Vectren 2013 Annual Report Download - page 60

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58
the Company may expand its businesses through acquisitions and/or joint venture investment. The timing and amount of such
investments depends on a variety of factors, including the availability of acquisition targets and available liquidity. The Company
may also consider disposing of certain assets, investments, or businesses to enhance or accelerate internally generated cash
flow.
Long-term debt transactions completed in 2013, 2012, and 2011 include issuances by Vectren Capital totaling $200 million,
issuances by Vectren Utility Holdings totaling $525 million, and issuances by SIGECO totaling $111 million. These transactions
are more fully described below. (See Financing Cash Flow.)
Consolidated Short-Term Borrowing Arrangements
At December 31, 2013, 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 $321 million was available for the Utility Group operations and approximately $210 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 in November 2011 and are available through September 2016. The maximum limit of both
facilities remained unchanged. These facilities are used to supplement working capital needs and also to fund capital
investments and debt redemptions until financed on a long-term basis.
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.
Utility Group Borrowings Nonutility Group Borrowings
(In millions) 2013 2012 2011 2013 2012 2011
As of Year End
Balance Outstanding $ 28.6 $ 116.7 $ 242.8 $ 40.0 $ 162.1 $ 84.3
Weighted Average Interest Rate 0.29% 0.40% 0.57% 1.27% 1.35% 1.45%
Annual Average
Balance Outstanding $ 119.6 $ 77.6 $ 39.6 $ 119.3 $ 151.5 $ 124.9
Weighted Average Interest Rate 0.34% 0.47% 0.48% 1.35% 1.44% 1.92%
Maximum Month End Balance
Outstanding $ 176.1 $ 214.2 $ 242.8 $ 173.8 $ 216.1 $ 180.1
Throughout 2013, 2012, and 2011, Utility Holdings has placed commercial paper without any significant issues and did not
borrow from its backup credit facility in any of these periods.
New Share Issues
The Company may periodically issue new common shares to satisfy the dividend reinvestment plan, stock option plan and other
employee benefit plan requirements. New issuances added additional liquidity of $6.9 million in 2013, $7.2 million in 2012, and
$7.9 million in 2011.
Potential Uses of Liquidity
Pension & Postretirement Funding Obligations
As of December 31, 2013, assets related to the Company’s qualified pension plans were approximately 101 percent of the
projected benefit obligation on a GAAP basis and 112 percent of the target liability for ERISA purposes. The Company currently
anticipates making no contributions to qualified pension plans in 2014, due to the plans being at or above 100 percent funded
levels.