Dominion Power 2003 Annual Report Download - page 26

24.Dominion 2003
Reconciliation of Debt to Capitalization
The debt-to-total capital target of the 50 percent range referenced in the
chairman’s letter is to be calculated in the same manner as the Adjusted
GAAP measure presented in the table below.
Millions
Year-end Ratio of GAAP Measure Adjusted
Debt to Total Capitalization at 12/31/03 at 12/31/03
Securities due within one year $ 1,252 $ 1,252
Short-term debt 1,452 1,452
Long-term debt:
Equity-linked debt securities 743 743
Junior subordinated debentures 1,440
Other long-term debt 13,593 13,593
Total long-term debt 15,776 14,336
Synthetic lease balance 71
Total debt 18,480 63.1% 17,111 56.9%
Preferred stock 257 257
Junior subordinated debentures 1,440
Common shareholders' equity 10,538 10,538
Equity-linked debt securities 743
Total equity 10,795 36.9% 12,978 43.1%
Total capitalization $ 29,275 $30,089
Consolidated Dominion Resources, Inc.—Reconciliation of Operating Earnings to Reported Earnings (GAAP)
2000 2001 2002 2003
Millions EPS Millions EPS Millions EPS Millions EPS
Operating Earnings $ 787 $ 3.33 $1,053 $ 4.17 $1,365 $4.83 $1,449 $4.55
After-tax items:
Telecom related charges (750) (2.35)
Hurricane Isabel costs (122) (0.38)
Impairment of certain other equity-method investments (69) (0.22)
Severance costs for workforce reductions (16) (0.06)
Restructuring of certain electric sales contracts (39) (0.12)
Financial service asset impairments (186) (0.79) (183) (0.73) (8) (0.03) (81) (0.25)
Termination of power-purchase contracts (136) (0.54) (65) (0.20)
Cumulative effect of changes in
accounting principles 21 0.09 11 0.03
Restructuring & acquisition-related charges (198) (0.84) (68) (0.27) 5 0.02
Loss on sale of Saxon Capital (25) (0.10)
Enron impairment (97) (0.38)
Gain on sale of Corby Power Station 12 0.06
Total after-tax items (351) (1.48) (509) (2.02) (3) (0.01) (1,131) (3.55)
Reported Earnings (GAAP) $ 436 $ 1.85 $ 544 $ 2.15 $1,362 $4.82 $ 318 $ 1.00
Reconciliation of 2003 Segment Operating Earnings
to Reported Earnings (GAAP)
Operating Earnings Reported Earnings
Millions % Millions %
Dominion Delivery $ 453 26 $ 453 142
Dominion Generation 508 30 508 160
Dominion Energy 350 20 350 110
Dominion Exploration & Production 415 24 415 131
Primary operating segments 1,726 100 1,726 543
Corporate and Other (277) (1,408) (443)
Consolidated $1,449 $318 100
Corporate Operations Segment —Reconciliation of
Operating Earnings to Reported Earnings
Millions
%
2002 2003 Change
Operating Earnings ($266) ($277) 4
After-tax items:
Telecom related charges (750)
Hurricane Isabel costs (122)
Impairment of certain other equity-method
investments (69)
Severance costs for workforce reductions (17)
Restructuring of certain electric sales contracts (39)
Financial service asset impairments (8) (80)
Termination of power-purchase contracts (65)
Cumulative effect of changes in
accounting principles 11
Restructuring & acquisition-related charges 5
Total after-tax items (3) (1,131)
Reported Earnings ($269) ($1,408) 423
Reconciliation of Free Cash Flow to GAAP Measures
Projected Projected
2004 GAAP Based 2004 Free
Cash Flows Cash Flow
(dollars in millions)
Operating Activities
Income from continuing operations $ 1,600 $ 1,600
Depreciation, depletion and amortization 1,400 1,400
Deferred income taxes and ITC 400 400
Changes in working capital and other 200
Net cash provided by operating activities 3,600 3,400
Investing Activities
Plant construction and other property additions (1,350) (1,350)
Purchases of gas and oil properties,
net of proceeds from sales of same (1,000) (1,000)
Repayment, net of advances, from lessor for
project under construction 700
Kewaunee acquisition (220)
Other investing cash flows 70
Net cash used in investing activities (1,800) (2,350)
Financing Activities
Common dividend payments (860) (860)
Debt repayments net of issuances (1,400)
Common stock issuances
Direct stock purchase, savings and
dividend reinvestment plans 160
Conversion of equity-linked debt securities 413
Kewaunee acquisition 110
Net cash used in financing activities (1,577) (860)
Net Change in Cash $ 223
Free Cash Flow $ 190
For factors that could cause actual results to differ, see Forward
Looking Statements, Risk Factors and Cautionary Statements That
May Affect Future Results and Market Rate Sensitive Instruments and
Risk Management in Management’s Discussion and Analysis of
Financial Condition and Results of Operations in this report.
Page 6: Dividend payout based on GAAP net income was 258%.
Page 6: The percentage of Operating Cash Flow Sources included
in the chart represents the net income less depreciation, depletion
and amortization of the operating segments, excluding the
Corporate segment. The percentages including the Corporate
segment are as follows: VEPCO-Reg 79%; CNG-Reg 35%;
CNG/DEI-E&P 62%; DEI -Non-Reg 13%; Corporate segment (-89%).
Page 6: Definitions of abbreviations
VEPCO: Virginia Electric and Power Company
CNG: Consolidated Natural Gas Company
DEI: Dominion Energy, Inc.
E&P: Dominion Exploration & Production