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Dominion Energy Announces Fourth-Quarter and Full-Year 2020 Earnings

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- Fourth-quarter 2020 GAAP net income of $0.82 per share; operating earnings of $0.81 per share

- Full-year 2020 GAAP net loss of $0.57; operating earnings of $3.54 per share

- Company initiates 2021 operating earnings guidance of $3.70 to $4.00 per share

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 maintenance1

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 EARNINGS1

$ 682


$ 1,009


$ (327)


Pre-tax loss (income)2

(452)


(24)


(428)


Income tax2

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 EARNINGS1

$ (401)


$ 1,358


$(1,759)


Pre-tax loss (income)2

4,120


1,943


2,177


Income tax2

(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 EARNINGS1

$ (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 20203

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 share amounts)

1Q19

2Q19

3Q19

4Q19

YTD 20193


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 expense2

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 expense2

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 expense2

(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 earnings1

($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

Cision
Cision

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SOURCE Dominion Energy