Vectren 2012 Annual Report Download - page 23

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21
Utility Holdings
In December 2012, the Company reached a three year agreement with Local 175 of the Utility Workers Union of America. The
labor agreement was retroactively effective to November 1, 2012 and ends October 31, 2015. This labor agreement relates to
employees of VEDO.
In September 2012, the Company reached a three year agreement with Local 135 of the Teamsters, Chauffeurs,
Warehousemen, and Helpers Union, ending September 23, 2015. This labor agreement relates to employees of SIGECO.
In December 2011, the Company reached a three year labor agreement, ending December 1, 2014, with Local 1393 of the
International Brotherhood of Electrical Workers and United Steelworkers of America Locals 12213 and 7441. This labor
agreement relates to employees of Indiana Gas.
In June 2010, the Company reached a three year labor agreement with Local 702 of the International Brotherhood of Electrical
Workers, ending June 30, 2013. This labor agreement relates to employees of SIGECO.
Infrastructure Services
The Company, through its Infrastructure Services subsidiaries, negotiates various trade agreements through contractor
associations. The two primary associations are the Distribution Contractors Association (DCA) and the Pipeline Contractors
Association (PLCA). These trade agreements are with a variety of construction unions including Laborer’s International Union of
North America, International Union of Operating Engineers, United Association of Journeymen and Apprentices of the Plumbing
and Pipe Fitting Industry, and Teamsters. The trade agreements through the DCA have varying expiration dates in 2015 and
2016. The trade agreements through the PLCA expire at various times in 2014. In addition, these subsidiaries have various
project agreements and small local agreements. These agreements expire upon completion of a specific project or on various
dates throughout the year.
ITEM 1A. RISK FACTORS
Investors should consider carefully the following factors that could cause the Company’s operating results and financial
condition to be materially adversely affected. New risks may emerge at any time, and the Company cannot predict those risks
or estimate the extent to which they may affect the Company’s businesses or financial performance.
Corporate Risks
Vectren is a holding company, and its assets consist primarily of investments in its subsidiaries.
Dividends on Vectren’s common stock depend on the earnings, financial condition, capital requirements and cash flow of its
subsidiaries, principally Utility Holdings and Enterprises, and the distribution or other payment of earnings from those entities to
Vectren. Should the earnings, financial condition, capital requirements, or cash flow of, or legal requirements applicable to them
restrict their ability to pay dividends or make other payments to the Company, its ability to pay dividends on its common stock
could be limited and its stock price could be adversely affected. Vectren’s results of operations, future growth, and earnings and
dividend goals also will depend on the performance of its subsidiaries. Additionally, certain of the Company’s lending
arrangements contain restrictive covenants, including the maintenance of a total debt to total capitalization ratio.
Deterioration in general economic conditions may have adverse impacts.
Economic conditions may have some negative impact on both gas and electric large customers and wholesale power
sales. This impact may include volatility and unpredictability in the demand for natural gas and electricity, tempered growth
strategies, significant conservation measures, and perhaps plant closures, production cutbacks, or bankruptcies. Economic
conditions may also cause reductions in residential and commercial customer counts and lower revenues. It is also possible
that an uncertain economy could affect costs including pension costs, interest costs, and uncollectible accounts
expense. Economic declines may be accompanied by a decrease in demand for products and services offered by nonutility
operations and therefore lower revenues for those products and services. The economic conditions may have some negative