Dominion Details Plans To Strengthen Balance
Sheet, Solidify Credit And Financial Outlook
Company announces that it:
Will issue $1 billion in equity in the near future,
eliminating new external financing needs going forward
Has cut capital spending by almost $900 million through
2005
Reaffirms $2.58 per share common stock dividend
Reaffirms 2002 earnings of $4.90 to $4.95 per share
RICHMOND, Va. - Dominion (NYSE: D) today detailed its
plans to further strengthen its balance sheet and solidify the company's credit
and financial outlook. Details of the plan will be discussed on its October
17th third-quarter earnings conference call. Following are highlights of the
plan to be discussed:
Plans to issue equity
In September the company announced plans to issue additional
equity to further strengthen its balance sheet. Dominion now estimates its total
new equity needs to be approximately $1 billion. The company, which expects
to issue new equity in the near future, also anticipates this amount to be the
extent of external equity needs under new capital spending plans through 2005.
Capital spending reductions
The company also announced it has lowered capital spending
by a total of nearly $900 million over the next three years.
Because of the lower expected capital spending in these years
-- when combined with strong and growing operating cash flows -- the company
now anticipates funding capital spending plans in 2003 with internally generated
cash flow and to be free cash flow positive in 2004 after capital expenditures
and payment of the $2.58 per share common stock dividend. The company also announced
that it expects its free cash flow position to continue to improve beyond 2004.
The common stock dividend is reaffirmed
A strong and improving balance sheet, solid cash flow and
strong liquidity lead the company to reaffirm its commitment to continuing its
$2.58 per share common stock dividend and to maintaining its BBB+/Baa1 investment
grade credit ratings.
An additional question from the market has focused on the
existence of triggers related to $665 million in Dominion Fiber Venture notes.
The company re-emphasizes that the likelihood of the triggers is remote because
they require both a two-notch downgrade by S&P or Moody's and
the stock price trading below $45.97 per share for 10 consecutive days.
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 3.9
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,
weather conditions, economic conditions in the company's service area, fluctuations
in energy-related commodity prices, changes to rating agency requirements, changing
financial accounting standards, trading counterparty credit risks, risks related
to energy trading and marketing, 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.
