Third Quarter 2016 Earnings Call October 31, 2016 Important Note - PowerPoint PPT Presentation

Third Quarter 2016 Earnings Call October 31, 2016

Important Note to Investors This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding Dominion and Dominion Midstream. The statements relate to, among other things, expectations, estimates and projections concerning the business and operations of Dominion and Dominion Midstream. We have used the words "anticipate", "believe", "could", "estimate", "expect", "intend", "may" , "plan", “outlook”, "predict", "project", “should”, “strategy”, “target”, "will“, “potential” and similar terms and phrases to identify forward -looking statements in this presentation. As outlined in our SEC filings, factors that could cause actual results to differ include, but are not limited to: unusual weather conditions and their effect on energy sales to customers and energy commodity prices; extreme weather events and other natural disasters; federal, state and local legislative and regulatory developments; changes to federal, state and local environmental laws and regulations, including proposed carbon regulations; cost of environmental compliance; changes in enforcement practices of regulators relating to environmental standards and litigation exposure for remedial activities; capital market conditions, including the availability of credit and the ability to obtain financing on reasonable terms; fluctuations in interest rates; changes in rating agency requirements or credit ratings and their effect on availability and cost of capital; impacts of acquisitions, divestitures, transfers of assets by Dominion to joint ventures or to Dominion Midstream, and retirements of assets based on asset portfolio reviews; receipt of approvals for, and timing of, closing dates for acquisitions and divestitures; the execution of Dominion Midstream’s growth strategy; changes in demand for Dominion’s servic es; additional competition in Dominion’s industries; changes to regulated rates collected by Dominion; changes in operating, maintenance and construction c osts; timing and receipt of regulatory approvals necessary for planned construction or expansion projects and compliance with conditions associated with such regulatory approvals; the inability to complete planned construction projects within time frames initially anticipated; and the ability of Dominion Midstream to negotiate, obtain necessary approvals and consummate acquisitions from Dominion and third-parties, and the impacts of such acquisitions. Other risk factors are detailed from time to time in Dominion’s and Dominion Midstream’s quarterly reports on Form 10 -Q or most recent annual report on Form 10-K filed with the Securities and Exchange Commission. The information in this presentation was prepared as of October 31, 2016. Dominion and Dominion Midstream undertake no obligation to update any forward- looking information statement to reflect developments after the statement is made. Projections or forecasts shown in this document are based on the assumptions listed in this document and are subject to change at any time. Actual capital expenditures may be subject to regula tory and/or Board of Directors’ approval and may vary from these estimates. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy securities. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the requirements of the Securities Act of 1933, as amended. This presentation has been prepared primarily for security analysts and investors in the hope that it will serve as a convenient and useful reference document. The format of this document may change in the future as we continue to try to meet the needs of security analysts and investors. This document is not intended for use in connection with any sale, offer to sell, or solicitation of any offer to buy securities. This presentation includes various estimates of EBITDA which is a non-GAAP financial measure. Please see the third quarter 2016 Dominion Midstream Press Release for a reconciliation to GAAP. Please continue to regularly check Dominion’s website at www.dom.com/investors and Dominion Midstream’s website at www.dommidstream.com/investors. Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. Third Quarter 2016 2

Operating Earnings Summary Third Quarter 2016 Versus Guidance $1.14 $1.10 3 rd Quarter Drivers $0.95 Weather Lower operating expenses Timing of partnership income Millstone margins Guidance Actual Range Operating EPS* *See page 30 of the third quarter 2016 Earnings Release Kit for a reconciliation to GAAP. Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. Third Quarter 2016 3

Operating EBITDA Summary Third Quarter 2016 Versus Guidance (in $millions) Operating Guidance Actual Drivers Segment EBITDA EBITDA Weather Dominion Virginia $395 - $430 $423 Power Major storm restoration Weather Dominion $840 - $905 $921 Generation Millstone outage Questar Dominion Energy $275 - $295 $310 Lower operating expenses *See page 34 of the third quarter 2016 Earnings Release Kit for a reconciliation to GAAP. Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. Third Quarter 2016 4

Dominion Midstream Partners (DM) Third Quarter 2016 Earnings and Distribution – Financial Results in line with Management expectations • Net Income $24.3 million • Adjusted EBITDA $27.9 million* • Distributable Cash Flow $24.1 million* – Distribution Results • Board declared 3Q 2016 cash distribution of $0.2475 per unit  5% increase above second-quarter – Key DM Updates • Questar Pipeline dropdown will support DM’s 22% distribution growth until 2H 2018 • Dropdown financing executed through variety of paths  Convertible preferred equity, common equity, debt and units to D *See the third quarter 2016 Dominion Midstream Press Release for a reconciliation to GAAP. Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. Third Quarter 2016 5

Cash Flow and Financing Activities Third Quarter 2016 – Cash Flow & Liquidity • $3.1 billion in funds from operations through 3Q 2016 • $5.5 billion of credit facilities* • $2.5 billion of liquidity* – Recent Financing Activities • DRI $1.3 billion senior notes issuance • DRI $1.4 billion mandatory convertible issuance • DM dropdown financing *Excludes two Dominion Questar facilities totaling $750 million. Effective October 11, 2016, these facilities were terminated. Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. Third Quarter 2016 6

Operating Earnings Guidance Fourth Quarter 2016 $1.05 4 th Quarter Drivers Return to normal weather $0.90 Absence of a Millstone outage $0.70 Growth projects Lower capacity expense Questar Financing costs 4Q 2015 4Q 2016 EPS* Guidance* *See page 36 and 37 of the third quarter 2016 Earnings Release Kit for a reconciliation to GAAP. Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. Third Quarter 2016 7

Dominion Generation Growth Project Update – Greensville – 1,588 MW plant in Greensville County, VA • 3-on-1 gas fired combined cycle • Duct burners, inlet air chillers, gas only Charlottesville Richmond – Estimated Costs of $1.3 billion Greensville – Major Milestones • Final air permit issued in June • Full Notice to Proceed with construction given to Fluor • Expected in-service late 2018 The Greensville facility will be the largest and most efficient natural-gas fueled power station in Virginia Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. Third Quarter 2016 8

Dominion Generation Growth Project Update – Solar – Utah long-term contracted solar projects went in-service in September 2016 – on-time and on-budget • Four Brothers – 50% ownership in 320 MW facility • Three Cedars – 50% ownership in 210 MW facility – Virginia and North Carolina solar under development: Expected In- Project State Capacity service Eastern Shore Solar Accomack County, VA 80 MW 4Q 2016 Scott, Whitehouse, Woodland Solar Powhatan, Louisa and Isle of Wight, VA 56 MW 4Q 2016 Summit Farms Solar Currituck County, NC 60 MW 4Q 2016 Remington Solar* Fauquier County, VA 20 MW Late 2017 Oceana Solar* Virginia Beach, VA 18 MW Late 2017 *Subject to SCC approval Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. Third Quarter 2016 9

Dominion Energy Growth Project Update – Cove Point Liquefaction Construction is On-time & On-budget – Engineering is ~99% complete – Procurement of engineered equipment is ~99% complete – 2,000+ construction workers on-site Project is ~75% Heat exchanger complete Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. Third Quarter 2016 10