Good morning, and welcome to Dominion's Fourth Quarter Earnings Conference Call. On the call today, we have Tom Farrell, CEO, and other members of senior management. [Operator Instructions] I would like to turn the conference over to Tom Hamlin, Vice President of Investor Relations for Safe Harbor statement.

Good morning, and welcome to Dominion's Fourth Quarter 2011 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 our website, register for email alerts and view our fourth quarter 2011 earnings documents. Our website address is www.dom.com/investors. 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 from 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 2011 operating earnings and our operating earnings guidance for the first quarter and full year 2012, as well as our operating earnings before interest and tax, commonly referred to as EBIT. Reconciliations of such measures to the most directly comparable GAAP financial measures we were able to calculate and report are 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 a review of the progress we have made on our growth plan in 2011 and our outlook for 2012. Mark will discuss our earnings results for the fourth quarter, as well as our guidance for the first quarter and full year 2012. We will then take your questions. I will now turn the call over to Tom Farrell.

Good morning. For Dominion, 2011 was a year of significant accomplishment. Across our business units, our employees delivered improved service quality in nearly all areas of operations, and in most cases, with record-setting safety performance. We completed several major capital projects in our strategic growth plan and made significant progress in the construction of several others. We also worked to secure the contractual commitments and regulatory approvals necessary for the next round of projects that should sustain our growth plan for the foreseeable future. We delivered operating earnings per share within our guidance range in the face of a sluggish, yet improving economy, weak commodity prices and mild weather, particularly in the fourth quarter. Shareholders were rewarded in 2011 with a total return of 29.4%, which exceeded the returns for most of our industry peers as well as the overall market. Our strategic growth plan consists of investments in new infrastructure in all of our regulated lines of business. At Dominion Generation, it involved the construction of new generation to reduce the existing capacity deficit of Virginia Power to meet the expected growth in demand from our service territory and to replace the generating capacity that is being retired, in order to comply with new EPA regulations. At Dominion Virginia Power, it involves the modernization of the 500 kV loop that has been the backbone of our electric transmission system, as well as upgrades in new service lines to support demand from new customers, including data centers, and to maintain reliability to portions of our service area affected by generation plant retirements. At Dominion Energy, it involves the construction of the gathering, processing and transmission infrastructure that will be needed to facilitate the natural gas production from Marcellus and Utica Shale formations. It also includes the systematic replacement of much…

Good morning, everyone. Dominion's 2011 operating earnings were within the guidance range we gave at the beginning of the year. And largely due to mild weather in the fourth quarter, we're at the bottom of the revised range we issued on our last call. Operating earnings were $3.05 per share for the year and $0.58 per share for the fourth quarter. Very mild weather, particularly in December, reduced earnings by $0.08 per share in the fourth quarter. GAAP earnings were $0.35 per share for the fourth quarter and $2.45 for the year. During the fourth quarter, we wrote down the value of our coal units at our Chesapeake, Yorktown and North Branch Power Stations which will be retired primarily as result of new EPA emissions regulations. These charges account for most of the difference between GAAP and operating earnings for the quarter. Other factors for the year include restoration costs related to Hurricane Irene, merchant plant retirements, Kewaunee operations and the net impact from the SCC's order and the biannual review. A summary and a reconciliation of GAAP to operating earnings can be found on Schedules 2 and 3 of the earnings release kit. Now moving to results by operating segment. At Dominion Virginia Power, EBIT for the fourth quarter was $232 million, which was below the bottom of our guidance range. This variance was driven primarily by warmer-than-normal weather plus higher-than-expected storm restoration expenses. EBIT for Dominion Energy was $258 million, which was above the top of its guidance range. Greater-than-expected earnings from Producer Services and lower fuel costs at Dominion Transmission were positive factors. Dominion Generation produced EBIT of $229 million for the fourth quarter, which was below the bottom of its guidance range. Mild weather at Virginia Power and lower merchant generation margins due to lower commodity…

[Operator Instructions] Our first question comes from Paul Ridzon with KeyBanc Capital.

What's the trajectory of new data centers? I mean, does that look like it's saturated? Or do we have a few more years of this?

I'm sorry, new gas what? Paul B. Fremont - Jefferies & Company, Inc., Research Division: New data centers, excuse me.

No, they moved data centers. I'll let Paul Koonce give you the detail, but it's been going on for some years, and it's expected to go on for at least several more. But Paul can go ahead and give you that exact numbers we have. These are points that are under contract.

Yes, Tom. For 2011, we expected to add about 75 megawatts of new demand from either existing or new data centers. And in 2011, that's exactly what we did. We added about the 9 new centers. For 2012, because data centers require facilities, that work is already underway. So for 2011, we expect to add about 11 new data centers. And between 2000 -- and between existing data centers and the new ones, we expect to add about another 175 megawatts of contract demand, for a total of about 545 megawatts. So it's a very predictable schedule. And we have not seen any change in customer needs in this area.

And philosophically, in this commodities market, how do you think about hedging the outyears? Do you -- I mean, are you cautious here, and you just don't want to -- I guess, I was asking, are you bearish or bullish on gas at this point?

We're not either bearish or bullish, Paul, on gas. This is Mark. As we look at the outyears, we look it as part of the package. And we're shooting to grow 5% to 6% commodity prices or a piece of that. So as we look at OEM opportunities, other growth opportunities, if we see a power price out there, a commodity price that helps support that long-term strategy, then you can see us hedge it. But you should watch us to average in hedges still at Millstone, but again, it'll be part of a bigger package as opposed to more of a standard averaging that we have done over the last several years?

Does your 1Q and full year guidance contemplate year-to-date weather?

Year-to-date as in January?

Yes.

Well, we don't -- January is 1 month out of 12 and 1 month out of 3. I think right now, we assume normal weather for the year. That's how we build our guidance range, and we'll see what the actuals prove out.

Our next question comes from Paul Patterson with Glenrock Associates.

Just to clarify, on the long-term earnings growth. If you guys, despite -- if I heard you guys correctly, despite what we've seen in the current market, coal, gas prices, et cetera, because of your hedging and because of the growth prospects and the other parts of the business, effectively, you still think that you can make the 5% to 6% growth, correct?

Yes.

Okay. And then the second thing is the impairment on the Generation assets. Could you just give us a little bit more flavor as to what happened this quarter?

Paul, its Mark. I'll be glad to do that. We got the final mercury order in December. And we have been talking to investors for some time that based on what we thought was going to come out, along with some -- with other orders out of the EPA that we would have several facilities in Virginia that would not be economically complying. And so we identified those. And then when the final order came out in December, we impaired them. We anticipate those coal units shutting down and being replaced by new gas unit. And so we impaired them based on a 2015, 2016 end of life, which is the exactly the same treatment that we talked with our State Line and Salem units, as we identified those as shutdown candidates based on environmental regulations.

Okay. Now these are regulated assets?

They are regulated assets.

Now, wouldn't you be able to recover the -- I mean, I guess, this is a regulatory treatment, how does it mean -- is this really a real write-off that you guys are going to be a -- you mean, there's going to be a hit to common equity? Is that -- how should we think about those in terms of regulatory rate case kind of thing?

Right. Well, I guess the way we think about it is we have an obligation to our customers and shareholders. We're going to be asking customers and our regulators to approve a new $1 billion plus gas facility with 100 basis point premium to replace these facilities. We felt it was appropriate to go ahead and remove them from rate base at the appropriate time, take that charge now and not ask for our customers to pay twice for facilities that will have the same megawatts.

Okay, so you guys are going to be taking a hit on this, it seems like.

We'll take a hit -- we took a hit in 2011 on it to our GAAP earnings.

Now how does that -- you mentioned that these are going to be coming out of 2015 and -- that was the expected life anyway. So does that have a depreciation benefit that we should be thinking about in the next few years? I mean, does that possibly impact EPS.

No, you shouldn't think about depreciation benefit for the next several years. And we'd be glad to go through the mechanics of write-down with you, with our IR [ph] after the call.

Our next question comes from Paul Fremont with Jefferies. Paul B. Fremont - Jefferies & Company, Inc., Research Division: Just to follow up on Paul's question. We should assume that this gets removed from rate base beginning in 2011 or in 2015 and '16?

No. We're going to remove it from rate base in 2013, which is when we would have our next biannual review. Paul B. Fremont - Jefferies & Company, Inc., Research Division: Okay. So it would be removed from 2013?

We're going to take the charge in 2011, and then as we file the biannual review for those 2 years, it'll be included in the 2013 biannual review. Paul B. Fremont - Jefferies & Company, Inc., Research Division: Okay. So this charge then would not apply towards '12 earnings, in the biannual review. We should apply this charge towards whatever you would potentially be earning in 2013?

No. You should apply the charge to 2011. And on average, the review is done on '11 and '12 earnings. But the actual charge was taken in December of 2011, and that's where you should apply it. Paul B. Fremont - Jefferies & Company, Inc., Research Division: Okay. There was a markedly lower tax rate in the quarter and also a lower tax rate for the year relative to guidance. Can -- what drove that? And should that sort of -- should we -- do we need to make an adjustment on what we assume as a tax rate in 2012?

I'm going to let Scott Hetzer answer that question for you.

Paul, the tax rate for the year was better because of favorable settlements from federal audit issues and reduced state taxes and having to do with state tax credits on items like the Brayton Point cooling towers. And in the guidance kit, we have a range for 2012, 36 to 37.5.

Paul, its Mark. I'd add to that, that we have had a concerted effort over the last couple of years to resolve outstanding IRS audits that date back almost a decade. And the tax group has done a great job doing this. A great deal that benefited in the fourth quarter was a catch-up benefit from those audits. We still have some more work to do on that. And so in 2012, give me a fairly wide range on taxes. Sometimes it's a benefit, sometimes it's a detriment. But we're consistently working on getting as current as we can with the IRS on our federal tax returns. Paul B. Fremont - Jefferies & Company, Inc., Research Division: And the last question for me is if I look at the utility rate base, I guess there's been a lot of accelerated depreciation that's taking place. Is it possible to sort of get an updated snapshot on what that rate base would be at the end of 2011?

We'll be glad to do that, which we'll have the IR team call you on the breakdown.

Our next question comes from Jonathan Arnold with Deutsche Bank.

Can I just follow-up on this question about what your thoughts around -- not having included the sort of mild start to the year in the guidance score. And did I hear you right that weather was kind of an $0.08 drag in Q4?

That's correct.

Was that versus normal or year-over-year, Mark? Sorry, didn't...

No, that was versus normal. It would be about $0.11 year-over-year.

And was it -- and you said most of that was December. So is that also correct?

Yes. It was extraordinary mild December in Virginia.

We have 5 days over 70.

Okay. So I mean, I guess, January -- I guess my question is assuming that kind of January has been somewhat similar, do you feel you have enough O&M flex that you could also accommodate that, let's just say, we're just normal from here?

Well, from what we've seen, Jonathan, from so far in January 1, its nowhere near what December was. December was one of the lowest ones on record in the state. January is not anywhere near that level. And again, what we balance is -- with our other activities. I mean is economy going to be stronger. Is February, March weather going to be better to offset, if there's going to be a shortfall in January? So again, I think we feel real comfortable right now that with all the drivers we have based on what we've seen so far in January, that our guidance range looks good.

So January is pretty less of a drag than December was, so that's good. Can I ask -- and one other thing. Your -- can you comment on where you are on sort of your levels of coal you have under contract going into this year versus, say, where you were last year? Is that appreciably lower or around the same? And as follow on to that, do you expect to see meaningfully incremental switching, in terms of gas substituting coal, given where the curves are, and given how your contracts look maybe in Virginia and also up in New England?

Okay, Jonathan, let me ask Dave Christian to answer that.

I think you could fairly say that we are solidly in the range of gas-coal switching. We followed this coal parity and have been for some time, and we're solidly in the substitution range now. We saw some of this coming in New England and reduced our coal hedging positions. If you were to look the hedging percentage in the kit, you'll probably see coal hedging at about 26% this year. Last year at this time, it would have been about 70%. So you're seeing significantly reduced coal burns everywhere and saw some of it coming and took some actions. So I think you're going to see a lot of gas burn for the remainder of the year.

Any quantification around how much additional switch might be?

I can tell you what it is for Dominion. We have in 2011, we went -- from '10 to '11, we from 13.5% gas to 17.7% gas. And coal went down by about the equivalent amount.

And any view on how '12 will shake out as you model it now?

Too early to give a percentage number on that.

Our next question comes from Carrie Saint Louis with Fidelity.

Two questions. First, I'm wondering where your annual cash flow guidance that you normally provide is located?

It's in the guidance kit.

It's in the guidance kits, Carrie?

Okay. I couldn't find it, so I don't know if I'm missing it or what, but I don't know if you know what page it is.

We'll check for the page -- Page 10. [indiscernible] Okay. It'll -- It's going to come out after the call, and it's going to be on Page 10.

Okay, after the call. All right. And then I was just wondering, it's been a while since I've seen in any of your published materials, like kind of what balance sheet strength and credit quality metrics you guys have been targeting. So I don't know, have you -- maybe you could just provide an update about what metrics you target like a FFO-to-debt metric and what credit quality you guys are hoping to maintain during this large CapEx build?

I'm going to go ahead and have Scott answer that for you.

Carrie, it continues to be the credit metrics that would help us achieve the existing ratings. We really like the high BBB rating. And, of course, each rating agency looks a little differently, so we try to get away from specific targets on credit metrics. But they're not different from what you've seen in the recent past.

Okay. But the high BBB is kind of -- because, obviously, you have right now a few different credit ratings, so that's kind of where your modeling the business. Do you define that as kind of roughly around the 20% FFO to debt? Or what ballpark do you kind of look out there?

That is certainly in the ballpark.

Our next question comes from Nathan Judge with Atlantic Equities.

I may have missed it, but did you quantify what your last 12 months ROE was at VEPCO if you had taken all those -- after all the charges and adjustments that you've mentioned in the call?

Nathan, we didn't quantify it, but I would tell you that we believe our ROE for 2011 will be below 9%.

So is it -- is there a reason why we couldn't see above allowed ROEs to balance that to get to -- you to that average in the second period -- second half of this period?

Well, there's a lot of drivers that go into that as you know. But the biannual review is based on an average over the 2-year period. And if you were to ask us know, do you believe that we will over earn our authorized return in the biannual period? Our answer to that would be no.

Our next question comes from Dan Eggers with Crédit Suisse. Dan Eggers - Crédit Suisse AG, Research Division: You guys have done a good job managing cost the last couple of years, and you're obviously targeting more, given these conditions. How should we think about kind of the durability of continuing to manage down O&M looking forward? And what sort of inflation rate should we thinking about from an O&M perspective, as you guys look at a 2- or 3-year period?

Well, Dan, we've been very focused on it. We gave very specific guidance in May of 2010 on what we thought our O&M expenditures will be in '10, '11 and '12. And we're right on target with that. We've taken a more aggressive stance now in '12 than what we've shown, so our '12 expenses will now be below 2011. We continue to optimize our operations. O&M's a huge driver for us. We have flexibility in a number of parts of our business to shape O&M year-to-year, in terms of focusing on different expense levels. So we don't have a specific long-term growth rate on O&M or a reduction level on O&M. We'll look at that as -- along with the other drivers that we have and take advantage of the opportunities that we have. We do have focus on it this year at a lower level. And based on the slides we show, we would expect to drive out an incremental $60 million to $90 million in O&M cost from where we stood last fall. Dan Eggers - Crédit Suisse AG, Research Division: Got it. And I guess the other kind of question is, with the degradation in the forward curves -- this is long-term situation, but are you having any change in conversation with people about some of the gas development needs? Or do you see any slowdown? Or are people are kind of charging ahead even as the recount is being talked down a little bit?

Dan, it hasn't slowed down at all. Actually, it accelerated in the fourth quarter. Where people are concentrating is in the West formations, which in particular for us is the Western Marcellus. But even more than that, the Utica. I mentioned it in the script. There's a lot in the script, you all could have missed it. It's actually every single well online in Ohio, in the Utica formation, is producing into our gathering systems at Dominion East Ohio. So permitting is going up, drilling activity is going up. But as you note in -- it's not accelerating in the dry gas. It's accelerating in the wet gas, which supports -- and there's not enough facilities in Ohio or West Virginia or Pennsylvania to handle all the wet gas that's coming online. So that's what supports Natrium, for example. And that were not the only one doing it. There are others pursuing these facilities. But we've gotten our share, and we expect to continue to get our share.

Our next question comes from Steve Fleishman with Bank of America Merrill Lynch.

Just a couple of questions. I think Tom, you mentioned something about the one issue that's not clarified on the rate order with respect to the timing of starting it. Could you just clarify that issue? And if it matters at all within the guidance range?

Well, it doesn't matter in the guidance range, first. Because our rates weren't changed. They weren't subject to being changed. And if we over -- remember, you have to over-earn in 2 consecutive biannual reviews under Virginia law. The commission found we over-earned in the first, which for -- it's for the years '09 and '10. They'll review '11 and '12 in 2013. So what the issue there is -- was this is our view, fairly strongly held view. All the parties agreed in the going-in case in 2009 that the new ROE level for the second biannual review would become effective at the commission's order in the first biannual review or when -- which was issued on December 1. So there's a -- we didn't think it was clear from the order that was entered in December whether they were going to do what that settlement agreement called for, which was that the first biannual review ROE, which was 11.9% apply to the first 11 months of the biannual review, and the new ROE to the second 13 months, or whether they were going to apply to the new ROE to the entire 24 months. It makes a difference of 40 or 50 basis points, I think, on the average of the 2 years. So it's -- we think it's fairly clear, but that's in front of the commissioners under our motion for clarification and they'll rule.

Got you. One unrelated question. Just on the Cove Point export approvals and the DOE process. Could you just go through what their process is? And this has become a bit of a political issue. Just maybe give a little more color on the reasons for support, the reasons against, and your -- how you think you'll be able to prevail?

When you file for a -- first, we got the NAFTA country permits. That's a fairly simple thing to do, because there's a limited number of countries. What matters is getting the non-NAFTA country permit, which is presently under consideration. When you file for that permit, you have to file an economic impact study with it, which we did and is available for review, and you look at a typical economic impact study what -- they're looking at what are the potential impacts on the price of natural gas, if this permit is allowed. But you also look at the economic activity that is created by the issuance of the permit: New jobs, tax revenues. Things like that, that will occur upstream from the facility: a new pipeline operations, processing facilities, drilling jobs, the jobs that spin off of that to support functions, et cetera. The study we filed shows that there are very significant beneficial impacts and economic activity from allowing the permit to be issued, so they'll consider that. They'll certainly consider other people's views. They'll look at what the potential is for impacts on gas prices out into the future. I think if you look at all of it in a balanced way, with all the gas that's available in this country now, and particularly in this region, we think it is likely the permit will be issued. We expect to have it later this year. And if you look at just the map, if you're going to export gas from the Marcellus and Utica Shale regions, I think it's pretty likely that's going to happen through the Cove Point facility, just because of the close -- how close we are to the region.

We have reached the conclusion of our call. Mr. McGettrick, do you have any closing remarks?

Yes, thank you. I just want to remind everybody that our next scheduled earnings call will be April 26. And that you should expect our year end K to come out of the end of next month. Thank you very much.

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