Significant Financing Transactions

Credit Facilities and Short-term Debt

The Companies use short-term debt to fund working capital requirements and as a bridge to long-term debt financings. The levels of borrowing may vary significantly during the course of the year, depending upon the timing and amount of cash requirements not satisfied by cash from operations. In addition, Dominion utilizes cash and letters of credit to fund collateral requirements. Collateral requirements are impacted by commodity prices, hedging levels, Dominion’s credit ratings and the credit quality of its counterparties.

Dominion

At June 30, 2014, Dominion’s commercial paper and letters of credit outstanding, as well as its capacity available under credit facilities, were as follows:



	Facility Limit		Outstanding Commercial Paper		Outstanding Letters of Credit		Facility Capacity Available
(millions)
Joint revolving credit facility⁽¹⁾	$	4,000	$	2,848	$	—	$	1,152
Joint revolving credit facility⁽²⁾	500		232		115		153
Total	$	4,500	$	3,080	$	115	$	1,305


(1)	In May 2014, this credit facility was amended and restated. The facility limit was increased from $3 billion to $4 billion and the maturity date was extended from September 2018 to April 2019. This credit facility can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $1.5 billion of letters of credit.


(2)	In May 2014, this credit facility was amended and restated and the maturity date was extended from September 2018 to April 2019. This credit facility can be used to support bank borrowings, commercial paper and letter of credit issuances.

Virginia Power

Virginia Power’s short-term financing is supported by two joint revolving credit facilities with Dominion and Dominion Gas. These credit facilities are being used for working capital, as support for the combined commercial paper programs of Dominion and Virginia Power and for other general corporate purposes.

At June 30, 2014, Virginia Power’s share of commercial paper and letters of credit outstanding, as well as its capacity available under its joint credit facilities with Dominion and Dominion Gas were as follows:



	Facility Sub-limit⁽³⁾		Outstanding Commercial Paper		Outstanding Letters of Credit		Facility Sub-limit Capacity Available⁽³⁾
(millions)
Joint revolving credit facility⁽¹⁾	$	1,000	$	1,091	$	—	$	(91	)
Joint revolving credit facility⁽²⁾	250		232		18		—
Total	$	1,250	$	1,323	$	18	$	(91	)

(1)

In May 2014, this credit facility was amended and restated and the maturity date was extended from September 2018 to April 2019. This credit facility can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $1.5 billion (or the sub-limit, whichever is less) of letters of credit. Virginia Power's current sub-limit under this credit facility can be increased or decreased multiple times per year.


(2)	In May 2014, this credit facility was amended and restated and the maturity date was extended from September 2018 to April 2019. This credit facility can be used to support bank borrowings, commercial paper and letter of credit issuances. Virginia Power's current sub-limit under this credit facility can be increased or decreased multiple times per year.

(3)

On June 30, 2014, Virginia Power's facility sub-limit was exceeded; however, Virginia Power retained ongoing access to its short-term demand note with Dominion as discussed in Note 17 and remained in compliance with its debt covenants. Effective July 10, 2014, Virginia Power increased its sub-limit under the $4 billion credit facility from $1.0 billion to $1.25 billion bringing its total sub-limit to $1.5 billion.

In addition to the credit facility commitments mentioned above, Virginia Power also has a $120 million credit facility. In May 2014, this credit facility was amended and restated and the maturity date was extended from September 2018 to April 2019. As of June 30, 2014, this facility supports approximately $119 million of certain variable rate tax-exempt financings of Virginia Power.

Dominion Gas

Dominion Gas’ short-term financing is supported by the two joint revolving credit facilities discussed above with Dominion and Virginia Power, to which Dominion Gas was added as a borrower in May 2014.

Dominion Gas’ current sub-limit under the $4 billion credit facility is $500 million, all of which is currently available, and can be increased or decreased multiple times per year, up to a maximum of $1 billion. Dominion Gas’ current sub-limit under the $500 million credit facility is $0 and can also be increased or decreased multiple times per year. The maturity date for both facilities is April 2019.

Long-term Debt

In February 2014, Virginia Power issued $350 million of 3.45% senior notes, and $400 million of 4.45% senior notes, that mature in 2024, and 2044, respectively.

In March 2014, Dominion issued $400 million of 1.25% senior notes that mature in 2017.

In April 2014, Virginia Power redeemed the $10 million 2.5% and the $30 million 2.5% Industrial Development Authority of the Town of Louisa, Virginia Solid Waste and Sewage Disposal Revenue Bonds, Series 1997A and 2000A, that would otherwise have matured in April 2022 and September 2030, respectively.

In June 2014, Dominion Gas commenced an offer to exchange $1.2 billion principal amount of unsecured senior notes that were issued in a private placement in October 2013. The exchange offer satisfies Dominion Gas' obligations under a registration rights agreement entered into in connection with the issuance of the Dominion Gas 2013 Senior Notes. The exchange offer does not represent a new financing transaction and there will be no proceeds to Dominion Gas when the offer settles, which is expected to occur in August 2014.

Convertible Securities

At June 30, 2014, Dominion had $36 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. 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 June 30, 2014, the conversion rate had been adjusted, primarily due to individual dividend payments above the level paid at issuance, to 30.1180 shares of common stock per $1,000 principal amount of senior notes, which represents a conversion price of $33.20. If the outstanding notes as of June 30, 2014 were all converted, it would result in the issuance of approximately 550,000 additional shares of common stock.

The senior notes are eligible for conversion during any calendar quarter when the closing price of Dominion’s common stock was equal to or higher than 120% of the conversion price for at least 20 out of the last 30 consecutive trading days of the preceding quarter, the notes are called for redemption by Dominion and upon the occurrence of certain other conditions. During the first and second quarters of 2014, the senior notes were eligible for conversion and approximately $7 million of the notes were converted by holders into $7 million of common stock. The senior notes are eligible for conversion during the third quarter of 2014.

Preferred Stock

In February 2014, Virginia Power provided irrevocable notice to redeem all 1,250,000 outstanding shares of its Flex MMP Stock. In March 2014, Virginia Power redeemed the stock at a price of $100 per share plus accumulated and unpaid dividends at a rate reset in March 2011 of 6.12%. Dividends ceased accumulating on the stock upon payment of the redemption price, thus the rate was not reset in March 2014.

Issuance of Common Stock

Dominion maintains Dominion Direct® and a number of employee savings plans through which contributions may be invested in Dominion’s common stock. These shares may either be newly issued or purchased on the open market with proceeds contributed to these plans. In January 2014, Dominion began purchasing its common stock on the open market for these plans. In April 2014, Dominion began issuing new common shares for these direct stock purchase plans.

Remarketable Subordinated Notes

In July 2014, Dominion issued $1 billion of 2014 Series A 6.375% Equity Units, initially in the form of Corporate Units. The Corporate Units are listed on the NYSE under the symbol DCUC.

Each Corporate Unit consists of a stock purchase contract and 1/20 interest in a RSN issued by Dominion. The stock purchase contracts obligate the holders to purchase shares of Dominion common stock at a future settlement date prior to the relevant RSN maturity date. The purchase price to be paid under the stock purchase contracts is $50 per Corporate Unit and the number of shares to be purchased will be determined under a formula based upon the average closing price of Dominion common stock near the settlement date. The RSNs are pledged as collateral to secure the purchase of common stock under the related stock purchase contracts.

Dominion makes quarterly interest payments on the RSNs and quarterly contract adjustment payments on the stock purchase contracts, at the rates described below. Dominion may defer payments on the stock purchase contracts and the RSNs for one or more consecutive periods but generally not beyond the purchase contract settlement date. If payments are deferred, Dominion may not make any cash distributions related to its capital stock, including dividends, redemptions, repurchases, liquidation payments or guarantee payments. 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 RSNs.

Under the terms of the stock purchase contracts, assuming no anti-dilution or other adjustments, Dominion will issue between 11.5 million and 14.3 million shares of its common stock in July 2017. A total of 17.75 million shares of Dominion's common stock has been reserved for issuance in connection with the stock purchase contracts.

Selected information about Dominion's 2014 Equity Units is presented below:



Issuance Date	Units Issued	Total Net Proceeds		Total Long-term Debt		RSN Annual Interest Rate		Stock Purchase Contract Annual Rate		Stock Purchase Settlement Date	RSN Maturity Date
(millions, except interest rates)
7/1/2014	20	$	982.0	$	1,000.0	1.500	%	4.875	%	7/1/2017	7/1/2020