EX-99.2 3 ex99_2.htm STATEMENTS OF INCOME statements of income                                                                       
               
Ex 99.2
                 
                       VECTREN CORPORATION
      
                           AND SUBSIDIARY COMPANIES      
                          CONSOLIDATED STATEMENTS OF INCOME      
                      (Millions, except per share amounts)    
      
                    (Unaudited)
      
                 
   
 Three Months
 
 Nine Months
 
 Ended September 30
  
 Ended September 30
   
2005
  
2004
  
2005
  
2004
 
                
OPERATING REVENUES:
                
  Gas utility
  
$                136.8
 
$           112.3
 
$                   839.5
 
$                          771.6
  Electric utility
  
128.7
 
102.3
 
320.3
 
        280.2
  Energy services and other
  
45.3
 
39.8
 
154.4
 
        124.6
    Total operating revenues
  
310.8
 
254.4
 
1,314.2
 
1,176.4
                 
OPERATING EXPENSES:
                
  Cost of gas sold
  
81.6
 
67.2
 
568.8
 
        529.8
  Fuel for electric generation
  
39.3
 
25.8
 
95.6
 
              72.4
  Purchased electric energy
  
8.8
 
5.3
 
14.7
 
          16.6
  Cost of energy services and other
  
32.5
 
27.0
 
115.5
 
          90.1
  Other operating
  
67.2
 
59.6
 
204.1
 
       190.8
  Depreciation and amortization
  
41.2
 
36.2
 
116.8
 
       103.6
  Taxes other than income taxes
  
10.3
 
9.9
 
44.4
 
                      43.3
    Total operating expenses
  
280.9
 
231.0
 
1,159.9
 
1,046.6
                 
OPERATING INCOME
  
29.9
 
23.4
 
154.3
 
129.8
                 
OTHER INCOME:
                
  Equity in earnings of unconsolidated affiliates
  
5.4
 
1.5
 
                          12.5
  
                              13.5
  Other - net
  
1.6
 
3.3
 
             5.6
 
          2.1
    Total other income
  
7.0
 
4.8
 
18.1
 
15.6
                 
INTEREST EXPENSE
  
21.0
 
19.4
 
60.8
 
57.5
                 
INCOME BEFORE INCOME TAXES
  
15.9
 
8.8
 
111.6
 
87.9
                 
INCOME TAXES
  
(0.6)
  
(0.9)
  
25.6
 
20.0
                 
MINORITY INTEREST & PREFERRED DIVIDEND
                
  REQUIREMENT OF SUBSIDIARIES
  
-
 
-
 
              -
  
              0.1
                 
NET INCOME
  
$ 16.5
 
$ 9.7
 
$ 86.0
 
$ 67.8
                 
                 
AVERAGE COMMON SHARES OUTSTANDING
  
        75.7
 
           75.6
 
           75.6
 
              75.5
DILUTED COMMON SHARES OUTSTANDING
  
76.2
 
76.0
 
76.2
 
75.9
                 
EARNINGS PER SHARE OF COMMON STOCK
                
                 
  BASIC
  
$          0.22
  
$        0.13
 
$        1.14
 
$            0.90
                 
  DILUTED
  
$          0.22
 
$         0.13
 
$         1.13
 
$            0.89
 
 
 
                         VECTREN UTILITY HOLDINGS INC.
      
                          AND SUBSIDIARY COMPANIES
      
                          CONSOLIDATED STATEMENTS OF INCOME
      
                             (Millions-Unaudited)    
      
                        
   
 Three Months
     Nine Months
   
 Ended September 30
  
    Ended September 30
   
2005
  
2004
  
2005
  
2004
                 
OPERATING REVENUES:
                
  Gas utility
  
$          136.8
 
 $           112.3
 
$                   839.5
 
$                  771.6
  Electric utility
  
128.7
 
102.3
 
320.3
 
280.2
  Other
  
0.2
 
0.1
 
0.5
 
0.5
    Total operating revenues
  
265.7
 
214.7
 
1,160.3
 
1,052.3
                 
OPERATING EXPENSES:
                
  Cost of gas sold
  
81.6
 
67.2
 
568.8
 
529.8
  Fuel for electric generation
  
39.3
 
25.8
 
95.6
 
72.4
  Purchased electric energy
  
8.8
 
5.3
 
14.7
 
16.6
  Other operating
  
58.9
 
52.0
 
179.7
 
167.7
  Depreciation and amortization
  
36.3
 
33.1
 
104.2
 
94.5
  Taxes other than income taxes
  
10.1
 
9.6
 
43.6
 
42.4
    Total operating expenses
  
235.0
 
193.0
 
1,006.6
 
923.4
                 
OPERATING INCOME
  
30.7
 
21.7
 
153.7
 
128.9
                 
OTHER INCOME (EXPENSE):
                
  Equity in earnings of unconsolidated affiliates
  
-
 
-
 
-
 
0.2
  Other - net
  
1.3
 
2.3
 
4.6
 
5.7
    Total other income
  
1.3
 
2.3
 
4.6
 
5.9
                 
INTEREST EXPENSE
  
17.5
 
16.7
 
50.8
 
50.2
                 
INCOME BEFORE INCOME TAXES
  
14.5
 
7.3
 
107.5
 
84.6
                 
INCOME TAXES
  
5.6
 
2.8
 
42.7
 
32.7
                 
                 
NET INCOME
  
$                      8.9
 
$                4.5
 
$             64.8
 
$            51.9
 
 
                         VECTREN CORPORATION
      
                          AND SUBSIDIARY COMPANIES
      
                          CONSOLIDATED BALANCE SHEETS
      
                             (Millions- Unaudited)    
      
                     
   
September 30,
  
December 31,
   
   2005
  
       2004
ASSETS
            
Current Assets
            
  Cash & cash equivalents
  
$
4.1
  
$
9.6
  Accounts receivable - less reserves of $2.4 &
            
    $2.0, respectively
    
97.2
   
173.5
  Accrued unbilled revenues
    
53.5
   
176.6
  Inventories
    
89.2
   
67.6
  Recoverable fuel & natural gas costs
    
17.1
   
17.7
  Prepayments & other current assets
    
180.7
   
141.3
    Total current assets
    
441.8
   
586.3
Utility Plant
            
  Original cost
    
3,563.5
   
3,465.2
  Less: accumulated depreciation & amortization
    
1,361.5
   
1,309.0
    Net utility plant
    
2,202.0
   
2,156.2
Investments in unconsolidated affiliates
    
183.2
   
180.0
Other investments
    
116.2
   
115.1
Non-utility property - net
    
242.4
   
229.2
Goodwill - net
    
207.1
   
207.1
Regulatory assets
    
88.0
   
82.5
Other assets
    
26.3
   
30.5
    TOTAL ASSETS
  
$
3,507.0
  
$
3,586.9
LIABILITIES & SHAREHOLDERS' EQUITY
            
Current Liabilities
            
  Accounts payable
  
$
92.7
  
$
123.8
  Accounts payable to affiliated companies
    
82.0
   
109.3
  Refundable fuel & natural gas costs
    
11.0
   
6.3
  Accrued liabilities
    
117.9
   
125.8
  Short-term borrowings
    
369.1
   
412.4
  Current maturities of long-term debt
    
38.4
   
38.5
  Long-term debt subject to tender
    
-
   
10.0
    Total current liabilities
    
711.1
   
826.1
Long-term Debt - Net of Current Maturities &
            
Debt Subject to Tender
    
1,026.6
   
1,016.6
Deferred Income Taxes & Other Liabilities
            
  Deferred income taxes
    
227.7
   
234.0
  Regulatory liabilities & other removal costs
    
266.0
   
251.7
  Deferred credits & other liabilities
    
168.6
   
163.2
    Total deferred credits & other liabilities
    
662.3
   
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
    
529.3
   
526.8
  Retained earnings
    
601.1
   
583.0
  Accumulated other comprehensive loss
    
(23.8
)
  
(15.0)
     Total common shareholders' equity
    
1,106.6
   
1,094.8
     TOTAL LIABILITIES & SHAREHOLDERS' EQUITY
  
$
3,507.0
  
$
3,586.9
 
 
                            VECTREN CORPORATION
      
                          AND SUBSIDIARY COMPANIES
      
                          CONSOLIDATED STATEMENTS OF CASH FLOWS
      
                         (Millions- Unaudited) 

 
 
 Nine Months
 
 Ended September 30,
   
2005
    
2004
  
CASH FLOWS FROM OPERATING ACTIVITIES:
              
  Net income
  
$
86.0
  
$
67.8
  
  Adjustments to reconcile net income to cash from operating activities:
              
    Depreciation & amortization
    
116.8
   
103.6
 
    Deferred income taxes & investment tax credits
    
(5.5
)
  
(5.4
)
    Equity in earnings of unconsolidated affiliates
    
(12.5
)
  
(13.5
)
    Net unrealized (gain) on derivative instruments
    
(1.4
)
  
1.0
 
    Pension & postretirement periodic benefit cost
    
13.5
   
12.3
 
    Other non-cash charges - net
   
13.2
   
16.1
 
    Changes in working capital accounts:
              
      Accounts receivable & accrued unbilled revenue
    
189.3
   
126.0
 
      Inventories
    
(21.6
)
  
(7.0
)
      Recoverable fuel & natural gas costs
    
5.3
   
(18.2
)
      Prepayments & other current assets
    
(33.1
)
  
(21.3
)
      Accounts payable, including to affiliated companies
    
(58.4
)
  
(22.5
)
      Accrued liabilities
    
(7.6
)
  
(12.8
)
    Changes in noncurrent assets
    
(5.7
)
  
(6.1
)
    Changes in noncurrent liabilities
    
(9.4
)
  
(13.4
)
      Net cash flows from operating activities
    
268.9
   
206.6
 
CASH FLOWS FROM FINANCING ACTIVITIES:
              
  Proceeds from stock option exercises & other stock plans
    
-
   
4.5
 
  Requirements for:
              
    Dividends on common stock
    
(67.3
)
  
(64.6
)
    Retirement of long-term debt, including premiums paid
    
(0.4
)
  
(12.5
)
    Redemption of preferred stock of subsidiary
    
(0.1
)
  
(0.1
)
    Other financing activities
    
(0.5
)
  
-
 
Net change in short-term borrowings
    
(43.3
)
  
34.9
 
    Net cash flows from financing activities
    
(111.6
)
  
(37.8
)
CASH FLOWS FROM INVESTING ACTIVITIES:
              
  Proceeds from:
              
    Unconsolidated affiliate distributions
    
9.3
   
23.6
 
    Notes receivable & other collections
    
0.9
   
8.9
 
  Requirements for:
              
    Capital expenditures, excluding AFUDC equity
    
(158.4
)
  
(189.3
)
    Unconsolidated affiliate investments
    
(14.6
)
  
(15.7
)
    Notes receivable & other investments
    
-
   
(3.8
)
      Net cash flows from investing activities
    
(162.8
)
  
(176.3
)
Net decrease in cash & cash equivalents
    
(5.5
)
  
(7.5
)
Cash & cash equivalents at beginning of period
    
9.6
   
15.3
 
Cash & cash equivalents at end of period
  
$
4.1
  
$
7.8
  
 
 

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
HIGHLIGHTS
(Millions-Unaudited)
                     
 
        
 
    
Three Months
Ended September 30 
        
 
Nine Months
Ended September 30
  
     
2005
    
2004
        
  2005
    
2004
  
                               
REPORTED EARNINGS:
                              
Utility Group
  
 
$               8.9
  
 
$               4.5
  
 
    
$            64.8
  
 
$             51.9
  
                               
Non-regulated Group
                              
Energy Marketing and Services
    
3.3
   
1.2
        10.0    
9.1
 
Mining
    
1.6
   
0.2
        4.2    
1.5
 
Synfuels related
    
3.3
   
3.4
        9.8    
9.6
 
    Total Coal Mining
    
4.9
   
3.6
        14.0    
11.1
 
Utility Infrastructure Services
    
1.0
   
1.4
       
0.5
    
1.3
 
Other Businesses
    
(0.7
)
  
(0.3
)
  
 
   (1.4 )  
(4.3
)
Total Non-regulated Group
    
8.5
   
5.9
        23.1    
17.2
 
                               
Corporate and Other
    
(0.9
)
  
(0.7
)
  
 
   (1.9 )  
(1.3
)
                               
Vectren Consolidated
  
 
$             16.5
  
 
$               9.7
  
 
     $            86.0  
 
$             67.8
  
 
                            VECTREN CORPORATION
      
                          AND SUBSIDIARY COMPANIES
      
                        SELECTED GAS DISTRIBUTION
      
                                      OPERATING STATISTICS
                                       (Unaudited)

 
        
 
        
 Three Months
Ended September 30
  Nine Months
Ended September 30
     
2005
    
2004
                 
2005
    
2004
  
GAS OPERATING REVENUES (Millions):
                    
 
          
Residential
  
 
$               80.4
  
 
$            66.5
  
 
      
$             549.3
  
 
$             508.9
  
Commercial
    
41.6
   
35.6
       
236.3
    
220.7
 
Industrial
    
13.9
   
10.5
       
45.6
   
39.5
 
Miscellaneous Revenue
    
0.9
   
(0.3
)
      
8.3
    
2.5
 
   
 
$             136.8
  
 
$          112.3
  
 
    
$             839.5
  
 
$             771.6
  
                               
                               
GAS MARGIN (Millions):
                              
                               
Residential
  
 
$               34.8
  
 
$            28.5
       $             174.8  
 
$             156.3
  
Commercial
    
10.0
   
8.0
        55.6    
49.6
 
Industrial
    
9.1
   
8.8
        34.4    
32.9
 
Miscellaneous
    
1.3
   
(0.2
)
       5.9    
3.0
 
   
 
$               55.2
  
 
$            45.1
       $             270.7  
 
$             241.8
  
                               
GAS SOLD & TRANSPORTED (MMDth):
                              
                               
Residential
    
4.0
   
4.1
        51.6    
54.0
 
Commercial
    
2.8
   
2.9
        23.7    
24.9
 
Industrial
    
17.4
   
17.1
        63.4    
62.4
 
     
24.2
   
24.1
        138.7    
141.3
 
                               
                               
AVERAGE GAS CUSTOMERS
                              
                               
Residential
    
877,273
   
870,204
        887,883    
879,394
 
Commercial
    
81,967
   
81,005
        83,046    
82,044
 
Industrial
    
1,638
   
1,564
        1,616    
1,569
 
     
960,878
   
952,773
        972,545    
963,007
 
                               
YTD WEATHER AS A PERCENT OF NORMAL:
                              
Heating Degree Days
 
 
22
%
 
51
%
 
 
 
91%
    
91%
 
 
 
 
 
                            VECTREN CORPORATION
      
                          AND SUBSIDIARY COMPANIES
      
                        SELECTED ELECTRIC
      
                                      OPERATING STATISTICS
                                        (Unaudited)

   
 Three Months
  
 Nine Months
    
 
  
 Ended September 30
  
Ended September 30 
  
     
2005
        
    2004
    
2005
        
2004
  
ELECTRIC OPERATING REVENUES (Millions):
                                         
    Residential
  
 
$             48.1
      
 
$            35.8
  
 
$            106.2
      
 
$            92.5
  
    Commercial
    
28.1
       
23.4
   
72.1
       
64.9
 
    Industrial
    
34.1
       
28.0
   
89.9
       
80.2
 
    Municipals
    
7.8
       
7.0
   
20.0
       
18.4
 
    Miscellaneous Revenue
    
1.9
       
2.3
   
4.3
       
8.9
 
        Total Retail
    
120.0
       
96.5
   
292.5
       
264.9
 
    Net Wholesale Revenues
    
8.7
       
5.8
   
27.8
       
15.3
 
   
 
$           128.7
      
 
$          102.3
  
 
$            320.3
      
 
$          280.2
  
                                   
ELECTRIC MARGIN (Millions):
                                  
    Residential
  
 
$             35.6
      
 
$            28.3
  
 
$              80.6
      
 
$            72.7
  
    Commercial
    
18.8
       
17.2
   
50.6
       
47.5
 
    Industrial
    
18.0
       
16.9
   
49.6
       
47.5
 
    Municipals
    
3.2
       
4.2
   
10.0
       
10.8
 
    Miscellaneous
    
1.7
       
0.3
   
4.1
       
3.1
 
        Total Retail
    
77.3
       
66.9
   
194.9
       
181.6
 
    Net Wholesale Margin
    
3.3
       
4.3
   
15.1
       
9.6
 
   
 
$              80.6
      
 
$             71.2
  
 
$            210.0
      
 
$           191.2
  
                                   
                                   
ELECTRICITY SOLD (GWh):
                                  
    Residential
    
536.8
       
442.3
   
1,228.1
       
1,179.4
 
    Commercial
    
395.8
       
368.6
   
1,035.9
       
1,018.3
 
    Industrial
    
684.9
       
653.1
   
1,954.9
       
1,911.6
 
    Municipals
    
200.5
       
176.6
   
519.5
       
486.8
 
    Miscellaneous Sales
    
4.7
       
55.6
   
13.8
       
163.1
 
        Total Retail
    
1,822.7
       
1,696.2
   
4,752.2
       
4,759.2
 
    Wholesale
    
727.0
       
1,231.2
   
2,423.9
       
2,336.3
 
     
2,549.7
       
2,927.4
   
7,176.1
       
7,095.5
 
                                   
                                   
                                   
AVERAGE ELECTRIC CUSTOMERS
                                  
    Residential
    
120,077
       
118,830
   
119,877
       
118,830
 
    Commercial
    
18,718
       
18,478
   
18,680
       
18,437
 
    Industrial
    
106
       
106
   
106
       
106
 
    All Others
    
54
       
21
   
55
       
21
 
     
138,955
       
137,435
   
138,718
       
137,394
 
                                   
                                   
YTD WEATHER AS A PERCENT OF NORMAL:
                          
    Heating Degree Days
    
22
%
      
51
%
  
91
%
      
91
%
    Cooling Degree Days
    
114
%
      
76
%
  
107
%
      
90
%