EX-99.2 3 exhibit99_2.htm EXHIBIT 99.2 Exhibit 99.2
                                                                                 Exhibit 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
  
   
2006
      
2005
  
2006
      
2005
  
                           
OPERATING REVENUES:
                          
    Gas utility
  
$
159.1
        
$
186.0
  
$
731.8
        
$
702.7
  
    Electric utility
    
96.0
         
96.9
   
201.2
         
191.6
 
    Energy services and other
    
62.4
         
43.3
   
159.0
         
109.1
 
    Total operating revenues
    
317.5
         
326.2
   
1,092.0
         
1,003.4
 
                                       
OPERATING EXPENSES:
                                      
    Cost of gas sold
    
88.5
         
116.3
   
517.5
         
487.2
 
    Cost of fuel and purchased power
    
30.9
         
33.0
   
69.0
         
62.2
 
    Cost of energy services and other
    
47.6
         
31.4
   
126.0
         
83.0
 
    Other operating
    
68.3
         
65.8
   
141.1
         
136.9
 
    Depreciation and amortization
    
41.9
         
38.5
   
83.5
         
75.6
 
    Taxes other than income taxes
    
11.8
         
12.0
   
34.9
         
34.1
 
    Total operating expenses
    
289.0
         
297.0
   
972.0
         
879.0
 
                                       
OPERATING INCOME
    
28.5
         
29.2
   
120.0
         
124.4
 
                                       
OTHER INCOME:
                                      
    Equity in earnings of unconsolidated affiliates
    
(2.2
)
        
0.7
   
11.5
         
7.1
 
    Other - net
    
(8.2
)
        
1.6
   
(6.1
)
        
4.0
 
    Total other income
    
(10.4
)
        
2.3
   
5.4
         
11.1
 
                                       
INTEREST EXPENSE
    
21.9
         
19.7
   
45.7
         
39.8
 
                                       
INCOME BEFORE INCOME TAXES
    
(3.8
)
        
11.8
   
79.7
         
95.7
 
                                       
INCOME TAXES
    
(8.1
)
        
(1.6
)
  
17.8
         
26.2
 
                                       
NET INCOME
  
$
4.3
        
$
13.4
  
$
61.9
        
$
69.5
  
                                       
                                       
AVERAGE COMMON SHARES OUTSTANDING
    
75.7
         
75.6
   
75.7
         
75.6
 
DILUTED COMMON SHARES OUTSTANDING
    
76.0
         
76.1
   
76.1
         
76.2
 
                                       
EARNINGS PER SHARE OF COMMON STOCK
                                      
                                       
    BASIC
  
$
0.06
        
$
0.18
  
$
0.82
        
$
0.92
  
                                       
    DILUTED
  
$
0.06
        
$
0.18
  
$
0.81
        
$
0.91
  
 
 

VECTREN UTILITY HOLDINGS
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions - Unaudited)
                           
   
 Three Months
  
 Six Months
  
   
 Ended June 30
  
 Ended June 30
  
   
2006
      
2005
  
2006
      
2005
  
                           
OPERATING REVENUES:
                          
    Gas utility
  
$
159.1
        
$
186.0
  
$
731.8
        
$
702.7
  
    Electric utility
    
96.0
         
96.9
   
201.2
         
191.6
 
    Other
    
0.5
         
0.1
   
0.9
         
0.3
 
        Total operating revenues
    
255.6
         
283.0
   
933.9
         
894.6
 
                                       
OPERATING EXPENSES:
                                      
    Cost of gas sold
    
88.5
         
116.3
   
517.5
         
487.2
 
    Fuel for electric generation
    
30.9
         
33.0
   
69.0
         
62.2
 
    Other operating
    
59.6
         
59.2
   
121.2
         
120.8
 
    Depreciation and amortization
    
37.7
         
34.5
   
74.8
         
67.9
 
    Taxes other than income taxes
    
11.6
         
11.7
   
34.4
         
33.5
 
        Total operating expenses
    
228.3
         
254.7
   
816.9
         
771.6
 
                                       
OPERATING INCOME
    
27.3
         
28.3
   
117.0
         
123.0
 
                                       
OTHER INCOME - NET
    
1.9
         
1.1
   
2.8
         
3.3
 
                                       
INTEREST EXPENSE
    
18.2
         
16.4
   
38.2
         
33.3
 
                                       
INCOME BEFORE INCOME TAXES
    
11.0
         
13.0
   
81.6
         
93.0
 
                                       
INCOME TAXES
    
3.9
         
5.2
   
31.1
         
37.1
 
                                       
NET INCOME
  
$
7.1
        
$
7.8
  
$
50.5
        
$
55.9
  
 
 
 
VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
  
(Millions - Unaudited)
   
June 30,
  
December 31,
  
   
2006
  
2005
  
           
ASSETS
          
Current Assets
          
  Cash & cash equivalents
  
$
6.7
  
$
20.4
  
  Accounts receivable - less reserves of $4.4 &
             
    $2.8, respectively
    
116.4
   
197.8
 
  Accrued unbilled revenues
    
46.7
   
240.6
 
  Inventories
    
125.6
   
144.6
 
  Recoverable fuel & natural gas costs
    
-
   
15.4
 
  Prepayments & other current assets
    
106.5
   
106.4
 
    Total current assets
    
401.9
   
725.2
 
Utility Plant
              
  Original cost
    
3,726.2
   
3,632.0
 
  Less: accumulated depreciation & amortization
    
1,420.7
   
1,380.1
 
    Net utility plant
    
2,305.5
   
2,251.9
 
Investments in unconsolidated affiliates
    
187.3
   
214.7
 
Other investments
    
107.6
   
111.6
 
Non-utility property - net
    
243.3
   
240.3
 
Goodwill - net
    
207.1
   
207.1
 
Regulatory assets
    
102.7
   
89.9
 
Other assets
    
33.2
   
27.4
 
    TOTAL ASSETS
  
$
3,588.6
  
$
3,868.1
  
               
LIABILITIES & SHAREHOLDERS' EQUITY
              
Current Liabilities
              
  Accounts payable
  
$
92.8
  
$
159.0
  
  Accounts payable to affiliated companies
    
49.9
   
162.3
 
  Refundable fuel & natural gas costs
    
34.9
   
7.6
 
  Accrued liabilities
    
131.7
   
156.6
 
  Short-term borrowings
    
175.5
   
299.9
 
  Current maturities of long-term debt
    
0.4
   
0.4
 
  Long-term debt subject to tender
    
-
   
53.7
 
    Total current liabilities
    
485.2
   
839.5
 
Long-term Debt - Net of Current Maturities &
             
  Debt Subject to Tender
    
1,251.7
   
1,198.0
 
Deferred Income Taxes & Other Liabilities
              
  Deferred income taxes
    
226.0
   
227.3
 
  Regulatory liabilities
   
289.8
   
272.9
 
  Deferred credits & other liabilities
    
191.0
   
186.7
 
    Total deferred credits & other liabilities
    
706.8
   
686.9
 
Minority Interest in Subsidiary
    
0.4
   
0.4
 
Common Shareholders' Equity
              
  Common stock (no par value) – issued & outstanding
             
     76.2 and 76.0 shares, respectively
    
524.6
   
528.1
 
  Retained earnings
    
644.0
   
628.8
 
  Accumulated other comprehensive loss
    
(24.1
)
  
(13.6
)
    Total common shareholders' equity
    
1,144.5
   
1,143.3
 
    TOTAL LIABILITIES & SHAREHOLDERS' EQUITY
  
$
3,588.6
  
$
3,868.1
  
 
 
 

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions - Unaudited)
           
   
Six Months
   
Ended June 30
   
2006
  
2005
  
           
CASH FLOWS FROM OPERATING ACTIVITIES:
          
    Net income
  
$
61.9
  
$
69.5
  
    Adjustments to reconcile net income to cash from operating activities:
              
        Depreciation & amortization
    
83.5
   
75.6
 
        Deferred income taxes & investment tax credits
    
0.6
   
(0.1
)
        Equity in earnings of unconsolidated affiliates
    
(11.5
)
  
(7.1
)
        Provision for uncollectible accounts
    
8.0
   
9.9
 
        Expense portion of pension & postretirement periodic benefit cost
    
5.4
   
6.5
 
        Other non-cash charges - net
   
12.8
   
(1.7
)
        Changes in working capital accounts:
              
            Acounts receivable & accrued unbilled revenue
    
268.1
   
189.7
 
            Inventories
    
19.0
   
2.1
 
            Recoverable fuel & natural gas costs
    
42.7
   
30.8
 
            Prepayments & other current assets
    
(1.9
)
  
39.9
 
            Accounts payable, including to affiliated companies
    
(183.6
)
  
(113.3
)
            Accrued liabilities
    
(32.2
)
  
4.8
 
        Uconsolidated affiliate dividends
    
32.1
   
7.0
 
        Changes in noncurrent assets
    
(17.8
)
  
(3.3
)
        Changes in noncurrent liabilities
    
(11.2
)
  
(9.3
)
            Net cash flows from operating activities
    
275.9
   
301.0
 
               
CASH FLOWS FROM FINANCING ACTIVITIES:
              
    Proceeds from:
             
        Stock option exercises & other stock plans
    
0.1
   
-
 
    Requirements for:
              
        Dividends on common stock
    
(46.2
)
  
(45.2
)
        Redemption of preferred stock of subsidiary
    
-
   
(0.1
)
    Net change in short-term borrowings
    
(124.4
)
  
(159.5
)
        Net cash flows from financing activities
    
(170.5
)
  
(204.8
)
               
CASH FLOWS FROM INVESTING ACTIVITIES:
              
    Proceeds from:
              
        Unconsolidated affiliate distributions
    
0.3
   
0.2
 
        Notes receivable & other collections
    
2.8
   
0.8
 
    Requirements for:
              
        Capital expenditures, excluding AFUDC equity
    
(107.6
)
  
(90.5
)
        Unconsolidated affiliate investments
    
(14.2
)
  
(6.8
)
        Notes receivable & other investments
    
(0.4
)
  
-
 
            Net cash flows from investing activities
    
(119.1
)
  
(96.3
)
               
Net decrease in cash & cash equivalents
    
(13.7
)
  
(0.1
)
Cash & cash equivalents at beginning of period
    
20.4
   
9.6
 
Cash & cash equivalents at end of period
  
$
6.7
  
$
9.5
  
 
 
 

VECTREN CORPORATION
  
AND SUBSIDIARY COMPANIES
  
HIGHLIGHTS
  
(Millions - Unaudited)
                           
   
 Three Months
  
 Six Months
  
   
 Ended June 30
  
 Ended June 30
  
   
2006
      
2005
  
2006
      
2005
  
                           
REPORTED EARNINGS:
                          
Utility Group
  
$
7.1
        
$
7.8
  
$
50.5
        
$
55.9
  
                                       
Non-utility Group
                                      
Energy Marketing and Services
    
0.3
         
1.0
   
13.2
         
8.1
 
Mining Operations
    
0.9
         
1.3
   
2.7
         
2.6
 
Energy Infrastructure Services
    
0.8
         
0.2
   
(0.4
)
        
(1.9
)
Other Businesses
    
0.2
         
(0.2
)
  
0.2
         
(0.7
)
Total Non-utility Operations
    
2.2
         
2.3
   
15.7
         
8.1
 
                                       
Corporate and Other
    
-  
          
(0.1
)
  
-  
          
(1.0
)
                                       
Sub-Total Operations
    
9.3
         
10.0
   
66.2
         
63.0
 
                                       
Synfuels-related
    
(5.0
)
        
3.4
   
(4.3
)
        
6.5
 
                                       
Vectren Consolidated
  
$
4.3
        
$
13.4
  
$
61.9
        
$
69.5
  
 
 
 

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED GAS DISTRIBUTION
OPERATING STATISTICS
(Unaudited)
                           
   
 Three Months
  
 Six Months
  
   
 Ended June 30
  
 Ended June 30
  
   
2006
      
2005
  
2006
      
2005
  
                           
GAS OPERATING REVENUES (Millions):
                          
                           
    Residential
  
$
101.9
        
$
120.4
  
$
486.5
        
$
468.9
  
    Commercial
    
40.8
         
48.1
   
202.9
         
194.7
 
    Industrial
    
12.6
         
12.7
   
34.7
         
31.7
 
    Miscellaneous Revenue
    
3.8
         
4.8
   
7.7
         
7.4
 
   
$
159.1
        
$
186.0
  
$
731.8
        
$
702.7
  
                                       
GAS MARGIN (Millions):
                                      
                                       
    Residential
  
$
44.4
        
$
45.2
  
$
137.3
        
$
140.0
  
    Commercial
    
12.6
         
12.7
   
44.4
         
45.6
 
    Industrial
    
9.8
         
9.7
   
24.7
         
25.3
 
    Miscellaneous
    
3.8
         
2.1
   
7.9
         
4.6
 
   
$
70.6
        
$
69.7
  
$
214.3
        
$
215.5
  
                                       
GAS SOLD & TRANSPORTED (MMDth):
                                      
                                       
    Residential
    
7.7
         
9.2
   
39.4
         
47.6
 
    Commercial
    
3.7
         
4.3
   
17.3
         
20.9
 
    Industrial
    
18.0
         
19.2
   
43.5
         
46.0
 
     
29.4
         
32.7
   
100.2
         
114.5
 
                                       
AVERAGE GAS CUSTOMERS
                                      
                                       
    Residential
    
890,674
         
885,954
   
898,361
         
893,186
 
    Commercial
    
83,179
         
82,870
   
83,823
         
83,586
 
    Industrial
    
1,643
         
1,635
   
1,650
         
1,606
 
     
975,496
         
970,459
   
983,834
         
978,378
 
                                       
YTD WEATHER AS A PERCENT OF NORMAL:
                                      
                                       
    Heating Degree Days
    
81
%
        
88
%
  
83
%
        
92
%
 
 
 

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED ELECTRIC
OPERATING STATISTICS
(Unaudited)
                           
   
 Three Months
  
 Six Months
  
   
 Ended June 30
  
 Ended June 30
  
   
2006
      
2005
  
2006
      
2005
  
                           
ELECTRIC OPERATING REVENUES (Millions):
                          
                           
    Residential
  
$
27.9
        
$
29.7
  
$
58.1
        
$
58.1
  
    Commercial
    
22.6
         
23.7
   
44.5
         
44.0
 
    Industrial
    
30.5
         
29.8
   
60.8
         
55.8
 
    Municipals
    
6.6
         
6.6
   
12.2
         
12.2
 
    Miscellaneous Revenue
    
3.0
         
1.5
   
5.9
         
2.4
 
        Total Retail
    
90.6
         
91.3
   
181.5
         
172.5
 
    Net Wholesale Revenues
    
5.4
         
5.6
   
19.7
         
19.1
 
   
$
96.0
        
$
96.9
  
$
201.2
        
$
191.6
  
                                       
ELECTRIC MARGIN (Millions):
                                      
                                       
    Residential
  
$
21.9
        
$
22.9
  
$
44.4
        
$
45.0
  
    Commercial
    
16.5
         
16.8
   
31.9
         
31.8
 
    Industrial
    
17.9
         
16.3
   
34.5
         
31.6
 
    Municipals
    
3.9
         
3.5
   
6.6
         
6.8
 
    Miscellaneous
    
2.9
         
1.6
   
5.7
         
2.4
 
        Total Retail
    
63.1
         
61.1
   
123.1
         
117.6
 
    Net Wholesale Margin
    
2.0
         
2.8
   
9.1
         
11.8
 
   
$
65.1
        
$
63.9
  
$
132.2
        
$
129.4
  
                                       
ELECTRICITY SOLD (GWh):
                                      
                                       
    Residential
    
317.3
         
329.0
   
672.7
         
691.3
 
    Commercial
    
331.1
         
336.5
   
632.7
         
640.1
 
    Industrial
    
671.3
         
651.1
   
1,309.2
         
1,270.0
 
    Municipals
    
156.9
         
169.4
   
302.2
         
319.0
 
    Miscellaneous Sales
    
4.4
         
4.3
   
9.6
         
9.1
 
        Total Retail
    
1,481.0
         
1,490.3
   
2,926.4
         
2,929.5
 
    Wholesale
    
189.7
         
632.9
   
652.3
         
1,696.9
 
     
1,670.7
         
2,123.2
   
3,578.7
         
4,626.4
 
                                       
AVERAGE ELECTRIC CUSTOMERS
                                      
                                       
    Residential
    
120,869
         
119,720
   
120,893
         
119,776
 
    Commercial
    
18,796
         
18,695
   
18,764
         
18,661
 
    Industrial
    
107
         
107
   
107
         
106
 
    All Others
    
49
         
55
   
50
         
55
 
     
139,821
         
138,577
   
139,814
         
138,598
 
                                       
YTD WEATHER AS A PERCENT OF NORMAL:
                                      
                                       
    Cooling Degree Days
    
94
%
        
93
%
  
94
%
        
92
%
    Heating Degree Days
    
81
%
        
88
%
  
83
%
        
92
%