|
Dominion News Releases
July 20, 2001
Dominion Announces 22 Percent Increase in
Second-Quarter Operating Earnings to 72 Cents Per Share
- Company increases 2002 earnings target to $4.85 - $4.90
per share
- Conference call at 3 p.m. EDT today
RICHMOND, Va. – Dominion (NYSE: D) today announced unaudited
consolidated operating earnings for the second quarter ended June 30, 2001 of
$180 million (72 cents per share), compared to operating earnings of $139 million
(59 cents per share) for the same period in 2000.
Second-quarter highlights include:
- More than 2,600 megawatts of new generation integrated
into portfolio during the quarter;
- 47 thousand net new delivery customers versus prior year;
- Proven gas and oil reserves increased to 2.95 trillion
cubic feet equivalent (tcfe) from 2.82 tcfe, resulting in a 266-percent reserve
replacement ratio;
- Net ownership interest in Front Runner reserves currently
estimated at 60-80 million barrels of oil equivalent (360-480 billion cubic
feet gas equivalent);
- Divestiture of Saxon Mortgage.
Thos. E. Capps, chairman, president and chief executive officer,
said:
“During the second quarter, Dominion made significant progress
toward becoming the leading energy company in the Midwest to Northeast portion
of the United States. Performance remains strong at all of our core businesses,
and we expect to meet or exceed the First Call 2001 consensus analyst estimate
of $4.15 per share. This will represent about 25 percent year-over-year growth,
and will be the third consecutive year Dominion has grown earnings at the top
end or above its long-term growth target.
“In addition, we are increasing our 2002 operating
earnings target from about $4.50 per share to a range of $4.85 to $4.90 per
share, based on expected continued solid growth in our core energy businesses
and the elimination of goodwill amortization beginning January 1, 2002.”
On June 29th of this year, the Financial Accounting Standards
Board (FASB) unanimously voted to adopt new rules which will result in the elimination
of Dominion’s annual goodwill expense.
Capps said: “Reporting under the new FASB rules will make
Dominion’s true earnings power more visible to investors. Since investors value
stocks in our industry principally on a multiple of book earnings per share,
this change in accounting will reveal a significant amount of value previously
hidden from investors.”
Second-quarter 2001 operating earnings exclude a one-time
after-tax charge of $24 million associated with the divestiture of Saxon Capital,
Inc., the company’s residential mortgage company. The sale of Saxon on July
6th was required by regulators as part of the company’s January 2000 merger
with Consolidated Natural Gas Company.
Second-quarter 2000 operating earnings exclude non-cash after-tax
charges of $184 million associated with asset write-downs at Dominion Capital
and restructuring and merger-related after-tax costs of $54 million.
Earnings Breakdown by Operating Segment
Dominion Energy, the company’s electric generation and gas
pipeline business segment, contributed $148 million (59 cents per share) to
second-quarter 2001 operating earnings, up from $97 million (41 cents per share)
in the second quarter of 2000. The increase in Dominion Energy’s second-quarter
2001 earnings is primarily attributable to the addition of the Millstone nuclear
power station, lower purchased power expenses, and lower depreciation expenses
resulting from the application for relicensing of the company’s nuclear units
in Virginia, partially offset by milder weather in the company’s electric service
areas and other factors.
Dominion Delivery, the company’s electric and gas distribution
and customer service segment, contributed $47 million (19 cents per share) to
second-quarter operating earnings, compared to $55 million (23 cents per share)
in the second quarter of 2000. The decrease in quarter-over-quarter earnings
is primarily attributable to milder weather in the company’s electric and gas
service areas and to a higher reserve for uncollectible gas receivables resulting
from higher commodity sales and prices in the first quarter of 2001, partially
offset by customer growth.
Dominion Exploration & Production, the company’s gas and
oil exploration and production unit, earned $84 million (34 cents per share)
in the second quarter of 2001, up from $62 million (26 cents per share) in the
prior-year period. The increase is primarily attributable to higher gas and
oil prices, partially offset by higher operating expenses.
Dominion Capital, the company’s financial services subsidiary,
reported a loss of $11 million (5 cents per share) in the second quarter of
2001, compared to income of $6 million (3 cents per share) last year. The decrease
in earnings at the core financial services units reflects a lack of securitization
gains and lower fee, interest and other income, partially offset by lower interest
expense and lower loan loss reserves.
Legal Entity Results
While Dominion has restructured its daily operations as described
above, assets remain wholly owned by its legal subsidiaries, including Virginia
Power, Consolidated
Natural Gas and Dominion Energy, pending full implementation
of electric and gas deregulation in the company’s service areas.
Second-quarter 2001 operating earnings for Virginia Power,
the company’s electric utility, were 51 cents per share, compared to 50 cents
per share in the second quarter of 2000.
Second-quarter 2001 operating earnings for Consolidated Natural
Gas, the company’s gas utility, were 29 cents per share, compared to 24 cents
per share in the second quarter of 2000.
Dominion Energy, the company’s independent power and natural
gas subsidiary, earned 31 cents per share, compared to 7 cents per share last
year.
Conference Call for Investors
Dominion will host a conference call at 3 p.m. EDT today
to discuss second-quarter earnings. Domestic investors who wish to participate
should call 800-289-0436. International investors should call 913-981-5507.
The confirmation number required to join the call is 773179. A simultaneous
web cast of the call will be available on Dominion’s investor web page (www.dom.com/investors),
or at www.streetfusion.com.
Detailed second-quarter financial statements and operating
statistics will also be posted on the investor page of the company’s web site
immediately following the conference call.
A tape recording of the conference call will be available
beginning at approximately 6 p.m. EDT, July 20, through 11 p.m., July 24. 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 773179. A replay of the conference
call also will be available on Dominion’s investor information home page by
the end of the day on July 20.
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 21,000
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 almost 3 trillion cubic feet
equivalent of natural gas reserves and an annual production capability of over
300 billion cubic feet equivalent of natural gas. The company has 7,600 miles
of 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 nearly 4 million retail natural gas and electric
customers, and owns a managing equity interest in Dominion Fiber Ventures LLC,
owner of Dominion Telecom. Dominion Telecom is expanding its fiber-optic network
from its current 35,000 fiber miles (4,000 route miles) to more than 800,000
planned 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 area, fluctuations in energy-related commodity prices, risks associated
with successfully executing the telecommunications business plan and other uncertainties.
Other risk factors are detailed from time to time in the company’s Securities
& Exchange Commission filings.
###
|
