Thomas E. Hamlin – Vice President Financial Analysis & Investor Relations Thomas F. Farrell II – Chairman, President and Chief Executive Officer Mark F. McGettrick – Executive Vice President and Chief Financial Officer Paul D. Koonce – Executive Vice President and Chief Executive Officer-Energy Infrastructure Group.

Angie Storozynski – Macquarie Capital, Inc. Steve I. Fleishman – Wolfe Research LLC Michael Weinstein – UBS Securities LLC Jonathan P. Arnold – Deutsche Bank Securities, Inc. Dan L. Eggers – Credit Suisse Securities LLC.

Good morning and welcome to Dominion’s First Quarter Earnings Conference Call. On the call today, we have Tom Farrell, CEO; Mark McGettrick, CFO and other members of senior management. At this time, each of your lines is in a listen-only mode. At the conclusion of today’s presentation, we will open the floor for questions.

At that time, instructions will be given as for the procedure to follow if you would like to ask a question. I would now like to turn the call over to Tom Hamlin, Vice President of Investor Relations and Financial Planning for the Safe Harbor statement..

Good morning and welcome to Dominion’s first quarter 2014 earnings conference call. During this call, we will refer to certain schedules included in this morning’s earnings release and pages from our earnings release kit.

Schedules in the earnings release kit are intended to answer the more detailed questions pertaining to operating statistics and accounting. Investor Relations will be available after the call for any clarification of these schedules.

If you have not done so, I encourage you to visit the Investor Relations page on our website, registered for email alerts and view our first quarter earnings documents. Our website address is www.dom.com. In addition to the earnings release kit, we have included a slide presentation on our website that will guide this morning’s discussion.

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 first quarter operating earnings and our operating earnings guidance for the second quarter and full year 2014, 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 are contained on Schedules 2 and 3 and Pages 8 and 9 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.

Mark will discuss our earnings results for the first quarter and our earnings guidance for the second quarter and full year 2014. Tom will review our operating and regulatory activity and review the progress we have made on our growth plans. I will now turn the call over to Mark McGettrick..

Good morning. Dominion reported operating earnings of $1.04 per share for the first quarter of 2014, which exceeded the top of our guidance range of $0.85 to $1 per share.

While favorable weather in our electric service territory contributed $0.05 per share compared to normal, weather-normalized operating earnings were at the very top of our guidance range. Other factors driving the strong results were improved merchant generation margins, higher ancillary revenues and lower operating expenses.

Compared to the first quarter of 2013, our 2014 weather-normalized earnings were $0.14 or 16% higher than last year. GAAP earnings were $0.65 per share for the first quarter.

Charges related to the exit from Producer Services and the write-off of goodwill at our unregulated electric retail operations account for the majority of difference between GAAP and operating earnings. A reconciliation of operating earnings to reported earnings can be found on Schedule 2 of the earnings release kit.

Now, moving to results by operating segment. At Dominion Virginia Power, EBIT for the first quarter was $269 million, which was above its guidance range. Kilowatt hour sales were above expectations largely due to colder than normal weather.

Excluding weather, sales were up about 1% for the quarter, somewhat below expectations, particularly in the commercial sector. We believe most of this slower growth was due to the numerous snowstorms in the area this winter which results in a significant number of commercial and governmental customers being closed for business.

We still expect annual weather normalized sales growth of 1.5%. First quarter EBIT for Dominion Energy was $344 million, which was also above the top of its guidance range. The weather condition this winter results in higher throughput at our pipeline in LDC businesses, which along with lower operating expenses drove the strong results.

Dominion Generation produced EBIT of $561 million in the first quarter, which was above its guidance range. EBIT from utility generation was above the guidance range because of higher kilowatt hour sales due to cold weather. Also revenues from ancillary services were above expectations due to the weather extremes in PJM.

EBIT from merchant generation was above its guidance range because of higher gross margins. On a consolidated basis, our effective tax rate was 33.5% for the quarter, which was in line with our guidance. Interest expenses were also in line with our expectations. Overall, we are very pleased with our first quarter operating results.

Now moving to cash flow and treasury activities. Funds from operations were $802 million for the first quarter. Regarding liquidity; we had $3.5 billion of credit facilities at the end of the first quarter. Commercial paper and letters of credit outstanding at the end of the quarter were $2.2 billion.

And taking into account cash and short-term investments, we ended the quarter with liquidity of $1.4 billion. Subject to State Corporation Commission approval, we will soon be executing a final agreement with our existing credit providers to increase our credit lines by $1 billion from $3.5 billion to $4.5 billion.

The terms of which will run for five years. Dominion Gas Holdings will be added as a potential borrower under these facilities. For statements of cash flow and liquidity, please see pages 14 and 25 of their earnings release kit. Now moving to our financing plans.

During the first quarter, we issued $750 million of 10-year and 30-year notes for Virginia Power. We also issued $400 million and three year notes at the parent company during the quarter. We’re pleased with the market perception of these offerings and thank those of you who participated.

Our debt plans for the remainder of the year include $1 billion of debt at Dominion Gas Holdings to refinance some parent company maturities and possibly another debt issue at the parent company.

On March 28, we filed an S-1 registration statement with the Securities and Exchange Commission for an initial public offering of common units representing limited partnership interests in Dominion Midstream Partners, LP a master limited partnership whose initial asset will be a preferred equity interest in Cove Point.

I would refer you to the S-1 filing for questions regarding the MLP as we are unable to discuss the details of it further on today’s call. On April 4, we filed the Dominion Gas Holdings’ S-4 registration statement with the SEC. Once the filing process is complete, the 144A bonds we issued last fall will be exchanged into public securities.

Shortly after that, we will follow a shelf registration statement with the SEC for future debt issuances by Dominion Gas. Our equity issuance plans for 2014 include an issue of mandatory convertibles, the proceeds from the MLP’s initial public offering and our dividend reinvestment and other stock purchase plans.

Now, to earnings guidance; our operating earnings guidance for the second quarter of 2014 is $0.55 per share to $0.65 per share compared to $0.62 per share for the second quarter of 2013.

Positive factors for the quarter relative to last year include a return to normal weather, higher weather-normalized kilowatt hour sales, and higher revenues from electric transmission. Negative factors include higher interest expense, the absence of contributions from our electric retail business and higher operating expenses.

Our operating earnings guidance for the year remains at $3.35 per share to $3.65 per share. As to hedging, you can find our hedge positions on page 27 of the earnings release kit. Since our last call, we’ve increased our Millstone hedge position from 92% to 96% for 2014 and from 23% to 31% for 2016. So let me summarize my financial review.

Operating earnings were $1.04 per share for the first quarter of 2014, exceeding the top of our guidance range. Favorable weather, higher merchant margins, higher ancillary revenues and higher throughput at our pipeline to LDC businesses were key factors in the strong performance.

Our financing plans for the remainder of 2014 include a debt offering for Dominion Gas Holdings, an offering of mandatory convertible securities and the initial public offering of a master limited partnership. Another debt issue by the parent company is also possible.

And finally, our operating earnings guidance for the second quarter of 2014 is $0.55 to $0.65 per share. Our operating earnings guidance for the full year remains $3.35 to $3.65 per share. I will now turn the call over to Tom Farrell..

Good morning. Our business units delivered outstanding operational and safety performance in the first quarter, despite the often challenging weather condition. On January 7, the Dominion Zone set a new winter peak demand of 19,730 megawatts, an increase of more than 9% above the previous record set in 2007.

On that same day, gas transmission also set a new peak with a one hour send-out rate equal to 7.65 billion cubic feet per day, and even higher winter peak electric demand was set on January 30, at 19,785 megawatt. The nuclear fleet achieved a capacity factor of nearly 100% and had only two OSHA recordables in the first quarter.

Our power generations’ utility fleet achieved a record 12.6 million megawatt hours of production and maintained capacity factors of 90% to 95% during the worst for the winter weather. Dominion Energy also delivered strong performance in the quarter.

Our pipeline business had no primary service issues during the extreme weather and developed a record high seasonal storage turn of 241 Bcf through the end of March. Natrium returned to service in January, and for the balance of the quarter, natural gas processing plant reliability was 99% at Natrium and 100% at Hastings.

All this was achieved with no loss time or restricted duty incidence during the quarter. Dominion East Ohio experienced a 14% increase in throughput compared to last year’s first quarter because of the weather extremes, yet achieved the best quarterly safety results in the Company’s over 100 year history.

We continue to move forward on our growth plan. Construction of 1,329 megawatt Warren County combined-cycle plant is progressing on schedule and on budget. All three borrowers completed hydrostatic testing during the first quarter and startup and commissioning activities are underway.

Overall, the project is about 80% complete and 1,200 people are employed at the site. We expect the project to be in service during the fourth quarter of this year. Last August, we began construction of the 1,358 megawatt combined-cycle facility in Brunswick County and expect that plant to be in service by mid-2016.

Much of the major equipment has been secured, and deliveries to the site have begun. There are about 450 people currently employed at the site. Conversion of Bremo Units 3 and 4 from coal to natural gas is nearly complete. Both units achieved first fire on gas in the first quarter.

Tuning and commissioning are underway, and the converted units should be in commercial operation by the middle of this year. Dominion closed on the acquisition of six solar projects totaling 139 megawatts from Recurrent Energy in the first quarter.

Long-term power purchase, interconnection, engineering, procurement and construction as well as operation and maintenance agreements have been executed for each of the projects. Construction began in the first quarter and all these facilities are expected to reach commercial operation late this year or early next year.

We are moving forward to identify and acquiring additional solar projects to support our plan to grow the Company’s solar portfolio by up to 250 megawatts. At Dominion Virginia Power, we have a number of electric transmission projects at various stages of regulatory approval and construction.

During the first quarter, $116 million of transmission assets were placed into service. Electric transmissions’ capital budget for growth projects in 2014 is over $750 million. This includes NERC, RTEP, maintenance as well as security-related investments.

Moreover, our project pipeline continues to remain full through at least the remainder of the decade. Progress in our growth plan for Dominion Energy also continues. Construction is underway on the Allegheny Storage Project and we have begun to accept injections. Construction has also begun on our Natrium-to-Market project.

Both projects are on budget and on schedule to commence full service by November. Last fall we announced several new pipeline expansion projects. The New Market Project will provide expanded service to two LDCs in New York State for 15 years beginning in November 2016. We are currently preparing the FERC application for this project.

In addition, we have had continued success in providing incremental transportation service as a result of the growing production within our region.

We describe these as producer outlet projects, taking advantage of the flexibility of Dominion Energy’s pipeline network to provide incremental services with shorter lead times and relatively small capital investment.

On our last earnings call, we announced binding precedent agreements for firm transportation service for six such projects covering 1.2 Bcf per day by 2016. Today, we are announcing another such project.

The Lebanon West 2 project will provide 130,000 dekatherms per day of firm transportation service for 20 years to move Marcellus production from Butler County, Pennsylvania to Lebanon, Ohio. Precedent agreements have been signed and the project is expected to be operational in late 2016.

Finally on April 16, the Company commenced the Dominion Southeast Reliability Project, a non-binding open season for firm transportation services through a new pipeline extending from the Marcellus and Utica production regions to markets in Virginia, in North Carolina.

Subject to FERC approvals, the firm transportation service is anticipated to be available as early as November 2018. The Utica region continues to be very active.

Through the middle of April, a total of 1,218 horizontal Utica permits have been issued and 829 wells have been drilled, an increase of 17% in wells permit and 22% in wells drilled in just the past three months. The number of producing wells has increased by 44% from 270 to 389, also in just the past three months.

Based on this Utica activity, our Blue Racer joint venture continues to execute its business plan. Dominion contributed to G-150 pipeline in January in the northern gathering system in March. These are the last of the originally planned asset contributions to the joint venture.

Blue Racer’s Natrium I processing and fractionation plant returned to service in January and has operated nearly 100% capacity since then. A second 200 million cubic feet per day processing facility we refer to as Natrium II became operational earlier this month and is expected to be at full capacity by the end of the second quarter.

Fractionation capacity at Natrium will be expanded from 46,000 barrels per day up to 126,000 barrels per day by March of next year. In addition, a 200 million cubic feet per day processing plant at the Berne site is under construction and is expected to begin operations this fall.

Blue Racer has entered into long-term acreage dedication agreements totaling more than 300,000 acres and continues to expand its acreage commitments and facilities to support its growth plan. We continue to make progress on our Cove Point Liquefaction project as well.

On February 27, the Pipeline and Hazardous Materials Safety Administration referred to as PHMSA issued its no objection letter to FERC, marking another significant milestone in the FERC permitting process. On March 12, FERC issued its notice of schedule and set May 15 for issuance of an environmental assessment.

We anticipate receiving our construction permit from FERC this summer. We also expect Maryland Public Service Commission to approve the CPCN and air permit for the site next month. Subject to and immediately filing its regulatory and other approvals, we expect to commence construction with commercial operation in late 2017.

Before I answer questions, I want to update you on a couple of other Virginia regulatory matters. Earlier this month, Virginia Governor Terry McAuliffe signed legislation allowing Dominion Virginia Power to set up a long-term program place about 4,000 miles of the system’s most vulnerable distribution lines underground.

The measure authorizes the Company to spend up to $175 million per year on a program with Virginia State Corporation Commission approval. Cost recovery for the project will come from a rate adjustment clause, also subject to commission approval.

The Governor also signed legislation that will help the Company preserve options for a third nuclear unit at North Anna Power Station and for development of offshore wind facilities. It calls for the write-off of 70% of the development costs incurred through the end of last year, which will be recovered through existing base rates.

The write-off will be spread over the second, third and fourth quarters of 2014. So to summarize, our business has delivered strong operating and safety performance in the first quarter. Construction of the Warren County and Brunswick power stations is proceeding on time and on budget.

Our Blue Racer joint venture, Dominion East Ohio and Dominion Transmission all continue to capitalize on the growth opportunities in the Marcellus and Utica shale regions. We look forward to receiving our remaining regulatory approvals beginning construction of our Cove Point Liquefaction project.

And finally, we look forward to our initial public offering by Dominion Midstream Partners later this year. Thank you, and we are ready for your questions..

Thank you. (Operator Instructions) Our first question will come from Angie Storozynski with Macquarie..

Hi, Angie..

How are you? I wanted to ask you a couple of questions about the growth on the energy side. So, first of all, how big – what is the capacity of the pipeline that will be going to the southeast? I understand that the open season is not over yet, but it looks like it’s just one week left. So, that’s one.

And two is, given all of the growth in Utica and Marcellus and your different entities that are growing in those shales, how should we think about it? What goes through Blue Racer, what goes through Dominion Energy and what is ultimately ending at the MLP? Sorry for the long question..

I’m going to ask Paul Koonce to answer those questions..

Good morning, Angie. The first question on the open season in the Southeast type, we’re in what I would call a sensitive phase of the scoping. So we’re not really prepared to talk about type size or number of miles. I would just say that we have substantial assets already with our gas transmission business throughout the Marcellus and the Utica.

We certainly saw the need for gas infrastructure in the Virginia North Carolina region, coming out of this February and the reliability issues associated with that. And we also know there are customers in the communities that are served throughout that area. So, we are bullish on the Southeast pipe. As you noted, the open season is not closed yet.

We are still gathering expressions of interest and really expect more to come later this summer. On the Utica and Marcellus question, and what goes to Blue Racer and what comes to Dominion, we have a defined business plan and operating area for Blue Racer.

It’s defined as really Southeastern Ohio, and it really is to gather and process gas and it’s been doing that very well as Tom noted in his comments. So that really is what goes to the joint venture, gathering and processing associated with the wet Utica and Southeastern Ohio. We have not extended the joint venture beyond that footprint.

So those activities in West Virginia and Pennsylvania would remain Dominion..

Okay, and just one follow-up question.

So given the pickup in drilling and permitting of wells in Utica, when would you expect the gas to go? Do you expect that most of the transportation would be to the south or southeast or more to the, say Illinois, Chicago area?.

Angie, I would just say that given the size of the basin, now producing 13, 14 Bcf and some projections have it 20 Bcf or greater by the end of the decade. I think you’re going to see gas flowing in all directions. Clearly, there is a need to New England.

We’ve already defined a need in the mid-Atlantic, and of course, I think the Tallgrass folks have had a successful open season, some reverse flow, the Rockies Express pipeline back to Chicago. So I think you’re seeing gas move in a lot of different directions..

Thank you. Our next question will come from Steve Fleishman with Wolfe Research..

Yes, hi, good morning. Couple of questions.

First, just curious in the Utica discussion and the chart you provide, the producing well seems to have kind of flattened out relative to the drilled and permitted, is there any bigger picture explanation of that?.

Steve, I think they have increased significantly and they’re continuing to be the bottleneck because there is not enough infrastructure, gathering systems, pipeline systems to get the gas to market. So they have to wait before they can start producing. That’s why we’re still very excited about all the prospects we have in that region..

Okay, second question is just, what was the impact of the Blue Racer contributions in the quarter?.

Steve, quarter-over-quarter, it was about a $20 million incremental pick-up from the first quarter of 2013..

And is there may be like an absolute amount from these two new contributions?.

The absolute amount is about $34 million..

Okay.

And just on the nuclear write-off and the like, can you tell us how much you expect to be kind of expensing over those three quarters in total?.

Yes. It will start in the second quarter and start expensing it between now and end of the year. We’ll have to catch up in the second quarter for the 2013 and the first quarter this year. So, second quarter write-off amount would be much larger than, much more than third and fourth. But you should think around $400 million..

And that will be obviously excluded from your newer guidance?.

It will be charged to our GAAP earnings..

Okay, one last question, kind of big picture. When you think about all the continued movement in natural gas, Marcellus, Utica, other regions and some of the new projects you are starting to announce, should we expect that there is likely another big ramp-up in capital spend in the gas business.

When you start updating your five-year plans?.

I think Steve, I’m not sure it would be a substantial run up in it. We’ve always set aside some capital for growth, particularly on these producer outlet project that don’t have much capital to be invested. But certainly if we’re successful, it’s a long pipe that would be – something that would be incremental capital to what we have out there already.

And again based on just the interest that we have thus far, we usually update everybody in the fall. That activity continues at the pace it is today, it is certain possible that the capital could go up between now and the five year window that we always talk about..

Okay, thank you..

Our next question comes from Michael Weinstein with UBS..

Hi, guys. Hey, just a follow-up on that a little bit.

So are the new producer outlet projects, the Southeast Reliability Project, is that incremental to the 5% to 6% growth rate as well and are other projects as we hear about them, is that all incremental 5% to 6%?.

The producer outlet projects are supportive of our 5% to 6% growth, and I think the way we should think about all these smaller projects are, we’re focused on significant growth in energy business and they are supportive of the 5% to 6%.

If the long haul, Southeast pipe were to go, it’s a multi-year construction period, so it’s really outside of what we’ve shown everybody in terms of CapEx and what that growth rate would be beyond ‘18, so I think it’s too early to say on that.

But until we let everybody know otherwise that, we should assume all the projects that’ll be announced on energy are supportive of the 5% to 6%..

On Cove Point, at what point I guess the summer are you going to be in a position to be talking about an IPO at that point? I know you are waiting for approvals, is the summer approval from FERC going to be the final one that you are waiting for?.

We’re in the approval process now with the SEC in our S-1, so we really don’t want to talk about any more timing issues than that. But previously we have said that, mid-year or so is what we thought would be a reasonable period and I think certainly mid-year third quarter probably makes sense. .

Okay, right, thank you very much..

Thank you..

Thank you. Our next question will come from Jonathan Arnold with Deutsche Bank..

Hi, good morning guys..

Good morning, Jonathan..

Could I just ask given the news on the screen today, one of your neighbors being acquired.

If you could just give us a sense of your current thinking about where that type of bolt-on M&A might fit within Dominion’s potential strategic plan? If at all maybe any specific comments and whether you look to pack or not?.

We don’t have any comments Jonathan on M&A activity, other than to say we’ve got a five year growth plan that takes us we think a long way gaining 5% to 6% growth all the way along the path. But we never comment on M&A activity..

Great, thank you. .

Thank you. Our next question comes from Daniel Eggers with Credit Suisse..

Hey, good morning guys..

Hi, Dan..

I just got a couple of questions I guess kind of maybe on the your kind of system performance in the quarter. But I don’t know if Paul, want to talk about it, but how the gas system performed through the winter from a storage perspective.

And then how the refill process is going and the soundness of the reservoir and whether you’re seeing focus or interest and maybe looking at the storage investment again, given volatility and delivery concerns?.

Dan, this is Paul Koonce. We had a really strong winter. We were really pleased with the operational performance of all of our storage across the system. And as Tom noted, we had a record turn of about 241 Bcf. As you will recall, our customers actually own the space and storage, so the rate that they fill storage is really their call.

Now, we report that information to EIA and it’s publicly available. And if you look, you’ll see that their injections are a little bit ahead of where they were at this time last year. Now obviously, they took more out. So we take that as a positive this early in the year that they are buying and injecting gas.

I think it does strengthen the interest in storage, certainly as it relates to our thoughts about a new pipeline in the Southeast. The nature of that load will be somewhat on and off, and so I think our storage capabilities, I think play nicely into that.

So we needed this winter to remind folks why they contract for firm transportation and firm storage, and it performed and I think we should be rewarded for that. So hopefully, we’ll see some projects resolved..

So Paul, would you kind of determine that you’ve just seen an uptake in all sorts of maybe end-use customer interest in signing more firm contracts or getting more capacity just because bandwidth was more constrained this year?.

I’m sorry, Dan, I really didn’t understand the question..

Okay, I guess, are you seeing your end-use customers, the LDCs and folks like that showing more interest in signing contracts or expanding the capacity to take from you guys just based on the volatility this winter?.

Yes, we’ve certainly seen some customers that had contracts that were expiring; renew and extend their contracts. So that’s the first thing that I’ll take as a positive. We’re still meeting with our customers following this winter and assessing their needs, but we have a couple of other customers that have expressed a desire to increase capacity.

So hopefully, we will be announcing something along those lines later this year. So certainly the interest is up.

There has been honestly somewhat of a stand-off between producers and LDCs trying to see who is going to build the next incremental capacity, is it going to be the producer to get the gas out of the basin, or is it going to be the customer to secure reliability.

Frankly following this winter, I think we’re beginning to see some movement back to LDC customers placing a premium on reliability as they should..

Great, thank you.

And I guess just, maybe to clarify on the impairments you guys are going to take on the development side, how does it get calculated into the earned ROEs from a Virginia oversight perspective on the biennial review process?.

It will go towards the GAAP earning calculation in the two-year biennial review..

So we would mark-down, from the recurring number would normally look out, we’d mark that down by about $400 million pre-tax to look at that comparable ROE over the two-year period?.

Yes, that’s right..

Okay, very good. Thank you, guys..

Thanks Dan..

Thank you. This does conclude this morning’s teleconference. You may disconnect your lines and enjoy your day..