|
January 31, 2007
Dominion Announces 2006 Earnings
- Conference call scheduled for 10 a.m. EST
today
RICHMOND, Va. – Dominion (NYSE: D) announced
today unaudited net income determined in accordance with Generally Accepted
Accounting Principles (GAAP) for the twelve months ended Dec. 31, 2006 of $1.38
billion ($3.93 per share) compared to net income of $1.03 billion ($3.00 per
share) for the same period last year.
Operating earnings for the 12 months ended Dec. 31, 2006
amounted to $1.81 billion ($5.16 per share) compared to operating earnings
of $1.57 billion ($4.56 per share) for the twelve months ended Dec. 31, 2005. Operating
earnings are defined as GAAP earnings adjusted for certain items.
Dominion uses operating earnings as the primary performance
measurement of its earnings outlook and results for public communications with
analysts and investors. Dominion also uses operating earnings internally
for budgeting, reporting to the board of directors and for the company’s
annual incentive plan. Dominion management believes operating earnings
provide a more meaningful representation of the company’s fundamental
earnings power.
Business segment results and detailed descriptions of items
included in 2006 and 2005 GAAP earnings but excluded from operating earnings
can be found on Schedules 1, 2 and 3 of this release.
Thomas F. Farrell II, president and chief executive officer,
said:
“Dominion’s full year 2006 operating earnings
reflect the hard work and dedication of our more than 17,000 employees. Despite
the poor utility weather throughout the year and its resulting impact on our
revenues, we achieved solid earnings in-line with our financial objectives.
“In November we announced the results of our strategic
review, which led to our decision to pursue the divestiture of the majority
of our E&P business and to focus on our traditional utility-oriented business
lines. The performance of the business units that would remain a part of Dominion
following our proposed E&P divestiture strengthens our belief in this strategic
decision.
“The board of directors has recently expressed its
continued confidence through a 2-cents per share increase to our quarterly
common stock dividend at the January board meeting. This will result in an
annual dividend rate of $2.84 per share, or a 3 percent increase over 2006.”
Fourth-quarter earnings
Dominion also announced today unaudited net income determined
in accordance with GAAP for the three months ended Dec. 31, 2006, of $31 million
(9 cents per share) compared to net income of $257 million (74 cents per share)
for the same period last year.
Operating earnings for the three months ended Dec. 31, 2006,
were $275 million (78 cents per share) compared to operating earnings of $357
million ($1.02 per share) for the three months ended Dec. 31, 2005.
Business segment results and detailed descriptions of items
included in 2006 and 2005 GAAP earnings but excluded from operating earnings
can be found on Schedules 1, 2 and 3 of this release.
2006 operating earnings compared to 2005
Fourth-quarter 2006 operating earnings of 78 cents per share
compare to operating earnings of $1.02 per share in the fourth quarter of 2005. The
decrease is primarily attributable to milder-than-normal weather in the electric
and gas utility service areas, lower average realized prices for natural gas
and oil sales and the absence of a mark-to-market benefit from hedges de-designated
following Hurricanes Katrina and Rita. These negatives were partially
offset by increased natural gas and oil production, lower unrecovered Virginia
fuel expenses and higher contributions from the company’s merchant generation
and nonregulated retail energy marketing businesses.
Full-year 2006 operating earnings of $5.16 per share compare
to 2005 operating earnings of $4.56 per share. The increase is primarily
attributable to higher natural gas and oil production, higher business interruption
insurance proceeds, mark-to-market benefits including the gain from natural-gas
hedges de-designated following Hurricanes Katrina and Rita, lower unrecovered
Virginia fuel expenses, and higher contributions from the company’s merchant
generation, nonregulated retail energy marketing, gas transmission and producer
services businesses. These positives were partially offset by milder-than-normal
weather in the electric and gas utility service areas, lower sales of emissions
allowances and lower average realized prices and higher production costs in
the company’s E&P business.
Complete details of fourth-quarter and full-year 2006 operating
earnings compared to 2005 can be found on Schedule 5 of this release.
Conference call today
Dominion will host its fourth-quarter earnings conference
call at 10 a.m. EST on Wednesday, Jan. 31, at which time Dominion management
will discuss 2006 financial results and provide an update on the company’s
strategic initiatives as well as other matters of interest to the financial
community.
Domestic callers should dial (866)
710-0179. The passcode for the conference call is “Dominion.” International
callers should dial (334) 323-9871. Participants
should dial in 10 to 15 minutes prior to the scheduled start time. Members
of the media also are invited to listen.
A live Web cast of the conference call will be available
on the company’s investor information page at http://www.dom.com/investors/ir.jsp.
A replay of the conference call will be available beginning
about 1 p.m. EST Jan. 31 and lasting until 11 p.m. EST Feb. 7. Domestic
callers may access the recording by dialing (877)
919-4059. International callers should dial (334)
323-7226. The PIN for the replay is 79275875. Additionally,
a replay of the Web cast will be available on the company’s investor
information page by the end of the day Jan. 31.
Dominion is one of the nation's largest producers of energy,
with a portfolio of about 28,000 megawatts of generation, about 6.5 trillion
cubic feet equivalent of proved natural gas reserves and 7,800 miles of natural
gas transmission pipeline. Dominion also operates the nation's largest
underground natural gas storage system with about 960 billion cubic feet of
storage capacity and serves retail energy customers in eleven states. For
more information about Dominion, visit the company's Web site at http://www.dom.com/.
This release contains certain forward-looking statements
that are subject to various risks and uncertainties. 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 fluctuations
in energy-related commodity prices, including changes in the cost of fuel
for our regulated electric business, the timing of the closing dates of acquisitions
or divestitures (including any divestiture of our natural gas and oil assets),
additional risk exposure associated with the termination of business interruption
and offshore property damage insurance related to our exploration and production
operations and our inability to replace such insurance on commercially reasonable
terms, estimates of future market conditions, estimates of proved and unproved
reserves, the company’s ability to meet its natural gas and oil production
forecasts, the behavior of other market participants, and the effects of
hurricanes on our operations, gas and oil production and realized prices.
Other factors include, but are not limited to, weather conditions, governmental
regulations, economic conditions in the company's service area, risks of
operating businesses in regulated industries that are subject to changing
regulatory structures, changes to regulated gas and electric rates collected
by Dominion, risks associated with the realignment of our operating assets
(including the potential dilutive effect on earnings in the near term and
costs associated with any sale of our exploration and production business
and the redeployment of proceeds from any sale), changes to rating agency requirements
and ratings, changing financial accounting standards, trading counter-party
credit risks, risks related to energy trading and marketing, and other uncertainties.
Other risk factors are detailed from time to time in Dominion’s most
recent quarterly report on Form 10-Q or annual report on Form 10-K filed
with the Securities & Exchange Commission.
###
|
