Dominion Power 2003 Annual Report Download - page 80

78.Dominion 2003
Notes to Consolidated Financial Statements, Continued
Selected information about Dominion’s equity-linked debt securities is presented below:
Senior Stock
Total Notes Purchase Stock
Total Long- Annual Contract Total Purchase Maturity
Date of Units Net term Interest Annual Equity Settlement of Senior
Issuance Issued Proceeds Debt Rate Rate Charge Date Notes
(millions, except percentages)
2000 8.3 $400.1 $412.5 8.05% 1.45% $20.7 11/04 11/06
2002 6.6 $320.1 $330.0 5.75% 3.00% $36.3 5/06 5/08
18. Subsidiary Preferred Stock
Dominion is authorized to issue up to 20 million shares of pre-
ferred stock. Dominion issued 665,000 shares of Series A
mandatorily convertible preferred stock, liquidation preference
$1,000 per share, to Piedmont Share Trust (Piedmont Trust) in con-
nection with the formation of DFV and the issuance of senior
notes by DFV. Dominion is the beneficial owner of the Piedmont
Trust which is consolidated in the preparation of Dominion’s Con-
solidated Financial Statements, thus eliminating these outstanding
shares of preferred stock.
Virginia Power is authorized to issue up to 10 million shares
of preferred stock, $100 liquidation preference. Upon involuntary
liquidation, dissolution or winding-up of Virginia Power, each
share is entitled to receive $100 per share plus accrued divi-
dends. Dividends are cumulative.
Holders of the outstanding preferred stock of Virginia Power
are not entitled to voting rights except under certain provisions of
the amended and restated articles of incorporation and related
provisions of Virginia law restricting corporate action, or upon
default in dividends, or in special statutory proceedings and as
required by Virginia law (such as mergers, consolidations, sales
of assets, dissolution and changes in voting rights or priorities of
preferred stock).
In 2002, Virginia Power purchased and redeemed, at par, all
shares of its variable rate preferred stock October 1988 Series,
June 1989 Series, September 1992A Series and September
1992B Series for $250 million, at the redemption price of $100
per share. The dividend rates for these series were variable
and set every 49 days via an auction process. The combined
weighted average rates for all series outstanding during 2002
and 2001, including fees for broker/dealer agreements, were
4.00% and 4.32%, respectively.
In 2002, Virginia Power issued 1,250 units consisting of 1,000
shares per unit of cumulative preferred stock for $125 million. The
preferred stock has a dividend rate of 5.50% until the end of the
initial dividend period on December 20, 2007. The dividend rate
for subsequent periods will be determined through periodic rate
remarketing. The preferred stock has a liquidation preference of
$100 per share plus accumulated and unpaid dividends. Except
during the initial dividend period, and any non-call period, the
preferred stock will be redeemable, in whole or in part, on any
dividend payment date at the option of Virginia Power. Virginia
Power may also redeem the preferred stock, in whole but not in
part, if certain changes are made to federal tax law which
reduce the dividends received deduction percentage.
Presented below are the series of Virginia Power preferred
stock not subject to mandatory redemption that were outstanding
as of December 31, 2003.
Issued and
Outstanding Entitled Per Share
Dividend Shares Upon Liquidation
(thousands)
$5.00 107 $112.50
4.04 13 102.27
4.20 15 102.50
4.12 32 103.73
4.80 73 101.00
7.05 500 103.53(1)
6.98 600 103.49(2)
Flex MMP 12/02, Series A 1,250 100.00
Total 2,590
(1) Through 7/31/04; $103.18 commencing 8/1/04; amounts decline in steps
thereafter to $100.00.
(2)Through 8/31/04; $103.15 commencing 9/1/04; amounts decline in steps
thereafter to $100.00.