-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U602GnKKkmCJQRobL78lJmuKyEVD8Gm6OSZh60S28+uUKeb2Y+D6y62tEDF9LbJ0 D2ZAKUedLCCgR4qtuBO+cA== 0001096385-04-000092.txt : 20040729 0001096385-04-000092.hdr.sgml : 20040729 20040729171031 ACCESSION NUMBER: 0001096385-04-000092 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040630 ITEM INFORMATION: FILED AS OF DATE: 20040729 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VECTREN UTILITY HOLDINGS INC CENTRAL INDEX KEY: 0001129542 STANDARD INDUSTRIAL CLASSIFICATION: GAS & OTHER SERVICES COMBINED [4932] IRS NUMBER: 352104850 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16739 FILM NUMBER: 04939785 BUSINESS ADDRESS: STREET 1: 20 NW 4TH ST CITY: EVANSVILLE STATE: IN ZIP: 47708 BUSINESS PHONE: 8124914000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VECTREN CORP CENTRAL INDEX KEY: 0001096385 STANDARD INDUSTRIAL CLASSIFICATION: GAS & OTHER SERVICES COMBINED [4932] IRS NUMBER: 352086905 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15467 FILM NUMBER: 04939784 BUSINESS ADDRESS: STREET 1: 20 NW FOURTH ST CITY: EVANSVILLE STATE: IN ZIP: 47708 BUSINESS PHONE: 8124914000 MAIL ADDRESS: STREET 1: 20 NW FOURTH ST CITY: EVANSVILLE STATE: IN ZIP: 47708 8-K 1 vvc_earningsrel-0604.txt 8K ANNOUNCING EARNINGS FOR JUNE 2004 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) July 29, 2004 VECTREN CORPORATION (Exact name of registrant as specified in its charter) Commission Registrant, State of Incorporation, I.R.S Employer File No. Address, and Telephone Number Identification No. ---------- ----------------------------------- ------------------ 1-15467 Vectren Corporation 35-2086905 (An Indiana Corporation) 20 N.W. Fourth Street, Evansville, Indiana 47708 (812) 491-4000 1-16739 Vectren Utility Holdings, Inc. 35-2104850 (An Indiana Corporation) 20 N.W. Fourth Street, Evansville, Indiana 47708 (812) 491-4000 Former name or address, if changed since last report: N/A Item 12. Results of Operations and Financial Condition The following information regarding an earnings release is furnished to the Securities and Exchange Commission under Item 12. On July 28, 2004, Vectren Corporation (the Company) released financial information to the investment community regarding the Company's results of operations for the three, six and twelve month periods ended June 30, 2004. The financial information released is included herein as Exhibit 99-1. This information does not include footnote disclosures and should not be considered complete financial statements. Vectren Corporation is the parent Company of Vectren Utility Holdings, Inc. (VUHI). VUHI serves as the intermediate holding company of the Company's three operating public utilities. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Company is hereby furnishing cautionary statements identifying important factors that could cause actual results of the Company and its subsidiaries, including Vectren Utility Holdings, Inc., to differ materially from those projected in forward-looking statements of the Company and its subsidiaries made by, or on behalf of, the Company and its subsidiaries. These cautionary statements are attached as Exhibit 99-2. 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 hereunto duly authorized. VECTREN CORPORATION VECTREN UTILITY HOLDINGS, INC. July 29, 2004 By: /s/ M. Susan Hardwick ---------------------------------- M. Susan Hardwick Vice President and Controller INDEX TO EXHIBITS The following Exhibits are furnished as part of this Report to the extent described in Item 12: Exhibit Number Description 99-1 Press Release - Vectren Corporation Reports Second Quarter 2004 Results 99-2 Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995 EX-99.1 PRESS REL 2 vvc8k_release99-1.txt PRESS RELEASE AND FINANCIALS FOR 3RD QTR OF 2004 EX 99-1 News Release Vectren Corporation P.O. Box 209 Evansville, IN 47702-0209 FOR IMMEDIATE RELEASE July 28, 2004 Vectren Corporation Reports Second Quarter 2004 Results Evansville, Indiana - Vectren Corporation (NYSE:VVC) today reported net income for the three months ended June 30, 2004, of $3.3 million, or $0.04 per share, compared to net income of $4.1 million, or $0.06 per share, for the three months ended June 30, 2003. For the six months ended June 30, 2004, reported earnings were $58.1 million, or $0.77 per share, compared to $59.8 million, or $0.88 per share, for the same period in 2003. Average common shares outstanding for the quarter and six months were nearly 12% higher, compared to the same periods last year, primarily due to the Company's equity offering in August 2003. Specific Highlights for the Quarter o Utility Group earnings were $2.8 million for the quarter, compared to $1.4 million in the prior year. Electric margins increased 15% due to the recovery of NOx related expenditures and increased demand in native load and large electric customer margins. This was partially offset by lower earnings from wholesale power marketing operations of $3.4 million after tax, compared to the same quarter last year. The Company estimates that weather favorably impacted second quarter earnings by approximately $0.8 million after tax, compared to last year. o Nonregulated Group earnings were $0.7 million for the quarter, compared to $3.4 million in the prior period. The write-down of the Company's share of an investment held by Haddington Energy Partners (Nations Energy Holdings), totaling $5.9 million, or $3.5 million after tax, is the primary contributor to the decline in Nonregulated earnings. Earnings Guidance Fiscal Year 2004 Based on the current expected timing for the receipt of rate relief for the Vectren North and Vectren Ohio gas rate cases and the recent write-down of the investment in Nations Energy, the Company is revising earnings guidance for fiscal year 2004 to $1.43 to $1.58 per share. Prior guidance was $1.60 to $1.75 per share. The $0.17 reduction in the range of earnings per share guidance is attributable to the following: o Rate relief deferred until 2005 $0.07 o Loss on Broadband businesses $0.08 o YTD heating weather 8% warmer than normal ($0.04) partially offset by expense control $0.02 Fiscal Year 2005 The Company believes the street consensus estimate of $1.78 for fiscal year 2005 is very achievable. The utility group is expected to benefit from gas rate relief in cases filed in Indiana and Ohio, normal weather, incremental recovery of NOx environmental compliance expenditures and continued growth in the utility operations. The nonregulated group is expected to benefit from growth in its primary business activities and from narrowing the focus within the group, including the lack of nonrecurring charges related to the broadband businesses, of $4.5 million after tax, recognized in the first quarter of 2004 and the further second quarter charges of $1.5 million after tax, related to ceasing operations at its broadband consulting business. Although a loss related to Nations Energy was recognized in the second quarter of 2004, Haddington has provided $2.0 million after tax earnings for the six months ended June 30, 2004, which is in line with the Company's original 2004 expectations. "We believe that we have made significant progress this year in executing our plans to improve returns in our utility operations and focus our nonregulated business on activities that can produce attractive growth," stated Niel C. Ellerbrook, Chairman, President and CEO. "We were able to reach an agreement in our $5.7 million Vectren South gas rate case, which allowed us to implement new rates on July 1 of this year. On March 19, we filed our Petition requesting $47 million in rate relief for our Vectren North territory with the Indiana Utility Regulatory Commission and presented our case at hearings during the week of July 19. On April 16, we issued a pre-filing notice requesting approximately $25 million in rate relief for our Ohio operations with the Public Utilities Commission of Ohio. While we would like to reach an earlier negotiated resolution in both cases and will work toward that end, we have decided to revise our 2004 guidance assuming both rate cases are fully litigated and completed late in the first quarter of 2005. On the nonregulated side, we continue to critically evaluate our activities and take actions to reduce or eliminate our involvement in businesses that do not fit our objectives. We are pleased that our primary nonregulated businesses continue to meet expectations, and we believe they provide a stable platform for future growth," added Ellerbrook. Discussion of Utility Group Results Utility Group earnings for the second quarter of 2004 were $2.8 million, compared to $1.4 million for the same quarter last year. The $1.4 million increase was primarily due to the return on additional NOx related environmental expenditures. Results from wholesale power activities were down for the quarter but were offset by increased electric customer usage. Weather for the quarter compared to last year had a slight favorable impact. Utility Group earnings were $47.4 million for the six months ended June 30, 2004, compared to $48.7 million in the prior year. The $1.3 million decrease was primarily due to mild heating weather and lower margins from wholesale power activities. This decrease was partially offset by the return on additional NOx related expenditures and increased electric customer usage. Gas utility margins were $57.1 million and $196.6 million for the three and six months ended June 30, 2004. This represents a decrease compared to prior periods of $3.7 million and $8.6 million, respectively. Heating weather for the quarter was 27% warmer than normal and 21% warmer than last year. Weather for the six months was 8% warmer than normal and 12% warmer than last year. The estimated decline in margin due to weather was $2.6 million and $10.3 million for the three and six month periods, compared to the prior year. Gas sold and transported volumes were 4% less for the second quarter 2004, compared to the prior year, and 6% less than the six months ended June 30, 2004, compared to the prior year. The decreased throughput was primarily attributable to weather and was partially offset by customer growth for both periods and a 3% increase in large volume contract throughput for the second quarter 2004, compared to 2003. Electric retail and firm wholesale utility margins were $60.2 million and $114.7 million for the three and six months ended June 30, 2004. This represents an increase over the same period last year of $13.4 million and $17.7 million, respectively. Margins increased $4.1 million quarter over quarter and $7.3 million for the six month periods due to an increase in retail electric rates related to the recovery of NOx related expenditures. Excluding the effects of NOx recovery, margins from industrial customers increased $1.8 million for the quarter and $2.8 million for the year to date over 2003, which reflects some economic recovery. Margin from small customers (excluding the effects of NOx) increased over $8 million for both the quarter and year to date due to weather and increased usage. It is estimated that weather, which was 111% warmer for the quarter and 114% warmer year to date (20% warmer than normal), contributed $4.0 million and $3.3 million, respectively, to the increases. Electric wholesale margins primarily result from asset optimization activities derived from generation capacity in excess of that needed to serve native load and firm wholesale customers. Net wholesale margins declined $5.7 million and $6.8 million for the three and six-month periods, compared to last year. Increases in demand by native load customers and scheduled outages of owned generation related to the installation of environmental compliance equipment reduced the availability of excess power, lowering wholesale margins. Other operating expenses and depreciation expense for the three and six months ended June 30, 2004 collectively increased $1.9 million and $6.3 million, respectively, compared to 2003. For the quarter, additional NOx related operating expenses were $2.2 million (other operating expenses of $1.6 million and depreciation of $0.6 million). For the six months, additional NOx related operating expenses were $4.1 million (other operating expenses of $2.2 million and depreciation of $1.9 million). The remaining increase in other operating expenses is primarily due to higher labor and benefit costs. The remaining increase in depreciation expense is primarily due to normal additions to utility plant. For the three and six months ended June 30, 2004, total other income (expense) increased $1.1 million and $3.3 million, respectively, compared to 2003. The increase was primarily attributable to 2003 charges related to the Company's investments in BABB, which totaled $1.9 million for the quarter and $3.9 million for the six-month period. For the three and six months ended June 30, 2004, interest expense increased $0.6 million and $1.1 million, respectively, compared to 2003. The increase reflects the July 2003 issuance of fixed rate long-term debt that replaced lower cost short-term variable rate debt. Discussion of Vectren Enterprise Nonregulated Results (All amounts following in this section are after tax) Nonregulated earnings for the second quarter 2004 were $0.7 million, compared to $3.4 million for the same quarter last year. The $2.7 million decrease was principally due to the Company's $3.5 million after-tax write-off of its investment in Nations Energy Holdings. Nonregulated earnings for the six months ended June 30, 2004, were $11.3 million, compared to $11.9 million for the same quarter last year. The six months earnings reflect the $6.0 million after-tax charges related to the write-down of the Company's broadband businesses, which was partially offset by net gains from the Company's investment in Haddington Energy Partners. Energy Marketing and Services generated net income of $1.0 million for the three months ended June 30, 2004, and about equal to 2003. Net income generated by Energy Marketing and Services for the six months ended June 30, 2004 was $8.0 million, compared to $9.2 million in 2003. Gas marketing operations, performed through ProLiance Energy, LLC, contributed quarterly earnings of $1.7 million in 2004, compared to $1.6 million in 2003; and year-to-date earnings in 2004 were $8.6 million, compared to $10.1 million in 2003. The six-month decrease results principally from unprecedented volatility in gas prices in March 2003. Vectren Source contributed earnings increases for the quarter and year-to-date periods of $0.7 million and $1.3 million, respectively. The increases are principally due to increased customers and margins per unit of throughput. Source continues to position itself for rapid growth. In June, it was certified by the Georgia Public Service Commission and has begun initial marketing efforts in the Atlanta Gas Light service territory. Earnings from Energy Systems Group decreased for the year to date by $0.8 million due to the timing of performance contract projects year over year; however, current backlog stands at a record of $41 million. ESG recently acquired Progress Energy Solutions, expanding its energy solutions and performance contracting operations throughout the Southeast and Mid-Atlantic United States. Coal Mining net income for the three months ended June 30, 2004, was $3.8 million, compared to $4.6 million in 2003. Coal Mining net income for the six months ended June 30, 2004, was $7.4 million, compared to $6.9 million in 2003. Mining operations improved by $0.8 million for the six months, compared to 2003 results. The increase was primarily due to improved pricing and better mining conditions. Synfuel-related results for the quarter, which include earnings from Pace Carbon and synfuel processing fees, contributed $3.2 million in earnings in 2004, compared to $4.1 million in 2003. Synfuel-related results for the six months contributed $6.1 million in earnings in 2004, compared to $6.4 million in 2003. During the second quarter of 2004, Pace Carbon produced less synthetic fuel, compared to 2003, due to feed stock problems at one of the four plants. Utility Infrastructure Services provides underground construction and repair to gas, wastewater, water and electric companies primarily through its investment in Miller Pipeline. Construction and repair activity improved in the second quarter due to the seasonal change in weather and continued increases in utility work. Infrastructure's income for the quarter was $0.5 million, an improvement of $0.7 million from 2003. Infrastructure was about flat for the six months ended June 30, 2004, an improvement of $1.1 million over 2003. During the first quarter of 2004, the Company continued to evaluate strategic alternatives for its broadband investments and concluded that it is unlikely that it would be making additional investments in its franchises in the Indianapolis and Dayton markets. As a result, the Company recorded impairment charges for its investment in Utilicom related activities, totaling $3.6 million after tax. Consistent with long-term strategic objectives, the Company ceased operations of Vectren Communications Services, a municipal broadband consulting business, during the second quarter of 2004. During the first quarter of 2004, the Company wrote down its investment in inventory at VCS by $0.9 million after tax and recorded additional cessation charges and other costs of $1.5 million after tax in the second quarter. Broadband results for the six months ended June 30, 2004, were a $3.3 million loss, compared to a $1.2 million loss in 2003. The second quarter of 2003 includes a $1.2 million loss on the sale of its investment in First Mile Technologies. Vectren is an investor in SIGECOM Holdings, Inc., located in Evansville, Indiana, and in convertible debt at its parent, Utilicom Networks. SIGECOM provides broadband service to over 28,000 customers, averaging nearly 3 revenue generating units per customer and continues to increase its positive EBITDA. Vectren Communications Services results are reported in Other Businesses. The Company's Other Businesses Group reported a net loss of $4.7 million for the three months ended June 30, 2004, compared to losses of $0.9 million in 2003. For the six months ended June 30, 2004, the Other Businesses Group reported losses of $0.7 million, compared to losses of $1.8 million in 2003. The six month results reflect the net effect of Haddington's sale of SAGO Energy in the first quarter of 2004 and the write-down at Nations Energy in the second quarter. The Company has invested $22 million in Haddington with an $8 million commitment remaining. While the Nations Energy write-down is disappointing, the Company has still realized an after-tax internal rate of return of 26% through June 2004. Haddington currently has two remaining investments, an operational and income generating underground storage field in California and a compressed air energy storage project for the bulk storage of compressed air to be used for the generation of electricity in Ohio. Vectren North Pending Gas Rate Case The Company filed its petition with the Indiana Utility Regulatory Commission on March 19, 2004, to increase its base rates by approximately $47 million to cover the ongoing cost of operating, maintaining and expanding its gas distribution business in central and southeastern Indiana. This marks the first request to increase base rates since 1991. Since that time, investments made to serve customers have exceeded $270 million. If approved, the typical residential customer who uses natural gas to heat his/her home would see a bill increase of about 7%. The filing also includes a request to implement a normal temperature adjustment mechanism to partially reduce the impact on customer bills caused by variations in weather. On July 19 and 20, the Company presented its case in a public hearing before the Indiana Commission. The public and intervenors' cases are scheduled to be filed in mid-September, and the Company's rebuttal and any other final evidentiary filings will be made in early October. The final public hearing is scheduled for mid-October, and the briefing will be concluded in early December. Vectren Ohio Pending Gas Rate Case The Company issued its initial pre-filing notice with the Ohio Commission on April, 2004, and requested an increase in its base rates of approximately $25 million to cover the ongoing cost of operating, maintaining and expanding its gas distribution business in west central Ohio. This marks the first request to increase base rates since 1991. Since that time, investments made to serve customers have exceeded $135 million. If approved, the typical residential customer who uses natural gas to heat his/her home would see a bill increase of less than 8%. The filing also includes a proposed conservation tariff, which, if approved, will enable the Company to proactively support conservation and promote home weatherization and the reduction of energy consumption. In late May, the Company filed its formal application for an increase in base rates; and based on the Ohio Commission's regulatory process, the Commission staff report relating to the Company's request is expected to be submitted in late October. Based upon the Ohio Commission's actions in other proceedings, the Company would expect a litigated resolution of this case late in the first quarter of 2005. Dividend The Board of Directors declared a quarterly common stock dividend of $0.285 per share, unchanged from the prior quarter. The dividend will be payable September 1, 2004, to shareholders of record at the close of business on August 13, 2004. Vectren and its predecessor companies have recorded 44 consecutive years of annual dividend increases. Please SEE ATTACHED unaudited schedules for additional financial information Live Webcast on July 29, 2004 Vectren Corporation officers will discuss Second Quarter 2004 earnings results and provide an outlook for 2004 during a conference call for analysts scheduled at 2:30 p.m. EDT (1:30 CDT), Thursday, July 29, 2004. You are invited to listen to the live Webcast and view the supporting slides by accessing the Investor Relations link on Vectren's Web site at www.Vectren.com. Interested parties may also view the slide presentation and listen to the Webcast replay via Vectren's Web site beginning two hours after the completion of the Webcast. About Vectren Vectren Corporation is an energy and applied technology holding company headquartered in Evansville, Indiana. Vectren's energy delivery subsidiaries provide gas and/or electricity to over one million customers in adjoining service territories that cover nearly two-thirds of Indiana and west central Ohio. Vectren's non-regulated subsidiaries and affiliates currently offer energy-related products and services to customers throughout the midwest and southeast. These include gas marketing and related services; coal production and sales; utility infrastructure services; and broadband communication services. To learn more about Vectren, visit www.vectren.com. Safe Harbor for Forward Looking Statements This document contains forward-looking statements, which are based on management's beliefs and assumptions that derive from information currently known by management. Vectren wishes to caution readers that actual results could differ materially from those contained in this document. Additional detailed information concerning a number of factors that could cause actual results to differ materially from the information that is provided to you is readily available in our report Form 10-K filed with the Securities and Exchange Commission on February 26, 2004. Investor Contact Steven M. Schein, (812) 491-4209, sschein@vectren.com ------------------- Media Contact Jeffrey W. Whiteside, (812) 491-4205, jwhiteside@vectren.com ---------------------- ### VECTREN CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF INCOME (Thousands, except per share amounts) (Unaudited)
Three Months Six Months Twelve Months Ended June 30 Ended June 30 Ended June 30 ------------------------------------------------------------------ 2004 2003 2004 2003 2004 2003 -------------------- -------------------- ---------------------- OPERATING REVENUE: Gas utility $ 154,108 $ 164,553 $ 659,264 $ 673,744 $1,097,833 $1,083,969 Electric utility 89,061 75,170 177,858 158,711 354,841 339,917 Energy services and other 33,545 28,110 84,952 61,711 162,944 122,242 -------- -------- -------- -------- --------- --------- Total operating revenues 276,714 267,833 922,074 894,166 1,615,618 1,546,128 -------- -------- -------- -------- --------- --------- OPERATING EXPENSES: Cost of gas sold 97,031 103,799 462,667 468,575 756,556 727,204 Fuel for electric generation 23,777 20,559 46,637 41,311 91,803 86,126 Purchased electric energy 6,777 3,753 11,233 8,333 19,072 16,814 Cost of energy services and other 23,095 19,060 63,099 44,595 122,241 87,171 Other operating 60,006 59,630 128,613 122,202 240,140 231,594 Depreciation and amortization 34,887 32,410 67,399 63,812 132,243 125,689 Taxes other than income taxes 10,711 11,083 33,371 33,118 57,260 56,447 -------- -------- -------- -------- --------- --------- Total operating expenses 256,284 250,294 813,019 781,946 1,419,315 1,331,045 -------- -------- -------- -------- --------- --------- OPERATING INCOME 20,430 17,539 109,055 112,220 196,303 215,083 OTHER INCOME: Equity in earnings of unconsolidated affiliates (4,883) (129) 11,998 8,677 15,490 10,966 Other - net 1,790 (1,007) (3,851) (2,155) 11,250 4,120 -------- -------- -------- -------- --------- --------- Total other income (3,093) (1,136) 8,147 6,522 26,740 15,086 -------- -------- -------- -------- --------- --------- INTEREST EXPENSE 18,787 18,261 38,129 37,137 76,578 76,273 -------- -------- -------- -------- --------- --------- INCOME BEFORE INCOME TAXES (1,450) (1,858) 79,073 81,605 146,465 153,896 INCOME TAXES (4,769) (5,939) 20,901 21,788 36,782 37,312 MINORITY INTEREST IN SUBSIDIARY 21 6 28 33 61 794 PREFERRED DIVIDEND REQUIREMENT OF SUBSIDIARY 3 5 9 14 18 36 -------- ------------------- -------------------- --------- NET INCOME $ 3,295 $ 4,070 $ 58,135 $ 59,770 $ 109,604 $ 115,754 ======== ======== ======== ======== ========= ========= AVERAGE COMMON SHARES OUTSTANDING 75,551 67,768 75,512 67,731 74,484 67,668 DILUTED COMMON SHARES OUTSTANDING 75,833 68,083 75,873 67,976 74,793 67,935 EARNINGS PER SHARE OF COMMON STOCK BASIC: EARNINGS PER SHARE OF COMMON STOCK $ 0.04 $ 0.06 $ 0.77 $ 0.88 $ 1.47 $ 1.71 ======== ======== ======== ======== ========= ========= DILUTED: EARNINGS PER SHARE OF COMMON STOCK $ 0.04 $ 0.06 $ 0.77 $ 0.88 $ 1.47 $ 1.70 ======== ======== ======== ======== ========= =========
VECTREN UTILITY HOLDINGS AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME (Thousands, except per share amounts) (Unaudited) Three Months Six Months Twelve Months Ended June 30 Ended June 30 Ended June 30 -------------------- -------------------- ---------------------- 2004 2003 2004 2003 2004 2003 -------------------- -------------------- ---------------------- OPERATING REVENUE: Gas utility $ 154,108 $ 164,553 $ 659,264 $ 673,744 $1,097,833 $1,083,969 Electric utility 89,061 75,170 177,858 158,711 354,841 339,917 Other 200 199 481 397 877 584 -------- -------- -------- -------- --------- --------- Total operating revenues 243,369 239,922 837,603 832,852 1,453,551 1,424,470 -------- -------- -------- -------- --------- --------- OPERATING EXPENSES: Cost of gas sold 97,031 103,799 462,667 468,575 756,556 727,204 Fuel for electric generation 23,777 20,559 46,637 41,311 91,803 86,126 Purchased electric energy 6,777 3,753 11,233 8,333 19,072 16,814 Other operating 53,670 53,895 113,768 110,498 213,368 208,987 Depreciation and amortization 31,833 29,681 61,444 58,443 120,949 116,009 Taxes other than income taxes 10,401 10,864 32,744 32,582 56,788 55,243 -------- -------- -------- -------- --------- --------- Total operating expenses 223,489 222,551 728,493 719,742 1,258,536 1,210,383 -------- -------- -------- -------- --------- --------- OPERATING INCOME 19,880 17,371 109,110 113,110 195,015 214,087 OTHER INCOME (EXPENSE): Equity in earnings (losses) of unconsolidated affiliates 45 86 213 (418) 158 (1,761) Other - net 1,428 225 1,385 (1,282) 7,429 23 -------- -------- -------- -------- --------- --------- Total other income (expense) 1,473 311 1,598 (1,700) 7,587 (1,738) -------- -------- -------- -------- --------- --------- INTEREST EXPENSE 16,467 15,864 33,426 32,380 67,181 66,659 -------- -------- -------- -------- --------- --------- INCOME BEFORE INCOME TAXES 4,886 1,818 77,282 79,030 135,421 145,690 INCOME TAXES 2,108 378 29,841 30,273 51,150 50,519 PREFERRED DIVIDEND REQUIREMENT OF SUBSIDIARY 3 5 9 14 18 36 -------- -------- -------- -------- --------- --------- NET INCOME $ 2,775 $ 1,435 $ 47,432 $ 48,743 $ 84,253 $ 95,135 ======== ======== ======== ======== ======== =========
VECTREN CORPORATION 3 Months 6 Months 12 Months HIGHLIGHTS Ended June 30 Ended June 30 Ended June 30 ------------------------------------------------------------- (millions, except per share amounts) ------------------------------------------------------------- (Unaudited) 2004 2003 2004 2003 2004 2003 - ---------------------------------------------------------------------------------------------------- Reported Earnings: Utility Group $ 2.8 $ 1.4 $ 47.4 $ 48.7 $ 84.3 $ 95.1 Non-regulated Group Energy Marketing and Services 1.0 1.1 8.0 9.2 14.1 14.1 Mining 0.6 0.5 1.3 0.5 0.5 1.5 Synfuels related 3.2 4.1 6.1 6.4 13.0 12.2 ------- ------- ------- ------- ------- ------- Total Coal Mining 3.8 4.6 7.4 6.9 13.5 13.7 Utility Infrastructure Services 0.5 (0.2) (0.1) (1.2) 0.3 (1.9) Broadband 0.1 (1.2) (3.3) (1.2) (3.2) (1.0) Other Businesses (4.7) (0.9) (0.7) (1.8) 2.4 (2.8) ------- ------- ------- ------- ------- ------- Total Non-regulated Group 0.7 3.4 11.3 11.9 27.1 22.1 Corporate and Other (0.2) (0.7) (0.6) (0.8) (1.8) (1.5) ------- ------- ------- ------- ------- ------- Vectren Consolidated $ 3.3 $ 4.1 $ 58.1 59.8 $ 109.6 $ 115.7 ======= ======= ======= ======= ======= =======
Vectren Selected Highlights 12 months 12 months Ended Ended June 30 June 30 2004 2003 --------- --------- Dividends Paid (per common share, 12 months) $ 1.13 $ 1.09 Annualized Dividend $ 1.14 $ 1.10 Dividend Yield (at close) 4.5% 4.4% Dividend Payout Ratio 76.9% 63.7% Dividend to Book Value 7.9% 8.3% Return on Average Shareholders' Equity 11.0% 13.1% Book Value Per Share $ 14.37 $ 13.20 Market to Book Value (at close) 175% 190% Common Stock Prices (VVC - NYSE) High $ 25.87 $ 26.13 Low $ 22.25 $ 17.95 Close $ 25.09 $ 25.05 Price/Earnings Ratio (trailing) 17.1 14.6 Ratio of Total Debt to Total Capitalization 53% 60% Percent Internally Generated Funds - Utility Group 63% 75% Ratio of Earnings to Fixed Charges - SEC Method Consolidated 3.1 2.9 Utility Group 3.0 3.2
VECTREN CORPORATION SELECTED GAS DISTRIBUTION 3 Months 6 Months 12 Months OPERATING STATISTICS Ended June 30 Ended June 30 Ended June 30 --------------------- --------------------- ------------------------ 2004 2003 2004 2003 2004 2003 --------- --------- --------- --------- ---------- ----------- (Unaudited) - ---------------------------- GAS OPERATING REVENUES (Thousands): Residential $ 97,847 $ 108,879 $ 438,939 $ 454,496 $ 727,006 $ 724,893 Commercial 38,062 38,836 164,518 166,054 274,641 263,123 Contract 15,151 14,604 48,117 48,365 84,400 86,277 Miscellaneous Revenue 3,048 2,234 7,690 4,829 11,786 9,676 --------- --------- --------- --------- ---------- ---------- $ 154,108 $ 164,553 $ 659,264 $ 673,744 $1,097,833 $1,083,969 ========= ========= ========= ========= ========== ========== GAS MARGIN (Thousands): Residential $ 35,721 $ 38,965 $ 126,089 $ 133,653 $ 217,899 $ 230,915 Commercial 9,102 9,199 37,213 38,924 63,005 67,414 Contract 10,831 9,668 28,881 28,179 52,571 51,445 Miscellaneous 1,423 2,922 4,414 4,413 7,802 6,991 --------- --------- --------- --------- ---------- ---------- $ 57,077 $ 60,754 $ 196,597 $ 205,169 $ 341,277 $ 356,765 ========= ========= ========= ========= ========== ========== GAS SOLD & TRANSPORTED (MDth): Residential 8,511 9,995 49,873 54,551 78,532 87,859 Commercial 3,690 4,161 19,570 21,379 31,554 34,623 Contract 18,607 18,070 47,828 48,394 92,205 95,706 --------- --------- --------- --------- ---------- ---------- 30,808 32,226 117,271 124,324 202,291 218,188 ========= ========= ========= ========= ========== ========== AVERAGE GAS CUSTOMERS Residential 875,982 869,127 883,568 877,105 877,334 871,816 Commercial 78,997 78,984 79,724 79,830 79,259 79,551 Contract 4,042 4,103 4,054 4,119 4,043 4,143 --------- --------- --------- --------- ---------- ---------- 959,021 952,214 967,346 961,054 960,636 955,510 ========= ========= ========= ========= ========== ========== WEATHER AS A PERCENT OF NORMAL: Heating Degree Days 73% 92% 92% 105% 92% 104%
VECTREN CORPORATION SELECTED ELECTRIC 3 Months 6 Months 12 Months OPERATING STATISTICS Ended June 30 Ended June 30 Ended June 30 ---------------------- ---------------------- ----------------------- 2004 2003 2004 2003 2004 2003 ---------- ---------- ---------- ---------- ---------- ---------- (Unaudited) - ------------------------------- ELECTRIC OPERATING REVENUES (Thousands): Residential $ 29,703 $ 20,401 $ 57,197 $ 46,397 $ 116,181 $ 108,017 Commercial 24,307 18,716 44,443 37,481 89,230 80,410 Industrial 27,586 23,449 53,104 44,500 101,350 91,823 Municipals 5,982 5,185 11,421 10,008 22,947 21,331 Miscellaneous Revenue 857 1,449 2,322 2,936 6,571 5,436 ---------- ---------- ---------- ---------- ---------- ---------- Total Retail 88,435 69,200 168,487 141,322 336,279 307,017 Net Wholesale Revenues 626 5,970 9,371 17,389 18,562 32,900 ---------- ---------- ---------- ---------- ---------- ---------- $ 89,061 $ 75,170 $ 177,858 $ 158,711 $ 354,841 $ 339,917 ========== ========== =========== ========== ========== ========== ELECTRIC MARGIN (Thousands): Residential $ 23,181 $ 16,110 $ 44,236 $ 35,891 $ 90,295 $ 84,708 Commercial 17,018 13,330 31,427 26,843 63,694 58,476 Industrial 15,770 12,791 30,216 25,126 58,623 54,121 Municipals 3,452 3,212 6,554 6,226 13,443 12,682 Miscellaneous 825 1,429 2,255 2,857 6,458 5,278 ---------- ---------- ---------- ---------- ---------- ---------- Total Retail 60,246 46,872 114,688 96,943 232,513 215,265 ---------- ---------- ---------- ---------- ---------- ---------- Net Wholesale Margin (1,739) 3,986 5,300 12,124 11,453 21,712 ---------- ---------- ---------- ---------- ---------- ---------- $ 58,507 $ 50,858 $ 119,988 $ 109,067 $ 243,966 $ 236,977 ========== ========== ========== ========== ========== ========== ELECTRICITY SOLD (MWh): Residential 362,713 261,504 740,263 656,319 1,525,650 1,543,253 Commercial 397,388 328,998 728,331 662,844 1,487,614 1,448,478 Industrial 642,456 651,770 1,277,725 1,205,681 2,488,929 2,493,342 Municipals 157,985 145,936 310,212 279,748 631,388 606,836 Miscellaneous Sales 2,791 4,235 6,452 9,349 14,313 18,998 ---------- ---------- ---------- ---------- ---------- ---------- Total Retail 1,563,333 1,392,443 3,062,983 2,813,941 6,147,894 6,110,907 Wholesale 593,800 576,700 1,105,114 2,025,050 3,385,254 7,100,763 ---------- ---------- ---------- ---------- ---------- ---------- 2,157,133 1,969,143 4,168,097 4,838,991 9,533,148 13,211,670 ========== ========== ========== ========== ========== ========== AVERAGE ELECTRIC CUSTOMERS Residential 117,994 116,719 118,121 116,887 117,697 116,654 Commercial 17,044 16,975 17,042 16,955 17,026 16,948 Industrial 154 177 155 177 157 175 All Others 21 21 21 21 21 22 ---------- ---------- ---------- ---------- ---------- ---------- 135,213 133,892 135,339 134,040 134,901 133,799 ========== ========== ========== ========== ========== ========== WEATHER AS A PERCENT OF NORMAL: Heating Degree Days 73% 92% 92% 105% 92% 104% Cooling Degree Days 120% 57% 120% 56% 101% 104%
EX-99.2 SAFE HARBOR 3 vvc8k_99-2.txt SAFE HARBOR STATEMENT EX 99-2 Cautionary Statement for Purposes of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. 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. Forward-looking statements have been and will be made in written documents and oral presentations of Vectren Corporation and its subsidiaries. Such statements are based on management's beliefs, as well as assumptions made by and information currently available to management. When used in Vectren Corporation and its subsidiaries' documents or oral presentations, 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 Vectren Corporation and its subsidiaries' actual results to differ materially from those contemplated in any forward-looking statements included, 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 The performance of projects undertaken by the Company's nonregulated businesses and the success of efforts to invest in and develop new opportunities, including but not limited to, the realization of Section 29 income tax credits and the Company's coal mining, gas marketing, and broadband strategies. o Direct or indirect effects on our business, financial condition or liquidity resulting from a change in our credit rating, changes in interest rates, and/or changes in market perceptions of the utility industry and other energy-related industries. o Discovery of material weakness in internal controls. o Employee or contractor 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 periodic filings made with Commission by Vectren Corporation and its subsidiaries, including Vectren Utility Holdings, Inc. o Changes in federal, state or local legislature requirements, such as changes in tax laws or rates, environmental laws and regulations. Vectren Corporation and its subsidiaries undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of changes in actual results, changes in assumptions, other factors affecting such statements. -----END PRIVACY-ENHANCED MESSAGE-----