Progress Energy 2008 Annual Report Download - page 69

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Progress Energy Annual Report 2008
for us for business combinations for which the acquisition
date is on or after January 1, 2009. Earlier application is
prohibited. We do not expect the adoption of SFAS No.
141R to have a material impact on our financial position
or results of operations.
SFAS No. 160, “Noncontrolling Interests
in Consolidated Financial Statements, an
amendment of ARB No. 51”
In conjunction with the issuance of SFAS No. 141R,
in December 2007, the FASB issued SFAS No. 160,
“Noncontrolling Interests in Consolidated Financial
Statements, an amendment of ARB No. 51” (SFAS No. 160),
which introduces significant changes in the accounting for
noncontrolling interests in a partially owned consolidated
subsidiary. SFAS No. 160 also changes the accounting
for and reporting for the deconsolidation of a subsidiary.
SFAS No. 160 requires that a noncontrolling interest in a
consolidated subsidiary be displayed in the consolidated
statement of financial position as a separate component
of equity rather than as a “mezzanine” item between
liabilities and equity. SFAS No. 160 also requires that
earnings attributed to the noncontrolling interests be
reported as part of consolidated earnings, and requires
disclosure of the attribution of consolidated earnings to
the controlling and noncontrolling interests on the face of
the consolidated income statement. SFAS No. 160 must be
adopted concurrently with the effective date of SFAS No.
141R, which for us is January 1, 2009. We do not expect
the adoption of SFAS No. 160 to have a material impact on
our financial position or results of operations.
SFAS No. 161,”Disclosures about Derivative
Instruments and Hedging Activities – an
amendment of FASB Statement No. 133”
In March 2008, the FASB issued SFAS Statement No. 161,
“Disclosures about Derivative Instruments and Hedging
Activities – an amendment of FASB Statement No.
133” (SFAS No. 161), which requires entities to provide
enhanced disclosures about how and why an entity
uses derivative instruments, how derivative instruments
and related hedged items are accounted for under
Statement 133 and its related interpretations, and how
derivative instruments and related hedged items affect
an entity’s financial position, financial performance and
cash flows. SFAS 161 is effective for us on January 1,
2009, and encourages, but does not require, comparative
disclosures for earlier periods at initial adoption. The
adoption of SFAS No. 161 will change certain disclosures
in the notes to the financial statements, but will have no
impact on our financial position or results of operations.
FSP No. SFAS 132R-1, “Employers’
Disclosures about Post Retirement Benefit
Plan Assets”
In December 2008, the FASB issued FSP No. SFAS 132R-1,
“Employers’ Disclosures about Post Retirement Benefit
Plan Assets” (FSP SFAS 132R-1), which requires additional
disclosures on the investment allocation decision making
process, the fair value of each major category of plan
assets and the inputs and valuation techniques used to
remeasure the fair value of plan assets. FSP SFAS 132R-1
is effective for us on December 31, 2009. The adoption of
FSP SFAS 132R-1 will change certain disclosures in the
notes to the financial statements, but will have no impact
on our financial position or results of operations.
3. DIVESTITURES
A. Terminals Operations and Synthetic Fuels
Businesses
On March 7, 2008, we sold coal terminals and docks in West
Virginia and Kentucky (Terminals) for $71 million in gross
cash proceeds. The terminals had a total annual capacity
in excess of 40 million tons for transloading, blending and
storing coal and other commodities. Proceeds from the
sale were used for general corporate purposes. During
the year ended December 31, 2008, we recorded an after-
tax gain of $42 million on the sale of these assets. The
accompanying consolidated financial statements reflect
the operations of Terminals as discontinued operations.
Prior to 2008, we had substantial operations associated
with the production of coal-based solid synthetic fuels
as defined under Section 29 (Section 29) of the Code
and as redesignated effective 2006 as Section 45K of
the Code (Section 45K and, collectively, Section 29/45K).
The production and sale of these products qualified for
federal income tax credits so long as certain requirements
were satisfied. As a result of the expiration of the
tax credit program, all of our synthetic fuels businesses
were abandoned and all operations ceased as of
December 31, 2007. The accompanying consolidated
statements of income reflect the abandoned operations of
our synthetic fuels businesses as discontinued operations.
Concurrent with the synthetic fuels intangibles impairment
evaluation discussed in Note 8, we also performed an
impairment evaluation of related long-lived assets during
the second quarter of 2006. Based on the results of the
impairment test, we recorded a pre-tax impairment charge
of $64 million ($38 million after-tax) during the quarter ended
June 30, 2006, which was reclassified to discontinued
operations, net of tax on the Consolidated Statements
of Income. This charge represented the entirety of the