<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 28, 2000
-----------------
Dominion Resources, Inc.
------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Virginia 1-8489 54-1229715
- ----------------------------------------------- ------------------- ----------
(State or other jurisdiction of incorporation) (Commission File (IRS Employer
Number) Identification No.)
120 Tredegar Street, Richmond, Virginia 23219
- ----------------------------------------------- --------
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (804) 819-2000
--------------
- --------------------------------------------------------------------------------
(Former name or former address if changed since last report.)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On January 28, 2000, Dominion Resources, Inc. and Consolidated Natural Gas
Company completed the merger of CNG into a subsidiary of Dominion Resources.
Shareholders of CNG received Dominion Resources common stock and/or cash in
consideration of their CNG shares. Shareholders of both companies approved the
merger in June 1999, and the companies received all state and federal regulatory
approvals required for the merger. The combination with CNG, based in
Pittsburgh, Pennsylvania, creates a fully integrated electric and natural gas
utility in the Midwest-Northeast quadrant of the United States with selective
energy businesses located abroad.
CNG has added to Dominion Resources nearly 2 million customers for a total
of 4 million customers; $6.4 billion of assets for a total of $24.4 billion;
$2.8 billion of revenues for a total of nearly $8 billion; and approximately
6,200 employees for a total of 17,000.
Dominion Resources funded the merger with a $3.5 billion commercial paper
program backed by a short-term credit facility agented by the Bank of America
and $1 billion of privately placed money market notes. The Company expects to
replace much of the short-term financing with long-term financing using a
combination of debt, preferred and/or convertible securities along with the
proceeds of any sales of non-core assets over the next several years.
Item 5. Other Events
On January 28, 2000, Dominion Resources announced preliminary financial
results for 1999. See Exhibit 99.4 filed herewith.
Item 7. Financial Statements to Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired.
The audited financial statements of CNG, together with the report of
the auditors, are incorporated by reference herein and filed herewith as Exhibit
99.1.
(b) Pro Forma Financial Information.
The required pro forma financial information reflecting the
combination of CNG is not available as of the filing of this report. The
required pro forma financial information will be filed as soon as practicable,
but not later than 60 days after the date this report is filed.
<PAGE>
(c) Exhibits
1.1 Amended and Restated Agreement and Plan of Merger dated as of May
11, 1999 by and among Dominion Resources, Inc. and Consolidated
Natural Gas Company (Exhibit 2, Pre-Effective Amendment No. 1 to
Registration Statement, File No. 333-75669, filed May 20, 1999,
incorporated by reference).
1.2 Joinder Agreement dated as of January 28, 2000 by and among
Dominion Resources, Inc., Consolidated Natural Gas Company, DRI
New Sub I, Inc. and DRI New Sub II, Inc. (filed herewith).
99.1 Consolidated Natural Gas Company audited financial statements;
(i) Consolidated Balance Sheets at December 31, 1999 and 1998
(Exhibit 1, Form 8-K, File No. 1-3196, dated
January 27, 2000 of CNG, incorporated by reference);
(ii) Consolidated Statements of Income for the years ended
December 31, 1999, 1998 and 1997 including Notes to
Consolidated Financial Statements (Exhibit 1, Form 8-K,
File No. 1-3196, dated January 27, 2000 of CNG,
incorporated by reference); and
(iii) Consent of Pricewaterhousecoopers LLP (filed herewith).
99.2 Press Release concerning merger (filed herewith).
99.3 Press Release concerning Preliminary Election Results of
the merger (filed herewith).
99.4 Press Release concerning the preliminary financial results
for 1999 (filed herewith).
99.5 Press Release concerning the Final Proration Factors of the
merger (filed herewith).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DOMINION RESOURCES, INC.
Registrant
/s/James L. Trueheart
--------------------
James L. Trueheart
Group Vice President and Controller
(Principal Accounting Officer)
Date: February 1, 2000
<PAGE>
Exhibit 1.2
JOINDER OF PARTIES
Reference is made to the Amended and Restated Agreement and Plan of Merger,
dated as of May 11, 1999 (the "Agreement"), by and between Dominion Resources,
Inc., a corporation organized under the laws of the Commonwealth of Virginia
("DRI"), and Consolidated Natural Gas Company, a corporation organized under the
laws of the State of Delaware ("CNG"). Capitalized terms used herein but not
otherwise defined herein have the meanings given such terms in the Agreement.
WHEREAS, DRI New Sub I, Inc., a corporation organized under the laws of the
Commonwealth of Virginia ("New Sub I"), and DRI New Sub II, Inc., a corporation
organized under the laws of the State of Delaware ("New Sub II"), desire to join
as parties to the Agreement pursuant to Section 1.1(a) of the Agreement.
WHEREAS, DRI and CNG desire to approve and acknowledge the joinder of New
Sub I and New Sub II to the Agreement pursuant to Section 1.1(a) of the
Agreement.
NOW, THEREFORE, in consideration of the premises and the covenants set
forth in this Joinder Agreement, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, agree as follows:
1. By executing below, New Sub I and New Sub II hereby join as parties to
the Agreement and shall be fully bound by and agree to abide by all terms and
conditions therein as though an original party thereto.
2. This Joinder Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which shall
constitute one and the same agreement.
3. This Joinder Agreement shall be governed by, and shall be construed in
accordance with the laws of the State of New York applicable to contracts
executed in and to be fully performed in such state, without giving effect to
its conflicts of laws statutes, rules or principles.
IN WITNESS WHEREOF, DRI, CNG, New Sub I and New Sub II have caused this
Joinder Agreement to be signed by their respective officers thereunto duly
authorized.
<PAGE>
<TABLE>
<CAPTION>
DOMINION RESOURCES, INC.
<S> <C>
Dated: January 28, 2000 By: /s/Thos. E. Capps
-----------------------
Name: Thos. E. Capps
Title: Chairman, President and Chief Executive Officer
CONSOLIDATED NATURAL GAS COMPANY
Dated: January 28,2000 By: /s/George A. Davidson, Jr.
------------------------------
Name: George A. Davidson, Jr.
Title: Chairman and Chief Executive Officer
DRI NEW SUB I, INC.
Dated: January 28, 2000 By: /s/Thos. E. Capps
-----------------------
Name: Thos. E. Capps
Title: Chairman, President and Chief Executive Officer
DRI NEW SUB II, INC.
Dated: January 28, 2000 By: /s/Thos. E. Capps
Name: Thos. E. Capps
Title: Chairman, President and Chief Executive Officer
</TABLE>
<PAGE>
Exhibit 99.1(iii)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Current Report
on Form 8-K of Dominion Resources, Inc. of our report dated January 26, 2000,
relating to the consolidated financial statements of Consolidated Natural Gas
Company, included as Exhibit 1 to Form 8-K filed by Consolidated Natural
Gas Company on January 27, 2000.
PricewaterhouseCoopers LLP
600 Grant St.
Pittsburgh, Pennsylvania
January 31, 2000
<PAGE>
[DOMINION RESOURCES LETTERHEAD]
Exhibit 99.2
FOR IMMEDIATE RELEASE
DOMINION RESOURCES, CONSOLIDATED NATURAL GAS
CLOSE MERGER TODAY
Merger Concluded in Just Over 11 Months
RICHMOND, Va., January 28, 2000 - Dominion Resources Inc. (NYSE:D) and
Consolidated Natural Gas Company (NYSE:CNG) completed their merger today,
creating in less than a year's time the largest fully integrated natural gas and
electric power company in the United States.
The transaction creates a company that serves about 4 million retail electric
and natural gas customers in five states. It has about 20,000 megawatts of
electric generating capacity and operates North America's largest natural gas
storage system. The company also is one of the largest independent oil and
natural gas exploration companies in North America, with more than 3 trillion
cubic feet equivalent of reserves in the United States and Canada.
The company retains the legal name Dominion Resources Inc. and is headquartered
in Richmond. George A. Davidson Jr. will serve as chairman of the board of
directors until his previously announced retirement on August 1. Thos. E. Capps
is vice chairman, president and chief executive officer and, when Davidson
retires, he will reassume the position of chairman.
In a joint statement, Capps and Davidson said: "We have put together a company
that can be a leader as deregulation transforms the energy industry, especially
in the area where our strength is already focused - the Mid-Atlantic, Northeast
and Midwest regions. That area accounts for 40 percent of the nation's energy
usage."
Pre-closing preparations will enable prompt integration of the companies'
businesses. A new operating structure is expected to be in place by April 1.
(MORE)
<PAGE>
"We were able to complete this merger in just over 11 months," Capps said. "That
is strong evidence of the focus, dedication and commitment of the people in our
organization. We intend to use those same skills to quickly integrate our
operations so we can deliver outstanding performance for our shareholders,
customers, employees and communities."
Dominion will continue to search for suitable buyers for two subsidiaries:
Dominion Capital Inc., its diversified financial services subsidiary, and
Virginia Natural Gas Inc., a gas distribution company headquartered in Norfolk.
Dominion agreed to seek buyers for both subsidiaries during the regulatory
approval process.
Seventeen directors were named to the board. Besides Davidson and Capps, those
appointed were:
Named by Dominion:
John B. Bernhardt, managing director, Bernhardt/Gibson Financial Opportunities,
Newport News, Virginia; John W. Harris, president, Lincoln Harris, LLC, a real
estate consulting firm, Charlotte, North Carolina; Benjamin J. Lambert III,
optometrist, Richmond; Richard L. Leatherwood, former president and chief
executive officer, CSX Equipment, Baltimore; Kenneth A. Randall, corporate
director for various companies, Williamsburg, Virginia; Frank S. Royal, M.D.,
physician, Richmond; S. Dallas Simmons, president, Dallas Simmons & Associates
Inc., Richmond; Robert H. Spilman, president, Spilman Properties Inc., Bassett,
Virginia; David A. Wollard, chairman of the board, Exempla Healthcare, Denver,
Colorado.
Named by CNG:
William S. Barrack Jr., retired senior vice president, Texaco Inc., Harrison,
New York; Raymond E. Galvin, retired president, Chevron U.S.A. Production
Company, Houston; Ray J. Groves, retired chairman and chief executive officer,
Ernst & Young, New York City; Paul E. Lego, retired chairman and chief executive
officer, Westinghouse Electric Corporation, Pittsburgh; Margaret A. McKenna,
president, Lesley College, Cambridge, Massachusetts; Steven A. Minter, executive
director and president, The Cleveland Foundation, Cleveland, Ohio.
Under terms of the merger agreement, CNG has merged with a Dominion subsidiary
and is now a direct subsidiary of Dominion.
(MORE)
<PAGE>
This press release contains forward-looking statements. The company wishes to
caution readers that the assumptions which form the basis for forward-looking
statements with respect to or that may impact earnings for fiscal 2000, and
thereafter, include many factors that are beyond the company's ability to
control or estimate precisely, such as estimates of future market conditions and
the behavior of other market participants. Other factors include, but are not
limited to, weather conditions, economic conditions in the company's service
territories, fluctuations in energy-related commodity prices, conversion
activity, other marketing efforts and other uncertainties.
# # #
CONTACTS:
- --------
Media
Mark Lazenby (804) 819-2042
Hunter Applewhite (804) 819-2043
Investors
Tom Wohlfarth (804) 819-2150
Suzette Mata (804) 819-2154
<PAGE>
[DOMINION RESOURCES LETTERHEAD]
Exhibit 99.3
January 27, 2000
To the financial community:
DOMINION RESOURCES ANNOUNCES PRELIMINARY ELECTION RESULTS FOR ITS MERGER
WITH CONSOLIDATED NATURAL GAS
The management of Dominion Resources Inc. today announced preliminary
shareholder election results in connection with its merger with Consolidated
Natural Gas. Final proration factors will be announced on January 31, 2000.
DOMINION RESOURCES SHARES
All Dominion stock elections will be honored and those shareholders will receive
a one-for-one exchange of shares.
Dominion shareholders who elected cash for some or all of their shares will
receive cash for approximately 75 percent of the shares for which cash was
elected at a rate of $43.00 per share. The remaining 25 percent will be
exchanged for new Dominion stock at an exchange rate of one-for-one.
For example, a holder of 1,000 Dominion shares who elected all cash would
receive $32,250 in cash and 250 shares of Dominion stock.
o 1,000 shares times 75% = 750
o 750 X $43.00 = $32,250
o 1,000 shares -750 shares exchanged for cash = 250 exchanged for stock
Shareholders who did not make an election, elected "no preference," or purchased
Dominion stock after 5:00 p.m. on January 21, 2000 will receive a one-for-one
exchange of shares.
Approximately 18 percent of total outstanding Dominion Resources shares will be
exchanged for cash and 82 percent for stock.
CONSOLIDATED NATURAL GAS SHARES
Cash elections will be honored and shareholders will receive $66.60 per CNG
share.
<PAGE>
CNG shareholders who elected stock will receive Dominion stock including cash
top-up for approximately 80 percent of their shares. The remaining 20 percent
will be exchanged for cash at a rate of $66.60 per share.
The issuance of stock will be based on the following:
Cash Rate: $66.60 per share
Exchange Ratio: 1.52
Top-Up Amount: $5.2917
Dominion Average Price: $40.3344 (average of closing
prices on the NYSE for the 20
trading days ending January 13, 2000)
For example, a holder of 1,000 shares of CNG who elected all stock would
receive:
o 1,216 shares of DRI (1,000 X 80% = 800 shares, 800 X 1.52 = 1,216)
o Cash top-up of $4,233.36 (800 shares for stock X $5.2917)
o Cash exchanged for CNG shares in the amount of $13,320
(1,000 X 20% = 200 X $66.60 = $13,320)
Shareholders who did not make an election, elected "no preference," or purchased
CNG stock after 5:00 p.m. on January 21, 2000 will receive $66.60 in cash in
exchange for each share held.
Approximately 40 percent of total outstanding CNG shares will be exchanged for
cash and 60 percent will be exchanged for Dominion Resources shares and cash
top-up.
The Dominion/CNG merger is scheduled to close on January 28, 2000. Immediately
following the merger closing, outstanding shares of Dominion Resources stock
will total approximately 238 million. Dominion shares will continue to trade on
the New York Stock Exchange under the current trading symbol, D. The CUSIP for
new Dominion Resources common stock will be 25746U109.
Analyst Contacts: Tom Wohlfarth (804) 819-2150
Suzette Mata (804) 819-2154
Joe O'Hare (804) 819-2156
<PAGE>
Exhibit 99.4
[DOMINION RESOURCES LETTERHEAD]
January 28, 2000
To the financial community:
DOMINION RESOURCES ANNOUNCES 9.5 PERCENT INCREASE
IN 1999 OPERATING EARNINGS PER SHARE
Posts $3.01 Versus $2.75 in 1998; Targets Earnings of $3.25 to $3.30 in 2000,
$3.50 to $3.60 in 2001
The management of Dominion Resources Inc. today announced unaudited consolidated
operating earnings for the 12 months ended December 31, 1999 of $575 million
($3.01 per share), a 9.5 percent increase in earnings per share over prior-year
earnings of $536 million ($2.75 per share).
Operating earnings for 1999 exclude a one-time, non-cash charge of $255 million
($1.33 per share) created by an accounting change resulting from a Virginia law,
effective July 1, 1999, which establishes a timeline for competition among
electric generators; and a one-time, after-tax charge of $21 million (11 cents
per share) related to the sale of the company's Latin American power
generation businesses. Operating earnings for 1999 also exclude transition costs
of $4 million (2 cents per share) associated with the company's merger with
Consolidated Natural Gas Company. The Dominion/CNG merger is expected to close
today.
Operating results for 1998 exclude a non-recurring, after-tax charge of $201
million ($1.03 per share) associated with Virginia Power's rate case settlement,
and a one-time after-tax gain of $200.7 million ($1.03 per share) from the sale
in July of East Midlands Electricity.
Thos. E. Capps, chairman, president and chief executive officer, said:
"It is powerfully symbolic to announce continued strong growth in operating
earnings on the very day we close our historic merger with CNG. In 1999, we
completed the groundwork necessary to grow and prosper as the nation's premier
electric power and natural gas provider. We worked with Virginia legislators
to establish a plan for electric industry deregulation that is beneficial to
both our customers and our shareholders. We began divesting non-core assets and
re-deploying proceeds into our focused energy business. We initiated a
transforming merger with Consolidated Natural Gas and started the work of
combining our two companies. Today we will celebrate the completion of that
combination.
"Our work has just began. As we begin operations as a new company entering a
new century, we will continue to build on this solid foundation to maximize
value for our owners. We are bullish about our company's ability to grow
earnings 8 to 10 percent annually. Combined
<PAGE>
with our annual dividend payment of $2.58 per share, we believe this growth
rate will translate into a long-term annual total shareholder return in excess
of 15 percent."
Full Year Results
Virginia Power, the company's principal subsidiary, earned $448 million ($2.34
per share), a 15-percent increase in earnings per share over 1998 operating
earnings of $395 million ($2.03 per share). Operating earnings for 1999 exclude
a non-recurring charge of $1.33 per share associated with an accounting change
resulting from a new Virginia law affecting electric generators. 1998 results
exclude a non-recurring charge of $1.03 per share associated with the company's
rate settlement.
Capps said: "Virginia Power's excellent performance in 1999 clearly reflects
the company's fundamental financial and operational strengths. A final $50
million rate reduction resulting from the 1998 Virginia rate case proceeding,
a mild weather impact of approximately $42 million (net of tax) and
extraordinary restoration costs totaling more than $22 million (net of tax)
following Hurricanes Floyd and Dennis and the most severe ice storm in the
history of our service area were offset by strong customer growth and
consistently solid results in key areas such as our wholesale power marketing
operations."
Dominion Energy, the company's independent power and natural gas subsidiary,
earned $63 million (33 cents per share) in 1999, up from $57 million (29 cents
per share) in 1998. Results for 1999 exclude a non-recurring loss of 11 cents
per share on the sale of the company's Latin American generation businesses.
Dominion Energy's results reflect strong earnings growth from its oil and gas
operations and commencement of operations at its 600-megawatt gas-fired
Elwood facility in Illinois, partially offset by a lower earnings contribution
from foreign operations.
Dominion Capital, the financial services subsidiary, earned $78 million (41
cents per share) in 1999, up from $59 million (30 cents per share) in 1998.
Continued growth in all three of its core financial services businesses was
responsible for the rise.
Capps said: "Dominion Capital continues to be a hard-working member of our
family and outperform its peer companies. The company's solid portfolio of
diversified operating units has grown earnings by more than 30 percent annually
since 1995 and has captured significant positions in specialized lending
markets."
Dominion Resources previously announced plans to divest Dominion Capital.
Fourth-Quarter Results
Consolidated operating earnings for the fourth quarter ended December 31, 1999
were $69 million (37 cents per share), compared to operating earnings of $54
million (28 cents per share) in the fourth quarter of 1998. Fourth-quarter
1999 earnings exclude a one-time after-tax loss of $3 million (2 cents per
share) on the sale of the company's Latin American generation businesses and
CNG merger transition costs of $4 million (2 cents per share).
<PAGE>
In the fourth quarter, Virginia Power earned $26 million (14 cents per share),
down from $36 million (19 cents per share) for the same period in 1998. The
decline included lower results from the wholesale power marketing business and
lower rates resulting from the 1998 Virginia rate case settlement.
Dominion Energy contributed $11 million (6 cents per share) to fourth quarter
operating earnings, up from $9 million (5 cents per share) last year. The 1999
figure excludes a non-recurring loss of 2 cents per share on the sale of
Dominion Energy's foreign operations. The increase in fourth quarter 1999
earnings is due primarily to higher oil and gas production volume and prices,
partially offset by a lower earnings contribution from its foreign and domestic
electric generation operations and higher information technology expenses at the
corporate level.
Dominion Capital contributed $35 million (19 cents per share), up from $3
million (1 cent per share) in the fourth quarter of 1998. Higher net interest
income, higher fee income and higher mortgage securitization gains at the
company's core segments were the main drivers of the strong quarter-over-quarter
growth. Operating results for real estate and other non-core segments also rose
in the fourth quarter of 1999.
Results by Operational Segment
- ------------------------------
Pro forma 1999 operating earnings for Dominion Resources' operating units as
structured under a major reorganization plan which took effect May 1, 1999 were
$292 million ($1.53 per share) for Dominion Generation, up from $262 million
($1.34 per share) in 1998; and $175 million (92 cents per share) for Virginia
Power, up from $168 million (86 cents per share) in 1998. Pro forma Dominion
Energy--Oil and Gas earnings were $43 million (22 cents per share), up from $22
million (12 cents per share) in 1998.
Fourth-quarter pro forma operating earnings for Dominion Generation were $3
million (2 cents per share), compared to $17 million (9 cents per share) in the
fourther quarter of 1998. Pro forma operating earnings for Virginia Power were
$24 million (13 cents per share), virtually unchanged from pro forma
fourth-quarter 1998 earnings of $25 million (13 cents per share). Pro forma
Dominion Energy--Oil and Gas earnings were $10 million (5 cents per share), up
from $3 million (2 cents per share) in the prior-year period.
Dominion Resources' restructuring plan organized the company's businesses into
five operating units:
o Dominion Generation: combined generation operations of Virginia Power and
Dominion Energy;
o Virginia Power: customer service and regulated transmission and
distribution operations of Virginia Power;
o Dominion Energy--Oil and Gas: gas and oil operations of Dominion Energy;
o Dominion Capital: financial services operations;
o Dominion Resources: holding company and Corby Power (UK) operations.
<PAGE>
Generation assets remain wholly owned by Virginia Power and Dominion Energy,
pending full implementation of legislation that creates competition among
electric generators and establishes a comprehensive plan for the transition to
competition in the electric utility industry in Virginia.
(This blast-fax contains forward-looking statements that are subject to various
risks and uncertainties. Discussion of factors that could cause actual results
to differ materially from management's projections, forecasts, estimates and
expectations may include factors that are beyond the company's ability to
control or estamate precisely, such as estimates of future market conditions and
the behavior of other market participants. Other factors include, but are not
limited to, weather conditions, economic conditions in the company's service
territory, fluctuations in energy-related commodity prices, conversion activity
and other uncertainties. Other risk factors are detailed from time to time in
the company's Securities & Exchange Commission filings.)
Analyst Contacts: Tom Wohlfarth (804) 819-2150
Suzette Mata (804) 819-2154
Joe O'Hare (804) 819-2156
<PAGE>
Dominion Resources, Inc.
Preliminary Earnings Report
December 1999
($ in millions, except earnings per share)
<TABLE>
<CAPTION>
4th Qtr Ended Dec 31 12 Months Ended Dec 31
--------------------- ------------------------
1999 1998 1999 1998
----- ----- ----- ----
<S> <C>
Operating Revenues & Income $ 1,249.5 $ 1,183.2 $5,520.3 $6,086.2
========= ========= ========== ========
Reported Net Income:
Virginia Power $ 26.0 $ 36.3 $ 192.8 $ 194.1
East Midlands Electricity 227.2
Dominion Energy 8.2 8.6 41.5 57.1
Dominion Capital 35.1 2.6 78.3 58.7
Corporate
(6.7) 6.7 (16.8) (1.5)
-------- ------- -------- --------
Consolidated $ 62.6 $ 54.2 $ 295.8 $ 535.6
======= ======= ======== ========
Common Shares Outstanding (Avg) 189.0 195.1 191.4 194.9
Reported Earnings Per Share:
Virginia Power $ 0.14 $ 0.19 $ 1.01 $ 1.00
East Midlands
Electricity - 1.17
Dominion Energy 0.04 0.05 0.22 0.29
Dominion Capital 0.19 0.01 0.41 0.30
Corporate (0.04) 0.03 (0.09) (0.01)
-------- ------- ------- -------
Consolidated $ 0.33 $ 0.28 $ 1.55 $ 2.75
======== ======= ======= =======
Unusual Items (Pre-tax): $ (5.6) $ (5.6)
Merger Transition Costs
Loss on Sale of Foreign Generation (2.9) (17.3)
Write-Off of Regulatory Assets & Liabilities (451.9)
Rate Case Settlement - Va Power $ (291.5)
Gain on Sale - East Midlands 332.3
Unusual Items (After-tax):
Merger Transition Costs (3.6) (3.6)
Loss on Sale of Foreign Generation (2.9) (21.0)
Write-Off of Regulatory Assets & Liabilities (254.8)
Rate Case Settlement - Va Power (201.0)
Gain on Sale - East Midlands 200.7
Unusual Items (EPS impact):
Merger Transition Costs (0.02) (0.02)
Loss on Sale of Foreign Generation (0.02) (0.11)
Write-Off of Regulatory Assets & Liabilities (1.33)
Rate Case Settlement - Va Power (1.03)
Gain on Sale - East Midlands 1.03
</TABLE>
<PAGE>
Dominion Resources, Inc. - Restructured Operations
Preliminary Earnings Report
December 1999
<TABLE>
<CAPTION>
($ in millions, except earnings per share)
4th Qtr Ended Dec 31 12 Months Ended Dec 31
-------------------------- -------------------------
1999 1998 1999 1998
----- ----- ----- ----
<S> <C>
Operating Revenues & Income $ 1,249.5 $ 1,183.2 $ 5,520.3 $ 6,086.2
========== ========== ========== ==========
Reported Net Income:
Dominion Generation $ - $ 16.9 $ 16.6 $ 97.9
Virginia Power 24.0 24.8 175.1 130.9
Dominion Energy - Oil & Gas 10.2 3.2 42.6 22.4
Dominion Capital 35.1 2.6 78.3 58.7
Dominion UK 227.2
Corporate (6.7) 6.7 (16.8) (1.5)
----------- --------- --------- ---------
Consolidated $ 62.6 $ 54.2 $ 295.8 $ 535.6
========== ========= ======== =========
Common Shares Outstanding (Avg) 189.0 195.1 191.4 194.9
Reported Earnings Per Share:
Dominion Generation $ - $ 0.09 $ 0.09 $ 0.50
Virginia Power 0.13 0.13 0.92 0.67
Dominion Energy - Oil & Gas 0.05 0.02 0.22 0.12
Dominion Capital 0.19 0.01 0.41 0.30
Dominion UK 1.17
Corporate (0.04) 0.03 (0.09) (0.01)
---------- -------- -------- -------
Consolidated $ 0.33 $ 0.28 $ 1.55 $ 2.75
========= ======== ======== =======
Unusual Items (Pre-tax):
Merger Transition Costs $ (5.6) $ (5.6)
Loss on Sale of Foreign Generation (2.9) (17.3)
Write-Off of Regulatory Assets & Liabilities (451.9)
Rate Case Settlement - Dominion Generation $(237.8)
Rate Case Settlement - Va Power (53.7)
Gain on Sale - East Midlands 332.3
Unusual Items (After-tax):
Merger Transition Costs (3.6) (3.6)
Loss on Sale of Foreign Generation (2.9) (21.0)
Write-Off of Regulatory Assets & Liabilities (254.8)
Rate Case Settlement - Dominion Generation (164.0)
Rate Case Settlement - Va Power (37.0)
Gain on Sale - East Midlands 200.7
Unusual Items (EPS impact):
Merger Transition Costs (0.02) (0.02)
Loss on Sale of Foreign Generation (0.02) (0.11)
Write-Off of Regulatory Assets & Liabilities (1.33)
Rate Case Settlement - Dominion Generation (0.84)
Rate Case Settlement - Va Power (0.19)
Gain on Sale - East Midlands 1.03
</TABLE>
<PAGE>
Virginia Power
Megawatt-hour Sales & Degree Days
<TABLE>
<CAPTION>
Percent
Increase Increase
4th Quarter Ended December 31 1999 1998 (Decrease) (Decrease)
- ----------------------------- ---- ---- ---------- ----------
<S> <C>
Residential 5,348,761 5,147,390 201,371 3.9%
Commercial 5,165,663 4,935,296 230,367 4.7%
Industrial 2,877,485 2,687,695 189,790 7.1%
Public authorities 2,158,170 2,124,881 33,289 1.6%
--------- ---------
Total retail 15,550,079 14,895,262 654,817 4.4%
Wholesale - sales for resale 1,116,702 1,086,352 30,350 2.8%
Total sales 16,666,781 15,981,614 685,167 4.3%
========== ==========
Cooling Degree Days 15 29 43 =Normal
Heating Degree Days 1,205 1,163 1,322 =Normal
12 Months Ended December 31
- ---------------------------
Residential 23,933,786 23,228,983 704,803 3.0%
Commercial 21,760,428 21,207,898 552,530 2.6%
Industrial 11,142,066 11,189,572 (47,506) -0.4%
Public authorities 8,989,899 8,696,232 293,667 3.4%
--------- ---------
Total retail 65,826,179 64,322,685 1,503,494 2.3%
Wholesale - sales for resale 4,779,378 4,461,403 317,975 7.1%
Total sales 70,605,557 68,784,088 1,821,469 2.6%
========== ==========
Cooling Degree Days 1,474 1,640 1,564 =Normal
Heating Degree Days 3,445 3,197 3,753 =Normal
</TABLE>
<PAGE>
DOMINION RESOURCES ANNOUNCES FINAL PRORATION FACTORS
FOR ITS MERGER WITH CONSOLIDATED NATURAL GAS
Richmond, Va. February 1, 2000 - Dominion Resources Inc. (NYSE: D) today
announced final proration factors in connection with its merger with
Consolidated Natural Gas, which became effective on January 28, 2000.
DOMINION RESOURCES SHARES
All Dominion stock elections will be honored and shareholders who elected stock
will receive a one-for-one exchange of shares. Shareholders who did not make an
election, elected "no preference," or purchased Dominion stock after 5:00 p.m.
on January 21, 2000 will receive a one-for-one exchange of shares.
Dominion shareholders who elected cash will receive cash based on a proration
factor of .754433. This factor will be applied to any shares for which a cash
election was made. Shares accepted for cash will be paid at $43.00 per share,
and the remaining shares will be exchanged for new Dominion stock at an exchange
rate of one-for-one.
As a result of the merger, approximately 18 percent of total outstanding old
Dominion Resources shares will be exchanged for cash and 82 percent for stock.
CONSOLIDATED NATURAL GAS SHARES
All cash elections will be honored and shareholders will receive $66.60 per CNG
share. Shareholders who did not make an election, elected "no preference," or
purchased CNG stock after 5:00 p.m. on January 21, 2000 will receive $66.60 in
cash in exchange for each share held.
CNG shareholders who elected stock will receive Dominion stock including cash
top-up based on a proration factor of .796471 applied to the shares for which
stock was elected. The remaining shares will be exchanged for cash at a rate of
$66.60 per share. The issuance of stock for CNG holders will be based on the
following:
Cash Rate: $66.60 per share
Exchange Ratio: 1.52
Rate for Cash-in-Lieu of Fraction: $40.625
Top-Up Amount: $5.2920
Dominion Average Price: $40.3344 (average of closing prices on
the NYSE for the 20 trading days ending
January 13, 2000)
<PAGE>
Approximately 40 percent of total outstanding CNG shares will be exchanged for
cash and 60 percent will be exchanged for Dominion Resources shares and cash
top-up.
Dominion Resources is an energy holding company headquartered in Richmond,
Virginia. It is active in regulated and competitive electric power, natural gas
and oil development and selected financial services. It has electric power and
natural gas operations throughout the United States and in Canada and the United
Kingdom. In February 1999, Dominion Resources and Consolidated Natural Gas
agreed to merge. Headquartered in Pittsburgh, CNG is one of the nation's largest
producers, transporters, distributors and retail marketers of natural gas. CNG
explores for and produces oil and natural gas in the United States and Canada;
its natural gas transmission and distribution operations serve customers in
Ohio, Pennsylvania, Virginia, West Virginia, New York and other states in the
Northeast and Mid-Atlantic regions. The merger of Dominion Resources and CNG
will create the nation's largest fully integrated gas and electric utility,
serving nearly 4 million customers. The merger closed on January 28, 2000.
Immediately following the merger closing, outstanding shares of Dominion
Resources stock will total approximately 238 million. Dominion shares will
continue to trade on the New York Stock Exchange under the current trading
symbol, D. The CUSIP for new Dominion Resources common stock will be 25746U109.
###
Media Contacts: Mark G. Lazenby (804) 819-2042
Hunter A. Applewhite (804) 819-2043
Analyst Contacts: Thomas P. Wohlfarth (804) 819-2150
Suzette M. S. Mata (804) 819-2154
Joseph G. O'Hare (804) 819-2156
