Dominion Announces Second-Quarter Earnings; Conference Call Scheduled for 10 A.M. EDT Today.Energy Editors/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)--July 17, 2003 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) announced today 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 second quarter ended June June: see month. 30, 2003, of $265 million (84 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. ), compared to operating earnings of $272 million (97 cents per share) for the same period in 2002. Second-quarter earnings prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), or reported earnings, were $240 million (76 cents per share) compared to $272 million (97 cents per share) last year. Second quarter 2003 operating earnings exclude the 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. impact of a $25 million (8 cents per share) impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of certain assets held for sale. Second quarter 2002 reported earnings equaled operating earnings. Dominion utilizes operating earnings as the primary performance measurement for external communications with analysts and investors. Dominion also uses operating earnings internally for budgeting, reporting to the Board of Directors and for the company's profit sharing profit sharing, arrangement by which employees receive, in addition to their wages, a share of the net profits of a business. The purpose is to give them an incentive to increase their output through enhanced morale, less wasteful use of materials, better care of plan. Dominion management believes that the company's operating earnings figure provides a more meaningful representation of the company's fundamental earnings power. Thos. E. Capps, chairman, president and chief executive officer, said: "Second quarter results were strong, despite significantly milder than normal weather conditions, which reduced earnings 8 cents per share compared to normal and 15 cents per share compared to last year. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. , operating earnings per share of $2.35 are 9 percent ahead of last year and cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses has increased to about $1.5 billion compared to $832 million during the same period last year. We are reaffirming operating earnings guidance of $4.60 to $4.80 per share in 2003 and 5-percent to 7-percent average annual growth after 2003." Year-to-date reported earnings per share of $2.39 are 11 percent ahead of 2002. In reaffirming operating earnings guidance of $4.60 to $4.80 per share, Dominion management is aware of potential differences going forward between 2003 reported and operating earnings due to changes resulting from the implementation of recently issued accounting standards. At this time Dominion management is still reviewing the effect of these recently issued accounting standards and has not fully determined the impact on its financial statements. Therefore, Dominion is not able at this time to provide a corresponding GAAP equivalent for 2003 earnings guidance figures. In other second-quarter highlights Dominion: -- Served an additional 40,000 franchise gas and electric utility customers compared to the same period last year, transporting and delivering nearly 17 million megawatt-hours of electricity and more than 58 billion cubic feet of natural gas to the company's 3.9 million franchise customers during the quarter; -- Completed replacement of nuclear reactor nuclear reactor, device for producing controlled release of nuclear energy. Reactors can be used for research or for power production. A research reactor is designed to produce various beams of radiation for experimental application; the heat produced is a waste vessel VESSEL, mar. law. A ship, brig, sloop or other craft used in navigation. 1 Boul. Paty, tit. 1, p. 100. See sup. 2. By an act of congress, approved July 29, 1850, it is provided that any person, not being an owner, who shall on the high seas, willfully, with. heads for North Anna Unit One in April in 54 days and for Surry Not to be confused with Surrey. Surry may refer to:
in June in 58 days; and -- Added 300 billion cubic feet equivalent to proved gas and oil reserves, a quarterly replacement ratio of 265 percent, bringing total proved reserves proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. to nearly 6.3 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. cubic feet equivalent. Second-quarter operating 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 segment 2002 segment results have been restated for comparison purposes to reflect the transfer of the electric transmission operations from Dominion Delivery to Dominion Energy. Dominion Energy earned $176 million (56 cents per share) in the second quarter compared to $189 million (67 cents per share) in the second quarter of 2002. The change resulted primarily from milder weather in the electric franchise area, a change in the allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of electric franchise base revenues, the effect of corporate hedges on natural gas production and other factors including share dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. , partially offset by Millstone's contribution and customer growth. Dominion Delivery earned $52 million (17 cents per share) in the second quarter compared to $55 million (19 cents per share) for the second quarter 2002. The change is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to milder weather in the electric and gas franchise areas partially offset by customer growth, a change in the allocation of electric franchise base revenues and other factors including share dilution. Dominion Exploration & Production (E&P) earned $95 million (30 cents per share) in the second quarter compared to $92 million (33 cents per share) in the second quarter of 2002. The benefit of higher average realized prices was offset by higher expenses, the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of Section 29 production tax credits and share dilution. Corporate segment impact on second quarter 2003 operating earnings, including Dominion Capital, was negative $58 million (19 cents per share) compared to negative $64 million (22 cents per share) in the second quarter of 2002. The change is attributable to lower expenses and share dilution partially offset by reduced earnings of Dominion Capital. The corporate segment's second quarter 2003 earnings impact under GAAP was negative $83 million (27 cents per share). Corporate segment operating earnings exclude the $25 million after-tax impact (8 cents per share) of an impairment of certain assets held for sale. Reported earnings were the same as operating earnings in the second quarter 2002. Commenting on assets held for sale, Capps said: "We are now entering the final phase of divesting two relatively small energy investments acquired through the Consolidated Natural Gas merger in 2000 that do not fit Dominion's MAIN-to-Maine strategy. The divestitures are expected to raise a modest amount of cash over the next year, which will be used for general corporate purposes." 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 to discuss second-quarter earnings in detail. 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 live web cast of the conference call will be available on the company's investor information page at www.dom.com/investors. Additionally, a reconciliation of measures prepared in accordance with GAAP versus non-GAAP measures can be found on the company's investor information page under "GAAP Reconciliation". A replay of the conference call will be available from approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 11 a.m. EDT July July: see month. 17 through 11 p.m. EDT July 24. Domestic investors may access the recording by dialing 800-642-1687. International callers should dial 706-645-9291 to access the recording. The conference ID for the replay is 1550379. A replay of the conference call also will be available on the company's investor information page by the end of the day July 17. Dominion is one of the nation's largest producers of energy, with an energy portfolio of about 24,000 megawatts of generation, 6.3 trillion cubic feet equivalent of proved natural gas reserves and 7,900 miles of natural gas transmission pipeline. Dominion also operates the nation's largest underground natural gas storage system with more than 960 billion cubic feet of storage capacity and serves 5 million retail energy customers in nine 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. including our expectations for 2003 earnings and for future annual growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. 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, changes to rating agency requirements and ratings, changing financial accounting standards, trading counterparty Counterparty The other participant, including intermediaries, in a swap or contract. credit risks, risks related to energy trading and marketing, 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
June 2003
(millions, except earnings per share)
2nd Quarter 6 Months
Ended Ended
June 30 June 30
2003 2002 2003 2002
------ ------ ------ ------
Operating Revenues & Income $2,604 $2,332 $6,189 $4,966
======== ======= ======= =======
Earnings:
Dominion Energy $176 $189 (2) $451 $344 (2)
Dominion Delivery 52 55 (2) 211 187 (2)
Dominion Exploration &
Production 95 92 201 180
Corporate, Dominion Capital &
Other (58) (64) (127) (118)
-------- ------- ------- -------
OPERATING EARNINGS (Excluding
Specific Items) $265 $272 $736 $593
======== ======= ======= =======
Specific items (1) (25) - 12 -
REPORTED NET INCOME $240 $272 $748 $593
======== ======= ======= =======
Common Shares Outstanding
(average, diluted) 315.9 279.9 312.8 274.3
Earnings Per Share (EPS):
Dominion Energy $0.56 $0.67 (2) $1.44 $1.25 (2)
Dominion Delivery 0.17 0.19 (2) 0.67 0.68 (2)
Dominion Exploration &
Production 0.30 0.33 0.64 0.66
Corporate, Dominion Capital &
Other (0.19) (0.22) (0.40) (0.43)
-------- ------- ------- -------
OPERATING EPS (Excluding
Specific Items) $0.84 $0.97 $2.35 $2.16
======== ======= ======= =======
Specific items (1) (0.08) - 0.04 -
REPORTED EPS $0.76 $0.97 $2.39 $2.16
======== ======= ======= =======
(1) Detail of specific items excluded from operating earnings
Pre-tax
Accounting change -
Asset Retirement Obligations $293
Accounting change -
Energy Trading and Risk Mgmt
Activities $(110)
Dominion Fiber Ventures -
consent and tender of
DFV notes $(57)
Dominion Fiber Ventures -
impairment and equity earnings $(44)
Severance costs $(29)
Impairment of assets held for
sale $(40) $(40)
After-tax
Accounting change -
Asset Retirement Obligations $180
Accounting change -
Energy Trading and Risk
Mgmt Activities $(67)
Dominion Fiber Ventures -
consent and tender of
DFV notes $(35)
Dominion Fiber Ventures -
impairment and equity earnings $(24)
Severance costs $(17)
Impairment of assets held for
sale $(25) $(25)
EPS impact
Accounting change -
Asset Retirement Obligations $0.58
Accounting change -
Energy Trading and
Risk Mgmt Activities $(0.22)
Dominion Fiber Ventures -
consent and tender of DFV notes $(0.11)
Dominion Fiber Ventures -
impairment and equity earnings $(0.07)
Severance costs $(0.06)
Impairment of assets held for
sale $(0.08) $(0.08)
(2) Amounts restated for transfer of Dominion's electric
transmission operations from Dominion Delivery to
Dominion Energy effective January 1, 2003.
Dominion
Preliminary 2nd Quarter Variance
Reconciliation (unaudited)
2003 vs. 2002 2003 vs. 2002
Reported Earnings Operating Earnings
Quarter-vs.- Quarter-vs.-
Quarter Variance Quarter Variance
Reconciling Items (cents per share) (cents per share)
---------------------------
Dominion Total (21) (13)
(76 cents per share 2Q'03 vs.
97 cents per share 2Q'02 reported)
(84 cents per share 2Q'03 vs.
97 cents per share 2Q'02 operating)
Dominion Energy
(56 cents per share 2Q'03 vs.
67 cents per share 2Q'02)
Customer growth 3 3
Weather (10) (10)
Allocation of Virginia
Power base revenue (4) (4)
Corporate hedges (2) (2)
Millstone 3 3
Other including share
dilution (1) (1)
--- ---
Dominion Energy Total (11) (11)
Dominion Delivery
(17 cents per share 2Q'03 vs.
19 cents per share 2Q'02)
Customer growth 1 1
Weather - electric (4) (4)
Weather - gas (1) (1)
Allocation of Virginia
Power base revenue 4 4
Other including share
dilution (2) (2)
--- ---
Dominion Delivery Total (2) (2)
Dominion E&P
(30 cents per share 2Q'03 vs.
33 cents per share 2Q'02)
Average realized prices 15 15
Production (1) (1)
DD&A Rate (3) (3)
O&M expense (4) (4)
Production tax credits
(Section 29) (3) (3)
Other income (3) (3)
Share dilution (4) (4)
--- ---
Dominion E&P Total (3) (3)
Corporate, Dominion Capital & Other
(-27 cents per share 2Q'03 vs. -22 cents
per share 2Q'02 reported)
(-19 cents per share 2Q'03 vs. -22 cents
per share 2Q'02 operating)
Dominion Capital (2) (2)
Expenses and share
dilution 5 5
---
Impairment of assets held
for sale (8)
---
Corporate, Dominion
Capital & Other Total (5) 3
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