EX-99.2 3 ex99_2.htm FINANCIAL STATEMENTS AND SCHEDULES financial statements and schedules
Ex 99.2
 
VECTREN CORPORATION
          
AND SUBSIDIARY COMPANIES
          
CONSOLIDATED STATEMENTS OF INCOME
          
(Millions, except per share amounts)
          
(Unaudited)
          
   
Three Months
  
Six Months
  
   
Ended June 30
  
Ended June 30
  
   
2005
  
2004
  
2005
  
2004
  
OPERATING REVENUES:
                          
  Gas utility
  
$
186.0
  
$
154.1
  
$
702.7
  
$
659.3
  
  Electric utility
    
96.9
   
89.1
   
191.6
   
177.9
 
  Energy services and other
    
43.3
   
33.5
   
109.1
   
84.9
 
     Total operating revenues
    
326.2
   
276.7
   
1,003.4
   
922.1
 
                           
OPERATING EXPENSES:
                          
  Cost of gas sold
    
116.3
   
97.0
   
487.2
   
462.7
 
  Fuel for electric generation
    
29.4
   
23.8
   
56.3
   
46.6
 
  Purchased electric energy
    
3.6
   
6.8
   
5.9
   
11.2
 
  Cost of energy services and other
    
31.4
   
23.1
   
83.0
   
63.1
 
  Other operating
    
65.8
   
60.0
   
136.9
   
131.2
 
  Depreciation and amortization
    
38.5
   
34.9
   
75.6
   
67.4
 
  Taxes other than income taxes
    
12.0
   
10.7
   
34.1
   
33.4
 
     Total operating expenses
    
297.0
   
256.3
   
879.0
   
815.6
 
                           
OPERATING INCOME
    
29.2
   
20.4
   
124.4
   
106.5
 
                           
OTHER INCOME:
                          
  Equity in earnings of unconsolidated affiliates
    
0.7
   
(4.9
)
  
7.1
   
12.0
 
  Other - net
    
1.6
   
1.8
   
4.0
   
(1.4
)
    Total other income
    
2.3
   
(3.1
)
  
11.1
   
10.6
 
                           
INTEREST EXPENSE
    
19.7
   
18.8
   
39.8
   
38.1
 
                           
INCOME BEFORE INCOME TAXES
    
11.8
   
(1.5
)
  
95.7
   
79.0
 
                           
INCOME TAXES
    
(1.6
)
  
(4.8
)
  
26.2
   
20.9
 
                           
NET INCOME
  
$
13.4
  
$
3.3
  
$
69.5
  
$
58.1
  
                           
AVERAGE COMMON SHARES OUTSTANDING
    
75.6
   
75.6
   
75.6
   
75.5
 
DILUTED COMMON SHARES OUTSTANDING
    
76.1
   
75.8
   
76.2
   
75.9
 
                           
EARNINGS PER SHARE OF COMMON STOCK
                          
                           
BASIC
  
$
0.18
  
$
0.04
  
$
0.92
  
$
0.77
  
                           
DILUTED
  
$
0.18
  
$
0.04
  
$
0.91
  
$
0.77
  

 
 
VECTREN CORPORATION
  
 
          
  AND SUBSIDIARY COMPANIES
  
 
          
  CONSOLIDATED BALANCE SHEETS
            
  (Millions - Unaudited)
  
 
          
       
June 30,
  
December 31,
  
       
2005
  
2004
  
ASSETS
                  
Current Assets
                  
    Cash & cash equivalents
      
$
9.5
  
$
9.6
  
    Accounts receivable - less reserves of $2.4 &
                  
        $2.0, respectively
        
103.7
   
173.5
 
    Accrued unbilled revenues
        
47.1
   
176.6
 
    Inventories
        
65.5
   
67.6
 
    Recoverable fuel & natural gas costs
        
2.4
   
17.7
 
    Prepayments & other current assets
        
102.6
   
141.3
 
        Total current assets
        
330.8
   
586.3
 
Utility Plant
                  
    Original cost
        
3,524.6
   
3,465.2
 
    Less: accumulated depreciation & amortization
        
1,343.0
   
1,309.0
 
        Net utility plant
        
2,181.6
   
2,156.2
 
Investments in unconsolidated affiliates
        
195.5
   
180.0
 
Other investments
        
115.6
   
115.1
 
Non-utility property - net
        
244.3
   
229.2
 
Goodwill - net
        
207.1
   
207.1
 
Regulatory assets
        
87.5
   
82.5
 
Other assets
        
29.6
   
30.5
 
        TOTAL ASSETS
      
$
3,392.0
  
$
3,586.9
  
LIABILITIES & SHAREHOLDERS' EQUITY
                  
Current Liabilities
                  
    Accounts payable
      
$
61.2
  
$
123.8
  
    Accounts payable to affiliated companies
        
61.8
   
109.3
 
    Refundable fuel & natural gas costs
        
21.8
   
6.3
 
    Accrued liabilities
        
133.5
   
125.8
 
    Short-term borrowings
        
252.9
   
412.4
 
    Current maturities of long-term debt
        
38.6
   
38.5
 
    Long-term debt subject to tender
        
-
   
10.0
 
        Total current liabilities
        
569.8
   
826.1
 
Long-term Debt - Net of Current Maturities &Debt Subject to Tender
         1,026.8      1,016.6   
Deferred Income Taxes & Other Liabilities
                  
    Deferred income taxes
        
239.6
   
234.0
 
    Regulatory liabilities & other removal costs
        
260.7
   
251.7
 
    Deferred credits & other liabilities
        
168.5
   
163.2
 
        Total deferred credits & other liabilities
        
668.8
   
648.9
 
Minority Interest in Subsidiary
        
0.4
   
0.4
 
Cumulative, Redeemable Preferred Stock of a Subsidiary
        
-
   
0.1
 
Common Shareholders' Equity
                  
    Common stock (no par value) – issued & outstanding
                 
    76.1 and 75.9 shares, respectively
        
528.6
   
526.8
 
    Retained earnings
        
607.3
   
583.0
 
    Accumulated other comprehensive loss
        
(9.7
)
  
(15.0
)
        Total common shareholders' equity
        
1,126.2
   
1,094.8
 
        TOTAL LIABILITIES & SHAREHOLDERS' EQUITY
      
$
3,392.0
  
$
3,586.9
  

           
 VECTREN CORPORATION
          
 AND SUBSIDIARY COMPANIES
          
 CONSOLIDATED STATEMENTS OF CASH FLOWS
          
 (Millions - Unaudited)
          
     
Six Months
  
     
Ended June 30,
  
     
2005
  
2004
  
CASH FLOWS FROM OPERATING ACTIVITIES:
                
    Net income
    
$
69.5
  
$
58.1
  
    Adjustments to reconcile net income to cash from operating activities:
                
        Depreciation & amortization
      
75.6
   
67.4
 
        Deferred income taxes & investment tax credits
      
(0.1
)
  
10.1
 
        Equity in earnings of unconsolidated affiliates
      
(7.1
)
  
(12.0
)
        Net unrealized (gain) on derivative instruments
      
(2.8
)
  
(0.8
)
        Pension & postretirement periodic benefit cost
      
9.0
   
8.3
 
        Other non-cash charges - net
     
12.0
   
13.3
 
        Changes in working capital accounts:
                
                Accounts receivable & accrued unbilled revenue
      
189.7
   
119.2
 
        Inventories
      
2.1
   
14.6
 
        Recoverable fuel & natural gas costs
      
30.8
   
(1.6
)
        Prepayments & other current assets
      
39.9
   
45.3
 
        Accounts payable, including to affiliated companies
      
(110.1
)
  
(37.8
)
        Accrued liabilities
      
11.9
   
6.7
 
        Changes in noncurrent assets
      
(3.3
)
  
(5.1
)
        Changes in noncurrent liabilities
      
(9.3
)
  
(5.6
)
          Net cash flows from operating activities
      
307.8
   
280.1
 
CASH FLOWS FROM FINANCING ACTIVITIES:
                
    Proceeds from stock option exercises & other stock plans
      
-
   
3.9
 
    Requirements for:
                
        Dividends on common stock
      
(45.2
)
  
(43.0
)
        Redemption of preferred stock of subsidiary
      
(0.1
)
  
(0.1
)
    Net change in short-term borrowings
      
(159.5
)
  
(149.4
)
        Net cash flows from financing activities
      
(204.8
)
  
(188.6
)
CASH FLOWS FROM INVESTING ACTIVITIES:
                
    Proceeds from:
                
        Unconsolidated affiliate distributions
      
7.2
   
21.0
 
        Notes receivable & other collections
      
0.8
   
1.0
 
    Requirements for:
                
        Capital expenditures, excluding AFUDC equity
      
(104.3
)
  
(111.3
)
        Unconsolidated affiliate investments
      
(6.8
)
  
(9.0
)
        Net cash flows from investing activities
      
(103.1
)
  
(98.3
)
Net decrease in cash & cash equivalents
      
(0.1
)
  
(6.8
)
Cash & cash equivalents at beginning of period
      
9.6
   
15.3
 
Cash & cash equivalents at end of period
    
$
9.5
  
$
8.5
  


  VECTREN CORPORATION
              
  AND SUBSIDIARY COMPANIES
              
  HIGHLIGHTS
              
  (millions, except per share amounts)
              
  (Unaudited)
              
                       
       
Three Months
  
Six Months
  
       
Ended June 30
  
Ended June 30
  
       
2005
  
2004
  
2005
  
2004
  
                       
REPORTED EARNINGS:
                        
Utility Group
        
$
7.8
  
$
2.8
  
$
55.9
  
$
47.4
  
                                 
Non-regulated Group
                                
Energy Marketing and Services
          
0.7
   
0.9
   
6.7
   
7.9
 
   Mining
          
1.3
   
0.6
   
2.6
   
1.3
 
   Synfuels related
          
3.4
   
3.3
   
6.5
   
6.2
 
Total Coal Mining
          
4.7
   
3.9
   
9.1
   
7.5
 
Utility Infrastructure Services
          
0.5
   
0.5
   
(0.5
)
  
(0.1
)
Other Businesses
          
(0.2
)
  
(4.6
)
  
(0.7
)
  
(4.0
)
Total Non-regulated Group
          
5.7
   
0.7
   
14.6
   
11.3
 
                                 
Corporate and Other
          
(0.1
)
  
(0.2
)
  
(1.0
)
  
(0.6
)
                                 
Vectren Consolidated
        
$
13.4
  
$
3.3
  
$
69.5
  
$
58.1
  
 
 
 
VECTREN UTILITY HOLDINGS
          
AND SUBSIDIARY COMPANIES
          
CONSOLIDATED STATEMENTS OF INCOME
          
(Millions, except per share amounts)
          
(Unaudited)
          
                   
   
 Three Months
  
Six Months 
  
   
 Ended June 30
  
Ended June 30 
  
   
2005
 
2004
 
2005
 
2004
  
OPERATING REVENUES:
                          
  Gas utility
  
$
186.0
  
$
154.1
  
$
702.7
  
$
659.3
  
  Electric utility
    
96.9
   
89.1
   
191.6
   
177.9
 
  Other
    
0.1
   
0.2
   
0.3
   
0.5
 
     Total operating revenues
    
283.0
   
243.4
   
894.6
   
837.7
 
                           
OPERATING EXPENSES:
                          
  Cost of gas sold
    
116.3
   
97.0
   
487.2
   
462.7
 
  Fuel for electric generation
    
29.4
   
23.8
   
56.3
   
46.6
 
  Purchased electric energy
    
3.6
   
6.8
   
5.9
   
11.2
 
  Other operating
    
59.2
   
53.7
   
120.8
   
115.7
 
  Depreciation and amortization
    
34.5
   
31.8
   
67.9
   
61.5
 
  Taxes other than income taxes
    
11.7
   
10.4
   
33.5
   
32.7
 
     Total operating expenses
    
254.7
   
223.5
   
771.6
   
730.4
 
                           
OPERATING INCOME
    
28.3
   
19.9
   
123.0
   
107.3
 
                           
OTHER INCOME (EXPENSE):
                          
  Equity in earnings of unconsolidated affiliates
    
-
   
0.1
   
-
   
0.2
 
  Other - net
    
1.1
   
1.4
   
3.3
   
3.2
 
     Total other income
    
1.1
   
1.5
   
3.3
   
3.4
 
                           
INTEREST EXPENSE
    
16.4
   
16.5
   
33.3
   
33.4
 
                           
INCOME BEFORE INCOME TAXES
    
13.0
   
4.9
   
93.0
   
77.3
 
                           
INCOME TAXES
    
5.2
   
2.1
   
37.1
   
29.9
 
                           
NET INCOME
  
$
7.8
  
$
2.8
  
$
55.9
  
$
47.4
  
 
 VECTREN CORPORATION
          
 AND SUBSIDIARY COMPANIES
          
 SELECTED GAS DISTRIBUTION
          
 OPERATING STATISTICS
          
 (Unaudited)
          
                   
   
Three Months
  
Six Months
  
   
Ended June 30
  
Ended June 30
  
   
2005
 
2004
 
2005
 
2004
  
                   
GAS OPERATING REVENUES (Millions):
                          
                           
     Residential
  
$
120.4
  
$
98.8
  
$
468.9
  
$
442.4
  
     Commercial
    
48.1
   
43.0
   
194.7
   
185.1
 
     Industrial
    
12.7
   
10.9
   
31.7
   
29.0
 
     Miscellaneous Revenue
    
4.8
   
1.4
   
7.4
   
2.8
 
   
$
186.0
  
$
154.1
  
$
702.7
  
$
659.3
  
                           
                           
GAS MARGIN (Millions):
                          
                           
     Residential
  
$
45.2
  
$
36.0
  
$
140.0
  
$
127.8
  
     Commercial
    
12.7
   
10.1
   
45.6
   
41.6
 
     Industrial
    
9.7
   
9.2
   
25.3
   
24.1
 
     Miscellaneous
    
2.1
   
1.8
   
4.6
   
3.1
 
   
$
69.7
  
$
57.1
  
$
215.5
  
$
196.6
  
                           
GAS SOLD & TRANSPORTED (MMDth):
                          
                           
     Residential
    
9.2
   
8.5
   
47.6
   
49.9
 
     Commercial
    
4.3
   
4.3
   
20.9
   
22.0
 
     Industrial
    
19.2
   
17.9
   
46.0
   
45.3
 
     
32.7
   
30.7
   
114.5
   
117.2
 
                           
                           
AVERAGE GAS CUSTOMERS
                          
                           
     Residential
    
885,954
   
876,405
   
893,186
   
883,990
 
     Commercial
    
82,870
   
81,590
   
83,586
   
82,484
 
     Industrial
    
1,635
   
1,569
   
1,606
   
1,568
 
     
970,459
   
959,564
   
978,378
   
968,042
 
                           
YTD WEATHER AS A PERCENT OF NORMAL:
                          
                           
     Heating Degree Days
    
88
%
  
73
%
  
92
%
  
92
%
                           
                           

 VECTREN CORPORATION
          
 AND SUBSIDIARY COMPANIES
          
 SELECTED ELECTRIC
          
 OPERATING STATISTICS
          
 (Unaudited)
          
   
  Three Months
  
  Six Months
  
   
  Ended June 30
  
  Ended June 30
  
   
2005
  
2004
  
2005
  
2004
  
ELECTRIC OPERATING REVENUES (Millions):
                          
     Residential
  
$
29.7
  
$
29.4
  
$
58.1
  
$
56.7
  
     Commercial
    
23.7
   
22.6
   
44.0
   
41.5
 
     Industrial
    
29.8
   
27.3
   
55.8
   
52.2
 
     Municipals
    
6.6
   
6.0
   
12.2
   
11.4
 
     Miscellaneous Revenue
    
1.5
   
3.0
   
2.4
   
6.6
 
       Total Retail
    
91.3
   
88.3
   
172.5
   
168.4
 
     Net Wholesale Revenues
    
5.6
   
0.8
   
19.1
   
9.5
 
   
$
96.9
  
$
89.1
  
$
191.6
  
$
177.9
  
                           
ELECTRIC MARGIN (Millions):
                          
     Residential
  
$
22.9
  
$
23.2
  
$
45.0
  
$
44.4
  
     Commercial
    
16.8
   
16.3
   
31.8
   
30.3
 
     Industrial
    
16.3
   
16.1
   
31.6
   
30.6
 
     Municipals
    
3.5
   
3.5
   
6.8
   
6.6
 
     Miscellaneous
    
1.6
   
1.2
   
2.4
   
2.9
 
       Total Retail
    
61.1
   
60.3
   
117.6
   
114.8
 
     Net Wholesale Margin
    
2.8
   
(1.8
)
  
11.8
   
5.3
 
   
$
63.9
  
$
58.5
  
$
129.4
  
$
120.1
  
                           
ELECTRICITY SOLD (GWh):
                          
     Residential
    
329.0
   
361.1
   
691.3
   
737.1
 
     Commercial
    
336.5
   
354.1
   
640.1
   
649.7
 
     Industrial
    
651.1
   
635.9
   
1,270.0
   
1,258.5
 
     Municipals
    
169.4
   
158.0
   
319.0
   
310.2
 
     Miscellaneous Sales
    
4.3
   
54.2
   
9.1
   
107.5
 
       Total Retail
    
1,490.3
   
1,563.3
   
2,929.5
   
3,063.0
 
     Wholesale
    
632.9
   
593.8
   
1,696.9
   
1,105.1
 
     
2,123.2
   
2,157.1
   
4,626.4
   
4,168.1
 
                           
AVERAGE ELECTRIC CUSTOMERS
                          
     Residential
    
119,720
   
118,723
   
119,776
   
118,830
 
     Commercial
    
18,695
   
18,446
   
18,661
   
18,417
 
     Industrial
    
107
   
107
   
106
   
106
 
     All Others
    
55
   
21
   
55
   
21
 
     
138,577
   
137,297
   
138,598
   
137,374
 
                           
YTD WEATHER AS A PERCENT OF NORMAL:
                          
     Heating Degree Days
    
88
%
  
73
%
  
92
%
  
92
%
     Cooling Degree Days
    
93
%
  
120
%
  
92
%
  
120
%