Mail Stop 0308
November 23, 2004
VIA U.S. MAIL AND FACSIMILE
Patricia A. Wilkerson
Vice President and Corporate Secretary
Dominion Resources, Inc.
120 Tredegar Street
Richmond, Virginia 23219
Re: Dominion Resources, Inc.
Registration Statement on Form S-4 filed November 10, 2004
File No. 333-120339
Schedule TO-I filed November 10, 2004
File No. 005-78036
Dear Ms. Wilkerson:
We have limited our review of your filings to the terms of
the
transaction and have performed a targeted review of legal
disclosure
and accounting issues. The staff of the Office of Mergers and
Acquisitions in the Division of Corporation Finance at the
Securities
and Exchange Commission has also conducted a limited review of the
registration statement on Form S-4 and the Schedule TO. The OM&A
staff`s review focused on compliance with the federal rules
applicable to tender offers, found in Regulations 13e-4 and 14E.
We
have the following comments. Where indicated, we think you should
revise your documents in response to these comments. If you
disagree, we will consider your explanation as to why our comment
is
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. In some of our comments, we may
ask
you to provide us with supplemental information so we may better
understand your disclosure. After reviewing this information, we
may
or may not raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
General
1. Where we ask for revisions to your disclosure at one place in
your
registration statement, please make similar revisions to all
applicable places.
2. Please disclose on the cover page, summary or equally prominent
section of the filing the aggregate amount of indebtedness that
will
rank senior to or equally with the New Notes as of the date of
your
latest balance sheet. Also, disclose the amount of additional
senior
debt you may incur as of such date.
3. We note that you have elected to commence this exchange offer
early, pursuant to Rule 162. Although a preliminary prospectus
used
to commence an exchange offer early must include the legend
required
by Rule 501(b)(10) of Regulation S-K, the language in the legend
must
be appropriately tailored and thus may not state that the
prospectus
is not complete. For an example of language that may be used in
the
"red herring" legend in an early commencement exchange offer,
please
see Q&A 2 in Part I.E in the Third Supplement (July 2001) the
Division of Corporation Finance`s Manual of Publicly Available
Telephone Interpretations, available on the SEC`s Web site at
www.sec.gov.
4. We note that the "terms of the New Notes are identical to the
Existing Notes" except that you have changed the conversion
feature
so that Dominion Resources may account for the New Notes under the
treasury stock method (but carry over the holding period for the
Old
Notes). If the outstanding notes were not issued in a registered
offering, please tell us the exemption upon which you relied to
issue
those securities and why it is appropriate to exchange them for
similar securities in a registered offering.
5. Although Form S-4 may allow you to incorporate by reference to
periodic reports filed after a registration statement, Schedule TO
does not permit such "forward" incorporation. Therefore, if you
intend to incorporate by reference future information, such as
information relating to the merger transaction, please confirm to
us
that you will amend the Schedule TO to expressly do so by specific
reference to such information.
FORM S-4
Cover Page
6. Please revise your cover page to include the date that the Old
Notes were issued.
Forward Looking Information, page 3
7. Sections 27A(b)(2)(C) of the Securities Act and Sections
21E(b)(2)(C) of the Exchange Act expressly state that the safe
harbor
for forward-looking statements does not apply to statements made
in
connection with a tender offer. Please remove the implication
that
the safe harbor has been available for any forward-looking
statements
that have been made, or will be made, in connection with this
offer
and avoid making any references to the Private Securities
Litigation
Reform Act of 1995 in any materials you disseminate in the future.
For example, include in the amended materials to be filed an
explanatory section which indicates that any forward-looking
statements made in connection with the offer are not, and have not
been, protected under the Act.
Summary, page 4
8. Revise the introductory paragraph to make clear that the
summary
highlights material information with respect to the exchange
offer,
rather than "basic information" about the offer.
9. Refer to "Conditions to the Exchange Offer" on page 6. Provide
a
brief list of the material conditions to the exchange offer.
10. On page 9, revise to clarify that you will return tendered Old
Notes not accepted for exchange "promptly," not "as promptly as
practicable" after the expiration or termination of the exchange
offer. See Rule 13e-4(f)(5). Make similar revisions throughout
the
prospectus to specify the time period in which Dominion Resources
expects the notes to be delivered to tendering security holders.
Ranking, page 13
11. Clarify the amounts to which the New Notes will rank senior,
junior or equal in right of payment. State, if true, that the
ability of Dominion Resources to incur additional indebtedness is
unlimited.
Certain U.S. Federal Income Tax Considerations, page 13
12. Revise to state that the United States federal income tax
consequences of the exchange are unclear and subject to
considerable
uncertainty. Additionally, describe briefly the negative United
States federal income tax consequences of owning the New Notes,
rather than simply refer investors to the discussion of tax
consequences later in the prospectus.
Risk Factors, page 14
13. Some of your subheadings do not fully describe the risk to
investors disclosed in the text and merely state a fact about the
offering or your business. As one example only, on page 18 you
state
that your merchant power business is operating in a challenging
market, but do not tie this statement of fact to the consequent
risk
faced by investors. Please revise so that each caption clearly
identifies the risk as it applies to your company, industry or
offering.
Conditions to the Exchange Offer, page 25
14. Refer to the introductory paragraph, which relates to the
company`s determination whether the triggering of a condition
"makes
it inadvisable" to proceed with the exchange offer. Please note
that, when a condition is triggered and the company decides to
proceed with the exchange offer anyway, we believe that this
constitutes a waiver of the triggered condition(s). You may not
rely
on this language to tacitly waive a condition of the offer by
failing
to assert it. Please confirm your understanding of this on a
supplemental basis.
15. In the second bullet point of the first condition, you
disclose
that your offer may be amended or terminated if, in your
reasonable
judgment, an enumerated event has occurred that "would be material
to
holders of Old Notes in deciding whether to accept the exchange
offer." This appears to include both positive and negative
effects.
Please revise your disclosure to clarify those changes that would
allow amendment or termination of the offer.
16. Please confirm your understanding that that all conditions to
the
offer, other than regulatory approvals, must be satisfied or
waived
prior to expiration, and that a delay in payment for shares
because
of the actions of a court or government agency would not
necessarily
be consistent with Rule 14e-1(c).
Expiration Date; Extensions; Amendment, page 26
17. Advise, with a view toward disclosure, how and when the offer
period will be extended if the registration statement has not been
declared effective by the SEC at the initial expiration of the
offer.
Clarify whether or not you intend to request effectiveness of the
registration statement at or before expiration of the offer.
18. Refer to the last paragraph of this section. Please revise to
clarify that you may be required to promptly file a post-effective
amendment to the registration statement to reflect certain
material
changes to the offer.
Description of the New Notes, page 34
19. Please supplementally address the following matters.
Accounting treatment for the exchange transaction
* We assume that you have determined that the New Notes do not
have
substantially different terms, as defined in EITF 96-19, than the
Old
Notes. Therefore, you will not record the Old Notes as
extinguished
with related gain or loss recognition. Please confirm our
understanding and, if correct, please show us how you arrived at
this
conclusion including how you assessed the change in the
consideration
payable and the payment of exchange fees in your calculation. If
this is not the case, please tell us your anticipated accounting
treatment and provide the accounting rationale including any
supporting calculations to support you accounting.
Accounting treatment for the exchange fee
* Please tell us how you will account for the exchange fee paid at
the time of exchange and going forward. Please also cite the
applicable authoritative GAAP that supports your policy.
Accounting treatment for the New Notes
* Please tell us how you will account for the New Notes in your
future financial statements. In doing so, please ensure that you
describe how you will account for the conversion feature at the
time
of issuance and at a point in time when the sale price condition,
as
defined on page 38 of your registration statement, is met. You
should support your accounting in the event that the conversion
feature is triggered citing appropriate accounting literature. We
may
have further comment upon review of your response.
Income Tax Accounting
* Please tell us how you will account for the tax consequences of
the
New Notes under the guidelines of SFAS 109 and contrast
supplementally for us this treatment to your treatment of the Old
Notes. As part of your response, please ensure that you detail
your
anticipated accounting treatment in the event that the sale price
conversion trigger is met. Please specifically address how the
additional payment will be treated for tax purposes. Please
consider the need to disclose this information in your
registration
statement to more fully disclose the impact of the exchange on the
future results of operations.
20. Please disclose your anticipated accounting treatment for the
exchange of Old Notes for New Notes under the guidelines of EITF
96-
19. Additionally, please disclose how you anticipate accounting
for
the New Notes going forward. Please ensure that your disclosure
includes a discussion of the anticipated accounting treatment of
the
exchange fee paid, classification on the Notes within your balance
sheet, treatment of the conversion features related to the New
Notes
at the time of issuance and upon triggering the sales price
conversion feature.
Description of Capital Stock, page 55
Fully Paid, page 56
21. The statement that all outstanding shares of common stock are
"fully paid and non-assessable" and similar statements regarding
additional shares of common stock to be issued upon conversion of
the
New Notes constitute legal conclusions that you are not qualified
to
make. Either attribute this statement to counsel and file
counsel`s
consent to be named in this section, or delete it.
Certain United States Federal Income Tax Considerations, page 59
22. Revise the caption and this section to delete the word
"certain"
and to clarify that this disclosure relates to the "material" tax
"consequences."
23. Given that McGuire Woods LLP is providing a tax opinion,
please
revise the prospectus` tax discussion to identify the firm as tax
counsel. Also, because you are providing as a short form tax
opinion, you should revise the lead-in paragraph and remove all
references in this section indicating that it is a "summary" as
opposed to counsel`s tax opinion. Further, clarify which matters
in
this section constitute counsel`s tax opinion. With respect to a
particular tax consequence, to the extent possible provide a
"should"
or "more likely than not" opinion. Alternatively, clearly state
that
tax counsel is not able to opine on a particular tax consequence.
Legal Matters, page 64
24. You have indicated that McGuire Woods LLP will pass upon
certain
legal matters. Please identify those matters.
Exhibit 5.1
25. Please revise paragraph 3 of this opinion to clarify that the
disclosure in the prospectus is your tax opinion rather than
indicating that it is a "discussion . . . accurate in all material
respects."
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert staff comments and the declaration of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Jim Hoffmeister at (202) 942-1988 or, in his
absence, Jim Allegretto, Senior Assistant Chief Accountant, at
(202)
942-1885 if you have questions regarding comments on the financial
statements and related matters. You may direct questions on the
tender offer rules to Julia Griffith, Office of Mergers and
Acquisitions, at (202) 942-1762. Direct questions on other
disclosure issues to Will Hines at (202) 824-5302 or me at (202)
942-
1900 with any questions regarding the foregoing comments.
Sincerely,
H. Christopher Owings
Assistant Director
cc: D. Michael Jones, Esq.
McGuire Woods LLP
901 East Cary Street
Richmond, Virginia 23219
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Dominion Resources, Inc.
Form S-4
November 23, 2004
Page 8