Dominion Energy Announces Second-Quarter 2024 Earnings

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Aug 01, 2024, 07:30 ET

Second-quarter 2024 GAAP net income of $0.65 per share; operating earnings (non-GAAP) of $0.65 per share
Company reaffirms all financial guidance provided at its March 1, 2024, investor meeting, including guidance related to earnings, credit, and dividend

RICHMOND, Va., Aug. 1, 2024 /PRNewswire/ -- Dominion Energy, Inc. (NYSE: D), today announced unaudited net income determined in accordance with Generally Accepted Accounting Principles (GAAP, or reported earnings) for the three months ended June 30, 2024, of $572 million ($0.65 per share) compared with net income of $583 million ($0.67 per share) for the same period in 2023.

Operating earnings (non-GAAP) for the three months ended June 30, 2024, were $563 million ($0.65 per share), compared to operating earnings of $310 million ($0.35 per share) for the same period in 2023.

Differences between GAAP and operating earnings for the period include a net benefit from discontinued operations primarily associated with the sale of gas distribution operations, gains and losses on nuclear decommissioning trust funds, mark-to-market impact of economic hedging activities, and other adjustments. 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
The company reaffirms its full-year 2024 operating earnings guidance range of $2.62 to $2.87 per share. The company also reaffirms its full-year 2025 operating earnings guidance range of $3.25 to $3.54 per share and the other financial guidance provided at the March 1, 2024 investor meeting including guidance related to earnings, credit, and dividend.

Webcast today
The company will host its second-quarter 2024 earnings call at 10 a.m. ET on Thursday, Aug. 1, 2024. 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 1-800-343-1703 and international callers should dial 1-785-424-1116. The passcode for the telephonic earnings call is 40578. 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 Aug. 1. A telephonic replay of the earnings call will be available beginning at about 1 p.m. ET on Aug. 1. Domestic callers may access the recording by dialing 1-800-839-3740. International callers should dial 1-402-220-7239. The passcode for the replay is 40578.

Important note to investors regarding operating, reported earnings
Dominion Energy uses operating earnings (non-GAAP) as the primary performance measurement of its results for public communications with analysts and investors. Operating earnings are defined as reported earnings adjusted for certain items. 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.

About Dominion Energy
More than 4.5 million customers in 13 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 providing reliable, affordable, and increasingly clean energy every day 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 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 concluded in March 2024; 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 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 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; the expected timing and likelihood of the completion of the proposed sale of Public Service Company of North Carolina, Incorporated, and its consolidated subsidiaries and related entities, including the ability to obtain the requisite regulatory approvals and the terms and conditions of such approvals; the expected timing and likelihood of the completion of the proposed sale of a 50% noncontrolling interest in the CVOW Commercial Project, including the ability to obtain the requisite regulatory approvals and the terms and conditions of such approvals; 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.

Consolidated Statements of Income (GAAP)

Dominion Energy, Inc.
Consolidated Statements of Income *
Unaudited (GAAP Based)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(millions, except per share amounts)	2024		2023		2024		2023
Operating Revenue	$	3,486	$	3,166	$	7,118	$	7,049
Operating Expenses
Electric fuel and other energy-related purchases		918		939		1,877		1,961
Purchased electric capacity		21		15		33		23
Purchased gas		44		49		164		172
Other operations and maintenance⁽¹⁾		907		798		1,792		1,636
Depreciation and amortization		621		607		1,242		1,229
Other taxes		170		164		372		355
Total operating expenses		2,681		2,572		5,480		5,376
Income (loss) from operations		805		594		1,638		1,673
Other income (expense)		250		314		685		590
Interest and related charges		469		395		1,043		874
Income (loss) from continuing operations including noncontrolling interests before income tax expense (benefit)		586		513		1,280		1,389
Income tax expense (benefit)		95		98		229		274
Net Income (loss) from continuing operations		491		415		1,051		1,115
Net Income (loss) from discontinued operations		81		168		195		449
Net Income (loss) attributable to Dominion Energy	$	572	$	583	$	1,246	$	1,564
Reported Income (loss) per common share from continuing operations - diluted	$	0.55	$	0.47	$	1.20	$	1.28
Reported Income (loss) per common share from discontinued operations - diluted		0.10		0.20		0.23		0.54
Reported Income (loss) per common share - diluted	$	0.65	$	0.67	$	1.43	$	1.82
Average shares outstanding, diluted		838.3		836.2		838.0		835.9


(1)	Includes impairment of assets and other charges (benefits) and losses (gains) on sales 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

	Three Months Ended June 30,						Six Months Ended June 30,
(millions, except per share amounts)	2024		2023		Change		2024		2023		Change
REPORTED EARNINGS⁽¹⁾	$	572	$	583	$	(11)	$	1,246	$	1,564	$	(318)
Pre-tax loss (income)⁽²⁾		39		(346)		385		(225)		(936)		711
Income tax⁽²⁾		(48)		73		(121)		25		197		(172)
Adjustments to reported earnings		(9)		(273)		264		(200)		(739)		539

OPERATING EARNINGS (non-GAAP)	$	563	$	310	$	253	$	1,046	$	825	$	221
By segment:
Dominion Energy Virginia		485		394		91		909		780		129
Dominion Energy South Carolina		69		68		1		149		159		(10)
Contracted Energy		100		(45)		145		222		66		156
Corporate and Other		(91)		(107)		16		(234)		(180)		(54)
	$	563	$	310	$	253	$	1,046	$	825	$	221
Earnings Per Share (EPS)⁽³⁾:
REPORTED EARNINGS⁽¹⁾	$	0.65	$	0.67	$	(0.02)	$	1.43	$	1.82	$	(0.39)
Adjustments to reported earnings (after-tax)		-		(0.32)		0.32		(0.23)		(0.88)		0.65
OPERATING EARNINGS (non-GAAP)	$	0.65	$	0.35	$	0.30	$	1.20	$	0.94	$	0.26
By segment:
Dominion Energy Virginia		0.58		0.47		0.11		1.09		0.93		0.16
Dominion Energy South Carolina		0.08		0.08		-		0.18		0.19		(0.01)
Contracted Energy		0.12		(0.05)		0.17		0.26		0.08		0.18
Corporate and Other		(0.13)		(0.15)		0.02		(0.33)		(0.26)		(0.07)
	$	0.65	$	0.35	$	0.30	$	1.20	$	0.94	$	0.26
Common Shares Outstanding (average, diluted)		838.3		836.2				838.0		835.9


(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 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. The calculation of operating earnings per share for the three and six months ended June 30, 2024 excludes a deemed dividend of $9 million associated with the Company's repurchase of certain Series B preferred stock in June 2024. During each quarter of 2024 and 2023, the calculation of reported and operating earnings per share includes the impact of preferred dividends associated with Series C preferred stock of $11 million. Reported and operating earnings per share for the three and six months ended June 30, 2024 also includes the impact of preferred dividends associated with Series B preferred stock of $8 million and $17 million, respectively. During each quarter of 2023, the calculation of reported and operating earnings per share includes the impact of preferred dividends associated with Series B preferred stock of $9 million. See Forms 10-Q and 10-K for additional information.

Schedule 2 - Reconciliation of 2024 Reported Earnings to Operating Earnings

2024 Earnings (Six Months Ended June 30, 2024)

The $225 million pre-tax net income of the adjustments included in 2024 reported earnings, but excluded from operating earnings, is primarily related to the following items:

$138 million net market benefit primarily associated with $350 million from nuclear decommissioning trusts (NDT) offset by $212 million in economic hedging activities.
$227 million of net benefit from discontinued operations primarily related to a $233 million benefit associated with gas distribution operations (inclusive of a $133 million net loss on sales related to the East Ohio and Questar Gas Transactions).
$80 million of nonregulated asset impairments and other charges related to a $47 million charge in connection with the settlement of an agreement and a $33 million charge associated with an impairment of certain nonregulated renewable natural gas facilities.

(millions, except per share amounts)	1Q24		2Q24		3Q24	4Q24	YTD 2024
Reported earnings	$	674	$	572			$	1,246
Adjustments to reported earnings⁽¹⁾:
Pre-tax loss (income)		(264)		39				(225)
Income tax (benefit)		73		(48)				25
		(191)		(9)				(200)
Operating earnings (non-GAAP)	$	483	$	563			$	1,046
Common shares outstanding (average, diluted)		837.6		838.3				838.0
Reported earnings per share⁽²⁾	$	0.78	$	0.65			$	1.43
Adjustments to reported earnings per share⁽²⁾		(0.23)		-				(0.23)
Operating earnings (non-GAAP) per share⁽²⁾	$	0.55	$	0.65			$	1.20

(1) Adjustments to reported earnings are reflected in the following table:
	1Q24		2Q24		3Q24	4Q24	YTD 2024
Pre-tax loss (income):
Net loss (gain) on NDT funds	$	(266)	$	(84)			$	(350)
Mark-to-market impact of economic hedging activities		108		104				212
Discontinued operations		(165)		(62)				(227)
Business review costs		29		15				44
Nonregulated asset impairments and other charges		47		33				80
Net loss (gain) on real estate dispositions		-		17				17
Regulated asset retirements and other charges		(17)		16				(1)
	$	(264)	$	39			$	(225)
Income tax expense (benefit):
Tax effect of above adjustments to reported earnings⁽³⁾		584		(84)				500
Deferred taxes associated with sale of gas distribution operations⁽⁴⁾		(511)		36				(475)
	$	73	$	(48)			$	25


(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. The calculation of operating earnings per share for the three and six months ended June 30, 2024 excludes a deemed dividend of $9 million associated with the Company's repurchase of certain Series B preferred stock in June 2024. During the first quarter of 2024, 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). During the second quarter of 2024, the calculation of reported and operating earnings per share includes the impact of preferred dividends associated with preferred stock of $8 million (Series B) and $11 million (Series C). See Forms 10-Q and 10-K for additional information.
(3)	Excludes a $450 million tax benefit on non-deductible goodwill associated with the sale of gas distribution operations. 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.
(4)	Represents the reversal of previously established deferred taxes related to the basis in the stock of the gas distribution operations.
(5)	YTD EPS may not equal sum of quarters due to share count differences.

Schedule 3 - Reconciliation of 2023 Reported Earnings to Operating Earnings

2023 Earnings (Twelve months ended December 31, 2023)

The $1.7 billion pre-tax net income of the adjustments included in 2023 reported earnings, but excluded from operating earnings, is primarily related to the following items:

$1.1 billion of net benefit from discontinued operations, primarily related to a $722 million benefit associated with the sale of the remaining non-controlling interest in Cove Point (including $626 million net gain on sale) and a $496 million benefit associated with the gas distribution operations expected to be sold to Enbridge Inc. (inclusive of a $334 million impairment charge associated with the East Ohio and Questar Gas Transactions).
$1.2 billion net market benefit primarily associated with $411 million from nuclear decommissioning trusts (NDT) and $758 million in economic hedging activities.
$370 million of regulated asset retirements and other charges primarily associated with the settlement of Virginia Power's 2021 triennial review.
$118 million of nonregulated asset impairments and other charges primarily related to an ARO revision at Millstone nuclear power station in connection with the expected approval of an operating license extension.

(millions, except per share amounts)	1Q23		2Q23		3Q23		4Q23		YTD 2023⁽⁵⁾
Reported earnings	$	981	$	583	$	157	$	273	$	1,994
Adjustments to reported earnings⁽¹⁾:
Pre-tax loss (income)		(590)		(346)		(778)		1		(1,713)
Income tax (benefit)		124		73		1,272		(7)		1,462
		(466)		(273)		494		(6)		(251)
Operating earnings (non-GAAP)	$	515	$	310	$	651	$	267	$	1,743
Common shares outstanding (average, diluted)		835.5		836.2		836.8		837.3		836.5
Reported earnings per share⁽²⁾	$	1.15	$	0.67	$	0.16	$	0.30	$	2.29
Adjustments to reported earnings per share⁽²⁾		(0.56)		(0.32)		0.59		(0.01)		(0.30)
Operating earnings (non-GAAP) per share⁽²⁾	$	0.59	$	0.35	$	0.75	$	0.29	$	1.99

(1) Adjustments to reported earnings are reflected in the following table:
	1Q23		2Q23		3Q23		4Q23		YTD 2023
Pre-tax loss (income):
Discontinued operations	$	(337)	$	(206)	$	(683)	$	96	$	(1,130)
Net loss (gain) on NDT funds		(123)		(158)		98		(228)		(411)
Mark-to-market impact of economic hedging activities		(272)		(58)		(287)		(141)		(758)
Regulated asset retirements and other charges		61		97		61		151		370
Nonregulated asset impairments and other charges		-		-		-		118		118
Net loss (gain) on real estate dispositions		81		(21)		16		(5)		71
Storm damage and restoration costs (income)		-		-		12		(2)		10
Business review costs		-		-		5		12		17
	$	(590)	$	(346)	$	(778)	$	1	$	(1,713)
Income tax expense (benefit):
Tax effect of above adjustments to reported earnings⁽³⁾		124		73		333		107		637
Deferred taxes associated with sale of gas distribution operations⁽⁴⁾		-		-		939		(114)		825
	$	124	$	73	$	1,272	$	(7)	$	1,462


(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. During each quarter of 2023, 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). See Forms 10-Q and 10-K for additional information.
(3)	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.
(4)	Represents deferred taxes related to the basis in the stock of the gas distribution operations expected to be sold to Enbridge that will reverse upon the completion of each sale.
(5)	YTD EPS may not equal sum of quarters due to share count difference.

Schedule 4 - Reconciliation of 2Q24 Earnings to 2Q23 Preliminary, Unaudited

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024 vs. 2023				2024 vs. 2023
(millions, except per share amounts)	Increase / (Decrease)				Increase / (Decrease)
Reconciling Items	Amount		EPS		Amount		EPS
Change in reported earnings (GAAP)	$	(11)	$	(0.02)	$	(318)	$	(0.39)
Change in Pre-tax loss (income)⁽¹⁾		385		0.46		711		0.85
Change in Income tax⁽¹⁾		(121)		(0.14)		(172)		(0.20)
Adjustments to reported earnings	$	264	$	0.32	$	539	$	0.65
Change in consolidated operating earnings (non-GAAP)	$	253	$	0.30	$	221	$	0.26

*Dominion Energy Virginia*
Weather	$	67	$	0.08	$	89	$	0.11
Customer usage and other factors		(11)		(0.01)		12		0.01
Customer-elected rate impacts		19		0.02		40		0.05
Rider equity return		83		0.10		136		0.16
Impact of 2023 Virginia legislation		(65)		(0.08)		(144)		(0.17)
Storm damage and service restoration		2		-		(13)		(0.02)
Planned outage costs		(3)		-		(10)		(0.01)
Nuclear production tax credit		17		0.02		17		0.02
Depreciation and amortization		(2)		-		(5)		(0.01)
Interest expense, net		16		0.02		23		0.03
Other		(32)		(0.04)		(16)		(0.01)
Share dilution		-		-		-		-
Change in contribution to operating earnings	$	91	$	0.11	$	129	$	0.16
*Dominion Energy South Carolina*
Weather	$	29	$	0.03	$	39	$	0.05
Customer usage and other factors		(1)		-		11		0.01
Customer-elected rate impacts		1		-		(1)		-
Base & RSA rate case impacts		(3)		-		(2)		-
Depreciation and amortization		(4)		-		(9)		(0.01)
Interest expense, net		(3)		-		(10)		(0.01)
Other		(18)		(0.03)		(38)		(0.05)
Share dilution		-		-		-		-
Change in contribution to operating earnings	$	1	$	-	$	(10)	$	(0.01)
*Contracted Energy*
Margin	$	35	$	0.04	$	36	$	0.04
Planned Millstone outages⁽²⁾⁽³⁾		83		0.10		85		0.10
Unplanned Millstone outages⁽²⁾		25		0.03		19		0.02
Depreciation and amortization		5		0.01		12		0.01
Other		(3)		(0.01)		4		0.01
Share dilution		-		-		-		-
Change in contribution to operating earnings	$	145	$	0.17	$	156	$	0.18
*Corporate and Other*
Interest expense, net	$	(4)	$	-	$	(64)	$	(0.08)
Equity method investments		(1)		-		(3)		-
Pension and other postretirement benefit plans		3		-		(1)		-
Corporate service company costs		5		0.01		9		0.01
Other		13		0.01		5		-
Share dilution		-		-		-		-
Change in contribution to operating earnings	$	16	$	0.02	$	(54)	$	(0.07)

*Change in consolidated operating earnings (non-GAAP)*	$	253	$	0.30	$	221	$	0.26
Change in adjustments included in reported earnings⁽¹⁾	$	(264)	$	(0.32)	$	(539)	$	(0.65)
*Change in consolidated reported earnings*	$	(11)	$	(0.02)	$	(318)	$	(0.39)


(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 earnings impact from outage costs and lower energy margins.
(3)	Includes the effect of a planned refueling outage in the second quarter of 2023 with no such outage in the second quarter of 2024.
NOTE: Figures may not sum due to rounding.