Dominion Power 2001 Annual Report Download - page 5

10 Percent Average Earnings
Growth Reaffirmed
In the face of heightened
economic and political
uncertainty, we surpassed our
10 percent operating earnings
target for 2001 and sustained
our dividend for the 76th
straight year. Dominion reported
operating earnings of $4.17
per share in 2001, a 25 percent
increase over 2000. We expect
10 percent average annual
earnings growth going forward.
I Call it Hard Work
Television talking heads call
it “guidance.” Others call it
“visibility.” In our case, I call it
results from hard work by a lot
of good people.
I credit our employees for
the very flattering results of a
survey published by Fortune
Magazine as this letter went to
press in early March. Fortune
ranked Dominion as America’s
second most admired utility in
its annual survey of America’s
most admired corporations.
Since January 2000, we’ve
increased our targeted earnings
four times. We worked hard to
deliver sound, safe operating
results at our business units,
to save money and increase
productivity. And we’re building
momentum in large part because
our merger with CNG created a
unique electric and natural gas
company. In industry speak, we
call it “fully integrated.” In the
even more tortured jargon of
our industry’s top analysts, we’re
“maximizing our optionality.”
In Plain English
In plain English, that means
we’ve got more options to
produce energy, buy it, sell
it and transport it on our
own systems. In the case of
gas, we can store it in our
own systems and sell it when
market conditions are best.
Fads on Wall Street
Like it or not, attention by
Wall Street analysts can help
solid companies without a lot
of flash and hype to get the
attention from investors the
companies deserve.
Candidly, many of these
pundits have yet to recognize
and value our model fully. But
we’re keeping ourselves focused
on sound daily operations. We’re
working on delivering depend-
able financial results. And we’re
hoping they’ll catch on and
share our story with an even
larger number of potential
investors. At times, our industry’s
pundits act like fashion people.
They get caught up in fads.
During one memorable period,
they advised us to spin off our
generation, as some companies
have done and regretted. We
declined. Others preached the
virtues of shedding assets under
an “asset lite” model that helped
to produce the Enron fiasco. We
passed on that one, too. I even
remember a heavy hitter who
suggested that we exit our retail
energy distribution businesses.
As my daughter used to say in
her teen-age years—“Not!”
We’ve stuck with our
original vision to build a fully
integrated energy company
focused in the Midwest,
Northeast and Mid-Atlantic
regions, home to 40 percent of
our nation’s demand for energy.
We’ve hedged our bets,
maintained and grown profit
margins in our core business,
and used our market knowledge
to jump at new opportunities.
We’ve stayed the course. And
when Wall Street sees that our
model will continue to yield
good results, I’m hopeful that
our share price will benefit.
A Loss of Faith
The energy sector’s bad returns
show that many investors lost
faith last year. Just when
California appeared to begin
recovering from an ill-conceived
scheme to partially deregulate
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Total Return Comparison
Dominion S&P Util. S&P Elec. S&P 500
1 Year Total Return
3 Year Total Return
5 Year Total Return