Dominion Power 2002 Annual Report Download - page 12

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63.4
67.0
60.8
56.4**
Debt to Capitalization
Percent
Per GAAP
Financial Statements.
* The first balance sheet
after our merger with CNG.
** Ratio is reduced to
55.6 percent with inclusion of
$500 million held in escrow
at year end for a January 2003
debt repayment.
Dec. 2000March 2000* Dec. 2001 Dec. 2002
40
80
60
10 Dominion ’02 Annual Report
have done the same. No matter how excited we are about our work, no matter
how bullish we are in the long-term, good leadership is not founded in delusion.
In our case, the agencies wanted us to run our businesses with a more conserva-
tively financed balance sheet.
Fundamental to Dominion’s advantage is our investment-grade rat-
ing—“BBB-plus”—an asset that tells lenders what rate to expect on the money
we borrow. This isn’t mysterious. Think of it as you would your own household
credit rating. Being able to borrow reasonably priced money when we need it is
critical to our ability to grow revenues and profits. It gives us a competitive
advantage when so many others are falling below investment grade.
Last year, we told you we were working to achieve a 55 percent
debt-to-capital ratio. We’re now close to our goal—at 56.4 percent when 2002
ended. We’re even closer—55.6 percent—when you count $500 million we had
escrowed for debt repayment in January 2003. Over time, credit-rating agencies
want us to achieve an even lower ratio. We plan to meet this or any other reason-
able goal and sustain your dividend, because our high investment-grade rating is
our target, not a numeric ratio. First, we’ll expect to retain more earnings. And
we expect to boost our equity account by more than $160 million annually from
customers and employees who increase their investment in Dominion through
dividend reinvestment, employee-matching stock and direct-stock purchase plans.
Our world-class nuclear opera-
tions are a critical competitive
advantage. Dominion’s North
Anna Unit 1 and Surry Unit 1
in 2002 were among the top
12 commercial reactors
world-wide as measured by
their capacity factors, accord-
ing to
Nucleonics Week
,a
division of the McGraw-Hill
Companies. Out of 436
nuclear units reporting, North
Anna Unit 1 and Surry Unit 1
ranked in 9th and 11th place,
respectively.