Vectren 2008 Annual Report Download - page 73

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71
Accumulated depreciation. Costs to dismantle and remove retired property are recovered through the depreciation
rates identified above.
AFUDC represents the cost of borrowed and equity funds which are used for construction purposes, and charged to
construction work in progress during the construction period. AFUDC is included in Other – net in the
Consolidated Statements of Income. The total AFUDC capitalized into utility plant and the portion of which was
computed on borrowed and equity funds for all periods reported follows:
(In millions) 2008 2007 2006
AFUDC – borrowed funds 2.2$ 3.5$ 2.6$
AFUDC – equity funds 0.3 0.5 1.5
Total AFUDC 2.5$ 4.0$ 4.1$
Year Ended December 31,
H. Nonutility Property
Nonutility property, net of accumulated depreciation and amortization follows:
(In millions) 2008 2007
Computer hardware & software 129.6$ 117.0$
Land & buildings 93.9 76.2
Coal mine development costs & equipment 109.1 71.3
Vehicles & equipment 41.7 35.0
All other 15.9 20.8
Nonutility property - net 390.2$ 320.3$
At December 31,
The depreciation of nonutility property is charged against income over its estimated useful life, using the straight-
line method of depreciation or units-of-production method of amortization. Repairs and maintenance, which are
not considered improvements and do not extend the useful life of the nonutility property, are charged to expense as
incurred. When nonutility property is retired, or otherwise disposed of, the asset and accumulated depreciation are
removed, and the resulting gain or loss is reflected in income. Nonutility property is presented net of accumulated
depreciation and amortization totaling $281.6 million and $258.7 million as of December 31, 2008, and 2007,
respectively. For the years ended December 31, 2008, 2007, and 2006, the Company capitalized interest totaling
$3.7 million, $2.3 million, and $1.2 million, respectively, on nonutility plant construction projects.
I. Investments in Unconsolidated Affiliates
Investments in unconsolidated affiliates where the Company has significant influence are accounted for using the
equity method of accounting. The Company’s share of net income or loss from these investments is recorded in
Equity in earnings of unconsolidated affiliates (See Note 19). Dividends are recorded as a reduction of the carrying
value of the investment when received. Investments in unconsolidated affiliates where the Company does not have
significant influence are accounted for using the cost method of accounting and include adjustments for declines in
value judged to be other than temporary. Dividends are recorded as Other - net when received. Investments in
unconsolidated affiliates consist of the following:
(In millions) 2008 2007
ProLiance Holdings, LLC 153.1$ 178.6$
Haddington Energy Partnerships 13.9 13.8
Other partnerships & corporations 12.1 16.4
Total investments in unconsolidated affiliates 179.1$ 208.8$
At December 31,