Dominion Power 2007 Annual Report Download - page 82

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Notes to Consolidated Financial Statements, Continued
The carrying amounts of the major classes of assets and
liabilities classified as held for sale in our Consolidated Balance
Sheets are as follows:
As of December 31, 2007 2006
(millions)
A
SSETS
Current Assets
Customer receivables $ 147 $ 144
Other 109 125
Total current assets 256 269
Property, Plant and Equipment
Property, plant and equipment 1,160 1,129
Accumulated depreciation, depletion and
amortization (367) (375)
Total property, plant and equipment, net 793 754
Deferred Charges and Other Assets
Regulatory assets 109 106
Other 24
Total deferred charges and other assets 111 110
Assets held for sale $1,160 $1,133
L
IABILITIES
Current Liabilities $ 210 $ 236
Deferred Credits and Other Liabilities
Deferred income taxes and investment tax credits 208 187
Other 74 71
Total deferred credits and other liabilities 282 258
Liabilities held for sale $ 492 $ 494
EITF Issue No. 03-13, Applying the Conditions of Paragraph
42 of FASB Statement No. 144 in Determining Whether to Report
Discontinued Operations (EITF 03-13), provides that the results
of operations of a component of an entity that has been disposed
of or is classified as held for sale shall be reported in discontinued
operations if both of the following conditions are met: (a) the
operations and cash flows of the components have been (or will
be) eliminated from the ongoing operations of the entity as a
result of the disposal transaction and (b) the entity will not have
any significant continuing involvement in the operations of the
component after the disposal transaction. While we do not expect
to have significant continuing involvement with Peoples or Hope
after their disposal, we do expect to have continuing cash flows
related primarily to our sale to them of natural gas production
from our Appalachian E&P operations, as well as natural gas
transportation and storage services provided to them by our gas
transmission operations. Due to these expected significant con-
tinuing cash flows, the results of Peoples and Hope have not been
reported as discontinued operations in our Consolidated State-
ments of Income. We will continue to assess the level of our
involvement and continuing cash flows with Peoples and Hope
for one year after the date of sale in accordance with EITF 03-13,
and if circumstances change, we may be required to reclassify the
results of Peoples and Hope as discontinued operations in our
Consolidated Statements of Income.
The following table presents selected information regarding
the results of operations of Peoples and Hope:
Year Ended December 31, 2007 2006 2005
(millions)
Operating revenue $673 $ 699 $742
Income (loss) before income taxes 78 (112) 54
During 2006, we recognized a $166 million ($104 million
after-tax) charge, recorded in other operations and maintenance
expense in our Consolidated Statement of Income, resulting from
the write-off of certain regulatory assets related to the planned sale
of Peoples and Hope, since the recovery of those assets was no
longer probable. During 2006, we also established $145 million
of deferred tax liabilities, as discussed in Note 9.
N
OTE
7. P
RO
F
ORMA
F
INANCIAL
S
TATEMENTS
(U
NAUDITED
)
The accompanying unaudited Pro Forma Condensed Con-
solidated Statements of Income for the year ended December 31,
2007, reflect the sale of our non-Appalachian E&P operations as
if it had occurred on January 1, 2007.
The pro forma adjustments have been based on the operations
of our non-Appalachian E&P business during the period pre-
sented, the impact of the sale of these operations and other trans-
actions resulting from the sale. The pro forma adjustments have
been made to illustrate the anticipated financial impact of the sale
upon Dominion and are based upon available information and
assumptions that we believe to be reasonable at the date of this
filing. Consequently, the pro forma financial information pre-
sented is not necessarily indicative of the consolidated results of
operations that would have been reported had the transaction
actually occurred on the date presented. Moreover, the pro forma
financial information does not purport to indicate the future
results that Dominion will experience.
80 Dominion 2007 Annual Report