UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q
(Mark One)

|X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the quarterly period ended March 31, 2003

                                       OR

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________

Commission file number:   1-15467

                              VECTREN UTILITY HOLDINGS, INC.
- -------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                INDIANA                                   35-2104850
- ----------------------------------------------        -------------------
 (State or other jurisdiction of incorporation          (IRS Employer
      or organization)                                Identification No.)



                 20 N.W. 4th Street, Evansville, Indiana, 47708
             -------------------------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                  812-491-4000
             -------------------------------------------------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No __

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes __ No |X|

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

 Common Stock- Without Par Value             10                May 1, 2003
 -------------------------------       ----------------        -----------
            Class                      Number of Shares            Date





                                Table of Contents
Item                                                                   Page
Number                                                                 Number
                          PART I. FINANCIAL INFORMATION
  1    Financial Statements (Unaudited)
       Vectren Utility Holdings, Inc. and Subsidiary Companies
          Consolidated Condensed Balance Sheets                         1-2
          Consolidated Condensed Statements of Income                    3
          Consolidated Condensed Statements of Cash Flows                4
       Notes to Unaudited Consolidated Condensed Financial
         Statements                                                     5-15
  2    Management's Discussion and Analysis of Results
         of Operations and Financial Condition                         16-25
  3    Quantitative and Qualitative Disclosures About
         Market Risk                                                    25
  4    Controls and Procedures                                         25-26

                           PART II. OTHER INFORMATION
  1    Legal Proceedings                                                26
  6    Exhibits and Reports on Form 8-K                                 26
       Signatures                                                       27
       Certifications                                                  28-30

                              Access to Information
Vectren Corporation makes available all SEC filings and recent annual reports
free of charge, including those of its wholly owned subsidiaries, through its
website at www.vectren.com, or by request, directed to Investor Relations at the
mailing address, phone number, or email address that follows:
Mailing Address:                   Phone Number:   Investor Relations Contact:
P.O. Box 209                       (812) 491-4000  Steven M. Schein
Evansville, Indiana  47702-0209                    Vice President, Investor
                                                     Relations
                                                   sschein@vectren.com


                                   Definitions
AFUDC:  allowance for funds used      MMBTU:  millions of British thermal units
   during construction
APB:  Accounting Principles Board     MW:  megawatts

EITF:  Emerging Issues Task Force     MWh / GWh:  megawatt hours / millions of
                                         megawatt hours (gigawatt hours)
FASB:  Financial Accounting           NOx:  nitrogen oxide
   Standards Board
FERC:  Federal Energy Regulatory      OUCC:  Indiana Office of the Utility
    Commission                           Consumer Counselor
IDEM:  Indiana Department of          PUCO:  Public Utilities Commission of Ohio
   Environmental Management
IURC:  Indiana Utility Regulatory     SFAS:  Statement of Financial Accounting
   Commission                            Standards
MCF / BCF:  millions / billions       USEPA:  United States Environmental
   of cubic feet                         Protection Agency
MDth / MMDth: thousands /millions     Throughput:  combined gas sales and gas
   of dekatherms                         transportation volumes






                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

             VECTREN UTILITY HOLDINGS, INC. AND SUBSIDIARY COMPANIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                            (Unaudited - In millions)


                                                     March 31,     December 31,
                                                       2003            2002
- -------------------------------------------------------------------------------
 ASSETS                                                            As Restated,
                                                                    See Note 3
Current Assets
  Cash & cash equivalents                            $    20.9      $    10.5
  Accounts receivable-less reserves of $4.1 &
      $5.5, respectively                                 183.8          131.9
  Receivables due from other Vectren companies            23.4           56.3
  Accrued unbilled revenues                               80.2          112.7
  Inventories                                             38.2           56.0
  Recoverable fuel & natural gas costs                    11.9           22.1
  Prepayments & other current assets                      19.6           86.5
- ------------------------------------------------------------------------------
      Total current assets                               378.0          476.0
- ------------------------------------------------------------------------------
Utility Plant
  Original cost                                        3,085.5        3,037.2
  Less:  accumulated depreciation
    & amortization                                     1,412.2        1,389.0
- ------------------------------------------------------------------------------
      Net utility plant                                1,673.3        1,648.2
- ------------------------------------------------------------------------------
Investments in unconsolidated affiliates                   1.8            2.4
Other investments                                         20.1           21.9
Non-utility property-net                                 135.2          139.2
Goodwill-net                                             202.2          202.2
Regulatory assets                                         78.6           75.2
Other assets                                               4.3            5.3
- ------------------------------------------------------------------------------
TOTAL ASSETS                                         $ 2,493.5      $ 2,570.4
==============================================================================


The accompanying notes are an integral part of these consolidated condensed
financial statements.






             VECTREN UTILITY HOLDINGS, INC. AND SUBSIDIARY COMPANIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                            (Unaudited - In millions)


                                                            March 31,    December 31,
                                                              2003          2002
- ------------------------------------------------------------------------------------

      LIABILITIES & SHAREHOLDER'S EQUITY                                 As Restated,
                                                                         See Note 3
                                                                    
Current Liabilities
   Accounts payable                                        $    30.6      $    74.8
   Accounts payable to affiliated companies                     65.4           85.6
   Accounts payable due to other Vectren companies              12.7           69.8
   Accrued liabilities                                         139.6           83.2
   Short-term borrowings                                       315.8          239.1
   Short-term borrowings due to other Vectren companies            -           86.9
   Current maturities of long-term debt                          1.0           39.8
   Long-term debt subject to tender                                -           26.6
- -------------------------------------------------------------------------------------
       Total current liabilities                               565.1          705.8
- -------------------------------------------------------------------------------------
Long-term Debt-Net of Current Maturities &
     Debt Subject to Tender                                    867.8          841.2

Deferred Income Taxes & Other Liabilities
   Deferred income taxes                                       180.7          172.3
   Deferred credits & other liabilities                         81.8           82.2
- -------------------------------------------------------------------------------------
       Total deferred credits & other liabilities              262.5          254.5
- -------------------------------------------------------------------------------------
Commitments & Contingencies (Notes 7, 8)

Cumulative, Redeemable Preferred Stock of
  a Subsidiary                                                   0.2            0.3

Common Shareholder's Equity
   Common stock (no par value)                                 385.7          385.7
   Retained earnings                                           411.7          382.4
   Accumulated other comprehensive income                        0.5            0.5
- -------------------------------------------------------------------------------------
           Total common shareholder's equity                   797.9          768.6
- -------------------------------------------------------------------------------------
TOTAL LIABILITIES & SHAREHOLDER'S EQUITY                   $ 2,493.5      $ 2,570.4
=====================================================================================




The accompanying notes are an integral part of these consolidated condensed
financial statements.





             VECTREN UTILITY HOLDINGS, INC. AND SUBSIDIARY COMPANIES
                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                            (Unaudited - In millions)

                                                Three Months Ended March 31
- -----------------------------------------------------------------------------
                                                   2003             2002
- -----------------------------------------------------------------------------
                                                                 As Restated,
                                                                 See Note 3
OPERATING REVENUES
  Gas utility                                    $ 509.5           $ 358.1
  Electric utility                                 119.4             126.8
  Other                                              0.2               0.1
- -----------------------------------------------------------------------------
      Total operating revenues                     629.1             485.0
- -----------------------------------------------------------------------------
OPERATING EXPENSES
  Cost of gas sold                                 365.1             230.5
  Fuel for electric generation                      20.8              17.8
  Purchased electric energy                         40.4              59.7
  Other operating                                   56.6              51.3
  Depreciation & amortization                       28.8              26.8
  Taxes other than income taxes                     21.7              18.1
- -----------------------------------------------------------------------------
      Total operating expenses                     533.4             404.2
- -----------------------------------------------------------------------------
OPERATING INCOME                                    95.7              80.8
OTHER INCOME (EXPENSE) - NET
  Equity in losses of unconsolidated
      affiliates                                    (0.5)             (0.1)
  Other - net                                       (1.5)              2.1
- -----------------------------------------------------------------------------
      Total other income (expense) - net            (2.0)              2.0
- -----------------------------------------------------------------------------
Interest expense                                    16.5              17.6
- -----------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES                          77.2              65.2
- -----------------------------------------------------------------------------
Income taxes                                        29.9              23.2
- -----------------------------------------------------------------------------
NET INCOME                                       $  47.3           $  42.0
=============================================================================



The accompanying notes are an integral part of these consolidated condensed
financial statements.





             VECTREN UTILITY HOLDINGS, INC. AND SUBSIDIARY COMPANIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                            (Unaudited - In millions)


                                                        Three Months Ended March 31,
- -------------------------------------------------------------------------------------
                                                               2003          2002
- -------------------------------------------------------------------------------------
                                                                         As Restated,
                                                                          See Note 3
                                                                     
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                  $ 47.3      $  42.0
   Adjustments to reconcile net income to cash from
           operating activities:
      Depreciation & amortization                                28.8         26.8
      Deferred income taxes & investment tax credits              5.1         (0.2)
      Equity in losses (earnings) of unconsolidated
        affiliates                                                0.5          0.1
      Net unrealized loss (gain) on derivative instruments       (0.9)         2.9
      Pension and postretirement expense                          1.5          1.2
      Other non-cash charges- net                                 5.7          0.5
      Changes in working capital accounts:
         Accounts receivable, including to Vectren
             companies & accrued unbilled revenue                 9.8        (36.0)
         Inventories                                             17.8         14.2
         Recoverable fuel & natural gas costs                    10.2         21.7
         Prepayments & other current assets                      68.2         63.2
         Accounts payable, including to Vectren
             companies & affiliated companies                  (121.5)       (43.9)
         Accrued liabilities                                     57.2         80.2
      Changes in other noncurrent assets                         (0.4)         0.2
      Changes in other noncurrent liabilities                    (1.4)         0.5
- -------------------------------------------------------------------------------------
           Net cash flows from operating activities             127.9        173.4
- -------------------------------------------------------------------------------------
CASH FLOWS REQUIRED FOR FINANCING ACTIVITIES

   Requirements for:
      Retirement of long-term debt, including
          premiums paid                                         (39.9)        (1.3)
      Dividends on common stock                                 (18.0)       (17.3)
      Redemption of preferred stock of subsidiary                (0.1)        (0.2)
   Net change in short-term borrowings, including
      to other Vectren companies                                (10.2)      (117.8)
- -------------------------------------------------------------------------------------
           Net cash flows required for financing
              activities                                        (68.2)      (136.6)
- -------------------------------------------------------------------------------------
CASH FLOWS REQUIRED FOR INVESTING ACTIVITIES
   Proceeds from:
      Unconsolidated affiliate distributions                      0.1            -
      Notes receivable, including notes from other
           Vectren companies & other collections                    -          7.8
   Requirements for:
      Capital expenditures, excluding AFUDC-equity              (49.4)       (38.7)
      Unconsolidated affiliate investments                          -         (0.4)
- -------------------------------------------------------------------------------------
           Net cash flows required for investing
              activities                                        (49.3)       (31.3)
- -------------------------------------------------------------------------------------
Net increase in cash & cash equivalents                          10.4          5.5
Cash & cash equivalents at beginning of period                   10.5          5.3
- -------------------------------------------------------------------------------------
Cash & cash equivalents at end of period                       $ 20.9      $  10.8
=====================================================================================



The accompanying notes are an integral part of these consolidated condensed
financial statements.






             VECTREN UTILITY HOLDINGS, INC. AND SUBSIDIARY COMPANIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.   Organization and Nature of Operations

Vectren Utility Holdings, Inc. (VUHI or the Company), an Indiana corporation,
was formed on March 31, 2000 to serve as the intermediate holding company for
Vectren Corporation's (Vectren) three operating public utilities, Indiana Gas
Company, Inc. (Indiana Gas), formerly a wholly owned subsidiary of Indiana
Energy, Inc. (Indiana Energy), Southern Indiana Gas and Electric Company
(SIGECO), formerly a wholly owned subsidiary of SIGCORP, Inc. (SIGCORP), and the
Ohio operations.

Indiana Gas provides natural gas distribution and transportation services to a
diversified customer base in 49 of Indiana's 92 counties. SIGECO provides
electric generation, transmission, and distribution services to 8 counties in
southwestern Indiana, including counties surrounding Evansville, and
participates in the wholesale power market. SIGECO also provides natural gas
distribution and transportation services to 10 counties in southwestern Indiana,
including counties surrounding Evansville. The Ohio operations, owned as a
tenancy in common by Vectren Energy Delivery of Ohio, Inc., a wholly owned
subsidiary, (53 % ownership) and Indiana Gas (47 % ownership), provide natural
gas distribution and transportation services to 17 counties in west central
Ohio, including counties surrounding Dayton.

Vectren is an energy and applied technology holding company headquartered in
Evansville, Indiana. The Company was organized on June 10, 1999 solely for the
purpose of effecting the merger of Indiana Energy and SIGCORP. On March 31,
2000, the merger of Indiana Energy with SIGCORP and into Vectren was consummated
with a tax-free exchange of shares and has been accounted for as a
pooling-of-interests in accordance with APB Opinion No. 16 "Business
Combinations" (APB 16).

Both Vectren and VUHI are exempt from registration pursuant to Section 3(a)(1)
and 3(c) of the Public Utility Holding Company Act of 1935.

2.   Basis of Presentation

The interim consolidated condensed financial statements included in this report
have been prepared by the Company, without audit, as provided in the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States
have been omitted as provided in such rules and regulations. The Company
believes that the information in this report reflects all adjustments necessary
to fairly state the results of the interim periods reported. These consolidated
condensed financial statements and related notes should be read in conjunction
with the Company's audited annual consolidated financial statements for the year
ended December 31, 2002, filed on Form 10-K. Because of the seasonal nature of
the Company's utility operations, the results shown on a quarterly basis are not
necessarily indicative of annual results.

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the statements
and the reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates.

3.   Restatement of Previously Reported Information

Subsequent to the issuance of the 2002 quarterly financial statements,
management determined that previously issued financial statements should be
restated. As a result, the Company has restated its financial statements for the
three months ended March 31, 2002 for various reconciliation errors and other
errors related primarily to the recording of estimates. These errors were not
significant either individually or in the aggregate and increased previously
reported earnings by approximately $0.4 million after tax.

In addition, on January 1, 2003, Vectren transferred certain information
technology systems and related assets and buildings from other entities within
its consolidated group to VUHI. These assets primarily support the operations of
VUHI's subsidiaries and VUHI's subsidiaries receive a charge for their use that
is included in their other operating expenses. The transfer required restatement
of VUHI's consolidated financial statements for all periods presented under
accounting rules governing combinations of entities under common control. The
reorganization increased previously reported earnings by $1.0 million after tax.
Total assets, liabilities, and equity transferred to VUHI on January 1, 2003
were $133.8 million, $93.5 million, and $40.3 million, respectively.

Following is a summary of the effects of the reorganization due to the transfer
of assets and restatement due to errors on previously reported results of
operations for the three months ended March 31, 2002.



                                                         Adjustments for
                                                   ---------------------------
OPERATING REVENUES                    As reported  Reorganization  Restatement  As Restated
                                      -----------  --------------  -----------  -----------
                                                                      
    Gas utility                        $ 357.1        $   -           $ 1.0       $ 358.1
    Electric utility                     126.8            -               -         126.8
    Energy services & other                  -          0.1               -           0.1
- -------------------------------------------------------------------------------------------
         Total operating revenues        483.9          0.1             1.0         485.0
- -------------------------------------------------------------------------------------------
OPERATING EXPENSES
    Cost of gas sold                     230.4            -             0.1         230.5
    Fuel for electric generation          17.8            -               -          17.8
    Purchased electric energy             59.8            -            (0.1)         59.7
    Other operating                       55.8         (5.5)            1.0          51.3
    Depreciation & amortization           23.6          3.2               -          26.8
    Taxes other than income taxes         17.9          0.1             0.1          18.1
- -------------------------------------------------------------------------------------------
         Total operating expenses        405.3         (2.2)            1.1         404.2
- -------------------------------------------------------------------------------------------
OPERATING INCOME                          78.6          2.3            (0.1)         80.8
OTHER INCOME (EXPENSE) - NET
    Equity in losses of unconsolidated
         affiliates                       (0.6)           -             0.5          (0.1)
    Other - net                            1.8            -             0.3           2.1
- -------------------------------------------------------------------------------------------
      Total other income (expense) - net   1.2            -             0.8           2.0
- -------------------------------------------------------------------------------------------
Interest expense                          16.9          0.7               -          17.6
- -------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES                62.9          1.6             0.7          65.2
- -------------------------------------------------------------------------------------------
Income taxes                              22.3          0.6             0.3          23.2
- -------------------------------------------------------------------------------------------
NET INCOME                             $  40.6        $ 1.0           $ 0.4       $  42.0
===========================================================================================




4.   Subsidiary Guarantor and Consolidating Information

The Company's three operating utility companies, SIGECO, Indiana Gas, and VEDO
are guarantors of VUHI's $475.0 million in short-term credit facilities and
VUHI's $350.0 million unsecured senior notes. As a result of the reorganization
described in Note 3, VUHI has operations other than those of the subsidiary
guarantors. Pursuant to Article 3-10 of Regulation S-X, disclosure of the
results of operations and balance sheets of the subsidiary guarantors separate
from the parent company's operations is required. Following are consolidating
financial statements including information on the combined operations of the
subsidiary guarantors separate from the other operations of the parent company.





Consolidating Balance Sheet as of March 31, 2003:




                 ASSETS                             Subsidiary    Parent
                                                    Guarantors    Company    Eliminations   Consolidated
                                                    ----------    -------    ------------   ------------
                                                                                  
Current Assets
   Cash & cash equivalents                          $    21.0    $    (0.1)  $        -       $    20.9
   Accounts receivable-less reserves                    183.2          0.6            -           183.8
   Receivables due from other Vectren companies           2.8         22.7         (2.1)           23.4
   Accrued unbilled revenues                             80.2            -            -            80.2
   Inventories                                           38.2            -            -            38.2
   Recoverable fuel & natural gas costs                  11.9            -            -            11.9
   Prepayments & other current assets                    19.9         (0.3)           -            19.6
- --------------------------------------------------------------------------------------------------------
       Total current assets                             357.2         22.9         (2.1)          378.0
- --------------------------------------------------------------------------------------------------------
Utility Plant
   Original cost                                      3,085.5            -            -         3,085.5
   Less:  accumulated depreciation & amortization     1,412.2            -            -         1,412.2
- --------------------------------------------------------------------------------------------------------
       Net utility plant                              1,673.3            -            -         1,673.3
- --------------------------------------------------------------------------------------------------------
Investments in consolidated subsidiaries                    -        832.7       (832.7)              -
Notes receivable from consolidated subsidiaries          26.8        499.6       (526.4)              -
Investments in unconsolidated affiliates                  0.1          1.7            -             1.8
Other investments                                        13.2          6.9            -            20.1
Non-utility property-net                                  5.4        129.8            -           135.2
Goodwill-net                                            202.2            -            -           202.2
Regulatory assets                                        73.8          4.8            -            78.6
Other assets                                              4.3            -            -             4.3
- --------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                        $ 2,356.3    $ 1,498.4   $ (1,361.2)      $ 2,493.5
========================================================================================================
       LIABILITIES & SHAREHOLDER'S EQUITY

Current Liabilities
   Accounts payable                                 $    29.1    $     1.5   $        -       $    30.6
   Accounts payable to affiliated companies              65.0          0.4            -            65.4
   Accounts payable due to other Vectren
     companies                                           11.3          3.6         (2.2)           12.7
   Accrued liabilities                                  136.9          4.9         (2.2)          139.6
   Short-term borrowings                                  3.2        312.6            -           315.8
   Short-term borrowings due from
       other Vectren companies                          153.4         26.7       (180.1)              -
   Current maturities of long-term debt                   1.0            -            -             1.0
- --------------------------------------------------------------------------------------------------------
       Total current liabilities                        399.9        349.7       (184.5)          565.1
- --------------------------------------------------------------------------------------------------------
Long-Term Debt
   Long-term debt-net of current maturities &
       debt subject to tender                           519.3        348.5            -           867.8
   Long-term debt due to VUHI                           344.0            -       (344.0)              -
- --------------------------------------------------------------------------------------------------------
       Total long-term debt-net                         863.3        348.5       (344.0)          867.8
- --------------------------------------------------------------------------------------------------------
Deferred Income Taxes & Other Liabilities
   Deferred income taxes                                180.6          0.1            -           180.7
   Deferred credits & other liabilities                  79.6          2.2            -            81.8
- --------------------------------------------------------------------------------------------------------
       Total deferred credits & other liabilities       260.2          2.3            -           262.5
- --------------------------------------------------------------------------------------------------------
Cumulative, Redeemable Preferred Stock of
     a Subsidiary                                         0.2            -            -             0.2
Common Shareholder's Equity
   Common stock (no par value)                          461.3        385.7       (461.3)          385.7
   Retained earnings                                    371.4        411.7       (371.4)          411.7
   Accumulated other comprehensive income                   -          0.5            -             0.5
- --------------------------------------------------------------------------------------------------------
       Total common shareholder's equity                832.7        797.9       (832.7)          797.9
- --------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES & SHAREHOLDER'S EQUITY            $ 2,356.3    $ 1,498.4   $ (1,361.2)      $ 2,493.5
========================================================================================================







Consolidating Balance Sheet as of December 31, 2002:



                 ASSETS                             Subsidiary    Parent
                                                    Guarantors    Company     Eliminations  Consolidated
                                                    ----------   ---------    ------------  ------------
                                                                                 
Current Assets
   Cash & cash equivalents                          $    10.2    $     0.3    $        -     $    10.5
   Accounts receivable-less reserves                    130.8          1.1             -         131.9
   Receivables due from other Vectren companies          39.3         19.7          (2.7)         56.3
   Accrued unbilled revenues                            112.7            -             -         112.7
   Inventories                                           56.0            -             -          56.0
   Recoverable fuel & natural gas costs                  22.1            -             -          22.1
   Prepayments & other current assets                    86.2          0.3             -          86.5
- --------------------------------------------------------------------------------------------------------
       Total current assets                             457.3         21.4          (2.7)        476.0
- --------------------------------------------------------------------------------------------------------
Utility Plant
  Original cost                                       3,037.2            -             -       3,037.2
  Less: accumulated depreciation & amortization       1,389.0            -             -       1,389.0
- --------------------------------------------------------------------------------------------------------
       Net utility plant                              1,648.2            -             -       1,648.2
- --------------------------------------------------------------------------------------------------------
Investments in consolidated subsidiaries                    -        802.4        (802.4)            -
Notes receivable from consolidated subsidiaries           8.5        493.9        (502.4)            -
Investments in unconsolidated affiliates                  0.1          2.3             -           2.4
Other investments                                        13.1          8.8             -          21.9
Non-utility property-net                                  5.4        133.8             -         139.2
Goodwill-net                                            202.2            -             -         202.2
Regulatory assets                                        70.3          4.9             -          75.2
Other assets                                              4.9          0.4             -           5.3
- --------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                        $ 2,410.0    $ 1,467.9    $ (1,307.5)    $ 2,570.4
========================================================================================================

        LIABILITIES & SHAREHOLDER'S EQUITY

Current Liabilities
   Accounts payable                                 $    71.3    $     3.5    $        -     $    74.8
   Accounts payable to affiliated companies              85.2          0.4             -          85.6
   Accounts payable due to other Vectren
     companies                                           61.3         11.2          (2.7)         69.8
   Accrued liabilities                                   83.8          1.7          (2.3)         83.2
   Short-term borrowings                                    -        239.1             -         239.1
   Short-term borrowings due from
       other Vectren companies                          147.6         95.4        (156.1)         86.9
   Current maturities of long-term debt                  39.8            -             -          39.8
   Long-term debt subject to tender                      26.6            -             -          26.6
- --------------------------------------------------------------------------------------------------------
       Total current liabilities                        515.6        351.3        (161.1)        705.8
- --------------------------------------------------------------------------------------------------------
Long-Term Debt
   Long-term debt-net of current maturities &
       debt subject to tender                           492.8        348.4             -         841.2
   Long-term debt due to VUHI                           344.0            -        (344.0)            -
- --------------------------------------------------------------------------------------------------------
       Total long-term debt-net                         836.8        348.4        (344.0)        841.2
- --------------------------------------------------------------------------------------------------------
Deferred Income Taxes & Other Liabilities
   Deferred income taxes                                174.6         (2.3)            -         172.3
   Deferred credits & other liabilities                  80.3          1.9             -          82.2
- --------------------------------------------------------------------------------------------------------
       Total deferred credits & other liabilities       254.9         (0.4)            -         254.5
- --------------------------------------------------------------------------------------------------------
Cumulative, Redeemable Preferred Stock of
  a Subsidiary                                            0.3            -             -           0.3
Common Shareholder's Equity
   Common stock (no par value)                          461.3        385.7        (461.3)        385.7
   Retained earnings                                    341.1        382.4        (341.1)        382.4
   Accumulated other comprehensive income                   -          0.5             -           0.5
- --------------------------------------------------------------------------------------------------------
       Total common shareholder's equity                802.4        768.6        (802.4)        768.6
- --------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES & SHAREHOLDER'S EQUITY            $ 2,410.0    $ 1,467.9    $ (1,307.5)    $ 2,570.4
========================================================================================================






Consolidating Statement of Income for the three months ended March 31, 2003:



                                            Subsidiary   Parent
                                            Guarantors   Company   Eliminations   Consolidated
- ----------------------------------------------------------------------------------------------
                                                                         
OPERATING REVENUES
   Gas utility                               $ 509.5      $    -     $     -         $ 509.5
   Electric utility                            119.4           -           -           119.4
   Other                                           -         6.6        (6.4)            0.2
- ----------------------------------------------------------------------------------------------
       Total operating revenues                628.9         6.6        (6.4)          629.1
- ----------------------------------------------------------------------------------------------
OPERATING EXPENSES
   Cost of gas sold                            365.1           -           -           365.1
   Fuel for electric generation                 20.8           -           -            20.8
   Purchased electric energy                    40.4           -           -            40.4
   Other operating                              62.8         0.2        (6.4)           56.6
   Depreciation & amortization                  25.2         3.6           -            28.8
   Taxes other than income taxes                21.4         0.3           -            21.7
- ----------------------------------------------------------------------------------------------
       Total operating expenses                535.7         4.1        (6.4)          533.4
- ----------------------------------------------------------------------------------------------
OPERATING INCOME                                93.2         2.5           -            95.7
OTHER INCOME (EXPENSE) - NET
   Equity in earnings of consolidated
     companies                                     -        48.5       (48.5)              -
   Equity in losses of unconsolidated
     affiliates                                    -        (0.5)          -            (0.5)
   Other - net                                   0.4         4.8        (6.7)           (1.5)
- ----------------------------------------------------------------------------------------------
       Total other income (expense) - net        0.4        52.8       (55.2)           (2.0)
- ----------------------------------------------------------------------------------------------
Interest expense                                15.5         7.7        (6.7)           16.5
- ----------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES                      78.1        47.6       (48.5)           77.2
- ----------------------------------------------------------------------------------------------
Income taxes                                    29.6         0.3           -            29.9
- ----------------------------------------------------------------------------------------------
NET INCOME                                  $   48.5      $ 47.3     $ (48.5)        $  47.3
==============================================================================================


Consolidating Statement of Income for the three months ended March 31, 2002:


                                            Subsidiary    Parent
                                            Guarantors    Company   Eliminations  Consolidated
- ----------------------------------------------------------------------------------------------
                                                                         
OPERATING REVENUES
   Gas utility                              $ 358.1       $    -     $     -         $ 358.1
   Electric utility                           126.8            -           -           126.8
   Other                                          -          5.6        (5.5)            0.1
- ----------------------------------------------------------------------------------------------
       Total operating revenues               484.9          5.6        (5.5)          485.0
- ----------------------------------------------------------------------------------------------
OPERATING EXPENSES
   Cost of gas sold                           230.5            -           -           230.5
   Fuel for electric generation                17.8            -           -            17.8
   Purchased electric energy                   59.7            -           -            59.7
   Other operating                             56.7          0.1        (5.5)           51.3
   Depreciation & amortization                 23.6          3.2           -            26.8
   Taxes other than income taxes               18.0          0.1           -            18.1
- ----------------------------------------------------------------------------------------------
       Total operating expenses               406.3          3.4        (5.5)          404.2
- ----------------------------------------------------------------------------------------------
OPERATING INCOME                               78.6          2.2           -            80.8
OTHER INCOME (EXPENSE) - NET
   Equity in earnings of consolidated
     companies                                    -         41.5       (41.5)              -
   Equity in losses of unconsolidated
     affiliates                                   -         (0.1)          -            (0.1)
   Other - net                                  1.6          6.8        (6.3)            2.1
- ----------------------------------------------------------------------------------------------
       Total other income (expense) - net       1.6         48.2       (47.8)            2.0
- ----------------------------------------------------------------------------------------------
Interest expense                               15.9          8.0        (6.3)           17.6
- ----------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES                     64.3         42.4       (41.5)           65.2
- ----------------------------------------------------------------------------------------------
Income taxes                                   22.8          0.4           -            23.2
- ----------------------------------------------------------------------------------------------
NET INCOME                                  $  41.5       $ 42.0     $ (41.5)        $  42.0
==============================================================================================





Consolidating Statement of Cash Flows for the three months ended March 31, 2003:




                                                   Subsidary   Parent
                                                   Guarantors  Company  Eliminations  Consolidated
- --------------------------------------------------------------------------------------------------
NET CASH FLOWS FROM OPERATING ACTIVITIES           $ 127.6      $ 0.3      $   -         $ 127.9
- --------------------------------------------------------------------------------------------------
                                                                               
CASH FLOWS REQUIRED FOR FINANCING ACTIVITIES
   Requirements for:
      Retirement of long-term debt,
        including premiums paid                      (39.9)         -          -           (39.9)
      Dividends on common stock                      (18.2)     (18.0)      18.2           (18.0)
      Redemption of preferred stock
        of subsidiary                                 (0.1)         -          -            (0.1)
   Net change in short-term borrowings,
        including to other Vectren companies           9.0        4.8      (24.0)          (10.2)
- --------------------------------------------------------------------------------------------------
       Net cash flows required for financing
          activities                                 (49.2)     (13.2)      (5.8)          (68.2)
- --------------------------------------------------------------------------------------------------
CASH FLOWS FROM (REQUIRED FOR) INVESTING ACTIVITIES
   Proceeds from:
      Consolidated subsidiary distributions              -       18.2      (18.2)              -
      Unconsolidated affiliate distributions             -        0.1          -             0.1
   Requirements for:
      Capital expenditures, excluding
        AFUDC-equity                                 (49.3)      (0.1)         -           (49.4)
   Net change in notes receivable to other
      Vectren companies                              (18.3)      (5.7)      24.0               -
- --------------------------------------------------------------------------------------------------
         Net cash flows from (required for)
         investing activities                        (67.6)      12.5        5.8           (49.3)
- --------------------------------------------------------------------------------------------------
Net increase (decrease) in cash & cash
   equivalents                                        10.8       (0.4)                      10.4
Cash & cash equivalents at beginning
   of period                                          10.2        0.3                       10.5
- --------------------------------------------------------------------------------------------------
Cash & cash equivalents at end of period           $  21.0     $ (0.1)     $   -         $  20.9
==================================================================================================


Consolidating Statement of Cash Flows for the three months ended March 31, 2002:



                                                  Subsidary    Parent
                                                  Guarantors   Company  Eliminations  Consolidated
- --------------------------------------------------------------------------------------------------

NET CASH FLOWS FROM OPERATING ACTIVITIES           $ 175.2     $ (1.8)     $   -         $ 173.4
- --------------------------------------------------------------------------------------------------
                                                                               
CASH FLOWS REQUIRED FOR FINANCING ACTIVITIES
  Requirements for:
     Retirement of long-term debt, including
       premiums paid                                  (1.3)         -          -            (1.3)
     Dividends on common stock                       (17.2)     (17.3)      17.2           (17.3)
     Redemption of preferred stock of subsidiary      (0.2)         -          -            (0.2)
  Net change in short-term borrowings, including
     to other Vectren companies                      (99.4)     (90.3)      71.9          (117.8)
- --------------------------------------------------------------------------------------------------
       Net cash flows required for financing
          activities                                (118.1)    (107.6)      89.1          (136.6)
- --------------------------------------------------------------------------------------------------
CASH FLOWS FROM (REQUIRED FOR) INVESTING ACTIVITIES
  Proceeds from consolidated subsidiary
    distributions                                        -       17.2      (17.2)              -
  Requirements for:
      Capital expenditures, excluding
           AFUDC-equity                              (24.6)     (14.1)         -           (38.7)
      Unconsolidated affiliate investments               -       (0.4)                      (0.4)
  Net change in notes receivable to other
    Vectren companies                                (27.5)     107.2      (71.9)            7.8
- --------------------------------------------------------------------------------------------------
         Net cash flows from (required for)
            investing activities                     (52.1)     109.9      (89.1)          (31.3)
- --------------------------------------------------------------------------------------------------
Net increase in cash & cash
    equivalents                                        5.0        0.5          -             5.5
Cash & cash equivalents at beginning
    of period                                          7.0       (1.7)         -             5.3
- --------------------------------------------------------------------------------------------------
Cash & cash equivalents at end of period           $  12.0     $ (1.2)     $   -         $  10.8
==================================================================================================





5.   Transactions with Other Vectren Companies

Support Services and Purchases
Vectren and certain subsidiaries of Vectren provided corporate and general and
administrative services to the Company including legal, finance, tax, risk
management, human resources, which includes charges for restricted stock
compensation and for pension and other postretirement benefits not directly
charged to subsidiaries. These costs have been allocated using various
allocators, primarily number of employees, number of customers and/or revenues.
Allocations are based on cost. VUHI received corporate allocations totaling
$17.7 million and $17.4 million for the three months ended March 31, 2003 and
2002, respectively.

Vectren Fuels, Inc., a wholly owned subsidiary of Vectren, owns and operates
coal mines from which SIGECO purchases fuel used for electric generation.
Amounts paid for such purchases for the three months ended March 31, 2003 and
2002, totaled $19.2 million and $13.2 million, respectively.

Stock-Based Incentive Plans
VUHI does not have stock-based compensation plans separate from Vectren. An
insignificant number of VUHI's employees participate in Vectren's stock-based
compensation plans.

6.   Transactions with ProLiance Energy, LLC

ProLiance Energy, LLC (ProLiance), a nonregulated energy marketing affiliate of
Vectren and Citizens Gas and Coke Utility (Citizens Gas), provides natural gas
and related services to Indiana Gas, the Ohio operations, Citizens Gas and
others. ProLiance also began providing service to SIGECO and Vectren Retail, LLC
(Vectren's retail gas marketer) in 2002. ProLiance's primary businesses include
gas marketing, gas portfolio optimization, and other portfolio and energy
management services.

Purchases from ProLiance for resale and for injections into storage for the
three months ended March 31, 2003 and 2002 totaled $261.4 million and $127.8
million, respectively. Amounts owed to ProLiance at March 31, 2003 and December
31, 2002 for those purchases were $53.5 million and $83.7 million, respectively,
and are included in accounts payable to affiliated companies. Amounts charged by
ProLiance for gas supply services are established by supply agreements with each
utility.

7.   Legal Proceedings

The Company is party to various legal proceedings arising in the normal course
of business. In the opinion of management, there are no legal proceedings
pending against the Company that are likely to have a material adverse effect on
its financial position or results of operations. See Note 8 regarding
environmental matters.

8.   Environmental Matters

Clean Air Act

NOx SIP Call Matter
The Clean Air Act (the Act) requires each state to adopt a State Implementation
Plan (SIP) to attain and maintain National Ambient Air Quality Standards (NAAQS)
for a number of pollutants, including ozone. If the USEPA finds a state's SIP
inadequate to achieve the NAAQS, the USEPA can call upon the state to revise its
SIP (a SIP Call).

In October 1998, the USEPA issued a final rule "Finding of Significant
Contribution and Rulemaking for Certain States in the Ozone Transport Assessment
Group Region for Purposes of Reducing Regional Transport of Ozone," (63 Fed.
Reg. 57355). This ruling found that the SIP's of certain states, including
Indiana, were substantially inadequate since they allowed for nitrogen oxide
(NOx) emissions in amounts that contributed to non-attainment with the ozone
NAAQS in downwind states. The USEPA required each state to revise its SIP to
provide for further NOx emission reductions. The NOx emissions budget, as
stipulated in the USEPA's final ruling, requires a 31% reduction in total NOx
emissions from Indiana.

In June 2001, the Indiana Air Pollution Control Board adopted final rules to
achieve the NOx emission reductions required by the NOx SIP Call. Indiana's SIP
requires the Company to lower its system-wide NOx emissions to .14 lbs./MMBTU by
May 31, 2004 (the compliance date). This is a 65% reduction from emission levels
existing in 1999 and 1998.

The Company has initiated steps toward compliance with the revised regulations.
These steps include installing Selective Catalytic Reduction (SCR) systems at
Culley Generating Station Unit 3 (Culley), Warrick Generating Station Unit 4,
and A.B. Brown Generating Station Units 1 and 2. SCR systems reduce flue gas NOx
emissions to atmospheric nitrogen and water using ammonia in a chemical
reaction. This technology is known to be the most effective method of reducing
NOx emissions where high removal efficiencies are required.

On August 28, 2001, the IURC issued an order that (1) approved the Company's
proposed project to achieve environmental compliance by investing in clean coal
technology, (2) approved the Company's initial cost estimate of $198 million for
the construction, subject to periodic review of the actual costs incurred, and
(3) approved a mechanism whereby, prior to an electric base rate case, the
Company may recover through a rider that is updated every six months a return on
its capital costs for the project, at its overall cost of capital, including a
return on equity. The first rider adjustment for ongoing cost recovery was
approved by the IURC on February 6, 2002. Based on the level of system-wide
emissions reductions required and the control technology utilized to achieve the
reductions, the current estimated clean coal technology construction cost ranges
from $240 million to $250 million and is expected to be expended during the
2001-2006 period. Through March 31, 2003, $80.8 million has been expended.

On June 5, 2002, the Company filed a new proceeding to update the NOx project
cost and to obtain approval of a second rider authorizing ongoing recovery of
depreciation and operating costs related to the clean coal technology. After the
equipment is installed and operational, related annual operating expenses,
including depreciation expense, are estimated to be between $24 million and $27
million. Such expenses would commence in 2004 when the technology becomes
operational. On January 3, 2003, the IURC approved a settlement that authorizes
total capital cost investment for this project up to $244 million (excluding
AFUDC) and recovery on those capital costs, as well as the recovery of future
operating costs, including depreciation and purchased emission allowances,
through a rider mechanism. The settlement establishes a fixed return of 8
percent on the capital investment, which approximates the return authorized in
the Company's last electric rate case in 1995.

The Company expects to achieve timely compliance as a result of the project.
Construction of the first SCR at Culley was completed on schedule, and
construction of the Warrick 4 and Brown SCRs is proceeding on schedule.
Installation of SCR technology as planned is expected to reduce the Company's
overall NOx emissions to levels compliant with Indiana's NOx emissions budget
allotted by the USEPA. Therefore, the Company has recorded no accrual for
potential penalties that may result from noncompliance.

Culley Generating Station Litigation
In the late 1990's, the USEPA initiated an investigation under Section 114 of
the Act of SIGECO's coal-fired electric generating units in commercial operation
by 1977 to determine compliance with environmental permitting requirements
related to repairs, maintenance, modifications, and operations changes. The
focus of the investigation was to determine whether new source review permitting
requirements were triggered by such plant modifications, and whether the best
available control technology was, or should have been used. Numerous electric
utilities were, and are currently, being investigated by the USEPA under an
industry-wide review for compliance. In July 1999, SIGECO received a letter from
the Office of Enforcement and Compliance Assurance of the USEPA discussing the
industry-wide investigation, vaguely referring to an investigation of SIGECO and
inviting SIGECO to participate in a discussion of the issues. No specifics were
noted; furthermore, the letter stated that the communication was not intended to
serve as a notice of violation. Subsequent meetings were conducted in September
and October 1999 with the USEPA and targeted utilities, including SIGECO,
regarding potential remedies to the USEPA's general allegations.

On November 3, 1999, the USEPA filed a lawsuit against seven utilities,
including SIGECO. SIGECO's suit is pending in the U.S. District Court for the
Southern District of Indiana. The USEPA alleges that, beginning in 1992, SIGECO
violated the Act by (1) making modifications to its Culley Generating Station in
Yankeetown, Indiana without obtaining required permits (2) making major
modifications to the Culley Generating Station without installing the best
available emission control technology and (3) failing to notify the USEPA of the
modifications. In addition, the lawsuit alleges that the modifications to the
Culley Generating Station required SIGECO to begin complying with federal new
source performance standards at its Culley Unit 3.

SIGECO believes it performed only maintenance, repair, and replacement
activities at the Culley Generating Station, as allowed under the Act. Because
proper maintenance does not require permits, application of the best available
control technology, notice to the USEPA, or compliance with new source
performance standards, SIGECO believes that the lawsuit is without merit, and
intends to vigorously defend itself. Since the filing of this lawsuit, the USEPA
has voluntarily dismissed a majority of the claims brought in its original
complaint. In its original complaint, USEPA alleged significant emissions
increases of three pollutants for each of four maintenance projects. Currently,
USEPA is alleging only significant emission increases of a single pollutant at
three of the four maintenance projects cited in the original complaint.

The lawsuit seeks fines against SIGECO in the amount of $27,500 per day per
violation. However, on July 29, 2002, the Court ruled that USEPA could not seek
civil penalties for two of the three remaining projects at issue in the
litigation, significantly reducing potential civil penalty exposure. The lawsuit
also seeks a court order requiring SIGECO to install the best available
emissions technology at the Culley Generating Station. If the USEPA were
successful in obtaining an order, SIGECO estimates that in response it could
incur capital costs of approximately $20 million to $40 million to comply with
the order. Trial is currently set to begin July 14, 2003.

The USEPA has also issued an administrative notice of violation to SIGECO making
the same allegations, but alleging that violations began in 1977.

While it is possible that SIGECO could be subjected to criminal penalties if the
Culley Generating Station continues to operate without complying with the
permitting requirements of new source review and the allegations are determined
by a court to be valid, SIGECO believes such penalties are unlikely as the USEPA
and the electric utility industry have a bonafide dispute over the proper
interpretation of the Act. Accordingly, the Company has recorded no accrual and
the plant continues to operate while the matter is being decided.

Information Request
On January 23, 2001, SIGECO received an information request from the USEPA under
Section 114 of the Act for historical operational information on the Warrick and
A.B. Brown generating stations. SIGECO has provided all information requested,
and no further action has occurred.

Manufactured Gas Plants
In the past, Indiana Gas and others operated facilities for the manufacture of
gas. Given the availability of natural gas transported by pipelines, these
facilities have not been operated for many years. Under currently applicable
environmental laws and regulations, Indiana Gas and others may now be required
to take remedial action if certain byproducts are found above the regulatory
thresholds at these sites.

Indiana Gas has identified the existence, location, and certain general
characteristics of 26 gas manufacturing and storage sites for which it may have
some remedial responsibility. Indiana Gas has completed a remedial
investigation/feasibility study (RI/FS) at one of the sites under an agreed
order between Indiana Gas and the IDEM, and a Record of Decision was issued by
the IDEM in January 2000. Although Indiana Gas has not begun an RI/FS at
additional sites, Indiana Gas has submitted several of the sites to the IDEM's
Voluntary Remediation Program and is currently conducting some level of remedial
activities including groundwater monitoring at certain sites where deemed
appropriate and will continue remedial activities at the sites as appropriate
and necessary.

In conjunction with data compiled by environmental consultants, Indiana Gas has
accrued the estimated costs for further investigation, remediation, groundwater
monitoring, and related costs for the sites. While the total costs that may be
incurred in connection with addressing these sites cannot be determined at this
time, Indiana Gas has recorded costs that it reasonably expects to incur
totaling approximately $20.4 million.

The estimated accrued costs are limited to Indiana Gas' proportionate share of
the remediation efforts. Indiana Gas has arrangements in place for 19 of the 26
sites with other potentially responsible parties (PRP), which serve to limit
Indiana Gas' share of response costs at these 19 sites to between 20% and 50%.

With respect to insurance coverage, Indiana Gas has received and recorded
settlements from all known insurance carriers in an aggregate amount
approximating $20.4 million.

Environmental matters related to manufactured gas plants have had no material
impact on earnings since costs recorded to date approximate PRP and insurance
settlement recoveries. While Indiana Gas has recorded all costs which it
presently expects to incur in connection with activities at these sites, it is
possible that future events may require some level of additional remedial
activities which are not presently foreseen.

In October 2002, the Company received a formal information request letter from
the IDEM regarding five manufactured gas plants owned and/or operated by SIGECO
and not currently enrolled in the IDEM's Voluntary Remediation Program. In
response SIGECO submitted to the IDEM the results of preliminary site
investigations conducted in the mid-1990's. These site investigations confirmed
that based upon the conditions known at the time, the sites posed no risk to
human health or the environment. Follow up reviews have recently been initiated
by the Company to confirm that the sites continue to pose no such risk.

9.   Impact of Recently Issued Accounting Guidance

SFAS 143
In July 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations" (SFAS 143). SFAS 143 requires entities to record the fair value of
a liability for an asset retirement obligation in the period in which it is
incurred. When the liability is initially recorded, the entity capitalizes a
cost by increasing the carrying amount of the related long-lived asset. Over
time, the liability is accreted to its present value, and the capitalized cost
is depreciated over the useful life of the related asset. Upon settlement of the
liability, an entity either settles the obligation for its recorded amount or
incurs a gain or loss upon settlement. The Company adopted this statement on
January 1, 2003. The adoption was not material to the Company's results of
operations or financial condition.

The Company records a net cost of removal to its utility plant through normal
depreciation rates. As of March 31, 2003 and December 31, 2002 such removal
costs approximated $380 million of accumulated depreciation as presented in the
condensed consolidated balance sheets based upon the Company's latest
depreciation studies.

SFAS 149
In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities" (SFAS 149). SFAS 149 amends and
clarifies the accounting guidance on (1) derivative instruments, including
certain derivative instruments embedded in other contracts, and (2) hedging
activities that fall within the scope of FASB Statement No. 133 (SFAS 133),
Accounting for Derivative Instruments and Hedging Activities. SFAS 149 amends
SFAS 133 to reflect decisions that were made (1) as part of the process
undertaken by the Derivatives Implementation Group (DIG), which necessitated
amending SFAS 133; (2) in connection with other projects dealing with financial
instruments; and (3) regarding implementation issues related to the application
of the definition of a derivative. SFAS 149 also amends certain other existing
pronouncements, which will result in more consistent reporting of contracts that
are derivatives in their entirety or that contain embedded derivatives that
warrant separate accounting. SFAS 149 is effective (1) for contracts entered
into or modified after June 30, 2003, with certain exceptions and (2) for
hedging relationships designated after June 30, 2003. The guidance is to be
applied prospectively. Although management is still evaluating the impact of
SFAS 149 on its financial position and results of operations, the adoption is
not expected to have a material effect.

FASB Interpretation (FIN) 45
In November 2002, the FASB issued Interpretation 45, "Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others" (FIN 45). FIN 45 clarifies the requirements for a
guarantor's accounting for and disclosure of certain guarantees issued and
outstanding and that a guarantor is required to recognize, at the inception of a
guarantee, a liability for the obligations it has undertaken. The objective of
the initial measurement of that liability is the fair value of the guarantee at
its inception. The initial recognition and measurement provisions are applicable
on a prospective basis to guarantees issued or modified after December 31, 2002.
Since that date, the adoption has not had a material effect on the Company's
results of operations or financial condition.

FIN 46
In January 2003, the FASB issued Interpretation 46, "Consolidation of Variable
Interest Entities" (FIN 46). FIN 46 addresses consolidation by business
enterprises of variable interest entities and significantly changes the
consolidation requirements for those entities. FIN 46 is intended to achieve
more consistent application of consolidation policies to variable interest
entities and, thus improves comparability between enterprises engaged in similar
activities when those activities are conducted through variable interest
entities. FIN 46 applies to variable interest entities created after January 31,
2003 and to variable interest entities in which an enterprise obtains an
interest after that date. FIN 46 applies to the Company's third quarter of 2003
for variable interest entities in which the Company holds a variable interest
acquired before February 1, 2003. Although management is still evaluating the
impact of FIN 46 on its financial position and results of operations, the
adoption is not expected to have a material effect.

10.  Segment Reporting

As discussed in Note 3, on January 1, 2003, Vectren transferred certain
information technology systems and related assets and buildings from other
entities within its consolidated group to VUHI. These assets primarily support
the operations of VUHI's subsidiaries. The operations of these assets comprise
the Corporate and Other operating segment. The Company separates its operations
into three operating segments: Gas Utility Services, Electric Utility Services,
and Corporate and Other. The Company uses operating income as the measure of
profitability for its segments.

Gas Utility Services provides natural gas distribution and transportation
services in nearly two-thirds of Indiana and west central Ohio. Electric Utility
Services provides electricity primarily to southwestern Indiana, and includes
the Company's power generating and marketing operations. Corporate and Other
Operations provide information technology and other support services to those
utility operations. Following is detailed information about the Company's
operating segments.


                                             Three Months Ended March 31,
                                           ------------------------------
In millions                                  2003                  2002
- -------------------------------------------------------------------------
Operating Revenues
  Gas Utility Services                     $ 509.5               $ 358.1
  Electric Utility Services                  119.4                 126.8
  Corporate & Other                            6.6                   5.6
  Eliminations                                (6.4)                 (5.5)
- -------------------------------------------------------------------------
     Total Operating Revenues              $ 629.1               $ 485.0
=========================================================================

Operating Income
  Gas Utility Services                      $ 69.3                $ 62.1
  Electric Utility Services                   23.9                  16.4
  Corporate & Other                            2.5                   2.3
- -------------------------------------------------------------------------
     Total Operating Income                 $ 95.7                $ 80.8
=========================================================================

                                         March 31,            December 31,
In millions                                2003                  2002
- -------------------------------------------------------------------------
Total Assets
  Gas Utility Services                   $ 1,479.5             $ 1,555.1
  Electric Utility Services                  880.4                 860.9
  Corporate & Other                          162.5                 171.6
  Eliminations                               (28.9)                (17.2)
- -------------------------------------------------------------------------
     Total Assets                        $ 2,493.5             $ 2,570.4
=========================================================================


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
        FINANCIAL CONDITION

                           Description of the Business

Vectren Utility Holdings, Inc. (VUHI or the Company), an Indiana corporation,
was formed on March 31, 2000 to serve as the intermediate holding company for
Vectren Corporation's (Vectren) three operating public utilities, Indiana Gas
Company, Inc. (Indiana Gas), formerly a wholly owned subsidiary of Indiana
Energy, Inc. (Indiana Energy), Southern Indiana Gas and Electric Company
(SIGECO), formerly a wholly owned subsidiary of SIGCORP, Inc. (SIGCORP), and the
Ohio operations.

Indiana Gas provides natural gas distribution and transportation services to a
diversified customer base in 49 of Indiana's 92 counties. SIGECO provides
electric generation, transmission, and distribution services to 8 counties in
southwestern Indiana, including counties surrounding Evansville, and
participates in the wholesale power market. SIGECO also provides natural gas
distribution and transportation services to 10 counties in southwestern Indiana,
including counties surrounding Evansville. The Ohio operations, owned as a
tenancy in common by Vectren Energy Delivery of Ohio, Inc., a wholly owned
subsidiary, (53 % ownership) and Indiana Gas (47 % ownership), provide natural
gas distribution and transportation services to 17 counties in west central
Ohio, including counties surrounding Dayton.

Vectren is an energy and applied technology holding company headquartered in
Evansville, Indiana. The Company was organized on June 10, 1999 solely for the
purpose of effecting the merger of Indiana Energy and SIGCORP. On March 31,
2000, the merger of Indiana Energy with SIGCORP and into Vectren was consummated
with a tax-free exchange of shares and has been accounted for as a
pooling-of-interests in accordance with APB Opinion No. 16 "Business
Combinations" (APB 16).

Both Vectren and VUHI are exempt from registration pursuant to Section 3(a)(1)
and 3(c) of the Public Utility Holding Company Act of 1935.

                       Consolidated Results of Operations

The following discussion and analysis should be read in conjunction with the
unaudited consolidated condensed financial statements and notes thereto.
Subsequent to the issuance of the Company's 2002 quarterly financial statements,
the Company's management determined that previously issued financial statements
should be restated. The restatement had the effect of increasing net income for
the three months ended March 31, 2002 by $0.4 million after tax.

In addition, on January 1, 2003, the Company transferred certain information
systems and related assets and buildings from other entities within its
consolidated group to VUHI. These assets primarily support the utility
operations of VUHI's subsidiaries. The transfer required restatement of VUHI's
consolidated financial statements for all periods presented under accounting
rules governing combinations of entities under common control. The
reorganization increased previously reported net income for the three months
ended March 31, 2002 by $1.0 million after tax.

Note 3 to the consolidated  condensed financial statements includes a summary of
the effects of the  reorganization due to the transfer of assets and restatement
due to errors on  previously  reported  results of  operations.  The  results of
operations give effect to these restatements.

Net Income

Net income was $47.3 million for the three months ended March 31, 2003 compared
to $42.0 million for the same period in 2002. The increase in net income results
primarily from the effects of colder weather and increased margins in wholesale
operations. These increases were offset somewhat by the effect of higher gas
costs which increased operating expenses, including uncollectible accounts
expense.






Significant Fluctuations

Margin

Gas Utility Margin
Gas utility margin by customer type and separated between volumes sold and
transported follows:

                                        Three Months Ended March 31,
- --------------------------------------------------------------------
In millions                                    2003           2002
- --------------------------------------------------------------------
Residential                                   $ 93.9         $ 85.1
Commercial                                      33.3           24.8
Contract                                        14.7           16.8
Other                                            2.5            0.9
- --------------------------------------------------------------------
    Total gas margin                         $ 144.4        $ 127.6
====================================================================
Volumes in MMDth
  Sold                                          64.0           51.7
  Transported                                   28.1           26.9
- --------------------------------------------------------------------
    Total throughput                            92.1           78.6
====================================================================


Gas utility margin for the three months ended March 31, 2003, increased $16.8
million, or 13%, compared to 2002. The increase is primarily due to weather 23%
colder than the prior year and 8% colder than normal. The effects of colder
weather resulted in a 17% increase in total throughput. The total average cost
per dekatherm of gas purchased for the three months ended March 31, 2003, was
$6.53 compared to $4.47 for the same period in 2002.

Electric Utility Margin
Electric utility margin by customer type and non-firm wholesale margin separated
between realized margin and mark-to-market gains and losses follows:

                                        Three Months Ended March 31,
- --------------------------------------------------------------------
In millions                                    2003           2002
- --------------------------------------------------------------------
Retail & firm wholesale                       $ 50.1         $ 48.2
Non-firm wholesale                               8.1            1.1
- --------------------------------------------------------------------
    Total electric margin                     $ 58.2         $ 49.3
====================================================================
Non-firm wholesale margin:
Realized margin                                $ 7.2          $ 4.0
Mark-to-market gains (losses)                    0.9           (2.9)

Electric utility margin for the three months ended March 31, 2002 increased $8.9
million, or 18%, compared to 2002 primarily due to the effect of price
volatility in the wholesale power market. Periodically, generation capacity is
in excess of that needed to serve retail and firm wholesale customers. The
Company markets this unutilized capacity to optimize the return on its owned
generation assets. The contracts entered into are primarily short-term purchase
and sale transactions that expose the Company to limited market risk. In 2003,
volumes sold into the wholesale market were 1.45 GWh compared to 2.47 GWh in
2002. Volumes purchased from the wholesale market, some of which were utilized
to serve retail and firm wholesale customers, were 1.26 GWh in 2003 compared to
2.34 GWh in 2002. While volumes both sold and purchased in the wholesale market
have decreased during 2003, margins increased $7.0 million compared to 2002 as a
result of increased capacity and price volatility.

The effect of colder weather on electric heating sales was the primary factor
for the $1.9 million increase in electric margin from retail and firm wholesale
customers. As result of the colder weather, volumes sold to retail and firm
wholesale customers increased 2% from 1.40 GWh in 2002 to 1.42 GWh in 2003.

Operating Expenses

Other Operating
Other operating expenses increased $5.3 million for the three months ended March
31, 2003 compared to the prior year. The increase results principally from
increased uncollectible accounts expense, uncollectible accounts expense related
to the percent of income payment plan (PIPP) in Ohio, and timing of maintenance
expenditures. Uncollectible accounts and PIPP expense increased by $2.1 million
due to primarily higher gas costs.

Depreciation & Amortization
Depreciation and amortization increased $2.0 million for the three months ended
March 31, 2003 compared to the prior year. The increase results from
depreciation of additions to utility plant.

Taxes Other Than Income Taxes
Taxes other than income taxes increased $3.6 million for the three months ended
March 31, 2003 compared to the prior year. The increase results from higher
utility receipts and excise taxes as a result of higher volumes sold and higher
gas prices.

Other Income (Expense) - Net

Equity in Losses of Unconsolidated Affiliates
Equity in losses of unconsolidated affiliates increased $0.4 million for the
three months ended March 31, 2003 compared to the prior year. The increase
results from increased losses incurred by a company that manufactures autoclaved
aerated concrete products from fly ash.

Other- net
Other, net decreased $3.6 million for the three months ended March 31, 2003
compared to the prior year. The decrease results principally from charges taken
against the Company's equity method investment that processes fly ash of
approximately $2.0 million. The remaining decrease results from less AFUDC, and
increased contributions to low-income heating assistance programs.

Interest Expense

Interest expense decreased $1.1 million for the three months ended March 31,
2003, when compared to the prior year. The decrease results from lower interest
rates on variable rate debt offset partially by higher outstanding balances. The
increased debt outstanding is due primarily to increased working capital
requirements resulting from the higher gas prices experienced during 2003 and
the funding of certain capital expenditures with short-term borrowings.

Income Tax

Federal and state income taxes related to the Utility Group increased $6.7
million for the three months ended March 31, 2003, when compared to the prior
year. The increase results principally from higher pre-tax earnings. The
effective tax rate increased from 35.6% in 2002 to 38.7% in 2003 principally due
to an increase in the Indiana state income tax rate from 4.5 % to 8.5% that was
effective January 1, 2003.




Environmental Matters

Clean Air Act

NOx SIP Call Matter
The Clean Air Act (the Act) requires each state to adopt a State Implementation
Plan (SIP) to attain and maintain National Ambient Air Quality Standards (NAAQS)
for a number of pollutants, including ozone. If the USEPA finds a state's SIP
inadequate to achieve the NAAQS, the USEPA can call upon the state to revise its
SIP (a SIP Call).

In October 1998, the USEPA issued a final rule "Finding of Significant
Contribution and Rulemaking for Certain States in the Ozone Transport Assessment
Group Region for Purposes of Reducing Regional Transport of Ozone," (63 Fed.
Reg. 57355). This ruling found that the SIP's of certain states, including
Indiana, were substantially inadequate since they allowed for nitrogen oxide
(NOx) emissions in amounts that contributed to non-attainment with the ozone
NAAQS in downwind states. The USEPA required each state to revise its SIP to
provide for further NOx emission reductions. The NOx emissions budget, as
stipulated in the USEPA's final ruling, requires a 31% reduction in total NOx
emissions from Indiana.

In June 2001, the Indiana Air Pollution Control Board adopted final rules to
achieve the NOx emission reductions required by the NOx SIP Call. Indiana's SIP
requires the Company to lower its system-wide NOx emissions to .14 lbs./MMBTU by
May 31, 2004 (the compliance date). This is a 65% reduction from emission levels
existing in 1999 and 1998.

The Company has initiated steps toward compliance with the revised regulations.
These steps include installing Selective Catalytic Reduction (SCR) systems at
Culley Generating Station Unit 3 (Culley), Warrick Generating Station Unit 4,
and A.B. Brown Generating Station Units 1 and 2. SCR systems reduce flue gas NOx
emissions to atmospheric nitrogen and water using ammonia in a chemical
reaction. This technology is known to be the most effective method of reducing
NOx emissions where high removal efficiencies are required.

On August 28, 2001, the IURC issued an order that (1) approved the Company's
proposed project to achieve environmental compliance by investing in clean coal
technology, (2) approved the Company's initial cost estimate of $198 million for
the construction, subject to periodic review of the actual costs incurred, and
(3) approved a mechanism whereby, prior to an electric base rate case, the
Company may recover through a rider that is updated every six months a return on
its capital costs for the project, at its overall cost of capital, including a
return on equity. The first rider adjustment for ongoing cost recovery was
approved by the IURC on February 6, 2002. Based on the level of system-wide
emissions reductions required and the control technology utilized to achieve the
reductions, the current estimated clean coal technology construction cost ranges
from $240 million to $250 million and is expected to be expended during the
2001-2006 period. Through March 31, 2003, $80.8 million has been expended.

On June 5, 2002, the Company filed a new proceeding to update the NOx project
cost and to obtain approval of a second rider authorizing ongoing recovery of
depreciation and operating costs related to the clean coal technology. After the
equipment is installed and operational, related annual operating expenses,
including depreciation expense, are estimated to be between $24 million and $27
million. Such expenses would commence in 2004 when the technology becomes
operational. On January 3, 2003, the IURC approved a settlement that authorizes
total capital cost investment for this project up to $244 million (excluding
AFUDC) and recovery on those capital costs, as well as the recovery of future
operating costs, including depreciation and purchased emission allowances,
through a rider mechanism. The settlement establishes a fixed return of 8
percent on the capital investment, which approximates the return authorized in
the Company's last electric rate case in 1995.

The Company expects to achieve timely compliance as a result of the project.
Construction of the first SCR at Culley was completed on schedule, and
construction of the Warrick 4 and Brown SCRs is proceeding on schedule.
Installation of SCR technology as planned is expected to reduce the Company's
overall NOx emissions to levels compliant with Indiana's NOx emissions budget
allotted by the USEPA. Therefore, the Company has recorded no accrual for
potential penalties that may result from noncompliance.

Culley Generating Station Litigation
In the late 1990's, the USEPA initiated an investigation under Section 114 of
the Act of SIGECO's coal-fired electric generating units in commercial operation
by 1977 to determine compliance with environmental permitting requirements
related to repairs, maintenance, modifications, and operations changes. The
focus of the investigation was to determine whether new source review permitting
requirements were triggered by such plant modifications, and whether the best
available control technology was, or should have been used. Numerous electric
utilities were, and are currently, being investigated by the USEPA under an
industry-wide review for compliance. In July 1999, SIGECO received a letter from
the Office of Enforcement and Compliance Assurance of the USEPA discussing the
industry-wide investigation, vaguely referring to an investigation of SIGECO and
inviting SIGECO to participate in a discussion of the issues. No specifics were
noted; furthermore, the letter stated that the communication was not intended to
serve as a notice of violation. Subsequent meetings were conducted in September
and October 1999 with the USEPA and targeted utilities, including SIGECO,
regarding potential remedies to the USEPA's general allegations.

On November 3, 1999, the USEPA filed a lawsuit against seven utilities,
including SIGECO. SIGECO's suit is pending in the U.S. District Court for the
Southern District of Indiana. The USEPA alleges that, beginning in 1992, SIGECO
violated the Act by (1) making modifications to its Culley Generating Station in
Yankeetown, Indiana without obtaining required permits (2) making major
modifications to the Culley Generating Station without installing the best
available emission control technology and (3) failing to notify the USEPA of the
modifications. In addition, the lawsuit alleges that the modifications to the
Culley Generating Station required SIGECO to begin complying with federal new
source performance standards at its Culley Unit 3.

SIGECO believes it performed only maintenance, repair, and replacement
activities at the Culley Generating Station, as allowed under the Act. Because
proper maintenance does not require permits, application of the best available
control technology, notice to the USEPA, or compliance with new source
performance standards, SIGECO believes that the lawsuit is without merit, and
intends to vigorously defend itself. Since the filing of this lawsuit, the USEPA
has voluntarily dismissed a majority of the claims brought in its original
complaint. In its original complaint, USEPA alleged significant emissions
increases of three pollutants for each of four maintenance projects. Currently,
USEPA is alleging only significant emission increases of a single pollutant at
three of the four maintenance projects cited in the original complaint.

The lawsuit seeks fines against SIGECO in the amount of $27,500 per day per
violation. However, on July 29, 2002, the Court ruled that USEPA could not seek
civil penalties for two of the three remaining projects at issue in the
litigation, significantly reducing potential civil penalty exposure. The lawsuit
also seeks a court order requiring SIGECO to install the best available
emissions technology at the Culley Generating Station. If the USEPA were
successful in obtaining an order, SIGECO estimates that in response it could
incur capital costs of approximately $20 million to $40 million to comply with
the order. Trial is currently set to begin July 14, 2003.

The USEPA has also issued an administrative notice of violation to SIGECO making
the same allegations, but alleging that violations began in 1977.

While it is possible that SIGECO could be subjected to criminal penalties if the
Culley Generating Station continues to operate without complying with the
permitting requirements of new source review and the allegations are determined
by a court to be valid, SIGECO believes such penalties are unlikely as the USEPA
and the electric utility industry have a bonafide dispute over the proper
interpretation of the Act. Accordingly, the Company has recorded no accrual and
the plant continues to operate while the matter is being decided.

Information Request
On January 23, 2001, SIGECO received an information request from the USEPA under
Section 114 of the Act for historical operational information on the Warrick and
A.B. Brown generating stations. SIGECO has provided all information requested,
and no further action has occurred.

Manufactured Gas Plants

In the past, Indiana Gas and others operated facilities for the manufacture of
gas. Given the availability of natural gas transported by pipelines, these
facilities have not been operated for many years. Under currently applicable
environmental laws and regulations, Indiana Gas and others may now be required
to take remedial action if certain byproducts are found above the regulatory
thresholds at these sites.

Indiana Gas has identified the existence, location, and certain general
characteristics of 26 gas manufacturing and storage sites for which it may have
some remedial responsibility. Indiana Gas has completed a remedial
investigation/feasibility study (RI/FS) at one of the sites under an agreed
order between Indiana Gas and the IDEM, and a Record of Decision was issued by
the IDEM in January 2000. Although Indiana Gas has not begun an RI/FS at
additional sites, Indiana Gas has submitted several of the sites to the IDEM's
Voluntary Remediation Program and is currently conducting some level of remedial
activities including groundwater monitoring at certain sites where deemed
appropriate and will continue remedial activities at the sites as appropriate
and necessary.

In conjunction with data compiled by environmental consultants, Indiana Gas has
accrued the estimated costs for further investigation, remediation, groundwater
monitoring, and related costs for the sites. While the total costs that may be
incurred in connection with addressing these sites cannot be determined at this
time, Indiana Gas has recorded costs that it reasonably expects to incur
totaling approximately $20.4 million.

The estimated accrued costs are limited to Indiana Gas' proportionate share of
the remediation efforts. Indiana Gas has arrangements in place for 19 of the 26
sites with other potentially responsible parties (PRP), which serve to limit
Indiana Gas' share of response costs at these 19 sites to between 20% and 50%.

With respect to insurance coverage, Indiana Gas has received and recorded
settlements from all known insurance carriers in an aggregate amount
approximating $20.4 million.

Environmental matters related to manufactured gas plants have had no material
impact on earnings since costs recorded to date approximate PRP and insurance
settlement recoveries. While Indiana Gas has recorded all costs which it
presently expects to incur in connection with activities at these sites, it is
possible that future events may require some level of additional remedial
activities which are not presently foreseen.

In October 2002, the Company received a formal information request letter from
the IDEM regarding five manufactured gas plants owned and/or operated by SIGECO
and not currently enrolled in the IDEM's Voluntary Remediation Program. In
response SIGECO submitted to the IDEM the results of preliminary site
investigations conducted in the mid-1990's. These site investigations confirmed
that based upon the conditions known at the time, the sites posed no risk to
human health or the environment. Follow up reviews have recently been initiated
by the Company to confirm that the sites continue to pose no such risk.

                  Impact of Recently Issued Accounting Guidance

SFAS 143

In July 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations" (SFAS 143). SFAS 143 requires entities to record the fair value of
a liability for an asset retirement obligation in the period in which it is
incurred. When the liability is initially recorded, the entity capitalizes a
cost by increasing the carrying amount of the related long-lived asset. Over
time, the liability is accreted to its present value, and the capitalized cost
is depreciated over the useful life of the related asset. Upon settlement of the
liability, an entity either settles the obligation for its recorded amount or
incurs a gain or loss upon settlement. The Company adopted this statement on
January 1, 2003. The adoption was not material to the Company's results of
operations or financial condition.

The Company records a net cost of removal to its utility plant through normal
depreciation rates. As of March 31, 2003 and December 31, 2002 such removal
costs approximated $380 million of accumulated depreciation as presented in the
condensed consolidated balance sheets based upon the Company's latest
depreciation studies.






SFAS 149

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities" (SFAS 149). SFAS 149 amends and
clarifies the accounting guidance on (1) derivative instruments, including
certain derivative instruments embedded in other contracts, and (2) hedging
activities that fall within the scope of FASB Statement No. 133 (SFAS 133),
Accounting for Derivative Instruments and Hedging Activities. SFAS 149 amends
SFAS 133 to reflect decisions that were made (1) as part of the process
undertaken by the Derivatives Implementation Group (DIG), which necessitated
amending SFAS 133; (2) in connection with other projects dealing with financial
instruments; and (3) regarding implementation issues related to the application
of the definition of a derivative. SFAS 149 also amends certain other existing
pronouncements, which will result in more consistent reporting of contracts that
are derivatives in their entirety or that contain embedded derivatives that
warrant separate accounting. SFAS 149 is effective (1) for contracts entered
into or modified after June 30, 2003, with certain exceptions and (2) for
hedging relationships designated after June 30, 2003. The guidance is to be
applied prospectively. Although management is still evaluating the impact of
SFAS 149 on its financial position and results of operations, the adoption is
not expected to have a material effect.

Financial Accounting Interpretation (FIN) 45

In November 2002, the FASB issued Interpretation 45, "Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others" (FIN 45). FIN 45 clarifies the requirements for a
guarantor's accounting for and disclosure of certain guarantees issued and
outstanding and that a guarantor is required to recognize, at the inception of a
guarantee, a liability for the obligations it has undertaken. The objective of
the initial measurement of that liability is the fair value of the guarantee at
its inception. The initial recognition and measurement provisions are applicable
on a prospective basis to guarantees issued or modified after December 31, 2002.
Since that date, the adoption has not had a material effect on the Company's
results of operations or financial condition.

FIN 46

In January 2003, the FASB issued Interpretation 46, "Consolidation of Variable
Interest Entities" (FIN 46). FIN 46 addresses consolidation by business
enterprises of variable interest entities and significantly changes the
consolidation requirements for those entities. FIN 46 is intended to achieve
more consistent application of consolidation policies to variable interest
entities and, thus improves comparability between enterprises engaged in similar
activities when those activities are conducted through variable interest
entities. FIN 46 applies to variable interest entities created after January 31,
2003 and to variable interest entities in which an enterprise obtains an
interest after that date. FIN 46 applies to the Company's third quarter for
variable interest entities in which the Company holds a variable interest
acquired before February 1, 2003. Although management is still evaluating the
impact of FIN 46 on its financial position and results of operations, the
adoption is not expected to have a material effect.

                               Financial Condition

Within Vectren's consolidated group, VUHI funds short-term and long-term
financing needs of the regulated operations. Vectren does not guarantee VUHI's
debt. VUHI's currently outstanding long-term and short-term borrowing
arrangements are jointly and severally guaranteed by Indiana Gas, SIGECO, and
VEDO. The guarantees are full and unconditional and joint and several, and VUHI
has no subsidiaries other than the subsidiary guarantors. Information about the
subsidiary guarantors as a group is included in Note 4 to the condensed
consolidated financial statements. VUHI's long-term and short-term obligations
outstanding at March 31, 2003 totaled $350.0 million and $312.6 million,
respectively. Additionally, prior to VUHI's formation, Indiana Gas and SIGECO
funded their operations separately, and therefore, have debt outstanding funded
solely by their operations. VUHI's operations have historically funded the
majority of Vectren's common stock dividends.

VUHI's and Indiana Gas' credit ratings on outstanding senior unsecured debt at
March 31, 2003 are A-/Baa1 as rated by Standard and Poor's Ratings Services
(Standard and Poor's) and Moody's Investor's Service (Moody's), respectively.
SIGECO's credit ratings on outstanding senior unsecured debt at March 31, 2003
are BBB+/Baa1. SIGECO's credit ratings on outstanding secured debt at December
31, 2002 are A-/A3. VUHI's commercial paper has a credit rating of A-2/P-2.
Moody's current outlook is stable while Standard and Poor's current outlook is
negative. The ratings of Moody's and Standard and Poor's are categorized as
investment grade and are unchanged from December 31, 2002. A security rating is
not a recommendation to buy, sell, or hold securities. The rating is subject to
revision or withdrawal at any time, and each rating should be evaluated
independently of any other rating. Moody's and Standard and Poor's lowest level
investment grade rating is Baa3 and BBB-, respectively.

The Company's consolidated equity capitalization objective is 45-55% of total
capitalization. This objective may have varied, and will vary, depending on
particular business opportunities, capital spending requirements, and seasonal
factors that affect the Company's operation. The Company's equity component was
48% and 46% of total capitalization, including current maturities of long-term
debt and long-term debt subject to tender, at March 31, 2003 and December 31,
2002, respectively.

The Company expects the majority of its capital expenditures and debt security
redemptions to be provided by internally generated funds. However, additional
permanent financing may be required due to significant capital expenditures for
NOx compliance equipment at SIGECO and plans to further strengthen the Company's
capital structure and the capital structures of its utility subsidiaries. These
plans may include the issuance of new equity to Vectren and the issuance of
additional long-term debt and the calling of certain long-term debt at SIGECO
and Indiana Gas. In April 2003, the Company filed with the United States
Securities and Exchange Commission a Form S-3 to issue a maximum of $200 million
in debt securities. Specific to the NOx compliance project, the Company is
authorized an 8 percent return on its capital investments through approved rider
recovery mechanisms.

Sources & Uses of Liquidity

Operating Cash Flow

The Company's primary and historical source of liquidity to fund working capital
requirements has been cash generated from operations, which for the three months
ended March 31, 2003 and 2002 was $127.9 million and $173.4 million,
respectively. The decrease of $45.5 million is primarily the result of more
favorable changes in working capital accounts occurring in 2002 due to a return
to lower gas prices in that year, offset by increased earnings before non-cash
charges in 2003.

Financing Cash Flow

Although working capital requirements are generally funded by cash flow from
operations, the Company uses short-term borrowings to supplement working capital
needs when accounts receivable balances are at their highest and gas storage is
refilled. Additionally short-term borrowings are required for capital projects
and investments until they are permanently financed.

Cash flow required for financing activities of $68.2 million for the three
months ended March 31, 2003 includes a decrease in borrowings outstanding of
$50.1 million and increased common stock dividends compared to 2002. In 2002,
higher operating cash flow was used to repay $119.1 million in borrowings.

Financing Transactions
In January, 2003, the Company called the remaining $23.8 million of Indiana Gas'
9.375% private placement notes originally due in 2021. The total amount paid on
redemption was $24.9 million. Pursuant to regulatory authority, the premium paid
was deferred as a regulatory asset. Also in January, 2003, other debt of Indiana
Gas totaling $15.0 million was paid as scheduled.

At December 31, 2002, the Company had $26.6 million of adjustable rate senior
unsecured bonds which could, at the election of the bondholder, be tendered to
the Company when interest rates are reset. Such bonds were classified as
long-term debt subject to tender. Subsequent to March 31, 2003, the Company
re-marketed those bonds on a long-term basis and has therefore reclassified them
as long-term debt at March 31, 2003.






Investing Cash Flow

Cash required for investing activities of $49.3 million for the three months
ended March 31, 2003 includes $49.4 million of requirements for capital
expenditures. Investing activities for 2002 were $31.3 million. The increase
occurring in 2003 is principally the result of additional capital expenditures,
principally for the NOx project and implementation of choice programs in Ohio,
and payments to other Vectren subsidiaries for the transfer of assets.

Available Sources of Liquidity

At March 31, 2003, the Company has $475.0 million of short-term borrowing
capacity, of which approximately $159.2 million is available. Subsequent to
December 31, 2002, the Company increased its capacity $145.0 million to $475.0
million.

Planned Capital Expenditures & Investments

Capital expenditures for the remainder to 2003 are estimated to be approximately
$185 million.

                           Forward-Looking Information

A "safe harbor" for forward-looking statements is provided by the Private
Securities Litigation Reform Act of 1995 (Reform Act of 1995). The Reform Act of
1995 was adopted to encourage such forward-looking statements without the threat
of litigation, provided those statements are identified as forward-looking and
are accompanied by meaningful cautionary statements identifying important
factors that could cause the actual results to differ materially from those
projected in the statement. Certain matters described in Management's Discussion
and Analysis of Results of Operations and Financial Condition are
forward-looking statements. Such statements are based on management's beliefs,
as well as assumptions made by and information currently available to
management. When used in this filing, the words "believe," "anticipate,"
"endeavor," "estimate," "expect," "objective," "projection," "forecast," "goal,"
and similar expressions are intended to identify forward-looking statements. In
addition to any assumptions and other factors referred to specifically in
connection with such forward-looking statements, factors that could cause the
Company's actual results to differ materially from those contemplated in any
forward-looking statements include, among others, the following:

o    Factors affecting utility operations such as unusual weather conditions;
     catastrophic weather-related damage; unusual maintenance or repairs;
     unanticipated changes to fossil fuel costs; unanticipated changes to gas
     supply costs, or availability due to higher demand, shortages,
     transportation problems or other developments; environmental or pipeline
     incidents; transmission or distribution incidents; unanticipated changes to
     electric energy supply costs, or availability due to demand, shortages,
     transmission problems or other developments; or electric transmission or
     gas pipeline system constraints.

o    Increased competition in the energy environment including effects of
     industry restructuring and unbundling.

o    Regulatory factors such as unanticipated changes in rate-setting policies
     or procedures, recovery of investments and costs made under traditional
     regulation, and the frequency and timing of rate increases.

o    Financial or regulatory accounting principles or policies imposed by the
     Financial Accounting Standards Board; the Securities and Exchange
     Commission; the Federal Energy Regulatory Commission; state public utility
     commissions; state entities which regulate electric and natural gas
     transmission and distribution, natural gas gathering and processing,
     electric power supply; and similar entities with regulatory oversight.

o    Economic conditions including the effects of an economic downturn,
     inflation rates, and monetary fluctuations.

o    Changing market conditions and a variety of other factors associated with
     physical energy and financial trading activities including, but not limited
     to, price, basis, credit, liquidity, volatility, capacity, interest rate,
     and warranty risks.

o    Direct or indirect effects on our business, financial condition or
     liquidity resulting from a change in credit ratings, changes in interest
     rates, and/or changes in market perceptions of the utility industry and
     other energy-related industries.

o    Employee workforce factors including changes in key executives, collective
     bargaining agreements with union employees, or work stoppages.

o    Legal and regulatory delays and other obstacles associated with mergers,
     acquisitions, and investments in joint ventures.

o    Costs and other effects of legal and administrative proceedings,
     settlements, investigations, claims, and other matters, including, but not
     limited to, those described in Management's Discussion and Analysis of
     Results of Operations and Financial Condition.

o    Changes in federal, state or local legislature requirements, such as
     changes in tax laws or rates, environmental laws and regulations.

The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of changes in actual results,
changes in assumptions, or other factors affecting such statements.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to various business risks associated with commodity
prices, interest rates, and counter-party credit. These financial exposures are
monitored and managed by the Company as an integral part of its overall risk
management program. The Company's risk management program includes, among other
things, the use of derivatives to mitigate risk.

The Company also executes derivative contracts in the normal course of
operations while buying and selling commodities and other fungible goods to be
used in operations and while optimizing generation assets. The Company does not
execute derivative contracts for speculative or trading purposes.

These risks are not significantly different from the information set forth in
Item 7A Quantitative and Qualitative Disclosures About Market Risk included in
the Vectren 2002 Form 10-K and is therefore not presented herein.

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Within 90 days prior to the filing of the report, the Company carried out an
evaluation under the supervision and with the participation of the Chief
Executive Officer and Chief Financial Officer of the effectiveness and the
design and operation of the Company's disclosure controls and procedures. Based
on that evaluation, the Chief Executive Officer and the Chief Financial Officer
have concluded that the Company's disclosure controls and procedures are
effective in bringing to their attention on a timely basis material information
relating to the Company required to be disclosed by the Company in its filings
under the Securities Exchange Act of 1934 (Exchange Act).

Disclosure controls and procedures, as defined by the Exchange Act in Rules
13a-14(c) and 15d-14(c), are controls and other procedures of the Company that
are designed to ensure that information required to be disclosed by the Company
in the reports filed or submitted by it under the Exchange Act is recorded,
processed, summarized, and reported within the time periods specified in the
SEC's rules and forms. "Disclosure controls and procedures" include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by the Company in its Exchange Act reports is accumulated and
communicated to the Company's management, including its principal executive and
financial officers, as appropriate to allow timely decisions regarding required
disclosure.

Changes in Internal Control

Since the evaluation of disclosure controls and procedures, there have been no
significant changes to the Company's internal controls and procedures or
significant changes in other factors that could significantly affect the
Company's internal controls and procedures.

Internal control, as defined in American Institute of Certified Public
Accountants Codification of Statements on Auditing Standards (AU ss.319), is a
process, effected by an entity's board of directors, management, and other
personnel, designed to provide reasonable assurance regarding the achievement of
objectives in the following categories: (a) reliability of financial reporting,
(b) effectiveness and efficiency of operations and (c) compliance with
applicable laws and regulations.

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The Company is party to various legal proceedings arising in the normal course
of business. In the opinion of management, there are no legal proceedings
pending against the Company that are likely to have a material adverse effect on
its financial position or results of operations. See Note 8 of its unaudited
consolidated condensed financial statements included in Part 1 Item 1 Financial
Statements regarding the Clean Air Act and related legal proceedings.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

None

(b)  Reports On Form 8-K During The Last Calendar Quarter
On January 31, 2003, The Company filed a Current Report on Form 8-K with respect
to the release of the Company's and Vectren Corporation's preliminary financial
information to the investment community regarding the Company's results of
operations, for the three and twelve month periods ended December 31, 2002.
         Item 5.  Other Events
         Item 7.  Exhibits
               99.1 - Press Release - Vectren Reports Preliminary 2002 Results
               99.2 - 2002 Selected Financial Data and Effects of Restatement
               99.3 - Cautionary Statement for Purposes of the "Safe Harbor"
                      Provisions of the Private Securities Litigation Reform
                      Act of 1995

On March 14, 2003, The Company filed a Current Report on Form 8-K with respect
to the release of the Company's and Vectren Corporation's financial information
to the investment community regarding the Company's results of operations,
financial position and cash flows for the three and twelve month periods ended
December 31, 2002.
         Item 9.  Regulation FD Disclosure
         Item 7.  Exhibits
               99.1 - Press Release - Vectren Reports Final 2002 Earnings
               99.2 - Cautionary Statement for Purposes of the "Safe Harbor"
                      Provisions of the Private Securities Litigation Reform
                      Act of 1995




                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
      registrant has duly caused this report to be signed on its behalf by the
      undersigned thereunto duly authorized.


                         VECTREN UTILITY HOLDINGS, INC.
                                 Registrant




        May 15, 2003                            /s/Jerome A. Benkert, Jr.
                                                -------------------------
                                                Jerome A. Benkert, Jr.
                                                Executive Vice President &
                                                Chief Financial Officer
                                                (Principal Financial Officer)



                                                /s/M. Susan Hardwick
                                                --------------------------
                                                M. Susan Hardwick
                                                Vice President & Controller
                                                (Principal Accounting Officer)






                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

                      CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Niel C. Ellerbrook, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Vectren Utility
     Holdings, Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
           a.   designed such disclosure controls and procedures to ensure that
               material information relating to the registrant, including its
               consolidated subsidiaries, is made known to us by others within
               those entities, particularly during the period in which this
               quarterly report is being prepared;
          b.   evaluated the effectiveness of the registrant's disclosure
               controls and procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and
          c.   presented in this quarterly report our conclusions about the
               effectiveness of the disclosure controls and procedures based on
               our evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):
          a.   all significant deficiencies in the design or operation of
               internal controls which could adversely affect the registrant's
               ability to record, process, summarize and report financial data
               and have identified for the registrant's auditors any material
               weaknesses in internal controls; and
          b.   any fraud, whether or not material, that involves management or
               other employees who have a significant role in the registrant's
               internal controls; and

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: May 15, 2003

                                  /s/ Niel C. Ellerbrook
                                  ----------------------------------------------
                                  Niel C. Ellerbrook
                                  Chairman & Chief Executive Officer







                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

                      CHIEF FINANCIAL OFFICER CERTIFICATION

I, Jerome A. Benkert, Jr., certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Vectren Utility
     Holdings, Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
          a.   designed such disclosure controls and procedures to ensure that
               material information relating to the registrant, including its
               consolidated subsidiaries, is made known to us by others within
               those entities, particularly during the period in which this
               quarterly report is being prepared;
          b.   evaluated the effectiveness of the registrant's disclosure
               controls and procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and
          c.   presented in this quarterly report our conclusions about the
               effectiveness of the disclosure controls and procedures based on
               our evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):
          a.   all significant deficiencies in the design or operation of
               internal controls which could adversely affect the registrant's
               ability to record, process, summarize and report financial data
               and have identified for the registrant's auditors any material
               weaknesses in internal controls; and
          b.   any fraud, whether or not material, that involves management or
               other employees who have a significant role in the registrant's
               internal controls; and

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: May 15, 2003

                                        /s/ Jerome A. Benkert, Jr.
                                        ----------------------------------
                                        Jerome A. Benkert, Jr.
                                        Executive Vice President &
                                        Chief Financial Officer






                            CERTIFICATION PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

                                  CERTIFICATION
By signing below, each of the undersigned officers hereby certifies pursuant to
18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, that, to his or her knowledge, (i) this report fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934
and (ii) the information contained in this report fairly presents, in all
material respects, the financial condition and results of operations of Vectren
Utility Holdings, Inc.

         Signed this 15th day of May, 2003.







/s/ Jerome A. Benkert, Jr.             /s/ Niel C. Ellerbrook
- ----------------------------------     -----------------------------------
(Signature of Authorized Officer)      (Signature of Authorized Officer)

Jerome A. Benkert, Jr.                 Niel C. Ellerbrook
- ----------------------------------     -----------------------------------
(Typed Name)                          (Typed Name)

Executive Vice President &
Chief Financial Officer               Chairman & Chief Executive Officer
- ---------------------------------     ------------------------------------
(Title)                               (Title)