Dominion Resources (D) Q4 2010 Earnings Call January 28, 2011 10:00 am ET Executives Mark McGettrick - Chief Financial Officer and Executive Vice President Gary Sypolt - Chief Executive Officer of Dominion Energy Thomas Hamlin -
And now for the usual cautionary language. The earnings release and other matters that will be discussed on the call today may contain forward-looking statements and estimates that are subject to various risks and uncertainties. Please refer to our SEC filings, including our most recent annual report on Form 10-K and our quarterly report on Form 10-Q for a discussion of factors that may cause results to differ from management's projections, forecasts, estimates and expectations. Also on this call, we will discuss some measures of our company's performance that differ from those recognized by GAAP. Those measures include our fourth quarter and full year operating earnings and our operating earnings guidance for the first quarter and full year 2011, as well as operating earnings before interest and tax, commonly referred to as EBIT. Reconciliation of such measures to the most directly comparable GAAP financial measures, we are able to calculate and report our contained in our earnings release kit.Joining us on the call this morning are our CEO, Tom Farrell; our CFO, Mark McGettrick; and other members of our management team. Tom will begin with the review of our operating and regulatory activities in 2010 and the outlook for 2011 and beyond. Mark will discuss the earnings results for the fourth quarter and full year 2010, as well as our outlook for the first quarter of the full year 2011 and earnings growth beyond 2011. We will also discuss our financing plans, and we will then take your questions. I will now turn the call over to our Chairman and Chief Executive Officer, Tom Farrell. Thomas Farrell Good morning, everyone, and thank you for joining us. While we typically do not discuss issues related to M&A, I want to make a couple of comments, given market rumors regarding Dominion's interest in merging with or acquiring other utilities. As anyone familiar with our company knows, Dominion has a very strong organic growth plan. We are investing over $2 billion a year on growth projects across all of our regulated lines of business. Achieving our 5% to 6% earnings growth target does not depend on our ability to make the acquisitions. If we were to consider an M&A transaction, it would have to be a unique opportunity that would not weaken our financial condition and will be accretive to earnings per share and shareholder value.
Now turning to 2010. 2010 was an extraordinary year for Dominion. We made significant progress on our strategic plan and demonstrated how our infrastructure growth plan will continue for at least the next five years. Our Board of Directors adopted a new dividend policy that raises our targeted payout ratio to be more in line with our more regulated peers. Last month, the Board authorized a 7.7% increase in the dividend to an annual rate of $1.97 per share. Also, our total shareholder return for the year was strong.We began the year with a comprehensive settlement agreement for Virginia Power that maintains current base rates through at least 2013 and enables the company to earn a competitive rates of return that support our infrastructure growth program. This was the first base rate case for the company under Virginia's new regulatory structure. We have since joined other parties in submitting a proposal to the Commission, which calls for the terms of the settlement to be extended for an additional year through a deferral of the first biennial review until 2012. The so-called staggering of the biennial review process was provided for in the 2007 Reregulation Law. If approved by the Commission, the first biennial review will cover results for 2010 and 2011. And no change in base rates could occur before December 2014. Read the rest of this transcript for free on seekingalpha.com