Dominion Reaffirms 2002 Earnings Target,
Announces Revised 2003 Earnings Outlook
Company provides
the following earnings outlook:
Reaffirms 2002 earnings per share expectations of $4.90
to $4.95 per share;
Expects 2003 earnings to be flat to 4 percent growth
over 2002
Conference call to discuss outlook scheduled for September
16, 10:30 a.m., EDT
RICHMOND, Va. - Dominion (NYSE: D) today reaffirmed
its earnings per share outlook for the full-year 2002 of between $4.90 and $4.95
per share, representing an increase of about 18 percent over 2001 operating
earnings of $4.17 per share and 15 percent compound annual growth since 1998.
Dominion also said that because of unforeseeable developments, it expects 2003
earnings to be flat to up 4 percent over 2002 earnings.
Reasons for the reduced outlook include plans
to further strengthen the company's balance sheet and debt coverage ratios as
a result of changes in ratings agency requirements, which is expected to reduce
2003 earnings by as much as 17 cents per share; increased security costs at
our six nuclear units; a higher expected level of pension expense; expenses
associated with new accounting for asset retirement obligations as a result
of a new accounting standard, FAS 143; costs associated with joining PJM; lengthened
nuclear outages as a result of a recent NRC directive related to vessel head
inspections; and flat trading and marketing earnings over the expected level
in 2002. These impacts are partially offset by certain positive factors including
higher oil and gas prices and the State Line and Cove Point acquisitions.
Thos. E. Capps, chairman, president and chief executive officer
of Dominion said: "While we are disappointed that we are modestly reducing
the earnings outlook for 2003, we are pleased that Dominion's integrated business
model has enabled it to withstand the temporary cyclical downturn in market
conditions and other factors that have more severely affected most of our peers.
Much of the reduction in the outlook is due to non-cash items, such as accounting
for asset retirement obligations. Cash flow remains strong and we expect to
generate about $2.5 billion in net cash flow from operating activities in 2002
and from $2.8 to $3.0 billion in 2003."
The biggest single factor impacting the 2003 outlook is the
planned issuance of additional equity and equity-equivalent securities in 2003
to strengthen the balance sheet.
Capps said: "We have always told our investors that
Dominion is committed to maintaining its strong investment grade credit ratings.
Our investors, both debt and equity, have told us this is very important to
them as well. Through this move to strengthen the balance sheet, Dominion will
be in a position to increase the earnings and cash flow growth after 2003. Through
a combination of solid earnings growth and the common stock dividend, Dominion
will be able to continue delivering the strong level of total shareholder return
our owners deserve and have come to expect."
Dominion is currently conducting its normal annual budgeting
and planning cycle and plans to provide details of the revised earnings outlook
during the third quarter earnings conference call, scheduled for October 17.
Prior to that, management will be available to preliminarily discuss the revised
outlook on a conference call scheduled for 10:30 a.m. EDT today. 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.
The dial-in number for domestic investors is 888-569-5033 and 719-457-2653 for
international callers. The access code is 646069. Participants should dial in
5 to 10 minutes prior to the scheduled start time. A taped replay of the call
also will be available beginning at 1:30 p.m. EDT today and ending at 11:00
p.m. EDT September 20. The dial-in number for the replay is 888-203-1112 for
domestic callers and 719-457-0820 for international callers. The access code
for the replay is also 646069.
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 3.8
million franchise natural gas and electric customers in five states and nearly
one million unregulated retail customers in eight 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, ratings
agency requirements, changes in accounting standards, weather conditions, economic
conditions in the company's service area, fluctuations in energy-related commodity
prices, trading counter-party 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.
