Dominion Power 2008 Annual Report Download - page 16

14 Dominion 2008
segments—a growing natural gas and oil exploration and production
business (E&P)— we reduced our exposure to earnings volatility and swings
in commodity prices.
By refocusing more toward utility-based infrastructure businesses while
maintaining upside potential in quality market-based businesses—more than
half of our operating earnings comes from our regulated electric power
and natural gas companies—we have built a “regulated plus” model with the
following financial goals: Earnings growth in challenging economic condi-
tions; an increasing dividend; and strong and stable credit ratings.
Because of our current business mix—and financial and operating
strength—we have maintained adequate liquidity and continued access to
capital markets during the current economic crisis. Even when money is tight,
we are obligated to keep our infrastructure modernization and expansion
plans on track. We will not lie dormant until an economic recovery bell sud-
denly goes off and, only then, begin. Siting, designing, permitting and
constructing a generation facility takes time and large amounts of capital.
Preparing now for future growth is a responsibility that customers rely
on us to carry through.
Meeting Operating Earnings, Dividend Targets. Our shareholders
entrust us with the responsibility to base earnings and dividend targets on
realistic assumptions and expectations.
In 2008 our operating earnings were $3.16 per share. That was slightly
above the upper end of our guidance range and up 23 percent from 2007
operating earnings of $2.56 per share. Our 2008 earnings under Generally
Accepted Accounting Principles (GAAP) also were $3.16 per share, down
Targeted
Dividend Increase*
Recent increase puts
targeted 2010 payout ratio
of ~55% in reach.
Dollars per Share
*All dividend declarations subject
to Board of Directors approval
2005 2007 2008 2009* 2010*2006
1.34 1.38 1.46 1.58
1.75
~ 55%
Payout
Ratio