Dominion 2011 Earnings Down (USA)

Dominion today reported earnings for the 12 months ended Dec. 31, 2011, of $1.41 billion ($2.45 per share), compared with reported earnings of $2.81 billion ($4.76 per share) for the same period in 2010.

Operating earnings for the 12 months ended Dec. 31, 2011, amounted to $1.75 billion ($3.05 per share), compared to operating earnings of $1.97 billion ($3.34 per share) for the same period in 2010. Operating earnings are defined as reported (GAAP) earnings adjusted for certain items.

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

“For Dominion, 2011 was a year of significant accomplishments. We completed several major capital projects in our strategic growth plan and made significant progress in the construction of several others. We delivered operating earnings per share within our guidance range in the face of a sluggish, yet improving economy, weak commodity prices and mild weather, particularly in the fourth quarter. The structural factors that will drive earnings growth remain in place, and we continue to expect operating earnings growth of 5 to 6 percent annually.

“In our Generation segment, the 590-megawatt Bear Garden combined cycle gas facility began commercial operation during the second quarter of 2011. The 585-megawatt Virginia City Hybrid Energy Center is nearing completion and is scheduled for operation in the middle of this year. Representing the next phase of our generation expansion plan, the Warren County 3-on-1 combined cycle plant with approximately 1,300 megawatts of capacity is moving forward. The Virginia State Corporation Commission held a hearing on the certificate of public convenience (CPCN) in December. Pending regulatory approvals, construction is expected to begin in the spring.

“At our Dominion Virginia Power segment, two major 500-kilovolt (kV) electric transmission projects came online in the first half of the year, Meadow Brook to Loudoun in Northern Virginia and Carson to Suffolk in Southeastern Virginia. The Mount Storm-to-Doubs 500-kV transmission line modernization is on track and is expected to be placed in service in 2015. Our electric transmission development pipeline remains robust and includes more than 40 projects scheduled for completion over the next five years.

“At Dominion Energy, the growth program at our natural gas infrastructure business continues to be fueled by the vast Marcellus and Utica Shale formations. Construction of our Appalachian Gateway project, a project designed to transport natural gas produced in West Virginia and Pennsylvania, began last summer and should be in service later this year. Construction of Phase I of the Natrium gas processing and fractionation plant, with access to both the Marcellus and the Utica Shales, is moving forward and scheduled to be in service in December.

“We expect 2012 operating earnings in the range of $3.10 to $3.35 per share. Incorporated in this guidance, compared to 2011, are the anticipated benefits of higher revenues from our rider projects, sales growth in our electric service area and reductions in operating expenses, primarily offset by lower merchant generation margins.

“Our Board of Directors affirmed the dividend policy set in December 2010 to target a dividend payout ratio of approximately 60 percent to 65 percent of expected earnings and established an annual dividend rate for 2012 of $2.11 per share of common stock, up from $1.97 per share in 2011, a 7 percent increase. The Board recently declared a first-quarter dividend of 52.75 cents per share of common stock. All dividend declarations are subject to Board of Directors’ approval.”

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LNG World News Staff, January 27, 2012