LONG-TERM DEBT



At December 31,	2011 Weighted- average Coupon⁽¹⁾		2011			2010
(millions, except percentages)
Virginia Electric and Power Company:
Unsecured Senior Notes:
4.75% to 8.625%, due 2012 to 2016	5.17	%	$	1,675		$	1,680
3.45% to 8.875%, due 2017 to 2038	6.17	%	4,204			4,214
Tax-Exempt Financings:⁽²⁾
Variable rates, due 2016 to 2041⁽³⁾	1.24	%	454			219
1.375% to 6.5%, due 2017 to 2040	3.99	%	533			608
Virginia Electric and Power Company total principal			$	6,866		$	6,721
Securities due within one year	5.17	%	(616		)	(15		)
Unamortized discount and premium, net			(4		)	(4		)
Virginia Electric and Power Company total long-term debt			$	6,246		$	6,702
Dominion Resources, Inc.:
Unsecured Senior Notes:
1.8% to 7.195%, due 2012 to 2016	4.31	%	$	3,195		$	2,345
4.45% to 8.875%, due 2017 to 2041⁽⁴⁾	6.07	%	4,749			3,749
Unsecured Convertible Senior Notes, 2.125%, due 2023⁽⁵⁾			143			202
Unsecured Junior Subordinated Notes Payable to Affiliated Trusts, 7.83% and 8.4%, due 2027 and 2031	7.85	%	268			268
Enhanced Junior Subordinated Notes, 6.3% to 8.375%, due 2064 and 2066⁽⁶⁾	8.11	%	985			1,469
Enhanced Junior Subordinated Notes, variable rate, due 2066⁽⁶⁾	2.67	%	468			—
Unsecured Debentures and Senior Notes⁽⁷⁾:
5.0% to 6.85%, due 2011 to 2014	5.06	%	622			1,091
6.8% and 6.875%, due 2026 and 2027	6.81	%	89			89
Dominion Energy, Inc.:
Secured Senior Notes:
5.03% to 5.78%, due 2013⁽⁸⁾	5.07	%	842			—
7.33%, due 2020⁽⁹⁾			159			171
Tax-Exempt Financings⁽¹⁰⁾:
2.25% and 5.75%, due 2033 to 2042	3.52	%	284			124
Variable rate, due 2041	1.15	%	75			—
Virginia Electric and Power Company total principal (from above)			6,866			6,721
Dominion Resources, Inc. total principal			$	18,745		$	16,229
Fair value hedge valuation⁽¹¹⁾			105			49
Securities due within one year⁽¹²⁾	5.62	%	(1,479		)	(497		)
Unamortized discount and premium, net			23			(23		)
Dominion Resources, Inc. total long-term debt			$	17,394		$	15,758


(1)	Represents weighted-average coupon rates for debt outstanding as of December 31, 2011.


(2)	These financings relate to certain pollution control equipment at Virginia Power's generating facilities. Certain variable rate tax-exempt financings are supported by a $120 million credit facility that terminates in September 2016.

(3)

$160 million of tax-exempt bonds due in 2040 issued by the Industrial Development Authority of Wise County on behalf of Virginia Power were remarketed to a third party and included in the Consolidated Balance Sheets in March 2011. These bonds were originally issued in December 2010 and September 2009 but were not included in the 2010 Consolidated Balance Sheet because the bonds had been temporarily purchased and were held by Virginia Power.


(4)	At the option of holders, $510 million of Dominion's 5.25% senior notes due 2033 and $600 million of Dominion's 8.875% senior notes due 2019 are subject to redemption at 100% of the principal amount plus accrued interest in August 2015 and January 2014, respectively.

(5)

Convertible into a combination of cash and shares of Dominion's common stock at any time when the closing price of common stock equals 120% of the applicable conversion price or higher for at least 20 out of the last 30 consecutive trading days ending on the last trading day of the previous calendar quarter. At the option of holders on December 15, 2013 or 2018, these securities are subject to redemption at 100% of the principal amount plus accrued interest. These senior notes have been callable by Dominion since December 15, 2011.


(6)	In September 2011, the $500 million 6.3% 2006 Series B Enhanced Junior Subordinated Notes due 2066 began bearing interest at the three-month LIBOR plus 2.3%, reset quarterly.


(7)	Represents debt assumed by Dominion from the merger of its former CNG subsidiary.


(8)	Juniper notes issued in 2004 and consolidated in October 2011 due to Dominion becoming the primary beneficiary of this VIE. This amount excludes $48 million of net unamortized premium in 2011. The debt is non-recourse to Dominion and is secured by Juniper's assets.


(9)	Represents debt associated with Kincaid. The debt is non-recourse to Dominion and is secured by the facility's assets ($530 million at December 31, 2011) and revenue.

(10)

$235 million of tax-exempt bonds due in 2041 issued by the Massachusetts Development Finance Agency on behalf of Brayton Point were remarketed to third parties in July and August 2011, and included in the Consolidated Balance Sheet. These bonds were originally issued in December 2010 but were not included in the 2010 Consolidated Balance Sheet because the bonds had been temporarily purchased and were held by Dominion.


(11)	Represents the valuation of certain fair value hedges associated with Dominion's fixed-rate debt.


(12)	Includes $4 million of net unamortized discount in 2011.

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, 2011, were as follows:



	2012			2013			2014			2015			2016			Thereafter			Total
(millions, except percentages)
Virginia Power	$	616		$	418		$	17		$	219		$	485		$	5,111		$	6,866
Weighted-average Coupon	5.17		%	4.88		%	7.73		%	5.43		%	5.29		%	5.52		%

Dominion
Secured Senior Notes	$	13		$	853		$	15		$	18		$	20		$	82		$	1,001
Unsecured Senior Notes	1,470			690			1,065			960			1,351			9,141			14,677
Tax-Exempt Financings	—			—			—			8			27			1,311			1,346
Unsecured Junior Subordinated Notes Payable to Affiliated Trusts	—			—			—			—			—			268			268
Enhanced Junior Subordinated Notes	—			—			—			—			—			1,453			1,453
Total	$	1,483		$	1,543		$	1,080		$	986		$	1,398		$	12,255		$	18,745
Weighted-average Coupon	5.62		%	5.04		%	3.99		%	4.52		%	4.29		%	5.79		%

Dominion's and Virginia Power's short-term credit facilities and long-term debt agreements contain customary covenants and default provisions. As of December 31, 2011, there were no events of default under these covenants.

In January 2012, Virginia Power issued $450 million of 2.95% senior notes that mature in 2022. The proceeds were used for general corporate purposes including the repayment of short-term debt.

Convertible Securities

At December 31, 2011, Dominion had $143 million of outstanding contingent convertible senior notes that are convertible by holders into a combination of cash and shares of Dominion's common stock under certain circumstances. The conversion feature requires that the principal amount of each note be repaid in cash, while amounts payable in excess of the principal amount will be paid in common stock. At issuance, the notes were valued at a conversion rate of 27.173 shares of common stock per $1,000 principal amount of senior notes, which represented a conversion price of $36.80. The conversion rate is subject to adjustment 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. As of December 31, 2011, the conversion rate had been adjusted to 28.9178 shares, primarily due to individual dividend payments above the level paid at issuance.

The number of shares included in the denominator of the diluted EPS calculation is calculated as the net shares issuable for the reporting period based upon the average market price for the period. This results in an increase in the average shares outstanding used in the calculation of Dominion's diluted EPS when the conversion price is lower than the average market price of Dominion's common stock over the period, and results in no adjustment when the conversion price exceeds the average market price.

The senior notes are convertible by holders into a combination of cash and shares of Dominion's common stock under any of the following circumstances:


(1)	The closing price of Dominion's common stock equals 120% of the applicable conversion price or higher for at least 20 out of the last 30 consecutive trading days ending on the last trading day of the previous calendar quarter;


(2)	The senior notes are called for redemption by Dominion;


(3)	The occurrence of specified corporate transactions; or


(4)	The credit rating assigned to the senior notes by Moody's is below Baa3 and by Standard & Poor's is below BBB- or the ratings are discontinued for any reason.

The senior notes were not eligible for conversion during the first quarter of 2011. However, since the closing price of Dominion's common stock was equal to 120% of the applicable conversion price or higher for at least 20 out of the last 30 consecutive trading days of each quarter, the senior notes were eligible for conversion during each of the last three quarters of 2011. During 2011, approximately $59 million of the contingent convertible senior notes were converted by holders. As of December 31, 2011, the closing price of Dominion's common stock was equal to $41.50 per share or higher for at least 20 out of the last 30 consecutive trading days; therefore, the senior notes are eligible for conversion during the first quarter of 2012. Beginning in 2007, the notes have been eligible for contingent interest if the average trading price as defined in the indenture equals or exceeds 120% of the principal amount of the senior notes. Holders have the right to require Dominion to purchase these senior notes for cash at 100% of the principal amount plus accrued interest in December 2013 or 2018, or if Dominion undergoes certain fundamental changes. The senior notes have been callable by Dominion since December 15, 2011.

Junior Subordinated Notes Payable to Affiliated Trusts

In previous years, Dominion established several subsidiary capital trusts, each as a finance subsidiary of the respective parent company, which hold 100% of the voting interests. The trusts sold trust preferred securities representing preferred beneficial interests and 97% beneficial ownership in the assets held by the trusts. In exchange for the funds realized from the sale of the trust preferred securities and common securities that represent the remaining 3% beneficial ownership interest in the assets held by the capital trusts, Dominion issued various junior subordinated notes. The junior subordinated notes constitute 100% of each capital trust's assets. Each trust must redeem its trust preferred securities when their respective junior subordinated notes are repaid at maturity or if redeemed prior to maturity.

The following table provides summary information about the trust preferred securities and junior subordinated notes outstanding as of December 31, 2011:



Date Established	Capital Trusts	Units	Rate		Trust Preferred Securities Amount		Common Securities Amount
		(thousands)			(millions)
December 1997	Dominion Resources Capital Trust I⁽¹⁾	250	7.83	%	$	250	$	7.7
January 2001	Dominion Resources Capital Trust III⁽²⁾	10	8.4		10		0.3

Junior subordinated notes/debentures held as assets by each capital trust were as follows:


(1)	$258 million-Dominion Resources, Inc. 7.83% Debentures due 12/1/2027.


(2)	$10 million-Dominion Resources, Inc. 8.4% Debentures due 1/15/2031.

Interest charges related to Dominion's junior subordinated notes payable to affiliated trusts were $21 million for the years ended December 31, 2011, 2010 and 2009.

Distribution payments on the trust preferred securities are considered to be fully and unconditionally guaranteed by the respective parent company that issued the debt instruments held by each trust when all of the related agreements are taken into consideration. Each guarantee agreement only provides for the guarantee of distribution payments on the relevant trust preferred securities to the extent that the trust has funds legally and immediately available to make distributions. The trust's ability to pay amounts when they are due on the trust preferred securities is dependent solely upon the payment of amounts by Dominion when they are due on the junior subordinated notes. Dominion may defer interest payments on the junior subordinated notes on one or more occasions for up to five consecutive years and the related trusts must also defer distributions. If the payment on the junior subordinated notes is deferred, Dominion may not make distributions related to its capital stock, including dividends, redemptions, repurchases, liquidation payments or guarantee payments, during the deferral period. Also, during any deferral period, Dominion may not make any payments on, redeem or repurchase any debt securities that are equal in right of payment with, or subordinated to, the junior subordinated notes.

Enhanced Junior Subordinated Notes

In June 2006 and September 2006, Dominion issued $300 million of June 2006 hybrids and $500 million of September 2006 hybrids, respectively. The June 2006 hybrids will bear interest at 7.5% per year until June 30, 2016. Thereafter, they will bear interest at the three-month LIBOR plus 2.825%, reset quarterly. Beginning September 30, 2011, the September 2006 hybrids bear interest at the three-month LIBOR plus 2.3%, reset quarterly. Previously, interest was fixed at 6.3% per year.

In June 2009, Dominion issued $685 million (including $60 million related to the underwriter's option to purchase additional notes to cover over-allotments) of 8.375% June 2009 hybrids. The June 2009 hybrids are listed on the New York Stock Exchange under the symbol DRU.

Dominion may defer interest payments on the hybrids on one or more occasions for up to 10 consecutive years. If the interest payments on the hybrids are deferred, Dominion may not make distributions related to its capital stock, including dividends, redemptions, repurchases, liquidation payments or guarantee payments during the deferral period. Also, during the deferral period, Dominion 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.

Dominion executed RCCs in connection with its issuance of all of the hybrids described above. Under the terms of the RCCs, Dominion covenants to and for the benefit of designated covered debtholders, as may be designated from time to time, that Dominion shall not redeem, repurchase, or defease all or any part of the hybrids, and shall not cause its majority owned subsidiaries to purchase all or any part of the hybrids, on or before their applicable RCC termination date, unless, subject to certain limitations, during the 180 days prior to such activity, Dominion has received a specified amount of proceeds as set forth in the RCCs from the sale of qualifying securities that have equity-like characteristics that are the same as, or more equity-like than the applicable characteristics of the hybrids at that time, as more fully described in the RCCs. In September 2011, Dominion amended the RCCs of the June 2006 hybrids and September 2006 hybrids to expand the measurement period for consideration of proceeds from the sale of common stock issuances from 180 days to 365 days. The proceeds Dominion receives from the replacement offering, adjusted by a predetermined factor, must equal or exceed the redemption or repurchase price.

In both December 2011 and April 2010, Dominion purchased and cancelled $16 million of the September 2006 hybrids. These purchases were conducted in compliance with the RCC. In late February 2012, Dominion launched a tender offer to purchase up to $150 million of additional September 2006 hybrids, which amount may be increased or decreased at Dominion’s sole discretion. All purchases will be conducted in compliance with the RCC.