Vectren 2013 Annual Report Download - page 89
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87
Leveraged Lease
At December 31, 2013, 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 $19.6 million at December 31, 2013. The book value of this leverage lease is $4.0 million at
December 31, 2013, net of related deferred taxes of $10.4 million.
Other Investments
Other investments totaled $4.1 million at December 31, 2013 and are comprised of investments in partnership-like structures
involved in multifamily housing and an 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. The multifamily housing investments are accounted
for using the equity method.
9. Intangible Assets
Intangible assets, which are included in Other assets, consist of the following:
(In millions) At December 31,
2013 2012
Amortizing Non-
amortizing Amortizing Non-
amortizing
Customer-related assets $ 17.4 $ — $ 18.9 $ —
Market-related assets 1.9 7.0 2.7 7.0
Intangible assets, net $ 19.3 $ 7.0 $ 21.6 $ 7.0
As of December 31, 2013, the weighted average remaining life for amortizing customer-related assets and all amortizing
intangibles is 13 years. These amortizing intangible assets have no significant residual values. Intangible assets are presented
net of accumulated amortization totaling $8.1 million for customer-related assets and $2.6 million for market-related assets at
December 31, 2013 and $6.6 million for customer-related assets and $1.7 million for market-related assets at December 31,
2012. Annual amortization associated with intangible assets totaled $2.3 million in 2013, $2.6 million in 2012 and $2.3 million in
2011. Amortization should approximate (in millions) $2.3, $2.2, $1.6, $1.4, and $1.4 in 2014, 2015, 2016, 2017, and 2018,
respectively. Intangible assets are primarily in the Nonutility Group.
10. Income Taxes
A reconciliation of the federal statutory rate to the effective income tax rate follows:
Year Ended December 31,
2013 2012 2011
Statutory rate: 35.0% 35.0% 35.0%
State & local taxes-net of federal benefit 4.6 4.0 4.2
Amortization of investment tax credit (0.3) (0.3) (0.3)
Depletion (1.5) (1.5) (1.9)
Energy efficiency building deductions (3.8) (3.0) (1.1)
Other tax credits (1.1) (0.1) (0.2)
Adjustment of income tax accruals and all other-net 0.1 0.1 2.2
Effective tax rate 33.0% 34.2% 37.9%