Dominion Announces Second-Quarter Earnings
of 97 Cents Per Share
Reaffirms full-year 2002 earnings of $4.90 to $4.95 per share
Conference call scheduled for 10 a.m. EDT today
RICHMOND, Va. – Dominion (NYSE: D) announced today unaudited
consolidated operating earnings for the second quarter ended June 30, 2002,
of $272 million (97 cents per share), compared with operating earnings of $180
million (72 cents per share) for the same period in 2001. Reported earnings
per share for second-quarter 2002 were 97 cents per share and for second-quarter
2001 were 62 cents per share. Operating earnings for the second quarter of 2001
excluded a $25 million charge related to the divestiture of Saxon Capital, Inc.
Second quarter 2002 reported earnings were the same as operating earnings.
Thos. E. Capps, chairman, president and chief executive officer,
said:
"Our second-quarter results demonstrate the strength
and dependability of Dominion's asset-backed, integrated business model. We've
maintained year-over-year earnings growth and expect to sustain it the old-fashioned
way - by rigorously improving our business processes through Six Sigma, by prudently
hedging our wholesale energy production, by carefully controlling costs and
by producing and delivering energy at high efficiency levels.
"Hot weather added about 7 cents per share compared
to normal weather, and we benefited 5 cents per share through the timing of
our corporate hedges on natural gas. Even without these benefits, our year-over-year
growth was solid.
"We're pleased that during a difficult and unsettling
period for our industry and financial markets in general, Dominion is providing
a return to our investors through the payment of common stock dividends and
bond coupons as well as growth in the company's long-term value. We are also
pleased that Dominion is a company with which our employees can be proudly associated,
that our investors can trust and upon which our customers can depend.
"Year-to-date results remain in line with our expectations.
Dominion is positioned to earn between $4.90 and $4.95 per share for the full
year 2002 and grow earnings an average of 10 percent annually going forward."
Other selected second-quarter highlights include:
Added 1,715 megawatts of generation during the quarter,
bringing the company's portfolio to nearly 24,000 megawatts.
Added 566 net billion cubic feet equivalent to proved
gas and oil reserves, bringing total proved reserves to 5.7 trillion cubic
feet equivalent.
Gained over 40,000 franchise customers since the second
quarter of 2001.
Earnings breakdown by operating segment
Dominion Energy contributed $171 million (61 cents per share)
to second-quarter 2002 earnings compared to $148 million (59 cents per share)
in the second quarter of 2001. The increase in Dominion Energy's second-quarter
2002 earnings resulted from higher than normal temperatures in the company's
electric service area, customer growth, and the 5-cent per share corporate hedge
impact, partially offset by share dilution and other factors.
Dominion Delivery earned $72 million (26 cents per share)
in its second quarter compared to $47 million (19 cents per share) for the same
period in 2001. The increase in Dominion Delivery's second-quarter earnings
is primarily attributable to higher than normal temperatures, customer growth,
and reduced expenses, partially offset by share dilution and other factors.
Dominion Exploration & Production (E&P) contributed
$92 million (33 cents per share) to second-quarter 2002 earnings, up from $84
million (34 cents per share) in the second quarter of 2001. The change in Dominion
E&P's second-quarter earnings is primarily attributable to higher production,
offset by lower average realized prices, increased expenses and share dilution.
The corporate segment, including Dominion Capital, posted
net expenses of $63 million (23 cents per share) for the quarter, compared to
net expenses of $99 million (40 cents per share) in the second quarter of 2001.
The decrease in the corporate segment's net expenses is attributable to the
elimination of goodwill amortization, Dominion Capital's contribution, and other
factors.
Legal entity results
Dominion assets remain wholly-owned by its legal subsidiaries,
Virginia Electric and Power Company (Virginia Power), Consolidated Natural Gas
Company (CNG), and Dominion Energy Inc. (DEI), pending full implementation of
electric and gas deregulation legislation in the company's service areas.
Second-quarter 2002 earnings for Virginia Power were 61 cents
per share, compared to 51 cents per share in the second quarter of 2001. Second-quarter
2002 earnings for CNG were 37 cents per share, compared to 29 cents per share
in 2001. DEI earned 22 cents per share in the second quarter of 2002, compared
to 31 cents per share in the second quarter of 2001.
Conference call for investors / media
Dominion will host a conference call for investors today
at 10 a.m. EDT during which Dominion management will review both second-quarter
2002 earnings and the outlook for the remainder of 2002. Members of the media
are also invited to listen. A live web cast of the conference call will be available
on the company's investor information page at www.dom.com/investors.
Slides will also be available on the company's web site for the convenience
of our investors as a visual aid to accompany the audio web cast.
Domestic investors who wish to participate in the conference
call should dial 888-569-5033. International investors should call 719-457-2653.
The confirmation number required to join the call is 788425. Participants
should dial in 5 to 10 minutes prior to the scheduled start time.
A tape recording of the conference call will be available
from approximately 1 p.m. ET July 18 through 11 p.m. ET July 23. 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 replay is also 788425. A replay of the conference call also will
be available on the company's investor information home page by the end of the
day July 18.
Dominion has a diversified and integrated energy portfolio
consisting of nearly 24,000-megawatts of generation, 5.7 trillion cubic feet
equivalent of natural gas reserves, 7,600 miles of natural gas transmission
pipeline and the nation's largest underground natural gas storage system with
more than 950 billion cubic feet of storage capacity. Dominion also serves over
3.8 million franchise natural gas and electric customers in five states. In
addition, Dominion owns a managing equity interest in Dominion Fiber Ventures
LLC, owner of Dominion Telecom. For more information about Dominion, visit the
company's web site 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, estimates of proved and unproved reserves 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, trading counterparty credit risks, 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.
