2 nd Quarter 2014 Earnings Call July 30, 2014 Important Note to - - PowerPoint PPT Presentation

2 nd quarter 2014 earnings call
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2 nd Quarter 2014 Earnings Call July 30, 2014 Important Note to - - PowerPoint PPT Presentation

2 nd Quarter 2014 Earnings Call July 30, 2014 Important Note to Investors This presentation contains certain forward-looking statements, including forecasted operating earnings for third-quarter and full-year 2014, which are subject to various


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2nd Quarter 2014 Earnings Call

July 30, 2014

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SLIDE 2

Important Note to Investors

This presentation contains certain forward-looking statements, including forecasted operating earnings for third-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 July 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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2Q14 Operating Earnings Summary

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

$0.55 $0.62 Guidance Range Actual Operating EPS*

– Charges associated with North Anna and offshore wind legislation

2nd Quarter Drivers

Principal Exclusions from Operating EPS

*See page 31 of the 2Q 2014 Earnings Release Kit for a reconciliation to GAAP.

 Lower operating expenses  Lower interest and taxes  Mild weather  Unplanned outage at Millstone

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$0.65

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SLIDE 4

Operating EBIT

2Q14 actual versus guidance (in $millions)

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

Guidance Actual  Mild weather  Reg. electric sales  Transport & storage revenues  Lower operating expenses  Mild weather  Unplanned Millstone outage

Dominion Generation

$190-220

Dominion Virginia Power

$243

$240-260

Dominion Energy

$290-345

$215 $306

Drivers

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SLIDE 5

Financing

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

  • Equity

– Issued $1 billion of mandatory convertibles

  • Debt

– Filed Dominion Gas Holdings S-4 registration statement with SEC – Anticipate issuing ~$1 billion at Dominion Gas in the 4th quarter

  • MLP

– Expect to commence offering this quarter after receiving FERC approval for Cove Point Liquefaction

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 Normal weather  Va. Power riders  Merchant margins  Absence of Blue Racer asset contribution  Interest expense  Operating expenses

3Q14 Operating Earnings Guidance

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

3Q13 EPS* 3Q14 EPS Guidance* $1.00

* See pages 36 and 37 of the 2Q14 Earnings Release Kit for reconciliations to GAAP.

3rd Quarter Drivers

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$0.90 to $1.05

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SLIDE 7

Hedged Power Update

$49.29 $52.43 $55.43 $52.38 $56.80 $57.58 $60.96 $55.34

2013 2014 2015 2016 $/MWH

NEPOOL Baseload Avg. Hedge Price NEPOOL ATC Power Price

2014-2016 forward curves as of 7/25/14

98% 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.

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SLIDE 8
  • Warren County

– ~90% complete – Expect in service in 4Q

  • Brunswick County

– ~20% complete – Expect in service mid-2016

  • Bremo Conversion

– Conversion of units 3 and 4 completed on time and on budget

  • Solar Energy Projects

– Construction of six California projects is on schedule – Acquired two projects in Tennessee and will acquire a seventh in California later this year – Total portfolio of projects in service or in development of 232 MWs

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

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  • Allegheny Storage Project and Natrium to Market Project

– Both expected in service by November

  • Producer Outlet Projects

– Monroe to Cornwell

  • 15-year agreement to move 205,000 dth/d beginning November 2016

– Western Access II

  • 15-year agreement to move 350,000 dth/d beginning November 2015

– Have announced nine projects totaling 2bcf/d by 2016

  • Southeast Reliability Project

– Are in negotiations with multiple counterparties and hope to secure necessary agreements in the next 60 days – Subject to successful negotiations, expect to submit a FERC pre-filing in 4Q

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

– Natrium II became operational during the quarter – Fractionation capacity at Natrium will be expanded by March 2015 – Berne processing facility is expected to begin operations in the 4th quarter

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 May-14 Jun-14 Jul-14

Permitted Drilled Producing

# of Wells

Utica Well Status

1,000 500

  • Cove Point Liquefaction Project

– MD PSC approved CPCN and air permit in May – FERC issued EA on May 15 and anticipate receiving construction permit for the project in the next few weeks – Expect to begin operations in 4Q 2017

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

1,500

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SLIDE 11

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