Dominion Announces First-quarter Earnings of $1.20 Per Share.Business Editors RICHMOND Richmond, cities, United States Richmond. 1 City (1990 pop. 87,425), Contra Costa co., W Calif., on San Pablo Bay, an inlet of San Francisco Bay; inc. 1905. , Va.--(BUSINESS WIRE)--April 18, 2002 Dominion dominion, power to rule, or that which is subject to rule. Before 1949 the term was used officially to describe the self-governing countries of the Commonwealth of Nations—e.g., Canada, Australia, or India. (NYSE NYSE See: New York Stock Exchange : D) -- Raised $938 million of equity capital through the issuance of 10.3 million shares of common stock and 6.6 million units of mandatory convertible securities. -- Added 300 megawatts of generation during the quarter, bringing portfolio to more than 22,100 megawatts. -- Reached agreement to acquire State Line power station. With the addition of State Line and additional greenfield generation in late stages of development, Dominion's power generation portfolio is expected to grow to 24,000 megawatts by summer - a 9 percent increase over the year-end 2001 level. -- Added 266 billion cubic feet equivalent to proved gas and oil reserves, a quarterly replacement ratio of 240 percent, bringing total proved reserves to 5.1 trillion cubic feet equivalent. -- Announced as winning bidder for lease rights on 37 blocks in the Central Gulf of Mexico, potentially increasing the lease inventory of exploration prospects by 20 percent and offshore lease acreage by 23 percent. -- Added 16,151 net new gas and electric franchise customers during the quarter. -- Reduced debt to capitalization ratio from 59.2 percent at year-end 2001 to 56.5 percent at the end of the first-quarter 2002. Dominion (NYSE: D) announced today unaudited consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before for the first quarter ended March 31, 2002, of $322 million ($1.20 per share), compared with operating earnings of $298 million ($1.20 per share) for the same period in 2001. First-quarter 2001 operating earnings exclude an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. charge of $136 million (55 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. ) related to the buyout Buyout The purchase of a company or a controlling interest of a corporation's shares. Notes: A leveraged buyout is accomplished with borrowed money or by issuing more stock. of power purchase contracts and non-utility generating plants previously serving the company under long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. contracts. Reported earnings per share for first-quarter 2002 were $1.20 per share and for first-quarter 2001 were 65 cents per share. There were no special items recorded in the first quarter of 2002. Earnings were in line with company expectations pre-announced on April 11. Thos. E. Capps, chairman, president and chief executive officer, said: "During the first quarter, we made significant progress in executing our business plan. We continued to strengthen the balance sheet and we posted solid earnings despite a 19-cent per share earnings impact from one of the warmest winters on record, and a 13-cent per share timing impact from natural gas `corporate' hedges. First-quarter earnings clearly demonstrated Dominion's potential earnings power. Dominion is on track to deliver earnings of $4.90 to $4.95 per share this year and 10 percent average annual growth thereafter." Other selected first-quarter highlights include: -- Raised $938 million of equity capital through the issuance of 10.3 million shares of common stock and 6.6 million units of mandatory convertible securities. -- Added 300 megawatts of generation during the quarter, bringing portfolio to more than 22,100 megawatts. -- Reached agreement to acquire State Line power station. With the addition of State Line and additional greenfield generation in late stages of development, Dominion's power generation portfolio is expected to grow to 24,000 megawatts by summer - a 9 percent increase over the year-end 2001 level. -- Added 266 billion cubic feet equivalent to proved gas and oil reserves, a quarterly replacement ratio of 240 percent, bringing total proved reserves to 5.1 trillion cubic feet equivalent. -- Announced as winning bidder for lease rights on 37 blocks in the Central Gulf of Mexico, potentially increasing the lease inventory of exploration prospects by 20 percent and offshore lease acreage by 23 percent. -- Added 16,151 net new gas and electric franchise customers during the quarter. -- Reduced debt to capitalization ratio from 59.2 percent at year-end 2001 to 56.5 percent at the end of the first-quarter 2002. Commodity hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. impacts and position The corporate hedges are derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. contracts being used by Dominion as economic hedges to obtain desired prices for sales of certain volumes of natural gas expected to be produced this year. However, Dominion did not designate des·ig·nate tr.v. des·ig·nat·ed, des·ig·nat·ing, des·ig·nates 1. To indicate or specify; point out. 2. To give a name or title to; characterize. 3. these contracts as hedges for accounting purposes. As described in a news release issued April 11, 2002, the first- quarter impact from the corporate hedges is purely a timing issue when the financial settlement of the corporate hedges is considered in combination with physical gas sales over the remainder of the year. The combination of physical gas sales and the financial settlement of the corporate hedges is expected to contribute to better-than-expected earnings for the sum total of the remaining three quarters of 2002, offsetting the negative impact in the first quarter. However, impacts on any individual quarter could be either positive or negative relative to expectations. Including the corporate hedges, Dominion has hedged hedge n. 1. A row of closely planted shrubs or low-growing trees forming a fence or boundary. 2. A line of people or objects forming a barrier: a hedge of spectators along the sidewalk. approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 90 percent of its expected natural gas production and has hedged about 75 percent of its expected oil production for 2002. In addition, Dominion has hedged more than 50 percent of expected 2003 natural gas and oil production. There are currently no corporate hedges on 2003 production. In addition, Dominion has hedged approximately 85 to 90 percent of anticipated sales from its power generation portfolio for this year and next. Earnings breakdown breakdown /break·down/ (brak´doun) 1. the act or process of ceasing to function. 2. an often sudden collapse in health. 3. loss of self-control. by operating segment Dominion Energy contributed $141 million (52 cents per share) to first-quarter 2002 earnings compared to $160 million (64 cents per share) in the first quarter of 2001. The change in Dominion Energy's first-quarter 2002 earnings is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to warmer-than-normal weather in the company's electric service area, the negative 13-cent per share corporate hedge impact and other factors, offset by customer growth in the company's electric service area and gains in Dominion Energy Clearinghouse clearinghouse Institution established by firms engaged in similar activities to enable them to offset transactions with one another in order to limit payment settlements to net balances. . Dominion Delivery earned $147 million (55 cents per share) in its first quarter compared to $157 million (63 cents per share) for the same period in 2001. The change in Dominion Delivery's first-quarter earnings is attributable to warmer-than-normal weather in the company's electric and gas service areas and other factors, offset in part by customer growth and O&M expense savings. Dominion Exploration & Production (E&P) contributed $88 million (33 cents per share) to first-quarter 2002 operating earnings, up from $71 million (29 cents per share) in the first quarter of 2001. The change in Dominion E&P's first-quarter earnings is primarily attributable to higher production, partially offset by lower average realized prices. The corporate segment, including Dominion Capital, posted net expenses of $54 million (20 cents per share) for the quarter, compared to net expenses of $90 million (36 cents per share) in the first quarter of 2001. The improvement is attributable to the elimination of goodwill amortization expense and other factors. Legal entity results While Dominion manages its daily operations as described above, assets remain wholly-owned by its legal subsidiaries, Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). Electric and Power Company (Virginia Power), Consolidated Natural Gas Company (CNG CNG Compressed Natural Gas CNG Calling (Tone) CNG Comfort Noise Generation CNG Cryptography Next Generation (Microsoft Windows Vista) CNG Centre National de Génotypage ), and Dominion Energy Inc. (DEI), pending full implementation of electric and gas deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. legislation in the company's service areas. First-quarter 2002 earnings for Virginia Power were 55 cents per share, compared to 62 cents per share in the first quarter of 2001. First-quarter 2002 earnings for CNG were 75 cents per share, compared to 72 cents per share in 2001. DEI earned 5 cents per share in the first quarter of 2002, compared to 15 cents per share in the first quarter of 2001. Conference call for investors / media Dominion will host a conference call for investors today at 10 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT during which Dominion management will review first-quarter 2002 earnings. Members of the media are also invited to listen. Domestic investors who wish to participate in the conference call should dial 800-314-7867. International investors should call 719-219-0214. The confirmation number required to join the call is 785609. Participants should dial in five to 10 minutes prior to the scheduled start time. A live web cast of the conference call will be available on the company's investor information page at www.dom.com/investors. A tape recording of the conference call will be available from approximately 1 p.m. EDT April 18 through 11 p.m. EDT April 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 785609. A replay of the conference call also will be available on the company's investor information home page by the end of the day April 18. Dominion is one of the nation's largest producers of energy, with a production capability of more than 3 trillion One thousand times one billion, which is 1, followed by 12 zeros, or 10 to the 12th power. See space/time. (mathematics) trillion - In Britain, France, and Germany, 10^18 or a million cubed. In the USA and Canada, 10^12. British thermal unit British thermal unit, abbr. Btu, unit for measuring heat quantity in the customary system of English units of measurement, equal to the amount of heat required to raise the temperature of one pound of water at its maximum density [which occurs at a temperature of 39. of energy per day. Dominion has a diversified diversified (di·verˑ·s and integrated energy portfolio consisting of over 22,100-megawatts of generation, 5.1 trillion cubic feet equivalent of proved 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. In addition, Dominion owns a managing equity interest in Dominion Fiber Ventures LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 The term market participant is used in United States constitutional law to describe a U.S. State which is acting as a producer or supplier of a marketable good or service. When a state is acting in such a role, it may permissibly discriminate against non-residents. . 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 Counterparty The other participant, including intermediaries, in a swap or contract. credit risks, risks associated with successfully executing the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. business plan and other uncertainties. Other risk factors are detailed from time to time in the company's Securities & Exchange Commission filings.
Dominion Resources Inc.
Preliminary Earnings Report - Operating Segments
March 2002
(millions, except earnings per share)
1st Quarter Ended
March 31
2002 2001
----- -----
Operating Revenues & Income $ 2,634 $ 3,198
======== ========
Earnings:
Dominion Energy $ 141 $ 160
Dominion Delivery 147 157
Dominion Exploration & Production 88 71
Corporate, Dominion Capital & Other (54) (90)
---- ----
OPERATING EARNINGS (EXCLUDING
SPECIAL ITEMS) $ 322 $ 298
====== ======
Special Items (see Note 1) - (136)
REPORTED NET INCOME $ 322 $ 162
====== ======
Common Shares Outstanding (average,
diluted) 269.0 248.8
Earnings Per Share (EPS):
Dominion Energy $ 0.52 $ 0.64
Dominion Delivery 0.55 0.63
Dominion Exploration & Production 0.33 0.29
Corporate, Dominion Capital & Other (0.20) (0.36)
------- -------
OPERATING EPS (EXCLUDING SPECIAL ITEMS) $ 1.20 $ 1.20
======= =======
Special Items (see Note 1) - (0.55)
REPORTED EPS $ 1.20 $ 0.65
======= =======
Note 1: Special Items
Pre-tax
NUG buyout $ (220)
After-tax
NUG buyout $ (136)
EPS impact
NUG buyout $ (0.55)
Dominion Resources Inc.
Preliminary Earnings Report - Legal Entities
March 2002
(millions, except earnings per share)
1st Quarter Ended
March 31
2002 2001
----- -----
Operating Revenues & Income $ 2,634 $ 3,198
======== ========
Earnings:
Virginia Power $ 149 $ 155
Consolidated Natural Gas 201 179
Dominion Energy 12 37
Corporate, Dominion Capital
& Other (40) (73)
---- ----
OPERATING EARNINGS (EXCLUDING
SPECIAL ITEMS) $ 322 $ 298
====== ======
Special Items (see Note 1) - (136)
REPORTED NET INCOME $ 322 $ 162
====== ======
Common Shares Outstanding (average,
diluted) 269.0 248.8
Earnings Per Share (EPS):
Virginia Power $ 0.55 $ 0.62
Consolidated Natural Gas 0.75 0.72
Dominion Energy 0.05 0.15
Corporate, Dominion Capital &
Other (0.15) (0.29)
------ ------
OPERATING EPS (EXCLUDING SPECIAL
ITEMS) $ 1.20 $ 1.20
======= =======
Special Items (see Note 1) - (0.55)
REPORTED EPS $ 1.20 $ 0.65
======= =======
Note 1: Special Items
Pre-tax
NUG buyout $ (220)
After-tax
NUG buyout $ (136)
EPS impact
NUG buyout $ (0.55)
Dominion
Preliminary 1st Quarter Variance Reconciliation (unaudited)
2002 vs. 2001
Quarter-vs.-Quarter Variance
Reconciling Items (cents per share)
-----------------
Dominion Energy
(52 cents per share 1Q'02 vs. 64
cents per share 1Q'01)
Customer growth 2
Weather (10)
Energy Clearinghouse 13
Corporate hedge (13)
Other including expenses and
share dilution (4)
---
Total (12)
Dominion Delivery
(55 cents per share 1Q'02 vs. 63
cents per share 1Q'01)
Customer growth 1
Weather - electric (5)
Weather - gas (4)
O&M Expense 6
Other including share dilution (6)
---
Total (8)
Dominion E&P
(33 cents per share 1Q'02 vs. 29
cents per share 1Q'01)
Production 18
Average realized prices (13)
Other including O&M expense
and share dilution (1)
---
Total 4
Corporate, Dominion Capital & Other
(-20 cents per share 1Q'02 vs. -36
cents per share 1Q'01)
Goodwill expense 9
Dominion Capital 2
Other including higher other
income and share dilution 5
-
Total 16
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