class action lawsuit.
|
- $547 million charge associated with Virginia
utility asset retirements, primarily electric generation facilities
in cold reserve and certain automated meters.
|
- $113 million benefit from the revision of
certain asset retirement obligations for ash ponds and landfills at
certain utility generation facilities, in connection with the
enactment of Virginia legislation in March.
|
- $253 million net gain related to our
investments in nuclear decommissioning trust funds.
|
Dominion also
recorded $198 million after-tax charge for certain income
tax-related regulatory assets acquired in the SCANA Combination for
which Dominion Energy committed to forgo recovery.
|
|
|
|
|
|
|
|
(millions,
except per share amounts)
|
1Q19
|
2Q19
|
3Q19
|
4Q19
|
YTD
2019
|
Reported
earnings
|
($680)
|
|
|
|
($680)
|
Adjustments to
reported earnings 1:
|
|
|
|
|
|
Pre-tax loss (income)
|
1,640
|
|
|
|
1,640
|
Income tax
|
(87)
|
|
|
|
(87)
|
|
|
1,553
|
|
|
|
1,553
|
Operating
earnings
|
$873
|
|
|
|
$873
|
Common shares
outstanding (average, diluted)
|
793.1
|
|
|
|
793.1
|
Reported earnings
per share
|
($0.86)
|
|
|
|
($0.86)
|
Adjustments to
reported earnings (after-tax)
|
1.96
|
|
|
|
1.96
|
Operating earnings
per share
|
$1.10
|
|
|
|
$1.10
|
|
|
|
|
|
|
|
1) Adjustments to
reported earnings are reflected in the following
table:
|
|
|
|
|
|
|
1Q19
|
2Q19
|
3Q19
|
4Q19
|
YTD
2019
|
Pre-tax loss
(income):
|
|
|
|
|
|
Merger and integration-related costs
|
1,429
|
|
|
|
1,429
|
Virginia utility asset retirements
|
547
|
|
|
|
547
|
Revision to ash pond and landfill closure costs
|
(113)
|
|
|
|
(113)
|
Net gain on NDT funds
|
(253)
|
|
|
|
(253)
|
Other
|
30
|
|
|
|
30
|
|
|
|
|
|
|
|
|
|
$1,640
|
|
|
|
$1,640
|
Income tax expense
(benefit):
|
|
|
|
|
|
Tax
effect of above adjustments to reported earnings *
|
(255)
|
|
|
|
(255)
|
Write-off EDIT regulatory assets (SCANA)
|
198
|
|
|
|
198
|
Other
|
(30)
|
|
|
|
(30)
|
|
|
|
|
|
|
|
|
|
($87)
|
|
|
|
($87)
|
|
|
|
|
|
|
|
* Income taxes for
individual pre-tax items include current and deferred taxes using a
transactional effective
|
tax
rate. For interim reporting purposes, such amounts may be adjusted
in connection with the calculation
|
of the
Company's year-to-date income tax provision based on its estimated
annual effective tax rate.
|
Schedule 3 -
Reconciliation of 2018 Operating Earnings to Reported
Earnings
|
|
2018 Earnings
(Twelve months ended December 31, 2018)
|
|
The $201 million
pre-tax net effect of the adjustments included in 2018 reported
earnings, but excluded from operating earnings, is primarily
related to the following items:
|
- $759 million net benefit associated with the
sales of our non-core assets, primarily reflecting the gains on
sales of certain merchant generation assets and our investment in
Blue Racer.
|
- $219 million impairment charge associated
with gathering and processing assets.
|
- $215 million charge associated with Virginia
legislation enacted in March that requires one-time rate credits of
certain amounts to utility customers.
|
- $170 million net loss related to our
investments in nuclear decommissioning trust funds.
|
- $124 million charge associated with
disallowance of FERC-regulated plant.
|
- $81 million charge associated with the asset
retirement obligations for ash ponds and landfills at certain
utility generation facilities in connection with the enactment of
Virginia legislation in April.
|
- $74 million of restoration costs associated
with major storms, primarily affecting our Virginia service
territory.
|
- $37 million of transaction and
transition costs associated with the Dominion Energy Questar
combination and the acquisition of SCANA Corporation.
|
|
|
|
|
|
|
|
|
(millions,
except per share amounts)
|
1Q18
|
2Q18
|
3Q18
|
4Q18
|
YTD
2018
|
2
|
Reported
earnings
|
$503
|
$449
|
$854
|
$641
|
$2,447
|
|
Adjustments to
reported earnings 1:
|
|
|
|
|
|
|
Pre-tax loss (income)
|
305
|
145
|
(199)
|
(50)
|
201
|
|
Income tax expense (benefit)
|
(67)
|
(34)
|
103
|
1
|
3
|
|
|
|
238
|
111
|
(96)
|
(49)
|
204
|
|
Operating
earnings
|
$741
|
$560
|
$758
|
$592
|
$2,651
|
|
Common shares
outstanding (average, diluted)
|
650.5
|
653.1
|
654.9
|
660.9
|
654.9
|
|
Reported earnings
per share
|
$0.77
|
$0.69
|
$1.30
|
$0.97
|
$3.74
|
|
Adjustments to
reported earnings (after-tax)
|
0.37
|
0.17
|
(0.15)
|
(0.08)
|
0.31
|
|
Operating earnings
per share
|
$1.14
|
$0.86
|
$1.15
|
$0.89
|
$4.05
|
|
|
|
|
|
|
|
|
|
1) Adjustments to
reported earnings are reflected in the following
table:
|
|
|
|
|
|
|
|
1Q18
|
2Q18
|
3Q18
|
4Q18
|
YTD
2018
|
|
Pre-tax loss
(income):
|
|
|
|
|
|
|
Sale of non-core assets
|
|
|
(70)
|
(689)
|
(759)
|
|
Impairment of gathering & processing assets
|
|
|
|
219
|
219
|
|
Impact of Virginia rate legislation
|
215
|
|
|
|
215
|
|
Net (gain) loss on NDT funds
|
43
|
(50)
|
(149)
|
326
|
170
|
|
FERC-regulated plant disallowance
|
|
122
|
2
|
|
124
|
|
Future ash pond and landfill closure costs
|
|
81
|
|
|
81
|
|
Storm costs
|
31
|
|
|
43
|
74
|
|
Merger-related transaction and transition costs
|
16
|
9
|
3
|
9
|
37
|
|
Other
|
|
(17)
|
15
|
42
|
40
|
|
|
|
|
|
|
|
|
|
|
|
$305
|
$145
|
($199)
|
($50)
|
$201
|
|
Income tax expense
(benefit):
|
|
|
|
|
|
|
Tax
effect of above adjustments to reported earnings *
|
(67)
|
(34)
|
38
|
11
|
(52)
|
|
Re-measurement of Deferred Tax balances **
|
|
|
47
|
(1)
|
46
|
|
Valuation Allowance ***
|
|
|
18
|
(9)
|
9
|
|
|
|
($67)
|
($34)
|
$103
|
$1
|
$3
|
|
|
|
|
|
|
|
|
|
* Income taxes for
individual pre-tax items include current and deferred taxes using a
transactional effective tax rate. For interim reporting
purposes, such amounts may be adjusted in connection with the
calculation of the Company's year-to-date income tax provision
based on its estimated annual effective tax rate.
|
|
|
|
|
|
|
|
|
|
** During 2018, the
Companies recorded further adjustments to deferred taxes in
accordance with recently released tax reform guidance and to revise
estimates made at year-end 2017.
|
|
|
|
|
|
|
|
|
|
*** In 3Q18, a
valuation allowance was established against the portion of a
deferred tax asset associated with the non-core assets that was no
longer projected of being utilized to offset future taxable income.
In 4Q18, the amount was adjusted based on management's assessment
that it is more-likely-than-not that a portion of the deferred tax
asset would be realized in 2018, to reduce tax expense associated
with the sale.
|
|
|
|
|
|
|
|
|
|
2)
YTD EPS may not equal sum of quarters due to share count
difference.
|
|
Schedule 4 -
Reconciliation of 1Q19 Earnings to 1Q18
|
|
|
|
|
|
|
Preliminary,
Unaudited
|
Three Months
Ended
|
(millions,
except EPS)
|
March
31,
|
|
|
2019 vs.
2018
|
|
|
Increase /
(Decrease)
|
Reconciling
Items
|
Amount
|
EPS
|
|
|
|
|
Change in reported
earnings (GAAP)
|
($1,183)
|
($1.63)
|
|
|
|
|
|
Change in Pre-tax
loss (income) 1
|
1,335
|
|
|
Change in Income tax
1
|
(20)
|
|
Adjustments to
reported earnings
|
$1,315
|
$1.59
|
|
|
|
|
Change in
consolidated operating earnings
|
$132
|
($0.04)
|
|
|
|
|
Power
Delivery
|
|
|
|
Regulated electric
sales:
|
|
|
|
Weather
|
($8)
|
($0.01)
|
|
Other
|
3
|
—
|
|
Rider
investment
|
12
|
0.02
|
|
Other
|
(8)
|
(0.01)
|
|
Share
dilution
|
|
(0.05)
|
|
Change in
contribution to operating earnings
|
($1)
|
($0.05)
|
|
|
|
|
Power
Generation
|
|
|
|
Regulated electric
sales:
|
|
|
|
Weather
|
($16)
|
($0.03)
|
|
Other
|
(4)
|
(0.01)
|
|
Electric
capacity
|
(11)
|
(0.02)
|
|
Sale of merchant
generation facilities
|
(14)
|
(0.02)
|
|
Other
|
5
|
0.01
|
|
Share
dilution
|
|
(0.08)
|
|
Change in
contribution to operating earnings
|
($40)
|
($0.15)
|
|
|
|
|
Gas
Infrastructure
|
|
|
|
Cove Point
|
$112
|
$0.17
|
|
Farmout
transactions
|
(32)
|
(0.05)
|
|
Interest
|
(50)
|
(0.07)
|
|
Other
|
2
|
—
|
|
Share
dilution
|
|
(0.10)
|
|
Change in
contribution to operating earnings
|
$32
|
($0.05)
|
|
|
|
|
Southeast
Energy
|
$132
|
$0.17
|
|
|
|
|
Corporate and
Other
|
|
|
|
Share dilution and
other
|
$9
|
$0.04
|
|
Change in
contribution to operating earnings
|
$9
|
$0.04
|
|
|
|
|
|
|
|
|
Change in
consolidated operating earnings
|
$132
|
($0.04)
|
|
|
|
|
Change in
adjustments included in reported
earnings1
|
($1,315)
|
($1.59)
|
|
|
|
|
Change in
consolidated reported earnings
|
($1,183)
|
($1.63)
|
|
|
|
|
|
|
|
|
1)
|
Adjustments to
reported earnings are included in Corporate and Other segment
reported GAAP earnings.
|
|
Refer to Schedules 2
and 3 for details, or find "GAAP Reconciliation" in the Earnings
Release Kit on Dominion Energy's website at
www.dominionenergy.com/investors.
|
Note: Figures may not
add due to rounding
|
View original
content:http://www.prnewswire.com/news-releases/dominion-energy-announces-first-quarter-earnings-300843304.html
SOURCE Dominion Energy