Dominion Announces First-Quarter 2014 Earnings

                Dominion Announces First-Quarter 2014 Earnings

- First-quarter 2014 operating earnings of $1.04 per share compared to
guidance of 85 cents to $1.00 per share

- First-quarter 2014 GAAP earnings of 65 cents per share

- Company affirms 2014 operating earnings guidance of $3.35 to $3.65 per share

PR Newswire

RICHMOND, Va., April 30, 2014

RICHMOND, Va., April 30, 2014 /PRNewswire/ -- Dominion (NYSE: D) today
announced unaudited reported earnings determined in accordance with Generally
Accepted Accounting Principles (GAAP) for the three months ended March 31,
2014, of $379 million ($0.65 per share), compared with earnings of $495
million ($0.86 per share) for the same period in 2013.

Operating earnings for the three months ended March 31, 2014, amounted to $607
million ($1.04 per share), compared to operating earnings of $476 million
($0.83 per share) for the same period in 2013. 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 and 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 differences between GAAP earnings and operating earnings for the
quarter were charges related to the repositioning of our Producer Services
business and the write-off of goodwill at our unregulated retail operations.

Business segment results and detailed descriptions of items included in 2014
and 2013 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 first-quarter results came in above our guidance range of $0.85 to $1.00
per share. While favorable weather in our electric service territory was a
benefit of about 5 cents per share, we are pleased that other factors,
including improved merchant generation margins, higher ancillary service
revenues and lower operating expenses, produced results that were above
expectations.

"During the quarter we also continued to move forward with our infrastructure
growth plan. We received a Notice of Schedule from FERC for our Cove Point
Liquefaction project and, pending receipt of regulatory approvals and permits,
expect to commence construction later this year. We also commenced a
non-binding open season for the Dominion Southeast Reliability Project, a new
pipeline extending from the Marcellus and Utica Shale production regions to
markets in Virginia and North Carolina.

"Construction of the Warren County Power Station and Brunswick County Power
Station continues on time and on budget, and we announced the acquisition of
six solar projects, totaling 139 megawatts, during the quarter."

FIRST-QUARTER 2014 OPERATING EARNINGS COMPARED TO 2013

The increase in first-quarter 2014 operating earnings per share as compared to
first-quarter 2013 operating earnings per share is primarily attributable to
favorable weather in our electric service territory, improved generation
margins and a lower effective tax rate.

Details of first-quarter 2014 operating earnings as compared to 2013 can be
found on Schedule 4 of this release.

SECOND-QUARTER 2014 OPERATING EARNINGS GUIDANCE

Dominion expects second-quarter 2014 operating earnings in the range of 55
cents to 65 cents per share, compared to second-quarter 2013 operating
earnings of 62 cents per share. Positive factors for the second-quarter of
2014 compared to the same period of the prior year include an expected return
to normal weather in our electric service territory, higher weather-normalized
kilowatt sales and higher revenues related to our electric transmission growth
projects. Negative factors for the quarter include higher interest expense,
the absence of contributions from unregulated electric retail operations and
higher operating expenses. GAAP earnings for the second quarter of 2013 were
35 cents per share. A reconciliation between operating and GAAP earnings for
the second quarter of 2013 can be found on Schedule 3 of this release.

In providing its second-quarter and full-year 2014 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 of
these items on reported earnings. However, Dominion anticipates a pre-tax
charge associated with legislation signed into law by Virginia's governor that
permits Virginia Power to recover 70 percent of the $570 million previously
deferred or capitalized costs related to the development of a third nuclear
unit located at North Anna through Dec. 31, 2013 from Virginia jurisdictional
and certain non-jurisdictional ratepayers as part of the 2013 and 2014 base
rates.

CONFERENCE CALL TODAY

Dominion will host its first-quarter earnings conference call at 10 a.m. ET on
Wednesday, April 30. Dominion management will discuss its first-quarter
financial results and 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) 323-9872.
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 webcast of the conference call, including accompanying slides, and the
Earnings Release Kit will be available on the company's investor information
page at www.dom.com/investors.

A replay of the conference call will be available beginning about 1 p.m. ET
April 30 and lasting until 11 p.m. ET May 7. Domestic callers may access the
recording by dialing (877) 919-4059. International callers should dial (334)
323-0140. The PIN for the replay is 69784861. Additionally, a replay of the
webcast will be available on the company's investor information page by the
end of the day April 30.

Dominion is one of the nation's largest producers and transporters of energy,
with a portfolio of approximately 23,600 megawatts of generation, 10,900 miles
of natural gas transmission, gathering and storage pipeline, and 6,400 miles
of electric transmission lines. Dominion operates one of the nation's largest
natural gas storage systems with 947 billion cubic feet of storage capacity
and serves utility and retail energy customers in 10 states. For more
information about Dominion, visit the company's website at www.dom.com.

This release contains certain forward-looking statements, including forecasted
operating earnings for second-quarter and full-year 2014 which 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, including fluctuations in energy-related
commodity prices, estimates of future market conditions, additional
competition in our industries, changes in the demand for Dominion's services,
access to and costs of capital, fluctuations in the value of our pension
assets and assets held in our decommissioning trusts, impacts of acquisitions,
divestitures, transfers of assets to joint ventures or an MLP and retirements
of assets based on asset portfolio reviews, the receipt of regulatory
approvals for, and timing of, planned projects, acquisitions and divestitures,
the timing and execution of our MLP strategy, and the ability to complete
planned construction or expansion projects at  all or within the terms and
timeframes initially anticipated. Other factors include, but are not limited
to, weather conditions and other events, including the effects of hurricanes,
earthquakes, high winds, major storms and changes in water temperatures on
operations, the risk associated with the operation of nuclear facilities,
unplanned outages at facilities in which Dominion has an ownership interest,
the impact of operational hazards and catastrophic events, state and federal
legislative and regulatory developments, including changes in federal and
state tax laws and changes to environmental and other laws and regulations,
including those related to climate change, greenhouse gases and other
emissions to which we are subject, political and economic conditions,
industrial, commercial and residential growth or decline in Dominion'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, changes to rating agency requirements and ratings,
changing financial accounting standards, fluctuations in interest rates,
employee workforce factors, including collective bargaining, counter-party
credit and performance risks, adverse outcomes in litigation matters or
regulatory proceedings, the risk of hostile cyber intrusions and other
uncertainties. Other risk factors are detailed from time to time in
Dominion's quarterly reports on Form 10-Q or most recent annual report on Form
10-K filed with the Securities and Exchange Commission.



Schedule 1 - Segment Operating Earnings
Preliminary, Unaudited
(millions, except earnings per Three months ended March 31,
share)
                               2014           2013           Change
Earnings:
                               $        $        $        
    Dominion Virginia Power*                             
                               131           116            15
    Dominion Energy            208            179            29
    Dominion Generation*       309            254            55
    Corporate and Other        (41)           (73)           32
                               $        $        $        
    OPERATING EARNINGS                                   131
                               607           476
    Items excluded from
                               (228)          19             (247)
    operating earnings^2, 3
                               $        $        $        
    REPORTED EARNINGS ^1                                (116)
                               379           495
Common Shares Outstanding      582.9          577.5
(average, diluted)
Earnings Per Share (EPS):
                               $        $        $        
    Dominion Virginia Power*                             0.02
                               0.22           0.20
    Dominion Energy            0.36           0.31           0.05
    Dominion Generation*       0.53           0.44           0.09
    Corporate and Other        (0.07)         (0.12)         0.05
                               $        $        $        
    OPERATING EARNINGS                                   0.21
                               1.04           0.83
    Items excluded from        (0.39)         0.03           (0.42)
    operating earnings^2
                               $        $        $        
    REPORTED EARNINGS ^1                                (0.21)
                               0.65           0.86
    1)          Determined in accordance with Generally Accepted Accounting
                Principles (GAAP).
    2)          Items excluded from operating earnings are reported in
                Corporate and Other segment. Refer to Schedules
                2 and 3 for details, or find "GAAP Reconciliation" on
                Dominion's website at www.dom.com/investors.
    3)          Pre-tax amounts for the current period and the prior period
                are ($352) million and $31 million, respectively.
    *           Amounts for 2013 have been recast to reflect unregulated
                retail energy marketing operations in Dominion Generation.

Schedule 2 - Reconciliation of 2014 Operating Earnings to Reported Earnings

2014 Earnings (Three months ended March 31, 2014)

The net effects of the following items, all shown on an after-tax basis, are
included in 2014 reported earnings, but are excluded from operating earnings:

  o$193 million net charge related to the repositioning of our Producer
    Services business, reflecting the termination of natural gas trading and
    certain energy marketing activities.
  o$31 million goodwill write-off associated with the company exiting the
    unregulated electric retail energy marketing business.
  o$4 million net charge related to other items.



(millions, except per share amounts)      1Q14    2Q14  3Q14  4Q14  YTD 2014
Operating earnings                       $607                      $607
Items excluded from operating earnings
(after-tax):
   Producer Services repositioning        (193)                     (193)
   Goodwill write-off at unregulated      (31)                      (31)
   electric retail
   Other items                            (4)                       (4)
   Total items excluded from operating    (228)                     (228)
   earnings (after-tax) ^1
Reported net income                       $379                      $379
Common shares outstanding (average,       582.9                     582.9
diluted)
Operating earnings per share              $1.04                     $1.04
Items excluded from operating earnings    (0.39)                    (0.39)
(after-tax)
Reported earnings per share               $0.65                     $0.65
1) Pre-tax amounts for items excluded from operating earnings are reflected
   in the following table:
   Items excluded from operating          1Q14    2Q14  3Q14  4Q14  YTD 2014
   earnings:
   Producer Services repositioning        (319)                     (319)
   Goodwill write-off at unregulated      (31)                      (31)
   electric retail
   Other items                            (2)                       (2)
   Total items excluded from operating    ($352)  $0    $0    $0    ($352)
   earnings



Schedule 3 - Reconciliation of 2013 Operating Earnings to Reported Earnings

2013 Earnings (Twelve months ended December 31, 2013)

The net effects of the following items, all shown on an after-tax basis, are
included in 2013 reported earnings, but are excluded from operating earnings:

  o$92 million net loss from discontinued operations of two merchant power
    stations (Brayton Point & Kincaid) which were sold in third quarter 2013.
  o$109 million net charge related to an impairment of certain natural gas
    infrastructure assets and the repositioning of Producer Services.
  o$28 million charge in connection with the Virginia Commission's final
    ruling associated with its biennial review of Virginia Power's base rates
    for 2011-2012 test years.
  o$17 million charge associated with our operating expense reduction
    initiative, primarily reflecting severance pay and other employee-related
    costs.
  o$39 million net gain related to our investments in nuclear decommissioning
    trust funds.
  o$30 million benefit due to a downward revision in the nuclear
    decommissioning asset retirement obligations (ARO) for certain merchant
    nuclear units that are no longer in service.
  o$7 million net expense related to other items.



(millions, except per share amounts)    1Q13  2Q13   3Q13   4Q13   YTD 2013 ^2
Operating earnings                     $476  $355   $583   $467   $1,881
Items excluded from operating earnings
(after-tax):
    Discontinued operations - Brayton   1     (70)   (23)          (92)
    Point & Kincaid
    Gas infrastructure & repositioning        (57)   (17)   (35)   (109)
    Impact of Virginia Power biennial                       (28)   (28)
    review order
    O&M expense reduction initiative          (17)                 (17)
    Net gain in nuclear decommissioning 20    1      9      9      39
    trust funds
    ARO revision                                            30     30
    Other items                         (2)   (10)   17     (12)   (7)
    Total items excluded from operating 19    (153)  (14)   (36)   (184)
    earnings (after-tax) ^1
Reported net income                     $495  $202   $569   $431   $1,697
Common shares outstanding (average,     577.5 578.9  580.1  581.3  579.5
diluted)
Operating earnings per share            $0.83 $0.62  $1.00  $0.80  $3.25
Items excluded from operating earnings  0.03  (0.27) (0.02) (0.06) (0.32)
(after-tax)
Reported earnings per share             $0.86 $0.35  $0.98  $0.74  $2.93
^1) Pre-tax amounts for items excluded from operating earnings are reflected
    in the following table:
    Items excluded from operating       1Q13  2Q13   3Q13   4Q13   YTD 2013
    earnings:
    Discontinued operations - Brayton   1     (119)  (17)          (135)
    Point & Kincaid
    Gas infrastructure & repositioning        (107)  (23)   (52)   (182)
    Impact of Virginia Power biennial                       (40)   (40)
    review order
    O&M expense reduction initiative          (28)                 (28)
    Net gain in nuclear decommissioning 34    1      15     15     65
    trust funds
    ARO revision                                            47     47
    Other items                         (4)   (10)   29     (26)   (11)
    Total items excluded from operating $31   ($263) $4     ($56)  ($284)
    earnings
^2) YTD EPS may not equal sum of quarters due to share
    count differences.

Schedule 4 - Reconciliation of 1Q14 Earnings to 1Q13
Preliminary, unaudited                         Three Months Ended
(millions, except EPS)                         March 31,
                                               2014 vs. 2013
                                               Increase / (Decrease)
Reconciling Items                              Amount         EPS
Dominion Virginia Power
    Regulated electric sales:
    Weather                                    $13            $0.02
    Other                                      (4)            (0.01)
    FERC Transmission equity return            2              0.00
    Storm damage and service restoration       5              0.01
    Other                                      (1)            0.00
    Change in contribution to operating        $15            $0.02
    earnings
Dominion Energy^
    Gas Distribution weather                   $4             $0.01
    Gas Transmission margin                    (1)            0.00
    Blue Racer Midstream JV                    22             0.04
    Other                                      4              0.00
    Change in contribution to operating        $29            $0.05
    earnings
Dominion Generation
    Regulated electric sales:
    Weather                                    $26            $0.04
    Other                                      (6)            (0.01)
    Merchant generation margin                 51             0.09
    Retail electric energy marketing 2013      (7)            (0.01)
    earnings
    Utility ancillary services                 21             0.03
    Outage costs                               (11)           (0.02)
    Other                                      (19)           (0.03)
    Change in contribution to operating        $55            $0.09
    earnings
Corporate and Other
    Change in contribution to operating        $32            $0.05
    earnings
Change in consolidated operating earnings      $131           $0.21
Change in items excluded from operating        ($247)         ($0.42)
earnings^1
Change in reported earnings (GAAP)             ($116)         ($0.21)
^1) Refer to Schedules 2 and 3 for details of items excluded from operating
    earnings, or find "GAAP Reconciliation"
    on Dominion's website at
    www.dom.com/investors. 

SOURCE Dominion

Website: http://www.dom.com
Contact: Media: Ryan Frazier, (804) 819-2521 or C.Ryan.Frazier@dom.com,
Financial analysts: Nathan Frost, (804) 819-2187 or Nathan.J.Frost@dom.com
 
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