Property, Plant and Equipment Depreciation Off Balance Sheet Financial Instruments Post-employment Benefits Stock-Based Compensation Plans Comparative Amounts ENBRIDGE 2000 ANNU AL REPORT 35 Expenditures for system expansion and major renewals and betterments are capitalized; maintenance and repair costs are expensed as incurred. Regulated operations capitalize an allowance for interest during construction at rates authorized by  the regulatory authorities. When allowed by the regulator, Energy Transportation operations capitalize an allowance for equity funds used during construction, at approved rates. Depreciation of property, plant and equipment is generally provided on a straight line basis over the estimated service lives  of the assets. The Energy Distribution operations recover a provision for future removal and site restoration costs through depreciation expense at rates approved by the regulator. Actual costs incurred are charged to accumulated depreciation. Similar costs  are not currently recovered through tolls by the Energy Transportation pipelines. Accordingly, no provision has been made  for removal and site restoration for these operations costs since it is expected that these costs will be recovered through  future tolls. Gains and losses on financial instruments used to hedge the Company’s investments in self-sustaining foreign operations are included in the foreign currency translation adjustment. Amounts received or paid related to financial instruments used to hedge the currency risk of cash flows from U.S. dollar denominated operations are recognized concurrently with the hedged cash flows. Amounts received or paid related to financial instruments used to hedge purchases of natural gas are recognized as part of the cost of the underlying physical purchases. For other off balance sheet financial instruments used for hedging purposes, amounts received or paid, including any deferred gains and losses realized upon settlement, are recognized over  the term of the underlying hedged items. The Company maintains both defined benefit and defined contribution pension plans. Pension costs and obligations for the defined benefit pension plans are determined using the projected benefit method and are charged to earnings as services are rendered, except in the Energy Distribution segment where contributions made to the plan are expensed as paid, consistent with the ratemaking process. For the defined contribution plan, contributions made by the Company are expensed as pension costs. The Company also provides post-employment benefits other than pensions, including group health care and life insurance benefits for eligible retirees, their spouses and qualified dependants. The cost of such benefits is accrued during the years the employees render service, except for the Energy Distribution segment where the cost of providing these benefits is expensed as paid, consistent with the recovery of such costs in rates. The issue of options under the Company’s incentive stock option plan is treated as a capital transaction for accounting purposes when the options are exercised. Accordingly, the grant of options does not give rise to compensation expense. Certain comparative amounts have been reclassified to conform with the current year’s financial statement presentation.