Notes to Consolidated Financial Statements
Note 5 — Common Shareholders' Equity
Share Repurchases
In March 2001, our Board of Directors approved the purchase of up to 600,000 shares of our common stock to be used for issuances under the Officer Incentive Plan. In 2007, we purchased 10,667 shares under this plan. As of December 31, 2007, we had purchased a total 297,234 shares, leaving 302,766 shares available for purchase.
In February 2006, our Board of Directors authorized a plan to purchase up to 8 million shares of our outstanding common stock over a five-year period. These purchases are intended to offset share issuances under our employee and non-employee director incentive compensation plans and our dividend reinvestment and stock purchase plans. Stock purchases under this program may be made in the open market or in private transactions at times and in amounts that we deem appropriate. There is no guarantee as to the exact number of shares that we will purchase, and we can terminate or limit the program at any time. We will hold the purchased shares as treasury shares. As of December 31, 2007, we had repurchased 3,049,049 shares at a weighted average price of $38.58.
Dividends
We derive a substantial portion of our consolidated assets, earnings and cash flow from the operation of regulated utility subsidiaries, whose legal authority to pay dividends or make other distributions to us is subject to regulation. Our common shareholders may receive dividends when declared at the discretion of our Board of Directors. Dividends may be paid in cash, stock or other form of payment, and payment of future dividends will depend on our future earnings, cash flow, financial requirements and other factors, some of which are noted below. In certain cases, our ability to pay dividends to our common shareholders is limited by the following:
- our ability to satisfy our obligations under certain financing agreements, including debt-to-capitalization and total shareholders' equity covenants
- our ability to satisfy our obligations to any preferred shareholders
- performance units (restricted stock units and performance cash units)