October 8, 2002
RICHMOND, Va. - Dominion (NYSE: D) today detailed its plans to further strengthen its balance sheet and solidify the company's credit and financial outlook. Details of the plan will be discussed on its October 17th third-quarter earnings conference call. Following are highlights of the plan to be discussed:
In September the company announced plans to issue additional equity to further strengthen its balance sheet. Dominion now estimates its total new equity needs to be approximately $1 billion. The company, which expects to issue new equity in the near future, also anticipates this amount to be the extent of external equity needs under new capital spending plans through 2005.
The company also announced it has lowered capital spending by a total of nearly $900 million over the next three years.
Because of the lower expected capital spending in these years -- when combined with strong and growing operating cash flows -- the company now anticipates funding capital spending plans in 2003 with internally generated cash flow and to be free cash flow positive in 2004 after capital expenditures and payment of the $2.58 per share common stock dividend. The company also announced that it expects its free cash flow position to continue to improve beyond 2004.
A strong and improving balance sheet, solid cash flow and strong liquidity lead the company to reaffirm its commitment to continuing its $2.58 per share common stock dividend and to maintaining its BBB+/Baa1 investment grade credit ratings.
An additional question from the market has focused on the existence of triggers related to $665 million in Dominion Fiber Venture notes. The company re-emphasizes that the likelihood of the triggers is remote because they require both a two-notch downgrade by S&P or Moody's and the stock price trading below $45.97 per share for 10 consecutive days.
Dominion has a diversified and integrated energy portfolio consisting of nearly 24,000-megawatts of generation, 5.7 trillion cubic feet equivalent of natural gas reserves, 7,600 miles of natural gas transmission pipeline and the nation's largest underground natural gas storage system with more than 950 billion cubic feet of storage capacity. Dominion also serves 3.9 million franchise natural gas and electric customers in five states and nearly one million unregulated retail customers in eight states. In addition, Dominion owns a managing equity interest in Dominion Fiber Ventures LLC, owner of Dominion Telecom. For more information about Dominion, visit the company's web site at www.dom.com.
This release contains forward-looking statements that are subject to various risks and uncertainties. Discussion of 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 estimates of future market conditions, estimates of proved and unproved reserves and the behavior of other market participants. Other factors include, but are not limited to, weather conditions, economic conditions in the company's service area, fluctuations in energy-related commodity prices, changes to rating agency requirements, changing financial accounting standards, trading counterparty credit risks, risks related to energy trading and marketing, risks associated with successfully executing the telecommunications business plan and other uncertainties. Other risk factors are detailed from time to time in the company's Securities & Exchange Commission filings.