Dominion Energy Announces Fourth-Quarter and Full-Year 2020 Earnings
RICHMOND, Va., Feb. 12, 2021 /PRNewswire/ -- Dominion Energy (NYSE: D) today announced an unaudited net income determined in accordance with Generally Accepted Accounting Principles (reported earnings) for the three months ended Dec. 31, 2020, of $682 million ($0.82 per share) compared with a net gain of $1.0 billion ($1.21 per share) for the same period in 2019. Reported earnings were a net loss, for the 12 months ended Dec. 31, 2020, of $401 million ($0.57 per share) compared with a net gain of $1.4 billion ($1.62 per share) for the same period in 2019.
Operating earnings for the three months ended Dec. 31, 2020, were $672 million ($0.81 per share), compared with operating earnings of $852 million ($1.02 per share) for the same period in 2019. Operating earnings for the 12 months ended Dec. 31, 2020, were $3.0 billion ($3.54 per share) compared with operating earnings of $2.9 billion ($3.53 per share) for the same period in 2019.
The difference between GAAP and operating earnings for the 12 months ended Dec. 31, 2020, was primarily attributable to a net loss from discontinued operations associated with the sale of the Gas Transmission & Storage segment and the cancellation of the Atlantic Coast Pipeline project and charges associated with the planned early retirement of electric generation facilities in Virginia.
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.
Guidance
Dominion Energy expects 2021 operating earnings in the range of $3.70 to $4.00 per share.
First-quarter 2021 operating earnings are expected to be in the range of $1.00 to $1.15 per share.
Webcast today
The company will host its fourth-quarter 2020 earnings call at 10 a.m. ET on Friday, Feb. 12, 2021. Management will discuss matters of interest to financial and other stakeholders including recent financial results. The call is expected to last between 60 and 90 minutes.
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.
For individuals that prefer to join via telephone, domestic callers should dial 1-800-341-6228 and international callers should dial 1-334-777-6993. The passcode for the telephonic earnings call is 26118983#. Participants should dial in 10 to 15 minutes prior to the scheduled start time.
A replay of the webcast will be available on the investor information pages by the end of the day Feb. 12. A telephonic replay of the earnings call will be available beginning at about 2 p.m. ET on Feb. 12. Domestic callers may access the recording by dialing 1-877-919-4059. International callers should dial 1-334-323-0140. The PIN for the replay is 21194578.
Important note to investors regarding operating, 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 extreme weather events and other natural disasters. 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
More than 7 million customers in 16 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 to achieving net zero carbon dioxide and methane emissions from its power generation and gas infrastructure operations by 2050.?Please visit DominionEnergy.com?to learn more.
This release contains certain forward-looking statements, including forecasted operating earnings first-quarter and full-year 2021 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; extraordinary external events, such as the current pandemic health event resulting from COVID-19; federal, state and local legislative and regulatory developments; changes to regulated rates collected by Dominion Energy; timing and receipt of regulatory approvals necessary for planned construction or expansion projects and compliance with conditions associated with such regulatory approvals; the inability to complete planned construction projects within time frames initially anticipated; changes to federal, state and local environmental laws and regulations, including those related to climate change; cost of environmental compliance; changes in implementation and enforcement practices of regulators relating to environmental standards and litigation exposure for remedial activities; changes in operating, maintenance and construction costs; additional competition in Dominion Energy's industries; changes in demand for Dominion Energy's services; receipt of approvals for, and timing of, closing dates for acquisitions and divestitures; impacts of acquisitions, divestitures, transfers of assets by Dominion Energy to joint ventures, and retirements of assets based on asset portfolio reviews; the expected timing and likelihood of completion of the proposed sale of Dominion Energy Questar Pipeline to Berkshire Hathaway Energy, including the ability to obtain the requisite regulatory approvals and the terms and conditions of such regulatory approvals; adverse outcomes in litigation matters or regulatory proceedings; fluctuations in interest rates; changes in rating agency requirements or credit ratings and their effect on availability and cost of capital; and capital market conditions, including the availability of credit and the ability to obtain financing on reasonable terms. Other risk factors are detailed from time to time in Dominion Energy's quarterly reports on Form 10-Q and 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 Year Ended
December 31, December 31,
---
2020 2019 2020 2019
---
Operating Revenue $3,521 $3,895 $14,172 $14,401
Operating Expenses
Electric fuel and other energy-related
purchases 485 635 2,243 2,885
Purchased electric capacity 17 14 53 88
Purchased gas 328 440 889 1,560
Other operations and maintenance(1) 1,046 1,115 5,729 5,158
Depreciation, depletion and amortization 581 570 2,332 2,283
Other taxes 208 185 871 883
---
Total operating expenses 2,665 2,959 12,117 12,857
---
Income from operations 856 936 2,055 1,544
---
Other income 406 285 733 811
Interest and related charges 241 353 1,377 1,486
---
Income from continuing operations including noncontrolling
interests before income tax expense
1,021 868 1,411 869
Income tax expense 206 48 83 209
---
Net Income from continuing operations including
noncontrolling interests
815 820 1,328 660
Net Income (loss) from discontinued operations including
noncontrolling interest
(125) 190 (1,878) 716
Net Income (loss) including
noncontrolling interests $690 $1,010 $(550) $1,376
Noncontrolling interests 8 1 (149) 18
---
Net Income (loss) attributable to
Dominion Energy $682 $1,009 $(401) $1,358
Reported Income per common share from continuing
operations -diluted
$0.98 $0.99 $1.82 $0.75
Reported Income (loss) per common share from discontinued
operations -diluted
(0.16) 0.22 (2.39) 0.87
Reported earnings (loss) per common
share -diluted $0.82 $1.21 ($0.57) $1.62
===
Average shares outstanding, diluted 812.8 826.3 831.0 808.9
1) Includes
impairment
of assets
and related
charges and
gains on
sale of
assets.
* 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 per share amounts) Three months ended December 31,
2020 2019 Change
REPORTED EARNINGS(1) $682 $1,009 $(327)
Pre-tax loss (income)(2) (452) (24) (428)
Income tax(2) 442 (133) 575
Adjustments to reported earnings (10) (157) 147
OPERATING EARNINGS $672 $852 $(180)
By segment:
Dominion Energy Virginia 412 403 9
Gas Distribution 185 173 12
Dominion Energy South Carolina 93 98 (5)
Contracted Assets 107 164 (57)
Corporate and Other (125) 14 (139)
$672 $852 $(180)
Earnings Per Share (EPS):(3)
REPORTED EARNINGS (1) $0.82 $1.21 $(0.39)
Adjustments to reported earnings (after tax) (0.01) (0.19) 0.18
OPERATING EARNINGS $0.81 $1.02 $(0.21)
By segment:
Dominion Energy Virginia 0.51 0.49 0.02
Gas Distribution 0.23 0.21 0.02
Dominion Energy South Carolina 0.11 0.12 (0.01)
Contracted Assets 0.13 0.20 (0.07)
Corporate and Other (0.17) (0.17)
$0.81 $1.02 $(0.21)
Common Shares Outstanding (average, diluted) 812.8 826.3
(millions, except earnings per share) Twelve months ended December 31,
2020 2019 Change
REPORTED EARNINGS(1) $(401) $1,358 $(1,759)
Pre-tax loss (income)(2) 4,120 1,943 2,177
Income tax(2) (713) (426) (287)
Adjustments to reported earnings 3,407 1,517 1,890
OPERATING EARNINGS $3,006 $2,875 $131
By segment:
Dominion Energy Virginia 1,891 1,786 105
Gas Distribution 560 487 73
Dominion Energy South Carolina 419 430 (11)
Contracted Assets 402 460 (58)
Corporate and Other (266) (288) 22
$3,006 $2,875 $131
Earnings Per Share (EPS):(3)
REPORTED EARNINGS(1) $(0.57) $1.62 $(2.19)
Adjustments to reported earnings (after tax) 4.11 1.91 2.20
OPERATING EARNINGS $3.54 $3.53 $0.01
By segment:
Dominion Energy Virginia 2.28 2.21 0.07
Gas Distribution 0.67 0.60 0.07
Dominion Energy South Carolina 0.51 0.53 (0.02)
Contracted Assets 0.48 0.57 (0.09)
Corporate and Other (0.40) (0.38) (0.02)
$3.54 $3.53 $0.01
Common Shares Outstanding (average, diluted) 831.0 808.9
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
investors.dominionenergy.com
.
3) The calculation of operating
earnings per share excludes
the impact, if any, of fair
value adjustments related
to the Company's
convertible preferred
securities
entered in June 2019. Such
fair value adjustments, if
any, are required for the
calculation of diluted
reported earnings per
share. No adjustments were
necessary
for
the three months ended
December 31, 2020. For the
twelve months ended
December 31, 2020, the fair
value adjustment required
for the diluted reported
earnings per share
calculation was $11
million. For the three
months and twelve months
ended December 31, 2019,
the fair value adjustment
required for the diluted
reported earnings
per share calculation was
$1 million and $28 million,
respectively. In each
quarter of 2020, the
calculation of reported and
operating earnings per
share includes the
impact of preferred
dividends of $7 million
associated with the Series
A preferred stock equity
units entered in June 2019
and $9 million
associated with the Series
B preferred stock equity
units entered in December
2019. See Forms 10-Q and
10-K for additional
information.
Schedule 2 - Reconciliation of 2020 Reported Earnings to Operating Earnings
2020 Earnings (Twelve months ended December 31, 2020)
The $4.1 billion pre-tax net effect of the adjustments included in 2020 reported earnings, but excluded from operating earnings, is primarily related to the following items:
-- $2.4 billion net loss from discontinued operations associated with the
sale of the Gas Transmission & Storage segment as well as the
cancellation of the Atlantic Coast Pipeline project.
-- $840 million of charges primarily relating to the planned early
retirement of electric generation facilities in Virginia and $257
million of charges for expected customer credit reinvestment offset and
customer arrears forgiveness for Virginia utility customers.
-- $626 million for an impairment charge attributable to Dominion Energy's
interests in certain merchant solar generation facilities and a contract
termination charge in connection with the sale of Fowler Ridge.
-- $238 million of merger and integration-related costs associated with the
SCANA Combination, including $117 million associated with litigation.
(millions, except
per share amounts) 1Q20 2Q20 3Q20 4Q20 YTD 2020
(3)
---
Reported earnings
(loss) ($270) ($1,169) $356 $682 ($401)
---
Adjustments to
reported earnings
(1):
Pre-tax loss
(income) 1,265 2,448 859 (452) 4,120
Income tax (207) (649) (299) 442 (713)
---
1,058 1,799 560 (10) 3,407
Operating earnings $788 $630 $916 $672 $3,006
---
Common shares
outstanding
(average, diluted) 838.2 839.4 833.8 812.8 831.0
---
Reported earnings
(loss) per share
(2) ($0.34) ($1.52) $0.41 $0.82 ($0.57)
Adjustments to
reported earnings
per share (2) 1.26 2.25 0.67 (0.01) 4.11
Operating earnings
per share (2) $0.92 $0.73 $1.08 $0.81 $3.54
---
1) Adjustments to
reported earnings
are reflected in
the following
table:
1Q20 2Q20 3Q20 4Q20 YTD 2020
Pre-tax loss
(income):
---
Discontinued
operations -Gas
Transmission &
Storage segment * (161) 2,691 90 (217) 2,403
Regulated asset
retirements and
other charges 768 44 200 96 1,108
Charges associated
with interests in
merchant renewable
generation
facilities 0 0 626 0 626
Merger and
integration-
related costs 51 22 77 88 238
Net (gain) loss on
NDT funds 538 (393) (190) (290) (335)
Liability
management and
financing 31 18 13 0 62
Mark-to-market
impact of economic
hedging activities 37 32 (46) (140) (117)
Other ** 1 34 89 11 135
$1,265 $2,448 $859 ($452) $4,120
Income tax expense
(benefit):
---
Tax effect of above
adjustments to
reported earnings
*** (224) (649) (230) 442 (661)
Other 17 0 (69) 0 (52)
($207) ($649) ($299) $442 ($713)
* Amount excludes
the 50% interest
in Cove Point
retained by the
Company.
** Includes social
justice
commitments and
Tropical Storm
Isaias.
*** 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) The calculation of
operating
earnings per
share excludes
the impact, if
any, of fair
value adjustments
related to the
Company's
convertible
preferred
securities
entered in June
2019. Such fair
value
adjustments, if
any, are required
for the
calculation of
diluted reported
earnings per
share. No
adjustments
were
necessary for the
three months
ended March 31,
September 30 or
December 31. For
the three months
ended June 30,
the fair value
adjustment
required for
diluted reported
earnings per
share calculation
was $92 million.
For the twelve
months ended
December 31, the
fair value
adjustment
required
for diluted
reported earnings
per share
calculation was
$11 million. In
each quarter of
2020, the
calculation of
reported and
operating
earnings per
share
includes the
impact of
preferred
dividends of $7
million
associated with
the Series A
preferred stock
equity units
entered in June
2019 and $9
million
associated with
the Series B
preferred stock
equity units
entered in
December 2019.
See Forms 10-Q
and 10-K for
additional
information.
3) YTD EPS may not
equal sum of
quarters due to
share count
difference and
fair value
adjustment
associated with
the convertible
preferred
securities.
Schedule 3 - Reconciliation of 2019 Reported Earnings to Operating Earnings
2019 Earnings (Twelve months ended December 31, 2019)
The $1.9 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:
-- $2.4 billion of merger and integration-related costs associated with the
SCANA Combination, primarily reflecting $1 billion for refunds of
amounts previously collected from retail electric customers of Dominion
Energy South Carolina (DESC) for the NND Project, $383 million
associated with a voluntary retirement program (which includes $111
million for employee benefit plan curtailment), and $641 million
associated with litigation.
-- $769 million of charges at our regulated entities, primarily consisting
of the retirement of electric generation facilities in cold reserve and
certain automated meters and a purchase power contract termination.
-- $612 million of net income from discontinued operations primarily
associated with the sale of the Gas Transmission & Storage segment.
-- $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.
-- $553 million net gain related to our investments in nuclear
decommissioning trust funds.
Dominion Energy also recorded $194 million 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 1Q19 2Q19 3Q19 4Q19 YTD 2019
share amounts) (3)
Reported earnings
(loss) ($680) $54 $975 $1,009 $1,358
Adjustments to
reported earnings
(1):
Pre-tax loss (income) 1,484 504 (21) (24) 1,943
Income tax (111) (174) (8) (133) (426)
1,373 330 (29) (157) 1,517
Operating earnings $693 $384 $946 $852 $2,875
Common shares
outstanding (average,
diluted) 793.1 802.5 813.0 826.3 808.9
Reported earnings
(loss) per share (2) ($0.86) $0.07 $1.17 $1.21 $1.62
Adjustments to
reported earnings per
share (2) 1.73 0.41 (0.02) (0.19) 1.91
Operating earnings per
share (2) $0.87 $0.48 $1.15 $1.02 $3.53
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 1,428 497 59 376 2,360
Regulated asset and
contract retirements/
terminations 547 197 47 (22) 769
Discontinued
operations -Gas
Transmission &
Storage segment * (154) (117) (125) (216) (612)
Revision to ash pond
and landfill closure
costs (113) 0 0 0 (113)
Net gain on NDT funds (253) (83) (28) (189) (553)
Other 29 10 26 27 92
$1,484 $504 ($21) ($24) $1,943
Income tax expense
(benefit):
Tax effect of above
adjustments to
reported earnings ** (279) (174) (8) (145) (606)
Write-off EDIT
regulatory assets
(SCANA) 198 0 0 (4) 194
Other (30) 0 0 16 (14)
($111) ($174) ($8) ($133) ($426)
* Amount
excludes the
50% interest
in Cove
Point
retained by
the Company.
** 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) The
calculation
of operating
earnings per
share
excludes the
impact, if
any, of fair
value
adjustments
related to
the
Company's
convertible
preferred
securities
entered in
June 2019.
Such fair
value
adjustments,
if any, are
required for
the
calculation
of diluted
reported
earnings per
share. No
adjustments
were
necessary
for the
three months
ended June
30. For the
three months
ended
September
30, the fair
value
adjustment
required for
diluted
reported
earnings
per
share
calculation
was $13
million. For
the three
and twelve
months ended
December 31,
the fair
value
adjustment
required for
diluted
reported
earnings
per
share
calculation
was $1
million and
$28 million,
respectively.
The
calculation
of reported
and
operating
earnings per
share
includes the
impact of
preferred
dividends of
$7 million
per quarter
associated
with the
Series A
preferred
stock equity
units
entered in
June of 2019
and $2
million
associated
with
the
Series B
preferred
stock equity
units
entered in
December of
2019. See
Forms 10-Q
and 10-K for
additional
information.
3)
YTD EPS may not equal sum of
quarters due to share count
difference and fair value
adjustment associated with the
convertible preferred
securities.
Schedule 4 - Reconciliation of 2020 Earnings to 2019
Preliminary, Unaudited Three Months Ended Twelve Months Ended
(millions, except EPS) December 31, December 31,
2020 vs. 2019 2020 vs. 2019
Increase /(Decrease) Increase /(Decrease)
Reconciling Items Amount EPS Amount EPS
---
Change in reported earnings (GAAP) ($327) ($0.39) ($1,759) ($2.19)
Change in Pre-tax loss (income) (1) (428) 2,177
Change in Income tax (1) 575 (287)
Adjustments to reported earnings $147 $0.18 $1,890 $2.20
Change in consolidated operating earnings ($180) ($0.21) $131 $0.01
Dominion Energy Virginia
Regulated electric sales:
Weather ($24) ($0.03) ($74) ($0.09)
Other (2) 0.00 (20) (0.02)
Rider equity return 11 0.01 87 0.10
Electric capacity (5) (0.01) 22 0.03
Select operations and maintenance expense(2) 14 0.02 61 0.08
Depreciation & amortization 9 0.01 42 0.05
Renewable energy investment tax credits 29 0.04 19 0.02
Other (23) (0.03) (32) (0.04)
Share dilution 0.01 (0.06)
Change in contribution to operating earnings $9 $0.02 $105 $0.07
Gas Distribution
Regulated gas sales:
Weather ($1) (0.00) ($2) ($0.00)
Other (1) (0.00) 11 0.01
Select operations and maintenance expense(2) 2 0.00 14 0.02
Interest expense, net 11 0.01 36 0.04
Other 1 0.00 14 0.02
Share dilution 0.00 (0.02)
Change in contribution to operating earnings $12 $0.02 $73 $0.07
Dominion Energy South Carolina
Regulated electric sales:
Weather $8 $0.01 ($15) ($0.02)
Other (17) (0.02) (8) (0.01)
Regulated gas sales 4 0.00 12 0.02
Interest expense, net (3) (0.00) 17 0.02
Other 3 0.00 (17) (0.02)
Share dilution 0.00 (0.01)
Change in contribution to operating earnings ($5) ($0.01) ($11) ($0.02)
Contracted Assets
Margin ($35) ($0.04) ($46) ($0.06)
Select operations and maintenance expense(2) (30) (0.04) (29) (0.04)
Renewable energy investment tax credits 10 0.01 17 0.02
Interest expense, net 0 0.00 13 0.02
Other (2) (0.00) (13) (0.02)
Share dilution 0.00 (0.01)
Change in contribution to operating earnings ($57) ($0.07) ($58) ($0.09)
Corporate and Other
Share dilution and other ($139) ($0.17) $22 ($0.02)
Change in contribution to operating earnings ($139) ($0.17) $22 ($0.02)
Change in consolidated operating earnings ($180) ($0.21) $131 $0.01
Change in adjustments included in reported earnings(1) ($147) ($0.18) ($1,890) ($2.20)
Change in consolidated reported earnings ($327) ($0.39) ($1,759) ($2.19)
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
investors.dominionenergy.com.
2) Includes salaries, wages,
and benefits and outage
expenses (DEV and
Contracted Assets
segments).
Note: Figures may not sum due to rounding
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SOURCE Dominion Energy
