Vectren 2008 Annual Report Download - page 87

85
Due to moving the measurement date from September 30 to December 31, in accordance with SFAS 158, the 2008
roll forwards of prior service cost, actuarial gains and losses, and transition obligations include 15 months of
activity.
Following is a reconciliation of the amounts in Accumulated other comprehensive income (AOCI) and Regulatory
assets related to retirement plan obligations at December 31, 2008 and 2007:
(In millions) 2008 2007
Pensions Other Benefits Pensions Other Benefits
Prior service cost 9.5$ (3.7)$ 11.2$ (4.7)$
Unamortized actuarial gain/(loss) 90.9 3.5 11.9 (1.1)
Transition obligation - 6.2 - 7.6
100.4 6.0 23.1 1.8
Less: Regulatory asset deferral (95.4) (5.7) (21.9) (1.7)
AOCI before taxes 5.0$ 0.3$ 1.2$ 0.1$
Related to pension plans, $1.7 million of prior service cost and $2.2 million of actuarial gain/loss is expected to be
amortized to periodic cost in 2009. Related to other benefits, $1.1 million of the transition obligation and $0.4
million of actuarial gain/loss is expected to be amortized to periodic cost in 2009, and $0.8 million of prior service
cost is expected to reduce periodic cost in 2009.
Expected Cash Flows
In 2009, the Company expects to make contributions of approximately $25 to 30 million to its pension plan trusts.
In addition, the Company expects to make payments totaling approximately $0.7 million directly to SERP
participants and approximately $5 million directly to those participating in other postretirement plans.
Estimated retiree pension benefit payments, including the SERP, projected to be required during the years
following 2008 (in millions) are $14.5 in 2009, $14.8 in 2010 $16.0 in 2011, $16.5 in 2012, $17.3 in 2013 and
$101.3 in years 2014-2018. Expected benefit payments projected to be required for postretirement benefits during
the years following 2008 (in millions) are $6.9 in 2009, $7.3 in 2010, $7.6 in 2011, $7.9 in 2012, and $8.2 in 2012
and $46.0 in years 2014-2018.
Defined Contribution Plan
The Company also has defined contribution retirement savings plans that are qualified under sections 401(a) and
401(k) of the Internal Revenue Code and include an option to invest in Vectren common stock, among other
alternatives. During 2008, 2007 and 2006, the Company made contributions to these plans of $4.1 million, $4.0
million, and $3.9 million, respectively.
Deferred Compensation Plans
The Company has nonqualified deferred compensation plans, which permit eligible executives and non-employee
directors to defer portions of their compensation and vested restricted stock. A record keeping account is
established for each participant, and the participant chooses from a variety of measurement funds for the deemed
investment of their accounts. The measurement funds are similar to the funds in the Company's defined
contribution plan and include an investment in phantom stock units of the Company. The account balance
fluctuates with the investment returns on those funds. At December 31, 2008 and 2007, the liability associated with
these plans totaled $21.1 million and $29.0 million, respectively, and is included in Deferred credits and other
liabilities. The impact of these plans on Other operating expenses was income of $2.6 million in 2008, expense of
$2.2 million in 2007 and expense of $0.7 million in 2006.
The Company has established certain investments to fund its deferred compensation liabilities that are currently
funded primarily through corporate-owned life insurance policies. These investments, which are consolidated, are
available to pay plan benefits and are subject to the claims of the Company's creditors. The cash surrender value of
these policies included in Other corporate and utility investments on the Consolidated Balance Sheets were $19.8
million and $18.2 million at December 31, 2008 and 2007, respectively. Earnings from those investments, which
are recorded in Other-net, totaled a loss of $2.8 million in 2008, earnings of $0.6 million in 2007, and earnings of
$0.8 million in 2006.