Dominion Power 2002 Annual Report Download - page 66

Notes to Consolidated Financial Statements, Continued
allowances for loan losses, and $266 million of CLO and CDO-
related retained interests. At December 31, 2001, Dominion
held commercial and other loans receivable of $106 million, net
of allowances for loan losses, and $268 million of CLO and
CDO-related retained interests.
In 2000, Dominion completed the sales of Virginia Natural
Gas, Inc. and CNG International’s Argentine assets for $678
million. Representing assets held for sale from the CNG acquisi-
tion, those transactions did not result in the recognition of any
gain or loss. Also in 2000, Dominion completed the sale of its
interest in Corby Power Limited for $78 million, resulting in an
after-tax gain of $13 million. Dominion completed the sale of its
interests in electric generation capacity in Latin America for
$405 million in 2000 and 1999, for which Dominion recog-
nized an after-tax impairment loss of $21 million in 1999.
7Operating Revenue
Year Ended December 31, 2002 2001 2000
(millions)
Regulated Sales
Electric $ 4,856 $ 4,619 $4,492
Gas 876 1,409 1,374
Nonregulated Sales
Electric 1,017 1,022 318
Gas 778 1,073 671
Gas transportation and storage 705 702 486
Gas and oil production 1,334 1,057 857
Other 652 676 1,048
Total operating revenue $10,218 $10,558 $9,246
The primary types of sales and service activities reported
as operating revenue include:
Regulated electric sales consist primarily of state-regulated
retail electric sales and federally regulated wholesale electric
sales and electric transmission services subject to cost-of-service
rate regulation.
Regulated gas sales consist primarily of state-regulated retail
natural gas sales and related distribution services.
Nonregulated electric sales consist primarily of sales of elec-
tricity from utility, independent power production and mer-
chant nuclear plant resources at market-based rates and net
operating revenue from electric trading activities.
Nonregulated gas sales consist primarily of sales of natural
gas at market-based rates, brokered gas sales and net operating
revenue from gas trading activities. Natural gas sold includes
gas produced by Dominion as well as purchased gas.
Gas transportation and storage consists primarily of federally-
regulated sales of gathering, transmission, distribution and stor-
age services. Also included are gas distribution charges to retail
distribution service customers opting for alternate suppliers.
Gas and oil production consists primarily of sales of natural
gas, oil and condensate produced by Dominion. Gas and oil
production revenue is reported net of royalties.
Other revenue consists primarily of miscellaneous service
revenue from electric and gas distribution operations; sales of
coal, brokered oil and other extracted products; gas and oil pro-
cessing; gas transmission capacity release; and interest and other
income from financial services operations.
Dominion’s customer accounts receivable at December 31,
2002 and 2001 included $334 million and $307 million,
respectively, of accrued unbilled revenue based on estimated
electric energy or natural gas delivered but not yet billed to its
utility customers. Considering historical usage and applicable
customer rates, Dominion estimates unbilled utility revenue
based on weather factors and, for electric customers, total daily
electric generation supplied after adjusting for estimated losses
of energy during transmission.
8Restructuring and
Acquisition-Related Activities
2001 Restructuring Costs
In the fourth quarter of 2001, after fully integrating CNG’s
organization and operations with those of Dominion, manage-
ment initiated a focused review of Dominion’s combined
operations and developed a plan of reorganization. As a result,
Dominion recognized $105 million of restructuring costs which
included employee severance and termination benefits and the
abandonment of leased office space no longer needed. In addi-
tion, restructuring charges included approximately $46 million
related to departing employees for modifications of stock
options, special termination benefits and losses related to the
settlement of the related nonqualified pension obligation and
plan curtailment attributable to reductions in expected future
years of service of plan participants. See Note 26.
Under the 2001 restructuring plan, Dominion identified
approximately 340 salaried positions to be eliminated and
recorded $42 million in employee severance-related costs.
Severance payments were based on the individual’s base salary
and years of service at the time of termination. In 2002,
Dominion recorded an $8 million adjustment to the liability
for severance and related costs and reported it in restructuring
and other acquisition-related costs in the Consolidated State-
ments of Income. With 303 positions actually being eliminated
under the plan, the adjustment reflected a reduction in the
number of employee positions being eliminated and a reduction
for differences between actual and estimated base salaries and
years of service for those employees actually terminated under
the plan.
64 Dominion ’02 Annual Report