Dominion Power 2006 Annual Report Download - page 86

Based on stated maturity dates rather than early redemption dates that could be elected by instrument holders, the scheduled principal
payments of long-term debt at December 31, 2006 were as follows:
2007 2008 2009 2010 2011 Thereafter Total
(millions, except percentages)
Secured Senior Notes $9 $10 $11 $12$12$159$213
Secured First andRefunding Mortgage
Bonds 215 —————215
Secured Bank Debt 370 —————370
UnsecuredSenior Notes (including
Medium-Term Notes) 1,863 1,413 313 1,444 965 7,230 13,228
UnsecuredCallable andPuttable
Enhanced SecuritiesSM —————225 225
Tax-Exempt Financings 20 157 115 55437739
UnsecuredJunior Subordinated Notes
Payable to Affiliated Trusts —————1,134 1,134
Enhanced Junior Subordinated Notes —————800800
Other 22———385389
Total $2,479 $1,582 $439$1,461$982$10,370 $17,313
Weighted average coupon 5.80% 5.29% 5.38% 6.56% 6.60% 5.91%
Our short-term credit facilities and long-term debt agreements
contain customary covenants and default provisions. As of
December 31, 2006, there were no events of default under these
covenants.
Convertible Securities
As described in Note 3, we entered into an exchange transaction
with respect to $220 million of our outstanding contingent con-
vertible senior notes in contemplation of the transition method
provided by EITF 04-8. We exchanged the outstanding notes for
new notes with a conversion feature that requires that the princi-
palamount of each note be repaid in cash. The notes are valued at
aconversion rate of 13.5865 shares of common stock per $1,000
principal amount of senior notes, which represents aconversion
price of $73.60. Amounts payable in excess of the principal
amount will be paid in common stock. The conversion rate is
subject toadjustment upon certain events such as subdivisions,
splits, combinations of common stock or the issuance to all
common stock holders of certain common stock rights, warrants
or options and certain dividend increases.
The notesoutstanding on December 31, 2004 were included
in thediluted EPS calculation retroactive to thedate of their issu-
ance using the methoddescribed in EITF 04-8, when appro-
priate. Under this method, the numberofshares included in the
denominator of the dilutedEPScalculation is calculated as the
net shares issuable for the reportingperiod based upon the average
market price forthe period. This results in an increase in the
average shares outstanding used in the calculation of our diluted
EPS when the conversion price of $73.60 is lower than the aver-
age marketprice of our common stock over the period,and
results in noadjustment when the conversion price exceeds the
average market price.
The senior notes are convertible by holders into acombination
of cash and shares of our common stock under any of the follow-
ing circumstances:
(1) The closing price of our common stock equals $88.32 per
share or higherfor at least 20 out of the last 30 consecutive
tradingdays ending on the last tradingday of the previous
calendar quarter;
(2) The senior notes are calledforredemption by us on or after
December 20, 2006;
(3) The occurrence of specified corporate transactions; or
(4) The credit rating assigned to the senior notes by Moody’s
Investors Service is below Baa3and by Standard &Poor’s
Ratings Services,adivision of the McGraw-Hill Companies,
Inc., is below BBB- or the ratings are discontinued forany
reason.
Since none of the conditions have been met, the senior notes
are not yet subject to conversion. In 2007, we will also begin to
paycontingent interest if the average tradingprice as defined in
the indenture equals or exceeds 120% of the principal amount of
the senior notes. Holders have the right to require us to purchase
our senior notes for cash at 100% of the principal amount plus
accrued interest in December 2008, 2013 or 2018, or if we
undergo certain fundamental changes.
Equity-Linked Securities
In 2002, we issued6.6million equity-linked debt securities, con-
sisting of stock purchase contracts and senior notes. Total net
proceeds were $320 million. Long-term debt of $330 million and
an equity charge of $36 million were recorded in our Con-
solidated Balance Sheet related to the issuance.
The stock purchasecontracts obligated the holders to purchase
shares of our common stock from us by May 2006. The purchase
price was $50 and the numberofshares to be purchased was
determined under a formulabased upon the average closing price
of our common stock near the settlement date. The senior notes,
or treasury securities in some instances, were pledged as collateral
to secure the purchase of common stock under the related stock
purchasecontracts. The holders were given the option to either
satisfy their obligationsunder the stock purchasecontracts by
allowing the senior notes to be remarketed with the proceeds
being paid to us as consideration for the purchase of stock or
continue to hold the senior notes and use other resources as con-
sideration for the purchase of stock under the stock purchase
contracts. In February 2006, we successfully remarketed the
senior notes related to our equity-linked debt securities. The
senior notes, which will mature in 2008, now carry an annual
DOMINION2006 Annual Report 85