Dominion Power 2001 Annual Report Download - page 73

Long-Term Debt
(millions) At December 31 2001 2000
First and Refunding Mortgage Bonds:
6.0% to 8.75%, due 2001 to 2025(1) $ 2,121 $ 2,321
Senior Subordinated Debt, 9.25%, due 2004 94 —
Senior and Medium-Term Notes:
Variable rates, due 2002 to 2012 690 470
5.375% to 9.85%, due 2001 to 2038(2) 8,275 5,133
Commercial Paper (see Note 19) — 250
Tax-Exempt Financings(3):
Variable rates, due 2007 to 2027 489 489
4.0% to 5.45%, due 2022 to 2031 110 60
Secured Revolving Lines of Credit:
Variable rates, due 2002 to 2004 — 297
Revolving Lines of Credit:
Variable rates, due 2001 to 2004(4) 241 145
Term Note:
Variable rate, due 2002 675 900
Nonrecourse Debt:
Variable rates, due 2004 to 2009 40 59
4.49% to 12.5%, due 2001 to 2020(4) 353 367
13,088 10,491
Fair value hedge valuation(5) 43 —
Amount due within one year (1,309) (336)
Unamortized discount and premium, net (25) (54)
11,797 10,101
Notes Payable—Affiliates (see Note 29):
6.0%, due 2005 175 —
Variable rates, due 2006 192 —
367 —
Amount due within one year (45) —
322 —
Total long-term debt $12,119 $10,101
(1) Substantially all of Virginia Power’s property is subject to the lien of the mortgage,
securing its First and Refunding Mortgage Bonds (Mortgage Bonds). In 2001, Virginia
Power retired $100 million of its 1993-E, 6% Mortgage Bonds and redeemed $100
million of its 1991-A, 8.75% Mortgage Bonds due April 1, 2021. In January 2002,
Virginia Power called its $200 million, 6.75% 1997-A Mortgage Bonds due February 1,
2007 for redemption in February 2002 at a price of 102.74 plus accrued interest. In
January 2002, Virginia Power issued $650 million of 5.375% Senior Notes (2002 Senior
Notes) maturing in February 2007.
(2) In 2001, CNG redeemed the remaining $84 million of 8.75% Senior Notes due October
1, 2019. At the exercised option of holders, CNG will be required on October 15, 2006
to purchase the $150 million, 6.875% Senior Notes due October 15, 2026 at 100% of
the principal amount plus accrued interest. In January 2002, Dominion Resources, Inc.
issued $250 million of 3.875 percent medium-term notes due 2004.
(3) Certain pollution control equipment at Virginia Power’s generating facilities has been
pledged or conveyed to secure these financings.
(4) $76 million of variable rate debt under revolving lines of credit and $12 million of 6.34%
to 6.5% nonrecourse debt were retired in 2001.
(5) Represents changes in fair value of certain fixed rate long-term debt associated with fair
value hedging relationships, as described in Note 15.
Note: Coupon rate for variable rate debt is a weighted average of the interest rates for 2001,
ranging from 2.52% to 5.17%.
Note 20 The scheduled principal payments of long-term debt at
December 31, 2001 were as follows (in millions):
2002 2003 2004 2005 2006 Thereafter Total
$1,354 $2,112 $1,459 $889 $1,445 $6,196 $13,455
Dominion’s short-term credit facilities and long-term debt
agreements contain customary covenants and default provisions.
Subsidiary Dividend Restrictions
The 1935 Act prohibits registered holding companies and their
subsidiaries from paying dividends out of capital or unearned
surplus except when they have received specific SEC authori-
zation. In January 2002, Dominion filed an application with
the SEC for relief from the restriction on paying dividends out
of unearned surplus of the subsidiary into which Louis Dreyfus
was merged. The request was for relief up to an amount equal
to Louis Dreyfus’ retained earnings before the merger.
The Virginia Commission may prohibit any public service
company, including Virginia Power, from declaring or paying a
dividend to an affiliate, if found not to be in the public interest.
At December 31, 2001, the Virginia Commission had not
restricted the payment of dividends by Virginia Power.
Certain agreements associated with Dominion’s credit facil-
ities contain restrictions on the ratio of debt to total capitaliza-
tion. These limitations did not restrict Dominion’s ability
to pay dividends or receive dividends from its subsidiaries at
December 31, 2001.
Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trusts
From 1995 through 2001, Dominion established five subsidiary
capital trusts that sold trust preferred securities that represented
preferred beneficial interests and 97 percent beneficial owner-
ship in the assets held by the capital trusts. In exchange for the
funds realized from the sale of the trust preferred securities and
common securities that represent the remaining 3 percent
beneficial ownership interest in the assets held by the capital
trust, Dominion issued various junior subordinated debt instru-
ments. The junior subordinated debt instruments constitute
Note 22
Note 21
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