Dominion Power 2008 Annual Report Download - page 32

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30 Dominion 2008
Reconciliation of Operating Earnings (non-GAAP) to Reported Earnings (GAAP)
(Millions, Except Per Share Amounts) 2004 2005 2006 2007 2008
Operating Earnings (non-GAAP)* $ 1,504 $ 1,557 $ 1,781 $ 1,678 $ 1,834
Items excluded from operating earnings (after-tax):
Net gain on sale of U.S.non- Appalachian
E&P business — — — 2,080 (26)
Charges related to the E&P divestitures — — (5) (506) —
Charges related to early retirement of debt — — — (148) —
Tax benefit (charge) related to the planned sale of
Peoples and Hope — — (145) 9 136
Impairment loss in nuclear decommissioning trust funds — — (15) (19) (109)
Extraordinary item related to the reapplication
of SFAS No. 71 — — — (158) —
Impairment of merchant generation assets — — — (270) —
Income (loss) from discontinued operations (6) 6 (150) (8) (2)
Termination of power purchase and sales contracts (155) (52) — (137) —
Charges related to hurricanes (50) (375) (11) — —
Net benefits (charges) related to exiting certain
businesses (29) (27) (20) 52 (23)
Other items (15) (76) (55) (34) 24
Total after-tax items (255) (524) (401) 861 —
Reported Earnings (GAAP) $ 1,249 $ 1,033 $ 1,380 $ 2,539 $ 1,834
Earnings per common share—diluted:
Operating Earnings $ 2.28 $ 2.26 $ 2.53 $ 2.56 $ 3.16
Items excluded from operating earnings (0.39) (0.76) (0.57) 1.32 —
Reported Earnings $ 1.89 $ 1.50 $ 1.96 $ 3.88 $ 3.16
* Dominion uses operating earnings as the primary performance measurement of its earnings outlook and results for public communications with analysts and investors. Dominion
management believes operating earnings provide a more meaningful representation of the company’s fundamental earnings power.
Reconciliation of Operating (non-GAAP) Return on Equity to
Reported (GAAP) Return on Equity
2007 2008
Millions % Millions %
Common Shareholders’ Equity—13 mos. average $ 11,508 $ 9,750
Operating Earnings—Twelve months ended* 1,678 1,834
Return on average common equity—operating 14.6% 18.8%
Reported Earnings—Twelve months ended 2,539 1,834
Return on average common equity— reported 22.1% 18.8%
* See Reconciliation of Operating Earnings to Reported Earnings.