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Ohio Utica Shale

Dominion issues third quarter earnings report

By Bob Downing Published: November 5, 2013

From Dominion today:




Third-Quarter 2013 Earnings

-- Third-quarter 2013 operating earnings of $1.00 per share compared to guidance of 85 cents to 95 cents

-- Third-quarter 2013 GAAP earnings of 98 cents per share

-- Company affirms 2013 operating earnings guidance of $3.20 to $3.50 per share

-- Conference call scheduled for 10 a.m. ET today

Nov 5, 2013

RICHMOND, Va., Nov. 5, 2013 /PRNewswire/ -- Dominion (NYSE: D) today announced unaudited reported earnings determined in accordance with Generally Accepted Accounting Principles (GAAP) for the three months ended Sept. 30, 2013, of $569 million ($0.98 per share), compared to $209 million ($0.36 per share) for the same period in 2012.

Operating earnings for the three months ended Sept. 30, 2013, amounted to $583 million ($1.00 per share), compared to operating earnings of $526 million ($0.92 per share) for the same period in 2012. Operating earnings are defined as reported (GAAP) earnings adjusted for certain items.

Dominion uses operating earnings as the primary performance measurement of its earnings guidance and results for public communications with analysts and investors. Dominion also uses operating earnings internally for budgeting, for reporting to the Board of Directors, for the company's incentive compensation plans, for its targeted dividend payouts, and other purposes. Dominion management believes operating earnings provide a more meaningful representation of the company's fundamental earnings power.

The principal difference between GAAP earnings and operating earnings for the quarter is related to the rescoping of activities of Producer Services.

Business segment results and detailed descriptions of items included in 2013 and 2012 reported earnings but excluded from operating earnings can be found on Schedules 1, 2 and 3 of this release.

Thomas F. Farrell II, chairman, president and chief executive officer, said:

"Our third-quarter results came in above our guidance range of $0.85 to $0.95 per share reflecting the benefit from our contribution of TL-388 to Blue Racer Midstream and lower operation and maintenance expenses. During the quarter we also recognized significant milestones associated with our infrastructure growth plan.

"We welcomed approval from the U.S. Department of Energy for natural gas exports to non-Free Trade Agreement countries from our Dominion Cove Point LNG facility. Pending receipt of regulatory approval and permits, construction is scheduled to begin in 2014, with an in-service date of 2017. We also created Dominion Gas Holdings, a first tier subsidiary holding company for most of our regulated natural gas businesses, and announced our intention to form a Master Limited Partnership in 2014.

"Construction of our Warren County Power Station reached a major milestone as the station is now about 60 percent complete and remains on track to be online by the fourth quarter of 2014. The 1,329-megawatt, combined-cycle power station will help Dominion meet the growing energy needs in Northern Virginia and throughout the state. We also received approval from the Virginia SCC for the Brunswick County Power Station and have begun construction on the 1,358-megawatt combined-cycle power station with commercial service expected to begin in the summer of 2016."

Third-quarter 2013 operating earnings compared to 2012

The increase in third-quarter 2013 operating earnings per share as compared to third-quarter 2012 operating earnings per share is primarily attributable to the benefit from our contribution of TL-388 to Blue Racer Midstream and higher revenues related to our gas transmission growth projects. Negative factors for the quarter were milder than normal weather in the regulated electric service territory and higher utility generation outage expense.

Details of third-quarter 2013 operating earnings as compared to 2012 can be found on Schedule 4 of this release.

Fourth-quarter and full-year 2013 operating earnings guidance

Dominion expects fourth-quarter 2013 operating earnings in the range of 85 cents per share to 95 cents per share as compared to fourth-quarter 2012 operating earnings of 69 cents per share. Positive factors for the fourth-quarter of 2013 compared to the same period of the prior year include lower merchant nuclear outage expense, lower operations and maintenance expenses, higher rate adjustment clause revenues and anticipated growth in our electric service territory. Negative factors for the quarter include the absence of a benefit from the contribution of assets to Blue Racer Midstream and higher interest expense. The reported GAAP loss for the fourth quarter of 2012 was $1.15 per share. A reconciliation between operating and GAAP earnings for the fourth quarter of 2012 can be found on Schedule 3 of this release.

Amounts for 2012 have been recast to reflect results for Brayton Point and Kincaid generating stations as discontinued operations. However, Dominion uses originally reported 2012 amounts prior to recast to calculate operating earnings growth targets as well as for comparison to 2012 and 2013 operating earnings and statistics.

In providing its fourth-quarter and full-year 2013 operating earnings guidance, the company notes that there could be differences between expected reported earnings and estimated operating earnings for matters such as, but not limited to, divestitures or changes in accounting principles. At this time, Dominion management is not able to estimate the aggregate impact, if any, of these items on reported earnings, other than those as set forth on Schedule 2 – Reconciliation of 2013 Operating Earnings to Reported Earnings on page 8 of the 3Q13 Earnings Release Kit. Accordingly, the company is not able to provide a corresponding GAAP equivalent for its operating earnings guidance.



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