Annual Report - 2001 - ARC Resources Ltd.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11. RELATED PARTY TRANSACTIONS
Pursuant to a reorganization of the ARC Group of Companies on June 9, 2000, ARC Financial Corporation assigned
its rights and obligations under the management agreement to ARC Resources Management Ltd. Fees payable to
the Manager for management, advisory and administrative services include a fee equal to three per cent of net
production revenue; and fees of 1.5 per cent, and 1.25 per cent of the purchase price of acquisitions and the net
proceeds of dispositions, respectively. In 2001, total acquisition and disposition fees paid or payable to the
Manager were $7,926,798 ($2,680,000 in 2000). These fees are accounted for as either part of the purchase price
or as a reduction of the proceeds of disposition of property, plant and equipment.
During 2001, the Manager was reimbursed $11,714,502 ($5,016,949 in 2000) for general and administrative
expenses incurred on behalf of the Trust.
12. CONTINGENCIES
The Trust is involved in litigation and claims associated with normal operations, and is of the opinion that any
resulting settlements would not materially affect its financial position or reported results of operations.
13. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
The consolidated financial statements have been prepared in accordance with Canadian generally accepted
accounting principles (“GAAP”), which differ in some respects to those in the United States. Any differences in
accounting principles as they pertain to the accompanying consolidated financial statements are immaterial
except as described below:
The application of US GAAP would have the following effect on net income as reported:
2001 2000
Net income as reported $ 140,688 $ 110,872
Adjustments (net of applicable income taxes):
Write-down of property, plant and equipment (a) (110,635) –
Depletion, depreciation and amortization (a) 10,338 10,646
Unrealized gain on derivative instruments (d) 6,592 –
Foreign exchange translation gain (loss) (b) (2,486) 1,106
Unit based compensation (c) (4,474) (4,402)
Net income under US GAAP $ 40,023 $ 118,222
2001 2000
Net income per trust unit under US GAAP
Basic $ 0.39 $ 1.86
Diluted 0.39 1.84
2001 2000
Comprehensive Income:
Net income under US GAAP $ 40,023 $ 118,222
Unrealized gain on derivative instruments
(net of future income taxes of $6,125) 8,251 –
Other comprehensive income (d) $ 48,274 $ 118,222
ARC ENERGY TRUST AR 2001