4Q07 Earnings Release Kit January 30, 2008

Transcription

1 4Q07 Earnings Release Kit Dominion Resources, Inc.

2 Table of Contents IMPORTANT NOTES TO INVESTORS... 3 EARNINGS RELEASE AND ACCOMPANYING SCHEDULES... 4 EARNINGS RELEASE... 4 SCHEDULE 1 - SEGMENT OPERATING EARNINGS... 8 SCHEDULE 2 - RECONCILIATION OF 2007 OPERATING EARNINGS TO GAAP... 9 SCHEDULE 3 - RECONCILIATION OF 2006 OPERATING EARNINGS TO GAAP SCHEDULE 4 - RECONCILIATION OF 2007 EARNINGS TO FINANCIALS * CONSOLIDATED FINANCIAL STATEMENTS (GAAP) SEGMENT OPERATING RESULTS AND STATISTICS SCHEDULE OF LONG-TERM DEBT SCHEDULE OF DEBT MATURITY SCHEDULE OF CHANGE IN CAPITALIZATION HEDGING NATURAL GAS AND LIQUIDS HEDGE POSITION ELECTRIC GENERATION AND COAL HEDGE POSITION REGIONAL CAPACITY HEDGE POSITION GAAP RECONCILIATION EARNINGS EXPECTATIONS * The notes contained in the most recent Forms 10-Q and 10-K are an integral part of the Consolidated Financial Statements. Reconciliation of Operating Earnings to GAAP can be found in Schedules 2 & 3 of this Earnings Kit. 2

3 Important Notes to Investors This kit contains certain forward-looking statements, including our forecasted operating earnings for 2008 and 2009 as well as projected future long-term operating earnings growth rates, that 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, such as fluctuations in energy-related commodity prices, the timing of the closing dates of acquisitions or divestitures, estimates of future market conditions, estimates of proved and unproved reserves, the company s ability to meet its natural gas and oil production forecasts, the timing and receipt of regulatory approvals necessary for planned projects, acquisitions and divestitures, and the ability to complete planned construction or expansion projects as scheduled. Other factors include, but are not limited to, weather conditions, including the effects of hurricanes on operations, the behavior of other market participants, state and federal legislative and regulatory developments and changes to environmental and other laws and regulations, including those related to climate change, economic conditions in the company'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, trading counter-party credit risks, risks related to energy trading and marketing, and other uncertainties. Other risk factors are detailed from time to time in Dominion s most recent quarterly report on Form 10-Q or annual report on Form 10-K filed with the Securities & Exchange Commission. The consolidated financial data and statistics in this 4Q07 Earnings Release Kit and its individual components reflect the financial position and operating results of Dominion and its primary operating segments through Independent auditors have not audited all of the financial and operating statements. Projections or forecasts shown in this document are based on the assumptions listed in this document and are subject to change at any time. Dominion undertakes no obligation to update any forward-looking information statement to reflect developments after the statement is made. This 4Q07 Earnings Release Kit has been prepared primarily for security analysts and investors in the hope that it will serve as a convenient and useful reference document. The format of this release kit may change in the future as we continue to try to meet the needs of security analysts and investors. This release kit is not intended for use in connection with any sale, offer to sell, or solicitation of any offer to buy securities. 3

4 Earnings Release and Accompanying Schedules Earnings Release FOR IMMEDIATE RELEASE Jan. 30, 2008 Company: Dominion Contacts: Media: Mark Lazenby (804) , Ryan Frazier (804) , Analysts: Greg Snyder (804) , Laura Kottkamp (804) , DOMINION ANNOUNCES 2007 EARNINGS Schedules conference call for 10 a.m. EST today Provides 2008 operating earnings guidance of $3.05 to $3.15 per share Introduces 2009 operating earnings outlook of $3.25 to $3.40 per share RICHMOND, Va. Dominion (NYSE: D) today announced unaudited net income determined in accordance with Generally Accepted Accounting Principles (GAAP) for the 12 months ended Dec. 31, 2007 of $2.54 billion ($3.88 per share) compared to net income of $1.38 billion ($1.96 per share) for the same period in Operating earnings for the 12 months ended Dec. 31, 2007 amounted to $1.68 billion ($2.56 per share) compared to operating earnings of $1.78 billion ($2.53 per share) for the same period in Operating earnings are defined as GAAP earnings adjusted for certain items. Dominion uses operating earnings as the primary performance measurement of its earnings outlook 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. Dominion management believes operating earnings provide a more meaningful representation of the company s fundamental earnings power. Business segment results and detailed descriptions of items included in 2007 and 2006 GAAP earnings but excluded from operating earnings can be found on Schedules 1, 2 and 3 of this release. All GAAP earnings, operating earnings and related per share amounts reflect the realignment of our business segments and the November for-1 stock split. 4

5 Thomas F. Farrell II, chairman, president and chief executive officer, said: We completed the divestiture of our non-appalachian natural gas and oil exploration and production businesses in 2007, while continuing to deliver exceptional results across the rest of our businesses. We posted impressive results in all business areas, from merchant generation and unregulated retail sales to our regulated electric and gas operations. Our newly aligned operating segments, combined with expanded disclosure of earnings drivers detailed in the 2008 Earnings Guidance Kit that will be posted this morning on Dominion s Web site, will better highlight Dominion s earnings power and growth prospects. We are providing 2008 operating earnings guidance of $3.05 to $3.15 per share and are confident that we can deliver long-term annual operating earnings per share growth of at least 6 percent after Fourth-quarter earnings Dominion also announced today unaudited net income determined in accordance with GAAP for the three months ended Dec. 31, 2007, of $299 million (52 cents per share) compared to net income of $31 million (4 cents per share) for the same period last year. Operating earnings for the three months ended Dec. 31, 2007, were $299 million (52 cents per share) compared to operating earnings of $271 million (38 cents per share) for the three months ended Dec. 31, Business segment results and detailed descriptions of items included in 2007 and 2006 GAAP earnings but excluded from operating earnings can be found on Schedules 1, 2 and 3 of this release operating earnings compared to 2006 The increase in both fourth-quarter 2007 and full-year 2007 operating earnings per share as compared to 2006 is primarily attributable to higher contributions from the merchant generation business; lower unrecovered Virginia fuel expenses; higher regulated electric sales; lower interest expense; and accretion due to share repurchases. These positives were partially offset by the decrease in earnings resulting from the sale of our non-appalachian E&P properties; higher outage costs at the company s generating units; higher salary, wages, and benefits expenses; and other expenses. Complete details of fourth-quarter and full-year 2007 operating earnings compared to 2006 can be found on Schedule 4 of this release. 5

6 2008 operating earnings guidance and 2009 outlook The company is providing operating earnings guidance of $3.05 to $3.15 per share for the full year 2008 and 89 cents to 94 cents per share for the first quarter of Additionally, the company is introducing its initial 2009 operating earnings outlook of $3.25 to $3.40 per share. This morning, at approximately 7:30 a.m. EST, the company will publish detailed guidance for each of the newly realigned operating segments. Complete details of the company s 2008 guidance can be found on Dominion s Web page under Financial Modeling, Forecasts and Outlook at In providing its 2008 operating earnings guidance and introducing its initial 2009 operating earnings outlook, the company notes that there could be differences between expected 2008 and 2009 GAAP and 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 impact, if any, of these items on GAAP earnings. Accordingly, Dominion is not able to provide a corresponding GAAP equivalent for its operating earnings guidance and outlook. Conference call today Dominion will host its fourth-quarter earnings conference call at 10 a.m. EST on Wednesday, Jan. 30. Dominion management, including the heads of each business unit, will discuss 2007 financial results, 2008 operating earnings guidance, its 2009 operating earnings outlook and other matters of interest to the financial community. Domestic callers should dial (866) The passcode for the conference call is Dominion. International callers should dial (334) Participants should dial in 10 minutes 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 will be available on the company s investor information page at A replay of the conference call will be available beginning about 1 p.m. EST Jan. 30 and lasting until 11 p.m. EST Feb. 6. Domestic callers may access the recording by dialing (877) International callers should dial (334) The PIN for the replay is Additionally, a replay of the webcast will be available on the company s investor information page by the end of the day Jan. 30. Dominion is one of the nation's largest producers and transporters of energy, with a portfolio of approximately 26,500 megawatts of generation, 14,000 miles of natural gas transmission, gathering and storage pipeline, 6,000 miles of electric transmission lines and 1 Tcfe of proved natural gas and oil reserves. Dominion also owns and operates the nation s largest underground natural gas storage system with over 970 billion cubic 6

7 feet of storage capacity and serves retail energy customers in 11 states. For more information about Dominion, visit the company's Web site at This release contains certain forward-looking statements, including our forecasted operating earnings for 2008 and 2009 as well as projected future long-term operating earnings growth rates, that 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, such as fluctuations in energy-related commodity prices, the timing of the closing dates of acquisitions or divestitures, estimates of future market conditions, estimates of proved and unproved reserves, the company s ability to meet its natural gas and oil production forecasts, the timing and receipt of regulatory approvals necessary for planned projects, acquisitions and divestitures, and the ability to complete planned construction or expansion projects as scheduled. Other factors include, but are not limited to, weather conditions, including the effects of hurricanes on operations, the behavior of other market participants, state and federal legislative and regulatory developments and changes to environmental and other laws and regulations, including those related to climate change, economic conditions in the company'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, trading counterparty credit risks, risks related to energy trading and marketing, and other uncertainties. Other risk factors are detailed from time to time in Dominion s most recent quarterly report on Form 10-Q or annual report on Form 10-K filed with the Securities & Exchange Commission. ### 7

8 Schedule 1 - Segment Operating Earnings Preliminary, Unaudited (millions, except earnings per share) Three months ended Change Operating Revenue (GAAP Based) $ 3,694 $ 3,922 $ (228) Earnings: (1) Dominion Virginia Power $ 82 $ 105 $ (23) Dominion Energy Dominion Generation (2) Corporate and Other: (2) Other (46) (49) 3 E&P Non-Appalachia (5) 29 (34) Peoples & Hope (3) OPERATING EARNINGS $ 299 $ 271 $ 28 Items excluded from operating earnings (4) - (240) 240 GAAP EARNINGS $ 299 $ 31 $ 268 Common Shares Outstanding (average, diluted) Earnings Per Share (EPS): (1) Dominion Virginia Power $ 0.14 $ 0.15 $ (0.01) Dominion Energy Dominion Generation (2) Corporate and Other: (2) Other (0.08) (0.07) (0.01) E&P Non-Appalachia (0.01) 0.04 (0.05) Peoples & Hope (3) OPERATING EARNINGS $ 0.52 $ 0.38 $ 0.14 Items excluded from operating earnings (4) - (0.34) 0.34 GAAP EARNINGS $ 0.52 $ 0.04 $ 0.48 Twelve months ended Change Operating Revenue (GAAP Based) $ 15,674 $ 16,297 $ (623) Earnings: (1) Dominion Virginia Power $ 415 $ 411 $ 4 Dominion Energy Dominion Generation (2) Corporate and Other: (2) Other (192) (201) 9 E&P Non-Appalachia (386) Peoples & Hope (3) OPERATING EARNINGS $ 1,678 $ 1,781 $ (103) Items excluded from operating earnings (4) 861 (401) 1,262 GAAP EARNINGS $ 2,539 $ 1,380 $ 1,159 Common Shares Outstanding (average, diluted) Earnings Per Share (EPS): (1) Dominion Virginia Power $ 0.64 $ 0.59 $ 0.05 Dominion Energy Dominion Generation (2) Corporate and Other: (2) Other (0.29) (0.29) - E&P Non-Appalachia (0.53) Peoples & Hope (3) OPERATING EARNINGS $ 2.56 $ 2.53 $ 0.03 Items excluded from operating earnings (4) 1.32 (0.57) 1.89 GAAP EARNINGS $ 3.88 $ 1.96 $ 1.92 (1) 2007 and 2006 segment earnings and per share values have been recast to reflect the impact of segment realignment and the 2 for 1 common stock split. (2) Earnings have been recast to exclude income and losses from discontinued operations. (3) Earnings for Peoples Natural Gas and Hope Gas, Inc. are reported in the Corporate Segment. (4) Refer to schedules 2 and 3 for details related to items excluded from operating earnings, or find "GAAP Reconciliation" on Dominion's Web site at 8

9 Schedule 2 - Reconciliation of 2007 Operating Earnings to GAAP 2007 Earnings (Twelve months ended 2007) The net effects of the following items, all shown on an after-tax basis, are included in 2007 reported earnings, but are excluded from operating earnings: $1.5 billion net benefit resulting from the sales of our non-appalachian E&P businesses including: $2.1 billion net gain from the sales; partially offset by $506 million in other charges including the effect of discontinuing hedge accounting for certain gas and oil hedges and subsequent changes in the fair value of these hedges ($342 million), settlement of volumetric production payment (VPP) agreements ($108 million), and employeerelated expenses; and $148 million in net charges related to the early retirement of debt associated with the completion of our debt tender offer in July 2007; $119 million net benefit related to the release of tax valuation allowances; $270 million of impairment charges related to our merchant generation assets including $252 million related to the sale of a partially completed generation facility (Dresden); $137 million charge related to the termination of a power sales agreement at our State Line generating facility; $158 million extraordinary item related to the reapplication of SFAS No. 71, Accounting for the Effects of Certain Types of Regulation, to the Virginia jurisdiction of our electric utility generation operations; $56 million in charges related to the impairment of certain Dominion Capital investments; $29 million in charges related to litigation reserves; $93 million in other charges, including losses from certain discontinued operations. (millions, except per share amounts) 1Q07 2Q07 3Q07 4Q07 YTD 2007* Operating earnings $518 $310 $551 $299 $1,678 Items excluded from operating earnings (after-tax): Items related to the sales of non-appalachian E&P businesses: Net gain on sale (2) 5 2, ,139 Other related charges (6) (482) (15) (3) (506) Net charges related to debt tender offer 15 (163) (148) Release of tax valuation allowances, net (6) Impairment of merchant generation assets (252) (18) (270) Termination of the State Line power sales agreement (140) 3 (137) Extraordinary item related to the reapplication of SFAS 71 (158) (158) Dominion Capital impairment of assets (55) (1) (56) Litigation reserves (16) (16) 3 (29) Other charges (35) (38) (6) (14) (93) Total items excluded from operating earnings (65) (840) 1, Reported net income $453 ($530) $2,317 $299 $2,539 Common shares outstanding (average, diluted) ** Operating earnings per share $0.74 $0.44 $0.86 $0.52 $2.56 Items excluded from operating earnings (after-tax) (0.09) (1.20) Reported earnings per share $0.65 ($0.76) $3.62 $0.52 $3.88 * YTD 2007 EPS may not equal sum of quarters due to share count differences. ** As a result of the net loss from continuing operations for the three months ended June 30, 2007, the issuance of common stock under potentially-dilutive securities was considered antidilutive and therefore not included in the calculation of the diluted loss per share for that period. 9

10 Schedule 3 - Reconciliation of 2006 Operating Earnings to GAAP 2006 Earnings (Twelve months ended 2006) The net effects of the following items, all shown on an after-tax basis, are included in 2006 reported earnings, but are excluded from operating earnings: $183 million in losses from discontinued operations of three merchant generation facilities (Troy, Pleasants, Armstrong) for which an agreement to sell was executed in December 2006 reflecting the impairment of assets ($164 million) and loss from normal operations ($19 million); $33 million in income from the discontinued operations of our Canadian E&P business sold in June 2007; $91 million in charges related to the impairment of certain Dominion Capital investments; $73 million in net charges related to the planned sale of Dominion Peoples and Dominion Hope natural gas local distribution companies; $37 million in charges due to the mark-to-market impact on certain interest rate swaps; $34 million of impairment charges, including the cancellation of a pipeline project ($17 million) and from a change in method of assessing other-than-temporary declines in the fair value of securities held in nuclear decommissioning trust funds ($15 million); $11 million of incremental charges related to Hurricanes Katrina and Rita; $6 million in charges related to the write-off of a prepaid merchant generation gas transportation contract; $6 million gain on the sale of an investment in a natural gas storage development project; and $5 million in other charges including charges related to the divestiture of oil and gas properties. (millions, except per share amounts) 1Q06 2Q06 3Q06 4Q06 YTD 2006 Operating earnings $567 $279 $664 $271 $1,781 Items excluded from operating earnings (after-tax): Discontinued operations - merchant generation facilities (5) (6) (4) (168) (183) Discontinued operations - Canadian E&P operations Discontinued operations - Dominion Capital subsidiary (1) 33 0 Dominion Capital related charges (85) (6) (91) Net charges related to the planned sale of Dominion Peoples and Dominion Hope natural gas distribution companies (21) (7) (7) (38) (73) Mark-to-market impact related to certain interest rate swaps (37) (37) Impairment of assets (6) (28) (34) Hurricanes Katrina and Rita (7) (3) (1) (11) Merchant generation prepaid contract write-off (6) (6) Gain on sale of natural gas storage development project Other 1 (1) 0 (5) (5) Total items excluded from operating earnings (33) (118) (10) (240) (401) Reported net income $534 $161 $654 $31 $1,380 Common shares outstanding (average, diluted) Operating earnings per share $0.81 $0.40 $0.94 $0.38 $2.53 Items excluded from operating earnings (after-tax) (0.04) (0.17) (0.02) (0.34) (0.57) Reported earnings per share $0.77 $0.23 $0.92 $0.04 $1.96 * YTD 2006 EPS may not equal sum of quarters due to share count differences. 10

11 Schedule 4 - Reconciliation of 2007 Earnings to 2006 Preliminary, unaudited (millions, except EPS) Three Months Ended December, Twelve Months Ended December, 2007 vs vs Increase / (Decrease) Increase / (Decrease) Reconciling Items Amount EPS Amount EPS Dominion Virginia Power Regulated electric sales: Weather $7 $0.01 $22 $0.03 Customer growth Major storm damage and service restoration Salary, wages and benefits expense (12) (0.02) (15) (0.02) Outside Services and Reliability (8) (0.01) (18) (0.02) Dominion Retail (8) (0.01) Other (7) (0.01) (5) (0.01) Share Accretion Change in contribution to operating earnings ($23) ($0.01) $4 $0.05 Dominion Energy Regulated gas sales - weather $5 $0.01 $16 $0.02 Gas Transmission operations (6) 0.00 Producer services (33) (0.05) Gas and Oil - production Gas and Oil - prices Gas and Oil - DDA expense (12) (0.02) (27) (0.04) Salary, wages and benefits expense (11) (0.02) (23) (0.04) Other (10) (0.01) Share Accretion Change in contribution to operating earnings $22 $0.07 $40 $0.10 Dominion Generation Regulated electric sales: Weather $12 $0.02 $37 $0.05 Customer growth Virginia fuel underrecovery Merchant generation margin Sales of emissions allowances (34) (0.05) Ancillary service revenues Interest expense (9) (0.01) Outage costs (40) (0.06) (61) (0.09) Salary, wages and benefits expense (46) (0.07) (51) (0.08) Depreciation and amortization (8) (0.01) (32) (0.04) Other (37) (0.05) (9) (0.01) Share Accretion Change in contribution to operating earnings $52 $0.12 $219 $0.39 Corporate and Other 1 Change in contribution to operating earnings ($23) ($0.04) ($366) ($0.51) Change in consolidated operating earnings $28 $0.14 ($103) $0.03 Change in items excluded from operating earnings 2 $240 $0.34 $1,262 $1.89 Change in net income (GAAP earnings) $268 $0.48 $1,159 $1.92 1) Earnings for Peoples Natural Gas and Hope Gas, Inc. are reported in the Corporate Segment. 2) Refer to schedules 2 and 3 for details of items excluded from operating earnings, or find "GAAP Reconciliation" on Dominion's Web site at 11

12 Financials * Consolidated Financial Statements (GAAP) Dominion Consolidated Preliminary and Unaudited Income Statements Three Months Ended Year Ended (millions, except per share amounts) Operating Revenue $ 3,694 $ 3,922 $ 15,674 $ 16,297 Operating Expenses Electric fuel and energy purchases, net ,511 3,236 Purchased electric capacity Purchased gas ,766 2,937 Other energy-related commodity purchases ,022 Other operations and maintenance 948 1,055 4,854 3,178 Gain on Sale of U.S. non-appalachian E&P business (33) (3,635) Depreciation, depletion and amortization ,368 1,557 Other taxes Total Operating Expenses 2,962 3,324 10,107 12,979 Income from Operations ,567 3,318 Other income (23) Interest and related charges: Interest expense , Interest expense - junior subordinated note payable Subsidiary preferred dividends Interest and related charges ,175 1,028 Income before income taxes ,494 2,463 Income tax expense , Minority interest (1) Income from continuing operations before extraordinary item ,705 1,530 Loss from discontinued operations (net of tax) (3) (164) (8) (150) Extraordinary item - - (158) - Reported net income $ 299 $ 31 $ 2,539 $ 1,380 Reported net income per common share - diluted $ 0.52 $ 0.04 $ 3.88 $ 1.96 Average shares outstanding, diluted * The notes contained in the most recent Forms 10-Q and 10-K are an integral part of the Consolidated Financial Statements. 12

13 Dominion Consolidated Preliminary Consolidated Balance Sheet - (Summarized & Unaudited) ($ in Millions) Assets At Assets held for sale $1,160 $1,391 Other current assets 5,516 6,707 Total Current Assets 6,676 8,098 Investments 3,880 3,825 Property, Plant and Equipment Net 21,282 29,382 Deferred Charges and Other Assets 7,029 7,964 Total Assets $38,867 $49,269 Liabilities and Shareholders' Equity Securities due within one year $1,477 $2,478 Short-term debt 1,757 2,332 Liabilities held for sale Other current liabilities 4,023 5,922 Total Current Liabilities 7,749 11,229 Long-Term Debt 13,235 14,791 Deferred Credits and Other Liabilities 8,286 10,056 Total Liabilities 29,270 36,076 Subsidiary Preferred Stock Not Subject To Mandatory Redemption Minority Interest Common Shareholders' Equity 9,312 12,913 Total Liabilities and Shareholders' Equity $38,867 $49,269 13

14 Dominion Consolidated Preliminary Consolidated Statement of Cash Flow - (Summarized & Unaudited) ($ in Millions) Operating Activities Twelve Months Ended Net Income $2,539 $1,380 Adjustments to reconcile net income to net cash from operating activities Gain on sale of non-appalachian E&P business (3,826) - Costs associated early retirement of debt Extraordinary item, net of taxes Impairment of merchant generation assets Depreciation, depletion and amortization 1,533 1,739 Deferred income taxes and investment tax credits, net (1,285) 510 Net realized and unrealized MTM and hedging transactions (291) (242) Other adjustments for non-cash items Changes in operating assets and liabilities Net cash provided by (used in) operating activities (279) 4,005 Investing Activities Plant construction and other property additions (2,170) (1,995) Purchases of gas and oil properties, prospects and equipment (1,795) (2,057) Proceeds from sale of non-appalachian E&P business 13,877 - Proceeds from sale of oil and gas properties Proceeds from sale of merchant generation facilities Acquisition of businesses - (91) Other (38) 256 Net cash provided by (used in) investing activities 10,225 (3,494) Financing Activities Issuance (Repayment) of short-term debt, net (575) 713 Issuance of long-term debt 2,675 2,450 Repayment of long-term debt (5,012) (2,333) Repayment of notes payable to affiliate (440) (300) Issuance of common stock Repurchase of common stock (5,763) (540) Common stock dividend payments (931) (970) Other 19 (14) Net cash provided by (used in) financing activities (9,801) (515) Increase (Decrease) in cash and cash equivalents 145 (4) Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $287 $142 14

15 Segment Operating Results and Statistics Dominion Consolidated Unaudited Summary of Operating Results Three Months Ended Twelve Months Ended (millions, except per share amounts) (millions, except per share amounts) Operating Revenue $ 3,693 $ 3,922 $ 15,673 $ 16,297 Operating Expenses Electric fuel and energy purchases ,511 3,236 Purchased electric capacity Purchased gas ,766 2,937 Other energy-related commodity purchases ,022 Other operations and maintenance 944 1,017 3,260 2,790 Depreciation, depletion and amortization ,368 1,557 Other taxes Total Operating Expenses 2,992 3,286 12,148 12,591 Operating Income ,525 3,706 Other income (7) Interest and related charges ,028 Income before income taxes and minority interest ,728 2,881 Income taxes ,044 1,094 Minority interest (1) Operating earnings (1) $ 299 $ 271 $ 1,678 $ 1,781 Operating earnings per share $ 0.52 $ 0.38 $ 2.56 $ 2.53 Items excluded from operating earnings (net of taxes) (1) - (240) 861 (401) Reported net income $ 299 $ 31 $ 2,539 $ 1,380 Reported net income per common share - Diluted $ 0.52 $ 0.04 $ 3.88 $ 1.96 Average shares outstanding, diluted (1) 2006 amounts have been recast to exclude from operating earnings the gains and losses from discontinued operations of three merchant generation facilities, a DCI subsidiary, and the Canadian E&P operations. Notes: Figures may not add due to rounding All per share and share amounts have been adjusted to reflect a 2-for-1 stock split distributed in November 2007 For additional detail on items excluded from operating earnings, visit Dominion's Investor Relations Web site at under "GAAP Reconciliation" 15

16 Dominion Virginia Power Unaudited Summary of Operating Results Three Months Ended Twelve Months Ended (millions, except per share amounts) (millions, except per share amounts) Operating Revenue $ 756 $ 703 $ 2,897 $ 2,590 Operating Expenses Electric fuel and energy purchases Purchased electric capacity Purchased gas Other energy-related commodity purchases Other operations and maintenance Depreciation, depletion and amortization Other taxes Total Operating Expenses ,123 1,821 Operating Income Other income Interest and related charges Income before income taxes and minority interest Income taxes Minority interest Operating earnings $ 82 $ 105 $ 415 $ 411 Operating earnings per share contribution $ 0.14 $ 0.15 $ 0.64 $ 0.59 Average shares outstanding, diluted Notes: Figures may not add due to rounding All per share and share amounts have been adjusted to reflect a 2-for-1 stock split distributed in November

17 Dominion Energy Unaudited Summary of Operating Results Three Months Ended Twelve Months Ended (millions, except per share amounts) (millions, except per share amounts) Operating Revenue $ 984 $ 904 $ 3,495 $ 3,531 Operating Expenses Electric fuel and energy purchases Purchased electric capacity Purchased gas ,741 1,962 Other energy-related commodity purchases Other operations and maintenance Depreciation, depletion and amortization Other taxes Total Operating Expenses ,797 2,863 Operating Income Other income Interest and related charges Income before income taxes and minority interest Income taxes Minority interest Operating earnings $ 113 $ 91 $ 387 $ 347 Operating earnings per share contribution $ 0.20 $ 0.13 $ 0.59 $ 0.49 Average shares outstanding, diluted Notes: Figures may not add due to rounding All per share and share amounts have been adjusted to reflect a 2-for-1 stock split distributed in November

18 Dominion Generation Unaudited Summary of Operating Results Three Months Ended Twelve Months Ended (millions, except per share amounts) (millions, except per share amounts) Operating Revenue $ 1,898 $ 1,780 $ 7,741 $ 7,108 Operating Expenses Electric fuel and energy purchases ,323 3,131 Purchased electric capacity Purchased gas Other energy-related commodity purchases Other operations and maintenance ,718 1,373 Depreciation, depletion and amortization Other taxes Total Operating Expenses 1,580 1,622 6,278 6,080 Operating Income ,463 1,028 Other income (31) Interest and related charges Income before income taxes and minority interest , Income taxes Minority interest Operating earnings (1) $ 133 $ 81 $ 756 $ 537 Operating earnings per share contribution $ 0.23 $ 0.11 $ 1.15 $ 0.76 Average shares outstanding, diluted (1) 2006 Amounts have been recast to exclude from operating earnings the loss from discontinued operations of three merchant generation facilities that were sold in March 2007 Notes: Figures may not add due to rounding All per share and share amounts have been adjusted to reflect a 2-for-1 stock split distributed in November

19 Corporate Unaudited Summary of Operating Results Three Months Ended Twelve Months Ended (millions, except per share amounts) (millions, except per share amounts) Operating Revenue $ 367 $ 819 $ 2,684 $ 4,185 Operating Expenses Electric fuel and energy purchases Purchased electric capacity Purchased gas Other energy-related commodity purchases Other operations and maintenance , Depreciation, depletion and amortization Other taxes Total Operating Expenses ,098 2,947 Operating Income ,238 Other income Interest and related charges Income before income taxes and minority interest (55) (20) Income taxes (27) (16) Minority interest (1) Operating earnings (1) $ (29) $ (6) $ 120 $ 486 Operating earnings per share contribution $ (0.05) $ (0.01) $ 0.18 $ 0.69 Average shares outstanding, diluted (1) 2006 Amounts have been recast to exclude from operating earnings the loss from discontinued operations of three merchant generation facilities that were sold in March 2007 Notes: Figures may not add due to rounding All per share and share amounts have been adjusted to reflect a 2-for-1 stock split distributed in November

20 Dominion Unaudited Operating Revenue Detail (GAAP Based) Three Months Ended Twelve Months Ended (millions, except per share amounts) (millions, except per share amounts) Dominion Consolidated Operating Revenue Electric Regulated $ 1,451 $ 1,220 $ 6,044 $ 5,451 Non-regulated ,099 2,528 Gas Regulated ,174 1,397 Non-regulated ,238 3,524 Other energy-related commodities ,939 Gas transportation and storage , Other revenue Total operating revenue $ 3,694 $ 3,922 $ 15,674 $ 16,297 Dominion Virginia Power Operating Revenue Electric Regulated $ 343 $ 319 $ 1,416 $ 1,334 Non-regulated Gas Regulated Non-regulated Other energy-related commodities Gas transportation and storage Other revenue Total operating revenue $ 756 $ 703 $ 2,897 $ 2,590 Dominion Energy Operating Revenue Electric Regulated $ - $ - $ - $ - Non-regulated Gas Regulated Non-regulated ,650 1,611 Other energy-related commodities Gas transportation and storage Other revenue Total operating revenue $ 984 $ 904 $ 3,495 $ 3,531 Dominion Generation Operating Revenue Electric Regulated $ 1,107 $ 902 $ 4,627 $ 4,117 Non-regulated ,850 2,359 Gas Regulated Non-regulated (1) - (4) 11 Other energy-related commodities Gas transportation and storage Other revenue Total operating revenue $ 1,898 $ 1,780 $ 7,741 $ 7,108 Corporate Operating Revenue Electric Regulated $ - $ - $ - $ - Non-regulated - (5) - (7) Gas Regulated Non-regulated ,462 Other energy-related commodities ,168 Gas transportation and storage Other revenue Total operating revenue $ 369 $ 819 $ 2,685 $ 4,185 Notes: Figures may not add due to rounding Revenue amounts have been recast to conform to the 2007 presentation 20

21 Dominion Operating Statistics Three Months Ended Twelve Months Ended Dominion Consolidated Regulated Electric Sales Revenue ($ millions) Residential $ 581 $ 522 $ 2,643 $ 2,440 Commercial ,790 1,660 Industrial Governmental Regulated retail revenue 1,357 1,170 5,636 5,179 Wholesale - sales for resale Other revenue Total $ 1,452 $ 1,220 $ 6,043 $ 5,449 Regulated Gas Revenue ($mm) Gas sales revenue Residential $ 264 $ 247 $ 887 $ 1,068 Commercial Industrial Other Total $345 $326 $ 1,174 1,397 Regulated Gas Transportation and Storage Revenue ($mm) Gas transportation revenue Residential $ 93 $ 73 $ 296 $ 217 Commercial Industrial Other Total transportation revenue Storage revenue Total $148 $124 $ Note: Figures may not add due to rounding. 21

22 Dominion Operating Statistics Three Months Ended Twelve Months Ended Dominion Virginia Power Degree Days (Electric service area) Cooling Actual ,794 1,557 Normal ,540 1,531 Heating Actual 1,135 1,122 3,500 3,178 Normal 1,340 1,332 3,690 3,679 Electric Delivery Customers (at period end) Residential 2,116,182 2,089,374 2,116,182 2,089,374 Commercial 229, , , ,087 Industrial Governmental 31,358 31,058 31,358 31,058 Total Retail 2,377,631 2,347,153 2,377,631 2,347,153 Wholesale - sales for resale Total 2,377,637 2,347,159 2,377,637 2,347,159 Electricity Delivered (GWh) Residential 6,920 6,411 30,468 28,543 Commercial 6,882 6,446 28,421 27,108 Industrial 2,430 2,467 10,073 10,188 Governmental 2,662 2,529 10,947 10,328 Total Retail 18,894 17,853 79,909 76,167 Wholesale - sales for resale 1, ,839 3,598 Total 20,056 18,539 84,748 79,765 Dominion Retail Unregulated Energy Customer Accounts (Average) Natural Gas 627, , , ,699 Electric 300, , , ,150 Products and Services 668, , , ,714 Total 1,596,197 1,414,563 1,554,841 1,354,563 Volumes Sold Natural Gas (Mcf) 27,385 31, ,534 84,460 Electricity (MWh) 1,083, ,925 3,823,394 3,493,118 Note: Figures may not add due to rounding. 22

23 Dominion Operating Statistics Three Months Ended Twelve Months Ended Dominion Energy - Gas Distribution Regulated Gas Revenue ($mm) Gas sales revenue Residential $ 139 $ 128 $ 464 $ 616 Commercial Industrial Other Total $180 $164 $ Regulated Gas Transportation and Storage Revenue ($mm) Gas transportation revenue Residential $ 82 $ 62 $ 253 $ 181 Commercial Industrial Other Total transportation revenue Storage revenue Total $127 $104 $ Degree Days Heating Actual 1,922 1,866 5,886 5,274 Normal 2,120 2,131 6,059 6,087 LDC Natural Gas Customers (at period end) Gas sales customers Residential 375, , , ,101 Commercial 25,198 26,549 25,198 26,549 Industrial Other Total 400, , , ,034 Gas transportation customers Residential 754, , , ,624 Commercial 58,780 57,963 58,780 57,963 Industrial 1,252 1,248 1,252 1,248 Total 814, , , ,835 Total LDC natural gas customers Residential 1,129,440 1,134,725 1,129,440 1,134,725 Commercial 83,978 84,512 83,978 84,512 Industrial 1,592 1,612 1,592 1,612 Other Total 1,215,021 1,220,869 1,215,021 1,220,869 LDC Natural Gas Delivery (mmcf) Gas sales volume Residential 11,084 10,931 38,325 43,286 Commercial 3,148 3,068 11,151 11,567 Industrial ,012 1,183 Other Total 14,471 14,315 50,488 56,036 Gas transportation volume Residential 23,725 22,322 79,586 62,339 Commercial 11,867 11,657 40,639 36,286 Industrial 21,160 21,794 81,235 85,520 Other 1,249 3,795 8,448 8,723 Total 58,001 59, , ,868 Total LDC natural gas throughput Residential 34,809 33, , ,625 Commercial 15,015 14,725 51,790 47,853 Industrial 21,399 22,110 82,247 86,703 Other 1,249 3,795 8,448 8,723 Total 72,472 73, , ,904 Note: Figures may not add due to rounding. 23

24 Dominion Operating Statistics Three Months Ended Twelve Months Ended Dominion Energy - Gas Transmission Firm Billing Determinants Transportation FT/FTNN (Dt) 8,033,046 8,047,143 32,320,106 33,285,510 FT GSS / FTNN GSS (Dt) 4,263,965 4,346,094 10,395,362 10,626,250 NOREX (Dt) 276, ,000 1,104,000 1,104,000 Stueben (Dt) 177, , , ,524 Niagara Cogen (Dt) 437, ,058 1,748,232 1,748,232 Lebanon to Leidy (Dt) 755, ,292 3,021,168 3,021,168 Leidy to Market (Dt) 131, , , ,256 Mid-Atlantic FT/FTNN (Dt) 669, ,000 2,676,000 2,676,000 Northeast Storage - FT-GSS (Dt) 293,328 93, ,320 93,328 Tioga 360, ,000 1,440,000 1,440,000 Storage GSS Demand (Dt) 12,943,206 12,943,206 51,772,824 51,798,011 GSS Capacity (Dt) 850,607, ,607,928 3,402,431,712 3,404,238,947 Northeast Storage - Demand (Dt) 439, ,992 1,459, ,976 Northeast Storage - Capacity (Dt) 26,399,400 8,399,400 87,597,600 25,198,200 Cove Point FTS/OTS (Dt) 5,018,997 4,269,000 20,075,988 17,076,000 FPS - 1/2/3 (Dt) 612, ,000 2,448,000 2,448,000 LTD-1(Dt) 2,250,000 2,250,000 9,000,000 9,000,000 Natural Gas Liquids Production (MMDt) Gathering Throughput (MMDt) Dominion Energy - Appalachia E&P* *NGLs reported with Liquids Volumes Produced (1) Natural Gas US (Bcf) Liquids US (MBbls) Total equivalent (Bcfe) Average Realized Prices Without Hedging Results Natural Gas (per Mcf) $6.78 $6.58 $6.69 $7.35 Liquids (per Bbl) $32.89 $33.09 $30.72 $32.65 Equivalent (per Mcfe) $6.68 $6.46 $6.55 $7.11 Average Realized Prices With Hedging Results Natural Gas (per Mcf) $7.07 $4.94 $6.70 $4.88 Liquids (per Bbl) $32.35 $32.00 $30.19 $31.48 Equivalent (per Mcfe) $6.94 $4.98 $6.55 $4.93 E&P Lifting costs ($/mcfe) $1.22 $1.23 $1.28 $1.19 E&P DD&A rates ($/mcfe) $1.90 $1.39 $1.68 $1.28 Note: Figures may not add due to rounding. 24

25 Dominion Operating Statistics Three Months Ended Twelve Months Ended Dominion Generation Regulated Generation Electricity Sold (GWh) to VP/NCP customers Residential 6,916 6,408 30,452 28,526 Commercial 6,882 6,446 28,421 27,108 Industrial 2,430 2,467 10,073 10,188 Governmental 2,662 2,529 10,947 10,328 Total Retail 18,890 17,850 79,893 76,150 Wholesale - sales for resale 1, ,838 3,598 Total 20,052 18,536 84,731 79,748 Note: Figures may not add due to rounding. 25

26 Dominion Operating Statistics Three Months Ended Twelve Months Ended Corporate - Gas Distribution 1 Regulated Gas Revenue ($mm) Gas sales revenue Residential $ 125 $ 118 $ 422 $ 451 Commercial Industrial Other Total $165 $160 $ Regulated Gas Transportation and Storage Revenue ($mm) Gas transportation revenue Residential $ 11 $ 11 $ 42 $ 35 Commercial Industrial Other Total transportation revenue Storage revenue Total $21 $20 $ Degree Days Heating Actual 1,801 1,787 5,290 4,980 Normal 1,988 1,981 5,383 5,383 LDC Natural Gas Customers (at period end) Gas sales customers Residential 347, , , ,185 Commercial 30,640 30,740 30,640 30,740 Industrial Other Total 378, , , ,998 Gas transportation customers Residential 88,434 98,179 88,434 98,179 Commercial 7,071 7,165 7,071 7,165 Industrial Total 95, ,549 95, ,549 Total LDC natural gas customers Residential 436, , , ,364 Commercial 37,711 37,905 37,711 37,905 Industrial Other Total 474, , , ,547 LDC Natural Gas Delivery (mmcf) Gas sales volume Residential 9,221 8,811 30,471 27,976 Commercial 2,994 2,977 10,551 9,532 Industrial Other Total 12,445 12,054 41,852 38,468 Gas transportation volume Residential 2,573 2,701 9,186 7,636 Commercial 3,158 2,958 10,421 9,309 Industrial 6,794 7,279 26,444 28,379 Other ,562 Total 12,525 13,221 47,022 46,886 Total LDC natural gas throughput Residential 11,794 11,512 39,657 35,612 Commercial 6,152 5,935 20,972 18,841 Industrial 6,940 7,397 26,883 28,828 Other ,362 2,073 Total 24,970 25,275 88,874 85,354 1) Operational data for Peoples Natural Gas and Hope Gas, Inc. is included in Corporate. Note: Figures may not add due to rounding. 26

27 Schedule of Long-term Debt Dominion Resources, Inc. Schedule of Long-Term Debt - Preliminary & Unaudited ($ in Millions) Dominion Resources, Inc. At 12/31 At 3/31 At 6/30 At 9/30 At 12/ Unsecured Senior and Medium-Term Notes: 4.125% to 8.125%, due 2008 to 2012 (1) $ 3,050 $ 3,050 $ 3,050 $ 2,262 $ 2, % to 7.195%, due 2013 to 2035 (1) $ 3,110 $ 3,110 $ 3,110 $ 2,697 $ 3,047 Variable rates, due 2007 and 2008 $ 1,400 $ 1,400 $ 1,400 $ 400 $ 400 Unsecured Convertible Senior Notes, 2.125%, due 2023 $ 220 $ 220 $ 220 $ 220 $ 220 Unsecured Junior Subordinated Notes Payable to Affiliated Trusts, 7.83% to 8.4%, due 2027 to 2031 (1)(2) $ 516 $ 516 $ 516 $ 268 $ 268 Enhanced Junior Subordinated Notes, 6.3% to 7.5%, due 2066 $ 800 $ 800 $ 800 $ 800 $ 800 Dominion Resources, Inc. (from CNG merger) (5) Unsecured Debentures and Senior Notes: 6.0% to 6.875%, due 2007 to 2011 (1) $ 1,500 $ 1,500 $ 1,300 $ 720 $ % to 6.875%, due 2013 to 2027 (1) $ 1,200 $ 1,200 $ 1,200 $ 711 $ 711 Unsecured Junior Subordinated Notes Payable to Affiliated Trust, 7.8%, due 2041 (3) $ 206 $ 206 $ 206 $ - $ - Virginia Electric and Power Company Secured First and Refunding Mortgage Bonds, 7.625%, due 2007 $ 215 $ 215 $ 215 $ - $ - Secured Bank Debt, Variable Rate, due 2007 $ 370 $ 370 $ 370 $ - $ - Unsecured Senior and Medium-Term Notes: 4.5% to 5.73%, due 2007 to 2012 $ 1,000 $ 350 $ 350 $ 350 $ % to 8.625%, due 2013 to 2037 $ 1,748 $ 1,747 $ 2,342 $ 2,941 $ 3,385 Unsecured Callable and Puttable Enhanced Securities SM, 4.10%, due 2038 $ 225 $ 225 $ 225 $ 225 $ 225 Tax-Exempt Financings: Variable Rate, due 2008 $ 60 $ 60 $ 60 $ 60 $ 60 Variable Rates, due 2015 to 2027 $ 137 $ 137 $ 137 $ 137 $ % to 7.65%, due 2007 to 2010 (4) $ 232 $ 220 $ 220 $ 220 $ % to 7.55%, due 2014 to 2031 (4) $ 263 $ 209 $ 209 $ 209 $ 223 Unsecured Junior Subordinated Notes Payable to Affiliated Trust, 7.375%, due 2042 $ 412 $ 412 $ 412 $ 412 $ 412 Dominion Energy, Inc. Secured Senior Note, 7.33%, due 2020 $ 213 $ 213 $ 208 $ 208 $ 204 Tax-Exempt Financing, 5.0%, due 2036 $ 47 $ 47 $ 47 $ 47 $ 47 Dominion Capital, Inc. Notes, 12.5%, due 2007 $ 4 $ 4 $ 2 $ - $ - $75M Revolving Credit Facility, Variable Rate, due 2017 $ - $ - $ - $ 35 $ 75 Senior Note, Variable Rate, due 2017 $ 385 $ 385 $ 385 $ 385 $ 385 $ 17,313 $ 16,596 $ 16,984 $ 13,307 $ 14,736 Fair Value Hedge Valuation (6) 17 (19) 2 9 Amounts Due Within One Year (2,478) (2,254) (2,592) (799) (1,477) Unamortized Discount & Premium, net (38) (38) (37) (32) (33) Total Long-Term Debt $ 14,791 $ 14,321 $ 14,336 $ 12,478 $ 13,235 (1) Includes one or more securities that were part of the Company's tender offer to purchase up to $2.5B of debt securities. The results of this offer were effective July 12, (2) $10.3 million of the 8.4% Junior Subordinated Notes due in 2031 were redeemed early on August 15, (3) The 7.8% Junior Subordinated Notes due in 2041 were redeemed early on July 17, (4) The Pittsylvania 1994-A Series tax exempt bonds were redeemed early on February 23, (5) Consolidated Natural Gas (CNG) was merged into Dominion Resources, Inc. (DRI) on June 30, 2007 at which time CNG ceased to exist and all outstanding obligations of CNG became direct obligations of DRI. 27

28 Schedule of Debt Maturity Dominion Resources, Inc. & Subsidiaries Schedule of Debt Maturities as of 2007 ($ in Millions) Due Date DRI VEPCO Other Total % Series 1994-B IDA Pittsylvania Multitrade 01/01/ % Series 1985 IDA Chesapeake Pollution Control Rev Bonds 02/01/ % 2003 Series B Senior Notes 02/15/ % Remarketed 2002 Series A Senior Notes 05/15/ Series B Senior Notes (floating rate) 11/14/ % Series F#2 Medium Term Notes 11/25/ % Debentures (from CNG Merger) 12/01/ IDA Louisa Money Market Municipals (variable) 12/01/ % Series 1985 IDA Louisa Pollution Control Rev Bonds 12/01/ % Mecklenburg Senior Bonds multiple % Panda-Rosemary Senior Notes multiple % Senior Secured Bonds multiple % Ft Story, Ft Eustis, Ft Lee and Ft Monroe Promissory Notes multiple Total , , % Series 1994-B IDA Pittsylvania Multitrade 01/01/ % Series 1985 IDA York Pollution Control Rev Bonds 07/01/ % Series 1985 IDA Chesterfield Pollution Control Rev Bonds 10/01/ % 2002 Series D Senior Notes 12/15/ % Mecklenburg Senior Bonds multiple % Panda-Rosemary Senior Notes multiple % Senior Secured Bonds multiple % Ft Story, Ft Eustis, Ft Lee and Ft Monroe Promissory Notes multiple Total % Series 1994-B IDA Pittsylvania Multitrade 01/01/ % 2000 Series A Senior Notes 06/15/ % 1998 Series A Debentures (from CNG Merger) 10/15/ % 2005 Series A Senior Notes 12/15/ % 2003 Series B Senior Notes 12/15/ % Mecklenburg Senior Bonds multiple % Panda-Rosemary Senior Notes multiple % Senior Secured Bonds multiple % Ft Story, Ft Eustis, Ft Lee and Ft Monroe Promissory Notes multiple Total % 2001 Series A Senior Notes (from CNG Merger) 04/15/ % 2001 Series C Senior Notes (from CNG Merger) 11/01/ % Mecklenburg Senior Bonds multiple % Panda-Rosemary Senior Notes multiple % Senior Secured Bonds multiple % Ft Story, Ft Eustis, Ft Lee and Ft Monroe Promissory Notes multiple Total % 2002 Series B Senior Notes 06/30/ % 2002 Series C Senior Notes 09/17/ % 2007 Series C Senior Notes 11/30/ % Mecklenburg Senior Bonds multiple % Panda-Rosemary Senior Notes multiple % Senior Secured Bonds multiple % Ft Story, Ft Eustis, Ft Lee and Ft Monroe Promissory Notes multiple Total ,483.3 Total 5-year Debt Maturities $ 3,382.0 $ 1,287.0 $ 58.7 $ 4,