Vectren 2012 Annual Report Download - page 112

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20. Fair Value Measurements
The carrying values and estimated fair values using primarily Level 2 assumptions of the Company's other financial instruments
follow:
At December 31,
2012 2011
(In millions) Carrying
Amount Est. Fair Value Carrying Amount Est. Fair Value
Long-term debt $ 1,659.8 $ 1,873.3 $ 1,622.3 $ 1,804.4
Short-term borrowings & notes payable 278.8 278.8 227.1 227.1
Cash & cash equivalents 19.5 19.5 8.6 8.6
For the balance sheets presented, the Company had no material assets or liabilities marked to fair value.
Certain methods and assumptions must be used to estimate the fair value of financial instruments. The fair value of the
Company's long-term debt was estimated based on the quoted market prices for the same or similar issues or on the current
rates offered to the Company for instruments with similar characteristics. Because of the maturity dates and variable interest
rates of short-term borrowings and cash & cash equivalents, those carrying amounts approximate fair value. Because of the
inherent difficulty of estimating interest rate and other market risks, the methods used to estimate fair value may not always be
indicative of actual realizable value, and different methodologies could produce different fair value estimates at the reporting
date.
Under current regulatory treatment, call premiums on reacquisition of long-term debt are generally recovered in customer rates
over the life of the refunding issue or over a 15-year period. Accordingly, any reacquisition would not be expected to have a
material effect on the Company's results of operations.
Because of the customized nature of certain other investments and lack of a readily available market, it is not practical to
estimate the fair value of these financial instruments at specific dates without considerable effort and cost. At December 31,
2012 and 2011, the fair value for these financial instruments was not estimated. The carrying value of these investments was
approximately $2.1 million at both December 31, 2012 and 2011.
21. Segment Reporting
The Company segregates its operations into three groups: 1) Utility Group, 2) Nonutility Group, and 3) Corporate and Other.
The Utility Group is comprised of Vectren Utility Holdings, Inc.’s operations, which consist of the Company’s regulated
operations and other operations that provide information technology and other support services to those regulated
operations. The Company segregates its regulated operations between a Gas Utility Services operating segment and an
Electric Utility Services operating segment. The Gas Utility Services segment provides natural gas distribution and
transportation services to nearly two-thirds of Indiana and to west central Ohio. The Electric Utility Services segment provides
electric distribution services primarily to southwestern Indiana, and includes the Company’s power generating and wholesale
power operations. Regulated operations supply natural gas and/or electricity to over one million customers. In total, the Utility
Group is comprised of three operating segments: Gas Utility Services, Electric Utility Services, and Other operations.
The Nonutility Group is comprised of five operating segments: Infrastructure Services, Energy Services, Coal Mining, Energy
Marketing, and Other Businesses.
Corporate and Other includes unallocated corporate expenses such as advertising and charitable contributions, among other
activities, that benefit the Company’s other operating segments. Net income is the measure of profitability used by management
for all operations. The acquisition of Minnesota Limited was completed on March 31, 2011 (See Note 5) and is included in the
Infrastructure Services nonutility operating segment. The sale of Vectren Source was completed on December 31, 2011 (See