Dominion Power 2007 Annual Report Download - page 95

tributions related to our capital stock, including dividends,
redemptions, repurchases, liquidation payments or guarantee
payments. Also, during the deferral period, we may not make any
payments on or redeem or repurchase any debt securities that are
equal in right of payment with, or subordinated to, the hybrids.
N OTE 20. S UBSIDIARY P REFERRED S TOCK
Dominion is authorized to issue up to 20 million shares of pre-
ferred stock, however, none were issued and outstanding at
December 31, 2007 or 2006.
Virginia Power is authorized to issue up to 10 million shares
of preferred stock, $100 liquidation preference, and had
2.59 million preferred shares issued and outstanding at
December 31, 2007 and 2006. Upon involuntary liquidation,
dissolution or winding-up of Virginia Power, each share would be
entitled to receive $100 plus accrued dividends. Dividends are
cumulative.
Holders of Virginia Power’s outstanding preferred stock are
not entitled to voting rights except, under certain provisions of
the amended and restated articles of incorporation and related
provisions of Virginia law restricting corporate action, or upon
default in dividends, or in special statutory proceedings and as
required by Virginia law (such as mergers, consolidations, sales of
assets, dissolution and changes in voting rights or priorities of
preferred stock).
Presented below are the series of Virginia Power preferred
stock not subject to mandatory redemption that were outstanding
as of December 31, 2007:
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
7.05 500 102.12(1)
6.98 600 102.10(2)
Flex MMP 12/02, Series A 1,250 100.00(3)
Total 2,590
(1) Through 7/31/2008; $101.77 commencing 8/1/2008; amounts decline
in steps thereafter to $100.00 by 8/1/2013.
(2) Through 8/31/2008; $101.75 commencing 9/1/2008; amounts decline
in steps thereafter to $100.00 by 9/1/2013.
(3) Dividend rate was 5.50% through 12/20/2007. Dividend rate is now
6.25% through 3/20/2011; after which, the rate will be determined
according to periodic auctions for periods established by Virginia Power
atthetimeoftheauctionprocess.
N OTE 21. S HAREHOLDERS ’E QUITY
Issuance of Common Stock
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.
Repurchases of Common Stock
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.
At December 31, 2007, the remaining stock repurchase
authorization provided by our Board of Directors is the lesser of
54 million shares or $2.7 billion of our outstanding common
stock.
Shares Reserved for Issuance
At December 31, 2007, we had a total of 46 million shares
reserved and available for issuance for the following: Dominion
Direct®, employee stock awards, employee savings plans, director
stock compensation plans and contingent convertible senior
notes.
Accumulated Other Comprehensive Income (Loss)
Presented in the table below is a summary of AOCI by
component:
At December 31, 2007 2006
(millions)
Net unrealized losses on derivatives—hedging
activities, net of tax of $30 and $266, respectively $(42) $(422)
Net unrealized gains on investment securities, net of
tax of $116 and $187, respectively 180 282
Net unrecognized pension and other postretirement
benefit costs, net of tax of $149 and $239,
respectively (150) (335)
Foreign currency translation adjustments —(1) 50
Total accumulated other comprehensive loss $ (12) $(425)
(1) Decrease is due to the sale of our Canadian E&P business in June 2007.
Stock-Based Awards
In April 2005, our shareholders approved the 2005 Incentive
Compensation Plan (2005 Incentive Plan) for employees and the
Non-Employee Directors Compensation Plan (Non-Employee
Directors Plan). The 2005 Incentive Plan permits stock-based
awards that include restricted stock, performance grants, goal-
based stock and stock options, and the Non-Employee Directors
Dominion 2007 Annual Report 93