d-10q_20170930.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 September 30, 2017

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.

Formerly Known As Dominion Resources, Inc.

 

 

54-1229715

 

 

 

 

 

000-55337

 

VIRGINIA ELECTRIC AND POWER COMPANY

 

 

54-0418825

 

 

 

 

 

001-37591

 

DOMINION ENERGY GAS HOLDINGS, LLC

Formerly Known As Dominion 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 October 13, 2017, the latest practicable date for determination, Dominion Energy, Inc. had 643,529,769 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

80

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

96

Item 4.

Controls and Procedures

97

 

 

 

 

PART II. Other Information

 

 

 

 

Item 1.

Legal Proceedings

98

Item 1A.

Risk Factors

98

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

98

Item 6.

Exhibits

99

 

 

 

2


 

GLOSSARY OF TERMS

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

 

Abbreviation or Acronym

 

Definition

2013 Equity Units

 

Dominion Energy's 2013 Series A Equity Units and 2013 Series B Equity Units issued in June 2013

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

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

bcfe

 

Billion cubic feet equivalent

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

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 (formerly known as Dominion Cove Point LNG, LP)

CPCN

 

Certificate of Public Convenience and Necessity

CWA

 

Clean Water Act

DECG

 

Dominion Energy Carolina Gas Transmission, LLC (formerly known as Dominion Carolina Gas Transmission, LLC)

DES

 

Dominion Energy Services, Inc. (formerly known as Dominion Resources Services, Inc.)

DETI

 

Dominion Energy Transmission, Inc. (formerly known as Dominion Transmission, Inc.)

DGI

 

Dominion Generation, Inc. (formerly known as Dominion Energy, Inc.)

DOE

 

Department of Energy

Dominion Energy

 

The legal entity, Dominion Energy, Inc. (formerly known as Dominion Resources, 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 (formerly known as Dominion 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 (formerly known as Dominion Midstream Partners, LP), one or more of its consolidated subsidiaries, Cove Point Holdings, Iroquois GP Holding Company, LLC, DECG and Dominion Energy Questar Pipeline (beginning December 1, 2016) or operating segment, or the entirety of Dominion Energy Midstream Partners, LP and its consolidated subsidiaries

Dominion Energy Questar

 

The legal entity, Dominion Energy Questar Corporation (formerly known as Dominion Questar Corporation), one or more of its consolidated subsidiaries or operating segment, or the entirety of Dominion Energy Questar Corporation and its consolidated subsidiaries

Dominion Energy Questar Combination

 

Dominion Energy's acquisition of Dominion Energy Questar completed on September 16, 2016 pursuant to the terms of the agreement and plan of merger entered on January 31, 2016

Dominion Energy Questar Pipeline

 

Dominion Energy Questar Pipeline, LLC (formerly known as 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

Eastern Market Access Project

 

Project to provide 294,000 Dths per 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 generation facility to be built in Maryland

EPA

 

Environmental Protection Agency

EPS

 

Earnings per share

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 effective November 2016

Fowler Ridge

 

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 effective November 2016

Greensville County

 

An approximately 1,588 MW combined cycle, natural gas-fired 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.

4


 

Abbreviation or Acronym

 

Definition

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 effective November 2016

Iroquois

 

Iroquois Gas Transmission System, L.P.

ISO-NE

 

Independent System Operator New England

kV

 

Kilovolt

Liquefaction Project

 

A natural gas export/liquefaction facility currently under construction by Cove Point

LNG

 

Liquefied natural gas

Local 69

 

Local 69, Utility Workers Union of America, United Gas Workers

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

MISO

 

Midcontinent Independent System Operator, Inc.

MW

 

Megawatt

MWh

 

Megawatt hour

NAV

 

Net asset value

NedPower

 

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 (including, effective November 2016, Four Brothers Holdings, LLC, Granite Mountain Renewables, LLC and Iron Springs Renewables, LLC) 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 BW

 

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

Rider U

 

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

5


 

Abbreviation or Acronym

 

Definition

Rider US-2

 

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

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

RSN

 

Remarketable subordinated note

SBL Holdco

 

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

Scott Solar

 

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

SEC

 

Securities and Exchange Commission

Standard & Poor’s

 

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

SunEdison

 

The legal entity, SunEdison, Inc., one or more of its consolidated subsidiaries (including, through November 2016, Four Brothers Holdings, LLC, Granite Mountain Renewables, LLC and Iron Springs Renewables, LLC) or operating segments, or the entirety of SunEdison, Inc. and its consolidated subsidiaries

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

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

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

 

 

 

6


 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DOMINION ENERGY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

(millions, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenue

 

$

3,179

 

 

$

3,132

 

 

$

9,376

 

 

$

8,651

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electric fuel and other energy-related purchases

 

 

638

 

 

 

606

 

 

 

1,711

 

 

 

1,791

 

Purchased (excess) electric capacity

 

 

21

 

 

 

(6

)

 

 

(8

)

 

 

107

 

Purchased gas

 

 

24

 

 

 

77

 

 

 

441

 

 

 

252

 

Other operations and maintenance

 

 

649

 

 

 

765

 

 

 

2,166

 

 

 

2,133

 

Depreciation, depletion and amortization

 

 

485

 

 

 

400

 

 

 

1,421

 

 

 

1,112

 

Other taxes

 

 

162

 

 

 

145

 

 

 

519

 

 

 

448

 

Total operating expenses

 

 

1,979

 

 

 

1,987

 

 

 

6,250

 

 

 

5,843

 

Income from operations

 

 

1,200

 

 

 

1,145

 

 

 

3,126

 

 

 

2,808

 

Other income

 

 

73

 

 

 

63

 

 

 

249

 

 

 

189

 

Interest and related charges

 

 

305

 

 

 

250

 

 

 

905

 

 

 

715

 

Income from operations including noncontrolling interests before

   income tax expense

 

 

968

 

 

 

958

 

 

 

2,470

 

 

 

2,282

 

Income tax expense

 

 

272

 

 

 

230

 

 

 

683

 

 

 

561

 

Net Income Including Noncontrolling Interests

 

 

696

 

 

 

728

 

 

 

1,787

 

 

 

1,721

 

Noncontrolling Interests

 

 

31

 

 

 

38

 

 

 

100

 

 

 

55

 

Net Income Attributable to Dominion Energy

 

$

665

 

 

$

690

 

 

$

1,687

 

 

$

1,666

 

Earnings Per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Dominion Energy - Basic

 

$

1.03

 

 

$

1.10

 

 

$

2.66

 

 

$

2.72

 

Net income attributable to Dominion Energy - Diluted

 

 

1.03

 

 

 

1.10

 

 

 

2.66

 

 

 

2.71

 

Dividends Declared Per Common Share

 

$

0.7700

 

 

$

0.7000

 

 

$

2.2800

 

 

$

2.1000

 

 

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 September 30,

 

 

Nine Months Ended September 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

$

696

 

 

$

728

 

 

$

1,787

 

 

$

1,721

 

Other comprehensive income, net of taxes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net deferred gains on derivatives-hedging activities(1)

 

 

11

 

 

 

14

 

 

 

82

 

 

 

56

 

Changes in unrealized net gains on investment securities(2)

 

 

48

 

 

 

31

 

 

 

141

 

 

 

72

 

Changes in net unrecognized pension and other postretirement

   benefit costs(3)

 

 

 

 

 

15

 

 

 

 

 

 

15

 

Amounts reclassified to net income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net derivative gains-hedging activities(4)

 

 

(15

)

 

 

(34

)

 

 

(56

)

 

 

(141

)

Net realized gains on investment securities(5)

 

 

(4

)

 

 

(13

)

 

 

(36

)

 

 

(23

)

Net pension and other postretirement benefit costs(6)

 

 

14

 

 

 

9

 

 

 

38

 

 

 

25

 

Changes in other comprehensive income (loss) from equity

   method investees(7)

 

 

 

 

 

 

 

 

2

 

 

 

(1

)

Total other comprehensive income

 

 

54

 

 

 

22

 

 

 

171

 

 

 

3

 

Comprehensive income including noncontrolling interests

 

 

750

 

 

 

750

 

 

 

1,958

 

 

 

1,724

 

Comprehensive income attributable to noncontrolling interests

 

 

31

 

 

 

38

 

 

 

100

 

 

 

55

 

Comprehensive income attributable to Dominion Energy

 

$

719

 

 

$

712

 

 

$

1,858

 

 

$

1,669

 

 

(1)

Net of $(5) million and $(8) million tax for the three months ended September 30, 2017 and 2016, respectively, and net of $(49) million and $(34) million tax for the nine months ended September 30, 2017 and 2016, respectively.

(2)

Net of $(27) million and $(18) million tax for the three months ended September 30, 2017 and 2016, respectively, and net of $(80) million and $(43) million tax for the nine months ended September 30, 2017 and 2016, respectively.

(3)

Net of $--- million and $(10) million tax for the three months ended September 30, 2017 and 2016, respectively, and net of $--- million and $(10) million tax for the nine months ended September 30, 2017 and 2016, respectively.

(4)

Net of $10 million and $21 million tax for the three months ended September 30, 2017 and 2016, respectively, and net of $35 million and $88 million tax for the nine months ended September 30, 2017 and 2016, respectively.

(5)

Net of $2 million and $7 million tax for the three months ended September 30, 2017 and 2016, respectively, and net of $20 million and $13 million tax for the nine months ended September 30, 2017 and 2016, respectively.

(6)

Net of $(7) million and $(4) million tax for the three months ended September 30, 2017 and 2016, respectively, and net of $(25) million and $(16) million tax for the nine months ended September 30, 2017 and 2016, respectively.

(7)

Net of $--- million tax for both the three months ended September 30, 2017 and 2016, and net of $(1) million and $--- million tax for the nine months ended September 30, 2017 and 2016, respectively.

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

 

8


 

DOMINION ENERGY, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

September 30, 2017

 

 

December 31, 2016(1)

 

(millions)

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

227

 

 

$

261

 

Customer receivables (less allowance for doubtful accounts of $16 and $18)

 

 

1,292

 

 

 

1,523

 

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

 

 

212

 

 

 

183

 

Inventories

 

 

1,527

 

 

 

1,524

 

Regulatory assets

 

 

311

 

 

 

244

 

Other

 

 

425

 

 

 

513

 

Total current assets

 

 

3,994

 

 

 

4,248

 

Investments

 

 

 

 

 

 

 

 

Nuclear decommissioning trust funds

 

 

4,881

 

 

 

4,484

 

Investment in equity method affiliates

 

 

1,895

 

 

 

1,561

 

Other

 

 

320

 

 

 

298

 

Total investments

 

 

7,096

 

 

 

6,343

 

Property, Plant and Equipment

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

73,610

 

 

 

69,556

 

Accumulated depreciation, depletion and amortization

 

 

(20,799

)

 

 

(19,592

)

Total property, plant and equipment, net

 

 

52,811

 

 

 

49,964

 

Deferred Charges and Other Assets

 

 

 

 

 

 

 

 

Goodwill

 

 

6,405

 

 

 

6,399

 

Regulatory assets

 

 

2,503

 

 

 

2,473

 

Other

 

 

2,582

 

 

 

2,183

 

Total deferred charges and other assets

 

 

11,490

 

 

 

11,055

 

Total assets

 

$

75,391

 

 

$

71,610

 

 

(1)

Dominion Energy’s Consolidated Balance Sheet at December 31, 2016 has been derived from the audited Consolidated Balance Sheet at that date.

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

9


 

DOMINION ENERGY, INC.

CONSOLIDATED BALANCE SHEETS—(Continued)

(Unaudited)

 

 

 

September 30, 2017

 

 

December 31, 2016(1)

 

(millions)

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Securities due within one year

 

$

2,788

 

 

$

1,709

 

Short-term debt

 

 

3,060

 

 

 

3,155

 

Accounts payable

 

 

757

 

 

 

1,000

 

Accrued interest, payroll and taxes

 

 

843

 

 

 

798

 

Regulatory liabilities

 

 

88

 

 

 

163

 

Other

 

 

1,023

 

 

 

1,290

 

Total current liabilities

 

 

8,559

 

 

 

8,115

 

Long-Term Debt

 

 

 

 

 

 

 

 

Long-term debt

 

 

25,529

 

 

 

24,878

 

Junior subordinated notes

 

 

3,980

 

 

 

2,980

 

Remarketable subordinated notes

 

 

1,377

 

 

 

2,373

 

Total long-term debt

 

 

30,886

 

 

 

30,231

 

Deferred Credits and Other Liabilities

 

 

 

 

 

 

 

 

Deferred income taxes and investment tax credits

 

 

9,379

 

 

 

8,602

 

Regulatory liabilities

 

 

2,906

 

 

 

2,622

 

Other

 

 

5,159

 

 

 

5,200

 

Total deferred credits and other liabilities

 

 

17,444

 

 

 

16,424

 

Total liabilities

 

 

56,889

 

 

 

54,770

 

Commitments and Contingencies (see Note 15)

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Common stock – no par(2)

 

 

9,789

 

 

 

8,550

 

Retained earnings

 

 

7,119

 

 

 

6,854

 

Accumulated other comprehensive loss

 

 

(628

)

 

 

(799

)

Total common shareholders' equity

 

 

16,280

 

 

 

14,605

 

Noncontrolling interests

 

 

2,222

 

 

 

2,235

 

Total equity

 

 

18,502

 

 

 

16,840

 

Total liabilities and equity

 

$

75,391

 

 

$

71,610

 

 

(1)

Dominion Energy’s Consolidated Balance Sheet at December 31, 2016 has been derived from the audited Consolidated Balance Sheet at that date.

(2)

1 billion shares authorized; 644 million shares and 628 million shares outstanding at September 30, 2017 and December 31, 2016, 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,  2015

 

 

596

 

 

$

6,680

 

 

$

6,458

 

 

$

(474

)

 

$

12,664

 

 

$

938

 

 

$

13,602

 

Net income including noncontrolling interests

 

 

 

 

 

 

 

 

 

 

1,666

 

 

 

 

 

 

 

1,666

 

 

 

55

 

 

 

1,721

 

Contributions from SunEdison to Four Brothers

   and Three Cedars

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

178

 

 

 

178

 

Sale of interest in merchant solar projects

 

 

 

 

 

 

22

 

 

 

 

 

 

 

 

 

 

 

22

 

 

 

117

 

 

 

139

 

Purchase of Dominion Energy Midstream

   common units

 

 

 

 

 

 

(3

)

 

 

 

 

 

 

 

 

 

 

(3

)

 

 

(14

)

 

 

(17

)

Issuance of common stock

 

 

31

 

 

 

2,079

 

 

 

 

 

 

 

 

 

 

 

2,079

 

 

 

 

 

 

 

2,079

 

Stock awards (net of change in unearned

   compensation)

 

 

 

 

 

 

10

 

 

 

 

 

 

 

 

 

 

 

10

 

 

 

 

 

 

 

10

 

Present value of stock purchase contract

   payments related to RSNs

 

 

 

 

 

 

(191

)

 

 

 

 

 

 

 

 

 

 

(191

)

 

 

 

 

 

 

(191

)

Dividends and distributions

 

 

 

 

 

 

 

 

 

 

(1,287

)

 

 

 

 

 

 

(1,287

)

 

 

(39

)

 

 

(1,326

)

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

 

 

3

 

 

 

 

 

 

 

3

 

Other

 

 

 

 

 

 

(5

)

 

 

 

 

 

 

 

 

 

 

(5

)

 

 

(1

)

 

 

(6

)

September 30, 2016

 

 

627

 

 

$

8,592

 

 

$

6,837

 

 

$

(471

)

 

$

14,958

 

 

$

1,234

 

 

$

16,192

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2016

 

 

628

 

 

$

8,550

 

 

$

6,854

 

 

$

(799

)

 

$

14,605

 

 

$

2,235

 

 

$

16,840

 

Net income including noncontrolling interests

 

 

 

 

 

 

 

 

 

 

1,687

 

 

 

 

 

 

 

1,687

 

 

 

100

 

 

 

1,787

 

Contributions from NRG to Four Brothers and

   Three Cedars

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 

 

 

9

 

Issuance of common stock

 

 

16

 

 

 

1,232

 

 

 

 

 

 

 

 

 

 

 

1,232

 

 

 

 

 

 

 

1,232

 

Stock awards (net of change in unearned

   compensation)

 

 

 

 

 

 

17

 

 

 

 

 

 

 

 

 

 

 

17

 

 

 

 

 

 

 

17

 

Dividends and distributions

 

 

 

 

 

 

 

 

 

 

(1,435

)

 

 

 

 

 

 

(1,435

)

 

 

(123

)

 

 

(1,558

)

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

171

 

 

 

171

 

 

 

 

 

 

 

171

 

Other

 

 

 

 

 

 

(10

)

 

 

13

 

 

.

 

 

 

3

 

 

1

 

 

 

4

 

September 30, 2017

 

 

644

 

 

$

9,789

 

 

$

7,119

 

 

$

(628

)

 

$

16,280

 

 

$

2,222

 

 

$

18,502

 

 

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

11


 

DOMINION ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

Nine Months Ended September 30,

 

2017

 

 

2016

 

(millions)

 

 

 

 

 

 

 

 

Operating Activities

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

$

1,787

 

 

$

1,721

 

Adjustments to reconcile net income including noncontrolling interests to net cash

   provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization (including nuclear fuel)

 

 

1,649

 

 

 

1,325

 

Deferred income taxes and investment tax credits

 

 

652

 

 

 

481

 

Proceeds from assignment of tower rental portfolio

 

 

91

 

 

 

 

Gains on the sales of assets and equity method investment in Iroquois

 

 

(61

)

 

 

(50

)

Contribution to pension plan

 

 

(75

)

 

 

 

Other adjustments

 

 

(95

)

 

 

(78

)

Changes in:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

247

 

 

 

19

 

Inventories

 

 

(34

)

 

 

(10

)

Deferred fuel and purchased gas costs, net

 

 

(81

)

 

 

84

 

Prepayments

 

 

34

 

 

 

71

 

Accounts payable

 

 

(158

)

 

 

(89

)

Accrued interest, payroll and taxes

 

 

61

 

 

 

205

 

Margin deposit assets and liabilities

 

 

51

 

 

 

1

 

Pension and other postretirement benefits

 

 

(132

)

 

 

(91

)

Other operating assets and liabilities

 

 

(272

)

 

 

(203

)

Net cash provided by operating activities

 

 

3,664

 

 

 

3,386

 

Investing Activities

 

 

 

 

 

 

 

 

Plant construction and other property additions (including nuclear fuel)

 

 

(4,122

)

 

 

(4,536

)

Acquisition of Dominion Energy Questar, net of cash acquired