Dominion Announces Third-Quarter Earnings of
$1.54 Per Share
Expects $4.80 to $4.90 earnings per share in 2002
Expects $4.60 to $4.80 earnings per share in 2003
Reaffirms $2.58 per share dividend
Conference call scheduled for 8 a.m. ET tomorrow to discuss third-quarter earnings and fourth-quarter
and 2003 earnings outlook
RICHMOND, Va. – Dominion (NYSE: D) announced today unaudited
consolidated operating earnings for the third quarter ended September 30, 2002,
of $430 million ($1.54 per share), compared with operating earnings of $344
million ($1.37 per share) for the same period in 2001. Third quarter 2002 and
2001 reported earnings were the same as operating earnings.
Thos. E. Capps, chairman, president and chief executive officer,
said:
"Our third-quarter results were very strong, especially
under these very difficult market conditions. If not for the anticipated dilution
from the stock offering, we would be in solid position to meet our previously
stated earnings guidance of $4.90 to $4.95 per share for the full year."
In September, the company notified the investment community
of its intentions to issue additional equity to strengthen the balance sheet.
Last week the company reiterated these plans and said it would offer approximately
$1 billion in equity in the near future.
Updated commodity hedge position and reaffirmation of dividend
The company has hedged about 90 percent of 2002 oil and gas
production, 75 percent of 2003 production, and 50 percent of 2004 production.
The company has hedged about 90 percent of its power generation portfolio for
2002 and 2003 and about 85 percent for 2004.
Capps said: "With our earnings largely derived from
tariff-based or hedged revenue sources, our earnings and cash flow are very
stable. Accordingly, we are once again reaffirming our $2.58 per share dividend.
We expect to earn $4.80 to $4.90 per share this year and $4.60 to $4.80 per
share in 2003. After 2003, we expect 5 to 7 percent average annual earnings
growth."
Earnings breakdown by operating segment
Dominion Energy contributed $273 million (98 cents per share)
to third-quarter 2002 earnings compared to $288 million ($1.15 per share) in
the third quarter of 2001. The decrease in Dominion Energy's third-quarter 2002
earnings resulted from a lower contribution from Dominion Energy Clearinghouse,
additional nuclear outage costs and share dilution which were partially offset
by customer growth, warmer weather in the electric franchise area and the recognition
of a state tax benefit.
Dominion Delivery earned $111 million (40 cents per share)
in its third quarter compared to $68 million (27 cents per share) for the same
period in 2001. The increase in Dominion Delivery's third-quarter earnings is
primarily attributable to higher than normal temperatures, customer growth,
reduced expenses and the recognition of a state tax benefit partially offset
by share dilution and other factors.
Dominion Exploration & Production (E&P) contributed
$90 million (32 cents per share) to third-quarter 2002 earnings, up from $78
million (31 cents per share) in the third quarter of 2001. The change in Dominion
E&P's third-quarter earnings is primarily attributable to higher production,
which was offset by lower average realized prices, share dilution and other
factors.
The corporate segment, including Dominion Capital, posted
net expenses of $44 million (16 cents per share) for the quarter, compared to
net expenses of $90 million (36 cents per share) in the third quarter of 2001.
The decrease in the corporate segment's net expenses is attributable to the
elimination of goodwill amortization, the recognition of a state tax benefit
and improved earnings of Dominion Capital.
Conference call for investors / media
Dominion will host a conference call for investors tomorrow
at 8 a.m. ET during which Dominion management will review both third-quarter
2002 earnings and the outlook for the remainder of 2002 and full year 2003.
Members of the media are also invited to listen.
Domestic investors who wish to participate in the conference
call should dial 877-241-5946. International investors should call 706-643-0540.
Participants should dial in 5 to 10 minutes prior to the scheduled start time.
A replay of the conference call will be available from approximately
1 p.m. ET October 15 through 11 p.m. ET October 29. Domestic investors may access
the recording by dialing 800-642-1687. International callers should dial
706-645-9291 to access the recording. The access code for the replay
is 6131607.
Dominion has a diversified and integrated energy portfolio
consisting of about 24,000-megawatts of generation, 5.7 trillion cubic feet
equivalent of natural gas reserves, nearly 7,700 miles of natural gas transmission
pipeline and the nation's largest underground natural gas storage system with
more than 960 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, 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.
