RICHMOND, Va., July 23, 2002 -- Dominion announced recently unaudited consolidated operating earnings for the second quarter ended June 30, 2002, of $272 million (97 cents per share), compared with operating earnings of $180 million (72 cents per share) for the same period in 2001.
Reported earnings per share for second-quarter 2002 were 97 cents per share and for second-quarter 2001 were 62 cents per share. Operating earnings for the second quarter of 2001 excluded a $25 million charge related to the divestiture of Saxon Capital, Inc. Second quarter 2002 reported earnings were the same as operating earnings.
Thos. E. Capps, chairman, president and chief executive officer, said:
"Our second-quarter results demonstrate the strength and dependability of Dominion's asset-backed, integrated business model. We've maintained year-over-year earnings growth and expect to sustain it the old-fashioned way - by rigorously improving our business processes through Six Sigma, by prudently hedging our wholesale energy production, by carefully controlling costs and by producing and delivering energy at high efficiency levels.
"Hot weather added about 7 cents per share compared to normal weather, and we benefited 5 cents per share through the timing of our corporate hedges on natural gas. Even without these benefits, our year-over-year growth was solid.
"We're pleased that during a difficult and unsettling period for our industry and financial markets in general, Dominion is providing a return to our investors through the payment of common stock dividends and bond coupons as well as growth in the company's long-term value. We are also pleased that Dominion is a company with which our employees can be proudly associated, that our investors can trust and upon which our customers can depend.
"Year-to-date results remain in line with our expectations. Dominion is positioned to earn between $4.90 and $4.95 per share for the full year 2002 and grow earnings an average of 10 percent annually going forward."
Other selected second-quarter highlights include:
* Added 1,715 megawatts of generation during the quarter, bringing the company's portfolio to nearly 24,000 megawatts.
* Added 566 net billion cubic feet equivalent to proved gas and oil reserves, bringing total proved reserves to 5.7 trillion cubic feet equivalent.
* Gained over 40,000 franchise customers since the second quarter of 2001.
Earnings breakdown by operating segment
Dominion Energy contributed $171 million (61 cents per share) to second-quarter 2002 earnings compared to $148 million (59 cents per share) in the second quarter of 2001. The increase in Dominion Energy's second-quarter 2002 earnings resulted from higher than normal temperatures in the company's electric service area, customer growth, and the 5-cent per share corporate hedge impact, partially offset by share dilution and other factors.
Dominion Delivery earned $72 million (26 cents per share) in its second quarter compared to $47 million (19 cents per share) for the same period in 2001. The increase in Dominion Delivery's second-quarter earnings is primarily attributable to higher than normal temperatures, customer growth, and reduced expenses, partially offset by share dilution and other factors.
Dominion Exploration & Production (E&P) contributed $92 million (33 cents per share) to second-quarter 2002 earnings, up from $84 million (34 cents per share) in the second quarter of 2001. The change in Dominion E&P's second-quarter earnings is primarily attributable to higher production, offset by lower average realized prices, increased expenses and share dilution.
The corporate segment, including Dominion Capital, posted net expenses of $63 million (23 cents per share) for the quarter, compared to net expenses of $99 million (40 cents per share) in the second quarter of 2001. The decrease in the corporate segment's net expenses is attributable to the elimination of goodwill amortization, Dominion Capital's contribution, and other factors.
Legal entity results
Dominion assets remain wholly-owned by its legal subsidiaries, Virginia Electric and Power Company (Virginia Power), Consolidated Natural Gas Company (CNG), and Dominion Energy Inc. (DEI), pending full implementation of electric and gas deregulation legislation in the company's service areas.
Second-quarter 2002 earnings for Virginia Power were 61 cents per share, compared to 51 cents per share in the second quarter of 2001. Second-quarter 2002 earnings for CNG were 37 cents per share, compared to 29 cents per share in 2001. DEI earned 22 cents per share in the second quarter of 2002, compared to 31 cents per share in the second quarter of 2001.
Dominion has a diversified and integrated energy portfolio consisting of nearly 24,000-megawatts of generation, 5.7 trillion cubic feet equivalent of 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 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.