Dominion Energy Announces Fourth-Quarter and Full-Year 2022 Earnings

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Feb 08, 2023, 07:30 ET

Fourth-quarter 2022 GAAP net loss of $0.07 per share; operating earnings of $1.06 per share
Full year 2022 GAAP net income of $1.09 per share; operating earnings of $4.11 per share

RICHMOND, Va., Feb. 8, 2023 /PRNewswire/ -- Dominion Energy (NYSE: D) today announced unaudited net loss determined in accordance with Generally Accepted Accounting Principles (reported earnings) for the three months ended Dec. 31, 2022, of $42 million ($0.07 per share) compared with net income of $1.3 billion ($1.63 per share) for the same period in 2021, with net income of $994 million ($1.09 per share) for the 12 months ended Dec. 31, 2022, compared with net income of $3.3 billion ($3.98 per share) for the same period in 2021.

Operating earnings for the three months ended Dec. 31, 2022, were $903 million ($1.06 per share), compared to operating earnings of $752 million ($0.90 per share) for the same period in 2021. Operating earnings for the 12 months ended Dec. 31, 2022, were $3.5 billion ($4.11 per share) compared with operating earnings of $3.2 billion ($3.86 per share) for the same period in 2021.

Differences between GAAP and operating earnings for the period include an impairment of certain nonregulated solar generation facilities, the mark-to-market impact of economic hedging activities, gains and losses on nuclear decommissioning trust funds, regulated asset retirements and other adjustments.

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 first-quarter operating earnings in the range of $0.97 to $1.12 per share.

Webcast today
The company will host its fourth-quarter 2022 earnings call at 10 a.m. ET on Wednesday, Feb. 8, 2023. Management will discuss matters of interest to financial and other stakeholders including recent financial results.

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 who prefer to join via telephone, domestic callers should dial 1-800-420-1271 and international callers should dial 1-785-424-1634. The passcode for the telephonic earnings call is 68006. 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. 8. A telephonic replay of the earnings call will be available beginning at about 1 p.m. ET on Feb. 8. Domestic callers may access the recording by dialing 1-800-839-6803. International callers should dial 1-402-220-6056. The PIN for the replay is 68006.

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. Dominion Energy management is not able to estimate the aggregate impact of these items on future period reported earnings.

About Dominion Energy
About 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 safely providing reliable, affordable and sustainable energy and to achieving Net Zero emissions by 2050. Please visit DominionEnergy.com to learn more.

This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including forecasted operating earnings first-quarter 2023 and beyond that are subject to various risks and uncertainties. Factors that could cause actual results to differ include, but are not limited to: the direct and indirect impacts of implementing recommendations resulting from the business review announced in November 2022; 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; risks and uncertainties that may impact the ability to develop and construct the Coastal Virginia Offshore Wind (CVOW) Commercial Project within the currently proposed timeline, or at all, and consistent with current cost estimates along with the ability to recover such costs from customers; changes to federal, state and local environmental laws and regulations, including those related to climate change; cost of environmental strategy and compliance, including cost related to climate change; 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; adverse outcomes in litigation matters or regulatory proceedings; fluctuations in interest rates; the effectiveness to which existing economic hedging instruments mitigate fluctuations in currency exchange rates of the Euro and Danish Krone associated with certain fixed price contracts for the major offshore construction and equipment components of the CVOW Commercial Project; 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 U.S. Securities and Exchange Commission.

Dominion Energy, Inc.
Consolidated Statements of Income *
Unaudited (GAAP Based)
(millions, except per share amounts)

	Three Months Ended		Twelve Months Ended
	December 31,		December 31,
	2022	2021	2022	2021

Operating Revenue	$ 4,913	$ 3,880	$ 17,174	$ 13,964

Operating Expenses
Electric fuel and other energy-related purchases	1,086	628	3,711	2,368
Purchased electric capacity	14	8	59	70
Purchased gas	597	418	1,582	1,083
Other operations and maintenance¹	2,436	1,037	6,473	4,037
Depreciation, depletion and amortization	710	645	2,830	2,478
Other taxes	204	207	923	909
Total operating expenses	5,047	2,943	15,578	10,945

Income (loss) from operations	(134)	937	1,596	3,019

Other income (expense)²	339	487	423	1,433
Interest and related charges	416	376	966	1,354

Income (loss) from continuing operations including noncontrolling interests before income tax expense (benefit)	(211)	1,048	1,053	3,098

Income tax expense (benefit)	(175)	225	68	425

Net Income (loss) from continuing operations including noncontrolling interests	(36)	823	985	2,673

Net Income (loss) from discontinued operations including noncontrolling interests	(6)	522	9	641

Net Income (loss) including noncontrolling interests	$ (42)	$ 1,345	$ 994	$ 3,314
Noncontrolling interests	-	4	-	26

Net Income (loss) attributable to Dominion Energy	$ (42)	$ 1,341	$ 994	$ 3,288

Reported Income (loss) per common share from continuing operations - diluted	$ (0.06)	$ 0.99	$ 1.08	$ 3.19
Reported Income (loss) per common share from discontinued operations - diluted	(0.01)	0.64	0.01	0.79
Reported Income (loss) per common share - diluted	$ (0.07)	$ 1.63	$ 1.09	$ 3.98
Average shares outstanding, diluted	833.7	811.0	824.8	808.5

¹⁾Includes impairment of assets and other charges (benefits) and losses (gains) on sales of assets.
²⁾Includes earnings from equity method investees.

*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,
	2022	2021	Change

REPORTED EARNINGS¹	$ (42)	$ 1,341	$ (1,383)

Pre-tax loss (income)²	1,255	(761)	2,016
Income tax²	(310)	172	(482)
Adjustments to reported earnings	945	(589)	1,534

OPERATING EARNINGS	$ 903	$ 752	$ 151
By segment:
Dominion Energy Virginia	433	455	(22)
Gas Distribution	211	185	26
Dominion Energy South Carolina	97	100	(3)
Contracted Assets	93	58	35
Corporate and Other	69	(46)	115
	$ 903	$ 752	$ 151


Earnings Per Share (EPS):³
REPORTED EARNINGS ¹	$ (0.07)	$ 1.63	$ (1.70)
Adjustments to reported earnings (after tax)	1.13	(0.73)	1.86
OPERATING EARNINGS	$ 1.06	$ 0.90	$ 0.16
By segment:
Dominion Energy Virginia	0.52	0.56	(0.04)
Gas Distribution	0.25	0.23	0.02
Dominion Energy South Carolina	0.12	0.12	-
Contracted Assets	0.11	0.07	0.04
Corporate and Other	0.06	(0.08)	0.14
	$ 1.06	$ 0.90	$ 0.16

Common Shares Outstanding (average, diluted)	834.1	811.0

(millions, except earnings per share)	Twelve months ended December 31,
	2022	2021	Change

REPORTED EARNINGS¹	$ 994	$ 3,288	$ (2,294)

Pre-tax loss (income)²	3,127	(26)	3,153
Income tax²	(616)	(71)	(545)
Adjustments to reported earnings	2,511	(97)	2,608

OPERATING EARNINGS	$ 3,505	$ 3,191	$ 314
By segment:
Dominion Energy Virginia	2,008	1,919	89
Gas Distribution	697	600	97
Dominion Energy South Carolina	505	437	68
Contracted Assets	335	431	(96)
Corporate and Other	(40)	(196)	156
	$ 3,505	$ 3,191	$ 314

Earnings Per Share (EPS):³
REPORTED EARNINGS¹	$ 1.09	$ 3.98	$ (2.89)
Adjustments to reported earnings (after tax)	3.02	(0.12)	3.14
OPERATING EARNINGS	$ 4.11	$ 3.86	$ 0.25
By segment:
Dominion Energy Virginia	2.44	2.37	0.07
Gas Distribution	0.85	0.74	0.11
Dominion Energy South Carolina	0.61	0.54	0.07
Contracted Assets	0.41	0.53	(0.12)
Corporate and Other	(0.20)	(0.32)	0.12
	$ 4.11	$ 3.86	$ 0.25

Common Shares Outstanding (average, diluted)	833.0	808.5

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 reported and operating earnings per share on a consolidated basis utilizes shares outstanding on a diluted basis with all dilutive impacts, primarily consisting of potential shares which had not yet been issued, reflected in the Corporate and Other segment. As a result of a reported net loss for the three months ended December 31, 2022, any adjustments to earnings or shares would be considered antidilutive and are excluded from the calculation of diluted earnings per share. Effective January 2022, the calculation of diluted reported and operating earnings per share assumes conversion, if dilutive, of the Series A preferred stock to common stock as of January 1, 2022. The Series A preferred stock was reclassified to a liability in June 2022 and redeemed in September 2022. In prior periods, a fair value adjustment of the Series A preferred stock was included in the calculation of diluted reported earnings per share if dilutive. No adjustments were necessary for the three and twelve months ended December 31, 2021. During each quarter of 2022, the calculation of reported and operating earnings per share includes the impact of preferred dividends associated with preferred stock of $9 million (Series B) and $11 million (Series C, issued in December 2021). Reported earnings per share for the twelve months ended December 31, 2022 also includes the impact of preferred dividends associated with Series A preferred stock of $12 million. During each quarter of 2021, the calculation of reported and operating earnings per share includes the impact of preferred dividends associated with preferred stock of $7 million (Series A) and $9 million (Series B). In addition, the fourth quarter of 2021 includes $3 million of preferred dividends associated with the Series C preferred stock issued in December 2021. See Forms 10-Q and 10-K for additional information.

Schedule 2 - Reconciliation of 2022 Reported Earnings to Operating Earnings

2022 Earnings (Twelve months ended December 31, 2022)

The $3.1 billion pre-tax net loss of the adjustments included in 2022 reported earnings, but excluded from operating earnings, is primarily related to the following items:

$51 million net market loss associated with $559 million from nuclear decommissioning trusts offset by $508 million in economic hedging activities.
$1.5 billion charge associated with the impairment of certain nonregulated solar generation facilities.
$830 million of regulated asset retirements and other charges, including $404M of charges for certain Virginia Power fuel and Regional Greenhouse Gas Initiative (RGGI) compliance costs deemed recovered through base rates, $243 million associated with the settlement of Virginia Power's 2021 triennial review and $167 million for dismantling costs associated with the early retirement of certain Virginia Power fossil-fuel generation facilities.
$649 million loss associated with the sale of Kewaunee nuclear power station.
$125 million of storm damage and restoration costs primarily associated with storms in Virginia Power's service territory.


(millions, except per share amounts)	1Q22	2Q22	3Q22	4Q22	YTD 2022³
Reported earnings	$711	($453)	$778	($42)	$994
Adjustments to reported earnings ¹:
Pre-tax loss (income)	255	1,383	234	1,255	3,127
Income tax	34	(272)	(68)	(310)	(616)
	289	1,111	166	945	2,511
Operating earnings	$1,000	$658	$944	$903	$3,505
Common shares outstanding (average, diluted)	832.0	832.5	833.2	834.1	833.0
Reported earnings per share ²	$0.83	($0.58)	$0.91	($0.07)	$1.09
Adjustments to reported earnings per share ²	0.35	1.35	0.20	1.13	3.02
Operating earnings per share ²	$1.18	$0.77	$1.11	$1.06	$4.11

1) Adjustments to reported earnings are reflected in the following table:
	1Q22	2Q22	3Q22	4Q22	YTD 2022
Pre-tax loss (income):
Net loss (gain) on NDT funds	$125	$454	$112	($132)	$559
Mark-to-market impact of economic hedging activities	(4)	(193)	24	(335)	(508)
Discontinued operations - Gas Transmission & Storage segment	(25)	3	3	2	(17)
Nonregulated asset impairments and other charges*	-	-	-	1,511	1,511
Regulated asset retirements and other charges	65	470	112	183	830
Sale of Kewaunee	-	649	-	-	649
Storm damage and restoration costs	94	-	-	31	125
Sale of Hope Gas, Inc.	-	-	(17)	(5)	(22)

	$255	$1,383	$234	$1,255	$3,127
Income tax expense (benefit):
Tax effect of above adjustments to reported earnings **	(53)	(275)	22	(310)	(616)
Deferred taxes associated with Hope Gas, Inc. divestiture⁴	87	3	(90)	-	-

	$34	($272)	($68)	($310)	($616)


^*	In the fourth quarter of 2022, Dominion Energy determined that its nonregulated solar generation assets within the Contracted Assets segment were impaired following the determination that it expects it is more likely than not such assets will be sold before the end of their useful lives.

^**	Income taxes for individual pre-tax items include current and deferred taxes using a transactional effective tax rate. For interim reporting purposes, calculation of 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 reported and operating earnings per share on a consolidated basis utilizes shares outstanding on a diluted basis with all dilutive impacts, primarily consisting of potential shares which had not yet been issued, reflected in the Corporate and Other segment. As a result of reported net losses for the three months ended June 30, and December 31, 2022, any adjustments to earnings or shares would be considered antidilutive and are excluded from the calculation of diluted earnings per share. Effective January 2022, the calculation of diluted reported and operating earnings per share assumes conversion, if dilutive, of the Series A preferred stock to common stock as of January 1, 2022. The Series A preferred stock was reclassified to a liability in June 2022 and redeemed in September 2022. During each quarter of 2022, the calculation of reported and operating earnings per share includes the impact of preferred dividends associated with preferred stock of $9 million (Series B) and $11 million (Series C, issued in December 2021). Reported earnings per share for the three months ended June 30, 2022 and the twelve months ended December 31, 2022 also includes the impact of preferred dividends associated with Series A preferred stock of $5 million and $12 million, respectively. See Forms 10-Q and 10-K for additional information.

³⁾	YTD EPS may not equal sum of quarters due to share count difference.

⁴⁾	Represents deferred taxes related to the basis in Hope Gas, Inc.'s stock that reversed when the sale closed in the third quarter of 2022. This charge is reflected as a component of current income tax expense on the sale in the third quarter of 2022.

Schedule 3 - Reconciliation of 2021 Reported Earnings to Operating Earnings

2021 Earnings (Twelve months ended December 31, 2021)

The $26 million pre-tax net gain of the adjustments included in 2021 reported earnings, but excluded from operating earnings, is primarily related to the following items:

$308 million net market benefit associated with $568 million from the nuclear decommissioning trusts offset by $260 million in economic hedging activities.
$829 million of net income from discontinued operations, including $685 million associated with the sale of Questar Pipelines.
$564 million of regulated asset retirements and other charges, including $266 million associated with the settlement of the South Carolina electric rate case, primarily for the write-off of regulatory assets for debt repurchased in 2019, $186 million associated with the settlement of Virginia Power's 2021 triennial review and $77 million for forgiveness of Virginia customer accounts in arrears pursuant to Virginia's 2021 budget process.
$235 million of net charges associated with the sales of non-wholly-owned nonregulated solar facilities.
$99 million of net merger and integration-related costs associated with the SCANA Combination, primarily for litigation charges.
$77 million of net charges associated with workplace realignment, primarily related to a corporate office lease termination.
$68 million of storm damage and restoration costs associated with ice storms in Virginia Power's service territory.


(millions, except per share amounts)	1Q21	2Q21	3Q21	4Q21	YTD 2021³
Reported earnings	$ 1,008	$ 285	$ 654	$ 1,341	$ 3,288
Adjustments to reported earnings¹:
Pre-tax loss (income)	(152)	474	413	(761)	(26)
Income tax	37	(131)	(149)	172	(71)
	(115)	343	264	(589)	(97)
Operating earnings	$ 893	$ 628	$ 918	$ 752	$ 3,191
Common shares outstanding (average, diluted)	805.9	806.6	810.0	811.0	808.5
Reported earnings per share²	$ 1.23	$ 0.33	$ 0.79	$ 1.63	$ 3.98
Adjustments to reported earnings per share²	(0.14)	0.43	0.32	(0.73)	(0.12)
Operating earnings per share²	$ 1.09	$ 0.76	$ 1.11	$ 0.90	$ 3.86

1) Adjustments to reported earnings are reflected in the following table:
	1Q21	2Q21	3Q21	4Q21	YTD 2021
Pre-tax loss (income):
Net (gain) loss on NDT funds	$ (134)	$ (194)	$ 19	$ (259)	$ (568)
Mark-to-market impact of economic hedging activities	(278)	291	284	(37)	260
Discontinued operations - Gas Transmission & Storage segment	(35)	(30)	(59)	(705)	(829)
Regulated asset retirements and other charges	100	278	119	67	564
Sales of non-wholly-owned nonregulated solar facilities	-	-	23	212	235
Merger litigation and integration charges	71	48	8	(28)	99
Workplace realignment	71	-	17	(11)	77
Storm damage and restoration costs	51	17	-	-	68
Kewaunee decommissioning revision	-	44	-	-	44
Other	2	20	2	-	24

	$ (152)	$ 474	$ 413	$ (761)	$ (26)
Income tax expense (benefit):
Tax effect of above adjustments to reported earnings*	37	(131)	(140)	204	(30)
Other	-	-	(9)	(32)	(41)

	$ 37	$ (131)	$ (149)	$ 172	$ (71)



* 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, June 30 or September 30 or for the three and twelve months ended December 31.
During each quarter of 2021, 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 and $9 million associated with the Series B preferred stock equity units. In addition, the
fourth quarter of 2021 includes $3 million of preferred dividends associated with the Series C preferred stock issued in December 2021.
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 2022 Earnings to 2021

Preliminary, Unaudited		Three Months Ended		Twelve Months Ended
(millions, except EPS)		December 31,		December 31,
		2022 vs. 2021		2022 vs. 2021
		Increase / (Decrease)		Increase / (Decrease)
Reconciling Items		Amount	EPS	Amount	EPS

Change in reported earnings (GAAP)		($1,383)	($1.70)	($2,294)	($2.89)

	Change in Pre-tax loss (income) ¹	2,016		3,153
	Change in Income tax ¹	(482)		(545)
Adjustments to reported earnings		$1,534	$1.86	$2,608	$3.14

Change in consolidated operating earnings		$151	$0.16	$314	$0.25

Dominion Energy Virginia
	Weather	$20	$0.02	$21	$0.03
	Customer usage and other factors	(16)	(0.02)	25	0.03
	Customer-elected rate impacts	(29)	(0.03)	13	0.02
	Base rate case impacts	(8)	(0.01)	(41)	(0.05)
	Rider equity return	8	0.01	64	0.08
	Renewable energy investment tax credits	14	0.02	65	0.08
	Storm damage and service restoration	(11)	(0.01)	(17)	(0.02)
	Interest expense, net	3	-	(13)	(0.02)
	Other	(3)	-	(28)	(0.03)
	Share dilution		(0.02)		(0.05)
	Change in contribution to operating earnings	($22)	($0.04)	$89	$0.07

Gas Distribution
	Weather	$1	-	$4	-
	Customer usage and other factors	32	0.04	57	0.07
	Base rate case impacts	(4)	(0.01)	29	0.04
	Rider equity return	6	0.01	25	0.03
	Interest expense, net	(9)	(0.01)	(16)	(0.02)
	Other	-	-	(2)	-
	Share dilution		(0.01)		(0.01)
	Change in contribution to operating earnings	$26	$0.02	$97	$0.11

Dominion Energy South Carolina
	Weather	$3	-	$21	$0.03
	Customer usage and other factors	(13)	(0.01)	14	0.02
	Customer-elected rate impacts	(1)	-	14	0.02
	Base & RSA rate case impacts	3	-	22	0.03
	Interest expense, net	(6)	-	(16)	(0.02)
	Other	11	0.01	13	-
	Share dilution		-		(0.01)
	Change in contribution to operating earnings	($3)	-	$68	$0.07

Contracted Assets
	Margin	$8	$0.01	$11	$0.01
	Sale of non-wholly-owned nonregulated solar facilities	(1)	-	(20)	(0.02)
	Planned outage costs	25	0.03	(19)	(0.02)
	Renewable energy investment tax credits	-	-	(29)	(0.04)
	Interest expense, net	(11)	(0.01)	(50)	(0.06)
	Other	14	0.01	11	0.02
	Share dilution		-		(0.01)
	Change in contribution to operating earnings	$35	$0.04	($96)	($0.12)

Corporate and Other
	Other	$115	$0.14	$156	$0.12
	Change in contribution to operating earnings	$115	$0.14	$156	$0.12


Change in consolidated operating earnings		$151	$0.16	$314	$0.25

Change in adjustments included in reported earnings¹		($1,534)	($1.86)	($2,608)	($3.14)

Change in consolidated reported earnings		($1,383)	($1.70)	($2,294)	($2.89)


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.
Note: Figures may not sum due to rounding