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These excerpts taken from the DVN 10-K filed Feb 27, 2009. Chevron
Common Stock and Related Embedded Option
Prior to 2007, we recognized unrealized changes in the fair
values of our investment in 14.2 million shares of Chevron
common stock as part of other comprehensive income. Effective
January 1, 2007 as a result of our adoption of Financial
Accounting Standard No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities — Including
an Amendment of FASB Statement No. 115, we began
recognizing unrealized gains and losses on our investment in
Chevron common stock in net earnings rather than as part of
other comprehensive income. On October 31, 2008, we
exchanged these shares of Chevron common stock for
Chevron’s interest in the Drunkard’s Wash properties
located in east-central Utah and $280 million in cash. In
accordance with the terms of the exchange, the fair value of our
investment in the Chevron shares was estimated to be $67.71 per
share on the exchange date. Prior to the exchange of these
shares, we calculated the fair value of our investment in
Chevron common stock using Chevron’s published market price.
We also recognized unrealized changes in the fair value of the
conversion option embedded in the debentures exchangeable into
shares of Chevron common stock. The embedded option was not
actively traded in an established market. Therefore, we
estimated its fair value using quotes obtained from a broker for
trades occurring near the valuation date. Since the exchangeable
debentures were retired in August 2008, we will not recognize
any future gains or losses from the embedded option.
The loss during 2008 on our investment in Chevron common stock
was directly attributable to a $25.62 per share decrease in the
estimated fair value while we owned Chevron’s common stock
during the year. The gain on the embedded option during 2008 was
directly attributable to the change in fair value of the Chevron
common stock from January 1, 2008 to the maturity date of
August 15, 2008. The gain on our investment in Chevron
common stock and loss on the embedded option during 2007 were
directly attributable to a $19.80 increase in the price per
share of Chevron’s common stock during 2007.
Chevron
Common Stock and Related Embedded Option
Prior to 2007, we recognized unrealized changes in the fair
values of our investment in 14.2 million shares of Chevron
common stock as part of other comprehensive income. Effective
January 1, 2007 as a result of our adoption of Financial
Accounting Standard No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities — Including
an Amendment of FASB Statement No. 115, we began
recognizing unrealized gains and losses on our investment in
Chevron common stock in net earnings rather than as part of
other comprehensive income. On October 31, 2008, we
exchanged these shares of Chevron common stock for
Chevron’s interest in the Drunkard’s Wash properties
located in east-central Utah and $280 million in cash. In
accordance with the terms of the exchange, the fair value of our
investment in the Chevron shares was estimated to be $67.71 per
share on the exchange date. Prior to the exchange of these
shares, we calculated the fair value of our investment in
Chevron common stock using Chevron’s published market price.
We also recognized unrealized changes in the fair value of the
conversion option embedded in the debentures exchangeable into
shares of Chevron common stock. The embedded option was not
actively traded in an established market. Therefore, we
estimated its fair value using quotes obtained from a broker for
trades occurring near the valuation date. Since the exchangeable
debentures were retired in August 2008, we will not recognize
any future gains or losses from the embedded option.
The loss during 2008 on our investment in Chevron common stock
was directly attributable to a $25.62 per share decrease in the
estimated fair value while we owned Chevron’s common stock
during the year. The gain on the embedded option during 2008 was
directly attributable to the change in fair value of the Chevron
common stock from January 1, 2008 to the maturity date of
August 15, 2008. The gain on our investment in Chevron
common stock and loss on the embedded option during 2007 were
directly attributable to a $19.80 increase in the price per
share of Chevron’s common stock during 2007.
Chevron Common Stock and Related Embedded Option Prior to 2007, we recognized unrealized changes in the fair values of our investment in 14.2 million shares of Chevron common stock as part of other comprehensive income. Effective January 1, 2007 as a result of our adoption of Financial Accounting Standard No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115, we began recognizing unrealized gains and losses on our investment in Chevron common stock in net earnings rather than as part of other comprehensive income. On October 31, 2008, we exchanged these shares of Chevron common stock for Chevron’s interest in the Drunkard’s Wash properties located in east-central Utah and $280 million in cash. In accordance with the terms of the exchange, the fair value of our investment in the Chevron shares was estimated to be $67.71 per share on the exchange date. Prior to the exchange of these shares, we calculated the fair value of our investment in Chevron common stock using Chevron’s published market price. We also recognized unrealized changes in the fair value of the conversion option embedded in the debentures exchangeable into shares of Chevron common stock. The embedded option was not actively traded in an established market. Therefore, we estimated its fair value using quotes obtained from a broker for trades occurring near the valuation date. Since the exchangeable debentures were retired in August 2008, we will not recognize any future gains or losses from the embedded option. The loss during 2008 on our investment in Chevron common stock was directly attributable to a $25.62 per share decrease in the estimated fair value while we owned Chevron’s common stock during the year. The gain on the embedded option during 2008 was directly attributable to the change in fair value of the Chevron common stock from January 1, 2008 to the maturity date of August 15, 2008. The gain on our investment in Chevron common stock and loss on the embedded option during 2007 were directly attributable to a $19.80 increase in the price per share of Chevron’s common stock during 2007. Chevron Common Stock and Related Embedded Option Prior to 2007, we recognized unrealized changes in the fair values of our investment in 14.2 million shares of Chevron common stock as part of other comprehensive income. Effective January 1, 2007 as a result of our adoption of Financial Accounting Standard No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115, we began recognizing unrealized gains and losses on our investment in Chevron common stock in net earnings rather than as part of other comprehensive income. On October 31, 2008, we exchanged these shares of Chevron common stock for Chevron’s interest in the Drunkard’s Wash properties located in east-central Utah and $280 million in cash. In accordance with the terms of the exchange, the fair value of our investment in the Chevron shares was estimated to be $67.71 per share on the exchange date. Prior to the exchange of these shares, we calculated the fair value of our investment in Chevron common stock using Chevron’s published market price. We also recognized unrealized changes in the fair value of the conversion option embedded in the debentures exchangeable into shares of Chevron common stock. The embedded option was not actively traded in an established market. Therefore, we estimated its fair value using quotes obtained from a broker for trades occurring near the valuation date. Since the exchangeable debentures were retired in August 2008, we will not recognize any future gains or losses from the embedded option. The loss during 2008 on our investment in Chevron common stock was directly attributable to a $25.62 per share decrease in the estimated fair value while we owned Chevron’s common stock during the year. The gain on the embedded option during 2008 was directly attributable to the change in fair value of the Chevron common stock from January 1, 2008 to the maturity date of August 15, 2008. The gain on our investment in Chevron common stock and loss on the embedded option during 2007 were directly attributable to a $19.80 increase in the price per share of Chevron’s common stock during 2007. | EXCERPTS ON THIS PAGE:
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