Dominion Power 2000 Annual Report Download - page 36

34
Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
•$400 million of 3-year fixed rate 7.60% notes;
•$200 million of 12-year fixed rate 7.40% remarketable notes;
•$250 million of 14-year fixed rate 7.82% remarketable notes;
•$250 million of 12-year variable rate remarketable notes; and
•$413 million of Premium Income Equity Securities (registered
trademark of Lehman Brothers, Inc.).
Also during 2000, Dominion used net proceeds from the sales of
non-core assets to pay down a portion of the bridge financing.
In January 2001, Dominion issued $250 million of 8.4% Capital
Securities due in January 2031 and $1 billion of 2-year fixed rate 6%
notes to refinance the remaining bridge financing. For additional
information on the capital securities, see Note 17 to the Consoli-
dated Financial Statements.
Millstone Nuclear Power Station Acquisition and
Related Financing
Dominion has reached an agreement to acquire Millstone, located
in Waterford, Connecticut, for a total purchase price of approxi-
mately $1.3 billion. The acquisition is expected to close by the end
of April 2001, following regulatory approvals. See Note 5 to the
Consolidated Financial Statements. During 2000, Dominion issued
6 million shares of common stock generating proceeds of $354
million to pre-finance a portion of the Millstone acquisition. Also
in January 2001, Dominion issued $300 million of 8.4% Trust
Preferred Securities due in January 2041 in anticipation of the
Millstone purchase. For additional information on the preferred
securities, see Note 17 to the Consolidated Financial Statements.
Dominion plans to finance the remainder of the Millstone acquisition
with bridge financing or through the issuance of long-term debt.
Short-Term Borrowings
In addition to the bridge financing discussed above, Dominion has
three separate commercial paper programs with an aggregate limit
of $2.85 billion supported by various credit facilities. One facility is
a $1.75 billion 364-day revolving credit facility that matures May 31,
2001. Two of the facilities, aggregating $500 million, are accessible
by CNG only and will terminate by March 31, 2001. The other facili-
ties are multi-year, one of which matures in June 2001.
Net borrowings under the commercial paper program were
$2.7 billion at December 31, 2000, an increase of $1.5 billion from
amounts outstanding at December 31, 1999. Commercial paper bor-
rowings are used primarily to fund working capital requirements
and bridge financing of acquisitions, and therefore may vary signifi-
cantly during the course of the year depending upon the timing
and amount of cash requirements not satisfied by cash provided
by operations.
In addition to commercial paper, Dominion may also issue
extendible commercial notes (ECNs) to meet working capital
requirements. This program became effective in July 2000 and will
allow Dominion to issue up to $200 million aggregate outstanding
principal of ECNs. ECNs are unsecured notes expected to be sold in
private placements. Any ECNs Dominion issues would have a
stated maturity of 390 days from issuance and may be redeemed, at
Dominion’s option, within 90 days or less from issuance.
Equity Plans
In 2000, Dominion raised $195 million from the sale of common
stock through Dominion Direct (a dividend reinvestment open
enrollment direct stock purchase plan) and employee savings plans.
Beginning in August 2000, Dominion began using newly issued
shares rather than shares purchased on the open market for
these plans.
Other Securities Issuances and Repayments
In 2000, Dominion issued the following securities:
•$220 million of variable-rate medium-term notes maturing
in 2002; and
•$30 million of Tax-Exempt Pollution Control Revenue Bonds due
September 1, 2030.
The proceeds from the issuances were used for general corpo-
rate purposes, including the scheduled retirement of outstanding
debt and preferred stock.
In 2000, Dominion repaid approximately $867 million of sched-
uled maturities of its long-term debt and preferred stock, excluding
debt repaid in connection with financial services operations, and
retired $45 million of debt securities through sinking fund
provisions and open market purchases.
In February 2001, Dominion issued through the Industrial Devel-
opment Authority of the Town of Louisa, Virginia, $50 million in
aggregate principal amount of Tax-Exempt Pollution Control Rev-
enue Bonds due 2031. The net proceeds of the bonds were used to
finance qualifying expenditures made during the construction of
facilities at the North Anna Power Station.
Dominion Capital Financing Activities
In connection with purchases and originations of loans and sales
and collections of loans during 2000, the Company repaid $237 mil-
lion of short-term commercial paper and issued and repaid long-
term debt of $5.0 billion and $6.1 billion, respectively.
Amounts Available under Shelf Registrations
As of December 31, 2000, Dominion had available $5.0 billion of
remaining principal amount under currently effective shelf registra-
tions with the SEC to meet capital requirements. Financing activi-
ties in January 2001 reduced this amount by $1.55 billion.
Investing Activities
In 2000, investing activities resulted in a net cash outflow of
$2.6 billion reflecting the following primary investing activities:
•Dominion’s cash payment of approximately $2.9 billion in con-
nection with the CNG acquisition;
•plant and nuclear fuel expenditures of $1.4 billion that included
construction and expansion of generation facilities, environ-
mental upgrades, purchase of nuclear-fuel, and construction
and improvements of gas and electric transmission and
distribution assets;