July 31, 2019 Important note to investors This presentation - - PowerPoint PPT Presentation

july 31 2019 important note to investors this
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July 31, 2019 Important note to investors This presentation - - PowerPoint PPT Presentation

Q2 2019 earnings call July 31, 2019 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


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Q2 2019 earnings call

July 31, 2019

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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 business and operations of Dominion Energy. We have used the words "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", “outlook”, "predict", "project", “should”, “strategy”, “target”, "will“, “potential” and similar terms and phrases to identify forward-looking statements in this presentation. As outlined in our SEC filings, 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 acquisitions and divestitures; changes in demand for Dominion Energy’s services; additional competition in Dominion Energy’s 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 Energy’s quarterly reports on Form 10- Q or most recent annual report on Form 10-K filed with the Securities and Exchange Commission. The information in this presentation was prepared as of July 31, 2019. Dominion Energy undertakes no obligation to update any forward-looking information statement to reflect developments after the statement is made. Projections or forecasts shown in this document are based on the assumptions listed in this document and are subject to change at any time. In addition, certain information presented in this document incorporates planned capital expenditures reviewed and endorsed by Dominion Energy’s Board of Directors. Actual capital expenditures may be subject to regulatory and/or Board of Directors’ approval and may vary from these estimates. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy securities. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the requirements of the Securities Act of 1933, as amended. This presentation has been prepared primarily for security analysts and investors in the hope that it will serve as a convenient and useful reference document. The format of this document may change in the future as we continue to try to meet the needs of security analysts and investors. This document is not intended for use in connection with any sale, offer to sell, or solicitation of any offer to buy securities. This presentation includes various estimates of EBITDA which is a non-GAAP financial measure. Please see the second quarter 2019 Dominion Energy earnings release kit for a reconciliation to GAAP. Please continue to regularly check Dominion Energy’s website at www.dominionenergy.com/investors.

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Operating earnings per share

Actual versus guidance ($ per share)

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Actual¹ Weather-normalized¹ Guidance¹

¹ See pages 23, 28 and 31 of the second quarter 2019 Earnings Release Kit for supporting information and a reconciliation to GAAP.

Second quarter 2019 $0.77 $0.75 $0.80 $0.70

Favorable weather impact

  • n utility earnings:

$0.02

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Operating segment Guidance range (midpoint) Actual¹ / Select driver(s) Power Delivery $260M—$290M ($275M) $275M Power Generation $360M—$400M ($380M) $408M Gas Infrastructure $405M—$435M ($420M) $418M Southeast Energy $155M—$180M ($168M) $172M

Operating EBIT

Actual versus guidance ($M)

4

¹ See pages 28 and 35 of the second quarter 2019 Earnings Release Kit for supporting information and a reconciliation to GAAP.

Second quarter 2019

O&M Weather Weather

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Dominion Energy Gas Transmission & Storage

UT CO WY OH GA SC NC VA PA NY

WV

  • Gas pipelines &

storage

  • Cove Point

Enhanced clarity and transparency

5 States of

  • peration

2020E

  • perating

earnings contribution Select assets

Dominion Energy Virginia Dominion Energy Contracted Generation Dominion Energy Gas Distribution

VA NC OH UT WY WV NC ID CT MD

40%— 45% 10%— 15% 25%— 30% <10%

CT UT CA IN Southeast U.S.

  • Electric

distribution, transmission, & generation

  • Gas distribution
  • Millstone
  • Long-term

contracted solar and wind Dominion Energy South Carolina

10%— 15%

  • Integrated

electric distribution, transmission, generation & gas distribution

SC

Reporting segment restructuring

= Will report to a single business unit CEO

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Initiative updates

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  • Incremental to existing “Flat O&M” initiative, not additive to existing earnings guidance
  • Savings available to overcome potential unexpected challenges; de-risks growth plan
  • ~12% of total workforce elected to participate
  • Up to one third of vacated positions to be backfilled
  • Embracing new technologies to complement human capital deployment
  • Cost savings associated with regulated employees to be passed through to

regulated customers

  • Consistent with guidance, $1.6B equity-linked unit offering completed in June
  • Nearly 5x oversubscribed, record pricing
  • No near-term common equity issuance related to the financing

Voluntary Retirement Program Equity- linked

  • ffering

Summary

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Operating earnings per share

Prior year actual versus guidance ($ per share)

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$1.15 $1.12 $1.00

Actual: Q3 2018¹ Weather-normalized: Q3 2018² Guidance: Q3 2019¹

¹ See pages 29 and 37 of the second quarter 2019 Earnings Release Kit for supporting information and a reconciliation to GAAP.

2 See page 22 of the third quarter 2018 Earnings Release Kit for weather information.

Third quarter $1.20

Driver Relative to 2H 2018 (operating EPS) Millstone refueling $0.08—$0.10 Net capacity expense $0.06—$0.08 Southeast Energy Group $0.04—$0.06

  • Regulated investment
  • Millstone PPA
  • O&M control initiatives

Positive impact

Select second half 2019 drivers Affirm 2019 full year guidance range of $4.05—$4.40

3Q18 Guidance: $0.95—$1.15

 Regulated investment  Southeast Energy Grp.  O&M controls  2018 asset sales  Share issuances  Farmout timing  Normal weather

2H 2019 VRP savings of 5 to 6 cents per share available to address unplanned challenges Example: YTD weather ($0.04)

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Core values

Embrace Change

Changing the way we think about the today and tomorrow of

  • ur businesses

Ethics

Doing right and doing well are inseparable

One Dominion Energy (Teamwork)

Sustainable performance depends on how well we support

  • ne another

Safety

Our highest priority is keeping

  • ur employees

and communities safe

Excellence

Striving for excellence in everything we do

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Business updates

Top states for business

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Virginia Utah North Carolina Ohio Top Ten States for Business (2019)¹ Primary state regulated utility operations

Regulated utility

  • perations centered

around 5 key states

~65—70% 2020E operating earnings

#1 #4 #3 #10

¹ CNBC America’s Top States for Business in 2019

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Business updates

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55%

reduction in carbon emissions by 2030 (vs. 2005)

50%

reduction in methane emissions by 2030 (vs. 2010)

80%

reduction in carbon emissions by 2050 (vs. 2005) Industry leading ESG

Note: Carbon and methane emissions reductions targets do not include the Southeast Energy Group. The company expects to update its targets to include the Southeast Energy Group later this year

Emissions targets Enhanced focus

 Creation of new Board-level Sustainability

and Corporate Responsibility Committee

 Enhanced engagement with top

shareholders

 Only utility with a ESG-focused investor

day meeting

 Environmental justice policy  Voluntary “two-degree” Climate Report  Edison Electric Institute (EEI) /American

Gas Association (AGA) industry template

 Dominion Energy dedicated ESG website

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Business updates

Select zero-carbon generation projects

Nuclear SLR Pumped Hydro Battery Storage Offshore Wind

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Business updates

Dominion Energy Virginia growth investments improve reliability

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Electric transmission rate base—$B

$2.9 $5.4

2013 2014 2015 2016 2017 2018

Data center capacity —MWs connected

95 1,612

2013 2014 2015 2016 2017 2018

Cumulative MW connected Annual MW connected

Expect 20+ new data center connects, greater than 750MW in 2019

$4.3B

2019—2023 growth capital

$1.7B

2019—2023 growth capital¹

¹ Includes all customer growth capital investment including data centers

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Business updates

Atlantic Coast Pipeline and Supply Header

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Biological

  • pinion

Briefs submitted to 4th Circuit Court order July 26 Reissuance Recommence at least partial construction By end of year

Appalachian Trail crossing

ACP and Solicitor General appeal to SCOTUS SCOTUS grants Cert. Oct/Nov 2019 Oral arguments Early 2020 Expected

  • rder

Recommence full construction Soon thereafter June 25 No later than June 2020

No changes to in-service date or cost expectations since 4th quarter earnings call and investor day meeting

Spring 2H 2019

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Summary

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 On-track to achieve safety results that are consistent with the record-setting

performance of recent years

 Engaged on initiatives that focus on creating shareholder, customer, and other

stakeholder value

 Second quarter operating EPS above guidance midpoint: weather-normalized at

midpoint

 Affirm full-year 2019 operating EPS guidance of $4.05—$4.40 and long-term EPS

growth rate of 5%+

 Strong state regulated utility fundamentals in attractive jurisdictions  Progress across capital investment programs to benefit of customers  Strong ESG message and continued engagement

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Appendix

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Appendix

Atlantic Coast Pipeline & Supply Header

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Note: Construction and /or tree felling recommencement subject to FERC review. Project construction activities, schedules and costs are subject to uncertainty due to permitting and or work delays (including due to judicial or regulatory action), abnormal weather and other conditions that could result in cost or schedule modifications in the future which could result in a material impact to Dominion Energy’s cash flows, financial position and/or results of operations.

Reflects judicial option to remedy Appalachian Trail crossing

Permit/authorization Agency Current status Assumed resolution (timing)

Biological Opinion U.S. Fish & Wildlife Service (USFWS) Vacated (July 2019) Reissuance (2H 2019) Nationwide 12 Permit U.S. Army Corps of Engineers (USACE) Voluntary remand to agency (Jan 2019) Reissuance (2H 2019) Blue Ridge crossing U.S. National Park Service (NPS) Voluntary remand to agency (Jan 2019) Reissuance (1H 2020) Forest Service crossing AT crossing: SCOTUS Vacated (Dec 2018) SCOTUS decision (no later than 6/2020) Non-AT crossing: U.S. Forest Service (USFS) Vacated (Dec 2018) Reissuance (Coincident with SCOTUS)

Consistent with in-service date and cost expectations for judicial option provided on 4th quarter earnings call and investor day meeting

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Appendix

Highlighted ESG statistics

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  • Safety: 0.55 OSHA recordable incident rate
  • Carbon emissions intensity: 0.275 metric tons/MWh
  • Fresh water withdrawals (consumptive): 0.0000001 billion liters/MWh
  • Methane emissions: 63,620 metric tons²
  • Supplier diversity: 60% increase in diverse spend since 2013
  • Employee volunteering: Over 125,000 hours
  • Charitable giving: Nearly $35 million³
  • Board of Directors diversity (since Feb. 2019): 31%

¹ Does not include legacy SCANA entities, as the measurement period precedes the January 2019 merger. ² For sources reported under the EPA’s Greenhouse Gas Reporting Program. ³ Given via the Dominion Energy Charitable Foundation, corporate dollars, and the EnergyShare program.

2018 reporting year, unless noted¹