Dominion Energy, Inc. · NYSE:D
Dominion Energy — Q4 2019 Earnings Presentation
55 slides from Dominion Energy's earnings presentation, Feb 11, 2020
Slide 1: Q4 2019 earnings call
Q4 2019 earnings call February 11, 2020
Slide 2: Important note to investors
Important note to investors This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding Dominion Energy. The statements relate to, among other things, expectations, estimates and projections concerning the busines
Slide 3: Operating earnings per share
Operating earnings per share Actual versus guidance ($ per share) Fourth quarter 2019 Full-year 2019 +5.5% Increase vs 20183 $4.30 $4.24 $4.22 Favorable weather $4.15 $1.25 impact on utility $1.18 $1.18 earnings: $0.02 $1.10 Favorable weather impact on utility earnings: <$0.01 Actual¹ Weather Guidan
Slide 4: Guidance
Guidance Operating earnings and dividends per share +5% to midpoint $4.60 $4.22 $4.25 ▪ Q1 2020 operating EPS guidance: $1.05—$1.25 Drivers vs. 2019 Regulated investment ▪ 2020+ annual operating EPS Lower interest expense Millstone: Full-year PPA growth per year: 5%+ Lower nuclear D&A Cove Point min
Slide 5: Updated operating segments
Updated operating segments Summary Dominion Energy Gas Transmission Dominion Energy Contracted Gas Distribution Virginia & Storage South Carolina Generation NY CT UT CT OH VA PA States of WY OH MD ID WV SC CA IN WV WY VA operation NC UT CO NC UT Southeast SC NC U.S. GA 2020E operating ~45% ~25% ~15%
Slide 6: Updated segment-level disclosure
Updated segment-level disclosure Operating income guidance and drivers Dominion Energy Gas Transmission Dominion Energy Contracted Gas Distribution Virginia & Storage South Carolina Generation earnings ($M) $1,596 $844 $373 N/A $245 2018A Operating 2019A $1,786 $934 $488 $430 $276 2020E $1,870—$2,01
Slide 7: Updated segment-level disclosure
Updated segment-level disclosure Operating earnings per share guidance 2020E guidance 2020E contribution by segment¹ Dominion Energy Contracted Dominion Energy Virginia $2.22—$2.40 Virginia Generation 5% 47% Gas Transmission & Storage $1.12—$1.21 Gas Transmission & Storage 24% Gas Distribution $0.64
Slide 8: Updated segment-level disclosure: capital structure summary
Updated segment-level disclosure Capital structure summary $38.0 $14.0 Total debt ($B)¹ $0.9 $3.4 $1.5 $5.6 $12.7 Dominion Segment Dominion Gas Gas Energy Contracted Corporate Energy Transmission Total Distribution South Generation and Other3 Virginia & Storage Carolina VEPCO ✓ DEGH ✓ DEO2 DESC ✓ So
Slide 9: Balance sheet
Balance sheet Continued improvement in 2019 CFO pre-WC / debt Pension Overall funded status ~14.5% 92% 14.0% 85% 12.0% 11.0% 2018A 2019E ▪ ~55 basis points increase in discount rate would bring overall pension to fully funded basis 2016A 2017A 2018A 2019E Note:2016A—2018A as per Moody’s “as-adjusted
Slide 10: Capital expenditures
Capital expenditures 2020 plan ($ billions) $0.5 $8.0 $0.9 $2.4 $0.3 $1.2 $0.3 $0.9 $1.4 $5.6 $3.9 $1.0 $3.0 Legend Maintenance¹ Growth Dominion Energy Gas Transmission & Gas Distribution Dominion Energy Contracted Total Virginia Storage South Carolina Generation Note: Totals reflect rounding ¹ Incl
Slide 11: Long-term debt issuance plan
Long-term debt issuance plan 2020 ($ millions) Scheduled debt Issuance range Net issuances maturities³ Dominion Energy Virginia $800—$1,000 $— $800—$1,000 Gas Transmission & $400—$700 $700 ($300)—0 Storage Gas Distribution $1,800—$2,000¹ $100 $1,700—$1,900 Dominion Energy $— $— $— South Carolina Con
Slide 12: Atlantic Coast Pipeline
Atlantic Coast Pipeline Select updates Financial update Capex to date (total project)¹ $3.4B Project-level $1.8B debt AFUDC 14% equity rate Expected EPS contribution: “Mid- to high- teen” 2020 cents per share Ownership Expected EPS contribution: ~20—25 cents Agreed to acquire 2022² per share Pro sel
Slide 13: Key themes
Key themes Regulated + Five-year growth 95% “like” earnings $26B capital plan (2019—23) Earnings from: 70% State-regulated utilities / Consecutive quarter of 25% FERC-regulated assets 16th meeting / exceeding midpoint of guidance serving utility customers Year-over-year 5%+ operating EPS ~6% rate ba
Slide 14: Safety
Safety OSHA recordable incident rate¹ 1.78 1.44 100 Employees Each Work Year Number of Recordables per 1.34 1.32 1.06 1.02 1.04 1.00 0.92 0.88 0.80 0.65 0.65 0.62 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 ¹ Pro forma for SCANA and Questar Please refer to page 2 for risks
Slide 15: Reducing our emissions profile
Reducing our emissions profile Carbon and methane emission reductions Carbon emissions (million metric tons)¹ Methane emissions (thousand metric tons)² 74.3 122.8 24% reduction 93.1 47% reduction 39.3 Nearly 2x better than industry average 2005 2018 2010 2018 ¹ Pro forma for legacy SCANA generation
Slide 16: Reducing our emissions profile
Reducing our emissions profile Coal-fired generation Coal-fired generation as percent of Coal-fired generation as percent of company-wide generation output (MWh)¹ company-wide generation capacity (MW)¹ 52% 35% 20% 12% 2005A 2019A 2005A 2019A Coal-fired generation as percent of company-wide investmen
Slide 17: Net zero emissions by 2050
Net zero emissions by 2050 Carbon and methane across electric and gas operations Test + deploy Supportive legislative and regulatory policies and broader technologies such as large- investments across the economy scale energy storage & carbon capture Transportation: Transportation: Agriculture: Beyo
Slide 18: Select ESG accolades
Select ESG accolades “Places the company in a category of leaders who manage carbon Climate A- emissions and address climate- related issues” “Dominion Energy is one of a small A number of high-performing Water companies out of thousands that were scored” “Shareholder returns mean nothing if a compa
Slide 19: Beyond Dominion Energy
“Beyond Dominion Energy” “Beyond Dominion Energy” Providing our customers with solutions to reduce their environmental footprints Transportation Agriculture Electric school Enhanced grid Renewable Marine LNG buses for EV natural gas Please refer to page 2 for risks and uncertainties related to proje
Slide 20: Business updates: Dominion Energy Virginia
Business updates Dominion Energy Virginia ▪ 2.6 GW of wind generation off the coast of Virginia ▪ COP submission: End of 2020 ▪ Complete permitting/commence construction: 2024 ▪ Full in-service: End of 2026 ▪ Utility asset with regulated cost recovery, subject to SCC approval Offshore wind ▪ ~$8B ca
Slide 21: Business updates: Dominion Energy Virginia
Business updates Dominion Energy Virginia ▪ 3,000MW of solar in development or in operation in Virginia by 2022: 57% complete ▪ Second solar CPCN approval (US-4) in last twelve months ▪ Company-wide solar investment to date: ~$4B ▪ Expected solar investment through 2023: ~$3B Solar ▪ Fourth largest
Slide 22: Business updates: Dominion Energy Virginia
Business updates Dominion Energy Virginia ▪ Electric transmission: Nearly $900M of capital investment in 2019 ▪ Nuclear life-extension: Turkey Point (NEE) approval positive for industry ▪ Distribution undergrounding: 1,300 miles since program inception ▪ Pumped storage: On-going, early-stage plannin
Slide 23: Business updates: South Carolina, Gas Distribution, GT&S
Business updates Dominion Energy South Carolina, Gas Distribution, GT&S Dominion Energy RNGSouth Carolina Gas Distribution Marine LNG 3-year customer CAGR 3-year customer CAGR ▪ Strong growth ▪ Strong growth 3.2% ▪ Integration 2.6% ▪ Infrastructure 1.7% progress replacement ▪ Excellent 1.5% ▪ Reliab
Slide 24: Business updates: Atlantic Coast Pipeline
Business updates Atlantic Coast Pipeline Appalachian Trail Biological Opinion Buckingham County Agency U.S. Fish and Wildlife U.S. Forest Service VA Air Control Board Service Supreme Court oral Status In process Evaluating alternatives argument: Feb 24 Expected resolution May/June 2020 1H 2020 2H 20
Slide 25: Summary
Summary ✓ Achieved full-year safety results that are consistent with the record-setting performance of recent years ✓ Introduced a net zero emissions by 2050 target that accounts for carbon and methane emissions across both electric and gas operations ✓ Achieved weather-normalized operating earnings
Slide 26: Appendix
Appendix Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 26
Slide 27: Operating earnings per share
Operating earnings per share Track-record of successful execution Weather normalized operating EPS vs. guidance Upper end guidance Guidance midpoint Lower end guidance 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q
Slide 28: Operating vs. reported earnings
Dominion Energy Operating vs. reported earnings Trailing twelve quarters as of 4Q2019 Trailing twelve quarters as of 4Q19—Ex SCG merger adj.¹ $1.86 $11.86 $12.25 $11.86 $10.00 ($0.39) Adjustments as % of operating Illustrative earnings: adjustments as 16% including % of operating adjustments earning
Slide 29: Adjustments to reported earnings
Adjustments to reported earnings Pre-tax drivers Full-year 2019 In-line with merger expectations $0.5B ($0.3B) $2.5B $1.4B Period expense treatment under GTSA— Retirement of generating units and automated meters SCANA merger Power Generation & Other¹ Pre-tax total Power Delivery Note: See page 8 of
Slide 30: Environmental: Generation by fuel type
Environmental Generation by fuel type Electric generation mix (MWH) 2005 2018 2019 2005 2018 2019 Coal 52% 17% 12% Nuclear 36% 39% 42% Natural Gas 7% 39% 42% Petroleum 4% <1% 0% Biomass, Hydro, 1% 5% 5% Solar, Wind Note: 2005 and 2018 historical data pro forma for SCANA. All data excludes Bath Count
Slide 31: Environmental: Generation portfolio
Environmental Generation portfolio 2019 owned electric generation capacity (MW) Solar ~27,100 ~27,100 ~1,800 MW MW MW Total by fuel Total by segment Solar portfolio Natural gas 40% DE Virginia 69% Contracted Gen 69% Nuclear 22% DE South Carolina 19% DE VA – PPA 20% Coal 20% Contracted Gen 12% DE VA
Slide 32: Environmental: Solar portfolio
Environmental Solar portfolio Capacity summary: By segment Approximate values In service In development Total Dominion Energy Virginia¹ 1,250 MW 1,100 MW 2,350 MW Contracted Generation 550 MW 200 MW 750 MW Total 1,800 MW 1,300 MW 3,100 MW Capacity summary: By geography Approximate values In service
Slide 33: Atlantic Coast Pipeline
Atlantic Coast Pipeline Reflects judicial solution to Appalachian Trail crossing Assumed Permit/authorization Agency Current status resolution (timing) U.S. Fish & Wildlife Service Vacated Reissuance Biological Opinion (USFWS) (July 2019) (1H 2020) U.S. Army Corps of Engineers Voluntarily remanded R
Slide 34: State utility customers
State utility customers Segment summary as of 12/31/2019 State summary Customers ‘17-’19 CAGR 12/31/2019 (M) DE South Carolina DE Virginia 1.1% 2.6 1.1M Gas Distribution 17% 3.0M DE South Carolina 2.2% 1.1 44% Electric 1.7% 0.7 Gas 3.2% 0.4 6.8M Gas Distribution 1.5% 3.0 state utility customers UT/I
Slide 35: Estimated rate base growth in 2019
Estimated rate base growth in 2019¹ $ billions Dominion Energy South Carolina³ 18% $8.4B Dominion Energy Virginia Gas Distribution 16% ~$48B 50% $23.8B $7.7B +~6% vs. 20194 Gas Transmission & Storage² 16% $7.8B Note: Gas Distribution and DEV represent estimated rate base as of 12/31/19; DESC and Gas
Slide 36: Dominion Energy Virginia
Dominion Energy Virginia Summary Electric Dominion VA base / Legacy A6 Other A6 Transmission Energy Total Other riders riders rider North Carolina Rate base $13.51 $4.43 $23.8 $4.42 $1.14 $0.45 ($B) Common 52.0%6 52.1%7 52.0%6 52.0%8 52.0%6 52.0%9 equity % Allowed 9.2%10 11.4%11 9.2% - 10.2% 9.75%8
Slide 37: Dominion Energy Virginia: Legacy A6 generation riders
Dominion Energy Virginia Legacy A6 generation riders Bear Warren VCHEC Biomass Brunswick Greensville US-2 Solar Total Garden County Rate base1 $0.3 $0.6 $1.0 $1.1 $0.1 $0.7 $0.1 $3.9 ($B) Common 52.0% 52.0% 52.0% 52.0% 52.0% 52.0% 52.0% 52.0% equity %2 Allowed 10.2% 10.2% 10.2% 9.2% 10.2% 9.2% 9.2%
Slide 38: Gas Transmission & Storage
Gas Transmission & Storage Summary Questar CP LNG and DETI DECG Iroquois Total Pipelines1 Pipeline Rate base $3.2 $1.0 $0.5 $0.3 $0.64 $5.6 ($B)3 Annual 8,740,000 7,880,000 810,000 1,600,000² 1,800,000 20,830,000 capacity (Dth/d) % contracted 90% 95% 99% 90% 99% 94% demand Underground Storage 756 13
Slide 39: Gas Distribution
Gas Distribution Summary Utah and Ohio North Carolina West Virginia Total Wyoming Rate base $3.7 $2.2 $1.5 $0.2 $7.7 ($B) Authorized 51.3% 62.1%¹ 52.0% 45.9%² 54.4%³ equity % Allowed ROE 10.4% 9.9%¹ 9.7% 9.5% 10.1%³ Customers 1.2M 1.1M 0.6M 0.1M 3.0M Notes: ¹ Weighted average of UT, WY, and Wexpro (
Slide 40: Dominion Energy South Carolina
Dominion Energy South Carolina Summary DESC: DESC: DESC: Total Electric¹ Gas NND¹ Rate 22 Ratebase base $5.5 $0.7 $2.23 $8.4 ($B) ($B) Authorized 52.18% 48.54% 52.81% 52.04%4 equity % Allowed ROE 10.25% 10.25% 9.90% 10.16%4 Customers 0.7M 0.4M — 1.1M Notes: ¹ Retail Portion ² As of September 30, 201
Slide 41: Contracted Generation: 2020 Millstone hedge position
Contracted Generation 2020 Millstone hedge position Millstone hedging as of January 2020 16% open 2.4M MWh 57% long-term 15.4M contracted MWh in 8.8M MWh 2020 $49.99 27% hedged 4.2M MWh $39.55 ~85% of 2020 volumes de-risked at volume weighted average price of $46.62 Please refer to page 2 for risks
Slide 42: Weather
Weather After-tax impact ($M) Q1 Q2 Q3 Q4 2019 Dominion Energy ($33) $5 $38 $4 $14 Virginia2 Versus normal¹ Dominion Energy (18) 13 7 2 4 South Carolina3 Gas Distribution4 (0) (1) (1) 0 (2) Total ($50) $17 $43 $6 $16 Q1 Q2 Q3 Q4 2019 Dominion Energy ($25) ($4) $23 ($8) ($15) Virginia2 Versus prior y
Slide 43: Weather: Degree days
Weather Degree days Quarter ended 12/31 12 months ended 12/31 2019 2018 2019 2018 Actual 1,217 1,302 3,259 3,608 Heating Dominion Normal 1,251 1,244 3,527 3,508 Energy Virginia Actual 83 129 2,031 2,019 Cooling Electric Normal 56 51 1,682 1,663 Actual 481 - 1,179 - Dominion Heating Normal 495 - 1,33
Slide 44: Fixed income: Credit ratings
Fixed income Credit ratings Dominion Energy, Inc. Moody’s S&P Fitch Corporate/Issuer Baa2 BBB+ BBB+ Senior Unsecured Debt Securities Baa2 BBB BBB+ Junior Subordinated Notes Baa3 BBB BBB Enhanced Junior Subordinated Notes Baa3 BBB- BBB- Preferred Stock Ba1 BBB- BBB- Short-Term/Commercial Paper P-2 A-
Slide 45: Fixed income: Credit ratings (cont'd)
Fixed income Credit ratings (cont’d) DESC Moody’s S&P Fitch Corporate/Issuer Baa2 BBB+ BBB First Mortgage Bonds Baa1 A A- Short-Term/Commercial Paper P-2 A-2 F2 Outlook Stable Stable Positive PSNC Moody’s S&P Fitch Corporate/Issuer Baa1 BBB+ BBB Senior Unsecured Debt Securities Baa1 BBB+ BBB+ Outloo
Slide 46: Fixed income: Company-modeled CFO pre-WC to debt
Fixed income Company-modeled CFO pre-WC to debt Net cash provided by operating activities (-) Changes in working capital Numerator (-) Capitalized interest (Note 2, Property, Plant and Equipment) Source: 10K (+) Depreciation component of operating leases (Note 15. Leases) Consolidated Statements of
Slide 47: Fixed income: Company-modeled CFO pre-WC 2019 adjustments
Fixed income Company-modeled CFO pre-WC 2019 adjustments ($ billions) $0.3 $0.1 $6.1 $5.7 CFO pre-WC (+) SCANA merger-related (+) NUG contract expense Adjusted CFO pre-WC expenses Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 47
Slide 48: Fixed income: Schedule of liquidity position
Fixed income Schedule of liquidity position ($ billions, as of Dec 31, 2019) $6.0 $5.1 $0.1 $5.2 ($0.9) Total (-) (=) (+) (=) commited Commercial paper Total available Cash and short-term Total bank lines outstanding / LOC¹ capacity investment on hand² liquidity available³ ¹ Includes commercial pape
Slide 49: Fixed income: Schedule of long-term debt
Fixed income Schedule of long-term debt ($ millions, preliminary & unaudited) Segment Financing Entity Description Maturity Weighted Avg. Rate Short-term at 12/31/2019 Long-term at 12/31/2019 DE Virginia VEPCO Unsecured Senior Notes, fixed rates 2022-2049 4.27% $ - $ 11,789 DE Virginia VEPCO Tax-Exe
Slide 50: Fixed income: Schedule of debt maturities
Fixed income Schedule of debt maturities ($ millions, as of Feb. 2020) Dominion Energy, Inc. & Subsidiaries Financing Segment Due Date Entity DE Virginia DE GT&S DE Gas Dist DE SC DE C Gen Corp & Other Total 2020 2006 Series A Enhanced Jr Subordinated Notes (variable) 02/18/20 1 DEI - - - - - 111 11
Slide 51: Fixed income: Schedule of debt maturities continued
Fixed income Schedule of debt maturities continued ($ millions, as of Feb. 2020) Dominion Energy, Inc. & Subsidiaries Financing Segment Due Date Entity DE Virginia DE GT&S DE Gas Dist DE SC DE C Gen Corp & Other Total 2023 2.45% 2019 Series B Private Placement Senior Notes 01/15/23 DEI - - - - - 1,0
Slide 52: Fixed income: Schedule of change in capitalization
Fixed income Schedule of change in capitalization ($ millions) Change in debt (long-term plus securities due in one year) Balance as of December 31, 2018 $38,841 Issuances: DEI 2019 Series A 4.60% Senior Notes due 2049 400 DEI 2019 Series B 2.45% Private Placement Senior Notes due 2023 1,000 DEI 201
Slide 53: Fixed income: Schedule of change in capitalization
Fixed income Schedule of change in capitalization ($ millions) Change in debt (long-term plus securities due in one year) Maturities (cont’d): DEI 2009 Series A 5.20% Senior Notes due 2019 (500) DEI 2006 Series A (variable) Enhanced Jr Subordinated Notes due 2066 2 (12) DEI 2006 Series B (variable)
Slide 54: Fixed income: Schedule of change in capitalization
Fixed income Schedule of change in capitalization ($ millions) Change in debt (long-term plus securities due in one year) Maturities (cont’d) SCANA 4.125% Medium Term Notes due 2022 2 (95) SCANA 2007 Senior Notes (variable) due 2034 (4) DESC First Mortgage Bonds 3.50% Series due 2021 2 (297) DESC Fi
Slide 55: Fixed income: Shareholders' equity change
Fixed income Schedule of change in capitalization ($ millions) Shareholders’ equity Change in shareholders’ equity¹ Balance as of December 31, 2018 $22,048 Net change in preferred stock 2,387 Net change in common stock 11,236 Net change in AOCI (93) Retained earnings (1,553) Net change in common sha