Vectren 2010 Annual Report Download - page 15

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PART I
ITEM 1. BUSINESS
Description of the Business
Vectren Corporation (the Company or Vectren), an Indiana corporation, is an energy holding company headquartered in
Evansville, Indiana. The Company’s wholly owned subsidiary, Vectren Utility Holdings, Inc. (Utility Holdings), serves as the
intermediate holding company for three public utilities: Indiana Gas Company, Inc. (Indiana Gas or Vectren North), Southern
Indiana Gas and Electric Company (SIGECO or Vectren South), and the Ohio operations. Utility Holdings also has other assets
that provide information technology and other services to the three utilities. Utility Holdings’ consolidated operations are
collectively referred to as the Utility Group. Both Vectren and Utility Holdings are holding companies as defined by the Energy
Policy Act of 2005 (Energy Act). Vectren was incorporated under the laws of Indiana on June 10, 1999.
Indiana Gas provides energy delivery services to over 570,000 natural gas customers located in central and southern Indiana.
SIGECO provides energy delivery services to approximately 142,000 electric customers and approximately 111,000 gas
customers located near Evansville in southwestern Indiana. SIGECO also owns and operates electric generation assets to
serve its electric customers and optimizes those assets in the wholesale power market. Indiana Gas and SIGECO generally do
business as Vectren Energy Delivery of Indiana. The Ohio operations provide energy delivery services to approximately
314,000 natural gas customers located near Dayton in west central Ohio. The Ohio operations are owned as a tenancy in
common by Vectren Energy Delivery of Ohio, Inc. (VEDO), a wholly owned subsidiary of Utility Holdings (53 percent ownership),
and Indiana Gas (47 percent ownership). The Ohio operations generally do business as Vectren Energy Delivery of Ohio.
The Company, through Vectren Enterprises, Inc. (Enterprises), is involved in nonutility activities in four primary business areas:
Infrastructure Services, Energy Services, Coal Mining, and Energy Marketing. Infrastructure Services provides underground
construction and repair services. Energy Services provides performance contracting and renewable energy services. Coal
Mining mines and sells coal. Energy Marketing markets and supplies natural gas and provides energy management services.
Enterprises also has other legacy businesses that have invested in energy-related opportunities and services, real estate, and
leveraged leases, among other investments. All of the above are collectively referred to as the Nonutility Group. Enterprises
supports the Company’s regulated utilities pursuant to service contracts by providing natural gas supply services, coal, and
infrastructure services.
Narrative Description of the Business
The Company segregates its operations into three groups: the Utility Group, the Nonutility Group, and Corporate and Other. At
December 31, 2010, the Company had $4.8 billion in total assets, with $3.9 billion (82 percent) attributed to the Utility Group,
$0.9 billion (18 percent) attributed to the Nonutility Group. Net income for the year ended December 31, 2010, was $133.7
million, or $1.65 per share of common stock, with net income of $123.9 million attributed to the Utility Group and $9.8 million
attributed to the Nonutility Group. Net income for the year ended December 31, 2009, was $133.1 million, or $1.65 per share of
common stock. For further information regarding the activities and assets of operating segments within these Groups, refer to
Note 19 in the Company’s Consolidated Financial Statements included under “Item 8 Financial Statements and Supplementary
Data.” Following is a more detailed description of the Utility Group and Nonutility Group.