Vectren 2010 Annual Report Download - page 91

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Multiemployer Benefit Plan
One of the company’s subsidiaries, Miller Pipeline LLC (Miller), participates in several industry-wide, multi-employer pension
plans for its union employees which provide for monthly benefits based on length of service. The expense for these plans
amounted to $10.0 million, $8.8 million, and $7.6 million for the years ended December 31, 2010, 2009, and 2008, respectively.
The relative position of each employer participating in these plans with respect to the actuarial present value of accumulated
plan benefits and net assets available for benefits is not readily available.
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 2010, 2009
and 2008, the Company made contributions to these plans of $6.6 million, $4.6 million, and $4.1 million, respectively.
10. Borrowing Arrangements
Short-Term Borrowings
At December 31, 2010, the Company has $600 million of short-term borrowing capacity, including $350 million for the Utility
Group and $250 million for the wholly owned Nonutility Group and corporate operations. As reduced by borrowings currently
outstanding, approximately $303 million was available for the Utility Group operations and approximately $179 million was
available for the wholly owned Nonutility Group and corporate operations.
Both Vectren Capital’s and Utility Holdings’ short-term credit facilities were renewed on September 30, 2010 and are available
through September 2013. During the renewal process, the Company lowered the level of capacity. The short-term borrowing
facilities were lowered from $515 million to $350 million for the Utility Group and from $255 million to $250 million for the
Nonutility Group. In addition, the Nonutility Group had a $120 million one year credit facility that expired in 2009 and was not
renewed. The Company has historically funded the short-term borrowing needs of Utility Holdings’ operations through the
commercial paper market and expects to use the Utility Holdings short-term borrowing facility in instances where the
commercial paper market is not efficient.
Following is certain information regarding these short-term borrowing arrangements.
(In millions) 2010 2009 2008 2010 2009 2008
Year End
Balance Outstanding 47.0$ 16.4$ 191.9$ 71.3$ 197.1$ 327.5$
Weighted Average Interest Rate 0.41% 0.25% 2.68% 2.01% 0.60% 1.54%
Annual Average
Balance Outstanding 14.0$ 29.2$ 178.3$ 143.2$ 151.8$ 208.8$
Weighted Average Interest Rate 0.40% 1.28% 3.71% 0.93% 0.78% 3.19%
Maximum Month End Balance Outstanding 47.0$ 151.1$ 338.0$ 174.6$ 256.5$ 327.5$
Nonutility Group BorrowingsUtility Group Borrowings
In 2008, the Company’s access to longer term commercial paper was significantly reduced as a result of the turmoil and
volatility in the financial markets. As a result, the Company met short-term financing needs through a combination of A-2/P-2
commercial paper issuances and draws on Utility Holdings’ back-up credit facility. At December 31, 2008, borrowings
outstanding were comprised of $100.4 million of bank loans at a weighted average interest rate of 1.56% and $91.5 million of
commercial paper at a weighted average interest rate of 3.87%. The average annual balance outstanding in 2008 was
comprised of $28.1 million of bank loans at a weighted average interest rate of 3.42% and $150.2 million of commercial paper at
a weighted average interest rate of 3.76%. Throughout 2010 and most of 2009, the Company has placed commercial paper
without any significant issues and only had to borrow from its backup credit facility in 2009 in early 2009 on a limited basis.