DTE Energy 2011 Annual Report Download - page 17

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15
NOTE 5 — PROPERTY, PLANT AND EQUIPMENT
Summary of property by classification as of December 31:
(in Millions)
Property, Plant and Equipment
Distribution
Storage
Transportation and Other
Total
Less Accumulated Depreciation
Distribution
Storage
Transportation and Other
Total
Net Property, Plant and Equipment
2011
$ 2,561
406
872
3,839
(1,041)
(127)
(396)
(1,564)
$ 2,275
2010
$ 2,460
395
962
3,817
(1,019)
(108)
(495)
(1,622)
$ 2,195
AFUDC capitalized in 2011 was approximately $1 million and no AFUDC was capitalized during 2010.
The composite depreciation rate for MichCon was 2.3% in 2011, 2.5% in 2010, and 3.1% in 2009.
The average estimated useful life for gas distribution and transportation property was 62 years and 61 years, respectively, at
December 31, 2011.
Capitalized software costs are classified as Property, plant and equipment and the related amortization is included in
Accumulated depreciation and amortization, on the Consolidated Statements of Financial Position. The Company capitalizes
the costs associated with computer software it develops or obtains for use in its business. The Company amortizes capitalized
software costs on a straight-line basis over the expected period of benefit, ranging from 5 to 15 years.
Capitalized software costs amortization expense was $7 million in 2011, 2010 and 2009. The gross carrying amount and
accumulated amortization of capitalized software costs at December 31, 2011 were $95 million and $55 million, respectively.
The gross carrying amount and accumulated amortization of capitalized software costs at December 31, 2010 were $96 million
and $51 million, respectively. Amortization expense for capitalized software costs is estimated to be $7 million annually for
2012 through 2016.
NOTE 6 — ASSET RETIREMENT OBLIGATIONS
The Company has conditional retirement obligations for gas pipelines, certain service centers, compressor and gate stations.
The Company recognizes such obligations as liabilities at fair market value when they are incurred, which generally is at the
time the associated assets are placed in service. Fair value is measured using expected future cash outflows discounted at our
credit-adjusted risk-free rate. The Company defers timing differences that arise in the expense recognition of legal asset
retirement costs that are currently recovered in rates.
No liability has been recorded with respect to lead-based paint, as the quantities of lead-based paint in the Company's facilities
are unknown. In addition, there is no incremental cost to demolitions of lead-based paint facilities vs. non-lead-based paint
facilities and no regulations currently exist requiring any type of special disposal of items containing lead-based paint.