1 st Quarter 2014 Earnings Call April 30, 2014 Important Note to - - PowerPoint PPT Presentation

1st Quarter 2014 Earnings Call

April 30, 2014

Important Note to Investors

This presentation 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. The information in this presentation was prepared as of April 30, 2014. Dominion undertakes no obligation to update any forward-looking information statement to reflect developments after the statement is made. Projections or forecasts shown in this document are based on the assumptions listed in this document and are subject to change at any time. In addition, certain information presented in this document incorporates planned capital expenditures reviewed and endorsed by Dominion’s Board of Directors in late 2013. Dominion undertakes no obligation to update such planned expenditures to reflect plan or project-specific developments, including regulatory developments, or other updates until the following annual update for the plans. Actual capital expenditures may be subject to regulatory and/or Board of Directors’ approval and may vary from these estimates. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy securities. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the requirements of the Securities Act of 1933, as amended. This presentation 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 document may change in the future as we continue to try to meet the needs of security analysts and investors. This document

is not intended for use in connection with any sale, offer to sell, or solicitation of any offer to buy securities. Please continue to regularly check our website at www.dom.com/investors.

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1Q14 Operating Earnings Summary

Please refer to page 2 for risks and uncertainties related to projections and forward looking statements.

$0.85 $1.04 Guidance Range Actual Operating EPS*

– Repositioning of Producer Services – Goodwill write-off at unregulated electric retail

1st Quarter Drivers

Principal Exclusions from Operating EPS

*See page 31 of the 1Q 2014 Earnings Release Kit for a reconciliation to GAAP.

 Weather  Merchant generation margins  Ancillary revenues  Lower O&M

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$1.00

Operating EBIT

1Q14 actual versus guidance (in $millions)

Please refer to page 2 for risks and uncertainties related to projections and forward looking statements.

Guidance Actual  Weather  Electric Transmission  Transport & Storage revenues  Lower O&M  Weather  Ancillary revenues  Merchant margins

Dominion Generation

$561

$475-525 Drivers

Dominion Virginia Power

$269 $344

$245-265 $290-320

Dominion Energy

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Financing

Please refer to page 2 for risks and uncertainties related to projections and forward looking statements.

• Debt

– Issued $750 million of 10 and 30-year notes at Virginia Power – Issued $400 million of 3-year notes at DRI

• Anticipate issuing $1 billion at Dominion Gas and possibly another issuance at DRI
• MLP

– Filed S-1 registration statement with SEC for IPO of common units of Dominion Midstream Partners, LP – Initial asset will be a preferred equity interest in Cove Point

• Equity

– 2014 plans include mandatory convertibles, proceeds from MLP, and DRIP

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 Normal weather  Regulated electric sales and electric transmission  Interest expense  Absence of electric retail business  Operating expenses

2Q14 Operating Earnings Guidance

Please refer to page 2 for risks and uncertainties related to projections and forward looking statements.

2Q13 EPS* 2Q14 EPS Guidance* $0.62

* See pages 34 and 36 of the 1Q14 Earnings Release Kit for reconciliations to GAAP.

2nd Quarter Drivers

$0.55 to $0.65

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Hedged Power Update

$49.29 $52.43 $55.44 $52.38 $56.80 $58.03 $65.53 $57.30

2013 2014 2015 2016 $/MWH

NEPOOL Baseload Avg. Hedge Price NEPOOL ATC Power Price

2014-2016 forward curves as of 4/21/14

96% 80% 31%

2014 2015 2016

Millstone Hedge Position

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Please refer to page 2 for risks and uncertainties related to projections and forward looking statements.

Operational Accomplishments

• Dominion Virginia Power

– Set new winter peak demand of 19,785 MWs, an increase of more than 9% above previous record set in 2007

• Dominion Generation

– Nuclear fleet achieved capacity factor near 100% – Power Generation’s utility fleet produced a record 12.6 million MWhs

• Dominion Energy

– Delivered record high seasonal storage turn of 241 Bcf through the end

• f March

– Plant reliability of 99% at Natrium and 100% at Hastings processing facilities – DEO experienced 14% increase in throughput vs. last year and achieved best quarterly safety results in the company’s history

Please refer to page 2 for risks and uncertainties related to projections and forward looking statements.

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• Warren County

– ~85% complete – Expect in service in 4Q

• Brunswick County

– Construction well underway – Expect in service mid-2016

• Bremo Conversion

– Conversion of units 3 and 4 nearly complete – Expect commercial operation by middle of year

• Solar Energy Projects

– Acquired six projects totaling 139 MWs

• Projects have long-term PPA, EPC and operation and maintenance agreements
• Commercial operation expected later this year or early next year

– Continuing to identify and acquire additional solar projects

Dominion Generation

Please refer to page 2 for risks and uncertainties related to projections and forward looking statements.

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Warren County Warren County

• Allegheny Storage Project and Natrium to Market Project

– Both expected in service in November

• New Market Project

– Preparing the FERC application and expect in service November 2016

• New Producer Outlet Project

– Lebanon West II

• 20-year agreement to move 130,000 dth/d from western PA to Lebanon, OH
• Dominion Southeast Reliability Project

– Commenced a non-binding open season for transportation through a new pipeline extending from Marcellus and Utica production regions to markets in Virginia and North Carolina – Subject to FERC approvals, transportation service is anticipated to be available as early as November 2018

Dominion Energy

Please refer to page 2 for risks and uncertainties related to projections and forward looking statements.

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• Blue Racer update

– Contributed the G-150 pipeline and the Northern Gathering System – Natrium II became operational this month – Fractionation capacity at Natrium will be expanded by March 2015 – Berne processing facility is expected to begin operations this fall

Dominion Energy

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Source: Ohio Department of Natural Resources

Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14

1,400

Permitted Drilled Producing

# of Wells

Utica Well Status

1,200 1,000 800 600 400 200

• Cove Point Liquefaction Project

– PHMSA issued a “no objections” letter to FERC – FERC issued Notice of Schedule and set May 15 for issuance of EA

• Anticipate receiving approval to construct from FERC this summer

– Expect MD PSC to approve CPCN and air permit in May

Please refer to page 2 for risks and uncertainties related to projections and forward looking statements.

• Distribution undergrounding legislation

– Long-term program to place ~4,000 miles of most vulnerable distribution lines underground – Authorized to spend up to $175 million/year – Cost recovery through a rate adjustment clause, subject to SCC approval

• New nuclear and offshore wind development costs

– Legislation helps preserve options for a third nuclear unit at North Anna Power Station and development of offshore wind facilities – Calls for the write-off of 70% of development costs incurred through the end of 2013, which will be recovered through existing base rates – Write-off will be spread over second, third and fourth quarters of this year

Virginia Regulatory Update

Please refer to page 2 for risks and uncertainties related to projections and forward looking statements.

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