Dominion Power 2006 Annual Report Download - page 88

required by Virginialaw(such as mergers,consolidations, sales of
assets, dissolution and changes in votingrights or priorities of
preferred stock).
Presented below are the series of Virginia Power preferred
stock not subject tomandatory redemption that were outstanding
as of December 31, 2006:
Dividend
Issued and
Outstanding
Shares
Entitled Per Share
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
7.05 500 102.47(1)
6.98 600 102.45(2)
Flex MMP 12/02, Series A 1,250 100.00(3)
Total 2,590
(1) Through 7/31/2007; $102.12 commencing 8/1/2007; amounts decline in
steps thereafter to $100.00 by 8/1/2013.
(2) Through 8/31/2007; $102.10 commencing 9/1/2007; amounts decline in
steps thereafter to $100.00 by 9/1/2013.
(3) Dividend rate is 5.50% through 12/20/2007; after which, the rate will be
determined according to periodic auctions for periods established by Virginia
Power at the time of the auction process. This series is not callable prior to
12/20/2007.
NOTE 20. SHAREHOLDERS’ EQUITY
Issuance of Common Stock
During 2006, we issued6.6million shares of common stock and
received proceedsof $479 million. Of this amount, 4.5 million
shares and proceedsof $330 million resulted from the settlement
of stock purchasecontracts associated with our 2002 issuance of
equity-linked debt securities. The remainder of the shares issued
and proceedsreceived were through Dominion Direct®(a divi-
dend reinvestment and open enrollment direct stock purchase
plan), employee savings plans and the exercise of employee stock
options.FromMay 2006 until November 2006, we issued new
common shares in consideration of proceeds received through
these programs. In November 2006, we began purchasingour
common stock on the open market with theproceeds received
through these programs, rather than havingadditional new
common shares issued.
Repurchases of Common Stock
In February 2005, we were authorized by our BoardofDirectors
to repurchase up to the lesser of 25 million shares or $2.0 billion
of our outstanding common stock.
Pursuant tothis authority, in November 2006 we repurchased
500 thousandsharesof our common stock forapproximately $40
million. Additionally, in December 2006 we entered into apre-
paid accelerated share repurchase agreement (ASR) with afinan-
cial institution as the counterparty. Under the ASR, we will
ultimately receive between 5.6 million and6.5million shares in
exchange forthe prepaymentof $500 million. At the time of
execution of the ASR, the counterparty delivered to us 5million
shares. The final number of shares delivered to the Company will
be determined by avolume weighted average price of our com-
monstock over the period commencing on December 12, 2006,
and terminating on or before May 16, 2007. The actual termi-
nation date is at the option of the counterparty. The average price
to be used to determine the final shares delivered to the Company
is subject toamaximum and minimum price. Assuming normal
termination, we will receive aminimum of 560 thousandaddi-
tional shares. In noevent will termination, normalor otherwise,
result in the Company delivering shares or additional cash to the
counterparty.
At December 31, 2006 the remaining purchase authorization
is thelesser of 15.7 million shares or $1.2 billion of our out-
standing common stock.
Shares Reserved for Issuance
At December 31, 2006, we had a total of 33 million shares
reservedand available for issuance for the following: Dominion
Direct®,employee stock awards, employee savings plans, director
stock compensation plans, and stock purchase contracts associated
with equity-linked debt securities.
Accumulated Other Comprehensive Income (Loss)
Presented in the table below is asummary of AOCI by
component:
At December 31, 2006 2005
(millions)
Net unrealized losses on derivatives—hedging
activities, net of tax$(422)$(2,777)
Net unrealized gains on investment securities,
net of tax 282 165
Net unrecognized pension andother
postretirement benefit costs, net of tax (335) —
Minimum pension liability adjustment, net of tax —(10)
Foreign currency translation adjustments 50 58
Total accumulated other comprehensive loss $(425) $(2,564)
Stock-Based Awards
In April 2005, shareholders approved the 2005 Incentive Com-
pensation Plan (2005 Incentive Plan) for employees and the
Non-Employee Directors Compensation Plan (Non-Employee
Directors Plan). Both plans permit stock-based awardsthat
include restricted stock, goal-based stock, stock options and stock
appreciation rights under the 2005 Incentive Plan andrestricted
stock and stock options under the Non-Employee Directors Plan.
Under provisions of both plans, employees and non-employee
directors may be grantedoptionstopurchasecommon stock at a
price not less than its fair market value at the dateof grant with a
maximum term of eight years. Option terms would be set at the
discretion of either the Compensation, Governance and
Nominating Committee of the Board of Directors or the Board of
Directors itself, as provided under each individual plan. At
December 31, 2006, approximately 14.8 million shares were
available forfuture grants under these plans. Prior to April 2005,
we had an incentive compensation plan that provided stock
options and restricted stock awards to directors, executives and
other key employees with vesting periods from oneto five years.
Stock options generally had contractual terms from six and one
half to ten years.
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