Vectren 2012 Annual Report Download - page 15

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13
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 Vectren Energy Delivery of Ohio, Inc. (VEDO). 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 approximately 566,000 natural gas customers located in central and southern
Indiana. SIGECO provides energy delivery services to approximately 142,000 electric customers and approximately 110,000
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. VEDO provides energy delivery services to over 310,000 natural gas
customers located near Dayton in west central 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 pipeline construction and repair services. Energy Services provides performance contracting and renewable
energy services. Coal Mining owns coal 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 a leveraged lease, among other investments. All of the above are collectively referred to as the
Nonutility Group. Pursuant to service contracts, the Nonutility Group provides the Company's regulated utilities 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, 2012, the Company had $5.1 billion in total assets, with $4.0 billion (80 percent) attributed to the Utility Group,
and $1.0 billion (20 percent) attributed to the Nonutility Group. Net income for the year ended December 31, 2012, was $159.0
million, or $1.94 per share of common stock, with net income of $138.0 million attributed to the Utility Group, $21.7 million
attributed to the Nonutility Group, and a loss of $0.7 million attributed to Corporate and Other. Net income for the year ended
December 31, 2011, was $141.6 million, or $1.73 per share of common stock. For further information regarding the activities
and assets of operating segments within these Groups, refer to Note 21 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.