EX-99.2 BYLAWS 5 driexhibit992.htm DRI EXHIBIT 99.2 CONSOLIDATED NATURAL GAS COMPANY

EXHIBIT 99.2

DOMINION RESOURCES, INC.

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
STATEMENTS OF INCOME FROM CONTINUING OPERATIONS

               Year Ended December 31,2000           


Dominion
(As Reported)

Louis
Dreyfus (As Reported) (A)


Pro Forma Adjustments

Pro
Forma Combined

(Millions, except per share data)

Operating Revenue

$9,260

$474

$9,734

Operating Expenses:

Electric fuel and energy purchases, net

1,106

1,106

Purchased electric capacity

741

741

Purchased gas, net

1,453

1,453

Liquids, pipeline capacity, and other purchases

299

299

Restructuring and other acquisition-related costs

460

460

Other operations and maintenance

2,011

117

$(36)

(G)

2,092

Depreciation, depletion and amortization

1,176

129

26 

(E)

1,331

Other taxes

     485

   31

       

     516

Total operating expenses

  7,731

  277

  (10)

  7,998

Income from operations

1,529

197

10 

1,736

Other income

93

3

96

Interest and related charges

  1,024

   41

   53 

(B)

  1,118

Income before income taxes

598

159

(43)

714

Income taxes

     183

   61

  (16)

(D3)

    228

Income from continuing operations

$   415

$  98

$(27)

$ 486

Average shares of common stock - basic

235.2

41.8

249.5

Earning per share - basic:

Income from continuing operations

$1.76

$2.35

$1.95

Average shares of common stock - diluted

235.9

42.8

250.3

Earning per share - diluted:

Income from continuing operations

$1.76

$2.29

$1.94

See Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Data

PAGE 2

DOMINION RESOURCES, INC.

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
STATEMENTS OF INCOME FROM CONTINUING OPERATIONS

        Nine Months Ended September 30, 2001            


Dominion
(As Reported)

Louis
Dreyfus (As Reported) (A)


Pro Forma Adjustments

Pro
Forma Combined

(Millions, except per share data)

Operating Revenue

$8,051

$509

$8,560

Operating Expenses:

Electric fuel and energy purchases, net

1,063

1,063

Purchased electric capacity

516

516

Purchased gas, net

1,474

1,474

Liquids, pipeline capacity, and other purchases

164

164

Other operations and maintenance

1,835

103

$(27)

(G)

1,911

Depreciation, depletion and amortization

906

97

20 

(E)

1,023

Other taxes

  299

  23

       

   322

Total operating expenses

  6,257

 223

  (7)

 6,473

Income from operations

1,794

286

2,087

Other income

71

2

73

Interest and related charges

   760

  24

   40 

(B)

   824

Income before income taxes

1,105

264

(33)

1,336

Income taxes

  444

 101

  (13)

(D3)

   532

Income from continuing operations

$  661

$163

$(20)

$  804

Average shares of common stock - basic

248.3

43.9

262.6

Earning per share - basic:

Income from continuing operations

$2.67

$3.72

$3.06

Average shares of common stock - diluted

250.3

44.6

264.8

Earning per share - diluted:

Income from continuing operations

$2.65

$3.65

$3.04

See Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Data

PAGE 3

DOMINION RESOURCES, INC.

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET

                                 At September 30, 2001                                     


Dominion
(As Reported)


Louis Dreyfus (A)


Pro Forma Adjustments

Pro
Forma Combined

(Millions)

ASSETS

Current Assets:

Cash and cash equivalents

$    367 

$      5 

$    372 

Accounts receivable, net

2,023 

69 

2,092 

Inventories

547 

547 

Investment securities-trading

283 

283 

Commodity contract assets

1,670 

74 

1,744 

Prepayments

154 

154 

Other

     321 

       5 

     326 

Total current assets

   5,365 

    153 

    5,518 

Investments

3,409 

           

    3,409 

Property, Plant and Equipment:

Property, plant and equipment

30,402 

2,195 

$   192

(D1)

32,789 

Accumulated depreciation, depletion, and amortization

(14,434)

  (665)

      665

(D1)

(14,434)

Total property, plant and equipment

  15,968 

  1,530  

      857

   18,355 

Deferred Charges and Other Assets:

Goodwill, net

3,672 

468

(D2)

4,140 

Prepaid pension costs

1,448 

1,448 

Other

   1,408 

      68 

             

    1,476 

Total deferred charges and other assets

   6,528 

      68 

      468

    7,064 

Total assets

$31,270 

$1,751 

$1,325

$34,346 

See Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Data

PAGE 4

DOMINION RESOURCES, INC.

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET

                     At September 30, 2001                 


Dominion
(As Reported)


Louis
Dreyfus (A)


Pro Forma Adjustments

Pro
Forma Combined

(Millions)

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:

Securities due within one year

$    531

$    531

Short-term debt

1,299

1,299

Accounts payable, trade

1,581

$    92 

$    22 

(F)

1,695

Commodity contract liabilities

1,356

1,364

Other

   1,439

     21 

     33 

(F)

   1,493

Total current liabilities

   6,206

    121 

     55  

   6,382

Long-term Debt:

Long-term debt

11,251

514 

712 

(B)

12,477

Notes payable-affiliates

     513

         

         

     513

Total long-term debt

  11,764

    514 

    712 

  12,990

Deferred Credits and Other Liabilities:

Deferred taxes

3,164

188 

316 

(D3)

3,668

Other

   1,131

     76 

         

   1,207

Total deferred credits and other liabilities

   4,295

    264 

    316 

   4,875

Total liabilities

  22,265

    899 

  1,083 

  24,247

Obligated manditorily redeemable preferred

securities of subsidiary trusts

    935

         

    200 

(B)

   1,135

Subsidiary preferred stock not subject to mandatory redemption

    509

         

          

     509

Common Shareholders' Equity:

Common stock

6,137

894 

(C, I )

7,031

Other paid-in capital

23

511 

(511)

(H)

23

Accumulated other comprehensive income

188

63 

(63)

(H)

188

Retaining earnings

1,213

289 

(289)

(H)

1,213

Treasury stock

         

     (11)

     11

(H)

         

Total common shareholders' equity

   7,561

     852 

     42

   8,455

Total liabilities and shareholders' equity

$31,270

$1,751 

$1,325

$34,346

See Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Data

PAGE 5

NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
FINANCIAL DATA

The Unaudited Pro Forma Combined Condensed Consolidated Financial Data are based on the following assumptions:

A. Certain revenues, expenses, assets and liabilities of Louis Dreyfus have been reclassified to conform to Dominion's presentation.

B. The issuance of $950 million of long-term debt and $200 million of trust preferred securities by CNG, a wholly-owned subsidiary of Dominion, at an average coupon rate of 6.14% to fund the cash consideration distributed in exchange for the outstanding shares of Louis Dreyfus at the closing of the merger. In addition, Dominion retired $185 million of Louis Dreyfus bank debt with proceeds from these financings and assuming any excess proceeds from the issuance of long term debt will be used to retire existing long term debt. Additionally, certain debt of Louis Dreyfus, which was not retired, is adjusted to reflect fair market value.

C. The issuance of 14.3 million shares of Dominion common stock at the closing of the merger based on the exchange ratio of 0.3226 share of Dominion common stock for each share of Louis Dreyfus common stock, amounting to $881 million, and the conversion of Louis Dreyfus common stock options into Dominion common stock options with an estimated fair value of $13 million.

D. Purchase adjustments which have been made to the assets and liabilities of Louis Dreyfus to reflect the effect of the merger being accounted for as a purchase business combination are as follows (in millions):

Total oil and gas exploration and production properties (1)

$857

Goodwill (2)

468

Deferred taxes (3)

316

1. Oil and gas exploration and production properties are adjusted to reflect the Louis Dreyfus exploration and production properties at estimated fair value. The fair value of proved reserves are estimated to be $1.5 billion and unproved properties are estimated to be $812 million.

2. Goodwill is recognized, representing the portion of the purchase price in excess of the estimated fair value of identified assets and liabilities. No amortization of goodwill is included in the Unaudited Pro Forma Combined Condensed Consolidated Financial Data, as provided in Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, for business combinations completed after June 30, 2001. The final allocation of the purchase price will be based on the fair value of identified assets and liabilities. Accordingly, goodwill will be adjusted as a result of the final determination of such fair values and thus may differ significantly from the amount reported in the Unaudited Pro Forma Combined Condensed Consolidated Balance Sheet.

3. Deferred taxes are adjusted to record the additional deferred taxes, resulting primarily from the recognition of the estimated fair value of the Louis Dreyfus exploration and production properties. The estimated provision for income taxes related to the pro forma adjustments are based on an assumed combined federal and state income tax rate of 38%.

E. Pro forma adjustments reflect the additional depletion related to the adjustment of the Louis Dreyfus exploration and production properties to estimated fair value under the full cost method of accounting. See Note G.

PAGE 6

F. Direct costs of the merger include approximately $22 million for fees of financial advisors, legal counsel, and independent auditors. In addition, estimated payments of $33 million are expected to be made under certain employment contracts, seismic licensing agreements and other liabilities. The Unaudited Pro Forma Combined Condensed Consolidated Financial Data do not reflect the nonrecurring costs and expenses associated with integrating the operations of the two companies, nor any of the anticipated recurring expense savings arising from the integration.

G. Dominion uses the full cost method to account for its oil and gas operations. Louis Dreyfus utilized the successful efforts method of accounting for its oil and gas operations. The pro forma data reflect an estimate of the change from the successful efforts method to the full cost method for the Louis Dreyfus oil and gas operations. This change resulted in a $6 million and $4 million increase in after-tax earnings in the Unaudited Pro Forma Combined Condensed Consolidated Statements of Income from Continuing Operations for the year ended December 31, 2000 and the nine months ended September 30, 2001, respectively.

H. The application of the purchase method of accounting eliminates the preexisting balances of Louis Dreyfus' other paid-in capital, accumulated other comprehensive income, retained earnings, and treasury stock.

I. The Louis Dreyfus Stock Option Plan ("Stock Option Plan") provides for awards of stock options to certain employees and non-employee directors. The Unaudited Pro Forma Combined Condensed Consolidated Financial Data reflect the exchange of those Louis Dreyfus common stock options outstanding at the time of the merger for options to purchase .7 million shares of Dominion common stock.