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Dominion News Releases
Dominion Resources Announces Solid 2000 Operating
Earnings
- Conference Call Scheduled for 3:00 p.m. EST
Today
- Company targets more than 20 percent earnings growth
in 2001
RICHMOND, Va. – Dominion (NYSE: D) today announced
unaudited consolidated operating earnings for the 12 months ended December 31,
2000 of $787 million ($3.33 per share), a 10.6 percent increase in earnings
per share over prior-year earnings of $577 million ($3.01 per share).
Thos. E. Capps, chairman, president and chief executive officer,
said:
"2000 was a superb year for Dominion. The merger with
Consolidated Natural Gas Company (CNG) has dramatically transformed us into
one of the nation's largest and most successful diversified energy companies.
Dominion is poised for growth in the new energy marketplace currently taking
shape. We are targeting 2001 operating earnings of $4.10 per share, a 23 percent
increase over 2000 results. We expect to grow operating earnings by 8 percent
to 10 percent annually thereafter."
Operating earnings for 2000 exclude special after-tax charges
of $198 million (84 cents per share) in restructuring and merger-related expenses,
$186 million (79 cents per share) associated with the write-down of Dominion
Capital assets, as well as after-tax gains of $13 million (5 cents per share)
from the sale of Corby Power Station and $21 million (9 cents per share) from
the cumulative effect of pension accounting changes.
Operating results for 1999 exclude a one-time, non-cash charge
of $255 million ($1.33 per share) created by an accounting change resulting
from a Virginia law, effective July 1, 1999, which establishes a timeline for
competition among electric generators; and a one-time, after-tax charge of $21
million (11 cents per share) related to the sale of the company’s Latin American
power generation businesses. Operating earnings for 1999 also exclude transition
costs of $4 million (2 cents per share) associated with the company’s merger
with Consolidated Natural Gas Company.
Impact of Goodwill Amortization Expense
Under purchase accounting for the CNG acquisition, earnings
reflect an annual non-cash expense representing the amortization of goodwill.
Earnings before goodwill were 32 cents higher, or $3.65 per share in 2000.
Capps said: "As solid as book earnings were, cash earnings
– earnings excluding goodwill – were even more substantial. Cash earnings are
key because it’s cash that we use to pay dividends and to reinvest in the company
to fuel earnings growth. We support the recent Financial Accounting Standards
Board’s tentative decision to discontinue the amortization of goodwill recorded
under purchase accounting. This change in accounting would make the company's
true earnings power more clearly visible to investors."
Full-Year Earnings Breakdown by Operating Segment
Dominion Energy, the company’s electric generation and gas
pipeline business segment, earned $478 million ($2.02 per share) in 2000, up
from 1999 operating earnings of $292 million ($1.53 per share). 1999 results
exclude a non-recurring charge of $1.33 per share associated with an accounting
change resulting from a new Virginia law affecting electric generators. Dominion
Energy’s results reflect the addition of CNG's pipeline operations, strong customer
growth in the company's electric service area and lower capacity costs resulting
from the expiration of third-party generation contracts, partially offset by
the dilutive effect of additional shares following the merger with CNG.
Dominion Delivery, the company’s electric and gas distribution
and customer service segment, earned $339 million ($1.43 per share), up from
1999 operating earnings of $175 million (92 cents per share). Dominion Delivery's
results reflect the addition of CNG's local distribution operations, strong
customer growth in the company's electric service area and lower electric service
restoration costs, partially offset by the dilutive effect of additional shares
following the merger with CNG.
Dominion Exploration & Production, the company’s gas
and oil exploration and production unit, earned $270 million ($1.14 per share)
in 2000, up from $44 million (23 cents per share) in the prior-year period.
The increase is primarily attributable to higher oil and gas prices and higher
production resulting from the addition of CNG Producing Company.
Dominion Capital, the financial services subsidiary, earned
$11 million (4 cents per share) in 2000, compared to $78 million (41 cents per
share) in 1999. Pursuant to regulatory agreements reached as part of its merger
with CNG, Dominion has agreed to divest Dominion Capital. Dominion made significant
progress in complying with these agreements in 2000. Suspension and sale of
various operations had an effect on earnings, principally from lower operating
income due to commercial lending activities, lower net equity and mortgage lending
gains and lower income from Vidalia due to a lower ownership percentage and
lower water flow.
Fourth-Quarter Earnings Breakdown by Operating Segment
Consolidated operating earnings for the fourth quarter ended
December 31, 2000 were $144 million (59 cents per share), compared to operating
earnings of $65 million (35 cents per share) in the fourth quarter of 1999.
Fourth-quarter 2000 earnings exclude after-tax restructuring and merger-related
costs of $38 million (15 cents per share). Fourth-quarter 1999 earnings exclude
a one-time after-tax loss of $3 million (2 cents per share) on the sale of the
company’s Latin American generation businesses and CNG merger transition costs
of $4 million (2 cents per share).
Dominion Energy contributed $67 million (27 cents per share)
to fourth-quarter 2000 operating earnings, compared to $3 million (2 cents per
share) in the fourth quarter of 1999. The change in Dominion Energy’s fourth-quarter
2000 earnings is primarily attributable to the addition of CNG's pipeline operations
and cooler-than-normal weather in the company's electric service area.
Dominion Delivery earned $79 million (32 cents per share)
in the recent fourth quarter, up from $24 million (13 cents per share) for the
same period in 1999. The change in Dominion Delivery's fourth-quarter earnings
is primarily attributable to the addition of CNG's local distribution operations
and cooler-than-normal weather in the company's electric service area.
Dominion Exploration & Production contributed $85 million
(35 cents per share), up from $6 million (3 cents per share) in the fourth quarter
of 1999. The increase is primarily attributable to higher oil and gas prices
and higher production resulting from the addition of CNG Producing Company.
Dominion Capital posted a loss of $1 million (-1 cent per
share) for the quarter, down from a contribution of $35 million (19 cents per
share) last year. The decrease is primarily from lower operating income from
commercial lending activities and lower net equity gains resulting from the
suspension and sale of certain operations.
Legal Entity Results
While Dominion has restructured its daily operations as described
above, assets remain wholly owned by its legal subsidiaries, Virginia Power,
Consolidated Natural Gas and Dominion Energy, pending full implementation of
electric and gas deregulation legislation in the company’s service areas.
Operating earnings for Virginia Power, the company’s electric
utility, were $2.40 per share in 2000, compared to operating earnings of $2.34
per share in 1999. Operating earnings (since the Dominion/CNG merger on January
28, 2000) for Consolidated Natural Gas, the company’s natural gas utility and
exploration and production concern, were $1.45 per share. Dominion Energy, the
company’s independent power and natural gas subsidiary, earned 36 cents per
share in 2000, compared to 33 cents per share last year.
Fourth-quarter 2000 operating earnings for Virginia Power
were 25 cents per share, compared to 14 cents per share in the fourth quarter
of 1999. Fourth-quarter 2000 operating earnings for Consolidated Natural Gas
were 42 cents per share. Dominion Energy earned 10 cents per share in the fourth
quarter of 2000, compared to 4 cents per share last year.
Conference Call for Investors
Dominion will host a conference call at 3:00 p.m. EST today
to discuss fourth-quarter earnings. Domestic investors who wish to participate
should call 800-231-9012. International investors should call 719-457-2617.
The confirmation number required to join the call is 438744. A simultaneous
Web cast of the call will be available on Dominion’s investor web pages (www.dom.com/investors),
or at www.streetfusion.com.
A tape recording of the conference call will be available beginning at approximately
6:00 p.m., EST, January 26 through 11:00 p.m., EST, January 31. Domestic investors
may access the recording by dialing 888-203-1112. International callers should
dial 719-457-0820 to access the recording. The access code for the tape-recorded
replay is also 438744. A replay of the conference call also will be available
on Dominion’s investor information home pages by the end of the day on January
26.
Dominion is one of the nation’s largest producers of energy,
with a production capability of 2.7 trillion British Thermal Units (BTUs) of
energy per day. The company has a power generation portfolio of more than 19,000
megawatts, which is expected to grow to more than 28,000 megawatts by 2005.
Dominion is also one of the largest independent oil and natural gas exploration
and production companies in North America, with 2.8 trillion cubic feet equivalent
of natural gas reserves, with an annual production capability of over 300 billion
cubic feet equivalent of natural gas. The company has 7,600 miles of interstate
natural gas pipeline with a delivery capability of 6.3 billion cubic feet per
day. In addition, the company operates the nation’s largest underground natural
gas storage system, with more than 950 billion cubic feet of storage capacity.
Dominion also serves 3.8 million retail natural gas and electric customers,
and owns a telecommunications business that is expanding its fiber-optic network
from its current 35,000 fiber miles (3,600 route miles) to more than 800,000
fiber miles (9,000 route miles). For more information about Dominion, visit
the company's website at www.dom.com.
This release contains forward-looking statements that
are subject to various risks and uncertainties. Discussion of factors that could
cause actual results to differ materially from management’s projections, forecasts,
estimates and expectations may include factors that are beyond the company’s
ability to control or estimate precisely, such as estimates of future market
conditions and the behavior of other market participants. Other factors include,
but are not limited to, weather conditions, economic conditions in the company’s
service territory, fluctuations in energy-related commodity prices, risks associated
with successfully executing the telecommunications business plan, conversion
activity and other uncertainties. Other risk factors are detailed from time
to time in the company’s Securities & Exchange Commission filings.
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