Vectren 2008 Annual Report Download - page 76

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cash payments of $5.2 million. During 2007, the Company recorded accretion of $1.2 million and increases in
estimates, net of cash payments of $6.3 million.
N. Impairment Review of Long-Lived Assets
Long-lived assets are reviewed as facts and circumstances indicate that the carrying amount may be impaired. This
review is performed in accordance with SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived
Assets” (SFAS 144). SFAS 144 establishes one accounting model for all impaired long-lived assets and long-lived
assets to be disposed of by sale or otherwise. SFAS 144 requires that the evaluation for impairment involve the
comparison of an asset’s carrying value to the estimated future cash flows that the asset is expected to generate over
its remaining life. If this evaluation were to conclude that the carrying value of the asset is impaired, an impairment
charge would be recorded based on the difference between the asset’s carrying amount and its fair value (less costs
to sell for assets to be disposed of by sale) as a charge to operations or discontinued operations.
O. Comprehensive Income
Comprehensive income is a measure of all changes in equity that result from the non-shareholder transactions. This
information is reported in the Consolidated Statements of Common Shareholders' Equity. A summary of the
components of and changes in Accumulated other comprehensive income for the past three years follows:
Beginning Changes End Changes End Changes End
of Year During of Year During of Year During of Year
(In millions) Balance Year Balance Year Balance Year Balance
Unconsolidated affiliates $ (0.5) $ 10.7 $ 10.2 11.0 $ 21.2 $ (50.2) $ (29.0)
Pension & other benefit costs (29.0) 26.5 (2.5) 1.2 (1.3) (4.0) (5.3)
Cash flow hedges 6.7 (6.0) 0.7 (0.1) 0.6 (0.5) 0.1
Deferred income taxes 9.2 (12.5) (3.3) (4.7) (8.0) 21.9 13.9
Accumulated other
comprehensive income (loss) $ (13.6) $ 18.7 $ 5.1 $ 7.4 $ 12.5 $ (32.8) $ (20.3)
2006 20082007
Accumulated other comprehensive income arising from unconsolidated affiliates is primarily the Company’s
portion of ProLiance Holdings, LLC’s accumulated comprehensive income related to use of cash flow hedges.
(See Note 3 for more information on ProLiance.)
P. Other Significant Policies
Included elsewhere in these Notes are significant accounting policies related to income taxes (Note 8), pensions and
postretirement benefits (Note 9), earnings per share (Note 12), share based compensation (Note 13), and derivatives
(Note 17).
3. Investments in ProLiance Holdings, LLC
ProLiance Holdings, LLC (ProLiance), a nonutility energy marketing affiliate of Vectren and Citizens Energy
Group (Citizens), provides services to a broad range of municipalities, utilities, industrial operations, schools, and
healthcare institutions located throughout the Midwest and Southeast United States. ProLiance’s customers include
Vectren’s Indiana utilities and nonutility gas supply operations as well as Citizens’ utilities. ProLiance’s primary
businesses include gas marketing, gas portfolio optimization, and other portfolio and energy management services.
Consistent with its ownership percentage, Vectren is allocated 61 percent of ProLiance’s profits and losses;
however, governance and voting rights remain at 50 percent for each member; and therefore, the Company
accounts for its investment in ProLiance using the equity method of accounting. The Company, including its retail
gas supply operations, contracted for 75 percent of its natural gas purchases through ProLiance in 2008, 2007, and
2006.