Dominion Power 2007 Annual Report Download - page 47

December 31, 2007, we had the following commercial paper,
bank loans and letters of credit outstanding, as well as capacity
available under credit facilities:
Facility
Limit
Outstanding
Commercial
Paper
Outstanding
Bank Loans
Outstanding
Letters of
Credit
Facility
Capacity
Available
(millions)
Five-year joint
revolving credit
facility $3,000 $757 $ — $229 $2,014
Five-year Dominion
credit facility 1,700 — 1,000 1 699
Five-year Dominion
bilateral facility 200 — — — 200
Totals $4,900 $757 $1,000 $230 $2,913
In addition to the facilities above, we also entered into a $100
million bilateral credit facility in August 2004 that terminates in
August 2009. At December 31, 2007, there were no letters of
credit outstanding under this facility.
In connection with our commodity hedging activities, we are
required to provide collateral to counterparties under some cir-
cumstances. Under certain collateral arrangements, we may satisfy
these requirements by electing to either deposit cash, post letters
of credit or, in some cases, utilize other forms of security. From
time to time, we vary the form of collateral provided to counter-
parties after weighing the costs and benefits of various factors
associated with the different forms of collateral. These factors
include short-term borrowing and short-term investment rates,
the spread over these short-term rates at which we can issue
commercial paper, balance sheet impacts, the costs and fees of
alternative collateral postings with these and other counterparties
and overall liquidity management objectives.
L
ONG -T ERM D EBT
During 2007 we issued the following long-term debt:
Type Principal Rate Maturity
Issuing
Company
(millions)
Senior notes $ 350 6.00% 2017 Dominion
Senior notes 600 6.00% 2037 Virginia Power
Senior notes 600 5.95% 2017 Virginia Power
Senior notes 600 5.10% 2012 Virginia Power
Senior notes 450 6.35% 2037 Virginia Power
Senior revolving notes 75 Variable 2017 DCI
Total long-term debt
issued $2,675
In January 2008, Virginia Power borrowed $30 million in
connection with the Economic Development Authority of the
City of Chesapeake Pollution Control Refunding Revenue Bonds,
Series 2008 A, which mature in 2032 and bear a coupon rate of
3.6%. The proceeds were used to refund the principal amount of
the Industrial Development Authority of the City of Chesapeake
Money Market Municipals Pollution Control Revenue, Series
1985 that would otherwise have matured in February 2008.
In November 2007, Virginia Power borrowed $14 million in
connection with the Economic Development Authority of the
County of Chesterfield’s issuance of its Solid Waste and Sewage
Disposal Revenue Bonds, Series 2007 A, which mature in 2031
and bear a coupon rate of 5.60%. The bonds were issued pur-
suant to a trust agreement whereby funds are withdrawn from the
trust as improvements are made at our Chesterfield Power Station
located in Chester, Virginia. We have withdrawn less than $1
million from the trust as of December 31, 2007.
DCI consolidates a collateralized debt obligation (CDO)
entity in accordance with FASB Interpretation No. 46 (revised
December 2003), Consolidation of Variable Interest Entities (FIN
46R). In August 2007, the CDO entity issued an additional $75
million of senior revolving notes that mature in January 2017 and
are nonrecourse to us. At December 31, 2007, outstanding bor-
rowings under this credit facility totaled $75 million.
During 2007, we repaid $5.5 billion of long-term debt and
notes payable, which includes the completion of a debt tender
offer repurchasing $2.5 billion of our debt securities in July 2007.
Included in the debt repayments above is the redemption of
all 8 million units of the $200 million 7.8% Dominion CNG
Capital Trust I debentures due October 31, 2041. These secu-
rities were redeemed at a price of $25 per preferred security plus
accrued and unpaid distributions. Also included is the
redemption of approximately 240 thousand units of the $250
million 8.4% Dominion Capital Trust III debentures due Jan-
uary 15, 2031. These securities were redeemed at a price of
$1,209 per preferred security plus accrued and unpaid dis-
tributions.
I
SSUANCE OF C OMMON S TOCK
In 2007, we received cash proceeds of $226 million for
7.6 million shares issued in connection with the exercise of
employee stock options. During 2007, we purchased our com-
mon stock on the open market with the proceeds received
through Dominion Direct®(a dividend reinvestment and open
enrollment direct stock purchase plan) and employee savings
plans, rather than having additional new common shares issued.
In January 2008, we began issuing additional new common shares
to be used for these programs. In 2008, we expect to receive pro-
ceeds from these programs of between $200 million to $250 mil-
lion.
R
EPURCHASES OF C OMMON S TOCK
In 2007, we repurchased 129.0 million shares of common stock
for approximately $5.8 billion. This amount includes the com-
pletion of our equity tender offer in August 2007, in which we
purchased approximately 115.5 million shares at a price of $45.50
per share for a total cost of approximately $5.3 billion, excluding
fees and expenses related to the tender.
In December 2006, we entered into a prepaid accelerated
share repurchase agreement (ASR) with a financial institution as
the counterparty. Under the ASR, we would receive between
11.2 million and 13.0 million shares in exchange for the prepay-
ment. At the time of execution of the ASR, we made a prepay-
ment of $500 million and the counterparty initially delivered
approximately 10.1 million shares to us. The final number of
shares to be delivered to the Company was determined by the
volume weighted-average price of our common stock over the
period commencing on December 12, 2006 and terminating on
May 16, 2007. In May 2007, the counterparty delivered approx-
imately 1.6 million additional shares to us in completion of the
ASR.
Dominion 2007 Annual Report 45