10-Q 1 d-10q_20180331.htm 10-Q d-10q_20180331.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark one)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2018

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to

 

 

Commission File

Number

 

Exact name of registrants as specified in their charters, address of

principal executive offices and registrants’ telephone number

 

I.R.S. Employer

Identification Number

 

 

 

 

 

001-08489

 

DOMINION ENERGY, INC.

 

 

54-1229715

 

 

 

 

 

000-55337

 

VIRGINIA ELECTRIC AND POWER COMPANY

 

 

54-0418825

 

 

 

 

 

001-37591

 

DOMINION ENERGY GAS HOLDINGS, LLC

 

 

46-3639580

 

 

 

 

 

 

 

120 Tredegar Street

Richmond, Virginia 23219

(804) 819-2000

 

 

 

State or other jurisdiction of incorporation or organization of the registrants: Virginia

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Dominion Energy, Inc.    Yes      No               Virginia Electric and Power Company    Yes      No  

Dominion Energy Gas Holdings, LLC    Yes      No  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Dominion Energy, Inc.    Yes      No               Virginia Electric and Power Company    Yes      No  

Dominion Energy Gas Holdings, LLC    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Dominion Energy, Inc.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

(Do not check if a smaller reporting company)

Smaller reporting company

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Virginia Electric and Power Company

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

(Do not check if a smaller reporting company)

Smaller reporting company

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

Dominion Energy Gas Holdings, LLC

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

(Do not check if a smaller reporting company)

Smaller reporting company

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Dominion Energy, Inc.    Yes      No               Virginia Electric and Power Company    Yes      No  

Dominion Energy Gas Holdings, LLC    Yes      No  

At April 13, 2018, the latest practicable date for determination, Dominion Energy, Inc. had 652,551,940 shares of common stock outstanding and Virginia Electric and Power Company had 274,723 shares of common stock outstanding. Dominion Energy, Inc. is the sole holder of Virginia Electric and Power Company’s common stock. Dominion Energy, Inc. holds all of the membership interests of Dominion Energy Gas Holdings, LLC.

This combined Form 10-Q represents separate filings by Dominion Energy, Inc., Virginia Electric and Power Company and Dominion Energy Gas Holdings, LLC. Information contained herein relating to an individual registrant is filed by that registrant on its own behalf. Virginia Electric and Power Company and Dominion Energy Gas Holdings, LLC make no representations as to the information relating to Dominion Energy, Inc.’s other operations.

VIRGINIA ELECTRIC AND POWER COMPANY AND DOMINION ENERGY GAS HOLDINGS, LLC MEET THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND ARE FILING THIS FORM 10-Q UNDER THE REDUCED DISCLOSURE FORMAT.

 

 

 

 


COMBINED INDEX

 

 

 

 

2


GLOSSARY OF TERMS

The following abbreviations or acronyms used in this Form 10-Q are defined below:

 

Abbreviation or Acronym

 

Definition

2014 Equity Units

 

Dominion Energy's 2014 Series A Equity Units issued in July 2014

2016 Equity Units

 

Dominion Energy's 2016 Series A Equity Units issued in August 2016

2017 Tax Reform Act

 

An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (previously known as The Tax Cuts and Jobs Act) enacted on December 22, 2017

AFUDC

 

Allowance for funds used during construction

AMR

 

Automated meter reading program deployed by East Ohio

AOCI

 

Accumulated other comprehensive income (loss)

ARO

 

Asset retirement obligation

Atlantic Coast Pipeline

 

Atlantic Coast Pipeline, LLC, a limited liability company owned by Dominion Energy, Duke and Southern Company Gas

BACT

 

Best available control technology

bcf

 

Billion cubic feet

bcfe

 

Billion cubic feet equivalent

Blue Racer

 

Blue Racer Midstream, LLC, a joint venture between Dominion Energy and Caiman Energy II, LLC

CAA

 

Clean Air Act

CAISO

 

California Independent System Operator

CCR

 

Coal combustion residual

CEO

 

Chief Executive Officer

CERCLA

 

Comprehensive Environmental Response, Compensation and Liability Act of 1980, also known as Superfund

CFO

 

Chief Financial Officer

CO2

 

Carbon dioxide

Companies

 

Dominion Energy, Virginia Power and Dominion Energy Gas, collectively

Cooling degree days

 

Units measuring the extent to which the average daily temperature is greater than 65 degrees Fahrenheit, calculated as the difference between 65 degrees and the average temperature for that day

Cove Point

 

Dominion Energy Cove Point LNG, LP

Cove Point Holdings

 

Cove Point GP Holding Company, LLC

CPCN

 

Certificate of Public Convenience and Necessity

CWA

 

Clean Water Act

DECG

 

Dominion Energy Carolina Gas Transmission, LLC

DES

 

Dominion Energy Services, Inc.

DETI

 

Dominion Energy Transmission, Inc.

DGI

 

Dominion Generation, Inc.

DOE

 

U.S. Department of Energy

Dominion Energy

 

The legal entity, Dominion Energy, Inc., one or more of its consolidated subsidiaries (other than Virginia Power and Dominion Energy Gas) or operating segments, or the entirety of Dominion Energy, Inc. and its consolidated subsidiaries

3


Abbreviation or Acronym

 

Definition

Dominion Energy Gas

 

The legal entity, Dominion Energy Gas Holdings, LLC, one or more of its consolidated subsidiaries or operating segment, or the entirety of Dominion Energy Gas Holdings, LLC and its consolidated subsidiaries

Dominion Energy Midstream

 

The legal entity, Dominion Energy Midstream Partners, LP, one or more of its consolidated subsidiaries, Cove Point Holdings, Iroquois GP Holding Company, LLC, DECG and Dominion Energy Questar Pipeline or operating segment, or the entirety of Dominion Energy Midstream Partners, LP and its consolidated subsidiaries

Dominion Energy Questar Pipeline

 

Dominion Energy Questar Pipeline, LLC, one or more of its consolidated subsidiaries, or the entirety of Dominion Energy Questar Pipeline, LLC and its consolidated subsidiaries

Dth

 

Dekatherm

Duke

 

The legal entity, Duke Energy Corporation, one or more of its consolidated subsidiaries or operating segments, or the entirety of Duke Energy Corporation and its consolidated subsidiaries

East Ohio

 

The East Ohio Gas Company, doing business as Dominion Energy Ohio

Eastern Market Access Project

 

Project to provide 294,000 Dths/day of firm transportation service to help meet demand for natural gas for Washington Gas Light Company, a local gas utility serving customers in D.C., Virginia and Maryland, and Mattawoman Energy, LLC for its new electric power generation facility to be built in Maryland

EPA

 

U.S. Environmental Protection Agency

EPS

 

Earnings per share

FASB

 

Financial Accounting Standards Board

FERC

 

Federal Energy Regulatory Commission

Four Brothers

 

Four Brothers Solar, LLC, a limited liability company owned by Dominion Energy and Four Brothers Holdings, LLC, a wholly-owned subsidiary of NRG

Fowler Ridge

 

Fowler I Holdings LLC, a wind-turbine facility joint venture between Dominion Energy and BP Wind Energy North America Inc. in Benton County, Indiana

FTA

 

Free Trade Agreement

FTRs

 

Financial transmission rights

GAAP

 

U.S. generally accepted accounting principles

Gal

 

Gallon

Gas Infrastructure

 

Gas Infrastructure Group operating segment

GHG

 

Greenhouse gas

Granite Mountain

 

Granite Mountain Holdings, LLC, a limited liability company owned by Dominion Energy and Granite Mountain Renewables, LLC, a wholly-owned subsidiary of NRG

Heating degree days

 

Units measuring the extent to which the average daily temperature is less than 65 degrees Fahrenheit, calculated as the difference between 65 degrees and the average temperature for that day

Hope

 

Hope Gas, Inc., doing business as Dominion Energy West Virginia

Iron Springs

 

Iron Springs Holdings, LLC, a limited liability company owned by Dominion Energy and Iron Springs Renewables, LLC, a wholly-owned subsidiary of NRG

Iroquois

 

Iroquois Gas Transmission System, L.P.

ISO-NE

 

ISO New England, Inc.

Kewaunee

 

Kewaunee nuclear power station

kV

 

Kilovolt

Liquefaction Project

 

A natural gas export/liquefaction facility at Cove Point

LNG

 

Liquefied natural gas

MATS

 

Utility Mercury and Air Toxics Standard Rule

4


Abbreviation or Acronym

 

Definition

MD&A

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

MGD

 

Million gallons a day

Millstone

 

Millstone nuclear power station

MW

 

Megawatt

MWh

 

Megawatt hour

NAV

 

Net asset value

NedPower

 

NedPower Mount Storm LLC, a wind-turbine facility joint venture between Dominion Energy and Shell Wind Energy, Inc. in Grant County, West Virginia

NGL

 

Natural gas liquid

NOx

 

Nitrogen oxide

NRC

 

Nuclear Regulatory Commission

NRG

 

The legal entity, NRG Energy, Inc., one or more of its consolidated subsidiaries or operating segments, or the entirety of NRG Energy, Inc. and its consolidated subsidiaries

NSPS

 

New Source Performance Standards

Ohio Commission

 

Public Utilities Commission of Ohio

Order 1000

 

Order issued by FERC adopting requirements for electric transmission planning, cost allocation and development

PIPP

 

Percentage of Income Payment Plan deployed by East Ohio

PIR

 

Pipeline Infrastructure Replacement program deployed by East Ohio

PJM

 

PJM Interconnection, L.L.C.

Power Delivery

 

Power Delivery Group operating segment

Power Generation

 

Power Generation Group operating segment

ppb

 

Parts-per-billion

PSD

 

Prevention of Significant Deterioration

Questar Gas

 

Questar Gas Company

Regulation Act

 

Legislation effective July 1, 2007, that amended the Virginia Electric Utility Restructuring Act and fuel factor statute, which legislation is known as the Virginia Electric Utility Regulation Act, as amended in 2015 and 2018

Rider B

 

A rate adjustment clause associated with the recovery of costs related to the conversion of three of Virginia Power’s coal-fired power stations to biomass

Rider U

 

A rate adjustment clause associated with the recovery of costs of new underground distribution facilities

ROE

 

Return on equity

SBL Holdco

 

SBL Holdco, LLC, a wholly-owned subsidiary of DGI

SCANA

 

The legal entity, SCANA Corporation, one or more of its consolidated subsidiaries, or operating segments, or the entirety of SCANA Corporation and its consolidated subsidiaries

SCANA Merger  Agreement

 

Agreement and plan of merger entered on January 2, 2018 between Dominion Energy and SCANA in which SCANA will become a wholly-owned subsidiary of Dominion Energy upon closing

SCE&G

 

South Carolina Electric & Gas Company, a wholly-owned subsidiary of SCANA

SEC

 

Securities and Exchange Commission

Standard & Poor’s

 

Standard & Poor’s Ratings Services, a division of McGraw Hill Financial, Inc.

Terra Nova Renewable Partners

 

A partnership comprised primarily of institutional investors advised by J.P. Morgan Asset Management-Global Real Assets

5


Abbreviation or Acronym

 

Definition

Three Cedars

 

Granite Mountain and Iron Springs, collectively

Utah Commission

 

Public Service Commission of Utah

VDEQ

 

Virginia Department of Environmental Quality

VEBA

 

Voluntary Employees' Beneficiary Association

VIE

 

Variable interest entity

Virginia Commission

 

Virginia State Corporation Commission

Virginia Power

 

The legal entity, Virginia Electric and Power Company, one or more of its consolidated subsidiaries or operating segments, or the entirety of Virginia Electric and Power Company and its consolidated subsidiaries

VOC

 

Volatile organic compounds

 

 

 

 

 

 

 

 

 

 

 

 

6


PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DOMINION ENERGY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2018

 

 

2017

 

(millions, except per share amounts)

 

 

 

 

 

 

 

 

Operating Revenue(1)

 

$

3,466

 

 

$

3,384

 

Operating Expenses

 

 

 

 

 

 

 

 

Electric fuel and other energy-related purchases

 

 

744

 

 

 

575

 

Purchased (excess) electric capacity

 

 

14

 

 

 

(17

)

Purchased gas

 

 

340

 

 

 

305

 

Other operations and maintenance

 

 

796

 

 

 

784

 

Depreciation, depletion and amortization

 

 

498

 

 

 

469

 

Other taxes

 

 

199

 

 

 

189

 

Total operating expenses

 

 

2,591

 

 

 

2,305

 

Income from operations

 

 

875

 

 

 

1,079

 

Other income

 

 

100

 

 

 

162

 

Interest and related charges

 

 

314

 

 

 

292

 

Income from operations including noncontrolling interests before

   income tax expense

 

 

661

 

 

 

949

 

Income tax expense

 

 

135

 

 

 

275

 

Net Income Including Noncontrolling Interests

 

 

526

 

 

 

674

 

Noncontrolling Interests

 

 

23

 

 

 

42

 

Net Income Attributable to Dominion Energy

 

$

503

 

 

$

632

 

Earnings Per Common Share

 

 

 

 

 

 

 

 

Net income attributable to Dominion Energy - Basic

 

$

0.77

 

 

$

1.01

 

Net income attributable to Dominion Energy - Diluted

 

 

0.77

 

 

 

1.01

 

Dividends Declared Per Common Share

 

$

0.835

 

 

$

0.755

 

(1)

See Note 10 for amounts attributable to related parties.

The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.

7


DOMINION ENERGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2018

 

 

2017

 

(millions)

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

$

526

 

 

$

674

 

Other comprehensive income (loss), net of taxes:

 

 

 

 

 

 

 

 

Net deferred gains on derivatives-hedging activities(1)

 

 

111

 

 

 

43

 

Changes in unrealized net gains (losses) on investment securities(2)

 

 

(13

)

 

 

58

 

Amounts reclassified to net income:

 

 

 

 

 

 

 

 

Net derivative (gains) losses-hedging activities(3)

 

 

8

 

 

 

(23

)

Net realized (gains) losses on investment securities(4)

 

 

1

 

 

 

(28

)

Net pension and other postretirement benefit costs(5)

 

 

25

 

 

 

13

 

Changes in other comprehensive income from equity

   method investees(6)

 

 

 

 

 

1

 

Total other comprehensive income

 

 

132

 

 

 

64

 

Comprehensive income including noncontrolling interests

 

 

658

 

 

 

738

 

Comprehensive income attributable to noncontrolling interests

 

 

24

 

 

 

42

 

Comprehensive income attributable to Dominion Energy

 

$

634

 

 

$

696

 

 

(1)

Net of $(37) million and $(27) million tax for the three months ended March 31, 2018 and 2017, respectively.

(2)

Net of $4 million and $(35) million tax for the three months ended March 31, 2018 and 2017, respectively.

(3)

Net of $(3) million and $14 million tax for the three months ended March 31, 2018 and 2017, respectively.

(4)

Net of $— million and $16 million tax for the three months ended March 31, 2018 and 2017, respectively.

(5)

Net of $(1) million and $(8) million tax for the three months ended March 31, 2018 and 2017, respectively.

(6)

Net of $— million and $(1) million tax for the three months ended March 31, 2018 and 2017, respectively.

The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.

 

8


DOMINION ENERGY, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

March 31, 2018

 

 

December 31, 2017(1)

 

(millions)

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

189

 

 

$

120

 

Customer receivables (less allowance for doubtful accounts of $19 and $17)

 

 

1,615

 

 

 

1,660

 

Other receivables (less allowance for doubtful accounts of $2 at both dates)(2)

 

 

136

 

 

 

126

 

Inventories

 

 

1,367

 

 

 

1,477

 

Other

 

 

974

 

 

 

951

 

Total current assets

 

 

4,281

 

 

 

4,334

 

Investments

 

 

 

 

 

 

 

 

Nuclear decommissioning trust funds

 

 

5,060

 

 

 

5,093

 

Investment in equity method affiliates

 

 

1,638

 

 

 

1,544

 

Other

 

 

334

 

 

 

327

 

Total investments

 

 

7,032

 

 

 

6,964

 

Property, Plant and Equipment

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

75,632

 

 

 

74,823

 

Accumulated depreciation, depletion and amortization

 

 

(21,503

)

 

 

(21,065

)

Total property, plant and equipment, net

 

 

54,129

 

 

 

53,758

 

Deferred Charges and Other Assets

 

 

 

 

 

 

 

 

Goodwill

 

 

6,405

 

 

 

6,405

 

Regulatory assets

 

 

2,698

 

 

 

2,480

 

Other

 

 

2,809

 

 

 

2,644

 

Total deferred charges and other assets

 

 

11,912

 

 

 

11,529

 

Total assets

 

$

77,354

 

 

$

76,585

 

 

(1)

Dominion Energy’s Consolidated Balance Sheet at December 31, 2017 has been derived from the audited Consolidated Balance Sheet at that date.

(2)

See Note 10 for amounts attributable to related parties.

The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.

9


DOMINION ENERGY, INC.

CONSOLIDATED BALANCE SHEETS—(Continued)

(Unaudited)

 

 

 

March 31, 2018

 

 

December 31, 2017(1)

 

(millions)

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Securities due within one year

 

$

3,603

 

 

$

3,078

 

Short-term debt

 

 

2,713

 

 

 

3,298

 

Accounts payable

 

 

702

 

 

 

875

 

Other(2)

 

 

2,321

 

 

 

2,385

 

Total current liabilities

 

 

9,339

 

 

 

9,636

 

Long-Term Debt

 

 

 

 

 

 

 

 

Long-term debt

 

 

25,759

 

 

 

25,588

 

Junior subordinated notes

 

 

3,980

 

 

 

3,981

 

Remarketable subordinated notes

 

 

1,381

 

 

 

1,379

 

Total long-term debt

 

 

31,120

 

 

 

30,948

 

Deferred Credits and Other Liabilities

 

 

 

 

 

 

 

 

Deferred income taxes and investment tax credits

 

 

4,719

 

 

 

4,523

 

Regulatory liabilities

 

 

6,977

 

 

 

6,916

 

Other(2)

 

 

5,157

 

 

 

5,192

 

Total deferred credits and other liabilities

 

 

16,853

 

 

 

16,631

 

Total liabilities

 

 

57,312

 

 

 

57,215

 

Commitments and Contingencies (see Note 16)

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Common stock – no par(3)

 

 

10,316

 

 

 

9,865

 

Retained earnings

 

 

8,924

 

 

 

7,936

 

Accumulated other comprehensive loss

 

 

(1,551

)

 

 

(659

)

Total common shareholders' equity

 

 

17,689

 

 

 

17,142

 

Noncontrolling interests

 

 

2,353

 

 

 

2,228

 

Total equity

 

 

20,042

 

 

 

19,370

 

Total liabilities and equity

 

$

77,354

 

 

$

76,585

 

 

(1)

Dominion Energy’s Consolidated Balance Sheet at December 31, 2017 has been derived from the audited Consolidated Balance Sheet at that date.

(2)

See Note 10 for amounts attributable to related parties.

(3)

1 billion shares authorized; 653 million shares and 645 million shares outstanding at March 31, 2018 and December 31, 2017, respectively.

The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.


10


DOMINION ENERGY, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

 

 

 

Common Stock

 

 

Dominion Energy Shareholders

 

 

Total

Common

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Retained Earnings

 

 

AOCI

 

 

Shareholders'

Equity

 

 

Noncontrolling

Interests

 

 

Total

Equity

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,  2016

 

 

628

 

 

$

8,550

 

 

$

6,854

 

 

$

(799

)

 

$

14,605

 

 

$

2,235

 

 

$

16,840

 

Net income including noncontrolling interests

 

 

 

 

 

 

 

 

 

 

632

 

 

 

 

 

 

 

632

 

 

 

42

 

 

 

674

 

Contributions from NRG to Four Brothers

   and Three Cedars

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

 

6

 

Issuance of common stock

 

 

1

 

 

 

79

 

 

 

 

 

 

 

 

 

 

 

79

 

 

 

 

 

 

 

79

 

Dividends and distributions

 

 

 

 

 

 

 

 

 

 

(474

)

 

 

 

 

 

 

(474

)

 

 

(19

)

 

 

(493

)

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

64

 

 

 

64

 

 

 

 

 

 

 

64

 

Other

 

 

 

 

 

 

 

 

 

 

11

 

 

 

 

 

 

 

11

 

 

 

 

 

 

 

11

 

March 31, 2017

 

 

629

 

 

$

8,629

 

 

$

7,023

 

 

$

(735

)

 

$

14,917

 

 

$

2,264

 

 

$

17,181

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2017

 

 

645

 

 

$

9,865

 

 

$

7,936

 

 

$

(659

)

 

$

17,142

 

 

$

2,228

 

 

$

19,370

 

Cumulative-effect of changes in accounting

   principles

 

 

 

 

 

 

(127

)

 

 

1,029

 

 

 

(1,023

)

 

 

(121

)

 

 

127

 

 

 

6

 

Net income including noncontrolling interests

 

 

 

 

 

 

 

 

 

 

503

 

 

 

 

 

 

 

503

 

 

 

23

 

 

 

526

 

Issuance of common stock

 

 

8

 

 

 

580

 

 

 

 

 

 

 

 

 

 

 

580

 

 

 

 

 

 

 

580

 

Sale of Dominion Energy Midstream common

   units - net of offering costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

 

 

4

 

Stock awards (net of change in unearned

   compensation)

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

 

 

3

 

 

 

 

 

 

 

3

 

Dividends and distributions

 

 

 

 

 

 

 

 

 

 

(544

)

 

 

 

 

 

 

(544

)

 

 

(31

)

 

 

(575

)

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

131

 

 

 

131

 

 

 

1

 

 

 

132

 

Other

 

 

 

 

 

 

(5

)

 

 

 

 

 

 

 

 

 

 

(5

)

 

 

1

 

 

 

(4

)

March 31, 2018

 

 

653

 

 

$

10,316

 

 

$

8,924

 

 

$

(1,551

)

 

$

17,689

 

 

$

2,353

 

 

$

20,042

 

The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.

11


DOMINION ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

Three Months Ended March 31,

 

2018

 

 

2017

 

(millions)

 

 

 

 

 

 

 

 

Operating Activities

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

$

526

 

 

$

674

 

Adjustments to reconcile net income including noncontrolling interests to net cash

   provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization (including nuclear fuel)

 

 

572

 

 

 

548

 

Deferred income taxes and investment tax credits

 

 

131

 

 

 

250

 

Proceeds from assignment of tower rental portfolio

 

 

 

 

 

91

 

Contribution to pension plan

 

 

 

 

 

(75

)

Gains on sales of assets

 

 

(44

)

 

 

 

Provision for rate credits to electric utility customers

 

 

215

 

 

 

 

Other adjustments

 

 

13

 

 

 

(84

)

Changes in:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

47

 

 

 

136

 

Inventories

 

 

104

 

 

 

61

 

Deferred fuel and purchased gas costs, net

 

 

(264

)

 

 

(37

)

Prepayments

 

 

(3

)

 

 

18

 

Accounts payable

 

 

(57

)

 

 

(140

)

Accrued interest, payroll and taxes

 

 

(103

)

 

 

(19

)

Customer deposits

 

 

101

 

 

 

 

Margin deposit assets and liabilities

 

 

(33

)

 

 

8

 

Net realized and unrealized changes related to derivative activities

 

 

47

 

 

 

31

 

Other operating assets and liabilities

 

 

(20

)

 

 

(102

)

Net cash provided by operating activities

 

 

1,232

 

 

 

1,360

 

Investing Activities

 

 

 

 

 

 

 

 

Plant construction and other property additions (including nuclear fuel)

 

 

(1,103

)

 

 

(1,435

)

Acquisition of solar development projects

 

 

(7

)

 

 

(94

)

Proceeds from sales of securities

 

 

419

 

 

 

756

 

Purchases of securities

 

 

(453

)

 

 

(786

)

Proceeds from assignment of shale development rights

 

 

44

 

 

 

 

Contributions to equity method affiliates

 

 

(87

)

 

 

(146

)

Other

 

 

4

 

 

 

4

 

Net cash used in investing activities

 

 

(1,183

)

 

 

(1,701

)

Financing Activities

 

 

 

 

 

 

 

 

Issuance of short-term notes

 

 

950

 

 

 

 

Repayment of short-term debt, net

 

 

(585

)

 

 

(528

)

Issuance of long-term debt

 

 

950

 

 

 

1,950

 

Repayment of long-term debt

 

 

(1,180

)

 

 

(401

)

Issuance of common stock

 

 

581

 

 

 

79

 

Common dividend payments

 

 

(544

)

 

 

(474

)

Other

 

 

(72

)

 

 

(67

)

Net cash provided by financing activities

 

 

100

 

 

 

559

 

Increase in cash, restricted cash and equivalents

 

 

149

 

 

 

218

 

Cash, restricted cash and equivalents at beginning of period

 

 

185

 

 

 

322

 

Cash, restricted cash and equivalents at end of period

 

$

334

 

 

$

540

 

Supplemental Cash Flow Information

 

 

 

 

 

 

 

 

Significant noncash investing activities:

 

 

 

 

 

 

 

 

Accrued capital expenditures

 

$

175

 

 

$

230

 

The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.

12


VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

 

 

 

Three Months Ended March 31,

 

 

 

2018

 

 

2017

 

(millions)

 

 

 

 

 

 

 

 

Operating Revenue(1)

 

$

1,748

 

 

$

1,831

 

Operating Expenses

 

 

 

 

 

 

 

 

Electric fuel and other energy-related purchases(1)

 

 

591

 

 

 

456

 

Purchased (excess) electric capacity

 

 

14

 

 

 

(17

)

Other operations and maintenance:

 

 

 

 

 

 

 

 

Affiliated suppliers

 

 

83

 

 

 

78

 

Other

 

 

316

 

 

 

296

 

Depreciation and amortization

 

 

297

 

 

 

286

 

Other taxes

 

 

83

 

 

 

79

 

Total operating expenses

 

 

1,384

 

 

 

1,178

 

Income from operations

 

 

364

 

 

 

653

 

Other income

 

 

3

 

 

 

31

 

Interest and related charges(1)

 

 

132

 

 

 

120

 

Income before income tax expense

 

 

235

 

 

 

564

 

Income tax expense

 

 

51

 

 

 

208

 

Net Income

 

$

184

 

 

$

356

 

(1)

See Note 18 for amounts attributable to affiliates.

The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.

 


13


VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

 

 

 

 

Three Months Ended March 31,

 

 

 

2018

 

 

2017

 

(millions)

 

 

 

 

 

 

 

 

Net income

 

$

184

 

 

$

356

 

Other comprehensive income (loss), net of taxes:

 

 

 

 

 

 

 

 

Net deferred gains on derivatives-hedging activities(1)

 

 

5

 

 

 

 

Changes in unrealized net gains (losses) on nuclear decommissioning trust funds(2)

 

 

 

 

 

7

 

Amounts reclassified to net income:

 

 

 

 

 

 

 

 

Net realized gains on nuclear decommissioning trust funds(3)

 

 

 

 

 

(3

)

Total other comprehensive income

 

 

5