Virginia
(State or other jurisdiction of incorporation) |
001-08489
(Commission File Number) |
54-1229715
(IRS Employer Identification No.) |
120 Tredegar Street
Richmond, Virginia (Address of Principal Executive Offices) |
23219 (Zip Code) |
Exhibit
|
|
99
|
DOMINION ENERGY, INC.
Registrant |
/s/ Carter M. Reid
|
Carter M. Reid
Executive Vice President, Chief Administrative & Compliance Officer and Corporate Secretary
|
·
|
Second-quarter 2018 reported earnings of $0.69 per share
|
·
|
Second-quarter 2018 operating earnings of $0.86 per share
|
·
|
Reaffirm full-year 2018 operating earnings guidance of $3.80 to $4.25 per share
|
Dominion Energy, Inc.
Consolidated Statements of Income*
Unaudited (GAAP Based)
(millions, except per share amounts)
|
||||||||
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||
2018
|
2017
|
2018
|
2017
|
|||||
(millions, except per share amounts)
|
||||||||
Operating Revenue
|
$ 3,088
|
$ 2,813
|
$ 6,554
|
$ 6,197
|
||||
Operating Expenses
|
||||||||
Electric fuel and other energy-related purchases
|
623
|
498
|
1,367
|
1,073
|
||||
Purchased (excess) electric capacity
|
23
|
(12)
|
37
|
(29)
|
||||
Purchased gas
|
64
|
112
|
404
|
417
|
||||
Other operations and maintenance
|
1,007
|
827
|
1,803
|
1,611
|
||||
Depreciation, depletion and amortization
|
463
|
467
|
961
|
936
|
||||
Other taxes
|
166
|
168
|
365
|
357
|
||||
Total operating expenses
|
2,346
|
2,060
|
4,937
|
4,365
|
||||
Income from operations
|
742
|
753
|
1,617
|
1,832
|
||||
Other income
|
185
|
108
|
285
|
270
|
||||
Interest and related charges
|
361
|
308
|
675
|
600
|
||||
Income from operations including noncontrolling interests before income tax expense
|
566
|
553
|
1,227
|
1,502
|
||||
Income tax expense
|
88
|
136
|
223
|
411
|
||||
Net Income Including Noncontrolling Interests
|
478
|
417
|
1,004
|
1,091
|
||||
Noncontrolling Interests
|
29
|
27
|
52
|
69
|
||||
Net Income Attributable to Dominion Energy
|
$ 449
|
$ 390
|
$ 952
|
$ 1,022
|
||||
Earnings Per Common Share
|
||||||||
Net income attributable to Dominion Energy - Basic
|
$ 0.69
|
$ 0.62
|
$ 1.46
|
$ 1.63
|
||||
Net income attributable to Dominion Energy - Diluted
|
0.69
|
0.62
|
1.46
|
1.63
|
||||
Dividends Declared Per Common Share
|
$ 0.8350
|
$ 0.7550
|
$ 1.670
|
$ 1.510
|
||||
* 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 June 30,
|
|||||||
2018
|
2017
|
Change
|
||||||
REPORTED EARNINGS 1
|
$ 449
|
$ 390
|
$ 59
|
|||||
Pre-tax loss (income) 2
|
145
|
47
|
98
|
|||||
Income tax 2
|
(34)
|
(16)
|
(18)
|
|||||
Adjustments to reported earnings
|
111
|
31
|
80
|
|||||
OPERATING EARNINGS
|
$ 560
|
$ 421
|
$ 139
|
|||||
By segment:
|
||||||||
Power Delivery
|
145
|
127
|
18
|
|||||
Power Generation
|
276
|
240
|
36
|
|||||
Gas Infrastructure
|
249
|
163
|
86
|
|||||
Corporate and Other
|
(110)
|
(109)
|
(1)
|
|||||
$ 560
|
$ 421
|
$ 139
|
||||||
Earnings Per Share (EPS):
|
||||||||
REPORTED EARNINGS 1
|
$ 0.69
|
$ 0.62
|
$ 0.07
|
|||||
Adjustments to reported earnings (after tax)
|
0.17
|
0.05
|
0.12
|
|||||
OPERATING EARNINGS
|
$ 0.86
|
$ 0.67
|
$ 0.19
|
|||||
By segment:
|
||||||||
Power Delivery
|
0.23
|
0.20
|
0.03
|
|||||
Power Generation
|
0.42
|
0.38
|
0.04
|
|||||
Gas Infrastructure
|
0.38
|
0.26
|
0.12
|
|||||
Corporate and Other
|
(0.17)
|
(0.17)
|
-
|
|||||
$ 0.86
|
$ 0.67
|
$ 0.19
|
||||||
Common Shares Outstanding (average, diluted)
|
653.1
|
629.2
|
||||||
(millions, except earnings per share)
|
Six months ended June 30,
|
|||||||
2018
|
2017
|
Change
|
||||||
REPORTED EARNINGS 1
|
$ 952
|
$ 1,022
|
$ (70)
|
|||||
Pre-tax loss (income) 2
|
450
|
16
|
434
|
|||||
Income tax 2
|
(101)
|
(6)
|
(95)
|
|||||
Adjustments to reported earnings
|
349
|
10
|
339
|
|||||
OPERATING EARNINGS
|
$ 1,301
|
$ 1,032
|
$ 269
|
|||||
By segment:
|
||||||||
Power Delivery
|
301
|
252
|
49
|
|||||
Power Generation
|
624
|
501
|
123
|
|||||
Gas Infrastructure
|
576
|
426
|
150
|
|||||
Corporate and Other
|
(200)
|
(147)
|
(53)
|
|||||
$ 1,301
|
$ 1,032
|
$ 269
|
||||||
Earnings Per Share (EPS):
|
||||||||
REPORTED EARNINGS 1
|
$ 1.46
|
$ 1.63
|
$ (0.17)
|
|||||
Adjustments to reported earnings (after tax)
|
0.54
|
0.01
|
0.53
|
|||||
OPERATING EARNINGS
|
$ 2.00
|
$ 1.64
|
$ 0.36
|
|||||
By segment:
|
||||||||
Power Delivery
|
0.46
|
0.40
|
0.06
|
|||||
Power Generation
|
0.96
|
0.80
|
0.16
|
|||||
Gas Infrastructure
|
0.88
|
0.68
|
0.20
|
|||||
Corporate and Other
|
(0.30)
|
(0.24)
|
(0.06)
|
|||||
$ 2.00
|
$ 1.64
|
$ 0.36
|
||||||
Common Shares Outstanding (average, diluted)
|
651.8
|
628.7
|
||||||
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.
|
|||||||
·
|
$215 million charge associated with Virginia legislation enacted in March that requires one-time rate credits of certain amounts to utility customers.
|
·
|
$122 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.
|
·
|
$31 million of restoration costs associated with Winter Storm Riley primarily affecting our Virginia service territory.
|
·
|
$25 million of transaction and transition costs associated with the Dominion Energy Questar combination and the proposed acquisition of SCANA Corporation.
|
·
|
$31 million benefit associated with retroactive application of depreciation rates for regulated nuclear plants to comply with the Virginia Commission requirements.
|
·
|
$7 million net gain related to our investments in nuclear decommissioning trust funds.
|
(millions, except per share amounts)
|
1Q18
|
2Q18
|
3Q18
|
4Q18
|
YTD 2018
|
2
|
|
Reported earnings
|
$503
|
$449
|
$952
|
||||
Adjustments to reported earnings 1:
|
|||||||
Pre-tax loss (income)
|
305
|
145
|
450
|
||||
Income tax benefit
|
(67)
|
(34)
|
(101)
|
||||
238
|
111
|
349
|
|||||
Operating earnings
|
$741
|
$560
|
$1,301
|
||||
Common shares outstanding (average, diluted)
|
650.5
|
653.1
|
651.8
|
||||
Reported earnings per share
|
$0.77
|
$0.69
|
$1.46
|
||||
Adjustments to reported earnings (after-tax)
|
0.37
|
0.17
|
0.54
|
||||
Operating earnings per share
|
$1.14
|
$0.86
|
$2.00
|
||||
1) Adjustments to reported earnings are reflected in the following table:
|
|||||||
1Q18
|
2Q18
|
3Q18
|
4Q18
|
YTD 2018
|
|||
Pre-tax loss (income):
|
|||||||
Impact of Virginia rate legislation
|
215
|
215
|
|||||
FERC-regulated plant disallowance
|
122
|
122
|
|||||
Future ash pond and landfill closure costs
|
81
|
81
|
|||||
Storm costs
|
31
|
31
|
|||||
Merger-related transaction and transition costs
|
16
|
9
|
25
|
||||
VA depreciation revision
|
(31)
|
(31)
|
|||||
Net (gain) loss on NDT funds
|
43
|
(50)
|
(7)
|
||||
Other
|
14
|
14
|
|||||
$305
|
$145
|
$450
|
|||||
Income tax expense (benefit):
|
|||||||
Tax effect of above adjustments to reported earnings *
|
(67)
|
(34)
|
(101)
|
||||
($67)
|
($34)
|
($101)
|
|||||
* 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.
|
|||||||
2) YTD EPS may not equal sum of quarters due to share count difference.
|
·
|
$158 million of impairment charges associated with our equity method investments in wind-powered generation facilities.
|
·
|
$72 million of transaction and transition costs, primarily associated with the Dominion Energy Questar combination.
|
·
|
$46 million net gain related to our investments in nuclear decommissioning trust funds.
|
(millions, except per share amounts)
|
1Q17
|
2Q17
|
3Q17
|
4Q17
|
YTD 2017
|
2
|
|
Reported earnings
|
$632
|
$390
|
$665
|
$1,312
|
$2,999
|
||
Adjustments to reported earnings 1:
|
|||||||
Pre-tax loss (income)
|
(31)
|
47
|
12
|
207
|
235
|
||
Income tax
|
10
|
(16)
|
(5)
|
(934)
|
(945)
|
||
(21)
|
31
|
7
|
(727)
|
(710)
|
|||
Operating earnings
|
$611
|
$421
|
$672
|
$585
|
$2,289
|
||
Common shares outstanding (average, diluted)
|
628.1
|
629.2
|
642.5
|
643.9
|
636.0
|
||
Reported earnings per share
|
$1.01
|
$0.62
|
$1.03
|
$2.04
|
$4.72
|
||
Adjustments to reported earnings (after-tax)
|
(0.04)
|
0.05
|
0.01
|
(1.13)
|
(1.12)
|
||
Operating earnings per share
|
$0.97
|
$0.67
|
$1.04
|
$0.91
|
$3.60
|
||
1) Adjustments to reported earnings are reflected in the following table:
|
|||||||
1Q17
|
2Q17
|
3Q17
|
4Q17
|
YTD 2017
|
|||
Pre-tax loss (income):
|
|||||||
Impairments of equity method investments
|
158
|
158
|
|||||
Merger-related transaction & transition costs
|
3
|
20
|
16
|
33
|
72
|
||
Net gain on NDT funds
|
(34)
|
(3)
|
(4)
|
(5)
|
(46)
|
||
Other
|
30
|
21
|
51
|
||||
($31)
|
$47
|
$12
|
$207
|
$235
|
|||
Income tax expense (benefit):
|
|||||||
Tax effect of above adjustments to reported earnings *
|
10
|
(16)
|
(5)
|
(83)
|
(94)
|
||
Re-measurement of Deferred Tax Balances **
|
(851)
|
(851)
|
|||||
$10
|
($16)
|
($5)
|
($934)
|
($945)
|
|||
* 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.
|
|||||||
** Federal tax reform, enacted in December 2017, reduced the corporate income tax rate from 35% to 21%, effective 1/1/2018. Deferred taxes are required to be measured at the enacted rate in effect when they are expected to reverse. As a result, deferred taxes were re-measured to the 21% rate. For regulated entities, where the reduction in deferred taxes is expected to be recovered or refunded in future rates, the adjustment was recorded to a regulatory asset or liability instead of income tax expense.
|
|||||||
2) YTD EPS may not equal sum of quarters due to share count differences
|
Schedule 4 - Reconciliation of 2Q18 Earnings to 2Q17
|
|||||||
Preliminary, Unaudited
|
Three Months Ended
June 30,
2018 vs. 2017
Increase / (Decrease)
|
Six Months Ended
June 30,
2018 vs. 2017
Increase / (Decrease)
|
|||||
(millions, except EPS)
|
|||||||
Reconciling Items
|
Amount
|
EPS
|
Amount
|
EPS
|
|||
Change in reported earnings (GAAP)
|
$59
|
$0.07
|
($70)
|
($0.17)
|
|||
Change in Pre-tax loss (income) 1
|
98
|
434
|
|||||
Change in Income tax 1
|
(18)
|
(95)
|
|||||
Adjustments to reported earnings
|
$80
|
$0.12
|
$339
|
$0.53
|
|||
Change in consolidated operating earnings
|
$139
|
$0.19
|
$269
|
$0.36
|
|||
Power Delivery 2
|
|||||||
Regulated electric sales:
|
|||||||
Weather
|
$8
|
$0.01
|
$22
|
$0.03
|
|||
Other
|
12
|
0.02
|
16
|
0.03
|
|||
FERC Transmission equity return
|
1
|
-
|
5
|
0.01
|
|||
Tax reform impacts
|
0
|
-
|
0
|
-
|
|||
Other
|
(3)
|
-
|
6
|
0.01
|
|||
Share dilution
|
-
|
-
|
-
|
(0.02)
|
|||
Change in contribution to operating earnings
|
$18
|
$0.03
|
$49
|
$0.06
|
|||
Power Generation 2
|
|||||||
Regulated electric sales:
|
|||||||
Weather
|
$13
|
$0.02
|
$41
|
$0.06
|
|||
Other
|
2
|
-
|
(7)
|
(0.01)
|
|||
Merchant generation margin
|
33
|
0.06
|
94
|
0.15
|
|||
Planned outage costs
|
36
|
0.06
|
40
|
0.06
|
|||
Electric capacity
|
(20)
|
(0.03)
|
(38)
|
(0.06)
|
|||
Renewable energy investment tax credits
|
(55)
|
(0.09)
|
(55)
|
(0.09)
|
|||
Tax reform impacts
|
9
|
0.01
|
32
|
0.05
|
|||
Other
|
18
|
0.03
|
16
|
0.03
|
|||
Share dilution
|
-
|
(0.02)
|
-
|
(0.03)
|
|||
Change in contribution to operating earnings
|
$36
|
$0.04
|
$123
|
$0.16
|
|||
Gas Infrastructure 2
|
|||||||
Farmout transactions
|
$4
|
$0.01
|
$36
|
$0.06
|
|||
Transportation and storage growth projects
|
10
|
0.02
|
18
|
0.03
|
|||
Cove Point
|
68
|
0.11
|
58
|
0.09
|
|||
Tax reform impacts
|
28
|
0.04
|
60
|
0.09
|
|||
Interest
|
(27)
|
(0.04)
|
(28)
|
(0.05)
|
|||
Other
|
3
|
-
|
6
|
0.01
|
|||
Share dilution
|
-
|
(0.02)
|
-
|
(0.03)
|
|||
Change in contribution to operating earnings
|
$86
|
$0.12
|
$150
|
$0.20
|
|||
Corporate and Other 2
|
|||||||
Renewable energy investment tax credits
|
$20
|
$0.03
|
($15)
|
($0.02)
|
|||
Tax reform impacts
|
(20)
|
(0.03)
|
(39)
|
(0.06)
|
|||
Interest expense, other, and share dilution
|
(1)
|
-
|
1
|
0.02
|
|||
Change in contribution to operating earnings
|
($1)
|
$0.00
|
($53)
|
($0.06)
|
|||
Change in consolidated operating earnings
|
$139
|
$0.19
|
$269
|
$0.36
|
|||
Change in adjustments included in reported earnings1
|
($80)
|
($0.12)
|
($339)
|
($0.53)
|
|||
Change in consolidated reported earnings
|
$59
|
$0.07
|
($70)
|
($0.17)
|
|||
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.
|
||||||
2)
|
For period over period comparability reconciling items tax effected using a 35% federal tax rate.
Segment specific tax reform impacts outlined as individual reconciling items.
|
||||||
Note: Figures may not add due to rounding
|