d-10q_20180630.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 June 30, 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 every Interactive Data File required to be submitted 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 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

Emerging growth company

Non-accelerated filer

 

Smaller reporting 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

Emerging growth company

Non-accelerated filer

 

Smaller reporting 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

Emerging growth company

Non-accelerated filer

 

Smaller reporting 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 July 13, 2018, the latest practicable date for determination, Dominion Energy, Inc. had 653,765,671 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

 

 

 

Page

Number

 

Glossary of Terms

3

 

 

 

 

PART I. Financial Information

 

 

 

 

Item 1.

Financial Statements

7

Item 2.

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

94

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

110

Item 4.

Controls and Procedures

111

 

 

 

 

PART II. Other Information

 

 

 

 

Item 1.

Legal Proceedings

112

Item 1A.

Risk Factors

112

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

113

Item 5.

Other Information

113

Item 6.

Exhibits

115

 

 

 

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

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

Bear Garden

 

A 590 MW combined-cycle, natural gas-fired power station in Buckingham County, Virginia

Blue Racer

 

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

Brunswick County

 

A 1,376 MW combined-cycle, natural gas-fired power station in Brunswick County, Virginia

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

Colonial Trail West

 

An approximately 142 MW proposed utility-scale solar power station located in Surry County, Virginia

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

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

DSM

 

Demand-side management

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

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

Greensville County

 

An approximately 1,588 MW natural gas-fired combined-cycle power station under construction in Greensville County, Virginia

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

4


 

Abbreviation or Acronym

 

Definition

LNG

 

Liquefied natural gas

MATS

 

Utility Mercury and Air Toxics Standard Rule

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

PREP

 

Pipeline Replacement and Expansion Program, a program of replacing, upgrading and expanding natural gas utility infrastructure deployed by Hope

PSD

 

Prevention of Significant Deterioration

Questar Gas

 

Questar Gas Company

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 BW

 

A rate adjustment clause associated with the recovery of costs related to Brunswick County

Rider GV

 

A rate adjustment clause associated with the recovery of costs related to Greensville County

Rider R

 

A rate adjustment clause associated with the recovery of costs related to Bear Garden

Rider S

 

A rate adjustment clause associated with the recovery of costs related to the Virginia City Hybrid Energy Center

Rider T1

 

A rate adjustment clause to recover the difference between revenues produced from transmission rates included in base rates, and the new total revenue requirement developed annually for the rate years effective September 1

Rider US-2

 

A rate adjustment clause associated with the recovery of costs related to Woodland, Scott Solar and Whitehouse

5


 

Abbreviation or Acronym

 

Definition

Rider US-3

 

A rate adjustment clause associated with the recovery of costs related to Colonial Trail West and Spring

Grove 1

Rider W

 

A rate adjustment clause associated with the recovery of costs related to Warren County

Riders C1A and C2A

 

Rate adjustment clauses associated with the recovery of costs related to certain DSM programs approved in DSM cases

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

Scott Solar

 

A 17 MW utility-scale solar power station in Powhatan County, Virginia

SEC

 

Securities and Exchange Commission

Spring Grove 1

 

An approximately 98 MW proposed utility-scale solar power station located in Surry County, Virginia

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

Three Cedars

 

Granite Mountain and Iron Springs, collectively

UEX Rider

 

Uncollectible Expense Rider deployed by East Ohio

Utah Commission

 

Public Service Commission of Utah

VDEQ

 

Virginia Department of Environmental Quality

VEBA

 

Voluntary Employees' Beneficiary Association

VIE

 

Variable interest entity

Virginia City Hybrid Energy Center

 

A 610 MW baseload carbon-capture compatible, clean coal powered electric generation facility in Wise County, Virginia

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

Warren County

 

A 1,350 MW combined-cycle, natural gas-fired power station in Warren County, Virginia

Whitehouse

 

A 20 MW utility-scale solar power station in Louisa County, Virginia

Woodland

 

A 19 MW utility-scale solar power station in Isle of Wight County, Virginia

Wyoming Commission

 

Wyoming Public Service Commission

 

 

 

 

 

 

 

 

 

 

 

 

6


 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DOMINION ENERGY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

(millions, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenue(1)

 

$

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

 

(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 June 30,

 

 

Six Months Ended June 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

$

478

 

 

$

417

 

 

$

1,004

 

 

$

1,091

 

Other comprehensive income (loss), net of taxes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net deferred gains (losses) on derivatives-hedging activities(1)

 

 

(33

)

 

 

28

 

 

 

78

 

 

 

71

 

Changes in unrealized net gains (losses) on investment

   securities(2)

 

 

(5

)

 

 

35

 

 

 

(18

)

 

 

93

 

Amounts reclassified to net income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

33

 

 

 

(18

)

 

 

41

 

 

 

(41

)

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

 

 

 

 

 

(4

)

 

 

1

 

 

 

(32

)

Net pension and other postretirement benefit costs(5)

 

 

17

 

 

 

11

 

 

 

42

 

 

 

24

 

Changes in other comprehensive income from equity

   method investees(6)

 

 

1

 

 

 

1

 

 

 

1

 

 

 

2

 

Total other comprehensive income

 

 

13

 

 

 

53

 

 

 

145

 

 

 

117

 

Comprehensive income including noncontrolling interests

 

 

491

 

 

 

470

 

 

 

1,149

 

 

 

1,208

 

Comprehensive income attributable to noncontrolling interests

 

 

29

 

 

 

27

 

 

 

53

 

 

 

69

 

Comprehensive income attributable to Dominion Energy

 

$

462

 

 

$

443

 

 

$

1,096

 

 

$

1,139

 

 

(1)

Net of $11 million and $(17) million tax for the three months ended June 30, 2018 and 2017, respectively, and net of $(26) million and $(44) million tax for the six months ended June 30, 2018 and 2017, respectively.

(2)

Net of $2 million and $(18) million tax for the three months ended June 30, 2018 and 2017, respectively, and net of $6 million and $(53) million tax for the six months ended June 30, 2018 and 2017, respectively.

(3)

Net of $(11) million and $11 million tax for the three months ended June 30, 2018 and 2017, respectively, and net of $(14) million and $25 million tax for the six months ended June 30, 2018 and 2017, respectively.

(4)

Net of $(1) million and $2 million tax for the three months ended June 30, 2018 and 2017, respectively, and net of $(1) million and $18 million tax for the six months ended June 30, 2018 and 2017, respectively.

(5)

Net of $(7) million and $(10) million tax for the three months ended June 30, 2018 and 2017, respectively, and net of $(8) million and $(18) million tax for the six months ended June 30, 2018 and 2017, respectively.

(6)

Net of $(1) million and $— million tax for the three months ended June 30, 2018 and 2017, respectively, and net of $(1) million tax for both the six months ended June 30, 2018 and 2017.

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

 

8


 

DOMINION ENERGY, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

June 30, 2018

 

 

December 31, 2017(1)

 

(millions)

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

190

 

 

$

120

 

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

 

 

1,510

 

 

 

1,660

 

Other receivables (less allowance for doubtful accounts of $3 and $2)(2)

 

 

133

 

 

 

126

 

Inventories

 

 

1,429

 

 

 

1,477

 

Regulatory assets

 

 

616

 

 

 

294

 

Other

 

 

732

 

 

 

657

 

Total current assets

 

 

4,610

 

 

 

4,334

 

Investments

 

 

 

 

 

 

 

 

Nuclear decommissioning trust funds

 

 

5,159

 

 

 

5,093

 

Investment in equity method affiliates

 

 

1,710

 

 

 

1,544

 

Other

 

 

339

 

 

 

327

 

Total investments

 

 

7,208

 

 

 

6,964

 

Property, Plant and Equipment

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

76,458

 

 

 

74,823

 

Accumulated depreciation, depletion and amortization

 

 

(21,854

)

 

 

(21,065

)

Total property, plant and equipment, net

 

 

54,604

 

 

 

53,758

 

Deferred Charges and Other Assets

 

 

 

 

 

 

 

 

Goodwill

 

 

6,405

 

 

 

6,405

 

Regulatory assets

 

 

2,395

 

 

 

2,480

 

Other

 

 

2,853

 

 

 

2,644

 

Total deferred charges and other assets

 

 

11,653

 

 

 

11,529

 

Total assets

 

$

78,075

 

 

$

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)

 

 

 

June 30, 2018

 

 

December 31, 2017(1)

 

(millions)

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Securities due within one year

 

$

2,950

 

 

$

3,078

 

Short-term debt

 

 

2,745

 

 

 

3,298

 

Accounts payable

 

 

660

 

 

 

875

 

Other(2)

 

 

2,563

 

 

 

2,385

 

Total current liabilities

 

 

8,918

 

 

 

9,636

 

Long-Term Debt

 

 

 

 

 

 

 

 

Long-term debt

 

 

26,679

 

 

 

25,588

 

Junior subordinated notes

 

 

3,981

 

 

 

3,981

 

Remarketable subordinated notes

 

 

1,382

 

 

 

1,379

 

Credit facility borrowings

 

 

73

 

 

 

 

Total long-term debt

 

 

32,115

 

 

 

30,948

 

Deferred Credits and Other Liabilities

 

 

 

 

 

 

 

 

Deferred income taxes and investment tax credits

 

 

4,844

 

 

 

4,523

 

Regulatory liabilities

 

 

7,065

 

 

 

6,916

 

Other(2)

 

 

5,097

 

 

 

5,192

 

Total deferred credits and other liabilities

 

 

17,006

 

 

 

16,631

 

Total liabilities

 

 

58,039

 

 

 

57,215

 

Commitments and Contingencies (see Note 16)

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Common stock – no par(3)

 

 

10,782

 

 

 

9,865

 

Retained earnings

 

 

8,820

 

 

 

7,936

 

Accumulated other comprehensive loss

 

 

(1,538

)

 

 

(659

)

Total common shareholders' equity

 

 

18,064

 

 

 

17,142

 

Noncontrolling interests

 

 

1,972

 

 

 

2,228

 

Total equity

 

 

20,036

 

 

 

19,370

 

Total liabilities and equity

 

$

78,075

 

 

$

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; 654 million shares and 645 million shares outstanding at June 30, 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

 

 

 

 

 

 

 

 

 

 

1,022

 

 

 

 

 

 

 

1,022

 

 

 

69

 

 

 

1,091

 

Contributions from NRG to Four Brothers

   and Three Cedars

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 

 

 

9

 

Issuance of common stock

 

 

2

 

 

 

156

 

 

 

 

 

 

 

 

 

 

 

156

 

 

 

 

 

 

 

156

 

Stock awards (net of change in unearned

   compensation)

 

 

 

 

 

 

11

 

 

 

 

 

 

 

 

 

 

 

11

 

 

 

 

 

 

 

11

 

Dividends and distributions

 

 

 

 

 

 

 

 

 

 

(949

)

 

 

 

 

 

 

(949

)

 

 

(82

)

 

 

(1,031

)

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

117

 

 

 

117

 

 

 

 

 

 

 

117

 

Other

 

 

 

 

 

 

 

 

 

 

11

 

 

 

 

 

 

 

11

 

 

 

1

 

 

 

12

 

June 30, 2017

 

 

630

 

 

$

8,717

 

 

$

6,938

 

 

$

(682

)

 

$

14,973

 

 

$

2,232

 

 

$

17,205

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

952

 

 

 

 

 

 

 

952

 

 

 

52

 

 

 

1,004

 

Issuance of common stock

 

 

9

 

 

 

662

 

 

 

 

 

 

 

 

 

 

 

662

 

 

 

 

 

 

 

662

 

Sale of Dominion Energy Midstream common

   units - net of offering costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

 

 

4

 

Remeasurement of noncontrolling interest in

   Dominion Energy Midstream

 

 

 

 

 

 

375

 

 

 

 

 

 

 

 

 

 

 

375

 

 

 

(375

)

 

 

 

Stock awards (net of change in unearned

   compensation)

 

 

 

 

 

 

12

 

 

 

 

 

 

 

 

 

 

 

12

 

 

 

 

 

 

 

12

 

Dividends and distributions

 

 

 

 

 

 

 

 

 

 

(1,089

)

 

 

 

 

 

 

(1,089

)

 

 

(65

)

 

 

(1,154

)

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

144

 

 

 

144

 

 

 

1

 

 

 

145

 

Other

 

 

 

 

 

 

(5

)

 

 

(8

)

 

 

 

 

 

 

(13

)

 

 

 

 

 

 

(13

)

June 30, 2018

 

 

654

 

 

$

10,782

 

 

$

8,820

 

 

$

(1,538

)

 

$

18,064

 

 

$

1,972

 

 

$

20,036

 

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

11


 

DOMINION ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Six Months Ended June 30,

 

2018

 

 

2017

 

(millions)

 

 

 

 

 

 

 

 

Operating Activities

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

$

1,004

 

 

$

1,091

 

Adjustments to reconcile net income including noncontrolling interests to net cash

   provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization (including nuclear fuel)

 

 

1,106

 

 

 

1,088

 

Deferred income taxes and investment tax credits

 

 

229

 

 

 

406

 

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

 

 

 

 

Charge associated with future ash pond and landfill closure costs

 

 

81

 

 

 

 

Charge associated with FERC-regulated plant disallowance

 

 

129

 

 

 

 

Other adjustments

 

 

(42

)

 

 

(64

)

Changes in:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

158

 

 

 

307

 

Inventories

 

 

31

 

 

 

21

 

Deferred fuel and purchased gas costs, net

 

 

(295

)

 

 

(79

)

Prepayments

 

 

(15

)

 

 

32

 

Accounts payable

 

 

(151

)

 

 

(211

)

Accrued interest, payroll and taxes

 

 

(90

)

 

 

(73

)

Customer deposits

 

 

108

 

 

 

12

 

Margin deposit assets and liabilities

 

 

(34

)

 

 

54

 

Net realized and unrealized changes related to derivative activities

 

 

82

 

 

 

34

 

Other operating assets and liabilities

 

 

(47

)

 

 

(274

)

Net cash provided by operating activities

 

 

2,425

 

 

 

2,360

 

Investing Activities