ý
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
VECTREN
CORPORATION
|
INDIANA
|
35-2086905
|
|
(State
or other jurisdiction of incorporation or organization)
|
(IRS
Employer Identification No.)
|
|
One
Vectren Square
|
47708
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Title
of each class
|
Name
of each exchange on which registered
|
|
Common – Without
Par
|
New
York Stock Exchange
|
Common Stock - Without Par
Value
|
81,152,870
|
January 31, 2010
|
Class
|
Number
of Shares
|
Date
|
AFUDC: allowance
for funds used during construction
|
MISO:
Midwest Independent System Operator
|
ASC: Accounting
Standards Codification
|
MW: megawatts
|
BTU
/ MMBTU: British thermal units / millions of
BTU
|
MWh
/ GWh: megawatt hours / thousands of megawatt hours (gigawatt
hours)
|
FASB: Financial
Accounting Standards Board
|
NERC: North
American Electric Reliability Corporation
|
FERC: Federal
Energy Regulatory Commission
|
OCC: Ohio
Office of the Consumer Counselor
|
IDEM: Indiana
Department of Environmental Management
|
OUCC: Indiana
Office of the Utility Consumer Counselor
|
IURC: Indiana
Utility Regulatory Commission
|
PUCO: Public
Utilities Commission of Ohio
|
IRC: Internal
Revenue Code
|
USEPA: United
States Environmental Protection Agency
|
MCF
/ BCF: thousands / billions of cubic feet
|
Throughput: combined
gas sales and gas transportation volumes
|
MDth
/ MMDth: thousands / millions of dekatherms
|
Mailing
Address:
One
Vectren Square
Evansville,
Indiana 47708
|
Phone
Number:
(812)
491-4000
|
Investor
Relations Contact:
Steven
M. Schein
Vice
President, Investor Relations
sschein@vectren.com
|
||
Date
of summer peak load
|
6/22/2009
|
7/21/2008
|
8/08/2007
|
8/10/2006
|
7/25/2005
|
|||||
Total
load at peak
(1)
|
1,143
|
1,242
|
1,341
|
1,325
|
1,315
|
|||||
Generating
capability
|
1,295
|
1,295
|
1,295
|
1,351
|
1,351
|
|||||
Firm
purchase supply
|
136
|
135
|
130
|
107
|
107
|
|||||
Interruptible
contracts & direct load control
|
62
|
62
|
62
|
62
|
76
|
|||||
Total
power supply capacity
|
1,493
|
1,492
|
1,487
|
1,520
|
1,534
|
|||||
Reserve
margin at peak
|
31%
|
20%
|
11%
|
15%
|
17%
|
(1)
|
The
total load at peak is increased 25 MW in 2007-2005 from the total load
actually experienced. The additional 25 MW represents load that
would have been incurred if the Summer Cycler program had not been
activated. The 25 MW is also included in the interruptible
contract portion of the Company’s total power supply capacity in those
years. On the date of peak in 2008 and 2009 the Summer Cycler
program was not activated.
|
Year
Ended December 31,
|
||||||||||||||||||||
Average
Delivered
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||
Cost per
Ton
|
$ | 61.67 | $ | 42.50 | $ | 40.23 | $ | 37.51 | $ | 30.27 | ||||||||||
Cost per
MWh
|
30.09 | 20.84 | 19.78 | 18.44 | 14.94 |
Cypress
|
Oaktown
|
Oaktown
|
||||||||
Creek
|
Prosperity
|
Mine
1
|
Mine
2
|
Totals
|
||||||
Type
of Mining
|
Surface
|
Underground
|
Underground
|
Underground
|
||||||
Mining
Technology
|
Truck
& Shovel
|
Room
& Pillar
|
Room
& Pillar
|
Room
& Pillar
|
||||||
Tons
Mined (in thousands)
|
||||||||||
2009
|
969
|
2,583
|
-
|
-
|
3,552
|
|||||
2008
|
1,150
|
2,378
|
-
|
-
|
3,528
|
|||||
2007
|
1,433
|
2,632
|
-
|
-
|
4,065
|
|||||
County
Located in Indiana
|
Warrick
|
Pike
|
Knox
|
Knox
|
||||||
Coal
Reserves (thousands of tons)
|
-
|
34,800
|
62,400
|
38,800
|
136,000
|
|||||
Average
Heat Content (BTU/lb.)
|
10,500
|
11,300
|
11,100
|
11,300
|
||||||
Average
Sulfur Content (lbs./ton)
|
8.0
|
4.0
|
5.6
|
4.8
|
||||||
Current
Rating
|
||
Standard
|
||
Moody’s
|
&
Poor’s
|
|
Utility
Holdings and Indiana Gas senior unsecured debt
|
Baa1
|
A-
|
Utility
Holdings commercial paper program
|
P-2
|
A-2
|
SIGECO’s senior
secured debt
|
A-2
|
A
|
Cash
|
Common
Stock Price Range
|
|||||||||||
Dividend
|
High
|
Low
|
||||||||||
2009
|
||||||||||||
First
Quarter
|
$ | 0.335 | $ | 26.90 | $ | 18.08 | ||||||
Second
Quarter
|
0.335 | 24.06 | 19.72 | |||||||||
Third
Quarter
|
0.335 | 25.33 | 22.47 | |||||||||
Fourth
Quarter
|
0.340 | 25.50 | 21.99 | |||||||||
2008
|
||||||||||||
First
Quarter
|
$ | 0.325 | $ | 29.20 | $ | 25.35 | ||||||
Second
Quarter
|
0.325 | 32.20 | 26.66 | |||||||||
Third
Quarter
|
0.325 | 31.74 | 26.05 | |||||||||
Fourth
Quarter
|
0.335 | 29.00 | 19.48 |
Year Ended December
31,
|
||||||||||||||||||||
(In
millions, except per share data)
|
2009 1/ | 2008 | 2007 | 2006 | 2005 | |||||||||||||||
Operating
Data:
|
||||||||||||||||||||
Operating
revenues
|
$ | 2,088.9 | $ | 2,484.7 | $ | 2,281.9 | $ | 2,041.6 | $ | 2,028.0 | ||||||||||
Operating
income
|
$ | 280.1 | $ | 263.4 | $ | 260.5 | $ | 220.5 | $ | 213.1 | ||||||||||
Net
income
|
$ | 133.1 | $ | 129.0 | $ | 143.1 | $ | 108.8 | $ | 136.8 | ||||||||||
Average
common shares outstanding
|
80.7 | 78.3 | 75.9 | 75.7 | 75.6 | |||||||||||||||
Fully
diluted common shares outstanding
|
81.0 | 78.9 | 76.6 | 76.2 | 76.1 | |||||||||||||||
Basic
earnings per share
|
||||||||||||||||||||
on
common stock
|
$ | 1.65 | $ | 1.65 | $ | 1.89 | $ | 1.44 | $ | 1.81 | ||||||||||
Diluted
earnings per share
|
||||||||||||||||||||
on
common stock
|
$ | 1.64 | $ | 1.63 | $ | 1.87 | $ | 1.43 | $ | 1.80 | ||||||||||
Dividends
per share on common stock
|
$ | 1.345 | $ | 1.310 | $ | 1.270 | $ | 1.230 | $ | 1.190 | ||||||||||
Balance
Sheet Data:
|
||||||||||||||||||||
Total
assets
|
$ | 4,671.8 | $ | 4,632.9 | $ | 4,296.4 | $ | 4,091.6 | $ | 3,868.1 | ||||||||||
Long-term
debt, net
|
$ | 1,540.5 | $ | 1,247.9 | $ | 1,245.4 | $ | 1,208.0 | $ | 1,198.0 | ||||||||||
Common
shareholders' equity
|
$ | 1,397.2 | $ | 1,351.6 | $ | 1,233.7 | $ | 1,174.2 | $ | 1,143.3 |
Year
Ended December 31,
|
||||||||||||
(In
millions, except per share data)
|
2009
|
2008
|
2007
|
|||||||||
Net
income, excluding Liberty Charge
|
$ | 145.0 | $ | 129.0 | $ | 143.1 | ||||||
Attributed
to:
|
||||||||||||
Utility
Group
|
$ | 107.4 | $ | 111.1 | $ | 106.5 | ||||||
Nonutility
Group, excluding Liberty Charge
|
37.7 | 18.9 | 37.0 | |||||||||
Corporate
& Other
|
(0.1 | ) | (1.0 | ) | (0.4 | ) | ||||||
Basic
earnings per share, excluding Liberty Charge
|
$ | 1.80 | $ | 1.65 | $ | 1.89 | ||||||
Attributed
to:
|
||||||||||||
Utility
Group
|
$ | 1.33 | $ | 1.42 | $ | 1.40 | ||||||
Nonutility
Group, excluding Liberty Charge
|
0.47 | 0.24 | 0.49 | |||||||||
Corporate
& Other
|
- | (0.01 | ) | - |
Year
Ended December 31,
|
||||||||||||
(In
millions, except per share data)
|
2009
|
2008
|
2007
|
|||||||||
OPERATING
REVENUES
|
||||||||||||
Gas
utility
|
$ | 1,066.0 | $ | 1,432.7 | $ | 1,269.4 | ||||||
Electric
utility
|
528.6 | 524.2 | 487.9 | |||||||||
Other
|
1.6 | 1.8 | 1.7 | |||||||||
Total
operating revenues
|
1,596.2 | 1,958.7 | 1,759.0 | |||||||||
OPERATING
EXPENSES
|
||||||||||||
Cost of gas
sold
|
618.1 | 983.1 | 847.2 | |||||||||
Cost of fuel &
purchased power
|
194.3 | 182.9 | 174.8 | |||||||||
Other
operating
|
304.6 | 300.3 | 266.1 | |||||||||
Depreciation &
amortization
|
180.9 | 165.5 | 158.4 | |||||||||
Taxes other than
income taxes
|
60.3 | 72.3 | 68.1 | |||||||||
Total
operating expenses
|
1,358.2 | 1,704.1 | 1,514.6 | |||||||||
OPERATING
INCOME
|
238.0 | 254.6 | 244.4 | |||||||||
Other
income - net
|
7.8 | 4.0 | 9.4 | |||||||||
Interest
expense
|
79.2 | 79.9 | 80.6 | |||||||||
INCOME
BEFORE INCOME TAXES
|
166.6 | 178.7 | 173.2 | |||||||||
Income
taxes
|
59.2 | 67.6 | 66.7 | |||||||||
NET
INCOME
|
$ | 107.4 | $ | 111.1 | $ | 106.5 | ||||||
CONTRIBUTION
TO VECTREN BASIC EPS
|
$ | 1.33 | $ | 1.42 | $ | 1.40 |
Year
Ended December 31,
|
||||||||||||
(In
millions)
|
2009
|
2008
|
2007
|
|||||||||
Gas
utility revenues
|
$ | 1,066.0 | $ | 1,432.7 | $ | 1,269.4 | ||||||
Cost
of gas sold
|
618.1 | 983.1 | 847.2 | |||||||||
Total
gas utility margin
|
$ | 447.9 | $ | 449.6 | $ | 422.2 | ||||||
Margin
attributed to:
|
||||||||||||
Residential
& commercial customers
|
$ | 388.8 | $ | 385.5 | $ | 360.9 | ||||||
Industrial
customers
|
46.8 | 51.2 | 48.7 | |||||||||
Other
|
12.3 | 12.9 | 12.6 | |||||||||
Sold
& transported volumes in MMDth attributed to:
|
||||||||||||
Residential
& commercial customers
|
106.5 | 114.8 | 108.4 | |||||||||
Industrial
customers
|
78.0 | 91.5 | 86.2 | |||||||||
Total
sold & transported volumes
|
184.5 | 206.3 | 194.6 |
Year
Ended December 31,
|
||||||||||||
(In
millions)
|
2009
|
2008
|
2007
|
|||||||||
Electric
utility revenues
|
$ | 528.6 | $ | 524.2 | $ | 487.9 | ||||||
Cost
of fuel & purchased power
|
194.3 | 182.9 | 174.8 | |||||||||
Total
electric utility margin
|
$ | 334.3 | $ | 341.3 | $ | 313.1 | ||||||
Margin
attributed to:
|
||||||||||||
Residential
& commercial customers
|
$ | 221.9 | $ | 218.6 | $ | 198.6 | ||||||
Industrial
customers
|
84.5 | 82.9 | 78.3 | |||||||||
Municipals
& other customers
|
7.2 | 7.3 | 15.3 | |||||||||
Subtotal:
Retail
|
$ | 313.6 | $ | 308.8 | $ | 292.2 | ||||||
Wholesale
margin
|
20.7 | 32.5 | 20.9 | |||||||||
Total
electric utility margin
|
$ | 334.3 | $ | 341.3 | $ | 313.1 | ||||||
Electric
volumes sold in GWh attributed to:
|
||||||||||||
Residential
& commercial customers
|
2,760.8 | 2,850.5 | 3,042.9 | |||||||||
Industrial
customers
|
2,258.9 | 2,409.1 | 2,538.5 | |||||||||
Municipals
& other
|
20.0 | 63.8 | 635.1 | |||||||||
Total
retail & firm wholesale volumes sold
|
5,039.7 | 5,323.4 | 6,216.5 |
Year
Ended December 31,
|
||||||||||||
(In
millions)
|
2009
|
2008
|
2007
|
|||||||||
Off-system
sales
|
$ | 6.1 | $ | 23.2 | $ | 16.9 | ||||||
Transmission
system sales
|
14.6 | 9.3 | 4.0 | |||||||||
Total
wholesale margin
|
$ | 20.7 | $ | 32.5 | $ | 20.9 |
(in
thousands)
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||
Direct
CO
2
Emissions (tons)
|
5,500
|
1/
|
8,029
|
7,995
|
7,827
|
8,242
|
1/
|
The
decline in emissions from 2008 to 2009 is primarily due to recessionary
impacts that resulted in a 30 percent decrease in
generation. It is not clear to what extent this recent
reduction may continue.
|
·
|
An
inclusive scope that involves all sectors of the economy and sources of
greenhouse gases, and recognizes early actions and investments made to
mitigate greenhouse gas emissions;
|
·
|
Provisions
for enhanced use of renewable energy sources as a supplement to base load
coal generation including effective energy conservation, demand side
management and generation efficiency
measures;
|
·
|
A
flexible market-based cap and trade approach with zero cost allowance
allocations to coal-fired electric generators. The approach
should have a properly designed economic safety valve in order to reduce
or eliminate extreme price spikes and potential price volatility. A long
lead time must be included to align nearer-term technology capabilities
and expanded generation efficiency and other enhanced renewable
strategies, ensuring that generation sources will rely less on natural gas
to meet short term carbon reduction requirements. This new
regime should allow for adequate resource and generation planning and
remove existing impediments to efficiency enhancements posed by the
current New Source Review provisions of the Clean Air
Act;
|
·
|
Inclusion
of incentives for investment in advanced clean coal technology and support
for research and development;
|
·
|
A
strategy supporting alternative energy technologies and biofuels and
increasing the domestic supply of natural gas to reduce dependence on
foreign oil and imported natural gas;
and
|
·
|
The
allocation of zero cost allowances to natural gas distribution companies
if those companies are required to hold allowances for the benefit of the
end use customer.
|
·
|
Focusing
the Company’s mission statement and purpose on corporate sustainability
and the need to help customers conserve and manage energy
costs;
|
·
|
Building
a renewable energy portfolio to complement base load coal-fired generation
in advance of mandated renewable energy portfolio
standards;
|
·
|
Implementing
conservation initiatives in the Company’s Indiana and Ohio gas utility
service territories;
|
·
|
Participation
in an electric conservation and demand side management collaborative with
the OUCC and other customer advocate
groups;
|
·
|
Evaluating
potential carbon requirements with regard to new generation, other fuel
supply sources, and future environmental compliance
plans;
|
·
|
Reducing
the Company’s carbon footprint by measures such as purchasing hybrid
vehicles and optimizing generation efficiencies;
and
|
·
|
Developing
renewable energy and energy efficiency performance contracting projects
through its wholly owned subsidiary, Energy Systems
Group.
|
Year
Ended December 31,
|
||||||||||||
(In
millions, except per share amounts)
|
2009
|
2008
|
2007
|
|||||||||
NET
INCOME EXCLUDING LIBERTY CHARGE
|
$ | 37.7 | $ | 18.9 | $ | 37.0 | ||||||
CONTRIBUTION
TO VECTREN BASIC EPS,
EXCLUDING
LIBERTY CHARGE
|
$ | 0.47 | $ | 0.24 | $ | 0.49 | ||||||
NET
INCOME ATTRIBUTED TO:
|
||||||||||||
Energy Marketing & Services (Excluding Liberty Charge)
|
$ | 16.0 | $ | 18.0 | $ | 22.3 | ||||||
Mining
Operations
|
13.4 | (4.6 | ) | 2.0 | ||||||||
Energy
Infrastructure Services
|
10.8 | 11.4 | 9.4 | |||||||||
Other
Businesses
|
(2.5 | ) | (5.9 | ) | 0.3 | |||||||
Synfuels-related
|
- | - | 3.0 |
Per
share earnings contributions of the Utility Group, Nonutility Group, and
Corporate and Other are presented. Such per share amounts are based
on the earnings contribution of each group included in Vectren’s
consolidated results divided by Vectren’s basic average shares outstanding
during the period. The earnings per share of the groups do not
represent a direct legal interest in the assets and liabilities allocated
to the groups, but rather represent a direct equity interest in Vectren
Corporation's assets and liabilities as a whole. These non-GAAP
measures are used by management to evaluate the performance of individual
businesses. Accordingly management believes these measures are
useful to investors in understanding each business’ contribution to
consolidated earnings per share and in analyzing consolidated period to
period changes. Reconciliations of these non-GAAP measures to
their most closely related GAAP measure of consolidated earnings per share
are included throughout this discussion and
analysis.
|
Year
Ended December 31, 2009
|
||||||||||||
(In
Millions, except EPS)
|
GAAP-
Measure
|
Exclude
Liberty Charge
|
Non-GAAP
Measure
|
|||||||||
Consolidated
|
||||||||||||
Net
Income
|
$ | 133.1 | 11.9 | $ | 145.0 | |||||||
Basic
EPS
|
$ | 1.65 | 0.15 | $ | 1.80 | |||||||
Nonutility
Group Net Income
|
$ | 25.8 | 11.9 | $ | 37.7 | |||||||
(In
millions)
|
2010
|
2011
|
2012
|
2013
|
2014
|
|||||||||||||||||||
Utility
Group
|
$ | 245 | $ | 230 | $ | 210 | $ | 195 | $ | 215 | ||||||||||||||
Nonutility
Group
|
120 | 80 | 75 | 70 | 70 | |||||||||||||||||||
Total
capital expenditures & investments
|
$ | 365 | $ | 310 | $ | 285 | $ | 265 | $ | 285 |
(In
millions)
|
Total
|
2010
|
2011
|
2012
|
2013
|
2014
|
Thereafter
|
|||||||||||||||||||||
Long-term
debt
(1)
|
$ | 1,639.8 | $ | 48.0 | $ | 250.0 | $ | 60.0 | $ | 105.0 | $ | 30.0 | $ | 1,146.8 | ||||||||||||||
Short-term
debt
|
213.5 | 213.5 | - | - | - | - | - | |||||||||||||||||||||
Long-term
debt interest commitments
|
1,179.3 | 98.8 | 94.5 | 77.5 | 73.0 | 68.1 | 767.4 | |||||||||||||||||||||
Nonutility
commodity purchase commitments
|
33.9 | 4.9 | 3.8 | 8.2 | 8.4 | 8.6 | - | |||||||||||||||||||||
Operating
leases
|
10.3 | 4.5 | 2.6 | 1.4 | 0.8 | 0.7 | 0.3 | |||||||||||||||||||||
Total
(2)
|
$ | 3,076.8 | $ | 369.7 | $ | 350.9 | $ | 147.1 | $ | 187.2 | $ | 107.4 | $ | 1,914.5 |
(1)
|
Certain
long-term debt issues contain put and call provisions that can be
exercised on various dates before maturity. These provisions
allow holders the one-time option to put debt back to the Company at face
value or the Company to call debt at face value or at a
premium. Long-term debt subject to tender during the years
following 2009 (in millions) is $10.0 in 2010, $30.0 in 2011, zero in 2012
and thereafter.
|
(2)
|
The
Company has other long-term liabilities that total approximately $205
million. This amount is comprised of the
following: pension obligations $55 million, postretirement
obligations $71 million, deferred compensation and share-based
compensation obligations $24 million, asset retirement obligations $33
million, investment tax credits $6 million, environmental remediation
obligations $6 million, and other obligations including unrecognized tax
benefits totaling $10 million. Based on the nature of these
items their expected settlement dates cannot be
estimated.
|
·
|
Factors
affecting utility operations such as unusual weather conditions;
catastrophic weather-related damage; unusual maintenance or repairs;
unanticipated changes to fossil fuel costs; unanticipated changes to gas
transportation and storage costs, or availability due to higher demand,
shortages, transportation problems or other developments; environmental or
pipeline incidents; transmission or distribution incidents; unanticipated
changes to electric energy supply costs, or availability due to demand,
shortages, transmission problems or other developments; or electric
transmission or gas pipeline system
constraints.
|
·
|
Catastrophic
events such as fires, earthquakes, explosions, floods, ice storms,
tornados, terrorist acts or other similar occurrences could adversely
affect Vectren’s facilities, operations, financial condition and results
of operations.
|
·
|
Increased
competition in the energy industry, including the effects of industry
restructuring and unbundling.
|
·
|
Regulatory
factors such as unanticipated changes in rate-setting policies or
procedures, recovery of investments and costs made under traditional
regulation, and the frequency and timing of rate
increases.
|
·
|
Financial,
regulatory or accounting principles or policies imposed by the Financial
Accounting Standards Board; the Securities and Exchange Commission; the
Federal Energy Regulatory Commission; state public utility commissions;
state entities which regulate electric and natural gas transmission and
distribution, natural gas gathering and processing, electric power supply;
and similar entities with regulatory
oversight.
|
·
|
Economic
conditions including the effects of an economic downturn, inflation rates,
commodity prices, and monetary
fluctuations.
|
·
|
Economic
conditions surrounding the recent recession, which may be more
prolonged and more severe than cyclical downturns, including significantly
lower levels of economic activity; uncertainty regarding energy prices and
the capital and commodity markets; decreases in demand for natural gas,
electricity, coal, and other nonutility products and services; impacts on
both gas and electric large customers; lower residential and commercial
customer counts; higher operating expenses; and further reductions in the
value of certain nonutility real estate and other legacy
investments.
|
·
|
Increased
natural gas and coal commodity prices and the potential impact on customer
consumption, uncollectible accounts expense, unaccounted for gas and
interest expense.
|
·
|
Changing
market conditions and a variety of other factors associated with physical
energy and financial trading activities including, but not limited to,
price, basis, credit, liquidity, volatility, capacity, interest rate, and
warranty risks.
|
·
|
Direct
or indirect effects on the Company’s business, financial condition,
liquidity and results of operations resulting from changes in credit
ratings, changes in interest rates, and/or changes in market perceptions
of the utility industry and other energy-related
industries.
|
·
|
The
performance of projects undertaken by the Company’s nonutility businesses
and the success of efforts to invest in and develop new opportunities,
including but not limited to, the Company’s coal mining, gas marketing,
and energy infrastructure
strategies.
|
·
|
Factors
affecting coal mining operations including MSHA guidelines and
interpretations of those guidelines; geologic, equipment, and operational
risks; the ability to execute and negotiate new sales contracts and
resolve contract interpretations; volatile coal market prices and
demand; supplier and contract miner performance; the
availability of key equipment, contract miners and commodities;
availability of transportation; and the ability to access/replace coal
reserves .
|
·
|
Employee
or contractor workforce factors including changes in key executives,
collective bargaining agreements with union employees, aging workforce
issues, work stoppages, or pandemic
illness.
|
·
|
Legal
and regulatory delays and other obstacles associated with mergers,
acquisitions and investments in joint
ventures.
|
·
|
Costs,
fines, penalties and other effects of legal and administrative
proceedings, settlements, investigations, claims, including, but not
limited to, such matters involving compliance with state and federal laws
and interpretations of these laws.
|
·
|
Changes
in or additions to federal, state or local legislative
requirements, such as changes in or additions to tax laws or rates,
environmental laws, including laws governing greenhouse gases, mandates of
sources of renewable energy, and other
regulations.
|
The
Company has in place a risk management committee that consists of senior
management as well as financial and operational management. The
committee is actively involved in identifying risks as well as reviewing
and authorizing risk mitigation
strategies.
|
|
CONSOLIDATED
BALANCE SHEETS
|
At December
31,
|
||||||||
2009
|
2008
|
|||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
& cash equivalents
|
$ | 11.9 | $ | 93.2 | ||||
Accounts
receivable - less reserves of $5.2 &
|
||||||||
$5.6,
respectively
|
162.4 | 226.7 | ||||||
Accrued
unbilled revenues
|
144.7 | 197.0 | ||||||
Inventories
|
167.8 | 131.0 | ||||||
Recoverable
fuel & natural gas costs
|
- | 3.1 | ||||||
Prepayments
& other current assets
|
95.1 | 124.6 | ||||||
Total
current assets
|
581.9 | 775.6 | ||||||
Utility
Plant
|
||||||||
Original
cost
|
4,601.4 | 4,335.3 | ||||||
Less: accumulated
depreciation & amortization
|
1,722.6 | 1,615.0 | ||||||
Net
utility plant
|
2,878.8 | 2,720.3 | ||||||
Investments
in unconsolidated affiliates
|
186.2 | 179.1 | ||||||
Other
utility & corporate investments
|
33.2 | 25.7 | ||||||
Other
nonutility investments
|
46.2 | 45.9 | ||||||
Nonutility
plant - net
|
482.6 | 390.2 | ||||||
Goodwill
- net
|
242.0 | 240.2 | ||||||
Regulatory
assets
|
187.9 | 216.7 | ||||||
Other
assets
|
33.0 | 39.2 | ||||||
TOTAL
ASSETS
|
$ | 4,671.8 | $ | 4,632.9 |
At December
31,
|
||||||||
2009
|
2008
|
|||||||
LIABILITIES & SHAREHOLDERS'
EQUITY
|
||||||||
Current
Liabilities
|
||||||||
Accounts
payable
|
$ | 183.8 | $ | 266.1 | ||||
Accounts
payable to affiliated companies
|
54.1 | 75.2 | ||||||
Refundable
fuel & natural gas costs
|
22.3 | 4.1 | ||||||
Accrued
liabilities
|
174.7 | 175.0 | ||||||
Short-term
borrowings
|
213.5 | 519.5 | ||||||
Current
maturities of long-term debt
|
48.0 | 0.4 | ||||||
Long-term
debt subject to tender
|
51.3 | 80.0 | ||||||
Total
current liabilities
|
747.7 | 1,120.3 | ||||||
Long-term
Debt - Net of Current Maturities &
|
||||||||
Debt
Subject to Tender
|
1,540.5 | 1,247.9 | ||||||
Deferred
Income Taxes & Other Liabilities
|
||||||||
Deferred
income taxes
|
458.7 | 353.4 | ||||||
Regulatory
liabilities
|
322.1 | 315.1 | ||||||
Deferred
credits & other liabilities
|
205.6 | 244.6 | ||||||
Total
deferred credits & other liabilities
|
986.4 | 913.1 | ||||||
Commitments
& Contingencies (Notes 5, 15-17)
|
||||||||
Common
Shareholders' Equity
|
||||||||
Common
stock (no par value) – issued & outstanding
|
||||||||
81.1
and 81.0, respectively
|
666.8 | 659.1 | ||||||
Retained
earnings
|
737.2 | 712.8 | ||||||
Accumulated
other comprehensive income/(loss)
|
(6.8 | ) | (20.3 | ) | ||||
Total
common shareholders' equity
|
1,397.2 | 1,351.6 | ||||||
TOTAL
LIABILITIES & SHAREHOLDERS' EQUITY
|
$ | 4,671.8 | $ | 4,632.9 |
|
The
accompanying notes are an integral part of these consolidated financial
statements.
|
Year
Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
OPERATING
REVENUES
|
||||||||||||
Gas
utility
|
$ | 1,066.0 | $ | 1,432.7 | $ | 1,269.4 | ||||||
Electric
utility
|
528.6 | 524.2 | 487.9 | |||||||||
Nonutility
revenues
|
494.3 | 527.8 | 524.6 | |||||||||
Total
operating revenues
|
2,088.9 | 2,484.7 | 2,281.9 | |||||||||
OPERATING
EXPENSES
|
||||||||||||
Cost
of gas sold
|
618.1 | 983.1 | 847.2 | |||||||||
Cost
of fuel & purchased power
|
194.3 | 182.9 | 174.8 | |||||||||
Cost
of nonutility revenues
|
207.5 | 282.2 | 287.7 | |||||||||
Other
operating
|
514.0 | 506.3 | 456.9 | |||||||||
Depreciation
& amortization
|
211.9 | 192.3 | 184.8 | |||||||||
Taxes
other than income taxes
|
63.0 | 74.5 | 70.0 | |||||||||
Total
operating expenses
|
1,808.8 | 2,221.3 | 2,021.4 | |||||||||
OPERATING
INCOME
|
280.1 | 263.4 | 260.5 | |||||||||
OTHER
INCOME
|
||||||||||||
Equity
in earnings of unconsolidated affiliates
|
3.4 | 37.4 | 22.9 | |||||||||
Other
– net
|
13.7 | 2.1 | 36.7 | |||||||||
Total
other income
|
17.1 | 39.5 | 59.6 | |||||||||
Interest
expense
|
100.0 | 97.8 | 101.0 | |||||||||
INCOME
BEFORE INCOME TAXES
|
197.2 | 205.1 | 219.1 | |||||||||
Income
taxes
|
64.1 | 76.1 | 76.0 | |||||||||
NET
INCOME
|
$ | 133.1 | $ | 129.0 | $ | 143.1 | ||||||
AVERAGE
COMMON SHARES OUTSTANDING
|
80.7 | 78.3 | 75.9 | |||||||||
DILUTED
COMMON SHARES OUTSTANDING
|
81.0 | 78.9 | 76.6 | |||||||||
EARNINGS
PER SHARE OF COMMON STOCK:
|
||||||||||||
BASIC
|
$ | 1.65 | $ | 1.65 | $ | 1.89 | ||||||
DILUTED
|
$ | 1.64 | $ | 1.63 | $ | 1.87 |
Year Ended December 31, | ||||||||||||
2009
|
2008
|
2007
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net
income
|
$ | 133.1 | $ | 129.0 | $ | 143.1 | ||||||
Adjustments to
reconcile net income to cash from operating activities:
|
||||||||||||
Depreciation & amortization
|
211.9 | 192.3 | 184.8 | |||||||||
Deferred income taxes & investment tax credits
|
84.9 | 79.6 | 27.0 | |||||||||
Equity in earnings of unconsolidated affiliates
|
(3.4 | ) | (37.4 | ) | (22.9 | ) | ||||||
Provision for uncollectible accounts
|
15.1 | 16.9 | 16.6 | |||||||||
Expense portion of pension & postretirement benefit
cost
|
10.4 | 7.8 | 9.8 | |||||||||
Other non-cash charges - net
|
13.3 | 25.4 | 4.8 | |||||||||
Changes in working capital accounts:
|
||||||||||||
Accounts receivable & accrued unbilled revenue
|
96.9 | (83.0 | ) | (29.1 | ) | |||||||
Inventories
|
(36.1 | ) | 26.4 | 2.6 | ||||||||
Recoverable/refundable fuel & natural gas costs
|
21.3 | (26.2 | ) | (6.3 | ) | |||||||
Prepayments & other current assets
|
43.1 | 9.8 | (3.7 | ) | ||||||||
Accounts payable, including to affiliated companies
|
(85.8 | ) | 65.7 | 4.9 | ||||||||
Accrued liabilities
|
4.0 | 16.5 | 4.6 | |||||||||
Unconsolidated affiliate dividends
|
12.6 | 15.5 | 20.8 | |||||||||
Employer contributions to pension & postretirement
plans
|
(38.5 | ) | (15.1 | ) | (22.6 | ) | ||||||
Changes in noncurrent assets
|
0.2 | 19.6 | (21.4 | ) | ||||||||
Changes in noncurrent liabilities
|
(33.4 | ) | (19.6 | ) | (14.9 | ) | ||||||
Net
cash flows from operating activities
|
449.6 | 423.2 | 298.1 | |||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Proceeds
from:
|
||||||||||||
Long-term
debt
|
312.5 | 171.4 | 16.4 | |||||||||
Issuance
of common stock
|
- | 124.9 | - | |||||||||
Dividend
reinvestment plan & other
|
5.8 | 0.9 | 5.2 | |||||||||
Requirements
for:
|
||||||||||||
Dividends
on common stock
|
(108.6 | ) | (102.6 | ) | (96.4 | ) | ||||||
Retirement
of long-term debt
|
(3.5 | ) | (104.9 | ) | (23.9 | ) | ||||||
Other
financing activities
|
- | (0.1 | ) | (0.8 | ) | |||||||
Net
change in short-term borrowings
|
(306.0 | ) | (37.8 | ) | 92.2 | |||||||
Net
cash flows from financing activities
|
(99.8 | ) | 51.8 | (7.3 | ) | |||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
Proceeds
from:
|
||||||||||||
Unconsolidated
affiliate distributions
|
4.6 | 0.2 | 12.7 | |||||||||
Other
collections
|
1.5 | 6.4 | 38.0 | |||||||||
Requirements
for:
|
||||||||||||
Capital
expenditures, excluding AFUDC equity
|
(432.0 | ) | (391.0 | ) | (334.5 | ) | ||||||
Unconsolidated
affiliate investments
|
(0.2 | ) | (0.6 | ) | (17.5 | ) | ||||||
Other
investments
|
(5.0 | ) | (17.4 | ) | (1.7 | ) | ||||||
Net
cash flows from investing activities
|
(431.1 | ) | (402.4 | ) | (303.0 | ) | ||||||
Net
change in cash & cash equivalents
|
(81.3 | ) | 72.6 | (12.2 | ) | |||||||
Cash
& cash equivalents at beginning of period
|
93.2 | 20.6 | 32.8 | |||||||||
Cash
& cash equivalents at end of period
|
$ | 11.9 | $ | 93.2 | $ | 20.6 |
Accumulated
|
||||||||||||||||||||
Common
Stock
|
Other
|
|||||||||||||||||||
Retained
|
Comprehensive
|
|||||||||||||||||||
Shares
|
Amount
|
Earnings
|
Income
(Loss)
|
Total
|
||||||||||||||||
Balance
at January 1, 2007
|
76.1 | $ | 525.5 | $ | 643.6 | $ | 5.1 | $ | 1,174.2 | |||||||||||
Comprehensive
income:
|
||||||||||||||||||||
Net
income
|
143.1 | 143.1 | ||||||||||||||||||
Pension/OPEB
funded status adjustment - net of $0.5 million in tax
|
0.7 | 0.7 | ||||||||||||||||||
Cash
flow hedge
|
||||||||||||||||||||
unrealized
gains(losses) - net of $0.3 million in tax
|
0.9 | 0.9 | ||||||||||||||||||
reclassifications
to net income- net of $0.3 million in tax
|
(1.0 | ) | (1.0 | ) | ||||||||||||||||
Comprehensive
income of unconsolidated
|
||||||||||||||||||||
affiliates
- net of $4.2 million in tax
|
6.8 | 6.8 | ||||||||||||||||||
Total
comprehensive income
|
150.5 | |||||||||||||||||||
Uncertain
tax position accounting change (see note 8)
|
(0.1 | ) | (0.1 | ) | ||||||||||||||||
Common
stock:
|
||||||||||||||||||||
Issuance: option
exercises & dividend reinvestment plan
|
0.2 | 5.2 | 5.2 | |||||||||||||||||
Dividends
($1.270 per share)
|
(96.4 | ) | (96.4 | ) | ||||||||||||||||
Other
|
2.0 | (1.7 | ) | 0.3 | ||||||||||||||||
Balance
at December 31, 2007
|
76.3 | 532.7 | 688.5 | 12.5 | 1,233.7 | |||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||
Net
income
|
129.0 | 129.0 | ||||||||||||||||||
Pension/OPEB
funded status adjustment - net of $1.7 million in tax
|
(2.4 | ) | (2.4 | ) | ||||||||||||||||
Cash
flow hedges:
|
||||||||||||||||||||
reclassifications
to net income- net of $0.2 million in tax
|
(0.2 | ) | (0.2 | ) | ||||||||||||||||
Comprehensive
income of unconsolidated
|
||||||||||||||||||||
affiliates
- net of $20.0 million in tax
|
(30.2 | ) | (30.2 | ) | ||||||||||||||||
Total
comprehensive income
|
96.2 | |||||||||||||||||||
Pension/OPEB
measurement date adjustment
-
net of $1.1 million in tax (see note 9)
|
(1.6 | ) | (1.6 | ) | ||||||||||||||||
Common
stock:
|
||||||||||||||||||||
Issuance: settlement
of equity forward
|
4.6 | 124.9 | 124.9 | |||||||||||||||||
Issuance: option
exercises & dividend reinvestment plan
|
0.1 | 1.2 | 1.2 | |||||||||||||||||
Dividends
($1.310 per share)
|
(102.6 | ) | (102.6 | ) | ||||||||||||||||
Other
|
0.3 | (0.5 | ) | (0.2 | ) | |||||||||||||||
Balance
at December 31, 2008
|
81.0 | 659.1 | 712.8 | (20.3 | ) | 1,351.6 | ||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||
Net
income
|
133.1 | 133.1 | ||||||||||||||||||
Pension/OPEB
funded status adjustment - net of $0.4 million in tax
|
0.5 | 0.5 | ||||||||||||||||||
Comprehensive
income of unconsolidated
|
||||||||||||||||||||
affiliates
- net of $8.9 million in tax
|
13.0 | 13.0 | ||||||||||||||||||
Total
comprehensive income
|
146.6 | |||||||||||||||||||
Common
stock:
|
||||||||||||||||||||
Issuance: option
exercises & dividend reinvestment plan
|
0.3 | 5.8 | 5.8 | |||||||||||||||||
Dividends
($1.345 per share)
|
(108.6 | ) | (108.6 | ) | ||||||||||||||||
Other
|
(0.2 | ) | 1.9 | (0.1 | ) | 1.8 | ||||||||||||||
Balance
at December 31, 2009
|
81.1 | $ | 666.8 | $ | 737.2 | $ | (6.8 | ) | $ | 1,397.2 |
2.
|
Summary
of Significant Accounting Policies
|
At
December 31,
|
||||||||
(In
millions)
|
2009
|
2008
|
||||||
Gas
in storage – at average cost
|
$ | 22.2 | $ | 40.4 | ||||
Gas
in storage – at LIFO cost
|
24.4 | 22.2 | ||||||
Total
Gas in storage
|
46.6 | 62.6 | ||||||
Materials
& supplies
|
42.6 | 33.4 | ||||||
Coal
& Oil for electric generation - at average cost
|
66.8 | 28.4 | ||||||
Coal
- at LIFO cost
|
8.5 | 3.3 | ||||||
Other
|
3.3 | 3.3 | ||||||
Total
inventories
|
$ | 167.8 | $ | 131.0 |
At
December 31,
|
||||||||
(In
millions)
|
2009
|
2008
|
||||||
ProLiance
Holdings, LLC
|
$ | 167.9 | $ | 153.1 | ||||
Haddington
Energy Partnerships
|
9.3 | 13.9 | ||||||
Other
partnerships & corporations
|
9.0 | 12.1 | ||||||
Total
investments in unconsolidated affiliates
|
$ | 186.2 | $ | 179.1 |
Year
Ended December 31,
|
||||||||||||
(In
millions)
|
2009
|
2008
|
2007
|
|||||||||
ProLiance
Holdings , LLC
|
$ | 3.6 | $ | 39.5 | $ | 41.0 | ||||||
Haddinton
Energy Partners, LP
|
0.9 | (0.2 | ) | (0.2 | ) | |||||||
Pace
Carbon Synfuels, LP
|
- | - | (20.0 | ) | ||||||||
Other
|
(1.1 | ) | (1.9 | ) | 2.1 | |||||||
Total
equity in earnings of unconsolidated affiliates
|
$ | 3.4 | $ | 37.4 | $ | 22.9 |
At
December 31,
|
||||||||
(In
millions)
|
2009
|
2008
|
||||||
Utility
Group
|
||||||||
Gas
Utility Services
|
$ | 205.0 | $ | 205.0 | ||||
Nonutility
Group
|
37.0 | 35.2 | ||||||
Consolidated
goodwill
|
$ | 242.0 | $ | 240.2 |
3.
|
Utility
& Nonutility Plant
|
At
December 31,
|
|||||||||||||||||
(In
millions)
|
2009
|
2008
|
|||||||||||||||
Original
Cost
|
Depreciation
Rates
as a
Percent
of
Original
Cost
|
Original
Cost
|
Depreciation
Rates
as a
Percent
of
Original
Cost
|
||||||||||||||
Gas
utility plant
|
$ | 2,299.1 | 3.5 | % | $ | 2,157.6 | 3.5 | % | |||||||||
Electric
utility plant
|
2,113.3 | 3.4 | % | 1,884.3 | 3.3 | % | |||||||||||
Common
utility plant
|
48.7 | 2.9 | % | 47.9 | 2.9 | % | |||||||||||
Construction
work in progress
|
140.3 | - | 245.5 | - | |||||||||||||
Total
original cost
|
$ | 4,601.4 | $ | 4,335.3 |
At
December 31,
|
||||||||
(In
millions)
|
2009
|
2008
|
||||||
Computer
hardware & software
|
$ | 119.9 | $ | 129.6 | ||||
Land
& buildings
|
115.1 | 93.9 | ||||||
Coal
mine development costs & equipment
|
188.6 | 109.1 | ||||||
Vehicles
& equipment
|
43.7 | 41.7 | ||||||
All
other
|
15.3 | 15.9 | ||||||
Nonutility
plant - net
|
$ | 482.6 | $ | 390.2 |
4.
|
Regulatory
Assets & Liabilities
|
At
December 31,
|
||||||||
(In
millions)
|
2009
|
2008
|
||||||
Future
amounts recoverable from ratepayers related to:
|
||||||||
Benefit
obligations
|
$ | 83.9 | $ | 101.0 | ||||
Deferred
Income taxes
|
14.7 | 11.4 | ||||||
Asset
retirement obligations & other
|
4.2 | 8.5 | ||||||
102.8 | 120.9 | |||||||
Amounts
deferred for future recovery related to:
|
||||||||
Cost
recovery riders & other
|
1.0 | 1.7 | ||||||
1.0 | 1.7 | |||||||
Amounts
currently recovered in customer rates related to:
|
||||||||
Demand
side management programs
|
15.3 | 21.5 | ||||||
Unamortized
debt issue costs & hedging proceeds
|
38.1 | 38.4 | ||||||
Indiana
authorized trackers
|
15.6 | 13.8 | ||||||
Ohio
authorized trackers
|
8.2 | 11.6 | ||||||
Premiums
paid to reacquire debt & other
|
6.9 | 8.8 | ||||||
84.1 | 94.1 | |||||||
Total
regulatory assets
|
$ | 187.9 | $ | 216.7 |
5.
|
Investment
in ProLiance Holdings, LLC
|
Year
Ended December 31,
|
||||||||||||
(in
millions)
|
2009
|
2008
|
2007
|
|||||||||
Summarized
Statement of Income information:
|
||||||||||||
Revenues
|
$ | 1,654.9 | $ | 2,883.6 | $ | 2,267.1 | ||||||
Operating
income
|
35.2 | 63.7 | 61.5 | |||||||||
Charge
related to Investment in Liberty Gas Storage
|
(32.7 | ) | - | - | ||||||||
ProLiance's
earnings
|
4.5 | 64.7 | 67.2 |
As
of December 31,
|
||||||||
(In
millions)
|
2009
|
2008
|
||||||
Summarized
balance sheet information:
|
||||||||
Current
assets
|
$ | 477.6 | $ | 661.5 | ||||
Noncurrent
assets
|
61.7 | 104.2 | ||||||
Current
liabilities
|
264.5 | 514.0 | ||||||
Noncurrent
liabilities
|
4.0 | 3.6 | ||||||
Members'
equity
|
282.4 | 295.8 | ||||||
Accumulated other
comprehensive income (loss)
|
(11.6 | ) | (47.7 | ) |
6.
|
Nonutility
Real Estate & Other Legacy
Holdings
|
December
31, 2009
|
||||||||||||
Value
Included In
|
||||||||||||
(in
millions)
|
Carrying
Value
|
Other
Nonutility Investments
|
Investments
in Unconsolidated Affiliates
|
|||||||||
Commercial
real estate investments
|
$ | 21.0 | $ | 21.0 | $ | - | ||||||
Leveraged
leases
|
17.5 | 17.5 | - | |||||||||
Haddington
energy partnerships
|
9.7 | 0.4 | 9.3 | |||||||||
Affordable
housing projects
|
7.8 | 0.1 | 7.7 | |||||||||
Other
investments
|
8.5 | 7.2 | 1.3 | |||||||||
$ | 64.5 | $ | 46.2 | $ | 18.3 |
7.
|
Intangible
Assets
|
(In
millions)
|
At
December 31,
|
|||||||||||||||
2009
|
2008
|
|||||||||||||||
Amortizing
|
Non-amortizing
|
Amortizing
|
Non-amortizing
|
|||||||||||||
Customer-related
assets
|
$ | 8.0 | $ | - | $ | 8.9 | $ | - | ||||||||
Market-related
assets
|
- | 7.0 | 0.1 | 7.0 | ||||||||||||
Intangible
assets, net
|
$ | 8.0 | $ | 7.0 | $ | 9.0 | $ | 7.0 |
8.
|
Income
Taxes
|
At
December 31,
|
||||||||
(In
millions)
|
2009
|
2008
|
||||||
Noncurrent
deferred tax liabilities (assets):
|
||||||||
Depreciation
& cost recovery timing differences
|
$ | 483.3 | $ | 372.6 | ||||
Leveraged
leases
|
14.7 | 15.1 | ||||||
Regulatory
assets recoverable through future rates
|
25.6 | 27.8 | ||||||
Other
comprehensive income
|
(5.7 | ) | (15.0 | ) | ||||
Alternative
minimum tax carryforward
|
(21.6 | ) | - | |||||
Employee
benefit obligations
|
(24.0 | ) | (36.2 | ) | ||||
Net
operating loss & other carryforwards
|
(0.5 | ) | (2.1 | ) | ||||
Regulatory
liabilities to be settled through future rates
|
(11.7 | ) | (15.7 | ) | ||||
Other
– net
|
(1.4 | ) | 6.9 | |||||
Net
noncurrent deferred tax liability
|
458.7 | 353.4 | ||||||
Current
deferred tax (assets)/liabilities:
|
||||||||
Deferred
fuel costs-net
|
1.2 | 2.6 | ||||||
Demand
side management programs
|
5.2 | 8.8 | ||||||
Alternative
minimum tax carryforward
|
(15.8 | ) | (11.2 | ) | ||||
Other
– net
|
(12.3 | ) | (8.4 | ) | ||||
Net
current deferred tax asset
|
(21.7 | ) | (8.2 | ) | ||||
Net
deferred tax liability
|
$ | 437.0 | $ | 345.2 |
Year
Ended December 31,
|
||||||||||
2009
|
2008
|
2007
|
||||||||
Statutory
rate:
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
||||
State
& local taxes-net of federal benefit
|
2.3
|
3.9
|
4.3
|
|||||||
Amortization of
investment tax credit
|
(0.5)
|
(0.6)
|
(0.8)
|
|||||||
Depletion
|
(2.0)
|
(0.4)
|
(0.7)
|
|||||||
Other
tax credits
|
(0.2)
|
(0.9)
|
(0.2)
|
|||||||
Synfuel
tax credits
|
-
|
-
|
(3.0)
|
|||||||
Adjustment of
income tax accruals
|
(2.1)
|
-
|
0.2
|
|||||||
All
other-net
|
-
|
0.1
|
(0.1)
|
|||||||
Effective
tax rate
|
32.5
|
%
|
37.1
|
%
|
34.7
|
%
|
Year
Ended December 31,
|
||||||||||||
(In
millions)
|
2009
|
2008
|
2007
|
|||||||||
Current:
|
||||||||||||
Federal
|
$ | (21.4 | ) | $ | (14.8 | ) | $ | 35.9 | ||||
State
|
0.6 | 11.3 | 13.1 | |||||||||
Total
current taxes
|
(20.8 | ) | (3.5 | ) | 49.0 | |||||||
Deferred:
|
||||||||||||
Federal
|
78.7 | 78.2 | 24.6 | |||||||||
State
|
7.3 | 2.7 | 4.1 | |||||||||
Total
deferred taxes
|
86.0 | 80.9 | 28.7 | |||||||||
Amortization
of investment tax credits
|
(1.1 | ) | (1.3 | ) | (1.7 | ) | ||||||
Total
income tax expense
|
$ | 64.1 | $ | 76.1 | $ | 76.0 |
(in
millions)
|
2009
|
2008
|
2007
|
|||||||||
Unrecognized
tax benefits at January 1
|
$ | 2.2 | $ | 6.2 | $ | 11.6 | ||||||
Gross increases -
tax positions in prior periods
|
1.1 | 1.7 | 0.3 | |||||||||
Gross decreases -
tax positions in prior periods
|
(1.8 | ) | (6.0 | ) | (7.4 | ) | ||||||
Gross increases -
current period tax positions
|
9.0 | 0.3 | 1.9 | |||||||||
Gross decreases -
current period tax positions
|
- | - | (0.2 | ) | ||||||||
Settlements
|
(0.1 | ) | - | - | ||||||||
Lapse of statute of
limitations
|
1.1 | - | - | |||||||||
Unrecognized
tax benefits at December 31
|
$ | 11.5 | $ | 2.2 | $ | 6.2 |
9.
|
Retirement
Plans & Other Postretirement
Benefits
|
Pension
Benefits
|
Other
Benefits
|
|||||||||||||||||||||||
(In
millions)
|
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
||||||||||||||||||
Service
cost
|
$ | 6.3 | $ | 6.1 | $ | 5.6 | $ | 0.5 | $ | 0.5 | $ | 0.5 | ||||||||||||
Interest
cost
|
15.8 | 15.1 | 14.9 | 4.4 | 4.2 | 4.0 | ||||||||||||||||||
Expected
return on plan assets
|
(16.4 | ) | (16.6 | ) | (14.3 | ) | (0.3 | ) | (0.5 | ) | (0.5 | ) | ||||||||||||
Amortization
of prior service cost (benefit)
|
1.7 | 1.7 | 1.7 | (0.8 | ) | (0.8 | ) | (0.8 | ) | |||||||||||||||
Amortization
of actuarial loss (gain)
|
2.2 | 0.1 | 1.5 | 0.4 | - | (0.1 | ) | |||||||||||||||||
Amortization
of transitional obligation
|
- | - | - | 1.1 | 1.1 | 1.1 | ||||||||||||||||||
Net
periodic benefit cost
|
$ | 9.6 | $ | 6.4 | $ | 9.4 | $ | 5.3 | $ | 4.5 | $ | 4.2 |
Pension
Benefits
|
Other
Benefits
|
||||||||||||
|
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
|||||||
Discount
rate
|
6.25%
|
6.25%
|
5.85%
|
6.25%
|
6.25%
|
5.85%
|
|||||||
Rate
of compensation increase
|
3.75%
|
3.75%
|
3.75%
|
N/A
|
N/A
|
N/A
|
|||||||
Expected
return on plan assets
|
8.25%
|
8.25%
|
8.25%
|
8.25%
|
8.25%
|
8.25%
|
|||||||
Expected
increase in Consumer Price Index
|
N/A
|
N/A
|
N/A
|
3.50%
|
3.50%
|
3.50%
|
|||||||
Pension
Benefits
|
Other
Benefits
|
|||||||||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Benefit
obligation, beginning of period
|
$ | 260.6 | $ | 249.6 | $ | 72.3 | $ | 70.2 | ||||||||
Service
cost – benefits earned during the period
|
6.3 | 7.7 | 0.5 | 0.7 | ||||||||||||
Interest
cost on projected benefit obligation
|
15.8 | 18.8 | 4.4 | 5.2 | ||||||||||||
Plan
participants' contributions
|
- | - | 2.8 | 2.8 | ||||||||||||
Plan
amendments
|
0.1 | 0.4 | - | - | ||||||||||||
Actuarial
loss (gain)
|
2.0 | 0.3 | 7.2 | 2.5 | ||||||||||||
Medicare
subsidy receipts
|
- | - | 0.8 | 0.7 | ||||||||||||
Benefits
paid
|
(13.3 | ) | (16.2 | ) | (8.4 | ) | (9.8 | ) | ||||||||
Benefit
obligation, end of period
|
$ | 271.5 | $ | 260.6 | $ | 79.6 | $ | 72.3 | ||||||||
Pension
Benefits
|
Other
Benefits
|
||||||||
2009
|
2008
|
2009
|
2008
|
||||||
Discount
rate
|
6.00%
|
6.25%
|
6.00%
|
6.25%
|
|||||
Rate
of compensation increase
|
3.50%
|
3.75%
|
N/A
|
N/A
|
|||||
Expected
increase in Consumer Price Index
|
N/A
|
N/A
|
3.00%
|
3.50%
|
Pension
Benefits
|
Other
Benefits
|
|||||||||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Plan
assets at fair value, beginning of period
|
$ | 150.9 | $ | 211.8 | $ | 4.3 | $ | 6.8 | ||||||||
Actual
return on plan assets
|
38.6 | (58.0 | ) | 0.9 | (1.4 | ) | ||||||||||
Employer
contributions
|
34.9 | 13.3 | 4.4 | 5.9 | ||||||||||||
Plan
participants' contributions
|
- | - | 2.8 | 2.8 | ||||||||||||
Benefits
paid
|
(13.3 | ) | (16.2 | ) | (8.4 | ) | (9.8 | ) | ||||||||
Fair
value of plan assets, end of period
|
$ | 211.1 | $ | 150.9 | $ | 4.0 | $ | 4.3 |
(I
n
millions)
|
Level
1
|
Level
2
|
Level
3
|
Total
|
||||||||||||
Common
stocks
|
$ | 46.7 | 48.3 | $ | - | $ | 95.0 | |||||||||
Fixed
income securities
|
31.1 | 50.4 | - | 81.5 | ||||||||||||
International,
real estate, & other
|
28.2 | 6.8 | - | 35.0 | ||||||||||||
Guaranteed
annuity contract
|
- | - | 3.6 | 3.6 | ||||||||||||
Total
Plan Investments
|
$ | 106.0 | $ | 105.5 | $ | 3.6 | $ | 215.1 |
(In
millions)
|
2009
|
||
Fair
value, beginning of year
|
$ | 3.5 | |
Unrealized
gains related to
investments
still held at reporting date
|
0.2 | ||
Purchases,
sales and settlements, net
|
(0.1 | ) | |
Fair
value, end of year
|
$ | 3.6 |
Pension
Benefits
|
Other
Benefits
|
|||||||||||||||
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Qualified
Plans
|
||||||||||||||||
Benefit obligation,
end of period
|
$ | (256.8 | ) | $ | (246.0 | ) | $ | (79.6 | ) | $ | (72.3 | ) | ||||
Fair value of plan
assets, end of period
|
211.1 | 150.9 | 4.0 | 4.3 | ||||||||||||
Funded
Status of Qualified Plans, end of period
|
(45.7 | ) | (95.1 | ) | (75.6 | ) | (68.0 | ) | ||||||||
Benefit
obligation of SERP Plan, end of period
|
(14.7 | ) | (14.6 | ) | - | - | ||||||||||
Total
funded status, end of period
|
$ | (60.4 | ) | $ | (109.7 | ) | $ | (75.6 | ) | $ | (68.0 | ) | ||||
Accrued
liabilities
|
$ | 6.0 | $ | 0.7 | $ | 4.5 | $ | 4.3 | ||||||||
Other
liabilities
|
$ | 54.4 | $ | 109.0 | $ | 71.1 | $ | 63.7 |
(In
millions)
|
Pensions
|
Other
Benefits
|
||||||||||||||||||
Prior
Service Cost
|
Net
Gain or
Loss
|
Prior
Service Cost
|
Net
Gain or
Loss
|
Transition
Obligation
|
||||||||||||||||
Balance
January 1, 2007
|
$ | 12.9 | $ | 35.3 | $ | (5.5 | ) | $ | (2.2 | ) | $ | 8.7 | ||||||||
Amounts
arising during the period
|
- | (21.9 | ) | - | 1.2 | - | ||||||||||||||
Reclassification
to benefit costs
|
(1.7 | ) | (1.5 | ) | 0.8 | (0.1 | ) | (1.1 | ) | |||||||||||
Balance
December 31, 2007
|
11.2 | 11.9 | (4.7 | ) | (1.1 | ) | 7.6 | |||||||||||||
Amounts
arising during the period
|
0.4 | 79.1 | - | 4.6 | - | |||||||||||||||
Reclassification
to benefit costs
|
(2.1 | ) | (0.1 | ) | 1.0 | - | (1.4 | ) | ||||||||||||
Balance
December 31, 2008
|
$ | 9.5 | $ | 90.9 | $ | (3.7 | ) | $ | 3.5 | $ | 6.2 | |||||||||
Amounts
arising during the period
|
0.1 | (20.2 | ) | 0.1 | 6.6 | (0.1 | ) | |||||||||||||
Reclassification
to benefit costs
|
(1.7 | ) | (2.2 | ) | 0.8 | (0.4 | ) | (1.1 | ) | |||||||||||
Balance
December 31, 2009
|
$ | 7.9 | $ | 68.5 | $ | (2.8 | ) | $ | 9.7 | $ | 5.0 |
(In
millions)
|
2009
|
2008
|
2007
|
|||||||||||||||||||||
Pensions
|
Other
Benefits
|
Pensions
|
Other
Benefits
|
Pensions
|
Other
Benefits
|
|||||||||||||||||||
Prior
service cost
|
$ | 7.9 | $ | (2.8 | ) | $ | 9.5 | $ | (3.7 | ) | $ | 11.2 | $ | (4.7 | ) | |||||||||
Unamortized
actuarial gain/(loss)
|
68.5 | 9.7 | 90.9 | 3.5 | 11.9 | (1.1 | ) | |||||||||||||||||
Transition
obligation
|
- | 5.0 | - | 6.2 | - | 7.6 | ||||||||||||||||||
76.4 | 11.9 | 100.4 | 6.0 | 23.1 | 1.8 | |||||||||||||||||||
Less:
Regulatory asset
deferral
|
(72.6 | ) | (11.3 | ) | (95.4 | ) | (5.7 | ) | (21.9 | ) | (1.7 | ) | ||||||||||||
AOCI
before
taxes
|
$ | 3.8 | $ | 0.6 | $ | 5.0 | $ | 0.3 | $ | 1.2 | $ | 0.1 |
10.
|
Borrowing
Arrangements
|
At
December 31,
|
|||||||||||
(In
millions)
|
2009
|
2008
|
|||||||||
Utility
Holdings
|
|||||||||||
Fixed Rate Senior
Unsecured Notes
|
|||||||||||
2011, 6.625% | $ | 250.0 | $ | 250.0 | |||||||
2013, 5.25% | 100.0 | 100.0 | |||||||||
2015, 5.45% | 75.0 | 75.0 | |||||||||
2018, 5.75% | 100.0 | 100.0 | |||||||||
2020, 6.28% | 100.0 | - | |||||||||
2035, 6.10% | 75.0 | 75.0 | |||||||||
2036, 5.95% | 97.8 | 99.1 | |||||||||
2039, 6.25% | 122.5 | 124.3 | |||||||||
Total
Utility Holdings
|
920.3 | 823.4 | |||||||||
SIGECO
|
|||||||||||
First Mortgage
Bonds
|
|||||||||||
2015,
1985 Pollution Control Series A, current adjustable rate 0.27%, tax
exempt,
|
|||||||||||
2009 weighted average: 0.37%
|
9.8 | 9.8 | |||||||||
2016, 1986 Series, 8.875%
|
13.0 | 13.0 | |||||||||
2020, 1998 Pollution Control Series B, 4.50%, tax exempt
|
4.6 | 4.6 | |||||||||
2023, 1993 Environmental Improvement Series B, 5.15%, tax
exempt
|
22.6 | 22.6 | |||||||||
2024, 2000 Environmental Improvement Series A, 4.65%, tax
exempt
|
22.5 | 22.5 | |||||||||
2025, 1998 Pollution Control Series A, current adjustable rate 0.27%, tax
exempt,
|
|||||||||||
2009 weighted average: 0.44%
|
31.5 | 31.5 | |||||||||
2029, 1999 Senior Notes, 6.72%
|
80.0 | 80.0 | |||||||||
2030, 1998 Pollution Control Series B, 5.00%, tax exempt
|
22.0 | 22.0 | |||||||||
2030, 1998 Pollution Control Series C, 5.35%, tax exempt
|
22.2 | 22.2 | |||||||||
2040, 2009 Environmental Improvement Series, 5.40%, tax
exempt
|
22.3 | - | |||||||||
2041, 2007 Pollution Control Series, 5.45%, tax exempt
|
17.0 | 17.0 | |||||||||
Total
SIGECO
|
267.5 | 245.2 | |||||||||
Indiana
Gas
|
|||||||||||
Fixed Rate Senior
Unsecured Notes
|
|||||||||||
2013, Series E, 6.69%
|
5.0 | 5.0 | |||||||||
2015, Series E, 7.15%
|
5.0 | 5.0 | |||||||||
2015, Series E, 6.69%
|
5.0 | 5.0 | |||||||||
2015, Series E, 6.69%
|
10.0 | 10.0 | |||||||||
2025, Series E, 6.53%
|
10.0 | 10.0 | |||||||||
2027, Series E, 6.42%
|
5.0 | 5.0 | |||||||||
2027, Series E, 6.68%
|
1.0 | 1.0 | |||||||||
2027, Series F, 6.34%
|
20.0 | 20.0 | |||||||||
2028, Series F, 6.36%
|
10.0 | 10.0 | |||||||||
2028, Series F, 6.55%
|
20.0 | 20.0 | |||||||||
2029, Series G, 7.08%
|
30.0 | 30.0 | |||||||||
Total
Indiana Gas
|
121.0 | 121.0 |
At
December 31,
|
|||||||||||
(In
millions)
|
2009
|
2008
|
|||||||||
Vectren
Capital Corp.
|
|||||||||||
Fixed Rate
Senior Unsecured Notes
|
|||||||||||
2010, 4.99% | 25.0 | 25.0 | |||||||||
2010, 7.98% | 22.5 | 22.5 | |||||||||
2012, 5.13% | 25.0 | 25.0 | |||||||||
2012, 7.43% | 35.0 | 35.0 | |||||||||
2014, 6.37% | 30.0 | - | |||||||||
2015, 5.31% | 75.0 | 75.0 | |||||||||
2016, 6.92% | 60.0 | - | |||||||||
2019, 7.30% | 60.0 | - | |||||||||
Total
Vectren Capital Corp.
|
332.5 | 182.5 | |||||||||
Other
Long-Term Notes Payable
|
1.2 | 0.7 | |||||||||
Total
long-term debt outstanding
|
1,642.5 | 1,372.8 | |||||||||
Current maturities of long-term debt
|
(48.0 | ) | (0.4 | ) | |||||||
Debt subject to tender
|
(51.3 | ) | (80.0 | ) | |||||||
Unamortized debt premium & discount - net
|
(2.7 | ) | (3.2 | ) | |||||||
Treasury debt
|
- | (41.3 | ) | ||||||||
Total
long-term debt-net
|
$ | 1,540.5 | $ | 1,247.9 |
11.
|
Common
Shareholders’ Equity
|
12.
|
Accumulated
Other Comprehensive Income
|
2007
|
2008
|
2009
|
||||||||||||||||||||||||||
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
|
$ | 10.2 | $ | 11.0 | $ | 21.2 | $ | (50.2 | ) | $ | (29.0 | ) | $ | 21.9 | $ | (7.1 | ) | |||||||||||
Pension
& other benefit costs
|
(2.5 | ) | 1.2 | (1.3 | ) | (4.0 | ) | (5.3 | ) | 0.9 | (4.4 | ) | ||||||||||||||||
Cash
flow hedges
|
0.7 | (0.1 | ) | 0.6 | (0.5 | ) | 0.1 | - | 0.1 | |||||||||||||||||||
Deferred
income taxes
|
(3.3 | ) | (4.7 | ) | (8.0 | ) | 21.9 | 13.9 | (9.3 | ) | 4.6 | |||||||||||||||||
Accumulated
other comprehensive income (loss)
|
$ | 5.1 | $ | 7.4 | $ | 12.5 | $ | (32.8 | ) | $ | (20.3 | ) | $ | 13.5 | $ | (6.8 | ) |
13.
|
Earnings
Per Share
|
Year
Ended December 31,
|
||||||||||||
(In
millions, except per share data)
|
2009
|
2008
|
2007
|
|||||||||
Numerator:
|
||||||||||||
Numerator
for basic EPS
|
$ | 132.9 | $ | 128.8 | $ | 142.8 | ||||||
Add
back earnings attributable to participating securities
|
0.2 | 0.2 | 0.4 | |||||||||
Reported
net income (Numerator for Diluted EPS)
|
$ | 133.1 | $ | 129.0 | $ | 143.2 | ||||||
Denominator:
|
||||||||||||
Weighted
average common shares outstanding (Basic EPS)
|
$ | 80.7 | $ | 78.3 | $ | 75.9 | ||||||
Equity
forward contract
|
- | 0.1 | 0.1 | |||||||||
Conversion
of share based compensation arrangements
|
0.3 | 0.3 | 0.4 | |||||||||
Adjusted
weighted average shares outstanding and
|
||||||||||||
assumed
conversions outstanding (Diluted EPS)
|
$ | 81.0 | $ | 78.7 | $ | 76.4 | ||||||
Basic
earnings per share
|
$ | 1.65 | $ | 1.65 | $ | 1.89 | ||||||
Diluted
earnings per share
|
$ | 1.64 | $ | 1.63 | $ | 1.87 |
14.
|
Share-Based
Compensation
|
Year
ended December 31,
|
||||||||||||
(in
millions)
|
2009
|
2008
|
2007
|
|||||||||
Total
cost of share-based compensation
|
$ | 4.6 | $ | 3.7 | $ | 2.5 | ||||||
Less
capitalized cost
|
1.6 | 0.9 | 0.5 | |||||||||
Total
in other operating expense
|
3.0 | 2.8 | 2.0 | |||||||||
Less
income tax benefit in earnings
|
1.2 | 1.1 | 0.8 | |||||||||
After
tax effect of share-based compensation
|
$ | 1.8 | $ | 1.7 | $ | 1.2 | ||||||
Equity
Awards
|
||||||||||||||||
Wtd.
Avg.
|
||||||||||||||||
Grant
Date
|
Liability
Awards
|
|||||||||||||||
Shares
|
Fair
value
|
Shares/Units
|
Fair
value
|
|||||||||||||
Restricted
at January 1, 2009
|
36,235 | $ | 28.24 | 524,393 | ||||||||||||
Granted
|
12,370 | $ | 24.76 | 269,429 | ||||||||||||
Vested
|
(6,761 | ) | $ | 26.65 | (129,937 | ) | ||||||||||
Forfeited
|
(2,931 | ) | $ | 27.73 | (57,532 | ) | ||||||||||
Restricted
at December 31, 2009
|
38,913 | $ | 27.55 | 606,353 | $ | 24.68 |
Weighted
average
|
Aggregate
|
|||||||||||||||
Remaining
|
Intrinsic
|
|||||||||||||||
Shares
|
Exercise
|
Contractual
|
Value
|
|||||||||||||
Price
|
Term
(years)
|
(In
millions)
|
||||||||||||||
Outstanding
at January 1, 2009
|
1,335,214 | $ | 23.95 | |||||||||||||
Exercised
|
(5,652 | ) | $ | 20.26 | ||||||||||||
Outstanding
at December 31, 2009
|
1,329,562 | $ | 23.97 | 3.0 | $ | 1.5 | ||||||||||
Exercisable
at December 31, 2009
|
1,329,562 | $ | 23.97 | 3.0 | $ | 1.5 |
15.
|
Commitments
& Contingencies
|
16.
|
Environmental
Matters
|
17.
|
Rate
& Regulatory Matters
|
18.
|
Fair
Value Measurements
|
At
December 31,
|
||||||||||||||||
2009
|
2008
|
|||||||||||||||
(In
millions)
|
Carrying
Amount
|
Est.
Fair
Value
|
Carrying
Amount
|
Est.
Fair
Value
|
||||||||||||
Long-term
debt
|
$ | 1,642.5 | $ | 1,720.1 | $ | 1,372.8 | $ | 1,251.0 | ||||||||
Short-term
borrowings & notes payable
|
213.5 | 213.5 | 519.5 | 519.5 | ||||||||||||
Cash
& cash equivalents
|
11.9 | 11.9 | 93.2 | 93.2 |
19.
|
Segment
Reporting
|
Year
Ended December 31,
|
||||||||||||
(In
millions)
|
2009
1/
|
2008
|
2007
|
|||||||||
Revenues
|
||||||||||||
Utility
Group
|
||||||||||||
Gas
Utility Services
|
$ | 1,066.0 | $ | 1,432.7 | $ | 1,269.4 | ||||||
Electric
Utility Services
|
528.6 | 524.2 | 487.9 | |||||||||
Other
Operations
|
42.8 | 36.8 | 40.4 | |||||||||
Eliminations
|
(41.2 | ) | (35.0 | ) | (38.7 | ) | ||||||
Total
Utility Group
|
1,596.2 | 1,958.7 | 1,759.0 | |||||||||
Nonutility
Group
|
673.9 | 664.7 | 643.4 | |||||||||
Eliminations
|
(181.2 | ) | (138.7 | ) | (120.5 | ) | ||||||
Consolidated
Revenues
|
$ | 2,088.9 | $ | 2,484.7 | $ | 2,281.9 | ||||||
Profitability
Measures - Net Income
|
||||||||||||
Gas
Utility Services
|
$ | 50.2 | $ | 53.3 | $ | 41.7 | ||||||
Electric
Utility Services
|
48.3 | 50.7 | 52.6 | |||||||||
Other
Operations
|
8.9 | 7.1 | 12.2 | |||||||||
Utility
Group Net Income
|
107.4 | 111.1 | 106.5 | |||||||||
Nonutility
Group Net Income
|
25.8 | 18.9 | 37.0 | |||||||||
Corporate
& Other Net Loss
|
(0.1 | ) | (1.0 | ) | (0.4 | ) | ||||||
Consolidated
Net Income
|
$ | 133.1 | $ | 129.0 | $ | 143.1 |
Year
Ended December 31,
|
||||||||||||
(In
millions)
|
2009
|
2008
|
2007
|
|||||||||
Amounts
Included in Profitability Measures
|
||||||||||||
Depreciation & Amortization
|
||||||||||||
Utility
Group
|
||||||||||||
Gas
Utility Services
|
$ | 76.9 | $ | 74.1 | $ | 70.6 | ||||||
Electric
Utility Services
|
77.5 | 68.5 | 66.0 | |||||||||
Other
Operations
|
26.5 | 22.9 | 21.8 | |||||||||
Total
Utility Group
|
180.9 | 165.5 | 158.4 | |||||||||
Nonutility
Group
|
31.0 | 26.8 | 26.4 | |||||||||
Consolidated
Depreciation & Amortization
|
$ | 211.9 | $ | 192.3 | $ | 184.8 | ||||||
Interest Expense
|
||||||||||||
Utility
Group
|
||||||||||||
Gas
Utility Services
|
$ | 38.8 | $ | 42.0 | $ | 39.8 | ||||||
Electric
Utility Services
|
34.8 | 32.0 | 29.6 | |||||||||
Other
Operations
|
5.6 | 5.9 | 11.2 | |||||||||
Total
Utility Group
|
79.2 | 79.9 | 80.6 | |||||||||
Nonutility
Group
|
20.9 | 17.3 | 21.9 | |||||||||
Corporate
& Other
|
(0.1 | ) | 0.6 | (1.5 | ) | |||||||
Consolidated
Interest Expense
|
$ | 100.0 | $ | 97.8 | $ | 101.0 | ||||||
Income Taxes
|
||||||||||||
Utility
Group
|
||||||||||||
Gas
Utility Services
|
$ | 31.3 | $ | 35.5 | $ | 33.2 | ||||||
Electric
Utility Services
|
27.4 | 32.0 | 38.0 | |||||||||
Other
Operations
|
0.5 | 0.1 | (4.5 | ) | ||||||||
Total
Utility Group
|
59.2 | 67.6 | 66.7 | |||||||||
Nonutility
Group
|
5.9 | 9.5 | 10.5 | |||||||||
Corporate
& Other
|
(1.0 | ) | (1.0 | ) | (1.2 | ) | ||||||
Consolidated
Income Taxes
|
$ | 64.1 | $ | 76.1 | $ | 76.0 | ||||||
Capital Expenditures
|
||||||||||||
Utility
Group
|
||||||||||||
Gas Utility
Services
|
$ | 121.1 | $ | 110.4 | $ | 128.9 | ||||||
Electric Utility
Services
|
154.1 | 172.0 | 134.7 | |||||||||
Other
Operations
|
16.7 | 29.6 | 36.4 | |||||||||
Non-cash costs
& changes in accruals
|
10.8 | (8.3 | ) | (0.2 | ) | |||||||
Total
Utility Group
|
302.7 | 303.7 | 299.8 | |||||||||
Nonutility
Group
|
129.3 | 87.3 | 34.7 | |||||||||
Consolidated
Capital Expenditures
|
$ | 432.0 | $ | 391.0 | $ | 334.5 |
At
December 31,
|
||||||||
(In
millions)
|
2009
|
2008
|
||||||
Assets
|
||||||||
Utility
Group
|
||||||||
Gas Utility
Services
|
$ | 2,102.4 | $ | 2,204.7 | ||||
Electric Utility
Services
|
1,592.4 | 1,462.1 | ||||||
Other Operations,
net of eliminations
|
128.3 | 171.3 | ||||||
Total Utility
Group
|
3,823.1 | 3,838.1 | ||||||
Nonutility
Group
|
836.0 | 780.1 | ||||||
Corporate &
Other
|
715.9 | 737.5 | ||||||
Eliminations
|
(703.2 | ) | (722.8 | ) | ||||
Consolidated
Assets
|
$ | 4,671.8 | $ | 4,632.9 |
20.
|
Synfuel-Related
Activity
|
21.
|
Additional
Balance Sheet & Operational
Information
|
At
December 31,
|
||||||||
(In
millions)
|
2009
|
2008
|
||||||
Prepaid
gas delivery service
|
$ | 38.7 | $ | 75.0 | ||||
Deferred
income taxes
|
21.7 | 8.2 | ||||||
Prepaid
taxes
|
20.6 | 14.1 | ||||||
Other
prepayments & current assets
|
14.1 | 27.3 | ||||||
Total
prepayments & other current assets
|
$ | 95.1 | $ | 124.6 |
At
December 31,
|
||||||||
(In
millions)
|
2009
|
2008
|
||||||
Cash
surrender value of life insurance policies
|
$ | 24.7 | $ | 19.8 | ||||
Municipal
bond
|
4.3 | 4.5 | ||||||
Restricted
cash
|
2.8 | - | ||||||
Other
investments
|
1.4 | 1.4 | ||||||
Other
utility & corporate investments
|
$ | 33.2 | $ | 25.7 |
At
December 31,
|
||||||||
(In
millions)
|
2009
|
2008
|
||||||
Refunds
to customers & customer deposits
|
$ | 51.0 | $ | 45.5 | ||||
Accrued
taxes
|
32.7 | 46.3 | ||||||
Accrued
interest
|
23.7 | 19.2 | ||||||
Asset
retirement obligation
|
3.0 | 7.2 | ||||||
Accrued
retirement & deferred compensation benefits
|
19.6 | 5.0 | ||||||
Accrued
salaries & other
|
44.7 | 51.8 | ||||||
Total
accrued liabilities
|
$ | 174.7 | $ | 175.0 | ||||
Year
Ended December 31,
|
||||||||||||
(In
millions)
|
2009
|
2008
|
2007
|
|||||||||
AFUDC
– borrowed funds
|
$ | 1.3 | $ | 2.2 | $ | 3.5 | ||||||
AFUDC
– equity funds
|
0.7 | 0.3 | 0.5 | |||||||||
Nonutility
plant capitalized interest
|
6.0 | 3.7 | 2.3 | |||||||||
Interest
income, net
|
1.4 | 2.3 | 2.9 | |||||||||
Synfuel-related
activity
|
- | - | 23.4 | |||||||||
Commercial
real estate impairment charge
|
- | (5.2 | ) | - | ||||||||
Cash
surrender value of life insurance policies
|
4.1 | (2.8 | ) | 0.6 | ||||||||
All
other income
|
0.2 | 1.6 | 3.5 | |||||||||
Total
other – net
|
$ | 13.7 | $ | 2.1 | $ | 36.7 | ||||||
Year
Ended December 31,
|
|||||||
(In
millions)
|
2009
|
2008
|
2007
|
||||
Cash
paid for:
|
|||||||
Interest
|
95.5
|
92.6
|
97.3
|
||||
Income
taxes
|
(12.2)
|
(3.5)
|
43.7
|
22.
|
Impact
of Recently Issued Accounting
Guidance
|
23.
|
Quarterly
Financial Data (Unaudited)
|
(In
millions, except per share amounts)
|
Q1 | Q2 1/ | Q3 | Q4 | ||||||||||||
2009
|
||||||||||||||||
Operating
revenues
|
$ | 795.2 | $ | 375.5 | $ | 349.6 | $ | 568.6 | ||||||||
Operating
income
|
121.8 | 32.4 | 40.5 | 85.4 | ||||||||||||
Net
income
|
72.8 | (6.7 | ) | 12.4 | 54.6 | |||||||||||
Earnings
per share:
|
||||||||||||||||
Basic
|
$ | 0.90 | $ | (0.08 | ) | $ | 0.15 | $ | 0.68 | |||||||
Diluted
|
0.90 | (0.08 | ) | 0.15 | 0.67 | |||||||||||
2008
|
||||||||||||||||
Operating
revenues
|
$ | 902.1 | $ | 463.9 | $ | 411.4 | $ | 707.3 | ||||||||
Operating
income
|
108.8 | 33.0 | 43.2 | 78.4 | ||||||||||||
Net
income
|
64.0 | 4.7 | 23.2 | 37.1 | ||||||||||||
Earnings
per share:
|
||||||||||||||||
Basic
|
$ | 0.84 | $ | 0.06 | $ | 0.29 | $ | 0.46 | ||||||||
Diluted
|
0.84 | 0.06 | 0.29 | 0.46 |
1)
|
recorded,
processed, summarized and reported within the time periods specified in
the SEC’s rules and forms, and
|
|
2)
|
accumulated
and communicated to management, including the Chief Executive Officer and
Chief Financial Officer, as appropriate to allow timely decisions
regarding required disclosure.
|
A
|
B
|
C
|
|||||||
Plan
category
|
Number
of securities to
be
issued upon
exercise
of outstanding
options,
warrants and
rights
|
Weighted
average
exercise
price of
outstanding
options,
warrants
and rights
|
Number
of securities remaining available for future issuance
under
equity compensation
plans
(excluding securities
reflected
in column (a)
|
||||||
Equity
compensation plans approved by
|
|||||||||
security holders
|
1,329,562
|
(1)
|
$ 23.97
|
(1)
|
2,286,193
|
(2)
|
|||
Equity
compensation plans not approved
|
|||||||||
by security holders
|
-
|
-
|
-
|
||||||
Total
|
1,329,562
|
$ 23.97
|
2,286,193
|
(1)
|
Includes
the following Vectren Corporation Plans: Vectren Corporation
At-Risk Compensation Plan.
|
(2)
|
Future
issuances of shares awards can only be made under the Vectren Corporation
At-Risk Plan. Shares available for issuance under the At-Risk
Plan have been reduced by the issuance of 270,810 restricted units
approved by the board of directors’ Compensation Committee on February 10,
2010. In addition, on February 10, 2010, participants forfeited
24,333 shares related to awards measured during the three year performance
period ending December 31, 2009, and shares available for future issue
have been increased by that amount. The issuance and forfeiture
of the shares on February 10, 2010 are included in the above
table.
|
Exhibit
Number
|
Document
|
31.1
|
Chief
Executive Officer Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
31.2
|
Chief
Financial Officer Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
32
|
Certification
Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
Exhibit
Number
|
Document
|
4.1
|
SIGECO
Mortgage Indenture Amendment
|
10.1
|
Coal
Supply Agreement Amendment
|
21.1
|
List
of Company’s Significant Subsidiaries
|
23.1
|
Consent
of Independent Registered Public Accounting Firm
|
23.2
|
Consent
of Independent Auditors
|
99.1
|
ProLiance
Holdings, LLC Consolidated Financial Statements
|
3.1
|
Amended
and Restated Articles of Incorporation of Vectren Corporation effective
March 31, 2000. (Filed and designated in Current Report on Form
8-K filed April 14, 2000, File No. 1-15467, as Exhibit
4.1.)
|
3.2
|
Code
of By-Laws of Vectren Corporation as Most Recently Amended and Restated as
of June 24, 2009. (Filed and designated in Current Report on
Form 8-K filed June 26, 2009, File No. 1-15467, as Exhibit
3.1.)
|
4.1
|
Mortgage
and Deed of Trust dated as of April 1, 1932 between Southern Indiana Gas
and Electric Company and Bankers Trust Company, as Trustee, and
Supplemental Indentures thereto dated August 31, 1936, October 1, 1937,
March 22, 1939, July 1, 1948, June 1, 1949, October 1, 1949, January 1,
1951, April 1, 1954, March 1, 1957, October 1, 1965, September 1, 1966,
August 1, 1968, May 1, 1970, August 1, 1971, April 1, 1972, October 1,
1973, April 1, 1975, January 15, 1977, April 1, 1978, June 4, 1981,
January 20, 1983, November 1, 1983, March 1, 1984, June 1, 1984, November
1, 1984, July 1, 1985, November 1, 1985, June 1, 1986. (Filed
and designated in Registration No. 2-2536 as Exhibits B-1 and B-2; in
Post-effective Amendment No. 1 to Registration No. 2-62032 as Exhibit
(b)(4)(ii), in Registration No. 2-88923 as Exhibit 4(b)(2), in Form 8-K,
File No. 1-3553, dated June 1, 1984 as Exhibit (4), File No. 1-3553, dated
March 24, 1986 as Exhibit 4-A, in Form 8-K, File No. 1-3553, dated June 3,
1986 as Exhibit (4).) July 1, 1985 and November 1, 1985 (Filed
and designated in Form 10-K, for the fiscal year 1985, File
No. 1-3553, as Exhibit 4-A.) November 15, 1986 and January
15, 1987. (Filed and designated in Form 10-K, for the fiscal
year 1986, File No. 1-3553, as Exhibit 4-A.) December 15,
1987. (Filed and designated in Form 10-K, for the fiscal year
1987, File No. 1-3553, as Exhibit 4-A.) December 13,
1990. (Filed and designated in Form 10-K, for the fiscal year
1990, File No. 1-3553, as Exhibit 4-A.) April 1,
1993. (Filed and designated in Form 8-K, dated April 13, 1993,
File No. 1-3553, as Exhibit 4.) June 1, 1993 (Filed and
designated in Form 8-K, dated June 14, 1993, File No. 1-3553, as Exhibit
4.) May 1, 1993. (Filed and designated in Form 10-K,
for the fiscal year 1993, File No. 1-3553, as Exhibit
4(a).) July 1, 1999. (Filed and designated in Form
10-Q, dated August 16, 1999, File No. 1-3553, as Exhibit
4(a).) March 1, 2000. (Filed and designated in Form
10-K for the year ended December 31, 2001, File No. 1-15467, as Exhibit
4.1.) August 1, 2004. (Filed and designated in Form 10-K for
the year ended December 31, 2004, File No. 1-15467, as Exhibit
4.1.) October 1, 2004. (Filed and designated in Form
10-K for the year ended December 31, 2004, File No. 1-15467, as Exhibit
4.2.) April 1, 2005 (Filed and designated in Form 10-K for the
year ended December 31, 2007, File No 1-15467, as Exhibit
4.1) March 1, 2006 (Filed and designated in Form 10-K for the
year ended December 31, 2007, File No 1-15467, as Exhibit
4.2) December 1, 2007 (Filed and designated in Form 10-K for
the year ended December 31, 2007, File No 1-15467, as Exhibit 4.3) August
1, 2009 (Filed herewith, as Exhibit
4.1)
|
4.2
|
Indenture
dated February 1, 1991, between Indiana Gas and U.S. Bank Trust National
Association (formerly know as First Trust National Association, which was
formerly know as Bank of America Illinois, which was formerly know as
Continental Bank, National Association. Inc.'s. (Filed and
designated in Current Report on Form 8-K filed February 15, 1991, File No.
1-6494.); First Supplemental Indenture thereto dated as of February 15,
1991. (Filed and designated in Current Report on Form 8-K filed
February 15, 1991, File No. 1-6494, as Exhibit 4(b).); Second Supplemental
Indenture thereto dated as of September 15, 1991, (Filed and designated in
Current Report on Form 8-K filed September 25, 1991, File No. 1-6494, as
Exhibit 4(b).); Third supplemental Indenture thereto dated as of September
15, 1991 (Filed and designated in Current Report on Form 8-K filed
September 25, 1991, File No. 1-6494, as Exhibit 4(c).); Fourth
Supplemental Indenture thereto dated as of December 2, 1992, (Filed and
designated in Current Report on Form 8-K filed December 8, 1992, File No.
1-6494, as Exhibit 4(b).); Fifth Supplemental Indenture thereto dated as
of December 28, 2000, (Filed and designated in Current Report on Form 8-K
filed December 27, 2000, File No. 1-6494, as Exhibit
4.)
|
4.3
|
Indenture
dated October 19, 2001, among Vectren Utility Holdings, Inc., Indiana Gas
Company, Inc., Southern Indiana Gas and Electric Company, Vectren Energy
Delivery of Ohio, Inc., and U.S. Bank Trust National Association.
(Filed and designated in Form 8-K, dated October 19, 2001, File No.
1-16739, as Exhibit 4.1); First Supplemental Indenture, dated October 19,
2001, between Vectren Utility Holdings, Inc., Indiana Gas Company, Inc.,
Southern Indiana Gas and Electric Company, Vectren Energy Delivery of
Ohio, Inc., and U.S. Bank Trust National Association. (Filed and
designated in Form 8-K, dated October 19, 2001, File No. 1-16739, as
Exhibit 4.2); Second Supplemental Indenture, among Vectren Utility
Holdings, Inc., Indiana Gas Company, Inc., Southern Indiana Gas and
Electric Company, Vectren Energy Delivery of Ohio, Inc., and U.S. Bank
Trust National Association. (Filed and designated in Form 8-K, dated
November 29, 2001, File No. 1-16739, as Exhibit 4.1); Third Supplemental
Indenture, among Vectren Utility Holdings, Inc., Indiana Gas Company,
Inc., Southern Indiana Gas and Electric Company, Vectren Energy Delivery
of Ohio, Inc., and U.S. Bank Trust National Association. (Filed and
designated in Form 8-K, dated July 24, 2003, File No. 1-16739, as Exhibit
4.1); Fourth Supplemental Indenture, among Vectren Utility Holdings, Inc.,
Indiana Gas Company, Inc., Southern Indiana Gas and Electric Company,
Vectren Energy Delivery of Ohio, Inc., and U.S. Bank Trust National
Association. (Filed and designated in Form 8-K, dated November 18,
2005, File No. 1-16739, as Exhibit 4.1). Form of Fifth
Supplemental Indenture, among Vectren Utility Holdings, Inc., Indiana Gas
Company, Inc., Southern Indiana Gas & Electric Company, Vectren Energy
Delivery of Ohio, Inc., and U.S. Bank Trust National Association.
(Filed and
designated in Form 8-K, dated October 16, 2006, File No. 1-16739, as
Exhibit 4.1). Sixth Supplemental Indenture, dated March 10,
2008, among Vectren Utility Holdings, Inc., Indiana Gas Company, Inc.,
Southern Indiana Gas and Electric Company, Vectren Energy Delivery of
Ohio, Inc., and U.S. Bank National Association (Filed and designated in
Form 8-K, dated March 10, 2008, File No. 1-16739, as Exhibit
4.1)
|
4.4
|
Note
purchase agreement, dated October 11, 2005, between Vectren Capital Corp.
and each of the purchasers named therein. (Filed designated in
Form 10-K for the year ended December 31, 2005, File No. 1-15467, as
Exhibit 4.4.) First Amendment, dated March 11, 2009, to Note Purchase
Agreement dated October 11, 2005, among Vectren Corporation, Vectren
Capital, Corp. and each of the holders named herein. (Filed and designated
in Form 8-K dated March 16, 2009 File No. 1-15467, as Exhibit
4.6)
|
4.5
|
Note
Purchase Agreement, dated March 11, 2009, among Vectren Corporation,
Vectren Capital, Corp. and each of the purchasers named therein. (Filed
and designated in Form 8-K dated March 16, 2009 File No. 1-15467, as
Exhibit 4.5)
|
4.6
|
Note
Purchase Agreement, dated April 7, 2009, among Vectren Utility Holdings,
Inc., Indiana Gas Company, Inc., Southern Indiana Gas and Electric Company
and Vectren Energy Delivery of Ohio, Inc. and the purchasers named
therein. (Filed and designated in Form 8-K dated April 7, 2009 File No.
1-15467, as Exhibit 4.5)
|
10.1
|
Summary
description of Southern Indiana Gas and Electric Company's nonqualified
Supplemental Retirement Plan (Filed and designated in Form 10-K for the
fiscal year 1992, File No. 1-3553, as Exhibit 10-A-17.) First
Amendment, effective April 16, 1997 (Filed and designated in Form 10-K for
the fiscal year 1997, File No. 1-3553, as Exhibit
10.29.).
|
10.2
|
Southern
Indiana Gas and Electric Company 1994 Stock Option Plan (Filed and
designated in Southern Indiana Gas and Electric Company's Proxy Statement
dated February 22, 1994, File No. 1-3553, as Exhibit
A.)
|
10.3
|
Vectren
Corporation At Risk Compensation Plan effective May 1, 2001,(as amended
and restated s of May 1, 2006). (Filed and designated in
Vectren Corporation’s Proxy Statement dated March 15, 2006, File No.
1-15467, as Appendix H.)
|
10.4
|
Vectren
Corporation Non-Qualified Deferred Compensation Plan, as amended and
restated effective January 1, 2001. (Filed and designated in
Form 10-K, for the year ended December 31, 2001, File No. 1-15467, as
Exhibit 10.32.)
|
10.5
|
Vectren
Corporation Nonqualified Deferred Compensation Plan, effective January 1,
2005. (Filed and designated in Form 8-K dated September 29,
2008, File No. 1-15467, as Exhibit
10.3.)
|
10.6
|
Vectren
Corporation Unfunded Supplemental Retirement Plan for a Select Group of
Management Employees (As Amended and Restated Effective January 1,
2005).(Filed and designated in Form 8-K dated December 17, 2008, File No.
1-15467, as Exhibit 10.1.)
|
10.7
|
Vectren
Corporation Nonqualified Defined Benefit Restoration Plan (As Amended and
Restated Effective January 1, 2005). (Filed and designated in Form 8-K
dated December 17, 2008, File No. 1-15467, as Exhibit
10.2.)
|
10.8
|
Vectren
Corporation Change in Control Agreement between Vectren Corporation and
Niel C. Ellerbrook dated as of March 1, 2005. (Filed and
designated in Form 8-K dated March 1, 2005, File No. 1-15467, as Exhibit
99.1.). Amendment Number One to the Vectren Corporation Change
in Control Agreement, effective as of March 1, 2005 between Vectren
Corporation and Niel C. Ellerbrook (Filed and designated in Form 8-K dated
September 29, 2008, File No. 1-15467, as Exhibit
10.1.)
|
10.9
|
Vectren
Corporation At Risk Compensation Plan specimen restricted stock grant
agreement for officers, effective January 1, 2006. (Filed and
designated in Form 8-K, dated February 27, 2006, File No. 1-15467, as
Exhibit 99.1.)
|
10.10
|
Vectren
Corporation At Risk Compensation Plan specimen unit award agreement for
officers, effective January 1, 2010. (Filed and designated in
Form 8-K, dated January 7, 2010, File No. 1-15467, as Exhibit
10.1.)
|
10.11
|
Vectren
Corporation At Risk Compensation Plan specimen unit award agreement for
officers, effective January 1, 2009. (Filed and designated in
Form 8-K, dated February 17, 2009, File No. 1-15467, as Exhibit
10.1.)
|
10.12
|
Vectren
Corporation At Risk Compensation Plan specimen restricted stock grant
agreement for officers, effective January 1, 2008. (Filed and
designated in Form 8-K, dated December 28, 2007, File No. 1-15467, as
Exhibit 99.1.)
|
10.13
|
Vectren
Corporation At Risk Compensation Plan specimen restricted stock units
agreement for officers, effective January 1, 2008. (Filed and
designated in Form 8-K, dated December 28, 2007, File No. 1-15467, as
Exhibit 99.2.)
|
10.14
|
Vectren
Corporation At Risk Compensation Plan specimen Stock Option Grant
Agreement for officers, effective January 1, 2005. (Filed and
designated in Form 8-K, dated January 1, 2005, File No. 1-15467, as
Exhibit 99.2.)
|
10.15
|
Vectren
Corporation At Risk Compensation Plan stock unit award agreement for
non-employee directors, effective May 1, 2009. (Filed and designation in
Form 8-K, dated February 20, 2009, File No. 1-15467, as Exhibit
10.1)
|
10.16
|
Vectren
Corporation specimen employment agreement dated February 1,
2005. (Filed and designated in Form 8-K, dated February 1,
2005, File No. 1-15467, as Exhibit 99.1.) Amendment Number One
to the Specimen Vectren Corporation Employment Agreement between Vectren
Corporation and Executive Officers (Filed and designated in Form 8-K dated
September 29, 2008, File No. 1-15467, as Exhibit 10.2.) The specimen
agreements and related amendments differ among named executive officers
only to the extent severance and change in control benefits are
provided in the amount of three times base salary and bonus for Messrs.
Benkert, Chapman, and Christian and two times for Mr.
Doty.
|
10.17
|
Coal
Supply Agreement for Warrick 4 Generating Station between Southern Indiana
Gas and Electric Company and Vectren Fuels, Inc., effective January 1,
2009. (Filed and designated in Form 8-K dated January 5, 2009,
File No. 1-15467, as Exhibit 10.1.)
|
10.18
|
Coal
Supply Agreement for F.B. Culley Generating Station between Southern
Indiana Gas and Electric Company and Vectren Fuels, Inc., effective
January 1, 2009. (Filed and designated in Form 8-K dated
January 5, 2009, File No. 1-15467, as Exhibit
10.2.)
|
10.19
|
Coal
Supply Agreement for A.B. Brown Generating Station for 410,000 tons
between Southern Indiana Gas and Electric Company and Vectren Fuels, Inc.,
effective January 1, 2009. (Filed and designated in Form 8-K
dated January 5, 2009, File No. 1-15467, as Exhibit
10.3.)
|
10.20
|
Coal
Supply Agreement for A.B. Brown Generating Station for 1 million tons
between Southern Indiana Gas and Electric Company and Vectren Fuels, Inc.,
effective January 1, 2009. (Filed and designated in Form 8-K
dated January 5, 2009, File No. 1-15467, as Exhibit
10.4.)
|
10.21
|
Amendment
to F.B. Culley and A.B. Brown Coal Supply Agreements dated December 21,
2009. (Filed herewith as exhibit
10.1)
|
10.22
|
Gas
Sales and Portfolio Administration Agreement between Indiana Gas Company,
Inc. and ProLiance Energy, LLC, effective August 30,
2003. (Filed and designated in Form 10-K, for the year ended
December 31, 2003, File No. 1-15467, as Exhibit
10.15.)
|
10.23
|
Gas
Sales and Portfolio Administration Agreement between Southern Indiana Gas
and Electric Company and ProLiance Energy, LLC, effective September 1,
2002. (Filed and designated in Form 10-K, for the year ended
December 31, 2003, File No. 1-15467, as Exhibit
10.16.)
|
10.24
|
Formation
Agreement among Indiana Energy, Inc., Indiana Gas Company, Inc., IGC
Energy, Inc., Indiana Energy Services, Inc., Citizens Energy Group,
Citizens Energy Services Corporation and ProLiance Energy, LLC, effective
March 15, 1996. (Filed and designated in Form 10-Q for the
quarterly period ended March 31, 1996, File No. 1-9091, as Exhibit
10-C.)
|
10.25
|
Revolving
Credit Agreement (5 year facility), dated November 10, 2005, among Vectren
Utility Holdings, Inc., and each of the purchasers named
therein. (Filed and designated in Form 10-Q, for the period
ended September 30, 2009, File No. 1-15467, as Exhibit
10.24.)
|
10.26
|
Revolving
Credit Agreement (5 year facility), dated November 10, 2005, among Vectren
Capital Corp., and each of the purchasers named therein. (Filed
and designated in Form 10-Q, for the period ended September 30, 2009, File
No. 1-15467, as Exhibit 10.25.)
|
10.27
|
Niel
C. Ellerbrook Retirement Agreement, dated February 3,
2010. (
Filed and
designated in Form 8-K dated February 4, 2010 File No. 1-15467, as Exhibit
99.2)
|
Signature
|
Title
|
Date
|
||
/s/
Niel C. Ellerbrook
|
Chairman,
Chief Executive Officer, and Director
|
February
26, 2010
|
||
Niel
C. Ellerbrook
|
(Principal
Executive Officer)
|
|||
/s/
Jerome A. Benkert, Jr.
|
Executive
Vice President and Chief Financial
|
February
26, 2010
|
||
Jerome
A. Benkert, Jr.
|
Officer
(Principal
Financial Officer)
|
|||
/s/ M.
Susan Hardwick
|
Vice
President, Controller and Assistant Treasurer
|
February
26, 2010
|
||
M.
Susan Hardwick
|
(Principal
Accounting Officer)
|
|||
/s/
Carl L. Chapman
|
Director
|
February
26, 2010
|
||
Carl
L. Chapman
|
||||
/s/
John M. Dunn
|
Director
|
February
26, 2010
|
||
John
M. Dunn
|
||||
/s/
John D. Engelbrecht
|
Director
|
February
26, 2010
|
||
John
D. Engelbrecht
|
||||
/s/
Anton H. George
|
Director
|
February
26, 2010
|
||
Anton
H. George
|
||||
/s/
Martin C. Jischke
|
Director
|
February
26, 2010
|
||
Martin
C. Jischke
|
||||
/s/
Robert L. Koch II
|
Director
|
February
26, 2010
|
||
Robert
L. Koch II
|
||||
/s/
William G Mays
|
Director
|
February
26, 2010
|
||
William
G. Mays
|
||||
/s/
J. Timothy McGinley
|
Director
|
February
26, 2010
|
||
J.
Timothy McGinley
|
||||
/s/
Richard P. Rechter
|
Director
|
February
26, 2010
|
||
Richard
P. Rechter
|
||||
/s/
R. Daniel Sadlier
|
Director
|
February
26, 2010
|
||
R.
Daniel Sadlier
|
||||
/s/
Michael L Smith
|
Director
|
February
26, 2010
|
||
Michael
L Smith
|
||||
/s/
Jean L. Wojtowicz
|
Director
|
February
26, 2010
|
||
Jean
L. Wojtowicz
|
-109- |
|
Southern Indiana Gas and
Electric Company
d/b/a
Vectren Energy Delivery
of Indiana, Inc.
|
|
By:
/s/ Robert L. Goocher
|
|
Vice
President and Treasurer
|
|
Deutsche Bank Trust
Company Americas
, by Deutsche Bank National Trust Company, as
Trustee
|
|
By:
/s/ David Contino
|
|
Southern Indiana Gas and
Electric Company
d/b/a
Vectren Energy Delivery
of Indiana, Inc.
|
|
By:
/s/ Robert L. Goocher
|
|
Deutsche Bank Trust
Company Americas,
by Deutsche Bank National Trust
Company
|
|
By:
/s/ David Contino
|
By
/s/
Irina
Golovashchuk
________________________
Irina
Golovashchuk
Assistant
Vice President
|
/s/
Kenneth R. Ring
____________________
Kenneth R.
Ring
Vice
President
|
|
/s/
Mary L. Payne
|
|
Notary
Public
|
|
/s/
Jeffrey Schoenfeld
|
|
Notary
Public
|
|
/s/ William M. Libit
|
|
Name:
William M. Libit
|
|
1.
|
Under
Section 3.1 of each of the Supply Agreement, Buyer agreed to accept
delivery from Seller of at least 85% of specified coal quantities in 2009
and 2010 at its Culley and Brown
plants.
|
|
2.
|
Pursuant
to this Amendment, Section 3.1 of the Supply Agreements is modified to
reflect that Seller has agreed to defer 88,000 tons of coal deliveries in
2009 and 522,000 tons of coal deliveries in 2010, over and above Buyer’s
option to reduce deliveries by 15% of the specified quantities in those
years.
|
|
|
3.
|
Buyer
shall control the amount and timing of such deferrals, as well as the
identity of the plant (Culley and Brown) that will be deferring the
delivery under the Supply Agreements, so long as the aggregate deferral
amount does not exceed the tonnage set forth in paragraph 2
above.
|
|
4.
|
With
respect to the 2009 and 2010 deferrals, such tonnage shall be subsequently
supplied to Buyer in 2011 or 2012, based upon Buyer’s
instructions. Buyer will direct the delivery of such deferred
tons to either Culley or Brown. All deferred tons must be
purchased from Seller no later then December 31, 2012. Delivery
of deferred tons in 2011 or 2012 does not count as part of the specified
quantities to be purchased under the Supply Agreements in those contract
years.
|
|
5.
|
With
respect to the deferred tons, Section 4.1 of the Supply Agreements is
modified so that tons deferred in 2009 shall be delivered in 2011 or 2012,
regardless of plant delivery location, at an FOB mine price of $57.50/ton.
Similarly, tons deferred in 2010 shall be delivered in 2011 or 2012 at an
FOB mine price of $59.00/ton.
|
|
6.
|
In
exchange for discounting the 2011 and 2012 Supply Agreement prices for the
deferred coal. , Buyer agrees that to the extent it determines it requires
incremental coal in 2012, 2013, or 2014, it will provide Seller a Right of
First Refusal (“ROFR”) allowing Seller to match competing offers to sell
coal of similar quality to Buyer. This ROFR shall be applicable
for up to 50% of incremental coal Buyer seeks to procure in those
years.
|
|
7.
|
All
deliveries of deferred tons shall comply with all Supply Agreement terms,
and the Supply Agreements are not modified except as provided
herein.
|
Name
of Entity
|
State
of
Incorporation/
Jurisdiction
|
Doing
Business As
|
||
Vectren
Utility Holdings, Inc.
|
Indiana
|
|||
Southern
Indiana Gas and Electric Company, Inc.
|
Indiana
|
Vectren
Energy Delivery of Indiana, Inc.
|
||
Indiana
Gas Company, Inc.
|
Indiana,
Ohio
|
Vectren
Energy Delivery of Indiana, Inc.
|
||
Vectren
Energy Delivery of Ohio, Inc.
|
Ohio
|
|||
Vectren
Enterprises, Inc.
|
Indiana
|
|||
Vectren
Energy Services, Inc.
|
Indiana
|
|||
Vectren
Utility Services, Inc.
|
Indiana
|
|||
Vectren
Communications, Inc.
|
Indiana
|
|||
Vectren
Ventures, Inc.
|
Indiana
|
|||
Vectren
Financial Group, Inc.
|
Indiana
|
|||
Vectren
Energy Marketing and Services, Inc.
|
Indiana
|
|||
Vectren
Energy Retail, Inc.
|
Indiana
|
|||
Energy
Systems Group, Inc.
|
Indiana
|
|||
Vectren
Environmental Services, Inc.
|
Indiana
|
|||
Vectren
Fuels, Inc.
|
Indiana
|
|||
Vectren
Communications Services, Inc.
|
Indiana
|
|||
Southern
Indiana Properties, Inc.
|
Indiana
|
|||
Vectren
Synfuels, Inc.
|
Indiana
|
|||
Energy
Realty, Inc.
|
Indiana
|
|||
Energy
Systems Group, LLC
|
Indiana
|
|||
Vectren
Retail, LLC
|
Indiana,
Ohio
|
Vectren
Source
|
||
Vectren
Capital Corp.
|
Indiana
|
|||
Vectren
Aero, LLC
|
Indiana
|
|||
Miller
Pipeline Corporation
|
Indiana
|
Name
of Entity
|
State
of
Incorporation/
Jurisdiction
|
Doing
Business As
|
||
ProLiance
Holdings, LLC
|
Indiana
|
|||
Reliant
Services, LLC
|
Indiana
|
|||
Haddington
Energy Partners, LP
|
Delaware
|
|||
Haddington
Energy Partners II, LP
|
Delaware
|
|||
Pace
Carbon Synfuels, LP
|
Delaware
|
1.
|
I
have reviewed this Annual Report on Form 10-K of Vectren
Corporation;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
(c)
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
(d)
|
Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
|
5.
|
The
registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
/s/
Niel C. Ellerbrook
|
Niel
C. Ellerbrook
|
Chairman
and Chief Executive
Officer
|
1.
|
I
have reviewed this Annual Report on Form 10-K of Vectren
Corporation;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
(c)
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
(d)
|
Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
|
5.
|
The
registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
/s/
Jerome A. Benkert, Jr.
|
Jerome
A. Benkert, Jr.
|
Executive
Vice President and Chief Financial
Officer
|
ProLiance
Holdings, LLC and Subsidiaries
Consolidated
Financial Statements for the
Years
Ended September 30, 2009, 2008 and 2007
and
Independent Auditors’ Report
|
INDEPENDENT
AUDITORS’ REPORT
|
1
|
Consolidated
Statements of Financial Position as of September 30, 2009 and
2008
Consolidated
Statements of Operations for the Years Ended
|
2
3
|
|
September 30,
2009, 2008 and 2007
|
Consolidated
Statements of Changes in Equity for the Years Ended
|
4
|
|
September
30, 2009, 2008 and 2007
|
Consolidated
Statements of Cash Flows for the Years Ended
|
5
|
|
September 30,
2009, 2008 and 2007
|
|
|
Notes
to Consolidated Financial Statements
|
6–17
|
CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY
|
||||||||||||
FOR
THE YEARS ENDED SEPTEMBER 30, 2009, 2008 AND 2007
|
||||||||||||
(In
thousands)
|
||||||||||||
Vectren
Energy
|
||||||||||||
Marketing
&
|
Citizens
|
|||||||||||
Services,
Inc.
|
Resources
|
Total
|
||||||||||
BALANCE
— October 1, 2006
|
$ | 119,917 | $ | 72,243 | $ | 192,160 | ||||||
Comprehensive
income:
|
||||||||||||
Net
income for the year ended September 30, 2007
|
50,239 | 32,120 | 82,359 | |||||||||
Other
comprehensive income (gain on cash flow
|
||||||||||||
hedges
— net)
|
15,758 | 10,074 | 25,832 | |||||||||
|
||||||||||||
Total
comprehensive income
|
65,997 | 42,194 | 108,191 | |||||||||
|
||||||||||||
Distributions
|
(21,910 | ) | (14,007 | ) | (35,917 | ) | ||||||
BALANCE
— September 30, 2007
|
164,004 | 100,430 | 264,434 | |||||||||
Comprehensive
income:
|
||||||||||||
Net
income for the year ended September 30, 2008
|
36,842 | 23,554 | 60,396 | |||||||||
Other
comprehensive loss (loss on cash flow
|
||||||||||||
hedges
— net)
|
(15,417 | ) | (9,857 | ) | (25,274 | ) | ||||||
|
||||||||||||
Total
comprehensive income
|
21,425 | 13,697 | 35,122 | |||||||||
|
||||||||||||
Distributions
|
(9,058 | ) | (5,791 | ) | (14,849 | ) | ||||||
BALANCE
— September 30, 2008
|
176,371 | 108,336 | 284,707 | |||||||||
Comprehensive
loss:
|
||||||||||||
Net
loss for the year ended September 30, 2009
|
(346 | ) | (221 | ) | (567 | ) | ||||||
Other
comprehensive loss (loss on cash flow
|
||||||||||||
hedges
— net)
|
(10,026 | ) | (6,410 | ) | (16,436 | ) | ||||||
Total
comprehensive loss
|
(10,372 | ) | (6,631 | ) | (17,003 | ) | ||||||
Distributions
|
(17,013 | ) | (10,877 | ) | (27,890 | ) | ||||||
BALANCE
— September 30, 2009
|
$ | 148,986 | $ | 90,828 | $ | 239,814 | ||||||
See
notes to consolidated financial statements.
|
1.
|
ORGANIZATION
AND NATURE OF BUSINESS
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
2009
|
2008
|
2007
|
||||||||||
Beginning
AOCI, consisting of net unrealized losses on derivatives
|
||||||||||||
qualifying
as cash flow hedges at the beginning of the period
|
$ | (3,541 | ) | $ | 21,733 | $ | (4,099 | ) | ||||
Unrealized
hedging gains (losses) arising during the period on
|
||||||||||||
derivatives
qualifying as cash flow hedges
|
(60,511 | ) | (110,752 | ) | 15,950 | |||||||
Reclassification
adjustment transferred to net income
|
44,555 | 85,898 | 9,882 | |||||||||
Change
in equity share of unconsolidated affiliate’s AOCI
|
(480 | ) | (420 | ) | ||||||||
Ending
AOCI, consisting of net unrealized losses on derivatives
|
||||||||||||
qualifying
as cash flow hedges at the end of the period
|
$ | (19,977 | ) | $ | (3,541 | ) | $ | 21,733 |
2009
|
2008
|
|||||||
Leasehold
improvements
|
$ | 2,307 | $ | 2,300 | ||||
Storage
and pipeline equipment
|
23,138 | 23,022 | ||||||
Office
furniture and equipment
|
974 | 971 | ||||||
Computer
applications and equipment
|
7,241 | 7,117 | ||||||
Total
property and equipment
|
33,660 | 33,410 | ||||||
Less
— accumulated depreciation
|
(16,181 | ) | (14,266 | ) | ||||
Property
and equipment — net
|
$ | 17,479 | $ | 19,144 |
3.
|
IMPACT
OF RECENTLY ISSUED ACCOUNTING
GUIDANCE
|
4.
|
CREDIT
FACILITIES
|
5.
|
AFFILIATED
NOTES RECEIVABLE
|
6.
|
DERIVATIVE
FAIR VALUES AND INCOME STATEMENT
IMPACTS
|
Fair
Value of Derivative Instruments (in thousands)
|
|||||||||
September
30, 2009
|
|||||||||
Derivative
Designation
|
Derivative
|
Derivative
|
|||||||
Derivative
|
under
ASC 815
|
Assets
|
Liabilities
|
||||||
Fair
Value
|
Fair
Value (5)
|
||||||||
Commodity
contracts (1) (2)
|
Hedge
instrument
|
$ | 34,346 | $ | 29,035 | ||||
Commodity
contracts (1) (3)
|
Non-hedge
|
||||||||
instrument
(4)
|
608 | 444 | |||||||
$ | 34,954 | $ | 29,479 |
1)
|
Commodity
contracts represent exchange-traded futures and swaps. These contracts are
subject to master netting arrangements and qualify for net presentation on
the Consolidated Statements of Financial Position; however, Holdings has
elected a gross presentation.
|
2)
|
The
fair value shown for commodity contracts is comprised of derivative
volumes totaling 82.2 billion cubic feet (Bcf). These volumes are
disclosed in absolute terms, not net. Swaps constitute 18.4 Bcf of the
total.
|
3)
|
The
fair value shown for commodity contracts is comprised of derivative
volumes totaling 0.2 billion cubic feet (Bcf). These volumes are
disclosed in absolute terms, not net.
|
4)
|
These
contracts represent speculative positions.
|
5)
|
The
net derivative liability is $30.6 million as shown on the
Consolidated Statements of Financial position, and is comprised of the
gross derivative liabilities related to commodity contracts shown above
and margin liability (collateral owed to the exchange) of
$1.1 million.
|
7.
|
FAIR
VALUE OF OTHER FINANCIAL
INSTRUMENTS
|
8.
|
FAIR
VALUE MEASUREMENTS
|
Level
1
|
Level
2
|
Level
3
|
Netting
|
Total
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Assets
|
||||||||||||||||||||
Derivative
assets
|
$ | 34,954 | $ | $ | $ | $ | 34,954 | |||||||||||||
Total
assets
|
$ | 34,954 | $ | $ | $ | $ | 34,954 | |||||||||||||
Liabilities
|
||||||||||||||||||||
Derivative
liabilities
|
$ | 29,479 | $ | $ | $ | 1,110 | $ | 30,589 | ||||||||||||
Total
liabilities
|
$ | 29,479 | $ | $ | $ | 1,110 | $ | 30,589 |
9.
|
10.
|
GAS
SALES AND PORTFOLIO ADMINISTRATION
AGREEMENTS
|
11.
|
RETIREMENT
PLAN
|
12.
|
CHARGE
RELATED TO INVESTMENT IN UNCONSOLIDATED
AFFILIATE
|
2009
|
2008
|
2007
|
||||||||||
Current
assets
|
$ | 10,562 | $ | 46,623 | $ | 5,927 | ||||||
Noncurrent
assets
|
275,992 | 383,761 | 340,178 | |||||||||
Current
liabilities
|
23,146 | 10,971 | 3,855 | |||||||||
Noncurrent
liabilities
|
329,003 | 356,857 | 292,692 | |||||||||
(Deficit)
Equity
|
(65,595 | ) | 62,556 | 49,558 |
2009
|
2008
|
2007
|
||||||||||
Revenues
|
$ | 3,384 | $ | 41 | ||||||||
Operating
loss
|
(133,007 | ) | (5,031 | ) | $ | (983 | ) | |||||
Net
(loss) gain
|
(133,151 | ) | (4,775 | ) | 713 |
13.
|
COMMITMENTS
AND CONTINGENCIES
|
14.
|
RELATED
PARTY TRANSACTIONS
|
Citizens
|
||||||||
Vectren
|
Gas
|
|||||||
Affiliates
|
Affiliates
|
|||||||
2009
|
||||||||
Revenues
|
$ | 597,247 | $ | 201,357 | ||||
Cost
of gas sold
|
74,260 | |||||||
Accounts
receivable — gas
|
25,317 | 7,707 | ||||||
Accounts
payable — gas
|
2,439 | |||||||
2008
|
||||||||
Revenues
|
$ | 944,632 | $ | 349,491 | ||||
Cost
of gas sold
|
104,390 | |||||||
Accounts
receivable — gas
|
54,612 | 27,975 | ||||||
Accounts
payable — gas
|
6,206 | |||||||
2007
|
||||||||
Revenues
|
$ | 780,876 | $ | 284,786 | ||||
Cost
of gas sold
|
2,602 | |||||||
Accounts
receivable — gas
|
36,958 | 20,245 | ||||||
Accounts
payable — gas
|
3,162 | 255 | ||||||
Interest
income
|
121 |