Vectren 2012 Annual Report Download - page 87

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85
8. Nonutility Real Estate & Other Legacy Holdings
Within the nonutility group, there are legacy investments involved in energy-related infrastructure and services, real estate, a
leveraged lease, and other ventures. As of December 31, 2012 and 2011, total remaining legacy investments included in the
Other Businesses portfolio total $28.7 million and $36.9 million, respectively. Further separation of that 2012 investment by type
of investment follows:
December 31, 2012
Value Included In
(In millions) Carrying
Value Other Nonutility
Investments
Investments in
Unconsolidated
Affiliates
Commercial real estate investments $ 8.0 $ 8.0 $ —
Leveraged lease 13.8 13.8 —
Other investments 6.9 3.1 3.8
$ 28.7 $ 24.9 $ 3.8
Net of deferred taxes related to the leveraged lease, the net investment at December 31, 2012 was $17.9 million.
Commercial Real Estate Charge
During the fourth quarter of 2011, the Company obtained new evidence confirming further weakness in markets where the
Company holds legacy real estate investments. The Company holds real estate investments such as an office building and
affordable housing projects. The evaluation of the evidence resulted in a $15.4 million charge in 2011. Of the $15.4 million
charge, $8.8 million is reflected in Other-net, $3.6 million is reflected in Equity in (losses) of unconsolidated affiliates, and $3.0
million is reflected in Other operating expenses.
Leveraged Lease
At December 31, 2012, the Company has an investment in a leveraged lease. The original cost for the leased facility was $27.5
million and was partially financed by non-recourse debt provided by lenders who were granted an assignment of rentals due and
a security interest in the leased property, which they accepted as their sole remedy in the event of default by the lessee. Such
remaining debt was approximately $22.9 million at December 31, 2012. The book value of this leverage lease is $3.0 million at
December 31, 2012, net of related deferred taxes of $10.8 million.
Other Investments
Other investments totaled $6.9 million at December 31, 2012 and are comprised of investments in partnership-like structures
involved in multifamily housing; a 40 percent ownership interest in Haddington Energy Partners LP and Haddington Energy
Partners II, LP; and a receivable resulting from a jury verdict, and a minor asset from an exited generation project. The
investments involving multifamily housing are variable interest entities where the Company is a limited partner. The Company's
exposure to loss is limited to its investment, and the Company does not consolidate any of these entities. Both the Haddington
investment and the multifamily housing investments are accounted for using the equity method. The carrying value of the
Haddington investments is fully reserved at December 31, 2012.