Dominion Power 2000 Annual Report Download - page 66

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Notes to Consolidated Financial Statements (continued)
1999, respectively. Total return swap transactions require additional
funding of or return of cash collateral resulting from decreases or
increases in the fair market value of the swap position. Total return
swap cash collateral is included in cash and cash equivalents.
Such cash collateral was $59 million at December 31, 1999.
During the fourth quarter of 1999, Dominion entered into a total
return equity swap facility agreement (Agreement). The Agreement
gave Dominion the right to direct the counterparty to purchase
shares of Dominion common stock during the term of the
Agreement. In addition, Dominion paid the counterparty a carrying
cost equal to a LIBOR-based rate on the counterparty’s cost of
acquiring the shares from the date of such acquisitions until the
date of settlement. Due to Dominion’s ability to issue shares to set-
tle periodic price fluctuations and fees under the Agreement,
Dominion recorded all amounts received and paid as equity. As of
December 31, 1999, the counterparty had acquired 3.2 million shares
of Dominion common stock under this Agreement at an aggregate
cost that was approximately $19 million more than the fair market
value of the shares at December 31, 1999. On February 3, 2000,
Dominion settled all transactions under the Agreement and
received the 3.2 million shares at a cost of $145 million.
Note 25 Gas and Oil Producing Activities
(unaudited)
Capitalized Costs
The aggregate amounts of costs capitalized for gas and oil produc-
ing activities, and related aggregate amounts of accumulated
depreciation and amortization, follow:
(millions) At December 31,
2000 1999
Capitalized costs of:
Proved properties $5,210 $1,116
Unproved properties 550 69
5,760 1,185
Accumulated depreciation of:
Proved properties 2,959 245
Unproved properties 233 6
3,192 251
Net capitalized costs $2,568 $ 934
Total Costs Incurred
The following costs were incurred in gas and oil producing activities during the years 1998 through 2000:
(millions)
Year ended December 31, 2000 1999 1998
Total United States Canada Total United States Canada Total United States Canada
Property acquisition costs:
Proved properties $1,475 $1,459 $16 $280 $121 $159 $165 $165
Unproved properties 125 125 33 3 30
1,600 1,584 16 313 124 189 165 165
Exploration costs 159 115 44 4 2 2 20 $16 4
Development costs 261 236 25 85 34 51 28 25 3
Total $2,020 $1,935 $85 $402 $160 $242 $213 $41 $172
(millions) Year ended December 31, 2000 1999 1998
Total United States Canada Total United States Canada Total United States Canada
Revenues (net of royalties) from:
Sales to nonaffiliated companies $861 $691 $170 $229 $142 $87 $141 $119 $22
Transfers to other operations 93 93
Total 954 784 170 229 142 87 141 119 22
Less:
Production (lifting) costs 158 133 25 77 47 30 43 37 6
Depreciation and amortization 345 294 51 84 47 37 59 45 14
Income tax expense 134 93 41 (10) (19) 9 (10) (11) 1
Results of operations $317 $264 $ 53 $ 78 $ 67 $11 $ 49 $ 48 $ 1
Results of Operations
The Company cautions that the following standardized
disclosures required by the FASB do not represent the results
of operations based on its historical financial statements. In
addition to requiring different determinations of revenue and costs,
the disclosures exclude the impact of interest expense and corpo-
rate overheads.