☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Commission File Number
|
Exact name of registrants as specified in their charters
|
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
|
||
|
VIRGINIA
(State or other jurisdiction of incorporation or organization)
|
|
||
|
120 TREDEGAR STREET
RICHMOND, VIRGINIA
(Address of principal executive offices)
|
23219
(Zip Code)
|
||
|
(804)
819-2000
(Registrants’ telephone number)
|
|
Registrant
|
Trading
Symbol
|
Title of Each Class
|
Name of Each Exchange
on Which Registered
|
|||
DOMINION ENERGY, INC.
|
D
|
Common Stock, no par value
|
New York Stock Exchange
|
|||
|
DRUA
|
2016 Series A 5.25% Enhanced Junior Subordinated Notes
|
New York Stock Exchange
|
|||
DOMINION ENERGY GAS
HOLDINGS, LLC
|
DCUE
|
2019 Series A Corporate Units
2014 Series C 4.6% Senior Notes
|
New York Stock Exchange
New York Stock Exchange
|
Large accelerated filer
☒
|
Accelerated filer
☐
|
Non-accelerated filer
☐
|
Smaller reporting company ☐
|
|||
|
|
|
Emerging growth company ☐
|
Large accelerated filer
☐
|
Accelerated filer
☐
|
Non-accelerated filer
☒
|
Smaller reporting company ☐
|
|||
|
|
|
Emerging growth company ☐
|
Large accelerated filer
☐
|
Accelerated filer
☐
|
Non-accelerated filer
☒
|
Smaller reporting company ☐
|
|||
|
|
|
Emerging growth company ☐
|
Item
Number
|
|
Page
Number
|
||
|
3
|
|||
Part I
|
|
|||
1.
|
8
|
|||
1A.
|
28
|
|||
1B.
|
36
|
|||
2.
|
37
|
|||
3.
|
42
|
|||
4.
|
42
|
|||
|
43
|
|||
Part II
|
|
|||
5.
|
44
|
|||
6.
|
45
|
|||
7.
|
46
|
|||
7A.
|
66
|
|||
8.
|
69
|
|||
9.
|
196
|
|||
9A.
|
196
|
|||
9B.
|
199
|
|||
Part III
|
|
|||
10.
|
200
|
|||
11.
|
200
|
|||
12.
|
200
|
|||
13.
|
200
|
|||
14.
|
201
|
|||
Part IV
|
|
|||
15.
|
202
|
|||
16.
|
209
|
2
|
|
|
|
|
Abbreviation or Acronym
|
Definition
|
|
2016 Equity Units
|
Dominion Energy’s 2016 Series A Equity Units issued in August 2016, initially in the form of 2016 Series A Corporate Units, consisting of a stock purchase contract and a 1/40 interest in RSNs issued by Dominion Energy
|
|
2019 Equity Units
|
Dominion Energy’s 2019 Series A Equity Units issued in June 2019, initially in the form of 2019 Series A Corporate Units, consisting of a stock purchase contract and a 1/10 interest in a share of the Series A Preferred Stock
|
|
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
|
|
2020 Proxy Statement
|
Dominion Energy 2020 Proxy Statement, File No.
001-08489
|
|
ABO
|
Accumulated benefit obligation
|
|
ACE Rule
|
Affordable Clean Energy Rule
|
|
AFUDC
|
Allowance for funds used during construction
|
|
Align RNG
|
Align RNG, LLC, a joint venture between Dominion Energy and Smithfield Foods, Inc.
|
|
AMI
|
Advanced Metering Infrastructure
|
|
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
|
|
Atlantic Coast Pipeline Project
|
An approximately
600-mile
natural gas pipeline running from West Virginia through Virginia to North Carolina which will be owned by Dominion Energy, Duke and Southern to be constructed and operated by DETI
|
|
BACT
|
Best available control technology
|
|
bcf
|
Billion cubic feet
|
|
bcfe
|
Billion cubic feet equivalent
|
|
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 Caiman Energy II, LLC and FR BR Holdings, LLC effective December 2018
|
|
BP
|
BP Wind Energy North America Inc.
|
|
Brookfield
|
Brookfield Super-Core Infrastructure Partners, an infrastructure fund managed by Brookfield Asset Management Inc.
|
|
Brunswick County
|
A 1,376 MW combined-cycle, natural
gas-fired
power station in Brunswick County, Virginia
|
|
CAA
|
Clean Air Act
|
|
CAISO
|
California ISO
|
|
CAO
|
Chief Accounting Officer
|
|
CCR
|
Coal combustion residual
|
|
CEA
|
Commodity Exchange Act
|
|
CEO
|
Chief Executive Officer
|
|
CEP
|
Capital Expenditure Program, as established by House Bill 95, Ohio legislation enacted in 2011, deployed by East Ohio to recover certain costs associated with capital investment
|
|
CERCLA
|
Comprehensive Environmental Response, Compensation and Liability Act of 1980, also known as Superfund
|
|
CFO
|
Chief Financial Officer
|
|
CGN Committee
|
Compensation, Governance and Nominating Committee of Dominion Energy’s Board of Directors
|
|
CNG
|
Consolidated Natural Gas Company
|
|
CO
2
|
Carbon dioxide
|
|
Colonial Trail West
|
A 142 MW utility-scale solar power station located in Surry County, Virginia
|
|
Companies
|
Dominion Energy, Virginia Power and Dominion Energy Gas, collectively
|
|
Contracted Generation
|
Contracted Generation operating segment
|
|
COO
|
Chief Operating Officer
|
|
Cooling degree days
|
Units measuring the extent to which the average daily temperature is greater than 65 degrees Fahrenheit, or 75 degrees Fahrenheit in DESC’s service territory, calculated as the difference between 65 or 75 degrees, as applicable, and the average temperature for that day
|
|
Cove Point
|
Dominion Energy Cove Point LNG, LP
|
|
Cove Point LNG Facility
|
An LNG import/export and storage facility, including the Liquefaction Facility, located on the Chesapeake Bay in Lusby, Maryland
|
|
Cove Point Pipeline
|
A 136 mile natural gas pipeline that connects the Cove Point LNG Facility to interstate natural gas pipelines
|
|
CPCN
|
Certificate of Public Convenience and Necessity
|
|
CWA
|
Clean Water Act
|
|
DCP
|
The legal entity, Dominion Cove Point, LLC (formerly known as Dominion Cove Point, Inc.), one or more of its consolidated subsidiaries, or the entirety of Dominion Cove Point, LLC and its consolidated subsidiaries
|
|
|
|
3
|
|
Abbreviation or Acronym
|
Definition
|
|
DECG
|
Dominion Energy Carolina Gas Transmission, LLC
|
|
DECGS
|
Dominion Energy Carolina Gas Services, Inc.
|
|
DEQPS
|
Dominion Energy Questar Pipeline Services, Inc.
|
|
DES
|
Dominion Energy Services, Inc.
|
|
DESC
|
The legal entity, Dominion Energy South Carolina, Inc. (formerly known as South Carolina Electric & Gas Company), one or more of its consolidated entities or operating segment, or the entirety of Dominion Energy South Carolina, Inc. and its consolidated entities
|
|
DETI
|
Dominion Energy Transmission, Inc.
|
|
DGI
|
Dominion Generation, Inc.
|
|
DGP
|
Dominion Gathering and Processing, Inc.
|
|
DMLPHCII
|
Dominion MLP Holding Company II, LLC (formerly known as Dominion MLP Holding Company II, Inc.)
|
|
Dodd-Frank Act
|
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
|
|
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
|
|
Dominion Energy Direct
®
|
A dividend reinvestment and open enrollment direct stock purchase plan
|
|
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 Gas Restructuring
|
The acquisition of DCP and DMLPHCII from, and the disposition of East Ohio and DGP to, Dominion Energy by Dominion Energy Gas on November 6, 2019
|
|
Dominion Energy Midstream
|
The legal entity, Dominion Energy Midstream Partners, LP, one or more of its consolidated subsidiaries, or the entirety of Dominion Energy Midstream Partners, LP and its consolidated subsidiaries
|
|
Dominion Energy Questar
|
The legal entity, Dominion Energy Questar Corporation, one or more of its consolidated subsidiaries (other than Dominion Energy Gas, effective November 2019), 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, one or more of its consolidated subsidiaries, or the entirety of Dominion Energy Questar Pipeline, LLC and its consolidated subsidiaries
|
|
Dominion Energy South Carolina
|
Dominion Energy South Carolina operating segment
|
|
Dominion Energy Virginia
|
Dominion Energy Virginia operating segment
|
|
DSM
|
Demand-side management
|
|
Dth
|
Dekatherm
|
|
Duke
|
The legal entity, Duke Energy Corporation, one or more of its consolidated subsidiaries, or the entirety of Duke Energy Corporation and its consolidated subsidiaries
|
|
Eagle Solar
|
Eagle Solar, LLC, a wholly-owned subsidiary of DGI
|
|
East Ohio
|
The East Ohio Gas Company, doing business as Dominion Energy Ohio
|
|
Eastern Market Access Project
|
Project to provide 150,000 Dths/day of 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
|
|
Energy Choice
|
Program authorized by the Ohio Commission which provides energy customers with the ability to shop for energy options from a group of suppliers certified by the Ohio Commission
|
|
EPA
|
U.S. Environmental Protection Agency
|
|
EPACT
|
Energy Policy Act of 2005
|
|
EPS
|
Earnings per share
|
|
ERISA
|
Employee Retirement Income Security Act of 1974
|
|
ESA
Excess Tax Benefits
|
Endangered Species Act
Benefits of tax deductions in excess of the compensation cost recognized for stock-based compensation
|
|
Export Customers
|
ST Cove Point, LLC, a joint venture of Sumitomo Corporation and Tokyo Gas Co., LTD., and GAIL Global (USA) LNG, LLC
|
|
Fairless
|
Fairless power station
|
|
FASB
|
Financial Accounting Standards Board
|
|
FERC
|
Federal Energy Regulatory Commission
|
|
FILOT
|
Fee in lieu of taxes
|
|
Fitch
|
Fitch Ratings Ltd.
|
|
Four Brothers
|
Four Brothers Solar, LLC, a limited liability company owned by Dominion Energy and Four Brothers Holdings, LLC, a subsidiary of GIP effective August 2018
|
|
Fowler Ridge
|
Fowler I Holdings LLC, a wind-turbine facility joint venture with BP in Benton County, Indiana
|
|
FTRs
|
Financial transmission rights
|
|
GAAP
|
U.S. generally accepted accounting principles
|
|
Gal
|
Gallon
|
|
Gas Distribution
|
Gas Distribution operating segment
|
|
Gas Transmission & Storage
|
Gas Transmission & Storage operating segment
|
4
|
|
|
|
|
Abbreviation or Acronym
|
Definition
|
|
GENCO
|
South Carolina Generating Company, Inc.
|
|
GHG
|
Greenhouse gas
|
|
GIP
|
The legal entity, Global Infrastructure Partners, one or more of its consolidated subsidiaries (including, effective August 2018, Four Brothers Holdings, LLC, Granite Mountain Renewables, LLC and Iron Springs Renewables, LLC) or operating segments, or the entirety of Global Infrastructure Partners and its consolidated subsidiaries
|
|
Granite Mountain
|
Granite Mountain Holdings, LLC, a limited liability company owned by Dominion Energy and Granite Mountain Renewables, LLC, a subsidiary of GIP effective August 2018
|
|
Green Mountain
|
Green Mountain Power Corporation
|
|
GreenHat
|
GreenHat Energy, LLC
|
|
Greensville County
|
A 1,588 MW combined-cycle, natural
gas-fired
power station in Greensville County, Virginia
|
|
GTSA
|
Virginia Grid Transformation and Security Act of 2018
|
|
Heating degree days
|
Units measuring the extent to which the average daily temperature is less than 65 degrees Fahrenheit, or 60 degrees Fahrenheit in DESC’s service territory, calculated as the difference between 65 or 60 degrees, as applicable, and the average temperature for that day
|
|
Hope
|
Hope Gas, Inc., doing business as Dominion Energy West Virginia
|
|
Idaho Commission
|
Idaho Public Utilities Commission
|
|
IRCA
|
Intercompany revolving credit agreement
|
|
Iron Springs
|
Iron Springs Holdings, LLC, a limited liability company owned by Dominion Energy and Iron Springs Renewables, LLC, a subsidiary of GIP effective August 2018
|
|
Iroquois
|
Iroquois Gas Transmission System, L.P.
|
|
IRS
|
Internal Revenue Service
|
|
ISO
|
Independent system operator
|
|
ISO-NE
|
ISO New England
|
|
July 2016 hybrids
|
Dominion Energy’s 2016 Series A Enhanced Junior Subordinated Notes due 2076
|
|
June 2006 hybrids
|
Dominion Energy’s 2006 Series A Enhanced Junior Subordinated Notes due 2066
|
|
Kewaunee
|
Kewaunee nuclear power station
|
|
kV
|
Kilovolt
|
|
LIBOR
|
London Interbank Offered Rate
|
|
LIFO
|
Last-in-first-out
inventory method
|
|
Liquefaction Facility
|
A natural gas export/liquefaction facility at the Cove Point LNG Facility
|
|
LNG
|
Liquefied natural gas
|
|
LTIP
|
Long-term incentive program
|
|
Manchester
|
Manchester power station
|
|
Massachusetts Municipal
|
Massachusetts Municipal Wholesale Electric Company
|
|
MATS
|
Utility Mercury and Air Toxics Standard Rule
|
|
mcf
|
Thousand cubic feet
|
|
mcfe
|
Thousand cubic feet equivalent
|
|
MD&A
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
MGD
|
Million gallons a day
|
|
Millstone
|
Millstone nuclear power station
|
|
Millstone 2019 power purchase agreements
|
Power purchase agreements with Eversource Energy and The United Illuminating Company for Millstone to provide nine million MWh per year of electricity for ten years
|
|
Moody’s
|
Moody’s Investors Service
|
|
Mtpa
|
Million metric tons per annum
|
|
MW
|
Megawatt
|
|
MWh
|
Megawatt hour
|
|
Natural Gas Rate Stabilization Act
|
Legislation effective February 2005 designed to improve and maintain natural gas service infrastructure to meet the needs of customers in South Carolina
|
|
NAV
|
Net asset value
|
|
NedPower
|
NedPower Mount Storm LLC, a wind-turbine facility joint venture between Dominion Energy and Shell WindEnergy, Inc. in Grant County, West Virginia
|
|
NEIL
|
Nuclear Electric Insurance Limited
|
|
NERC
|
North American Electric Reliability Corporation
|
|
NG
|
Collectively, North East Transmission Co., Inc. and National Grid IGTS Corp.
|
|
NGL
|
Natural gas liquid
|
|
NJNR
|
NJNR Pipeline Company
|
|
NND Project
|
V.C. Summer Units 2 and 3 nuclear development project under which DESC and Santee Cooper undertook to construct two Westinghouse AP1000 Advanced Passive Safety Nuclear Units in Jenkinsville, South Carolina
|
|
North Anna
|
North Anna nuclear power station
|
|
North Carolina Commission
|
North Carolina Utilities Commission
|
|
NO
X
|
Nitrogen oxide
|
|
NRC
|
U.S. Nuclear Regulatory Commission
|
|
|
|
5
|
|
Abbreviation or Acronym
|
Definition
|
|
NRG
|
The legal entity, NRG Energy, Inc., one or more of its consolidated subsidiaries (including, effective November 2016 through August 2018, 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
|
|
NYSE
|
New York Stock Exchange
|
|
October 2014 hybrids
|
Dominion Energy’s 2014 Series A Enhanced Junior Subordinated Notes due 2054
|
|
ODEC
|
Old Dominion Electric Cooperative
|
|
Ohio Commission
|
Public Utilities Commission of Ohio
|
|
Order 1000
|
Order issued by FERC adopting requirements for electric transmission planning, cost allocation and development
|
|
PHMSA
|
Pipeline and Hazardous Materials Safety Administration
|
|
PIR
|
Pipeline Infrastructure Replacement program deployed by East Ohio
|
|
PJM
|
PJM Interconnection, L.L.C.
|
|
ppb
|
Parts-per-billion
|
|
Predecessor
|
Dominion Energy as the predecessor for accounting purposes for the period of Dominion Energy’s ownership of DCP and DMLPHCII until the completion of the Dominion Energy Gas Restructuring
|
|
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
|
|
PSNC
|
Public Service Company of North Carolina, Incorporated, doing business as Dominion Energy North Carolina
|
|
PURA
|
Connecticut’s Public Utility Regulatory Authority
|
|
Questar Gas
|
Questar Gas Company, doing business as Dominion Energy Utah, Dominion Energy Wyoming and Dominion Energy Idaho
|
|
RCC
|
Replacement Capital Covenant
|
|
Regulation Act
|
Legislation effective July 1, 2007, that amended the Virginia Electric Utility Restructuring Act and fuel factor statute, which legislation is also known as the Virginia Electric Utility Regulation Act, as amended in 2015 and 2018
|
|
RGGI
|
Regional Greenhouse Gas Initiative
|
|
RICO
|
Racketeer Influenced and Corrupt Organizations Act
|
|
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 E
|
A rate adjustment clause associated with the recovery of costs related to certain capital projects at Virginia Power’s electric generating stations to comply with federal and state environmental laws and regulations
|
|
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 U
|
A rate adjustment clause associated with the recovery of costs of new underground distribution facilities
|
|
Rider
US-2
|
A rate adjustment clause associated with the recovery of costs related to Woodland Solar, Scott Solar and Whitehouse Solar
|
|
Rider
US-3
|
A rate adjustment clause associated with the recovery of costs related to Colonial Trail West and Spring Grove 1
|
|
Rider US-4
|
A rate adjustment clause associated with the recovery of costs related to Sadler Solar
|
|
Rider W
|
A rate adjustment clause associated with the recovery of costs related to Warren County
|
|
Riders C1A, C2A and C3A
|
Rate adjustment clauses associated with the recovery of costs related to certain DSM programs approved in DSM cases
|
|
ROE
|
Return on equity
|
|
ROIC
|
Return on invested capital
|
|
RSN
|
Remarketable subordinated note
|
|
RTEP
|
Regional transmission expansion plan
|
|
RTO
|
Regional transmission organization
|
|
Sadler Solar
|
An approximately 100 MW proposed utility-scale solar power station located in Greensville County, Virginia
|
|
SAFSTOR
|
A method of nuclear decommissioning, as defined by the NRC, in which a nuclear facility is placed and maintained in a condition that allows the facility to be safely stored and subsequently decontaminated to levels that permit release for unrestricted use
|
|
SAIDI
|
System Average Interruption Duration Index, metric used to measure electric service reliability
|
|
Santee Cooper
|
South Carolina Public Service Authority
|
|
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 the entirety of SCANA Corporation and its consolidated subsidiaries
|
6
|
|
|
|
|
Abbreviation or Acronym
|
Definition
|
|
SCANA Combination
|
Dominion Energy’s acquisition of SCANA completed on January 1, 2019 pursuant to the terms of the agreement and plan of merger entered on January 2, 2018 between Dominion Energy and SCANA
|
|
SCANA Merger Approval Order
|
Final order issued by the South Carolina Commission on December 21, 2018 setting forth its approval of the SCANA Combination
|
|
SCDHEC
|
South Carolina Department of Health and Environmental Control
|
|
SCDOR
|
South Carolina Department of Revenue
|
|
Scott Solar
|
A 17 MW utility-scale solar power station in Powhatan County, Virginia
|
|
SEC
|
U.S. Securities and Exchange Commission
|
|
SEMI
|
SCANA Energy Marketing, Inc.
|
|
September 2006 hybrids
|
Dominion Energy’s 2006 Series B Enhanced Junior Subordinated Notes due 2066
|
|
SERC
|
Southeast Electric Reliability Council
|
|
Series A Preferred Stock
|
Dominion Energy’s 1.75% Series A Cumulative Perpetual Convertible Preferred Stock, without par value, with a liquidation preference of $1,000 per share
|
|
Series B Preferred Stock
|
Dominion Energy’s 4.65% Series B Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock, without par value, with a liquidation preference of $1,000 per share
|
|
SO
2
|
Sulfur dioxide
|
|
South Carolina Commission
|
Public Service Commission of South Carolina
|
|
Southern
|
The legal entity, The Southern Company, one or more of its consolidated subsidiaries, or the entirety of The Southern Company and its consolidated subsidiaries
|
|
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 the McGraw-Hill Companies, Inc.
|
|
Summer
|
V.C. Summer nuclear power station
|
|
SunEdison
|
The legal entity, SunEdison, Inc., one or more of its consolidated subsidiaries, or the entirety of SunEdison, Inc. and its consolidated subsidiaries
|
|
Surry
|
Surry nuclear power station
|
|
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
|
|
TransCanada
|
The legal entity, TransCanada Corporation, one or more of its consolidated subsidiaries or operating segments, or the entirety of TransCanada Corporation and its consolidated subsidiaries
|
|
TSR
|
Total shareholder return
|
|
Utah Commission
|
Utah Public Service Commission
|
|
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 segment, 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
|
|
WECTEC
|
WECTEC Global Project Services, Inc. (formerly known as Stone & Webster, Inc.), a wholly-owned subsidiary of Westinghouse
|
|
West Virginia Commission
|
Public Service Commission of West Virginia
|
|
Westinghouse
|
Westinghouse Electric Company LLC
|
|
Wexpro
|
The legal entity, Wexpro Company, one or more of its consolidated subsidiaries, or the entirety of Wexpro Company and its consolidated subsidiaries
|
|
Wexpro Agreement
|
An agreement which sets forth the rights of Questar Gas to receive certain benefits from Wexpro’s operations, including
cost-of-service
gas
|
|
Wexpro II Agreement
|
An agreement with the states of Utah and Wyoming modeled after the Wexpro Agreement that allows for the addition of properties under the
cost-of-service
methodology for the benefit of Questar Gas customers
|
|
Whitehouse Solar
|
A 20 MW utility-scale solar power station in Louisa County, Virginia
|
|
White River Hub
|
White River Hub, LLC
|
|
Woodland Solar
|
A 19 MW utility-scale solar power station in Isle of Wight County, Virginia
|
|
Wrangler
|
Wrangler Retail Gas Holdings, LLC, a partnership between Dominion Energy and Interstate Gas Supply Inc.
|
|
Wyoming Commission
|
Wyoming Public Service Commission
|
|
|
|
7
|
|
8
|
|
|
|
|
9
|
10
|
|
|
|
|
Primary Operating
Segment |
Description of Operations
|
Dominion
Energy |
Virginia
Power |
Dominion
Energy Gas |
||||||||||
Dominion Energy Virginia
|
Regulated electric distribution
|
|
X
|
|
|
X
|
|
|
|
|
||||
|
Regulated electric transmission
|
|
X
|
|
|
X
|
|
|
|
|
||||
|
Regulated electric generation fleet
(1)
|
|
X
|
|
|
X
|
|
|
|
|
||||
Gas Transmission & Storage
|
Regulated gas transmission and storage
(2)
|
|
X
|
|
|
|
|
|
X
|
|
||||
|
LNG terminalling and storage
|
|
X
|
|
|
|
|
|
X
|
|
||||
|
Nonregulated retail energy marketing
|
|
X
|
|
|
|
|
|
|
|
||||
Gas Distribution
|
Regulated gas distribution and storage
(3)
|
|
X
|
|
|
|
|
|
|
|
||||
Dominion Energy South Carolina
|
Regulated electric distribution
|
|
X
|
|
|
|
|
|
|
|
||||
|
Regulated electric transmission
|
|
X
|
|
|
|
|
|
|
|
||||
|
Regulated electric generation fleet
|
|
X
|
|
|
|
|
|
|
|
||||
|
Regulated gas distribution and storage
|
|
X
|
|
|
|
|
|
|
|
||||
Contracted Generation
|
Merchant electric generation fleet
|
|
X
|
|
|
|
|
|
|
|
(1)
|
Includes Virginia Power’s nonjurisdictional generation operations.
|
(2)
|
Includes gathering and processing activities.
|
(3)
|
Includes Wexpro’s natural gas development and production operations.
|
11
|
•
|
Mt.
Storm-to-Valley
($290 million);
|
•
|
Gainesville-to-Haymarket
($170 million);
|
•
|
Idylwood
-to-Tysons
($125 million);
|
•
|
Glebe substation and North Potomac Yard terminal station underground ($125 million); |
•
|
Remington/Gordonsville/Pratts Area Improvement (including
Remington-to-Gordonsville,
and new Gordonsville substation transformer) ($115 million);
|
•
|
Idylwood substation ($105 million); |
•
|
Harmony
Village-to-White
Stone ($105 million);
|
•
|
Elmont-to-Ladysmith ($90 million); |
•
|
Lanexa-to-Northern Neck ($90 million); |
•
|
Loudoun-to-Ox
($70 million);
|
•
|
Mt. Storm substation ($70 million); |
•
|
Bristers-to-Chancellor
($65 million); and
|
•
|
Dooms-to-Valley
($65 million).
|
12
|
|
|
|
|
• | Virginia Power plans to acquire or construct certain solar facilities in Virginia and North Carolina. See Notes 10 and 13 to the Consolidated Financial Statements for more information. |
• |
Virginia Power continues to consider the construction of a third nuclear unit at a site located at North Anna. See
Future Issues and Other Matters
|
• | Virginia Power is considering the construction of an approximately $2 billion hydroelectric pumped storage facility in Southwest Virginia. |
• | Virginia Power has announced an approximately $400 million project to replace approximately 1,500 diesel buses with electric buses at school districts in Virginia by 2025. |
• | In November 2018, Virginia Power received approval from the Virginia Commission for its petition seeking a prudency determination as provided in the GTSA with respect to the proposed Coastal Virginia Offshore Wind Pilot project, consisting of two 6 MW wind turbine generators located approximately 27 miles off the coast of Virginia Beach, Virginia in federal waters, and for a CPCN, for the generation tie line connecting the generators to shore. This project is expected to cost approximately $300 million and to be placed into service by the end of 2020. |
• | In September 2019, Virginia Power filed an application with PJM for the Coastal Virginia Offshore Wind Commercial project to interconnect 2,640 MW of wind energy between 2024 and 2026 off the coast of Virginia as an expansion of the Coastal Virginia Offshore Wind Pilot project, expected to increase the total cost of the project by up to approximately $8 billion. |
• | Virginia Power is considering the construction of simple cycle combustion turbines in Virginia. These projects are expected to be placed in service beginning 2023. |
Source
|
2019
|
|
2018
|
2017
|
||||||||
Natural gas
|
|
41
|
%
|
33
|
% |
32
|
% | |||||
Nuclear
(1)
|
|
29
|
|
29
|
32
|
|||||||
Purchased power, net
|
|
17
|
|
19
|
14
|
|||||||
Coal
(2)
|
|
8
|
|
13
|
17
|
|||||||
Renewable/hydro
(3)
|
|
5
|
|
5
|
5
|
|||||||
Oil
|
|
—
|
|
1
|
—
|
|||||||
Total
|
|
100
|
%
|
100
|
% |
100
|
% |
(1)
|
Excludes ODEC’s 11.6% ownership interest in North Anna.
|
(2)
|
Excludes ODEC’s 50.0% ownership interest in the Clover power station.
|
(3)
|
Includes solar and biomass.
|
13
|
|
NRC license expiration year
|
Most
recent cost estimate (2019 dollars)
(1)
|
Funds in
trusts at December 31, 2019 |
2019
contributions to trusts |
||||||||||||
(dollars in millions)
|
|
|
|
|
|
|
||||||||||
Surry
|
|
|
|
|
|
|
||||||||||
Unit 1
|
|
2032
|
|
|
$ 803
|
|
|
$ 815
|
|
|
$ —
|
|
||||
Unit 2
|
|
2033
|
|
|
794
|
|
|
803
|
|
|
—
|
|
||||
North Anna
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unit 1
(2)
|
|
2038
|
|
|
720
|
|
|
651
|
|
|
—
|
|
||||
Unit 2
(2)
|
|
2040
|
|
|
724
|
|
|
612
|
|
|
—
|
|
||||
Total
|
|
|
|
|
$3,041
|
|
|
$2,881
|
|
|
$—
|
|
(1)
|
The cost estimates shown above reflect reductions for the expected future recovery of certain spent fuel costs based on Virginia Power’s contracts with the DOE for disposal of spent nuclear fuel consistent with the reductions reflected in Virginia Power’s nuclear decommissioning AROs and includes the expectation that
20-year
license extensions are approved for all units.
|
(2)
|
North Anna is jointly owned by Virginia Power (88.4%) and ODEC (11.6%). However, Virginia Power is responsible for 89.26% of the decommissioning obligation. Amounts reflect 89.26% of the decommissioning cost for both of North Anna’s units.
|
14
|
|
|
|
|
15
|
16
|
|
|
|
|
17
|
|
Source
|
2019
|
|
2018
(1)
|
|||||
Natural gas
|
|
46
|
%
|
37
|
% | |||
Coal
|
|
27
|
|
35
|
||||
Nuclear
(2)
|
|
23
|
|
20
|
||||
Renewable/hydro
(3)
|
|
4
|
|
8
|
||||
Total
|
|
100
|
%
|
100
|
% |
(1)
|
Dominion Energy did not acquire DESC until January 2019. These amounts represent data obtained as part of the due diligence performed by Dominion Energy prior to the SCANA Combination.
|
(2)
|
Excludes Santee Cooper’s 33.3% undivided ownership interest in Summer.
|
(3)
|
Includes solar.
|
18
|
|
|
|
|
19
|
20
|
|
|
|
|
|
NRC
license expiration year |
Most
recent cost estimate (2019 dollars)
(1)
|
Funds in
trusts at December 31, 2019 |
2019
contributions to trusts |
||||||||||||
(dollars in millions)
|
|
|
|
|
|
|||||||||||
Millstone
|
|
|
|
|
|
|
||||||||||
Unit 1
(2)
|
|
N/A
|
|
$
|
450
|
|
|
$ 622
|
|
|
$ —
|
|
||||
Unit 2
|
|
2035
|
|
|
653
|
|
|
828
|
|
|
—
|
|
||||
Unit 3
(3)
|
|
2045
|
|
|
741
|
|
|
813
|
|
|
—
|
|
||||
Kewaunee
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unit 1
(4)
|
|
N/A
|
|
|
573
|
|
|
834
|
|
|
—
|
|
||||
Total
|
|
|
|
$
|
2,417
|
|
|
$3,097
|
|
|
$ —
|
|
(1)
|
The cost estimates shown above reflect reductions for the expected future recovery of certain spent fuel costs based on Dominion Energy’s contracts with the DOE for disposal of spent nuclear fuel consistent with the reductions reflected in Dominion Energy’s nuclear decommissioning AROs.
|
(2)
|
Unit 1 permanently ceased operations in 1998, before Dominion Energy’s acquisition of Millstone.
|
(3)
|
Millstone Unit 3 is jointly owned by Dominion Energy Nuclear Connecticut, Inc., with a 6.53% undivided interest in Unit 3 owned by Massachusetts Municipal and Green Mountain. Decommissioning cost is shown at Dominion Energy’s ownership percentage. At December 31, 2019, the minority owners held $49 million of trust funds related to Millstone Unit 3 that are not reflected in the table above.
|
(4)
|
Permanently ceased operations in 2013.
|
21
|
22
|
|
|
|
|
23
|
24
|
|
|
|
|
25
|
• | Reduction of GHG emissions; |
• | Energy infrastructure modernization, including natural gas and electric operations; and |
• | Conservation and energy efficiency. |
26
|
|
|
|
|
Subpart W Segment
|
Subpart W
Total CH
4
Emissions
(mcf CH
4
)
|
|
||
Distribution
|
|
1,839,577
|
|
|
Production
|
|
736,188
|
|
|
Transmission pipelines
|
|
403,164
|
|
|
Transmission compressor stations
|
|
219,011
|
|
|
Gathering and boosting
|
|
219,056
|
|
|
Storage
|
|
88,973
|
|
|
LNG import/export
|
|
4,331
|
|
|
Processing
|
|
1,880
|
|
27
|
|
• | Energy audits and assessments; |
• | Incentives for customers to upgrade or install certain energy efficient measures and/or systems; |
• | Weatherization assistance to help income-eligible customers reduce their energy usage; |
• |
Home energy planning, which provides homeowners with a
step-by-step
roadmap to efficiency improvements to reduce gas usage; and
|
• | Rebates for installing high-efficiency equipment. |
28
|
|
|
|
|
29
|
30
|
|
|
|
|
31
|
32
|
|
|
|
|
33
|
34
|
|
|
|
|
35
|
36
|
|
|
|
|
37
|
|
Plant
|
Location
|
Net Summer
Capability (MW)
|
Percentage
Net Summer
Capability
|
|||||||||
Gas
|
|
|
|
|||||||||
Greensville County (CC)
|
Greensville County, VA
|
1,629
|
|
|||||||||
Brunswick County (CC)
|
Brunswick County, VA
|
1,376
|
|
|||||||||
Warren County (CC)
|
Warren County, VA
|
1,370
|
|
|||||||||
Ladysmith (CT)
|
Ladysmith, VA
|
783
|
|
|||||||||
Bear Garden (CC)
|
Buckingham County, VA
|
622
|
|
|||||||||
Remington (CT)
|
Remington, VA
|
622
|
|
|||||||||
Possum Point (CC)
(1)
|
Dumfries, VA
|
573
|
|
|||||||||
Chesterfield (CC)
|
Chester, VA
|
392
|
|
|||||||||
Elizabeth River (CT)
|
Chesapeake, VA
|
330
|
|
|||||||||
Gordonsville Energy (CC)
|
Gordonsville, VA
|
218
|
|
|||||||||
Gravel Neck (CT)
|
Surry, VA
|
170
|
|
|||||||||
Darbytown (CT)
|
Richmond, VA
|
168
|
|
|||||||||
Rosemary (CC)
|
Roanoke Rapids, NC
|
160
|
|
|||||||||
Total Gas
|
|
8,413
|
40
|
% | ||||||||
Coal
|
|
|
|
|||||||||
Mt. Storm
|
Mt. Storm, WV
|
1,621
|
|
|||||||||
Chesterfield
|
Chester, VA
|
1,014
|
|
|||||||||
Virginia City Hybrid Energy Center
|
Wise County, VA
|
610
|
|
|||||||||
Clover
|
Clover, VA
|
439
|
(2)
|
|
||||||||
Total Coal
|
|
3,684
|
18
|
|||||||||
Nuclear
|
|
|
|
|||||||||
Surry
|
Surry, VA
|
1,676
|
|
|||||||||
North Anna
|
Mineral, VA
|
1,672
|
(3)
|
|
||||||||
Total Nuclear
|
|
3,348
|
16
|
|||||||||
Oil
|
|
|
|
|||||||||
Yorktown
|
Yorktown, VA
|
790
|
|
|||||||||
Possum Point
|
Dumfries, VA
|
770
|
|
|||||||||
Gravel Neck (CT)
|
Surry, VA
|
198
|
|
|||||||||
Darbytown (CT)
|
Richmond, VA
|
168
|
|
|||||||||
Possum Point (CT)
|
Dumfries, VA
|
72
|
|
|||||||||
Low Moor (CT)
|
Covington, VA
|
48
|
|
|||||||||
Northern Neck (CT)
|
Lively, VA
|
47
|
|
|||||||||
Chesapeake (CT)
|
Chesapeake, VA
|
39
|
|
|||||||||
Total Oil
|
|
2,132
|
10
|
|||||||||
Hydro
|
|
|
|
|||||||||
Bath County
|
Warm Springs, VA
|
1,808
|
(4)
|
|
||||||||
Gaston
|
Roanoke Rapids, NC
|
220
|
|
|||||||||
Roanoke Rapids
|
Roanoke Rapids, NC
|
95
|
|
|||||||||
Other
|
|
1
|
|
|||||||||
Total Hydro
|
|
2,124
|
10
|
|||||||||
Solar
|
|
|
|
|||||||||
Colonial Trail West
|
Surry County, VA
|
142
|
|
|||||||||
Whitehouse Solar
|
Louisa County, VA
|
20
|
|
|||||||||
Woodland Solar
|
Isle of Wight County, VA
|
19
|
|
|||||||||
Scott Solar
|
Powhatan, VA
|
17
|
|
|||||||||
Total Solar
|
|
198
|
1
|
|||||||||
Biomass
|
|
|
|
|||||||||
Altavista
|
Altavista, VA
|
51
|
|
|||||||||
Polyester
|
Hopewell, VA
|
51
|
|
|||||||||
Southampton
|
Southampton, VA
|
51
|
|
|||||||||
Total Biomass
|
|
153
|
1
|
|||||||||
Various
|
|
|
|
|||||||||
Mt. Storm (CT)
|
Mt. Storm, WV
|
11
|
—
|
|||||||||
|
|
20,063
|
|
|||||||||
Power Purchase Agreements
|
|
782
|
4
|
|||||||||
Total Utility Generation
|
|
20,845
|
100
|
% |
(1)
|
Will be retired after meeting capacity obligation to PJM in 2021. See Note 2 to the Consolidated Financial Statements for additional information.
|
(2)
|
Excludes 50% undivided interest owned by ODEC.
|
(3)
|
Excludes 11.6% undivided interest owned by ODEC.
|
(4)
|
Excludes 40% undivided interest owned by Allegheny Generating Company, a subsidiary of FirstEnergy Corp.
|
38
|
|
|
|
|
Plant
|
Location
|
Net Summer
Capability (MW)
|
||||||
Solar
(1)
|
|
|
|
|
||||
Gutenberg
|
Garysburg, NC
|
80
|
||||||
Pecan
|
Pleasant Hill, NC
|
75
|
||||||
Gloucester
|
Gloucester County, VA
|
20
|
||||||
Montross
|
Westmoreland County, VA
|
20
|
||||||
Morgans Corner
|
Pasquotank County, NC
|
20
|
||||||
Remington
|
Fauquier County, VA
|
20
|
||||||
Oceana
|
Virginia Beach, VA
|
18
|
||||||
Hollyfield
|
Manquin, VA
|
17
|
||||||
Puller
|
Topping, VA
|
15
|
||||||
Total Solar
|
|
|
|
285
|
(1)
|
All solar facilities are alternating current.
|
|
|
|
39
|
|
Plant
|
Location
|
Net Summer
Capability (MW)
|
Percentage
Net Summer
Capability
|
|||||||
Gas
|
|
|
|
|||||||
Jasper (CC)
(1)
|
Hardeeville, SC
|
852
|
|
|||||||
Columbia Energy Center (CC)
(1)
|
Gaston, SC
|
519
|
|
|||||||
Urquhart (CC)
(1)
|
Beech Island, SC
|
458
|
|
|||||||
McMeekin
|
Irmo, SC
|
250
|
|
|||||||
Hagood (CT)
(1)
|
Charleston, SC
|
126
|
|
|||||||
Urquhart Unit 3
|
Beech Island, SC
|
95
|
|
|||||||
Urquhart (CT)
|
Beech Island, SC
|
87
|
|
|||||||
Parr (CT)
(1)
|
Jenkinsville, SC
|
60
|
|
|||||||
Williams (CT)
(1)
|
Goose Creek, SC
|
40
|
|
|||||||
Coit (CT)
(1)
|
Columbia, SC
|
26
|
|
|||||||
Total Gas
(2)
|
|
2,513
|
40
|
% | ||||||
Coal
|
|
|
|
|||||||
Wateree
|
Eastover, SC
|
684
|
|
|||||||
Williams
|
Goose Creek, SC
|
605
|
|
|||||||
Cope
(3)
|
Cope, SC
|
415
|
|
|||||||
Total Coal
|
|
1,704
|
27
|
|||||||
Hydro
|
|
|
|
|||||||
Fairfield
|
Jenkinsville, SC
|
576
|
|
|||||||
Saluda
|
Irmo, SC
|
190
|
|
|||||||
Other
|
Various
|
18
|
|
|||||||
Total Hydro
|
|
784
|
13
|
|||||||
Nuclear
|
|
|
|
|||||||
Summer
|
Jenkinsville, SC
|
650
|
(4)
|
|
||||||
Total Nuclear
|
|
650
|
10
|
|||||||
Power Purchase Agreements
|
|
596
|
(5)
|
10
|
||||||
Total Utility Generation
|
|
6,247
|
100
|
% |
(1)
|
Capable of burning fuel oil as a secondary source.
|
(2)
|
Excludes the Hardeeville gas combustion turbine which currently does not have any net summer capability.
|
(3)
|
Capable of burning natural gas as a secondary source.
|
(4)
|
Excludes 33.3% undivided interest owned by Santee Cooper.
|
(5)
|
Includes 143MW from agreements with certain solar facilities within Contracted Generation.
|
40
|
|
|
|
|
Plant
|
Location
|
Net Summer
Capability (MW)
|
Percentage
Net Summer
Capability
|
|||||||||
Nuclear
|
|
|
|
|
|
|||||||
Millstone
|
Waterford, CT
|
2,001
|
(1)
|
|
||||||||
Total Nuclear
|
|
2,001
|
59
|
% | ||||||||
Solar
(2)
|
|
|
|
|||||||||
Escalante I, II and III
|
Beaver County, UT
|
120
|
(3)
|
|
||||||||
Amazon Solar Farm Virginia—Southampton
|
Newsoms, VA
|
100
|
(4)
|
|
||||||||
Amazon Solar Farm Virginia—Accomack
|
Oak Hall, VA
|
80
|
(4)
|
|
||||||||
Innovative Solar 37
|
Morven, NC
|
79
|
(4)
|
|
||||||||
Wilkinson
|
Pantego, NC
|
74
|
|
|||||||||
Seabrook
|
Beaufort County, SC
|
72
|
|
|||||||||
Moffett Solar 1
|
Ridgeland, SC
|
71
|
(4)
|
|
||||||||
Granite Mountain East and West
|
Iron County, UT
|
65
|
(3)
|
|
||||||||
Summit Farms Solar
|
Moyock, NC
|
60
|
(4)
|
|
||||||||
Enterprise
|
Iron County, UT
|
40
|
(3)
|
|
||||||||
Iron Springs
|
Iron County, UT
|
40
|
(3)
|
|
||||||||
Pavant Solar
|
Holden, UT
|
34
|
(5)
|
|
||||||||
Camelot Solar
|
Mojave, CA
|
30
|
(5)
|
|
||||||||
Midway II
|
Calipatria, CA
|
30
|
(4)
|
|
||||||||
Indy I, II and III
|
Indianapolis, IN
|
20
|
(5)
|
|
||||||||
Amazon Solar Farm Virginia—Buckingham
|
Cumberland, VA
|
20
|
(4)
|
|
||||||||
Amazon Solar Farm Virginia—Correctional
|
Barhamsville, VA
|
20
|
(4)
|
|
||||||||
Hecate Cherrydale
|
Cape Charles, VA
|
20
|
(4)
|
|
||||||||
Amazon Solar Farm Virginia—Sappony
|
Stoney Creek, VA
|
20
|
(4)
|
|
||||||||
Amazon Solar Farm Virginia—Scott II
|
Powhatan, VA
|
20
|
(4)
|
|
||||||||
Cottonwood Solar
|
Kings and Kern Counties, CA
|
16
|
(5)
|
|
||||||||
Adams East Solar
|
Tranquility, CA
|
13
|
(5)
|
|
||||||||
Alamo Solar
|
San Bernardino, CA
|
13
|
(5)
|
|
||||||||
CID Solar
|
Corcoran, CA
|
13
|
(5)
|
|
||||||||
Imperial Valley Solar
|
Imperial, CA
|
13
|
(5)
|
|
||||||||
Kansas Solar
|
Lenmore, CA
|
13
|
(5)
|
|
||||||||
Kent South Solar
|
Lenmore, CA
|
13
|
(5)
|
|
||||||||
Maricopa West Solar
|
Kern County, CA
|
13
|
(5)
|
|
||||||||
Old River One Solar
|
Bakersfield, CA
|
13
|
(5)
|
|
||||||||
Richland Solar
|
Jeffersonville, GA
|
13
|
(5)
|
|
||||||||
West Antelope Solar
|
Lancaster, CA
|
13
|
(5)
|
|
||||||||
Catalina 2 Solar
|
Kern County, CA
|
12
|
(5)
|
|
||||||||
Mulberry Solar
|
Selmer, TN
|
11
|
(5)
|
|
||||||||
Selmer Solar
|
Selmer, TN
|
11
|
(5)
|
|
||||||||
Columbia 2 Solar
|
Mojave, CA
|
10
|
(5)
|
|
||||||||
Hecate Energy Clarke County
|
White Post, VA
|
10
|
(4)
|
|
||||||||
Ridgeland Solar Farm I
|
Ridgeland, SC
|
10
|
(4)
|
|
||||||||
Other
|
Various
|
43
|
(4)(5)
|
|
||||||||
Total Solar
|
|
|
|
1,268
|
37
|
|||||||
Wind
|
|
|
|
|||||||||
Fowler Ridge
(6)
|
Benton County, IN
|
150
|
(7)
|
4
|
||||||||
Total Merchant Generation
|
|
|
|
3,419
|
100
|
% |
(1)
|
Excludes 6.53% undivided interest in Unit 3 owned by Massachusetts Municipal and Green Mountain.
|
(2)
|
All solar facilities are alternating current.
|
(3)
|
Excludes 50% noncontrolling interest owned by GIP. Dominion Energy’s interest is subject to a lien securing Dominion Solar Projects III, Inc.’s debt.
|
(4)
|
Dominion Energy’s interest is subject to a lien securing Eagle Solar’s debt.
|
(5)
|
Excludes 33% noncontrolling interest owned by Terra Nova Renewable Partners. Dominion Energy’s interest is subject to a lien securing SBL Holdco’s debt.
|
(6)
|
Subject to a lien securing the facility’s debt.
|
(7)
|
Excludes 50% membership interest owned by BP.
|
|
|
|
41
|
|
42
|
|
|
|
|
Name and Age
|
Business Experience Past Five Years
(1)
|
|
Thomas F. Farrell, II (65)
|
Chairman of the Board of Directors, President and CEO from April 2007 to date.
|
|
Robert M. Blue (52)
|
Executive Vice President and
Co-COO
from December 2019 to date; Executive Vice President and President & CEO—Power Delivery Group from May 2017 to November 2019; Senior Vice President and President & CEO—Dominion Virginia Power from January 2017 to May 2017; Senior Vice President—Law, Regulation & Policy from February 2016 to December 2016; Senior Vice President—Regulation, Law, Energy Solutions and Policy from May 2015 to January 2016; President of Virginia Power from January 2014 to May 2015.
|
|
James R. Chapman (50)
|
Executive Vice President, CFO and Treasurer from January 2019 to date; Senior Vice President, CFO and Treasurer from November 2018 to December 2018; Senior Vice President—Mergers & Acquisitions and Treasurer from February 2016 to October 2018; Vice President—Corporate Finance and Mergers & Acquisitions and Assistant Treasurer from May 2015 to January 2016; Vice President—Corporate Finance and Mergers & Acquisitions from January 2015 to May 2015.
|
|
Diane Leopold (53)
|
Executive Vice President and
Co-COO
from December 2019 to date; Executive Vice President and President & CEO—Gas Infrastructure Group from May 2017 to November 2019; Senior Vice President and President & CEO—Dominion Energy from January 2017 to May 2017; President of DETI, East Ohio and DCP from January 2014 to date.
|
|
P. Rodney Blevins (55)
|
President— Dominion Energy South Carolina from December 2019 to date; President & Chief Executive Officer—Southeast Energy Group from January 2019 to November 2019; Senior Vice President and Chief Information Officer from January 2014 to December 2018.
|
|
Donald R. Raikes (57)
|
President—Gas Distribution of Dominion Energy from December 2019 to date and of Hope, East Ohio, PSNC, and Questar Gas from October 2019 to date; Senior Vice President—Gas Transmission Operations of DCP, Dominion Energy Midstream and Dominion Energy Questar Pipeline from February 2019 to September 2019; Senior Vice President—Dominion Midstream Operations of DCP, Dominion Energy Midstream and Dominion Energy Questar Pipeline from August 2017 to January 2019; Senior Vice President—Pipeline Customer Service & Business Development of DCP and DETI from May 2017 to August 2017; Senior Vice President—Customer Service and Business Development of DCP and DETI from November 2014 to May 2017.
|
|
Paul E. Ruppert (55)
|
President—Gas Transmission & Storage from December 2019 to date; President—Gas Transmission of DETI, Dominion Energy Questar Pipeline and DCP from August 2017 to November 2019; President—Dominion Midstream Operations of Dominion Energy Questar Pipeline and DCP from May 2017 to July 2017; Senior Vice President and President—Dominion Midstream Operations of Dominion Energy Midstream from January 2017 to July 2017; Senior Vice President—Dominion Midstream Operations of Dominion Energy Midstream from January 2016 to December 2016; Senior Vice President—Business Development & Generation Construction of Virginia Power from April 2012 to December 2015.
|
|
Daniel G. Stoddard (57)
|
Senior Vice President, Chief Nuclear Officer and President—Contracted Generation from December 2019 to date; Senior Vice President and Chief Nuclear Officer of Virginia Power from October 2016 to date; Senior Vice President—Nuclear Operations of Virginia Power from May 2011 to September 2016.
|
|
Carlos M. Brown (45)
|
Senior Vice President, General Counsel and Chief Compliance Officer from December 2019 to date; Senior Vice President and General Counsel from January 2019 to November 2019; Vice President and General Counsel from January 2017 to December 2018; Deputy General Counsel—Litigation, Labor, and Employment of DES from July 2016 to December 2016; Director—Power Generation Station II of DES from July 2015 to June 2016; Director—Alternative Energy Solutions Business Development & Commercialization of DES from January 2013 to June 2015.
|
|
William L. Murray (52)
|
Senior Vice President—Corporate Affairs & Communications from February 2019 to date; Vice President—State & Electric Public Policy of DES from May 2017 to January 2019; Senior Policy Director—Public Policy of DES from April 2016 to May 2017; Managing Director—Corporate Public Policy of DES from June 2007 to March 2016.
|
|
Michele L. Cardiff (52)
|
Vice President, Controller and CAO from April 2014 to date.
|
(1)
|
All positions held at Dominion Energy, unless otherwise noted. Any service listed for Virginia Power, DETI, East Ohio, Hope, PSNC, Questar Gas, Dominion Energy Midstream, Dominion Energy Questar Pipeline, DCP and DES reflects service at a subsidiary of Dominion Energy.
|
|
|
|
43
|
|
Dominion Energy Purchases Of Equity Securities
|
||||||||||||||||
Period
|
Total
Number
of Shares
(or Units)
Purchased
(1)
|
Average
Price Paid
per Share
(or Unit)
(2)
|
Total Number
of Shares (or Units)
Purchased as Part
of Publicly Announced
Plans or Programs |
Maximum Number (or
Approximate Dollar Value)
of Shares (or Units) that May
Yet Be Purchased under the
Plans or Programs
(3)
|
||||||||||||
10/1/19-10/31/19
|
|
31,435
|
|
|
$81.22
|
|
|
—
|
|
19,629,059 shares/$
|
1.18 billion
|
|
||||
11/1/19-11/30/19
|
|
401
|
|
|
83.08
|
|
|
—
|
|
19,629,059 shares/$
|
1.18 billion
|
|
||||
12/1/19-12/31/19
|
|
2,429
|
|
|
83.11
|
|
|
—
|
|
19,629,059 shares/$
|
1.18 billion
|
|
||||
Total
|
|
34,265
|
|
|
$81.38
|
|
|
—
|
|
19,629,059 shares/$
|
1.18 billion
|
|
(1)
|
Represents shares that were tendered by employees to satisfy tax withholding obligations on vested restricted stock.
|
(2)
|
Represents the weighted-average price paid per share.
|
(3)
|
The remaining repurchase authorization is pursuant to repurchase authority granted by the Dominion Energy Board of Directors in February 2005, as modified in June 2007. The aggregate authorization granted by the Dominion Energy Board of Directors was 86 million shares (as adjusted to reflect a
two-for-one
stock split distributed in November 2007) not to exceed $4 billion.
|
44
|
|
|
|
|
Year Ended December 31,
|
2019
(1)
|
|
2018
(2)
|
2017
(3)
|
2016
(4)
|
2015
|
||||||||||||||
(millions, except per share amounts)
|
|
|
|
|
|
|
||||||||||||||
Operating revenue
|
$
|
16,572
|
|
$ |
13,366
|
$ |
12,586
|
$ |
11,737
|
$ |
11,683
|
|||||||||
Net income attributable to Dominion Energy
|
|
1,358
|
|
2,447
|
2,999
|
2,123
|
1,899
|
|||||||||||||
Net income attributable to Dominion Energy per common share-basic
|
|
1.66
|
|
3.74
|
4.72
|
3.44
|
3.21
|
|||||||||||||
Net income attributable to Dominion Energy per common share-diluted
|
|
1.62
|
|
3.74
|
4.72
|
3.44
|
3.20
|
|||||||||||||
Dividends declared per common share
|
|
3.67
|
|
3.34
|
3.035
|
2.80
|
2.59
|
|||||||||||||
Total assets
|
|
103,823
|
|
77,914
|
76,585
|
71,610
|
58,648
|
|||||||||||||
Long-term debt
(5)
|
|
33,824
|
|
31,144
|
30,948
|
30,231
|
23,468
|
(1)
|
Includes merger and integration-related costs associated with the SCANA Combination of $1.8 billion
after-tax
(inclusive of $756 million
after-tax
charge for refunds of amounts previously collected for the NND Project, $480 million
after-tax
charge for litigation acquired in the SCANA Combination and $319 million
after-tax
charge related to a voluntary retirement program), $585 million
after-tax
charges associated primarily with the planned early retirement of certain electric generation facilities, automated meter reading infrastructure and the termination of a contract with a
non-utility
generator, partially offset by a $429 million
after-tax
net gain related to nuclear decommissioning trust funds.
|
(2)
|
Includes $568 million
after-tax
gains on sales of certain merchant generation facilities and equity method investments partially offset by $164 million
after-tax
charge related to the impairment of certain gathering and processing assets and a $160 million
after-tax
charge associated with Virginia legislation enacted in March 2018 that required
one-time
rate credits of certain amounts to utility customers.
|
(3)
|
Includes $851 million of tax benefits resulting from the remeasurement of deferred income taxes to the new corporate income tax rate, partially offset by $96 million of
after-tax
charges associated with equity method investments in wind-powered generation facilities.
|
(4)
|
Includes a $122 million
after-tax
charge related to future ash pond and landfill closure costs at certain utility generation facilities.
|
(5)
|
Includes finance leases.
|
|
|
|
45
|
|
• | Forward-Looking Statements |
• | Accounting Matters—Dominion Energy |
• | Dominion Energy |
•
|
Results of Operations |
•
|
Segment Results of Operations |
• | Virginia Power |
•
|
Results of Operations |
• | Dominion Energy Gas |
•
|
Results of Operations |
• | Liquidity and Capital Resources—Dominion Energy |
• | Future Issues and Other Matters—Dominion Energy |
• | Unusual weather conditions and their effect on energy sales to customers and energy commodity prices; |
• | Extreme weather events and other natural disasters, including, but not limited to, hurricanes, high winds, severe storms, earthquakes, flooding, climate changes and changes in water temperatures and availability that can cause outages and property damage to facilities; |
• | Federal, state and local legislative and regulatory developments, including changes in federal and state tax laws and regulations; |
• | Risks of operating businesses in regulated industries that are subject to changing regulatory structures; |
• | Changes to regulated electric rates collected by Dominion Energy and Virginia Power and regulated gas distribution, transportation and storage rates, including LNG storage, collected by Dominion Energy and Dominion Energy Gas; |
• | Changes in rules for RTOs and ISOs in which Dominion Energy and Virginia Power join and/or participate, including changes in rate designs, changes in FERC’s interpretation of market rules and new and evolving capacity models; |
• | Risks associated with Virginia Power’s membership and participation in PJM, including risks related to obligations created by the default of other participants; |
• | Risks associated with entities in which Dominion Energy and Dominion Energy Gas share ownership with third parties, including risks that result from lack of sole decision making authority, disputes that may arise between Dominion Energy and Dominion Energy Gas and third party participants and difficulties in exiting these arrangements; |
• | Changes in future levels of domestic and international natural gas production, supply or consumption; |
• | Fluctuations in future volumes of LNG imports or exports from the U.S. and other countries worldwide or demand for, purchases of, and prices related to natural gas or LNG; |
• | Timing and receipt of regulatory approvals necessary for planned construction or growth projects and compliance with conditions associated with such regulatory approvals; |
• | The inability to complete planned construction, conversion or growth projects at all, or with the outcomes or within the terms and time frames initially anticipated, including as a result of increased public involvement, intervention or litigation in such projects; |
• | Changes to federal, state and local environmental laws and regulations, including those related to climate change, the tightening of emission or discharge limits for GHGs and other substances, more extensive permitting requirements and the regulation of additional substances; |
• | Cost of environmental compliance, including those costs related to climate change; |
• | Changes in implementation and enforcement practices of regulators relating to environmental standards and litigation exposure for remedial activities; |
• | Difficulty in anticipating mitigation requirements associated with environmental and other regulatory approvals or related appeals; |
• | Unplanned outages at facilities in which the Companies have an ownership interest; |
• | The impact of operational hazards, including adverse developments with respect to pipeline and plant safety or integrity, equipment loss, malfunction or failure, operator error, and other catastrophic events; |
• | Risks associated with the operation of nuclear facilities, including costs associated with the disposal of spent nuclear fuel, decommissioning, plant maintenance and changes in existing regulations governing such facilities; |
• | Changes in operating, maintenance and construction costs; |
• | Domestic terrorism and other threats to the Companies’ physical and intangible assets, as well as threats to cybersecurity; |
• | Additional competition in industries in which the Companies operate, including in electric markets in which Dominion Energy’s merchant generation facilities operate and potential competition from the development and deployment of alternative energy sources, such as self-generation and distributed generation technologies, and availability of market alternatives to large commercial and industrial customers; |
46
|
|
|
|
|
• | Competition in the development, construction and ownership of certain electric transmission facilities in Dominion Energy and Virginia Power’s service territory in connection with Order 1000; |
• | Changes in technology, particularly with respect to new, developing or alternative sources of generation and smart grid technologies; |
• | Changes in demand for the Companies’ services, including industrial, commercial and residential growth or decline in the Companies’ service areas, changes in supplies of natural gas delivered to Dominion Energy and Dominion Energy Gas’ pipeline systems, failure to maintain or replace customer contracts on favorable terms, changes in customer growth or usage patterns, including as a result of energy conservation programs, the availability of energy efficient devices and the use of distributed generation methods; |
• | Receipt of approvals for, and timing of, closing dates for acquisitions and divestitures; |
• | Impacts of acquisitions, divestitures, transfers of assets to joint ventures and retirements of assets based on asset portfolio reviews; |
• | Adverse outcomes in litigation matters or regulatory proceedings, including matters acquired in the SCANA Combination; |
• | Counterparty credit and performance risk; |
• | Fluctuations in the value of investments held in nuclear decommissioning trusts by Dominion Energy and Virginia Power and in benefit plan trusts by Dominion Energy and Dominion Energy Gas; |
• | Fluctuations in energy-related commodity prices and the effect these could have on Dominion Energy’s earnings and the Companies’ liquidity position and the underlying value of their assets; |
• | Fluctuations in interest rates or foreign currency exchange rates; |
• | Changes in rating agency requirements or credit ratings and their effect on availability and cost of capital; |
• | Global capital market conditions, including the availability of credit and the ability to obtain financing on reasonable terms; |
• | Political and economic conditions, including inflation and deflation; |
• | Employee workforce factors including collective bargaining agreements and labor negotiations with union employees; and |
• | Changes in financial or regulatory accounting principles or policies imposed by governing bodies. |
•
|
Orders issued by regulatory commissions, legislation and judicial actions; |
•
|
Past experience; |
•
|
Discussions with applicable regulatory authorities and legal counsel; |
•
|
Forecasted earnings; and |
•
|
Considerations around the likelihood of impacts from events such as unusual weather conditions, extreme weather events and other natural disasters and unplanned outages of facilities. |
47
|
|
48
|
|
|
|
|
49
|
• | Expected inflation and risk-free interest rate assumptions; |
• | Historical return analysis to determine long-term historic returns as well as historic risk premiums for various asset classes; |
• | Expected future risk premiums, asset classes’ volatilities and correlations; |
• | Forward-looking return expectations derived from the yield on long-term bonds and the expected long-term returns of major capital market assumptions; and |
• |
Investment allocation of plan assets. The strategic target asset allocation for Dominion Energy’s pension funds is 28% U.S. equity, 18%
non-U.S.
equity, 35% fixed income, 3% real estate and 16% other alternative investments, such as private equity investments.
|
|
|
|
Increase in 2020 Net Periodic Cost
|
|||||||||
|
Change in
Actuarial Assumptions |
Pension
Benefits |
Other
Postretirement Benefits |
|||||||||
(millions, except percentages)
|
|
|
|
|
||||||||
Discount Rate
|
|
(0.25
|
)%
|
|
19
|
|
|
2
|
|
|||
Long-Term rate of return on plan assets
|
|
(0.25
|
)%
|
|
23
|
|
|
5
|
|
|||
Health care cost trend rate
|
|
1
|
%
|
|
N/A
|
|
|
20
|
|
50
|
|
|
|
|
Year Ended
December 31, |
2019
|
|
$ Change
|
|
2018
|
$ Change
|
2017
|
|||||||||||||
(millions, except
EPS) |
|
|
|
|
|
|
||||||||||||||
Net Income attributable to Dominion Energy
|
$
|
1,358
|
|
|
$(1,089)
|
|
$ |
2,447
|
$(552)
|
$ |
2,999
|
|||||||||
Diluted EPS
|
|
1.62
|
|
|
(2.12
|
)
|
3.74
|
(0.98
|
) |
4.72
|
Year Ended December 31,
|
2019
|
|
$ Change
|
|
2018
|
$ Change
|
2017
|
|||||||||||||
(millions)
|
|
|
|
|
|
|
|
|||||||||||||
Operating revenue
|
$
|
16,572
|
|
|
$3,206
|
|
$ |
13,366
|
$780
|
$ |
12,586
|
|||||||||
Electric fuel and other energy-related purchases
|
|
2,938
|
|
|
124
|
|
2,814
|
513
|
2,301
|
|||||||||||
Purchased electric capacity
|
|
88
|
|
|
(34
|
)
|
122
|
116
|
6
|
|||||||||||
Purchased gas
|
|
1,536
|
|
|
891
|
|
645
|
(56
|
) |
701
|
||||||||||
Net revenue
|
|
12,010
|
|
|
2,225
|
|
9,785
|
207
|
9,578
|
|||||||||||
Other operations and maintenance
|
|
4,428
|
|
|
970
|
|
3,458
|
258
|
3,200
|
|||||||||||
Depreciation, depletion and amortization
|
|
2,655
|
|
|
655
|
|
2,000
|
95
|
1,905
|
|||||||||||
Other taxes
|
|
1,040
|
|
|
337
|
|
703
|
35
|
668
|
|||||||||||
Impairment of assets and related charges
|
|
1,535
|
|
|
1,132
|
|
403
|
388
|
15
|
|||||||||||
Gains on sales of assets
|
|
(162
|
)
|
|
218
|
|
(380
|
) |
(233
|
) |
(147
|
) | ||||||||
Other income
|
|
986
|
|
|
(35
|
)
|
1,021
|
663
|
358
|
|||||||||||
Interest and related charges
|
|
1,773
|
|
|
280
|
|
1,493
|
288
|
1,205
|
|||||||||||
Income tax expense (benefit)
|
|
351
|
|
|
(229
|
)
|
580
|
610
|
(30
|
) | ||||||||||
Noncontrolling interests
|
|
18
|
|
|
(84
|
)
|
102
|
(19
|
) |
121
|
• | A $1.5 billion increase from the SCANA Combination, due to operations acquired ($2.5 billion), partially offset by a $1.0 billion charge for refunds of amounts previously collected from retail electric customers of DESC for the NND Project; |
• | A $348 million increase from Virginia Power rate adjustment clauses; |
• |
A $257 million increase from the Liquefaction Facility, including terminalling services provided to the Export Customers ($190 million), a decrease in credits associated with the
start-up
phase ($44 million) and regulated gas transportation contracts to serve the Export Customers ($23 million);
|
• |
The absence of a $215 million charge associated with Virginia legislation enacted in March 2018 that required
one-time
rate credits of certain amounts to utility customers;
|
• |
A $74 million decrease in Virginia Power electric capacity expense related to the annual PJM capacity performance market effective June 2019 ($63 million) and a contract termination with a
non-utility
generator ($37 million), partially offset by the annual PJM capacity performance market effective June 2018 ($26 million);
|
• | A $57 million increase due to favorable pricing at Millstone, including the effects of the Millstone 2019 power purchase agreements; and |
• | A $40 million decrease in Virginia Power fuel costs due to the expiration of an energy supply contract. |
• | A $211 million decrease from the absence of certain merchant generation facilities sold in 2018; |
51
|
• | A $99 million decrease in services performed for Atlantic Coast Pipeline; and |
• | A $45 million decrease in sales to Virginia Power retail customers from lower heating degree days during the heating season, partially offset by a $25 million increase from higher cooling degree days during the cooling season. |
• | A $735 million increase from operations acquired in the SCANA Combination; |
• | An increase in merger and integration-related costs associated with the SCANA Combination ($474 million), including a charge related to a voluntary retirement program ($291 million); |
• | A $116 million increase in certain Virginia Power transmission and generation-related expenditures. These expenses are primarily recovered through state and FERC rates and do not impact net income; and |
• | A $38 million increase in operating expenses from the commercial operations of the Liquefaction Facility and costs associated with regulated gas transportation contracts to serve the Export Customers. |
• | A $113 million benefit from the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019; |
• | A $99 million decrease in services performed for Atlantic Coast Pipeline. These expenses are billed to Atlantic Coast Pipeline and do not significantly impact net income; |
• | The absence of an $81 million charge associated primarily with future ash pond and landfill closure costs in connection with the enactment of Virginia legislation in April 2018; and |
• | A $43 million decrease from the absence of certain merchant generation facilities sold in 2018. |
• | Charges associated with litigation acquired in the SCANA Combination ($641 million); |
• | A $346 million charge related to the early retirement of certain Virginia Power electric generation facilities; |
• | A $160 million charge related to Virginia Power’s planned early retirement of certain automated meter reading infrastructure; |
• |
A $135 million charge related to Virginia Power’s contract termination with a
non-utility
generator;
|
• | A $105 million charge for property, plant and equipment acquired in the SCANA Combination for which Dominion Energy committed to forgo recovery; |
• | A $62 million charge related to the abandonment of a project at a Virginia Power electric generating facility; and |
• | The abandonment of certain property, plant and equipment ($39 million); partially offset by |
• | The absence of a $219 impairment charge on certain gathering and processing assets; |
• | The absence of a $135 million charge for disallowance of FERC-regulated plant; and |
• |
The absence of a $37 million
write-off
associated with the Eastern Market Access Project.
|
52
|
|
|
|
|
• |
A $500 million increase due to commencement of commercial operations of the Liquefaction Facility, including terminalling services provided to the Export Customers ($508 million) and regulated gas transportation contracts to serve the Export Customers ($58 million), partially offset by credits associated with the
start-up
phase of the Liquefaction Facility ($66 million);
|
• | An increase in sales to electric utility retail customers from an increase in heating degree days during the heating season of 2018 ($71 million) and an increase in cooling degree days during the cooling season of 2018 ($69 million); |
• | A $130 million increase due to favorable pricing at merchant generation facilities; |
• | A $92 million increase due to growth projects placed in service, other than the Liquefaction Facility; |
• | A $74 million increase in services performed for Atlantic Coast Pipeline; and |
• | A $46 million increase in sales to electric utility retail customers due to customer growth. |
• | A $325 million decrease for regulated electric generation and electric and gas distribution operations as a result of the 2017 Tax Reform Act; |
• |
A $215 million charge associated with Virginia legislation enacted in March 2018 that requires
one-time
rate credits of certain amounts to utility customers;
|
• |
A $94 million increase in net electric capacity expense related to the annual PJM capacity performance market effective June 2017 ($112 million) and the annual PJM capacity performance market effective June 2018 ($39 million), partially offset by a benefit related to
non-utility
generators ($57 million);
|
• | An $89 million decrease in rate adjustment clauses associated with electric utility operations, which includes the impacts of the 2017 Tax Reform Act; and |
• | A $38 million decrease from scheduled declines in or expiration of certain DETI and Cove Point contracts. |
• | A $102 million increase in storm damage and service restoration costs in the regulated electric service territory; |
• | An $81 million increase due to a charge associated primarily with future ash pond and landfill closure costs in connection with the enactment of Virginia legislation in April 2018; |
• | A $73 million increase in services performed for Atlantic Coast Pipeline. These expenses are billed to Atlantic Coast Pipeline and do not significantly impact net income; |
• | A $47 million increase in operating expenses from the commercial operations of the Liquefaction Facility and costs associated with regulated gas transportation contracts to serve the Export Customers; and |
• | A $38 million increase in salaries, wages and benefits, partially offset by |
• | A $74 million decrease from a reduction in planned outage days at certain merchant and utility generation facilities. |
• | The absence of charges for refunds of amounts previously collected from retail electric customers of DESC for the NND Project; |
• | The absence of charges associated with the early retirement of certain Virginia Power electric generation facilities and automated meter reading infrastructure; |
• | A reduction in merger and integration-related costs associated with the SCANA Combination, including charges related to a voluntary retirement program; |
53
|
• | A decrease in charges associated with litigation acquired in the SCANA Combination; |
• | Construction and operation of growth projects in gas transmission and distribution; |
• | Construction and operation of growth projects in electric utility operations; |
• | Lower depreciation on Virginia Power’s nuclear plants associated with expected approval of license extensions from the NRC; |
• | Reduced interest expense as a result of early redemptions of long-term debt; and |
• | Delivery under the Millstone 2019 power purchase agreements for an entire year. |
• | The absence of a benefit for the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019; |
• | The noncontrolling 25% limited partnership interest in Cove Point sold in December 2019; |
• | An increase in planned outage days at Millstone; and |
• | Share dilution. |
Year Ended December 31,
|
2019
|
2018
|
2017
|
|||||||||||||||||||||
|
Net
income
(loss) attributable to Dominion Energy |
|
Diluted
EPS
|
|
Net
income
(loss) attributable to Dominion Energy |
Diluted
EPS
|
Net income
attributable to Dominion Energy |
Diluted
EPS
|
||||||||||||||||
(millions, except EPS)
|
|
|
|
|
|
|
|
|
||||||||||||||||
Dominion Energy Virginia
|
|
$ 1,786
|
|
|
$2.21
|
|
$1,596
|
$2.44
|
$1,466
|
$2.30
|
||||||||||||||
Gas Transmission & Storage
|
|
934
|
|
|
1.16
|
|
844
|
1.29
|
552
|
0.87
|
||||||||||||||
Gas Distribution
|
|
488
|
|
|
0.60
|
|
373
|
0.57
|
351
|
0.55
|
||||||||||||||
Dominion Energy South Carolina
|
|
430
|
|
|
0.53
|
|
—
|
—
|
—
|
—
|
||||||||||||||
Contracted Generation
|
|
276
|
|
|
0.34
|
|
245
|
0.37
|
253
|
0.40
|
||||||||||||||
Corporate and Other
|
|
(2,556
|
)
|
|
(3.22
|
)
|
(611
|
) |
(0.93
|
) |
377
|
0.60
|
||||||||||||
Consolidated
|
|
$ 1,358
|
|
$ 1.62
|
|
$ 2,447
|
$3.74
|
$2,999
|
$4.72
|
Year Ended December 31,
|
2019
|
|
% Change
|
|
2018
|
% Change
|
2017
|
|||||||||||||
Electricity delivered (million MWh)
|
|
87.7
|
|
—
|
% |
87.8
|
5
|
% |
83.4
|
|||||||||||
Electricity supplied (million MWh):
|
|
|
|
|
|
|
|
|
|
|||||||||||
Utility
|
|
88.2
|
|
|
—
|
|
88.0
|
4
|
85.0
|
|||||||||||
Degree days (electric distribution and utility service area):
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cooling
|
|
2,031
|
|
|
1
|
|
2,019
|
12
|
1,801
|
|||||||||||
Heating
|
|
3,259
|
|
|
(10
|
)
|
3,608
|
16
|
3,104
|
|||||||||||
Average electric distribution customer accounts (thousands)
|
|
2,626
|
|
|
1
|
|
2,600
|
1
|
2,574
|
|
Increase
(Decrease) |
|||||||
|
Amount
|
|
EPS
|
|
||||
(millions, except EPS)
|
|
|
||||||
Regulated electric sales:
|
|
|
||||||
Weather
|
|
$ (14
|
)
|
$
|
(0.02
|
)
|
||
Other
|
|
9
|
|
|
0.01
|
|
||
Rate adjustment clause equity return
|
|
84
|
|
|
0.13
|
|
||
Electric capacity
|
|
54
|
|
|
0.08
|
|
||
Expiration of energy supply contract
|
|
30
|
|
|
0.05
|
|
||
Renewable energy investment tax credits
|
|
(14
|
)
|
|
(0.02
|
)
|
||
Other
|
|
41
|
|
|
0.06
|
|
||
Share dilution
|
|
—
|
|
|
(0.52
|
)
|
||
Change in net income contribution
|
|
$190
|
|
$
|
(0.23
|
)
|
|
Increase (Decrease)
|
|||||||
|
Amount
|
|
EPS
|
|
||||
(millions, except EPS)
|
|
|
||||||
Regulated electric sales:
|
|
|
||||||
Weather
|
$ 86
|
$ |
0.14
|
|||||
Other
|
43
|
0.07
|
||||||
Rate adjustment clause equity return
|
14
|
0.02
|
||||||
Depreciation and amortization
|
31
|
0.05
|
||||||
Storm damage and service restoration
|
(19
|
) |
(0.03
|
) | ||||
Planned outage costs
|
12
|
0.02
|
||||||
Electric capacity
|
(66
|
) |
(0.10
|
) | ||||
Renewable energy investment tax credits
|
34
|
0.05
|
||||||
Other
|
(5
|
) |
(0.01
|
) | ||||
Share dilution
|
—
|
(0.07
|
) | |||||
Change in net income contribution
|
$130
|
$ |
0.14
|
54
|
|
|
|
|
Year Ended December 31,
|
2019
(1)
|
|
% Change
|
|
2018
|
% Change
|
2017
|
|||||||||||||
Average retail energy marketing customer accounts (thousands)
|
|
762
|
|
|
2
|
%
|
750
|
(47
|
)% |
1,405
|
(1)
|
Includes SEMI effective January 2019 until December 2019.
|
|
Increase (Decrease)
|
|||||||
|
Amount
|
|
EPS
|
|
||||
(millions, except EPS)
|
|
|
|
|||||
Cove Point export contracts
|
|
$172
|
|
|
$ 0.26
|
|
||
Assignment of shale development rights
|
|
(83
|
)
|
|
(0.12
|
)
|
||
Interest expense, net
|
|
(60
|
)
|
|
(0.09
|
)
|
||
State legislative change
|
|
(18
|
)
|
|
(0.03
|
)
|
||
Noncontrolling interest
|
|
62
|
|
|
0.09
|
|
||
Atlantic Coast Pipeline equity earnings
|
|
37
|
|
|
0.06
|
|
||
Other
|
|
(20
|
)
|
|
(0.03
|
)
|
||
Share dilution
|
|
—
|
|
|
(0.27
|
)
|
||
Change in net income contribution
|
|
$ 90
|
|
|
$ (0.13
|
)
|
|
Increase (Decrease)
|
|||||||
|
Amount
|
EPS
|
||||||
(millions, except EPS)
|
|
|
|
|||||
Transmission and storage growth projects
|
$ 30
|
$ |
0.05
|
|||||
Cove Point export contracts
|
259
|
0.41
|
||||||
Cove Point import contracts
|
(12
|
) |
(0.02
|
) | ||||
DETI contract declines
|
(20
|
) |
(0.03
|
) | ||||
Assignment of shale development rights
|
27
|
0.04
|
||||||
2017 Tax Reform Act impacts
|
113
|
0.18
|
||||||
Interest expense, net
|
(81
|
) |
(0.13
|
) | ||||
State legislative change
|
18
|
0.03
|
||||||
Other
|
(42
|
) |
(0.07
|
) | ||||
Share dilution
|
—
|
(0.04
|
) | |||||
Change in net income contribution
|
$ 292
|
$ 0.42
|
Year Ended December 31,
|
2019
(1)
|
|
% Change
|
|
2018
|
% Change
|
2017
|
|||||||||||||
Gas distribution throughput (bcf):
|
|
|
|
|
|
|
|
|||||||||||||
Sales
|
|
192
|
|
|
47
|
%
|
131
|
1
|
% |
130
|
||||||||||
Transportation
|
|
811
|
|
|
12
|
|
725
|
11
|
654
|
|||||||||||
Heating degree days (gas distribution service area):
|
|
|
|
|
|
|
|
|
|
|||||||||||
North Carolina
|
|
2,942
|
|
|
|
|
|
|
|
|||||||||||
Ohio and West Virginia
|
|
5,355
|
|
|
(6
|
)
|
5,693
|
15
|
4,930
|
|||||||||||
Utah, Wyoming and Idaho
|
|
5,501
|
|
|
18
|
|
4,672
|
(4
|
) |
4,892
|
||||||||||
Average gas distribution customer accounts (thousands):
|
|
|
|
|
|
|
|
|
|
|||||||||||
Sales
|
|
1,857
|
|
|
48
|
|
1,258
|
1
|
1,240
|
|||||||||||
Transportation
|
|
1,108
|
|
|
1
|
|
1,096
|
1
|
1,086
|
(1)
|
Includes PSNC effective January 1, 2019.
|
|
Increase (Decrease)
|
|||||||
|
Amount
|
|
EPS
|
|
||||
(millions, except EPS)
|
|
|
|
|||||
Regulated gas sales:
|
|
|
|
|
|
|
||
Weather
|
$
|
(3
|
)
|
$ |
—
|
|||
Other
|
|
(2
|
)
|
—
|
||||
Rate adjustment clause equity return
|
|
16
|
|
|
0.02
|
|
||
SCANA Combination
|
|
87
|
|
|
0.13
|
|
||
Other
|
|
17
|
|
|
0.02
|
|
||
Share dilution
|
|
—
|
|
|
(0.14
|
)
|
||
Change in net income contribution
|
|
$115
|
|
|
$0.03
|
|
|
Increase (Decrease)
|
|||||||
|
Amount
|
EPS
|
||||||
(millions, except EPS)
|
|
|
|
|||||
Regulated gas sales:
|
|
|
|
|
||||
Weather
|
$ |
7
|
$ |
0.01
|
||||
Other
|
2
|
—
|
||||||
Rate adjustment clause equity return
|
9
|
0.01
|
||||||
2017 Tax Reform Act impacts
|
28
|
0.04
|
||||||
Interest expense
|
(4
|
) |
—
|
|||||
Other
|
(20
|
) |
(0.02
|
) | ||||
Share dilution
|
—
|
(0.02
|
) | |||||
Change in net income contribution
|
$22
|
$0.02
|
55
|
Year Ended December 31,
|
|
2019
|
|
|
Electricity delivered (million MWh)
|
|
23.0
|
|
|
Electricity supplied (million MWh)
|
|
24.1
|
|
|
Degree days (electric and gas distribution service areas):
|
|
|
|
|
Cooling
|
|
951
|
|
|
Heating
|
|
1,179
|
|
|
Average electric distribution customer accounts (thousands)
|
|
739
|
|
|
Gas distribution throughput (bcf):
|
|
|
|
|
Sales
|
|
65
|
|
|
Average gas distribution customer accounts (thousands)
|
|
386
|
|
|
Increase (Decrease)
|
|||||||
|
Amount
|
|
EPS
|
|
||||
(millions, except EPS)
|
|
|
|
|||||
SCANA Combination
|
|
$430
|
|
|
$0.53
|
|
Year Ended December 31,
|
2019
|
|
% Change
|
|
2018
|
% Change
|
2017
|
|||||||||||||
Electricity supplied (million MWh)
|
|
20.2
|
|
|
(30
|
)%
|
28.8
|
—
|
% |
28.9
|
|
Increase
(Decrease) |
|||||||
|
Amount
|
|
EPS
|
|
||||
(millions, except EPS)
|
|
|
|
|||||
Margin
|
|
$ 42
|
|
$
|
0.06
|
|
||
Renewable energy investment tax credits
|
|
50
|
|
|
0.08
|
|
||
Sale of certain electric generation facilities
|
|
(95
|
)
|
|
(0.14
|
)
|
||
Interest expense
|
|
26
|
|
|
0.04
|
|
||
Other
|
|
8
|
|
|
0.01
|
|
||
Share dilution
|
|
—
|
|
|
(0.08
|
)
|
||
Change in net income contribution
|
|
$ 31
|
|
$
|
(0.03
|
)
|
|
Increase (Decrease)
|
|||||||
|
Amount
|
EPS
|
||||||
(millions, except EPS)
|
|
|
||||||
Margin
|
$101
|
$ 0.16
|
||||||
Planned outage costs
|
34
|
0.05
|
||||||
Depreciation and amortization
|
(9
|
) |
(0.01
|
) | ||||
Renewable energy investment tax credits
|
(172
|
) |
(0.28
|
) | ||||
2017 Tax Reform Act impacts
|
45
|
0.07
|
||||||
Other
|
(7
|
) |
(0.01
|
) | ||||
Share dilution
|
—
|
(0.01
|
) | |||||
Change in net income contribution
|
$ (8
|
) |
$(0.03
|
) |
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions, except EPS)
|
|
|
|
|
||||||||
Specific items attributable to operating segments
|
$
|
(2,039
|
)
|
$ |
(88
|
) | $ |
861
|
||||
Specific items attributable to Corporate and Other segment
|
|
(50
|
)
|
(116
|
) |
(151
|
) | |||||
Total specific items
|
|
(2,089
|
)
|
(204
|
) |
710
|
||||||
Other corporate operations:
|
|
|
|
|
|
|||||||
2017 Tax Reform Act impacts
|
|
—
|
|
(81
|
) |
—
|
||||||
Interest expense, net
|
|
(430
|
)
|
(358
|
) |
(334
|
) | |||||
Other
|
|
(37
|
)
|
32
|
1
|
|||||||
Total other corporate operations
|
|
(467
|
)
|
(407
|
) |
(333
|
) | |||||
Total net income (expense)
|
|
(2,556
|
)
|
(611
|
) |
377
|
||||||
EPS impact
|
$
|
(3.22
|
)
|
$ |
(0.93
|
) | $ |
0.60
|
Year Ended
December 31, |
2019
|
|
$ Change
|
|
2018
|
$ Change
|
2017
|
|||||||||||||
(millions)
|
|
|
|
|
|
|
|
|||||||||||||
Net Income
|
$
|
1,149
|
|
|
$(133
|
)
|
$ |
1,282
|
$(258
|
) | $ |
1,540
|
56
|
|
|
|
|
Year Ended December 31,
|
2019
|
|
$ Change
|
|
2018
|
$ Change
|
2017
|
|||||||||||||
(millions)
|
|
|
|
|
|
|
|
|||||||||||||
Operating revenue
|
$
|
8,108
|
|
|
$ 489
|
|
$ |
7,619
|
$ 63
|
$ |
7,556
|
|||||||||
Electric fuel and other energy-related purchases
|
|
2,178
|
|
|
(140
|
)
|
2,318
|
409
|
1,909
|
|||||||||||
Purchased electric capacity
|
|
40
|
|
|
(82
|
)
|
122
|
116
|
6
|
|||||||||||
Net revenue
|
|
5,890
|
|
|
711
|
|
5,179
|
(462
|
) |
5,641
|
||||||||||
Other operations and maintenance
|
|
1,743
|
|
|
67
|
|
1,676
|
198
|
1,478
|
|||||||||||
Depreciation and amortization
|
|
1,223
|
|
|
91
|
|
1,132
|
(9
|
) |
1,141
|
||||||||||
Other taxes
|
|
328
|
|
|
28
|
|
300
|
10
|
290
|
|||||||||||
Impairment of assets and other charges
|
|
757
|
|
|
757
|
|
—
|
—
|
—
|
|||||||||||
Other income
|
|
98
|
|
|
76
|
|
22
|
(54
|
) |
76
|
||||||||||
Interest and related charges
|
|
524
|
|
|
13
|
|
511
|
17
|
494
|
|||||||||||
Income tax expense
|
|
264
|
|
|
(36
|
)
|
300
|
(474
|
) |
774
|
• | A $348 million increase from rate adjustment clauses; |
• |
The absence of a $215 million charge associated with Virginia legislation enacted in March 2018 that required
one-time
rate credits of certain amounts to utility customers;
|
• |
A $74 million decrease in electric capacity expense primarily related to the annual PJM capacity performance market effective June 2019 ($63 million) and a contract termination with a
non-utility
generator ($37 million), partially offset by the annual PJM capacity performance market effective June 2018 ($26 million); and
|
• | A $40 million decrease in fuel costs due to the expiration of an energy supply contract; partially offset by |
• | A $45 million decrease in sales to retail customers from lower heating degree days during the heating season, partially offset by a $25 million increase from higher cooling degree days during the cooling season. |
• | A $190 million charge related to a voluntary retirement program; and |
• | A $116 million increase in certain transmission and generation-related expenses. These expenses were primarily |
• | A $113 million benefit from the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019; |
• | The absence of an $81 million charge associated primarily with future ash pond and landfill closure costs in connection with the enactment of Virginia legislation in April 2018; and |
• | A $25 million decrease in storm damage and service restoration costs. |
• | A $346 million charge related to the early retirement of certain electric generation facilities; |
• | A $160 million charge related to the planned early retirement of certain automated meter reading infrastructure; |
• |
A $135 million charge related to contract termination with a
non-utility
generator; and
|
• | A $62 million charge related to the abandonment of a project at an electric generating facility. |
• | A $238 million decrease for regulated generation and distribution operations as a result of the 2017 Tax Reform Act; |
• |
A $215 million charge associated with Virginia legislation enacted in March 2018 that requires
one-time
rate credits of certain amounts to utility customers;
|
• |
A $94 million increase in net electric capacity expense related to the annual PJM capacity performance market effective June 2017 ($112 million) and the annual PJM capacity performance market effective June 2018 ($39 million), partially offset by a benefit related to
non-utility
generators ($57 million); and
|
• | An $89 million decrease from rate adjustment clauses, which includes the impacts of the 2017 Tax Reform Act; partially offset by |
• | An increase in sales to retail customers from an increase in heating degree days during the heating season of 2018 ($71 million) and an increase in cooling degree days during the cooling season of 2018 ($69 million); and |
• | A $46 million increase in sales to retail customers due to customer growth. |
57
|
|
• | A $102 million increase due to storm damage and service restoration costs; and |
• | An $81 million increase due to a charge associated primarily with future ash pond and landfill closure costs in connection with the enactment of Virginia legislation in April 2018; partially offset by |
• | A $19 million decrease from a reduction in planned outage days at certain generation facilities. |
Year Ended December 31,
|
2019
|
|
$ Change
|
|
2018
|
$ Change
|
2017
|
|||||||||||||
(millions)
|
|
|
|
|
|
|
|
|||||||||||||
Net income attributable to Dominion Energy Gas
|
|
$721
|
|
|
$240
|
|
$481
|
$(222)
|
$703
|
Year Ended December 31,
|
2019
|
|
$ Change
|
|
2018
|
$ Change
|
2017
|
|||||||||||||
(millions)
|
|
|
|
|
|
|
|
|||||||||||||
Operating revenue
|
$
|
2,169
|
|
|
$ 173
|
|
$ |
1,996
|
$ 473
|
$ |
1,523
|
|||||||||
Purchased (excess) gas
|
|
7
|
|
|
17
|
|
(10
|
) |
(119
|
) |
109
|
|||||||||
Other energy-related purchases
|
|
2
|
|
|
(2
|
)
|
4
|
—
|
4
|
|||||||||||
Net revenue
|
|
2,160
|
|
|
158
|
|
2,002
|
592
|
1,410
|
|||||||||||
Other operations and maintenance
|
|
724
|
|
|
8
|
|
716
|
144
|
572
|
|||||||||||
Depreciation and amortization
|
|
367
|
|
|
34
|
|
333
|
91
|
242
|
|||||||||||
Other taxes
|
|
154
|
|
|
34
|
|
120
|
21
|
99
|
|||||||||||
Impairment of assets and related charges
|
|
13
|
|
|
(150
|
)
|
163
|
148
|
15
|
|||||||||||
Gains on sales of assets
|
|
(2
|
)
|
|
115
|
|
(117
|
) |
(47
|
) |
(70
|
) | ||||||||
Earnings from equity method investees
|
|
43
|
|
|
(11
|
)
|
54
|
7
|
47
|
|||||||||||
Other income
|
|
166
|
|
|
77
|
|
89
|
27
|
62
|
|||||||||||
Interest and related charges
|
|
311
|
|
|
137
|
|
174
|
114
|
60
|
|||||||||||
Income tax expense (benefit)
|
|
101
|
|
|
(23
|
)
|
124
|
189
|
(65
|
) | ||||||||||
Net Income from discontinued operations
|
|
141
|
|
|
117
|
|
24
|
(139
|
) |
163
|
||||||||||
Noncontrolling interests
|
|
121
|
|
|
(54
|
)
|
175
|
49
|
126
|
• |
A $257 million increase from the Liquefaction Facility, including terminalling services provided to the Export Customers ($190 million), a decrease in credits associated with the
start-up
phase ($44 million) and regulated gas transportation contracts to serve the Export Customers ($23 million); and
|
• | An $18 million increase due to DETI contract changes; partially offset by |
• | A $99 million decrease in services performed for Atlantic Coast Pipeline; and |
• | A $42 million increase in net fuel carrying costs as a result of depressed natural gas market conditions. |
58
|
|
|
|
|
• | A $45 million increase in operating expenses from the commercial operations of the Liquefaction Facility and costs associated with regulated gas transportation contracts to serve the Export Customers; |
• | A $39 million charge related to a voluntary retirement program; and |
• | A $10 million increase in salaries, wages and benefits and general administrative expenses; substantially offset by |
• | A $99 million decrease in services performed for Atlantic Coast Pipeline. These expenses are billed to Atlantic Coast Pipeline and do not significantly impact net income. |
• |
A $500 million increase due to commencement of commercial operations of the Liquefaction Facility, including terminalling services provided to the Export Customers ($508 million) and regulated gas transportation contracts to serve the Export Customers ($58 million), partially offset by credits associated with the
start-up
phase of the Liquefaction Facility ($66 million);
|
• | A $74 million increase in services performed for Atlantic Coast Pipeline; and |
• | A $57 million increase due to regulated natural gas transmission growth projects placed in service, other than the Liquefaction Facility; partially offset by |
• | A $38 million decrease from scheduled declines in or expiration of certain DETI and Cove Point contracts. |
• | A $73 million increase in services performed for Atlantic Coast Pipeline. These expenses are billed to Atlantic Coast Pipeline and do not significantly impact net income; |
• | A $47 million increase in operating expenses from the commercial operations of the Liquefaction Facility and costs associated with regulated gas transportation contracts to serve the Export Customers; and |
• | A $13 million increase in salaries, wages and benefits and general administrative expenses. |
59
|
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|
||||||||
Cash, restricted cash and equivalents at beginning of year
|
$
|
391
|
|
$ |
185
|
$ |
322
|
|||||
Cash flows provided by (used in):
|
|
|
|
|
|
|||||||
Operating activities
|
|
5,204
|
|
4,773
|
4,502
|
|||||||
Investing activities
|
|
(4,622
|
)
|
(2,358
|
) |
(5,942
|
) | |||||
Financing activities
|
|
(704
|
)
|
(2,209
|
) |
1,303
|
||||||
Net increase (decrease) in cash, restricted cash and equivalents
|
|
(122
|
)
|
206
|
(137
|
) | ||||||
Cash, restricted cash and equivalents at end of year
|
$
|
269
|
|
$ |
391
|
$ |
185
|
|
Gross
Credit
Exposure
|
Credit
Collateral
|
Net
Credit
Exposure
|
|||||||||
(millions)
|
|
|
|
|
||||||||
Investment grade
(1)
|
|
$87
|
|
|
$—
|
|
|
$87
|
|
|||
No external ratings:
|
|
|
|
|
|
|
|
|
|
|||
Internally rated—investment grade
(2)
|
|
119
|
|
|
—
|
|
|
119
|
|
|||
Internally
rated—non-investment
grade
(3)
|
|
27
|
|
|
—
|
|
|
27
|
|
|||
Total
(4)
|
|
$233
|
|
|
$—
|
|
|
$233
|
|
(1)
|
Designations as investment grade are based upon minimum credit ratings assigned by Moody’s and Standard & Poor’s. The five largest counterparty exposures, combined, for this category represented approximately 25% of the total net credit exposure.
|
(2)
|
The five largest counterparty exposures, combined, for this category represented approximately 51% of the total net credit exposure.
|
(3)
|
The five largest counterparty exposures, combined, for this category represented approximately 11% of the total net credit exposure.
|
(4)
|
Excludes Millstone 2019 power purchase agreements.
|
60
|
|
|
|
|
|
Facility
Limit |
Outstanding
Commercial Paper
(1)
|
Outstanding
Letters of Credit |
Facility
Capacity Available |
||||||||||||
(millions)
|
|
|
|
|
|
|||||||||||
At December 31, 2019
|
|
|
|
|
|
|
||||||||||
Joint revolving credit facility
(2)
|
$
|
6,000
|
|
|
$836
|
|
|
$89
|
|
$
|
5,075
|
|
(1)
|
The weighted-average interest rate of the outstanding commercial paper supported by Dominion Energy’s credit facility was 2.10% at December 31, 2019.
|
(2)
|
This credit facility matures in March 2023 and can be used by the borrowers under the credit facility to support bank borrowings and the issuance of commercial paper, as well as to support up to a combined $2.0 billion of letters of credit.
|
Type
|
Issuer
|
Principal
|
Rate
|
Maturity
|
||||||||||||
|
|
(millions)
|
|
|
||||||||||||
Senior notes
|
Dominion Energy
|
$
|
200
|
|
|
4.250
|
%
|
|
2028
|
|
||||||
Senior notes
|
Dominion Energy
|
|
400
|
|
|
4.600
|
%
|
|
2049
|
|
||||||
Senior notes
|
Virginia Power
|
|
500
|
|
|
2.875
|
%
|
|
2029
|
|
||||||
Senior notes
|
Virginia Power
|
|
550
|
|
|
3.300
|
%
|
|
2049
|
|
||||||
Senior notes
|
Dominion Energy Gas
|
|
600
|
|
|
2.500
|
%
|
|
2024
|
|
||||||
Senior notes
|
Dominion Energy Gas
|
|
600
|
|
|
3.000
|
%
|
|
2029
|
|
||||||
Senior notes
|
Dominion Energy Gas
|
|
300
|
|
|
3.900
|
%
|
|
2049
|
|
||||||
Total notes issued
|
|
|
|
$
|
3,150
|
|
|
|
|
|
|
|
• | In August 2019, Dominion Energy issued $1.0 billion of 2.45% senior notes that mature in 2023 through a private placement. The proceeds were used for general corporate purposes and to repay short-term debt, including commercial paper. |
• |
In May 2019, Virginia Power remarketed four series of
tax-exempt
bonds, with an aggregate outstanding principal of $198 million to new investors. One of the bonds will bear interest at a coupon rate of 1.8% until April 2022, after which it will bear interest at a market rate to be determined at that time. Three of the bonds will bear interest at a coupon rate of 1.9% until June 2023, after which they will bear interest at a market rate to be determined at that time.
|
• |
In June 2019, Dominion Energy successfully remarketed its $700 million 2016 Series
A-1
2.0% RSNs due 2021 and $700 million 2016 Series
A-2
2.0% RSNs due 2024 pursuant to the terms of the 2016 Equity Units. In connection with the remarketing, the interest rates on the Series
A-1
and Series
A-2
notes were reset to 2.715% and 3.071%, respectively. Dominion Energy did not receive any proceeds from the remarketing.
|
• | In October 2019, Dominion Energy Terminal Company remarketed its $27 million Peninsula Ports Authority of Virginia Coal |
61
|
Terminal Revenue Refunding Bonds, Series 2003 due in 2033 resulting in a reset of the interest rate from 1.55% to 1.70% until October 2022. |
• | In February 2019, Dominion Energy Midstream repaid its $300 million variable rate term loan agreement due in December 2019 at the principal outstanding plus accrued interest. |
• | In February and March 2019, DESC purchased certain of its first mortgage bonds having an aggregate purchase price of $1.2 billion pursuant to tender offers. Also in March 2019, SCANA purchased certain of its medium term notes having an aggregate purchase price of $300 million pursuant to a tender offer. Both DESC tender offers and the SCANA tender offer expired in the first quarter of 2019. |
• | In May 2019, Virginia Power redeemed its $40 million 5.0% Economic Development Authority of the County of Chesterfield Pollution Control Refunding Revenue Bonds, Series 2009A, due in 2023 at the principal outstanding plus accrued interest. |
• | In May 2019, GENCO redeemed its 5.49% senior secured notes due in 2024 at the remaining principal outstanding of $33 million plus accrued interest. In June 2019, the first mortgage lien on an electric generating facility that previously secured these notes was released. |
• | In June 2019, Dominion Energy purchased and canceled $12 million and $13 million of its June 2006 hybrids and September 2006 hybrids, respectively. All purchases were conducted in compliance with the applicable RCC. |
• | In September 2019, DESC purchased certain of its first mortgage bonds with an outstanding principal balance of $552 million pursuant to a tender offer that expired in the third quarter of 2019. |
• | In November 2019, Dominion Energy Gas redeemed its $450 million 2014 Series A 2.50% senior notes which would have otherwise matured in December 2019. |
62
|
|
|
|
|
|
Fitch
|
Moody’s
|
Standard & Poor’s
|
|||||||||
Dominion Energy
|
|
|
|
|
|
|||||||
Issuer
|
|
BBB+
|
|
|
Baa2
|
|
|
BBB+
|
|
|||
Senior unsecured debt securities
|
|
BBB+
|
|
|
Baa2
|
|
|
BBB
|
|
|||
Junior subordinated notes
|
|
BBB
|
|
|
Baa3
|
|
|
BBB
|
|
|||
Enhanced junior subordinated notes
|
|
BBB-
|
|
|
Baa3
|
|
|
BBB-
|
|
|||
Preferred Stock
|
|
BBB-
|
|
|
Ba1
|
|
|
BBB-
|
|
|||
Commercial paper
|
|
F2
|
|
|
P-2
|
|
|
A-2
|
|
|||
Outlook
|
|
Stable
|
|
|
Stable
|
|
|
Stable
|
|
• | The timely payment of principal and interest; |
• | Information requirements, including submitting financial reports and information about changes in Dominion Energy’s credit ratings to lenders; |
• | Performance obligations, audits/inspections, continuation of the basic nature of business, restrictions on certain matters related to merger or consolidation and restrictions on disposition of all or substantially all assets; |
• | Compliance with collateral minimums or requirements related to mortgage bonds; and |
• | Limitations on liens. |
Company
|
Maximum Allowed Ratio
|
Actual Ratio
(1)
|
||||||
Dominion Energy
|
|
67.5
|
%
|
|
50.3%
|
|
(1)
|
Indebtedness as defined by the bank agreements excludes certain junior subordinated notes reflected as long-term debt as well as AOCI reflected as equity in the Consolidated Balance Sheets.
|
63
|
|
2020
|
2021-
2022 |
2023-
2024 |
2025 and
thereafter |
Total
|
|||||||||||||||
(millions)
|
|
|
|
|
|
|
||||||||||||||
Long-term debt
(1
)
|
$
|
2,325
|
|
$
|
4,284
|
|
$
|
5,256
|
|
$
|
25,253
|
|
$
|
37,118
|
|
|||||
Interest payments
(
2
)
|
|
1,602
|
|
|
2,917
|
|
|
2,524
|
|
|
19,742
|
|
|
26,785
|
|
|||||
Leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating Leases
|
|
72
|
|
|
120
|
|
|
81
|
|
|
582
|
|
|
855
|
|
|||||
Finance Leases
|
|
34
|
|
|
60
|
|
|
45
|
|
|
9
|
|
|
148
|
|
|||||
Purchase obligations
(
:
3
)
|
|
|
|
|
|
|
|
|||||||||||||
Purchased electric capacity for utility operations
|
|
59
|
|
|
116
|
|
|
114
|
|
|
664
|
|
|
953
|
|
|||||
Fuel commitments for utility operations
|
|
1,061
|
|
|
932
|
|
|
318
|
|
|
946
|
|
|
3,257
|
|
|||||
Fuel commitments for nonregulated operations
|
|
160
|
|
|
184
|
|
|
213
|
|
|
222
|
|
|
779
|
|
|||||
Pipeline transportation and storage
|
|
591
|
|
|
961
|
|
|
640
|
|
|
2,459
|
|
|
4,651
|
|
|||||
Other
(
4
)
|
|
574
|
|
|
81
|
|
|
40
|
|
|
—
|
|
|
695
|
|
|||||
Other
long-term
liabilities
(
:
5
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other contractual obligations
(
6
)
|
|
29
|
|
|
44
|
|
|
14
|
|
|
56
|
|
|
143
|
|
|||||
Total cash payments
|
$
|
6,507
|
|
$
|
9,699
|
|
$
|
9,245
|
|
$
|
49,933
|
|
$
|
75,384
|
|
(1)
|
Based on stated maturity dates rather than the earlier redemption dates that could be elected by instrument holders.
|
(2)
|
Includes interest payments over the terms of the debt and payments on stock purchase contracts. Interest is calculated using the applicable interest rate or forward interest rate curve at December 31, 2019 and outstanding principal for each instrument with the terms ending at each instrument’s stated maturity. See Note 18 to the Consolidated Financial Statements. Does not reflect Dominion Energy’s ability to defer stock purchase contract payments on the 2019 Equity Units, initially in the form of corporate units.
|
(3)
|
Amounts exclude open purchase orders for services that are provided on demand, the timing of which cannot be determined.
|
(4)
|
Includes capital, operations and maintenance commitments.
|
(5)
|
Excludes regulatory liabilities, AROs and employee benefit plan obligations, which are not contractually fixed as to timing and amount. See Notes 12, 14 and 22 to the Consolidated Financial Statements. Due to uncertainty about the timing and amounts that will ultimately be paid, $118 million of income taxes payable associated with unrecognized tax benefits are excluded. Deferred income taxes are also excluded since cash payments are based primarily on taxable income for each discrete fiscal year. See Note 5 to the Consolidated Financial Statements.
|
(6)
|
Includes interest rate and foreign currency swap agreements.
|
64
|
|
|
|
|
65
|
66
|
|
|
|
|
67
|
|
68
|
|
|
|
|
|
Page Number
|
|
||
Dominion Energy, Inc.
|
|
|
|
|
|
71
|
|
||
|
74
|
|
||
|
75
|
|
||
|
76
|
|
||
|
78
|
|
||
|
79
|
|
||
Virginia Electric and Power Company
|
|
|
|
|
|
81
|
|
||
|
82
|
|
||
|
83
|
|
||
|
84
|
|
||
|
86
|
|
||
|
87
|
|
||
Dominion Energy Gas Holdings, LLC
|
|
|
|
|
|
89
|
|
||
|
90
|
|
||
|
91
|
|
||
|
92
|
|
||
|
94
|
|
||
|
95
|
|
||
|
97
|
|
|
|
|
69
|
|
70
|
|
|
|
|
•
|
We tested the effectiveness of controls over management’s impairment analysis, including determination of the judgments regarding the resolution of the outstanding permitting issues within the project timeframe and the likelihood of obtaining amended contacts with the customers. |
71
|
•
|
We evaluated the reasonableness of management’s permitting, project timeframe, and customer contract assumptions by: |
• | Assessing the reasonableness of management’s plans to resolve outstanding permitting issues and the corresponding impact on project timeframes by inquiring with legal counsel and executive management and considering other potential outcomes. |
• |
Assessing the reasonableness of the various projected
in-service
dates by inquiring with Atlantic Cost Pipeline’s project managers and engineers and comparing the
in-service
dates to the project’s timeframe.
|
• |
Obtaining and reading correspondence between Atlantic Coast Pipeline and the third-party pipeline construction contractor regarding the feasibility of the various projected
in-service
dates assumed by management.
|
• | Obtaining and reading correspondence, including draft terms, between Atlantic Coast Pipeline and major customers. |
• | Searching for disconfirming evidence by listening to earnings calls, reading press releases, news articles and other publicly available information. |
•
|
We read and analyzed the minutes of the Board of Managers of Atlantic Coast Pipeline for discussions of changes in legal, regulatory, or business factors which could impact management’s assumptions of the resolution of the outstanding permitting issues within the project timeframe and the likelihood of obtaining amended contacts with the customers. |
•
|
We tested the effectiveness of controls over management’s technical accounting assessment of the balance sheet classification of the components of the 2019 Equity Units. |
•
|
We read the applicable agreements and compared the key terms from the agreements to management’s analysis of the transaction. |
•
|
With the assistance of professionals in our firm having expertise in accounting for debt and equity instruments, we evaluated management’s conclusions regarding the balance sheet classification of the components of the 2019 Equity Units through evaluation of the terms within the applicable agreements and considering the applicable generally accepted accounting standards. |
•
|
We evaluated Dominion Energy’s disclosures related to the financial statement impacts of the transaction. |
72
|
|
|
|
|
•
|
We tested the effectiveness of management’s controls over the evaluation of the likelihood of (1) recovery of regulatory assets through future rates, and (2) whether a regulatory liability is due to customers. We also tested the effectiveness of management’s controls over the initial recognition of amounts as regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that may impact the assessment of whether recovery of regulatory assets through future rates or a regulatory liability due to customers is probable. |
•
|
We evaluated Dominion Energy’s disclosures related to the consolidated financial statement impacts of rate regulation. |
•
|
We read and evaluated orders issued by the relevant commissions, as well as relevant regulatory statutes, interpretations, procedural memorandums, filings made by interveners, existing laws and other publicly available information to assess whether this external information was properly considered by management in concluding upon the financial statement impacts of rate regulation. |
•
|
We considered the likelihood of (1) recovery of regulatory assets through future rates and (2) whether a regulatory liability is due to customers based on precedence established by the relevant commissions’ previous orders and Dominion Energy’s past experience with the relevant commissions. |
•
|
For regulatory matters in process, we inspected associated documents and testimony filed with the relevant commissions for any evidence that might contradict management’s assertions. |
•
|
We read and analyzed the minutes of the Boards of Directors of Dominion Energy and Dominion Energy’s rate-regulated subsidiaries for discussions of changes in legal, regulatory, or business factors which could impact management’s conclusions with respect to the financial statement impacts of rate regulation. |
73
|
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions, except per share amounts)
|
|
|
|
|||||||||
Operating Revenue
(1)
|
$
|
16,572
|
|
$ |
13,366
|
$ |
12,586
|
|||||
Operating Expenses
|
|
|
|
|
|
|||||||
Electric fuel and other energy-related purchases
|
|
2,938
|
|
2,814
|
2,301
|
|||||||
Purchased electric capacity
|
|
88
|
|
122
|
6
|
|||||||
Purchased gas
|
|
1,536
|
|
645
|
701
|
|||||||
Other operations and maintenance
|
|
4,428
|
|
3,458
|
3,200
|
|||||||
Depreciation, depletion and amortization
|
|
2,655
|
|
2,000
|
1,905
|
|||||||
Other taxes
|
|
1,040
|
|
703
|
668
|
|||||||
Impairment of assets and related charges
|
|
1,535
|
|
403
|
15
|
|||||||
Gains on sales of assets
|
|
(162
|
)
|
(380
|
) |
(147
|
) | |||||
Total operating expenses
|
|
14,058
|
|
9,765
|
8,649
|
|||||||
Income from operations
|
|
2,514
|
|
3,601
|
3,937
|
|||||||
Other income
(1)
|
|
986
|
|
1,021
|
358
|
|||||||
Interest and related charges
|
|
1,773
|
|
1,493
|
1,205
|
|||||||
Income from operations including noncontrolling interests before income tax expense (benefit)
|
|
1,727
|
|
3,129
|
3,090
|
|||||||
Income tax expense (benefit)
|
|
351
|
|
580
|
(30
|
) | ||||||
Net Income Including Noncontrolling Interests
|
|
1,376
|
|
2,549
|
3,120
|
|||||||
Noncontrolling Interests
|
|
18
|
|
102
|
121
|
|||||||
Net Income Attributable to Dominion Energy
|
$
|
1,358
|
|
$ |
2,447
|
$ |
2,999
|
|||||
Earnings Per Common Share
|
|
|
|
|
|
|||||||
Net income attributable to Dominion Energy—Basic
|
$
|
1.66
|
|
$ |
3.74
|
$ |
4.72
|
|||||
Net income attributable to Dominion Energy—Diluted
|
$
|
1.62
|
|
$ |
3.74
|
$ |
4.72
|
(1)
|
See Note 9 for amounts attributable to related parties.
|
74
|
|
|
|
|
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|||||||||
Net Income Including Noncontrolling Interests
|
$
|
1,376
|
|
$ |
2,549
|
$ |
3,120
|
|||||
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|||||||
Net deferred gains (losses) on derivatives-hedging activities, net of $35, $(10) and $(3) tax
|
|
(110
|
)
|
30
|
8
|
|||||||
Changes in unrealized net gains (losses) on investment securities, net of $(14), $5 and $(121) tax
|
|
39
|
|
(18
|
) |
215
|
||||||
Changes in net unrecognized pension and other postretirement benefit costs, net of $(4), $75 and $32 tax
|
|
(22
|
)
|
(215
|
) |
(69
|
) | |||||
Amounts reclassified to net income:
|
|
|
|
|
|
|||||||
Net derivative (gains) losses-hedging activities, net of $21, $(35) and $18 tax
|
|
(62
|
)
|
102
|
(29
|
) | ||||||
Net realized (gains) losses on investment securities, net of $1, $(2) and $21 tax
|
|
(4
|
)
|
5
|
(37
|
) | ||||||
Net pension and other postretirement benefit costs, net of $(23), $(21) and $(32) tax
|
|
66
|
|
78
|
50
|
|||||||
Changes in other comprehensive gains (losses) from equity method investees, net of $—, $(1) and $(2) tax
|
|
—
|
|
1
|
3
|
|||||||
Total other comprehensive income (loss)
|
|
(93
|
)
|
(17
|
) |
141
|
||||||
Comprehensive income including noncontrolling interests
|
|
1,283
|
|
2,532
|
3,261
|
|||||||
Comprehensive income attributable to noncontrolling interests
|
|
18
|
|
103
|
122
|
|||||||
Comprehensive income attributable to Dominion Energy
|
$
|
1,265
|
|
$ |
2,429
|
$ |
3,139
|
|
|
|
75
|
|
At December 31,
|
2019
|
|
2018
|
|||||
(millions)
|
|
|
||||||
Assets
|
|
|
|
|
||||
Current Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
166
|
|
$ |
268
|
|||
Customer receivables (less allowance for doubtful accounts of $20 and $14)
|
|
2,278
|
|
1,749
|
||||
Other receivables (less allowance for doubtful accounts of $3 and $4
(1
)
|
|
367
|
|
331
|
||||
Inventories:
|
|
|
|
|
||||
Materials and supplies
|
|
1,193
|
|
1,039
|
||||
Fossil fuel
|
|
412
|
|
287
|
||||
Gas stored
|
|
137
|
|
92
|
||||
Prepayments
|
|
328
|
|
265
|
||||
Regulatory assets
|
|
879
|
|
496
|
||||
Other
|
|
328
|
|
634
|
||||
Total current assets
|
|
6,088
|
|
5,161
|
||||
Investments
|
|
|
|
|
||||
Nuclear decommissioning trust funds
|
|
6,192
|
|
4,938
|
||||
Investment in equity method affiliates
|
|
1,646
|
|
1,278
|
||||
Other
|
|
379
|
|
344
|
||||
Total investments
|
|
8,217
|
|
6,560
|
||||
Property, Plant and Equipment
|
|
|
|
|
||||
Property, plant and equipment
|
|
97,466
|
|
76,578
|
||||
Accumulated depreciation, depletion and amortization
|
|
(28,384
|
)
|
(22,018
|
) | |||
Total property, plant and equipment, net
|
|
69,082
|
|
54,560
|
||||
Deferred Charges and Other Assets
|
|
|
|
|
||||
Goodwill
|
|
8,946
|
|
6,410
|
||||
Pension and other postretirement benefit assets
|
|
1,708
|
|
1,279
|
||||
Intangible assets, net
|
|
791
|
|
670
|
||||
Regulatory assets
|
|
7,687
|
|
2,676
|
||||
Other
|
|
1,304
|
|
598
|
||||
Total deferred charges and other assets
|
|
20,436
|
|
11,633
|
||||
Total assets
|
$
|
103,823
|
|
$ |
77,914
|
(1)
|
See Note 9 for amounts attributable to related parties.
|
76
|
|
|
|
|
At December 31,
|
2019
|
|
2018
|
||||||
(millions)
|
|
|
|||||||
Liabilities and Equity
|
|
|
|
|
|||||
Current Liabilities
|
|
|
|
|
|||||
Securities due within one year
|
$
|
3,162
|
|
$ |
3,624
|
||||
Credit facility borrowings
|
|
—
|
|
73
|
|||||
Short-term debt
|
|
911
|
|
334
|
|||||
Accounts payable
|
|
1,115
|
|
914
|
|||||
Accrued interest, payroll and taxes
|
|
1,323
|
|
836
|
|||||
Regulatory liabilities
|
|
497
|
|
356
|
|||||
Reserves for SCANA legal proceedings
|
|
696
|
|
—
|
|||||
Other
(1)
|
|
2,235
|
|
1,510
|
|||||
Total current liabilitie
s
|
|
9,939
|
|
7,647
|
|||||
Long-Term Debt
|
|
|
|
|
|||||
Long-term debt
|
|
30,313
|
|
26,293
|
|||||
Junior subordinated notes
|
|
3,406
|
|
3,430
|
|||||
Remarketable subordinated notes
|
|
—
|
|
1,386
|
|||||
Finance leases
|
|
105
|
|
35
|
|||||
Total long-term debt
|
|
33,824
|
|
31,144
|
|||||
Deferred Credits and Other Liabilities
|
|
|
|
|
|||||
Deferred income taxes and investment tax credits
|
|
6,277
|
|
5,116
|
|||||
Regulatory liabilities
|
|
11,001
|
|
6,840
|
|||||
Asset retirement obligations
|
|
4,866
|
|
2,250
|
|||||
Pension and other postretirement benefit liability
|
|
2,366
|
|
2,328
|
|||||
Other
(1)
|
|
1,517
|
|
541
|
|||||
Total deferred credits and other liabilities
|
|
26,027
|
|
17,075
|
|||||
Total liabilities
|
|
69,790
|
|
55,866
|
|||||
Commitments and Contingencies (see Note 23)
|
|
|
|
|
|
|
|||
Equity
|
|
|
|
|
|||||
Preferred stock (See Note 19)
|
|
2,387
|
|
—
|
|||||
Common stock – no par
(
2
)
|
|
23,824
|
|
12,588
|
|||||
Retained earnings
|
|
7,576
|
|
9,219
|
|||||
Accumulated other comprehensive loss
|
|
(1,793
|
)
|
(1,700
|
) | ||||
Total shareholders’ equity
|
|
31,994
|
|
20,107
|
|||||
Noncontrolling interests
|
|
2,039
|
|
1,941
|
|||||
Total equity
|
|
34,033
|
|
22,048
|
|||||
Total liabilities and equity
|
$
|
103,823
|
|
$ |
77,914
|
(1)
|
See Note 9 for amounts attributable to related parties.
|
(2)
|
1.8 billion shares authorized; 838 million shares and 681 million shares outstanding at December 31, 2019 and 2018, respectively.
|
|
|
|
77
|
|
|
Preferred Stock
|
Common Stock
|
Dominion Energy
Shareholders |
|
|
|
||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Retained
Earnings |
Accumulated
Other Comprehensive Income (Loss) |
Total
Shareholders’ Equity |
Noncontrolling
Interests
|
Total
Equity
|
|||||||||||||||||||||||||||
(millions except per share amounts)
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
December 31, 2016
|
|
|
|
|
628
|
$ |
8,550
|
$ |
6,854
|
$ (799
|
) |
$14,605
|
$ 2,235
|
$ |
16,840
|
|||||||||||||||||||||
Net income including noncontrolling interests
|
|
|
|
|
|
|
2,999
|
|
2,999
|
121
|
3,120
|
|||||||||||||||||||||||||
Contributions from NRG to Four Brothers and Three Cedars
|
|
|
|
|
|
|
|
|
—
|
9
|
9
|
|||||||||||||||||||||||||
Issuance of common stock
|
|
|
|
|
17
|
1,302
|
|
|
1,302
|
|
1,302
|
|||||||||||||||||||||||||
Sale of Dominion Energy Midstream common units—net of offering costs
|
|
|
|
|
|
|
|
|
—
|
18
|
18
|
|||||||||||||||||||||||||
Stock awards (net of change in unearned compensation)
|
|
|
|
|
|
22
|
|
|
22
|
|
22
|
|||||||||||||||||||||||||
Dividends ($3.035 per common share) and distributions
|
|
|
|
|
|
|
(1,931
|
) |
|
(1,931
|
) |
(156
|
) |
(2,087
|
) | |||||||||||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
140
|
140
|
1
|
141
|
|||||||||||||||||||||||||
Other
|
|
|
|
|
|
(9
|
) |
14
|
|
5
|
|
5
|
||||||||||||||||||||||||
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
|
|
|
|
|
|
|
2,447
|
|
2,447
|
102
|
2,549
|
|||||||||||||||||||||||||
Issuance of common stock
|
|
|
|
|
36
|
2,461
|
|
|
2,461
|
|
2,461
|
|||||||||||||||||||||||||
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)
|
|
|
|
|
|
22
|
|
|
22
|
|
22
|
|||||||||||||||||||||||||
Dividends ($3.34 per common share) and distributions
|
|
|
|
|
|
|
(2,185
|
) |
|
(2,185
|
) |
(146
|
) |
(2,331
|
) | |||||||||||||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
(18
|
) |
(18
|
) |
1
|
(17
|
) | ||||||||||||||||||||||
Other
|
|
|
|
|
|
(8
|
) |
(8
|
) |
|
(16
|
) |
|
(16
|
) | |||||||||||||||||||||
December 31, 2018
|
|
|
|
|
681
|
$ |
12,588
|
$ |
9,219
|
$(1,700
|
) |
$20,107
|
$ 1,941
|
$ |
22,048
|
|||||||||||||||||||||
Net income including noncontrolling interests
|
|
|
|
|
|
1,358
|
|
|
|
1,358
|
|
|
18
|
|
|
1,376
|
|
|||||||||||||||||||
Issuance of Stock
|
|
2
|
|
|
2,387
|
|
|
39
|
|
|
3,014
|
|
|
|
|
5,401
|
|
|
|
5,401
|
|
|||||||||||||||
Stock purchase contract component of 2019 Equity Units
|
|
|
|
|
(264
|
)
|
|
|
|
(264
|
)
|
|
|
(264
|
)
|
|||||||||||||||||||||
Acquisition of SCANA
|
|
|
|
96
|
|
|
6,818
|
|
|
|
|
6,818
|
|
|
|
6,818
|
|
|||||||||||||||||||
Acquisition of public interest in Dominion Energy Midstream
|
|
|
|
22
|
|
|
1,181
|
|
|
|
|
1,181
|
|
|
(1,221
|
)
|
|
(40
|
)
|
|||||||||||||||||
Sale of interest in Cove Point
|
|
|
|
|
476
|
|
|
|
|
476
|
|
|
1,386
|
|
|
1,862
|
|
|||||||||||||||||||
Stock awards (net of change in unearned compensation)
|
|
|
|
|
24
|
|
|
|
|
24
|
|
|
|
24
|
|
|||||||||||||||||||||
Preferred stock dividends (See Note 19)
|
|
|
|
|
|
(17
|
)
|
|
|
(17
|
)
|
|
|
(17
|
)
|
|||||||||||||||||||||
Common dividends ($3.67 per common share) and distributions
|
|
|
|
|
|
(2,983
|
)
|
|
|
(2,983
|
)
|
|
(85
|
)
|
|
(3,068
|
)
|
|||||||||||||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(93
|
)
|
|
(93
|
)
|
|
|
|
|
(93
|
)
|
|||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
(13
|
)
|
|
(1
|
)
|
|
|
|
|
(14
|
)
|
|
|
|
|
(14
|
)
|
|||||||||
December 31, 2019
|
|
2
|
|
$
|
2,387
|
|
|
838
|
|
$
|
23,824
|
|
$
|
7,576
|
|
|
$(1,793
|
)
|
|
$31,994
|
|
|
$ 2,039
|
|
$
|
34,033
|
|
78
|
|
|
|
|
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|||||||||
Operating Activities
|
|
|
|
|
|
|||||||
Net income including noncontrolling interests
|
$
|
1,376
|
|
$ |
2,549
|
$ |
3,120
|
|||||
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:
|
|
|
|
|
|
|||||||
Depreciation, depletion and amortization (including nuclear fuel)
|
|
2,977
|
|
2,280
|
2,202
|
|||||||
Deferred income taxes and investment tax credits
|
|
216
|
|
517
|
(3
|
) | ||||||
Proceeds from assignment of tower rental portfolio
|
|
—
|
|
—
|
91
|
|||||||
Contribution to pension plan
|
|
(21
|
)
|
—
|
(75
|
) | ||||||
Provision for refunds and rate credits to electric utility customers
|
|
800
|
|
77
|
—
|
|||||||
Impairment of assets and other charges
|
|
1,333
|
|
395
|
15
|
|||||||
Charge related to a voluntary retirement program
|
|
320
|
|
—
|
—
|
|||||||
Gains on sales of assets and equity method investments
|
|
(167
|
)
|
(1,006
|
) |
(148
|
) | |||||
Net (gains) losses on nuclear decommissioning trusts funds and other investments
|
|
(626
|
)
|
102
|
(117
|
) | ||||||
Charges associated with equity method investments
|
|
—
|
|
—
|
158
|
|||||||
Charge (revision) for future ash pond and landfill closure costs
|
|
(113
|
)
|
81
|
—
|
|||||||
Other adjustments
|
|
(5
|
)
|
19
|
33
|
|||||||
Changes in:
|
|
|
|
|
|
|||||||
Accounts receivable
|
|
(71
|
)
|
(110
|
) |
(103
|
) | |||||
Inventories
|
|
(90
|
)
|
(29
|
) |
15
|
||||||
Deferred fuel and purchased gas costs, net
|
|
195
|
|
(247
|
) |
(71
|
) | |||||
Prepayments
|
|
(225
|
)
|
(51
|
) |
(62
|
) | |||||
Accounts payable
|
|
(225
|
)
|
67
|
(89
|
) | ||||||
Accrued interest, payroll and taxes
|
|
(78
|
)
|
(12
|
) |
64
|
||||||
Customer deposits
|
|
(101
|
)
|
54
|
15
|
|||||||
Margin deposit assets and liabilities
|
|
60
|
|
—
|
(10
|
) | ||||||
Net realized and unrealized changes related to derivative activities
|
|
43
|
|
181
|
44
|
|||||||
Asset retirement obligations
|
|
41
|
|
(35
|
) |
(94
|
) | |||||
Pension and other postretirement benefits
|
|
(148
|
)
|
(114
|
) |
(177
|
) | |||||
Other operating assets and liabilities
|
|
(287
|
)
|
55
|
(306
|
) | ||||||
Net cash provided by operating activities
|
|
5,204
|
|
4,773
|
4,502
|
|||||||
Investing Activities
|
|
|
|
|
|
|||||||
Plant construction and other property additions (including nuclear fuel)
|
|
(4,980
|
)
|
(4,254
|
) |
(5,504
|
) | |||||
Cash and restricted cash acquired in the SCANA Combination
|
|
389
|
|
—
|
—
|
|||||||
Acquisition of solar development projects
|
|
(341
|
)
|
(151
|
) |
(405
|
) | |||||
Proceeds from sales of securities
|
|
1,712
|
|
1,804
|
1,831
|
|||||||
Purchases of securities
|
|
(1,749
|
)
|
(1,894
|
) |
(1,940
|
) | |||||
Proceeds from sales of assets and equity method investments
|
|
447
|
|
2,542
|
138
|
|||||||
Contributions to equity method affiliates
|
|
(209
|
)
|
(428
|
) |
(370
|
) | |||||
Distributions from equity method affiliates
|
|
9
|
|
36
|
275
|
|||||||
Other
|
|
100
|
|
(13
|
) |
33
|
||||||
Net cash used in investing activities
|
|
(4,622
|
)
|
(2,358
|
) |
(5,942
|
) | |||||
Financing Activities
|
|
|
|
|
|
|||||||
Issuance (repayment) of short-term debt, net
|
|
404
|
|
(2,964
|
) |
143
|
||||||
Issuance of short-term notes
|
|
3,000
|
|
1,450
|
—
|
|||||||
Repayment and repurchase of short-term notes
|
|
(3,000
|
)
|
(1,450
|
) |
(250
|
) | |||||
Credit facility borrowings
|
|
—
|
73
|
—
|
||||||||
Repayment of credit facility borrowings
|
|
|
(113
|
)
|
|
|
— |
|
|
|
— |
|
Issuance and remarketing of long-term debt
|
|
4,374
|
|
6,362
|
3,880
|
|||||||
Repayment and repurchase of long-term debt (including redemption premiums)
|
|
(9,116
|
)
|
(5,682
|
) |
(1,572
|
) | |||||
Proceeds from sale of interest in Cove Point
|
|
2,078
|
|
—
|
—
|
|||||||
Net proceeds from issuance of Dominion Energy Midstream common units
|
|
—
|
|
4
|
18
|
|||||||
Issuance of 2019 Equity Units
|
|
1,582
|
|
—
|
—
|
|||||||
Issuance of Series B Preferred Stock
|
|
791
|
|
—
|
—
|
|||||||
Issuance of common stock
|
|
2,515
|
|
2,461
|
1,302
|
|||||||
Common dividend payments
|
|
(2,983
|
)
|
(2,185
|
) |
(1,931
|
) | |||||
Other
|
|
(236
|
)
|
(278
|
) |
(287
|
) | |||||
Net cash provided by (used in) financing activities
|
|
(704
|
)
|
(2,209
|
) |
1,303
|
||||||
Increase (decrease) in cash, restricted cash and equivalents
|
|
(122
|
)
|
206
|
(137
|
) | ||||||
Cash, restricted cash and equivalents at beginning of period
|
|
391
|
|
185
|
322
|
|||||||
Cash, restricted cash and equivalents at end of period
|
$
|
269
|
|
$ |
391
|
$ |
185
|
|||||
Supplemental Cash Flow Information
|
|
|
|
|
|
|||||||
Cash paid during the year for:
|
|
|
|
|
|
|||||||
Interest and related charges, excluding capitalized amounts
|
$
|
1,643
|
|
$ |
1,362
|
1,083
|
||||||
Income taxes
|
|
106
|
|
89
|
9
|
|||||||
Significant noncash investing and financing activities:
(1)(2)(3)(4)(5)
|
|
|
|
|
|
|||||||
Accrued capital expenditures
|
|
555
|
|
307
|
343
|
|||||||
Leases
(6)
|
|
157
|
|
—
|
—
|
|||||||
Receivables from sales of assets and equity method investments
|
|
5
|
|
159
|
—
|
|||||||
Guarantee provided by equity method affiliate
|
|
—
|
|
—
|
30
|
(1)
|
See Note 2 for noncash investing and financing activities related to the adoption of a new accounting standard for leasing arrangements.
|
(2)
|
See Note 3 for noncash investing and financing activities related to the SCANA Combination.
|
(3)
|
See Note 5 for noncash activities related to the sale of a noncontrolling interest in Cove Point.
|
(4)
|
See Note 9 for noncash investing activities related to the acquisition of a noncontrolling interest in Wrangler.
|
(5)
|
See Notes 18,19 and 20 for noncash financing activities related to the acquisition of the public interest in Dominion Energy Midstream, the remarketing of RSNs, the issuance of stock purchase contracts associated with the 2019 Equity Units and the contribution of stock to Dominion Energy’s qualified defined benefit pension plan.
|
(
6
)
|
Includes $113 million of finance leases and $44 million of operating leases.
|
|
|
|
79
|
|
80
|
|
|
|
|
|
|
|
81
|
|
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|||||||||
Operating Revenue
(1)
|
$
|
8,108
|
|
$ |
7,619
|
$ |
7,556
|
|||||
Operating Expenses
|
|
|
|
|
|
|||||||
Electric fuel and other energy-related purchases
(1)
|
|
2,178
|
|
2,318
|
1,909
|
|||||||
Purchased electric capacity
|
|
40
|
|
122
|
6
|
|||||||
Other operations and maintenance:
|
|
|
|
|
|
|||||||
Affiliated suppliers
|
|
367
|
|
305
|
309
|
|||||||
Other
|
|
1,376
|
|
1,371
|
1,169
|
|||||||
Depreciation and amortization
|
|
1,223
|
|
1,132
|
1,141
|
|||||||
Other taxes
|
|
328
|
|
300
|
290
|
|||||||
Impairment of assets and other charges
|
|
757
|
|
—
|
—
|
|||||||
Total operating expenses
|
|
6,269
|
|
5,548
|
4,824
|
|||||||
Income from operations
|
|
1,839
|
|
2,071
|
2,732
|
|||||||
Other income
|
|
98
|
|
22
|
76
|
|||||||
Interest and related charges
(1)
|
|
524
|
|
511
|
494
|
|||||||
Income from operations before income tax expense
|
|
1,413
|
|
1,582
|
2,314
|
|||||||
Income tax expense
|
|
264
|
|
300
|
774
|
|||||||
Net Income
|
$
|
1,149
|
|
$ |
1,282
|
$ |
1,540
|
(1)
|
See Note 25 for amounts attributable to affiliates.
|
82
|
|
|
|
|
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|||||||||
Net Income
|
$
|
1,149
|
|
$ |
1,282
|
$ |
1,540
|
|||||
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|||||||
Net deferred gains (losses) on derivatives-hedging activities, net of $8, $(1) and $3 tax
|
|
(22
|
)
|
1
|
(5
|
) | ||||||
Changes in unrealized net gains (losses) on nuclear decommissioning trust funds, net of $(2), $— and $(16) tax
|
|
5
|
|
—
|
24
|
|||||||
Amounts reclassified to net income:
|
|
|
|
|
|
|||||||
Net derivative (gains) losses-hedging activities, net of $—, $— and $— tax
|
|
1
|
|
1
|
1
|
|||||||
Net realized (gains) losses on nuclear decommissioning trust funds, net of $1, $— and $3 tax
|
|
(1
|
)
|
—
|
(4
|
) | ||||||
Other comprehensive income (loss)
|
|
(17
|
)
|
2
|
16
|
|||||||
Comprehensive income
|
$
|
1,132
|
|
$ |
1,284
|
$ |
1,556
|
|
|
|
83
|
|
At December 31,
|
2019
|
|
2018
|
|||||
(millions)
|
|
|
||||||
Assets
|
|
|
|
|
||||
Current Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
17
|
|
$ |
29
|
|||
Customer receivables (less allowance for doubtful accounts of $9 at both dates)
|
|
1,163
|
|
999
|
||||
Other receivables (less allowance for doubtful accounts of $2 and $3)
|
|
106
|
|
76
|
||||
Affiliated receivables
|
|
27
|
|
101
|
||||
Inventories (average cost method):
|
|
|
|
|
||||
Materials and supplies
|
|
549
|
|
550
|
||||
Fossil fuel
|
|
324
|
|
287
|
||||
Prepayments
|
|
27
|
|
28
|
||||
Regulatory assets
|
|
433
|
|
424
|
||||
Other
(1)
|
|
30
|
|
77
|
||||
Total current assets
|
|
2,676
|
|
2,571
|
||||
Investments
|
|
|
|
|
||||
Nuclear decommissioning trust funds
|
|
2,881
|
|
2,369
|
||||
Other
|
|
3
|
|
3
|
||||
Total investments
|
|
2,884
|
|
2,372
|
||||
Property, Plant and Equipment
|
|
|
|
|
||||
Property, plant and equipment
|
|
47,038
|
|
44,524
|
||||
Accumulated depreciation and amortization
|
|
(14,156
|
)
|
(14,003
|
) | |||
Total property, plant and equipment, net
|
|
32,882
|
|
30,521
|
||||
Deferred Charges and Other Assets
|
|
|
|
|
||||
Pension and other postretirement benefit assets
(1)
|
|
287
|
|
254
|
||||
Intangible assets, net
|
|
271
|
|
250
|
||||
Regulatory assets
|
|
1,863
|
|
737
|
||||
Other
(1)
|
|
565
|
|
175
|
||||
Total deferred charges and other assets
|
|
2,986
|
|
1,416
|
||||
Total assets
|
$
|
41,428
|
|
$ |
36,880
|
(1)
|
See Note 25 for amounts attributable to affiliates.
|
84
|
|
|
|
|
At December 31,
|
2019
|
|
2018
|
||||||
(millions)
|
|
|
|||||||
Liabilities And Common Shareholder’s Equity
|
|
|
|
|
|||||
Current Liabilities
|
|
|
|
|
|||||
Securities due within one year
|
$
|
4
|
|
$ |
350
|
||||
Short-term debt
|
|
243
|
|
314
|
|||||
Accounts payable
|
|
334
|
|
339
|
|||||
Payables to affiliates
|
|
210
|
|
209
|
|||||
Affiliated current borrowings
|
|
107
|
|
224
|
|||||
Accrued interest, payroll and
t
axes
|
|
253
|
|
248
|
|||||
Asset retirement obligations
|
|
340
|
|
245
|
|||||
Regulatory liabilities
|
|
167
|
|
299
|
|||||
Derivative liabilities
(1)
|
|
243
|
|
25
|
|||||
Customer deposits
|
|
121
|
|
121
|
|||||
Other current liabilities
|
|
450
|
|
441
|
|||||
Total current liabilities
|
|
2,472
|
|
2,815
|
|||||
Long-Term Debt
|
|
|
|
|
|||||
Long-term debt
|
|
12,325
|
|
11,320
|
|||||
Finance leases
|
|
16
|
|
1
|
|||||
Total long-term debt
|
|
12,341
|
|
11,321
|
|||||
Deferred Credits and Other Liabilities
|
|
|
|
|
|||||
Deferred income taxes and investment tax credits
|
|
2,962
|
|
3,017
|
|||||
Asset retirement obligations
|
|
3,241
|
|
1,200
|
|||||
Regulatory liabilities
|
|
5,074
|
|
4,647
|
|||||
Pension and other postretirement benefit liability
(1)
|
|
782
|
|
632
|
|||||
Other
(1)
|
|
567
|
|
201
|
|||||
Total deferred credits and other liabilities
|
|
12,626
|
|
9,697
|
|||||
Total liabilities
|
|
27,439
|
|
23,833
|
|||||
Commitments and Contingencies (see Note 23)
|
|
|
|
|
|
|
|||
Common Shareholder’s Equity
|
|
|
|
|
|||||
Common stock – no par
(2)
|
|
5,738
|
|
5,738
|
|||||
Other
paid-in
capital
|
|
1,113
|
|
1,113
|
|||||
Retained earnings
|
|
7,167
|
|
6,208
|
|||||
Accumulated other comprehensive loss
|
|
(29
|
)
|
(12
|
) | ||||
Total common shareholder’s equity
|
|
13,989
|
|
13,047
|
|||||
Total liabilities and shareholder’s equity
|
$
|
41,428
|
|
$ |
36,880
|
(1)
|
See Note 25 for amounts attributable to affiliates.
|
(2)
|
500,000 shares authorized; 274,723 shares outstanding at December 31, 2019 and 2018.
|
|
|
|
85
|
|
|
Common Stock
|
Other
Paid-In
Capital |
Retained
Earnings |
Accumulated
Other Comprehensive Income (Loss) |
Total
|
|||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||
(millions, except for shares)
|
(thousands)
|
|
|
|
|
|
||||||||||||||||||
December 31, 2016
|
275
|
$ |
5,738
|
$ |
1,113
|
$ |
4,968
|
$ 46
|
$ |
11,865
|
||||||||||||||
Net income
|
|
|
|
1,540
|
|
1,540
|
||||||||||||||||||
Dividends
|
|
|
|
(1,199
|
) |
|
(1,199
|
) | ||||||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
16
|
16
|
||||||||||||||||||
Other
|
|
|
|
2
|
|
2
|
||||||||||||||||||
December 31, 2017
|
275
|
5,738
|
1,113
|
5,311
|
62
|
12,224
|
||||||||||||||||||
Cumulative-effect of changes in accounting principles
|
|
|
|
79
|
(76
|
) |
3
|
|||||||||||||||||
Net income
|
|
|
|
1,282
|
|
1,282
|
||||||||||||||||||
Dividends
|
|
|
|
(464
|
) |
|
(464
|
) | ||||||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
2
|
|
||||||
December 31, 2018
|
275
|
5,738
|
1,113
|
6,208
|
(12
|
) |
13,047
|
|||||||||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
1,149
|
|
|
|
|
|
1,149
|
|
||||||
Dividends
|
|
|
|
|
|
|
|
|
|
|
(190
|
)
|
|
|
|
|
(190
|
)
|
||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(17
|
)
|
|
(17
|
)
|
||||||
December 31, 2019
|
|
275
|
|
$
|
5,738
|
|
$
|
1,113
|
|
$
|
7,167
|
|
|
$(29
|
)
|
$
|
13,989
|
|
86
|
|
|
|
|
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|||||||||
Operating Activities
|
|
|
|
|
|
|||||||
Net income
|
$
|
1,149
|
|
$ |
1,282
|
$ |
1,540
|
|||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|||||||
Depreciation and amortization (including nuclear fuel)
|
|
1,392
|
|
1,309
|
1,333
|
|||||||
Deferred income taxes and investment tax credits
|
|
(80
|
)
|
224
|
269
|
|||||||
Proceeds from assignment of rental portfolio
|
|
—
|
|
—
|
91
|
|||||||
Charge (revision) for future ash pond and landfill closure costs
|
|
(113
|
)
|
|
81
|
—
|
||||||
Impairment of assets and other charges
|
|
624
|
|
—
|
—
|
|||||||
Provision for rate credits to customers
|
|
—
|
|
77
|
—
|
|||||||
Charge related to a voluntary retirement program
|
|
116
|
|
—
|
—
|
|||||||
Other adjustments
|
|
(86
|
)
|
(21
|
) |
(36
|
) | |||||
Changes in:
|
|
|
|
|
|
|||||||
Accounts receivable
|
|
(196
|
)
|
(60
|
) |
(27
|
) | |||||
Affiliated receivables and payables
|
|
75
|
|
(14
|
) |
125
|
||||||
Inventories
|
|
(56
|
)
|
13
|
3
|
|||||||
Prepayments
|
|
1
|
|
(1
|
) |
3
|
||||||
Deferred fuel expenses, net
|
|
243
|
|
(269
|
) |
(59
|
) | |||||
Accounts payable
|
|
(31
|
)
|
(26
|
) |
(42
|
) | |||||
Accrued interest, payroll and taxes
|
|
5
|
|
(8
|
) |
17
|
||||||
Net realized and unrealized changes related to derivative activities
|
|
21
|
|
119
|
13
|
|||||||
Asset retirement obligations
|
|
51
|
|
(54
|
) |
(88
|
) | |||||
Other operating assets and liabilities
|
|
(331
|
)
|
188
|
(181
|
) | ||||||
Net cash provided by operating activities
|
|
2,784
|
|
2,840
|
2,961
|
|||||||
Investing Activities
|
|
|
|
|
|
|||||||
Plant construction and other property additions
|
|
(2,642
|
)
|
(2,228
|
) |
(2,496
|
) | |||||
Purchases of nuclear fuel
|
|
(157
|
)
|
(173
|
) |
(192
|
) | |||||
Acquisition of solar development projects
|
|
(182
|
)
|
(141
|
) |
(41
|
) | |||||
Proceeds from sales of securities
|
|
858
|
|
887
|
849
|
|||||||
Purchases of securities
|
|
(905
|
)
|
(925
|
) |
(884
|
) | |||||
Other
|
|
(37
|
)
|
(63
|
) |
(41
|
) | |||||
Net cash used in investing activities
|
|
(3,065
|
)
|
(2,643
|
) |
(2,805
|
) | |||||
Financing Activities
|
|
|
|
|
|
|||||||
Issuance (repayment) of short-term debt, net
|
|
(71
|
)
|
(228
|
) |
477
|
||||||
Issuance (repayment) of affiliated current borrowings, net
|
|
(117
|
)
|
191
|
(229
|
) | ||||||
Issuance and remarketing of long-term debt
|
|
1,248
|
|
1,300
|
1,500
|
|||||||
Repayment and repurchase of long-term debt
|
|
(591
|
)
|
(964
|
) |
(681
|
) | |||||
Common dividend payments to parent
|
|
(190
|
)
|
(464
|
) |
(1,199
|
) | |||||
Other
|
|
(12
|
)
|
(18
|
) |
(11
|
) | |||||
Net cash provided by (used in) financing activities
|
|
267
|
|
(183
|
) |
(143
|
) | |||||
Increase (decrease) in cash, restricted cash and equivalents
|
|
(14
|
)
|
14
|
13
|
|||||||
Cash, restricted cash and equivalents at beginning of year
|
|
38
|
|
24
|
11
|
|||||||
Cash, restricted cash and equivalents at end of year
|
$
|
24
|
|
$ |
38
|
$ |
24
|
|||||
Supplemental Cash Flow Information
|
|
|
|
|
|
|||||||
Cash paid during the year for:
|
|
|
|
|
|
|||||||
Interest and related charges, excluding capitalized amounts
|
$
|
495
|
|
$ |
498
|
$ |
458
|
|||||
Income taxes
|
|
272
|
|
128
|
362
|
|||||||
Significant noncash investing and financing activities:
(1)
|
|
|
|
|
|
|||||||
Accrued capital expenditures
|
|
292
|
|
204
|
169
|
|||||||
Leases
(2)
|
|
55
|
|
—
|
—
|
(1)
|
See Note 2 for noncash investing and financing activities related to the adoption of a new accounting standard for leasing arrangements.
|
(2)
|
Includes $20 million of finance leases and $35 million of operating leases.
|
|
|
|
87
|
|
88
|
|
|
|
|
|
|
|
89
|
|
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|||||||||
Operating Revenue
(1)
|
$
|
2,169
|
|
$ |
1,996
|
$ |
1,523
|
|||||
Operating Expenses
|
|
|
|
|
|
|||||||
Purchased (excess) gas
(1)
|
|
7
|
|
(10
|
) |
109
|
||||||
Other energy-related purchases
|
|
2
|
|
4
|
4
|
|||||||
Other operations and maintenance:
|
|
|
|
|
|
|||||||
Affiliated suppliers
|
|
168
|
|
132
|
123
|
|||||||
Other
(1)
|
|
556
|
|
584
|
449
|
|||||||
Depreciation and amortization
|
|
367
|
|
333
|
242
|
|||||||
Other taxes
|
|
154
|
|
120
|
99
|
|||||||
Impairment of assets and related charges
|
|
13
|
|
163
|
15
|
|||||||
Gains on sales of assets
|
|
(2
|
)
|
(117
|
) |
(70
|
) | |||||
Total operating expenses
|
|
1,265
|
|
1,209
|
971
|
|||||||
Income from continuing operations
|
|
904
|
|
787
|
552
|
|||||||
Earnings from equity method investees
|
|
43
|
|
54
|
47
|
|||||||
Other income
|
|
166
|
|
89
|
62
|
|||||||
Interest and related charges
(1)
|
|
311
|
|
174
|
60
|
|||||||
Income from continuing operations before income tax expense
|
|
802
|
|
756
|
601
|
|||||||
Income tax expense (benefit)
|
|
101
|
|
124
|
(65
|
) | ||||||
Net Income from Continuing Operations
|
|
701
|
|
632
|
666
|
|||||||
Net Income from discontinued operations
(2)
|
|
141
|
|
24
|
163
|
|||||||
Net Income including noncontrolling interests
|
|
842
|
|
656
|
829
|
|||||||
Noncontrolling interests
|
|
121
|
|
175
|
126
|
|||||||
Net Income Attributable to Dominion Energy Gas
|
$
|
721
|
|
$ |
481
|
$ |
703
|
(1)
|
See Note 25 for amounts attributable to related parties.
|
(2)
|
Includes income tax expense of $33 million, less than $1 million and $91 million in 2019, 2018 and 2017, respectively.
|
90
|
|
|
|
|
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|||||||||
Net Income including noncontrolling interests
|
$
|
842
|
|
$ |
656
|
$ |
829
|
|||||
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|||||||
Net deferred gains (losses) on derivatives-hedging activities, net of $22, $5 and $(3) tax
|
|
(61
|
)
|
(16
|
) |
6
|
||||||
Changes in net unrecognized pension benefit (costs) , net of $(13), $20 and $(8) tax
|
|
33
|
|
(52
|
) |
20
|
||||||
Amounts reclassified to net income:
|
|
|
|
|
|
|||||||
Net derivative (gains) losses-hedging activities, net of $(2), $(7) and $2 tax
|
|
5
|
|
19
|
(4
|
) | ||||||
Net pension and other postretirement benefit costs, net of $(2), $(2) and $(2) tax
|
|
5
|
|
4
|
4
|
|||||||
Total other comprehensive income (loss)
|
|
(18
|
)
|
(45
|
) |
26
|
||||||
Comprehensive income including noncontrolling interests
|
|
824
|
|
611
|
855
|
|||||||
Comprehensive income attributable to noncontrolling interests
|
|
120
|
|
175
|
127
|
|||||||
Comprehensive income attributable to Dominion Energy Gas
|
$
|
704
|
|
$ |
436
|
$ |
728
|
|
|
|
91
|
|
At December 31,
|
2019
|
|
2018
|
|||||
(millions)
|
|
|
||||||
Assets
|
|
|
|
|
||||
Current Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
27
|
|
$ |
99
|
|||
Customer receivables (less allowance for doubtful accounts of $2 and
less than
$1)
(1)
|
|
173
|
|
187
|
||||
Other receivables
(1)
|
|
26
|
|
18
|
||||
Affiliated receivables
|
|
362
|
|
319
|
||||
Affiliated notes receivable
|
|
—
|
|
819
|
||||
Inventories:
|
|
|
|
|
||||
Materials and supplies
|
|
120
|
|
95
|
||||
Gas stored
|
|
2
|
|
2
|
||||
Prepayments
|
|
73
|
|
77
|
||||
Gas imbalances
(1)
|
|
52
|
|
187
|
||||
Current assets of discontinued operations
|
|
—
|
|
444
|
||||
Other
|
|
23
|
|
101
|
||||
Total current assets
|
|
858
|
|
2,348
|
||||
Investments
|
|
|
|
|
||||
Affiliated notes receivables
|
|
3,437
|
|
4,317
|
||||
Investment in equity method affiliates
|
|
312
|
|
339
|
||||
Total investments
|
|
3,749
|
|
4,656
|
||||
Property, Plant and Equipment
|
|
|
|
|
||||
Property, plant and equipment
|
|
15,166
|
|
14,700
|
||||
Accumulated depreciation and amortization
|
|
(3,538
|
)
|
(3,219
|
) | |||
Total property, plant and equipment, net
|
|
11,628
|
|
11,481
|
||||
Deferred Charges and Other Assets
|
|
|
|
|
||||
Goodwill
|
|
1,471
|
|
1,471
|
||||
Intangible assets, net
|
|
106
|
|
115
|
||||
Pension and other postretirement benefit assets
(1)
|
|
840
|
|
705
|
||||
Regulatory assets
|
|
40
|
|
52
|
||||
Other
(1)
|
|
92
|
|
74
|
||||
Total deferred charges and other assets
|
|
2,549
|
|
2,417
|
||||
Noncurrent Assets of Discontinued Operations
|
|
—
|
|
5,849
|
||||
Total assets
|
$
|
18,784
|
|
$ |
26,751
|
(1)
|
See Note 25 for amounts attributable to related parties.
|
92
|
|
|
|
|
At December 31,
|
2019
|
|
2018
|
||||||
(millions)
|
|
|
|||||||
Liabilities and Equity
|
|
|
|
|
|||||
Current Liabilities
|
|
|
|
|
|||||
Securities due within one year
|
$
|
700
|
|
$ |
748
|
||||
Credit facility borrowings
|
|
—
|
|
73
|
|||||
Short-term debt
|
|
62
|
|
10
|
|||||
Accounts payable
|
|
59
|
|
76
|
|||||
Payables to affiliates
|
|
82
|
|
124
|
|||||
Affiliated current borrowings
|
|
260
|
|
3,097
|
|||||
Accrued interest, payroll and taxe
s
|
|
128
|
|
116
|
|||||
Current liabilities of discontinued operations
|
|
—
|
|
1,273
|
|||||
Other
(1)
|
|
161
|
|
238
|
|||||
Total current liabilities
|
|
1,452
|
|
5,755
|
|||||
Long-Term Debt
|
|
|
|
|
|||||
Long-term debt
|
|
4,821
|
|
7,022
|
|||||
Finance leases
|
|
5
|
|
—
|
|||||
Total Long-Term Debt
|
|
4,826
|
|
7,022
|
|||||
Deferred Credits and Other Liabilities
|
|
|
|
|
|||||
Deferred income taxes and investment tax credits
|
|
1,288
|
|
1,330
|
|||||
Regulatory liabilities
|
|
800
|
|
765
|
|||||
Other
|
|
189
|
|
118
|
|||||
Total deferred credits and other liabilities
|
|
2,277
|
|
2,213
|
|||||
Noncurrent Liabilities of Discontinued Operations
|
|
—
|
|
2,896
|
|||||
Total liabilities
|
|
8,555
|
|
17,886
|
|||||
Commitments and Contingencies (see Note 23)
|
|
|
|
|
|
|
|||
Equity
|
|
|
|
|
|||||
Predecessor equity
|
|
—
|
|
1,804
|
|||||
Membership interests
|
|
9,031
|
|
4,566
|
|||||
Accumulated other comprehensive loss
|
|
(187
|
)
|
(169
|
) | ||||
Total members’ equity
|
|
8,844
|
|
6,201
|
|||||
Noncontrolling interests
|
|
1,385
|
|
2,664
|
|||||
Total equity
|
|
10,229
|
|
8,865
|
|||||
Total liabilities and equity
|
$
|
18,784
|
|
$ |
26,751
|
(1)
|
See Note 25 for amounts attributable to related parties.
|
|
|
|
93
|
|
|
Predecessor
Equity |
Membership
Interests |
Accumulated
Other Comprehensive Income (Loss) |
Total
Members’ Equity |
Noncontrolling
Interests |
Total
|
||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|||||||||||||||||
December 31, 2016
|
$ 1,438
|
$3,659
|
$(123
|
) | $ |
4,974
|
$ 2,713
|
$ |
7,687
|
|||||||||||||||
Net income including noncontrolling interests
|
88
|
615
|
|
703
|
126
|
829
|
||||||||||||||||||
Sale of Dominion Energy Midstream common units—net of offering costs
|
|
|
|
—
|
18
|
18
|
||||||||||||||||||
Dividends and distributions
|
(19
|
) |
(15
|
) |
|
(34
|
) |
(87
|
) |
(121
|
) | |||||||||||||
Distributions to noncontrolling interests
|
(193
|
) |
|
|
(193
|
) |
193
|
—
|
||||||||||||||||
Equity contributions from Dominion Energy
|
44
|
|
|
44
|
7
|
51
|
||||||||||||||||||
Other comprehensive income, net of tax
|
|
|
25
|
25
|
1
|
26
|
||||||||||||||||||
Other
|
3
|
2
|
|
5
|
|
5
|
||||||||||||||||||
December 31, 2017
|
1,361
|
4,261
|
(98
|
) |
5,524
|
2,971
|
8,495
|
|||||||||||||||||
Cumulative-effect of changes in accounting principles
|
|
29
|
(26
|
) |
3
|
|
3
|
|||||||||||||||||
Net income including noncontrolling interests
|
180
|
301
|
|
481
|
175
|
656
|
||||||||||||||||||
Sale of Dominion Energy Midstream common units—net of offering costs
|
|
|
|
—
|
4
|
4
|
||||||||||||||||||
Remeasurement of noncontrolling interest in Dominion Energy Midstream
|
375
|
|
|
375
|
(375
|
) |
—
|
|||||||||||||||||
Dividends and distributions
|
(133
|
) |
(25
|
) |
|
(158
|
) |
(138
|
) |
(296
|
) | |||||||||||||
Distributions to noncontrolling interests
|
(27
|
) |
|
|
(27
|
) |
27
|
|
||||||||||||||||
Equity contributions from Dominion Energy
|
48
|
|
|
48
|
|
48
|
||||||||||||||||||
Other comprehensive loss, net of tax
|
|
|
(45
|
) |
(45
|
) |
|
(45
|
) | |||||||||||||||
December 31, 2018
|
1,804
|
4,566
|
(169
|
) |
6,201
|
2,664
|
8,865
|
|||||||||||||||||
Net income including noncontrolling interests
|
|
232
|
|
|
489
|
|
|
|
721
|
|
|
121
|
|
|
842
|
|
||||||||
Acquisition of public interest in Dominion Energy Midstream
|
|
1,181
|
|
|
|
|
1,181
|
|
|
(1,221
|
)
|
|
(40
|
)
|
||||||||||
Dividends and distributions
|
|
(457
|
)
|
|
|
|
(457
|
)
|
|
(179
|
)
|
|
(636
|
)
|
||||||||||
Equity contributions from Dominion Energy
|
|
3,385
|
|
|
|
|
3,385
|
|
|
|
3,385
|
|
||||||||||||
Dominion Energy Gas Restructuring
|
|
(6,145
|
)
|
|
3,978
|
|
|
(1
|
)
|
|
(2,168
|
)
|
|
|
|
|
(2,168
|
)
|
||||||
Other comprehensive loss, net of tax
|
|
|
|
(17
|
)
|
|
(17
|
)
|
|
(1
|
)
|
|
(18
|
)
|
||||||||||
Other
|
|
|
|
(2
|
)
|
|
|
|
|
(2
|
)
|
|
1
|
|
|
(1
|
)
|
|||||||
December 31, 2019
|
|
$ —
|
|
|
$9,031
|
|
|
$(187
|
)
|
$
|
8,844
|
|
|
$ 1,385
|
|
$
|
10,229
|
|
94
|
|
|
|
|
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|||||||||
Operating Activities
|
|
|
|
|
|
|||||||
Net Income including noncontrolling interests
|
$
|
842
|
|
$ |
656
|
$ |
829
|
|||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|||||||
Depreciation and amortization
|
|
445
|
|
424
|
328
|
|||||||
Deferred income taxes and investment tax credits
|
|
(3
|
)
|
380
|
(19
|
) | ||||||
Charge related to a voluntary retirement program
|
|
20
|
|
—
|
—
|
|||||||
Gains on sales of assets
|
|
(7
|
)
|
(109
|
) |
(70
|
) | |||||
Impairment of assets and related charges
|
|
13
|
|
385
|
15
|
|||||||
Other adjustments
|
|
69
|
|
21
|
14
|
|||||||
Changes in:
|
|
|
|
|
|
|||||||
Accounts receivable
|
|
69
|
|
(101
|
) |
(4
|
) | |||||
Affiliated receivables and payables
|
|
(51
|
)
|
(310
|
) |
26
|
||||||
Inventories
|
|
(50
|
)
|
(28
|
) |
(5
|
) | |||||
Prepayments
|
|
59
|
|
(23
|
) |
(20
|
) | |||||
Accounts payable
|
|
(109
|
)
|
1
|
(7
|
) | ||||||
Accrued interest, payroll and taxes
|
|
(52
|
)
|
22
|
26
|
|||||||
Pension and other postretirement benefits
|
|
(142
|
)
|
(153
|
) |
(143
|
) | |||||
Other operating assets and liabilities
|
|
(37
|
)
|
30
|
(13
|
) | ||||||
Net cash provided by operating activities
|
|
1,066
|
|
1,195
|
957
|
|||||||
Investing Activities
|
|
|
|
|
|
|||||||
Plant construction and other property additions
|
|
(704
|
)
|
(1,109
|
) |
(1,815
|
) | |||||
Loan to Dominion Energy
|
|
(1,757
|
)
|
—
|
—
|
|||||||
Loan to East Ohio
|
|
(115
|
)
|
—
|
—
|
|||||||
Loan to Dominion Energy from Cove Point
|
|
—
|
|
(2,986
|
) |
—
|
||||||
Repayment of loan by Dominion Energy to Cove Point
|
|
2,986
|
|
—
|
—
|
|||||||
Repayment of loan to East Ohio
|
|
115
|
|
—
|
—
|
|||||||
Repayment of affiliated notes receivable, net
|
|
647
|
—
|
32
|
||||||||
Proceeds from assignments of shale development rights
|
|
—
|
|
109
|
70
|
|||||||
Other
|
|
(22
|
)
|
(20
|
) |
(27
|
) | |||||
Net cash provided by (used in) investing activities
|
|
1,150
|
|
(4,006
|
) |
(1,740
|
) | |||||
Financing Activities
|
|
|
|
|
|
|||||||
Issuance (repayment) of short-term debt, net
|
|
52
|
|
(619
|
) |
169
|
||||||
Issuance (repayment) of affiliated current borrowings, net
|
|
(2,837
|
)
|
291
|
628
|
|||||||
Issuance of long-term debt
|
|
1,500
|
|
3,750
|
—
|
|||||||
Issuance of affiliated long-term debt
|
|
395
|
|
—
|
—
|
|||||||
Repayment of long-term debt
|
|
(3,750
|
)
|
(255
|
) |
—
|
||||||
Repayment of affiliated long-term debt
|
|
(395
|
)
|
—
|
—
|
|||||||
Credit facility borrowings
|
|
—
|
|
73
|
—
|
|||||||
Repayment of credit facility borrowings
|
|
(73
|
)
|
—
|
—
|
|||||||
Net proceeds from sale of Dominion Energy Midstream common units
|
|
—
|
|
4
|
18
|
|||||||
Contributions from Dominion Energy
|
|
3,385
|
|
25
|
25
|
|||||||
Dividends and distributions
|
|
(636
|
)
|
(296
|
) |
(121
|
) | |||||
Other
|
|
(16
|
)
|
(21
|
) |
—
|
||||||
Net cash provided by (used in) financing activities
|
|
(2,375
|
)
|
2,952
|
719
|
|||||||
Increase (decrease) in cash, restricted cash and cash equivalents
|
|
(159
|
)
|
141
|
(64
|
) | ||||||
Cash, restricted cash and equivalents at beginning of year
|
|
198
|
|
57
|
121
|
|||||||
Cash, restricted cash and equivalents at end of year
|
$
|
39
|
|
$ |
198
|
$ |
57
|
|||||
Supplemental Cash Flow Information
|
|
|
|
|
|
|||||||
Cash paid during the year for:
|
|
|
|
|
|
|||||||
Interest and related charges, excluding capitalized amounts
|
$
|
291
|
|
$ |
162
|
$ |
55
|
|||||
Income taxes
|
|
65
|
|
79
|
11
|
|||||||
Significant noncash investing and financing activities:
(1)(2)
|
|
|
|
|
|
|||||||
Accrued capital expenditures
|
|
25
|
|
59
|
69
|
|||||||
Equity contributions from Dominion Energy
|
|
—
|
|
23
|
26
|
|||||||
Finance leases
|
|
6
|
|
—
|
—
|
(1)
|
See Note 2 for noncash investing and financing activities related to the adoption of a new accounting standard for lease arrangements.
|
(2)
|
See Notes 3 and 25 for noncash investing and financing activities related to the Dominion Energy Gas Restructuring and related-party transactions.
|
|
|
|
95
|
|
96
|
|
|
|
|
|
|
|
97
|
|
• |
Regulated electric sales
|
• |
Nonregulated electric sales
|
• |
Regulated gas sales
|
• |
Nonregulated gas sales
|
• |
Regulated gas transportation and storage sales
|
• |
Nonregulated gas transportation and storage sales
|
• |
Other regulated revenue
|
• |
Other nonregulated revenue
|
• |
Other revenue
|
• |
Regulated electric sales
|
• |
Nonregulated electric sales
|
• |
Regulated gas sales
|
• |
Nonregulated gas sales
|
• |
Gas transportation and storage sales
|
• |
Other revenue
|
• |
Regulated electric sales
|
• |
Other regulated revenue
|
• |
Other nonregulated revenue
non-jurisdictional
customers from certain solar facilities, revenue from renting space on certain electric transmission poles and distribution towers and service concession arrangements.
|
• |
Other revenue
|
• |
Regulated electric sales
|
98
|
|
|
|
|
• |
Other revenue
|
• |
Regulated gas sales—wholesale
|
• |
Nonregulated gas sales
|
• |
Regulated gas transportation and storage sales
|
• |
Nonregulated gas transportation and storage sales
|
• |
Management service revenue
|
• |
Other regulated revenue
|
• |
Other nonregulated revenue
|
• |
Other revenue
|
• |
Regulated gas sales
|
• |
Nonregulated gas sales
|
• |
Gas transportation and storage sales
|
• |
Other revenue
|
|
|
|
99
|
|
100
|
|
|
|
|
At December 31,
|
2019
|
|
2018
|
|||||
(millions)
|
|
|
|
|||||
Dominion Energy
|
$
|
29
|
|
$ |
35
|
|||
Virginia Power
|
|
9
|
|
16
|
||||
Dominion Energy Gas
|
|
6
|
|
7
|
|
Cash, Restricted Cash and Equivalents at
End/Beginning of Year |
|||||||||||||||
|
December 31,
2019 |
|
December 31,
2018 |
December 31,
2017 |
December 31,
2016 |
|||||||||||
(millions)
|
|
|
|
|
|
|||||||||||
Dominion Energy
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$166
|
|
$268
|
$120
|
$261
|
||||||||||
Restricted cash and equivalents
(1)
|
|
103
|
|
123
|
65
|
61
|
||||||||||
Cash, restricted cash and equivalents shown in the Consolidated Statements of Cash Flows
|
|
$269
|
|
$391
|
$185
|
$322
|
||||||||||
Virginia Power
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$ 17
|
|
$ 29
|
$ 14
|
$ 11
|
||||||||||
Restricted cash and equivalents
(1)
|
|
7
|
|
9
|
10
|
—
|
||||||||||
Cash, restricted cash and equivalents shown in the Consolidated Statements of Cash Flows
|
|
$ 24
|
|
$ 38
|
$ 24
|
$ 11
|
||||||||||
Dominion Energy Gas
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
(2)
|
|
$ 27
|
|
$108
|
$ 18
|
$ 76
|
||||||||||
Restricted cash and equivalents
(1)
|
|
12
|
|
90
|
39
|
45
|
||||||||||
Cash, restricted cash and equivalents shown in the Consolidated Statements of Cash Flows
|
|
$ 39
|
|
$198
|
$ 57
|
$121
|
(1)
|
Restricted cash and equivalent balances are presented within other current assets in the Companies’ Consolidated Balance Sheets.
|
(2)
|
At December 31, 2018, 2017 and 2016, Dominion Energy Gas had $9 million, $3 million and $14 million of cash and cash equivalents included in current assets of discontinued operations, respectively.
|
|
|
|
101
|
|
102
|
|
|
|
|
•
|
In January 2019, Virginia Power committed to a plan to retire certain automated metering reading infrastructure associated with its electric operations before the end of its estimated useful life and replace such equipment with more current AMI technology. As a result, Virginia Power recorded a charge of $160 million ($119 million
after-tax).
This charge is considered a component of Virginia Power’s base rates deemed recovered under the GTSA, subject to review as discussed in Note 13.
|
•
|
In March 2019, Virginia Power committed to retire certain electric generating units before the end of their useful lives and completed the retirement of certain units at six facilities representing 1,292 MW of electric generating capacity, which had previously been placed in cold reserve. An additional unit at Possum Point power station will be retired after it meets its capacity obligation to PJM in 2021. As a result, Virginia Power recorded a charge of $346 million ($257 million
after-tax
). This charge is considered a component of Virginia Power’s base rates deemed recovered under the GTSA, subject to review as discussed in Note 13.
|
•
|
In May 2019, Virginia Power abandoned a coal rail project at its Mt. Storm generating facility. As a result, Virginia Power recorded a charge of $62 million ($46 million
after-tax).
|
•
|
In September 2019, Dominion Energy and Virginia Power abandoned certain property, plant and equipment before the end of its useful life. As a result, Dominion Energy recorded a charge of $26 million ($19 million
after-tax)
and Virginia Power recorded a charge of $17 million ($12 million
after-tax).
|
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(percent)
|
|
|
|
|
||||||||
Dominion Energy
|
|
|
|
|
|
|||||||
Generation
|
|
2.84
|
|
2.71
|
2.94
|
|||||||
Transmission
|
|
2.47
|
|
2.54
|
2.55
|
|||||||
Distribution
|
|
2.80
|
|
2.97
|
3.00
|
|||||||
Storage
|
|
2.40
|
|
2.40
|
2.48
|
|||||||
General and other
|
|
4.04
|
|
4.20
|
4.38
|
|||||||
Virginia Power
|
|
|
|
|
|
|||||||
Generation
|
|
2.94
|
|
2.71
|
2.94
|
|||||||
Transmission
|
|
2.54
|
|
2.52
|
2.54
|
|||||||
Distribution
|
|
3.14
|
|
3.31
|
3.32
|
|||||||
General and other
|
|
4.40
|
|
4.52
|
4.68
|
|||||||
Dominion Energy Gas
(1)
|
|
|
|
|
|
|||||||
Transmission
|
|
2.43
|
|
2.66
|
2.67
|
|||||||
Storage
|
|
2.53
|
|
2.42
|
2.51
|
|||||||
General and other
|
|
4.59
|
|
4.18
|
5.08
|
(1)
|
Excludes rates for depreciation reported as discontinued operations.
|
|
|
|
103
|
|
Asset
|
Estimated Useful Lives
|
|||
Merchant generation-nuclear
|
|
44 years
|
|
|
Merchant generation-other
|
|
15-30
years
|
|
|
Nonutility gas gathering and processing
|
|
3-50
years
|
|
|
LNG facility
|
|
40 years
|
|
|
General and other
|
|
5-59
years
|
|
• | Orders issued by regulatory commissions, legislation and judicial actions; |
• | Past experience; |
• | Discussions with applicable regulatory authorities and legal counsel; |
• | Forecasted earnings; and |
• | Considerations around the likelihood of impacts from events such as unusual weather conditions, extreme weather events and other natural disasters and unplanned outages of facilities. |
104
|
|
|
|
|
• |
Debt securities classified as trading securities
|
• |
Debt securities classified as available-for-sale securities
available-for-sale
debt securities, including those held in Dominion Energy’s merchant generation nuclear decommissioning trusts, net realized gains and losses (including any other-than-temporary impairments) are included in other income and unrealized gains and losses are reported as a component of AOCI,
after-tax.
|
• |
Equity method investments
|
|
|
|
105
|
|
investee. Dominion Energy and Dominion Energy Gas’ investments are included in investments in equity method affiliates in their Consolidated Balance Sheets. Dominion Energy and Dominion Energy Gas record equity method adjustments in other income and earnings from equity method investees, respectively, in their Consolidated Statements of Income, including their proportionate share of investee income or loss, gains or losses resulting from investee capital transactions, amortization of certain differences between the carrying value and the equity in the net assets of the investee at the date of investment and other adjustments required by the equity method. |
• |
Cost method investments
|
• |
The recognition provisions of other-than-temporary impairment guidance apply only to debt securities classified as
available-for-sale
or
held-to-maturity.
|
• |
Using information obtained from their nuclear decommissioning trust fixed-income investment managers, Dominion Energy and Virginia Power record in earnings any unrealized loss for a debt security when the manager intends to sell the debt security or it is
more-likely-than-not
that the manager will have to sell the debt security before recovery of its fair value up to its cost basis. If that is not the case, but the debt security is deemed to have experienced a credit loss, Dominion Energy and Virginia Power record the credit loss in earnings and any remaining portion of the unrealized loss in AOCI. Credit losses are evaluated primarily by considering the credit ratings of the issuer, prior instances of
non-performance
by the issuer and other factors.
|
106
|
|
|
|
|
|
|
|
107
|
|
108
|
|
|
|
|
• | DESC will not file an application for a general rate case with the South Carolina Commission with a requested effective date earlier than January 2021; |
• | PSNC will not file an application for a general rate case with the North Carolina Commission with a requested effective date earlier than April 2021; |
• | Dominion Energy has committed to increasing SCANA’s historical level of corporate contributions to charities by $1 million per year over five years; |
• | Dominion Energy will maintain DESC and PSNC’s headquarters in Cayce, South Carolina and Gastonia, North Carolina, respectively; and |
• | Dominion Energy will seek to minimize reductions in local employment by allowing some DES employees supporting shared and common services functions and activities to be located in Cayce, South Carolina where it makes economic and practical sense to do so. |
|
Amount
|
|
||
(millions)
|
|
|
||
Total current assets
(1)
|
$
|
1,782
|
|
|
Investments
(2)
|
|
224
|
|
|
Property, plant and equipment
(3)(4)
|
|
11,006
|
|
|
Goodwill
|
|
2,609
|
|
|
Regulatory assets
(5)
|
|
3,940
|
|
|
Other deferred charges and other assets, including intangible assets
(6)
|
|
430
|
|
|
Total Assets
|
|
19,991
|
|
|
Total current liabilities
(7)
|
|
1,556
|
|
|
Long-term debt
|
|
6,707
|
|
|
Deferred income taxes
|
|
1,068
|
|
|
Regulatory liabilities
|
|
2,706
|
|
|
Other deferred credits and other liabilities
(8)
|
|
1,115
|
|
|
Total Liabilities
|
|
13,152
|
|
|
Total purchase price
(9)
|
$
|
6,839
|
|
(1)
|
Includes $389 million of cash, restricted cash and equivalents, of which $115 million is considered restricted.
|
(2)
|
Includes $31 million for equity method investments. The fair value adjustment on the equity method investments is considered to be equity method goodwill and is not amortized.
|
(
3
)
|
Includes $105 million of certain property, plant and equipment associated with the NND Project for which Dominion Energy committed to forgo recovery in accordance with the SCANA Merger Approval Order. As a result, Dominion Energy’s Consolidated Statements of Income for the year ended December 31, 2019 include a charge of $105 million ($79 million
after-tax),
included in impairment of assets and other charges (reflected in the Corporate and Other segment).
|
(
4
)
|
Nonregulated property, plant and equipment, excluding land, will be depreciated on a straight-line basis over the remaining useful lives of such property, primarily ranging from 5 to 78 years.
|
(
5
)
|
Includes $258 million of certain income
tax-related
regulatory assets associated with the NND Project for which Dominion Energy committed to forgo recovery in accordance with the SCANA Merger Approval Order. See Note 5 for additional information.
|
(
6
)
|
Intangible assets have an estimated weighted-average amortization period of approximately five years.
|
(
7
)
|
Includes $40 million outstanding under letters of credit advances, which were repaid in January 2019, as well as $173 million outstanding commercial paper under various credit facilities. As discussed in Note 17, all credit facilities were terminated in 2019.
|
(
8
)
|
Includes a $379 million pension and other postretirement benefit liability.
|
(
9
)
|
Includes stock-based compensation awards with a fair value of $21 million.
|
|
|
|
109
|
|
|
Twelve
Months Ended December 31, |
|||||||
|
2019
(1)
|
|
2018
(1)
|
|||||
(millions, except EPS)
|
|
|
|
|||||
Operating Revenue
|
$
|
17,579
|
|
$ |
17,505
|
|||
Net income attributable to Dominion Energy
|
|
3,266
|
|
2,081
|
||||
Earnings Per Common Share – Basic
|
$
|
4.04
|
|
$ |
2.78
|
|||
Earnings Per Common Share – Diluted
|
$
|
4.00
|
|
$ |
2.77
|
(1)
|
Amounts include adjustments for
non-recurring
costs directly related to the SCANA Combination.
|
Completed Acquisition
Date |
Seller
|
Number of
Projects |
Project Location
|
Project Name(s)
|
Initial
Acquisition (millions)
(1)
|
Project
Cost (millions)
(2)
|
Date of
Commercial Operations |
MW
Capacity |
||||||||||||||||||||||||
February 2017
|
Community Energy Solar, LLC
|
1
|
Virginia
|
Amazon Solar Farm Virginia—Southhampton
|
$ |
29
|
$ |
205
|
December 2017
|
100
|
||||||||||||||||||||||
March 2017
|
Solar Frontier Americas Holding LLC
|
1
|
(3)
|
California
|
Midway II
|
77
|
78
|
June 2017
|
30
|
|||||||||||||||||||||||
May 2017
|
Cypress Creek Renewables, LLC
|
1
|
North Carolina
|
IS37
|
154
|
160
|
June 2017
|
79
|
||||||||||||||||||||||||
June 2017
|
Hecate Energy Virginia C&C LLC
|
1
|
Virginia
|
Clarke County
|
16
|
16
|
August 2017
|
10
|
||||||||||||||||||||||||
June 2017
|
Strata Solar Development, LLC/Moorings Farm 2 Holdco, LLC
|
2
|
North Carolina
|
Fremont, Moorings 2
|
20
|
20
|
November 2017
|
10
|
||||||||||||||||||||||||
September 2017
|
Hecate Energy Virginia C&C LLC
|
1
|
Virginia
|
Cherrydale
|
40
|
41
|
November 2017
|
20
|
||||||||||||||||||||||||
October 2017
|
Strata Solar Development, LLC
|
2
|
North Carolina
|
Clipperton, Pikeville
|
20
|
21
|
November 2017
|
10
|
(1)
|
The purchase price was primarily allocated to property, plant and equipment.
|
(2)
|
Includes acquisition cost.
|
(3)
|
In April 2017, Dominion Energy discontinued efforts on the acquisition of the additional 20 MW solar project from Solar Frontier Americas Holding LLC.
|
110
|
|
|
|
|
|
Period Ended
November 6, 2019 |
|
Year Ended
December 31, 2018 |
Year Ended
December 31, 2017 |
||||||||
(millions)
|
|
|
|
|||||||||
Operating revenue
|
$
|
594
|
|
$ |
729
|
$ |
728
|
|||||
Depreciation and amortization
|
|
73
|
|
76
|
71
|
|||||||
Other operating expenses
|
|
399
|
|
444
|
428
|
|||||||
Other income
|
|
61
|
|
72
|
50
|
|||||||
Interest and related charges
|
|
33
|
|
37
|
33
|
|||||||
Income tax expense
|
|
26
|
|
53
|
86
|
|||||||
Net income from discontinued operations
|
|
124
|
|
191
|
160
|
|
At December 31, 2018
|
|||
(millions)
|
|
|||
Current assets of discontinued operations
(1)
|
$ |
423
|
||
Investments
|
2
|
|||
Property, plant and equipment, net
|
3,669
|
|||
Regulatory assets
|
711
|
|||
Other deferred charges and other assets, including goodwill and intangible assets
|
1,275
|
|||
Noncurrent assets of discontinued operations
|
5,657
|
|||
Current liabilities of discontinued operations
|
1,262
|
|||
Long-term debt
|
1,300
|
|||
Deferred income taxes and investment tax credits
|
716
|
|||
Regulatory liabilities
|
747
|
|||
Other deferred credits and liabilities
|
108
|
|||
Noncurrent liabilities of discontinued operations
|
2,871
|
(1)
|
Includes cash and cash equivalents of $9 million as of December 31, 2018.
|
|
Period Ended
November 6, 2019 |
|
Year Ended
December 31, 2018 |
Year Ended
December 31, 2017 |
||||||||
(millions)
|
|
|
|
|||||||||
Capital expenditures
|
$
|
299
|
|
$ |
352
|
$ |
348
|
|||||
Significant noncash items
:
|
|
|
|
|
|
|||||||
Charge related to a voluntary retirement program
|
|
20
|
|
—
|
—
|
|||||||
Accrued capital expenditures
|
|
2
|
|
5
|
8
|
|
Period Ended
November 6, 2019 |
|
Year Ended
December 31, 2018 |
Year Ended
December 31, 2017 |
||||||||
(millions)
|
|
|
|
|||||||||
Operating revenue
|
$
|
125
|
|
$ |
220
|
$ |
114
|
|||||
Depreciation and amortization
|
|
4
|
|
15
|
15
|
|||||||
Impairment of assets and related charges
|
|
—
|
|
219
|
—
|
|||||||
Other operating expenses
|
|
97
|
|
206
|
91
|
|||||||
Income tax expense (benefit)
|
|
7
|
|
(53
|
) |
5
|
||||||
Net income (loss) from discontinued operations
|
$
|
17
|
|
$ |
(167
|
) | $ |
3
|
|
|
|
111
|
|
|
At December 31, 2018
|
|||
(millions)
|
|
|||
Current assets of discontinued operations
(1)
|
$ |
21
|
||
Noncurrent assets of discontinued operations
(2)
|
192
|
|||
Current liabilities of discontinued operations
|
11
|
|||
Noncurrent liabilities of discontinued operations
|
25
|
(1)
|
Includes cash and cash equivalents of less than $1 million.
|
(2)
|
Primarily property, plant and equipment, net.
|
|
Period Ended
November 6, 2019 |
|
Year Ended
December 31, 2018 |
Year Ended
December 31, 2017 |
||||||||
(millions)
|
|
|
|
|||||||||
Capital expenditures
|
$
|
11
|
|
$ |
6
|
$ |
8
|
|||||
Significant noncash
items
:
|
|
|
|
|
|
|||||||
Impairment of assets and related charges
|
|
—
|
(219
|
) |
—
|
Year Ended December 31,
|
2019
|
|
2018
|
|||||
(millions)
|
|
|
|
|||||
Dominion Energy
|
|
|
|
|
||||
Regulated electric sales:
|
|
|
|
|
||||
Residential
|
$
|
4,325
|
|
$ |
3,413
|
|||
Commercial
|
|
3,219
|
|
2,503
|
||||
Industrial
|
|
683
|
|
490
|
||||
Government and other retail
|
|
873
|
|
854
|
||||
Wholesale
|
|
176
|
|
137
|
||||
Nonregulated electric sales
|
|
926
|
|
1,294
|
||||
Regulated gas sales:
|
|
|
|
|
||||
Residential
|
|
1,343
|
|
818
|
||||
Commercial
|
|
457
|
|
221
|
||||
Other
|
|
117
|
|
36
|
||||
Nonregulated gas sales
|
|
496
|
|
214
|
||||
Regulated gas transportation and storage:
|
|
|
|
|
||||
FERC-regulated
|
|
1,057
|
|
1,091
|
||||
State-regulated
|
|
742
|
|
640
|
||||
Nonregulated gas transportation and storage
|
|
676
|
|
442
|
||||
Other regulated revenues
|
|
259
|
|
179
|
||||
Other nonregulated revenues
(1)(2)
|
|
415
|
|
563
|
||||
Total operating revenue from contracts with customers
|
|
15,764
|
|
12,895
|
||||
Other revenues
(2)(3)
|
|
808
|
|
471
|
||||
Total operating revenue
|
$
|
16,572
|
|
$ |
13,366
|
|||
Virginia Power
|
|
|
|
|
||||
Regulated electric sales:
|
|
|
|
|
||||
Residential
|
$
|
3,657
|
|
$ |
3,413
|
|||
Commercial
|
|
2,712
|
|
2,503
|
||||
Industrial
|
|
455
|
|
490
|
||||
Government and other retail
|
|
823
|
|
854
|
||||
Wholesale
|
|
128
|
|
137
|
||||
Other regulated revenues
|
|
190
|
|
132
|
||||
Other nonregulated revenues
(1)(2)
|
|
71
|
|
55
|
||||
Total operating revenue from contracts with customers
|
|
8,036
|
|
7,584
|
||||
Other revenues
(1)(3)
|
|
72
|
|
35
|
||||
Total operating revenue
|
$
|
8,108
|
|
$ |
7,619
|
|||
Dominion Energy Gas
|
|
|
|
|
||||
Regulated gas sales—wholesale
|
$
|
9
|
|
$ |
25
|
|||
Nonregulated gas sales
(1)
|
|
6
|
|
7
|
||||
Regulated gas transportation and storage
|
|
1,300
|
|
1,249
|
||||
Nonregulated gas transportation and storage
|
|
676
|
|
442
|
||||
Management service revenue
(1)
|
|
162
|
|
257
|
||||
Other regulated revenues
(1
)(2
)
|
|
7
|
|
19
|
||||
Other nonregulated revenues
(1
)(2
)
|
|
5
|
|
3
|
||||
Total operating revenue from contracts with customers
|
|
2,165
|
|
2,002
|
||||
Other revenues
|
|
4
|
|
(6
|
) | |||
Total operating revenue
|
$
|
2,169
|
|
$ |
1,996
|
112
|
|
|
|
|
(1)
|
See Notes 9 and 25 for amounts attributable to related parties and affiliates.
|
(2)
|
Amounts above include sales which are considered to be goods transferred at a point in time. For the years ended December 31, 2019 and 2018, such amounts included $171 million and $241 million, respectively, at Dominion Energy and $5 million and $10 million, respectively, at Dominion Energy Gas, primarily consisting of NGL sales. Additionally, amounts above include sales of renewable energy credits. For the years ended December 31, 2019 and 2018, such sales were $24 million and $ 17 million, respectively, at Dominion Energy and $17 million and $11 million, respectively, at Virginia Power.
|
(3)
|
Includes alternative revenue of $66 million and $52 million for the year ended December 31, 2019 at Dominion Energy and Virginia Power, respectively, and $15 million for year ended December 31, 2018 at both Dominion Energy and Virginia Power.
|
Revenue expected to be recognized on multi-year
contracts in place at December 31, 2019
|
2020
|
|
2021
|
2022
|
2023
|
2024
|
Thereafter
|
Total
|
||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Dominion Energy
|
$
|
1,569
|
|
$ |
1,470
|
$ |
1,363
|
$ |
1,216
|
$ |
1,104
|
$ |
12,519
|
$ |
19,241
|
|||||||||||||
Virginia Power
|
|
3
|
|
1
|
—
|
—
|
—
|
—
|
4
|
|||||||||||||||||||
Dominion Energy Gas
|
|
1,723
|
|
1,624
|
1,495
|
1,325
|
1,185
|
12,783
|
20,135
|
Year Ended December 31
|
2017
|
|
||
(millions)
|
|
|
||
Dominion Energy
|
|
|
|
|
Electric sales:
|
|
|
|
|
Regulated
|
$ |
7,383
|
||
Nonregulated
|
1,429
|
|||
Gas sales:
|
|
|||
Regulated
|
1,067
|
|||
Nonregulated
|
457
|
|||
Gas transportation and storage
|
1,786
|
|||
Other
|
464
|
|||
Total operating revenue
|
$ |
12,586
|
||
Virginia Power
|
|
|||
Regulated electric sales
|
$ |
7,383
|
||
Other
|
173
|
|||
Total operating revenue
|
$ |
7,556
|
||
Dominion Energy Gas
|
|
|||
Gas sales:
|
|
|||
Regulated
|
$ |
6
|
||
Nonregulated
|
6
|
|||
Gas transportation and storage
|
1,291
|
|||
Other
|
220
|
|||
Total operating revenue
|
$ |
1,523
|
|
|
|
113
|
|
|
Dominion Energy
|
Virginia Power
|
Dominion Energy Gas
|
|||||||||||||||||||||||||||||||||
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
2019
|
|
2018
|
2017
|
2019
|
|
2018
|
2017
|
||||||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Current:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Federal
|
$
|
32
|
|
$ |
(45
|
) | $ |
(1
|
) |
$
|
286
|
|
$ |
36
|
$ |
432
|
$
|
130
|
|
$ |
(227
|
) | $ |
75
|
||||||||||||
State
|
|
103
|
|
108
|
(26
|
) |
|
58
|
|
40
|
73
|
|
17
|
|
31
|
13
|
||||||||||||||||||||
Total current expense (benefit)
|
|
135
|
|
63
|
(27
|
) |
|
344
|
|
76
|
505
|
|
147
|
|
(196
|
) |
88
|
|||||||||||||||||||
Deferred:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Federal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
2017 Tax Reform Act impact
(1)
|
|
—
|
|
46
|
(851
|
) |
|
—
|
|
21
|
(93
|
) |
|
—
|
|
(6
|
) |
(246
|
) | |||||||||||||||||
Taxes before operating loss carryforwards, investment tax credits and tax reform
|
|
182
|
|
436
|
739
|
|
(128
|
)
|
199
|
319
|
|
(36
|
)
|
343
|
88
|
|||||||||||||||||||||
Tax utilization expense (benefit) of operating loss carryforwards
|
|
119
|
|
92
|
174
|
|
—
|
|
—
|
4
|
|
—
|
|
—
|
—
|
|||||||||||||||||||||
Investment tax credits
|
|
(51
|
)
|
(56
|
) |
(200
|
) |
|
(34
|
)
|
(51
|
) |
(23
|
) |
|
—
|
|
—
|
—
|
|||||||||||||||||
State
|
|
(93
|
)
|
(1
|
) |
132
|
|
22
|
|
55
|
59
|
|
(10
|
)
|
(17
|
) |
5
|
|||||||||||||||||||
Total deferred expense (benefit)
|
|
157
|
|
517
|
(6
|
) |
|
(140
|
)
|
224
|
266
|
|
(46
|
)
|
320
|
(153
|
) | |||||||||||||||||||
Investment tax credit-gross deferral
|
|
62
|
|
2
|
5
|
|
62
|
|
2
|
5
|
|
—
|
|
—
|
—
|
|||||||||||||||||||||
Investment tax credit-amortization
|
|
(3
|
)
|
(2
|
) |
(2
|
) |
|
(2
|
)
|
(2
|
) |
(2
|
) |
|
—
|
|
—
|
—
|
|||||||||||||||||
Total income tax expense (benefit)
|
$
|
351
|
|
$ |
580
|
$ |
(30
|
) |
$
|
264
|
|
$ |
300
|
$ |
774
|
$
|
101
|
|
$ |
124
|
$ |
(65
|
) |
(1)
|
The 2017 Tax Reform Act impact for Dominion Energy Gas includes an expense of $8 million for the year ended December 31, 2018 and a benefit of $93 million for the year ended December 31, 2017 arising from discontinued operations.
|
114
|
|
|
|
|
|
Dominion Energy
|
Virginia Power
|
Dominion Energy Gas
|
|||||||||||||||||||||||||||||||||
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
2019
|
|
2018
|
2017
|
2019
|
|
2018
|
2017
|
||||||||||||||||||||||||
U.S. statutory rate
|
|
21.0
|
%
|
21.0
|
% |
35.0
|
% |
|
21.0
|
%
|
21.0
|
% |
35.0
|
% |
|
21.0
|
%
|
21.0
|
% |
35.0
|
% | |||||||||||||||
Increases (reductions) resulting from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
State taxes, net of federal benefit
|
|
1.3
|
|
3.0
|
2.0
|
|
4.5
|
|
4.7
|
3.7
|
|
2.5
|
|
3.2
|
2.6
|
|||||||||||||||||||||
Investment tax credits
|
|
(5.7
|
)
|
(1.9
|
) |
(6.3
|
) |
|
(2.9
|
)
|
(3.5
|
) |
(0.8
|
) |
|
—
|
|
—
|
—
|
|||||||||||||||||
Production tax credits
|
|
(1.1
|
)
|
(0.7
|
) |
(0.7
|
) |
|
(0.7
|
)
|
(0.7
|
) |
(0.4
|
) |
|
—
|
|
—
|
—
|
|||||||||||||||||
Valuation allowances
|
|
0.1
|
|
0.3
|
0.2
|
|
—
|
|
—
|
—
|
|
(0.2
|
)
|
—
|
0.3
|
|||||||||||||||||||||
Reversal of excess deferred income taxes
|
|
(2.0
|
)
|
(2.0
|
) |
—
|
|
(3.1
|
)
|
(3.2
|
) |
—
|
|
(0.8
|
)
|
(0.6
|
) |
—
|
||||||||||||||||||
Federal legislative change
|
|
—
|
|
1.5
|
(27.5
|
) |
|
—
|
|
1.3
|
(4.0
|
) |
|
—
|
|
(0.5
|
) |
(41.0
|
) | |||||||||||||||||
State legislative change
|
|
—
|
|
(0.6
|
) |
—
|
|
—
|
|
—
|
—
|
|
—
|
|
(2.0
|
) |
(0.7
|
) | ||||||||||||||||||
Write-off
of regulatory assets
|
|
10.9
|
|
—
|
—
|
|
—
|
|
—
|
—
|
|
—
|
|
—
|
—
|
|||||||||||||||||||||
Change in tax status
|
|
(2.8
|
)
|
—
|
—
|
|
—
|
|
—
|
—
|
|
(6.0
|
)
|
—
|
—
|
|||||||||||||||||||||
AFUDC—equity
|
|
(1.8
|
)
|
(0.8
|
) |
(1.4
|
) |
|
—
|
|
(0.5
|
) |
(0.6
|
) |
|
(0.5
|
)
|
(0.3
|
) |
(0.9
|
) | |||||||||||||||
Employee stock ownership plan deduction
|
|
(0.7
|
)
|
(0.4
|
) |
(0.6
|
) |
|
—
|
|
—
|
—
|
|
—
|
|
—
|
—
|
|||||||||||||||||||
Other, net
|
|
1.1
|
|
(0.9
|
) |
(1.7
|
) |
|
(0.2
|
)
|
(0.1
|
) |
0.6
|
|
(3.4
|
)
(1)
|
(4.4
|
)
(1)
|
(6.0
|
)
(1)
|
||||||||||||||||
Effective tax rate
|
|
20.3
|
%
|
18.5
|
% |
(1.0
|
)% |
|
18.6
|
%
|
19.0
|
% |
33.5
|
% |
|
12.6
|
%
|
16.4
|
% |
(10.7
|
)% |
(1)
|
Includes (3.2)%, (4.6)% and (6.7)% relating to the absence of tax on noncontrolling interest in 2019, 2018 and 2017, respectively.
|
|
|
|
115
|
|
|
Dominion Energy
|
Virginia Power
|
Dominion Energy
Gas |
|||||||||||||||||||||
At December 31,
|
2019
|
|
2018
|
2019
|
|
2018
|
2019
|
|
2018
|
|||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Deferred income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total deferred income tax assets
|
$
|
3,736
|
|
$ |
2,748
|
$
|
1,207
|
|
$ 1,054
|
|
$ 206
|
|
$ |
296
|
||||||||||
Total deferred income tax liabilities
|
|
9,883
|
|
7,813
|
|
4,058
|
|
4,020
|
|
1,494
|
|
1,626
|
||||||||||||
Total net deferred income tax liabilities
|
$
|
6,147
|
|
$ |
5,065
|
$
|
2,851
|
|
$2,966
|
|
$1,288
|
|
$ |
1,330
|
||||||||||
Total deferred income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Plant and equipment, primarily depreciation method and basis differences
|
$
|
6,616
|
|
$ |
4,933
|
$
|
3,359
|
|
$ |
3,367
|
$
|
742
|
|
$ |
671
|
|||||||||
Excess deferred income taxes
|
|
(1,306
|
)
|
(993
|
) |
|
(672
|
)
|
(678
|
) |
|
(149
|
)
|
(156
|
) | |||||||||
Unrecovered NND Project costs
|
|
553
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
||||||||||||
DESC rate refund
|
|
(169
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
||||||||||||
Toshiba Settlement
|
|
(219
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
||||||||||||
Nuclear decommissioning
|
|
909
|
|
815
|
|
290
|
|
273
|
|
—
|
|
—
|
||||||||||||
Deferred state income taxes
|
|
863
|
|
626
|
|
302
|
|
284
|
|
199
|
|
203
|
||||||||||||
Federal benefit of deferred state income taxes
|
|
(184
|
)
|
(132
|
) |
|
(63
|
)
|
(60
|
) |
|
(42
|
)
|
(43
|
) | |||||||||
Deferred fuel, purchased energy and gas costs
|
|
30
|
|
60
|
|
1
|
|
59
|
|
—
|
|
(1
|
) | |||||||||||
Pension benefits
|
|
174
|
|
81
|
|
(153
|
)
|
(132
|
) |
|
154
|
|
134
|
|||||||||||
Other postretirement benefits
|
|
(37
|
)
|
(5
|
) |
|
62
|
|
55
|
|
(6
|
)
|
(3
|
) | ||||||||||
Loss and credit carryforwards
|
|
(1,832
|
)
|
(1,546
|
) |
|
(280
|
)
|
(183
|
) |
|
(1
|
)
|
(5
|
) | |||||||||
Valuation allowances
|
|
161
|
|
158
|
|
5
|
|
5
|
|
1
|
|
6
|
||||||||||||
Partnership basis differences
|
|
823
|
|
1,135
|
|
—
|
|
—
|
|
423
|
|
570
|
||||||||||||
Other
|
|
(235
|
)
|
(67
|
) |
|
—
|
|
(24
|
) |
|
(33
|
)
|
(46
|
) | |||||||||
Total net deferred income tax liabilities
|
$
|
6,147
|
|
$ |
5,065
|
$
|
2,851
|
|
$2,966
|
|
$1,288
|
|
$ |
1,330
|
||||||||||
Deferred Investment Tax Credits – Regulated Operations
|
|
130
|
|
51
|
|
111
|
|
51
|
|
—
|
|
—
|
||||||||||||
Total Deferred Taxes and Deferred Investment Tax Credits
|
$
|
6,277
|
|
$ |
5,116
|
$
|
2,962
|
|
$3,017
|
|
$1,288
|
|
$ |
1,330
|
|
Deductible
Amount |
Deferred
Tax Asset |
Valuation
Allowance |
Expiration
Period |
||||||||||||
(millions)
|
|
|
|
|
|
|||||||||||
Federal losses
|
|
$ 1,361
|
|
$
|
286
|
|
|
$ —
|
|
|
2037
|
|
||||
Federal investment credits
|
|
—
|
|
|
922
|
|
|
—
|
|
|
2035-2039
|
|
||||
Federal production credits
|
|
—
|
|
|
126
|
|
|
—
|
|
|
2035-2039
|
|
||||
Other federal credits
|
|
—
|
|
|
40
|
|
|
—
|
|
|
2035-2038
|
|
||||
State losses
|
|
3,074
|
|
|
173
|
|
|
(57
|
)
|
|
2020-2038
|
|
||||
State minimum tax credits
|
|
—
|
|
|
165
|
|
|
—
|
|
|
No expiration
|
|
||||
State investment and other credits
|
|
—
|
|
|
144
|
|
|
(98
|
)
|
|
2020-2031
|
|
||||
Total
|
|
$4,435
|
|
$
|
1,856
|
|
|
$(155)
|
|
|
|
|
|
Deductible
Amount |
Deferred
Tax Asset |
Valuation
Allowance |
Expiration
Period |
||||||||||||
(millions)
|
|
|
|
|
|
|||||||||||
Federal investment credits
|
|
$ —
|
|
|
$ 213
|
|
|
$ —
|
|
|
2035-2039
|
|
||||
Federal production and other credits
|
|
—
|
|
|
58
|
|
|
—
|
|
|
2035-2039
|
|
||||
State investment credits
|
|
—
|
|
|
9
|
|
|
(5
|
)
|
|
2024
|
|
||||
Total
|
|
$
—
|
|
|
$ 280
|
|
|
$ (5
|
)
|
|
|
|
116
|
|
|
|
|
|
Dominion Energy
|
Virginia Power
|
Dominion Energy
Gas |
|||||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
2017
|
2019
|
|
2018
|
2017
|
2019
|
|
2018
|
2017
|
||||||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Balance at January 1
|
$
|
44
|
|
$ |
38
|
$ |
64
|
$
|
2
|
|
$ |
4
|
$ |
13
|
|
$2
|
|
$ |
2
|
$9
|
||||||||||||||||
Acquired unrecognized tax benefits
|
|
129
|
(1)
|
—
|
—
|
|
—
|
|
—
|
—
|
|
—
|
|
—
|
—
|
|||||||||||||||||||||
Increases-prior period positions
|
|
—
|
|
10
|
1
|
|
—
|
|
—
|
—
|
|
—
|
|
—
|
—
|
|||||||||||||||||||||
Decreases-prior period positions
|
|
—
|
|
—
|
(9
|
) |
|
—
|
|
—
|
(1
|
) |
|
—
|
|
—
|
—
|
|||||||||||||||||||
Increases-current period positions
|
|
9
|
|
10
|
5
|
|
—
|
|
—
|
—
|
|
—
|
|
—
|
—
|
|||||||||||||||||||||
Settlements with tax authorities
|
|
(7
|
)
|
(6
|
) |
(23
|
) |
|
(2
|
)
|
(1
|
) |
(8
|
) |
|
—
|
|
—
|
(7
|
) | ||||||||||||||||
Expiration of statutes of limitations
|
|
—
|
|
(8
|
) |
—
|
|
—
|
|
(1
|
) |
—
|
|
—
|
|
—
|
—
|
|||||||||||||||||||
Balance at December 31
|
$
|
175
|
|
$ |
44
|
$ |
38
|
$
|
—
|
|
$ |
2
|
$ |
4
|
|
$2
|
|
$ |
2
|
$2
|
(1)
|
Acquired unrecognized tax benefits reflect $106 million plus increases in prior period positions of $76 million and decreases in prior period positions of $53 million that were recorded through purchase accounting.
|
State
|
Earliest
Open Tax Year |
|
||
Pennsylvania
(1)
|
|
2012
|
|
|
Connecticut
|
|
2016
|
|
|
Virginia
(2)
|
|
2016
|
|
|
West Virginia
(1)
|
|
2016
|
|
|
New York
(1)
|
|
2015
|
|
|
Utah
|
|
2016
|
|
|
South Carolina
|
|
2012
|
|
(1)
|
Considered a major state for Dominion Energy Gas’ operations.
|
(2)
|
Considered a major state for Virginia Power’s operations.
|
|
|
|
117
|
|
•
|
Forward commodity prices |
•
|
Transaction prices |
•
|
Price volatility |
•
|
Price correlation |
•
|
Volumes |
•
|
Commodity location |
•
|
Interest rates |
•
|
Credit quality of counterparties and the Companies |
•
|
Credit enhancements |
•
|
Time value |
•
|
Interest rate curves |
•
|
Credit quality of counterparties and the Companies |
•
|
Notional value |
•
|
Credit enhancements |
•
|
Time value |
•
|
Foreign currency forward exchange rates |
•
|
Interest rates |
•
|
Credit quality of counterparties and the Companies |
•
|
Notional value |
•
|
Credit enhancements |
•
|
Time value |
•
|
Quoted securities prices and indices |
•
|
Securities trading information including volume and restrictions |
•
|
Maturity |
•
|
Interest rates |
•
|
Credit quality |
• | Level 1—Quoted prices (unadjusted) in active markets for identical assets and liabilities that they have the ability to access at the measurement date. Instruments categorized in Level 1 primarily consist of financial instruments such as certain exchange-traded derivatives, and exchange-listed equities, U.S. and international equity securities, mutual funds and certain Treasury securities held in nuclear decommissioning trust funds for Dominion Energy and Virginia Power, benefit plan trust funds for Dominion Energy and Dominion Energy Gas, and rabbi trust funds for Dominion Energy. |
• | Level 2—Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived from observable market data by correlation or other means. Instruments categorized in Level 2 primarily include commodity forwards and swaps, interest rate swaps, foreign currency swaps and cash and cash equivalents, corporate debt instruments, government securities and other fixed income investments held in nuclear decommissioning trust funds for Dominion Energy and Virginia Power, benefit plan trust funds for Dominion Energy and Dominion Energy Gas and rabbi trust funds for Dominion Energy. |
• | Level 3—Unobservable inputs for the asset or liability, including situations where there is little, if any, market activity for the asset or liability. Instruments categorized in Level 3 for the Companies consist of long-dated commodity derivatives, FTRs, certain natural gas and power options and other modeled commodity derivatives. |
118
|
|
|
|
|
|
Fair Value
(millions) |
Valuation Techniques
|
Unobservable Input
|
Range
|
Weighted
Average
(1)
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|||||||||||||
Physical and financial forwards:
|
|
|
|
|
|
|
|
|||||||||||||
Natural gas
(2)
|
|
$ 13
|
|
Discounted cash flow
|
Market price (per Dth)
(3)
|
(1) -
|
—
|
|||||||||||||
FTRs
|
|
6
|
|
Discounted cash flow
|
Market price (per MWh)
(3)
|
(1) - 5
|
1
|
|||||||||||||
Total assets
|
|
$ 19
|
|
|
|
|
|
|||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|||||||||||||
Physical and financial forwards:
|
|
|
|
|
|
|
|
|||||||||||||
Natural gas
(2)
|
|
$ 43
|
|
Discounted cash flow
|
Market price (per Dth)
(3)
|
(2) - 4
|
(1
|
) | ||||||||||||
FTRs
|
|
5
|
|
Discounted cash flow
|
Market price (per MWh)
(3)
|
(4) - 4
|
—
|
|||||||||||||
Physical options:
|
|
|
|
|
|
|
|
|||||||||||||
Natural gas
|
|
8
|
|
Option model
|
Market price (per Dth)
(3)
|
1 - 4
|
3
|
|||||||||||||
|
|
|
|
|
Price volatility
(4)
|
24% - 66%
|
37
|
% | ||||||||||||
Total liabilities
|
|
$ 56
|
|
|
|
|
|
(1)
|
Averages weighted by volume.
|
(2)
|
Includes basis.
|
(3)
|
Represents market prices beyond defined terms for Levels 1 and 2.
|
(4)
|
Represents volatilities unrepresented in published markets.
|
Significant Unobservable
Inputs |
Position
|
Change to Input
|
Impact on Fair
Value Measurement |
|||||||||
Market price
|
Buy
|
Increase (decrease)
|
Gain (loss)
|
|||||||||
Market price
|
Sell
|
Increase (decrease)
|
Loss (gain)
|
|||||||||
Price volatility
|
Buy
|
Increase (decrease)
|
Gain (loss)
|
|||||||||
Price volatility
|
Sell
|
Increase (decrease)
|
Loss (gain)
|
|
|
|
119
|
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
(millions)
|
|
|
|
|
|
|||||||||||
December 31, 2019
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
||||||||||
Derivatives:
|
|
|
|
|
|
|
||||||||||
Commodity
|
$
|
—
|
|
$
|
55
|
|
|
$ 19
|
|
$
|
74
|
|
||||
Interest rate
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
||||
Foreign currency
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||
Investments
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S.
|
|
4,195
|
|
|
—
|
|
|
—
|
|
|
4,195
|
|
||||
Fixed income:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt instruments
|
|
—
|
|
|
463
|
|
|
—
|
|
|
463
|
|
||||
Government securities
|
|
473
|
|
|
719
|
|
|
—
|
|
|
1,192
|
|
||||
Cash equivalents and other
|
|
19
|
|
|
1
|
|
|
—
|
|
|
20
|
|
||||
Total assets
|
$
|
4,687
|
|
$
|
1,257
|
|
|
$ 19
|
|
$
|
5,963
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commodity
|
$
|
—
|
|
$
|
75
|
|
|
$ 56
|
|
$
|
131
|
|
||||
Interest rate
|
|
—
|
|
|
606
|
|
|
—
|
|
|
606
|
|
||||
Foreign currency
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Total liabilities
|
$
|
—
|
|
$
|
684
|
|
|
$56
|
|
$
|
740
|
|
||||
December 31, 2018
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
||||||||||
Derivatives:
|
|
|
|
|
|
|
||||||||||
Commodity
|
$ |
—
|
$ |
180
|
$ 70
|
$ |
250
|
|||||||||
Interest rate
|
—
|
18
|
—
|
18
|
||||||||||||
Foreign currency
|
—
|
26
|
—
|
26
|
||||||||||||
Investments
(1)
:
|
|
|
|
|
||||||||||||
Equity securities:
|
|
|
|
|
||||||||||||
U.S.
|
3,277
|
—
|
—
|
3,277
|
||||||||||||
Fixed income:
|
|
|
|
|
||||||||||||
Corporate debt instruments
|
—
|
431
|
—
|
431
|
||||||||||||
Government securities
|
455
|
688
|
—
|
1,143
|
||||||||||||
Cash equivalents and other
|
11
|
—
|
—
|
11
|
||||||||||||
Total assets
|
$ |
3,743
|
$ |
1,343
|
$ 70
|
$ |
5,156
|
|||||||||
Liabilities
|
|
|
|
|
||||||||||||
Derivatives:
|
|
|
|
|
||||||||||||
Commodity
|
$ |
—
|
$ |
129
|
$ 6
|
$ |
135
|
|||||||||
Interest rate
|
—
|
142
|
—
|
142
|
||||||||||||
Foreign currency
|
—
|
2
|
—
|
2
|
||||||||||||
Total liabilities
|
$ |
—
|
$ |
273
|
$ 6
|
$ |
279
|
(1)
|
Includes investments held in the nuclear decommissioning and rabbi trusts. Excludes $274 million and $220 million of assets at December 31, 2019 and 2018, respectively, measured at fair value using NAV (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.
|
120
|
|
|
|
|
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|
||||||||
Balance at January 1,
|
$
|
64
|
|
$ |
150
|
$ |
139
|
|||||
Total realized and unrealized gains (losses):
|
|
|
|
|
|
|||||||
Included in earnings:
|
|
|
|
|
|
|||||||
Operating Revenue
|
|
(1
|
)
|
(2
|
) |
3
|
||||||
Electric fuel and other energy-related purchases
|
|
(22
|
)
|
(15
|
) |
(42
|
) | |||||
Purchased gas
|
|
2
|
|
—
|
1
|
|||||||
Included in other comprehensive income (loss)
|
|
—
|
|
1
|
(2
|
) | ||||||
Included in regulatory assets/liabilities
|
|
(90
|
)
|
(44
|
) |
42
|
||||||
Settlements
|
|
17
|
|
(27
|
) |
6
|
||||||
Purchases
|
|
(10
|
)
|
—
|
—
|
|||||||
Sales
|
|
6
|
|
—
|
—
|
|||||||
Transfers out of Level 3
|
|
(3
|
)
|
1
|
3
|
|||||||
Balance at December 31,
|
$
|
(37
|
)
|
$ |
64
|
$ |
150
|
|||||
The amount of total gains (losses) for the period included in earnings
attributable to the change in unrealized gains (losses) relating to assets still held at the reporting date: |
|
|
|
|
|
|||||||
Operating Revenue
|
$
|
—
|
|
$ |
—
|
$ |
2
|
|
|
|
121
|
|
|
Fair Value
(millions) |
Valuation Techniques
|
Unobservable Input
|
Range
|
Weighted
Average
(1)
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|||||||||||||
Physical and financial forwards:
|
|
|
|
|
|
|
|
|||||||||||||
Natural gas
(2)
|
|
$ 13
|
|
Discounted cash flow
|
Market price (per Dth)
(3)
|
(1)
-
4
|
—
|
|||||||||||||
FTRs
|
|
6
|
|
Discounted cash flow
|
Market price (per MWh)
(3)
|
(1)
-
5
|
1
|
|||||||||||||
Total assets
|
|
$ 19
|
|
|
|
|
|
|||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|||||||||||||
Physical and financial forwards:
|
|
|
|
|
|
|
|
|||||||||||||
Natural gas
(2)
|
|
$ 43
|
|
Discounted cash flow
|
Market price (per Dth)
(3)
|
(2)
-
4
|
(1
|
) | ||||||||||||
FTRs
|
|
5
|
|
Discounted cash flow
|
Market price (per MWh)
(3)
|
(4)
-
4
|
—
|
|||||||||||||
Physical options:
|
|
|
|
|
|
|
|
|||||||||||||
Natural gas
|
|
8
|
|
Option model
|
Market price (per Dth)
(3)
|
1 - 4
|
3
|
|||||||||||||
|
|
|
|
|
Price volatility
(4)
|
24%—66%
|
37
|
% | ||||||||||||
Total liabilities
|
|
$ 56
|
|
|
|
|
|
(1)
|
Averages weighted by volume.
|
(2)
|
Includes basis.
|
(3)
|
Represents market prices beyond defined terms for Levels 1 and 2.
|
(4)
|
Represents volatilities unrepresented in published markets.
|
122
|
|
|
|
|
Significant Unobservable
Inputs |
Position
|
Change to Input
|
Impact on Fair
Value Measurement |
|||||||||
Market price
|
Buy
|
Increase (decrease)
|
Gain (loss)
|
|||||||||
Market price
|
Sell
|
Increase (decrease)
|
Loss (gain)
|
|||||||||
Price volatility
|
Buy
|
Increase (decrease)
|
Gain (loss)
|
|||||||||
Price volatility
|
Sell
|
Increase (decrease)
|
Loss (gain)
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
(millions)
|
|
|
|
|
|
|||||||||||
December 31, 2019
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
||||||||||
Derivatives:
|
|
|
|
|
|
|
||||||||||
Commodity
|
$
|
—
|
|
|
$ 3
|
|
|
$19
|
|
$
|
22
|
|
||||
Interest rate
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Investments
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S.
|
|
1,920
|
|
|
—
|
|
|
—
|
|
|
1,920
|
|
||||
Fixed income:
|
|
|
|
|
|
|
||||||||||
Corporate debt instruments
|
|
—
|
|
|
256
|
|
|
—
|
|
|
256
|
|
||||
Government securities
|
|
186
|
|
|
361
|
|
|
—
|
|
|
547
|
|
||||
Cash equivalents and other
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Total assets
|
$
|
2,106
|
|
|
$623
|
|
|
$19
|
|
$
|
2,748
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives:
|
|
|
|
|
|
|
||||||||||
Commodity
|
$
|
—
|
|
|
$ 47
|
|
|
$56
|
|
$
|
103
|
|
||||
Interest rate
|
|
—
|
|
|
363
|
|
|
—
|
|
|
363
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$410
|
|
|
$56
|
|
$
|
466
|
|
||||
December 31, 2018
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
||||||||||
Derivatives:
|
|
|
|
|
|
|
||||||||||
Commodity
|
$ |
—
|
$ 24
|
$66
|
$ |
90
|
||||||||||
Interest rate
|
—
|
3
|
—
|
3
|
||||||||||||
Investments
(1)
:
|
|
|
|
|
|
|
||||||||||
Equity securities:
|
|
|
|
|
|
|
||||||||||
U.S.
|
1,476
|
—
|
—
|
1,476
|
||||||||||||
Fixed income:
|
|
|
|
|
||||||||||||
Corporate debt instruments
|
—
|
221
|
—
|
221
|
||||||||||||
Government securities
|
164
|
343
|
—
|
507
|
||||||||||||
Total assets
|
$ |
1,640
|
$591
|
$66
|
$ |
2,297
|
||||||||||
Liabilities
|
|
|
|
|
||||||||||||
Derivatives:
|
|
|
|
|
||||||||||||
Commodity
|
$ |
—
|
$ 9
|
$ 6
|
$ |
15
|
||||||||||
Interest rate
|
—
|
88
|
—
|
88
|
||||||||||||
Total liabilities
|
$ |
—
|
$ 97
|
$ 6
|
$ |
103
|
(1)
|
Includes investments held in the nuclear decommissioning trusts. Excludes $159 million and $160 million of assets at December 31, 2019 and 2018, respectively, measured at fair value using NAV (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.
|
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|
||||||||
Balance at January 1,
|
$
|
60
|
|
$ |
147
|
$ |
143
|
|||||
Total realized and unrealized gains (losses):
|
|
|
|
|
|
|||||||
Included in earnings:
|
|
|
|
|
|
|||||||
Electric fuel and other energy-related purchases
|
|
(22
|
)
|
(17
|
) |
(43
|
) | |||||
Included in regulatory assets/liabilities
|
|
(88
|
)
|
(45
|
) |
40
|
||||||
Settlements
|
|
13
|
|
(25
|
) |
7
|
||||||
Balance at December 31,
|
$
|
(37
|
)
|
$ |
60
|
$ |
147
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
(millions)
|
|
|
|
|
||||||||||||
December 31, 2019
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
||||||||||
Foreign currency
|
|
$ —
|
|
|
$8
|
|
|
$ —
|
|
|
$8
|
|
||||
Total assets
|
|
$ —
|
|
|
$8
|
|
|
$ —
|
|
|
$8
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate
|
|
$ —
|
|
|
$83
|
|
|
$ —
|
|
|
$83
|
|
||||
Foreign currency
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Total liabilities
|
|
$ —
|
|
|
$86
|
|
|
$ —
|
|
|
$86
|
|
||||
December 31, 2018
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
||||||||||
Commodity
|
$ —
|
$3
|
$ —
|
$3
|
||||||||||||
Interest rate
|
—
|
2
|
—
|
2
|
||||||||||||
Foreign currency
|
—
|
26
|
—
|
26
|
||||||||||||
Total assets
|
$ —
|
$31
|
$ —
|
$31
|
||||||||||||
Liabilities
|
|
|
|
|
||||||||||||
Interest rate
|
$ —
|
$17
|
$ —
|
$17
|
||||||||||||
Foreign currency
|
—
|
2
|
—
|
2
|
||||||||||||
Total liabilities
|
$ —
|
$ 19
|
$ —
|
$ 19
|
|
2018
|
|
2017
|
|||||
(millions)
|
|
|
|
|||||
Balance at January 1,
|
|
$(2
|
) |
$(2
|
) | |||
Total realized and unrealized gains (losses):
|
|
|
|
|||||
Included in other comprehensive income (loss)
|
|
1
|
(3
|
) | ||||
Transfers out of Level 3
|
|
1
|
3
|
|||||
Balance at December 31,
|
|
$—
|
$(2
|
) |
|
|
|
123
|
|
December 31,
|
2019
|
2018
|
||||||||||||||
|
Carrying
Amount
|
|
Estimated
Fair Value
(1)
|
|
Carrying
Amount
|
Estimated
Fair Value
(1)
|
||||||||||
(millions)
|
|
|
|
|
|
|
||||||||||
Dominion Energy
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt
(2)
|
$
|
32,055
|
|
|
$36,155
|
|
$ |
29,952
|
$31,045
|
|||||||
Credit facility borrowings
|
|
—
|
|
|
—
|
|
73
|
73
|
||||||||
Junior subordinated notes
(3)
|
|
4,797
|
|
|
4,953
|
|
3,430
|
3,358
|
||||||||
Remarketable subordinated notes
(3)
|
|
—
|
|
|
—
|
|
1,386
|
1,340
|
||||||||
Virginia Power
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt
(3)
|
$
|
12,326
|
|
|
$14,281
|
|
$ |
11,671
|
$12,400
|
|||||||
Dominion Energy Gas
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt
(4)
|
$
|
5,520
|
|
|
$5,738
|
|
$ |
7,770
|
$7,803
|
|||||||
Credit facility borrowings
|
|
—
|
|
|
—
|
|
73
|
73
|
(1)
|
Fair value is estimated using market prices, where available, and interest rates currently available for issuance of debt with similar terms and remaining maturities. All fair value measurements are classified as Level 2. The carrying amount of debt issuances with short-term maturities and variable rates refinanced at current market rates is a reasonable estimate of their fair value.
|
(2)
|
Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs, discount or premium, and foreign currency remeasurement adjustments. At December 31, 2019 and 2018, includes the valuation of certain fair value hedges associated with Dominion Energy’s fixed rate debt of $4 million and $(20) million, respectively.
|
(3)
|
Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs, discount or premium.
|
(4)
|
Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs, discount or premium, and foreign currency remeasurement adjustments.
|
124
|
|
|
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
|||||||||||||||||||||||||||
|
|
|
Gross Amounts Not Offset
in the Consolidated Balance Sheet |
|
|
Gross Amounts Not Offset
in the Consolidated Balance Sheet |
|
|||||||||||||||||||||||||
|
Gross Assets
Presented in the Consolidated Balance Sheet
(1)
|
|
Financial
Instruments |
|
Cash
Collateral Received |
|
Net
Amounts |
|
Gross Assets
Presented in the Consolidated Balance Sheet
(1)
|
Financial
Instruments |
Cash
Collateral Received |
Net
Amounts |
||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Commodity contracts:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Over-the-counter
|
|
$35
|
|
|
$21
|
|
|
$—
|
|
|
$14
|
|
$175
|
$12
|
$—
|
$163
|
||||||||||||||||
Exchange
|
|
37
|
|
|
21
|
|
|
—
|
|
|
16
|
|
68
|
68
|
—
|
—
|
||||||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Over-the-counter
|
|
11
|
|
|
3
|
|
|
—
|
|
|
8
|
|
18
|
1
|
—
|
17
|
||||||||||||||||
Foreign currency contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Over-the-counter
|
|
8
|
|
|
8
|
|
|
—
|
|
|
—
|
|
26
|
2
|
—
|
24
|
||||||||||||||||
Total derivatives, subject to a master netting or similar arrangement
|
|
$91
|
|
|
$53
|
|
|
$—
|
|
|
$38
|
|
$287
|
$83
|
$—
|
$204
|
(1)
|
Excludes $2 million and $7 million of derivative assets at December 31, 2019 and 2018, respectively, which are not subject to master netting or similar arrangements.
|
|
December 31, 2019
|
December 31, 2018
|
||||||||||||||||||||||||||||||
|
|
|
Gross Amounts Not
Offset in the Consolidated Balance Sheet |
|
|
Gross Amounts Not
Offset in the Consolidated Balance Sheet |
|
|||||||||||||||||||||||||
|
Gross Liabilities
Presented in the Consolidated Balance Sheet
(1)
|
|
Financial
Instruments |
|
Cash
Collateral Paid |
|
Net
Amounts |
|
Gross Liabilities
Presented in the Consolidated Balance Sheet
(1)
|
Financial
Instruments |
Cash
Collateral Paid |
Net
Amounts |
||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Commodity contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Over-the-counter
|
|
$105
|
|
|
$21
|
|
|
$—
|
|
|
$ 84
|
|
$ 19
|
$12
|
$—
|
$ 7
|
||||||||||||||||
Exchange
|
|
21
|
|
|
21
|
|
|
—
|
|
|
—
|
|
115
|
68
|
47
|
—
|
||||||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Over-the-counter
|
|
606
|
|
|
8
|
|
|
35
|
|
|
563
|
|
142
|
1
|
—
|
141
|
||||||||||||||||
Foreign currency contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Over-the-counter
|
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
2
|
2
|
—
|
—
|
||||||||||||||||
Total derivatives, subject to a master netting or similar arrangement
|
|
$735
|
|
|
$53
|
|
|
$35
|
|
|
$647
|
|
$278
|
$83
|
$47
|
$148
|
(1)
|
Excludes $5 million and $1 million of derivative liabilities at December 31, 2019 and 2018, respectively, which are not subject to master netting or similar arrangements.
|
|
|
|
125
|
|
|
Current
|
Noncurrent
|
||||||
Natural Gas (bcf):
|
|
|
||||||
Fixed price
(1)
|
|
79
|
|
|
34
|
|
||
Basis
|
|
227
|
|
|
495
|
|
||
Electricity (MWh):
|
|
|
|
|
|
|
||
Fixed price
(1)
|
|
3,810,015
|
|
|
—
|
|
||
FTRs
|
|
46,585,304
|
|
|
—
|
|
||
Liquids (Gal)
(2)
|
|
52,374,000
|
|
|
—
|
|
||
Interest rate
(3)
|
$
|
2,450,000,000
|
|
$
|
3,976,014,497
|
|
||
Foreign currency
(3)
|
—
|
€
|
250,000,000
|
€ |
(1)
|
Includes options.
|
(2)
|
Includes NGLs.
|
(3)
|
Maturity is determined based on final settlement period.
|
|
AOCI
After-Tax
|
Amounts Expected to be
Reclassified to Earnings During the Next 12 Months
After-Tax
|
Maximum Term
|
|||||||||
(millions)
|
|
|
|
|
||||||||
Commodities:
|
|
|
|
|
|
|||||||
Gas
|
$
|
(4
|
)
|
$
|
(4
|
)
|
|
24 months
|
|
|||
Electricity
|
|
19
|
|
|
19
|
|
|
12 months
|
|
|||
Other
|
|
1
|
|
|
1
|
|
|
12 months
|
|
|||
Interest rate
|
|
(426
|
)
|
|
(64
|
)
|
|
384 months
|
|
|||
Foreign currency
|
|
3
|
|
|
(2
|
)
|
|
78 months
|
|
|||
Total
|
$
|
(407
|
)
|
$
|
(50
|
)
|
|
126
|
|
|
|
|
|
Carrying Amount of the Hedged Asset
(Liability)
(1)
|
Cumulative Amount of Fair Value
Hedging Adjustments
Included in the Carrying Amount
of the Hedged Assets
(Liabilities)
(2)
|
||||||||||||||
|
December 31,
2019 |
|
December 31,
2018 |
December 31,
2019 |
|
December 31,
2018 |
||||||||||
(millions)
|
|
|
|
|
|
|
||||||||||
Long-term
debt
|
$
|
(1,154
|
)
|
$ |
(1,631
|
) |
$
|
(4
|
)
|
$20
|
(1)
|
Includes $(397) million and $(892) million related to discontinued hedging relationships at December 31, 2019 and December 31, 2018, respectively.
|
(2)
|
Includes $3 million and $8 million of hedging adjustments on discontinued hedging relationships at December 31, 2019 and December 31, 2018, respectively.
|
|
Fair Value –
Derivatives under Hedge Accounting |
Fair Value –
Derivatives not under Hedge Accounting |
Total
Fair Value |
|||||||||
(millions)
|
|
|
|
|
||||||||
At December 31, 2019
|
|
|
|
|
|
|||||||
ASSETS
|
|
|
|
|
|
|||||||
Current Assets
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
|
$ 30
|
|
|
$37
|
|
$
|
67
|
|
|||
Interest rate
|
|
1
|
|
|
—
|
|
|
1
|
|
|||
Total current derivative assets
(1)
|
|
31
|
|
|
37
|
|
|
68
|
|
|||
Noncurrent Assets
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
|
1
|
|
|
6
|
|
|
7
|
|
|||
Interest rate
|
|
10
|
|
|
—
|
|
|
10
|
|
|||
Foreign currency
|
|
8
|
|
|
—
|
|
|
8
|
|
|||
Total noncurrent derivative assets
(2)
|
|
19
|
|
|
6
|
|
|
25
|
|
|||
Total derivative assets
|
|
$ 50
|
|
|
$43
|
|
$
|
93
|
|
|||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
|
$ 6
|
|
|
$77
|
|
$
|
83
|
|
|||
Interest rate
|
|
321
|
|
|
1
|
|
|
322
|
|
|||
Foreign currency
|
|
3
|
|
|
—
|
|
|
3
|
|
|||
Total current derivative liabilities
(3)
|
|
330
|
|
|
78
|
|
|
408
|
|
|||
Noncurrent Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
|
1
|
|
|
47
|
|
|
48
|
|
|||
Interest rate
|
|
267
|
|
|
17
|
|
|
284
|
|
|||
Total noncurrent derivative liabilities
(4)
|
|
268
|
|
|
64
|
|
|
332
|
|
|||
Total derivative liabilities
|
|
$598
|
|
|
$142
|
|
$
|
740
|
|
|||
At December 31, 2018
|
|
|
|
|
|
|
|
|
|
|||
ASSETS
|
|
|
|
|
|
|
|
|
|
|||
Current Assets
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
$ 55
|
$154
|
$ |
209
|
||||||||
Interest rate
|
14
|
—
|
14
|
|||||||||
Total current derivative assets
(1)
|
69
|
154
|
223
|
|||||||||
Noncurrent Assets
|
|
|
|
|||||||||
Commodity
|
6
|
35
|
41
|
|||||||||
Interest rate
|
4
|
—
|
4
|
|||||||||
Foreign currency
|
26
|
—
|
26
|
|||||||||
Total noncurrent derivative assets
(2)
|
36
|
35
|
71
|
|||||||||
Total derivative assets
|
$105
|
$189
|
$ |
294
|
||||||||
LIABILITIES
|
|
|
|
|||||||||
Current Liabilities
|
|
|
|
|||||||||
Commodity
|
$ 17
|
$112
|
$ |
129
|
||||||||
Interest rate
|
26
|
—
|
26
|
|||||||||
Foreign currency
|
2
|
—
|
2
|
|||||||||
Total current derivative liabilities
(3)
|
45
|
112
|
157
|
|||||||||
Noncurrent Liabilities
|
|
|
|
|||||||||
Commodity
|
5
|
1
|
6
|
|||||||||
Interest rate
|
116
|
—
|
116
|
|||||||||
Total noncurrent derivative liabilities
(4)
|
121
|
1
|
122
|
|||||||||
Total derivative liabilities
|
$166
|
$113
|
$ |
279
|
|
|
|
127
|
|
(1)
|
Current derivative assets are presented in other current assets in Dominion Energy’s Consolidated Balance Sheets.
|
(2)
|
Noncurrent derivative assets are presented in other deferred charges and other assets in Dominion Energy’s Consolidated Balance Sheets.
|
(3)
|
Current derivative liabilities are presented in other current liabilities in Dominion Energy’s Consolidated Balance Sheets.
|
(4)
|
Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in Dominion Energy’s Consolidated Balance Sheets.
|
Derivatives in cash flow hedging relationships
|
Amount of
Gain (Loss)
Recognized in AOCI on Derivatives (Effective Portion)
(1)
|
Amount of
Gain (Loss)
Reclassified From AOCI to Income |
Increase
(Decrease) in Derivatives Subject to Regulatory Treatment
(2)
|
|||||||||
(millions)
|
|
|
|
|
||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|||
Derivative type and location of gains (losses):
|
|
|
|
|
|
|
|
|
|
|||
Commodity:
|
|
|
|
|
|
|
|
|
|
|||
Operating revenue
|
|
|
|
|
$146
|
|
|
|
|
|||
Purchased gas
|
|
|
|
|
(3
|
)
|
|
|
|
|||
Total commodity
|
|
$125
|
|
|
$143
|
|
|
$ —
|
|
|||
Interest rate
(3)
|
|
(252
|
)
|
|
(54
|
)
|
|
(255
|
)
|
|||
Foreign currency
(4)
|
|
(18
|
)
|
|
(6
|
)
|
|
—
|
|
|||
Total
|
|
$(145
|
)
|
|
$ 83
|
|
|
$(255
|
)
|
|||
Year Ended December 31, 2018
|
|
|
|
|
|
|||||||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Commodity:
|
|
|
|
|||||||||
Operating revenue
|
|
$(90
|
) |
|
||||||||
Electric fuel and other energy-related purchases
|
|
14
|
|
|||||||||
Total commodity
|
$ 64
|
$(76
|
) |
$ —
|
||||||||
Interest rate
(3)
|
(18
|
) |
(48
|
) |
39
|
|||||||
Foreign currency
(4)
|
(6
|
) |
(13
|
) |
—
|
|||||||
Total
|
$ 40
|
$(137
|
) |
$ 39
|
||||||||
Year Ended December 31, 2017
|
|
|
|
|||||||||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Commodity:
|
|
|
|
|||||||||
Operating revenue
|
|
$ 81
|
|
|||||||||
Purchased gas
|
|
|
|
(2
|
) |
|
||||||
Total commodity
|
$ 1
|
$ 79
|
$ —
|
|||||||||
Interest rate
(3)
|
(8
|
) |
(52
|
) |
(58
|
) | ||||||
Foreign currency
(4)
|
18
|
20
|
—
|
|||||||||
Total
|
$ 11
|
$ 47
|
$ (58
|
) |
(1)
|
Amounts deferred into AOCI have no associated effect in Dominion Energy’s Consolidated Statements of Income.
|
(2)
|
Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Dominion Energy’s Consolidated Statements of Income.
|
(3)
|
Amounts recorded in Dominion Energy’s Consolidated Statements of Income are classified in interest and related charges.
|
(4)
|
Amounts recorded in Dominion Energy’s Consolidated Statements of Income are classified in other income.
|
128
|
|
|
|
|
Derivatives not designated as hedging instruments
|
Amount of Gain (Loss) Recognized in
Income on Derivatives
(1)
|
|||||||||||
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|
||||||||
Derivative type and location of gains (losses):
|
|
|
|
|
|
|||||||
Commodity:
|
|
|
|
|
|
|||||||
Operating revenue
|
$
|
45
|
|
$ |
(28
|
) | $ |
18
|
||||
Purchased gas
|
|
(28
|
)
|
11
|
(3
|
) | ||||||
Electric fuel and other energy-related purchases
|
|
(46
|
)
|
(9
|
) |
(59
|
) | |||||
Other operations & maintenance
|
|
—
|
|
—
|
(1
|
) | ||||||
Interest rate
|
|
3
|
|
—
|
—
|
|||||||
Total
|
$
|
(26
|
)
|
$ |
(26
|
) | $ |
(45
|
) |
(1)
|
Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Dominion Energy’s Consolidated Statements of Income.
|
|
December 31, 2019
|
December 31, 2018
|
||||||||||||||||||||||||||||||
|
|
|
Gross Amounts Not Offset in the
Consolidated Balance Sheet |
|
Gross Amounts Not Offset in the
Consolidated Balance Sheet |
|||||||||||||||||||||||||||
|
Gross Assets
Presented in the Consolidated Balance Sheet
(1)
|
|
Financial
Instruments |
|
Cash
Collateral Received |
|
Net
Amounts |
|
Gross Assets
Presented in the Consolidated Balance Sheet
(1)
|
Financial
Instruments |
Cash
Collateral Received |
Net
Amounts |
||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Commodity contracts:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Over-the-counter
|
|
$19
|
|
|
$18
|
|
|
$—
|
|
|
$1
|
|
$64
|
$6
|
$—
|
$58
|
||||||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Over-the-counter
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
3
|
—
|
—
|
3
|
||||||||||||||||
Total derivatives, subject to a master netting or similar arrangement
|
|
$21
|
|
|
$18
|
|
|
$—
|
|
|
$3
|
|
$67
|
$6
|
$—
|
$61
|
(1)
|
Excludes $3 million and $26 million of derivative assets at December 31, 2019 and 2018, respectively, which are not subject to master netting or similar arrangements.
|
|
December 31, 2019
|
December 31, 2018
|
||||||||||||||||||||||||||||||
|
|
|
Gross Amounts Not Offset in the
Consolidated Balance Sheet |
|
Gross Amounts Not Offset in the
Consolidated Balance Sheet |
|||||||||||||||||||||||||||
|
Gross Liabilities
Presented in the Consolidated Balance Sheet
(1)
|
|
Financial
Instruments |
|
Cash
Collateral Paid |
|
Net
Amounts |
|
Gross Liabilities
Presented in the Consolidated Balance Sheet
(1)
|
Financial
Instruments |
Cash
Collateral Paid |
Net
Amounts |
||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Commodity contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Over-the-counter
|
|
$ 59
|
|
|
$18
|
|
|
$—
|
|
|
$ 41
|
|
$ 6
|
$6
|
$—
|
$—
|
||||||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Over-the-counter
|
|
363
|
|
|
—
|
|
|
—
|
|
|
363
|
|
88
|
—
|
—
|
88
|
||||||||||||||||
Total derivatives, subject to a master netting or similar arrangement
|
|
$422
|
|
|
$18
|
|
|
$—
|
|
|
$404
|
|
$94
|
$6
|
$—
|
$88
|
(1)
|
Excludes $44 million and $9 million of derivative liabilities at December 31, 2019 and 2018, respectively, which are not subject to master netting or similar arrangements.
|
|
|
|
129
|
|
|
Current
|
Noncurrent
|
||||||
Natural Gas (bcf):
|
|
|
||||||
Fixed price
(1)
|
|
41
|
|
|
9
|
|
||
Basis
|
|
132
|
|
|
448
|
|
||
Electricity (MWh):
|
|
|
||||||
FTRs
|
|
46,585,304
|
|
|
—
|
|
||
Interest rate
(2)
|
$
|
900,000,000
|
|
$
|
950,000,000
|
|
(1)
|
Includes options.
|
(2)
|
Maturity is determined based on final settlement period.
|
|
AOCI
After-Tax
|
Amounts Expected to be
Reclassified to Earnings During the Next 12 Months
After-Tax
|
Maximum
Term |
|||||||||
(millions)
|
|
|
|
|
||||||||
Interest rate
|
$
|
(34
|
)
|
$
|
(1
|
)
|
|
384 months
|
|
|||
Total
|
$
|
(34
|
)
|
$
|
(1
|
)
|
|
|
|
130
|
|
|
|
|
|
Fair Value –
Derivatives under Hedge Accounting |
Fair Value –
Derivatives not under Hedge Accounting |
Total
Fair Value |
|||||||||
(millions)
|
|
|
|
|
||||||||
At December 31, 2019
|
|
|
|
|
|
|||||||
ASSETS
|
|
|
|
|
|
|||||||
Current Assets
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
|
$ —
|
|
|
$ 20
|
|
$
|
20
|
|
|||
Total current derivative assets
(1)
|
|
—
|
|
|
20
|
|
|
20
|
|
|||
Noncurrent Assets
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
|
—
|
|
|
2
|
|
|
2
|
|
|||
Interest rate
|
|
2
|
|
|
—
|
|
|
2
|
|
|||
Total noncurrent derivative assets
(2)
|
|
2
|
|
|
2
|
|
|
4
|
|
|||
Total derivative assets
|
|
$ 2
|
|
|
$ 22
|
|
$
|
24
|
|
|||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
|
$ —
|
|
|
$ 58
|
|
$
|
58
|
|
|||
Interest rate
|
|
185
|
|
|
—
|
|
|
185
|
|
|||
Total current derivative liabilities
|
|
185
|
|
|
58
|
|
|
243
|
|
|||
Noncurrent Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
|
—
|
|
|
45
|
|
|
45
|
|
|||
Interest rate
|
|
178
|
|
|
—
|
|
|
178
|
|
|||
Total noncurrent derivatives liabilities
(3)
|
|
178
|
|
|
45
|
|
|
223
|
|
|||
Total derivative liabilities
|
|
$363
|
|
|
$103
|
|
$
|
466
|
|
|||
At December 31, 2018
|
|
|
|
|
|
|
|
|
|
|||
ASSETS
|
|
|
|
|
|
|
|
|
|
|||
Current Assets
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
$ —
|
$ 60
|
$ |
60
|
||||||||
Interest rate
|
3
|
—
|
3
|
|||||||||
Total current derivative assets
(1)
|
3
|
60
|
63
|
|||||||||
Noncurrent Assets
|
|
|
|
|||||||||
Commodity
|
—
|
30
|
30
|
|||||||||
Total noncurrent derivative assets
(2)
|
—
|
30
|
30
|
|||||||||
Total derivative assets
|
$ 3
|
$ 90
|
$ |
93
|
||||||||
LIABILITIES
|
|
|
|
|||||||||
Current Liabilities
|
|
|
|
|||||||||
Commodity
|
$ —
|
$ 15
|
$ |
15
|
||||||||
Interest rate
|
10
|
—
|
10
|
|||||||||
Total current derivative liabilities
|
10
|
15
|
25
|
|||||||||
Noncurrent Liabilities
|
|
|
|
|||||||||
Interest rate
|
78
|
—
|
78
|
|||||||||
Total noncurrent derivative liabilities
(3)
|
78
|
—
|
78
|
|||||||||
Total derivative liabilities
|
$ 88
|
$ 15
|
$ |
103
|
(1)
|
Current derivative assets are presented in other current assets in Virginia Power’s Consolidated Balance Sheets.
|
(2)
|
Noncurrent derivative assets are presented in other deferred charges and other assets in Virginia Power’s Consolidated Balance Sheets.
|
(3)
|
Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in Virginia Power’s Consolidated Balance Sheets.
|
Derivatives in cash flow hedging
relationships |
Amount of
Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion)
(1)
|
Amount of
Gain (Loss) Reclassified From AOCI to Income |
Increase
(Decrease) in Derivatives Subject to Regulatory Treatment
(2)
|
|||||||||
(millions)
|
|
|
|
|
||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|||
Derivative type and location of gains (losses):
|
|
|
|
|
|
|
|
|
|
|||
Interest rate
(3)
|
|
$(30
|
)
|
|
$(1
|
)
|
|
$(259
|
)
|
|||
Total
|
|
$(30
|
)
|
|
$(1
|
)
|
|
$(259
|
)
|
|||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|||
Derivative type and location of gains (losses):
|
|
|
|
|
|
|
|
|
|
|||
Interest rate
(3)
|
$ 2
|
$(1
|
) |
$ 39
|
||||||||
Total
|
$ 2
|
$(1
|
) |
$ 39
|
||||||||
Year Ended December 31, 2017
|
|
|
|
|||||||||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Interest rate
(3)
|
$ (8
|
) |
$(1
|
) |
$(58
|
) | ||||||
Total
|
$ (8
|
) |
$(1
|
) |
$(58
|
) |
(1)
|
Amounts deferred into AOCI have no associated effect in Virginia Power’s Consolidated Statements of Income.
|
(2)
|
Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Virginia Power’s Consolidated Statements of Income.
|
(3)
|
Amounts recorded in Virginia Power’s Consolidated Statements of Income are classified in interest and related charges.
|
Derivatives not designated as hedging instruments
|
Amount of Gain (Loss)
Recognized in Income on Derivatives
(1)
|
|||||||||||
Year Ended December 31,
|
2019
|
2018
|
2017
|
|||||||||
(millions)
|
|
|
|
|
||||||||
Derivative type and location of gains (losses):
|
|
|
|
|
|
|||||||
Commodity
(2)
|
$
|
(45
|
)
|
$2
|
$(57)
|
|||||||
Total
|
$
|
(45
|
)
|
$2
|
$(57)
|
(1)
|
Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Virginia Power’s Consolidated Statements of Income.
|
(2)
|
Amounts recorded in Virginia Power’s Consolidated Statements of Income are classified in electric fuel and other energy-related purchases.
|
|
|
|
131
|
|
|
December 31, 2019
|
December 31, 2018
|
||||||||||||||||||||||||||||||
|
Gross Amounts Not Offset in the Consolidated
Balance Sheet |
Gross Amounts Not Offset in the Consolidated
Balance Sheet |
||||||||||||||||||||||||||||||
|
Gross Assets
Presented in the Consolidated Balance Sheet |
|
Financial
Instruments |
|
Cash
Collateral Received |
|
Net
Amounts
|
|
Gross Assets
Presented in the Consolidated Balance Sheet |
Financial
Instruments |
Cash
Collateral Received |
Net
Amounts |
||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Commodity contracts:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Over-the-counter
|
|
$ —
|
|
|
$ —
|
|
|
$ —
|
|
|
$ —
|
|
$ 3
|
$ —
|
$ —
|
$ 3
|
||||||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Over-the-counter
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
2
|
—
|
—
|
2
|
||||||||||||||||
Foreign currency contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Over-the-counter
|
|
8
|
|
|
8
|
|
|
—
|
|
|
—
|
|
26
|
2
|
—
|
24
|
||||||||||||||||
Total derivatives, subject to a master netting or similar arrangement
|
|
$ 8
|
|
|
$ 8
|
|
|
$ —
|
|
|
$ —
|
|
$ 31
|
$ 2
|
$ —
|
$ 29
|
|
December 31, 2019
|
December 31, 2018
|
||||||||||||||||||||||||||||||
|
Gross Amounts Not Offset in the Consolidated
Balance Sheet |
Gross Amounts Not Offset in the Consolidated
Balance Sheet |
||||||||||||||||||||||||||||||
|
Gross Liabilities
Presented in the Consolidated Balance Sheet |
|
Financial
Instruments |
|
Cash
Collateral Paid |
|
Net
Amounts |
|
Gross Liabilities
Presented in the Consolidated Balance Sheet |
Financial
Instruments |
Cash
Collateral Paid |
Net
Amounts |
||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Over-the-counter
|
|
$ 83
|
|
|
$ 5
|
|
|
$ —
|
|
|
$ 78
|
|
$ 17
|
$ —
|
$ —
|
$ 17
|
||||||||||||||||
Foreign currency contracts:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Over-the-counter
|
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
2
|
2
|
—
|
—
|
||||||||||||||||
Total derivatives, subject to a master netting or similar arrangement
|
|
$ 86
|
|
|
$ 8
|
|
|
$ —
|
|
|
$ 78
|
|
$ 19
|
$ 2
|
$ —
|
$ 17
|
132
|
|
|
|
|
|
Current
|
Noncurrent
|
||||||
Interest rate
(1)
|
$
|
250,000,000
|
|
$
|
1,050,000,000
|
|
||
Foreign currency
(1)
|
€
|
—
|
|
€
|
250,000,000
|
|
(1)
|
Maturity is determined based on final settlement period.
|
|
AOCI
After-Tax
|
Amounts Expected
to be Reclassified to Earnings During the Next 12 Months
After-Tax
|
Maximum Term
|
|||||||||
(millions)
|
|
|
|
|
||||||||
Interest rate
|
|
$(84
|
)
|
|
$ 15
|
|
|
300 months
|
|
|||
Foreign currency
|
|
3
|
|
|
(2
|
)
|
|
78 months
|
|
|||
Total
|
|
$(81
|
)
|
|
$ 13
|
|
|
|
|
|
Fair Value –
Derivatives
under
Hedge Accounting |
Fair Value –
Derivatives
not under
Hedge Accounting |
Total
Fair Value |
|||||||||
(millions)
|
|
|
|
|
||||||||
At December 31, 2019
|
|
|
|
|
|
|||||||
ASSETS
|
|
|
|
|
|
|||||||
Noncurrent Assets
|
|
|
|
|
|
|||||||
Foreign currency
|
|
$ 8
|
|
|
$ —
|
|
$
|
8
|
|
|||
Total noncurrent derivative assets
(1)
|
|
8
|
|
|
—
|
|
|
8
|
|
|||
Total derivative assets
|
|
$ 8
|
|
|
$ —
|
|
$
|
8
|
|
|||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Interest rate
|
|
$30
|
|
|
$ —
|
|
$
|
30
|
|
|||
Foreign currency
|
|
3
|
|
|
—
|
|
|
3
|
|
|||
Total current derivative liabilities
(2)
|
|
33
|
|
|
—
|
|
|
33
|
|
|||
Noncurrent Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Interest rate
|
|
53
|
|
|
—
|
|
|
53
|
|
|||
Total noncurrent derivative
liabilities
(3)
|
|
53
|
|
|
—
|
|
|
53
|
|
|||
Total derivative liabilities
|
|
$86
|
|
|
$ —
|
|
$
|
86
|
|
|||
At December 31, 2018
|
|
|
|
|
|
|||||||
ASSETS
|
|
|
|
|
|
|||||||
Current Assets
|
|
|
|
|
|
|||||||
Commodity
|
$ 3
|
$ —
|
$ |
3
|
||||||||
Interest rate
|
2
|
—
|
2
|
|||||||||
Total current derivative assets
(4)
|
5
|
—
|
5
|
|||||||||
Noncurrent Assets
|
|
|
|
|||||||||
Foreign currency
|
26
|
—
|
26
|
|||||||||
Total noncurrent derivative assets
(1)
|
26
|
—
|
26
|
|||||||||
Total derivative assets
|
$31
|
$ —
|
$ |
31
|
||||||||
LIABILITIES
|
|
|
|
|||||||||
Current Liabilities
|
|
|
|
|||||||||
Interest rate
|
$ 9
|
$ —
|
$ |
9
|
||||||||
Foreign currency
|
2
|
—
|
2
|
|||||||||
Total current derivative liabilities
(2)
|
11
|
—
|
11
|
|||||||||
Noncurrent Liabilities
|
|
|
|
|||||||||
Interest rate
|
8
|
—
|
8
|
|||||||||
Total noncurrent derivative
liabilities
(3)
|
8
|
—
|
8
|
|||||||||
Total derivative liabilities
|
$19
|
$ —
|
$ |
19
|
(1)
|
Noncurrent derivative assets are presented in other deferred charges and other assets in Dominion Energy Gas’ Consolidated Balance Sheets.
|
(2)
|
Current derivative liabilities are presented in other current liabilities in Dominion Energy Gas’ Consolidated Balance Sheets
.
|
(3)
|
Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in Dominion Energy Gas’ Consolidated Balance Sheets.
|
(4)
|
Current derivative assets include $2 million in other current assets, with the remainder recorded in current assets of discontinued operations in Dominion Energy Gas’ Consolidated Balance Sheets.
|
|
|
|
133
|
|
Derivatives in cash flow hedging relationships
|
Amount of
Gain (Loss)
Recognized
in AOCI on
Derivatives
(Effective
Portion)
(1)
|
|
Amount of
Gain (Loss)
Reclassified From AOCI to Income |
|
||||
(millions)
|
|
|
|
|
||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
||
Derivative type and location of gains (losses):
|
|
|
|
|
|
|
||
Commodity:
|
|
|
|
|
|
|
||
Net income from discontinued operations
|
|
|
|
|
$ 4
|
|
||
Total commodity
|
|
$ 1
|
|
|
$ 4
|
|
||
Interest rate
(2)
|
|
(68
|
)
|
|
(5
|
)
|
||
Foreign currency
(3)
|
|
(18
|
)
|
|
(6
|
)
|
||
Total
|
|
$ (85
|
)
|
|
$ (7
|
)
|
||
Year Ended December 31, 2018
|
|
|
|
|
||||
Derivative type and location of gains (losses):
|
|
|
|
|
||||
Commodity:
|
|
|
|
|
||||
Net income from discontinued operations
|
|
|
|
$ (8
|
) | |||
Total commodity
|
$ 1
|
$ (8
|
) | |||||
Interest rate
(2)
|
(16
|
) |
(5
|
) | ||||
Foreign currency
(3)
|
(6
|
) |
(13
|
) | ||||
Total
|
$ (21
|
) |
$ (26
|
) | ||||
Year Ended December 31, 2017
|
|
|
||||||
Derivative type and location of gains (losses):
|
|
|
||||||
Commodity:
|
|
|
||||||
Net income from discontinued operations
|
|
$ (8
|
) | |||||
Total commodity
|
$ (10
|
) |
$ (8
|
) | ||||
Interest rate
(2)
|
1
|
(6
|
) | |||||
Foreign currency
(3)
|
18
|
20
|
||||||
Total
|
$ 9
|
$ 6
|
(1)
|
Amounts deferred into AOCI have no associated effect in Dominion Energy Gas’ Consolidated Statements of Income.
|
(2)
|
Amounts recorded in Dominion Energy Gas’ Consolidated Statements of Income are classified in interest and related charges.
|
(3)
|
Amounts recorded in Dominion Energy Gas’ Consolidated Statements of Income are classified in other income.
|
Derivatives not designated as hedging
instruments |
Amount of Gain (Loss) Recognized in
Income on Derivatives
|
|||||||||||
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|
||||||||
Derivative type and location of gains (losses):
|
|
|
|
|
|
|||||||
Commodity
|
|
|
|
|
|
|||||||
Operating revenue
|
|
$—
|
|
$(11
|
) |
$—
|
||||||
Total
|
|
$—
|
|
$(11
|
) |
$—
|
|
2019
|
|
2018
|
2017
|
||||||||
(millions, except EPS)
|
|
|
|
|
||||||||
Net income attributable to Dominion Energy
|
$
|
1,358
|
|
$ |
2,447
|
$ |
2,999
|
|||||
Preferred stock dividends (see Note 19)
|
|
(17
|
)
|
—
|
—
|
|||||||
Net income attributable to Dominion Energy – Basic
|
|
1,341
|
|
2,447
|
2,999
|
|||||||
Dilutive effect of Series A Preferred Stock
|
|
(28
|
)
|
—
|
—
|
|||||||
Net income attributable to Dominion Energy – Diluted
|
|
1,313
|
|
2,447
|
2,999
|
|||||||
Average shares of common stock outstanding – Basic
|
|
808.8
|
|
654.2
|
636.0
|
|||||||
Net effect of dilutive securities
(1)
|
|
0.1
|
|
0.7
|
—
|
|||||||
Average shares of common stock outstanding – Diluted
|
|
808.9
|
|
654.9
|
636.0
|
|||||||
Earnings Per Common Share – Basic
|
$
|
1.66
|
|
$ |
3.74
|
$ |
4.72
|
|||||
Earnings Per Common Share – Diluted
|
$
|
1.62
|
|
$ |
3.74
|
$ |
4.72
|
(1)
|
Dilutive securities for 2018 consist primarily of forward sale agreements, effective April 2018 to December 2018. See Notes 17 and 19 for more information.
|
134
|
|
|
|
|
|
Amortized
Cost
|
Total
Unrealized
Gains
|
Total
Unrealized
Losses
|
Fair
Value
|
||||||||||||
(millions)
|
|
|
|
|
|
|||||||||||
December 31, 2019
|
|
|
|
|
|
|
||||||||||
Equity securities:
(1)
|
|
|
|
|
|
|
||||||||||
U.S.
|
$
|
1,807
|
|
$
|
2,451
|
|
$
|
(20
|
)
|
$
|
4,238
|
|
||||
Fixed income securities:
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt instruments
|
|
434
|
|
|
29
|
|
|
—
|
|
|
463
|
|
||||
Government securities
|
|
1,108
|
|
|
39
|
|
|
(2
|
)
|
|
1,145
|
|
||||
Common/collective trust funds
|
|
115
|
|
|
4
|
|
|
—
|
|
|
119
|
|
||||
Insurance contracts
|
|
214
|
|
|
—
|
|
|
—
|
|
|
214
|
|
||||
Cash equivalents and other
(3)
|
|
13
|
|
|
—
|
|
|
—
|
|
|
13
|
|
||||
Total
|
$
|
3,691
|
|
$
|
2,523
|
|
$
|
(22
|
)
(4)
|
$
|
6,192
|
|
||||
December 31, 2018
|
|
|
|
|
|
|
||||||||||
Equity securities:
(1)
|
|
|
|
|
||||||||||||
U.S.
|
$1,741
|
$1,640
|
$(51)
|
$3,330
|
||||||||||||
Fixed income securities:
(2)
|
|
|
|
|
||||||||||||
Corporate debt instruments
|
435
|
5
|
(9)
|
431
|
||||||||||||
Government securities
|
1,092
|
17
|
(12)
|
1,097
|
||||||||||||
Common/collective trust funds
|
76
|
—
|
—
|
76
|
||||||||||||
Cash equivalents and other
|
4
|
—
|
—
|
4
|
||||||||||||
Total
|
$3,348
|
$1,662
|
$(72)
(4)
|
$4,938
|
(1)
|
Unrealized gains and losses on equity securities are included in other income and the nuclear decommissioning trust regulatory liability as discussed in Note 2.
|
(2)
|
Unrealized gains and losses on fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability as discussed in Note 2.
|
(3)
|
Includes pending purchases of securities of $1 million at December 31, 2019.
|
(4)
|
The fair value of securities in an unrealized loss position was $298 million and $833 million at December 31, 2019 and 2018, respectively.
|
Year Ended December 31,
|
2019
|
|
2018
|
|||||
(millions)
|
|
|
|
|||||
Net gains (losses) recognized during the period
|
$
|
919
|
|
$ |
(245
|
) | ||
Less: Net gains recognized during the period on securities sold during the period
|
|
(80
|
)
|
(58
|
) | |||
Unrealized gains (losses) recognized during the period on securities still held at December 31, 2019 and 2018
(1)
|
$
|
839
|
|
$ |
(303
|
) |
(1)
|
Included in other income and the nuclear decommissioning trust regulatory liability as discussed in Note 2.
|
|
Amount
|
|
||
(millions)
|
|
|
||
Due in one year or less
|
$
|
198
|
|
|
Due after one year through five years
|
|
412
|
|
|
Due after five years through ten years
|
|
390
|
|
|
Due after ten years
|
|
727
|
|
|
Total
|
$
|
1,727
|
|
|
|
|
135
|
|
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|
||||||||
Proceeds from sales
|
$
|
1,712
|
|
$ |
1,804
|
$ |
1,831
|
|||||
Realized gains
(1)
|
|
195
|
|
140
|
166
|
|||||||
Realized losses
(1)
|
|
96
|
|
91
|
71
|
(1)
|
Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability as discussed in Note 2.
|
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|
||||||||
Total other-than-temporary impairment losses
(1)
|
$
|
3
|
|
$ |
30
|
$ |
44
|
|||||
Losses recorded to the nuclear decommissioning trust regulatory liability
|
|
—
|
|
—
|
(16
|
) | ||||||
Losses recognized in other comprehensive income (before taxes)
|
|
(3
|
)
|
(30
|
) |
(5
|
) | |||||
Net impairment losses recognized in earnings
|
$
|
—
|
|
$ |
—
|
$ |
23
|
(1)
|
Amounts include other-than-temporary impairment losses for fixed income securities of $5 million at December 31, 2017.
|
|
Amortized
Cost
|
Total
Unrealized
Gains
|
Total
Unrealized
Losses
|
Fair
Value |
||||||||||||
(millions)
|
|
|
|
|
|
|||||||||||
December 31, 2019
|
|
|
|
|
|
|
||||||||||
Equity securities:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S.
|
|
$894
|
|
|
$1,144
|
|
|
$(11)
|
|
|
$2,027
|
|
||||
Fixed income securities:
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt instruments
|
|
241
|
|
|
15
|
|
|
—
|
|
|
256
|
|
||||
Government securities
|
|
534
|
|
|
14
|
|
|
(2)
|
|
|
546
|
|
||||
Common/collective trust funds
|
|
51
|
|
|
—
|
|
|
—
|
|
|
51
|
|
||||
Cash equivalents and other
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Total
|
|
$1,721
|
|
|
$1,173
|
|
|
$(13)
(4)
|
|
|
$2,881
|
|
||||
December 31, 2018
|
|
|
|
|
|
|
||||||||||
Equity securities:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S.
|
$ 858
|
$751
|
$(24)
|
$1,585
|
||||||||||||
Fixed income securities:
(2)
|
|
|
|
|
||||||||||||
Corporate debt instruments
|
224
|
2
|
(5)
|
221
|
||||||||||||
Government securities
|
504
|
7
|
(5)
|
506
|
||||||||||||
Common/collective trust funds
|
51
|
—
|
—
|
51
|
||||||||||||
Cash equivalents and other
(3)
|
6
|
—
|
—
|
6
|
||||||||||||
Total
|
$1,643
|
$760
|
$(34)
(4)
|
$2,369
|
(1)
|
Unrealized gains and losses on equity securities, are included in other income and the nuclear decommissioning trust regulatory liability as discussed in Note 2.
|
(2)
|
Unrealized gains and losses on fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability as discussed in Note 2.
|
(3)
|
Includes pending sales of securities of $6 million at December 31, 2018.
|
(4)
|
The fair value of securities in an unrealized loss position was $185 million and $404 million at December 31, 2019 and 2018, respectively.
|
Year Ended December 31,
|
2019
|
|
2018
|
|||||
(millions)
|
|
|
|
|||||
Net gains (losses) recognized during the period
|
$
|
423
|
|
$ |
(105
|
) | ||
Less: Net gains recognized during the period on securities sold during the period
|
|
(20
|
)
|
(32
|
) | |||
Unrealized gains (losses) recognized during the period on securities still held at December 31, 2019 and 2018
(1)
|
$
|
403
|
|
$ |
(137
|
) |
(1)
|
Included in other income and the nuclear decommissioning trust regulatory liability as discussed in Note 2.
|
|
Amount
|
|
||
(millions)
|
|
|
||
Due in one year or less
|
|
$ 91
|
|
|
Due after one year through five years
|
|
175
|
|
|
Due after five years through ten years
|
|
206
|
|
|
Due after ten years
|
|
381
|
|
|
Total
|
|
$853
|
|
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|
||||||||
Proceeds from sales
|
$
|
858
|
|
$ |
887
|
$ |
849
|
|||||
Realized gains
(1)
|
|
58
|
|
60
|
75
|
|||||||
Realized losses
(1)
|
|
22
|
|
27
|
30
|
(1)
|
Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability as discussed in Note 2.
|
136
|
|
|
|
|
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|
||||||||
Total other-than-temporary impairment losses
(1)
|
$
|
2
|
|
$ |
15
|
$ |
20
|
|||||
Losses recorded to the nuclear decommissioning trust regulatory liability
|
|
—
|
|
—
|
(16
|
) | ||||||
Losses recognized in other comprehensive income (before taxes)
|
|
(2
|
)
|
(15
|
) |
(2
|
) | |||||
Net impairment losses recognized in earnings
|
$
|
—
|
|
$ |
—
|
$ |
2
|
(1)
|
Amounts include other-than-temporary impairment losses for fixed income securities of $2 million at December 31, 2017.
|
Company
|
Ownership%
|
Investment
Balance
|
Description
|
|||||||||||||
As of December 31,
|
|
|
2019
|
|
2018
|
|
||||||||||
(millions)
|
|
|
|
|
|
|||||||||||
Atlantic Coast Pipeline
|
48
|
% |
$
|
1,123
|
|
$ |
820
|
Gas transmission system
|
||||||||
Iroquois
|
50
|
% |
|
276
|
|
302
|
Gas transmission system
|
|||||||||
Fowler Ridge
|
50
|
% |
|
74
|
|
82
|
Wind-powered merchant generation facility
|
|||||||||
Wrangler
|
20
|
% |
|
77
|
|
—
|
Nonregulated retail energy marketing
|
|||||||||
Other
(1)(2)
|
various
|
|
96
|
|
74
|
|
||||||||||
Total
|
|
|
|
$
|
1,646
|
|
$ |
1,278
|
|
(1)
|
Liability of less than $1 million associated with NedPower recorded to other deferred credits and other liabilities, on the Consolidated Balance Sheets as of December 31, 2018. See additional discussion of NedPower below.
|
(2)
|
Dominion Energy has an $
80
million unfunded commitment to be made to Align RNG by the end of 202
2
.
|
|
|
|
137
|
|
138
|
|
|
|
|
Company
|
Ownership%
|
Investment
Balance |
Description
|
|||||||||||||
As of December 31,
|
|
|
2019
|
|
2018
|
|
||||||||||
(millions)
|
|
|
|
|
|
|
||||||||||
Iroquois
|
50
|
% |
|
$276
|
|
$302
|
Gas transmission system
|
|||||||||
White River Hub
|
50
|
% |
|
36
|
|
37
|
Gas transmission system
|
|||||||||
Total
|
|
|
|
|
$312
|
|
$339
|
|
|
At December 31, 2019
|
|
At December 31, 2018
|
|||||
(millions)
|
|
|
|
|||||
Current assets
|
|
$ 79
|
|
$ |
112
|
|||
Noncurrent assets
|
|
586
|
|
588
|
||||
Current liabilities
|
|
37
|
|
165
|
||||
Noncurrent liabilities
|
|
334
|
|
193
|
|
Year Ended
December 31, 2019
|
|
Year Ended
December 31, 2018
|
Year Ended
December 31, 2017
|
||||||||
(millions)
|
|
|
|
|
||||||||
Revenues
|
|
$180
|
|
$194
|
$194
|
|||||||
Operating income
|
|
93
|
|
108
|
110
|
|||||||
Net income
|
|
82
|
|
94
|
93
|
|
At December 31, 2019
|
|
At December 31, 2018
|
|||||
(millions)
|
|
|
|
|||||
Current assets
|
|
$ 3
|
|
$ 3
|
||||
Noncurrent assets
|
|
39
|
|
41
|
||||
Current liabilities
|
|
2
|
|
2
|
|
Year Ended
December 31, 2019
|
|
Year Ended
December 31, 2018
|
Year Ended
December 31, 2017
|
||||||||
(millions)
|
|
|
|
|||||||||
Revenues
|
|
$10
|
|
$12
|
$10
|
|||||||
Operating income
|
|
6
|
|
8
|
7
|
|||||||
Net income
|
|
6
|
|
8
|
7
|
|
|
|
139
|
|
At December 31,
|
2019
|
|
2018
|
|||||
(millions)
|
|
|
|
|||||
Dominion Energy
|
|
|
|
|
||||
Utility:
|
|
|
|
|
||||
Generation
|
$
|
25,317
|
|
$ |
18,896
|
|||
Transmission
|
|
20,486
|
|
16,666
|
||||
Distribution
|
|
25,748
|
|
18,535
|
||||
Storage
|
|
3,227
|
|
2,906
|
||||
Nuclear fuel
|
|
2,296
|
|
1,626
|
||||
Oil and gas
|
|
1,792
|
|
1,763
|
||||
General and other
|
|
2,413
|
|
1,783
|
||||
Plant under construction
|
|
2,956
|
|
2,348
|
||||
Total utility
|
|
84,235
|
|
64,523
|
||||
Non-jurisdictional—including plant under construction
|
|
854
|
|
407
|
||||
Nonutility:
|
|
|
|
|
||||
Merchant generation-nuclear
|
|
1,652
|
|
1,550
|
||||
Merchant generation-other
|
|
3,985
|
|
3,802
|
||||
Nuclear fuel
|
|
930
|
|
1,025
|
||||
Gas gathering and processing
|
|
190
|
|
185
|
||||
LNG facility
|
|
4,425
|
|
3,977
|
||||
Other—including plant under construction
|
|
1,195
|
|
1,109
|
||||
Total nonutility
|
|
12,377
|
|
11,648
|
||||
Total property, plant and equipment
|
$
|
97,466
|
|
$ |
76,578
|
|||
Virginia Power
|
|
|
|
|
||||
Utility:
|
|
|
|
|
||||
Generation
|
$
|
19,552
|
|
$ |
18,896
|
|||
Transmission
|
|
10,229
|
|
9,391
|
||||
Distribution
|
|
12,095
|
|
11,771
|
||||
Nuclear fuel
|
|
1,688
|
|
1,626
|
||||
General and other
|
|
825
|
|
820
|
||||
Plant under construction
|
|
1,784
|
|
1,602
|
||||
Total utility
|
|
46,173
|
|
44,106
|
||||
Non-jurisdictional—including plant under construction
|
|
854
|
|
407
|
||||
Other
|
|
11
|
|
11
|
||||
Total property, plant and equipment
|
$
|
47,038
|
|
$ |
44,524
|
|||
Dominion Energy Gas
|
|
|
|
|
||||
Utility:
|
|
|
|
|
||||
Transmission
|
$
|
7,014
|
|
$ |
6,790
|
|||
Storage
|
|
2,799
|
|
2,615
|
||||
General and other
|
|
219
|
|
210
|
||||
Plant under construction
|
|
574
|
|
732
|
||||
Total utility
|
|
10,606
|
|
10,347
|
||||
Nonutility:
|
|
|
|
|
||||
LNG facility
|
|
4,425
|
|
3,977
|
||||
Other—including plant under construction
|
|
135
|
|
376
|
||||
Total nonutility
|
|
4,560
|
|
4,353
|
||||
Total property, plant and equipment
|
$
|
15,166
|
|
$ |
14,700
|
|
Bath
County Pumped Storage Station
(1)
|
North
Anna Units 1 and 2
(1)
|
Clover
Power Station
(1)
|
Millstone
Unit 3
(2)
|
Summer
Unit 1
(2)
|
|||||||||||||||
(millions, except
percentages) |
|
|
|
|
|
|
||||||||||||||
Ownership interest
|
|
60
|
%
|
|
88.4
|
%
|
|
50
|
%
|
|
93.5
|
%
|
|
66.7
|
%
|
|||||
Plant in service
|
|
1,058
|
|
|
2,564
|
|
|
610
|
|
|
1,267
|
|
|
1,394
|
|
|||||
Accumulated depreciation
|
|
(661
|
)
|
|
(1,321
|
)
|
|
(247
|
)
|
|
(449
|
)
|
|
(659
|
)
|
|||||
Nuclear fuel
|
|
—
|
|
|
793
|
|
|
—
|
|
|
483
|
|
|
608
|
|
|||||
Accumulated amortization of nuclear fuel
|
|
—
|
|
|
(634
|
)
|
|
—
|
|
|
(390
|
)
|
|
(389
|
)
|
|||||
Plant under construction
|
|
7
|
|
|
143
|
|
|
5
|
|
|
87
|
|
|
77
|
|
(1)
|
Units jointly owned by Virginia Power.
|
(2)
|
Unit jointly owned by Dominion Energy.
|
140
|
|
|
|
|
Date Agreement
Entered
|
Date Agreement
Closed
|
Project Location
|
Project
Name
|
Project Cost
(millions)
(1)
|
Date of Commercial
Operations
|
MW Capacity
|
||||||||||||||||||
September 2017
|
October 2018
|
North Carolina
|
Pecan
|
$140
|
December 2018
|
75
|
||||||||||||||||||
September 2017
|
June 2019
|
North Carolina
|
Gutenberg
|
142
|
September 2019
|
80
|
||||||||||||||||||
June 2018
|
February 2019
|
Virginia
|
Gloucester
|
37
|
April 2019
|
20
|
||||||||||||||||||
August 2018
|
May 2019
|
Virginia
|
Grasshopper
|
130
|
Expected 2020
|
80
|
||||||||||||||||||
August 2018
|
May 2019
|
North Carolina
|
Chestnut
|
130
|
Expected 2020
|
75
|
||||||||||||||||||
June 2019
|
June 2019
|
Virginia
|
Ft. Powhatan
|
270
|
Expected 2021
|
150
|
||||||||||||||||||
June 2019
|
August 2019
|
Virginia
|
Belcher
|
160
|
Expected 2020
|
88
|
||||||||||||||||||
August 2019
|
November 2019
|
Virginia
|
Bedford
|
110
|
Expected 2021
|
70
|
||||||||||||||||||
October 2019
|
October 2019
|
Virginia
|
Maplewood
|
190
|
Expected 2022
|
120
|
||||||||||||||||||
December 2019
|
January 2020
|
Virginia
|
Rochambeau
|
35
|
Expected 2021
|
20
|
(1)
|
Includes acquisition costs.
|
Date Agreement
Entered
|
Date Agreement
Closed
|
Project Location
|
Project
Name |
Project Cost
(millions)
(1)
|
Date of Commercial
Operations
|
MW Capacity
|
||||||||||||||||||
August 2019
|
August 2019
|
Virginia
|
Greensville
|
$130
|
Expected 2020
|
80
|
||||||||||||||||||
August 2019
|
August 2019
|
Virginia
|
Myrtle
|
35
|
Expected 2020
|
15
|
||||||||||||||||||
September 2019
|
September 2019
|
South Carolina
|
Seabrook
|
103
|
December 2019
|
72
|
||||||||||||||||||
November 2019
|
November 2019
|
North Carolina
|
Wilkinson
|
153
|
December 2019
|
74
|
(1)
|
Includes acquisition costs.
|
|
|
|
141
|
|
|
Dominion
Energy Virginia |
Gas
Transmission & Storage |
Gas
Distribution |
Dominion
Energy South Carolina |
Contracted
Generation |
Corporate
and Other |
Total
|
|||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Dominion Energy
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at December 31, 2017
(1)
|
$ |
2,106
|
$ |
1,561
|
$ |
2,496
|
$ |
—
|
$ |
242
|
$—
|
$ |
6,405
|
|||||||||||||||
Purchase Accounting Adjustment
|
—
|
4
|
1
|
—
|
—
|
—
|
5
|
|||||||||||||||||||||
Balance at December 31, 2018
(1)
|
$ |
2,106
|
$ |
1,565
|
$ |
2,497
|
$ |
—
|
$ |
242
|
$—
|
$ |
6,410
|
|||||||||||||||
SCANA Combination
(2)
|
|
—
|
|
|
73
|
|
|
1,015
|
|
|
1,521
|
|
|
—
|
|
|
—
|
|
|
2,609
|
|
|||||||
Contribution of SEMI to Wrangler
(3)
|
|
—
|
|
|
(73
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(73
|
)
|
|||||||
Balance at December 31, 2019
(1)
|
$
|
2,106
|
|
$
|
1,565
|
|
$
|
3,512
|
|
$
|
1,521
|
|
$
|
242
|
|
|
$—
|
|
$
|
8,946
|
|
|||||||
Dominion Energy Gas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance at December 31, 2017
(1)
|
$ |
—
|
$ |
1,466
|
$ |
—
|
$ |
—
|
$ |
—
|
$—
|
$ |
1,466
|
|||||||||||||||
Purchase Accounting Adjustment
|
—
|
5
|
—
|
—
|
—
|
—
|
5
|
|||||||||||||||||||||
Balance at December 31, 2018
(1)
|
$ |
—
|
$ |
1,471
|
$ |
—
|
$ |
—
|
$ |
—
|
$—
|
$ |
1,471
|
|||||||||||||||
No events affecting goodwill
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance at December 31, 2019
(1)
|
$
|
—
|
|
$
|
1,471
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
$—
|
|
$
|
1,471
|
|
(1)
|
Goodwill amounts do not contain any accumulated impairment losses.
|
(2)
|
See Note 3 for discussion of Dominion Energy’s acquisitions.
|
(3)
|
See Note 9 for additional information.
|
142
|
|
|
|
|
|
2019
|
2018
|
||||||||||||||
At December 31,
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Gross
Carrying Amount |
Accumulated
Amortization |
||||||||||
(millions)
|
|
|
|
|
|
|
||||||||||
Dominion Energy
|
|
|
|
|
|
|
||||||||||
Software, licenses and other
|
$
|
1,340
|
|
|
$549
|
|
$ |
1,033
|
$363
|
|||||||
Virginia Power
|
|
|
|
|
|
|
||||||||||
Software, licenses and other
|
$
|
406
|
|
|
$135
|
|
$ |
384
|
$134
|
|||||||
Dominion Energy Gas
|
|
|
|
|
|
|
||||||||||
Software, licenses and other
|
$
|
178
|
|
|
$ 72
|
|
$ |
179
|
$ 64
|
|
2020
|
2021
|
2022
|
2023
|
2024
|
|||||||||||||||
(millions)
|
|
|
|
|
|
|
||||||||||||||
Dominion Energy
|
$
|
88
|
|
$
|
78
|
|
$
|
70
|
|
$
|
56
|
|
$
|
49
|
|
|||||
Virginia Power
|
$
|
25
|
|
$
|
19
|
|
$
|
15
|
|
$
|
8
|
|
$
|
6
|
|
|||||
Dominion Energy Gas
|
$
|
9
|
|
$
|
8
|
|
$
|
8
|
|
$
|
5
|
|
$
|
4
|
|
At December 31,
|
2019
|
|
2018
|
|||||
(millions)
|
|
|
|
|||||
Dominion Energy
|
|
|
|
|
||||
Regulatory assets:
|
|
|
|
|
||||
Deferred cost of fuel used in electric generation
(1)
|
$
|
48
|
|
$ |
174
|
|||
Deferred project costs and DSM programs for gas utilities
(2)
|
|
21
|
|
17
|
||||
Unrecovered gas costs
(3)
|
|
102
|
|
14
|
||||
Deferred rate adjustment clause costs for Virginia electric utility
(4)(5)
|
|
109
|
|
78
|
||||
Deferred nuclear refueling outage costs
(6)
|
|
68
|
|
69
|
||||
NND Project costs
(7)
|
|
138
|
|
—
|
||||
PJM transmission rates
(8)
|
|
121
|
|
45
|
||||
Other
|
|
272
|
|
99
|
||||
Regulatory assets-current
|
|
879
|
|
496
|
||||
Deferred cost of fuel used in electric generation
(1)
|
|
—
|
|
83
|
||||
P
ension and other postretirement benefit costs
(9)
|
|
1,431
|
|
1,497
|
||||
Deferred rate adjustment clause costs for Virginia electric utility
(4)(5)(10)
|
|
235
|
|
230
|
||||
PJM transmission rates
(8)
|
|
85
|
|
192
|
||||
Deferred project costs for gas utilities
(2)
|
|
521
|
|
335
|
||||
Interest rate hedges
(11)
|
|
741
|
|
184
|
||||
AROs and related funding
(12)
|
|
311
|
|
—
|
||||
Cost of reacquired debt
(13)(14)
|
|
262
|
|
3
|
||||
NND Project costs
(7)
|
|
2,503
|
|
—
|
||||
Ash pond and landfill closure costs
(15)
|
|
1,016
|
|
27
|
||||
Other
|
|
582
|
|
125
|
||||
Regulatory assets-noncurrent
|
|
7,687
|
|
2,676
|
||||
Total regulatory assets
|
$
|
8,566
|
|
$ |
3,172
|
|||
Regulatory liabilities:
|
|
|
|
|
||||
Provision for future cost of removal and AROs
(16)
|
$
|
142
|
|
$ |
117
|
|||
Reserve for refunds and rate credits to electric utility customers
(17)
|
|
143
|
|
71
|
||||
Cost-of-service
impact of 2017 Tax Reform Act
(18)
|
|
4
|
|
104
|
||||
Income taxes refundable through future rates
(19)
|
|
77
|
|
—
|
||||
Monetization of guarantee settlement
(20)
|
|
67
|
|
—
|
||||
Other
|
|
64
|
|
64
|
||||
Regulatory liabilities-current
|
|
497
|
|
356
|
||||
Income taxes refundable through future rates
(19)
|
|
5,088
|
|
4,071
|
||||
Provision for future cost of removal and AROs
(16)
|
|
2,302
|
|
1,409
|
||||
Nuclear decommissioning trust
(21)
|
|
1,471
|
|
1,070
|
||||
Monetization of guarantee settlement
(20)
|
|
970
|
|
—
|
||||
Reserve for refunds and rate credits to electric utility customers
(17)
|
|
656
|
|
—
|
||||
Overrecovered other postretirement benefit costs
(22)
|
|
189
|
|
120
|
||||
Other
|
|
325
|
|
170
|
||||
Regulatory liabilities-noncurrent
|
|
11,001
|
|
6,840
|
||||
Total regulatory liabilities
|
$
|
11,498
|
|
$ |
7,196
|
(1)
|
Reflects deferred fuel expenses for the Virginia, North Carolina and South Carolina jurisdictions of Dominion Energy’s electric generation operations.
|
(2)
|
Primarily reflects amounts expected to be collected from or owed to gas customers in Dominion Energy’s service territories associated with current and prospective rider projects, including CEP, PIR and pipeline integrity management. See Note 13 for more information.
|
(3)
|
Reflects unrecovered or overrecovered gas costs at regulated gas operations, which are recovered or refunded through filings with the applicable regulatory authority.
|
|
|
|
143
|
|
(4)
|
Reflects deferrals under Virginia Power’s electric transmission FERC formula rate and the deferral of costs associated with certain current and prospective rider projects, net of income taxes refundable from the 2017 Tax Reform Act for Virginia Power. See Note 13 for more information.
|
(5)
|
As a result of actions from the Virginia Commission in the first quarter of 2019 regarding the ratemaking treatment of excess deferred taxes from the adoption of the 2017 Tax Reform Act for all existing rate adjustment clauses, Virginia Power recorded a $29 million ($22 million
after-tax)
charge in operating revenue in the Consolidated Statements of Income for amounts which are probable of being returned to customers.
|
(6)
|
Legislation enacted in Virginia in April 2014 requires Virginia Power to defer operation and maintenance costs incurred in connection with the refueling of any nuclear-powered generating plant. These deferred costs will be amortized over the refueling cycle, not to exceed 18 months.
|
(7)
|
Reflects expenditures by DESC associated with the NND Project, which pursuant to the SCANA Merger Approval Order, will be recovered from DESC electric service customers over a
20-year
period ending in 2039. See Note 3 for more information.
|
(8)
|
Reflects amounts to be recovered through retail rates in Virginia for payments Virginia Power will make to PJM over a
ten-year
period ending 2028 under the terms of a FERC settlement agreement in May 2018 resolving a PJM cost allocation matter.
|
(9)
|
Represents unrecognized pension and other postretirement employee benefit costs expected to be recovered or refunded through future rates generally over the expected remaining service period of plan participants by certain of Dominion Energy’s rate-regulated subsidiaries.
|
(10)
|
During 2019, Virginia Power recorded a charge of $17 million ($13 million
after-tax)
in impairment of assets and other charges (reflected in the Corporate and Other segment)
to
write-off
the balance of a regulatory asset for which it is no longer seeking recovery.
|
(11)
|
Reflects interest rate hedges recoverable from or refundable to customers. Certain of these instruments are settled and any related payments are being amortized into interest expense over the life of the related debt, which has a weighted-average useful life of approximately 27 years as of December 31, 2019.
|
(12)
|
Represents deferred depreciation and accretion expense related to legal obligations associated with the future retirement of generation, transmission and distribution properties. The AROs primarily relate to DESC’s electric generating facilities, including Summer, and are expected to be recovered over the related property lives and periods of decommissioning which may range up to approximately 105
|
(13)
|
Costs of the reacquisition of debt are deferred and amortized as interest expense over the
would-be
remaining life of the reacquired debt. The reacquired debt costs had a weighted-average life of approximately 26 years as of December 31, 2019.
|
(14)
|
During 2019, DESC purchased certain of its first mortgage bonds as discussed in Note 18. As a result of these transactions, DESC incurred net costs, including write-offs of unamortized discount, premium and debt issuance costs, of $270 million.
|
(15)
|
Primarily reflects legislation enacted in Virginia in March 2019 which requires any CCR unit located at certain Virginia Power stations to be closed by removing the CCRs to an approved landfill or through recycling for beneficial reuse. Subject to approval by the Virginia Commission, amounts are expected to be collected over a period between 15 and 18 years commencing no earlier than 2021. Virginia Power is entitled to collect carrying costs once expenditures have been made. See Note 23 for additional information.
|
(16)
|
Rates charged to customers by Dominion Energy’s regulated businesses include a provision for the cost of future activities to remove assets that are expected to be incurred at the time of retirement.
|
(17)
|
Reflects amounts previously collected from retail electric customers of DESC for the NND Project to be credited over an estimated
11-year
period in connection with the SCANA Merger Approval Order and Virginia legislation enacted in March 2018 that required
one-time
rate credits of certain amounts to utility customers in Virginia. See Notes 3 and 13 for additional information.
|
(18)
|
Balance refundable to customers related to the decrease in revenue requirements for recovery of income taxes at the Companies’ regulated electric generation and electric and natural gas distribution operations. See Notes 3 and 13 for additional information.
|
(19)
|
Amounts recorded to pass the effect of reduced income taxes from the 2017 Tax Reform Act to customers in future periods, which will reverse at the weighted average tax rate that was used to build the reserves over the remaining book life of the property, net of amounts to be recovered through future rates to pay income taxes that become payable when rate revenue is provided to recover AFUDC equity.
|
(20)
|
Reflects amounts to be refunded to DESC electric service customers over a
20-year
period ending in 2039 associated with the monetization of a bankruptcy settlement agreement. See Note 3 for additional information.
|
(21)
|
Primarily reflects a regulatory liability representing amounts collected from Virginia jurisdictional customers and placed in external trusts (including income, losses and changes in fair value thereon, as applicable) for the future decommissioning of Dominion Energy’s utility nuclear generation stations, in excess of the related AROs.
|
(22)
|
Reflects a regulatory liability for the collection of postretirement benefit costs allowed in rates in excess of expense incurred.
|
At December 31,
|
2019
|
|
2018
|
|||||
(millions)
|
|
|
|
|||||
Virginia Power
|
|
|
|
|
||||
Regulatory assets:
|
|
|
|
|
||||
Deferred cost of fuel used in electric generation
(1)
|
$
|
48
|
|
$ |
174
|
|||
Deferred rate adjustment clause costs
(2)(3)
|
|
109
|
|
78
|
||||
Deferred nuclear refueling outage costs
(4)
|
|
68
|
|
69
|
||||
PJM transmission rates
(5)
|
|
121
|
|
45
|
||||
Other
|
|
87
|
|
58
|
||||
Regulatory assets-current
|
|
433
|
|
424
|
||||
Deferred rate adjustment clause costs
(2)(3)(6)
|
|
235
|
|
230
|
||||
PJM transmission rates
(5)
|
|
85
|
|
192
|
||||
Interest rate hedges
(7)
|
|
404
|
|
151
|
||||
Deferred cost of fuel used in electric generation
(1)
|
|
—
|
|
83
|
||||
Ash pond and landfill closure costs
(8)
|
|
1,016
|
|
27
|
||||
Other
|
|
123
|
|
54
|
||||
Regulatory assets-noncurrent
|
|
1,863
|
|
737
|
||||
Total regulatory assets
|
$
|
2,296
|
|
$ |
1,161
|
|||
Regulatory liabilities:
|
|
|
|
|
||||
Provision for future cost of removal
(9)
|
$
|
103
|
|
$ |
92
|
|||
Cost-of-service
impact of 2017 Tax Reform Act
(10)
|
|
—
|
|
95
|
||||
Reserve for rate credits to electric utility customers
(11`)
|
|
—
|
|
71
|
||||
Income taxes refundable through future rates
(12)
|
|
54
|
|
—
|
||||
Other
|
|
10
|
|
41
|
||||
Regulatory liabilities-current
|
|
167
|
|
299
|
||||
Income taxes refundable through future rates
(12)
|
|
2,438
|
|
2,579
|
||||
Nuclear decommissioning trust
(13)
|
|
1,471
|
|
1,070
|
||||
Provision for future cost of removal
(9)
|
|
1,054
|
|
940
|
||||
Other
|
|
111
|
|
58
|
||||
Regulatory liabilities-noncurrent
|
|
5,074
|
|
4,647
|
||||
Total regulatory liabilities
|
$
|
5,241
|
|
$ |
4,946
|
(1)
|
Reflects deferred fuel expenses for the Virginia and North Carolina jurisdictions of Virginia Power’s generation operations.
|
(2)
|
Reflects deferrals under Virginia Power’s electric transmission FERC formula rate and the deferral of costs associated with certain current and prospective rider projects, net of income taxes refundable from the 2017 Tax Reform Act for Virginia Power. See Note 13 for more information.
|
(3)
|
As a result of actions from the Virginia Commission in the first quarter of 2019 regarding the ratemaking treatment of excess deferred taxes from the adoption of the 2017 Tax Reform Act for all existing rate adjustment clauses, Virginia Power recorded a $29 million ($22 million
after-tax)
charge in operating revenue in the Consolidated Statements of Income for amounts which are probable of being returned to customers.
|
(4)
|
Legislation enacted in Virginia in April 2014 requires Virginia Power to defer operation and maintenance costs incurred in connection with the refueling of any nuclear-powered generating plant. These deferred costs will be amortized over the refueling cycle, not to exceed 18 months.
|
(5)
|
Reflects amounts to be recovered through retail rates in Virginia for payments Virginia Power will make to PJM over a
ten-year
period ending 2028 under the terms of a FERC settlement agreement in May 2018 resolving a PJM cost allocation matter.
|
144
|
|
|
|
|
(6)
|
During 2019, Virginia Power recorded a charge of $17 million ($13 million
after-tax)
in impairment of assets and other charges (reflected in the Corporate and Other segment)
to
write-off
the balance of a regulatory asset for which it is no longer seeking recovery.
|
(7)
|
Reflects interest rate hedges recoverable from or refundable to customers. Certain of these instruments are settled and any related payments are being amortized into interest expense over the life of the related debt, which has a weighted-average useful life of approximately 24 years as of December 31, 2019.
|
(8)
|
Primarily reflects legislation enacted in Virginia in March 2019 which requires any CCR unit located at certain Virginia Power stations to be closed by removing the CCR to an approved landfill or through recycling for beneficial reuse. Subject to approval by the Virginia Commission, amounts are expected to be collected over a period between 15 and 18 years commencing no earlier than 2021. Virginia Power is entitled to collect carrying costs once expenditures have been made. See Note 23 for additional information.
|
(9)
|
Rates charged to customers by Virginia Power’s regulated businesses include a provision for the cost of future activities to remove assets that are expected to be incurred at the time of retirement.
|
(10)
|
Balance refundable to customers related to the decrease in revenue requirements for recovery of income taxes at regulated electric generation and distribution operations. See Note 13 for additional information.
|
(11)
|
Charge associated with Virginia legislation enacted in March 2018 that required
one-time
rate credits of certain amounts to utility customers. See Note 13 for additional information.
|
(12)
|
Amounts recorded to pass the effect of reduced income taxes from the 2017 Tax Reform Act to customers in future periods, which will reverse at the weighted average tax rate that was used to build the reserves over the remaining book life of the property, net of amounts to be recovered through future rates to pay income taxes that become payable when rate revenue is provided to recover AFUDC equity.
|
(13)
|
Primarily reflects a regulatory liability representing amounts collected from Virginia jurisdictional customers and placed in external trusts (including income, losses and changes in fair value thereon) for the future decommissioning of Virginia Power’s utility nuclear generation stations, in excess of the related AROs.
|
At December 31,
|
2019
|
|
2018
|
|||||
(millions)
|
|
|
|
|||||
Dominion Energy Gas
|
|
|
|
|
||||
Regulatory assets:
|
|
|
|
|
||||
Unrecovered gas costs
(1)
|
$
|
2
|
|
$ |
1
|
|||
Other
|
|
6
|
|
7
|
||||
Regulatory assets-current
(2)
|
|
8
|
|
8
|
||||
Unrecognized pension and other postretirement benefit costs
(3)
|
|
—
|
|
15
|
||||
Interest rate hedges
(4)
|
|
32
|
|
33
|
||||
Other
|
|
8
|
|
4
|
||||
Regulatory assets-noncurrent
|
|
40
|
|
52
|
||||
Total regulatory assets
|
$
|
48
|
|
$ |
60
|
|||
Regulatory liabilities:
|
|
|
|
|
||||
Provision for future cost of removal and AROs
(5)
|
$
|
18
|
|
$ |
9
|
|||
Overrecovered gas costs
(1)
|
|
8
|
|
7
|
||||
Other
|
|
15
|
|
8
|
||||
Regulatory liabilities-current
(6)
|
|
41
|
|
24
|
||||
Income taxes refundable through future rates
(7)
|
|
560
|
|
530
|
||||
Provision for future cost of removal and AROs
(6)
|
|
95
|
|
113
|
||||
Overrecovered other postretirement benefit costs
(8)
|
|
133
|
|
106
|
||||
Other
|
|
12
|
|
16
|
||||
Regulatory liabilities-noncurrent
|
|
800
|
|
765
|
||||
Total regulatory liabilities
|
$
|
841
|
|
$ |
789
|
(1)
|
Reflects unrecovered or overrecovered gas costs at regulated gas operations, which are recovered or refunded through filings with the applicable regulatory authority.
|
(2)
|
Current regulatory assets are presented in other current assets in Dominion Energy Gas’ Consolidated Balance Sheets.
|
(3)
|
Represents unrecognized pension and other postretirement employee benefit costs expected to be recovered or refunded through future rates generally over the expected remaining service period of plan participants by certain of Dominion Energy Gas’ rate-regulated subsidiaries.
|
(4)
|
Reflects interest rate hedges recoverable from or refundable to customers. Certain of these instruments are settled and any related payments are being amortized into interest expense over the life of the related debt, which has a weighted average useful life of approximately 30 years.
|
(5)
|
Rates charged to customers by Dominion Energy Gas’ regulated businesses include a provision for the cost of future activities to remove assets that are expected to be incurred at the time of retirement.
|
(6)
|
Current regulatory liabilities are presented in other current liabilities in Dominion Energy Gas’ Consolidated Balance Sheets.
|
(7)
|
Amounts recorded to pass the effect of reduced income taxes from the 2017 Tax Reform Act to customers in future periods, which will reverse at the weighted average tax rate that was used to build the reserves over the remaining book life of the property, net of amounts to be recovered through future rates to pay income taxes that become payable when rate revenue is provided to recover AFUDC equity.
|
(8)
|
Reflects a regulatory liability for the collection of postretirement benefit costs allowed in rates in excess of expense incurred.
|
|
|
|
145
|
|
146
|
|
|
|
|
|
|
|
147
|
|
148
|
|
|
|
|
• |
In July 2018, Virginia Power filed an application with the Virginia Commission for CPCNs to construct two solar facilities. Colonial Trail West and Spring Grove 1 are estimated to cost approximately $410 million, excluding financing costs. Colonial Trail West commenced commercial operations in December 2019 and Spring Grove 1 is expected to commence commercial operations in the fourth quarter of 2020. Virginia Power also applied for approval of Rider
US-3
associated with these projects with a proposed $10 million total revenue requirement for the rate year beginning June 1, 2019. In January 2019, the Virginia Commission issued a final order granting CPCNs to construct the solar facilities, subject to a
20-year
performance guarantee of the facilities at a 25% solar capacity factor when normalized for force majeure events. In April 2019, the Virginia Commission approved Rider
US-3.
|
• |
In July 2019, Virginia Power filed an application with the Virginia Commission for a CPCN to construct Sadler Solar, which is estimated to cost approximately $146 million, excluding financing costs. Sadler Solar is expected to commence commercial operations, subject to regulatory approvals associated with the project, in the fourth quarter of 2020. Virginia Power also applied for approval of Rider
US-4
associated with this project with a proposed $9 million total revenue requirement for the rate year beginning June 1, 2020. In January 2020, the Virginia Commission issued a final order granting the CPCN to construct Sadler Solar, subject to a
20-
year performance guarantee of the facility at a 22% solar capacity factor when normalized for force majeure events. This matter regarding Rider
US-4
is pending.
|
• | The Virginia Commission previously approved Rider T1 concerning transmission rates. In May 2019, Virginia Power |
• | The Virginia Commission previously approved Rider U in conjunction with cost recovery to move certain electric distribution facilities underground as authorized by Virginia legislation. In October 2019, the Virginia Commission approved Virginia Power’s proposed fourth phase of conversions totaling $123 million and a total $52 million revenue requirement for the rate year beginning February 1, 2020 for continuing recovery of the previously approved phase conversions and the proposed fourth phase conversions. |
• | The Virginia Commission previously approved Riders C1A, C2A and C3A in connection with cost recovery for DSM programs. In December 2019, Virginia Power filed a petition to approve an additional 10 new energy efficiency programs and one new demand response DSM program for five years, subject to future extension, with a $186 million cost cap, and proposed a total $60 million revenue requirement for the rate year beginning September 1, 2020. This total revenue requirement represents an $11 million increase over the previous year. |
• |
In December 2018, Virginia Power filed a petition requesting approval of Rider E and proposed a $114 million total revenue requirement for the rate year beginning November 1, 2019. In August 2019, the Virginia Commission issued an order approving in part and denying in part the petition. As a result, Virginia Power recorded a $21 million ($16 million
after-tax)
charge in impairment of assets and other charges in the Consolidated Statements of Income for the three and nine months ended September 30, 2019 to
write-off
certain disallowed environmental property, plant and equipment and regulatory assets. In August 2019, the Virginia Commission granted Virginia Power’s petition for reconsideration of the disallowed amount and stayed the order issued earlier in August 2019. In October 2019, the Virginia Commission approved Virginia Power’s request to implement a total revenue requirement of $104 million on an interim basis, subject to
true-up,
pending resolution of the petition for reconsideration. In November 2019, the Virginia Commission denied the petition for reconsideration and the $104 million total revenue requirement remains in effect.
|
• | Additional significant riders associated with various Virginia Power projects are as follows: |
Rider Name
|
Application
Date |
Approval
Date
|
Rate Year
Beginning
|
Total
Revenue Requirement (millions) |
Increase
(Decrease) Over Previous Year (millions) |
|||||||||||||||
Rider S
|
May 2019
|
February 2020
|
April 2020
|
$195
|
$(20
|
) | ||||||||||||||
Rider GV
|
May 2019
|
February 2020
|
April 2020
|
132
|
12
|
|||||||||||||||
Rider W
|
May 2019
|
February 2020
|
April 2020
|
106
|
1
|
|||||||||||||||
Rider R
|
May 2019
|
February 2020
|
April 2020
|
44
|
(13
|
) | ||||||||||||||
Rider B
|
May 2019
|
February 2020
|
April 2020
|
32
|
(6
|
) | ||||||||||||||
Rider
US-3
|
July 2019
|
Pending
|
June 2020
|
31
|
21
|
|||||||||||||||
Rider BW
|
October 2019
|
Pending
|
September 2020
|
120
|
1
|
|||||||||||||||
Rider
US-2
|
October 2019
|
Pending
|
September 2020
|
10
|
(5
|
) | ||||||||||||||
Rider E
|
January 2020
|
Pending
|
November 2020
|
88
|
(16
|
) |
|
|
|
149
|
|
Description and Location
of Project
|
Application
Date
|
Approval
Date
|
Type of
Line
|
Miles
of
Lines
|
Cost
Estimate
(millions)
|
|||||||||||||||
Rebuild and operate transmission line between Lanexa and the Northern Neck
in Virginia |
June 2018
|
February 2019
|
230 kV
|
3
|
$ 30
|
|||||||||||||||
Build a new substation and connect three existing
transmission lines thereto in Fluvanna County, Virginia |
October 2018
|
June 2019
|
230 kV
|
<1
|
30
|
|||||||||||||||
Rebuild and operate the Glebe
substation and relocate and operate in Arlington County, Virginia and the City of Alexandria, Virginia existing overhead line underground |
March 2019
|
September 2019
|
230 kV
|
<1
|
125
|
|||||||||||||||
Rebuild and operate transmission line between Valley, Virginia and
Mt. Storm, West Virginia |
April 2019
|
November 2019
|
500 kV
|
65
|
290
|
|||||||||||||||
Rebuild and operate transmission line between the Suffolk substation and
the Virginia/North Carolina state line |
May 2019
|
November 2019
|
230 kV
|
11
|
20
|
|||||||||||||||
Rebuild and operate five segments between the Loudoun
and Ox substations |
August 2019
|
Pending
|
230 kV
|
19
|
70
|
|||||||||||||||
Build new Evergreen Mills switching station and line loops in Loudoun County,
Virginia |
December 2019
|
Pending
|
230 kV
|
2
|
30
|
|||||||||||||||
Build new Lockridge substation and line loop in Loudoun County, Virginia
|
December 2019
|
Pending
|
230 kV
|
<1
|
35
|
150
|
|
|
|
|
|
|
|
151
|
|
152
|
|
|
|
|
|
Amount
|
|||
(millions)
|
|
|
||
Dominion Energy
|
|
|
|
|
AROs at December 31, 2017
|
$ |
2,432
|
||
Obligations incurred during the period
|
20
|
|||
Obligations settled during the period
|
(159
|
) | ||
Revisions in estimated cash flows
(2)
|
120
|
|||
Accretion
|
119
|
|||
AROs at December 31, 2018
(1)
|
$ |
2,532
|
||
Obligations incurred during the period
(2)
|
|
2,413
|
|
|
Obligations settled during the period
|
|
(137
|
)
|
|
AROs acquired in the SCANA Combination
|
|
577
|
|
|
Revisions in estimated cash flows
(3)
|
|
(324
|
)
|
|
Accretion
|
|
213
|
|
|
AROs at December 31, 2019
(1)
|
$
|
5,274
|
|
|
Virginia Power
|
|
|
|
|
AROs at December 31, 2017
|
$ |
1,365
|
||
Obligations incurred during the period
|
14
|
|||
Obligations settled during the period
|
(119
|
) | ||
Revisions in estimated cash flows
(2)
|
120
|
|||
Accretion
|
65
|
|||
AROs at December 31, 2018
|
$ |
1,445
|
||
Obligations incurred during the period
(
2
)
|
|
2,408
|
|
|
Obligations settled during the period
|
|
(81
|
)
|
|
Revisions in estimated cash flows
(3)
|
|
(323
|
)
|
|
Accretion
|
|
132
|
|
|
AROs at December 31, 2019
|
$
|
3,581
|
|
|
Dominion Energy Gas
|
|
|
|
|
AROs at December 31, 2017
|
$ |
85
|
||
Obligations incurred during the period
|
3
|
|||
Obligations settled during the period
|
(6
|
) | ||
Accretion
|
6
|
|||
AROs at December 31, 2018
(
4
)
|
$ |
88
|
||
Obligations settled during the period
|
|
(3
|
)
|
|
Accretion
|
|
4
|
|
|
AROs at December 31, 2019
(
4
)
|
$
|
89
|
|
(1)
|
Includes $282 million and $408 million reported in other current liabilities at December 31, 2018, and 2019, respectively.
|
(2)
|
Reflects future ash pond and landfill closure costs at certain utility generation facilities. See Note 23 for further information.
|
(3)
|
Reflects revisions to future ash pond and landfill closure costs at certain utility generation facilities as well as revisions for 20 year license extensions for regulated nuclear power stations in Virginia.
|
(4)
|
Includes $74 million and $75 million reported in other deferred credits and other liabilities, with the remainder recorded in other current liabilities, at December 31, 2018 and 2019, respectively.
|
|
December 31, 2019
|
|||
(millions)
|
|
|
||
Dominion Energy
|
|
|
|
|
Lease assets:
|
|
|
|
|
Operating lease assets
(1)
|
$
|
499
|
|
|
Finance lease assets
(2)
|
|
140
|
|
|
Total lease assets
|
$
|
639
|
|
|
Lease liabilities:
|
|
|
|
|
Operating lease liabilities
(3)
|
$
|
59
|
|
|
Finance lease liabilities
(4)
|
|
29
|
|
|
Total lease liabilities—current
|
|
88
|
|
|
Operating lease liabilities
(5)
|
|
442
|
|
|
Finance lease liabilities
|
|
105
|
|
|
Total lease liabilities—noncurrent
|
|
547
|
|
|
Total lease liabilities
|
$
|
635
|
|
|
Virginia Power
|
|
|
|
|
Operating lease assets
(1)
|
$
|
212
|
|
|
Finance lease assets
(2)
|
|
19
|
|
|
Total lease assets
|
$
|
231
|
|
|
Lease liabilities:
|
|
|
|
|
Operating lease liabilities
(3)
|
$
|
30
|
|
|
Finance lease liabilities
(4)
|
|
3
|
|
|
Total lease liabilities—current
|
|
33
|
|
|
Operating lease liabilities
(5)
|
|
180
|
|
|
Finance lease liabilities
|
|
16
|
|
|
Total lease liabilities—noncurrent
|
|
196
|
|
|
Total lease liabilities
|
$
|
229
|
|
|
Dominion Energy Gas
|
|
|
|
|
Operating lease assets
(1)
|
$
|
37
|
|
|
Finance lease assets
(2)
|
|
6
|
|
|
Total lease assets
|
$
|
43
|
|
|
Lease liabilities:
|
|
|
|
|
Operating lease liabilities
(3)
|
$
|
6
|
|
|
Finance lease liabilities
(4)
|
|
1
|
|
|
Total lease liabilities—current
|
|
7
|
|
|
Operating lease liabilities
(5)
|
|
29
|
|
|
Finance lease liabilities
|
|
5
|
|
|
Total lease liabilities—noncurrent
|
|
34
|
|
|
Total lease liabilities
|
$
|
41
|
|
(1)
|
Included in other deferred charges and other assets in the Companies’ Consolidated Balance Sheets.
|
(2)
|
Included in property, plant and equipment in the Companies’ Consolidated Balance Sheets, net of $27 million, $4 million and $1 million of accumulated amortization at Dominion Energy, Virginia Power and Dominion Energy Gas, respectively, at December 31, 2019.
|
(3)
|
Included in other current liabilities in the Companies’ Consolidated Balance Sheets.
|
(4)
|
Included in securities due within one year in the Companies’ Consolidated Balance Sheets.
|
(5)
|
Included in other deferred credits and other liabilities in the Companies’ Consolidated Balance Sheets.
|
|
|
|
153
|
|
|
Year Ended
December 31, 2019
|
|||
(millions)
|
|
|
||
Dominion Energy
|
|
|
|
|
Finance lease cost:
|
|
|
|
|
Amortization
|
$
|
20
|
|
|
Interest
|
|
4
|
|
|
Operating lease cost
|
|
87
|
|
|
Short-term lease cost
|
|
30
|
|
|
Variable lease cost
|
|
6
|
|
|
Total lease cost
|
$
|
147
|
|
|
Virginia Power
|
|
|
|
|
Operating lease cost
|
$
|
41
|
|
|
Short-term lease cost
|
|
13
|
|
|
Variable lease cost
|
|
2
|
|
|
Total lease cost
|
$
|
56
|
|
|
Dominion Energy Gas
|
|
|
|
|
Operating lease cost
|
$
|
7
|
|
|
Short-term lease cost
|
|
7
|
|
|
Total lease cost
|
$
|
14
|
|
|
Year Ended
December 31,
2019 |
|||
(millions)
|
|
|
||
Dominion Energy
|
|
|
|
|
Operating cash flows for finance leases
|
$
|
4
|
|
|
Operating cash flows for operating leases
|
|
121
|
|
|
Financing cash flows for finance leases
|
|
20
|
|
|
Virginia Power
|
|
|
|
|
Operating cash flows for operating leases
|
|
56
|
|
|
Dominion Energy Gas
|
|
|
|
|
Operating cash flows for operating leases
|
|
14
|
|
|
December 31, 2019
|
|
||
Dominion Energy
|
|
|
|
|
Weighted average remaining lease term—finance leases
|
|
5 years
|
|
|
Weighted average remaining lease term—operating leases
|
|
21 years
|
|
|
Weighted average discount rate—finance leases
|
|
3.84
|
%
|
|
Weighted average discount rate—operating leases
|
|
4.47
|
%
|
|
Virginia Power
|
|
|
|
|
Weighted average remaining lease term—finance leases
|
|
6 years
|
|
|
Weighted average remaining lease term—operating leases
|
|
20 years
|
|
|
Weighted average discount rate—finance leases
|
|
4.12
|
%
|
|
Weighted average discount rate—operating leases
|
|
4.29
|
%
|
|
Dominion Energy Gas
|
|
|
|
|
Weighted average remaining lease term—finance leases
|
|
6 years
|
|
|
Weighted average remaining lease term—operating leases
|
|
11 years
|
|
|
Weighted average discount rate—finance leases
|
|
4.08
|
%
|
|
Weighted average discount rate—operating leases
|
|
4.37
|
%
|
Maturity of Lease Liabilities
|
Dominion Energy
|
Virginia Power
|
Dominion Energy
Gas |
|||||||||||||||||||||
|
Operating
|
Finance
|
Operating
|
Finance
|
Operating
|
Finance
|
||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|||||||||||||||||
2020
|
$ |
72
|
$ |
34
|
$ |
34
|
$ |
4
|
$ |
7
|
$ |
2
|
||||||||||||
2021
|
65
|
31
|
30
|
4
|
6
|
1
|
||||||||||||||||||
2022
|
55
|
29
|
24
|
4
|
5
|
1
|
||||||||||||||||||
2023
|
45
|
26
|
19
|
3
|
4
|
1
|
||||||||||||||||||
2024
|
36
|
19
|
14
|
3
|
3
|
1
|
||||||||||||||||||
After 2024
|
582
|
9
|
205
|
4
|
20
|
1
|
||||||||||||||||||
Total undiscounted lease payments
|
855
|
148
|
326
|
22
|
45
|
7
|
||||||||||||||||||
Present value adjustment
|
(377
|
) |
(14
|
) |
(139
|
) |
(3
|
) |
(10
|
) |
(1
|
) | ||||||||||||
Present value of lease liabilities
|
$ |
478
|
$ |
134
|
$ |
187
|
$ |
19
|
$ |
35
|
$ |
6
|
154
|
|
|
|
|
|
|
|
155
|
|
|
Facility
Limit |
Outstanding
Commercial Paper
(1)
|
Outstanding
Letters of Credit |
Facility
Capacity Available |
||||||||||||
(millions)
|
|
|
|
|
|
|||||||||||
At December 31, 2019
|
|
|
|
|
|
|
||||||||||
Joint revolving credit facility
(2)
|
$
|
6,000
|
|
|
$836
|
|
|
$89
|
|
$
|
5,075
|
|
||||
At December 31, 2018
|
|
|
|
|
|
|
||||||||||
Joint revolving credit facility
(2)
|
$ |
6,000
|
$324
|
$88
|
$ |
5,588
|
156
|
|
|
|
|
(1)
|
The weighted-average interest rates of the outstanding commercial paper supported by Dominion Energy’s credit facility was 2.10% and 2.93% at December 31, 2019 and 2018, respectively.
|
(2)
|
This credit facility matures in March 2023 and can be used by the borrowers under the credit facility to support bank borrowings and the issuance of commercial paper, as well as to support up to a combined $2.0 billion of letters of credit.
|
|
Facility
Limit |
Outstanding
Commercial Paper
(1)
|
Outstanding
Letters of Credit |
|||||||||
(millions)
|
|
|
|
|
||||||||
At December 31, 2019
|
|
|
|
|
|
|||||||
Joint revolving credit facility
(2)
|
|
$6,000
|
|
|
$243
|
|
|
$ 7
|
|
|||
At December 31, 2018
|
|
|
|
|
|
|||||||
Joint revolving credit facility
(2)
|
$6,000
|
$314
|
$16
|
(1)
|
The weighted-average interest rates of the outstanding commercial paper supported by the credit facility was 2.10% and 2.94% at December 31, 2019 and 2018, respectively.
|
(2)
|
The full amount of the facility is available to Virginia Power, less any amounts outstanding to
co-borrowers
Dominion Energy, Dominion Energy Gas, Questar Gas and DESC. The
sub-limit
for Virginia Power is set within the facility limit but can be changed at the option of the borrowers under the credit facility multiple times per year. At December 31, 2019, the
sub-limit
for Virginia Power was $1.5 billion. If Virginia Power has liquidity needs in excess of its
sub-limit,
the
sub-limit
may be changed or such needs may be satisfied through short-term intercompany borrowings from Dominion Energy. This credit facility matures in March 2023 and can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $2.0 billion (or the
sub-limit,
whichever is less) of letters of credit.
|
|
Facility
Limit |
Outstanding
Commercial Paper
(1)
|
Outstanding
Letters of Credit |
|||||||||
(millions)
|
|
|
|
|
||||||||
At December 31, 2019
|
|
|
|
|
|
|||||||
Joint revolving credit facility
(2)
|
|
$1,500
|
|
|
$62
|
|
|
$—
|
|
|||
At December 31, 2018
|
|
|
|
|
|
|||||||
Joint revolving credit facility
(2)
|
$1,500
|
$10
|
$—
|
(1)
|
The weighted-average interest rates of the outstanding commercial paper supported by the credit facility was 1.98% and 2.58% at December 31, 2019 and 2018, respectively.
|
(2)
|
A maximum of $1.5 billion of the facility is available to Dominion Energy Gas, assuming adequate capacity is available after giving effect to uses by
co-borrowers
Dominion Energy, Virginia Power, Questar Gas and DESC. The
sub-limit
for Dominion Energy Gas is set within the facility limit but can be changed at the option of the borrowers under the credit facility multiple times per year. At December 31, 2019, the
sub-limit
for Dominion Energy Gas was $750 million. If Dominion Energy Gas has liquidity needs in excess of its
sub-limit,
the
sub-limit
may be changed or such needs may be satisfied through short-term intercompany borrowings from Dominion Energy. This credit facility matures in March 2023 and can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $1.5 billion (or the
sub-limit,
whichever is less) of letters of credit.
|
|
|
|
157
|
|
At December 31,
|
2019
Weighted-
average
Coupon
(1)
|
|
2019
|
|
2018
|
|||||||
(millions, except percentages)
|
|
|
|
|
|
|||||||
Dominion Energy Gas Holdings, LLC:
|
|
|
|
|
|
|
|
|||||
Unsecured senior notes:
|
|
|
|
|
|
|
|
|||||
Variable rate, due 2021
|
|
2.49
|
%
|
$
|
500
|
|
$ |
500
|
||||
2.5% to 4.8%, due 2019 to 2049
(2)
|
|
3.44
|
%
|
|
4,631
|
|
3,587
|
|||||
Cove Point, term loan, due 2021
(3)
|
|
|
|
|
—
|
|
3,000
|
|||||
Dominion Energy Midstream:
|
|
|
|
|
|
|
|
|||||
Term loan, variable rate, due 2019
|
|
|
|
|
—
|
|
300
|
|||||
Revolving credit agreement, variable rate, due 2021
(4)
|
|
|
|
|
—
|
|
73
|
|||||
Dominion Energy Questar Pipeline, unsecured senior notes, 3.53% to 4.875%, due 2028 to 2041
|
|
4.23
|
%
|
|
430
|
|
430
|
|||||
Dominion Energy Gas Holdings, LLC total principal
|
|
|
|
$
|
5,561
|
|
$ |
7,890
|
||||
Securities due within one year
|
|
2.80
|
%
|
|
(699
|
)
|
(748
|
) | ||||
Credit facility borrowings
(4)
|
|
|
|
|
—
|
|
(73
|
) | ||||
Unamortized discount and debt issuance costs
|
|
|
|
|
(41
|
)
|
(47
|
) | ||||
Finance leases
|
|
|
|
|
5
|
|
—
|
|||||
Dominion Energy Gas Holdings, LLC total long-term debt
|
|
|
|
$
|
4,826
|
|
$ |
7,022
|
||||
Virginia Electric and Power Company:
|
|
|
|
|
|
|
|
|||||
Unsecured senior notes:
|
|
|
|
|
|
|
|
|||||
2.75% to 8.875%, due 2019 to 2049
|
|
4.27
|
%
|
$
|
11,789
|
|
$ |
11,090
|
||||
Tax-
exempt financings, 1.80% to 5.0%, due 2023 to 2041
(5)
(6)
|
|
2.02
|
%
|
|
625
|
|
664
|
|||||
Virginia Electric and Power Company total principal
|
|
|
|
$
|
12,414
|
|
$ |
11,754
|
||||
Securities due within one year
|
|
4.29
|
%
|
|
(1
|
)
|
(350
|
) | ||||
Unamortized discount, premium and debt issuances costs, net
|
|
|
|
|
(88
|
)
|
(83
|
) | ||||
Finance leases
|
|
|
|
|
16
|
|
—
|
|||||
Virginia Electric and Power Company total long-term debt
|
|
|
|
$
|
12,341
|
|
$ |
11,321
|
||||
Dominion Energy, Inc.:
|
|
|
|
|
|
|
|
|||||
Unsecured senior notes:
|
|
|
|
|
|
|
|
|||||
Variable rates, due 2019 and 2020
|
|
2.31
|
%
|
$
|
300
|
|
$ |
800
|
||||
1.6% to 7.0%, due 2019 to 2049
(7)
|
|
4.15
|
%
|
|
7,688
|
|
7,488
|
|||||
Unsecured junior subordinated notes:
|
|
|
|
|
|
|
|
|||||
2.579% to 4.104%, due 2019 to 2024
|
|
3.01
|
%
|
|
2,950
|
|
2,100
|
|||||
Payable to affiliated trust, 8.4%, due 2031
|
|
8.40
|
%
|
|
10
|
|
10
|
|||||
Enhanced junior subordinated notes:
|
|
|
|
|
|
|
|
|||||
Variable rates, due 2066
(8)
|
|
4.41
|
%
|
|
397
|
|
422
|
|||||
5.25% and 5.75%, due 2054 and 2076
|
|
5.48
|
%
|
|
1,485
|
|
1,485
|
|||||
Remarketable subordinated notes, 2.0%, due 2021 and 2024
|
|
|
|
|
—
|
|
1,400
|
|||||
Questar Gas, unsecured senior notes, 2.98% to 7.20%, due 2024 to 2051
|
|
4.25
|
%
|
|
750
|
|
750
|
|||||
SCANA:
|
|
|
|
|
|
|
|
|||||
Unsecured medium term notes, 4.125% to 6.25%, due 2020 to 2022
(9)(10)
|
|
5.06
|
%
|
|
508
|
|
—
|
|||||
Unsecured senior notes, variable rate, due 2034
(11)
|
|
2.61
|
%
|
|
66
|
|
—
|
|||||
PSNC, senior debentures and notes, 4.13% to 7.45%, due 2020 to 2047
|
|
5.05
|
%
|
|
700
|
|
—
|
|||||
DESC:
|
|
|
|
|
|
|
|
|||||
First mortgage bonds, 3.22% to 6.625%, due 2021 to 2065
(12)
|
|
5.42
|
%
|
|
3,267
|
|
—
|
|||||
Tax-
exempt financings:
(13)
|
|
|
|
|
|
|
|
|||||
Variable rate due 2038
|
|
1.65
|
%
|
|
35
|
|
—
|
|||||
GENCO, variable rates due 2038
(14)
|
|
1.65
|
%
|
|
33
|
|
—
|
|||||
3.625% and 4.00%, due 2028 and 2033
|
|
3.90
|
%
|
|
54
|
|
—
|
|||||
Other
|
|
3.69
|
%
|
|
1
|
|
—
|
|||||
Secured senior notes, 4.82%, due 2042
(15)
|
|
4.82
|
%
|
|
345
|
|
362
|
|||||
Term loans, variable rates, due 2023 and 2024
(15)
|
|
4.24
|
%
|
|
527
|
|
582
|
|||||
Tax-
exempt financing, 1.7%, due 2033
|
|
1.70
|
%
|
|
27
|
|
27
|
|||||
Dominion Energy Gas Holdings, LLC total principal (from above)
|
|
|
|
|
5,561
|
|
7,890
|
|||||
Virginia Electric and Power Company total principal (from above)
|
|
|
|
|
12,414
|
|
11,754
|
|||||
Dominion Energy, Inc. total principal
|
|
|
|
$
|
37,118
|
|
$ |
35,070
|
||||
Fair value hedge valuation
(16)
|
|
|
|
|
4
|
|
(20
|
) | ||||
Securities due within one year
(8)(10)(11)(17)
|
|
3.41
|
%
|
|
(3,133
|
)
|
(3,624
|
) | ||||
Credit facility borrowings
(4)
|
|
|
|
|
—
|
|
(73
|
) | ||||
Unamortized discount, premium and debt issuance costs, net
|
|
|
|
|
(270
|
)
|
(248
|
) | ||||
Finance leases
|
|
|
|
|
105
|
|
39
|
|||||
Dominion Energy, Inc. total long-term debt
|
|
|
|
$
|
33,824
|
|
$ |
31,144
|
158
|
|
|
|
|
(1)
|
Represents weighted-average coupon rates for debt outstanding as of December 31, 2019.
|
(2)
|
Amount includes foreign currency remeasurement adjustments.
|
(3)
|
In September 2019, Cove Point repaid its $3.0 billion term loan due in 2021.
|
(4)
|
In February 2019, Dominion Energy Midstream repaid its $300 million variable rate term loan due in December 2019 and terminated the credit facility due in March 2021 subsequent to repaying the $73 million outstanding balance. As such, credit facility borrowings are presented within current liabilities in Dominion Energy Gas’ Consolidated Balance Sheets at December 31, 2018.
|
(5)
|
These financings relate to certain pollution control equipment at Virginia Power’s generating facilities.
|
(6)
|
In May 2019, Virginia Power redeemed its $40 million 5.0% Economic Development Authority of the County of Chesterfield Pollution Control Refunding Revenue Bonds, Series 2009A, due in 2023 at the principal outstanding plus accrued interest.
|
(7)
|
Includes debt assumed by Dominion Energy from the merger of its former CNG subsidiary.
|
(8)
|
In February 2020, Dominion Energy purchased and cancelled the remaining $111 million and $286 million of its June 2006 hybrids and September 2006 hybrids, respectively, both of which would have otherwise matured in 2066. As such, these borrowings are presented within securities due within one year in Dominion Energy’s Consolidated Balance Sheets at December 31, 2019.
|
(9)
|
In March 2019, SCANA purchased certain of its medium term notes having an aggregate purchase price of $300 million pursuant to tender offer that expired in the first quarter of 2019.
|
(10)
|
In February 2020, SCANA provided notice to redeem the remaining principal outstanding of $183 million of its 4.75% medium-term notes and $155 million of its 4.125% medium-term notes plus accrued interest and make-whole premiums in March 2020. The notes would have otherwise matured in May 2021 and February 2022, respectively. As such, these borrowings are presented within securities due within one year in Dominion Energy’s Consolidated Balance Sheets at December 31, 2019.
|
(11)
|
In January 2020, SCANA provided notice to redeem its floating rate senior notes at the remaining principal outstanding of $66 million plus accrued interest in March 2020. The notes would have otherwise matured in June 2034. As such, these borrowings are presented within securities due within one year in Dominion Energy’s Consolidated Balance Sheets at December 31, 2019.
|
(12)
|
In February, March and September 2019, DESC purchased certain of its first mortgage bonds having an aggregate purchase price of $1.8 billion pursuant to tender offers. The February and March tender offers expired in the first quarter of 2019 and the September tender offer expired in the third quarter of 2019.
|
(13)
|
Industrial revenue bonds totaling $68 million are secured by letters of credit
that
expire, subject to renewal, in the fourth quarter of 2020.
|
(1
4
)
|
In May 2019, GENCO redeemed its 5.49% senior secured notes due in 2024 at the remaining principal outstanding of $33 million plus accrued interest. In June 2019, the first mortgage lien on an electric generating facility that previously secured these notes was released.
|
(1
5
)
|
Represents debt associated with Eagle Solar, SBL Holdco and Dominion Solar Projects III, Inc. The debt is nonrecourse to Dominion Energy and is secured by Eagle Solar’s, SBL Holdco’s and Dominion Solar Projects III, Inc’s interest in certain solar facilities.
|
(1
6
)
|
Represents the valuation of certain fair value hedges associated with Dominion Energy’s fixed rate debt.
|
(1
7
)
|
Includes $20 million of estimated mandatory prepayments due within one year based on estimated cash flows in excess of debt service at SBL Holdco and Dominion Solar Projects III, Inc.
|
|
2020
|
2021
|
2022
|
2023
|
2024
|
Thereafter
|
Total
|
|||||||||||||||||||||
(millions, except percentages)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Dominion Energy Gas
|
$
|
700
|
|
$
|
500
|
|
$
|
—
|
|
$
|
650
|
|
$
|
1,050
|
|
$
|
2,661
|
|
$
|
5,561
|
|
|||||||
Weighted-average coupon
|
|
2.80
|
%
|
|
2.49
|
%
|
|
—
|
|
|
3.29
|
%
|
|
2.97
|
%
|
|
3.95
|
%
|
|
|
|
|||||||
Virginia Power
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Unsecured senior notes
|
$
|
—
|
|
$
|
—
|
|
$
|
750
|
|
$
|
700
|
|
$
|
350
|
|
$
|
9,989
|
|
$
|
11,789
|
|
|||||||
Tax-
exempt financings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
625
|
|
|
625
|
|
|||||||
Total
|
$
|
—
|
|
$
|
—
|
|
$
|
750
|
|
$
|
700
|
|
$
|
350
|
|
$
|
10,614
|
|
$
|
12,414
|
|
|||||||
Weighted-average coupon
|
|
—
|
|
|
—
|
|
|
3.15
|
%
|
|
2.75
|
%
|
|
3.45
|
%
|
|
4.35
|
%
|
|
|
|
|||||||
Dominion Energy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Term loans
(1
)
|
$
|
35
|
|
$
|
35
|
|
$
|
34
|
|
$
|
259
|
|
$
|
164
|
|
$
|
—
|
|
$
|
527
|
|
|||||||
First mortgage bonds
|
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,234
|
|
|
3,267
|
|
|||||||
Unsecured senior notes
(2)(3)
|
|
1,275
|
|
|
1,237
|
|
|
1,659
|
|
|
2,355
|
|
|
1,745
|
|
|
19,092
|
|
|
27,363
|
|
|||||||
Secured senior notes
|
|
15
|
|
|
17
|
|
|
19
|
|
|
16
|
|
|
17
|
|
|
261
|
|
|
345
|
|
|||||||
Tax-
exempt financings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
774
|
|
|
774
|
|
|||||||
Unsecured junior subordinated notes payable
to affiliated trusts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
|||||||
Unsecured junior subordinated notes
|
|
1,000
|
|
|
1,250
|
|
|
—
|
|
|
—
|
|
|
700
|
|
|
—
|
|
|
2,950
|
|
|||||||
Enhanced junior subordinated notes
(4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,882
|
|
|
1,882
|
|
|||||||
Total
|
$
|
2,325
|
|
$
|
2,572
|
|
$
|
1,712
|
|
$
|
2,630
|
|
$
|
2,626
|
|
$
|
25,253
|
|
$
|
37,118
|
|
|||||||
Weighted-average coupon
|
|
3.09
|
%
|
|
3.15%
|
|
|
3.10
|
%
|
|
2.95%
|
|
|
3.19%
|
|
|
4.62
|
%
|
|
|
|
(1)
|
Excludes mandatory prepayments associated with SBL Holdco and Dominion Solar Projects III, Inc. based on cash flows in excess of debt service. At December 31, 2019, $20 million of estimated mandatory prepayments due within one year were included in securities due within one year in Dominion Energy’s Consolidated Balance Sheets.
|
(2)
|
In January 2020, SCANA provided notice to redeem its floating rate senior notes at the remaining principal outstanding of $66 million plus accrued interest in March 2020. The notes would have otherwise matured in June 2034.
|
(3)
|
In February 2020, SCANA provided notice to redeem the remaining principal outstanding of $183 million of its 4.75% medium-term notes and $155 million of its 4.125% medium-term notes plus accrued interest and make-whole premiums in March 2020. The notes would have otherwise matured in May 2021 and February 2022, respectively.
|
(4)
|
In February 2020, Dominion Energy purchased and cancelled the remaining $111 million and $286 million of its June 2006 hybrids and September 2006 hybrids, respectively, both of which would have otherwise matured in 2066. As such, these borrowings are presented within current liabilities in Dominion Energy’s Consolidated Balance Sheets at December 31, 2019.
|
|
|
|
159
|
|
160
|
|
|
|
|
Issuance Date
|
Units
Issued |
Total Net
Proceeds
(1)
|
Total
Preferred Stock
(2)
|
Cumulative
Dividend Rate
|
Stock Purchase
Contract Annual
Rate |
Stock Purchase
Contract Liability
(3)
|
Stock Purchase
Contract
Settlement Date
|
|||||||||||||||||||||
(millions except interest rates)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
6/14/2019
|
|
16
|
|
$
|
1,582
|
|
|
$1,610
|
|
|
1.75
|
%
|
|
5.5
|
%
|
|
$250
|
|
|
6/1/2022
|
|
(1)
|
Issuance costs of $28 million were recorded as a reduction to preferred stock ($14 million) and common stock ($14 million) in the Consolidated Balance Sheets.
|
(2)
|
Dominion Energy recorded dividends of $15 million ($9.479 per share) for the year ended December 31, 2019.
|
(3)
|
Payments of $38 million were made in 2019. The stock purchase contract liability was $212 million at December 31, 2019.
|
|
|
|
161
|
|
162
|
|
|
|
|
At December 31,
|
2019
|
|
2018
|
|||||
(millions)
|
|
|
|
|||||
Dominion Energy
|
|
|
|
|
||||
Net deferred losses on derivatives-hedging activities, net of $135 and $79 tax
|
$
|
(407
|
)
|
$ |
(234
|
) | ||
Net unrealized gains on nuclear decommissioning trust funds, net of $(13) and $— tax
|
|
37
|
|
2
|
||||
Net unrecognized pension and other postretirement benefit costs, net of $492 and $519 tax
|
|
(1,421
|
)
|
(1,465
|
) | |||
Other comprehensive loss from equity method investees, net of $1 and $— tax
|
|
(2
|
)
|
(2
|
) | |||
Total AOCI, including noncontrolling interests
|
$
|
(1,793
|
)
|
$ |
(1,699
|
) | ||
Less other comprehensive income attributable to noncontrolling interests
|
|
—
|
|
1
|
||||
Total AOCI, excluding noncontrolling interests
|
$
|
(1,793
|
)
|
$ |
(1,700
|
) | ||
Virginia Power
|
|
|
|
|
||||
Net deferred losses on derivatives-hedging activities, net of $11 and $4 tax
|
$
|
(34
|
)
|
$ |
(13
|
) | ||
Net unrealized gains on nuclear decommissioning trust funds, net of $(1) and $— tax
|
|
5
|
|
1
|
||||
Total AOCI
|
$
|
(29
|
)
|
$ |
(12
|
) | ||
Dominion Energy Gas
|
|
|
|
|
||||
Net deferred losses on derivatives-hedging activities, net of $28 and $8 tax
|
$
|
(82
|
)
|
$ |
(25
|
) | ||
Net unrecognized pension costs, net of $41 and $56 tax
|
|
(106
|
)
|
(144
|
) | |||
Total AOCI, including noncontrolling interests
|
|
(188
|
)
|
(169
|
) | |||
Less other comprehensive income (loss) attributable to noncontrolling interests
|
|
(1
|
)
|
—
|
||||
Total AOCI, excluding noncontrolling interests
|
$
|
(187
|
)
|
$ |
(169
|
) |
|
|
|
163
|
|
|
Deferred
gains and losses on derivatives- hedging activities |
Unrealized
gains and losses on investment securities |
Unrecognized
pension and other postretirement benefit costs |
Other
comprehensive loss from equity method investees |
Total
|
|||||||||||||||
(millions)
|
|
|
|
|
|
|
||||||||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|||||||||||||
Beginning balance
|
|
$(235)
|
|
|
$ 2
|
|
|
$(1,465
|
)
|
|
$(2
|
)
|
|
$(1,700)
|
|
|||||
Other comprehensive income before reclassifications: gains (losses)
|
|
(110)
|
|
|
39
|
|
|
(22)
|
|
|
—
|
|
|
(93)
|
|
|||||
Amounts reclassified from AOCI: (gains) losses
(1)
|
|
(62)
|
|
|
(4)
|
|
|
66
|
|
|
—
|
|
|
—
|
|
|||||
Net current period other comprehensive income (loss)
|
|
(172)
|
|
|
35
|
|
|
44
|
|
|
—
|
|
|
(93
|
)
|
|||||
Ending balance
|
|
$(407)
|
|
|
$37
|
|
|
$(1,421
|
)
|
|
$(2
|
)
|
|
$(1,793
|
)
|
|||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|||||||||||||
Beginning balance
|
$(302)
|
$747
|
$(1,101)
|
$(3)
|
$(659
|
) | ||||||||||||||
Other comprehensive income before reclassifications: gains (losses)
|
30
|
(18
|
) |
(215)
|
1
|
(202
|
) | |||||||||||||
Amounts reclassified from AOCI: (gains) losses
(1)
|
102
|
5
|
78
|
—
|
185
|
|||||||||||||||
Net current period other comprehensive income (loss)
|
132
|
(13)
|
(137)
|
1
|
(17)
|
|||||||||||||||
Cumulative-effect of changes in accounting principle
|
(64)
|
(732)
|
(227)
|
—
|
(1,023
|
) | ||||||||||||||
Less other comprehensive income (loss) attributable to noncontrolling interests
|
1
|
—
|
—
|
—
|
1
|
|||||||||||||||
Ending balance
|
$(235)
|
$ 2
|
$(1,465)
|
$(2)
|
$ (1,700
|
) |
(1)
|
See table below for details about these reclassifications.
|
Details about AOCI components
|
Amounts
reclassified from AOCI |
Affected line item in the
Consolidated Statements of Income |
||||
(millions)
|
|
|
|
|||
Year Ended December 31, 2019
|
|
|
|
|
||
Deferred (gains) and losses on derivatives-hedging activities:
|
|
|
|
|
||
Commodity contracts
|
|
$(146)
|
|
Operating revenue
|
||
|
|
3
|
|
Purchased gas
|
||
Interest rate contracts
|
|
54
|
|
Interest and related charges
|
||
Foreign currency contracts
|
|
6
|
|
Other Income
|
||
Total
|
|
(83
|
)
|
|
||
Tax
|
|
21
|
|
Income tax expense
|
||
Total, net of tax
|
|
$(62
|
)
|
|
||
Unrealized (gains) and losses on investment securities:
|
|
|
|
|
||
Realized (gain) loss on sale of securities
|
|
$(5)
|
|
Other income
|
||
Total
|
|
(5)
|
|
|
||
Tax
|
|
1
|
|
Income tax expense
|
||
Total, net of tax
|
|
$(4
|
)
|
|
||
Unrecognized pension and other postretirement benefit costs:
|
|
|
|
|
||
Amortization of prior-service costs (credits)
|
|
$(24)
|
|
Other income
|
||
Amortization of actuarial losses
|
|
113
|
|
Other income
|
||
Total
|
|
89
|
|
|
||
Tax
|
|
(23
|
)
|
Income tax expense
|
||
Total, net of tax
|
|
$66
|
|
|
||
Year Ended December 31, 2018
|
|
|
|
|
||
Deferred (gains) and losses on derivatives-hedging activities:
|
|
|
|
|
||
Commodity contracts
|
$90
|
Operating revenue
|
||||
|
(14
|
) |
Purchased gas
|
|||
Interest rate contracts
|
48
|
Interest and related charges
|
||||
Foreign currency contracts
|
13
|
Other Income
|
||||
Total
|
137
|
|
||||
Tax
|
(35
|
) |
Income tax expense
|
|||
Total, net of tax
|
$102
|
|
||||
Unrealized (gains) and losses on investment securities:
|
|
|
||||
Realized (gain) loss on sale of securities
|
$7
|
Other income
|
||||
Total
|
7
|
|
||||
Tax
|
(2
|
) |
Income tax expense
|
|||
Total, net of tax
|
$5
|
|
||||
Unrecognized pension and other postretirement benefit costs:
|
|
|
||||
Prior-service costs (credits)
|
$(21
|
) |
Other income
|
|||
Actuarial losses
|
120
|
Other income
|
||||
Total
|
99
|
|
||||
Tax
|
(21
|
) |
Income tax expense
|
|||
Total, net of tax
|
$78
|
|
164
|
|
|
|
|
|
Deferred
gains and losses on derivatives- hedging activities |
Unrealized
gains and losses on investment securities |
Total
|
|||||||||
(millions)
|
|
|
|
|
||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|||||||
Beginning balance
|
|
$(13
|
)
|
$
|
1
|
|
|
$(12)
|
|
|||
Other comprehensive income before reclassifications: gains (losses)
|
|
(22
|
)
|
|
5
|
|
|
(17)
|
|
|||
Amounts reclassified from AOCI: (gains) losses
(1)
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||
Net current period other comprehensive income (loss)
|
|
(21
|
)
|
|
4
|
|
|
(17)
|
|
|||
Ending balance
|
|
$(34
|
)
|
$
|
5
|
|
|
$(29)
|
|
|||
Year Ended December 31, 2018
|
|
|
|
|
|
|||||||
Beginning balance
|
$(12
|
) | $ |
74
|
$ |
62
|
||||||
Other comprehensive income before reclassifications: gains (losses)
|
1
|
—
|
1
|
|||||||||
Amounts reclassified from AOCI: gains (losses)
(1)
|
1
|
—
|
1
|
|||||||||
Net current period other comprehensive income (loss)
|
2
|
—
|
2
|
|||||||||
Cumulative-effect of changes in accounting principle
|
(3
|
) |
(73
|
) |
(76)
|
|||||||
Ending balance
|
$(13
|
) | $ |
1
|
$ |
(12)
|
(1)
|
See table below for details about these reclassifications.
|
Details about AOCI components
|
Amounts
reclassified from AOCI |
Affected line item in the
Consolidated Statements of Income |
||||
(millions)
|
|
|
|
|||
Year Ended December 31, 2019
|
|
|
|
|
||
(Gains) losses on cash flow hedges:
|
|
|
|
|
||
Interest rate contracts
|
|
$ 1
|
|
Interest and related charges
|
||
Total
|
|
1
|
|
|
||
Tax
|
|
—
|
|
Income tax expense
|
||
Total, net of tax
|
|
$ 1
|
|
|
||
Unrealized (gains) and losses on investment securities:
|
|
|
|
|
||
Realized (gain) loss on sale of securities
|
|
$ (2)
|
|
Other income
|
||
Impairment
|
|
—
|
|
Other income
|
||
Total
|
|
(2)
|
|
|
||
Tax
|
|
1
|
|
Income tax expense
|
||
Total, net of tax
|
|
$ (1)
|
|
|
||
Year Ended December 31, 2018
|
|
|
|
|
||
(Gains) losses on cash flow hedges:
|
|
|
|
|
||
Interest rate contracts
|
$ 1
|
Interest and related charges
|
||||
Total
|
1
|
|
||||
Tax
|
—
|
Income tax expense
|
||||
Total, net of tax
|
$ 1
|
|
|
Deferred gains
and losses on derivatives- hedging activities |
Unrecognized
pension and other postretirement benefit costs |
Total
|
|||||||||
(millions)
|
|
|
|
|
||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|||||||
Beginning balance
|
|
$(25
|
)
|
|
$(144
|
)
|
$
|
(169)
|
|
|||
Other comprehensive income before reclassifications: gains (losses)
|
|
(61
|
)
|
|
33
|
|
|
(28
|
)
|
|||
Amounts reclassified from AOCI: (gains) losses
(1)
|
|
5
|
|
|
5
|
|
|
10
|
|
|||
Net current period other comprehensive income (loss)
|
|
(56
|
)
|
|
38
|
|
|
(18
|
)
|
|||
Dominion Energy Gas Restructuring
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Less other comprehensive income attributable to noncontrolling interests
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Ending balance
|
|
$(81
|
)
|
|
$(106
|
)
|
$
|
(187
|
)
|
|||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|||
Beginning balance
|
$(23
|
) |
$(75
|
) | $ |
(98
|
) | |||||
Other comprehensive income before reclassifications: gains (losses)
|
(16
|
) |
(52
|
) |
(68
|
) | ||||||
Amounts reclassified from AOCI: gains (losses)
(1)
|
19
|
4
|
23
|
|||||||||
Net current period other comprehensive income (loss)
|
3
|
(48
|
) |
(45
|
) | |||||||
Cumulative-effect of changes in accounting principle
|
(5
|
) |
(21
|
) |
(26
|
) | ||||||
Ending balance
|
$(25
|
) |
$(144
|
) |
$(169
|
) |
(1)
|
See table below for details about these reclassifications.
|
|
|
|
165
|
|
Details about AOCI components
|
Amounts
reclassified from AOCI |
Affected line item in the
Consolidated Statements of Income |
||||
(millions)
|
|
|
|
|||
Year Ended December 31, 2019
|
|
|
|
|
||
Deferred (gains) and losses on derivatives-hedging activities:
|
|
|
|
|
||
Commodity contracts
|
|
$ (4)
|
|
Net income from discontinued operations
|
||
Interest rate contracts
|
|
5
|
|
Interest and related charges
|
||
Foreign currency contracts
|
|
6
|
|
Other income
|
||
Total
|
|
7
|
|
|
||
Tax
|
|
(2)
|
|
Income tax expense
|
||
Total, net of tax
|
|
$ 5
|
|
|
||
Unrecognized pension costs:
|
|
|
|
|
||
Actuarial losses
|
|
$ 7
|
|
Other income
|
||
Total
|
|
7
|
|
|
||
Tax
|
|
(2)
|
|
Income tax expense
|
||
Total, net of tax
|
|
$ 5
|
|
|
||
Year Ended December 31, 2018
|
|
|
|
|
||
Deferred (gains) and losses on derivatives-hedging activities:
|
|
|
|
|
||
Commodity contracts
|
$ 8
|
Net income from discontinued operations
|
||||
Interest rate contracts
|
5
|
Interest and related charges
|
||||
Foreign currency contracts
|
13
|
Other income
|
||||
Total
|
26
|
|
||||
Tax
|
(7)
|
Income tax expense
|
||||
Total, net of tax
|
$19
|
|
||||
Unrecognized pension costs:
|
|
|
||||
Actuarial losses
|
$ 6
|
Other income
|
||||
Total
|
6
|
|
||||
Tax
|
(2)
|
Income tax expense
|
||||
Total, net of tax
|
$ 4
|
|
|
Shares
|
Weighted—average
Grant Date Fair Value |
||||||
|
(thousands)
|
|
||||||
Nonvested at December 31, 2016
|
886
|
$71.40
|
||||||
Granted
|
454
|
74.24
|
||||||
Vested
|
(287
|
) |
68.90
|
|||||
Cancelled and forfeited
|
(10
|
) |
72.37
|
|||||
Nonvested at December 31, 2017
|
1,043
|
$73.32
|
||||||
Granted
|
534
|
72.92
|
||||||
Vested
|
(316
|
) |
73.59
|
|||||
Cancelled and forfeited
|
(53
|
) |
74.25
|
|||||
Nonvested at December 31, 2018
|
1,208
|
$73.03
|
||||||
Granted
|
|
614
|
|
|
76.49
|
|
||
Vested
|
|
(324
|
)
|
|
71.75
|
|
||
Cancelled and forfeited
|
|
(96
|
)
|
|
77.16
|
|
||
Nonvested at December 31, 2019
|
|
1,402
|
|
|
$74.77
|
|
166
|
|
|
|
|
|
|
|
167
|
|
168
|
|
|
|
|
|
Pension Benefits
|
Other Postretirement Benefits
|
||||||||||||||
Year Ended December 31,
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions, except percentages)
|
|
|
|
|
|
|
||||||||||
Dominion Energy
|
|
|
|
|
|
|
|
|
||||||||
Changes in benefit obligation:
|
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
8,500
|
|
$ |
9,052
|
$
|
1,363
|
|
$ |
1,529
|
||||||
Dominion Energy SCANA Combination (See Note 3)
|
|
854
|
|
—
|
|
253
|
|
—
|
||||||||
Service cost
|
|
162
|
|
157
|
|
26
|
|
27
|
||||||||
Interest cost
|
|
394
|
|
337
|
|
68
|
|
56
|
||||||||
Benefits paid
|
|
(470
|
)
|
(358
|
) |
|
(96
|
)
|
(87
|
) | ||||||
Actuarial (gains) losses during the year
|
|
1,054
|
|
(688
|
) |
|
111
|
|
(158
|
) | ||||||
Plan amendments
|
|
—
|
|
—
|
|
—
|
|
(4
|
) | |||||||
Settlements and curtailments
(1)
|
|
(48
|
)
|
—
|
|
44
|
|
—
|
||||||||
Benefit obligation at end of year
|
$
|
10,446
|
|
$ |
8,500
|
$
|
1,769
|
|
$ |
1,363
|
||||||
Changes in fair value of plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
7,197
|
|
$ |
8,062
|
$
|
1,581
|
|
$ |
1,729
|
||||||
Dominion Energy SCANA Combination (See Note 3)
|
|
727
|
|
—
|
|
—
|
|
—
|
||||||||
Actual return (loss) on plan assets
|
|
1,747
|
|
(513
|
) |
|
349
|
|
(92
|
) | ||||||
Employer contributions
|
|
557
|
|
6
|
|
12
|
|
12
|
||||||||
Benefits paid
|
|
(470
|
)
|
(358
|
) |
|
(62
|
)
|
(68
|
) | ||||||
Settlements
(2)
|
|
(127
|
)
|
—
|
|
—
|
|
—
|
||||||||
Fair value of plan assets at end of year
|
$
|
9,631
|
|
$ |
7,197
|
$
|
1,880
|
|
$ |
1,581
|
||||||
Funded status at end of year
|
$
|
(815
|
)
|
$ |
(1,303
|
) |
$
|
111
|
|
$ |
218
|
|||||
Amounts recognized in the Consolidated Balance Sheets at December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noncurrent pension and other postretirement benefit assets
|
$
|
1,266
|
|
$ |
1,003
|
$
|
442
|
|
$ |
276
|
||||||
Other current liabilities
|
|
(29
|
)
|
(34
|
) |
|
(17
|
)
|
(2
|
) | ||||||
Noncurrent pension and other postretirement benefit liabilities
|
|
(2,052
|
)
|
(2,272
|
) |
|
(314
|
)
|
(56
|
) | ||||||
Net amount recognized
|
$
|
(815
|
)
|
$ |
(1,303
|
) |
$
|
111
|
|
$ |
218
|
|||||
Significant assumptions used to determine benefit
obligations as of December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Discount rate
|
|
3.47%–3.63%
|
|
4.42%–4.43%
|
|
3.44%–3.52%
|
|
4.37%–4.38%
|
||||||||
Weighted average rate of increase for compensation
|
|
4.23%
|
|
4.32%
|
|
n/a
|
|
n/a
|
||||||||
Dominion Energy Gas
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Changes in benefit obligation:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Benefit obligation at beginning of year
|
$
|
730
|
|
$ |
773
|
$
|
256
|
|
$ |
290
|
||||||
Dominion Energy Gas Restructuring (See Note 3)
|
|
(468
|
)
|
—
|
|
(135
|
)
|
—
|
||||||||
Service cost
|
|
6
|
|
18
|
|
1
|
|
4
|
||||||||
Interest cost
|
|
11
|
|
29
|
|
5
|
|
11
|
||||||||
Benefits paid
|
|
(15
|
)
|
(34
|
) |
|
(8
|
)
|
(18
|
) | ||||||
Actuarial (gains) losses during the year
|
|
30
|
|
(56
|
) |
|
1
|
|
(27
|
) | ||||||
Plan amendments
|
|
—
|
|
—
|
|
—
|
|
(4
|
) | |||||||
Settlements and curtailments
(1)
|
|
1
|
|
—
|
|
1
|
|
—
|
||||||||
Benefit obligation at end of year
|
$
|
295
|
|
$ |
730
|
$
|
121
|
|
$ |
256
|
||||||
Changes in fair value of plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
1,656
|
|
$ |
1,803
|
$
|
311
|
|
$ |
333
|
||||||
Dominion Energy Gas Restructuring
|
|
(1,084
|
)
|
—
|
$
|
(126
|
)
|
—
|
||||||||
Actual return (loss) on plan assets
|
|
129
|
|
(113
|
) |
|
38
|
|
(16
|
) | ||||||
Employer contributions
|
|
—
|
|
—
|
|
12
|
|
12
|
||||||||
Benefits paid
|
|
(15
|
)
|
(34
|
) |
|
(8
|
)
|
(18
|
) | ||||||
Fair value of plan assets at end of year
|
$
|
686
|
|
$ |
1,656
|
$
|
227
|
|
$ |
311
|
||||||
Funded status at end of year
|
$
|
391
|
|
$ |
926
|
$
|
106
|
|
$ |
55
|
||||||
Amounts recognized in the Consolidated Balance
Sheets at December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noncurrent pension and other postretirement benefit assets
|
$
|
391
|
|
$ |
310
|
$
|
106
|
|
$ |
63
|
||||||
Noncurrent assets of discontinued operations
|
|
—
|
|
616
|
|
—
|
|
—
|
||||||||
Noncurrent liabilities of discontinued operations
|
|
—
|
|
—
|
|
—
|
|
(8
|
) | |||||||
Net amount recognized
|
$
|
391
|
|
$ |
926
|
$
|
106
|
|
$ |
55
|
||||||
Significant assumptions used to determine
benefit obligations as of December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Discount rate
|
|
3.63
|
%
|
4.42
|
% |
|
3.44
|
%
|
4.37
|
% | ||||||
Weighted average rate of increase for compensation
|
|
4.64
|
%
|
4.55
|
% |
|
n/a
|
|
n/a
|
(1)
|
2019 amounts relate primarily to a settlement as a result of the voluntary retirement program.
|
|
|
|
169
|
|
|
Pension Benefits
|
Other Postretirement
Benefits
|
||||||||||||||
As of December 31,
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
|
|
||||||||||
Dominion Energy
|
|
|
|
|
|
|
|
|
||||||||
Benefit obligation
|
$
|
9,552
|
|
$ |
7,705
|
$
|
341
|
|
$ |
164
|
||||||
Fair value of plan assets
|
|
7,471
|
|
5,398
|
|
10
|
|
136
|
||||||||
Dominion Energy Gas
|
|
|
|
|
|
|
|
|
||||||||
Benefit obligation
|
$
|
—
|
|
$ |
—
|
$
|
—
|
|
$ |
134
|
||||||
Fair value of plan assets
|
|
—
|
|
—
|
|
—
|
|
126
|
As of December 31,
|
2019
|
|
2018
|
|||||
(millions)
|
|
|
||||||
Accumulated benefit obligation
|
$
|
8,852
|
|
$ |
7,056
|
|||
Fair value of plan assets
|
|
7,471
|
|
5,398
|
|
Estimated Future Benefit Payments
|
|||||||
|
Pension Benefits
|
Other Postretirement
Benefits
|
||||||
(millions)
|
|
|
|
|
||||
Dominion Energy
|
|
|
|
|
|
|
||
2020
|
$
|
535
|
|
$
|
120
|
|
||
2021
|
|
472
|
|
|
117
|
|
||
2022
|
|
511
|
|
|
116
|
|
||
2023
|
|
519
|
|
|
114
|
|
||
2024
|
|
536
|
|
|
113
|
|
||
2025-2029
|
|
2,792
|
|
|
528
|
|
||
Dominion Energy Gas
|
|
|
|
|
|
|
||
2020
|
$
|
15
|
|
$
|
8
|
|
||
2021
|
|
15
|
|
|
8
|
|
||
2022
|
|
15
|
|
|
8
|
|
||
2023
|
|
15
|
|
|
8
|
|
||
2024
|
|
15
|
|
|
8
|
|
||
2025-2029
|
|
79
|
|
|
36
|
|
170
|
|
|
|
|
At December 31,
|
2019
|
2018
|
||||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Dominion Energy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents
|
$
|
22
|
|
$
|
1
|
|
|
$
—
|
|
$
|
23
|
|
$ |
17
|
$ |
1
|
$—
|
$ |
18
|
|||||||||||||
Common and preferred stocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S.
(1)
|
|
2,284
|
|
|
—
|
|
|
—
|
|
|
2,284
|
|
1,645
|
—
|
—
|
1,645
|
||||||||||||||||
International
|
|
1,634
|
|
|
—
|
|
|
—
|
|
|
1,634
|
|
1,061
|
—
|
—
|
1,061
|
||||||||||||||||
Insurance contracts
|
|
—
|
|
|
360
|
|
|
—
|
|
|
360
|
|
—
|
318
|
—
|
318
|
||||||||||||||||
Corporate debt instruments
|
|
273
|
|
|
859
|
|
|
—
|
|
|
1,132
|
|
23
|
729
|
—
|
752
|
||||||||||||||||
Government securities
|
|
58
|
|
|
757
|
|
|
—
|
|
|
815
|
|
25
|
605
|
—
|
630
|
||||||||||||||||
Total recorded at fair value
|
$
|
4,271
|
|
$
|
1,977
|
|
|
$—
|
|
$
|
6,248
|
|
$ |
2,771
|
$ |
1,653
|
$—
|
$ |
4,424
|
|||||||||||||
Assets recorded at NAV
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common/collective trust funds
|
|
|
|
|
|
|
|
|
|
|
2,355
|
|
|
|
|
1,849
|
||||||||||||||||
Alternative investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Real estate funds
|
|
|
|
|
|
|
|
|
|
|
91
|
|
|
|
|
108
|
||||||||||||||||
Private equity funds
|
|
|
|
|
|
|
|
|
|
|
787
|
|
|
|
|
633
|
||||||||||||||||
Debt funds
|
|
|
|
|
|
|
|
|
|
|
159
|
|
|
|
|
155
|
||||||||||||||||
Hedge funds
|
|
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
17
|
||||||||||||||||
Total recorded at NAV
|
|
|
|
|
|
|
|
|
|
$
|
3,406
|
|
|
|
|
$ |
2,762
|
|||||||||||||||
Total investments
(3)
|
|
|
|
|
|
|
|
|
|
$
|
9,654
|
|
|
|
|
$ |
7,186
|
|||||||||||||||
Dominion Energy Gas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents
|
$
|
1
|
|
$
|
—
|
|
|
$
—
|
|
$
|
1
|
|
$ |
4
|
$ |
—
|
$—
|
$ |
4
|
|||||||||||||
Common and preferred stocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S.
|
|
177
|
|
|
—
|
|
|
—
|
|
|
177
|
|
378
|
—
|
—
|
378
|
||||||||||||||||
International
|
|
114
|
|
|
—
|
|
|
—
|
|
|
114
|
|
244
|
—
|
—
|
244
|
||||||||||||||||
Insurance contracts
|
|
—
|
|
|
28
|
|
|
—
|
|
|
28
|
|
—
|
73
|
—
|
73
|
||||||||||||||||
Corporate debt instruments
|
|
3
|
|
|
66
|
|
|
—
|
|
|
69
|
|
5
|
168
|
—
|
173
|
||||||||||||||||
Government securities
|
|
2
|
|
|
59
|
|
|
—
|
|
|
61
|
|
6
|
139
|
—
|
145
|
||||||||||||||||
Total recorded at fair value
|
$
|
297
|
|
$
|
153
|
|
|
$—
|
|
$
|
450
|
|
$ |
637
|
$ |
380
|
$—
|
$ |
1,017
|
|||||||||||||
Assets recorded at NAV
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common/collective trust funds
|
|
|
|
|
|
|
|
|
|
|
157
|
|
|
|
|
425
|
||||||||||||||||
Alternative investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Real estate funds
|
|
|
|
|
|
|
|
|
|
|
7
|
|
|
|
|
25
|
||||||||||||||||
Private equity funds
|
|
|
|
|
|
|
|
|
|
|
61
|
|
|
|
|
146
|
||||||||||||||||
Debt funds
|
|
|
|
|
|
|
|
|
|
|
12
|
|
|
|
|
36
|
||||||||||||||||
Hedge funds
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
4
|
||||||||||||||||
Total recorded at NAV
|
|
|
|
|
|
|
|
|
|
$
|
238
|
|
|
|
|
$ |
636
|
|||||||||||||||
Total investments
(4)
|
|
|
|
|
|
|
|
|
|
$
|
688
|
|
|
|
|
$ |
1,653
|
(1)
|
Includes $508 million of Dominion Energy common stock at December 31, 2019.
|
(2)
|
These investments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.
|
(3)
|
Excludes net assets related to pending sales of securities of $52 million, net accrued income of $24 million, and includes net assets related to pending purchases of securities of $99 million at December 31, 2019. Excludes net assets related to pending sales of securities of $12 million, net accrued income of $21 million, and includes net assets related to pending purchases of securities of $22 million at December 31, 2018.
|
(4)
|
Excludes net assets related to pending sales of securities of $2 million, net accrued income of $2 million, and includes net assets related to pending purchases of securities of $6 million at December 31, 2019. Excludes net assets related to pending sales of securities of $3 million, net accrued income of $5 million, and includes net assets related to pending purchases of securities of $5 million at December 31, 2018.
|
|
|
|
171
|
|
At December 31,
|
2019
|
2018
|
||||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Dominion Energy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents
|
$
|
2
|
|
$
|
—
|
|
|
$—
|
|
$
|
2
|
|
$ |
1
|
$ |
1
|
$—
|
$ |
2
|
|||||||||||||
Common and preferred stocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S.
|
|
719
|
|
|
—
|
|
|
—
|
|
|
719
|
|
554
|
—
|
—
|
554
|
||||||||||||||||
International
|
|
206
|
|
|
—
|
|
|
—
|
|
|
206
|
|
170
|
—
|
—
|
170
|
||||||||||||||||
Insurance contracts
|
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
—
|
19
|
—
|
19
|
||||||||||||||||
Corporate debt instruments
|
|
1
|
|
|
50
|
|
|
—
|
|
|
51
|
|
1
|
44
|
—
|
45
|
||||||||||||||||
Government securities
|
|
2
|
|
|
44
|
|
|
—
|
|
|
46
|
|
2
|
37
|
—
|
39
|
||||||||||||||||
Total recorded at fair value
|
$
|
930
|
|
$
|
115
|
|
|
$—
|
|
$
|
1,045
|
|
$ |
728
|
$ |
101
|
$—
|
$ |
829
|
|||||||||||||
Assets recorded at NAV
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common/collective trust funds
|
|
|
|
|
|
|
|
|
|
|
717
|
|
|
|
|
650
|
||||||||||||||||
Alternative investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Real estate funds
|
|
|
|
|
|
|
|
|
|
|
8
|
|
|
|
|
10
|
||||||||||||||||
Private equity funds
|
|
|
|
|
|
|
|
|
|
|
100
|
|
|
|
|
80
|
||||||||||||||||
Debt funds
|
|
|
|
|
|
|
|
|
|
|
10
|
|
|
|
|
10
|
||||||||||||||||
Hedge funds
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
1
|
||||||||||||||||
Total recorded at NAV
|
|
|
|
|
|
|
|
|
|
$
|
836
|
|
|
|
|
$ |
751
|
|||||||||||||||
Total investments
(2)
|
|
|
|
|
|
|
|
|
|
$
|
1,881
|
|
|
|
|
$ |
1,580
|
|||||||||||||||
Dominion Energy Gas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common and preferred stocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S.
|
$
|
86
|
|
$
|
—
|
|
|
$—
|
|
$
|
86
|
|
$ |
113
|
$ |
—
|
$—
|
$ |
113
|
|||||||||||||
International
|
|
21
|
|
|
—
|
|
|
—
|
|
|
21
|
|
30
|
—
|
—
|
30
|
||||||||||||||||
Total recorded at fair value
|
$
|
107
|
|
$
|
—
|
|
|
$—
|
|
$
|
107
|
|
$ |
143
|
$ |
—
|
$—
|
$ |
143
|
|||||||||||||
Assets recorded at NAV
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common/collective trust funds
|
|
|
|
|
|
|
|
|
|
|
105
|
|
|
|
|
148
|
||||||||||||||||
Alternative investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Real estate funds
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
2
|
||||||||||||||||
Private equity funds
|
|
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
18
|
||||||||||||||||
Debt funds
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
||||||||||||||||
Total recorded at NAV
|
|
|
|
|
|
|
|
|
|
$
|
120
|
|
|
|
|
$ |
168
|
|||||||||||||||
Total investments
|
|
|
|
|
|
|
|
|
|
$
|
227
|
|
|
|
|
$ |
311
|
(1)
|
These investments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.
|
(2)
|
Excludes net assets related to pending sales of securities of $2 million, net accrued income of $2 million, and includes net assets related to pending purchases of securities of $5 million at December 31, 2019. Excludes net assets related to pending sales of securities of $1 million, net accrued income of $2 million, and includes net assets related to pending purchases of securities of $2 million at December 31, 2018.
|
172
|
|
|
|
|
• |
Cash and Cash Equivalents
|
• |
Common and Preferred Stocks
|
• |
Insurance Contracts
|
• |
Corporate Debt Instruments
|
• |
Government Securities
|
• |
Common/Collective Trust Funds
|
• |
Alternative Investments
|
|
|
|
173
|
|
|
Pension Benefits
|
Other Postretirement Benefits
|
||||||||||||||||||||||
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
2019
|
|
2018
|
2017
|
||||||||||||||||
(millions, except percentages)
|
|
|
|
|
|
|
|
|
||||||||||||||||
Dominion Energy
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Service cost
|
$
|
162
|
|
$ |
157
|
$ |
138
|
$
|
26
|
|
$ |
27
|
$ |
26
|
||||||||||
Interest cost
|
|
394
|
|
337
|
345
|
|
68
|
|
56
|
60
|
||||||||||||||
Expected return on plan assets
|
|
(708
|
)
|
(663
|
) |
(639
|
) |
|
(140
|
)
|
(143
|
) |
(128
|
) | ||||||||||
Amortization of prior service (credit) cost
|
|
1
|
|
1
|
1
|
|
(52
|
)
|
(52
|
) |
(51
|
) | ||||||||||||
Amortization of net actuarial loss
|
|
172
|
|
193
|
162
|
|
10
|
|
11
|
13
|
||||||||||||||
Settlements and curtailments
|
|
72
|
|
—
|
—
|
|
42
|
|
—
|
—
|
||||||||||||||
Net periodic benefit (credit) cost
|
$
|
93
|
|
$ |
25
|
$ |
7
|
$
|
(46
|
)
|
$ |
(101
|
) | $ |
(80
|
) | ||||||||
Changes in plan assets and benefit obligations recognized in other comprehensive income and regulatory assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current year net actuarial (gain) loss
|
$
|
16
|
|
$ |
490
|
$ |
142
|
$
|
(98
|
)
|
$ |
78
|
$ |
12
|
||||||||||
Prior service (credit) cost
|
|
—
|
|
—
|
5
|
|
2
|
|
(4
|
) |
(73
|
) | ||||||||||||
Settlements and curtailments
|
|
6
|
|
—
|
1
|
|
—
|
|
—
|
2
|
||||||||||||||
Less amounts included in net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Amortization of net actuarial loss
|
|
(172
|
)
|
(193
|
) |
(162
|
) |
|
(10
|
)
|
(11
|
) |
(13
|
) | ||||||||||
Amortization of prior service credit (cost)
|
|
(1
|
)
|
(1
|
) |
(1
|
) |
|
52
|
|
52
|
51
|
||||||||||||
Total recognized in other comprehensive income and regulatory assets and liabilities
|
$
|
(151
|
)
|
$ |
296
|
$ |
(15
|
) |
$
|
(54
|
)
|
$ |
115
|
$ |
(21
|
) | ||||||||
Significant assumptions used to determine periodic cost:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Discount rate
|
|
3.57%-
4.43
|
%
|
3.80%-3.81
|
% |
3.31%-4.50
|
% |
|
4.05%
-
4.41
|
%
|
3.76
|
% |
3.92%-4.47
|
% | ||||||||||
Expected long-term rate of return on plan assets
|
|
7.00%-
8.65
|
%
|
8.75
|
% |
8.75
|
% |
|
8.50
|
%
|
8.50
|
% |
8.50
|
% | ||||||||||
Weighted average rate of increase for compensation
|
|
4.20
|
%
|
4.09
|
% |
4.09
|
% |
|
n/a
|
|
n/a
|
n/a
|
||||||||||||
Healthcare cost trend rate
(1)
|
|
|
|
|
|
|
6.50%
-
6.60
|
%
|
7.00
|
% |
7.00
|
% | ||||||||||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
(1)
|
|
|
|
|
|
|
5.00
|
%
|
5.00
|
% |
5.00
|
% | ||||||||||||
Year that the rate reaches the ultimate trend rate
(1)
|
|
|
|
|
|
|
2023-2025
|
|
2022
|
2021
|
||||||||||||||
Dominion Energy Gas
(2)
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Service cost
|
$
|
6
|
|
$ |
18
|
$ |
15
|
$
|
1
|
|
$ |
4
|
$ |
4
|
||||||||||
Interest cost
|
|
11
|
|
29
|
30
|
|
5
|
|
11
|
12
|
||||||||||||||
Expected return on plan assets
|
|
(54
|
)
|
(150
|
) |
(141
|
) |
|
(16
|
)
|
(28
|
) |
(24
|
) | ||||||||||
Amortization of prior service (credit) cost
|
|
—
|
|
—
|
—
|
|
(5
|
)
|
(4
|
) |
(3
|
) | ||||||||||||
Amortization of net actuarial loss
|
|
7
|
|
19
|
16
|
|
3
|
|
3
|
2
|
||||||||||||||
Settlements and curtailments
|
|
1
|
|
—
|
—
|
|
1
|
|
—
|
—
|
||||||||||||||
Net periodic benefit (credit) cost
|
$
|
(29
|
)
|
$ |
(84
|
) | $ |
(80
|
) |
$
|
(11
|
)
|
$ |
(14
|
) | $ |
(9
|
) | ||||||
Changes in plan assets and benefit obligations recognized in other comprehensive income and regulatory assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current year net actuarial (gain) loss
|
$
|
(46
|
)
|
$ |
207
|
$ |
(75
|
) |
$
|
(21
|
)
|
$ |
16
|
$ |
18
|
|||||||||
Prior service cost
|
|
—
|
|
—
|
—
|
|
—
|
|
(4
|
) |
(61
|
) | ||||||||||||
Less amounts included in net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Amortization of net actuarial loss
|
|
(7
|
)
|
(19
|
) |
(16
|
) |
|
(3
|
)
|
(3
|
) |
(2
|
) | ||||||||||
Amortization of prior service credit (cost)
|
|
—
|
|
—
|
—
|
|
5
|
|
4
|
3
|
||||||||||||||
Total recognized in other comprehensive income and regulatory assets and liabilities
|
$
|
(53
|
)
|
$ |
188
|
$ |
(91
|
) |
$
|
(19
|
)
|
$ |
13
|
$ |
(42
|
) | ||||||||
Significant assumptions used to determine periodic cost:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Discount rate
|
|
4.10%-4.42
|
%
|
3.81
|
% |
4.50
|
% |
|
4.05%-4.37
|
%
|
3.81
|
% |
4.47
|
% | ||||||||||
Expected long-term rate of return on plan assets
|
|
8.65
|
%
|
8.75
|
% |
8.75
|
% |
|
8.50
|
%
|
8.50
|
% |
8.50
|
% | ||||||||||
Weighted average rate of increase for compensation
|
|
4.55
|
%
|
4.11
|
% |
4.11
|
% |
|
n/a
|
|
n/a
|
n/a
|
||||||||||||
Healthcare cost trend rate
(1)
|
|
|
|
|
|
|
6.50
|
%
|
7.00
|
% |
7.00
|
% | ||||||||||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
(1)
|
|
|
|
|
|
|
5.00
|
%
|
5.00
|
% |
5.00
|
% | ||||||||||||
Year that the rate reaches the ultimate trend rate
(1)
|
|
|
|
|
|
|
2025
|
|
2022
|
2021
|
(1)
|
Assumptions used to determine net periodic cost for the following year.
|
(2)
|
Amounts related to East Ohio are presented within discontinued operations.
|
174
|
|
|
|
|
|
Pension Benefits
|
Other
Postretirement
Benefits
|
||||||||||||||
At December 31,
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
|
|||||||||||
Dominion Energy
|
|
|
|
|
|
|
||||||||||
Net actuarial loss
|
$
|
3,327
|
|
$ |
3,477
|
$
|
241
|
|
$ |
350
|
||||||
Prior service (credit) cost
|
|
5
|
|
7
|
|
(339
|
)
|
(393
|
) | |||||||
Total
(1)
|
$
|
3,332
|
|
$ |
3,484
|
$
|
(98
|
)
|
$ |
(43
|
) | |||||
Dominion Energy Gas
|
|
|
|
|
|
|
||||||||||
Net actuarial loss
|
$
|
150
|
|
$ |
555
|
$
|
44
|
|
$ |
89
|
||||||
Prior service (credit) cost
|
|
—
|
|
—
|
|
(49
|
)
|
(52
|
) | |||||||
Total
(2)
|
$
|
150
|
|
$ |
555
|
$
|
(5
|
)
|
$ |
37
|
(1)
|
As of December 31, 2019, of the $3.3 billion and $(98) million related to pension benefits and other postretirement benefits, $2.0 billion and $(65) million, respectively, are included in AOCI, with the remainder included in regulatory assets and liabilities. As of December 31, 2018, of the $3.5 billion and $(43) million related to pension benefits and other postretirement benefits, $2.0 billion and $(41) million, respectively, are included in AOCI, with the remainder included in regulatory assets and liabilities.
|
(2)
|
As of December 31, 2019, of the $150 million related to pension benefits, $147 million is included in AOCI, with the remainder included in regulatory assets and liabilities; the $(5) million related to other postretirement benefits is included entirely in regulatory assets and liabilities. As of December 31, 2018, of the $555 million related to pension benefits, $200 million is included in AOCI, with the remainder included
in
noncurrent assets of discontinued operations; of the
$37 million related to other postretirement benefits
, $22 million
is included
in noncurrent assets of discontinued operations with the remainder
included
in regulatory assets and liabilities.
|
|
Pension Benefits
|
Other
Postretirement
Benefits
|
||||||
(millions)
|
|
|
|
|||||
Dominion Energy
|
|
|
|
|
||||
Net actuarial loss
|
|
$194
|
|
|
$5
|
|
||
Prior service (credit) cost
|
|
1
|
|
|
(50
|
)
|
||
Dominion Energy Gas
|
|
|
|
|
|
|
||
Net actuarial loss
|
|
$7
|
|
|
$2
|
|
||
Prior service (credit) cost
|
|
—
|
|
|
(5
|
)
|
• | Expected inflation and risk-free interest rate assumptions; |
• | Historical return analysis to determine long term historic returns as well as historic risk premiums for various asset classes; |
• | Expected future risk premiums, asset classes’ volatilities and correlations; |
• | Forward-looking return expectations derived from the yield on long-term bonds and the expected long-term returns of major capital market assumptions; and |
• | Investment allocation of plan assets. |
|
Other Postretirement Benefits
|
|||||||
|
One percentage
point increase
|
One percentage
point decrease
|
||||||
(millions)
|
|
|
|
|||||
Dominion Energy
|
|
|
|
|
||||
Effect on net periodic cost for 2020
|
|
$20
|
|
|
$(11)
|
|
||
Effect on other postretirement benefit obligation at December 31, 2019
|
|
153
|
|
|
(128)
|
|
||
Dominion Energy Gas
|
|
|
|
|
|
|
||
Effect on net periodic cost for 2020
|
|
$2
|
|
|
$(2)
|
|
||
Effect on other postretirement benefit obligation at December 31, 2019
|
|
14
|
|
|
(12)
|
|
|
|
|
175
|
|
176
|
|
|
|
|
|
|
|
177
|
|
178
|
|
|
|
|
|
|
|
179
|
|
180
|
|
|
|
|
|
|
|
181
|
|
182
|
|
|
|
|
|
|
|
183
|
|
|
Coverage
|
|
||
(billions)
|
|
|
|
|
Dominion Energy
|
|
|
|
|
Millstone
|
$
|
1.70
|
|
|
Kewaunee
|
|
0.05
|
|
|
Summer
|
|
2.75
|
|
|
Virginia Power
(1)
|
|
|
|
|
Surry
|
$
|
1.70
|
|
|
North Anna
|
|
1.70
|
|
(1)
|
Surry and North Anna share a blanket property limit of $200 million.
|
184
|
|
|
|
|
|
2020
|
2021
|
2022
|
2023
|
2024
|
Thereafter
|
Total
|
|||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Purchased electric capacity
(1)
|
|
$45
|
|
|
$44
|
|
|
$44
|
|
|
$44
|
|
|
$44
|
|
|
$494
|
|
|
$715
|
|
(1)
|
Commitments represent estimated amounts payable for energy under power purchase contracts with qualifying facilities which expire at various dates through 2046. Energy payments are generally based on fixed dollar amounts per month and totaled $29 million for the year ended December 31, 2019.
|
|
|
|
185
|
|
|
Maximum Exposure
|
|
||
(millions)
|
|
|
||
Commodity transactions
(1)
|
$
|
2,215
|
|
|
Nuclear obligations
(2)
|
|
182
|
|
|
Cove Point
(3)
|
|
1,900
|
|
|
Solar
(4)
|
|
477
|
|
|
Other
(5)
|
|
377
|
|
|
Total
(6)
|
$
|
5,151
|
|
(1)
|
Guarantees related to commodity commitments of certain subsidiaries. These guarantees were provided to counterparties in order to facilitate physical and financial transaction related commodities and services.
|
(2)
|
Guarantees primarily related to certain DGI subsidiaries’ regarding all aspects of running a nuclear facility.
|
(3)
|
Guarantees related to Cove Point, in support of terminal services, transportation and construction. Cove Point has two guarantees that have no maximum limit and, therefore, are not included in this amount.
|
(4)
|
Includes guarantees to facilitate the development of solar projects. Also includes guarantees entered into by DGI on behalf of certain subsidiaries to facilitate the acquisition and development of solar projects.
|
(5)
|
Guarantees related to other miscellaneous contractual obligations such as leases, environmental obligations, construction projects and insurance programs. Due to the uncertainty of worker’s compensation claims, the parental guarantee has no stated limit.
|
(6)
|
Excludes Dominion Energy’s guarantees for the new corporate office properties discussed further within Note 15.
|
186
|
|
|
|
|
|
|
|
187
|
|
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|
|
|||||||
Commodity purchases from affiliates
|
$
|
690
|
|
$ |
930
|
$ |
674
|
|||||
Services provided by affiliates
(1)
|
|
503
|
|
450
|
453
|
|||||||
Services provided to affiliates
|
|
24
|
|
24
|
25
|
(1)
|
Includes capitalized expenditures of $133 million, $145 million and $144 million for the year ended December 31, 2019, 2018 and 2017, respectively.
|
Year Ended December 31,
|
2019
|
|
2018
|
2017
|
||||||||
(millions)
|
|
|
|
|
||||||||
Sales of natural gas and transportation and storage services
|
$
|
249
|
|
$ |
168
|
$ |
173
|
|||||
Purchases of natural gas and transportation and storage services
|
|
12
|
|
—
|
10
|
|||||||
Services provided by related parties
(1)
|
|
226
|
|
169
|
193
|
|||||||
Services provided to related parties
(2)
|
|
164
|
|
260
|
190
|
(1)
|
Includes capitalized expenditures of $19 million, $37 million and $53 million for the year ended December 31, 2019, 2018 and 2017, respectively.
|
(2)
|
Amounts primarily attributable to Atlantic Coast Pipeline, a related party VIE.
|
At December 31,
|
2019
|
|
2018
|
|||||
(millions)
|
|
|
|
|||||
Other receivables
(1)
|
$
|
7
|
|
$ |
13
|
|||
Imbalances receivable from affiliates
|
|
8
|
|
16
|
||||
Imbalances payable from affiliates
(2)
|
|
1
|
|
4
|
||||
Other deferred charges and other assets
|
|
12
|
|
—
|
(1)
|
Represents amounts due from Atlantic Coast Pipeline, a related party VIE.
|
(2)
|
Amounts are presented in other current liabilities in Dominion Energy Gas’ Consolidated Balance Sheets.
|
188
|
|
|
|
|
Primary Operating
Segment |
Description of Operations
|
Dominion
Energy |
Virginia
Power |
Dominion
Energy Gas |
||||
Dominion Energy Virginia
|
Regulated electric distribution
|
X
|
X
|
|
||||
|
Regulated electric transmission
|
X
|
X
|
|
||||
|
Regulated electric generation fleet
(1)
|
X
|
X
|
|
||||
Gas Transmission & Storage
|
Regulated gas transmission and storage
(2)
|
X
|
|
X
|
||||
|
LNG terminalling and storage
|
X
|
|
X
|
||||
|
Nonregulated retail energy marketing
|
X
|
|
|
||||
Gas Distribution
|
Regulated gas distribution and storage
(3)
|
X
|
|
|
||||
Dominion Energy South Carolina
|
Regulated electric distribution
|
X
|
|
|
||||
|
Regulated electric transmission
|
X
|
|
|
||||
|
Regulated electric generation fleet
|
X
|
|
|
||||
|
Regulated gas distribution and storage
|
X
|
|
|
||||
Contracted Generation
|
Merchant electric generation fleet
|
X
|
|
|
|
|
|
189
|
|
(1)
|
Includes Virginia Power’s nonjurisdictional generation operations.
|
(2)
|
Includes gathering and processing activities.
|
(3)
|
Includes Wexpro’s natural gas development and production operations.
|
• |
A $1.0 billion ($756 million
after-tax)
charge for refunds of amounts previously collected from retail electric customers of DESC for the NND Project, attributable to Dominion Energy South Carolina;
|
• |
$641 million ($480 million
after-tax)
of charges associated with litigation acquired in the SCANA Combination, attributable to Dominion Energy South Carolina;
|
• |
$484 million ($315 million
after-tax)
of charges for merger and integration-related costs associated with the SCANA Combination, including a $444 million ($332 million
after-tax)
charge related to a voluntary retirement program, attributable to:
|
•
|
Dominion Energy Virginia ($151 million
after-tax);
|
•
|
Gas Distribution ($56 million
after-tax);
|
•
|
Dominion Energy South Carolina ($75 million
after-tax);
and
|
•
|
Contracted Generation ($38 million
after-tax);
partially offset by
|
•
|
Gas Transmission & Storage ($5 million
after-tax
benefit);
|
• |
A $346 million ($257 million
after-tax)
charge related to the early retirement of certain Virginia Power electric generation facilities, attributable to Dominion Energy Virginia;
|
• |
A $194 million tax charge for $258 million of income
tax-related
regulatory assets acquired in the SCANA Combination for which Dominion Energy committed to forgo recovery, attributable to Dominion Energy South Carolina;
|
• |
A $160 million ($119 million
after-tax)
charge related to Virginia Power’s planned early retirement of certain automated meter reading infrastructure, attributable to Dominion Energy Virginia;
|
• |
A $135 million ($100 million
after-tax)
charge related to Virginia Power’s contract termination with a
non-utility
generator, attributable to Dominion Energy Virginia;
|
• |
A $114 million ($86 million
after-tax)
charge for property, plant and equipment acquired in the SCANA Combination primarily for which Dominion Energy committed to forgo recovery, attributable to Dominion Energy South Carolina; partially offset by
|
• |
A $553 million ($411 million
after-tax)
net gain related to investments in nuclear decommissioning trust funds attributable to:
|
•
|
Dominion Energy Virginia ($49 million
after-tax);
and
|
•
|
Contracted Generation ($362 million
after-tax);
and
|
• |
A $113 million ($84 million
after-tax)
benefit from the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019, attributable to Dominion Energy Virginia.
|
• |
A $219 million ($164 million
after-tax)
charge related to the impairment of certain gathering and processing assets attributable to Gas Transmission & Storage;
|
• |
A $215 million ($160 million
after-tax)
charge associated with Virginia legislation enacted in March 2018 that requires
one-time
rate credits of certain amounts to utility customers, attributable to Dominion Energy Virginia;
|
• |
A $170 million ($134 million
after-tax)
net loss related to our investments in nuclear decommissioning trust funds attributable to:
|
•
|
Dominion Energy Virginia ($14 million
after-tax);
and
|
•
|
Contracted Generation ($120 million
after-tax);
|
• |
A $124 million ($88 million
after-tax)
charge for disallowance of FERC-regulated plant attributable to Gas Transmission & Storage;
|
• |
An $81 million ($60 million
after-tax)
charge associated primarily with the asset retirement obligations for ash ponds and landfills at certain utility generation facilities in connection with the enactment of Virginia legislation in April 2018 attributable to Dominion Energy Virginia; and
|
• |
A $70 million ($52 million
after-tax)
charge associated with major storm damage and service restoration attributable to Dominion Energy Virginia; partially offset by
|
• |
An $828 million ($619 million
after-tax)
benefit associated with the sale of certain merchant generation facilities and equity method investments attributable to:
|
•
|
Contracted Generation ($229 million
after-tax);
and
|
•
|
Gas Transmission & Storage ($390 million
after-tax).
|
• | A $1.0 billion tax benefit resulting from the remeasurement of deferred income taxes as a result of the 2017 Tax Reform Act, primarily attributable to: |
•
|
Dominion Energy Virginia ($83 million); |
•
|
Gas Transmission & Storage ($302 million); |
•
|
Gas Distribution ($56 million); |
•
|
Contracted Generation ($569 million); partially offset by |
• |
$158 million ($96 million
after-tax)
of charges associated with equity method investments in wind-powered generation facilities, attributable to Contracted Generation.
|
190
|
|
|
|
|
Year Ended December 31,
|
Dominion
Energy Virginia |
|
Gas
Transmission & Storage |
|
Gas
Distribution |
|
Dominion
Energy South Carolina |
|
Contracted
Generation |
|
Corporate
and Other
|
|
Adjustments &
Eliminations
|
|
Consolidated
Total
|
|
||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total revenue from external customers
|
|
$8,170
|
|
|
$3,074
|
|
|
$2,367
|
|
|
$2,948
|
|
|
$1,135
|
|
|
$(1,122
|
)
|
|
$ —
|
|
|
$16,572
|
|
||||||||
Intersegment revenue
|
|
(13
|
)
|
|
247
|
|
|
18
|
|
|
4
|
|
|
15
|
|
|
1,199
|
|
|
(1,470
|
)
|
|
—
|
|
||||||||
Total operating revenue
|
|
8,157
|
|
|
3,321
|
|
|
2,385
|
|
|
2,952
|
|
|
1,150
|
|
|
77
|
|
|
(1,470
|
)
|
|
16,572
|
|
||||||||
Depreciation, depletion and amortization
|
|
1,216
|
|
|
400
|
|
|
335
|
|
|
452
|
|
|
179
|
|
|
73
|
|
|
—
|
|
|
2,655
|
|
||||||||
Equity in earnings of equity method investees
|
|
—
|
|
|
161
|
|
|
2
|
|
|
(4
|
)
|
|
(1
|
)
|
|
10
|
|
|
—
|
|
|
168
|
|
||||||||
Interest income
|
|
11
|
|
|
211
|
|
|
4
|
|
|
9
|
|
|
92
|
|
|
160
|
|
|
(386
|
)
|
|
101
|
|
||||||||
Interest and related charges
|
|
530
|
|
|
405
|
|
|
116
|
|
|
242
|
|
|
98
|
|
|
768
|
|
|
(386
|
)
|
|
1,773
|
|
||||||||
Income tax expense (benefit)
|
|
482
|
|
|
262
|
|
|
114
|
|
|
163
|
|
|
20
|
|
|
(690
|
)
|
|
—
|
|
|
351
|
|
||||||||
Net income (loss) attributable to Dominion Energy
|
|
1,786
|
|
|
934
|
|
|
488
|
|
|
430
|
|
|
276
|
|
|
(2,556
|
)
|
|
—
|
|
|
1,358
|
|
||||||||
Investment in equity method investees
|
|
—
|
|
|
1,517
|
|
|
32
|
|
|
—
|
|
|
74
|
|
|
23
|
|
|
—
|
|
|
1,646
|
|
||||||||
Capital expenditures
|
|
3,002
|
|
|
431
|
|
|
848
|
|
|
562
|
|
|
367
|
|
|
111
|
|
|
—
|
|
|
5,321
|
|
||||||||
Total assets (billions)
|
|
43.7
|
|
|
20.9
|
|
|
16.0
|
|
|
15.8
|
|
|
10.2
|
|
|
6.9
|
|
|
(9.7
|
)
|
|
103.8
|
|
||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total revenue from external customers
|
$8,401
|
$1,867
|
$1,769
|
$ —
|
$1,487
|
$ (249
|
) |
$ 91
|
$13,366
|
|||||||||||||||||||||||
Intersegment revenue
|
(552
|
) |
723
|
16
|
—
|
8
|
723
|
(918
|
) |
—
|
||||||||||||||||||||||
Total operating revenue
|
7,849
|
2,590
|
1,785
|
—
|
1,495
|
474
|
(827
|
) |
13,366
|
|||||||||||||||||||||||
Depreciation, depletion and amortization
|
1,158
|
348
|
263
|
—
|
213
|
18
|
—
|
2,000
|
||||||||||||||||||||||||
Equity in earnings of equity method investees
|
—
|
178
|
—
|
—
|
18
|
1
|
—
|
197
|
||||||||||||||||||||||||
Interest income
|
10
|
143
|
—
|
—
|
80
|
122
|
(271
|
) |
84
|
|||||||||||||||||||||||
Interest and related charges
|
516
|
262
|
79
|
—
|
124
|
784
|
(272
|
) |
1,493
|
|||||||||||||||||||||||
Income tax expense (benefit)
|
380
|
236
|
95
|
—
|
75
|
(206
|
) |
—
|
580
|
|||||||||||||||||||||||
Net income (loss) attributable to Dominion Energy
|
1,596
|
844
|
373
|
—
|
245
|
(611
|
) |
—
|
2,447
|
|||||||||||||||||||||||
Investment in equity method investees
|
—
|
1,159
|
—
|
—
|
82
|
37
|
—
|
1,278
|
||||||||||||||||||||||||
Capital expenditures
|
2,640
|
765
|
647
|
—
|
247
|
106
|
—
|
4,405
|
||||||||||||||||||||||||
Total assets (billions)
|
39.1
|
22.6
|
11.8
|
—
|
9.0
|
8.3
|
(12.9
|
) |
77.9
|
|||||||||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total revenue from external customers
|
$8,254
|
$1,054
|
$1,778
|
$ —
|
$1,345
|
$ (27
|
) |
$ 182
|
$12,586
|
|||||||||||||||||||||||
Intersegment revenue
|
(688
|
) |
946
|
17
|
—
|
9
|
724
|
(1,008
|
) |
—
|
||||||||||||||||||||||
Total operating revenue
|
7,566
|
2,000
|
1,795
|
—
|
1,354
|
697
|
(826
|
) |
12,586
|
|||||||||||||||||||||||
Depreciation, depletion and amortization
|
1,141
|
260
|
258
|
—
|
200
|
46
|
—
|
1,905
|
||||||||||||||||||||||||
Equity in earnings of equity method investees
|
—
|
158
|
—
|
—
|
(171
|
) |
(5
|
) |
—
|
(18
|
) | |||||||||||||||||||||
Interest income
|
19
|
114
|
—
|
—
|
77
|
94
|
(222
|
) |
82
|
|||||||||||||||||||||||
Interest and related charges
|
497
|
100
|
72
|
—
|
110
|
648
|
(222
|
) |
1,205
|
|||||||||||||||||||||||
Income tax expense (benefit)
|
865
|
291
|
195
|
—
|
(160
|
) |
(1,221
|
) |
—
|
(30
|
) | |||||||||||||||||||||
Net income (loss) attributable to Dominion Energy
|
1,466
|
552
|
351
|
—
|
253
|
377
|
—
|
2,999
|
||||||||||||||||||||||||
Capital expenditures
|
2,726
|
1,489
|
452
|
—
|
979
|
263
|
—
|
5,909
|
|
|
|
191
|
|
• |
A $346 million ($257 million
after-tax)
charge related to the early retirement of certain electric generation facilities;
|
• |
A $198 million ($146 million
after-tax)
charge related to a voluntary retirement program;
|
• |
A $160 million ($119 million
after-tax)
charge related to the planned early retirement of certain automated meter reading infrastructure;
|
• |
A $135 million ($100 million
after-tax)
charge related to a contract termination with a
non-utility
generator; and
|
• |
A $62 million ($46 million
after-tax)
charge related to the abandonment of a project at an electric generating facility, partially offset by
|
• |
A $113 million ($84 million
after-tax)
benefit from the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019.
|
• |
A $215 million ($160 million
after-tax)
charge associated with Virginia legislation enacted in March 2018 that requires
one-time
rate credits of certain amounts to utility customers;
|
• |
An $81 million ($60 million
after-tax)
charge associated primarily with the asset retirement obligations for ash ponds and landfills at certain utility generation facilities in connection with the enactment of Virginia legislation in April 2018; and
|
• |
A $70 million ($52 million
after-tax)
charge associated with major storm damage and service restoration.
|
• | A $93 million tax benefit resulting from the remeasurement of deferred income taxes as a result of the 2017 Tax Reform Act. |
Year Ended December 31,
|
Dominion Energy
Virginia
|
|
Corporate
and Other |
|
Consolidated
Total
|
|
||||||
(millions)
|
|
|
|
|
||||||||
2019
|
|
|
|
|
|
|||||||
Operating revenue
|
|
$8,137
|
|
|
$ (29
|
)
|
|
$8,108
|
|
|||
Depreciation and amortization
|
|
1,215
|
|
|
8
|
|
|
1,223
|
|
|||
Interest income
|
|
11
|
|
|
—
|
|
|
11
|
|
|||
Interest expense (benefit) and related charges
|
|
529
|
|
|
(5
|
)
|
|
524
|
|
|||
Income tax expense (benefit)
|
|
481
|
|
|
(217
|
)
|
|
264
|
|
|||
Net income (loss)
|
|
1,783
|
|
|
(634
|
)
|
|
1,149
|
|
|||
Capital expenditures
|
|
2,981
|
|
|
—
|
|
|
2,981
|
|
|||
Total assets (billions)
|
|
41.4
|
|
|
—
|
|
|
41.4
|
|
|||
2018
|
|
|
|
|
|
|||||||
Operating revenue
|
$7,835
|
$(216
|
) |
$7,619
|
||||||||
Depreciation and amortization
|
1,157
|
(25
|
) |
1,132
|
||||||||
Interest income (expense)
|
10
|
—
|
10
|
|||||||||
Interest expense (benefit) and related charges
|
516
|
(5
|
) |
511
|
||||||||
Income tax expense (benefit)
|
378
|
(78
|
) |
300
|
||||||||
Net income (loss)
|
1,594
|
(312
|
) |
1,282
|
||||||||
Capital expenditures
|
2,542
|
—
|
2,542
|
|||||||||
Total assets (billions)
|
37.0
|
(0.1
|
) |
36.9
|
||||||||
2017
|
|
|
|
|||||||||
Operating revenue
|
$7,556
|
$ —
|
$7,556
|
|||||||||
Depreciation and amortization
|
1,141
|
—
|
1,141
|
|||||||||
Interest income (expense)
|
19
|
—
|
19
|
|||||||||
Interest expense (benefit) and related charges
|
497
|
(3
|
) |
494
|
||||||||
Income tax expense (benefit)
|
868
|
(94
|
) |
774
|
||||||||
Net income
|
1,466
|
74
|
1,540
|
|||||||||
Capital expenditures
|
2,729
|
—
|
2,729
|
192
|
|
|
|
|
• |
A $48 million tax benefit resulting from changes in tax status of certain subsidiaries in connection with the Dominion Energy Gas Restructuring
;
and
|
• |
A $42 million ($31 million
after-tax)
charge related to a voluntary retirement program.
|
Year Ended December 31,
|
Gas
Transmission & Storage |
|
Corporate and
Other
|
|
Consolidated
Total
|
|
||||||
(millions)
|
|
|
|
|
||||||||
2019
|
|
|
|
|
|
|||||||
Operating revenue
|
|
$2,186
|
|
|
$ (17
|
)
|
|
$2,169
|
|
|||
Depreciation and amortization
|
|
367
|
|
|
—
|
|
|
367
|
|
|||
Equity in earnings of equity method investees
|
|
43
|
|
|
—
|
|
|
43
|
|
|||
Interest income
|
|
105
|
|
|
—
|
|
|
105
|
|
|||
Interest and related charges
|
|
309
|
|
|
2
|
|
|
311
|
|
|||
Income tax expense (benefit)
|
|
170
|
|
|
(69
|
)
|
|
101
|
|
|||
Net Income from discontinued operations
|
|
—
|
|
|
141
|
|
|
141
|
|
|||
Net Income attributable to Dominion Energy Gas
|
|
594
|
|
|
127
|
|
|
721
|
|
|||
Investment in equity method investees
|
|
312
|
|
|
—
|
|
|
312
|
|
|||
Capital expenditures
|
|
391
|
|
|
313
|
|
|
704
|
|
|||
Total assets (billions)
|
|
18.8
|
|
|
—
|
|
|
18.8
|
|
|||
2018
|
|
|
|
|
|
|||||||
Operating revenue
|
$1,996
|
$ —
|
$1,996
|
|||||||||
Depreciation and amortization
|
333
|
—
|
333
|
|||||||||
Equity in earnings of equity method investees
|
54
|
—
|
54
|
|||||||||
Interest income
|
26
|
—
|
26
|
|||||||||
Interest and related charges
|
173
|
1
|
174
|
|||||||||
Income tax expense (benefit)
|
226
|
(102
|
) |
124
|
||||||||
Net Income from discontinued operations
|
—
|
24
|
24
|
|||||||||
Net Income (loss) attributable to Dominion Energy Gas
|
571
|
(90
|
) |
481
|
||||||||
Investment in equity method investees
|
339
|
—
|
339
|
|||||||||
Capital expenditures
|
749
|
360
|
1,109
|
|||||||||
Total assets (billions)
|
19.9
|
6.9
|
26.8
|
|||||||||
2017
|
|
|
|
|||||||||
Operating revenue
|
$1,523
|
$ —
|
$1,523
|
|||||||||
Depreciation and amortization
|
242
|
—
|
242
|
|||||||||
Equity in earnings of equity method investees
|
47
|
—
|
47
|
|||||||||
Interest income
|
4
|
—
|
4
|
|||||||||
Interest and related charges
|
60
|
—
|
60
|
|||||||||
Income tax expense (benefit)
|
189
|
(254
|
) |
(65
|
) | |||||||
Net Income from discontinued operations
|
—
|
163
|
163
|
|||||||||
Net Income attributable to Dominion Energy Gas
|
314
|
389
|
703
|
|||||||||
Capital expenditures
|
1,459
|
356
|
1,815
|
|
|
|
193
|
|
|
First
Quarter |
Second
Quarter |
Third
Quarter |
Fourth
Quarter |
||||||||||||
(millions)
|
|
|
|
|
|
|||||||||||
2019
|
|
|
|
|
|
|
||||||||||
Operating revenue
|
$
|
3,858
|
|
$
|
3,970
|
|
$
|
4,269
|
|
$
|
4,475
|
|
||||
Income (loss) from operations
|
|
(482
|
)
|
|
461
|
|
|
1,314
|
|
|
1,221
|
|
||||
Net income (loss) including noncontrolling interests
|
|
(677
|
)
|
|
58
|
|
|
985
|
|
|
1,010
|
|
||||
Net income (loss) attributable to Dominion Energy
|
|
(680
|
)
|
|
54
|
|
|
975
|
|
|
1,009
|
|
||||
Basic EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to Dominion Energy
|
|
(0.86
|
)
|
|
0.07
|
|
|
1.19
|
|
|
1.22
|
|
||||
Diluted EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to Dominion Energy
|
|
(0.86
|
)
|
|
0.05
|
|
|
1.17
|
|
|
1.21
|
|
||||
Dividends per share (Series A Preferred Stock)
|
|
—
|
|
|
0.729
|
|
|
4.375
|
|
|
4.375
|
|
||||
Dividends per share (Series B Preferred Stock)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9375
|
|
||||
Dividends declared per common share
|
|
0.9175
|
|
|
0.9175
|
|
|
0.9175
|
|
|
0.9175
|
|
||||
2018
|
|
|
|
|
|
|
||||||||||
Operating revenue
|
$ |
3,466
|
$ |
3,088
|
$ |
3,451
|
$ |
3,361
|
||||||||
Income from operations
|
875
|
742
|
1,150
|
834
|
||||||||||||
Net income including noncontrolling interests
|
526
|
478
|
883
|
662
|
||||||||||||
Net income attributable to Dominion Energy
|
503
|
449
|
854
|
641
|
||||||||||||
Basic EPS:
|
|
|
|
|
||||||||||||
Net income attributable to Dominion Energy
|
0.77
|
0.69
|
1.31
|
0.97
|
||||||||||||
Diluted EPS:
|
|
|
|
|
||||||||||||
Net income attributable to Dominion Energy
|
0.77
|
0.69
|
1.30
|
0.97
|
||||||||||||
Dividends declared per common share
|
0.835
|
0.835
|
0.835
|
0.835
|
• | Fourth quarter results include a $244 million after-tax charge related to litigation acquired in the SCANA Combination, offset by a $150 million net gain related to nuclear decommissioning trust funds. |
• | Second quarter results include a $316 million after-tax charge related to a voluntary retirement program, a $100 million after-tax charge related to a contract termination with a non-utility generator and a $75 million after-tax charge for litigation acquired in the SCANA Combination. |
• |
First quarter results include $1.3 billion of after-tax merger and integration-related costs related to the SCANA Combination (inclusive of a $756 million after-tax charge for refunds of amounts previously collected from retail electric customers of DESC for the NND Project, a $277 million after-tax charge for certain regulatory assets and property, plant and equipment acquired in the SCANA Combination for which Dominion Energy committed to forego recovery and $134 million after-tax charge for litigation acquired in the SCANA Combination) and a $409 million after-tax charge for the planned early retirement of certain Virginia Power electric generation facilities
and automated metering reading infrastructure
, partially offset by $197 million after-tax net gain related to nuclear decommissioning trust funds and an $84 million after-tax revision to future ash ponds and landfill closure costs.
|
• |
Fourth quarter results include $536 million of
after-tax
gains from the sale of certain merchant generation facilities and equity method investments partially offset by a $164 million
after-tax
impairment charge for certain gathering and processing assets.
|
• |
Second quarter results include an $89 million
after-tax
charge for disallowance of FERC-regulated plant.
|
• |
First quarter results include a $160 million
after-tax
charge associated with Virginia legislation enacted in March 2018 that required
one-time
rate credits of certain amounts to utility customers.
|
|
First
Quarter |
Second
Quarter |
Third
Quarter |
Fourth
Quarter |
||||||||||||
(millions)
|
|
|
|
|
|
|||||||||||
2019
|
|
|
|
|
|
|
||||||||||
Operating revenue
|
$
|
1,965
|
|
$
|
1,938
|
|
$
|
2,264
|
|
$
|
1,941
|
|
||||
Income from operations
|
|
122
|
|
|
238
|
|
|
820
|
|
|
659
|
|
||||
Net income
|
|
20
|
|
|
100
|
|
|
602
|
|
|
427
|
|
||||
2018
|
|
|
|
|
|
|
||||||||||
Operating revenue
|
$ |
1,748
|
$ |
1,829
|
$ |
2,232
|
$ |
1,810
|
||||||||
Income from operations
|
364
|
533
|
756
|
418
|
||||||||||||
Net income
|
184
|
339
|
520
|
239
|
• | Second quarter results include a $144 million after-tax charge related to a voluntary retirement program, a $100 million after-tax charge related to a contract termination with a non-utility generator and a $47 million after-tax charge for the abandonment of a project at an electric generation facility. |
• |
First quarter results include a $409 million
after-tax
charge
for the planned early retirement of certain electric generation facilities and automated metering reading infrastructure, partially offset by an $84 million after-tax revision to future ash ponds and landfill closure costs.
|
194
|
|
|
|
|
• |
First quarter results include a $160 million
after-tax
charge associated with Virginia legislation enacted in March 2018 that required
one-time
rate credits of certain amounts to utility customers.
|
|
First
Quarter |
Second
Quarter |
Third
Quarter |
Fourth
Quarter |
||||||||||||
(millions)
|
|
|
|
|
|
|||||||||||
2019
|
|
|
|
|
|
|
||||||||||
Operating revenue
|
|
$566
|
|
|
$530
|
|
|
$502
|
|
|
$571
|
|
||||
Income from continuing operations
|
|
247
|
|
|
179
|
|
|
202
|
|
|
276
|
|
||||
Net income from continuing operations
|
|
172
|
|
|
123
|
|
|
130
|
|
|
276
|
|
||||
Net income from discontinued operations
|
|
54
|
|
|
26
|
|
|
45
|
|
|
16
|
|
||||
Net income including noncontrolling interests
|
|
|
226
|
|
|
|
149
|
|
|
|
175
|
|
|
|
292
|
|
Net income attributable to
Dominion Energy Gas |
190
|
|
119
|
|
151
|
|
261
|
|
||||||||
2018
|
|
|
|
|
|
|
||||||||||
Operating revenue
|
$389
|
$508
|
$533
|
$566
|
||||||||||||
Income from continuing operations
|
167
|
90
|
302
|
228
|
||||||||||||
Net income from continuing operations
|
157
|
84
|
209
|
182
|
||||||||||||
Net income (loss) from discontinued operations
|
56
|
45
|
33
|
(110
|
) | |||||||||||
Net income including noncontrolling interests
|
|
|
213
|
|
|
|
129
|
|
|
|
242
|
|
|
|
72
|
|
Net income attributable to Dominion Energy Gas
|
180
|
83
|
191
|
27
|
• |
Second quarter results include a $58 million after-tax charge related to a voluntary retirement program
, including $32 million in discontinued operations.
|
• |
Fourth quarter results include a $165 million
after-tax
impairment charge for certain gathering and processing assets, included in discontinued operations.
|
• |
Second quarter results include an $89 million
after-tax
charge for disallowance of FERC-regulated plant.
|
|
|
|
195
|
|
196
|
|
|
|
|
|
|
|
197
|
|
198
|
|
|
|
|
199
|
• |
Information regarding the directors required by this item is found under the heading
Election of Directors
|
• |
Information regarding compliance with Section 16 of the Securities Exchange Act of 1934, as amended, required by this item is found under the heading
Delinquent Section 16(a) Reports
|
• |
Information regarding the Dominion Energy Audit Committee Financial expert(s) required by this item is found under the heading
The Committees of the Board—Audit Committee
|
• |
Information regarding the Dominion Energy Audit Committee required by this item is found under the headings
The Committees of the Board—Audit Committee
Audit Committee Report
|
• |
Information regarding Dominion Energy’s Code of Ethics and Business Conduct required by this item is found under the heading
Other Information
Code of Ethics and Business Conduct
|
200
|
|
|
|
|
Type of Fees
|
2019
|
|
2018
|
|||||
(millions)
|
|
|
|
|||||
Virginia Power
|
|
|
|
|
||||
Audit fees
|
|
$2.13
|
|
$ |
1.68
|
|||
Audit-related fees
|
|
—
|
|
—
|
||||
Tax fees
|
|
—
|
|
—
|
||||
All other fees
|
|
—
|
|
—
|
||||
Total Fees
|
|
$2.13
|
|
$ |
1.68
|
|||
Dominion Energy Gas
|
|
|
|
|
||||
Audit fees
|
|
$2.31
|
|
$ |
0.97
|
|||
Audit-related fees
|
|
0.26
|
|
0.26
|
||||
Tax fees
|
|
—
|
|
—
|
||||
All other fees
|
|
—
|
|
—
|
||||
Total Fees
|
|
$2.57
|
|
$ |
1.23
|
201
|
Exhibit
Number |
Description
|
Dominion
Energy
|
Virginia
Power
|
Dominion
Energy
Gas
|
||||||||||||
2.1
|
X
|
|
|
|||||||||||||
3.1.a
|
X
|
|
|
|||||||||||||
3.1.b
|
|
X
|
|
|||||||||||||
3.1.c
|
|
|
X
|
|||||||||||||
3.1.d
|
|
|
X
|
|||||||||||||
3.2.a
|
X
|
|
|
|||||||||||||
3.2.b
|
|
X
|
|
|||||||||||||
3.2.c
|
|
|
X
|
|||||||||||||
4
|
Dominion Energy, Inc., Virginia Electric and Power Company and Dominion Energy Gas Holdings, LLC agree to furnish to the Securities and Exchange Commission upon request any other instrument with respect to long-term debt as to which the total amount of securities authorized does not exceed 10% of any of their total consolidated assets.
|
X
|
X
|
X
|
||||||||||||
4.1.a
|
X
|
|
|
|||||||||||||
4.1.b
|
|
X
|
|
|||||||||||||
4.2
|
Indenture of Mortgage of Virginia Electric and Power Company, dated November 1, 1935, as supplemented and modified by Fifty-Eighth Supplemental Indenture (Exhibit 4(ii), Form
10-K
for the fiscal year ended December 31, 1985, File No.
1-2255);
Ninety-Second Supplemental Indenture, dated as of July 1, 2012 (Exhibit 4.1, Form 10-Q for the quarter ended June 30, 2012 filed August 1, 2012, File No. 1-2255).
|
X
|
X
|
|
202
|
|
|
|
|
|
|
|
203
|
|
204
|
|
|
|
|
|
|
|
205
|
|
206
|
|
|
|
|
|
|
|
207
|
|
Exhibit
Number |
Description
|
Dominion
Energy
|
Virginia
Power
|
Dominion
Energy
Gas
|
||||||||||||
10.27*
|
X
|
X
|
X
|
|||||||||||||
10.28*
|
X
|
X
|
X
|
|||||||||||||
10.29*
|
X
|
X
|
X
|
|||||||||||||
10.30*
|
X
|
X
|
X
|
|||||||||||||
10.31*
|
X
|
X
|
X
|
|||||||||||||
10.32*
|
X
|
X
|
X
|
|||||||||||||
10.33*
|
X
|
X
|
X
|
|||||||||||||
10.34*
|
X
|
X
|
X
|
|||||||||||||
10.35*
|
X
|
X
|
X
|
|||||||||||||
21
|
X
|
|
|
|||||||||||||
23
|
X
|
X
|
X
|
|||||||||||||
31.a
|
X
|
|
|
|||||||||||||
31.b
|
X
|
|
|
|||||||||||||
31.c
|
|
X
|
|
|||||||||||||
31.d
|
|
X
|
|
|||||||||||||
31.e
|
|
|
X
|
|||||||||||||
31.f
|
|
|
X
|
|||||||||||||
32.a
|
X
|
|
|
|||||||||||||
32.b
|
|
X
|
|
208
|
|
|
|
|
Exhibit
Number |
Description
|
Dominion
Energy
|
Virginia
Power
|
Dominion
Energy
Gas
|
||||||||||||
32.c
|
|
|
X
|
|||||||||||||
99
|
X
|
|
|
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101
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The following financial statements from Dominion Energy, Inc.’s Annual Report on Form
10-K
for the year ended December 31, 2019, filed on February 28, 2020, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Equity, (v) Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements. The following financial statements from Virginia Electric and Power Company’s Annual Report on Form
10-K
for the year ended December 31, 2019, filed on February 28, 2020, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Common Shareholder’s Equity (v) Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements. The following financial statements from Dominion Energy Gas Holdings, LLC’s Annual Report on Form
10-K
for the year ended December 31, 2019, filed on February 28, 2020, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Equity, (v) Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements.
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X
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X
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X
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||||||||||||
104
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Cover Page Interactive Data File formatted in iXBRL (Inline eXtensible Business Reporting Language) and contained in Exhibit 101.
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X
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X
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X
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*
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Indicates management contract or compensatory plan or arrangement.
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209
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DOMINION ENERGY, INC.
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By:
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/s/ Thomas F. Farrell, II
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(Thomas F. Farrell, II, Chairman, President and
Chief Executive Officer)
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Signature
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Title
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/s/ Thomas F. Farrell, II
Thomas F. Farrell, II
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Chairman of the Board of Directors, President and Chief
Executive Officer
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/s/ James A. Bennett
James A. Bennett
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Director
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/s/ Helen E. Dragas
Helen E. Dragas
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Director
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/s/ James O. Ellis, Jr.
James O. Ellis, Jr.
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Director
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/s/ D. Maybank Hagood
D. Maybank Hagood
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Director
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/s/ John W. Harris
John W. Harris
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Director
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/s/ Ronald W. Jibson
Ronald W. Jibson
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Director
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/s/ Mark J. Kington
Mark J. Kington
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Director
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/s/ Joseph M. Rigby
Joseph M. Rigby
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Director
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/s/ Pamela J. Royal
Pamela J. Royal
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Director
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/s/ Robert H. Spilman, Jr.
Robert H. Spilman, Jr.
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Director
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/s/ Susan N. Story
Susan N. Story
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Director
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/s/ Michael E. Szymanczyk
Michael E. Szymanczyk
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Director
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/s/ James R. Chapman
James R. Chapman
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Executive Vice President, Chief Financial Officer and Treasurer
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/s/ Michele L. Cardiff
Michele L. Cardiff
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Vice President, Controller and Chief Accounting Officer
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210
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VIRGINIA ELECTRIC AND POWER COMPANY
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By:
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/s/ Thomas F. Farrell, II
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||
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(Thomas F. Farrell, II, Chairman of the Board
of Directors and Chief Executive Officer)
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Signature
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Title
|
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/s/ Thomas F. Farrell, II
Thomas F. Farrell, II
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Chairman of the Board of Directors and Chief Executive Officer
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/s/ Robert M. Blue
Robert M. Blue
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Director
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/s/ Carlos M. Brown
Carlos M. Brown
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Director
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/s/ James R. Chapman
James R. Chapman
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Executive Vice President, Chief Financial Officer and Treasurer
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/s/ Michele L. Cardiff
Michele L. Cardiff
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Vice President, Controller and Chief Accounting Officer
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211
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DOMINION ENERGY GAS HOLDINGS, LLC
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|||
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By:
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/s/ Thomas F. Farrell, II
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||
|
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(Thomas F. Farrell, II, Chairman of the Board
of Directors and Chief Executive Officer)
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Signature
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Title
|
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/s/ Thomas F. Farrell, II
Thomas F. Farrell, II
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Chairman of the Board of Directors and Chief Executive Officer
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/s/ Carlos M. Brown
Carlos M. Brown
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Director
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/s/ James R. Chapman
James R. Chapman
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Director, Executive Vice President, Chief Financial Officer and Treasurer
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/s/ Michele L. Cardiff
Michele L. Cardiff
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Vice President, Controller and Chief Accounting Officer
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212
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EXHIBIT 4.16
DESCRIPTION OF DOMINION ENERGY, INC.
COMMON STOCK
The following description of our common stock, which is registered under Section 12(b) of the Securities Exchange Act of 1934, as amended, is a summary and is qualified in its entirety by reference to our articles of incorporation and bylaws, which are incorporated by reference as exhibits to the Annual Report on Form 10-K of which this exhibit is a part. We encourage you to read our articles of incorporation and bylaws, as well as applicable provisions of the Virginia Stock Corporation Act, for more information.
References herein to we, our, us, the Company or Dominion Energy refer to Dominion Energy, Inc., a Virginia corporation.
Authorized Shares
We are authorized to issue 1.77 billion shares of capital stock, consisting of 20 million shares of preferred stock and 1.75 billion shares of common stock, without par value. No holder of shares of our common stock or preferred stock has any preemptive rights.
Listing
Our outstanding shares of common stock are listed on the New York Stock Exchange under the symbol D. Any additional common stock we issue will also be listed on the New York Stock Exchange.
Dividends
Common shareholders may receive dividends when declared by our board of directors. Dividends may be paid in cash, stock or other form. In certain cases, common shareholders may not receive dividends until we have satisfied our obligations to any preferred shareholders. Under certain circumstances, our indentures or other agreements to which we are a party may also restrict our ability to pay cash dividends.
Authorized but Unissued Shares
Our authorized but unissued shares of common stock will be available for future issuance without shareholder approval. These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans. The existence of authorized but unissued shares of common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Fully Paid
All outstanding shares of common stock are fully paid and non-assessable. Any additional common stock we issue will also be fully paid and non-assessable.
Voting Rights
Each share of common stock is entitled to one vote in the election of directors and other matters. Common shareholders are not entitled to cumulative voting rights.
Other Rights
We will notify common shareholders of any shareholders meetings according to applicable law. If we liquidate, dissolve or wind up our business, either voluntarily or not, common shareholders will share equally in the assets remaining after we pay our creditors and preferred shareholders.
Transfer Agent and Registrar
Broadridge Corporate Issuer Solutions, Inc. currently serves as transfer agent, registrar and dividend paying agent for our common stock.
Preferred Stock
Our board of directors can, without approval of shareholders, issue one or more series of preferred stock. The board can also determine the number of shares of each series and the rights, preferences and limitations of each series including the dividend rights, voting rights, conversion rights, redemption rights and any liquidation preferences, the number of shares constituting each series and the terms and conditions of issue. In some cases, the issuance of preferred stock could delay a change in control of the Company and make it harder to remove present management. Under certain circumstances, preferred stock could also restrict dividend payments to holders of our common stock.
The preferred stock will, when issued, be fully paid and non-assessable. Unless otherwise specified in the terms of the applicable series, shares of preferred stock of a given series will rank on a parity in all respects with any outstanding preferred stock we may have and will have priority over our common stock as to dividends and distributions of assets. Therefore, the rights of any preferred stock may limit the rights of the holders of our common stock and preferred stock.
On June 14, 2019, we issued approximately 1.6 million shares of 1.75% Series A Cumulative Perpetual Convertible Preferred Stock, without par value (the Series A Preferred Stock), as a component of our 2019 Series A Equity Units. On December 13, 2019, we issued 800,000 shares of 4.65% Series B Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock, without par value (the Series B Preferred Stock and, together with the Series A Preferred Stock, the Preferred Stock).
Certain terms of the Preferred Stock are described below and the full terms of the Preferred Stock are set forth in Article IIIA, in the case of the Series A Preferred Stock, and Article IIIB, in the cast of the Series B Preferred Stock, of our articles of incorporation.
Ranking
The Preferred Stock ranks senior to all classes or series of our common stock and any other class or series of junior stock with respect to dividends rights and rights upon any liquidation, winding-up or dissolution.
Liquidation Preference
If we liquidate, dissolve or wind up, holders of shares of Preferred Stock will have the right to receive $1,000 per share, plus accumulated and unpaid dividends, if any (whether or not authorized or declared) up to, but excluding, the date of payment, before any payment is made to holders of our common stock and any other class or series of capital stock ranking junior to the Preferred Stock as to liquidation rights, but subject to the prior payment in full of all of our liabilities and the preferences of any senior stock.
Dividends and Restrictions on Common Dividends
Dividends are payable on the Series A Preferred Stock quarterly in arrears and on the Series B Preferred Stock semi-annually in arrears, in each case when, as and if declared by our board of directors. However, dividends on both the Series A Preferred Stock and the Series B Preferred Stock accumulate regardless of whether such dividends are declared by the board of directors, permitted under Virginia law or prohibited by any agreement to which we are a party. In the case of the Series A Preferred Stock, any accumulated and unpaid dividends will accrue additional dividends at the then-current dividend rate until paid, compounded quarterly, to, but excluding the payment date. We may pay dividends on the Series A Preferred Stock in cash, shares of our common stock or a combination of cash and shares of our common stock. Dividends on the Series B Preferred Stock are payable only in cash.
As long as shares of the Series A Preferred Stock and/or Series B Preferred Stock remain outstanding, unless all accumulated and unpaid dividends (including, in the case of the Series A Preferred Stock, any compounded dividends thereon) for all preceding dividends periods have been declared and paid, or a sufficient sum or number of shares of common stock has been set apart for the payment of such dividends, we are not permitted to (i) declare and pay
dividends on any capital stock ranking, as to dividends, on parity with or junior to the Preferred Stock, such as the common stock, or (ii) redeem, purchase or otherwise acquire any capital stock ranking, as to dividends or upon liquidation, on parity with or junior to the Preferred Stock, such as the common stock, subject, in the case of both clauses (i) and (ii), to certain exceptions as described in the terms of the Series A Preferred Stock and the Series B Preferred Stock, respectively.
Voting Rights
Holders of shares of Preferred Stock generally have no voting rights, except as otherwise required by Virginia law. However, if dividends on any shares of Series A Preferred Stock have not been declared and paid in full for six or more quarterly dividend periods, whether or not consecutive, or if dividends on any shares of Series B Preferred Stock have not been declared and paid in full for the equivalent of three semi-annual dividend periods, whether or not consecutive, holders of the outstanding shares of Series A Preferred Stock and outstanding shares of Series B Preferred Stock, together with holders of any other series of our preferred stock ranking equally with the Series A Preferred Stock and Series B Preferred Stock as to payment of dividends and upon which like voting rights have been conferred and are exercisable, will be entitled to vote for the election of two additional directors to our board to serve until all accumulated unpaid dividends have been paid or declared with a sufficient sum or, in the case of the Series A Preferred Stock, number of shares of common stock set aside for payment.
Virginia Stock Corporation Act and our Articles of Incorporation and Bylaws
General
We are a Virginia corporation subject to the Virginia Stock Corporation Act (the Virginia Act). Provisions of the Virginia Act, in addition to provisions of our articles of incorporation and bylaws, address corporate governance issues, including the rights of shareholders. Some of these provisions could hinder management changes while others could have an anti- takeover effect. This anti-takeover effect may, in some circumstances, reduce the control premium that might otherwise be reflected in the value of our common stock.
Certain key provisions of the Virginia Act and our articles of incorporation and bylaws are summarized below.
Business Combinations
Our articles of incorporation require that any merger, share exchange or sale of substantially all of our assets be approved by a majority of the votes entitled to be cast on the matter by each voting group entitled to vote on the matter. Abstentions and broker non-votes will have no effect on the outcome.
Article 14 of the Virginia Act contains several provisions relating to transactions with interested shareholders. Interested shareholders are holders of more than 10% of any class of a corporations outstanding voting shares. Transactions between a corporation and an interested shareholder are referred to as affiliated transactions. The Virginia Act requires that material affiliated transactions must be approved by at least two-thirds of the shareholders not including the interested shareholder. Affiliated transactions requiring this two-thirds approval include mergers, share exchanges, material dispositions of corporate assets, dissolution or any reclassification of securities or merger of the corporation with any of its subsidiaries which increases the percentage of voting shares owned by an interested shareholder by more than five percent.
For three years following the time that a shareholder becomes an interested shareholder, a Virginia corporation cannot engage in an affiliated transaction with the interested shareholder without approval of two-thirds of the disinterested voting shares, and majority approval of disinterested directors. A disinterested director is a director who was a director on the date on which an interested shareholder became an interested shareholder or was recommended for election or elected by a majority of the disinterested directors then on the board. After three years, an affiliated transaction must be approved by either two-thirds of disinterested voting shares or a majority of disinterested directors.
The provisions of the Virginia Act relating to affiliated transactions do not apply if a majority of disinterested directors approve the acquisition of shares making a person an interested shareholder.
The Virginia Act permits corporations to opt out of the affiliated transactions provisions. We have not opted out.
The Virginia Act also contains provisions regulating certain control share acquisitions, which are transactions causing the voting strength of any person acquiring beneficial ownership of shares of a public corporation in Virginia to meet or exceed certain threshold voting percentages (20%, 33 1/3%, or 50%). Shares acquired in a control share acquisition have no voting rights unless the voting rights are granted by a majority vote of all outstanding shares other than those held by the acquiring person or any officer or employee-director of the corporation. The acquiring person may require that a special meeting of the shareholders be held to consider the grant of voting rights to the shares acquired in the control share acquisition.
Our bylaws give us the right to redeem the shares purchased by an acquiring person in a control share acquisition. We can do this if the acquiring person fails to deliver a statement to us listing information required by the Virginia Act or if our shareholders vote not to grant voting rights to the acquiring person.
The Virginia Act permits corporations to opt out of the control share acquisition provisions. We have not opted out.
Directors Duties
The standards of conduct for directors of Virginia corporations are listed in Section 13.1-690 of the Virginia Act. Directors must discharge their duties in accordance with their good faith business judgment of the best interests of the corporation. Directors may rely on the advice or acts of others, including officers, employees, attorneys, accountants and board committees if they have a good faith belief in their competence. Directors actions are not subject to a reasonableness or prudent person standard. Virginias federal and state courts have focused on the process involved with directors decision-making and are generally supportive of directors if they have based their decision on an informed process. These elements of Virginia law could make it more difficult to take over a Virginia corporation than corporations in other states.
Board of Directors
Members of our board of directors serve one-year terms and are elected annually. Except when the number of nominees exceeds the number of directors to be elected (a contested election), directors are elected by majority vote. In the case of a contested election, directors are elected by a plurality vote. Directors may be removed from office for cause if the number of votes cast to remove the director constitutes a majority of the votes entitled to be cast at an election of directors of the voting group by which the director was elected.
Shareholder Proposals and Director Nominations
Our shareholders can submit shareholder proposals and nominate candidates for the board of directors if the shareholders follow advance notice procedures described in our bylaws.
To nominate directors, shareholders must submit a written notice to our corporate secretary at least 60 days before a scheduled meeting. The notice must include the name and address of the shareholder and of the nominee, a description of any arrangements between the shareholder and the nominee, information about the nominee required by the Securities and Exchange Commission, the written consent of the nominee to serve as a director and other information.
Shareholder proposals must be submitted to our corporate secretary at least 90 days before the first anniversary of the date of our last annual meeting. The notice must include a description of the proposal, the reasons for presenting the proposal at the annual meeting, the text of any resolutions to be presented, the shareholders name and address and number of shares held and any material interest of the shareholder in the proposal.
Director nominations and shareholder proposals that are late or that do not include all required information may be rejected. This could prevent shareholders from bringing certain matters before an annual or special meeting, including making nominations for directors.
Proxy Access
Our bylaws permit a shareholder, or a group of up to 20 shareholders, owning 3% or more of our outstanding common stock continuously for at least three years, to nominate and include in our annual meeting proxy materials director candidates to occupy up to two or 20% of our board seats (whichever is greater), provided that such shareholder or group of shareholders satisfies the requirements set forth in the bylaws.
Meetings of Shareholders and Action by Written Consent
Under our bylaws, meetings of the shareholders may be called by the chairman of the board, the vice chairman, the president or a majority of our board of directors. Special meetings of shareholders will also be held whenever called by the Corporate Secretary, upon the written request of shareholders owning continuously for a period of at least one year prior to the date of such request more than 25% of all of our outstanding shares of common stock.
Under the Virginia Act, action required or permitted to be taken at a shareholders meeting may be taken without a meeting if the action is taken by all the shareholders entitled to vote on the action. In addition, the Virginia Act provides that the articles of incorporation of a corporation may authorize action by shareholders by less than unanimous written consent provided that the taking of such action is consistent with any requirements that may be set forth in the corporations articles of incorporation, bylaws or the Virginia Act provision. In the case of a public corporation, the inclusion of such a provision in the articles of incorporation must be approved by more than two-thirds of any voting group entitled to vote on the amendment.
The Virginia Act further provides that less than unanimous written consents is not available at any public corporation whose articles of incorporation or bylaws allow a special meeting to be called by shareholders (or a group of shareholders) holding 30% or fewer of all votes entitled to be cast. Therefore, before our shareholders may have the right to act by less than unanimous written consent, our board and more than two-thirds of the holders of our common stock would need to approve an amendment to our articles of incorporation to add such a provision and the bylaws would need to be amended to increase the percentage of shareholders required to call a special meeting above 30%. The board currently does not intend to approve either of these actions.
These provisions could have the effect of delaying until the next annual shareholders meeting shareholder consideration of actions which are favored by the holders of up to 25% of our outstanding shares of common stock, because such holders would be able to consider such action as shareholders, such as electing new directors or approving a merger, only at a duly called shareholders meeting and would not own sufficient shares of our common stock to request the calling of a special meeting.
Amendment of Articles
Generally, our articles of incorporation may only be amended or repealed by a majority of the votes entitled to be cast on the matter by each voting group entitled to vote on the matter.
Indemnification
Under our articles of incorporation, we indemnify our officers and directors to the fullest extent permitted under Virginia law against all liabilities incurred in connection with their service to us. We have also entered into agreements relating to the advancement of expenses for certain of our directors and officers in advance of a final disposition of proceedings or the making of any determination of eligibility for indemnification pursuant to our articles of incorporation.
Limitation of Liability
Our articles of incorporation provide that our directors and officers will not be personally liable for monetary damages to us for breaches of their fiduciary duty as directors or officers, unless they violated their duty of loyalty to us or our shareholders, acted in bad faith, knowingly or intentionally violated the law, authorized illegal dividends or redemptions or derived an improper personal benefit from their action as directors or officers. This provision applies only to claims against directors or officers arising out of their role as directors or officers and not in any other capacity. Directors and officers remain liable for violations of the federal securities laws and we retain the right to pursue legal remedies other than monetary damages, such as an injunction or rescission for breach of the officers or directors duty of care.
EXHIBIT 4.17
DESCRIPTION OF DOMINION ENERGY, INC.
2016 SERIES A 5.25% ENHANCED JUNIOR SUBORDINATED NOTES DUE 2076
The following description of our 2016 Series A 5.25% Enhanced Junior Subordinated Notes due 2076, which are registered under Section 12(b) of the Securities Exchange Act of 1934, as amended, is a summary and is qualified in its entirety by reference to the Junior Subordinated Indenture II, dated June 1, 2006 (the Subordinated Indenture II), between us and The Bank of New York Mellon (successor to JPMorgan Chase Bank, N.A., as trustee (the Indenture Trustee), as supplemented and amended by the Third Supplemental and Amending Indenture, dated as of June 1, 2009 (the Third Supplemental Indenture), among us, the Bank of New York Mellon (successor to JPMorgan Chase Bank, N.A., as the original trustee, and Deutsche Bank Trust Company Americas, as series trustee (the Series Trustee) and as further supplemented by the Tenth Supplemental Indenture, dated July 1, 2016 (the Tenth Supplemental Indenture), between us and the Series Trustee, each of which is incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this exhibit is a part. We encourage you to read the Subordinated Indenture II, the Third Supplemental Indenture and the Tenth Supplemental Indenture for more information.
References herein to we, our, us, the Company or Dominion Energy refer to Dominion Energy, Inc., a Virginia corporation.
General
On July 19, 2016, Dominion Energy issued $800,000,000 aggregate principal amount of 2016 Series A 5.25% Enhanced Junior Subordinated Notes due 2076 (the Junior Subordinated Notes). The Junior Subordinated Notes were issued in denominations of $25 and integral multiples thereof. The Junior Subordinated Notes are held in book-entry form in the name of DTC or its nominee. We may reopen this series of Junior Subordinated Notes and issue additional Junior Subordinated Notes of this series without the consent of the holders of the Junior Subordinated Notes.
Maturity
The Junior Subordinated Notes mature on July 30, 2076.
Ranking
The Junior Subordinated Notes are subordinate and junior in right of payment, to the extent set forth in the Subordinated Indenture II, to all Priority Indebtedness as defined below. If:
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we make a payment or distribution of any of our assets to creditors upon our dissolution, winding-up, liquidation or reorganization, whether in bankruptcy, insolvency or otherwise; |
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a default beyond any grace period has occurred and is continuing with respect to the payment of principal, interest or any other monetary amounts due and payable on any Priority Indebtedness; or |
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the maturity of any Priority Indebtedness has been accelerated because of a default on that Priority Indebtedness, |
then the holders of Priority Indebtedness generally will have the right to receive payment, in the first instance above, of all amounts due or to become due upon that Priority Indebtedness, and, in the second and third instances above, of all amounts due on that Priority Indebtedness, or we will make provision for those payments, in each instance above before the holders of any Junior Subordinated Notes have the right to receive any payments of principal or interest on their Junior Subordinated Notes.
Priority Indebtedness means, with respect to the Junior Subordinated Notes, the principal, premium, interest and any other payment in respect of any of the following:
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all of our current and future indebtedness for borrowed or purchase money whether or not evidenced by notes, debentures, bonds or other similar written instruments; |
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our obligations under synthetic leases, finance leases and capitalized leases; |
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our obligations for reimbursement under letters of credit, bankers acceptances, security purchase facilities or similar facilities issued for our account; |
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any of our other indebtedness or obligations with respect to derivative contracts, including commodity contracts, interest rate, commodity and currency swap agreements, forward contracts and other similar agreements or arrangements; and |
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all indebtedness of others of the kinds described in the preceding categories which we have assumed or guaranteed, |
other than obligations ranking on a parity with the Junior Subordinated Notes or ranking junior to the Junior Subordinated Notes.
Priority Indebtedness does not include trade accounts payable, accrued liabilities arising in the ordinary course of business, indebtedness to our subsidiaries or indebtedness evidenced by other junior subordinated notes issued under the Subordinated Indenture II.
Priority Indebtedness is entitled to the benefits of the subordination provisions in the Subordinated Indenture II irrespective of the amendment, modification or waiver of any term of the Priority Indebtedness. We may not amend the Subordinated Indenture II or the Junior Subordinated Notes to change the subordination of any outstanding Priority Indebtedness without the consent of each holder of Priority Indebtedness that the amendment would adversely affect.
As of December 31, 2019, we had approximately $8.0 billion principal amount of outstanding long-term debt on an unconsolidated basis (including securities due within one year and junior subordinated debentures issued under our Subordinated Indenture dated as of December 1, 1997) that are senior to the Junior Subordinated Notes.
Because we are a holding company and conduct all of our operations through our subsidiaries, our ability to meet our obligations under the Junior Subordinated Notes is dependent on the earnings and cash flows of those subsidiaries and the ability of those subsidiaries to pay dividends or to advance or repay funds to us. Holders of the Junior Subordinated Notes generally have a junior position to claims of creditors of our subsidiaries, including trade creditors, debtholders, secured creditors, taxing authorities and guarantee holders, and any preferred security holders of our subsidiaries. As of December 31, 2019, our subsidiaries had approximately $24.3 billion principal amount of outstanding long-term debt (including securities due within one year).
There are no terms in the Subordinated Indenture II or the Junior Subordinated Notes that limit our ability to incur additional indebtedness or our subsidiaries ability to incur additional indebtedness or issue preferred securities. We and our subsidiaries expect to incur additional indebtedness from time to time that will be senior to the Junior Subordinated Notes.
Interest
The Junior Subordinated Notes bear interest at 5.25% per year.
Subject to our right to defer interest payments as described below, interest on the Junior Subordinated Notes is payable quarterly in arrears on January 30, April 30, July 30 and October 30 of each year. The amount of interest payable for any quarterly interest accrual period is computed on the basis of a 360-day year consisting of twelve 30-day months.
The term interest includes quarterly interest payments and applicable interest on interest payments accrued but not paid on the applicable interest payment date.
If an interest payment date or a redemption date of the Junior Subordinated Notes falls on a day that is not a business day, the payment of interest and/or principal payable on that date will be made on the next succeeding business day, and no interest on such payment will accrue for the period from and after the interest payment date or the redemption date, as applicable.
So long as the Junior Subordinated Notes remain in book-entry only form, the record date for each interest payment date is the close of business on the business day before the applicable interest payment date. If the Junior Subordinated Notes are not in book-entry only form, the record date for each interest payment date will be the close of business on the fifteenth calendar day (whether or not a business day) before the applicable interest payment date.
A business day is any day that is not a Saturday, a Sunday, a day on which banks in New York City are authorized or obligated by law or executive order to remain closed, or a day on which the Corporate Trust Office of the Series Trustee is closed for business.
Option to Defer Interest Payments
So long as there is no event of default with respect to the Junior Subordinated Notes under the Subordinated Indenture II, at our option, we may, on one or more occasions, defer payment of all or part of the current and accrued interest otherwise due on the Junior Subordinated Notes for a period of up to 10 consecutive years (each period, commencing on the date that the first such interest payment would otherwise have been made, an Optional Deferral Period). In other words, we may declare at our discretion up to a 10-year interest payment moratorium on the Junior Subordinated Notes and may choose to do that on more than one occasion. A deferral of interest payments may not end on a date other than an Interest Payment Date and may not extend beyond the maturity date of the Junior Subordinated Notes (which is July 30, 2076), and we may not begin a new Optional Deferral Period and may not pay current interest on the Junior Subordinated Notes until we have paid all accrued interest on the Junior Subordinated Notes from the previous Optional Deferral Period.
Any deferred interest on the Junior Subordinated Notes will accrue additional interest at a rate equal to the interest rate applicable to the Junior Subordinated Notes, to the extent permitted by applicable law. Once we pay all deferred interest payments on the Junior Subordinated Notes, including any additional interest accrued on the deferred interest, we can again defer interest payments on the Junior Subordinated Notes as described above, but not beyond the maturity date of the Junior Subordinated Notes.
We will give the Series Trustee written notice of our election to begin an Optional Deferral Period at least one business day before the record date for the next interest payment date which shall contain an instruction for the Series Trustee to forward such notice to the holders of the Junior Subordinated Notes. However, our failure to pay interest on any interest payment date will itself constitute the commencement of an Optional Deferral Period unless we pay such interest within five business days after the interest payment date, whether or not we provide a notice of deferral.
Certain Limitations during an Optional Deferred Period
Unless we have paid all accrued and payable interest on the Junior Subordinated Notes and are not deferring any interest payments on the Junior Subordinated Notes at such time, subject to several exceptions, we will not and our subsidiaries will not do any of the following:
(i) |
declare or pay any dividends or distributions, or redeem, purchase, acquire, or make a liquidation payment on any of our capital stock; |
(ii) |
make any payment of principal of, or interest or premium, if any, on or repay, repurchase or redeem any of our debt securities that rank on a parity with, or junior to, the Junior Subordinated Notes (including debt securities of other series issued under the Subordinated Indenture II); or |
(iii) |
make any guarantee payments on any guarantee of debt securities if the guarantee ranks on a parity with or junior to the Junior Subordinated Notes. |
However, |
the foregoing provisions shall not prevent or restrict us from making: |
(a) |
purchases, redemptions or other acquisitions of our capital stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors, agents or consultants or a stock purchase or dividend reinvestment plan, or the satisfaction of our obligations pursuant to any contract or security outstanding on the date that the payment of interest is deferred requiring us to purchase, redeem or acquire our capital stock; |
(b) |
any payment, repayment, redemption, purchase, acquisition or declaration of dividend described in clause (i) above as a result of a reclassification of our capital stock, or the exchange or conversion of all or a portion of one class or series of our capital stock for another class or series of our capital stock; |
(c) |
the purchase of fractional interests in shares of our capital stock pursuant to the conversion or exchange provisions of our capital stock or the security being converted or exchanged, or in connection with the settlement of stock purchase contracts outstanding on the date that the payment of interest is deferred or with any split, reclassification or similar transaction; |
(d) |
dividends or distributions paid or made in our capital stock (or rights to acquire our capital stock), or repurchases, redemptions or acquisitions of capital stock in connection with the issuance or exchange of capital stock (or of securities convertible into or exchangeable for shares of our capital stock) and distributions in connection with the settlement of stock purchase contracts outstanding on the date that the payment of interest is deferred; |
(e) |
redemptions, exchanges or repurchases of, or with respect to, any rights outstanding under a shareholder rights plan outstanding on the date that the payment of interest is deferred or the declaration or payment thereunder of a dividend or distribution of or with respect to rights in the future; |
(f) |
payments on the Junior Subordinated Notes, any trust preferred securities, subordinated debentures, junior subordinated debentures or junior subordinated notes, or any guarantees of any of the foregoing, in each case that rank equal in right of payment to the Junior Subordinated Notes, so long as the amount of payments made on account of such securities or guarantees is paid on all such securities and guarantees then outstanding on a pro rata basis in proportion to the full payment to which each series of such securities and guarantees is then entitled if paid in full; |
(g) |
any payment of deferred interest or principal on, or repayment, redemption or repurchase of, parity securities that, if not made, would cause us to breach the terms of the instrument governing such parity securities; or |
(h) |
make any regularly scheduled dividend or distribution payments declared prior to the date that the applicable Optional Deferral Period commences. |
Agreement by Holders to Certain Tax Treatment
Each holder of the Junior Subordinated Notes has or will, by accepting the Junior Subordinated Notes or a beneficial interest therein, be deemed to have agreed that the holder intends that the Junior Subordinated Notes constitute debt and will treat the Junior Subordinated Notes as debt for United States federal, state and local tax purposes.
No Sinking Fund, Conversion or Amortization
The Junior Subordinated Notes are not entitled to the benefit of any sinking fund and are not subject to conversion or amortization.
No Defeasance
The Junior Subordinated Notes are not subject to defeasance.
Redemption
The Junior Subordinated Notes may be redeemed before their maturity:
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in whole or in part on one or more occasions on or after July 30, 2021, at 100% of their principal amount, plus accrued and unpaid interest, |
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in whole, but not in part, before July 30, 2021, at 100% of their principal amount, plus accrued and unpaid interest, upon the occurrence of a Tax Event (see Right to Redeem at Tax Event below), or |
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in whole, but not in part, on one or more occasions before July 30, 2021, at 102% of their principal amount, plus accrued and unpaid interest, at any time within 90 days after the conclusion of any review or appeal process instituted by us following the occurrence and continuation of a Rating Agency Event (see Right to Redeem at Rating Agency Event below). |
Subject to the provisions of the Subordinated Indenture II, notice of any redemption of the Junior Subordinated Notes will be mailed not less than 20 days nor more than 60 days prior to the redemption date. Unless we default in payment of the applicable redemption price, on and after the redemption date interest shall cease to accrue on such Junior Subordinated Notes called for redemption.
Right to Redeem at Tax Event
The Junior Subordinated Notes are redeemable, in whole, but not in part, before July 30, 2021, at 100% of their principal amount, plus accrued and unpaid interest, upon the occurrence of a Tax Event (as defined below).
Tax Event means the receipt by us of an opinion of counsel experienced in such tax matters to the effect that, as a result of (a) any amendment to, clarification of, or change (including any announced prospective change) in the laws or treaties of the United States or any political subdivisions or taxing authorities, or any regulations under such laws or treaties, (b) any judicial decision or any official administrative pronouncement, ruling, regulatory procedure, notice or announcement (including any notice or announcement of intent to issue or adopt any such administrative pronouncement, ruling, regulatory procedure or regulation), (c) any amendment to, clarification of, or change in the official position or the interpretation of any administrative action or judicial decision or any interpretation or pronouncement that provides for a position with respect to an administrative action or judicial decision that differs from the theretofore generally accepted position, in each case by any legislative body, court, governmental authority or regulatory body, irrespective of the time or manner in which such amendment, clarification or change is introduced or made known, or (d) threatened challenge asserted in writing in connection with an audit of us or any of our subsidiaries, or a publicly-known threatened challenge asserted in writing against any other taxpayer that has raised capital through the issuance of securities that are substantially similar to the Junior Subordinated Notes, which amendment, clarification, or change is effective, or which administrative action is taken or which judicial decision, interpretation or pronouncement is issued or threatened challenge is asserted or becomes publicly-known, in each case after the date of this prospectus supplement, there is more than an insubstantial risk that interest payable by us on the Junior Subordinated Notes is not deductible, or within 90 days would not be deductible, in whole or in part, by us for United States Federal income tax purposes.
Right to Redeem at Rating Agency Event
The Junior Subordinated Notes are redeemable in whole, but not in part, before July 30, 2021 at 102% of their principal amount, plus accrued and unpaid interest, at any time within 90 days after the conclusion of any review or appeal process instituted by us following the occurrence and continuation of a Rating Agency Event (as defined below).
Rating Agency Event means a change in the methodology employed by any nationally recognized statistical rating organization within the meaning of Section 3(a)(62) of the Exchange Act (sometimes referred to in this prospectus supplement as a rating agency) that currently publishes a rating for us in assigning equity credit to securities such as the Junior Subordinated Notes, as such methodology is in effect on the date of issuance of this prospectus supplement (the current criteria), which change results in:
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the length of time for which such current criteria are scheduled to be in effect being shortened with respect to the Junior Subordinated Notes, or |
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a lower or higher equity credit being assigned by such rating agency to the Junior Subordinated Notes as of the date of such change than the equity credit that would have been assigned to the Junior Subordinated Notes as of the date of such change by such rating agency pursuant to its current criteria. |
Events of Default; Waiver; Acceleration; Compliance
The following are events of default under the Subordinated Indenture II:
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our failure to pay principal when due; |
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our failure to pay interest when due and payable that continues for 30 days (subject to our right to optionally defer interest payments as described above under Option to Defer Interest Payments); |
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our failure to perform other covenants that continues beyond 90 days after the applicable trustee or holders of not less than 25% in principal amount of the Junior Subordinated Notes and any other series of securities issued under the Subordinated Indenture II so benefited give written notice of default; or |
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certain events of bankruptcy, insolvency or reorganization. |
An event of default with respect to a particular series of securities issued under the Subordinated Indenture II, such as the Junior Subordinated Notes, does not necessarily constitute an event of default for another series of securities issued under the Subordinated Indenture II.
In the case of a general covenant default described above, the applicable trustee may extend the grace period. In addition, if holders of a particular series of securities under the Subordinated Indenture II have given a notice of default, then holders of at least the same percentage of securities of that series, together with the applicable trustee, may also extend the grace period. The grace period will be automatically extended if we have initiated and are diligently pursuing corrective action.
The holders of a majority of the outstanding securities of all series under the Subordinated Indenture II with respect to which a default has occurred and is continuing may waive a default for all those series, except a default in the payment of principal or interest, or any premium, on any such securities or a default with respect to a covenant or provision which cannot be amended or modified without the consent of the holder of each outstanding security of the series affected. In addition, under certain circumstances, the holders of a majority of the outstanding securities of any series under the Subordinated Indenture II may waive in advance, for that series, our compliance with certain restrictive provisions of the Subordinated Indenture II.
If an event of default (other than certain events of bankruptcy) occurs under the Subordinated Indenture II, the applicable trustee or the holders of 25% of the principal amount of the Junior Subordinated Notes have the right to declare the principal amount of the Junior Subordinated Notes and any accrued interest thereon, immediately due and payable. If this happens, subject to certain conditions, the holders of a majority of the aggregate principal amount of the Junior Subordinated Notes can void the declaration.
If an event of default consisting of certain events of bankruptcy occurs under the Subordinated Indenture II, the principal amount of all the outstanding Junior Subordinated Notes and other series of securities issued under the Subordinated Indenture II will automatically, and without any declaration or other action on the part of the trustee or any holder, become immediately due and payable.
The applicable trustee may withhold notice to the holders of Junior Subordinated Notes or other series of securities issued under the Subordinated Indenture II of any default (except in the payment of principal or interest) if it considers the withholding of notice to be in the best interests of the holders. Other than its duties in case of a default, the applicable trustee is not obligated to exercise any of its rights or powers under the Subordinated Indenture II at the request, order or direction of any holders, unless the holders offer the applicable trustee reasonable indemnity. If they provide this reasonable indemnification, the holders of a majority in principal amount of any series of securities issued under the Subordinated Indenture II may direct the time, method and place of conducting any proceeding or any remedy available to the applicable trustee, or exercising any power conferred upon the applicable trustee, for any series of securities issued under the Subordinated Indenture II. However, the applicable trustee must give holders notice of any default to the extent provided by the Trust Indenture Act of 1939, as amended (the Trust Indenture Act).
We have agreed to provide to the Indenture Trustee an annual certificate as to our compliance with the conditions and covenants in the Subordinated Indenture II or as to the occurrence of a default in the fulfillment of any such obligation.
Modification
Under the Subordinated Indenture II, our rights and obligations and the rights of the holders may generally be modified with the consent of the holders of a majority in aggregate principal amount of the outstanding securities of each series affected by the modification. No modification of the principal or interest payment terms, and no modification reducing the percentage required for modifications, is effective against any holder without its consent.
We may also enter into supplemental indentures to amend the Subordinated Indenture II for certain specified purposes without the consent of holders, including to cure ambiguities in the terms of the securities issued thereunder, to maintain the qualification of the Subordinated Indenture II under the Trust Indenture Act or to add additional covenants or events of default to the Subordinated Indenture II.
Consolidation, Merger or Sale
The Subordinated Indenture II provides that we may not merge or consolidate with any other corporation or sell or convey all or substantially all of our assets to any person or acquire all or substantially all of the assets of another person unless (i) either we are the continuing corporation, or the successor corporation (if other than us) is a corporation organized and existing under the laws of the United States of America or a State thereof or the District of Columbia and such corporation expressly assumes the due and punctual payment of the principal of and interest and other amounts due on the securities outstanding under the Subordinated Indenture II, and the due and punctual performance and observance of all of the covenants and conditions of the Subordinated Indenture II to be performed by us by supplemental indenture in form satisfactory to the applicable trustee, executed and delivered to the applicable trustee by such corporation, and (ii) we or such successor corporation, as the case may be, will not, immediately after such merger or consolidation, or such sale or conveyance, be in default in the performance of any such covenant or condition.
In case of any such consolidation, merger or conveyance, such successor corporation will succeed to and be substituted for us, with the same effect as if it had been named as us in the Subordinated Indenture II, and in the event of such conveyance, we will be discharged of all of our obligations and covenants under the Subordinated Indenture II and any outstanding securities issued thereunder.
Satisfaction; Discharge
We may discharge all our obligations (except those described below) to holders of the securities issued under the Subordinated Indenture II, which securities have not already been delivered to the applicable trustee for cancellation and which either have become due and payable or are by their terms due and payable within one year, or are to be called for redemption within one year, by depositing with the applicable trustee an amount certified to be sufficient to pay when due the principal, interest and premium, if any, on all outstanding securities. However, certain of our obligations under the Subordinated Indenture II will survive, including with respect to the following:
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remaining rights to register the transfer, conversion, substitution or exchange of securities of the applicable series; |
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rights of holders to receive payments of principal of, and any interest on, the Debt Securities of the applicable series, and other rights, duties and obligations of the holders of Debt Securities with respect to any amounts deposited with the applicable trustee; and |
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the rights, obligations and immunities of the applicable trustee under the Subordinated Indenture II. |
The Indenture Trustee and the Series Trustee
The Indenture Trustee under the Subordinated Indenture II is The Bank of New York Mellon (successor to JPMorgan Chase Bank, N.A.). We and certain of our affiliates maintain deposit accounts and banking relationships with The Bank of New York Mellon. The Bank of New York Mellon also serves as trustee under other indentures under which securities of certain of our affiliates are outstanding. The Bank of New York Mellon and its affiliates have purchased, and are likely to purchase in the future, our securities and securities of our affiliates.
The Series Trustee for the Junior Subordinated Notes is Deutsche Bank Trust Company Americas. The Series Trustee administers its corporate trust business at 60 Wall Street, 24th Floor, New York, NY 10005. We and certain of our affiliates maintain banking relationships with Deutsche Bank Trust Company Americas. Deutsche Bank Trust Company Americas also serves as trustee under other indentures under which we and certain of our affiliates have issued securities. Deutsche Bank Trust Company Americas and its affiliates have purchased, and are likely to purchase in the future, our securities and securities of our affiliates.
Governing Law
The Subordinated Indenture II and the Junior Subordinated Notes are governed by, and will be construed in accordance with, the laws of the State of New York, without regard to the conflicts of law principles thereof.
EXHIBIT 4.18
DESCRIPTION OF DOMINION ENERGY, INC.
2019 SERIES A CORPORATE UNITS
The following description of our 2019 Series A Corporate Units, which are registered under Section 12(b) of the Securities Exchange Act of 1934, as amended, is a summary and is qualified in its entirety by reference to the 2019 Series A Purchase Contract and Pledge Agreement, dated June 14, 2019 (the purchase contract and pledge agreement), among us, Deutsche Bank Trust Company Americas, as the purchase contract agent (the purchase contract agent), and HSBC Bank USA, National Association, as the collateral agent (the collateral agent), custodial agent (the custodial agent) and securities intermediary (the securities intermediary), and our articles of incorporation. The purchase contract and pledge agreement and our articles of incorporation are incorporated by reference as exhibits to the Annual Report on Form 10-K of which this exhibit is a part. We encourage you to read the purchase contract and pledge agreement and the applicable sections of our articles of incorporation for more information.
References herein to we, our, us, the Company or Dominion Energy refer to Dominion Energy, Inc., a Virginia corporation. References herein to you or your refer to a holder of a 2019 Series A Corporate Unit or other applicable security.
Description of the Equity Units
General
In June 2019, under the purchase contract and pledge agreement, we issued 16,100,000 2019 Series A Equity Units (Equity Units), initially in the form of 16,100,000 2019 Series A Corporate Units (Corporate Units). Each Corporate Unit has a stated amount of $100.
Each Corporate Unit consists of:
(1) |
a purchase contract under which: |
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the holder agrees to purchase from us on June 1, 2022, which we refer to as the purchase contract settlement date, and we agree to sell to the holder, unless the purchase contract terminates prior to that date as described under Description of the Purchase ContractsTermination or is settled early as described under Description of the Purchase ContractsEarly Settlement or Early Settlement Upon a Fundamental Change, for $100, a number of shares of our common stock equal to the applicable settlement rate described under Description of the Purchase ContractsPurchase of Common Stock, Early Settlement or Early Settlement Upon a Fundamental Change, as the case may be, plus, in the case of an early settlement upon a fundamental change, an additional make-whole amount of shares as described under Early Settlement Upon a Fundamental ChangeCalculation of Make-Whole Shares; and |
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we pay to the holder quarterly contract adjustment payments at the rate of 5.50% of the stated amount of $100 per year, subject to our right to defer such contract adjustment payments, payable in cash, shares of our common stock or a combination thereof, at our election; and |
(2) |
either: |
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a 1/10, or 10%, undivided beneficial ownership in one share of 1.75% Series A Cumulative Perpetual Convertible Preferred Stock, without par value, with a liquidation preference of $1,000 per share (the convertible preferred stock), issued by us; or |
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following a successful optional remarketing, the applicable ownership interest in a portfolio of U.S. Treasury securities, which we refer to as the Treasury portfolio. |
Applicable ownership interest means, with respect to a Corporate Unit and the U.S. Treasury securities in the Treasury portfolio, (1) a 1/10, or 10%, undivided beneficial ownership interest in $1,000 face amount of U.S. Treasury securities (or principal or interest strips thereof) included in the Treasury portfolio that matures on or prior to the purchase contract settlement date and (2) a 0.04375% undivided beneficial ownership interest in $1,000 face amount
of U.S. Treasury securities (or principal or interest strips thereof) included in the Treasury portfolio that mature on or prior to the purchase contract settlement date, which results in an amount equal to the dividend payment that would have been due in respect of the convertible preferred stock on such date (without giving effect to any increase of the dividend rate following a successful remarketing, and whether or not such dividend is authorized or declared).
The fair market value of the Corporate Units we issue is recorded in our financial statements based on an allocation between the purchase contracts and the convertible preferred stock in proportion to their respective fair market values at the time of issuance. Under the purchase contract and pledge agreement, you are deemed to have agreed to allocate the entire purchase price to your convertible preferred stock.
As long as a unit is in the form of a Corporate Unit, any ownership interest in a share of convertible preferred stock or, solely with respect to the Treasury securities described in clause (1) of the definition applicable ownership interest, any applicable ownership interest in the Treasury portfolio forming a part of the Corporate Unit will be pledged to us through the collateral agent to secure your obligation to purchase our common stock under the related purchase contract.
Creating Treasury Units by Substituting a Treasury Security for Convertible Preferred Stock
Each holder of 10 Corporate Units may create, at any time other than (i) if we elect to conduct an optional remarketing, during the period from 5:00 p.m., New York City time, on the second business day immediately preceding the first day of any optional remarketing period until the settlement date of such remarketing or the date we announce that no successful optional remarketing has occurred during the optional remarketing period, (ii) following any successful remarketing and (iii) after 5:00 p.m., New York City time, on the second business day immediately preceding the first day of the final remarketing period (we refer to each such period as a blackout period), 10 2019 Series A Treasury Units (Treasury Units) by substituting for the share of convertible preferred stock that is a component of 10 Corporate Units a zero-coupon U.S. Treasury security with a principal amount of $1,000 that matures on or prior to June 1, 2022 (e.g., CUSIP No. 912820V46), which we refer to as a Treasury security. This substitution would create 10 Treasury Units, and the related share of convertible preferred stock would be released to the holder and would be separately tradable from the Treasury Units. Because the convertible preferred stock is issued with a liquidation preference of $1,000 per share, holders of Corporate Units may make this substitution only in integral multiples of 10 Corporate Units.
Each Treasury Unit will consist of:
(1) |
a purchase contract under which: |
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the holder agrees to purchase from us on the purchase contract settlement date, unless the purchase contract terminates prior to that date as described under Description of the Purchase Contracts Termination or is settled early as described under Description of the Purchase ContractsEarly Settlement or Early Settlement Upon a Fundamental Change, for $100, a number of shares of our common stock equal to the applicable settlement rate, plus, in the case of an early settlement upon a fundamental change, an additional make-whole amount of shares; and |
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we will pay to the holder quarterly contract adjustment payments at the rate of 5.50% of the stated amount of $100 per year, subject to our right to defer such contract adjustment payments, payable in cash, shares of our common stock or a combination thereof, at our election; and |
(2) |
a 1/10 undivided beneficial ownership interest in a Treasury security. |
The term business day means any day other than a Saturday or a Sunday or any other day on which banking institutions and trust companies in New York City, New York are authorized or required by law or executive order to remain closed.
To create 10 Treasury Units, a holder is required to:
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deposit with the collateral agent a Treasury security, which must be purchased in the open market at the expense of the Corporate Unit holder, unless otherwise owned by the holder; and |
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transfer to the purchase contract agent 10 Corporate Units, accompanied by a notice stating that the holder of the Corporate Units has deposited the Treasury security with the collateral agent, and requesting that the purchase contract agent instruct the collateral agent in writing to release the related share of convertible preferred stock. |
Promptly following receipt of written instructions from the purchase contract agent and receipt of the Treasury security, the collateral agent will release the related share of convertible preferred stock from the pledge and deliver it to the transfer agent on behalf of the holder, free and clear of our security interest. The purchase contract agent or transfer agent, as applicable, then will:
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cancel the 10 Corporate Units; |
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transfer the related share of convertible preferred stock to the holder; and |
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deliver 10 Treasury Units to the holder. |
The Treasury Unit holders beneficial ownership interest in the Treasury security will be pledged to us through the collateral agent to secure the holders obligation to purchase our common stock under the related purchase contracts. The share of convertible preferred stock thereafter will trade and be transferable separately from the Treasury Units.
Holders who create Treasury Units or recreate Corporate Units, as discussed below, will be responsible for any taxes, governmental charges or other fees or expenses (including reasonable fees and expenses of the collateral agent and its counsel) payable in connection with substitutions of collateral. See Certain Provisions of the Purchase Contract and Pledge AgreementMiscellaneous.
Recreating Corporate Units from Treasury Units
Each holder of 10 Treasury Units has the right, at any time other than during a blackout period, to substitute for the related Treasury security held by the collateral agent one share of convertible preferred stock for each such 10 Treasury Units. This substitution would recreate Corporate Units and the applicable Treasury security would be released to the holder. Because the convertible preferred stock has a liquidation preference of $1,000 per share, holders of Treasury Units may make the substitution only in integral multiples of 10 Treasury Units.
To recreate 10 Corporate Units, a holder is required to:
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deposit with the collateral agent one share of convertible preferred stock, which must be purchased in the open market at the expense of the Treasury Unit holder, unless otherwise owned by the holder; and |
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transfer to the purchase contract agent 10 Treasury Units, accompanied by a notice stating that the holder of the Treasury Units has deposited one share of convertible preferred stock with the collateral agent, and requesting that the purchase contract agent instruct the collateral agent in writing to release the related Treasury security. |
Promptly following receipt of written instructions from the purchase contract agent and receipt of the share of convertible preferred stock, the collateral agent will release the related Treasury security from the pledge and promptly instruct the securities intermediary to transfer such Treasury security to the purchase contract agent on behalf of the holder, free and clear of our security interest. The purchase contract agent then will:
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cancel the 10 Treasury Units; |
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transfer the related Treasury security to the holder; and |
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deliver 10 Corporate Units to the holder. |
The share of convertible preferred stock will be substituted for the Treasury security and will be pledged to us through the collateral agent to secure the holders obligation to purchase shares of our common stock under the related purchase contracts. The Treasury security thereafter will trade and be transferable separately from the Corporate Units.
Creating Cash Settled Units from Corporate Units
Each holder of 10 Corporate Units may create, only during the period after the date we give notice of the final remarketing period and prior to 5:00 p.m., New York City time, on the second business day immediately preceding the first day of the final remarketing period, 2019 Series A Cash Settled Units (Cash Settled Units) by substituting for a share of convertible preferred stock that is a component of the Corporate Units $1,000 in cash. This substitution
would create 10 Cash Settled Units, and the related share of convertible preferred stock would be released to the holder and would be separately tradable from the Cash Settled Units. Because the convertible preferred stock has a liquidation preference of $1,000 per share, holders of Corporate Units may make this substitution only in integral multiples of 10 Corporate Units. Holders of Cash Settled Units do not have the right to recreate Corporate Units or create Treasury Units.
Each Cash Settled Unit will consist of:
(1) |
a purchase contract under which: |
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the holder agrees to purchase from us on the purchase contract settlement date, unless the purchase contract terminates prior to that date as described under Description of the Purchase Contracts Termination or is settled early as described under Early Settlement Upon a Fundamental Change below, for $100, a number of shares of our common stock equal to the applicable settlement rate, plus, in the case of an early settlement upon a fundamental change, an additional make-whole amount of shares; and |
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we will pay to the holder the final quarterly contract adjustment payment due on the purchase contract settlement date (including any accrued and unpaid deferred contract adjustment payments and compounded contract adjustment payments thereon), payable in cash, shares of our common stock or a combination thereof, at our election; and |
(2) |
$100 in cash. |
To create 10 Cash Settled Units, a holder is required to:
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deposit with the collateral agent $1,000 in cash; and |
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transfer to the purchase contract agent 10 Corporate Units, accompanied by a notice stating that the holder of the Corporate Units has deposited $1,000 in cash with the collateral agent, and requesting that the purchase contract agent instruct the collateral agent in writing to release the related share of convertible preferred stock. |
Promptly following receipt of written instructions from the purchase contract agent and receipt of cash, the collateral agent will release the related share of convertible preferred stock from the pledge and deliver it to the transfer agent on behalf of the holder, free and clear of our security interest. The purchase contract agent or transfer agent, as applicable, then will:
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cancel the 10 Corporate Units; |
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transfer the related share of convertible preferred stock to the holder; and |
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deliver 10 Cash Settled Units to the holder. |
The cash will be substituted for the share of convertible preferred stock and will be pledged to us through the collateral agent to secure the holders obligation to purchase shares of our common stock under the related purchase contract. Cash held as a component of the Cash Settled Unit will be held in a non-interest bearing account as set forth in the purchase contract and pledge agreement. The share of convertible preferred stock thereafter will trade separately from the Cash Settled Units.
Holders who create Cash Settled Units, as discussed below, will be responsible for any taxes, governmental charges or other fees or expenses (including reasonable fees and expenses of the collateral agent and its counsel) payable in connection with substitutions of collateral. See Certain Provisions of the Purchase Contract and Pledge AgreementMiscellaneous.
Current Payments
Holders of Corporate Units and Treasury Units will receive quarterly contract adjustment payments payable by us at the rate of 5.50% per year on the stated amount of $100 per Equity Unit until the earliest of the purchase contract settlement date, the fundamental change early settlement date (in the case of a fundamental change where the holder has elected to settle its purchase contracts early in connection with such fundamental change as described in Description of the Purchase ContractsEarly Settlement Upon a Fundamental Change) and the most recent quarterly payment date on or before an early settlement as described in Description of the Purchase ContractsEarly
Settlement. Holders of Cash Settled Units will receive the final quarterly contract adjustment payment payable by us on the final contract adjustment payment date. In addition, holders of Corporate Units will receive, when, as and if declared by our board of directors, quarterly cash distributions consisting of dividends on the convertible preferred stock attributable to such Corporate Units (and distributions on the applicable ownership interest in the Treasury portfolio if the convertible preferred stock has been replaced by the Treasury portfolio), equivalent to a rate of 1.75% per annum on the liquidation preference of the convertible preferred stock. Any contract adjustment payments and distributions in respect of dividends on the convertible preferred stock may be paid in cash, shares of our common stock or a combination thereof, at our election, as described herein. There will be no distributions in respect of the Treasury securities that are a component of the Treasury Units or the cash that is a component of the Cash Settled Units, but to the extent that such holders of Treasury Units or Cash Settled Units, as the case may be, continue to hold the shares of convertible preferred stock that were released to them when such Treasury Units or Cash Settled Units were created, such holders will continue to receive, when, as and if declared by our board of directors, quarterly dividend payments on their separate shares of convertible preferred stock for as long as they continue to hold such shares.
We will make all contract adjustment payments quarterly in arrears on March 1, June 1, September 1 and December 1 of each year (except where such date is not a business day, in which case contract adjustment payments will be payable as of the next subsequent business day, without adjustment).
We have the right to defer payment of quarterly contract adjustment payments as described under Description of the Purchase ContractsContract Adjustment Payments. We are not obligated to declare or pay dividends on the convertible preferred stock, as described under Description of the Convertible Preferred StockDividends, except that we will pay all accumulated and unpaid dividends on the convertible preferred stock (whether or not declared) on the June 1, 2022 dividend payment date, unless such payment is not permitted under Virginia law (a dividend deficiency event).
Listing
The Corporate Units are listed on the New York Stock Exchange under the symbol DCUE. Unless and until substitution has been made as described above, none of the convertible preferred stock component of a Corporate Unit, the Treasury security component of a Treasury Unit nor the cash component of a Cash Settled Unit will trade separately from Corporate Units, Treasury Units or Cash Settled Units. The convertible preferred stock component will trade as a unit with the purchase contract component of the Corporate Units, the Treasury security component will trade as a unit with the purchase contract component of the Treasury Units and the cash component will trade as a unit with the purchase contract component of the Cash Settled Units. In addition, if Treasury Units, Cash Settled Units or shares of convertible preferred stock are separately traded to a sufficient extent that the applicable exchange listing requirements are met, we may, but have no obligation to, cause the Treasury Units, Cash Settled Units or convertible preferred stock to be listed on the exchange on which the Corporate Units are then listed, including, if applicable, the New York Stock Exchange.
Voting and Certain Other Rights
Holders of purchase contracts forming part of the Corporate Units, Treasury Units, or Cash Settled Units, in their capacities as such holders, have no voting or other rights in respect of our common stock. Holders of shares of convertible preferred stock, whether or not part of a Corporate Unit, have only the limited voting rights described in Description of the Convertible Preferred StockLimited Voting Rights.
Description of the Purchase Contracts
Purchase of Common Stock
Each purchase contract that is a part of a Corporate Unit, a Treasury Unit or a Cash Settled Unit obligates its holder to purchase, and us to sell, on the purchase contract settlement date (unless the purchase contract terminates prior to that date as described under Termination or is settled early at the holders option as described under Early Settlement or Early Settlement Upon a Fundamental Change), for $100 in cash, a number of shares of our common stock equal to the settlement rate (together with cash, if applicable, in lieu of any fractional shares of common stock in the manner described below). The number of shares of our common stock issuable upon settlement of each purchase contract on the purchase contract settlement date (which we call the settlement rate) will be rounded to the nearest ten-thousandth of a share and determined as follows, subject to adjustment as described under Anti-dilution Adjustments below:
(1) |
If the applicable market value of our common stock is less than or equal to $73.91, which we refer to as the reference price, the settlement rate will be 1.3529 shares of our common stock (which we refer to as the maximum settlement rate). |
Accordingly, if the market price for our common stock decreases from the date of this prospectus supplement and during the market value averaging period (described below), the aggregate market value of the shares of common stock issued upon settlement of each purchase contract will be less than the stated amount of $100, assuming that the market price on the purchase contract settlement date is the same as the applicable market value of the common stock.
(2) |
If the applicable market value of our common stock is greater than the reference price, the settlement rate will be a number of shares of our common stock equal to $100 divided by that applicable market value. |
Accordingly, if the market price for the common stock increases from the date of this prospectus supplement and during the market value averaging period, the aggregate market value of the shares of common stock issued upon settlement of each purchase contract will be equal to the stated amount of $100, assuming that the market price of the common stock on the purchase contract settlement date is the same as the applicable market value of the common stock.
The initial reference price noted above equals the closing price of our common stock on the New York Stock Exchange on the date of the pricing of our offering of the Equity Units.
If you elect to settle your purchase contract early in the manner described under Early Settlement, the number of shares of our common stock issuable upon settlement of such purchase contract will be equal to 85% of the settlement rate determined in the manner set forth above but over a 20 consecutive trading day period beginning on the trading day immediately following the day you exercise your early settlement right, which we refer to as the early settlement averaging period. If you elect to settle your purchase contract early upon a fundamental change, the number of shares of our common stock issuable upon settlement will be determined as described under Early Settlement Upon a Fundamental Change.
The applicable market value of our common stock means the average of the daily VWAPs of our common stock during the market value averaging period.
The market value averaging period means the 20 consecutive trading day period beginning on, and including, the 21st scheduled trading day immediately preceding the purchase contract settlement date.
The daily VWAP of our common stock means, for each relevant trading day, the per share volume weighted average price as displayed under the heading Bloomberg VWAP on Bloomberg page D <EQUITY> AQR (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading on the relevant trading day until the scheduled close of trading on the relevant trading day (or if such VWAP is unavailable, the market price of one share of our common stock on such trading day determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by us).
A trading day means (a) a day (i) on which the New York Stock Exchange, or, if our common stock is not then listed on the New York Stock Exchange, the principal exchange or quotation system on which our common stock is listed or admitted for trading, is scheduled to be open for business and (ii) on which there has not occurred or does not exist a market disruption event, or (b) if our common stock is not so listed or admitted for trading, a trading day means a business day.
A market disruption event means (i) a failure by the primary U.S. national or regional securities exchange or market on which our common stock is listed or admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any scheduled trading day for our common stock for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in our common stock or in any options contracts or futures contracts relating to our common stock.
If a market disruption event occurs on any scheduled trading day during the market value averaging period or any early settlement averaging period, we will notify investors on the calendar day on which such event occurs.
If 20 trading days for our common stock have not occurred during the period from, and including, the first day of the market value averaging period to, and including, the second scheduled trading day immediately prior to the purchase contract settlement date, all remaining trading days in the market value averaging period will be deemed to occur on that second scheduled trading day immediately prior to the purchase contract settlement date, and the daily VWAP of our common stock for each of those remaining trading days will be the daily VWAP of our common stock on that second scheduled trading day or, if such day is not a trading day, the closing price as of such day.
We will not issue any fractional shares of our common stock upon settlement of a purchase contract. Instead of a fractional share, the holder will receive an amount of cash equal to the percentage of a whole share represented by such fractional share multiplied by the closing price of our common stock on the trading day immediately preceding the purchase contract settlement date (or the trading day immediately preceding the relevant date for delivery of shares of our common stock, in the case of early settlement). If, however, a holder surrenders for settlement more than one purchase contract on the same date, then the number of shares of our common stock issuable pursuant to such purchase contracts will be computed based upon the aggregate number of purchase contracts surrendered on such date or, if the Equity Units are held in global book-entry form, based on such other aggregate number of purchase contracts being surrendered by the holder on the same date as DTC may otherwise request.
The closing price per share of our common stock means, on any date of determination, the closing sale price (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions for the principal U.S. national or regional securities exchange on which our common stock is traded. If our common stock is not listed for trading on a U.S. national or regional securities exchange on the relevant date, the closing price will be the last quoted bid price for our common stock in the over-the-counter market on the relevant date as reported by OTC Markets Group Inc. or a similar organization. If our common stock is not so quoted, the closing price will be the average of the mid-point of the last bid and ask prices for our common stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by us for this purpose.
Unless:
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a holder has settled the related purchase contracts early by delivery of cash to the purchase contract agent in the manner described under Early Settlement or Early Settlement Upon a Fundamental Change; or |
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an event described under Termination has occurred, |
then, on the purchase contract settlement date,
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in the case of Corporate Units where there has been a successful remarketing, the portion of the proceeds from the final remarketing or the maturity of the Treasury portfolio from an earlier optional remarketing, as applicable, equal to $1,000 multiplied by the number of shares of the convertible preferred stock underlying the Corporate Units that were remarketed will automatically be applied to satisfy in full the holders obligations to purchase our common stock under the related purchase contracts and any excess proceeds will be delivered to the purchase contract agent for the benefit of the holders whose shares of convertible preferred stock were remarketed; |
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in the case of Corporate Units where there has not been a successful remarketing (i) except in the case of a dividend deficiency event, on June 1, 2022, we will pay each holder all accumulated and unpaid dividends (whether or not declared) on the convertible preferred stock to, but excluding, the June 1, 2022 dividend payment date as described under Final Remarketing and (ii) immediately following such payment, each holder will be deemed to have automatically delivered to us on the purchase contract settlement date the ownership interests in the shares of convertible preferred stock that are a part of such Corporate Units (unless such holder shall have elected to settle the related purchase contracts in cash as described under Final Remarketing) to satisfy in full the holders obligations to purchase our common stock under the related purchase contracts; |
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in the case of Treasury Units, the cash proceeds of the related Treasury securities, when paid at maturity, will automatically be applied to satisfy in full the holders obligation to purchase our common stock under the related purchase contracts and any excess proceeds will be delivered to the purchase contract agent for the benefit of the holders of the Treasury Units; and |
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in the case of Cash Settled Units, the cash component of such units will automatically be applied to satisfy in full the holders obligation to purchase our common stock under the related purchase contracts. |
Our common stock will then be issued and delivered to the holder or the holders designee, promptly following presentation and surrender of the certificate evidencing the Corporate Units, the Treasury Units or the Cash Settled Units, if in certificated form, and payment by the holder of any transfer or similar taxes payable in connection with the issuance of our common stock to any person other than the holder.
Prior to the settlement of a purchase contract, the shares of our common stock underlying each purchase contract will not be outstanding, and the holder of a purchase contract will not have any voting rights, rights to dividends or other distributions or other rights of a holder of our common stock by virtue of holding such purchase contract.
By purchasing a Corporate Unit, a Treasury Unit or a Cash Settled Unit, a holder is deemed to have, among other things:
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irrevocably appointed the purchase contract agent as its attorney-in-fact to enter into and perform the purchase contract and the related purchase contract and pledge agreement in the name of and on behalf of such holder; and |
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agreed to be bound by the terms and provisions of the Corporate Units, Treasury Units and Cash Settled Units and perform its obligations under the related purchase contract and the purchase contract and pledge agreement. |
In addition, each beneficial owner of an Equity Unit, by acceptance of the beneficial interest therein, is deemed to have agreed to treat itself as the owner of the related convertible preferred stock, applicable interest in the Treasury portfolio, Treasury securities or cash, as the case may be.
Remarketing
We will enter into a remarketing agreement with a nationally recognized investment banking firm, as remarketing agent. Pursuant to the remarketing agreement, remarketing of the convertible preferred stock underlying the Corporate Units and any separate shares of convertible preferred stock whose holders have elected to participate in the remarketing will be attempted as described below. We refer to each of an optional remarketing and the final remarketing (each as defined below) as a remarketing. No remarketing will occur if a termination event has occurred or, in the case of an optional remarketing, certain other events have occurred as described below.
As described under Description of the Convertible Preferred StockRemarketing, in connection with a successful remarketing, (i) the dividend rate on the convertible preferred stock may be increased as described below, (ii) the conversion rate of the convertible preferred stock may be increased as described below and (iii) dividends will continue to be payable quarterly in arrears, when, as and if declared by our board of directors, commencing on the March 1, June 1, September 1 or December 1 immediately following the remarketing settlement date.
During any blackout period you do not have the right to:
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settle a purchase contract early; |
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create Treasury Units; |
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create Cash Settled Units; or |
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recreate Corporate Units from Treasury Units. |
We will use commercially reasonable efforts to ensure that a registration statement with regard to the full amount of the convertible preferred stock to be remarketed will be effective in a form that may be used by the remarketing agent in connection with the remarketing process (unless such registration statement is not required under the applicable laws and regulations that are in effect at that time or unless we conduct any remarketing in accordance with an exemption under the securities laws).
Optional Remarketing
Unless (i) a termination event has occurred, (ii) there are any accumulated and unpaid dividends on the convertible preferred stock in respect of prior dividend periods or (iii) we have not declared a dividend payable on the March 1, 2022 dividend payment date, we may elect, at our option, to remarket the convertible preferred stock during a period (which we call the optional remarketing window) beginning on and including February 25, 2022 and ending on and including May 13, 2022. Any remarketing in the optional remarketing window will occur during a fifteen-business day remarketing period (which we call an optional remarketing period) consisting of fifteen sequential possible remarketing dates selected by us and will include shares of convertible preferred stock underlying Corporate Units and other shares of convertible preferred stock of holders that have elected to include those shares in the remarketing as described under Description of the Convertible Preferred StockRemarketing of Shares That Are Not Included in Corporate Units. We may attempt remarketings during multiple optional remarketing periods in the optional remarketing window so long as we give to the depositary 15 calendar days notice prior to the first day of any optional remarketing period as described below. We refer to a remarketing that occurs during the optional remarketing window as an optional remarketing and the date we price the convertible preferred stock offered in an optional remarketing as the optional remarketing date.
If we elect to conduct an optional remarketing, the remarketing agent will use its reasonable best efforts to obtain a price (i) for shares of convertible preferred stock that are components of Corporate Units, that results in proceeds of at least 100% of the Treasury portfolio purchase price described below and (ii) for shares of convertible preferred stock that are not part of Corporate Units, at least equal to the separate convertible preferred stock purchase price (as defined in Description of the Convertible Preferred StockRemarketing of Shares That Are Not Included in Corporate Units). To obtain that price, we may increase the dividend rate on the convertible preferred stock, as described under Description of the Convertible Preferred StockIncreased Dividend Rate and Increased Conversion Rate. In addition, if, on the date of any successful remarketing, the closing price of our common stock on such date is less than the reference price, the conversion rate for the convertible preferred stock will increase to an amount equal to $1,000, divided by 120% of the closing price of our common stock on the date of such remarketing (rounded to the nearest ten-thousandth share). If, however, on the date of any successful remarketing, the closing price of our common stock on such date is greater than or equal to the reference price, we will not change the conversion rate for the convertible preferred stock. We will not decrease the dividend rate or the conversion rate in connection with a successful remarketing.
Notwithstanding the foregoing, in no event will the increased conversion rate for the convertible preferred stock exceed 45.1000 shares of common stock per share of convertible preferred stock (which is approximately equal to four times the initial conversion rate for the convertible preferred stock), subject to adjustment in the same manner as the conversion rate as set forth under Description of the Convertible Preferred StockConversion Rate Adjustments.
We will request that the depositary notify its participants holding Corporate Units, Treasury Units, and separate shares of convertible preferred stock of our election to conduct an optional remarketing no later than 15 calendar days prior to the date we begin the optional remarketing.
Following a successful optional remarketing of the convertible preferred stock, the remarketing agent will purchase the Treasury portfolio at the Treasury portfolio purchase price (as defined below), and deduct such price from the proceeds of the optional remarketing. Any remaining proceeds will be promptly remitted after the optional remarketing settlement date by the remarketing agent for the benefit of the holders whose shares of convertible preferred stock were remarketed.
If we elect to conduct an optional remarketing and such remarketing is successful:
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settlement of the remarketed convertible preferred stock will occur on the second business day following the optional remarketing date, or such other date we and the remarketing agent agree to (we refer to such settlement date as the optional remarketing settlement date); |
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the dividend rate and/or conversion rate of all outstanding shares of convertible preferred stock (whether or not the holders of such shares elected to participate in the remarketing) will be increased, if applicable, on the optional remarketing settlement date; |
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any terms of the remarketed convertible preferred stock modified by us in accordance with the preferred stock articles of amendment will become effective on the optional remarketing settlement date, if applicable; |
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dividends will continue to be payable on the convertible preferred stock quarterly, when, as and if declared by our board of directors; |
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your Corporate Units will consist of a purchase contract and the applicable ownership interest in the Treasury portfolio, as described above; and |
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you may no longer create Treasury Units or Cash Settled Units or recreate Corporate Units from Treasury Units. |
If we do not elect to conduct an optional remarketing in the optional remarketing window, or no optional remarketing succeeds for any reason, the shares of convertible preferred stock will continue to be components of the Corporate Units or will continue to be held separately and the remarketing agent will use its reasonable best efforts to remarket the convertible preferred stock during the final remarketing period as described below.
For the purposes of a successful optional remarketing, Treasury portfolio purchase price means the lowest aggregate ask-side price quoted by a primary U.S. government securities dealer to the quotation agent selected by us between 9:00 a.m. and 4:00 p.m., New York City time, on the optional remarketing date for the purchase of the Treasury portfolio for settlement on the optional remarketing settlement date.
Following a successful optional remarketing, the remarketing agent will purchase, at the Treasury portfolio purchase price, the Treasury portfolio. If U.S. Treasury securities (or principal or interest strips thereof) that are to be included in the Treasury portfolio in connection with a successful optional remarketing have a yield that is less than zero, the Treasury portfolio will consist of an amount in cash equal to the aggregate principal amount at maturity of the U.S. Treasury securities described in the description of the Treasury portfolio under Description of the Equity Units. If the provisions set forth in this paragraph apply, references in this prospectus supplement to a Treasury security and U.S. Treasury securities (or principal or interest strips thereof) in connection with the Treasury portfolio will, thereafter, be deemed to be references to such amount in cash. Neither we, the purchase contract agent, the collateral agent nor anyone else will be required to invest that cash.
The applicable ownership interests in the Treasury portfolio will be substituted for the shares of convertible preferred stock that are components of the Corporate Units and, solely with respect to the Treasury securities described in clause (1) of the definition of applicable ownership interest, such applicable ownership interests will be pledged to us through the collateral agent to secure the Corporate Unit holders obligations under the purchase contracts. On the purchase contract settlement date, a portion of the proceeds from the Treasury portfolio equal to $1,000 multiplied by the number of shares of convertible preferred stock that are components of the Corporate Units at the time of remarketing will automatically be applied to satisfy the Corporate Unit holders obligations to purchase our common stock under the purchase contracts. In addition, proceeds from the Treasury portfolio equal to the dividend payment that would have been attributable to the shares of convertible preferred stock that were components of the Corporate Units at the time of the remarketing (whether or not declared) will be paid on the purchase contract settlement date, which is the same date as the first originally scheduled dividend payment date after the optional remarketing settlement date.
If we elect to remarket the convertible preferred stock during an optional remarketing period and a successful remarketing has not occurred on or prior to the last day of the optional remarketing period, we will cause a notice of the failed remarketing of the convertible preferred stock to be published before 9:00 a.m., New York City time, on the business day immediately following the last date of the optional remarketing period. This notice will be validly published by making a timely release to any appropriate news agency, including, without limitation, Bloomberg Business News and the Dow Jones News Service. We will similarly cause a notice of a successful remarketing of the convertible preferred stock to be published before 9:00 a.m., New York City time, on the business day immediately following the date of such successful remarketing.
Final Remarketing
Unless (i) a termination event has occurred or (ii) the Treasury portfolio has replaced the convertible preferred stock as a component of the Corporate Units as a result of a successful optional remarketing, the remarketing agent will remarket the shares of convertible preferred stock that are components of the Corporate Units and any separate shares of convertible preferred stock whose holders have elected to participate in the remarketing as described under
Description of the Convertible Preferred StockRemarketing of Shares That Are Not Included in Corporate Units, during each day of the five business day period ending on May 27, 2022 (the second business day immediately preceding the purchase contract settlement date) until the remarketing is successful. We refer to such period as the final remarketing period, the remarketing during this period as the final remarketing and the date we price the convertible preferred stock offered in the final marketing as the final remarketing date.
The remarketing agent will use its reasonable best efforts to obtain, and the remarketing will be considered successful if the remarketing agent is able to obtain, a price that results in proceeds of at least $1,000 multiplied by the aggregate number of shares of convertible preferred stock being remarketed. To obtain that price, we may increase the dividend rate on the convertible preferred stock as described under Description of the Convertible Preferred StockIncreased Dividend Rate and Increased Conversion Rate. In addition, if, on the date of any successful remarketing, the closing price of our common stock on such date is less than the reference price, the conversion rate for the convertible preferred stock will increase to an amount equal to $1,000, divided by 120% of the closing price of our common stock on the date of such remarketing (rounded to the nearest ten-thousandth share). If, however, on the date of any successful remarketing, the closing price of our common stock on such date is greater than or equal to the reference price, we will not change the conversion rate for the convertible preferred stock. Notwithstanding the foregoing, in no event will the increased conversion rate for the convertible preferred stock exceed 45.1000 shares of common stock per share of convertible preferred stock (which is approximately equal to four times the initial conversion rate for the convertible preferred stock), subject to adjustment in the same manner as the conversion rate as set forth under Description of the Convertible Preferred StockConversion Rate Adjustments. We will request that the depositary notify its participants holding Corporate Units, Treasury Units and separate shares of convertible preferred stock of the remarketing no later than May 5, 2022. In our notice of a final remarketing, we will set forth the dates of the final remarketing period, applicable procedures for holders of separate shares of convertible preferred stock to participate in the final remarketing, the applicable procedures for holders of Corporate Units to create Treasury Units or Cash Settled Units, the applicable procedures for holders of Corporate Units to settle their purchase contracts early and any other applicable procedures, including the procedures that must be followed by a holder of an ownership interest in a share of convertible preferred stock that is a part of a Corporate Unit in the case of a failed final remarketing if such holder wishes not to have its ownership interests in shares of convertible preferred stock automatically delivered to us as described in this prospectus supplement in satisfaction of its obligation under the related purchase contracts.
We have the right to postpone the final remarketing in our absolute discretion on any day prior to the last business day of the final remarketing period.
If the final remarketing is successful:
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settlement of the remarketed convertible preferred stock will occur on the purchase contract settlement date; |
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except in the case of a dividend deficiency event, we will pay all accumulated and unpaid dividends (including compounded dividends thereon), whether or not declared, on the purchase contract settlement date to the holders of the convertible preferred stock as of the close of business on the immediately preceding record date; |
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the dividend rate and/or conversion rate of all outstanding shares of convertible preferred stock (whether or not the holder of such shares elected to participate in the remarketing) will be increased, if applicable, effective on the purchase contract settlement date; |
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any terms of the remarketed convertible preferred stock modified by us in accordance with the preferred stock articles of amendment will become effective on the final remarketing settlement date, if applicable; |
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dividends will continue to be payable on the convertible preferred stock quarterly, when, as and if declared by our board of directors; |
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a portion of the proceeds from the remarketing equal to $1,000 multiplied by the number of shares of convertible preferred stock underlying Corporate Units that were remarketed will automatically be applied to satisfy in full the Corporate Unit holders obligations to purchase our common stock under the related purchase contracts on the purchase contract settlement date; |
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a portion of the proceeds from the remarketing equal to $1,000 multiplied by the number of separate shares of convertible preferred stock whose holders have elected to participate in the remarketing will be remitted by the remarketing agent for the benefit of such holders on the purchase contract settlement date; and |
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any remaining proceeds will be promptly remitted after the purchase contract settlement date by the remarketing agent for the benefit of the holders whose shares of convertible preferred stock were remarketed. |
If (1) despite using its reasonable best efforts, the remarketing agent cannot remarket the related convertible preferred stock on or prior to the last day of the final remarketing period, at a price equal to or greater than $1,000 multiplied by the aggregate number of shares of convertible preferred stock being remarketed or (2) the final remarketing has not occurred on or prior to the last day of the final remarketing period because a condition precedent to the remarketing has not been fulfilled, in each case resulting in a failed remarketing, the ownership interests in the shares of convertible preferred stock held as a part of Corporate Units will be automatically delivered to us, on the purchase contract settlement date, in full satisfaction of the Corporate Unit holders obligation to purchase our common stock under the related purchase contract, unless the holder has elected otherwise, as set forth under Description of the Convertible Preferred StockAutomatic Settlement Upon Failed Final Remarketing. Notwithstanding the foregoing, except in the case of a dividend deficiency event, all accumulated and unpaid dividends (including compounded dividends thereon) will be paid on the purchase contract settlement date to the holders of the shares of convertible preferred stock as of the record date immediately preceding the purchase contract settlement date, whether or not declared. If a dividend deficiency event occurs, following the final remarketing (whether successful or failed), we shall have no obligation to pay the then accumulated but unpaid dividends on the convertible preferred stock on the purchase contract settlement date to the holders of the shares of convertible preferred stock as of the record date immediately preceding the purchase contract settlement date. However, the right to receive such accumulated but unpaid dividends (including compounded dividends thereon) shall continue to exist (and shall continue to compound) with respect to such convertible preferred stock notwithstanding such remarketing, and such dividends shall be payable to the holders of such convertible preferred stock as of the record date for the dividend payment date on which such dividends are subsequently declared and paid (if ever).
If a successful remarketing has not occurred on or prior to the last day of the final remarketing period, we will cause a notice of the failed remarketing of the convertible preferred stock to be published before 9:00 a.m., New York City time, on the business day immediately following the last date of the final remarketing period. This notice will be validly published by making a timely release to any appropriate news agency, including, without limitation, Bloomberg Business News and the Dow Jones News Service.
Early Settlement
Subject to the conditions described below, a holder of Corporate Units or Treasury Units may elect to settle the related purchase contracts at any time prior to the close of business on the scheduled trading day immediately preceding the first day of the market value averaging period, other than during a blackout period. In the case of Corporate Units and Treasury Units, such early settlement may only be made in integral multiples of 10 Corporate Units or 10 Treasury Units, as applicable. If the Treasury portfolio has replaced the shares of convertible preferred stock that are components of the Corporate Units, holders of the Corporate Units may settle early only in integral multiples of such number of Corporate Units as may be determined by the remarketing agent upon a successful optional remarketing of convertible preferred stock.
In order to settle purchase contracts early, a holder of Equity Units must deliver to the purchase contract agent (1) a completed Election to Settle Early form, along with the Corporate Unit or Treasury Unit certificate, if they are in certificated form and (2) a cash payment in immediately available funds in an amount equal to:
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$100 times the number of purchase contracts being settled; plus |
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if the early settlement date (as defined below) for any purchase contract occurs during the period from the close of business on any contract adjustment payment record date to the opening of business on the related payment date, an amount equal to the contract adjustment payments payable on the payment date with respect to the purchase contracts being settled, unless we have elected to defer the contract adjustment payments payable on such date. |
So long as you hold Equity Units as a beneficial interest in a global security certificate deposited with the depositary, procedures for early settlement will also be governed by standing arrangements between the depositary and the purchase contract agent.
The early settlement right is also subject to the condition that, if we determine that it is required under U.S. federal securities laws, we have a registration statement under the Securities Act in effect and an available prospectus covering the shares of common stock and other securities, if any, deliverable upon settlement of a purchase contract. We have agreed that, if required under U.S. federal securities laws, we will use our commercially reasonable efforts to (1) have a registration statement in effect covering those shares of common stock and other securities, if any, to be delivered in respect of the purchase contracts being settled and (2) provide a prospectus in connection therewith, in each case in a form that may be used in connection with the early settlement right (it being understood that if there is a material business transaction or development that has not yet been publicly disclosed, we will not be required to provide such a prospectus, and the early settlement right will not be available, until we have publicly disclosed such transaction or development, provided that we will use our commercially reasonable efforts to make such disclosure as soon as it is commercially reasonable to do so).
Upon early settlement, except as described below in Early Settlement Upon a Fundamental Change, we will issue, for each purchase contract being settled, 85% of the number of shares of our common stock that would be deliverable for each purchase contract as described in Purchase of Common Stock above as if the applicable market value were the average of the daily VWAPs of our common stock during the early settlement averaging period.
We will cause the related shares of convertible preferred stock or applicable ownership interests in the Treasury portfolio or Treasury securities, as the case may be, underlying the Equity Units and securing such purchase contract to be released from the pledge under the purchase contract and pledge agreement, and delivered within two business days following the early settlement date, to the purchase contract agent or stock transfer agent, as applicable, on behalf of the holder, free and clear of our security interest. In addition, we will issue the number of shares of our common stock to be issued upon settlement of the purchase contract within two business days following the last day of the early settlement averaging period, to the holder through the transfer agent for our common stock. Upon early settlement, the holder will be entitled to receive any accrued and unpaid contract adjustment payments (including any accrued and unpaid deferred contract adjustment payments and compounded contract adjustment payments thereon) to, but excluding, the quarterly payment date immediately preceding the early settlement date. The holders right to receive future contract adjustment payments will terminate (except for contract adjustment payments payable to the holders of record on the applicable record date), and no adjustment will be made to or for the holder on account of any amounts accrued in respect of contract adjustment payments since the most recent quarterly payment date.
If the purchase contract agent receives a completed Election to Settle Early form, along with the Corporate Unit or Treasury Unit certificate, if they are in certificated form, and payment of $100 for each purchase contract being settled prior to 5:00 p.m., New York City time, on any business day and all conditions to early settlement have been satisfied, then that day will be considered the early settlement date. If the purchase contract agent receives the foregoing on or after 5:00 p.m., New York City time, on any business day or at any time on a day that is not a business day, then the next business day will be considered the early settlement date.
Early Settlement Upon a Fundamental Change
If a fundamental change (as defined below) occurs prior to the purchase contract settlement date, then, following the fundamental change, each holder of a purchase contract, subject to certain conditions described in this prospectus supplement, will have the right to settle the purchase contract early on the fundamental change early settlement date (as defined below) at the settlement rate determined as if the applicable market value equaled the stock price (as defined below under Calculation of Make-Whole Shares), plus an additional number of shares determined as set forth below (such additional number referred to as the make-whole shares). We refer to this right as the fundamental change early settlement right.
A fundamental change will be deemed to have occurred if any of the following occurs:
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a person or group within the meaning of Section 13(d) of the Exchange Act has become the direct or indirect beneficial owner, as defined in Rule 13d-3 under the Exchange Act, of shares of our common stock representing more than 50% of the voting power of our common stock; |
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(A) we are involved in a consolidation with or merger into any other person, or any merger of another person into us, or any other similar transaction or series of related transactions (other than a merger, consolidation or similar transaction that does not result in the conversion or exchange of outstanding shares of our common stock), in each case, in which 90% or more of the outstanding shares of our common stock are exchanged |
for or converted into cash, securities or other property, greater than 10% of the value of which consists of cash, securities or other property that is not (or will not be upon or immediately following the effectiveness of such consolidation, merger or other transaction) common stock listed on the New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or any of their respective successors) or (B) the consummation of any sale, lease or other transfer in one transaction or a series of related transactions of all or substantially all of our consolidated assets to any person other than one of our subsidiaries; |
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our common stock ceases to be listed on at least one of the New York Stock Exchange, the NASDAQ Global Select Market and the NASDAQ Global Market (or any of their respective successors); or |
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our shareholders approve our liquidation, dissolution or termination. |
The fundamental change early settlement right is subject to the condition that at such time, if so required under U.S. federal securities laws, there is in effect a registration statement and an available prospectus covering shares of our common stock and other securities, if any, to be delivered pursuant to the purchase contracts being settled. We have agreed that, if required under U.S. federal securities laws, we will use our commercially reasonable efforts to (1) have a registration statement in effect covering our common stock and other securities, if any, to be delivered in respect of the purchase contracts being settled and (2) provide a prospectus in connection therewith, in each case in a form that may be used in connection with the early settlement upon a fundamental change (it being understood that if there is a material business transaction or development that has not yet been publicly disclosed, we will not be required to provide such a prospectus, and the fundamental change early settlement right will not be available, until we have publicly disclosed such transaction or development, provided that we will use our commercially reasonable efforts to make such disclosure as soon as it is commercially reasonable to do so). The fundamental change early settlement date will be postponed by the number of days during the period on which no such registration statement is effective, except that the fundamental change early settlement date will not be postponed beyond the purchase contract settlement date. If, but for the exception contained in the immediately preceding sentence, the fundamental change early settlement date would occur on or after the purchase contract settlement date, we will deliver to any holder of purchase contracts on the purchase contract settlement date the applicable number of make-whole shares in addition to a number of shares equal to the settlement rate, determined as if the applicable market value were equal to the stock price (as defined below under Calculation of Make-Whole Shares) in such fundamental change.
We will provide each holder of Equity Units with a notice of a fundamental change within five business days after the effective date of the fundamental change. The notice will specify:
(1) |
a date on which the fundamental change early settlement will occur (the fundamental change early settlement date,) which shall be at least 10 business days after the effective date of such fundamental change but, subject to the foregoing, no later than the earlier of (x) 20 business days after the effective date of such fundamental change and (y) one business day prior to (i) the first day of the commencement of an optional remarketing period, or (ii) if we have not specified an optional remarketing period or the optional remarketing is not successful, the first day of the commencement of the final remarketing period or, if the final remarketing is not successful, the purchase contract settlement date; |
(2) |
the date by which holders must exercise the fundamental change early settlement right; |
(3) |
the applicable settlement rate and number of make-whole shares; |
(4) |
the amount and kind (per share of common stock) of the cash, securities and other consideration receivable by the holder upon settlement; and |
(5) |
the amount of accrued and unpaid contract adjustment payments (including any deferred contract adjustment payments and compounded contract adjustment payments thereon), if any, that will be paid upon settlement to holders exercising the fundamental change early settlement right. Notwithstanding the foregoing, if the final remarketing period begins less than 10 business days following the occurrence of a fundamental change, the notice will specify the purchase contract settlement date as the fundamental change early settlement date. |
To exercise the fundamental change early settlement right, a holder must, no later than the second business day prior to the fundamental change early settlement date:
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deliver to the purchase contract agent a completed Election to Settle Early Following a Fundamental Change form; |
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deliver to the purchase contract agent the certificate evidencing the holders Corporate Units or Treasury Units, if in certificated form; and |
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deliver to the purchase contract agent cash in immediately available funds equal to $100 multiplied by the number of purchase contracts being settled. |
So long as you hold Equity Units as a beneficial interest in a global security certificate deposited with the depositary, procedures for fundamental change early settlement will also be governed by standing arrangements between the depositary and the purchase contract agent.
If you exercise the fundamental change early settlement right, we will deliver to you on the fundamental change early settlement date for each purchase contract with respect to which you have elected fundamental change early settlement, a number of shares (or exchange property units, if applicable) equal to the settlement rate described above plus the additional make-whole shares, together with accrued and unpaid contract adjustment payments to the fundamental change early settlement date; provided that if a fundamental change early settlement date falls after a record date and on or prior to the corresponding contract adjustment payment date, we will pay the full amount of accrued and unpaid contract adjustment payments, if any, due on such contract adjustment payment date to the holder of record at the close of business on the corresponding record date.
The holder will also receive on the fundamental change early settlement date the shares of convertible preferred stock or the applicable ownership interest in the Treasury portfolio or Treasury securities underlying the Corporate Units or Treasury Units, as the case may be, with respect to which such holder is effecting a fundamental change early settlement, which, in each case, shall have been released from the pledge under the purchase contract and pledge agreement and delivered to the purchase contract agent or transfer agent, as applicable, on behalf of the holder, free and clear of our security interest. In the case of Corporate Units, if such holder has elected to settle the purchase contracts with cash, such holder will also receive on the fundamental change early settlement date the aggregate number of shares of convertible preferred stock underlying the Corporate Units. If a holder does not elect to exercise the fundamental change early settlement right, its Corporate Units or Treasury Units will remain outstanding and subject to normal settlement on the purchase contract settlement date.
Holders of Corporate Units and Treasury Units may exercise the fundamental change early settlement right only in integral multiples of 10 Corporate Units or Treasury Units, as applicable. If the Treasury portfolio has replaced the shares of convertible preferred stock that are components of the Corporate Units, holders of the Corporate Units may exercise the fundamental change early settlement right only in integral multiples of such number of Corporate Units as may be determined by the remarketing agent upon a successful optional remarketing of convertible preferred stock.
Calculation of Make-Whole Shares.
The number of make-whole shares per purchase contract applicable to a fundamental change early settlement will be determined by reference to the table below, based on the date on which the fundamental change occurs or becomes effective (the effective date) and the stock price in the fundamental change, which will be:
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in the case of a fundamental change described in clause (2) of the definition of fundamental change above where the holders of our common stock receive only cash in the fundamental change, the cash amount paid per share of our common stock; and |
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in all other cases, the average of the closing prices of our common stock for the 10 consecutive trading days immediately prior to but not including the effective date. |
For purposes of this Description of the Purchase Contracts section, the stock prices set forth in the first row of the table (i.e., the column headers) will be adjusted upon the occurrence of certain events requiring anti-dilution adjustments to the maximum settlement rate in a manner inversely proportional to the adjustments to the maximum settlement rate. Each of the make-whole share amounts in the table will be subject to adjustment in the same manner and at the same time as the maximum settlement rate as set forth under Anti-dilution Adjustments.
Stock Price | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Effective Date |
$30.00 | $40.00 | $50.00 | $60.00 | $70.00 | $73.91 | $80.00 | $90.00 | $100.00 | $110.00 | $120.00 | $130.00 | $140.00 | |||||||||||||||||||||||||||||||||||||||
June 14, 2019 |
0.5222 | 0.3435 | 0.2292 | 0.1356 | 0.0436 | 0.0000 | 0.0515 | 0.0949 | 0.1142 | 0.1200 | 0.1189 | 0.1145 | 0.1088 | |||||||||||||||||||||||||||||||||||||||
June 1, 2020 |
0.3518 | 0.2316 | 0.1557 | 0.0899 | 0.0142 | 0.0000 | 0.0273 | 0.0691 | 0.0847 | 0.0875 | 0.0848 | 0.0802 | 0.0753 | |||||||||||||||||||||||||||||||||||||||
June 1, 2021 |
0.1778 | 0.1170 | 0.0799 | 0.0472 | 0.0000 | 0.0000 | 0.0094 | 0.0425 | 0.0495 | 0.0480 | 0.0447 | 0.0414 | 0.0385 | |||||||||||||||||||||||||||||||||||||||
June 1, 2022 |
0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 |
The actual stock price and effective date may not be set forth on the table, in which case:
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if the actual stock price is between two stock prices on the table or the actual effective date is between two effective dates on the table, the amount of make-whole shares will be determined by a straight-line interpolation between the make-whole share amounts set forth for the two stock prices and the two effective dates on the table based on a 365-day year, as applicable; |
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if the stock price exceeds $140.00 per share, subject to adjustment in the same manner as the stock prices in the table above, then the make-whole share amount will be zero; and |
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if the stock price is less than $30.00 per share, subject to adjustment in the same manner as the stock prices in the table above (the minimum stock price), then the make-whole share amount will be determined as if the stock price equaled the minimum stock price, using straight-line interpolation, as described above, if the actual effective date is between two effective dates on the table. |
Contract Adjustment Payments
Contract adjustment payments in respect of Corporate Units, Treasury Units and Cash Settled Units are payable in cash, shares of our common stock or a combination thereof, at a rate per year of 5.50% of the stated amount of $100 per Equity Unit. Contract adjustment payments payable for any period are computed (1) for any full quarterly period on the basis of a 360-day year of twelve 30-day months and (2) for any period shorter than a full quarterly period, on the basis of a 30-day month and, for any period less than a month, on the basis of the actual number of days elapsed in a 30-day month. Contract adjustment payments accrue from the date of original issuance of the Corporate Units to (but excluding) the earliest occurrence of a termination event, the purchase contract settlement date, the fundamental change early settlement date and the most recent quarterly payment date on or before any early settlement of the related purchase contracts, and are payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year (we refer to each of these dates as a contract adjustment payment date).
Contract adjustment payments are payable to the holders of purchase contracts as they appear on the books and records of the purchase contract agent at the close of business on the relevant record dates, which are the fifteenth day of the month immediately preceding the month in which the relevant contract adjustment payment date falls (whether or not a business day) or if the Equity Units are held in global book-entry form, the record date is the business day immediately preceding the applicable contract adjustment payment date. Contract adjustment payments will be payable to such record holders notwithstanding the occurrence of any early settlement date or fundamental change early settlement date following a record date and on or prior to the open of business on the related payment date, except that holders will be required to pay us, in connection with any early settlement (other than in connection with a fundamental change), an equivalent payment as described under Early Settlement above. These distributions will be paid through the purchase contract agent, who will distribute amounts received in respect of the contract adjustment payments for the benefit of the holders of the purchase contracts relating to the Corporate Units, Treasury Units and Cash Settled Units.
If any date on which contract adjustment payments are to be made is not a business day, then payment of the contract adjustment payments payable on that date will be made on the next succeeding day that is a business day and no interest or payment will be paid in respect of the delay, if any.
Our obligations with respect to contract adjustment payments are subordinated and junior in right of payment to our existing and future indebtedness. Upon certain events of our bankruptcy, insolvency or reorganization, holders of our Equity Units will have no claims against us or our estate for any accrued and unpaid (including any deferred) contract adjustment payments.
We may, at our option and upon prior written notice to the holders of the Equity Units and the purchase contract agent, defer the payment of contract adjustment payments on the related purchase contracts forming a part of the Equity Units until the purchase contract settlement date; provided, however, that in (x) an early settlement upon a fundamental change, we will pay deferred contract adjustment payments (including compounded contract adjustment payments thereon as described below) to, but excluding, the fundamental change early settlement date and (y) an early settlement other than upon a fundamental change, we will pay deferred contract adjustment payments (including compounded contract adjustment payments thereon as described below) to, but excluding, the quarterly contract adjustment payment date immediately preceding the early settlement date.
Deferred contract adjustment payments will accrue additional contract adjustment payments at the rate of 7.25% per year until paid, compounded quarterly, which is equal to the rate of total distributions on the Corporate Units (compounding on each succeeding payment date), to, but excluding, the date such deferred contract adjustment payments are made. We refer to these additional contract adjustment payments that accrue on deferred contract adjustment payments as compounded contract adjustment payments. We may pay any such deferred contract adjustment payments (including compounded contract adjustment payments thereon) on any scheduled contract adjustment payment date. If the purchase contracts are terminated (upon the occurrence of certain events of bankruptcy, insolvency or reorganization with respect to us), the right to receive contract adjustment payments and deferred contract adjustment payments (including compounded contract adjustment payments thereon) will also terminate.
If we exercise our option to defer the payment of contract adjustment payments, then, until the deferred contract adjustment payments (including compounded contract adjustment payments thereon) have been paid, we will not (1) declare or pay any dividends on, or make any distributions on, or redeem, purchase or acquire, or make a liquidation payment with respect to, any shares of our capital stock (including the convertible preferred stock), (2) make any payment of principal of, or interest or premium, if any, on, or repay, repurchase or redeem any of our debt securities that rank on parity with, or junior to, the contract adjustment payments, or (3) make any guarantee payments under any guarantee by us of securities of any of our subsidiaries if our guarantee ranks on parity with, or junior to, the contract adjustment payments.
The restrictions listed above do not apply to:
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purchases, redemptions or other acquisitions of our capital stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors, agents or consultants or a stock purchase or dividend reinvestment plan, or the satisfaction of our obligations pursuant to any contract or security outstanding on the date that the contract adjustment payment is deferred requiring us to purchase, redeem or acquire our capital stock; |
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any payment, repayment, redemption, purchase, acquisition or declaration of dividends described in clause (1) above as a result of a reclassification of our capital stock, or the exchange or conversion of all or a portion of one class or series of our capital stock, for another class or series of our capital stock; |
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the purchase of fractional interests in shares of our capital stock pursuant to the conversion or exchange provisions of our capital stock or the security being converted or exchanged, or in connection with the settlement of stock purchase contracts outstanding on the date that the contract adjustment payment is deferred; |
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dividends or distributions paid or made in our capital stock (or rights to acquire our capital stock), or repurchases, redemptions or acquisitions of capital stock in connection with the issuance or exchange of capital stock (or of securities convertible into or exchangeable for shares of our capital stock) and distributions in connection with the settlement of stock purchase contracts outstanding on the date that the contract adjustment payment is deferred; |
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redemptions, exchanges or repurchases of, or with respect to, any rights outstanding under a shareholder rights plan outstanding on the date that the contract adjustment payment is deferred or the declaration or payment thereunder of a dividend or distribution of or with respect to rights in the future; |
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payments on any trust preferred securities, subordinated debentures, junior subordinated debentures or junior subordinated notes, or any guarantees of any of the foregoing, in each case, that rank equal in right of payment to the contract adjustment payments, so long as the amount of payments made on account of such securities or guarantees and the purchase contracts is paid on all such securities and guarantees and the purchase contracts then outstanding on a pro rata basis in proportion to the full payment to which each series of such securities, guarantees or purchase contracts is then entitled if paid in full; provided that, for the avoidance of doubt, we will not be permitted under the purchase contract and pledge agreement to make contract adjustment payments in part; or |
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any payment of deferred interest or principal on, or repayment, redemption or repurchase of, parity or junior securities that, if not made, would cause us to breach the terms of the instrument governing such parity or junior securities. |
Method of Payment of Contract Adjustment Payments
Subject to the limitations described below, we may pay any contract adjustment payment (or any portion of any contract adjustment payment) on the Equity Units (whether or not for a current quarterly period or any prior quarterly period), determined in our sole discretion:
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in cash; |
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by delivery of shares of our common stock; or |
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through any combination of cash and shares of our common stock. |
We will make each contract adjustment payment in cash, except to the extent we elect to make all or any portion of such payment in shares of our common stock. To the extent we do not elect to defer such payment, we will give the holders of the Equity Units notice of any such election and the portion of such payment that will be made in cash and the portion that will be made in common stock no later than eight scheduled trading days prior to the payment date for such contract adjustment payment.
If we elect to make any such contract adjustment payment, or any portion thereof, in shares of our common stock, such shares shall be valued for such purpose at the average of the daily VWAPs per share of our common stock over the five consecutive trading day period ending on the second trading day immediately preceding the applicable payment date (the five-day average price), multiplied by 97%.
No fractional shares of common stock will be delivered to the holders of the Equity Units in respect of contract adjustment payments. We will instead pay a cash adjustment to each holder that would otherwise be entitled to a fraction of a share of common stock based on (i) the five-day average price and (ii) the aggregate number of Equity Units held by such holder (or, if the Equity Units are held in global book-entry form, based on the applicable procedures of the depositary for determining such number of Equity Units).
To the extent a shelf registration statement is required in our reasonable judgment in connection with the issuance of or for resales of common stock issued as a contract adjustment payment, including contract adjustment payments paid in connection with a fundamental change early settlement, we will, to the extent such a registration statement is not currently filed and effective, use our reasonable best efforts to file and maintain the effectiveness of such a shelf registration statement until the earlier of such time as all such shares of common stock have been resold thereunder and such time as all such shares are freely tradable under Rule 144 by non-affiliates of ours without registration. To the extent applicable, we will also use our reasonable best efforts to have the shares of common stock qualified or registered under applicable state securities laws, if required, and approved for listing on the New York Stock Exchange (or if our common stock is not listed on the New York Stock Exchange, on the principal other U.S. national or regional securities exchange on which our common stock is then listed).
Anti-dilution Adjustments
The maximum settlement rate will be subject to the following adjustments:
(1) If we issue common stock as a dividend or distribution on our common stock to all or substantially all holders of our common stock, or if we effect a share split or share combination, the maximum settlement rate will be adjusted based on the following formula:
SR1 = SR0 x (OS1 / OS0)
where,
SR0 | = | the maximum settlement rate in effect immediately prior to the close of business on the record date for such dividend or distribution or immediately prior to the open of business on the effective date for such share split or share combination, as the case may be; | ||
SR1 | = | the maximum settlement rate in effect immediately after the close of business on such record date or immediately after the open of business on such effective date, as the case may be; |
OS0 | = | the number of shares of our common stock outstanding immediately prior to the close of business on such record date or immediately prior to the open of business on such effective date, as the case may be, in each case, prior to giving effect to such event; and | ||
OS1 | = | the number of shares of our common stock that would be outstanding immediately after, and solely as a result of, such event. |
Any adjustment made pursuant to this paragraph (1) shall become effective as of the close of business on the record date for such dividend or other distribution or as of the open of business on the effective date for such share split or share combination becomes effective, as applicable. If any dividend or distribution in this paragraph (1) is declared but not so paid or made, the new maximum settlement rate shall be readjusted, on the date that our board of directors determines not to pay or make such dividend or distribution, to the maximum settlement rate that would then be in effect if such dividend or distribution had not been declared.
(2) If we distribute to all holders of our common stock any rights, options or warrants entitling them for a period of not more than 45 calendar days after the date of distribution thereof to subscribe for or purchase our common stock, in any case at an exercise price per share of our common stock less than the average of the closing prices of our common stock for the 10 consecutive trading days ending on, and including, the trading day immediately preceding the date of the announcement of such distribution, the maximum settlement rate will be increased based on the following formula:
SR1 = SR0 x (OS0 + X) / (OS0 +Y)
where,
SR0 | = | the maximum settlement rate in effect immediately prior to the close of business on the record date for such distribution; | ||
SR1 | = | the maximum settlement rate in effect immediately after the close of business on such record date; | ||
OS0 | = | the number of shares of our common stock outstanding immediately prior to the close of business on the record date for such distribution; | ||
X | = | the total number of shares of our common stock issuable pursuant to such rights, options or warrants; and | ||
Y | = | the number of shares of our common stock equal to the quotient of (A) the aggregate price payable to exercise such rights, options or warrants divided by (B) the average of the closing prices of our common stock for the 10 consecutive trading days ending on, and including, the trading day immediately preceding the date of the announcement of the distribution of such rights, options or warrants. |
If any right, option or warrant described in this paragraph (2) is not exercised or converted prior to the expiration of the exercisability or convertibility thereof (and as a result no additional shares of common stock are delivered or issued pursuant to such rights or warrants), the new maximum settlement rate shall be readjusted, as of the date of such expiration, to the maximum settlement rate that would then be in effect had the increase with respect to the distribution of such rights, options or warrants been made on the basis of delivery or issuance of only the number of shares of common stock actually delivered.
For purposes of this paragraph (2), in determining whether any rights, options or warrants entitle the holders to subscribe for or purchase shares of the common stock at a price per share of our common stock less than the average of the closing prices of our common stock for the 10 consecutive trading days ending on, and including, the trading day immediately preceding the date of the announcement of the distribution of such rights, options or warrants, and in determining the aggregate price payable to exercise such rights, options or warrants, there shall be taken into account any consideration received by us for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined in good faith by our board of directors. Any increase made under this paragraph (2) will be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the close of business on the record date for such distribution.
(3) (a) If we distribute shares of capital stock, evidences of indebtedness or other assets or property of us to all holders of our common stock (excluding (i) any dividend, distribution, rights, warrants or options as to which an adjustment was effected pursuant to clause (1) or (2) above, (ii) any dividend or distribution paid exclusively in cash, and (iii) any spin-off to which the provisions in clause 3(b) below apply), the maximum settlement rate will be increased based on the following formula:
SR1 = SR0 x SP0 / (SP0 FMV)
where,
SR0 | = | the maximum settlement rate in effect immediately prior to the close of business on the record date for such distribution; | ||
SR1 | = | the maximum settlement rate in effect immediately after the close of business on such record date; | ||
SP0 | = | the closing price of our common stock on the trading day immediately preceding the ex-dividend date for such distribution; and | ||
FMV | = | the fair market value (as determined in good faith by our board of directors), on the record date for such dividend or distribution, of the shares of capital stock, evidences of indebtedness, assets or property so distributed, expressed as an amount per share of our common stock. |
Notwithstanding the foregoing, if FMV (as defined above) exceeds SP0 (as defined above), in lieu of the foregoing increase, each holder of a purchase contract shall receive, for each purchase contract, at the same time and upon the same terms as holders of shares of our common stock, the amount of such distributed shares of capital stock, evidences of indebtedness or other assets or property that such holder would have received if such holder owned a number of shares of our common stock equal to the maximum settlement rate on the record date for such dividend or distribution.
(b) However, if we distribute to all holders of our common stock, capital stock of any class or series, or similar equity interest, of or relating to a subsidiary or other business unit, in each case, that will be listed on a U.S. national securities exchange, which we refer to as a spin-off, then the maximum settlement rate will instead be increased based on the following formula:
SR1 = SR0 x (FMV0 + MP0) / MP0
where,
SR0 | = | the maximum settlement rate in effect immediately prior to the end of the valuation period (as defined below); | ||
SR1 | = | the maximum settlement rate in effect immediately after the end of the valuation period; | ||
FMV0 | = | the average of the closing price of the capital stock or similar equity interests distributed to holders of our common stock applicable to one share of our common stock over each of the 10 consecutive trading days commencing on, and including, the ex-dividend date for such dividend or distribution (the valuation period); and | ||
MP0 | = | the average of the closing price of our common stock over the valuation period. |
The adjustment to the maximum settlement rate under this paragraph 3(b) will occur on the last day of the valuation period; provided that if a holder elects to early settle the purchase contracts, or the purchase contract settlement date occurs, in either case, during the valuation period, references with respect to 10 trading days shall be deemed replaced with such lesser number of trading days as have elapsed between the ex-dividend date of such spin-off and the date on which such holder elected its early settlement right, or the business day immediately preceding the purchase contract settlement date, as the case may be, in determining the maximum settlement rate.
If any dividend or distribution described in this paragraph (3) is declared but not so paid or made, the new maximum settlement rate shall be readjusted, as of the date our board of directors determines not to pay or make such dividend or distribution, to the maximum settlement rate that would then be in effect if such dividend or distribution had not been declared.
(4) If any regular, quarterly cash dividend or distribution made to all or substantially all holders of our common stock during any quarterly fiscal period exceeds $0.9175 per share (the reference dividend), the maximum settlement rate will be increased based on the following formula:
SR1 = SR0 x [(SP0 T) / (SP0 C)]
where,
SR0 | = | the maximum settlement rate in effect immediately prior to the close of business on the record date for such distribution; | ||
SR1 | = | the maximum settlement rate in effect immediately after the close of business on such record date; | ||
SP0 | = | the closing price of our common stock on the record date for such distribution; | ||
C | = | the amount in cash per share we distribute to holders of our common stock; and | ||
T | = | the reference dividend; provided that if the dividend or distribution is not a regular quarterly cash dividend, the reference dividend will be deemed to be zero. |
Notwithstanding the foregoing, if C (as defined above) exceeds SP0 (as defined above), in lieu of the foregoing increase, each holder of a purchase contract shall receive, for each purchase contract, at the same time and upon the same terms as holders of shares of our common stock, the amount of distributed cash that such holder would have received if such holder owned a number of shares of our common stock equal to the maximum settlement rate on the record date for such cash dividend or distribution.
The reference dividend will be subject to an inversely proportional adjustment whenever the maximum settlement rate is adjusted, other than pursuant to this paragraph (4). For the avoidance of doubt, the reference dividend will be zero in the case of a cash dividend that is not a regular quarterly dividend.
If any dividend or distribution described in this paragraph (4) is declared but not so paid or made, the new maximum settlement rate shall be readjusted, as of the date our board of directors determines not to pay or make such dividend or distribution, to the maximum settlement rate that would then be in effect if such dividend or distribution had not been declared.
(5) If we or any of our subsidiaries makes a payment in respect of a tender offer or exchange offer for our common stock to the extent that the cash and value of any other consideration included in the payment per share of our common stock validly tendered or exchanged exceeds the closing price of a share of our common stock on the trading day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the maximum settlement rate will be increased based on the following formula:
SR1 = SR0 x [(FMV + (SP1 x OS1)] / (SP1 x OS0)
where,
SR0 | = | the maximum settlement rate in effect immediately prior to the close of business on the trading day on which such tender or exchange offer expires; | ||
SR1 | = | the maximum settlement rate in effect immediately after the close of business on the trading day immediately following the date such tender or exchange offer expires; | ||
FMV | = | the fair market value (as determined in good faith by our board of directors, whose good faith determination will be conclusive), at the close of business on the trading day immediately following the date such tender or exchange offer expires, of the aggregate value of all cash and any other consideration paid or payable for shares validly tendered or exchanged and not withdrawn as of the expiration date; | ||
OS0 | = | the number of shares of our common stock outstanding immediately prior to the last time tenders or exchanges may be made pursuant to such tender or exchange offer (prior to giving effect to the purchase or exchange of shares pursuant to such tender or exchange offer); | ||
OS1 | = | the number of shares of our common stock outstanding immediately after the last time tenders or exchanges may be made pursuant to such tender or exchange offer (after giving effect to the purchase or exchange of shares pursuant to such tender or exchange offer); and | ||
SP1 | = | the closing price of our common stock on the trading day next succeeding the date such tender or exchange offer expires. |
The adjustment to the maximum settlement rate under the preceding paragraph (5) will occur at the close of business on the trading day on which such tender or exchange offer expires.
The term ex-dividend date, when used with respect to any issuance or distribution on our common stock or any other security, means the first date on which our common stock or such other security, as applicable, trades, regular way, on the principal U.S. securities exchange or quotation system on which our common stock or such other security, as applicable, is listed or quoted at that time, without the right to receive the issuance or distribution.
We currently do not have a shareholders rights plan with respect to our common stock. To the extent that we have a shareholders rights plan involving the issuance of share purchase rights or other similar rights to all or substantially all holders of our common stock in effect upon settlement of a purchase contract, you will receive, in addition to the common stock issuable upon settlement of any purchase contract, the related rights for the common stock under the shareholders rights plan, unless, prior to any settlement of a purchase contract, the rights have separated from the common stock, in which case the maximum settlement rate will be adjusted at the time of separation as if we made a distribution to all holders of our common stock as described in clause (3) above, subject to readjustment in the event of the expiration, termination or redemption of the rights under the shareholder rights plan.
For United States federal income tax purposes, you may be treated as receiving a constructive distribution from us with respect to the purchase contract if (1) the maximum settlement rate is adjusted (or fails to be adjusted) and, as a result of the adjustment (or failure to adjust), your proportionate interest in our assets or earnings and profits is increased, and (2) the adjustment (or failure to adjust) is not made pursuant to a bona fide, reasonable anti-dilution formula. For example, if the maximum settlement rate is adjusted as a result of a distribution that is taxable to the holders of our common stock, such as a cash dividend, you will be deemed to have received a constructive distribution of our stock. Thus, under certain circumstances, an adjustment to the maximum settlement rate might give rise to a taxable dividend to you even though you will not receive any cash in connection with such adjustment. In addition, non-U.S. holders may be deemed to have received a distribution subject to United States federal withholding tax.
In addition, we may increase the maximum settlement rate if our board of directors deems it advisable to avoid or diminish any income tax to holders of our common stock resulting from any dividend or distribution of shares (or rights to acquire shares) or from any event treated as a dividend or distribution for income tax purposes or for any other reasons.
Adjustments to the maximum settlement rate will be calculated to the nearest ten thousandth of a share. No adjustment to the maximum settlement rate will be required unless the adjustment would require an increase or decrease of at least one percent in the maximum settlement rate. If any adjustment is not required to be made because it would not change the maximum settlement rate by at least one percent, then the adjustment will be carried forward and taken into account in any subsequent adjustment. All adjustments will be made not later than the purchase contract settlement date, any early settlement date, any fundamental change early settlement date and the time at which we are required to determine the relevant settlement rate or amount of make-whole shares (if applicable) in connection with any settlement with respect to the purchase contracts.
No adjustment to the maximum settlement rate will be made if holders of purchase contracts participate, as a result of holding the purchase contracts and without having to settle the purchase contracts that form part of the Equity Units, in the transaction that would otherwise give rise to an adjustment as if they held, per purchase contract, a number of shares of our common stock equal to the maximum settlement rate, at the same time and upon the same terms as the holders of common stock participate in the transaction.
Except as described above, the maximum settlement rate will not be adjusted:
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upon the issuance of any shares of our common stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on our securities and the investment of additional optional amounts in shares of our common stock under any plan; |
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upon the issuance of options, restricted stock or other awards in connection with any employment contract, executive compensation plan, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors, consultants or independent contractors or the exercise of such options or other awards; |
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upon the issuance of any shares of our common stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security outstanding as of the date the Equity Units were first issued; |
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for a change in the par value or no par value of the common stock; or |
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for accumulated and unpaid contract adjustment payments. |
We will, as promptly as practicable after the maximum settlement rate is adjusted, provide written notice of the adjustment to the holders of Equity Units.
If an adjustment is made to the maximum settlement rate, an adjustment also will be made to the reference price on an inversely proportional basis solely to determine which of the clauses of the definition of settlement rate will be applicable to determine the settlement rate with respect to the purchase contract settlement date, any early settlement date or any fundamental change early settlement date.
If any adjustment to the maximum settlement rate becomes effective, or any effective date, expiration time, ex-dividend date or record date for any stock split or reverse stock split, tender or exchange offer, issuance, dividend or distribution (relating to a required maximum settlement rate adjustment) occurs, during the period beginning on, and including, (i) the open of business on a first trading day of the market value averaging period or (ii) in the case of an early settlement or fundamental change early settlement, the relevant early settlement date or the fundamental change early settlement date and, in each case, ending on, and including, the date on which we deliver shares of our common stock under the related purchase contract, we will make appropriate adjustments to the maximum settlement rate and/or the number of shares of our common stock deliverable upon settlement with respect to the purchase contract, in each case, consistent with the methodology used to determine the anti-dilution adjustments set forth above. If any adjustment to the maximum settlement rate becomes effective, or any effective date, expiration time, ex-dividend date or record date for any stock split or reverse stock split, tender or exchange offer, issuance, dividend or distribution (relating to a required maximum settlement rate adjustment) occurs, during the period used to determine the applicable market value, the stock price or any other averaging period hereunder, we will make appropriate adjustments to the applicable prices, consistent with the methodology used to determine the anti-dilution adjustments set forth above.
Reorganization Events
The following events are defined as reorganization events:
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any recapitalization, reclassification or change of our common stock (other than changes resulting from a subdivision or combination); |
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any consolidation, merger or combination involving us; |
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any sale, lease or other transfer to another person of the consolidated assets of ours and our subsidiaries substantially as an entirety; or |
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any statutory exchange of our common stock; |
in each case as a result of which our common stock would be converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof) (exchange property).
Following the effective date of a reorganization event, the settlement rate shall be determined by reference to the value of an exchange property unit, and we will deliver, upon settlement of any purchase contract, a number of exchange property units equal to the number of shares of our common stock that we would otherwise be required to deliver. An exchange property unit is the kind and amount of exchange property receivable in such reorganization event (without any interest thereon, and without any right to dividends or distribution thereon which have a record date that is prior to the applicable settlement date) per share of our common stock by a holder of common stock that is not a person with which we are consolidated or into which we are merged or which merged into us or to which such sale or transfer was made, as the case may be (we refer to any such person as a constituent person), or an affiliate of a constituent person, to the extent such reorganization event provides for different treatment of common stock held by the constituent person and/or the affiliates of the constituent person, on the one hand, and non-affiliates of a constituent person, on the other hand. In the event holders of our common stock (other than any constituent person or affiliate thereof) have the opportunity to elect the form of consideration to be received in such transaction, the exchange property unit that holders of the Corporate Units or Treasury Units are entitled to receive will be deemed to be the weighted average of the types and amounts of consideration actually received by the holders of our common stock.
In the event of such a reorganization event, the person formed by such consolidation or surviving such merger or, if other than us, the person which acquires our assets and those of our subsidiaries substantially as an entirety will execute and deliver to the purchase contract agent an agreement providing that the holder of each Equity Unit that remains outstanding after the reorganization event (if any) will have the rights described in the preceding paragraph and expressly assuming all of our obligations under the purchase contracts, the purchase contract and pledge agreement, the convertible preferred stock and the remarketing agreement. Such supplemental agreement will provide for adjustments to the amount of any securities constituting all or a portion of an exchange property unit and/or adjustments to the maximum settlement rate, which, for events subsequent to the effective date of such reorganization event, will be as nearly equivalent as may be practicable, as determined by us in our sole commercially reasonable discretion, to the adjustments provided for under Anti-dilution Adjustments above (it being understood that any such adjustment may be zero and that no such adjustments shall be required with respect to any portion of the exchange property that consists of cash). The provisions described in the preceding two paragraphs shall similarly apply to successive reorganization events.
In connection with any reorganization event, we will also adjust the reference dividend based on the number of shares of common stock comprising an exchange property unit and (if applicable) the value of any non-stock consideration comprising an exchange property unit. If an exchange property unit is composed solely of non-stock consideration, the reference dividend will be zero.
Termination
The purchase contract and pledge agreement provides that the purchase contracts and the obligations and rights of us and of the holders of Corporate Units, Treasury Units and Cash Settled Units thereunder, including the holders obligation and right to purchase and receive shares of our common stock and the right to receive accrued and unpaid contract adjustment payments (including deferred contract adjustment payments), will immediately and automatically terminate upon the occurrence of certain events of bankruptcy, insolvency or reorganization with respect to us.
Upon any such termination and receipt of written notice from the purchase contract agent of the same, the collateral agent will release the convertible preferred stock, the applicable ownership interest in the Treasury portfolio, Treasury securities or cash, as the case may be, from the pledge arrangement and transfer such convertible preferred stock, the applicable ownership interest in the Treasury portfolio, Treasury securities or cash to the purchase contract agent or transfer agent, as applicable, for distribution to the holders of Corporate Units, Treasury Units and Cash Settled Units. Upon any termination, however, such release and distribution may be subject to a delay. In the event that we become the subject of a case under the U.S. Bankruptcy Code, such delay may occur as a result of the automatic stay under Section 362 of the U.S. Bankruptcy Code or other relief sought by the collateral agent, the purchase contract agent or other party asserting an interest in the pledged securities or contending that such termination is not effective and may continue until such automatic stay has been lifted or efforts to obtain such other relief has been resolved against such party.
Moreover, claims arising out of the convertible preferred stock will be subject to the equitable jurisdiction and powers of the bankruptcy court.
Pledged Securities and Pledge
The shares of convertible preferred stock that are a component of the Corporate Units or, following a successful optional remarketing, solely with respect to the Treasury securities described in clause (1) of the definition applicable ownership interest, the applicable ownership interests in the Treasury portfolio, that are a component of the Corporate Units or, if substituted, the Treasury securities that are a component of the Treasury Units or cash that is a component of the Cash Settled Units, collectively, the pledged securities, will be pledged to the collateral agent for our benefit pursuant to the purchase contract and pledge agreement to secure your obligation to purchase shares of our common stock under the related purchase contracts. The rights of the holders of the Corporate Units, Treasury Units and Cash Settled Units with respect to such pledged securities will be subject to our security interest therein. No holder of Corporate Units, Treasury Units or Cash Settled Units will be permitted to withdraw the pledged securities related to such Corporate Units, Treasury Units or Cash Settled Units from the pledge arrangement except:
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in the case of Corporate Units, to substitute a Treasury security or cash, as the case may be, for the related convertible preferred stock as provided for under Description of the Equity UnitsCreating Treasury Units by Substituting a Treasury Security for Convertible Preferred Stock and Description of the Equity UnitsCreating Cash Settled Units; |
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in the case of Treasury Units, to substitute convertible preferred stock for the related Treasury security, as provided for under Description of the Equity UnitsRecreating Corporate Units from Treasury Units; and |
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upon any early settlement, cash settlement or termination of the related purchase contracts. |
Subject to our security interest and the terms of the purchase contract and pledge agreement, each holder of Corporate Units, unless the Treasury portfolio has replaced the convertible preferred stock as a component of the Corporate Units, will be entitled through the purchase contract agent or transfer agent, as applicable, and the collateral agent to all of the proportional rights and preferences of the related convertible preferred stock. Each holder of Treasury Units and each holder of Corporate Units, if the Treasury portfolio has replaced the convertible preferred stock as a component of the Corporate Units, will retain ownership of the related Treasury securities or, solely with respect to the Treasury securities described in clause (1) of the definition applicable ownership interest, the applicable ownership interests in the Treasury portfolio, as applicable, pledged in respect of the related purchase contracts. Each holder of Cash Settled Units will retain ownership of the related cash pledged in respect of the related purchase contracts. We will have no interest in the pledged securities other than our security interest.
Except as described in Certain Provisions of the Purchase Contract and Pledge AgreementGeneral, upon receipt of distributions on the pledged securities, the collateral agent will distribute such payments to the purchase contract agent, which in turn will distribute those payments, together with contract adjustment payments received from us, to the holders in whose names the Corporate Units, Treasury Units or Cash Settled Units are registered at the close of business on the record date preceding the date of such distribution.
Certain Provisions of the Purchase Contract and Pledge Agreement
General
Except as described under Book-Entry System for Corporate Units, Treasury Units and Cash Settled Units below, payments on the Corporate Units, Treasury Units and Cash Settled Units will be payable, the purchase contracts will be settled and transfers of the Corporate Units, Treasury Units and Cash Settled Units will be registrable at the offices or agency of the purchase contract agent in the Borough of Manhattan, The City of New York. In addition, if the Corporate Units, Treasury Units or Cash Settled Units do not remain in book-entry only form, we have the option to make payments on the Corporate Units, Treasury Units and Cash Settled Units by check mailed to the address of the person entitled thereto as shown on the security register or by a wire transfer to the account designated by the holder by a prior written notice.
Shares of our common stock will be delivered on the purchase contract settlement date (or earlier upon early settlement), or, if the purchase contracts have terminated, the related pledged securities will be delivered (potentially after a delay as a result of the imposition of the automatic stay under the U.S. Bankruptcy Code or efforts by other parties to obtain other relief from the bankruptcy court, see Description of the Purchase ContractsTermination) at the offices or agency of the purchase contract agent or transfer agent, as applicable, upon presentation and surrender of the applicable Corporate Unit, Treasury Unit or Cash Settled Unit certificate, if in certificated form.
If Corporate Units, Treasury Units or Cash Settled Units are in certificated form and a holder fails to present and surrender the certificate evidencing the Corporate Units, Treasury Units or Cash Settled Units to the purchase contract agent on or prior to the purchase contract settlement date, the shares of our common stock issuable upon settlement of the related purchase contract will be registered in the name of the purchase contract agent. The shares of our common stock, together with any distributions, will be held by the purchase contract agent as agent for the benefit of the holder until the certificate is presented and surrendered or the holder provides satisfactory evidence that the certificate has been destroyed, lost or stolen, together with any indemnity or security that may be required by the purchase contract agent and us.
If the purchase contracts terminate prior to the purchase contract settlement date, the related pledged securities are transferred to the purchase contract agent for distribution to the holders, and a holder fails to present and surrender the certificate evidencing the holders Corporate Units, Treasury Units or Cash Settled Units, if in certificated form, to the purchase contract agent, the related pledged securities delivered to the purchase contract agent and payments on the pledged securities will be held by the purchase contract agent as agent for the benefit of the holder until the applicable certificate is presented, if in certificated form, or the holder provides the evidence and indemnity or security described above.
No service charge will be made for any registration of transfer or exchange of the Corporate Units, Treasury Units or Cash Settled Units, except for any tax or other governmental charge that may be imposed in connection therewith.
The purchase contract agent will have no obligation to invest or to pay interest on any amounts held by the purchase contract agent pending payment to any holder.
Modification
The purchase contract and pledge agreement contains provisions permitting us, the purchase contract agent and the collateral agent, to modify the purchase contract and pledge agreement without the consent of the holders for any of the following purposes:
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to evidence the succession of another corporation to our obligations; |
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to add to the covenants for the benefit of holders or to surrender any of our rights or powers under those agreements; |
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to evidence and provide for the acceptance of appointment of a successor purchase contract agent or a successor collateral agent or securities intermediary; |
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to conform the provisions of the purchase contract and pledge agreement to the description contained in this prospectus supplement; |
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to cure any ambiguity, defect or inconsistency; or |
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to make such other provisions in regard to matters or questions arising under the purchase contract and pledge agreement that do not adversely affect the interests of any holders of Equity Units in any material respect. |
The purchase contract and pledge agreement also contains provisions preventing us, the purchase contract agent and the collateral agent, subject to certain limited exceptions, from modifying the terms of the purchase contracts and the purchase contract and pledge agreement without the consent of the holders of not less than a majority of the outstanding purchase contracts. However, no modification may, without the consent of the holder of each outstanding purchase contract affected thereby:
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subject to our right to defer contract adjustment payments, change any payment date; |
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change the place or currency or method of payment or reduce any contract adjustment payments; |
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impair the right to institute suit for the enforcement of a purchase contract or any contract adjustment payment or deferred contract adjustment payment (including compounded contract adjustment payments thereon); |
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except as described under Description of the Purchase ContractsEarly Settlement or Anti-dilution Adjustments, reduce the number of shares of our common stock purchasable under a purchase contract, increase the purchase price of the shares of our common stock issuable on settlement of any purchase contract, change the purchase contract settlement date or the right to early settlement; |
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adversely affect the holders rights under a purchase contract in any material respect, provided that any amendment made solely to conform the provisions of the purchase contract and pledge agreement to the description contained in the prospectus supplement filed by us with the Securities and Exchange Commission on June 13, 2019 will not be deemed to adversely affect the interests of the holders; |
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change the amount or type of collateral required to be pledged to secure a holders obligations under the purchase contract and pledge agreement, impair the right of the holder of any purchase contract to receive distributions on such collateral, or otherwise adversely affect the holders rights in or to such collateral; |
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reduce any contract adjustment payments or any deferred contract adjustment payments (including compounded contract adjustment payments); or |
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reduce the above-stated percentage of outstanding purchase contracts whose holders consent is required for the modification or amendment of the provisions of the purchase contracts and the purchase contract and pledge agreement; |
provided that if any amendment or proposal would adversely affect only the Corporate Units, only the Treasury Units or only the Cash Settled Units, then only the affected voting group of holders will be entitled to vote on such amendment or proposal, and such amendment or proposal will not be effective except with the consent of the holders of not less than a majority of such voting group or, if referred to in the immediately preceding eight bullets above, all of the holders of such voting group.
We will be entitled to set any day as a record date for the purpose of determining the holders of outstanding Equity Units entitled to give or take any demand, direction, consent or other action under the Equity Units, in the manner and subject to the limitations provided in the purchase contract and pledge agreement. In certain circumstances, the purchase contract agent also will be entitled to set a record date for action by holders. If such a record date is set for any action to be taken by holders of particular Equity Units, such action may be taken only by persons who are holders of such Equity Units at the close of business on the record date.
No Consent to Assumption; Agreement by Purchasers
Each holder of a Corporate Unit, a Treasury Unit or a Cash Settled Unit is deemed under the terms of the purchase contract and pledge agreement, by the purchase of such Corporate Unit, Treasury Unit or Cash Settled Unit, to have expressly withheld any consent to the assumption (i.e., affirmance) of the related purchase contracts by us, our receiver, liquidator or trustee in the event that we become the subject of a case under the U.S. Bankruptcy Code or other similar state or federal law providing for reorganization or liquidation.
Consolidation, Merger and Conveyance of Assets as an Entirety
We will agree not to merge or consolidate with any other person or sell or convey all or substantially all of our assets to any person unless (i) either we are the continuing entity, or the successor entity (if other than us) is a corporation organized and existing under the laws of the United States of America or a State thereof or the District of Columbia and such corporation expressly assumes all of our responsibilities and liabilities under the purchase contracts, the Corporate Units, the Treasury Units, the Cash Settled Units, the purchase contract and pledge agreement and the remarketing agreement (if any) by one or more supplemental agreements in form satisfactory to the purchase contract agent and the collateral agent, executed and delivered to the purchase contract agent and the collateral agent by such corporation, and (ii) we or such successor corporation, as the case may be, will not, immediately after such merger or consolidation, or such sale or conveyance, be in default in the performance of any of its obligations or covenants under such agreements.
In case of any such consolidation, merger, sale or conveyance, and upon any such assumption by the successor corporation, such successor corporation shall succeed to and be substituted for us, with the same effect as if it had been named in the purchase contracts, the Corporate Units, the Treasury Units, the Cash Settled Units, the purchase contract and pledge agreement and the remarketing agreement (if any) as us and (other than in the case of a lease) we shall be relieved of any further obligation under the purchase contracts, the Corporate Units, the Treasury Units, the Cash Settled Units, the purchase contract and pledge agreement and the remarketing agreement (if any).
Title
We, the purchase contract agent and the collateral agent may treat the registered owner of any Corporate Units, Treasury Units or Cash Settled Units as the absolute owner of the Corporate Units, Treasury Units or Cash Settled Units for the purpose of making payment (subject to the record date provisions described above), settling the related purchase contracts and for all other purposes.
Replacement of Equity Unit Certificates
In the event that physical certificates have been issued, any mutilated Corporate Unit, Treasury Unit or Cash Settled Unit certificate will be replaced by us at the expense of the holder upon surrender of the certificate to the purchase contract agent. Corporate Unit, Treasury Unit or Cash Settled Unit certificates that become destroyed, lost or stolen will be replaced by us at the expense of the holder upon delivery to us and the purchase contract agent of evidence of their destruction, loss or theft satisfactory to us and the purchase contract agent. In the case of a destroyed, lost or stolen Corporate Unit, Treasury Unit or Cash Settled Unit certificate, an indemnity or security satisfactory to the purchase contract agent and us may be required at the expense of the holder before a replacement certificate will be issued.
Notwithstanding the foregoing, we will not be obligated to issue any Corporate Unit, Treasury Unit or Cash Settled Unit certificates on or after the business day immediately preceding the earliest of any early settlement date, any fundamental change early settlement date, the purchase contract settlement date or the date on which the purchase contracts have terminated. The purchase contract and pledge agreement will provide that, in lieu of the delivery of a replacement Corporate Unit, Treasury Unit or Cash Settled Unit certificate following any of these dates, the transfer agent, on behalf of the purchase contract agent, upon delivery of the evidence and indemnity or security described above, will deliver the shares of our common stock issuable pursuant to the purchase contracts included in the Corporate Units, Treasury Units or Cash Settled Units evidenced by the certificate, or, if the purchase contracts have terminated prior to the purchase contract settlement date, transfer the pledged securities included in the Corporate Units, Treasury Units or Cash Settled Units evidenced by the certificate.
Governing Law
The purchase contracts and the purchase contract and pledge agreement will be governed by, and construed in accordance with, the laws of the State of New York.
Information Concerning the Purchase Contract Agent
Deutsche Bank Trust Company Americas (or its successor) is the purchase contract agent. The purchase contract agent acts as the agent for the holders of Corporate Units, Treasury Units and Cash Settled Units. The purchase contract agent is not obligated to take any discretionary action in connection with a default under the terms of the Corporate Units, the Treasury Units, the Cash Settled Units or the purchase contract and pledge agreement.
The purchase contract and pledge agreement contains provisions limiting the liability of and providing indemnification to the purchase contract agent. The purchase contract and pledge agreement also contains provisions under which the purchase contract agent may resign or be replaced. Such resignation or replacement will be effective upon the appointment of a successor.
We and certain of our affiliates maintain banking relationships with Deutsche Bank Trust Company Americas or its affiliates. Deutsche Bank Trust Company Americas also serves as trustee or series trustee under other indentures under which we and certain of our affiliates have issued securities. Deutsche Bank Trust Company Americas and its affiliates have purchased, and are likely to purchase in the future, our securities and securities of our affiliates.
Information Concerning the Collateral Agent
HSBC Bank USA, National Association is the collateral agent. The collateral agent acts solely as our agent and has not assumed any obligation or relationship of agency or trust for or with any of the holders of the Corporate Units, the Treasury Units and the Cash Settled Units except for the obligations owed by a pledgee of property to the owner thereof under the purchase contract and pledge agreement and applicable law.
The purchase contract and pledge agreement contains provisions limiting the liability of and providing indemnification to the collateral agent. The purchase contract and pledge agreement also contains provisions under which the collateral agent may resign or be replaced. Such resignation or replacement will be effective upon the appointment of a successor.
Miscellaneous
The purchase contract and pledge agreement provides that we will pay all fees and expenses (including fees and expenses of counsel) related to the retention of the collateral agent and the purchase contract agent. Holders who elect to substitute the related pledged securities, thereby creating Treasury Units or Cash Settled Units or recreating Corporate Units, however, will be responsible for any fees or expenses (including fees and expenses of counsel) payable in connection with such substitution, as well as for any commissions, fees or other expenses incurred in acquiring the pledged securities to be substituted. We will not be responsible for any such fees or expenses.
Book-Entry System for Corporate Units, Treasury Units and Cash Settled Units
The Depository Trust Company, or DTC, which we refer to along with its successors in this capacity as the depositary, acts as securities depositary for the Corporate Units, Treasury Units and Cash Settled Units. The Corporate Units, Treasury Units and Cash Settled Units were issued as fully registered securities registered in the name of Cede & Co., the depositarys nominee. One or more fully registered global security certificates, representing the total aggregate number of Corporate Units, Treasury Units and Cash Settled Units, were issued and deposited with the depositary or its custodian and bear a legend regarding the restrictions on exchanges and registration of transfer referred to below.
The laws of some jurisdictions may require that some purchasers of securities take physical delivery of securities in certificated form. These laws may impair the ability to transfer beneficial interests in the Corporate Units, Treasury Units and Cash Settled Units so long as the Corporate Units, Treasury Units and Cash Settled Units are represented by global security certificates.
DTC advises that it is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code and a clearing agency registered pursuant to the provisions of Section 1A of the Exchange Act. The depositary holds securities that its participants deposit with the depositary. The depositary also facilitates the settlement among participants of securities transactions, including transfers and pledges, in deposited securities through electronic computerized book-entry changes in participants accounts, thereby eliminating the need for physical movement of securities certificates. Direct participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. The depositary is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (DTCC). DTCC is the holding company for DTC, National Securities Clearing Corporation, and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the depositarys system is also available to others, including securities brokers and dealers, banks, trust companies and clearing corporations that clear transactions through or maintain a custodial relationship with a direct participant, either directly or indirectly. The rules applicable to the depositary and its participants are on file with the SEC.
We will issue the Corporate Units, Treasury Units and Cash Settled Units in definitive certificated form if the depositary notifies us that it is unwilling or unable to continue as depositary or the depositary ceases to be a clearing agency registered under the Exchange Act and a successor depositary is not appointed by us within 90 calendar days. In addition, beneficial interests in a global security certificate may be exchanged for definitive certificated Corporate Units, Treasury Units or Cash Settled Units upon request by or on behalf of the depositary in accordance with customary procedures following the request of a beneficial owner seeking to exercise or enforce its rights under such Corporate Units, Treasury Units or Cash Settled Units. If we determine at any time that the Corporate Units, Treasury Units or Cash Settled Units shall no longer be represented by global security certificates, we will inform the depositary of such determination and the depositary will, in turn, notify participants of their right to withdraw their beneficial interest from the global security certificates, and if such participants elect to withdraw their beneficial interests, we will issue certificates in definitive form in exchange for such beneficial interests in the global security certificates. Any global Corporate Unit, Treasury Unit or Cash Settled Unit, or portion thereof that is exchangeable pursuant to this paragraph will be exchangeable for Corporate Unit, Treasury Unit or Cash Settled Unit certificates, as the case may be, registered in the names directed by the depositary. We expect that these instructions will be based upon directions received by the depositary from its participants with respect to ownership of beneficial interests in the global security certificates.
As long as the depositary or its nominee is the registered owner of the global security certificates, the depositary or its nominee, as the case may be, will be considered the sole owner and holder of the global security certificates and all Corporate Units, Treasury Units and Cash Settled Units represented by these certificates for all purposes under the Corporate Units, Treasury Units, Cash Settled Units and the purchase contract and pledge agreement. Except in the limited circumstances referred to above, owners of beneficial interests in global security certificates:
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will not be entitled to have the Corporate Units, the Treasury Units or the Cash Settled Units represented by these global security certificates registered in their names, and |
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will not be considered to be owners or holders of the global security certificates or any Corporate Units, Treasury Units or Cash Settled Units represented by these certificates for any purpose under the Corporate Units, Treasury Units, Cash Settled Units or the purchase contract and pledge agreement. |
All payments on the Corporate Units, Treasury Units and Cash Settled Units represented by the global security certificates and all transfers and deliveries of related convertible preferred stock, Treasury securities, cash and common stock will be made to the depositary or its nominee, as the case may be, as the holder of the securities.
Ownership of beneficial interests in the global security certificates will be limited to participants or persons that may hold beneficial interests through institutions that have accounts with the depositary or its nominee. Ownership of beneficial interests in global security certificates will be shown only on, and the transfer of those ownership interests will be effected only through, records maintained by the depositary or its nominee, with respect to participants interests, or any participant, with respect to interests of persons held by the participant on their behalf. Procedures for settlement of purchase contracts on the purchase contract settlement date, or upon early settlement, will be governed by arrangements among the depositary, participants and persons that may hold beneficial interests through participants designed to permit settlement without the physical movement of certificates. Payments, transfers, deliveries, exchanges and other matters relating to beneficial interests in global security certificates may be subject to various policies and procedures adopted by the depositary from time to time. None of us, the purchase contract agent or any agent of us or the purchase contract agent will have any responsibility or liability for any aspect of the depositarys or any participants records relating to, or for payments made on account of, beneficial interests in global security certificates, or for maintaining, supervising or reviewing any of the depositarys records or any participants records relating to these beneficial ownership interests.
Although the depositary has agreed to the foregoing procedures in order to facilitate transfers of interest in the global security certificates among participants, the depositary is under no obligation to perform or continue to perform these procedures, and these procedures may be discontinued at any time. We will not have any responsibility for the performance by the depositary or its direct participants or indirect participants under the rules and procedures governing the depositary.
The information in this section concerning the depositary and its book-entry system has been obtained from sources that we believe to be reliable, but we have not attempted to verify the accuracy of this information.
Description of the Convertible Preferred Stock
General
In connection with the issuance of the Corporate Units, we amended our articles of incorporation creating a new series of our preferred stock designated as the 1.75% Series A Cumulative Perpetual Convertible Preferred Stock, which we refer to as the convertible preferred stock. We shall not (i) change any terms of the convertible preferred stock except as set forth in the preferred stock articles of amendment and (ii) issue any additional shares of the convertible preferred stock other than in accordance with the preferred stock articles of amendment.
In connection with the issuance of the Corporate Units, we issued 1,610,000 shares of convertible preferred stock. Upon issuance, the convertible preferred stock was validly issued, fully paid and non-assessable.
Each Corporate Unit includes a 1/10, or 10%, undivided beneficial ownership interest in one share of convertible preferred stock with an initial $1,000 liquidation preference that corresponds to the stated amount of $100 per Corporate Unit.
We do not intend to list the convertible preferred stock that are not a part of Corporate Units on any securities exchange.
Ranking
The convertible preferred stock, with respect to dividend rights or rights upon our liquidation, winding-up or dissolution, ranks:
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senior to all classes or series of our common stock and to any other class or series of our capital stock expressly designated as ranking junior to the convertible preferred stock; |
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on parity with any other class or series of our capital stock expressly designated as ranking on parity with the convertible preferred stock; |
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junior to any other class or series of our capital stock expressly designated as ranking senior to the convertible preferred stock; and |
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junior to our existing and future indebtedness and other liabilities (including trade payables). |
The term capital stock does not include convertible or exchangeable debt securities, which, prior to conversion or exchange, will rank senior in right of payment to the shares of convertible preferred stock.
In the case of our liquidation, dissolution or winding up, holders of the convertible preferred stock will not have the right to receive any payment or distribution unless all of our liabilities are first paid in full and the priority of any senior stock is satisfied.
Other than the 800,000 shares of 4.65% Series B Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock with a liquidation preference of $1,000 per share that we issued in December 2019, we currently have no capital stock outstanding that is senior to or on parity with the convertible preferred stock, and we own all of the equity interest of our subsidiaries. Our indebtedness is senior in right of payment to the convertible preferred stock. In addition, the convertible preferred stock will be structurally subordinated to all debt, preferred stock and other liabilities of our subsidiaries, which means that creditors and any preferred stockholders of our subsidiaries will be paid from the assets of such subsidiaries before holders of the convertible preferred stock would have any claims to those assets.
Dividends
Holders of the convertible preferred stock will receive when, as and if authorized by our board of directors and declared by us, cumulative dividends at the rate of 1.75% per year (the dividend rate) on the $1,000 liquidation preference per share of the convertible preferred stock, payable in cash, shares of our common stock, or a combination of cash and shares of our common stock, at our election.
Dividends will accumulate from the most recent date of payment, and will be payable to investors quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, each a dividend payment date, to the person whose name appears in our stock records at the close of business on the applicable record date, which will be the fifteenth day of the month immediately preceding the month in which the relevant dividend payment date falls (whether or not a business day) or, with respect to any dividend payment date scheduled to occur on or prior to June 1, 2022, if (x) the Corporate Units are held in global book-entry form and (y) separate shares of the convertible preferred stock are held in global book-entry form, the record date will be the business day immediately preceding the applicable dividend payment date. We refer to each period beginning on and including a dividend payment date (or, if no dividends have been paid on the convertible preferred stock, the date of first issuance) to, but excluding, the next dividend payment date as a dividend period.
We will calculate dividends on the convertible preferred stock on the basis of a 360-day year of twelve 30-day months. Dollar amounts resulting from that calculation will be rounded to the nearest cent, with one-half cent being rounded upward. Dividends on the convertible preferred stock will cease to accumulate upon conversion, as described below.
If a dividend payment date falls on a date that is not a business day, such dividend payment date will be postponed to the next succeeding business day, provided that, if such business day falls in the next succeeding calendar month, the dividend payment date will be brought forward to the immediately preceding business day.
Dividends on the convertible preferred stock will accumulate whether or not:
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we have earnings; |
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the payment of those dividends is then permitted under Virginia law; or |
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those dividends are authorized or declared. |
So long as any shares of convertible preferred stock remain outstanding, except as described in the second following paragraph, unless full cumulative dividends on the convertible preferred stock for all past dividend periods (including compounded dividends thereon) shall have been or contemporaneously are declared and paid or declared and a sum or number of shares of common stock sufficient for the payment thereof is set apart for payment, we will not:
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declare and pay or declare and set aside for payment of dividends, and we will not declare and make any distribution of cash or other property, directly or indirectly, on or with respect to any shares of our common stock or shares of any other class or series of our capital stock ranking, as to dividends, on parity with or junior to the convertible preferred stock, for any period; |
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redeem, purchase or otherwise acquire for any consideration, or make any other distribution of cash or other property, directly or indirectly, on or with respect to, or pay or make available any monies for a sinking fund for the redemption of, any common stock or shares of any other class or series of our capital stock ranking, as to dividends or upon liquidation, on parity with or junior to the convertible preferred stock; or |
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make any contract adjustment payments under the purchase contracts or any payment under any similar agreement providing for the issuance by us of capital stock on a forward basis. |
The foregoing sentence, however, will not prohibit:
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purchases, redemptions or other acquisitions of shares of capital stock ranking junior to the convertible preferred stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of current or former employees, officers, directors or consultants; |
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purchases of shares of our common stock pursuant to a contractually binding requirement to buy stock existing prior to the commencement of the first dividend period for which dividends are unpaid, including under a contractually binding stock repurchase plan; |
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the purchase of, or the payment of cash in lieu of, fractional interests in shares of capital stock ranking junior to the convertible preferred stock issued by us (i) in connection with a bona fide acquisition of a business or (ii) pursuant to the conversion or exchange provisions of such capital stock or securities convertible into or exchangeable for such capital stock; |
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any declaration of a dividend on our capital stock in connection with the implementation of a shareholders rights plan designed to protect us against unsolicited offers to acquire our capital stock, or the issuance of our capital stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto; |
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dividends or distributions payable solely in capital stock ranking junior to the convertible preferred stock, or warrants, options or rights to acquire such capital stock, other than any indebtedness or our capital stock ranking, as to dividends or upon liquidation, on parity with or senior to the convertible preferred stock, in each case, convertible into our capital stock ranking junior to the convertible preferred stock; or |
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the conversion into or exchange for other shares of any class or series of capital stock ranking junior to the convertible preferred stock. |
We will not permit any of our subsidiaries to purchase or otherwise acquire for consideration any shares of our stock unless we could, under the above paragraph, purchase or otherwise acquire such shares at such time and in such manner. We refer to the provisions described in this paragraph and the above paragraph as the dividend blocker provisions.
When we do not pay dividends in full (or do not set apart a sum sufficient to pay them in full) on the convertible preferred stock and the shares of any other class or series of capital stock ranking, as to dividends, on parity with the convertible preferred stock, we will declare any dividends upon the convertible preferred stock and each such other class or series of capital stock ranking, as to dividends, on parity with the convertible preferred stock pro rata, so that the amount of dividends declared per share of the convertible preferred stock and such other class or series of capital stock will in all cases bear to each other the same ratio that accumulated and unpaid dividends per share on the convertible preferred stock and such other class or series of capital stock (which will not include any accumulation in respect of unpaid dividends on such other class or series of capital stock for prior dividend periods if such other class or series of capital stock does not have a cumulative dividend) bear to each other.
Any accumulated and unpaid dividends will accumulate additional dividends at the then-current dividend rate until paid, compounded quarterly, to, but excluding, the payment date. We refer to these additional dividends that accumulate on accumulated and unpaid dividends as compounded dividends and the payments in respect thereof as compounded dividend payments.
Holders of shares of the convertible preferred stock are not entitled to any dividends in excess of the full cumulative dividends (including compounded dividends) on the convertible preferred stock as described above. Any dividend payment made on the convertible preferred stock will first be credited against the earliest accumulated but unpaid dividends due with respect to those shares which remain payable.
No dividend will be paid unless and until our board of directors, or an authorized committee of our board of directors, declares a dividend payable with respect to the convertible preferred stock. Our ability to declare and pay dividends and make other distributions with respect to our capital stock, including the convertible preferred stock, may be limited by the terms of any indentures, loan agreements or other financing arrangements that we enter into in the future. In addition, our ability to declare and pay dividends may be limited by applicable Virginia law. Notwithstanding the foregoing, except in the case of a dividend deficiency event, all accumulated and unpaid dividends (including compounded dividends thereon), whether or not declared, will be paid on the purchase contract settlement date, whether or not there is a successful remarketing to the holders of the shares of convertible preferred stock as of the record date immediately preceding the purchase contract settlement date. If a dividend deficiency event occurs, following the final remarketing (whether successful or failed), we shall have no obligation to pay the then accumulated but unpaid dividends on the convertible preferred stock on the purchase contract settlement date to the holders of the shares of convertible preferred stock as of the record date immediately preceding the purchase contract settlement date. However, the right to receive such accumulated but unpaid dividends (including compounded dividends thereon) shall continue to exist (and shall continue to compound) with respect to such convertible preferred stock notwithstanding such remarketing, and such dividends shall be payable to the holders of such convertible preferred stock as of the record date for the dividend payment date on which such dividends are subsequently declared and paid (if ever).
Method of Payment of Dividends
Subject to the limitations described below, we may pay any dividend (or any portion of any dividend) on the convertible preferred stock (whether or not for a current dividend period or any prior dividend period), determined in the sole discretion of our board of directors, or an authorized committee thereof:
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in cash; |
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by delivery of shares of our common stock; or |
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through any combination of cash and shares of our common stock. |
We will make each payment of a dividend on the convertible preferred stock in cash, except to the extent we elect to make all or any portion of such payment in shares of our common stock. We will give the holders of the convertible preferred stock notice of any such election and the portion of such payment that will be made in cash and the portion that will be made in common stock no later than eight scheduled trading days prior to the dividend payment date for such dividend.
If we elect to make any such payment of a dividend, or any portion thereof, in shares of our common stock, such shares shall be valued for such purpose at the applicable five-day average price, multiplied by 97%.
No fractional shares of common stock will be delivered to the holders of the convertible preferred stock in respect of dividends. We will instead pay a cash adjustment to each holder that would otherwise be entitled to a fraction of a share of common stock based on (i) the five-day average price and (ii) the aggregate number of shares of convertible preferred stock held by such holder (or, if the convertible preferred stock is held in global book-entry form, based on the applicable procedures of the depositary for determining such number of shares).
To the extent a shelf registration statement is required in our reasonable judgment in connection with the issuance of or for resales of common stock issued as payment of a dividend, we will, to the extent such a registration statement is not currently filed and effective, use our reasonable best efforts to file and maintain the effectiveness of such a shelf registration statement until the earlier of such time as all such shares of common stock have been resold thereunder and such time as all such shares are freely tradable under Rule 144 by non-affiliates of ours without registration. To the extent applicable, we will also use our reasonable best efforts to have the shares of common stock qualified or registered under applicable state securities laws, if required, and approved for listing on the New York Stock Exchange (or if our common stock is not listed on the New York Stock Exchange, on the principal other U.S. national or regional securities exchange on which our common stock is then listed).
Any dividends paid in shares of our common stock will be subject to the listing standards of the New York Stock Exchange, if applicable.
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, before any distribution or payment shall be made to holders of shares of our common stock or any other class or series of capital stock ranking, as to rights upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, junior to the convertible preferred stock, holders of shares of the convertible preferred stock are entitled to be paid out of our assets legally available for distribution to our stockholders, after payment of or provision for our debts and other liabilities, a liquidation preference of $1,000 per share of the convertible preferred stock, plus an amount equal to any accumulated and unpaid dividends (whether or not authorized or declared) up to but excluding the date of payment, but subject to the prior payment in full of all our liabilities and the payment of our senior stock. If, upon our voluntary or involuntary liquidation, dissolution or winding up, our available assets are insufficient to pay the full amount of the liquidating distributions on all outstanding shares of the convertible preferred stock and the corresponding amounts payable on all shares of each other class or series of capital stock ranking, as to liquidation rights, on parity with the convertible preferred stock in the distribution of assets, then holders of shares of the convertible preferred stock and each such other class or series of capital stock ranking, as to voluntary or involuntary liquidation rights, on parity with the convertible preferred stock will share ratably in any distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.
Holders of shares of the convertible preferred stock will be entitled to written notice of any event triggering the right to receive a distribution in connection with any voluntary or involuntary liquidation, dissolution or winding up of our affairs. After payment of the full amount of the liquidating distributions to which they are entitled, holders of shares of the convertible preferred stock will have no right or claim to any of our remaining assets. Our consolidation or merger with or into any other corporation, trust or other entity, or the voluntary sale, lease, transfer or conveyance of all or substantially all of our property or business, will not be deemed to constitute a liquidation, dissolution or winding up of our affairs.
No Maturity
The convertible preferred stock has no maturity date, but we are permitted to redeem the convertible preferred stock as described under Optional Redemption. Accordingly, the convertible preferred stock will remain outstanding indefinitely unless a holder of shares of the convertible preferred stock decides, subject to satisfaction of the conditions described herein, to convert it, or we elect to redeem it. See Conversion Rights, and Optional Redemption below.
Optional Redemption
We do not have the right to redeem any shares of the convertible preferred stock before September 1, 2022. On or after September 1, 2022, we will have the option to redeem some or all the shares of the convertible preferred stock at a redemption price equal to 100% of the liquidation preference per share, plus any accumulated and unpaid dividends, if any (whether or not declared) to, but excluding, the redemption date. The redemption price will be paid solely in cash.
In the event of a redemption, we will request that the depositary notify its participants holding convertible preferred stock or, if the convertible preferred stock is in certificated form, send a written notice by first class mail to each holder of record of the convertible preferred stock at such holders registered address, not fewer than 25 scheduled trading days nor more than 90 calendar days prior to the redemption date, stating, among other things, the redemption price and the settlement method of the convertible preferred stock if the holder elects to convert. In addition, we will (i) issue a press release containing such information and (ii) publish such information on our website. In no event will we give any notice of redemption prior to the earlier of a remarketing settlement date and the purchase contract settlement date.
If we give notice of redemption, then, by 12:00 p.m., New York City time, on the redemption date, to the extent funds are legally available, we shall, with respect to:
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shares of the convertible preferred stock held by DTC or its nominees, deposit or cause to be deposited, irrevocably with DTC cash sufficient to pay the redemption price and will give DTC irrevocable instructions and authority to pay the redemption price to holders of such shares of the convertible preferred stock; and |
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shares of the convertible preferred stock held in certificated form, deposit or cause to be deposited, irrevocably with the paying agent cash sufficient to pay the redemption price and will give the paying agent irrevocable instructions and authority to pay the redemption price to holders of such shares of the convertible preferred stock upon surrender to the paying agent of their certificates evidencing their shares of the convertible preferred stock. |
If on the redemption date DTC or the paying agent holds cash sufficient to pay the redemption price for the shares of the convertible preferred stock delivered for redemption in accordance with the terms of the certificate of designations, dividends will cease to accumulate on those shares of the convertible preferred stock called for redemption and all rights of holders of such shares will terminate except for the right to receive the redemption price. Payment of the redemption price for the shares of the convertible preferred stock is conditioned upon book-entry transfer of or physical delivery of certificates representing the convertible preferred stock, together with necessary endorsements, to the paying agent, or to the paying agents account at DTC, at any time after delivery of the redemption notice. Payment of the redemption price for the convertible preferred stock will be made (i) if book-entry transfer of or physical delivery of the convertible preferred stock has been made by or on the redemption date, on the redemption date, or (ii) if book-entry transfer of or physical delivery of the convertible preferred stock has not been made by or on such date, at the time of book-entry transfer of or physical delivery of the convertible preferred stock.
If the redemption date falls after a dividend payment record date and before the related dividend payment date, holders of the shares of convertible preferred stock at the close of business on that dividend payment record date will be entitled to receive the full dividend payable on those shares on the corresponding dividend payment date. The redemption price payable on such redemption date will include only the liquidation preference, but will not include any amount in respect of dividends declared and payable on such corresponding dividend payment date.
In the case of any partial redemption, we will select the shares of convertible preferred stock to be redeemed on a pro rata basis, by lot or any other method that we, in our discretion, deem fair and appropriate.
We do not have the right to authorize, issue a press release or give notice of redemption unless (a) we have funds legally available for the payment of the aggregate redemption price and (b) prior to giving the notice, (i) all accumulated and unpaid dividends on the convertible preferred stock (whether or not declared) for dividend periods ended prior to the date of such notice of redemption shall have been or contemporaneously are declared and paid and (ii) if the redemption date occurs following a record date and prior to the related dividend payment date, a cash dividend for the related dividend period has been declared and sufficient funds have been set aside for payment of such dividend.
Limited Voting Rights
Holders of shares of the convertible preferred stock generally do not have any voting rights, except as set forth below and as required by law. In matters where holders of the convertible preferred stock are entitled to vote, each share of the convertible preferred stock shall be entitled to one vote.
Preferred Stock Directors
If at any time dividends on the convertible preferred stock have not been declared and paid in full for six or more dividend periods, whether or not consecutive (which we refer to as a preferred dividend default), holders of shares of the convertible preferred stock (voting together as a class with the holders of all other classes or series of preferred stock upon which like voting rights have been conferred and are exercisable (and with voting rights allocated pro rata based on the liquidation preference of the convertible preferred stock and each such other class or series of preferred stock)) will be entitled to vote for the election of two additional directors to serve on our board of directors (which we refer to as preferred stock directors), until all accumulated unpaid dividends with respect to the convertible preferred stock and any other class or series of preferred stock upon which like voting rights have been conferred and are exercisable have been paid or declared and a sum sufficient for payment is set aside for such payment. In such a case, the number of directors serving on our board of directors will be increased by two. The preferred stock directors will be elected by a plurality of the votes cast in the election to serve until the next annual meeting and each preferred stock director will serve until his successor is duly elected and qualifies or until the directors right to hold the office terminates, whichever occurs earlier. The election will take place at:
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a special meeting called by holders of at least 10% of the outstanding shares of the convertible preferred stock together with any other class or series of preferred stock upon which like voting rights have been conferred and are exercisable, if this request is received more than 90 calendar days before the date fixed for our next annual or special meeting of stockholders or, if we receive the request for a special meeting within 90 calendar days before the date fixed for our next annual or special meeting of stockholders, at our annual or special meeting of stockholders; and |
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each subsequent annual meeting (or special meeting held in its place) until all accumulated dividends on the convertible preferred stock and on any other class or series of preferred upon which like voting rights have been conferred and are exercisable have been paid in full for all past dividend periods and the dividend for the then current dividend period shall have been fully paid or declared and a sum sufficient for the payment thereof set aside for payment. |
If and when all accumulated dividends on the convertible preferred stock and all other classes or series of preferred stock upon which like voting rights have been conferred and are exercisable shall have been paid in full or a sum sufficient for such payment in full is set aside for payment, holders of shares of the convertible preferred stock shall be divested of the voting rights set forth above (subject to re-vesting in the event of any subsequent preferred dividend defaults) and the term of office of such preferred stock directors so elected will terminate and the entire board of directors will be reduced accordingly. Each preferred stock director shall be entitled to one vote on any matter.
When a Supermajority Vote is Required
So long as any shares of the convertible preferred stock remain outstanding, we will not, without the consent or the affirmative vote of the holders of at least two-thirds of the outstanding shares of the convertible preferred stock together with each other class or series of preferred stock ranking on parity with the convertible preferred stock with respect to the payment of dividends and the distribution of assets upon our liquidation, dissolution or winding up and upon which like voting rights have been conferred (voting as a single class):
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authorize, create or issue, or increase the number of authorized or issued shares of, any class or series of stock ranking senior to the convertible preferred stock with respect to payment of dividends, or the distribution of assets upon the liquidation, dissolution or winding up of our affairs, or reclassify any of our authorized capital stock into any such shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such shares; |
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amend, alter or repeal the provisions of our articles of incorporation so as to materially and adversely affect any right, preference, privilege or voting power of the convertible preferred stock; or |
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consummate a binding share exchange or reclassification involving the shares of convertible preferred stock or a merger or consolidation of us with another entity, unless either (i) the shares of convertible preferred stock remain outstanding and have rights, preferences, privileges and voting powers, taken as a whole, that are no less favorable to the holders thereof than the rights, preferences, privileges and voting powers of the convertible preferred stock immediately prior to such consummation, taken as a whole, or (ii) in the case of any such merger or consolidation with respect to which we are not the surviving or resulting entity, the shares of convertible preferred stock are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, such surviving or resulting entity or ultimate parent is organized under the laws of the United States, any state thereof or the District of Columbia and treated as a corporation for U.S. federal income tax purposes, and such preference securities have rights, preferences, privileges and voting powers, taken as a whole, that are no less favorable to the holders thereof than the rights, preferences, privileges and voting powers of the convertible preferred stock immediately prior to such consummation, taken as a whole; |
provided that the creation and issuance, or an increase in the authorized or issued amount, whether pursuant to pre-emptive or similar rights or otherwise, of any series of preferred stock (including the convertible preferred stock), ranking equally with and/or junior to the convertible preferred stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and the distribution of assets upon our liquidation, dissolution and winding-up, shall not be deemed to adversely affect the rights, preferences, privileges or voting powers of the convertible preferred stock, and shall not require the affirmative vote or consent of the holders of the convertible preferred stock.
If any amendment, alteration, repeal, share exchange, reclassification, merger or consolidation specified above would adversely affect one or more but not all series of parity stock (including the convertible preferred stock for this purpose), then only the one or more series of parity stock adversely affected and entitled to vote, rather than all series of parity stock, shall vote as a class.
Without the consent of the holders of the convertible preferred stock, so long as such action does not adversely affect the special rights, preferences, privileges or voting powers of the convertible preferred stock, and limitations and restrictions thereof, we may amend, alter, supplement, or repeal any terms of the convertible preferred stock for the following purposes:
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to cure any ambiguity or mistake, or to correct or supplement any provision contained in the preferred stock articles of amendment that may be defective or inconsistent with any other provision contained in such preferred stock articles of amendment; |
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to make any provision with respect to matters or questions relating to the convertible preferred stock that is not inconsistent with the provisions of the preferred stock articles of amendment; |
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to waive any of our rights with respect thereto; or |
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make any other change to the terms of the convertible preferred stock; |
provided that any such amendment, alteration, supplement or repeal of any terms of the convertible preferred stock effected in order to (1) conform the terms thereof to the description of the terms of the convertible preferred stock set forth under Description of the Convertible Preferred Stock in the preliminary prospectus supplement filed by us with the Securities and Exchange Commission on June 10, 2019 as supplemented and/or amended by the related pricing term sheet or (2) implement the changes under Increased Dividend Rate and Increased Conversion Rate, as the case may be, shall be deemed not to adversely affect the special rights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the convertible preferred stock.
Holders of shares of the convertible preferred stock will not be entitled to vote with respect to any increase in the total number of authorized shares of our common stock or preferred stock, any increase in the number of authorized shares of the convertible preferred stock or the creation or issuance of any other class or series of capital stock, or any increase in the number of authorized shares of any other class or series of capital stock, in each case, ranking on parity with or junior to the convertible preferred stock with respect to the payment of dividends and the distribution of assets upon liquidation, dissolution or winding up, except as set forth above.
Holders of shares of the convertible preferred stock will not have any voting rights with respect to, and the consent of the holders of shares of the convertible preferred stock is not required for, the taking of any corporate action, including any merger or consolidation involving us or a sale of all or substantially all of our assets, regardless of the effect that such merger, consolidation or sale may have upon the powers, preferences, voting power or other rights or privileges of the convertible preferred stock, except as set forth above.
In addition, the voting provisions above will not apply if, at or prior to the time when the act with respect to which the vote would otherwise be required would occur, we have redeemed upon proper procedures all outstanding shares of the convertible preferred stock.
Conversion Rights
General
Holders of Corporate Units do not have the right to convert their ownership interests in the convertible preferred stock that are a part of such Corporate Units. Only shares of convertible preferred stock that are not a part of Corporate Units may be so converted. Holders of such separate shares of convertible preferred stock that are not a part of Corporate Units may convert their shares into common stock (or cash or a combination of cash and common stock, at our election) at their option prior to June 1, 2022 only upon the occurrence of a fundamental change. In order for a holder of Corporate Units to separate their convertible preferred stock from the purchase contracts in order to convert the convertible preferred stock following a fundamental change, the holder must either (1) create Treasury Units or
(2) settle the related purchase contracts early with separate cash, as described under Description of the Purchase ContractsEarly Settlement Upon a Fundamental Change above. If a fundamental change occurs, holders of separate shares of convertible preferred stock can convert such shares at any time from or after the effective date of such transaction until the related fundamental change conversion deadline (as defined below).
On and after June 1, 2022, holders of shares of the convertible preferred stock may, at their option, at any time and from time to time, convert some or all of their outstanding shares of the convertible preferred stock.
The conversion rate will initially be 11.2750 shares of our common stock per share of convertible preferred stock, which is equivalent to an initial conversion price of approximately $88.69 per share of our common stock. Upon conversion of the convertible preferred stock, we will settle our obligations in the manner set forth under Settlement Upon Conversion.
Upon settlement of a conversion of the convertible preferred stock and except as set forth in the immediately succeeding paragraph, a holder will not receive payment of accumulated and unpaid dividends as described under Dividends and we will not make any payments in respect of or adjust the conversion rate to account for accumulated and unpaid dividends to the conversion date except as provided under Adjusted Conversion Rate Upon a Fundamental Change.
If a holder of shares of convertible preferred stock exercises its conversion rights, on and after the conversion date, those shares will cease to accumulate dividends as of the end of the day immediately preceding the date of conversion. A holder of shares of convertible preferred stock on the record date for the payment of a dividend will receive that dividend notwithstanding a conversion of the convertible preferred stock following such record date to the dividend payment date. However, convertible preferred stock surrendered for conversion after the close of business on any record date for the payment of dividends declared and before the opening of business on the dividend payment date relating to that record date must be accompanied by a payment in cash of an amount equal to the dividend payable in respect of those shares for the dividend period in which the shares are converted; provided that no such payment need be made:
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if we have specified a redemption date that is after a dividend payment record date and on or prior to the corresponding dividend payment date; or |
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if we have specified a fundamental change conversion deadline that is after a dividend payment record date and on or prior to the corresponding dividend payment date. |
In case any shares of convertible preferred stock are to be redeemed, the right to convert those shares of the convertible preferred stock will terminate at 5:00 p.m., New York City time, on the business day immediately preceding the redemption date unless we default in the payment of the redemption price of those shares.
Adjusted Conversion Rate Upon a Fundamental Change
If a fundamental change (as defined in Description of the Purchase ContractsEarly Settlement Upon a Fundamental Change above) occurs, a holder may elect to convert separate shares of convertible preferred stock in connection with the fundamental change (the right of conversion, fundamental change conversion right). If the stock price (as defined in Description of the Purchase ContractsEarly Settlement Upon a Fundamental ChangeCalculation of Make-Whole Shares above) is less than $88.69 (which we refer to as the conversion price, and which initially equals the conversion price of the convertible preferred stock), any such conversion in connection with the fundamental change will be at an adjusted conversion rate that will be equal to the $1,000 liquidation preference plus all accumulated and unpaid dividends to, but excluding the fundamental change settlement date described below (unless the conversion date for a share of convertible preferred stock occurs after the record date for the payment of declared dividends and prior to the related dividend payment date, in which case the conversion rate calculation for such share will not include accumulated and unpaid dividends that will be paid to holders of record on such record date) divided by the average of the closing prices of our common stock for the five consecutive trading days ending on the second business day prior to the fundamental change settlement date (or, in the case of a fundamental change described in clause (ii) of the definition of fundamental change where the holders of our common stock receive only cash in the fundamental change, the cash amount paid per share of our common stock) (the fundamental change settlement price). Notwithstanding the foregoing, in no event will the conversion rate exceed 27.0599 shares of common stock per share of convertible preferred stock (subject to adjustment as set forth under Conversion Rate Adjustments and increase as set forth under Increased Dividend Rate and Increased Conversion Rate), which is equal to the $1,000 liquidation preference divided by 50% of the reference price.
The reference price will be adjusted as of any date on which the conversion rate of the convertible preferred stock is adjusted. The adjusted reference price will equal the reference price applicable immediately prior to such adjustment multiplied by a fraction, the numerator of which is the conversion rate immediately prior to the adjustment giving rise to the stock price adjustment and the denominator of which is the conversion rate as so adjusted. The conversion price as of any time is equal to $1,000 divided by the conversion rate as of such time.
A conversion of the convertible preferred stock will be deemed for these purposes to be in connection with such a fundamental change (regardless of the stock price) if the conversion date occurs from, and including, the effective date of such fundamental change to, and including, the date we specified in the fundamental change company notice as the last date on which a holder of the convertible preferred stock may exercise the fundamental change conversion right for that fundamental change, which we refer to as the fundamental change conversion deadline. The fundamental change conversion deadline will be a date no less than 20 business days nor more than 35 business days after the effective date of such fundamental change; provided that if any purchase contracts are outstanding at the time we give the fundamental change company notice, such date shall not be less than 10 business days following the fundamental change early settlement date we specify for the purchase contracts as described under Description of the Purchase ContractsEarly Settlement Upon a Fundamental Change.
We will send a notice to holders of the convertible preferred stock of a fundamental change within five business days after the effective date of the fundamental change (the fundamental change company notice). Such fundamental change company notice will state:
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the events constituting the fundamental change; |
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the effective date of the fundamental change; |
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the name and address of the paying agent and the conversion agent; |
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the conversion rate and any adjustment to the conversion rate that will result from the fundamental change, or if the stock price is less than the conversion price, the formula for determination of the conversion rate; |
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the procedures that the holder of the convertible preferred stock must follow to exercise the fundamental change conversion right; |
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the fundamental change conversion deadline; |
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the settlement method for all conversions in exercise of the fundamental change conversion right, including, in the case of combination settlement, the amount of cash per share of convertible preferred stock we will pay in settlement of any such conversions; and |
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if the stock price is less than the conversion price, the date on which all conversions in exercise of the fundamental change conversion right will be settled (the fundamental change settlement date), which will be the second business day immediately following the fundamental change conversion deadline. |
To exercise the fundamental change conversion right, a holder of a separate share of convertible preferred stock must deliver, on or before the close of business on the fundamental change conversion deadline, the convertible preferred stock to be converted, duly endorsed for transfer, together with a written conversion notice completed, to our conversion agent. The conversion notice will state:
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the relevant fundamental change conversion date; and |
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the number of shares of the convertible preferred stock to be converted pursuant to the fundamental change conversion right. |
If the convertible preferred stock is held in global form, the conversion notice must comply with applicable DTC procedures.
If the stock price is greater than or equal to the conversion price, the convertible preferred stock as to which the fundamental change conversion right has been properly exercised will be converted into cash, shares of our common stock or a combination thereof at our election in accordance with Settlement Upon Conversion below. If the stock price is less than the conversion price, then notwithstanding anything herein to the contrary, we can elect to settle conversions in connection with a valid exercise of the fundamental change conversion right through cash settlement, combination settlement or physical settlement, as follows:
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any such conversions will settle on the fundamental change settlement date; |
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if we have validly elected physical settlement, we will deliver, in respect of each share of the convertible preferred stock, a number of shares of common stock (and cash in lieu of any fractional shares) equal to the conversion rate described above; |
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if we have validly elected cash settlement, we will deliver an amount of cash per share of convertible preferred stock equal to the conversion rate described above multiplied by the fundamental change settlement price; and |
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if we have validly elected combination settlement, we will deliver, in addition to the amount of cash per share of convertible preferred stock specified in the fundamental change company notice, a number of shares of common stock (and cash in lieu of any fractional shares) equal to a fraction, the numerator of which is (i) the conversion rate described above multiplied by the fundamental change settlement price minus (ii) the amount of cash per share specified in the fundamental change company notice, and the denominator of which is the fundamental change settlement price. |
If the holders of our common stock receive only cash in a reorganization event, then notwithstanding the foregoing, for all conversions in connection with a fundamental change that occur after the effective date of such transaction where the relevant stock price is less than the conversion price, the consideration due upon conversion of each such share of convertible preferred stock shall be solely cash in an amount equal to the conversion rate as modified by this Adjusted Conversion Rate Upon a Fundamental Change, multiplied by the fundamental change settlement price for such transaction.
We will, to the extent applicable, comply with listing standards of the New York Stock Exchange in connection with the issuance of our common stock upon any exercise of the fundamental change conversion right.
Conversion Procedures
Holders of shares of the convertible preferred stock represented by a beneficial interest in a global security may convert their shares by complying with the depositarys procedures and, if required, by paying any dividends as described in this prospectus supplement. Holders of shares of the convertible preferred stock in certificated form may convert some or all of their shares by surrendering to us at our principal office or at the office of our conversion agent, as may be designated by our board of directors or a committee of our board of directors, the certificate or certificates, if any, for the shares of the convertible preferred stock to be converted, accompanied by a written notice stating that the holder of shares of the convertible preferred stock elects to convert all or a specified whole number of those shares in accordance with the provisions described in this prospectus supplement and specifying the name or names in which the holder of shares of the convertible preferred stock wishes the certificate or certificates, if any, for the shares of our common stock to be issued. If the notice specifies a name or names other than the name of the holder of shares of the convertible preferred stock, the notice will be accompanied by payment of all transfer taxes payable upon the issuance of shares of our common stock in that name or names. Other than such transfer taxes, we will pay any documentary, stamp or similar issue or transfer taxes that may be payable in respect of any issuance or delivery of shares of our common stock upon conversion of shares of the convertible preferred stock. The date on which the foregoing procedures have been complied with will be deemed the conversion date with respect to a share of the convertible preferred stock.
As promptly as practicable after the conversion date with respect to any shares of the convertible preferred stock, we will reflect in our stock records the cancellation of the convertible preferred stock that is being converted and the issuance of such number of validly issued, fully paid and non-assessable shares of our common stock to which the holders of such shares of the convertible preferred stock are entitled as a result of the conversion, if any, as of such conversion date (in the case of any physical settlement) or the final day of the observation period (in the case of a combination settlement). In addition, if the common stock to be issued upon conversion is certificated, promptly after the issuance of the common stock certificate (or, if the convertible preferred stock is certificated, promptly after, and in any case, no later than (x) two business days after the surrender of the certificates representing the shares that are converted (in the case of physical settlement) and (y) two business days after the later of the surrender of the certificates representing the shares that are converted and the final day of the observation period (in the case of
combination settlement)) we will deliver or cause to be delivered (i) certificates representing the number of validly issued, fully paid and non-assessable shares of our common stock to which the holders of such shares of the convertible preferred stock, or the transferee of the holder of such shares of the convertible preferred stock, will be entitled and (ii) if the convertible preferred stock is then certificated and if less than the full number of shares of the convertible preferred stock represented by the surrendered certificate or certificates, if any, or specified in the notice, are being converted, a new certificate or certificates, of like tenor, for the number of shares represented by the surrendered certificate or certificates, less the number of shares being converted. This conversion will be deemed to have been made at the close of business on the conversion date so that the rights of the holder of shares of the convertible preferred stock as to the shares being converted will cease, except for the right to receive the shares of our common stock.
Holders of shares of the convertible preferred stock are not eligible to exercise any rights of a holder of shares of our common stock until they have converted their shares of the convertible preferred stock into shares of our common stock, if any. If more than one share of the convertible preferred stock is surrendered for conversion by the same stockholder at the same time, the number of whole shares of our common stock issuable upon conversion of those shares of the convertible preferred stock will be computed on the basis of the total number of shares of the convertible preferred stock so surrendered.
We will at all times reserve and keep available, free from preemptive rights, out of our authorized but unissued shares of capital stock, for issuance upon the conversion of shares of the convertible preferred stock, a number of authorized but unissued shares of our common stock that will from time to time be sufficient to permit the conversion of all outstanding shares of the convertible preferred stock (assuming, for such purposes, that physical settlement is applicable to all conversions).
Before the delivery of any securities upon conversion of shares of the convertible preferred stock, we will comply with all applicable federal and state laws and regulations. All shares of our common stock delivered upon conversion of shares of the convertible preferred stock, if any, will, upon delivery, be duly and validly issued, fully paid and non-assessable, free of all liens and charges and not subject to any preemptive rights.
Settlement Upon Conversion
To satisfy our obligations upon a conversion, we may elect to pay or deliver, as the case may be, solely shares of our common stock, together with cash in lieu of fractional shares (physical settlement), solely cash (cash settlement) or a combination of cash and our common stock (combination settlement). We refer to each of these elections as a settlement method.
We will use the same settlement method for all conversions with the same conversion date, but we will not have any obligation to use the same settlement method with respect to conversions occurring on different conversion dates, except that we will use the same settlement method for (x) all conversions following our delivery of a notice of redemption to holders of the convertible preferred stock to, and including, the related redemption date, regardless of the conversion date and (y) all conversions in connection with a fundamental change. If we elect a settlement method, we will inform holders so converting through the conversion agent of such settlement method we have selected no later than the second business day immediately following the related conversion date; provided that (x) in the case of any conversions of convertible preferred stock called for redemption, we will elect our settlement method in the redemption notice and (y) in the case of a conversion in connection with a fundamental change, we will elect our settlement method in the fundamental change company notice. If we elect combination settlement, but we do not timely notify converting holders of the specified dollar amount per $1,000 liquidation preference of convertible preferred stock, such specified dollar amount will be deemed to be $1,000. If we do not timely provide notice electing a settlement method in respect of any conversion of the convertible preferred stock, we will be deemed to have elected combination settlement and the specified dollar amount per $1,000 liquidation preference of convertible preferred stock will be equal to $1,000.
Settlement amounts will be computed as follows:
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if we elect physical settlement, we will deliver to the converting holder a number of shares of our common stock equal to the number of shares of convertible preferred stock to be converted multiplied by the applicable conversion rate; |
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if we elect cash settlement, we will deliver to the converting holder, in respect of each $1,000 liquidation preference of the convertible preferred stock being converted, cash in an amount equal to the sum of the daily conversion values for each of the 20 consecutive trading days during the related observation period; and |
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if we elect combination settlement, we will deliver to the converting holder in respect of each $1,000 liquidation preference of the convertible preferred stock being converted a settlement amount equal to the sum of the daily settlement amounts for each of the 20 consecutive trading days during the related observation period. |
The daily settlement amount, for each of the 20 consecutive trading days during the observation period, will consist of:
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cash equal to the lesser of (i) a dollar amount per share of the convertible preferred stock to be received upon conversion as specified by us in the notice regarding our chosen settlement method (the specified dollar amount), if any, divided by 20 (such quotient being referred to as the daily measurement value) and (ii) the daily conversion value for such trading day; and |
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to the extent the daily conversion value for such trading day exceeds the daily measurement value, a number of shares equal to (i) the difference between such daily conversion value and the daily measurement value, divided by (ii) the daily VWAP for such trading day. |
Daily conversion value means, for each of the 20 consecutive trading days during the observation period, one-twentieth of the product of (i) the applicable conversion rate and (ii) the daily VWAP of our common stock on such trading day.
Observation period means, with respect to any share of convertible preferred stock being converted, the 20 consecutive trading day period beginning on and including the third trading day after the conversion date for such share of convertible preferred stock, provided that if the relevant conversion date occurs on or after the date of our issuance of a notice of redemption with respect to the convertible preferred stock as described under Redemption and prior to the relevant redemption date, the observation period shall be the 20 consecutive trading days beginning on, and including, the 21st scheduled trading day immediately preceding such redemption date.
If we elect physical settlement in respect of a conversion, we will deliver the settlement amount to converting holders on the second trading day following the conversion date, but such holders will be deemed to be the owners of the shares of our common stock included in the settlement amount as of the close of business on the conversion date. If we elect cash settlement or combination settlement, we will pay or deliver, as the case may be, the settlement amount to converting holders on the second trading day following the final trading day of the relevant observation period and such holders will be deemed to be the owners of any of the shares of our common stock included in the settlement amount on the last trading day of the relevant observation period.
We will not issue fractional shares upon conversion of the convertible preferred stock. Instead, we will pay cash in lieu of fractional shares based on the daily VWAP of our common stock on the relevant conversion date (in the case of physical settlement) or based on the daily VWAP of our common stock on the last trading day of the relevant observation period (in the case of combination settlement).
Recapitalizations, Reclassifications and Changes of Our Common Stock
In the case of any reorganization event, at and after the effective time of such reorganization event, the conversion rate shall be determined by reference to the value of an exchange property unit, and we will deliver, upon settlement of any conversion of convertible preferred stock, a number of exchange property units equal to the number of shares of our common stock that we would otherwise be required to deliver. However, at and after the effective time of the reorganization event, (i) we will continue to have the right to determine the form of consideration to be paid or delivered, as the case may be, upon conversion, as set forth under Conversion RightsSettlement Upon Conversion and (ii)(x) any amount payable in cash upon conversion as set forth under Conversion RightsSettlement Upon Conversion will continue to be payable in cash, (y) any shares of our common stock that we would have been required to deliver upon conversion as set forth under Conversion RightsSettlement Upon Conversion will instead be deliverable in the amount and type of exchange property that a holder of that number of shares of our common stock would have received in such transaction and (z) the daily VWAP and fundamental change
settlement price will be calculated based on the value of an exchange property unit that a holder of one share of our common stock would have received in such transaction. In the event holders of our common stock (other than any constituent person or affiliate thereof) have the opportunity to elect the form of consideration to be received in such transaction, the exchange property unit that holders of the convertible preferred stock are entitled to receive will be deemed to be the weighted average of the types and amounts of consideration actually received by the holders of our common stock. We will notify holders of the weighted average as soon as practicable after such determination is made. If the holders receive only cash in such transaction, then notwithstanding anything herein to the contrary for all conversions that occur after the effective date of such transaction (other than conversions in connection with a fundamental change where the relevant stock price is less than the conversion price) (i) the consideration due upon conversion of each share of convertible preferred stock shall be solely cash in an amount equal to the conversion rate in effect on the conversion date, multiplied by the price paid per share of common stock in such transaction and (ii) we will satisfy our conversion obligation by paying cash to converting holders on the second scheduled trading day immediately following the conversion date. In addition, we will amend the articles of incorporation (1) to provide for anti-dilution and other adjustments that are as nearly equivalent as possible to the adjustments described under Conversion Rate Adjustments below, (2) in the case of any transaction that results in the common equity of any entity other than us (or, for the avoidance of doubt, our successor in such transaction) being included as exchange property, (a) by replacing references to us or our (and similar references) in the definitions of fundamental change with references to that other entity and (b) by causing the dividend blocker provisions to apply to that other entity, with its equity securities being deemed stock ranking junior to the convertible preferred stock for this purpose and (3) to include such additional provisions to protect the interests of the holders of convertible preferred stock as our board of directors reasonably considers necessary by reason of the foregoing. We will not become party to any such transaction unless its terms are consistent with the foregoing.
In connection with any adjustment to the conversion rate described below, we will also adjust the initial dividend threshold (as defined under Conversion Rate Adjustments) based on the number of shares of common stock comprising the exchange property and (if applicable) the value of any non-stock consideration comprising the exchange property. If the exchange property is composed solely of non-stock consideration, the initial dividend threshold will be zero.
The provisions described in the preceding two paragraphs shall similarly apply to successive reorganization events.
Conversion Rate Adjustments
The applicable conversion rate shall be adjusted from time to time for any of the following events that occur following the original issue date of the convertible preferred stock:
(1) |
If we issue common stock as a dividend or distribution on our common stock to all or substantially all holders of our common stock, or if we effect a share split or share combination, the conversion rate will be adjusted based on the following formula: |
CR1 = CR0 × | OS1 | |
OS0 |
where: |
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CR0 = the conversion rate in effect immediately prior to the open of business on the ex-dividend date for such dividend or distribution, or the open of business on the effective date of such share split or share combination;
CR1 = the new conversion rate in effect immediately after the open of business on the ex-dividend date for such dividend or distribution, or the open of business on the effective date of such share split or share combination;
OS0 = the number of shares of our common stock outstanding immediately prior to the open of business on the ex-dividend date, or the open of business on the effective date of such share split or share combination; and
OS1 = the number of shares of our common stock outstanding immediately after giving effect to such dividend or distribution, or the effective date of such share split or share combination.
Any adjustment made pursuant to this clause (1) shall become effective as of the open of business on (x) the ex-dividend date for such dividend or other distribution or (y) the date on which such split or combination becomes effective, as applicable. If any dividend or distribution described in this clause (1) is declared but not so paid or made, the new conversion rate shall be readjusted to the conversion rate that would then be in effect if such dividend or distribution had not been declared.
(2) |
If we distribute to all holders of our common stock any rights, warrants or options entitling them for a period of not more than 45 calendar days after the date of distribution thereof to subscribe for or purchase our common stock, in any case at an exercise price per share of our common stock less than the average of the closing prices of our common stock for the 10 consecutive trading days ending on, and including, the trading day immediately preceding the date of the announcement of such distribution, the conversion rate will be increased based on the following formula: |
CR1 = CR0 × | OS0 + X | |
OS0 + Y |
where:
CR0 = the conversion rate in effect immediately prior to the open of business on the ex-dividend date for such distribution;
CR1 = the new conversion rate in effect immediately after the open of business on the ex-dividend date for such distribution;
OS0 = the number of shares of our common stock outstanding immediately prior to the ex-dividend date for such distribution;
X = the aggregate number of shares of our common stock issuable pursuant to such rights, warrants or options; and
Y = the number of shares of our common stock equal to the quotient of (A) the aggregate price payable to exercise all such rights, warrants or options divided by (B) the average of the closing prices of our common stock for the 10 consecutive trading days ending on, and including, the trading day immediately preceding the date of the announcement of the distribution of such rights, warrants or options.
For purposes of this clause (2), in determining whether any rights, warrants or options entitle the holders to subscribe for or purchase our common stock at less than the average of the closing prices of our common stock for the 10 consecutive trading days ending on, and including, the trading day immediately preceding the date of the announcement of the distribution of such rights, warrants or options, and in determining the aggregate exercise or conversion price payable for such common stock, there shall be taken into account any consideration received by us for such rights, warrants or options and any amount payable on exercise or conversion thereof, with the value of such consideration, if other than cash, to be determined by us. Any increase made under this clause (2) will be made successively whenever any such rights, options or warrants are distributed and shall become effective immediately after the open of business on the ex-dividend date for such distribution. If any right, warrant or option described in this clause (2) is not exercised or converted prior to the expiration of the exercisability or convertibility thereof, the new conversion rate shall be readjusted to the conversion rate that would then be in effect if such right, warrant or option had not been so distributed.
(3) |
If we distribute shares of capital stock, evidences of indebtedness or other assets or property of us to all holders of our common stock, excluding: |
(A) |
dividends, distributions, rights, warrants or options as to which an adjustment was effected in clause (1) or (2) above; |
(B) |
dividends or distributions paid exclusively in cash; and |
(C) |
spin-offs described below in this clause (3), |
then the conversion rate will be increased based on the following formula:
CR1 = CR0 × | SP0 | |
SP0 FMV |
where:
CR0 = the conversion rate in effect immediately prior to the open of business on the ex-dividend date for such distribution;
CR1 = the new conversion rate in effect immediately after the open of business on the ex-dividend date for such distribution;
SP0 = the closing price of our common stock on the trading day immediately preceding the ex-dividend date for such distribution; and
FMV = the fair market value (as determined in good faith by us) of the shares of capital stock, evidences of indebtedness, assets or property distributed with respect to each outstanding share of our common stock on the ex-dividend date for such distribution.
An adjustment to the conversion rate made pursuant to the immediately preceding paragraph shall become effective as of the open of business on the ex-dividend date for such distribution.
Notwithstanding the foregoing, if FMV (as defined above) is equal to or greater than SP0 (as defined above), in lieu of the foregoing increase, each holder of convertible preferred stock shall receive, in respect of each share of convertible preferred stock, at the same time and upon the same terms as holders of our common stock and without having to convert its shares of convertible preferred stock, the amount and kind of our capital stock, evidences of indebtedness or other assets or property of ours that such holder would have received if such holder owned a number of shares of common stock equal to the conversion rate in effect on the ex-dividend date for the distribution.
If we distribute to all holders of our common stock, capital stock of any class or series, or similar equity interest, of or relating to a subsidiary or other business unit, in each case, that will be listed on a U.S. national securities exchange (which we refer to as a spin-off), the conversion rate in effect immediately following the 10th trading day immediately following, and including, the ex-dividend date of the spin-off will be increased based on the following formula:
CR1 = CR0 × | FMV0 + MP0 | |
MP0 |
where:
CR0 = the conversion rate in effect on the 10th trading day immediately following, and including, the ex-dividend date of the spin-off;
CR1 = the new conversion rate immediately after the 10th trading day immediately following (and including) the ex-dividend date of the spin-off;
FMV = the average of the closing prices of the capital stock or similar equity interest distributed to holders of our common stock applicable to one share of our common stock over the first 10 consecutive trading days after (and including) the ex-dividend date of the spin-off (the valuation period); and
MP0 = the average of the closing prices of our common stock over the valuation period.
The increase to the conversion rate under the preceding paragraph will occur at the close of business on the last trading day of the valuation period; provided that (x) in respect of any conversion of convertible preferred stock for which physical settlement is applicable, if the relevant conversion date occurs during the valuation period, the reference to 10 in the preceding paragraph shall be deemed replaced with such lesser number of trading days as have elapsed from, and including, the ex-dividend date for such spin-off to, and including, such conversion date in determining the conversion rate and (y) in respect of any conversion of convertible preferred stock for which cash settlement or combination settlement is applicable, for any trading day that falls within the relevant observation period for such conversion and within the valuation period, the reference to 10 in the preceding paragraph shall be deemed replaced with such lesser number of trading days as have elapsed from, and including, the ex-dividend date for such spin-off to, and including, such trading day in determining the conversion rate as of such trading day.
If any such dividend or distribution described in this clause (3) is declared but not paid or made, the new conversion rate shall be readjusted to be the conversion rate that would then be in effect if such dividend or distribution had not been declared.
(4) |
If any cash dividend or distribution is made to all or substantially all holders of our common stock, other than a regular, quarterly cash dividend that does not exceed $0.9175 per share (the initial dividend threshold), the conversion rate will be adjusted based on the following formula: |
CR1 = CR0 × | SP0 IDT | |
SP0 C |
where,
CR0 = the conversion rate in effect immediately prior to the open of business on the ex-dividend date for such dividend or distribution;
CR1 = the conversion rate in effect immediately after the open of business on the ex-dividend date for such dividend or distribution;
SP0 = the closing price of our common stock on the trading day immediately preceding the ex-dividend date for such distribution;
C = the amount in cash per share we distribute to holders of our common stock; and
IDT = the initial dividend threshold; provided that if the dividend or distribution is not a regular quarterly cash dividend, the initial dividend threshold will be deemed to be zero.
Any increase to the conversion rate made pursuant to this clause (4) shall become effective as of the open of business on the ex-dividend date for such dividend or distribution. If any such dividend or distribution is not so paid or made, the new conversion rate shall be readjusted to the conversion rate that would be in effect if such dividend or distribution had not been declared.
Notwithstanding the foregoing, if C (as defined above) is equal to or greater than SP0 (as defined above), in lieu of the foregoing increase, each holder of convertible preferred stock shall receive, for each share of convertible preferred stock, at the same time and upon the same terms as holders of shares of our common stock and without having to convert its shares of convertible preferred stock, the amount of cash that such holder would have received if such holder owned a number of shares of our common stock equal to the conversion rate on the ex-dividend date for such cash dividend or distribution.
The initial dividend threshold is subject to adjustment in a manner inversely proportional to adjustments to the conversion rate, provided that no adjustment will be made to the initial dividend threshold for any adjustment made to the conversion rate under this clause (4).
(5) |
If we or any of our subsidiaries make a payment in respect of a tender offer or exchange offer for our common stock to the extent that the cash and value of any other consideration included in the payment per share of our common stock exceeds the closing price of a share of our common stock on the trading day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the conversion rate will be increased based on the following formula: |
CR1 = CR0 × | AC + (SP1 × OS1) | |
OS0 ×SP1 |
where:
CR0 = the conversion rate in effect immediately prior to the close of business on the trading day on which such tender or exchange offer expires;
CR1 = the conversion rate in effect immediately after the close of business on the trading day immediately following the date such tender or exchange offer expires;
AC = the aggregate value of all cash and any other consideration (as determined in good faith by us) paid or payable for our common stock purchased in such tender or exchange offer;
OS0 = the number of shares of our common stock outstanding immediately prior to the close of business on the trading day such tender or exchange offer expires (prior to giving effect to the purchase or exchange of shares pursuant to such tender or exchange offer);
OS1 = the number of shares of our common stock outstanding immediately after the close of business on the trading day such tender or exchange offer expires (after giving effect to the purchase or exchange of shares pursuant to such tender or exchange offer); and
SP1 = the closing price of our common stock on the trading day next succeeding the date such tender or exchange offer expires.
If the application of the foregoing formula would result in a decrease in the conversion rate, no adjustment to the conversion rate will be made.
Any adjustment to the conversion rate made pursuant to this clause (5) shall become effective at the close of business on the trading day immediately following the date such tender offer or exchange offer expires. If we or one of our subsidiaries is obligated to purchase our common stock pursuant to any such tender or exchange offer but is permanently prevented by applicable law from effecting any such purchase or all such purchases are rescinded, the new conversion rate shall be readjusted to be the conversion rate that would be in effect if such tender or exchange offer had not been made.
If we have in effect a rights plan while any convertible preferred stock remains outstanding, holders of convertible preferred stock will receive, upon a conversion of convertible preferred stock, in addition to shares of our common stock, if any, rights under our shareholder rights agreement unless, prior to conversion, the rights have separated from our common stock, in which case the conversion rate will be adjusted at the time of separation as if we had distributed to all holders of our common stock capital stock, evidences of indebtedness or other assets or property pursuant to clause (3) above, subject to readjustment upon the subsequent expiration, termination or redemption of the rights.
Notwithstanding the foregoing, if a conversion rate adjustment becomes effective on any ex-dividend date as described above, and a holder that has converted its shares of the convertible preferred stock on or after such ex-dividend date and on or prior to the related record date would be treated as the record holder of our common stock as of the related conversion date based on an adjusted conversion rate for such ex-dividend date, then, notwithstanding the foregoing conversion rate adjustment provisions, the conversion rate adjustment relating to such ex-dividend date will not be made for such converting holder. Instead, such holder will be treated as if such holder were the record owner of our common stock on an unadjusted basis and participate in the related dividend, distribution or other event giving rise to such adjustment.
In addition to the adjustments pursuant to paragraphs (1) through (5) above, we may increase the conversion rate in order to avoid or diminish any income tax to holders of our common stock resulting from any dividend or distribution of capital stock (or rights to acquire our common stock) or from any event treated as such for income tax purposes. We may also, from time to time, to the extent permitted by applicable law, increase the conversion rate by any amount for any period of at least 20 business days if we have determined that such increase would be in our best interests. If we make such determination, it will be conclusive and we will mail to holders of the convertible preferred stock a notice of the increased conversion rate and the period during which it will be in effect at least 15 calendar days prior to the date the increased conversion rate takes effect in accordance with applicable law.
No adjustment to the conversion rate will be made if holders of the convertible preferred stock, as a result of holding the convertible preferred stock and without conversion thereof, are entitled to participate at the same time as our common stock holders participate in any of the transactions described above as if such holders of the convertible preferred stock held a number shares of our common stock equal to the conversion rate, multiplied by the number of shares of convertible preferred stock held by such holder, without having to convert their convertible preferred stock.
As used in this section and in Description of the Purchase ContractsAnti-dilution Adjustments above, record date means, with respect to any dividend, distribution or other transaction or event in which the holders of our common stock (or other applicable security) have the right to receive any cash, securities or other property or in which our common stock (or such other security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of our common stock (or such other security) entitled to receive such cash, securities or other property (whether such date is fixed by our board of directors or a duly authorized committee thereof, statute, contract or otherwise).
The conversion rate will not be adjusted except as specifically set forth in this Conversion Rate Adjustments and in Conversion RightsAdjusted Conversion Rate Upon a Fundamental Change. Without limiting the foregoing, the conversion rate will not be adjusted for:
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the issuance of our common stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on securities of ours and the investment of additional optional amounts in shares of our common stock under any plan; |
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the issuance of our common stock or options or rights to purchase those shares pursuant to any present or future employee, director, trustee or consultant benefit plan, employee agreement or arrangement or program of ours; |
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the issuance of our common stock pursuant to any option, warrant, right, or exercisable, exchangeable or convertible security outstanding as of the date the convertible preferred stock was first issued; |
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a change in the par value of our common stock; and |
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accumulated and unpaid dividends. |
All required calculations will be made to the nearest cent or 1/10,000th of a share, as the case may be. We will not be required to make an adjustment to the conversion rate unless the adjustment would require a change of at least 1% in the conversion rate. However, we will carry forward any adjustments that are less than 1% of the conversion rate and make such carried-forward adjustments (x) when all such carried-forward adjustments aggregate to a change of at least 1% in the conversion rate and (y) regardless of whether the aggregate adjustment is less than 1% (i) on the effective date for any fundamental change, (ii) on the conversion date in respect of any shares of convertible preferred stock for which physical settlement applies and (iii) on each trading day of any observation period in respect of any conversion of convertible preferred stock for which cash settlement or combination settlement applies.
In the event of a taxable distribution to holders of shares of our common stock that results in an adjustment to the conversion rate, holders of Corporate Units and convertible preferred stock may, in certain circumstances, be deemed to have received a distribution subject to U.S. federal income tax as a dividend. See Material U.S. Federal Income Tax ConsiderationsU.S. HoldersConvertible Preferred StockConstructive Distributions below. In addition, non-U.S. holders of Corporate Units and convertible preferred stock may, in certain circumstances, be deemed to have received a distribution subject to U.S. federal withholding tax requirements. See Material U.S. Federal Income Tax ConsiderationsNon-U.S. Holders.
Adjustments of Prices
Whenever any provision of the preferred stock articles of amendment requires us to calculate the closing prices, the daily VWAPs, the daily conversion values or the daily settlement amounts over a span of multiple days (including any observation period, the five-day average price and the stock price and fundamental change settlement price (if applicable) for purposes of this Description of the Convertible Preferred Stock section), we will make appropriate adjustments to each to account for any adjustment to the conversion rate that becomes effective, or any event requiring an adjustment to the conversion rate where the ex-dividend date or the expiration date of the event occurs, at any time during the period when the closing prices, the daily VWAPs, the daily conversion values or the daily settlement amounts are to be calculated.
Transfer Agent, Registrar, Paying Agent, Conversion Agent
The registrar and transfer agent for the convertible preferred stock is Broadridge Corporation Issuer Solutions, Inc. The paying agent and conversion agent for the convertible preferred stock is Deutsche Bank Trust Company Americas.
Remarketing
The convertible preferred stock will be remarketed as described under Description of the Purchase ContractsRemarketing.
In connection with a successful remarketing:
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the dividend rate and/or conversion rate of all outstanding shares of convertible preferred stock (whether or not the holder of such shares elected to participate in the remarketing) may be increased, if applicable, as described below; and |
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dividends will continue to be payable on the convertible preferred stock quarterly, when, as and if declared by our board of directors, as described herein. |
In order to remarket the convertible preferred stock, our board of directors may, after consultation with the remarketing agent, increase the dividend rate in order to produce the required price in the remarketing. In addition, if, on the date of any successful remarketing, the closing price of our common stock on such date is less than the reference price, the conversion rate for the convertible preferred stock will increase to an amount equal to $1,000, divided by 120% of the closing price of our common stock on the date of such remarketing (rounded to the nearest ten-thousandth share). If, however, on the date of any successful remarketing, the closing price of our common stock on such date is greater than or equal to the reference price, we will not change the conversion rate for the convertible preferred stock.
Notwithstanding the foregoing, in no event will the increased conversion rate for the convertible preferred stock exceed 45.1000 shares of common stock per share of convertible preferred stock (which is approximately equal to four times the initial conversion rate for the convertible preferred stock), subject to adjustment in the same manner as the conversion rate as set forth under Description of the Convertible Preferred StockConversion Rate Adjustments.
Remarketing of Shares That Are Not Included in Corporate Units
At any time prior to a remarketing, other than during a blackout period, holders of convertible preferred stock that do not underlie Corporate Units may elect to have their shares of convertible preferred stock remarketed in such remarketing in the same manner as shares of convertible preferred stock that underlie Corporate Units by delivering their shares along with a notice of this election to the custodial agent. The custodial agent will hold the shares of convertible preferred stock in an account separate from the collateral account in which the pledged securities will be held. Holders of shares of convertible preferred stock electing to have their shares remarketed will also have the right to withdraw their election at any time prior to 5:00 p.m., New York City time, on the second business day immediately preceding an optional remarketing period or the final remarketing period, as applicable. In the event of a successful remarketing during the optional remarketing period, each holder of separate shares of convertible preferred stock that elects to have its shares remarketed will receive, for each share sold, at least the remarketing price per share of convertible preferred stock on the optional remarketing settlement date. The remarketing price per share of convertible preferred stock means, for each share of convertible preferred stock, an amount in cash equal to the quotient of the Treasury portfolio purchase price divided by the number of shares of convertible preferred stock included in such remarketing that are held as components of Corporate Units. For purposes of determining the proceeds that the remarketing agent will seek to obtain for the convertible preferred stock in an optional remarketing, the separate convertible preferred stock purchase price means the amount in cash equal to the product of (A) the remarketing price per share of convertible preferred stock and (B) the number of shares of convertible preferred stock included in such remarketing that are not part of Corporate Units. Any proceeds in excess of such amount in respect of such remarketed shares will be delivered to the holders of such shares that elected to participate in the optional remarketing. In the event of a successful remarketing during the final remarketing period, each holder of separate shares of convertible preferred stock that elects to have its shares remarketed will receive an amount in cash on the purchase contract settlement date, for each such share, equal to at least $1,000. Any proceeds in excess of such amounts in respect of such remarketed shares will be delivered to the holders of such shares that elected to participate in the final remarketing. Except in the case of a dividend deficiency event, any accumulated and unpaid dividends on such shares (including compounded dividends thereon), whether or not declared, will be paid by us, on the purchase contract settlement date, to holders of record on the immediately preceding dividend payment record date. If a dividend deficiency event occurs, following the final remarketing (whether successful or failed), we shall have no obligation to pay the then accumulated but unpaid dividends on the convertible preferred stock on the purchase contract settlement date to the holders of the shares of convertible preferred stock as of the record date immediately preceding the purchase contract settlement date. However, the right to receive such accumulated but unpaid dividends (including compounded dividends thereon) shall continue to exist (and shall continue to compound) with respect to such convertible preferred stock notwithstanding such remarketing, and such dividends shall be payable to the holders of such convertible preferred stock as of the record date for the dividend payment date on which such dividends are subsequently declared and paid (if ever). If there are any accumulated and unpaid dividends on the convertible preferred stock for prior dividend periods, or we have not declared a dividend payable on the March 1, 2022 dividend payment date, we may not conduct an optional remarketing.
Increased Dividend Rate and Increased Conversion Rate
In the case of a successful remarketing, the dividend rate on the convertible preferred stock may be increased and/or the conversion rate on the convertible preferred stock may be increased, in each case, effective on the settlement date of the remarketing, which will be, in the case of a successful optional remarketing, the second business day following the optional remarketing date (or such other date as we and the remarketing agent agree upon) and, in the case of the final remarketing period, the purchase contract settlement date. If the dividend rate is increased pursuant to a successful optional remarketing, the increased rate will be the dividend rate determined by one or more of our senior officers acting under authority granted by our board of directors, after consultation with the remarketing agent, as the rate the convertible preferred stock should bear in order for the net remarketing proceeds of such convertible preferred stock to have an aggregate market value on the optional remarketing date of at least 100% of the aggregate of the Treasury portfolio purchase price plus the separate convertible preferred stock purchase price, if any. If the dividend rate is increased pursuant to a successful final remarketing, the increased rate will be the dividend rate determined by one or more of our senior officers acting under authority granted by our board of directors, after consultation with the remarketing agent, as the rate the convertible preferred stock should bear in order for the net remarketing proceeds to equal at least $1,000 multiplied by the aggregate number of shares of convertible preferred stock being remarketed. We will not decrease the dividend rate in connection with a successful remarketing.
In addition, if, on the date of any successful remarketing, the closing price of our common stock is less than the reference price, the conversion rate for the convertible preferred stock will increase to an amount equal to $1,000, divided by 120% of the closing price of our common stock on such date (rounded to the nearest ten-thousandth share). If, however, on the date of any successful remarketing, the closing price of our common stock on such date is greater than or equal to the reference price, we will not change the conversion rate for the convertible preferred stock. We will not decrease the conversion rate in connection with a successful remarketing.
Notwithstanding the foregoing, in no event will the increased conversion rate for the convertible preferred stock exceed 45.1000 shares of common stock per share of convertible preferred stock (which is approximately equal to four times the initial conversion rate for the convertible preferred stock), subject to adjustment in the same manner as the conversion rate as set forth under Description of the Convertible Preferred StockConversion Rate Adjustments.
If the convertible preferred stock is not successfully remarketed, neither the dividend rate nor the conversion rate will be changed.
The remarketing agent is not obligated to purchase any shares of convertible preferred stock that would otherwise remain unsold in the remarketing. None of us, the remarketing agent or any agent of us or the remarketing agent will be obligated in any case to provide funds to make payment upon tender of convertible preferred stock for remarketing.
Automatic Settlement Upon Failed Final Remarketing
If the convertible preferred stock has not been successfully remarketed on or prior to the last day of the final remarketing period, all ownership interests in shares of convertible preferred stock held as part of Corporate Units will be delivered to us on the purchase contract settlement date in full satisfaction of the Corporate Unit holders obligations to purchase our common stock under the related purchase contracts on the purchase contract settlement date, unless the holder separately cash settles purchase contracts as described below. Notwithstanding the foregoing, except in the case of a dividend deficiency event, all accumulated and unpaid dividends (including compounded dividends thereon) will be paid on the purchase contract settlement date to the holders of the shares of convertible preferred stock as of the record date immediately preceding the purchase contract settlement date, whether or not declared. If a dividend deficiency event occurs, following the final remarketing (whether successful or not), we shall have no obligation to pay the then accumulated but unpaid dividends on the convertible preferred stock on the purchase contract settlement date to the holders of the shares of convertible preferred stock as of the record date immediately preceding the purchase contract settlement date.
The ownership interest in convertible preferred stock underlying a Corporate Unit will be automatically delivered to us thereby satisfying such holders obligations to us under the related purchase contracts in full, unless, prior to 5:00 p.m., New York City time, on the second business day immediately prior to the purchase contract settlement date, the holder provides written notice of an intention to settle the related purchase contracts with separate cash and on or prior to the business day immediately preceding the purchase contract settlement date delivers to the securities intermediary $1,000 in cash per 10 purchase contracts. Holders of Corporate Units may settle their purchase contracts with separate cash only in integral multiples of 10 Corporate Units.
Payment
So long as any separate shares of convertible preferred stock are registered in the name of DTC, as depository for the convertible preferred stock as described herein under Book-Entry IssuanceThe Depository Trust Company, or DTCs nominee, payments on the convertible preferred stock will be made as described therein.
Form
So long as any separate shares of convertible preferred stock are registered in the name of DTC, as depository for the convertible preferred stock as described herein under Book-Entry IssuanceThe Depository Trust Company, or DTCs nominee, transfers and exchanges of beneficial interests in the separate shares of convertible preferred stock will be made as described therein.
Certain Trading Characteristics
The convertible preferred stock is expected to trade at a price that takes into account the value, if any, of accumulated but unpaid dividends (except for declared dividends accumulated after a record date and prior to a dividend payment date, which dividends will be payable to the holders as of the record date, as described above); thus, it is expected that purchasers of the convertible preferred stock will not pay, and sellers will not receive, accumulated and unpaid dividends with respect to the convertible preferred stock that is not included in the trading price thereof.
Title
We and any agent of ours will treat the person or entity in whose name securities are registered as the absolute owner of those securities for the purpose of making payments and for all other purposes irrespective of notice to the contrary.
Book-Entry IssuanceThe Depository Trust Company
The shares of convertible preferred stock were issued in fully registered form and are evidenced by one or more global securities registered in the name of DTCs nominee, Cede & Co.. Such global securities are deposited with the registrar as custodian for DTC and, in the case of shares of convertible preferred stock that form a part of the Corporate Units, credited to the collateral account. See Certain Provisions of the Purchase Contract and Pledge AgreementBook-Entry System for Corporate Units, Treasury Units and Cash Settled Units for a description of DTC.
Purchases of the convertible preferred stock under the DTC system must be made by or through direct participants, which will receive a credit for the convertible preferred stock on DTCs records. The ownership interest of each actual purchaser of each share of convertible preferred stock (beneficial owner) is in turn to be recorded on the direct and indirect participants records. Beneficial owners will not receive written confirmation from DTC of their purchases, but beneficial owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the direct or indirect participant through which they purchased the convertible preferred stock. Transfers of ownership interests on the convertible preferred stock are to be accomplished by entries made on the books of direct and indirect participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in convertible preferred stock, except in the event that use of the book-entry system for the convertible preferred stock is discontinued.
To facilitate subsequent transfers, all convertible preferred stock deposited by direct participants with DTC are registered in the name of DTCs nominee, Cede & Co.. The deposit of the convertible preferred stock with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the convertible preferred stock; DTCs records reflect only the identity of the direct participants to whose accounts the shares of convertible preferred stock are credited, which may or may not be the beneficial owners. The direct and indirect participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct participants, by direct participants to indirect participants, and by direct participants and indirect participants to beneficial owners, will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Notices will be sent to DTC.
Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the convertible preferred stock unless authorized by a direct participant in accordance with DTCs procedures. Under its usual procedures, DTC mails an omnibus proxy to us as soon as possible after the record date. The omnibus proxy assigns the voting or consenting rights of Cede & Co. to those direct participants to whose accounts the shares of convertible preferred stock are credited on the record date. We believe that these arrangements will enable the beneficial owners to exercise rights equivalent in substance to the rights that can be directly exercised by a registered holder of the convertible preferred stock.
Payments of dividends on the convertible preferred stock will be made to Cede & Co. (or such other nominee of DTC). DTCs practice is to credit direct participants accounts upon DTCs receipt of funds and corresponding detail information from us or the transfer agent, on payable date in accordance with their respective holdings shown on DTCs records. Payments by participants to beneficial owners will be governed by standing instructions and customary practices and will be the responsibility of each participant and not of DTC or us, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of dividends to Cede & Co. (or other such nominee of DTC) is our responsibility. Disbursement of such payments to direct participants will be the responsibility of DTC, and disbursement of such payments to the beneficial owners is the responsibility of direct and indirect participants.
A beneficial owner will not be entitled to receive physical delivery of the convertible preferred stock. Accordingly, each beneficial owner must rely on the procedures of DTC to exercise any rights under the convertible preferred stock.
DTC may discontinue providing its services as securities depository with respect to the convertible preferred stock at any time by giving us or the transfer agent reasonable notice. In the event no successor securities depository is obtained, certificates for the convertible preferred stock will be printed and delivered.
The information in this section concerning DTCs book-entry system has been obtained from sources that we believe to be reliable, but neither we nor the underwriters take any responsibility for the accuracy of this information.
EXHIBIT 4.19
DESCRIPTION OF VIRGINIA ELECTRIC AND POWER COMPANY
COMMON STOCK
The following description of Virginia Electric and Power Companys common stock, which is registered under Section 12(g) of the Securities Exchange Act of 1934, as amended, is a summary and is qualified in its entirety by reference to its articles of incorporation and bylaws, which are incorporated by reference as exhibits to the Annual Report on Form 10-K of which this exhibit is a part. You are encouraged to read Virginia Electric and Power Companys articles of incorporation and bylaws, as well as applicable provisions of the Virginia Stock Corporation Act, for more information.
Authorized Shares
Virginia Electric and Power Company (Virginia Power) is authorized to issue 500,000 shares of common stock, no par value, and 10,000,000 shares of preferred stock. Virginia Powers parent, Dominion Energy, Inc. (Dominion Energy), currently holds all 274,723 outstanding shares of Virginia Powers common stock. There are currently no shares of preferred stock outstanding. However, Virginia Powers board can, without approval of the holders of the common stock, issue one or more series of preferred stock with such rights, preferences and limitations as are determined and set by the board.
Dividends
Dividends on the common stock are payable at the direction of Virginia Powers board of directors so long as dividends on any outstanding preferred stock with respect to all past dividend periods and the then-current period have been paid in full or declared and set apart for payment and all mandatory sinking fund payments due with respect to any outstanding series of preferred stock have been made. Because Virginia Power is a Virginia public service company, the Virginia State Corporation Commission may prohibit Virginia Power from declaring or paying a dividend to an affiliate if found to be inconsistent with the public interest. In addition, Virginia Power may from time to time enter into certain agreements that could restrict its ability to pay dividends.
Voting Rights
Holders of the common stock are entitled to one vote per share on all matters on which such holders may vote. Unless otherwise provided under Virginia Powers articles of incorporation or under Virginia law, action on any such matters shall be approved if the votes cast approving the matter exceed the votes cast opposing the matter at a meeting at which a quorum is present, with a quorum being a majority of the shares outstanding. Subject to the accrual of voting rights to the preferred stock in the event of a default on the payment of dividends on any of the then-outstanding preferred stock, holders of the common stock have the sole and full power to vote for the election of Virginia Powers directors. Directors are elected on an annual basis by a plurality vote of the common shares and may be removed by a majority vote of the holders of the common stock, subject, in each case, to the accrual of voting rights to the preferred stock noted above.
Liquidation Rights
In the event of any liquidation, dissolution or winding up of Virginia Power, holders of the common stock are entitled to share ratably in the distribution of those assets, or proceeds from the sale thereof, remaining after the full preferential amounts to which any holders of preferred stock are entitled have been paid or set aside for payment.
Preemptive and Other Rights
Holders of the common stock do not have preemptive rights or redemption or conversion rights. Shares of common stock are not subject to any further calls or assessments and are not entitled to the benefit of any sinking fund provision.
EXHIBIT 4.20
DESCRIPTION OF DOMINION ENERGY GAS HOLDINGS, LLC
LIMITED LIABILITY COMPANY MEMBERSHIP INTERESTS
The following description of Dominion Energy Gas Holdings, LLCs limited liability company membership interests, which are registered under Section 12(g) of the Securities Exchange Act of 1934, as amended, is a summary and is qualified in its entirety by reference to Dominion Energy Gas Holdings, LLCs articles of organization and operating agreement, which are incorporated by reference as exhibits to the Annual Report on Form 10-K of which this exhibit is a part. You are encouraged to read Dominion Energy Gas Holdings, LLCs articles of organization and operating agreement, as well as applicable provisions of the Virginia Limited Liability Company Act, for more information.
Membership Interests
Dominion Energy Gas Holdings, LLC (Dominion Energy Gas) has one class of membership interests, all of which are held by Dominion Energy Questar Corporation (the Sole Member), a wholly-owned subsidiary of Dominion Energy, Inc.
Distributions
Dominion Energy Gas operating agreement requires it to make annual distributions of any cash amounts that, in the reasonable determination of Dominion Energy Gas board (the Board), are not necessary for Dominion Energy Gass operations, expenses or reserves. The Board may authorize more frequent distributions of such cash amounts as determined by the Board in its sole discretion.
Management by the Board and Board Membership
The business and affairs of Dominion Energy Gas are managed by the Board. Each member of the Board is elected by the Sole Member and the Sole Member may remove any member of the Board at any time, with or without cause.
Liquidation Rights
Dominion Energy Gas shall dissolve upon the occurrence of any of the following: (i) the written instruction of the Sole Member, (ii) the sale or other transfer of all, or substantially all, of its non-cash assets, or (iii) any event requiring dissolution under the Virginia Limited Liability Company Act (the Act).
Upon dissolution, and subject to the requirements of the Act, the Board must distribute the assets of Dominion Energy Gas in the following order of priority: (i) to any creditors of Dominion Energy Gas, (ii) to known and reasonably estimated costs of dissolution and winding up, (iii) to any reserves established by the Board, in its sole discretion, for contingent liabilities of Dominion Energy Gas, and (iv) to the Sole Member.
Resignation of the Sole Member; Transfers of Interests; Additional Members
The Sole Member shall not resign or withdraw from Dominion Energy Gas except by operation of law or as the result of a transfer of its entire interest in Dominion Energy Gas in accordance with the terms of the operating agreement. Unless the Sole Member otherwise determines, in its sole discretion, it cannot assign, sell, exchange or otherwise transfer all or any part of its membership interests unless each prospective transferee tenders full payment of the required purchase price and executed a counterpart signature page of an amendment and restatement of the operating agreement. Dominion Energy Gas may not admit additional members unless the Sole Member consents in writing, Dominion Energy Gas and the Sole Member amend or replace the operating agreement to address any issues raised by joint or multiple members, including changes to the status of Dominion Energy Gas for federal income tax purposes, and each additional member executes the amended and restated operating agreement and makes any required capital contributions in full.
If the Sole Member transfers its entire membership interest in Dominion Energy Gas, such transfer shall operate, upon completion, as the complete resignation or withdrawal of the Sole Member from Dominion Energy Gas.
EXHIBIT 4.21
DESCRIPTION OF DOMINION ENERGY GAS HOLDINGS, LLC
2014 SERIES C 4.60% SENIOR NOTES DUE 2044
The following description of our 2014 Series C 4.60% Senior Notes due 2044, which are registered under Section 12(b) of the Securities Exchange Act of 1934, as amended, is a summary and is qualified in its entirety by reference to the Indenture, dated as of October 1, 2013 (the Indenture), by and between us and Deutsche Bank Trust Company Americas, as trustee (the Trustee), as supplemented by the Sixth Supplemental Indenture, dated December 1, 2014 (the Sixth Supplemental Indenture), between us and the Trustee, each of which is incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this exhibit is a part. We encourage you to read the Indenture and the Sixth Supplemental Indenture for more information.
References herein to we, our, us, the Company or Dominion Energy Gas refer to Dominion Energy Gas Holdings, LLC, a Virginia limited liability company.
General
On December 3, 2014, Dominion Energy Gas issued $500,000,000 aggregate principal amount of 2014 Series C 4.60% Senior Notes due 2044 (the Senior Notes). The Senior Notes were issued in denominations of $1,000 and any greater integral multiple of $1,000. We may, without the consent of the existing holders of Senior Notes, issue additional notes having the same ranking and the same interest rate, maturity and other terms as the Senior Notes. Any additional notes having such similar terms, together with any of the Senior Notes, will constitute a single series of notes under the Indenture. The Senior Notes are not subject to any sinking fund provision and are not subject to conversion.
Maturity
The entire principal amount of the Senior Notes will mature and become due and payable, together with any accrued and unpaid interest thereon, on December 15, 2044.
Ranking
The Senior Notes are our direct, unsecured and unsubordinated obligations, rank equally with all of our other senior unsecured debt, and are senior in right of payment to all of our subordinated indebtedness, if any. The Senior Notes are effectively subordinated to all of our secured debt, if any.
Because we are a holding company and conduct all of our operations through our subsidiaries, our ability to meet our obligations under the Senior Notes is dependent on the earnings and cash flows of those subsidiaries and the ability of those subsidiaries to pay dividends or to advance or repay funds to us. Holders of Senior Notes generally have a junior position to claims of creditors of our subsidiaries, including trade creditors, debtholders, secured creditors, taxing authorities, guarantee holders and any preferred stockholders.
The Indenture contains no restrictions on the amount of additional indebtedness that we or our subsidiaries may incur. We and our subsidiaries expect to incur additional indebtedness from time to time.
Interest
The Senior Notes bear interest at the rate of 4.60% per year.
Interest is payable on each series of the Senior Notes semi-annually in arrears on June 15 and December 15 of each year (each, an Interest Payment Date).
The amount of interest payable will be computed on the basis of a 360-day year of twelve 30-day months. If any date on which interest is payable on the Senior Notes is not a business day, then payment of the interest payable on that date will be made on the next succeeding day which is a business day (and without any interest or other payment in respect of any delay), with the same force and effect as if made on such date.
So long as the Senior Notes remain in book-entry only form, the record date for each Interest Payment Date will be the close of business on the business day before the applicable Interest Payment Date. If the Senior Notes are not in book-entry only form, the record date for each Interest Payment Date will be the close of business on the fifteenth calendar day before the applicable Interest Payment Date (whether or not a business day); however, interest payable at maturity or upon redemption or repurchase will be paid to the person to whom principal is payable.
Optional Redemption
The Senior Notes are redeemable, in whole or in part at any time and from time to time prior to June 15, 2044 (six months prior to the maturity date) at our option, at a redemption price equal to the greater of:
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100% of the principal amount of the Senior Notes then outstanding to be redeemed, or |
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the sum of the present values of the remaining scheduled payments of principal and interest on the Senior Notes to be redeemed that would be due if such Senior Notes matured on June 15, 2044 but for the redemption (not including any portion of such payments of interest accrued as of the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, plus 25 basis points, as calculated by an Independent Investment Banker, |
plus accrued and unpaid interest thereon to the Redemption Date.
In addition, the Senior Notes are redeemable, in whole or in part at any time and from time to time on or after June 15, 2044 (six months prior to the maturity date), at our option at a redemption price equal to 100% of the principal amount of the Senior Notes then outstanding to be redeemed, plus accrued and unpaid interest thereon to the Redemption Date.
Treasury Rate means, with respect to any Redemption Date, the rate per annum equal to the semiannual equivalent yield to maturity or interpolated (on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.
The Treasury Rate will be calculated on the third business day preceding the Redemption Date.
Comparable Treasury Issue means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Senior Notes to be redeemed (assuming, for this purpose, that the Senior Notes matured on June 15, 2044) that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Senior Notes.
Comparable Treasury Price for any Redemption Date means (1) the average of the Reference Treasury Dealer Quotations for the Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations.
Independent Investment Banker means any of Goldman, Sachs & Co., RBS Securities Inc., BNP Paribas Securities Corp. and Scotia Capital (USA) Inc. and their respective affiliates or successors, as selected by us, or if any such firm is unwilling or unable to serve as such, an independent investment and banking institution of national standing appointed by us.
Reference Treasury Dealer means:
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Goldman, Sachs & Co., RBS Securities Inc., BNP Paribas Securities Corp. and Scotia Capital (USA) Inc. and their respective affiliates or successors; provided that, if any such firm or its successors ceases to be a primary U.S. Government securities dealer in the United States (Primary Treasury Dealer), we will substitute another Primary Treasury Dealer; and |
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up to one other Primary Treasury Dealer selected by us. |
Reference Treasury Dealer Quotations means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue related to the Senior Notes being redeemed (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 3:30 p.m., New York City time, on the third business day preceding such Redemption Date.
We will mail a notice of redemption at least 20 days but not more than 60 days before the Redemption Date to each holder of Senior Notes to be redeemed. If we elect to partially redeem the Senior Notes of a particular series, the trustee will select the Senior Notes to be redeemed in accordance with the procedures of DTC.
Unless we default in payment of the redemption price, on and after the Redemption Date, interest will cease to accrue on the Senior Notes or portions thereof called for redemption.
The Senior Notes may not be redeemed at any time at the option of the holder.
Events of Default; Waiver; Acceleration; Compliance
Event of Default when used in the Indenture, means any of the following with respect to the Senior Notes:
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failure to pay the principal or any premium when due; |
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failure to deposit any sinking fund payment when due that continues for 60 days; |
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failure to pay any interest, when due, that continues for 60 days; |
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failure to perform any other covenant in the Indenture (other than a covenant expressly included solely for the benefit of other series) that continues for 90 days after the Trustee or the holders of at least 33% of the outstanding Senior Notes give written notice of the default; |
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certain events in bankruptcy, insolvency or reorganization of the Company; or |
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any other Event of Default included in the Indenture. |
In the case of a general covenant default described above, the Trustee may extend the grace period. In addition, if holders of the Senior Notes have given a notice of default, then holders of at least the same percentage of the Senior Notes, together with the Trustee, may also extend the grace period. The grace period will be automatically extended if we have initiated and are diligently pursuing corrective action.
The holders of a majority of the outstanding securities of all series under the Indenture with respect to which a default has occurred and is continuing may waive a default for all those series, except a default in the payment of principal or interest, or any premium, on any securities or a default with respect to a covenant or provision which cannot be amended or modified without the consent of the holder of each outstanding security of the series affected.
An Event of Default for a particular series of securities issued under the Indenture does not necessarily constitute an Event of Default for any other series of securities issued under the Indenture.
If an Event of Default for the Senior Notes occurs and continues, the Trustee or the holders of at least 33% in aggregate principal amount of the Senior Notes may declare the entire principal of all the Senior Notes to be due and payable immediately. If this happens, subject to certain conditions, the holders of a majority of the aggregate principal amount of the Senior Notes can void the declaration.
The Trustee may withhold notice to the holders of securities issued under the Indenture of any default (except in the payment of principal or interest) if it considers the withholding of notice to be in the best interests of the holders. Other than its duties in case of a default, the Trustee is not obligated to exercise any of its rights or powers under the Indenture at the request, order or direction of any holders, unless the holders offer the Trustee reasonable indemnity. If they provide this reasonable indemnification, the holders of a majority in principal amount of any series of securities issued under the Indenture may direct the time, method and place of conducting any proceeding or any remedy available to the Trustee, or exercising any power conferred upon the Trustee, for any series of securities issued under the Indenture. However, the Trustee must give holders notice of any default to the extent provided by the Trust Indenture Act of 1939, as amended.
The holder of any Senior Note will have an absolute and unconditional right to receive payment of the principal, any premium and, within certain limitations, any interest on that Senior Note on its maturity date or redemption date and to enforce those payments.
We have agreed to provide the Trustee an annual certificate as to our compliance with the conditions and covenants in the Indenture or as to the occurrence of a default in the fulfillment of any such obligation. We have further agreed to certify in such annual certificate whether an event has occurred and is continuing which is, or after notice or lapse of time or both would become, an event of default under the Indenture.
Modification of Indenture
Under the Indenture our rights and obligations and the rights of the holders may be modified with the consent of the holders of a majority in aggregate principal amount of the outstanding securities of each series affected by the modification. No modification of the principal or interest payment terms, and no modification reducing the percentage required for modifications, is effective against any holder without its consent. In addition, we may supplement the Indenture to create new series of securities and for certain other purposes, without the consent of any holders of securities issued under the Indenture.
Consolidation, Merger or Sale
The Indenture provides that we may not merge or consolidate with any other corporation or sell or convey all or substantially all of our assets to any person unless (i) either we are the continuing corporation, or the successor corporation (if other than us) is a corporation organized and existing under the laws of the United States of America or a State thereof or the District of Columbia and such corporation expressly assumes the due and punctual payment of the principal of and interest on the securities issued under the Indenture, and the due and punctual performance and observance of all of the covenants and conditions of the Indenture to be performed by us by supplemental indenture in form satisfactory to the Trustee, executed and delivered to the Trustee by such corporation, and (ii) we or such successor corporation, as the case may be, will not, immediately after such merger or consolidation, or such sale or conveyance, be in default in the performance of any such covenant or condition.
In case of any such consolidation, merger or conveyance, such successor corporation will succeed to and be substituted for us, with the same effect as if it had been named as us in the Indenture, and in the event of such conveyance (other than by way of a lease), we will be discharged of all of our obligations and covenants under the Indenture and the securities issued under the Indenture.
Limitation on Liens
While any securities under the Indenture are outstanding, we are not permitted to create liens upon any Principal Property (as defined below) or upon any shares of stock of any Material Subsidiary (as defined below), which we now own or will own in the future, to secure any of our debt, unless at the same time we provide that the securities issued under the Indenture will also be secured by that lien on an equal and ratable basis. However, we are generally permitted to create the following types of liens:
(1) |
purchase money liens on future property acquired by us; liens of any kind existing on property or shares of stock at the time they are acquired by us; conditional sales agreements and other title retention agreements on future property acquired by us (as long as none of those liens cover any of our other properties); |
(2) |
liens on our property or any shares of stock of any Material Subsidiary that existed as of the date the Notes were first issued; liens on the shares of stock of any corporation, which liens existed at the time that corporation became a Material Subsidiary; certain liens typically incurred in the ordinary course of business; |
(3) |
liens in favor of the United States (or any State), any foreign country or any department, agency or instrumentality or political subdivision of those jurisdictions, to secure payments pursuant to any contract or statute or to secure any debt incurred for the purpose of financing the purchase price or the cost of constructing or improving the property subject to those liens, including, for example liens to secure debt of the pollution control or industrial revenue bond type; |
(4) |
debt that we may issue in connection with a consolidation or merger of Dominion Energy, Inc. or any Material Subsidiary with or into any other company (including any of our affiliates or Material Subsidiaries) in exchange for secured debt of that company (Third Party Debt) as long as that debt (i) is secured by a mortgage on all or a portion of the property of that company, (ii) prohibits secured debt from being incurred by that company, unless the Third Party Debt is secured on an equal and ratable basis, or (iii) prohibits secured debt from being incurred by that company; |
(5) |
debt of another company that we must assume in connection with a consolidation or merger of that company, with respect to which any of our property is subjected to a lien; |
(6) |
liens on any property that we acquire, construct, develop or improve after the date the securities are first issued that are created before or within 18 months after the acquisition, construction, development or improvement of the property and secure the payment of the purchase price or related costs; |
(7) |
liens in favor of us, our Material Subsidiaries or our wholly-owned subsidiaries; |
(8) |
the replacement, extension or renewal of any lien referred to above in clauses (1) through (7) as long as the amount secured by the liens or the property subject to the liens is not increased; and |
(9) |
any other lien not covered by clauses (1) through (8) above as long as immediately after the creation of the lien the aggregate principal amount of debt secured by all liens created or assumed under this clause (9) does not exceed 10% of the members equity, as shown on the companys consolidated balance sheet for the accounting period occurring immediately prior to the creation or assumption of such lien. |
When we use the term lien in this section, we mean any mortgage, lien, pledge, security interest or other encumbrance of any kind; Material Subsidiary means each of our subsidiaries whose total assets (as determined in accordance with GAAP in the United States) represent at least 20% of our total assets on a consolidated basis; and Principal Property means any of our plants or facilities located in the United States that in the opinion of our Board or management is of material importance to the business conducted by us and our consolidated subsidiaries taken as whole.
Satisfaction; Discharge
We may discharge all our obligations (except those described below) to holders of the securities issued under the Indenture, which securities have not already been delivered to the Trustee for cancellation and which either have become due and payable or are by their terms due and payable within one year, or are to be called for redemption within one year, by depositing with the Trustee an amount certified to be sufficient to pay when due the principal, interest and premium, if any, on all outstanding securities issued under the Indenture. However, certain of our obligations under the Indenture will survive, including with respect to the following:
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remaining rights to register the transfer, conversion, substitution or exchange of securities of the applicable series; |
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rights of holders to receive payments of principal of, and any interest on, the securities of the applicable series, and other rights, duties and obligations of the holders of securities with respect to any amounts deposited with the Trustee; and |
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the rights, obligations and immunities of the Trustee under the Indenture. |
Defeasance
We will be discharged from our obligations on the Senior Notes at any time if we deposit with the Trustee sufficient cash or government securities to pay the principal, interest, any premium and any other sums due to the stated maturity date or a redemption date of the Senior Notes. If this happens, the holders of the Senior Notes will not be entitled to the benefits of the Indenture, except for registration of transfer and exchange of Senior Notes and replacement of lost, stolen or mutilated Senior Notes.
The Trustee
The trustee under the Indenture is Deutsche Bank Trust Company Americas or its affiliates. The trustee will administer its corporate trust business at 60 Wall Street, 24th Floor, New York, NY 10005. We and certain of our affiliates maintain banking relationships with Deutsche Bank Trust Company Americas. Deutsche Bank Trust Company Americas also serves as trustee under other indentures under which we and certain of our affiliates have issued securities. Deutsche Bank Trust Company Americas and its affiliates have purchased, and are likely to purchase in the future, our securities and securities of our affiliates.
Governing Law
The Indenture, the Sixth Supplemental Indenture and the Senior Notes will be governed by and construed in accordance with the laws of the State of New York applicable to agreements made or instruments entered into and, in each case, performed in the State of New York
EXHIBIT 10.33
DOMINION ENERGY, INC.
2020 PERFORMANCE GRANT PLAN
1. Purpose. The purpose of the 2020 Performance Grant Plan (the Plan) is to set forth the terms of 2020 Performance Grants (Performance Grants) awarded by Dominion Energy, Inc., a Virginia corporation (the Company). This Plan contains the performance goals for the awards, the performance criteria, the target and maximum amounts payable, and other applicable terms and conditions. Capitalized terms not otherwise defined herein shall have the meanings given them in the Companys 2014 Incentive Compensation Plan, as amended.
2. Definitions.
a. Beneficiary. Means the individual, individuals, entity, entities or the estate of a Participant entitled to receive the amounts payable under a Performance Grant, if any, upon the Participants death.
b. Cause. For purposes of this Plan, the term Cause will have the meaning assigned to that term under a Participants Employment Continuity Agreement with the Company, as such Agreement may be amended from time to time.
c. Committee. Means the Compensation, Governance and Nominating Committee of the board of directors of the Company (or any successor board committee designated by the board of directors of the Company to administer this Plan).
d. Company Pension Plan. Means the applicable pension plan of the Company or its subsidiaries, if any, in which the Participant is eligible to participate as of the Date of Grant, which may include either the Dominion Energy Pension Plan or the SCANA Corporation Retirement Plan or any successor thereto, but excluding the cash balance portion of any such plan.
e. Date of Grant. February 1, 2020.
f. Disability or Disabled. Means a disability as defined under Treasury Regulation Section 1.409A-3(i)(4). The Committee will determine whether or not a Disability exists and its determination will be conclusive and binding on the Participant.
g. Participant. An officer of the Company or a Dominion Company who receives a Performance Grant on the Date of Grant.
h. Performance Period. The 36-month period beginning on January 1, 2020 and ending on December 31, 2022.
i. Retire or Retirement. For purposes of this Plan, the term Retire or Retirement means a voluntary termination of employment on a date when the Participant is eligible for early or normal retirement benefits under the terms of the Company Pension Plan, or would be eligible if any crediting of deemed additional years of age or service
1
applicable to the Participant under a supplemental retirement plan of the Company was applied under the Company Pension Plan, as in effect at the time of the determination, or, for a Participant who is not eligible to participate in a Company Pension Plan, a voluntary termination of employment on or after age 55, unless (in each case) the Companys Chief Executive Officer in his sole discretion (or, if the Participant is the Companys Chief Executive Officer, the Committee in its sole discretion) determines that the Participants retirement is detrimental to the Company. Notwithstanding the foregoing, with respect to the Chief Executive Officers Performance Grant, if the Chief Executive Officer continues to provide substantial services to the Company as a member of the Board or otherwise after a termination of employment that would otherwise qualify as a Retirement hereunder, the Chief Executive Officer will not be deemed to have Retired for purposes hereof until the end of such period of service.
j. Target Amount. The dollar amount designated in the written notice to the Participant communicating the Performance Grant.
3. Performance Grants. A Participant will receive a written notice of the amount designated as the Participants Target Amount for the Performance Grant payable under the terms of this Plan. The actual payout may be from 0% to 200% of the Target Amount, depending on the achievement of the performance goals.
4. Performance Achievement and Time of Payment. Upon the completion of the Performance Period, the Committee will determine the final performance goal achievement of each of the performance criteria described in Section 6. The Company will then calculate the final amount of each Participants Performance Grant based on such performance goal achievement. Except as provided in Sections 7(b) or 8, the Committee will determine the time of payout of the Performance Grants, provided that in no event will payment be made later than March 15, 2023. Performance Grants shall be paid in cash.
5. Forfeiture. Except as provided in Sections 7 and 8, a Participants right to payout of a Performance Grant will be forfeited if the Participants employment with the Company or a Dominion Company terminates for any reason before the end of the Performance Period.
6. Performance Goals. Payout of Performance Grants will be based on the performance goal achievement of the performance criteria described in this Section 6 and further defined in Exhibit A.
a. TSR Performance. Total Shareholder Return (TSR) Performance will determine fifty percent (50%) of the Target Amount (TSR Percentage). Relative TSR Performance and Absolute TSR Performance are each defined in Exhibit A. The percentage of the TSR Percentage that will be paid out, if any, is based on the following table:
Relative TSR Performance Percentile Ranking |
Percentage Payout
of TSR Percentage |
|||
85th or above |
200 | % | ||
50th |
100 | % | ||
25th |
50 | % | ||
Below 25th |
0 | % |
2
To the extent that the Companys Relative TSR Performance ranks in a percentile between the 25th and 85th percentile in the table above, then the TSR Percentage payout will be interpolated between the corresponding TSR Percentage payout set forth above. No payment of the TSR Percentage will be made if the Relative TSR Performance is below the 25th percentile, except that a payment of 25% of the TSR Percentage will be made if the Companys Relative TSR Performance is below the 25th percentile but its Absolute TSR Performance is at least 9%. In addition to the foregoing payments, and regardless of the Companys Relative TSR Performance, either (but not both) of the following may be earned: (i) an additional payment of 25% of the TSR Percentage will be made if the Companys Absolute TSR Performance is at least 10% but less than 15%, and/or if the Companys Price-Earnings Ratio (as defined in Exhibit A) is at or above the 50th percentile and below the top third of the group of companies (inclusive of the Company) used to measure Relative TSR Performance in accordance with Exhibit A hereto, or (ii) an additional payment of 50% of the TSR Percentage will be made if the Companys Absolute TSR Performance is at least 15%, and/or if the Companys Price-Earnings Ratio is at or above the top third of the group of companies (inclusive of the Company) used to measure Relative TSR Performance in accordance with Exhibit A hereto (in either case, the Performance Adder). The Committee may reduce or eliminate payment of the Performance Adder in its sole discretion.
The aggregate payments under this Section 6(a) may not exceed 250% of the TSR Percentage. In addition, the overall percentage payment under the entire Performance Grant may not exceed 200% of the Target Amount.
b. ROIC Performance. Return on Invested Capital Performance (ROIC Performance) will determine fifty percent (50%) of the Target Amount (ROIC Percentage). ROIC Performance is defined in Exhibit A. The percentage of the ROIC Percentage that will be paid out, if any, is based on the following table:
Percentage Payout | ||||
ROIC Performance | of ROIC Percentage | |||
7.31% and above |
200 | % | ||
7.08% |
100 | % | ||
6.84% |
50 | % | ||
Below 6.84% |
0 | % |
|
To the extent that the Companys ROIC Performance is greater than 6.84% and less than 7.08%, the ROIC Percentage payout will be interpolated between the applicable Percentage Payout of ROIC Percentage range set forth above. |
|
To the extent that the Companys ROIC Performance is greater than 7.08% and less than 7.31%, the ROIC Percentage payout will be interpolated between the applicable Percentage Payout of ROIC Percentage range set forth above. |
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7. Retirement, Involuntary Termination without Cause, Death or Disability.
a. Retirement or Involuntary Termination without Cause. Except as provided in Section 8, if a Participant Retires during the Performance Period or if a Participants employment is involuntarily terminated by the Company or a Dominion Company without Cause during the Performance Period, and in either case the Participant would have been eligible for a payment if the Participant had remained employed until the end of the Performance Period, the Participant will receive a pro-rated payout of the Participants Performance Grant equal to the payment the Participant would have received had the Participant remained employed until the end of the Performance Period multiplied by a fraction, the numerator of which is the number of whole months from February 1, 2020 to the first day of the month coinciding with or immediately following the date of the Participants retirement or termination of employment, and the denominator of which is thirty-five (35). Payment will be made after the end of the Performance Period at the time provided in Section 4 based on the performance goal achievement approved by the Committee. If the Participant Retires, however, no payment will be made if the Companys Chief Executive Officer in his sole discretion (or, if the Participant is the Companys Chief Executive Officer, the Committee in its sole discretion) determines that the Participants Retirement is detrimental to the Company.
b. Death or Disability. If, while employed by the Company or a Dominion Company, a Participant dies or becomes Disabled during the Performance Period, the Participant or, in the event of the Participants death, the Participants Beneficiary will receive a lump sum cash payment equal to the product of (i) and (ii) where:
(i) |
is the amount that would be paid based on the predicted performance used for determining the compensation cost recognized by the Company for the Participants Performance Grant for the latest financial statement filed with the Companys Annual Report on Form 10-K or Quarterly Report on Form 10-Q immediately prior to the event; and |
(ii) |
is a fraction, the numerator of which is the number of whole months from February 1, 2020 to the first day of the calendar month coinciding with or immediately following the date of the Participants death or Disability, and the denominator of which is thirty-five (35). |
Payment under this Section 7(b) will be made as soon as administratively feasible (and in any event within sixty (60) days) after the date of the Participants death or Disability, and the Participant shall not have the right to any further payment under this Agreement. In the event of the Participants death, payment will be made to the Participants designated Beneficiary.
8. Qualifying Change of Control. Upon a Qualifying Change of Control prior to the end of the Performance Period, provided the Participant has remained continuously employed with the Company or a Dominion Company from the Date of Grant to the date of the Qualifying Change of Control, the Participant will receive a lump sum cash payment equal to the greater of (i) the Target Amount or (ii) the total payout that would be made at the end of the Performance Period if the predicted performance used for determining the compensation cost recognized by the
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Company for the Participants Performance Grant for the latest financial statement filed with the Companys Annual Report on Form 10-K or Quarterly Report on Form 10-Q immediately prior to the Qualifying Change of Control was the actual performance for the Performance Period (in either case, the COC Payout Amount). Payment will be made on or as soon as administratively feasible following the Qualifying Change of Control date and in no event later than sixty (60) days following the Qualifying Change of Control date. If a Qualifying Change of Control occurs prior to the end of the Performance Period and after a Participant has Retired or been involuntarily terminated without Cause pursuant to Section 7(a) above, then the Participant will receive a pro-rated payout of the Participants Performance Grant, equal to the COC Payout Amount multiplied by the fraction set forth in Section 7(a) above, with payment occurring in a cash lump sum on or as soon as administratively feasible (but in any event within sixty (60) days) after the Qualifying Change of Control date. Following any payment under this Section 8, the Participant shall not have the right to any further payment under this Agreement.
9. Termination for Cause. Notwithstanding any provision of this Plan to the contrary, if the Participants employment with the Company or a Dominion Company is terminated for Cause (as defined by the Employment Continuity Agreement between the Participant and the Company), the Participant will forfeit all rights to his or her Performance Grant.
10. Clawback of Award Payment.
a. Restatement of Financial Statements. If the Companys financial statements are required to be restated at any time within a two (2) year period following the end of the Performance Period as a result of fraud or intentional misconduct, the Committee may, in its discretion, based on the facts and circumstances surrounding the restatement, direct the Company to recover all or a portion of the Performance Grant payout from the Participant if the Participants conduct directly caused or partially caused the need for the restatement.
b. Fraudulent or Intentional Misconduct. If the Company determines that the Participant has engaged in fraudulent or intentional misconduct related to or materially affecting the Companys business operations or the Participants duties at the Company, the Committee may, in its discretion, based on the facts and circumstances surrounding the misconduct, direct the Company to withhold payment, or if payment has been made, to recover all or a portion of the Performance Grant payout from the Participant.
c. Recovery of Payout. The Company reserves the right to recover a Performance Grant payout pursuant to this Section 10 by (i) seeking repayment from the Participant; (ii) reducing the amount that would otherwise be payable to the Participant under another Company benefit plan or compensation program to the extent permitted by applicable law; (iii) withholding future annual and long-term incentive awards or salary increases; or (iv) taking any combination of these actions.
d. No Limitation on Remedies. The Companys right to recover a Performance Grant payout pursuant to this Section 10 shall be in addition to, and not in lieu of, actions the Company may take to remedy or discipline a Participants misconduct including, but not limited to, termination of employment or initiation of a legal action for breach of fiduciary duty.
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e. Subject to Future Rulemaking. The Performance Grant payout is subject to any claw back policies the Company may adopt in order to conform to the requirements of Section 954 of the Dodd-Frank Wall Street Reform Act and Consumer Protection Act and resulting rules issued by the Securities and Exchange Commission or national securities exchanges thereunder and that the Company determines should apply to this Performance Grant Plan.
11. Miscellaneous.
a. Nontransferability. Except as provided in Section 7(b), a Performance Grant is not transferable and is subject to a substantial risk of forfeiture until the end of the Performance Period.
b. No Right to Continued Employment. A Performance Grant does not confer upon a Participant any right with respect to continuance of employment by the Company, nor will it interfere in any way with the right of the Company to terminate a Participants employment at any time.
c. Tax Withholding. The Company will withhold Applicable Withholding Taxes from the payout of Performance Grants.
d. Performance Goal Adjustments. The Committee may at any time, in its sole discretion, remove or revise any performance goals or other performance objectives for this 2020 Performance Grant Plan. The Committee retains the authority to exercise negative discretion to reduce payments under this Plan as it deems appropriate.
e. Governing Law. This Plan shall be governed by the laws of the Commonwealth of Virginia, without regard to its choice of law provisions.
f. Binding Effect. This Plan will be binding upon and inure to the benefit of the legatees, distributes, and personal representatives of Participants and any successors of the Company.
g. Section 409A. This Plan and the Performance Grants hereunder are intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (Code Section 409A), and shall be interpreted to the maximum extent possible in accordance with such intent. To the extent necessary to comply with Code Section 409A, no payment will be made earlier than six months after a Participants termination of employment other than for death if the Performance Grant is subject to Code Section 409A and the Participant is a specified employee (within the meaning of Code Section 409A(a)(2)(B)(i)).
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h. Administration. The Plan shall be administered by the Committee, which shall have all of the applicable powers and authority set forth in Section 19 of the Companys 2014 Incentive Compensation Plan with respect to this Plan and the Performance Grants awarded hereunder, the terms of which are incorporated by reference herein.
i. Termination and Amendment. The Committee may amend the Plan and Performance Grants awarded hereunder, provided that, except as otherwise provided herein, no termination or amendment of the Plan or any Performance Grants under the Plan shall materially adversely affect a Participants rights with respect to any outstanding Performance Grant without that Participants consent. Notwithstanding the foregoing, the Committee may amend the Plan and Performance Grants awarded hereunder without having to obtain the consent of any affected Participant as it deems necessary or appropriate to ensure compliance with applicable laws or to cause Performance Grants to avoid adverse tax consequences under the Code and regulations thereunder.
j. Notice. All notices and other communications required or permitted to be given under this Plan shall be in writing and shall be deemed to have been duly given if delivered personally or mailed first class, postage prepaid, as follows: (a) if to the Companyat the principal business address of the Company to the attention of the Corporate Secretary of the Company; and (b) if to any Participantat the last address of the Participant known to the sender at the time the notice or other communication is sent.
k. Interpretation. Unless otherwise specifically provided under the terms of any such plan or program, settlements of awards received by participants under the Plan shall not be deemed a part of a participants regular, recurring compensation for purposes of calculating payments or benefits from any benefit plan or severance program of the Company or a Dominion Company or any severance pay law of any country. Nothing contained in the Plan will be deemed in any way to limit or restrict the Company or any Dominion Company from making any award or payment to any person under any other plan, arrangement or understanding, whether now existing or hereafter in effect.
l. Beneficiary Matters. A Participant may designate a Beneficiary to receive benefits due under a Performance Grant, if any, upon the Participants death. Designation of a Beneficiary shall be made by execution of a form approved or accepted by the Committee. In the absence of a valid Beneficiary designation, a Participants surviving spouse, if any, and if none, the Participants estate, shall be the Beneficiary. A Participant may change a prior Beneficiary designation by a subsequent execution of a new Beneficiary designation form. The change in Beneficiary will be effective upon receipt by the Committee. Any payment made to a Beneficiary under this Plan in good faith shall fully discharge the Company and the Dominion Companies from all further obligations with respect to that payment. If the Committee has any doubt as to the proper Beneficiary to receive a payment under this Plan, the Committee shall have the right to withhold such payment until the matter is fully adjudicated. In making any payment to or for the benefit of any minor or an incompetent Participant or Beneficiary, the administrator, in its sole and absolute discretion, may make a distribution to a legal or natural guardian or other relative of a minor or court-appointed representative of such incompetent. Alternatively, it may make a payment to any adult with whom the minor or incompetent temporarily or
7
permanently resides. The receipt by a guardian, representative, relative or other person shall be a complete discharge of the Company and the Dominion Companies obligations under the Plan. The Company shall have no responsibility to see to the proper application of any payment so made. The Plan shall be binding on all successors and assigns of a Participant, including, without limitation, the estate of such participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative of the Participants creditors.
m. Unfunded Plan. Unless otherwise determined by the Committee, the Plan shall be unfunded and shall not create (or be construed to create) a trust or a separate fund or funds. The Plan shall not establish any fiduciary relationship between the Company and any Participant or other person. To the extent any person holds any rights by virtue of a Performance Grant granted under the Plan, such rights (unless otherwise determined by the Committee) shall be no greater than the rights of an unsecured general creditor of the Company.
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EXHIBIT A
DOMINION ENERGY, INC.
2020 PERFORMANCE GRANT PLAN
PERFORMANCE CRITERIA
Total Shareholder Return
Relative TSR Performance will be measured based on where the Companys total shareholder return during the Performance Period ranks in relation to the total shareholder returns of the companies that are members of the Companys compensation peer group as of the Date of Grant as set forth below (the Comparison Companies):
Ameren Corporation | Exelon Corporation | |
American Electric Power Company | FirstEnergy Corporation | |
CenterPoint Energy | NextEra Energy | |
Consolidated Edison Company | NiSource Incorporated | |
DTE Energy Company | Public Service Enterprise Group | |
Duke Energy Corporation | Sempra Energy | |
Edison International | Southern Company | |
Entergy Corporation | Xcel Energy | |
Eversource Energy |
The Comparison Companies shall be adjusted during the Performance Period as follows:
(i) |
In the event of a merger, acquisition or business combination transaction of a Comparison Company with or by another Comparison Company, effective upon the public announcement of the transaction, the surviving entity shall remain a Comparison Company and the non-surviving entity shall cease to be a Comparison Company (provided that, if the proposed transaction is subsequently terminated before the Relative TSR Performance is calculated, then the non-surviving company shall be retroactively reinstated as a Comparison Company); |
(ii) |
If it is publicly announced that a Comparison Company will be acquired by another company that is not a Comparison Company, or in the event a going private transaction is publicly announced where the Comparison Company will not be the surviving entity or will otherwise no longer be publicly traded, the company shall cease to be a Comparison Company as of the date such announcement is made (provided that, if the proposed transaction is subsequently terminated before the Relative TSR Performance is calculated, then the company shall be retroactively reinstated as a Comparison Company); |
(iii) |
In the event of a spinoff, divestiture, or sale of a substantial portion of assets of a Comparison Company, the Comparison Company shall no longer be a Comparison Company if the companys reported revenue (in its GAAP accounts) for the four most recently reported quarters ending on or before the last day of the Performance Period falls below 40% of Dominion Energys reported revenue for the last year of the Performance Period; and |
i
(iv) |
In the event of a bankruptcy of a Comparison Company, such company shall remain a Comparison Company and its stock price will continue to be tracked for purposes of Relative TSR Performance. If the company liquidates, it will remain a Comparison Company and its stock price will be reduced to zero for the remaining Performance Period. |
Total shareholder return consists of the difference between the value of a share of common stock at the beginning and end of the Performance Period, plus the value of gross dividends paid as if reinvested in stock and other appropriate adjustments for such events as stock splits. For purposes of TSR Performance, the total shareholder return of the Company and the Comparison Companies will be calculated using Bloomberg1. As soon as practicable after the completion of the Performance Period, the total shareholder returns of the Comparison Companies will be calculated and ranked from highest to lowest by the Committee. The Companys total shareholder return will then be ranked in terms of which percentile it would have placed in among the Comparison Companies.
Absolute TSR Performance will be the Companys total shareholder return on an average annual basis for the Performance Period.
Price-Earnings Ratio
Price-Earnings Ratio for the Company and each of the Comparison Companies means the forward price-earnings ratio (i.e. the share price on the last day of the Performance Period divided by the expected earnings per share for the year following the end of the Performance Period) reported as of the last day of the Performance Period as sourced from FactSet or such other financial data provider as the Committee may determine. The expected earnings per share will be the mean of analyst recommendations. Price-Earnings Ratio performance will be measured based on where the Companys Price-Earnings Ratio ranks in relation to the Price-Earnings Ratios of the Comparison Companies. As soon as practicable after the completion of the Performance Period, the Price-Earnings Ratios of the Comparison Companies will be determined and ranked from highest to lowest by the Committee. The Companys Price-Earnings Ratio will then be ranked in terms of which percentile it placed in among the Comparison Companies.
Return on Invested Capital
Return on Invested Capital (ROIC)
The following terms are used to calculate ROIC for purposes of the 2020 Performance Grant:
ROIC means Total Return divided by Average Invested Capital. Performance will be calculated for the three successive fiscal years within the Performance Period, added together and then divided by three to arrive at an annual average ROIC for the Performance Period.
1 |
Specifically, using the function CUST-TRR-RETURN-PER or successor functions as defined by Bloomberg. |
ii
Total Return means Operating Earnings plus After-tax Interest & Related Charges, determined for each of the three successive fiscal years within the Performance Period.
Operating Earnings means operating earnings as disclosed on the Companys earnings report furnished on Form 8-K for the applicable fiscal year.
Average Invested Capital means the Average Balances for Long & Short-term Debt plus Preferred Equity plus Common Shareholders Equity. The Average Balances for a year are calculated by performing the calculation at the end of each quarter during the fiscal year (including in the fiscal years opening balance sheet) and then averaging those amounts over five quarters. Long and short-term debt shall be as reported in the Companys consolidated balance sheet prepared under GAAP, net of cash and cash equivalents.
Average Invested Capital will be calculated by excluding (i) accumulated other comprehensive income/(loss) from Common Shareholders Equity (as shown on the Companys financial statements); (ii) impacts from changes in accounting principles that were not prescribed as of the Date of Grant; and (iii) the effects of incremental impacts from non-operating gains or losses during the Performance Period, as disclosed on the Companys earnings report furnished on Form 8-K, that were not included in the projection on which the original ROIC calculation was based at the time of the grant.
iii
EXHIBIT 10.34
DOMINION ENERGY, INC.
2020 GOAL-BASED STOCK AWARD AGREEMENT
THIS AGREEMENT, dated February 13, 2020, between Dominion Energy, Inc., a Virginia corporation (the Company) and [Insert Name] (Participant), is made pursuant and subject to the provisions of the Dominion Energy, Inc. 2014 Incentive Compensation Plan and any amendments thereto (the Plan). All terms used in this Agreement that are defined in the Plan have the same meaning given to such terms in the Plan.
1. Goal-Based Stock Award. Pursuant to the Plan, [Insert Number] shares of Goal-Based Stock (Target Amount) were awarded to the Participant on February 13, 2020 (Date of Grant), subject to the terms and conditions of the Plan, and subject further to the terms and conditions set forth in this Agreement and Exhibit A attached hereto. Goal-Based Stock is Company Stock that will be issued if the Performance Goals set forth in Section 4 for the Performance Period are fulfilled. The actual number of shares of Goal-Based Stock that may be issued may be from 0% to 200% of the Target Amount, depending on the achievement of the Performance Goals. The Performance Period for purposes of this Agreement is the period beginning on January 1, 2020 and ending on December 31, 2022.
2. Performance Achievement and Time of Goal-Based Stock Issuance. Upon the completion of the Performance Period, the Committee will determine the final achievement of the Performance Goals described in Section 4. The Company will then calculate the final number of Goal-Based Stock shares to be issued based on such Performance Goal achievement. Except as provided in Section 5(b) or 6, the appropriate number of Goal-Based Stock shares will be issued to the Participant at a time determined by the Committee, but not later than March 15, 2023.
3. Forfeiture. Except as provided in Paragraphs 5 or 6, the Participant will forfeit any and all rights in the Goal-Based Stock if the Participants employment with the Company or a Dominion Company terminates for any reason before the end of the Performance Period.
4. Performance Goals. Issuance of Goal-Based Stock shares will be based on the Performance Goal achievement of the Performance Criteria described in this Section 4 and further defined in Exhibit A.
a. TSR Performance. Total Shareholder Return (TSR) Performance will determine fifty percent (50%) of the Target Amount (TSR Percentage). Relative TSR Performance and Absolute TSR Performance are each defined in Exhibit A. The percentage of the TSR Percentage of Goal-Based Stock shares that will be issued, if any, is based on the following table:
Relative TSR Performance Percentile Ranking |
Percentage Payout
of TSR Percentage |
|||
85th or above |
200 | % | ||
50th |
100 | % | ||
25th |
50 | % | ||
Below 25th |
0 | % |
1
To the extent that the Companys Relative TSR Performance ranks in a percentile between the 25th and 85th percentile in the table above, then the TSR Percentage payout will be interpolated between the corresponding TSR Percentage payout set forth above. No payment of the TSR Percentage of Goal-Based Stock shares will be made if the Relative TSR Performance is below the 25th percentile, except that a payment of 25% of the TSR Percentage will be made if the Companys Relative TSR Performance is below the 25th percentile but its Absolute TSR Performance is at least 9%. In addition to the foregoing payments, and regardless of the Companys Relative TSR Performance, either (but not both) of the following may be earned: (i) an additional payment of 25% of the TSR Percentage will be made if the Companys Absolute TSR Performance is at least 10% but less than 15%, and/or if the Companys Price-Earnings Ratio (as defined in Exhibit A) is at or above the 50th percentile and below the top third of the group of companies (inclusive of the Company) used to measure Relative TSR Performance in accordance with Exhibit A hereto, or (ii) an additional payment of 50% of the TSR Percentage will be made if the Companys Absolute TSR Performance is at least 15%, and/or if the Companys Price-Earnings Ratio is at or above the top third of the group of companies (inclusive of the Company) used to measure Relative TSR Performance in accordance with Exhibit A hereto (in either case, the Performance Adder). The Committee may reduce or eliminate payment of the Performance Adder in its sole discretion.
The aggregate payments under this Section 4(a) may not exceed 250% of the TSR Percentage. In addition, the overall percentage payment under the entire Award may not exceed 200% of the Target Amount.
b. ROIC Performance. Return on Invested Capital Performance (ROIC Performance) will determine fifty percent (50%) of the Target Amount (ROIC Percentage). ROIC Performance is defined in Exhibit A. The percentage of the ROIC Percentage that will be paid out, if any, is based on the following table:
ROIC Performance |
Percentage Payout
of ROIC Percentage |
|||
7.31% and above |
200 | % | ||
7.08% |
100 | % | ||
6.84% |
50 | % | ||
Below 6.84% |
0 | % |
|
To the extent that the Companys ROIC Performance is greater than 6.84% and less than 7.08%, the ROIC Percentage payout will be interpolated between the applicable Percentage Payout of ROIC Percentage range set forth above. |
|
To the extent that the Companys ROIC Performance is greater than 7.08% and less than 7.31%, the ROIC Percentage payout will be interpolated between the applicable Percentage Payout of ROIC Percentage range set forth above. |
5. Retirement, Involuntary Termination without Cause, Death or Disability.
a. Retirement or Involuntary Termination without Cause. Except as provided in Section 6, if the Participant Retires (as such term is defined in Section 9(b) below) during the Performance Period or if the Participants employment is involuntarily terminated by the Company or a Dominion Company without Cause (as defined in the Employment Continuity Agreement between the Participant and the Company) during the
2
Performance Period and the Participant would have been eligible for a payment if the Participant had remained employed until the end of the Performance Period, the Participant will receive a pro-rated payout of the Participants Goal-Based Stock Award equal to the number of Goal-Based Stock shares the Participant would have received had the Participant remained employed until the end of the Performance Period, multiplied by a fraction, the numerator of which is the number of whole months from February 1, 2020 to the first day of the calendar month coinciding with or immediately following the date of the Participants Retirement or termination of employment, and the denominator of which is thirty-five (35). Shares will be issued after the end of the Performance Period at the time provided in Section 2 based on the Performance Goal achievement approved by the Committee. If the Participant Retires, however, no shares will be issued if the Companys Chief Executive Officer in his sole discretion (or, if the Participant is the Companys Chief Executive Officer, the Committee in its sole discretion) determines that the Participants Retirement is detrimental to the Company. Any potential shares of Goal-Based Stock not issued in accordance with the terms of this Paragraph 5(a) will be forfeited.
b. Death or Disability. If, while employed by the Company or a Dominion Company, a Participant dies or becomes Disabled (as defined in Section 9(b) below) during the Performance Period, a number of Goal-Based Stock shares will be issued to the Participant or the Participants Beneficiary equal to the product of (i) and (ii) where:
(i) is the number of shares that would be issued based on the predicted performance used for determining the compensation cost recognized by the Company for this Goal-Based Stock Award for the latest financial statement filed with the Companys Annual Report on Form 10-K or Quarterly Report on Form 10-Q immediately prior to the event; and
(ii) is a fraction, the numerator of which is the number of whole months from February 1, 2020 to the first day of the calendar month coinciding with or immediately following the date of the Participants death or Disability, and the denominator of which is thirty-five (35).
Any potential shares of Goal-Based Stock not issued in accordance with the terms of this Section 5(b) will be forfeited. Goal-Based Stock shares will be issued as soon as administratively feasible (and in any event within sixty (60) days) after the date of the Participants death or Disability.
6. Qualifying Change of Control. Upon a Qualifying Change of Control prior to the end of the Performance Period, provided the Participant has remained continuously employed with the Company or a Dominion Company from the Date of Grant to the date of the Qualifying Change of Control, a number of the Goal-Based Stock shares will be issued to the Participant equal to the greater of (i) the Target Amount or (ii) the number of shares that would be issued at the end of the Performance Period if the predicted performance used for determining the compensation cost recognized by the Company for this Award for the latest financial statement filed with the Companys Annual Report on Form 10-K or Quarterly Report on Form 10-Q immediately prior to the Qualifying Change of Control was the actual performance for the Performance Period (in either case, the COC Payout Amount). The Goal-Based Stock shares will be issued on or as soon as administratively feasible (but in any event within sixty (60) days) following the Qualifying Change of Control date. If a Qualifying Change of Control occurs prior to the end of the Performance Period and after a Participant has Retired or been involuntarily terminated without Cause pursuant to Section 5(a) above, then the Participant will receive a pro-rated
3
payout of the Participants Goal-Based Stock Award, equal to the COC Payout Amount multiplied by the fraction set forth in Section 5(a) above, with shares being issued on or as soon as administratively feasible (but in any event within sixty (60) days) after the Qualifying Change of Control date. Any potential shares of Goal-Based Stock not issued in accordance with the terms of this Section 6 will be forfeited.
7. Termination for Cause. Notwithstanding any provision of this Agreement to the contrary, if the Participants employment with the Company or a Dominion Company is terminated for Cause (as defined by the Employment Continuity Agreement between the Participant and the Company), the Participant will forfeit all rights to Goal-Based Stock shares awarded pursuant to this Agreement.
8. Clawback of Award Payment.
a. |
Restatement of Financial Statements. If the Companys financial statements are required to be restated at any time within a two (2) year period following the end of the Performance Period as a result of fraud or intentional misconduct, the Committee may, in its discretion, based on the facts and circumstances surrounding the restatement, direct the Company to recover all or a portion of the issued (vested) shares from the Participant if the Participants conduct directly caused or partially caused the need for the restatement. |
b. |
Fraudulent or Intentional Misconduct. If the Company determines that the Participant has engaged in fraudulent or intentional misconduct related to or materially affecting the Companys business operations or the Participants duties at the Company, the Committee may, in its discretion, based on the facts and circumstances surrounding the misconduct, direct the Company to withhold issuance of all or a portion of the Goal-Based Stock shares granted pursuant to this Agreement, or if shares have been issued, to recover all or a portion of the shares from the Participant. |
c. |
Recovery of Payout. The Company reserves the right to recover a Goal-Based Stock Award payout pursuant to this Section 8 by (i) seeking recovery of the vested shares from the Participant; (ii) reducing the amount that would otherwise be payable to the Participant under another Company benefit plan or compensation program to the extent permitted by applicable law; (iii) withholding future annual and long-term incentive awards or salary increases; or (iv) taking any combination of these actions. |
d. |
No Limitation on Remedies. The Companys right to recover Goal-Based or issued shares pursuant to this Section 8 shall be in addition to, and not in lieu of, actions the Company may take to remedy or discipline a Participants misconduct including, but not limited to, termination of employment or initiation of a legal action for breach of fiduciary duty. |
e. |
Subject to Future Rulemaking. The Goal-Based Stock granted under this Agreement is subject to any clawback policies the Company may adopt in order to conform to the requirements of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and resulting rules issued by the Securities and Exchange Commission or national securities exchanges thereunder and that the Company determines should apply to this Agreement. |
4
9. Terms and Conditions.
a. |
Nontransferability; No Shareholder Rights. Except as provided in Section 5, this award of Goal-Based Stock is not transferable and is subject to a substantial risk of forfeiture until the end of the Performance Period. A Participant shall have not have any rights as a shareholder with respect to the shares of Goal-Based Stock that may be issued under this Agreement unless and until such shares have actually been issued to the Participant after the end of the Performance Period as provided herein. |
b. |
Certain Definitions. |
(i) Retirement. For purposes of this Agreement, the term Retire or Retirement means a voluntary termination of employment on a date when the Participant is eligible for early or normal retirement benefits under the terms of the Company Pension Plan (as defined below), or would be eligible if any crediting of deemed additional years of age or service applicable to the Participant under a supplemental retirement plan of the Company was applied under the Company Pension Plan, as in effect at the time of the determination, or, for a Participant who is not eligible to participate in a Company Pension Plan, a voluntary termination of employment on or after age 55, unless (in each case) the Companys Chief Executive Officer in his sole discretion (or, if the Participant is the Companys Chief Executive Officer, the Committee in its sole discretion) determines that the Participants retirement is detrimental to the Company. Company Pension Plan means the applicable pension plan of the Company or its subsidiaries, if any, in which the Participant is eligible to participate as of the Date of Grant, which may include either the Dominion Energy Pension Plan or the SCANA Corporation Retirement Plan or any successor thereto, but excluding the cash balance portion of any such plan.
(ii) Disabled or Disability. For purposes of this Agreement, the term Disabled or Disability means a disability as defined under Treasury Regulation Section 1.409A-3(i)(4). The Committee will determine whether or not a Disability exists and its determination will be conclusive and binding on the Participant.
c. |
Delivery of Shares. |
(i) Share Delivery. Within the applicable time periods after the end of the Performance Period or after the occurrence of an event described in Sections 5 or 6 as described above, the Company will deliver to the Participant (or in the event of the Participants death, the Participants Beneficiary) the appropriate number of shares of Company Stock.
(ii) Withholding of Taxes. No Company Stock will be delivered until the Participant (or the Participants Beneficiary) has paid to the Company the amount that must be withheld under federal, state and local income and
5
employment tax laws (the Applicable Withholding Taxes) or the Participant and the Company have made satisfactory arrangements for the payment of such taxes. Unless the Participant makes an alternative election, the Company will retain the number of shares of Goal-Based Stock (valued at their Fair Market Value) required to satisfy the Applicable Withholding Taxes. As an alternative to the Company retaining shares, the Participant or the Participants Beneficiary may elect to (i) deliver Mature Shares (valued at their Fair Market Value) or (ii) make a cash payment to satisfy Applicable Withholding Taxes.
d. |
Fractional Shares. Fractional shares of Company Stock will not be issued. |
e. |
No Right to Continued Employment. This Agreement does not confer upon the Participant any right with respect to continuance of employment by the Company, nor will it interfere in any way with the right of the Company to terminate the Participants employment at any time. |
f. |
Change in Capital Structure. The number and fair market value of shares of Goal-Based Stock awarded by this Agreement will be automatically adjusted as provided in Section 18(a) of the Plan if the Company has a change in capital structure. |
g. |
Governing Law. This Agreement shall be governed by the laws of the Commonwealth of Virginia, other than its choice of law provisions. |
h. |
Conflicts. In the event of any conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan will govern. |
i. |
Participant Bound by Plan. By accepting this Agreement, Participant hereby acknowledges receipt of a copy of the prospectus and Plan document accessible on the Company Intranet and agrees to be bound by all the terms and provisions thereof. |
j. |
Binding Effect. This Agreement will be binding upon and inure to the benefit of the legatees, distributees, and personal representatives of the Participant and the successors of the Company. |
k. |
Performance Goal Adjustments. Pursuant to Section 10(c) of the Plan, the Committee may at any time, in its sole discretion, remove or revise any performance goals or other performance objectives for this Goal-Based Stock Award. The Committee may exercise negative discretion to reduce payments under this Agreement as it deems appropriate. |
l. |
Section 409A. This Agreement and the Goal-Based Stock award arrangement described herein is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (Code Section 409A), and shall be interpreted to the maximum extent possible in accordance with such intent. To the extent necessary to comply with Code Section 409A, no payment will be made earlier than six months after a Participants termination of employment other than for death if the Award is subject to Code Section 409A and the Participant is a specified employee (within the meaning of Code Section 409A(a)(2)(B)(i)). |
6
EXHIBIT A
DOMINION ENERGY, INC.
2020 GOAL-BASED STOCK AWARD AGREEMENT
PERFORMANCE CRITERIA
Total Shareholder Return
Relative TSR Performance will be measured based on where the Companys total shareholder return during the Performance Period ranks in relation to the total shareholder returns of the companies that are members of the Companys compensation peer group as of the Date of Grant as set forth below (the Comparison Companies):
Ameren Corporation | Exelon Corporation | |
American Electric Power Company | FirstEnergy Corporation | |
CenterPoint Energy | NextEra Energy | |
Consolidated Edison Company | NiSource Incorporated | |
DTE Energy Company | Public Service Enterprise Group | |
Duke Energy Corporation | Sempra Energy | |
Edison International | Southern Company | |
Entergy Corporation | Xcel Energy | |
Eversource Energy |
The Comparison Companies shall be adjusted during the Performance Period as follows:
(i) |
In the event of a merger, acquisition or business combination transaction of a Comparison Company with or by another Comparison Company, effective upon the public announcement of the transaction, the surviving entity shall remain a Comparison Company and the non-surviving entity shall cease to be a Comparison Company (provided that, if the proposed transaction is subsequently terminated before the Relative TSR Performance is calculated, then the non-surviving company shall be retroactively reinstated as a Comparison Company); |
(ii) |
If it is publicly announced that a Comparison Company will be acquired by another company that is not a Comparison Company, or in the event a going private transaction is publicly announced where the Comparison Company will not be the surviving entity or will otherwise no longer be publicly traded, the company shall cease to be a Comparison Company as of the date such announcement is made (provided that, if the proposed transaction is subsequently terminated before the Relative TSR Performance is calculated, then the company shall be retroactively reinstated as a Comparison Company); |
(iii) |
In the event of a spinoff, divestiture, or sale of a substantial portion of assets of a Comparison Company, the Comparison Company shall no longer be a Comparison Company if the companys reported revenue (in its GAAP accounts) for the four most recently reported quarters ending on or before the last day of the Performance Period falls below 40% of Dominion Energys reported revenue for last year of the Performance Period; and |
(iv) |
In the event of a bankruptcy of a Comparison Company, such company shall remain a Comparison Company and its stock price will continue to be tracked for purposes of Relative TSR Performance. If the company liquidates, it will remain a Comparison Company and its stock price will be reduced to zero for the remaining Performance Period. |
i
Total shareholder return consists of the difference between the value of a share of common stock at the beginning and end of the Performance Period, plus the value of gross dividends paid as if reinvested in stock and other appropriate adjustments for such events as stock splits. For purposes of TSR Performance, the total shareholder return of the Company and the Comparison Companies will be calculated using Bloomberg.1 As soon as practicable after the completion of the Performance Period, the total shareholder returns of the Comparison Companies will be calculated and ranked from highest to lowest by the Committee. The Companys total shareholder return will then be ranked in terms of which percentile it would have placed in among the Comparison Companies.
Absolute TSR Performance will be the Companys total shareholder return on an average annual basis for the Performance Period.
Price-Earnings Ratio
Price-Earnings Ratio for the Company and each of the Comparison Companies means the forward price-earnings ratio (i.e. the share price on the last day of the Performance Period divided by the expected earnings per share for the year following the end of the Performance Period) reported as of the last day of the Performance Period as sourced from FactSet or such other financial data provider as the Committee may determine. The expected earnings per share will be the mean of analyst recommendations. Price-Earnings Ratio performance will be measured based on where the Companys Price-Earnings Ratio ranks in relation to the Price-Earnings Ratios of the Comparison Companies. As soon as practicable after the completion of the Performance Period, the Price-Earnings Ratios of the Comparison Companies will be determined and ranked from highest to lowest by the Committee. The Companys Price-Earnings Ratio will then be ranked in terms of which percentile it placed in among the Comparison Companies.
Return on Invested Capital
Return on Invested Capital (ROIC)
The following terms are used to calculate ROIC for purposes of the 2020 Goal-Based Stock Award:
ROIC means Total Return divided by Average Invested Capital. Performance will be calculated for the three successive fiscal years within the Performance Period, added together and then divided by three to arrive at an annual average ROIC for the Performance Period.
Total Return means Operating Earnings plus After-tax Interest & Related Charges, determined for each of the three successive fiscal years within the Performance Period.
Operating Earnings means operating earnings as disclosed on the Companys earnings report furnished on Form 8-K for the applicable fiscal year.
1 |
Specifically, using the function CUST-TRR-RETURN-PER or successor functions as defined by Bloomberg. |
ii
Average Invested Capital means the Average Balances for Long & Short-term Debt plus Preferred Equity plus Common Shareholders Equity. The Average Balances for a year are calculated by performing the calculation at the end of each quarter during the fiscal year (including in the fiscal years opening balance sheet) and then averaging those amounts over five quarters. Long and short-term debt shall be as reported in the Companys consolidated balance sheet prepared under GAAP, net of cash and cash equivalents.
Average Invested Capital will be calculated by excluding (i) accumulated other comprehensive income/(loss) from Common Shareholders Equity (as shown on the Companys financial statements); (ii) impacts from changes in accounting principles that were not prescribed as of the Date of Grant; and (iii) the effects of incremental impacts from non-operating gains or losses during the Performance Period, as disclosed on the Companys earnings report furnished on Form 8-K, that were not included in the projection on which the original ROIC calculation was based at the time of the grant.
iii
EXHIBIT 10.35
DOMINION ENERGY, INC.
RESTRICTED STOCK AWARD AGREEMENT
PARTICIPANT | DATE OF GRANT | NUMBER OF SHARES OF RESTRICTED STOCK GRANTED | ||
«First_Name» «Last_Name» |
February 13, 2020 | «##,###» | ||
PERSONNEL NUMBER | VESTING DATE |
VESTING SCHEDULE Vesting Date Percentage |
||
«#####» |
February 1, 2023 | February 1, 2023 100% |
THIS AGREEMENT, effective as of the Date of Grant shown above, between Dominion Energy, Inc., a Virginia corporation (the Company) and the Participant named above is made pursuant and subject to the provisions of the Dominion Energy, Inc. 2014 Incentive Compensation Plan and any amendments thereto (the Plan). All terms used in this Agreement that are defined in the Plan have the same meaning given to such terms in the Plan.
1. |
Award of Stock. Pursuant to the Plan, the Number of Shares of Restricted Stock Granted shown above (the Restricted Stock) were awarded to the Participant on the Date of Grant shown above, subject to the terms and conditions of the Plan, and subject further to the terms and conditions set forth in this Agreement. |
2. |
Vesting. Except as provided in Sections 3, 4, 5 or 6, one hundred percent (100%) of the shares of Restricted Stock awarded under this Agreement will vest on the Vesting Date shown above. |
3. |
Forfeiture. Except as provided in Sections 4 or 5, the Participant will forfeit any and all rights in the Restricted Stock if the Participants employment with the Company or a Dominion Company terminates for any reason prior to the Vesting Date. |
4. |
Death, Disability, Retirement or Involuntary Termination without Cause. Except as provided in Section 5, if the Participant terminates employment due to death, Disability, or Retirement (as such term is defined in Section 8(e)) before the Vesting Date or if the Participants employment is involuntarily terminated by the Company or a Dominion Company without Cause (as defined in the Employment Continuity Agreement between the Participant and the Company) before the Vesting Date, the Participant will become vested in the number of shares of Restricted Stock awarded under this Agreement multiplied by a fraction, the numerator of which is the number of whole months from February 1, 2020 to the first day of the month coinciding with or immediately following the date of the Participants termination of employment, and the denominator of which is the number of whole months from February 1, 2020 to the Vesting Date, rounded |
1
down to the nearest whole share. If the Participant Retires, however, the Participants Restricted Stock will not vest if the Companys Chief Executive Officer in his sole discretion (or, if the Participant is the Companys Chief Executive Officer, the Committee in its sole discretion) determines that the Participants Retirement is detrimental to the Company. The vesting will occur on the date of the Participants termination of employment due to death, Disability, Retirement, or termination by the Company without Cause. Any shares of Restricted Stock that do not vest in accordance with this Section 4 will be forfeited. |
5. |
Change of Control. Upon a Change of Control prior to the Vesting Date, provided the Participant has remained continuously employed with the Company or a Dominion Company from the Date of Grant to the date of the Change of Control, the Participants rights in the Restricted Stock will become vested as follows: |
a. |
A portion of the Restricted Stock will be immediately vested equal to the number of shares of Restricted Stock awarded under this Agreement multiplied by a fraction, the numerator of which is the number of whole months from February 1, 2020 to the Change of Control date, and the denominator of which is the number of whole months from February 1, 2020 to the Vesting Date, rounded down to the nearest whole share. |
b. |
Unless previously forfeited, the remaining shares of Restricted Stock will become vested after a Change of Control at the earliest of the following events and in accordance with the terms described in subsections (i) through (iii) below: |
(i) |
Vesting Date. All remaining shares of Restricted Stock will become vested on the Vesting Date. |
(ii) |
Death, Disability or Retirement. If the Participant terminates employment due to death, Disability or Retirement (as defined in Section 8(e)) before the Vesting Date, the Participant will become vested in the remaining shares of Restricted Stock multiplied by a fraction, the numerator of which is the number of whole months from the first day of the month in which the Change of Control occurs to the first day of the month coinciding with or immediately following the Participants termination of employment, and the denominator of which is the number of whole months from the first day of the month in which the Change of Control occurs to the Vesting Date, rounded down to the nearest whole share. If the Participant Retires, however, the Participants Restricted Stock will not vest if the Companys Chief Executive Officer in his sole discretion (or, if the Participant is the Companys Chief Executive Officer, the Committee in its sole discretion) determines that the |
2
Participants Retirement is detrimental to the Company. The vesting will occur on the date of the Participants termination of employment due to death, Disability, or Retirement. Any shares of the Restricted Stock that do not vest in accordance with the terms of this subsection (ii) will be forfeited. |
(iii) |
Involuntary Termination without Cause. All remaining shares of Restricted Stock will become vested upon the Participants involuntary termination by the Company or a Dominion Company without Cause before the Vesting Date, or upon the Participants Constructive Termination before the Vesting Date, as such terms are defined by the Employment Continuity Agreement between the Participant and the Company. |
6. |
Termination for Cause. Notwithstanding any provision of this Agreement to the contrary, if the Participants employment with the Company or a Dominion Company is terminated for Cause (as defined by the Employment Continuity Agreement between the Participant and the Company), the Participant will forfeit all Restricted Stock shares awarded pursuant to this Agreement. |
7. |
Clawback of Award Payment. |
a. |
Restatement of Financial Statements. If the Companys financial statements are required to be restated at any time within a two (2) year period following the Vesting Date as a result of fraud or intentional misconduct, the Committee may, in its discretion, based on the facts and circumstances surrounding the restatement, direct the Company to withhold issuance of all or a portion of the shares granted pursuant to this Agreement, or if shares have been issued, to recover all or a portion of the shares from the Participant if the Participants conduct directly caused or partially caused the need for the restatement. |
b. |
Fraudulent or Intentional Misconduct. If the Company determines that the Participant has engaged in fraudulent or intentional misconduct related to or materially affecting the Companys business operations or the Participants duties at the Company, the Committee may, in its discretion, based on the facts and circumstances surrounding the misconduct, direct the Company to withhold issuance of all or a portion of the shares granted pursuant to this Agreement, or if shares have been issued, to recover all or a portion of the shares from the Participant. |
c. |
Recovery of Payout. The Company reserves the right to recover a Restricted Stock Award payout pursuant to this Section 7 by (i) seeking recovery of the vested shares from the Participant; (ii) reducing the amount that would otherwise be payable to the Participant under another Company benefit plan or compensation program to the extent permitted by applicable law; (iii) withholding future annual and long-term incentive awards or salary increases; or (iv) taking any combination of these actions. |
3
d. |
No Limitation on Remedies. The Companys right to recover Restricted Stock or issued shares pursuant to this Section 7 shall be in addition to, and not in lieu of, actions the Company may take to remedy or discipline a Participants misconduct including, but not limited to, termination of employment or initiation of a legal action for breach of fiduciary duty. |
e. |
Subject to Future Rulemaking. The Restricted Stock granted under this Agreement is subject to any claw back policies the Company may adopt in order to conform to the requirements of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and resulting rules issued by the Securities and Exchange Commission or national securities exchanges thereunder and that the Company determines should apply to said Restricted Stock. |
8. |
Terms and Conditions. |
a. |
Nontransferability. Except as provided in Sections 4 and 5, the shares of Restricted Stock are not transferable and are subject to a substantial risk of forfeiture until the Vesting Date. |
b. |
Uncertificated Shares; Power of Attorney. The Company may issue the Restricted Shares in uncertificated form. Such uncertificated shares shall be credited to a book entry account maintained by the Company (or its transfer agent) on behalf of the Participant. As a condition of accepting this award, the Participant hereby irrevocably appoints Dominion Energy Services, Inc., or its successor, as the Participants attorney-in-fact, with full power of substitution, to transfer (or provide instructions to the Companys transfer agent to transfer) such shares on the Companys books. |
c. |
Custody of Share Certificates; Stock Power. The Company will retain custody of any share certificates for the Restricted Stock that may be issued until such shares vest or are forfeited. If share certificates are issued, the Participant shall execute and deliver a stock power, endorsed in blank, to Dominion Energy Services, Inc., with respect to such shares. |
d. |
Shareholder Rights. The Participant will have the right to receive dividends and will have the right to vote the shares of Restricted Stock awarded under Section 1, both vested and unvested. |
4
e. |
Retirement. For purposes of this Agreement, the term Retire or Retirement means a voluntary termination of employment on a date when the Participant is eligible for early or normal retirement benefits under the terms of the Company Pension Plan (as defined below), or would be eligible if any crediting of deemed additional years of age or service applicable to the Participant under a supplemental retirement plan of the Company was applied under the Company Pension Plan, as in effect at the time of the determination, or, for a Participant who is not eligible to participate in a Company Pension Plan, a voluntary termination of employment on or after age 55, unless (in each case) the Companys Chief Executive Officer in his sole discretion (or, if the Participant is the Companys Chief Executive Officer, the Committee in its sole discretion) determines that the Participants retirement is detrimental to the Company. Company Pension Plan means the applicable pension plan of the Company or its subsidiaries, if any, in which the Participant is eligible to participate as of the Date of Grant, which may include either the Dominion Energy Pension Plan or the SCANA Corporation Retirement Plan or any successor thereto, but excluding the cash balance portion of any such plan. [For CEO award only - Notwithstanding the foregoing, if the Participant continues to provide substantial services to the Company as a member of the Board or otherwise after a termination of employment that would otherwise qualify as a Retirement hereunder, the Participant will not be deemed to have Retired for purposes hereof until the end of such period of service.] |
f. |
Delivery of Shares. |
(i) |
Share Delivery. On or as soon as administratively feasible after the Vesting Date or the date on which the shares of Restricted Stock have become vested due to the occurrence of an event described in Section 4 or 5, the Company will remove (or provide instructions to its transfer agents to remove) the transfer restrictions described herein, and (if any share certificate has been issued) shall deliver to the Participant (or in the event of the Participants death, the Participants Beneficiary) any such certificates free of the transfer restrictions described herein. The Company will also cancel any stock power covering such shares. |
(ii) |
Withholding of Taxes. No Company Stock will be delivered until the Participant (or the Participants Beneficiary) has paid to the Company the amount that must be withheld under federal, state and local income and employment tax laws (the Applicable Withholding Taxes) or the Participant and the Company have made satisfactory arrangements for the payment of such taxes. Unless the Participant makes an alternative election, the Company will retain the number of shares of Restricted Stock (valued at their Fair Market Value) required to satisfy the Applicable Withholding Taxes. As an alternative to the Company retaining shares, the Participant or the Participants Beneficiary may elect to (i) deliver Mature Shares (valued at their Fair Market Value) or (ii) make a cash payment to satisfy Applicable Withholding Taxes. |
5
g. |
Fractional Shares. Fractional shares of Company Stock will not be issued. |
h. |
No Right to Continued Employment. This Agreement does not confer upon the Participant any right with respect to continuance of employment by the Company or a Dominion Company, nor shall it interfere in any way with the right of the Company or a Dominion Company to terminate the Participants employment at any time. |
i. |
Change in Capital Structure. The number and fair market value of shares of Restricted Stock awarded by this Agreement shall be automatically adjusted as provided in Section 18(a) of the Plan if the Company has a change in capital structure. |
j. |
Governing Law. This Agreement shall be governed by the laws of the Commonwealth of Virginia, other than its choice of law provisions. |
k. |
Conflicts. In the event of any conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall govern. |
l. |
Participant Bound by Plan. By accepting this Agreement, Participant hereby acknowledges receipt of a copy of the prospectus and Plan document accessible on the Company Intranet and agrees to be bound by all the terms and provisions thereof. |
m. |
Binding Effect. This Agreement shall be binding upon and inure to the benefit of the legatees, distributees, and personal representatives of the Participant and any successors of the Company. |
6
Exhibit 21
Dominion Energy, Inc.
Subsidiaries of the Registrant
As of February 14, 2020
Name |
Jurisdiction of Incorporation |
Name Under Which Business is Conducted |
||
Dominion Energy, Inc. |
Virginia |
Dominion Energy, Inc. |
||
BrightSuite, Inc. |
Virginia |
BrightSuite, Inc. |
||
BrightSuite Distributed Solar Holdings, Inc. |
Virginia |
BrightSuite Distributed Solar Holdings, Inc. |
||
DE Fluvanna Solar, LLC |
Virginia |
DE Fluvanna Solar, LLC |
||
DE Hanover Solar, LLC |
Virginia |
DE Hanover Solar, LLC |
||
DE King William Solar, LLC |
Virginia |
DE King William Solar, LLC |
||
DE Powhatan Solar, LLC |
Virginia |
DE Powhatan Solar, LLC |
||
BrightSuite Home, LLC |
Virginia |
BrightSuite Home, LLC |
||
BrightSuite Solar, LLC |
Virginia |
BrightSuite Solar, LLC |
||
Dominion Energy Marketplace, LLC |
Virginia |
Dominion Energy Marketplace, LLC |
||
CNG Coal Company |
Delaware |
CNG Coal Company |
||
Dominion ACP Holding, Inc. |
Virginia |
Dominion ACP Holding, Inc. |
||
Dominion Atlantic Coast Pipeline, LLC |
Virginia |
Dominion Atlantic Coast Pipeline, LLC |
||
Atlantic Coast Pipeline, LLC |
Delaware |
Atlantic Coast Pipeline, LLC |
||
Dominion Alternative Energy Holdings, Inc. |
Virginia |
Dominion Alternative Energy Holdings, Inc. |
||
Dominion Energy Technologies II, Inc. |
Virginia |
Dominion Energy Technologies II, Inc. |
||
Dominion Energy Technologies, Inc. |
Virginia |
Dominion Energy Technologies, Inc. |
||
Dominion Voltage, Inc. |
Virginia |
Dominion Voltage, Inc. DVI |
||
Tredegar Solar Fund I, LLC |
Delaware |
Tredegar Solar Fund I, LLC |
||
Dominion Capital, Inc. |
Virginia |
Dominion Capital, Inc. |
||
Dominion Energy Carolina Gas Services, Inc. |
Virginia |
Dominion Energy Carolina Gas Services, Inc. |
||
Dominion Energy Field Services, Inc. |
Delaware |
Dominion Energy Field Services, Inc. |
||
Dominion Energy Fuel Services, Inc. |
Virginia |
Dominion Energy Fuel Services, Inc. |
||
Dominion Energy Payroll Company, Inc. |
Virginia |
Dominion Energy Payroll Company, Inc. |
||
Dominion Energy Questar Corporation |
Utah |
Dominion Energy Questar Corporation |
||
Dominion Energy Gas Distribution, LLC |
Virginia |
Dominion Energy Gas Distribution, LLC |
||
The East Ohio Gas Company |
Ohio |
Dominion Energy Ohio |
||
Dominion Energy Gas Holdings, LLC |
Virginia |
Dominion Energy Gas Holdings, LLC |
||
Dominion Cove Point, LLC |
Virginia |
Dominion Cove Point, LLC |
||
Dominion Energy Midstream GP, LLC |
Delaware |
Dominion Energy Midstream GP, LLC |
||
Dominion Energy Midstream Partners, LP |
Delaware |
Dominion Energy Midstream Partners, LP |
||
Dominion Energy Carolina Gas Transmission, LLC |
South Carolina |
Dominion Energy Carolina Gas Transmission, LLC |
||
Dominion Energy Questar Pipeline, LLC |
Utah |
Dominion Energy Questar Pipeline, LLC |
||
Dominion Energy Overthrust Pipeline, LLC |
Utah |
Dominion Energy Overthrust Pipeline, LLC |
||
Questar Field Services, LLC |
Utah |
Questar Field Services, LLC |
||
Questar White River Hub, LLC |
Utah |
Questar White River Hub, LLC |
||
Iroquois GP Holding Company, LLC |
Delaware |
Iroquois GP Holding Company, LLC |
||
Dominion Energy Midstream Partners, LP |
Delaware |
Dominion Energy Midstream Partners, LP |
||
Dominion Energy Carolina Gas Transmission, LLC |
South Carolina |
Dominion Energy Carolina Gas Transmission, LLC |
||
Dominion Energy Questar Pipeline, LLC |
Utah |
Dominion Energy Questar Pipeline, LLC |
||
Dominion Energy Overthrust Pipeline, LLC |
Utah |
Dominion Energy Overthrust Pipeline, LLC |
||
Questar Field Services, LLC |
Utah |
Questar Field Services, LLC |
||
Questar White River Hub, LLC |
Utah |
Questar White River Hub, LLC |
||
Iroquois GP Holding Company, LLC |
Delaware |
Iroquois GP Holding Company, LLC |
||
Dominion MLP Holding Company, LLC |
Delaware |
Dominion MLP Holding Company, LLC |
||
Dominion Energy Midstream Partners, LP |
Delaware |
Dominion Energy Midstream Partners, LP |
||
Dominion Energy Carolina Gas Transmission, LLC |
South Carolina |
Dominion Energy Carolina Gas Transmission, LLC |
Dominion Energy Questar Pipeline, LLC |
Utah |
Dominion Energy Questar Pipeline, LLC |
||
Dominion Energy Overthrust Pipeline, LLC |
Utah |
Dominion Energy Overthrust Pipeline, LLC |
||
Questar Field Services, LLC |
Utah |
Questar Field Services, LLC |
||
Questar White River Hub, LLC |
Utah |
Questar White River Hub, LLC |
||
Iroquois GP Holding Company, LLC |
Delaware |
Iroquois GP Holding Company, LLC |
||
Dominion Energy Transmission, Inc. |
Delaware |
Dominion Energy Transmission, Inc. |
||
Dominion Brine, LLC |
Delaware |
Dominion Brine, LLC |
||
Tioga Properties, LLC |
Delaware |
Tioga Properties, LLC |
||
Farmington Properties, Inc. |
Pennsylvania |
Farmington Properties, Inc. |
||
NE Hub Partners, L.L.C. |
Delaware |
NE Hub Partners, L.L.C. |
||
NE Hub Partners, L.P. |
Delaware |
NE Hub Partners, L.P. |
||
Dominion Iroquois, Inc. |
Delaware |
Dominion Iroquois, Inc. |
||
Dominion MLP Holding Company II, LLC |
Virginia |
Dominion MLP Holding Company II, LLC |
||
Cove Point GP Holding Company, LLC |
Delaware |
Cove Point GP Holding Company, LLC |
||
Dominion Energy Cove Point LNG, LP |
Delaware |
Dominion Energy Cove Point LNG, LP |
||
Dominion Energy Cove Point LNG, LP |
Delaware |
Dominion Energy Cove Point LNG, LP |
||
Dominion Energy Questar Pipeline Services, Inc. |
Utah |
Dominion Energy Questar Pipeline Services, Inc. |
||
Dominion Energy Wexpro Services Company |
Utah |
Dominion Energy Wexpro Services Company |
||
Dominion Gas Projects Company, LLC |
Delaware |
Dominion Gas Projects Company, LLC |
||
QPC Holding Company, LLC |
Utah |
QPC Holding Company, LLC |
||
Questar InfoComm, Inc. |
Utah |
Questar InfoComm, Inc. |
||
Questar Energy Services, Inc. |
Utah |
Questar Energy Services, Inc. |
||
Questar Southern Trails Pipeline Company |
Utah |
Questar Southern Trails Pipeline Company |
||
Questar Gas Company |
Utah |
Dominion Energy Utah (in Utah) Dominion Energy Wyoming (in Wyoming) Dominion Energy Idaho (in Idaho) |
||
Wexpro Company |
Utah |
Dominion Energy Wexpro |
||
Wexpro II Company |
Utah |
Wexpro II Company |
||
Wexpro Development Company |
Utah |
Wexpro Development Company |
||
Dominion Energy RNG Holdings II, Inc. |
Delaware |
Dominion Energy RNG Holdings II, Inc. |
||
Clean Energy Asset USA LLC |
Delaware |
Clean Energy Asset USA LLC |
||
CEA Dairy RNG Colorado, LLC |
Delaware |
CEA Dairy RNG Colorado, LLC |
||
CEA Greely, LLC |
Delaware |
CEA Greely, LLC |
||
CEA Dairy RNG Georgia, LLC |
Delaware |
CEA Dairy RNG Georgia, LLC |
||
CEA Americus, LLC |
Delaware |
CEA Americus, LLC |
||
CEA Dairy RNG Nevada, LLC |
Delaware |
CEA Dairy RNG Nevada, LLC |
||
CEA Mason, LLC |
Delaware |
CEA Mason, LLC |
||
CEA Dairy RNG New Mexico, LLC |
Delaware |
CEA Dairy RNG New Mexico, LLC |
||
CEA Clovis, LLC |
Delaware |
CEA Clovis, LLC |
||
Dairy RNG Holdings, LLC |
Delaware |
Dairy RNG Holdings, LLC |
||
Dominion Energy RNG Holdings, Inc. |
Virginia |
Dominion Energy RNG Holdings, Inc. |
||
Align RNG, LLC |
Delaware |
Align RNG, LLC |
||
Align RNG North Carolina, LLC |
Delaware |
Align RNG North Carolina, LLC |
||
Align RNG Grady Road, LLC |
Delaware |
Align RNG Grady Road, LLC |
||
Align RNG Utah, LLC |
Delaware |
Align RNG Utah, LLC |
||
Align RNG Utah-Milford, LLC |
Delaware |
Align RNG Utah-Milford, LLC |
||
Align RNG Virginia, LLC |
Delaware |
Align RNG Virginia, LLC |
||
Align RNG Virginia-Waverly, LLC |
Delaware |
Align RNG Virginia-Waverly, LLC |
||
Dominion Energy Services, Inc. |
Virginia |
Dominion Energy Services, Inc. |
||
Dominion Energy Solutions, Inc. |
Delaware |
Dominion Energy Solutions Dominion East Ohio Energy Dominion Peoples Plus |
||
Dominion Energy Technical Solutions, Inc. |
Virginia |
Dominion Energy Technical Solutions, Inc. |
||
Dominion Gathering & Processing, Inc. |
Virginia |
Dominion Gathering & Processing, Inc. |
||
Dominion Generation, Inc. |
Virginia |
Dominion Generation, Inc. |
||
CNG Power Services Corporation |
Delaware |
CNG Power Services Corporation |
||
Dominion Cogen WV, Inc. |
Virginia |
Dominion Cogen WV, Inc. |
Dominion Energy Generation Marketing, Inc. |
Delaware |
Dominion Energy Generation Marketing, Inc. |
||
Dominion Energy Nuclear Connecticut, Inc. |
Delaware |
Dominion Energy Nuclear Connecticut, Inc. |
||
Dominion Energy Solar CA, LLC |
Delaware |
Dominion Energy Solar CA, LLC |
||
Dominion Energy Terminal Company, Inc. |
Virginia |
Dominion Energy Terminal Company, Inc. |
||
Dominion Equipment III, Inc. |
Delaware |
Dominion Equipment III, Inc. |
||
Dominion Equipment, Inc. |
Virginia |
Dominion Equipment, Inc. |
||
Dominion Fairless Hills, Inc. |
Delaware |
Dominion Fairless Hills, Inc. |
||
Dominion Mt. Storm Wind, LLC |
Virginia |
Dominion Mt. Storm Wind, LLC |
||
Dominion Nuclear Projects, Inc. |
Virginia |
Dominion Nuclear Projects, Inc. |
||
Dominion Energy Kewaunee, Inc. |
Wisconsin |
Dominion Energy Kewaunee, Inc. |
||
Dominion Person, Inc. |
Delaware |
Dominion Person, Inc. |
||
Dominion Solar Projects III, Inc. |
Virginia |
Dominion Solar Projects III, Inc. |
||
Four Brothers Solar, LLC |
Delaware |
Four Brothers Solar, LLC |
||
Enterprise Solar, LLC |
Delaware |
Enterprise Solar, LLC |
||
Escalante Solar I, LLC |
Delaware |
Escalante Solar I, LLC |
||
Escalante Solar II, LLC |
Delaware |
Escalante Solar II, LLC |
||
Escalante Solar III, LLC |
Delaware |
Escalante Solar III, LLC |
||
Granite Mountain Holdings, LLC |
Delaware |
Granite Mountain Holdings, LLC |
||
Granite Mountain Solar East, LLC |
Delaware |
Granite Mountain Solar East, LLC |
||
Granite Mountain Solar West, LLC |
Delaware |
Granite Mountain Solar West, LLC |
||
Iron Springs Holdings, LLC |
Delaware |
Iron Springs Holdings, LLC |
||
Iron Springs Solar, LLC |
Delaware |
Iron Springs Solar, LLC |
||
Dominion Solar Projects VI, Inc. |
Virginia |
Dominion Solar Projects VI, Inc. |
||
Greensville County Solar Project, LLC |
Delaware |
Greensville County Solar Project, LLC |
||
TWE Myrtle Solar Project, LLC |
Delaware |
TWE Myrtle Solar Project, LLC |
||
Dominion Solar Projects VII, Inc. |
Virginia |
Dominion Solar Projects VII, Inc. |
||
Seabrook Solar, LLC |
Delaware |
Seabrook Solar, LLC |
||
Wilkinson Solar LLC |
Delaware |
Wilkinson Solar LLC |
||
Dominion Solar Services, Inc. |
Virginia |
Dominion Solar Services, Inc. |
||
Dominion State Line, LLC |
Delaware |
Dominion State Line, LLC |
||
Dominion Wholesale, Inc. |
Virginia |
Dominion Wholesale, Inc. |
||
Dominion Wind Projects, Inc. |
Virginia |
Dominion Wind Projects, Inc. |
||
Dominion Fowler Ridge Wind, LLC |
Virginia |
Dominion Fowler Ridge Wind, LLC |
||
Dominion Wind Development, LLC |
Virginia |
Dominion Wind Development, LLC |
||
Prairie Fork Wind Farm, LLC |
Virginia |
Prairie Fork Wind Farm, LLC |
||
Eagle Holdco Solar, LLC |
Virginia |
Eagle Holdco Solar, LLC |
||
Eagle Solar, LLC |
Virginia |
Eagle Solar, LLC |
||
Dominion Solar Projects C, Inc. |
Virginia |
Dominion Solar Projects C, Inc. |
||
Dominion Solar Holdings IV, LLC |
Virginia |
Dominion Solar Holdings IV, LLC |
||
96WI 8ME LLC |
Delaware |
96WI 8ME LLC |
||
Clipperton Holdings LLC |
North Carolina |
Clipperton Holdings LLC |
||
Fremont Farm, LLC |
North Carolina |
Fremont Farm, LLC |
||
Innovative Solar 37, LLC |
North Carolina |
Innovative Solar 37, LLC |
||
Moffett Solar 1, LLC |
Delaware |
Moffett Solar 1, LLC |
||
Moorings Farm 2, LLC |
North Carolina |
Moorings Farm 2, LLC |
||
Mustang Solar, LLC |
North Carolina |
Mustang Solar, LLC |
||
Pikeville Farm, LLC |
North Carolina |
Pikeville Farm, LLC |
||
Ridgeland Solar Farm I, LLC |
Delaware |
Ridgeland Solar Farm I, LLC |
||
Siler Solar, LLC |
North Carolina |
Siler Solar, LLC |
||
Wakefield Solar, LLC |
North Carolina |
Wakefield Solar, LLC |
||
Dominion Solar Projects D, Inc. |
Virginia |
Dominion Solar Projects D, Inc. |
||
Dominion Solar Holdings IV, LLC |
Virginia |
Dominion Solar Holdings IV, LLC |
||
96WI 8ME LLC |
Delaware |
96WI 8ME LLC |
||
Clipperton Holdings LLC |
North Carolina |
Clipperton Holdings LLC |
||
Fremont Farm, LLC |
North Carolina |
Fremont Farm, LLC |
||
Innovative Solar 37, LLC |
North Carolina |
Innovative Solar 37, LLC |
||
Moffett Solar 1, LLC |
Delaware |
Moffett Solar 1, LLC |
Moorings Farm 2, LLC |
North Carolina |
Moorings Farm 2, LLC |
||
Mustang Solar, LLC |
North Carolina |
Mustang Solar, LLC |
||
Pikeville Farm, LLC |
North Carolina |
Pikeville Farm, LLC |
||
Ridgeland Solar Farm I, LLC |
Delaware |
Ridgeland Solar Farm I, LLC |
||
Siler Solar, LLC |
North Carolina |
Siler Solar, LLC |
||
Wakefield Solar, LLC |
North Carolina |
Wakefield Solar, LLC |
||
Dominion Solar Projects IV, Inc. |
Virginia |
Dominion Solar Projects IV, Inc. |
||
Eastern Shore Solar LLC |
Delaware |
Eastern Shore Solar LLC |
||
Hecate Energy Cherrydale LLC |
Delaware |
Hecate Energy Cherrydale LLC |
||
Hecate Energy Clarke County LLC |
Delaware |
Hecate Energy Clarke County LLC |
||
Southampton Solar LLC |
Delaware |
Southampton Solar LLC |
||
Virginia Solar 2017 Projects LLC |
Delaware |
Virginia Solar 2017 Projects LLC |
||
Buckingham Solar I LLC |
Delaware |
Buckingham Solar I LLC |
||
Correctional Solar LLC |
Delaware |
Correctional Solar LLC |
||
Sappony Solar LLC |
Delaware |
Sappony Solar LLC |
||
Scott-II Solar LLC |
Delaware |
Scott-II Solar LLC |
||
Dominion Solar Projects V, Inc. |
Virginia |
Dominion Solar Projects V, Inc. |
||
Summit Farms Solar, LLC |
North Carolina |
Summit Farms Solar, LLC |
||
SBL Holdco, LLC |
Virginia |
SBL Holdco, LLC |
||
Dominion Solar Projects A, Inc. |
Virginia |
Dominion Solar Projects A, Inc. |
||
Dominion Solar Holdings I, LLC |
Virginia |
Dominion Solar Holdings I, LLC |
||
Azalea Solar, LLC |
Delaware |
Azalea Solar, LLC |
||
Dominion Solar Construction and Maintenance, LLC |
Virginia |
Dominion Solar Construction and Maintenance, LLC |
||
Indy Solar Development, LLC |
Delaware |
Indy Solar Development, LLC |
||
Indy Solar I, LLC |
Delaware |
Indy Solar I, LLC |
||
Indy Solar II, LLC |
Delaware |
Indy Solar II, LLC |
||
Indy Solar III, LLC |
Delaware |
Indy Solar III, LLC |
||
Somers Solar Center, LLC |
Delaware |
Somers Solar Center, LLC |
||
Dominion Solar Holdings II, LLC |
Virginia |
Dominion Solar Holdings II, LLC |
||
CID Solar, LLC |
Delaware |
CID Solar, LLC |
||
Dominion Solar Gen-Tie, LLC |
Delaware |
Dominion Solar Gen-Tie, LLC |
||
Mulberry Farm, LLC |
North Carolina |
Mulberry Farm, LLC |
||
Mulberry Solar Farm, LLC |
||||
RE Adams East LLC |
Delaware |
RE Adams East LLC |
||
RE Camelot LLC |
Delaware |
RE Camelot LLC |
||
RE Columbia, LLC |
Delaware |
RE Columbia, LLC |
||
RE Columbia Two LLC |
Delaware |
RE Columbia Two LLC |
||
RE Columbia, LLC |
Delaware |
RE Columbia, LLC |
||
RE Kansas LLC |
Delaware |
RE Kansas LLC |
||
RE Kent South LLC |
Delaware |
RE Kent South LLC |
||
RE Old River One LLC |
Delaware |
RE Old River One LLC |
||
Selmer Farm, LLC |
North Carolina |
Selmer Farm, LLC |
||
TA - Acacia, LLC |
Delaware |
TA - Acacia, LLC |
||
West Antelope Solar Park |
||||
Dominion Solar Projects B, Inc. |
Virginia |
Dominion Solar Projects B, Inc. |
||
Dominion Solar Holdings I, LLC |
Virginia |
Dominion Solar Holdings I, LLC |
||
Azalea Solar, LLC |
Delaware |
Azalea Solar, LLC |
||
Dominion Solar Construction and Maintenance, LLC |
Virginia |
Dominion Solar Construction and Maintenance, LLC |
||
Indy Solar Development, LLC |
Delaware |
Indy Solar Development, LLC |
||
Indy Solar I, LLC |
Delaware |
Indy Solar I, LLC |
||
Indy Solar II, LLC |
Delaware |
Indy Solar II, LLC |
||
Indy Solar III, LLC |
Delaware |
Indy Solar III, LLC |
||
Somers Solar Center, LLC |
Delaware |
Somers Solar Center, LLC |
||
Dominion Solar Holdings II, LLC |
Virginia |
Dominion Solar Holdings II, LLC |
||
CID Solar, LLC |
Delaware |
CID Solar, LLC |
||
Dominion Solar Gen-Tie, LLC |
Delaware |
Dominion Solar Gen-Tie, LLC |
Mulberry Farm, LLC |
North Carolina |
Mulberry Farm, LLC Mulberry Solar Farm, LLC |
||
RE Adams East LLC |
Delaware |
RE Adams East LLC |
||
RE Camelot LLC |
Delaware |
RE Camelot LLC |
||
RE Columbia, LLC |
Delaware |
RE Columbia, LLC |
||
RE Columbia Two LLC |
Delaware |
RE Columbia Two LLC |
||
RE Columbia, LLC |
Delaware |
RE Columbia, LLC |
||
RE Kansas LLC |
Delaware |
RE Kansas LLC |
||
RE Kent South LLC |
Delaware |
RE Kent South LLC |
||
RE Old River One LLC |
Delaware |
RE Old River One LLC |
||
Selmer Farm, LLC |
North Carolina |
Selmer Farm, LLC |
||
TA - Acacia, LLC |
Delaware |
TA - Acacia, LLC West Antelope Solar Park |
||
Dominion Solar Projects I, Inc. |
Virginia |
Dominion Solar Projects I, Inc. |
||
Dominion Solar Holdings III, LLC |
Virginia |
Dominion Solar Holdings III, LLC |
||
Alamo Solar, LLC |
California |
Alamo Solar, LLC |
||
Catalina Solar 2, LLC |
Delaware |
Catalina Solar 2, LLC |
||
Cottonwood Solar, LLC |
Delaware |
Cottonwood Solar, LLC |
||
Imperial Valley Solar Company (IVSC) 2, LLC |
California |
Imperial Valley Solar Company (IVSC) 2, LLC |
||
Maricopa West Solar PV, LLC |
Delaware |
Maricopa West Solar PV, LLC |
||
Pavant Solar LLC |
Delaware |
Pavant Solar LLC |
||
Richland Solar Center, LLC |
Georgia |
Richland Solar Center, LLC |
||
Dominion Solar Projects II, Inc. |
Virginia |
Dominion Solar Projects II, Inc. |
||
Dominion Solar Holdings III, LLC |
Virginia |
Dominion Solar Holdings III, LLC |
||
Alamo Solar, LLC |
California |
Alamo Solar, LLC |
||
Catalina Solar 2, LLC |
Delaware |
Catalina Solar 2, LLC |
||
Cottonwood Solar, LLC |
Delaware |
Cottonwood Solar, LLC |
||
Imperial Valley Solar Company (IVSC) 2, LLC |
California |
Imperial Valley Solar Company (IVSC) 2, LLC |
||
Maricopa West Solar PV, LLC |
Delaware |
Maricopa West Solar PV, LLC |
||
Pavant Solar LLC |
Delaware |
Pavant Solar LLC |
||
Richland Solar Center, LLC |
Georgia |
Richland Solar Center, LLC |
||
Dominion Greenbrier, Inc. |
Virginia |
Dominion Greenbrier, Inc. |
||
Greenbrier Pipeline Company, LLC |
Delaware |
Greenbrier Pipeline Company, LLC |
||
Greenbrier Marketing Company, LLC |
Delaware |
Greenbrier Marketing Company, LLC |
||
Dominion High Voltage Holdings, Inc. |
Virginia |
Dominion High Voltage Holdings, Inc. |
||
Dominion High Voltage Midatlantic, Inc. |
Virginia |
Dominion High Voltage Midatlantic, Inc. |
||
Dominion Investments, Inc. |
Virginia |
Dominion Investments, Inc. |
||
Dominion Keystone Pipeline Holdings, Inc. |
Delaware |
Dominion Keystone Pipeline Holdings, Inc. |
||
Dominion Keystone Pipeline, LLC |
Delaware |
Dominion Keystone Pipeline, LLC |
||
Dominion MLP Holding Company III, Inc. |
Virginia |
Dominion MLP Holding Company III, Inc. |
||
Dominion Modular LNG Holdings, Inc. |
Virginia |
Dominion Modular LNG Holdings, Inc. |
||
NiCHe LNG, LLC |
Delaware |
NiCHe LNG, LLC |
||
NiCHe Storage Solutions, LLC |
Delaware |
NiCHe Storage Solutions, LLC |
||
Rev LNG SSL BC LLC |
Pennsylvania |
Rev LNG SSL BC LLC |
||
Dominion Oklahoma Texas Exploration & Production, Inc. |
Delaware |
Dominion Oklahoma Texas Exploration & Production, Inc. |
||
Dominion Privatization Holdings, Inc. |
Virginia |
Dominion Privatization Holdings, Inc. |
||
Dominion Privatization Florida, LLC |
Virginia |
Dominion Privatization Florida, LLC |
||
Dominion Privatization Georgia, LLC |
Virginia |
Dominion Privatization Georgia, LLC |
||
Dominion Privatization Kentucky, LLC |
Virginia |
Dominion Privatization Kentucky, LLC |
||
Dominion Privatization South Carolina, LLC |
Virginia |
Dominion Privatization South Carolina, LLC |
||
Dominion Privatization Texas, LLC |
Virginia |
Dominion Privatization Texas, LLC |
||
Dominion Privatization Virginia, LLC |
Virginia |
Dominion Privatization Virginia, LLC |
||
Dominion Products and Services, Inc. |
Delaware |
Dominion Products and Services, Inc. |
||
Dominion Energy Solutions |
||||
Dominion Projects Services, Inc. |
Virginia |
Dominion Projects Services, Inc. |
||
Dominion Resources Capital Trust III |
Delaware |
Dominion Resources Capital Trust III |
||
Dominion Retail Gas Holdings, Inc. |
Virginia |
Dominion Retail Gas Holdings, Inc. |
Wrangler Retail Gas Holdings, LLC |
Delaware |
Wrangler Retail Gas Holdings, LLC |
||
SCANA Energy Marketing, LLC |
South Carolina |
SCANA Energy Marketing, LLC |
||
Hope Gas, Inc. |
West Virginia |
Dominion Energy West Virginia |
||
SCANA Corporation |
South Carolina |
SCANA Corporation |
||
Dominion Energy South Carolina, Inc. |
South Carolina |
Dominion Energy South Carolina |
||
SRFI, LLC |
South Carolina |
SRFI, LLC |
||
Dominion Energy Southeast Services, Inc. |
South Carolina |
Dominion Energy Southeast Services, Inc. |
||
SCANA Pharmacy LLC |
South Carolina |
SCANA Pharmacy LLC |
||
Public Service Company of North Carolina, Incorporated |
South Carolina |
Dominion Energy North Carolina |
||
Clean Energy Enterprises, Inc. |
North Carolina |
Clean Energy Enterprises, Inc. |
||
PSNC Blue Ridge Corporation |
North Carolina |
PSNC Blue Ridge Corporation |
||
PSNC Cardinal Pipeline Company |
North Carolina |
PSNC Cardinal Pipeline Company |
||
PSNC Southgate, LLC |
South Carolina |
PSNC Southgate, LLC |
||
SCANA Communications Holdings, Inc. |
Delaware |
SCANA Communications Holdings, Inc. |
||
SCANA Corporate Security Services, Inc. |
South Carolina |
SCANA Corporate Security Services, Inc. |
||
South Carolina Fuel Company, Inc. |
South Carolina |
South Carolina Fuel Company, Inc. |
||
South Carolina Generating Company, Inc. |
South Carolina |
South Carolina Generating Company, Inc. |
||
Virginia Electric and Power Company |
Virginia |
Dominion Energy Virginia (in Virginia) |
||
Dominion Energy North Carolina (in North Carolina) |
||||
Virginia Power Fuel Corporation |
Virginia |
Virginia Power Fuel Corporation |
||
Virginia Power Services, LLC |
Virginia |
Virginia Power Services, LLC |
||
Virginia Power Nuclear Services Company |
Virginia |
Virginia Power Nuclear Services Company |
||
Virginia Power Services Energy Corp., Inc. |
Virginia |
Virginia Power Services Energy Corp., Inc. |
||
VP Property, Inc. |
Virginia |
VP Property, Inc. |
Exhibit 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement Nos. 333-216476, 333-219088 and 333-221291 on Form S-3, and Registration Statement Nos. 033-62705, 333-02733, 333-09167, 333-18391, 333-25587, 333-49725, 333-78173, 333-85094, 333-87529, 333-95795, 333-110332, 333-124257, 333-143916, 333-149989, 333-163805, 333-189578, 333-189579, 333-195768, 333-202364, 333-202366, 333-226041 and 333-226039 on Form S-8 of our reports dated February 28, 2020, relating to the consolidated financial statements of Dominion Energy, Inc. and subsidiaries and the effectiveness of Dominion Energy, Inc. and subsidiaries internal control over financial reporting, appearing in this Annual Report on Form 10-K of Dominion Energy, Inc. for the year ended December 31, 2019.
We consent to the incorporation by reference in Registration Statement No. 333-219085 on Form S-3 of our report dated February 28, 2020, relating to the consolidated financial statements of Virginia Electric and Power Company (a wholly-owned subsidiary of Dominion Energy, Inc.) and subsidiaries, appearing in this Annual Report on Form 10-K of Virginia Electric and Power Company for the year ended December 31, 2019.
We consent to the incorporation by reference in Registration Statement No. 333-234746 on Form S-3 of our report dated February 28, 2020, relating to the consolidated financial statements of Dominion Energy Gas Holdings, LLC (a wholly-owned subsidiary of Dominion Energy, Inc.) and subsidiaries, appearing in this Annual Report on Form 10-K of Dominion Energy Gas Holdings, LLC for the year ended December 31, 2019.
/s/ Deloitte & Touche LLP
Richmond, Virginia
February 28, 2020
Exhibit 31.a
I, Thomas F. Farrell, II, certify that:
1. |
I have reviewed this report on Form 10-K of Dominion Energy, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. |
The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: February 28, 2020 |
/s/ Thomas F. Farrell, II |
|||
Thomas F. Farrell, II President and Chief Executive Officer |
Exhibit 31.b
I, James R. Chapman, certify that:
1. |
I have reviewed this report on Form 10-K of Dominion Energy, Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. |
The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: February 28, 2020 |
/s/ James R. Chapman |
|||
James R. Chapman Executive Vice President, Chief Financial Officer and Treasurer |
Exhibit 31.c
I, Thomas F. Farrell, II, certify that:
1. |
I have reviewed this report on Form 10-K of Virginia Electric and Power Company; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. |
The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: February 28, 2020 |
/s/ Thomas F. Farrell, II |
|||
Thomas F. Farrell, II Chief Executive Officer |
Exhibit 31.d
I, James R. Chapman, certify that:
1. |
I have reviewed this report on Form 10-K of Virginia Electric and Power Company; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. |
The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: February 28, 2020 |
/s/ James R. Chapman |
|||
James R. Chapman Executive Vice President, Chief Financial Officer and Treasurer |
Exhibit 31.e
I, Thomas F. Farrell, II, certify that:
1. |
I have reviewed this report on Form 10-K of Dominion Energy Gas Holdings, LLC; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) |
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) |
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. |
The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: February 28, 2020 |
/s/ Thomas F. Farrell, II |
|||
Thomas F. Farrell, II Chief Executive Officer |
Exhibit 31.f
I, James R. Chapman, certify that:
1. |
I have reviewed this report on Form 10-K of Dominion Energy Gas Holdings, LLC; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) |
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) |
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. |
The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: February 28, 2020 |
/s/ James R. Chapman |
|||
James R. Chapman Executive Vice President, Chief Financial Officer and Treasurer |
Exhibit 32.a
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Dominion Energy, Inc. (the Company), certify that:
1. |
the Annual Report on Form 10-K for the year ended December 31, 2019 (the Report), of the Company to which this certification is an exhibit fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)). |
2. |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of December 31, 2019, and for the period then ended. |
/s/ Thomas F. Farrell, II |
Thomas F. Farrell, II |
President and Chief Executive Officer |
February 28, 2020 |
/s/ James R. Chapman |
James R. Chapman |
Executive Vice President, |
Chief Financial Officer and Treasurer |
February 28, 2020 |
Exhibit 32.b
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Virginia Electric and Power Company (the Company), certify that:
1. |
the Annual Report on Form 10-K for the year ended December 31, 2019 (the Report), of the Company to which this certification is an exhibit fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)). |
2. |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of December 31, 2019, and for the period then ended. |
/s/ Thomas F. Farrell, II |
Thomas F. Farrell, II |
Chief Executive Officer |
February 28, 2020 |
/s/ James R. Chapman |
James R. Chapman |
Executive Vice President, |
Chief Financial Officer and Treasurer |
February 28, 2020 |
Exhibit 32.c
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Dominion Energy Gas Holdings, LLC (the Company), certify that:
1. |
the Annual Report on Form 10-k for the year ended December 31, 2019 (the Report), of the Company to which this certification is an exhibit fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)). |
2. |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of December 31, 2019, and for the period then ended. |
/s/ Thomas F. Farrell, II |
Thomas F. Farrell, II |
Chief Executive Officer |
February 28, 2020 |
/s/ James R. Chapman |
James R. Chapman |
Executive Vice President, |
Chief Financial Officer and Treasurer |
February 28, 2020 |
Exhibit 99
4th Quarter 2019
Earnings Release
Kit
As revised on
February 28, 2020¹
¹ |
As a result of developments subsequent to the Fourth Quarter 2019 earnings call and release of the Earnings Release Kit on February 11, 2020, Dominion Energy increased certain litigation reserves acquired in the SCANA Merger by $120 million ($90 million after-tax). The change impacted GAAP reported earnings for the fourth quarter and the full-year of 2019 but had no impact on operating earnings during the same periods. The revision also did not impact the original operating earnings guidance. A list of revised schedules is available on page 34. |
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Table of Contents
IMPORTANT NOTES TO INVESTORS |
3 | |||
EARNINGS REPORT |
4 | |||
CONSOLIDATED STATEMENTS OF INCOME (GAAP) |
6 | |||
SCHEDULE 1 - SEGMENT REPORTED AND OPERATING EARNINGS |
7 | |||
SCHEDULE 2 - RECONCILIATION OF 2019 REPORTED EARNINGS TO OPERATING EARNINGS |
8 | |||
SCHEDULE 3 - RECONCILIATION OF 2018 REPORTED EARNINGS TO OPERATING EARNINGS |
9 | |||
SCHEDULE 4 - RECONCILIATION OF 2019 EARNINGS TO 2018 |
10 | |||
FINANCIALS |
11 | |||
CONSOLIDATED FINANCIAL STATEMENTS (GAAP) |
11 | |||
SEGMENT EARNINGS RESULTS |
13 | |||
RECONCILIATION OF OPERATING EARNINGS GUIDANCE |
20 | |||
2019 Operating Earnings Summary |
20 | |||
4Q19 Operating Earnings Summary |
21 | |||
2020 EARNINGS GUIDANCE AND ACCOMPANYING SCHEDULES |
22 | |||
EARNINGS GUIDANCE |
22 | |||
GAAP RECONCILIATION |
24 | |||
RECONCILIATION OF 2019 CONSOLIDATED REPORTED EARNINGS TO OPERATING EARNINGS |
24 | |||
RECONCILIATION OF 2018 CONSOLIDATED REPORTED EARNINGS TO OPERATING EARNINGS |
25 | |||
RECONCILIATION OF 2019 CORPORATE AND OTHER REPORTED EARNINGS TO OPERATING EARNINGS |
26 | |||
RECONCILIATION OF 2018 CORPORATE AND OTHER REPORTED EARNINGS TO OPERATING EARNINGS |
27 | |||
RECONCILIATION OF 2019 REPORTED EARNINGS TO 2019 OPERATING EARNINGS |
28 | |||
RECONCILIATION OF 2018 REPORTED EARNINGS TO 2018 OPERATING EARNINGS |
29 | |||
RECONCILIATION OF 4Q19 REPORTED EARNINGS TO 4Q19 OPERATING EARNINGS |
30 | |||
RECONCILIATION OF 4Q18 REPORTED EARNINGS TO 4Q18 OPERATING EARNINGS |
31 | |||
RECONCILIATION OF 1Q19 REPORTED EARNINGS TO 1Q19 OPERATING EARNINGS |
32 | |||
2020 EARNINGS EXPECTATIONS |
33 | |||
APPENDIX |
34 | |||
LIST OF REVISED SCHEDULES |
34 |
February 28, 2020 | 2 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Important Notes to Investors
This Revised 4Q19 Earnings Release Kit contains certain forward-looking statements, including our forecasted operating earnings for the first-quarter and full-year 2020 which are subject to various risks and uncertainties. Factors that could cause actual results to differ include, but are not limited to: unusual weather conditions and their effect on energy sales to customers and energy commodity prices; extreme weather events and other natural disasters; federal, state and local legislative and regulatory developments; changes to federal, state and local environmental laws and regulations, including proposed carbon regulations; cost of environmental compliance; changes in enforcement practices of regulators relating to environmental standards and litigation exposure for remedial activities; capital market conditions, including the availability of credit and the ability to obtain financing on reasonable terms; fluctuations in interest rates; changes in rating agency requirements or credit ratings and their effect on availability and cost of capital; impacts of acquisitions, divestitures, transfers of assets by Dominion Energy to joint ventures and retirements of assets based on asset portfolio reviews; receipt of approvals for, and timing of, closing dates for other acquisitions and divestitures; changes in demand for Dominion Energys services; additional competition in Dominion Energys industries; changes to regulated rates collected by Dominion Energy; changes in operating, maintenance and construction costs; timing and receipt of regulatory approvals necessary for planned construction or expansion projects and compliance with conditions associated with such regulatory approvals; adverse outcomes in litigation matters or regulatory proceedings; and the inability to complete planned construction projects within time frames initially anticipated. Other risk factors are detailed from time to time in Dominion Energys quarterly reports on Form 10-Q and most recent annual report on Form 10-K filed with the Securities and Exchange Commission.
Certain information provided in this Revised 4Q19 Earnings Release Kit includes financial measures that are not required by, or presented in accordance with generally accepted accounting principles (GAAP), including operating earnings before interest and taxes (Adjusted EBIT). These non-GAAP financial measures should not be considered as alternatives to GAAP measures, such as net income, operating income, or earnings per share, and may be calculated differently from, and therefore may not be comparable to, similarly titled measures used at other companies. Dominion Energy has included reconciliations to the most directly comparable financial measures it is able to calculate and report in accordance with GAAP.
The consolidated financial data and statistics in this Revised 4Q19 Earnings Release Kit and its individual components reflect the financial position and operating results of Dominion Energy and its primary operating segments through December 31, 2019. Independent auditors have not audited any of the financial and operating statements. Projections or forecasts shown in this document are subject to change at any time. Dominion Energy undertakes no obligation to update any forward-looking information statement to reflect developments after the statement is made.
This Revised 4Q19 Earnings Release Kit has been prepared primarily for securities analysts and investors in the hope that it will serve as a convenient and useful reference document. The format of this release kit may change in the future as we continue to try to meet the needs of securities analysts and investors. This Revised 4Q19 Earnings Release Kit is not intended for use in connection with any sale, offer to sell, or solicitation of any offer to buy securities.
Please continue to check our website regularly at http://investors.dominionenergy.com/.
February 28, 2020 | 3 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Earnings Release and Accompanying Schedules
Earnings Report
SUMMARY OF DOMINIONS 2019 EARNINGS AS REVISED ON FEBRUARY 28, 2020
|
Fourth-quarter 2019 GAAP (reported) earnings of $1.21 per share; operating earnings of $1.18 per share |
|
Full-year 2019 reported earnings of $1.62 per share; operating earnings of $4.24 per share |
|
Company initiates 2020 operating earnings guidance of $4.25 to $4.60 per share |
Dominion Energys reported earnings determined in accordance with Generally Accepted Accounting Principles (reported earnings) for the three months ended Dec. 31, 2019, of $1.0 billion ($1.21 per share) compared with net income of $641 million ($0.97 per share) for the same period in 2018. Reported earnings for the twelve months ended Dec. 31, 2019, were $1.4 billion ($1.62 per share) compared with earnings of $2.4 billion ($3.74 per share) for the same period in 2018.
Operating earnings for the three months ended Dec. 31, 2019, were $988 million ($1.18 per share), compared with operating earnings of $592 million ($0.89 per share) for the same period in 2018. Operating earnings for the twelve months ended Dec. 31, 2019, were $3.4 billion ($4.24 per share) compared with operating earnings of $2.7 billion ($4.05 per share) for the same period in 2018.
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.
Operating earnings guidance
Dominion Energy expects 2020 operating earnings in the range of $4.25 to $4.60 per share, compared to full-year 2019 operating earnings of $4.24 per share. Positive drivers include regulated investment growth across electric and gas businesses, lower financing costs due to lower average debt balances, the full-year impact of the Millstone nuclear facility zero-carbon procurement contract, and lower depreciation expense associated with an anticipated extension of the useful life assumption for our regulated nuclear plants in Virginia. The company expects negative drivers for the year to include increased minority interest expense associated with the equity recapitalization of Cove Point, share dilution, two planned refueling outages at Millstone and lower New England capacity prices.
First-quarter 2020 operating earnings are expected to be in the range of $1.05 to $1.25 per share.
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 companys 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 companys fundamental earnings power.
February 28, 2020 | 4 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
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 changes in accounting principles. At this time, Dominion Energy management is not able to estimate the aggregate impact of these items on future period reported earnings.
About Dominion Energy
More than 7 million customers in 18 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 sustainable, reliable, affordable and safe energy and is one of the nations largest producers and transporters of energy with more than $100 billion of assets providing electric generation, transmission and distribution, as well as natural gas storage, transmission, distribution and import/export services. The company is committed to achieve net zero carbon dioxide and methane emissions from its power generation and gas infrastructure operations by 2050. Please visit DominionEnergy.com to learn more.
This release contains certain forward-looking statements, including forecasted operating earnings first-quarter and full-year 2020 and beyond which are subject to various risks and uncertainties. Factors that could cause actual results to differ include, but are not limited to: unusual weather conditions and their effect on energy sales to customers and energy commodity prices; extreme weather events and other natural disasters; federal, state and local legislative and regulatory developments; changes to federal, state and local environmental laws and regulations, including proposed carbon regulations; cost of environmental compliance; changes in enforcement practices of regulators relating to environmental standards and litigation exposure for remedial activities; capital market conditions, including the availability of credit and the ability to obtain financing on reasonable terms; fluctuations in interest rates; changes in rating agency requirements or credit ratings and their effect on availability and cost of capital; impacts of acquisitions, divestitures, transfers of assets by Dominion Energy to joint ventures and retirements of assets based on asset portfolio reviews; receipt of approvals for, and timing of, closing dates for other acquisitions and divestitures; changes in demand for Dominion Energys services; additional competition in Dominion Energys industries; changes to regulated rates collected by Dominion Energy; changes in operating, maintenance and construction costs; timing and receipt of regulatory approvals necessary for planned construction or expansion projects and compliance with conditions associated with such regulatory approvals; adverse outcomes in litigation matters or regulatory proceedings; and the inability to complete planned construction projects within time frames initially anticipated. Other risk factors are detailed from time to time in Dominion Energys quarterly reports on Form 10-Q and most recent annual report on Form 10-K filed with the Securities and Exchange Commission.
#####
February 28, 2020 | 5 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Consolidated Statements of Income (GAAP)
Dominion Energy, Inc.
Consolidated Statements of Income*
Unaudited (GAAP Based)
(millions, except per share amounts)
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Operating Revenue |
$ | 4,475 | $ | 3,361 | $ | 16,572 | $ | 13,366 | ||||||||
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|
|||||||||
Operating Expenses |
||||||||||||||||
Electric fuel and other energy-related purchases |
655 | 686 | 2,938 | 2,814 | ||||||||||||
Purchased electric capacity |
14 | 35 | 88 | 122 | ||||||||||||
Purchased gas |
426 | 236 | 1,536 | 645 | ||||||||||||
Other operations and maintenance1 |
1,274 | 896 | 5,801 | 3,481 | ||||||||||||
Depreciation, depletion and amortization |
664 | 513 | 2,655 | 2,000 | ||||||||||||
Other taxes |
221 | 161 | 1,040 | 703 | ||||||||||||
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Total operating expenses |
3,254 | 2,527 | 14,058 | 9,765 | ||||||||||||
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|||||||||
Income from operations |
1,221 | 834 | 2,514 | 3,601 | ||||||||||||
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|
|
|||||||||
Other income |
333 | 363 | 986 | 1,021 | ||||||||||||
Interest and related charges |
401 | 440 | 1,773 | 1,493 | ||||||||||||
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|||||||||
Income from continuing operations including noncontrolling interests before income tax expense |
1,153 | 757 | 1,727 | 3,129 | ||||||||||||
Income tax expense |
143 | 95 | 351 | 580 | ||||||||||||
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Net income including noncontrolling interests |
1,010 | 662 | 1,376 | 2,549 | ||||||||||||
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Noncontrolling interests |
1 | 21 | 18 | 102 | ||||||||||||
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Net Income attributable to Dominion Energy |
$ | 1,009 | $ | 641 | $ | 1,358 | $ | 2,447 | ||||||||
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Reported earnings per common share - diluted |
$ | 1.21 | $ | 0.97 | $ | 1.62 | $ | 3.74 | ||||||||
Average shares outstanding, diluted |
826.3 | 660.9 | 808.9 | 654.9 |
1) |
Includes impairment of assets and related charges and gains on sale of assets. |
* |
The notes contained in Dominion Energys most recent quarterly report on Form 10-Q or annual report on Form 10-K are an integral part of the Consolidated Financial Statements. |
February 28, 2020 | 6 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Schedule 1 - Segment Reported and Operating Earnings
Unaudited | ||||||||||||
(millions, except earnings per share) | Three months ended December 31, | |||||||||||
2019 | 2018 | Change | ||||||||||
REPORTED EARNINGS1 |
$ | 1,009 | $ | 641 | $ | 368 | ||||||
Pre-tax loss (income)2 |
193 | (50 | ) | 243 | ||||||||
Income tax2 |
(214 | ) | 1 | (215 | ) | |||||||
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|
|||||||
Adjustments to reported earnings |
(21 | ) | (49 | ) | 28 | |||||||
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|
|||||||
OPERATING EARNINGS |
$ | 988 | $ | 592 | $ | 396 | ||||||
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|||||||
By segment: |
||||||||||||
Dominion Energy Virginia |
403 | 333 | 70 | |||||||||
Gas Transmission & Storage |
360 | 257 | 103 | |||||||||
Gas Distribution |
173 | 118 | 55 | |||||||||
Dominion Energy South Carolina |
98 | | 98 | |||||||||
Contracted Generation |
114 | 5 | 109 | |||||||||
Corporate and Other |
(160 | ) | (121 | ) | (39 | ) | ||||||
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|||||||
$ | 988 | $ | 592 | $ | 396 | |||||||
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|||||||
Earnings Per Share (EPS):3 |
||||||||||||
REPORTED EARNINGS 1 |
$ | 1.21 | $ | 0.97 | $ | 0.24 | ||||||
Adjustments to reported earnings (after tax) |
(0.03 | ) | (0.08 | ) | 0.05 | |||||||
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|
|||||||
OPERATING EARNINGS |
$ | 1.18 | $ | 0.89 | $ | 0.29 | ||||||
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|||||||
By segment: |
||||||||||||
Dominion Energy Virginia |
0.49 | 0.50 | (0.01 | ) | ||||||||
Gas Transmission & Storage |
0.43 | 0.39 | 0.04 | |||||||||
Gas Distribution |
0.21 | 0.18 | 0.03 | |||||||||
Dominion Energy South Carolina |
0.12 | | 0.12 | |||||||||
Contracted Generation |
0.14 | 0.01 | 0.13 | |||||||||
Corporate and Other |
(0.21 | ) | (0.19 | ) | (0.02 | ) | ||||||
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$ | 1.18 | $ | 0.89 | $ | 0.29 | |||||||
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|||||||
Common Shares Outstanding (average, diluted) |
826.3 | 660.9 |
(millions, except earnings per share) | Twelve months ended December 31, | |||||||||||
2019 | 2018 | Change | ||||||||||
REPORTED EARNINGS1 |
$ | 1,358 | $ | 2,447 | $ | (1,089 | ) | |||||
Pre-tax loss (income)2 |
2,620 | 201 | 2,419 | |||||||||
Income tax2 |
(531 | ) | 3 | (534 | ) | |||||||
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|||||||
Adjustments to reported earnings |
2,089 | 204 | 1,885 | |||||||||
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|
|||||||
OPERATING EARNINGS |
$ | 3,447 | $ | 2,651 | $ | 796 | ||||||
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|||||||
By segment: |
||||||||||||
Dominion Energy Virginia |
1,786 | 1,596 | 190 | |||||||||
Gas Transmission & Storage |
934 | 844 | 90 | |||||||||
Gas Distribution |
488 | 373 | 115 | |||||||||
Dominion Energy South Carolina |
430 | | 430 | |||||||||
Contracted Generation |
276 | 245 | 31 | |||||||||
Corporate and Other |
(467 | ) | (407 | ) | (60 | ) | ||||||
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|||||||
$ | 3,447 | $ | 2,651 | $ | 796 | |||||||
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|
|||||||
Earnings Per Share (EPS):3 |
||||||||||||
REPORTED EARNINGS1 |
$ | 1.62 | $ | 3.74 | $ | (2.12 | ) | |||||
Adjustments to reported earnings (after tax) |
2.62 | 0.31 | 2.31 | |||||||||
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|
|||||||
OPERATING EARNINGS |
$ | 4.24 | $ | 4.05 | $ | 0.19 | ||||||
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|
|||||||
By segment: |
||||||||||||
Dominion Energy Virginia |
2.21 | 2.44 | (0.23 | ) | ||||||||
Gas Transmission & Storage |
1.16 | 1.29 | (0.13 | ) | ||||||||
Gas Distribution |
0.60 | 0.57 | 0.03 | |||||||||
Dominion Energy South Carolina |
0.53 | | 0.53 | |||||||||
Contracted Generation |
0.34 | 0.37 | (0.03 | ) | ||||||||
Corporate and Other |
(0.60 | ) | (0.62 | ) | 0.02 | |||||||
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|||||||
$ | 4.24 | $ | 4.05 | $ | 0.19 | |||||||
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|
|||||||
Common Shares Outstanding (average, diluted) |
808.9 | 654.9 |
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 Energys website at www.dominionenergy.com/investors. |
3) |
The calculation of operating earnings per share excludes the impact, if any, of fair value adjustments related to the Companys convertible preferred securities entered in June 2019. Such fair value adjustments, if any, are required for the calculation of diluted reported earnings per share. For the three and twelve months ended December 31, the fair value adjustment required for diluted reported earnings per share calculation was $1 million and $28 million, respectively. The calculation of reported and operating earnings per share includes the impact of preferred dividends of $7 million per quarter associated with the Series A preferred stock equity units entered in June of 2019 and $2 million associated with the Series B preferred stock equity units entered in December of 2019. See Form 10-K for additional information. |
February 28, 2020 | 7 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Schedule 2 - Reconciliation of 2019 Reported Earnings to Operating Earnings
2019 Earnings (Twelve months ended December 31, 2019)
The $2.6 billion pre-tax net effect of the adjustments included in 2019 reported earnings, but excluded from operating earnings, is primarily related to the following items:
|
$2.4 billion of merger and integration-related costs associated with the SCANA Combination, primarily reflecting $1 billion for refunds of amounts previously collected from retail electric customers of Dominion Energy South Carolina (DESC) for the NND Project, $427 million associated with a voluntary retirement program (which includes $112 million for employee benefit plan curtailment), and $641 million associated with litigation. |
|
$783 million of charges at our regulated entities, primarily consisting of the retirement of electric generation facilities in cold reserve and certain automated meters and a purchase power contract termination. |
|
$113 million benefit from the revision of certain asset retirement obligations for ash ponds and landfills at certain utility generation facilities, in connection with the enactment of Virginia legislation in March. |
|
$553 million net gain related to our investments in nuclear decommissioning trust funds. |
Dominion Energy also recorded $194 million tax charge for certain income tax-related regulatory assets acquired in the SCANA Combination for which Dominion Energy committed to forgo recovery.
(millions, except per share amounts) |
1Q19 | 2Q19 | 3Q19 | 4Q19 | YTD 2019 3 | |||||||||||||||
Reported earnings (loss) |
($ | 680 | ) | $ | 54 | $ | 975 | $ | 1,009 | $ | 1,358 | |||||||||
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|
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|
|
|
|
|
|||||||||||
Adjustments to reported earnings 1: |
||||||||||||||||||||
Pre-tax loss (income) |
1,640 | 656 | 131 | 193 | 2,620 | |||||||||||||||
Income tax |
(87 | ) | (91 | ) | (139 | ) | (214 | ) | (531 | ) | ||||||||||
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|||||||||||
1,553 | 565 | (8 | ) | (21 | ) | 2,089 | ||||||||||||||
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|||||||||||
Operating earnings |
$ | 873 | $ | 619 | $ | 967 | $ | 988 | $ | 3,447 | ||||||||||
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|
|||||||||||
Common shares outstanding (average, diluted) |
793.1 | 802.6 | 813.0 | 826.3 | 808.9 | |||||||||||||||
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|||||||||||
Reported earnings (loss) per share 2 |
($ | 0.86 | ) | $ | 0.05 | $ | 1.17 | $ | 1.21 | $ | 1.62 | |||||||||
Adjustments to reported earnings per share 2 |
1.96 | 0.72 | 0.01 | (0.03 | ) | 2.62 | ||||||||||||||
Operating earnings per share 2 |
$ | 1.10 | $ | 0.77 | $ | 1.18 | $ | 1.18 | $ | 4.24 | ||||||||||
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|
1) |
Adjustments to reported earnings are reflected in the following table: |
1Q19 | 2Q19 | 3Q19 | 4Q19 | YTD 2019 | ||||||||||||||||
Pre-tax loss (income): |
||||||||||||||||||||
Merger and integration-related costs |
1,429 | 542 | 60 | 378 | 2,409 | |||||||||||||||
Regulated asset and contract retirements/terminations |
547 | 211 | 47 | (22 | ) | 783 | ||||||||||||||
Revision to ash pond and landfill closure costs |
(113 | ) | 0 | 0 | 0 | (113 | ) | |||||||||||||
Net gain on NDT funds |
(253 | ) | (83 | ) | (28 | ) | (189 | ) | (553 | ) | ||||||||||
Other |
30 | (14 | ) | 52 | 26 | 94 | ||||||||||||||
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|||||||||||
$ | 1,640 | $ | 656 | $ | 131 | $ | 193 | $ | 2,620 | |||||||||||
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|||||||||||
Income tax expense (benefit): |
||||||||||||||||||||
Tax effect of above adjustments to reported earnings * |
(255 | ) | (91 | ) | (139 | ) | (226 | ) | (711 | ) | ||||||||||
Write-off EDIT regulatory assets (SCANA) |
198 | 0 | 0 | (4 | ) | 194 | ||||||||||||||
Other |
(30 | ) | 0 | 0 | 16 | (14 | ) | |||||||||||||
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($ | 87 | ) | ($ | 91 | ) | ($ | 139 | ) | ($ | 214 | ) | ($ | 531 | ) | ||||||
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|
* |
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 Companys 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 Companys 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 June 30. For the three months ended September 30, the fair value adjustment required for diluted reported earnings per share calculation was $ 13 million. For the three and twelve months ended December 31, the fair value adjustment required for diluted reported earnings per share calculation was $ 1million and $ 28 million, respectively. The calculation of reported and operating earnings per share includes the impact of preferred dividends of $ 7 million per quarter associated with the Series A preferred stock equity units entered in June of 2019 and $ 2 million associated with the Series B preferred stock equity units entered in December of 2019. 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. |
February 28, 2020 | 8 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Schedule 3 - Reconciliation of 2018 Reported Earnings to Operating Earnings
2018 Earnings (Twelve months ended December 31, 2018)
The $201 million pre-tax net effect of the adjustments included in 2018 reported earnings, but excluded from operating earnings, is primarily related to the following items:
|
$759 million net benefit associated with the sales of our non-core assets, primarily reflecting the gains on sales of certain merchant generation assets and our investment in Blue Racer. |
|
$219 million impairment charge associated with gathering and processing assets. |
|
$215 million charge associated with Virginia legislation enacted in March that requires one-time rate credits of certain amounts to utility customers. |
|
$170 million net loss related to our investments in nuclear decommissioning trust funds. |
|
$124 million charge associated with disallowance of FERC-regulated plant. |
|
$81 million charge associated with the asset retirement obligations for ash ponds and landfills at certain utility generation facilities in connection with the enactment of Virginia legislation in April. |
|
$74 million of restoration costs associated with major storms, primarily affecting our Virginia service territory. |
|
$37 million of transaction and transition costs associated with the Dominion Energy Questar combination and the acquisition of SCANA Corporation. |
(millions, except per share amounts) |
1Q18 | 2Q18 | 3Q18 | 4Q18 | YTD 2018 2 | |||||||||||||||
Reported earnings |
$ | 503 | $ | 449 | $ | 854 | $ | 641 | $ | 2,447 | ||||||||||
Adjustments to reported earnings 1: |
||||||||||||||||||||
Pre-tax loss (income) |
305 | 145 | (199 | ) | (50 | ) | 201 | |||||||||||||
Income tax expense (benefit) |
(67 | ) | (34 | ) | 103 | 1 | 3 | |||||||||||||
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238 | 111 | (96 | ) | (49 | ) | 204 | ||||||||||||||
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Operating earnings |
$ | 741 | $ | 560 | $ | 758 | $ | 592 | $ | 2,651 | ||||||||||
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|||||||||||
Common shares outstanding (average, diluted) |
650.5 | 653.1 | 654.9 | 660.9 | 654.9 | |||||||||||||||
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Reported earnings per share |
$ | 0.77 | $ | 0.69 | $ | 1.30 | $ | 0.97 | $ | 3.74 | ||||||||||
Adjustments to reported earnings (after-tax) |
0.37 | 0.17 | (0.15 | ) | (0.08 | ) | 0.31 | |||||||||||||
Operating earnings per share |
$ | 1.14 | $ | 0.86 | $ | 1.15 | $ | 0.89 | $ | 4.05 | ||||||||||
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1) |
Adjustments to reported earnings are reflected in the following table: |
1Q18 | 2Q18 | 3Q18 | 4Q18 | YTD 2018 | ||||||||||||||||
Pre-tax loss (income): |
||||||||||||||||||||
Sale of non-core assets |
(70 | ) | (689 | ) | (759 | ) | ||||||||||||||
Impairment of gathering & processing assets |
219 | 219 | ||||||||||||||||||
Impact of Virginia rate legislation |
215 | 215 | ||||||||||||||||||
Net (gain) loss on NDT funds |
43 | (50 | ) | (149 | ) | 326 | 170 | |||||||||||||
FERC-regulated plant disallowance |
122 | 2 | 124 | |||||||||||||||||
Future ash pond and landfill closure costs |
81 | 81 | ||||||||||||||||||
Storm costs |
31 | 43 | 74 | |||||||||||||||||
Merger-related transaction and transition costs |
16 | 9 | 3 | 9 | 37 | |||||||||||||||
Other |
(17 | ) | 15 | 42 | 40 | |||||||||||||||
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|||||||||||
$ | 305 | $ | 145 | ($ | 199 | ) | ($ | 50 | ) | $ | 201 | |||||||||
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|
|||||||||||
Income tax expense (benefit): |
||||||||||||||||||||
Tax effect of above adjustments to reported earnings * |
(67 | ) | (34 | ) | 38 | 11 | (52 | ) | ||||||||||||
Re-measurement of Deferred Tax balances ** |
47 | (1 | ) | 46 | ||||||||||||||||
Valuation Allowance *** |
18 | (9 | ) | 9 | ||||||||||||||||
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($ | 67 | ) | ($ | 34 | ) | $ | 103 | $ | 1 | $ | 3 | |||||||||
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|
* |
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 Companys year-to -date income tax provision based on its estimated annual effective tax rate. |
** |
During 2018, the Companies recorded further adjustments to deferred taxes in accordance with recently released tax reform guidance and to revise estimates made at year-end 2017. |
*** |
In 3Q18, a valuation allowance was established against the portion of a deferred tax asset associated with the non-core assets that was no longer projected of being utilized to offset future taxable income. In 4Q18, the amount was adjusted based on managements assessment that it is more-likely-than-not that a portion of the deferred tax asset would be realized in 2018, to reduce tax expense associated with the sale. |
2) |
YTD EPS may not equal sum of quarters due to share count difference. |
February 28, 2020 | 9 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Schedule 4 - Reconciliation of 2019 Earnings to 2018
Preliminary, Unaudited |
Twelve Months
Ended |
|||||||
(millions, except EPS) | December 31, | |||||||
2019 vs. 2018 | ||||||||
Increase/ (Decrease) | ||||||||
Reconciling Items |
Amount | EPS | ||||||
Change in reported earnings (GAAP) |
($ | 1,089 | ) | ($ | 2.12 | ) | ||
Change in Pre-tax loss (income) 1 |
2,419 | |||||||
Change in Income tax 1 |
(534 | ) | ||||||
|
|
|
|
|||||
Adjustments to reported earnings |
$ | 1,885 | $ | 2.31 | ||||
|
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|
|||||
Change in consolidated operating earnings |
$ | 796 | $ | 0.19 | ||||
|
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|
|||||
Dominion Energy Virginia |
||||||||
Regulated electric sales: |
||||||||
Weather |
($ | 14 | ) | ($ | 0.02 | ) | ||
Other |
9 | 0.01 | ||||||
Rate adjustment clause equity return |
84 | 0.13 | ||||||
Electric capacity |
54 | 0.08 | ||||||
Renewable energy investment tax credits |
(14 | ) | (0.02 | ) | ||||
Other |
71 | 0.11 | ||||||
Share dilution |
| (0.52 | ) | |||||
|
|
|
|
|||||
Change in contribution to operating earnings |
$ | 190 | ($ | 0.23 | ) | |||
Gas Transmission & Storage |
||||||||
Cove Point export contracts |
$ | 172 | $ | 0.26 | ||||
Assignment of shale development rights |
(83 | ) | (0.12 | ) | ||||
Atlantic Coast Pipeline equity earnings |
37 | 0.06 | ||||||
Interest expense |
(60 | ) | (0.09 | ) | ||||
Other |
24 | 0.03 | ||||||
Share dilution |
| (0.27 | ) | |||||
|
|
|
|
|||||
Change in contribution to operating earnings |
$ | 90 | ($ | 0.13 | ) | |||
Gas Distribution |
||||||||
Regulated gas sales: |
||||||||
Weather |
($ | 3 | ) | $ | 0.00 | |||
Other |
(2 | ) | 0.00 | |||||
Rate adjustment clause equity return |
16 | 0.02 | ||||||
SCANA combination |
87 | 0.13 | ||||||
Other |
17 | 0.02 | ||||||
Share dilution |
| (0.14 | ) | |||||
|
|
|
|
|||||
Change in contribution to operating earnings |
$ | 115 | $ | 0.03 | ||||
Dominion Energy South Carolina |
||||||||
SCANA combination |
$ | 430 | $ | 0.53 | ||||
|
|
|
|
|||||
Change in contribution to operating earnings |
$ | 430 | $ | 0.53 | ||||
|
|
|
|
|||||
Contracted Generation |
||||||||
Margin |
$ | 42 | $ | 0.06 | ||||
Renewable energy investment tax credits |
50 | 0.08 | ||||||
Sale of certain merchant generation facilitites |
(95 | ) | (0.14 | ) | ||||
Other |
34 | 0.05 | ||||||
Share dilution |
| (0.08 | ) | |||||
|
|
|
|
|||||
Change in contribution to operating earnings |
$ | 31 | ($ | 0.03 | ) | |||
|
|
|
|
|||||
Corporate and Other |
||||||||
Share dilution and other |
(60 | ) | 0.02 | |||||
|
|
|
|
|||||
Change in contribution to operating earnings |
($ | 60 | ) | $ | 0.02 | |||
|
|
|
|
|||||
Change in consolidated operating earnings |
$ | 796 | $ | 0.19 | ||||
Change in adjustments included in reported earnings 1 |
($ | 1,885 | ) | ($ | 2.31 | ) | ||
|
|
|
|
|||||
Change in consolidated reported earnings |
($ | 1,089 | ) | ($ | 2.12 | ) | ||
|
|
|
|
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 Energys
website at www.dominionenergy.com/investors.
Note: Figures may not sum due to rounding
February 28, 2020 | 10 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Financials
Consolidated Financial Statements (GAAP)
Dominion Energy, Inc.
Consolidated Balance Sheets *
Unaudited & Summarized (GAAP Based)
($ in Millions)
At December 31, | ||||||||
2019 | 2018 | |||||||
Assets |
||||||||
Current assets |
$ | 6,088 | $ | 5,161 | ||||
Investments |
8,217 | 6,560 | ||||||
Property, plant and equipment, net |
69,082 | 54,560 | ||||||
Deferred charges and other assets |
20,436 | 11,633 | ||||||
|
|
|
|
|||||
Total Assets |
$ | 103,823 | $ | 77,914 | ||||
|
|
|
|
|||||
Liabilities and Equity |
||||||||
Securities due within one year |
$ | 3,162 | $ | 3,697 | ||||
Short-term debt |
911 | 334 | ||||||
Other current liabilities |
5,866 | 3,616 | ||||||
|
|
|
|
|||||
Total current liabilities |
9,939 | 7,647 | ||||||
Long-term debt |
33,824 | 31,144 | ||||||
Deferred credits and other liabilities |
26,027 | 17,075 | ||||||
|
|
|
|
|||||
Total liabilities |
69,790 | 55,866 | ||||||
Shareholders equity |
31,994 | 20,107 | ||||||
Noncontrolling interest |
2,039 | 1,941 | ||||||
|
|
|
|
|||||
Total equity |
34,033 | 22,048 | ||||||
Total liabilities and equity |
$ | 103,823 | $ | 77,914 | ||||
|
|
|
|
* |
The notes contained in Dominion Energys most recent quarterly report on Form 10-Q or annual report on Form 10-K are an integral part of the Consolidated Financial Statements. |
February 28, 2020 | 11 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Dominion Energy , Inc.
Consolidated Statements of Cash Flows *
Unaudited & Summarized
($ in Millions)
Year Ended December 31, | ||||||||
2019 | 2018 | |||||||
Operating Activities |
||||||||
Net Income including noncontrolling interests |
$ | 1,376 | $ | 2,549 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation, depletion and amortization (including nuclear fuel) |
2,977 | 2,280 | ||||||
Deferred income taxes and investment tax credits |
216 | 517 | ||||||
Provision for refunds and rate credits to electric utility customers |
800 | 77 | ||||||
Impairment of assets and other charges |
1,333 | 395 | ||||||
Charge related to a voluntary retirement program |
320 | | ||||||
Gains on the sales of assets and equity method investments |
(167 | ) | (1,006 | ) | ||||
Net (gains) losses on nuclear decommissionning trusts funds and other investments |
(626 | ) | 102 | |||||
Charge associated with future ash pond and landfill closure costs |
| 81 | ||||||
Revision to future ash pond and landfill closure costs |
(113 | ) | | |||||
Other adjustments |
(26 | ) | 19 | |||||
Changes in: |
||||||||
Accounts receivable |
(71 | ) | (110 | ) | ||||
Inventories |
(90 | ) | (29 | ) | ||||
Deferred fuel and purchased gas costs, net |
195 | (247 | ) | |||||
Prepayments |
(225 | ) | (51 | ) | ||||
Accounts payable |
(225 | ) | 67 | |||||
Accrued interest, payroll and taxes |
(78 | ) | (12 | ) | ||||
Margin deposits assets and liabilities |
60 | | ||||||
Net realized and unrealized changes related to derivative activities |
43 | 181 | ||||||
Asset retirement obligations |
41 | (35 | ) | |||||
Pension and other postretirement benefits |
(148 | ) | (114 | ) | ||||
Other operating assets and liabilities |
(388 | ) | 109 | |||||
|
|
|
|
|||||
Net cash provided by operating activities |
5,204 | 4,773 | ||||||
Investing Activities |
||||||||
Plant construction and other property additions (including nuclear fuel) |
(4,980 | ) | (4,254 | ) | ||||
Cash and restricted cash acquired in the SCANA Combination |
389 | | ||||||
Acquisition of solar development projects |
(341 | ) | (151 | ) | ||||
Proceeds from sales of certain merchant generation facilities and equity method investments |
447 | 2,379 | ||||||
Contributions to equity method affiliates |
(209 | ) | (428 | ) | ||||
Distributions from equity method affiliates |
9 | 36 | ||||||
Other |
63 | 60 | ||||||
|
|
|
|
|||||
Net cash used in investing activities |
(4,622 | ) | (2,358 | ) | ||||
Financing Activities |
||||||||
Issuance (repayment) of short-term debt, net |
404 | (2,964 | ) | |||||
Issuance of short-term notes |
3,000 | 1,450 | ||||||
Repayment and repurchase of short-term notes |
(3,000 | ) | (1,450 | ) | ||||
Issuance and remarketing of long-term debt |
4,374 | 6,362 | ||||||
Repayment and repurchase of long-term debt (including redemption premiums) |
(9,116 | ) | (5,682 | ) | ||||
Proceeds from sale of interest in Cove Point |
2,078 | | ||||||
Issuance of common stock |
2,515 | 2,461 | ||||||
Common dividend payments |
(2,983 | ) | (2,185 | ) | ||||
Issuance of 2019 Equity Units |
1,582 | | ||||||
Issuance of Series B preferred stock |
791 | | ||||||
Other |
(349 | ) | (201 | ) | ||||
|
|
|
|
|||||
Net cash used in financing activities |
(704 | ) | (2,209 | ) | ||||
Increase (Decrease) in cash, restricted cash and equivalents |
(122 | ) | 206 | |||||
Cash, restricted cash and equivalents at beginning of period |
391 | 185 | ||||||
|
|
|
|
|||||
Cash, restricted cash and equivalents at end of period |
$ | 269 | $ | 391 | ||||
|
|
|
|
* |
The notes contained in Dominion Energys most recent quarterly report on Form 10-Q or annual report on Form 10-K are an integral part of the Consolidated Financial Statements. |
February 28, 2020 | 12 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Segment Earnings Results
Dominion Energy Consolidated Reported and Operating Results1
Three Months Ended | Year Ended | |||||||||||||||
Unaudited Summary | December 31, | December 31, | ||||||||||||||
(millions, except per share amounts) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating Revenue |
$ | 4,475 | $ | 3,361 | $ | 16,572 | $ | 13,366 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating Expenses |
||||||||||||||||
Electric fuel and other energy-related purchases |
655 | 686 | 2,938 | 2,814 | ||||||||||||
Purchased electric capacity |
14 | 35 | 88 | 122 | ||||||||||||
Purchased gas |
426 | 236 | 1,536 | 645 | ||||||||||||
Other operations and maintenance 3 |
1,274 | 896 | 5,801 | 3,481 | ||||||||||||
Depreciation, depletion and amortization |
664 | 513 | 2,655 | 2,000 | ||||||||||||
Other taxes |
221 | 161 | 1,040 | 703 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
3,254 | 2,527 | 14,058 | 9,765 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income from operations |
1,221 | 834 | 2,514 | 3,601 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other income |
333 | 363 | 986 | 1,021 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income including noncontrolling interests before interest and income taxes |
1,554 | 1,197 | 3,500 | 4,622 | ||||||||||||
Interest and related charges |
401 | 440 | 1,773 | 1,493 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income including noncontrolling interests before income taxes |
1,153 | 757 | 1,727 | 3,129 | ||||||||||||
Income taxes |
143 | 95 | 351 | 580 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income including noncontrolling interests |
1,010 | 662 | 1,376 | 2,549 | ||||||||||||
Noncontrolling interests |
1 | 21 | 18 | 102 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Reported Earnings |
$ | 1,009 | $ | 641 | $ | 1,358 | $ | 2,447 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Reported Earnings Per Share4 |
$ | 1.21 | $ | 0.97 | $ | 1.62 | $ | 3.74 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjustments to reported earnings: |
||||||||||||||||
Pre-tax Loss (Income) 2 |
193 | (50 | ) | 2,620 | 201 | |||||||||||
Income Tax 2 |
(214 | ) | 1 | (531 | ) | 3 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
(21 | ) | (49 | ) | 2,089 | 204 | |||||||||||
Operating Earnings |
$ | 988 | $ | 592 | $ | 3,447 | $ | 2,651 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating Earnings Per Share4 |
$ | 1.18 | $ | 0.89 | $ | 4.24 | $ | 4.05 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Average shares outstanding, diluted |
826.3 | 660.9 | 808.9 | 654.9 | ||||||||||||
Adjusted EBIT Reconciliation |
||||||||||||||||
Reported Earnings |
$ | 1,009 | $ | 641 | $ | 1,358 | $ | 2,447 | ||||||||
Noncontrolling interest |
1 | 21 | 18 | 102 | ||||||||||||
Income taxes |
143 | 95 | 351 | 580 | ||||||||||||
Interest and related charges |
401 | 440 | 1,773 | 1,493 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 1,554 | $ | 1,197 | $ | 3,500 | $ | 4,622 | |||||||||
Adjustments2 |
192 | (119 | ) | 2,609 | 131 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBIT |
$ | 1,746 | $ | 1,078 | $ | 6,109 | $ | 4,753 |
1) |
Dominion Energy Consolidated Income Statement reflects the impact of segment eliminations and adjustments. |
2) |
For additional details on adjustments to reporting earnings and to EBIT, see the GAAP Reconciliation schedules on pages 24-32. |
3) |
Includes impairment of assets and other charges. |
4) |
The calculation of operating earnings per share excludes the impact, if any, of fair value adjustments related to the Companys convertible preferred securities entered in June 2019. Such fair value adjustments, if any, are required for the calculation of diluted reported earnings per share. For the three months and twelve months ended December 31, the fair value adjustment required for diluted reported earnings per share calculation was $1 million and $28 million, respectively. The calculation of reported and operating earnings per share includes the impact of preferred dividends of $7 million per quarter associated with the Series A preferred stock equity units entered in June of 2019 and $2 million associated with the Series B preferred stock equity units entered in December of 2019. See Form 10K for additional information. |
February 28, 2020 | 13 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Dominion Energy Virginia Reported and Operating Results
Three Months Ended | Year Ended | |||||||||||||||
Unaudited Summary | December 31, | December 31, | ||||||||||||||
(millions, except per share amounts) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating Revenue |
$ | 1,948 | $ | 1,814 | $ | 8,157 | $ | 7,849 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating Expenses |
||||||||||||||||
Electric fuel and other energy-related purchases |
487 | 570 | 2,178 | 2,318 | ||||||||||||
Purchased (excess) electric capacity |
(5 | ) | 35 | 40 | 114 | |||||||||||
Purchased gas |
| | | | ||||||||||||
Other operations and maintenance |
440 | 400 | 1,641 | 1,513 | ||||||||||||
Depreciation, depletion and amortization |
305 | 292 | 1,216 | 1,158 | ||||||||||||
Other taxes |
71 | 61 | 323 | 305 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
1,298 | 1,358 | 5,398 | 5,408 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income from operations |
650 | 456 | 2,759 | 2,441 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other income |
11 | 14 | 39 | 51 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income including noncontrolling interests before interest and income taxes |
661 | 470 | 2,798 | 2,492 | ||||||||||||
Interest and related charges |
118 | 124 | 530 | 516 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income including noncontrolling interests before income taxes |
543 | 346 | 2,268 | 1,976 | ||||||||||||
Income taxes |
140 | 13 | 482 | 380 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income including noncontrolling interests |
403 | 333 | 1,786 | 1,596 | ||||||||||||
Noncontrolling interests |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Reported and Operating Earnings Contribution |
$ | 403 | $ | 333 | $ | 1,786 | $ | 1,596 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Reported and Operating Earnings Per Share Contribution |
$ | 0.49 | $ | 0.50 | $ | 2.21 | $ | 2.44 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Average shares outstanding, diluted |
826.3 | 660.9 | 808.9 | 654.9 | ||||||||||||
Adjusted EBIT Reconciliation |
||||||||||||||||
Reported Earnings |
$ | 403 | $ | 333 | $ | 1,786 | $ | 1,596 | ||||||||
Noncontrolling interest |
| | | | ||||||||||||
Income taxes |
140 | 13 | 482 | 380 | ||||||||||||
Interest and related charges |
118 | 124 | 530 | 516 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBIT |
$ | 661 | $ | 470 | $ | 2,798 | $ | 2,492 |
February 28, 2020 | 14 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Gas Transmission & Storage Reported and Operating Results
Three Months Ended | Year Ended | |||||||||||||||
Unaudited Summary | December 31, | December 31, | ||||||||||||||
(millions, except per share amounts) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating Revenue |
$ | 833 | $ | 756 | $ | 3,321 | $ | 2,590 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating Expenses |
||||||||||||||||
Electric fuel and other energy-related purchases |
29 | 48 | 93 | 139 | ||||||||||||
Purchased electric capacity |
| | | | ||||||||||||
Purchased gas |
181 | 107 | 900 | 353 | ||||||||||||
Other operations and maintenance |
43 | 128 | 597 | 580 | ||||||||||||
Depreciation, depletion and amortization |
95 | 95 | 400 | 348 | ||||||||||||
Other taxes |
37 | 33 | 158 | 125 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
385 | 411 | 2,148 | 1,545 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income from operations |
448 | 345 | 1,173 | 1,045 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other income |
99 | 121 | 439 | 389 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income including noncontrolling interests before interest and income taxes |
547 | 466 | 1,612 | 1,434 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Interest and related charges |
65 | 96 | 405 | 262 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income including noncontrolling interests before income taxes |
482 | 370 | 1,207 | 1,172 | ||||||||||||
Income taxes |
117 | 88 | 262 | 236 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income including noncontrolling interests |
365 | 282 | 945 | 936 | ||||||||||||
Noncontrolling interests |
5 | 25 | 11 | 92 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Reported and Operating Earnings Contribution |
$ | 360 | $ | 257 | $ | 934 | $ | 844 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Reported and Operating Earnings Per Share Contribution |
$ | 0.43 | $ | 0.39 | $ | 1.16 | $ | 1.29 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Average shares outstanding, diluted |
826.3 | 660.9 | 808.9 | 654.9 | ||||||||||||
Adjusted EBIT Reconciliation |
||||||||||||||||
Reported Earnings |
$ | 360 | $ | 257 | $ | 934 | $ | 844 | ||||||||
Noncontrolling interest |
5 | 25 | 11 | 92 | ||||||||||||
Income taxes |
117 | 88 | 262 | 236 | ||||||||||||
Interest and related charges |
65 | 96 | 405 | 262 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBIT |
$ | 547 | $ | 466 | $ | 1,612 | $ | 1,434 |
February 28, 2020 | 15 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Gas Distribution Reported and Operating Results
Three Months Ended | Year Ended | |||||||||||||||
Unaudited Summary | December 31, | December 31, | ||||||||||||||
(millions, except per share amounts) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating Revenue |
$ | 737 | $ | 533 | $ | 2,385 | $ | 1,785 | ||||||||
Operating Expenses |
||||||||||||||||
Electric fuel and other energy-related purchases |
| | | | ||||||||||||
Purchased electric capacity |
| | | | ||||||||||||
Purchased gas |
233 | 157 | 619 | 401 | ||||||||||||
Other operations and maintenance |
166 | 120 | 618 | 475 | ||||||||||||
Depreciation, depletion and amortization |
82 | 67 | 335 | 263 | ||||||||||||
Other taxes |
39 | 47 | 200 | 190 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
520 | 391 | 1,772 | 1,329 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income from operations |
217 | 142 | 613 | 456 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other income |
27 | 23 | 105 | 91 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income including noncontrolling interests before interest and income taxes |
244 | 165 | 718 | 547 | ||||||||||||
Interest and related charges |
29 | 20 | 116 | 79 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income including noncontrolling interests before income taxes |
215 | 145 | 602 | 468 | ||||||||||||
Income taxes |
42 | 27 | 114 | 95 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income including noncontrolling interests |
173 | 118 | 488 | 373 | ||||||||||||
Noncontrolling interests |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Reported and Operating Earnings Contribution |
$ | 173 | $ | 118 | $ | 488 | $ | 373 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Reported and Operating Earnings Per Share Contribution |
$ | 0.21 | $ | 0.18 | $ | 0.60 | $ | 0.57 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Average shares outstanding, diluted |
826.3 | 660.9 | 808.9 | 654.9 | ||||||||||||
Adjusted EBIT Reconciliation |
||||||||||||||||
Reported Earnings |
$ | 173 | $ | 118 | $ | 488 | $ | 373 | ||||||||
Noncontrolling interest |
| | | | ||||||||||||
Income taxes |
42 | 27 | 114 | 95 | ||||||||||||
Interest and related charges |
29 | 20 | 116 | 79 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBIT |
$ | 244 | $ | 165 | $ | 718 | $ | 547 |
February 28, 2020 | 16 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Dominion Energy South Carolina Reported and Operating Results
Three Months Ended | Year Ended | |||||||
Unaudited Summary | December 31, | December 31, | ||||||
(millions, except per share amounts) | 2019 | 2019 | ||||||
Operating Revenue |
$ | 767 | $ | 2,952 | ||||
Operating Expenses |
||||||||
Electric fuel and other energy-related purchases |
114 | 619 | ||||||
Purchased electric capacity |
19 | 50 | ||||||
Purchased gas |
55 | 177 | ||||||
Other operations and maintenance |
170 | 595 | ||||||
Depreciation, depletion and amortization |
117 | 452 | ||||||
Other taxes |
53 | 241 | ||||||
|
|
|
|
|||||
Total operating expenses |
528 | 2,134 | ||||||
|
|
|
|
|||||
Income from operations |
239 | 818 | ||||||
|
|
|
|
|||||
Other income |
9 | 17 | ||||||
|
|
|
|
|||||
Income including noncontrolling interests before interest and income taxes |
248 | 835 | ||||||
Interest and related charges |
52 | 242 | ||||||
|
|
|
|
|||||
Income including noncontrolling interests before income taxes |
196 | 593 | ||||||
Income taxes |
98 | 163 | ||||||
|
|
|
|
|||||
Income including noncontrolling interests |
98 | 430 | ||||||
Noncontrolling interests |
| | ||||||
|
|
|
|
|||||
Reported and Operating Earnings Contribution |
$ | 98 | $ | 430 | ||||
|
|
|
|
|||||
Reported and Operating Earnings Per Share Contribution |
$ | 0.12 | $ | 0.53 | ||||
|
|
|
|
|||||
Average shares outstanding, diluted |
826.3 | 808.9 | ||||||
Adjusted EBIT Reconciliation |
||||||||
Reported Earnings |
$ | 98 | $ | 430 | ||||
Noncontrolling interest |
| | ||||||
Income taxes |
98 | 163 | ||||||
Interest and related charges |
52 | 242 | ||||||
|
|
|
|
|||||
Adjusted EBIT |
$ | 248 | $ | 835 |
February 28, 2020 | 17 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Contracted Generation Reported and Operating Results
Three Months Ended | Year Ended | |||||||||||||||
Unaudited Summary | December 31, | December 31, | ||||||||||||||
(millions, except per share amounts) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating Revenue |
$ | 274 | $ | 303 | $ | 1,150 | $ | 1,495 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating Expenses |
||||||||||||||||
Electric fuel and other energy-related purchases |
35 | 73 | 138 | 340 | ||||||||||||
Purchased electric capacity |
| | | | ||||||||||||
Purchased gas |
| | | | ||||||||||||
Other operations and maintenance |
103 | 157 | 459 | 512 | ||||||||||||
Depreciation, depletion and amortization |
45 | 45 | 179 | 213 | ||||||||||||
Other taxes |
13 | 15 | 53 | 57 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
196 | 290 | 829 | 1,122 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income from operations |
78 | 13 | 321 | 373 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other income |
19 | 22 | 80 | 81 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income including noncontrolling interests before interest and income taxes |
97 | 35 | 401 | 454 | ||||||||||||
Interest and related charges |
24 | 30 | 98 | 124 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income including noncontrolling interests before income taxes |
73 | 5 | 303 | 330 | ||||||||||||
Income taxes |
(37 | ) | 4 | 20 | 75 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income including noncontrolling interests |
110 | 1 | 283 | 255 | ||||||||||||
Noncontrolling interests |
(4 | ) | (4 | ) | 7 | 10 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Reported and Operating Earnings Contribution |
$ | 114 | $ | 5 | $ | 276 | $ | 245 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Reported and Operating Earnings Per Share Contribution |
$ | 0.14 | $ | 0.01 | $ | 0.34 | $ | 0.37 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Average shares outstanding, diluted |
826.3 | 660.9 | 808.9 | 654.9 | ||||||||||||
Adjusted EBIT Reconciliation |
||||||||||||||||
Reported Earnings |
$ | 114 | $ | 5 | $ | 276 | $ | 245 | ||||||||
Noncontrolling interest |
(4 | ) | (4 | ) | 7 | 10 | ||||||||||
Income taxes |
(37 | ) | 4 | 20 | 75 | |||||||||||
Interest and related charges |
24 | 30 | 98 | 124 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBIT |
$ | 97 | $ | 35 | $ | 401 | $ | 454 |
February 28, 2020 | 18 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Corporate & Other Reported and Operating Results
Three Months Ended | Year Ended | |||||||||||||||
Unaudited Summary | December 31, | December 31, | ||||||||||||||
(millions, except per share amounts) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating Revenue |
$ | 253 | $ | 173 | $ | 77 | $ | 474 | ||||||||
Operating Expenses |
||||||||||||||||
Electric fuel and other energy-related purchases |
| | | | ||||||||||||
Purchased electric capacity |
| | | 8 | ||||||||||||
Purchased gas |
| | | | ||||||||||||
Other operations and maintenance 2 |
634 | 276 | 3,105 | 1,133 | ||||||||||||
Depreciation, depletion and amortization |
20 | 14 | 73 | 18 | ||||||||||||
Other taxes |
9 | 5 | 68 | 29 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
663 | 295 | 3,246 | 1,188 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (Loss) from operations |
(410 | ) | (122 | ) | (3,169 | ) | (714 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Other income |
233 | 266 | 691 | 681 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (Loss) including noncontrolling interests before interest and income taxes |
(177 | ) | 144 | (2,478 | ) | (33 | ) | |||||||||
Interest and related charges |
179 | 253 | 768 | 784 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (Loss) including noncontrolling interests before income taxes |
(356 | ) | (109 | ) | (3,246 | ) | (817 | ) | ||||||||
Income taxes |
(217 | ) | (37 | ) | (690 | ) | (206 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (Loss) including noncontrolling interests |
(139 | ) | (72 | ) | (2,556 | ) | (611 | ) | ||||||||
Noncontrolling interests |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Reported Earnings (Loss) Contribution |
$ | (139 | ) | $ | (72 | ) | $ | (2,556 | ) | $ | (611 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Reported Earnings (Loss) Per Share Contribution3 |
$ | (0.18 | ) | $ | (0.11 | ) | $ | (3.22 | ) | $ | (0.93 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Adjustments to reported earnings: |
||||||||||||||||
Pre-tax Loss (Income) 1 |
193 | (50 | ) | 2,620 | 201 | |||||||||||
Income Tax 1 |
(214 | ) | 1 | (531 | ) | 3 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
(21 | ) | (49 | ) | 2,089 | 204 | |||||||||||
Operating Earnings (Loss) Contribution |
$ | (160 | ) | $ | (121 | ) | $ | (467 | ) | $ | (407 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Operating Earnings (Loss) Per Share Contribution3 |
$ | (0.21 | ) | $ | (0.19 | ) | $ | (0.60 | ) | $ | (0.62 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Average shares outstanding, diluted |
826.3 | 660.9 | 808.9 | 654.9 | ||||||||||||
Adjusted EBIT Reconciliation |
||||||||||||||||
Reported Earnings (Loss) |
$ | (139 | ) | $ | (72 | ) | $ | (2,556 | ) | $ | (611 | ) | ||||
Noncontrolling interest |
| | | | ||||||||||||
Income taxes |
(217 | ) | (37 | ) | (690 | ) | (206 | ) | ||||||||
Interest and related charges |
179 | 253 | 768 | 784 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | (177 | ) | $ | 144 | $ | (2,478 | ) | $ | (33 | ) | ||||||
Adjustments1 |
192 | (119 | ) | 2,609 | 131 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBIT |
$ | 15 | $ | 25 | $ | 131 | $ | 98 |
1) |
For additional details on adjustments to reporting earnings and to EBIT see the GAAP Reconciliation schedules on pages 24-32. |
2) |
Includes impairment of assets and other charges. |
3) |
The calculation of operating earnings per share excludes the impact, if any, of fair value adjustments related to the Companys convertible preferred securities entered in June 2019. Such fair value adjustments, if any, are required for the calculation of diluted reported earnings per share For the three months and twelve months ended December 31, the fair value adjustment required for diluted reported earnings per share calculation was $1 million and $28 million, respectively. The calculation of reported and operating earnings per share includes the impact of preferred dividends of $7 million per quarter associated with the Series A preferred stock equity units entered in June of 2019 and $2 million associated with the Series B preferred stock equity units entered in December of 2019. See Form 10K for additional information. |
February 28, 2020 | 19 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Reconciliation of Operating Earnings Guidance
2019 Operating Earnings Summary
(millions, except per share amounts)
2018
Actual |
Range of FY19 |
2019
Actual |
||||||||||||||
Description |
Low | High | ||||||||||||||
Dominion Energy Virginia |
||||||||||||||||
Adjusted EBIT |
$ | 2,492 | | | $ | 2,798 | ||||||||||
Operating earnings |
$ | 1,596 | | | $ | 1,786 | ||||||||||
Operating EPS |
$ | 2.44 | | | $ | 2.21 | ||||||||||
Gas Transmission & Storage |
||||||||||||||||
Adjusted EBIT |
$ | 1,434 | | | $ | 1,612 | ||||||||||
Operating earnings |
$ | 844 | | | $ | 934 | ||||||||||
Operating EPS |
$ | 1.29 | | | $ | 1.16 | ||||||||||
Gas Distribution |
||||||||||||||||
Adjusted EBIT |
$ | 547 | | | $ | 718 | ||||||||||
Operating earnings |
$ | 373 | | | $ | 488 | ||||||||||
Operating EPS |
$ | 0.57 | | | $ | 0.60 | ||||||||||
Dominion Energy South Carolina |
||||||||||||||||
Adjusted EBIT |
$ | 0 | | | $ | 835 | ||||||||||
Operating earnings |
$ | 0 | | | $ | 430 | ||||||||||
Operating EPS |
$ | 0.00 | | | $ | 0.53 | ||||||||||
Contracted Generation |
||||||||||||||||
Adjusted EBIT |
$ | 454 | | | $ | 401 | ||||||||||
Operating earnings |
$ | 245 | | | $ | 276 | ||||||||||
Operating EPS |
$ | 0.37 | | | $ | 0.34 | ||||||||||
Corporate and Other & Eliminations |
||||||||||||||||
Adjusted EBIT |
($ | 174 | ) | | | ($ | 255 | ) | ||||||||
Operating earnings |
($ | 407 | ) | | | ($ | 467 | ) | ||||||||
Operating EPS |
($ | 0.62 | ) | | | ($ | 0.60 | ) | ||||||||
Dominion Energy Consolidated |
||||||||||||||||
Total adjusted EBIT |
$ | 4,753 | $ | 5,780 | $ | 6,105 | $ | 6,109 | ||||||||
Consolidated interest |
1,423 | 1,835 | 1,815 | 1,762 | ||||||||||||
Consolidated income taxes |
577 | 690 | 725 | 882 | ||||||||||||
Noncontrolling interests |
102 | 15 | 20 | 18 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating earnings |
$ | 2,651 | $ | 3,240 | $ | 3,545 | $ | 3,447 | ||||||||
Operating EPS |
$ | 4.05 | $ | 4.01 | $ | 4.39 | $ | 4.24 | ||||||||
Average Diluted Shares |
654.9 | 809.0 | 807.0 | 808.9 | ||||||||||||
2019 Operating EPS Guidance Range |
$ | 4.05 | $ | 4.40 | ||||||||||||
2019 Operating EPS Actual >>> |
$ | 4.24 |
Notes:
Figures may not sum due to rounding
For additional detail on items excluded from operating earnings see the GAAP Reconciliation schedules on pages 28 and 29
For additional detail on Adjusted EBIT see Segment Results on pages 13 - 19
Adjusted EBIT is defined as Reported Earnings excluding any adjustments to Reported Earnings (Operating Earnings)
before interest and related charges, income taxes and noncontrolling interests
February 28, 2020 | 20 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
4Q19 Operating Earnings Summary | ||||||||||||||||
(millions, except per share amounts) | ||||||||||||||||
4Q18 | Range of 4Q19 | 4Q19 | ||||||||||||||
Description |
Actual | Low | High | Actual | ||||||||||||
Dominion Energy Consolidated |
||||||||||||||||
Total adjusted EBIT |
$ | 1,078 | $ | 1,500 | $ | 1,650 | $ | 1,746 | ||||||||
Consolidated interest |
371 | 430 | 420 | 400 | ||||||||||||
Consolidated income taxes |
94 | 145 | 175 | 357 | ||||||||||||
Noncontrolling interests |
21 | 0 | 0 | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating earnings |
$ | 592 | $ | 925 | $ | 1,055 | $ | 988 | ||||||||
Operating EPS |
$ | 0.89 | $ | 1.10 | $ | 1.26 | $ | 1.18 | ||||||||
Average Diluted Shares |
660.9 | 832 | 830 | 826.3 | ||||||||||||
4Q19 Operating EPS Guidance Range |
$ | 1.10 | $ | 1.25 | ||||||||||||
4Q19 Operating EPS Actual >>> |
$ | 1.18 |
Notes:
Figures may not sum due to rounding
For additional detail on items excluded from operating earnings see the GAAP Reconciliation schedules on pages 30 and 31
Adjusted EBIT is defined as Reported Earnings excluding any adjustments to Reported Earnings (Operating Earnings)
before interest and related charges, income taxes and noncontrolling interests
February 28, 2020 | 21 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
2020 Earnings Guidance and Accompanying Schedules
Earnings Guidance
2020 Operating Earnings Forecast | ||||||||||||
(millions, except per share amounts) | ||||||||||||
2019 | Range of FY2020 | |||||||||||
Description |
Actual | Low | High | |||||||||
Dominion Energy Virginia |
||||||||||||
Adjusted EBIT |
$ | 2,798 | $ | 2,830 | $ | 3,010 | ||||||
Operating earnings |
$ | 1,786 | $ | 1,870 | $ | 2,010 | ||||||
Operating EPS |
$ | 2.21 | $ | 2.22 | $ | 2.40 | ||||||
Gas Transmission & Storage |
||||||||||||
Adjusted EBIT |
$ | 1,612 | $ | 1,535 | $ | 1,615 | ||||||
Operating earnings |
$ | 934 | $ | 940 | $ | 1,015 | ||||||
Operating EPS |
$ | 1.16 | $ | 1.12 | $ | 1.21 | ||||||
Gas Distribution |
||||||||||||
Adjusted EBIT |
$ | 718 | $ | 755 | $ | 795 | ||||||
Operating earnings |
$ | 488 | $ | 535 | $ | 565 | ||||||
Operating EPS |
$ | 0.60 | $ | 0.64 | $ | 0.67 | ||||||
Dominion Energy South Carolina |
||||||||||||
Adjusted EBIT |
$ | 835 | $ | 785 | $ | 825 | ||||||
Operating earnings |
$ | 430 | $ | 460 | $ | 490 | ||||||
Operating EPS |
$ | 0.53 | $ | 0.55 | $ | 0.58 | ||||||
Contracted Generation |
||||||||||||
Adjusted EBIT |
$ | 401 | $ | 290 | $ | 315 | ||||||
Operating earnings |
$ | 276 | $ | 205 | $ | 235 | ||||||
Operating EPS |
$ | 0.34 | $ | 0.24 | $ | 0.28 | ||||||
Corporate and Other & Eliminations |
||||||||||||
Adjusted EBIT |
($ | 255 | ) | ($ | 80 | ) | ($ | 112 | ) | |||
Operating earnings |
($ | 467 | ) | ($ | 370 | ) | ($ | 387 | ) | |||
Operating EPS |
($ | 0.60 | ) | ($ | 0.52 | ) | ($ | 0.54 | ) | |||
Dominion Energy Consolidated |
||||||||||||
Total adjusted EBIT |
$ | 6,109 | $ | 6,115 | $ | 6,448 | ||||||
Consolidated interest |
1,762 | 1,630 | 1,550 | |||||||||
Consolidated income taxes |
882 | 705 | 830 | |||||||||
Noncontrolling interests |
18 | 140 | 140 | |||||||||
|
|
|
|
|
|
|||||||
Operating earnings |
$ | 3,447 | $ | 3,640 | $ | 3,928 | ||||||
Operating EPS |
$ | 4.24 | $ | 4.25 | $ | 4.60 | ||||||
Average Diluted Shares |
808.9 | 841.0 | 839.0 | |||||||||
2020 Operating EPS Guidance Range |
$ | 4.25 | $ | 4.60 |
Notes:
Figures may not sum due to rounding
For additional detail on items excluded from operating earnings see the GAAP Reconciliation schedule on page 28 and 33
Corporate and Other & Eliminations Operating EPS guidance includes the impact of preferred dividends
Guidance assumes consolidated federal and state effective income tax rate of 15.5%17.5%
February 28, 2020 | 22 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
1Q20 Operating Earnings Forecast | ||||||||||||
(millions, except per share amounts) | ||||||||||||
1Q19 | Range of 1Q20 | |||||||||||
Description |
Actual | Low | High | |||||||||
Dominion Energy Consolidated |
||||||||||||
Total adjusted EBIT |
$ | 1,536 | $ | 1,535 | $ | 1,715 | ||||||
Consolidated interest |
459 | 410 | 390 | |||||||||
Consolidated income taxes |
201 | 210 | 250 | |||||||||
Noncontrolling interests |
3 | 30 | 30 | |||||||||
|
|
|
|
|
|
|||||||
Operating earnings |
$ | 873 | $ | 885 | $ | 1,045 | ||||||
Operating EPS |
$ | 1.10 | $ | 1.03 | $ | 1.23 | ||||||
Average Diluted Shares |
793.1 | 840.0 | 838.0 | |||||||||
1Q20 Operating EPS Guidance Range |
$ | 1.05 | $ | 1.25 |
Notes:
Figures may not sum due to rounding
For additional detail on items excluded from operating earnings see the GAAP Reconciliation schedule on page 32 and 33
Operating EPS guidance includes the impact of preferred dividends
February 28, 2020 | 23 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
GAAP Reconciliation
Reconciliation of 2019 Consolidated Reported Earnings to Operating Earnings
Unaudited Income Statements | ||||||||||||||||||||||||
(millions, except per share
amounts) |
||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
December 31, 2019 | December 31, 2019 | |||||||||||||||||||||||
GAAP | Adjustments | Operating | GAAP | Adjustments | Operating | |||||||||||||||||||
Operating Revenue |
$ | 4,475 | $ | 14 | (e) | $ | 4,489 | $ | 16,572 | $ | 1,088 | (a),(e) | $ | 17,660 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating Expenses |
||||||||||||||||||||||||
Electric fuel and other energy-related purchases |
655 | | 655 | 2,938 | | 2,938 | ||||||||||||||||||
Purchased electric capacity |
14 | | 14 | 88 | | 88 | ||||||||||||||||||
Purchased gas |
426 | | 426 | 1,536 | | 1,536 | ||||||||||||||||||
Other operations and maintenance |
1,274 | (366 | )(a),(b),(e) | 908 | 5,801 | (1,948 | )(a),(b),(c),(e) | 3,853 | ||||||||||||||||
Depreciation, depletion and amortization |
664 | (1 | )(b) | 663 | 2,655 | | (b),(e) | 2,655 | ||||||||||||||||
Other taxes |
221 | | 221 | 1,040 | (15 | )(a) | 1,025 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total operating expenses |
3,254 | (367 | ) | 2,887 | 14,058 | (1,963 | ) | 12,095 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income from operations |
1,221 | 381 | 1,602 | 2,514 | 3,051 | 5,565 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other income (loss) |
333 | (189 | )(d) | 144 | 986 | (442 | )(a),(b),(d) | 544 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income including noncontrolling interests before interest and income taxes |
1,554 | 192 | 1,746 | 3,500 | 2,609 | 6,109 | ||||||||||||||||||
Interest and related charges |
401 | (1 | )(a) | 400 | 1,773 | (11 | )(a),(b) | 1,762 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income including noncontrolling interests before income taxes |
1,153 | 193 | 1,346 | 1,727 | 2,620 | 4,347 | ||||||||||||||||||
Income taxes |
143 | 214 | (f) | 357 | 351 | 531 | (f),(g) | 882 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income including noncontrolling interests |
1,010 | (21 | ) | 989 | 1,376 | 2,089 | 3,465 | |||||||||||||||||
Noncontrolling interests |
1 | | 1 | 18 | | 18 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earnings |
$ | 1,009 | $ | (21 | ) | $ | 988 | $ | 1,358 | $ | 2,089 | $ | 3,447 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earnings Per Share - Diluted |
$ | 1.21 | $ | (0.03 | ) | $ | 1.18 | $ | 1.62 | $ | 2.62 | $ | 4.24 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Average shares outstanding, diluted |
826.3 | 826.3 | 808.9 | 808.9 |
Adjustments to Reported Earnings
(a) |
Merger and integration-related costs. |
(b) |
Charges associated with regulated asset and contract retirements/terminations. |
(c) |
Revision to ash pond and landfill closure costs at certain Virginia utility power stations. |
(d) |
Net gain/loss on our investment in nuclear decommissioning trust funds. |
(e) |
Other miscellaneous items. |
(f) |
Income tax provisions associated with adjustments to reported earnings. |
(g) |
Deferred tax adjustments associated with the SCANA Combination. |
February 28, 2020 | 24 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Reconciliation of 2018 Consolidated Reported Earnings to Operating Earnings
Unaudited Income Statements | ||||||||||||||||||||||||
(millions, except per share
amounts) |
||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
December 31, 2018 | December 31, 2018 | |||||||||||||||||||||||
GAAP | Adjustments | Operating | GAAP | Adjustments | Operating | |||||||||||||||||||
Operating Revenue |
$ | 3,361 | $ | | $ | 3,361 | $ | 13,366 | $ | 218 | (a),(j) | $ | 13,584 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating Expenses |
||||||||||||||||||||||||
Electric fuel and other energy-related purchases |
686 | | 686 | 2,814 | | 2,814 | ||||||||||||||||||
Purchased electric capacity |
35 | | 35 | 122 | (8 | ) (h) | 114 | |||||||||||||||||
Purchased gas |
236 | | 236 | 645 | | 645 | ||||||||||||||||||
Other operations and maintenance |
896 | (93 | ) (b),(c),(j),(m) | 803 | 3,481 | (403 | ) (b),(c),(e),(f),(h),(j),(m) | 3,078 | ||||||||||||||||
Depreciation, depletion and amortization |
513 | (2 | ) (c) | 511 | 2,000 | 35 | (c),(f),(g) | 2,035 | ||||||||||||||||
Other taxes |
161 | | 161 | 703 | | 703 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total operating expenses |
2,527 | (95 | ) | 2,432 | 9,765 | (376 | ) | 9,389 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income from operations |
834 | 95 | 929 | 3,601 | 594 | 4,195 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other income (loss) |
363 | (214 | ) (d),(h),(j) | 149 | 1,021 | (463 | ) (d),(f),(h),(j) | 558 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income including noncontrolling interests before interest and income taxes |
1,197 | (119 | ) | 1,078 | 4,622 | 131 | 4,753 | |||||||||||||||||
Interest and related charges |
440 | (69 | ) (j) | 371 | 1,493 | (70 | ) (f),(j) | 1,423 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income including noncontrolling interests before income taxes |
757 | (50 | ) | 707 | 3,129 | 201 | 3,330 | |||||||||||||||||
Income taxes |
95 | (1 | ) (i),(k),(l) | 94 | 580 | (3 | ) (i),(k),(l) | 577 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income including noncontrolling interests |
662 | (49 | ) | 613 | 2,549 | 204 | 2,753 | |||||||||||||||||
Noncontrolling interests |
21 | | 21 | 102 | | 102 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earnings |
$ | 641 | $ | (49 | ) | $ | 592 | $ | 2,447 | $ | 204 | $ | 2,651 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earnings Per Share - Diluted |
$ | 0.97 | $ | (0.08 | ) | $ | 0.89 | $ | 3.74 | $ | 0.31 | $ | 4.05 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Average shares outstanding, diluted |
660.9 | 660.9 | 654.9 | 654.9 |
Adjustments to Reported Earnings
(a) |
Reserve for utility customers one-time rate credits associated with Virginia legislation. |
(b) |
Restoration costs associated with major storms. |
(c) |
Merger-related transaction and transition costs. |
(d) |
Net gain/loss on our investment in nuclear decommissioning trust funds. |
(e) |
Ash pond and landfill closure costs at certain utility power stations. |
(f) |
Charge associated with FERC-regulated plant disallowance. |
(g) |
Virginia depreciation revision. |
(h) |
Other miscellaneous items. |
(i) |
Income tax provisions associated with adjustments to reported earnings. |
(j) |
Transactions related to sale of non-core assets. |
(k) |
Remeasurement of deferred tax balances. |
(l) |
Tax valuation allowance. |
(m) |
Impairment charge associated with gathering and processing assets. |
February 28, 2020 | 25 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Reconciliation of 2019 Corporate and Other Reported Earnings to Operating Earnings
Unaudited Income Statements | ||||||||||||||||||||||||
(millions, except per share amounts) | ||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
December 31, 2019 | December 31, 2019 | |||||||||||||||||||||||
GAAP | Adjustments | Operating | GAAP | Adjustments | Operating | |||||||||||||||||||
Operating Revenue |
$ | 253 | $ | 14 | (e) | $ | 267 | $ | 77 | $ | 1,088 | (a),(e) | $ | 1,165 | ||||||||||
Operating Expenses |
||||||||||||||||||||||||
Electric fuel and other energy-related purchases |
| | | | | | ||||||||||||||||||
Purchased electric capacity |
| | | | | | ||||||||||||||||||
Purchased gas |
| | | | | | ||||||||||||||||||
Other operations and maintenance |
634 | (366 | ) (a),(b),(e) | 268 | 3,105 | (1,948 | ) (a),(b),(c),(e) | 1,157 | ||||||||||||||||
Depreciation, depletion and amortization |
20 | (1 | ) (b) | 19 | 73 | | (b),(e) | 73 | ||||||||||||||||
Other taxes |
9 | | 9 | 68 | (15 | ) (a) | 53 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total operating expenses |
663 | (367 | ) | 296 | 3,246 | (1,963 | ) | 1,283 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income from operations |
(410 | ) | 381 | (29 | ) | (3,169 | ) | 3,051 | (118 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other income (loss) |
233 | (189 | ) (d) | 44 | 691 | (442 | ) (a),(b),(d) | 249 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income including noncontrolling interests before interest and income taxes |
(177 | ) | 192 | 15 | (2,478 | ) | 2,609 | 131 | ||||||||||||||||
Interest and related charges |
179 | (1 | ) (a) | 178 | 768 | (11 | ) (a),(b) | 757 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income including noncontrolling interests before income taxes |
(356 | ) | 193 | (163 | ) | (3,246 | ) | 2,620 | (626 | ) | ||||||||||||||
Income taxes |
(217 | ) | 214 | (f) | (3 | ) | (690 | ) | 531 | (f),(g) | (159 | ) | ||||||||||||
Income including noncontrolling interests |
(139 | ) | (21 | ) | (160 | ) | (2,556 | ) | 2,089 | (467 | ) | |||||||||||||
Noncontrolling interests |
| | | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earnings |
$ | (139 | ) | $ | (21 | ) | $ | (160 | ) | $ | (2,556 | ) | $ | 2,089 | $ | (467 | ) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earnings Per Share - Diluted |
$ | (0.18 | ) | $ | (0.03 | ) | $ | (0.21 | ) | $ | (3.22 | ) | $ | 2.62 | $ | (0.60 | ) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Average shares outstanding, diluted |
826.3 | 826.3 | 808.9 | 808.9 | ||||||||||||||||||||
Adjustments to Reported Earnings
(a) |
Merger and integration-related costs. |
(b) |
Charges associated with regulated asset and contract retirements/terminations. |
(c) |
Revision to ash pond and landfill closure costs at certain Virginia utility power stations. |
(d) |
Net gain/loss on our investment in nuclear decommissioning trust funds. |
(e) |
Other miscellaneous items. |
(f) |
Income tax provisions associated with adjustments to reported earnings. |
(g) |
Deferred tax adjustments associated with the SCANA Combination. |
February 28, 2020 | 26 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Reconciliation of 2018 Corporate and Other Reported Earnings to Operating Earnings
Unaudited Income Statements | ||||||||||||||||||||||||
(millions, except per share amounts) | ||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
December 31, 2018 | December 31, 2018 | |||||||||||||||||||||||
GAAP |
Adjustments |
Operating |
GAAP |
Adjustments |
Operating |
|||||||||||||||||||
Operating Revenue |
$ | 173 | $ | | $ | 173 | $ | 474 | $ | 218 | (a),(j) | $ | 692 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating Expenses |
||||||||||||||||||||||||
Electric fuel and other energy-related purchases |
| | | | | | ||||||||||||||||||
Purchased electric capacity |
| | | 8 | (8 | ) (h) | | |||||||||||||||||
Purchased gas |
| | | | | | ||||||||||||||||||
Other operations and maintenance |
276 | (93 | ) (b),(c),(j),(m) | 183 | 1,133 | (403 | ) (b),(c),(e),(f),(h),(j),(m) | 730 | ||||||||||||||||
Depreciation, depletion and amortization |
14 | (2 | ) (c) | 12 | 18 | 35 | (c),(f),(g) | 53 | ||||||||||||||||
Other taxes |
5 | | 5 | 29 | | 29 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total operating expenses |
295 | (95 | ) | 200 | 1,188 | (376 | ) | 812 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income from operations |
(122 | ) | 95 | (27 | ) | (714 | ) | 594 | (120 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other income (loss) |
266 | (214 | ) (d),(h),(j) | 52 | 681 | (463 | ) (d),(f),(h),(j) | 218 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income including noncontrolling interests before interest and income taxes |
144 | (119 | ) | 25 | (33 | ) | 131 | 98 | ||||||||||||||||
Interest and related charges |
253 | (69 | ) (j) | 184 | 784 | (70 | ) (f),(j) | 714 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income including noncontrolling interests before income taxes |
(109) | (50 | ) | (159 | ) | (817 | ) | 201 | (616 | ) | ||||||||||||||
Income taxes |
(37) | (1 | ) (i),(k),(l) | (38 | ) | (206 | ) | (3 | ) (i),(k),(l) | (209 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income including noncontrolling interests |
(72 | ) | (49 | ) | (121) | (611 | ) | 204 | (407 | ) | ||||||||||||||
Noncontrolling interests |
| | | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earnings |
$ | (72 | ) | $ | (49 | ) | $ | (121 | ) | $ | (611 | ) | $ | 204 | $ | (407 | ) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earnings Per Share - Diluted |
$ | (0.11 | ) | $ | (0.08 | ) | $ | (0.19 | ) | $ | (0.93 | ) |
$
|
0.31 |
|
$ | (0.62 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Average shares outstanding, diluted |
660.9 | 660.9 | 654.9 | 654.9 |
Adjustments to Reported Earnings
(a) |
Reserve for utility customers one-time rate credits associated with Virginia legislation. |
(b) |
Restoration costs associated with major storms. |
(c) |
Merger-related transaction and transition costs. |
(d) |
Net gain/loss on our investment in nuclear decommissioning trust funds. |
(e) |
Ash pond and landfill closure costs at certain utility power stations. |
(f) |
Charge associated with FERC-regulated plant disallowance. |
(g) |
Virginia depreciation revision. |
(h) |
Other miscellaneous items. |
(i) |
Income tax provisions associated with adjustments to reported earnings. |
(j) |
Transactions related to sale of non-core assets. |
(k) |
Remeasurement of deferred tax balances. |
(l) |
Tax valuation allowance. |
(m) |
Impairment charge associated with gathering and processing assets. |
February 28, 2020 | 27 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Reconciliation of 2019 Reported Earnings to 2019 Operating Earnings
Unaudited, Operating Segments
(millions, except per share amounts)
Description |
2019
Reported |
Adjustments |
2019
Operating |
|||||||||
Dominion Energy Virginia Adjusted EBIT |
$ | 2,798 | $ | 2,798 | ||||||||
Gas Transmission & Storage Adjusted EBIT |
1,612 | 1,612 | ||||||||||
Gas Distribution Adjusted EBIT |
718 | 718 | ||||||||||
Dominion Energy South Carolina Adjusted EBIT |
835 | 835 | ||||||||||
Contracted Generation Adjusted EBIT |
401 | 401 | ||||||||||
Corporate and Other & Eliminations Adjusted EBIT |
(2,864 | ) | 2,609 | (a), (b), (c), (d), (e) | (255 | ) | ||||||
|
|
|
|
|
|
|||||||
Total Adjusted EBIT |
$ | 3,500 | $ | 2,609 | $ | 6,109 | ||||||
Consolidated Interest |
1,773 | (11 | ) (a), (b) | 1,762 | ||||||||
Consolidated Income Taxes |
351 | 531 | (f), (g) | 882 | ||||||||
Noncontrolling Interests |
18 | 0 | 18 | |||||||||
|
|
|
|
|
|
|||||||
Earnings |
$ | 1,358 | $ | 2,089 | $ | 3,447 | ||||||
Average Diluted Shares Outstanding |
808.9 | 808.9 | 808.9 | |||||||||
|
|
|
|
|
|
|||||||
Reported EPS |
$ | 1.62 | | | ||||||||
|
|
|
|
|
|
|||||||
Adjustments to reported earnings |
| $ | 2.62 | | ||||||||
|
|
|
|
|
|
|||||||
Operating EPS |
| | $ | 4.24 | ||||||||
|
|
|
|
|
|
Adjustments to Reported Earnings
(a) |
Merger and integration-related costs. |
(b) |
Charges associated with regulated asset and contract retirements/terminations. |
(c) |
Revision to ash pond and landfill closure costs at certain Virginia utility power stations. |
(d) |
Net gain/loss on our investment in nuclear decommissioning trust funds. |
(e) |
Other miscellaneous items. |
(f) |
Income tax provisions associated with adjustments to reported earnings. |
(g) |
Deferred tax adjustments associated with the SCANA Combination. |
February 28, 2020 | 28 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Reconciliation of 2018 Reported Earnings to 2018 Operating Earnings
Unaudited, Operating Segments
(millions, except per share amounts)
Description |
2018
Reported |
Adjustments |
2018
Operating |
|||||||||
Dominion Energy Virginia Adjusted EBIT |
2,492 | 2,492 | ||||||||||
Gas Transmission & Storage Adjusted EBIT |
1,434 | 1,434 | ||||||||||
Gas Distribution Adjusted EBIT |
547 | 547 | ||||||||||
Contracted Generation Adjusted EBIT |
454 | 454 | ||||||||||
Corporate and Other & Eliminations Adjusted EBIT |
(305 | ) | 131 | (a), (b), (c), (d), (e), (f), (g), (h), (i), (j) | (174 | ) | ||||||
|
|
|
|
|
|
|||||||
Total Adjusted EBIT |
$ | 4,622 | $ | 131 | $ | 4,753 | ||||||
Consolidated Interest |
1,493 | (70 | ) (a), (e) | 1,423 | ||||||||
Consolidated Income Taxes |
580 | (3 | ) (k), (l), (m) | 577 | ||||||||
Noncontrolling Interests |
102 | 0 | 102 | |||||||||
|
|
|
|
|
|
|||||||
Earnings |
$ | 2,447 | $ | 204 | $ | 2,651 | ||||||
Average Diluted Shares Outstanding |
654.9 | 654.9 | 654.9 | |||||||||
|
|
|
|
|
|
|||||||
Reported EPS |
$ | 3.74 | | | ||||||||
|
|
|
|
|
|
|||||||
Adjustments to reported earnings |
| $ | 0.31 | | ||||||||
|
|
|
|
|
|
|||||||
Operating EPS |
| | $ | 4.05 | ||||||||
|
|
|
|
|
|
Adjustments to Reported Earnings
(a) |
Transactions related to sale of non-core assets. |
(b) |
Impairment charge associated with gathering and processing assets. |
(c) |
Reserve for utility customers one-time rate credits associated with Virginia legislation. |
(d) |
Net gain/loss on our investment in nuclear decommissioning trust funds. |
(e) |
Charge associated with FERC-regulated plant disallowance. |
(f) |
Ash pond and landfill closure costs at certain utility power stations. |
(g) |
Restoration costs associated with major storms. |
(h) |
Merger-related transaction and transition costs. |
(i) |
Virginia depreciation revision. |
(j) |
Other miscellaneous items. |
(k) |
Income tax provisions associated with adjustments to reported earnings. |
(l) |
Remeasurement of deferred tax balances. |
(m) |
Tax valuation allowance. |
February 28, 2020 | 29 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Reconciliation of 4Q19 Reported Earnings to 4Q19 Operating Earnings
Unaudited, Operating Segments
(millions, except per share amounts)
Description |
4Q19
Reported |
Adjustments |
4Q19
Operating |
|||||||||
Dominion Energy Consolidated |
||||||||||||
Total Adjusted EBIT |
$ | 1,554 | $ | 192 | (a),(b),(c),(d) | $ | 1,746 | |||||
Consolidated Interest |
401 | (1 | ) (a) | 400 | ||||||||
Consolidated Income Taxes |
143 | 214 | (e) | 357 | ||||||||
Noncontrolling Interests |
1 | 0 | 1 | |||||||||
|
|
|
|
|
|
|||||||
Earnings |
$ | 1,009 | ($21 | ) | $ | 988 | ||||||
Average Diluted Shares Outstanding |
826.3 | 826.3 | 826.3 | |||||||||
|
|
|
|
|
|
|||||||
Reported EPS |
$ | 1.21 | | | ||||||||
|
|
|
|
|
|
|||||||
Adjustments to reported earnings |
| ($ | 0.03) | | ||||||||
|
|
|
|
|
|
|||||||
Operating EPS |
| | $ | 1.18 | ||||||||
|
|
|
|
|
|
Adjustments to Reported Earnings
(a) |
Merger and integration-related costs. |
(b) |
Charges associated with regulated asset and contract retirements/terminations. |
(c) |
Other miscellaneous items. |
(d) |
Net gain/loss on our investment in nuclear decommissioning trust funds. |
(e) |
Income tax provisions associated with adjustments to reported earnings. |
February 28, 2020 | 30 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Reconciliation of 4Q18 Reported Earnings to 4Q18 Operating Earnings
Unaudited, Operating Segments (millions, except per share amounts) |
||||||||||||
Description |
4Q18
Reported |
Adjustments |
4Q18
Operating |
|||||||||
Dominion Energy Consolidated |
||||||||||||
Total Adjusted EBIT |
$ | 1,197 | ($119 | ) (a), (b), (c), (d), (e), (f) | $ | 1,078 | ||||||
Consolidated Interest |
440 | (69 | ) (a) | 371 | ||||||||
Consolidated Income Taxes |
95 | (1 | ) (g), (h), (i) | 94 | ||||||||
Noncontrolling Interests |
21 | 0 | 21 | |||||||||
|
|
|
|
|
|
|||||||
Earnings |
$ | 641 | ($49 | ) | $ | 592 | ||||||
Average Diluted Shares Outstanding |
660.9 | 660.9 | 660.9 | |||||||||
|
|
|
|
|
|
|||||||
Reported EPS |
$ | 0.97 | | | ||||||||
|
|
|
|
|
|
|||||||
Adjustments to reported earnings |
| ($0.08 | ) | | ||||||||
|
|
|
|
|
|
|||||||
Operating EPS |
| | $ | 0.89 | ||||||||
|
|
|
|
|
|
Adjustments to Reported Earnings
(a) |
Transactions related to sale of non-core assets. |
(b) |
Impairment charge associated with gathering and processing assets. |
(c) |
Net gain/loss on our investment in nuclear decommissioning trust funds. |
(d) |
Restoration costs associated with major storms. |
(e) |
Merger-related transaction and transition costs. |
(f) |
Other miscellaneous items. |
(g) |
Income tax provisions associated with adjustments to reported earnings. |
(h) |
Remeasurement of deferred tax balances. |
(i) |
Tax valuation allowance. |
February 28, 2020 | 31 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
Reconciliation of 1Q19 Reported Earnings to 1Q19 Operating Earnings
Unaudited, Operating Segments (millions, except per share amounts) |
||||||||||||
Description |
1Q19
Reported |
Adjustments |
1Q19
Operating |
|||||||||
Dominion Energy Consolidated |
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Total Adjusted EBIT |
(94 | ) | $ | 1,630 | (a),(b),(c),(d),(e) | $ | 1,536 | |||||
Consolidated Interest |
469 | (10 | ) (a), (b) | 459 | ||||||||
Consolidated Income Taxes |
114 | 87 | (f), (g) | 201 | ||||||||
Noncontrolling Interests |
3 | 0 | 3 | |||||||||
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Earnings (Loss) |
($ | 680 | ) | $ | 1,553 | $ | 873 | |||||
Average Diluted Shares Outstanding |
793.1 | 793.1 | 793.1 | |||||||||
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Reported EPS |
($ | 0.86 | ) | | | |||||||
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Adjustments to reported earnings |
| $ | 1.96 | | ||||||||
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Operating EPS |
| | $ | 1.10 | ||||||||
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Adjustments to Reported Earnings
(a) |
Merger and integration-related costs. |
(b) |
Charges associated with Virginia utility asset retirements. |
(c) |
Revision to ash pond and landfill closure costs at certain Virginia utility power stations. |
(d) |
Net gain/loss on our investment in nuclear decommissioning trust funds. |
(e) |
Other miscellaneous items. |
(f) |
Income tax provisions associated with adjustments to reported earnings. |
(g) |
Deferred tax adjustments associated with the SCANA Combination. |
February 28, 2020 | 32 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
2020 Earnings Expectations
Earnings Per Share (diluted)
Reconciliation of measures prepared in accordance with Generally Accepted Accounting Principles (GAAP) versus non-GAAP measures
1Q 2020 Operating Earnings (estimate): |
$ | 1.05 - $1.25 | ||
1Q 2020 Reported Earnings (estimate): |
See Note 1 below | |||
FY 2020 Operating Earnings (estimate): |
$ | 4.25 - $4.60 | ||
FY 2020 Reported Earnings (estimate): |
See Note 1 below |
1. |
In providing its first-quarter and full-year 2020 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 changes in accounting principles. At this time, Dominion Energy management is not able to estimate the aggregate impact, if any, of these items on future period reported earnings. Accordingly, Dominion Energy is not able to provide a corresponding GAAP equivalent for its operating earnings guidance. |
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 companys 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 companys fundamental earnings power.
Dominion Energys estimates of first-quarter and full-year 2020 earnings are subject to various risks and uncertainties. Factors that could cause actual results to differ include, but are not limited to: unusual weather conditions and their effect on energy sales to customers and energy commodity prices; extreme weather events and other natural disasters; federal, state and local legislative and regulatory developments; changes to federal, state and local environmental laws and regulations, including proposed carbon regulations; cost of environmental compliance; changes in enforcement practices of regulators relating to environmental standards and litigation exposure for remedial activities; capital market conditions, including the availability of credit and the ability to obtain financing on reasonable terms; fluctuations in interest rates; changes in rating agency requirements or credit ratings and their effect on availability and cost of capital; impacts of acquisitions, divestitures, transfers of assets by Dominion Energy to joint ventures and retirements of assets based on asset portfolio reviews; receipt of approvals for, and timing of, closing dates for other acquisitions and divestitures; changes in demand for Dominion Energys services; additional competition in Dominion Energys industries; changes to regulated rates collected by Dominion Energy; changes in operating, maintenance and construction costs; timing and receipt of regulatory approvals necessary for planned construction or expansion projects and compliance with conditions associated with such regulatory approvals; adverse outcomes in litigation matters or regulatory proceedings; and the inability to complete planned construction projects within time frames initially anticipated. Other risk factors are detailed from time to time in Dominion Energys quarterly reports on Form 10-Q and most recent annual report on Form 10-K filed with the Securities and Exchange Commission.
February 28, 2020 | 33 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.
DOMINION ENERGY 4Q19 EARNINGS RELEASE KIT
APPENDIX
List of Revised Schedules
Schedule |
Page
Number |
|||
Consolidated Statements of Income (GAAP) |
6 | |||
Schedule 1 - Segment Operating Earnings |
7 | |||
Schedule 2 - Reconciliation of 2019 Repoted Earnings to Operating Earnings |
8 | |||
Schedule 4 - Reconciliation of 2019 Earnings to 2018 |
10 | |||
Consolidated Financial Statements (GAAP) - Dominion Energy Consolidated |
||||
Unaudited Balance Sheets (Summarized) |
11 | |||
Unaudited Statements of Cash Flows (Summarized |
12 | |||
Segment Earnings Results |
||||
Dominion Energy Consolidated Reported and Operating Results (Unaudited Summary) |
13 | |||
Corporate & Other Reported and Operating Results (Unaudited Summary) |
19 | |||
GAAP Reconciliation |
||||
Reconciliation of 2019 Consolidated Reported Earnings to Operating Earnings |
24 | |||
Reconciliation of 2019 Corporate and Other Reported Earnings to Operating Earnings |
26 | |||
Reconciliation of 2019 Reported Earnings to 2019 Operating Earnings |
28 | |||
Reconciliation of 4Q19 Reported Earnings to 4Q19 Operating Earnings |
30 |
February 28, 2020 | 34 |
Please refer to page 3 for risks and uncertainties related to projections and forward-looking statements.