-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, puIcIKlSrVEu0mGpGxcJ26Q/YUDnuyjofG0DFx5edAnP2g814vrcBMOCAUeOv+vm l1lkdnVXmOOIZO5GEbdZ5A== 0000715957-95-000005.txt : 19950508 0000715957-95-000005.hdr.sgml : 19950508 ACCESSION NUMBER: 0000715957-95-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950505 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DOMINION RESOURCES INC /VA/ CENTRAL INDEX KEY: 0000715957 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 541229715 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08489 FILM NUMBER: 95534965 BUSINESS ADDRESS: STREET 1: 901 E BYRD ST STREET 2: P O BOX 26532 CITY: RICHMOND STATE: VA ZIP: 23219 BUSINESS PHONE: 8047755700 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) /X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission file number 1-8489 DOMINION RESOURCES, INC. (Exact name of registrant as specified in its charter) Virginia 54-1229715 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 901 East Byrd Street, Richmond, Virginia 23219 (Address of principal executive offices) (Zip Code) Registrant's telephone number (804) 775-5700 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes __X__ No _____ At April 30, 1995 the latest practicable date for determination, 172,782,542 shares of common stock, without par value, of the registrant were outstanding. DOMINION RESOURCES, INC. INDEX Page Number PART I. Financial Information Item 1. Consolidated Financial Statements Consolidated Statements of Income - Three 3 Months Ended March 31, 1995 and 1994 Consolidated Balance Sheets - March 31, 1995 4-5 and December 31, 1994 Consolidated Statements of Cash Flows 6-7 Three Months Ended March 31, 1995 and 1994 Notes to Consolidated Financial Statements 8-11 Item 2. Management's Discussion and Analysis 12-16 PART II. Other Information Item 1. Legal Proceedings 17 Item 4. Submission of Matters to a Vote of 18 Security Holders Item 5. Other Information 19-20 Item 6. Exhibits and Reports on Form 8-K 21 DOMINION RESOURCES, INC. PART I. FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended March 31, 1995 1994 Millions, except per share amounts Operating revenues and income: Electric $1,076.3 $1,102.1 Nonutility 53.0 64.9 1,129.3 1,167.0 Operating expenses: Fuel, net 254.0 262.3 Purchased power capacity, net 178.7 177.3 Other operation 168.4 153.1 Maintenance 66.9 70.5 Depreciation and amortization 135.2 135.4 Other taxes 69.6 73.2 872.8 871.8 Operating income 256.5 295.2 Other income 2.3 3.3 Income before fixed charges and Federal income taxes 258.8 298.5 Fixed charges: Interest charges, net 95.2 91.0 Preferred dividends of Virginia Power 11.7 10.0 106.9 101.0 Income before provision for Federal income taxes 151.9 197.5 Provision for Federal income taxes 43.4 56.1 Net income $108.5 $141.4 Average common stock 172.3 168.5 Earnings per common share $ 0.63 $ 0.84 Dividends paid per common share $ 0.645 $ 0.635 __________________ The accompanying notes are an integral part of the Consolidated Financial Statements. 3 DOMINION RESOURCES, INC. CONSOLIDATED BALANCE SHEETS ASSETS (UNAUDITED) March 31, December 31, 1995 1994* (Millions) Current assets: Cash and cash equivalents $ 122.8 $ 146.7 Trading securities 62.1 110.8 Customer accounts receivable, net 245.4 202.7 Other accounts receivable 113.2 83.2 Accrued unbilled revenues 98.2 97.4 Accrued taxes 41.1 0.0 Materials and supplies: Plant and general 187.4 186.6 Fossil fuel 82.1 122.9 Other 96.7 136.2 1,049.0 1,086.5 Investments 1,276.5 1,160.1 Property, plant and equipment: 15,533.9 15,415.4 Less accumulated depreciation and amortization 5,292.0 5,170.0 10,241.9 10,245.4 Deferred charges and other assets: Regulatory assets 859.1 871.0 Other 190.4 199.2 1,049.5 1,070.2 Total assets $13,616.9 $13,562.2 __________________ The accompanying notes are an integral part of the Consolidated Financial Statements. * The Balance Sheet at December 31, 1994 has been taken from the udited Consolidated Financial Statements at that date. 4 DOMINION RESOURCES, INC. CONSOLIDATED BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' EQUITY (UNAUDITED) March 31, December 31, 1995 1994* (Millions) Current liabilities: Securities due within one year $ 205.1 $ 399.1 Short-term debt 76.8 146.0 Accounts payable, trade 293.7 343.5 Accrued interest 108.0 106.3 Accrued taxes 111.3 0.0 Accrued payrolls 48.6 59.5 Customer deposits 55.2 55.0 Provision for rate refunds 14.3 12.2 Other 94.4 115.8 1,007.4 1,237.4 Long-term debt: Utility 4,073.7 3,910.4 Nonrecourse - nonutility 657.1 640.2 Other 200.0 160.0 4,930.8 4,710.6 Deferred credits and other liabilities: Deferred income taxes 1,633.0 1,613.6 Investment tax credits 284.9 289.2 Deferred fuel expenses 50.7 51.5 Other 276.5 257.7 2,245.1 2,212.0 Total liabilities 8,183.3 8,160.0 Commitments and Contingencies Preferred stock: Virginia Power stock subject to mandatory redemption 221.7 222.1 Virginia Power stock not subject to mandatory redemption 594.0 594.0 Common shareholders' equity: Common stock - no par 3,180.7 3,157.6 Retained earnings 1,449.5 1,455.2 Allowance on available-for-sale securities (33.4) (47.8) Other 21.1 21.1 4,617.9 4,586.1 Total liabilities & shareholders' equity $13,616.9 $13,562.2 The accompanying notes are an integral part of the Consolidated Financial Statements. * The Balance Sheet at December 31, 1994 has been taken from the audited Consolidated Financial Statements at that date. 5 DOMINION RESOURCES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31, 1995 1994 (Millions) Cash flows from operating activities: Net income $ 108.5 $ 141.4 Adjustments to reconcile net income to net cash: Depreciation and amortization 151.3 152.8 Deferred income taxes 16.5 47.1 Investment tax credits, net (4.2) (4.2) Allowance for other funds used during construction (1.8) (1.2) Deferred fuel expenses (0.8) (16.9) Deferred capacity expenses (0.8) 30.0 Non-cash return on terminated construction projects costs (pre-tax) (2.3) (2.7) Changes in assets and liabilities: Accounts receivable (65.0) 121.0 Accrued unbilled revenues 29.6 35.9 Materials and supplies 40.1 33.7 Accounts payable, trade (27.6) (65.0) Accrued interest and taxes 95.2 42.4 Provision for rate refunds 2.1 (98.9) Other changes 29.8 (72.4) Net cash flows from operating activities 370.6 343.0 Cash flows from (to) financing activities: Issuance of common stock 35.0 52.7 Issuance of long-term debt: Utility 200.0 164.0 Nonrecourse-nonutility 55.2 5.3 Issuance (repayment) of short-term debt (69.1) (35.9) Repayment of long-term debt and preferred stock (239.9) (153.1) Common dividend payments (111.0) (106.9) Other (4.3) 8.9 Net cash flows (to) financing activities (134.1) (65.0) 6 DOMINION RESOURCES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED) Three Months Ended March 31, 1995 1994 (Millions) Cash flows from (used in) investing activities: Capital expenditures-(excluding AFC-equity funds) (141.1) (132.8) Investments in Marketable Securities 29.1 (72.5) Sale of Accounts Receivable (60.0) (50.0) Other (88.4) (21.1) Net cash flows (used in) investing activities (260.4) (276.4) Increase in cash and cash equivalents (23.9) 1.6 Cash and cash equivalents at beginning of period 146.7 102.0 Cash and cash equivalents at end of period $122.8 $103.6 Supplementary cash flows information: Cash paid during the period for: Interest (net of interest capitalized) $ 133.1 $ 95.3 Income taxes 3.4 5.6 __________ The accompanying notes are an integral part of the Consolidated Financial Statements. 7 DOMINION RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (a) In the opinion of Dominion Resources' management, the accompanying unaudited Consolidated Financial Statements contain all adjustments, consisting only of normal recurring accruals, necessary to present fairly the financial position as of March 31, 1995, the results of operations for the three-month periods ended March 31, 1995 and 1994, and cash flows for the three-month periods ended March 31, 1995 and 1994. These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Dominion Resources Annual Report on Form 10-K for the year ended December 31, 1994. Certain amounts in the 1994 Consolidated Financial Statements have been reclassified to conform to the 1995 presentation. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. (b) Common Stock At March 31, 1995 there were 300,000,000 shares of common stock authorized of which 172,706,628 were issued and outstanding. Common shareholders' equity at March 31, 1995 also includes $12.3 million for amounts received under the Stock Purchase Plan for Customers of Virginia Power and the Automatic Dividend Reinvestment and Stock Purchase Plan for which shares have not yet been issued. Common shares issued during the referenced periods were as follows: Three Months Ended March 31, 1995 1994 Automatic Dividend Reinvestment and Stock Purchase Plan 645,998 722,439 Customer Stock Purchase Plan 0 0 Employee Savings Plan 0 232,311 Stock repurchase and retirement (377,000) 0 Other 32,581 36,774 Total Shares 301,579 991,524 (c) Long-term Incentive Plan On February 24, 1995, the Organization and Compensation Committee of the Board of Directors of Dominion Resources awarded participants 25,320 shares of restricted common stock at the award price of $37.625 per share. The stock has a one to three-year vesting period. 8 DOMINION RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) For the three-month period ended March 31, 1995, no common shares were issued associated with exercised stock options from previous awards. As of March 31, 1995, options from 11,076 shares were exercisable from previous awards. (d) Preferred Stock - Virginia Power As of March 31, 1995, there were 2,217,319 and 5,940,140 issued and outstanding shares of preferred stock subject to mandatory redemption and preferred stock not subject to mandatory redemption, respectively. There are a total of 10,000,000 authorized shares of Virginia Power's preferred stock. (e) Provision for Federal Income Taxes Total Federal income tax expense differs from the amount computed by applying the statutory Federal income tax rate to pre-tax income for the following reasons: Three Months Ended March 31, 1995 1994 (Millions) Computation of Provision for Federal Income Tax: Pre-tax income $151.9 $197.5 Tax at statutory federal income tax rate of 35% applied to pre-tax income $ 53.2 $ 69.1 Changes in federal income taxes resulting from: Preferred dividends of Virginia Power 4.1 3.5 Nonconventional Fuel credit (7.3) (9.0) Ratable amortization of investment tax credits (4.2) (4.2) Other, net (2.4) (3.3) Total Provisions for Federal Income Tax Expense $43.4 $56.1 Effective Tax Rate 28.6% 28.4% (f) Contingencies Litigation For matters relating to corporate governance issues between Dominion Resources and Virginia Power, see Part II. Other Information Item 1. - Legal Proceedings and Note O to CONSOLIDATED FINANCIAL STATEMENTS included in the Company's Annual Report on Form 10-K for the year ended December 31, 1994. 9 DOMINION RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Virginia Power Nuclear Insurance The Price-Anderson Act limits the public liability of an owner of a nuclear power plant to $8.9 billion for a single nuclear incident. Virginia Power is a member of certain insurance programs that provide coverage for property damage to members' nuclear generating plants, replacement power and liability in the event of a nuclear incident. Virginia Power may be subject to retrospective premiums in the event of major incidents at nuclear units owned by covered utilities (including Virginia Power). For additional information, see Note O to CONSOLIDATED FINANCIAL STATEMENTS included in the Company's Annual Report on Form 10-K for the year ended December 31, 1994. Nonutility Subsidiaries: Dominion Energy Dominion Cogen, Inc., is a wholly owned subsidiary of Dominion Energy with an investment interest in the Clear Lake cogeneration plant near Houston, Texas. Under terms of the investment agreement, Dominion Resources must provide contingent equity support to Dominion Energy. While management believes that the possibility of such support is remote, Dominion Resources could be required to insure that Dominion Energy has sufficient funds to meet its guarantee of $58.8 million. Dominion Energy has general partnership interests in certain of its energy ventures. Accordingly, Dominion Energy may be called upon to fund future operation of these investments to the extent operating cash flow is insufficient. (g) Lines of Credit Dominion Resources and its subsidiaries have lines of credit and revolving credit agreements that provide for maximum borrowings of $705.8 million. At March 31, 1995, $97.1 million had been borrowed under such agreements. In addition, these credit agreements supported $203.1 million of Dominion Resources' commercial paper and $104.4 million of nonrecourse commercial paper issued by Dominion Resources' subsidiaries which was outstanding at March 31, 1995. A total of $290.0 million of the commercial paper is classified as long-term debt since it is supported by revolving credit agreements that have expiration dates extending beyond one year. 10 DOMINION RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (h) Investments Investments at March 31, 1995 and December 31, 1994 are as follows: March 31, December 31, 1995 1994 (Millions) Investments in affiliates $ 264.2 $ 282.8 Available-for-sale securities 316.2 286.5 Nuclear decommissioning trust funds 282.3 260.9 Investments in real estate 132.2 107.5 Other 281.6 222.4 $1,276.5 $1,160.1 11 DOMINION RESOURCES, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS First Source Financial On December 27, 1994, Dominion Capital (DCI), through its owned subsidiary Virginia Financial Ventures, Inc., contributed $5 million to an escrow account for a 50% interest in First Source Financial LLP, a joint venture with HCFS Corporate Finance Venture, Inc. (HCFS). A Venture Agreement was concurrently signed whereby DCI's contribution, with that of HCFS, was held pending final closing of the joint venture which occurred on March 24, 1995. On March 27, 1995, DCI funded their portion of the joint venture with an additional $45 million contribution. Natural Gas Joint Venture On February 23, 1995, Dominion Energy, through a wholly-owned subsidiary, entered into a joint venture with Enron Exploration Australia Pty. Ltd. to explore certain coal fields of Queensland, Australia for natural gas reserves. The companies will assess the natural gas potential of more than 9 million acres in the eastern Galilee Basin of the Queensland "Outback". Dominion Energy has committed to a minimum investment of $4 million. Dominion Resources - Consolidated Financial Condition Earnings Per Share Three Months Ended March 31, 1995 1994 Virginia Power $0.60 $0.73 Nonutility .03 .11 Consolidated $0.63 $0.84 Virginia Power's earnings were down 13 cents in the first quarter of 1995 when compared to the same time period for 1994. Retail sales to residential customers were down 10.4 percent for the first quarter of 1995 when compared with the first quarter of 1994. This is mainly attributable to the abnormally mild weather during the first quarter of 1995 as compared to the same time period in 1994. Dominion Resources' nonutility subsidiaries earned 3 cents per share in the first quarter of 1995, down 8 cents from the same period last year. Dominion Capital was negatively affected by lower income from the Vidalia hydroelectric facility in Louisiana. Dominion Energy reported lower income from its oil and gas operations because of lower gas prices in the first quarter of this year and last year's sale of a 65 percent interest in the Black Warrior Trust. 12 DOMINION RESOURCES, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) Dividends On April 21, 1995, the Board of Directors of Dominion Resources declared a quarterly common stock dividend of $0.645 per share,payable June 20, 1995 to holders of record at the close of business June 1, 1995. Financing Activities Common Stock Issuance Dominion Resources issued 301,579 net shares of common stock primarily through its Automatic Dividend Reinvestment and Stock Purchase Plan and Customer Stock Purchase Plan including the repurchase of 377,000 shares on the open market (see Note (c) to the Notes to the Consolidated Financial Statements) during the three-month period ended March 31, 1995. The proceeds from issuance of common stock are invested on a short-term basis by Dominion Resources and ultimately utilized to provide equity capital to its subsidiaries generally within the same calendar year as the issuance of the common stock. Virginia Power Liquidity and Capital Resources Cash Flows From Operations As detailed in the Statements of Cash Flows, cash flow from operating activities for the three month period ended March 31, 1995 increased $31.2 million as compared to the three month period ended March 31, 1994 primarily as a result of normal operations. Cash Flows To Financing Activities Cash from (to) financing activities was as follows: Three Months Ended March 31, 1995 1994 (Millions) Mortgage bonds $ 200.0 $ 164.0 Repayment of long-term debt and preferred stock (185.0) (148.0) Dividends (111.8) (107.7) Other 9.1 (36.6) Total $ (87.7) $(128.3) 13 DOMINION RESOURCES, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) Financing activities for the first three months of 1995 resulted in a net cash outflow of $87.7 million. In the first quarter of 1995, Virginia Power sold $200 million of First and Refunding Mortgage Bonds (Bonds). A portion of the proceeds from this sale was used to retire $180 million of Bonds. In addition, during the first three months of 1995, Virginia Power retired $5.0 million of securities through sinking fund requirements. During the first quarter of 1995, net borrowings under the commercial paper program increased $13.4 million. Cash Flows (Used in) Investing Activities Cash from (used in) investing activities was as follows: Three Months Ended March 31, 1995 1994 (Millions) Utility plant expenditures $(130.6) $(109.4) Nuclear fuel (4.5) (8.5) Nuclear decommissioning contributions (6.2) (6.1) Pollution control project funds (0.2) 2.4 Sale of accounts receivable (60.0) (50.0) Other (4.8) (2.4) Total $(206.3) $(174.0) Investing activities for the first three months of 1995 resulted in a net cash outflow of $206.3 million primarily due to $130.6 million of construction expenditures and $4.5 million of nuclear fuel expenditures. Of the construction expenditures, approximately $7.0 million was spent on new generating facilities, $40.9 million on power production projects, and $75.3 million on transmission and distributions projects. Results of Operations Balance available for Common stock decreased by $20.1 million for the three-month period ended March 31, 1995, as compared to the same period in 1994, primarily as a result of the milder weather experienced in the first quarter of 1995. 14 DOMINION RESOURCES, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) Operating Revenues Operating revenues changed primarily due to the following: Three Months Ended March 31, 1995 vs. 1994 (Millions) Kwh sales $(53.6) Change in base revenues 26.5 Fuel cost recovery 2.7 Other, net (1.4) Total $(25.8) Customer kilowatt-hour sales changed as follows: Three Months Ended March 31, 1995 vs. 1994 Residential (10.4)% Commercial (0.2) Industrial 5.0 Public authorities 0.7 Total retail sales (3.8) Resale (2.2) Total sales (3.6) The decrease in kilowatt-hour retail sales for the three-month period ended March 31, 1995 reflects the milder weather experienced in the first quarter of 1995 compared to 1994. Base revenues were higher for the three-month period ended March 31, 1995, as compared to the same period in 1994, primarily as a result of the establishment of additional revenue reserves for the 1992 rate case in the first quarter of 1994 and lower sales in the first quarter of 1995. 15 DOMINION RESOURCES, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED) Operation - Other Operation - other increased for the three-month period ended March 31, 1995, as compared to the same period in 1994, primarily as a result of higher administrative and general expenses in 1995 and the recognition of insurance refunds in 1994, partially offset by a decrease in payroll costs due to a reduction in staffing levels. Dominion Resources and its Nonutility Subsidiaries Liquidity and Capital Resources During the first three months of 1995, Dominion Resources' nonutility subsidiaries expended $18.6 million on capital requirements. Estimated capital requirements for 1995 are $104.7 million. Results of Operations Nonutility revenues and income decreased for the three-month period ended March 31, 1995, as compared to the same periods in 1994, primarily as a result of lower revenues from the Vidalia hydroelectric project and lower income from oil and gas operations as well as last year's sale of a 65 percent interest in the Black Warrior Trust. Commitments and Contingencies For additional information on commitment and contingencies, see Note (g) to CONSOLIDATED FINANCIAL STATEMENTS. 16 DOMINION RESOURCES, INC. PART II. - OTHER INFORMATION Item 1. Legal Proceedings In reference to the proceeding before the Virginia State Corporation Commission (the Virginia Commission) into the holding company structure and the relationship between Dominion Resources and Virginia Power, on April 12, 1995 the Staff of the Virginia Commission and its consultants filed their Final Report in which they recognized that conditions had improved since their Interim Report was prepared in the fall of 1994, but suggested that the corporate relationship between Virginia Power and Dominion Resources warrants continued monitoring by the Virginia Commission. The Final Report contains numerous recommendations by the consultant pertaining to corporate governance issues, operating relationships, affiliate service arrangements, financial issues involving the two companies, and possible regulatory tools for the Virginia Commission, many of which are the same as were recommended in the Interim Report. Additional recommendations were made relating to the role of the Joint Committee created under the Settlement Agreement, Commission monitoring of corporate governance issues, controls and accountability for affiliate transactions, allocation of certain holding company overhead expense to Virginia Power, enhancement of Virginia Power's control over certain of its financial functions and compensation to Virginia Power for credit support perceived by the consultants to flow to Dominion Resources and its other subsidiaries from Virginia Power. The Final Report is included in Dominion Resources' Current Report on Form 8-K, dated April 17, 1995. In reference to the Report issued by the Staff in the proceeding on its investigation of a coal transportation contract between Virginia Power and CSX Transportation, on March 24, 1995, the Staff filed its Reply to the Joint Response and Motion of Virginia Power and Dominion Resources in which it supported the recommendations made by the companies. Virginia Power In reference to the arbitration between Virginia Power and Smith Cogeneration of Virginia, Inc., Virginia Power filed its Comments on the Report of the Arbitrator on March 31, 1995, and Smith Cogeneration filed its response on May 1, 1995. Virginia Power has until May 15, 1995 to respond. In reference to the lawsuit filed against Virginia Power by Doswell Limited Partnership, on March 6, 1995 the Circuit Court of the City of Richmond entered its Opinion in favor of Virginia Power, and on April 4, 1995 Doswell filed its Notice of Appeal to the Virginia Supreme Court. 17 DOMINION RESOURCES, INC. PART II. - OTHER INFORMATION (CONTINUED) Item 4. Submission of Matters to a Vote of Security Holders Dominion Resources Annual Shareholders Meeting was held on April 21, 1995. a) The following Directors were elected to the Board of Directors for terms expiring in the years indicated: Elected for Term Expiring in 1998 Votes Director For Withheld John B. Adams, Jr. 147,895,114 3,870,620 Benjamin J. Lambert, III 147,626,710 4,139,024 Richard L. Leatherwood 147,745,352 4,020,382 Frank S. Royal 147,528,806 4,236,928 Elected for Term Expiring in 1997 Votes For Withheld Robert H. Spilman 147,751,756 4,013,978 Elected for Term Expiring in 1996 Votes For Withheld Tyndall L. Baucom 147,897,482 3,868,252 Harvey L. Lindsey, Jr. 147,748,452 4,017,082 William T. Roos 147,833,651 3,932,083 Richard L. Sharp 147,803,792 3,961,942 b) The following incumbent Directors will continue on the Board of Directors with terms expiring in the years indicated: Director Term Expiring Kenneth A. Randall 1996 Judith B. Sack 1996 John B. Bernhardt 1997 Thos. E. Capps 1997 S. Dallas Simmons 1997 The shareholders also voted in favor of the designation of Deloitte & Touche LLP as Dominion Resources' independent certified public accountants to audit the consolidated financial statements for the year 1995. The vote was as follows: Votes For 149,181,186 Against 976,883 Abstain 1,607,665 18 DOMINION RESOURCES, INC. PART II. - OTHER INFORMATION (CONTINUED) Item 5. Other Information Virginia Power Union Employees On April 1, 1995, Virginia Power and the International Brotherhood of Electrical Workers (IBEW) reached an agreement on a new three-year contract to cover approximately 3,800 hourly workers. The new contract, which was ratified on May 2, 1995, will expire on March 31, 1998.Rates Virginia In reference to the Motions of Intent to Seek Rehearing filed by Virginia Power and other appellants in the appeal of Virginia Power's 1992 Virginia rate case to the Virginia Supreme Court, on March 3, 1995, the Court denied the Motions. In reference to the proceeding before the Virginia Commission requesting approval of Schedule DEF-Dispersed Energy Facility, on April 20, 1995, the Virginia Commission declined to approve that schedule, stating that the scope of the proposal was not an appropriate experiment under Virginia law, and that without a specific construction proposal before it, the Virginia Commission could not approve the concept. The Virginia Commission noted, however, that upon a proper record it would consider the public interest of allowing a DEF-type facility to be constructed. In reference to the proceeding before the Virginia Commission seeking approval to implement real time pricing for certain industrial customers, on April 20, 1995, the Virginia Commission approved the implementation of the proposed rate schedule for a five-year period. North Carolina In reference to Virginia Power's Motion for Rehearing in the appeal of its 1992 North Carolina rate case to the North Carolina Supreme Court, on February 13, 1995, the Court denied the Motion. The Company has 90 days to seek review of this decision. 19 DOMINION RESOURCES, INC. PART II. - OTHER INFORMATION (CONTINUED) Competition In reference to the plans of the City of Falls Church, Virginia, to pursue the establishment of a municipal electric system, on March 13, 1995, Virginia Power responded to the City's request for transmission services and stated that it would not provide such service voluntarily, that the City was not an appropriate entity to request that the Federal Energy Regulatory Commission (FERC) compel the provision of such service and that its request was deficient under the provisions of the appropriate FERC regulations. On that same date, Virginia Power filed a Petition for Declaratory Judgment with the Virginia Commission asking it to find that the request of the City would, without the Virginia Commission's approval, be illegal under Virginia law. The Virginia Commission, on March 21, 1995, ordered the City to respond to the Petition. On April 17, 1995, the Mayor of the City wrote to the Chairman of the Commission and stated that the City would not respond to the Petition and asserted that the Virginia Commission has no jurisdiction over the City. Virginia Power, consistent with state and federal law, will still attempt to negotiate a new long-term franchise, and it submitted a proposed franchise to the City on March 20, 1995. Environmental Virginia Power recently completed its compliance plan for Phase II of the Clean Air Act. The plan will involve switching to lower sulfur coal, purchase of sulfur dioxide emission allowances and additional nitrogen oxide and sulfur dioxide controls. Maximum flexibility and least-cost compliance will be maintained through annual studies. During the next 10 years capital investment is not expected to exceed the previously estimated $481 million (1992 dollars) for Title IV compliance. Future Sources of Power Virginia Power has obtained all approvals and is proceeding with construction of a 75 mile, 500 kv transmission line from the Clover Power Station to the Carson Substation in Dinwiddie County, Virginia. The line is expected to be completed by April 1996. The testing of Clover Power Station, Unit 1 is underway and commercial operation is now expected in the Summer of 1995. 20 DOMINION RESOURCES, INC. PART II. - OTHER INFORMATION (CONTINUED) Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: 10(i)* - Employment Agreement dated April 12, 1995 between Dominion Resources and Thos. E. Capps (filed herewith). 10(ii)* - Amendment dated April 12, 1995 to Employment Agreement dated February 6, 1995 between Dominion Resources and Tyndall L. Baucom (filed herewith). 10(iii)* - Employment Agreement dated April 21, 1995 between Virginia Power and James T. Rhodes (filed herewith). 11 - Statement re: computation of per share earnings (included in this Form 10-Q on page 3). 27 - Financial Data Schedule (filed herewith) * Indicates management contract or compensatory plan or arrangement. (b) Report on Form 8-K. Dominion Resources filed a report on Form 8-K, dated February 21, 1995, reporting the entry of a Consent Order by the Virginia Commission on the joint motion of Dominion Resources, Virginia Power and the Staff and the withdrawal by Delegate Clinton Miller of certain legislation introduced by Delegate Miller in the 1995 Virginia General Assembly at the request of the Commission. Dominion Resources filed a report on Form 8-K, dated April 17, 1995, relating to the final order received by the Staff of the Virginia Commission as prepared by two consultants retained by the Commission in its investigation of the corporate governance issues between Dominion Resources and its wholly-owned subsidiary, Virginia Power. 21 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DOMINION RESOURCES, INC. Registrant BY JAMES L. TRUEHEART James L. Trueheart Vice President and Controller (Principal Accounting Officer) May 5, 1995 22 -----END PRIVACY-ENHANCED MESSAGE-----