Dominion Power 2003 Annual Report Download - page 69

67.Dominion 2003
aggregate purchase price was $1.8 billion, which consisted of
approximately 14 million shares of Dominion common stock val-
ued at $881 million, $902 million in cash and employee stock
options with a fair value on the date of grant of approximately
$13 million. Dominion recorded $543 million of goodwill, repre-
senting the excess of purchase price over the fair value of the
Louis Dreyfus assets acquired and liabilities assumed. The opera-
tions of Louis Dreyfus are included in the Dominion Exploration &
Production operating segment. All of the goodwill arising from
the acquisition was allocated to that segment for purposes of
impairment testing under SFAS No. 142.
Millstone Power Station
In March 2001, Dominion acquired Millstone Power Station
(Millstone), a nuclear power station located in Waterford,
Connecticut. The aggregate purchase price was $1.3 billion in
cash, consisting of approximately $1.2 billion for plant assets and
$105 million for nuclear fuel. Dominion recorded $302 million
of goodwill representing the excess of the purchase price over
amounts allocated to Millstone’s assets acquired and liabilities
assumed. The operations of Millstone are included in the Domin-
ion Generation operating segment and all of the goodwill arising
from the acquisition has been allocated to that segment for
purposes of impairment testing under SFAS No. 142.
5. Operating Revenue
Year Ended December 31, 2003 2002 2001
(millions)
Regulated electric sales $ 4,876 $ 4,856 $ 4,619
Regulated gas sales 1,258 876 1,409
Nonregulated electric sales 1,130 1,017 1,022
Nonregulated gas sales 1,718 778 1,073
Gas transportation and storage 740 705 702
Gas and oil production 1,503 1,334 1,057
Other 853 652 676
Total operating revenue $12,078 $10,218 $10,558
6. Restructuring Activities
In 2001, after fully integrating CNG’s organization and opera-
tions with those of Dominion, management initiated a focused
review of Dominion’s combined operations. As a result,
Dominion recognized the following restructuring costs and
related liabilities during 2001:
Amount
(millions)
Severance and related costs $42
Nonqualified plan benefits, settlement and other costs 46
Lease termination and restructuring 13
Other 4
Total restructuring costs $105
The change in the liabilities for severance and related costs
and lease termination costs during 2003 and 2002 are pre-
sented below:
Severance Liability Lease Liability
(millions)
Balance at December 31, 2001 $42 $10
Amounts paid (24) (1)
Revision of estimate (8) —
Balance at December 31, 2002 10 9
Amounts paid (9)(3)
Balance at December 31, 2003 $1 $6
7. Income Taxes
Income from continuing operations before provision for income
taxes (pre-tax income), classified by source of income, and the
details of income tax expense were as follows:
Year Ended December 31, 2003 2002 2001
(millions)
Income before provision for taxes:
U.S. $1,506 $2,018 $816
Non-U.S. 40 25 98
Total $1,546 $2,043 $914
Income tax expense:
Current
Federal 121 (46) 104
State 22 13 62
Non-U.S. 13
Total current 144 (33) 169
Deferred
Federal 433 654 151
State 32 65 24
Non-U.S. 613 45
Total deferred 471 732 220
Amortization of deferred investment
tax credits — net (18) (18) (19)
Total income tax expense $ 597 $ 681 $370