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Commission File No. | Registrant, State of Incorporation, Address, and Telephone Number | I.R.S Employer Identification No. |
1-15467 | Vectren Corporation | 35-2086905 |
(An Indiana Corporation) | ||
One Vectren Square, | ||
Evansville, Indiana 47708 | ||
(812) 491-4000 | ||
1-16739 | Vectren Utility Holdings, Inc. | 35-2104850 |
(An Indiana Corporation) | ||
One Vectren Square, | ||
Evansville, Indiana 47708 | ||
(812) 491-4000 |
r | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
r | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
r | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
r | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Three Months Ended September 30, 2014 | Nine Months Ended September 30, 2014 | ||||||||||||||||||||||||
(in millions, except EPS) | GAAP Measure | Exclude Coal Mining Results | Non-GAAP Measure | GAAP Measure | Exclude Coal Mining Results | Non-GAAP Measure | |||||||||||||||||||
Consolidated | |||||||||||||||||||||||||
Net Income | $ | 47.3 | $ | 2.1 | $ | 49.4 | $ | 110.4 | $ | 21.4 | $ | 131.8 | |||||||||||||
Basic EPS | $ | 0.57 | $ | 0.03 | $ | 0.60 | $ | 1.34 | $ | 0.26 | $ | 1.60 | |||||||||||||
Nonutility Group Net Income | $ | 21.6 | $ | 2.1 | $ | 23.7 | $ | 1.1 | $ | 21.4 | $ | 22.5 | |||||||||||||
Three Months Ended September 30, 2013 | Nine Months Ended September 30, 2013 | ||||||||||||||||||||||||
(in millions, except EPS) | GAAP Measure | Exclude ProLiance Results | Non-GAAP Measure | GAAP Measure | Exclude ProLiance Results | Non-GAAP Measure | |||||||||||||||||||
Consolidated | |||||||||||||||||||||||||
Net Income | $ | 42.8 | $ | — | $ | 42.8 | $ | 86.8 | $ | 37.5 | $ | 124.3 | |||||||||||||
Basic EPS | $ | 0.52 | $ | — | $ | 0.52 | $ | 1.05 | $ | 0.46 | $ | 1.51 | |||||||||||||
Nonutility Group Net Income (Loss) | $ | 17.5 | $ | — | $ | 17.5 | $ | (17.6 | ) | $ | 37.5 | $ | 19.9 |
Exhibit Number | Description | |
99.1 | Vectren Corporation Reports Third Quarter 2014 Results Company Affirms 2014 Guidance | |
99.2 | Vectren Increases Dividend Establishes 2015 Earnings Guidance Company Expects Higher Earnings Growth and Dividend Growth | |
99.3 | Supporting Financial Statements and Schedules | |
99.4 | Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995 |
VECTREN CORPORATION VECTREN UTILITY HOLDINGS, INC. | ||||
November 7, 2014 | ||||
By: /s/ M. Susan Hardwick | ||||
M. Susan Hardwick | ||||
Senior Vice President and Chief Financial Officer | ||||
Exhibit Number | Description | |
99.1 | Vectren Corporation Reports Third Quarter 2014 Results Company Affirms 2014 Guidance | |
99.2 | Vectren Increases Dividend Establishes 2015 Earnings Guidance Company Expects Higher Earnings Growth and Dividend Growth | |
99.3 | Supporting Financial Statements and Schedules | |
99.4 | Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995 |
• | Utility Group earnings were $24.3 million, or $0.30 per share, in the third quarter of 2014, compared to $25.3 million, or $0.31 per share, in 2013. Year-to-date net income for the utility group was $108.5 million or $1.32 per share, compared with $104.6 million or $1.27 per share for the year-to-date period in 2013. |
• | Nonutility Group earnings were $23.7 million, or $0.29 per share, in the third quarter of 2014, excluding Coal Mining results, compared to $17.5 million, or $0.21 per share, in 2013. For the year-to-date period, nonutility results were earnings of $22.5 million, or $0.27 per share, excluding Coal Mining results, compared to net income of $19.9 million, or $0.24 per share in the 2013 period. The 2013 results exclude the results of ProLiance. |
(millions) | Quarter End | Year-to-Date | |||||||
2013 Gas Utility Earnings | $ | (3.8 | ) | $ | 37.2 | ||||
Customer growth & usage | — | 2.0 | |||||||
Returns from Ohio infrastructure replacement programs | 0.5 | 1.4 | |||||||
Other operating expenses, primarily increased maintenance due to extremely cold weather | (0.7 | ) | (3.9 | ) | |||||
Performance-based compensation expense | (0.9 | ) | (2.0 | ) | |||||
All other | (0.2 | ) | (0.8 | ) | |||||
(1.3 | ) | (3.3 | ) | ||||||
2014 Gas Utility Earnings | $ | (5.1 | ) | $ | 33.9 | ||||
(millions) | Quarter End | Year-to-Date | |||||||
2013 Electric Utility Earnings | $ | 26.6 | $ | 60.1 | |||||
Weather impact on small customer usage | (0.5 | ) | 1.6 | ||||||
Other small customer usage | (0.2 | ) | 0.8 | ||||||
Lost revenue adjustment mechanism (LRAM) | 0.5 | 1.9 | |||||||
Wholesale margin | 0.2 | 1.2 | |||||||
Other operating expenses | (0.4 | ) | (0.4 | ) | |||||
Performance-based compensation expense | (0.6 | ) | (1.1 | ) | |||||
Deferral of interest on construction projects (AFUDC) | 0.3 | 1.7 | |||||||
All other | 0.8 | 0.1 | |||||||
0.1 | 5.8 | ||||||||
2014 Electric Utility Earnings | $ | 26.7 | $ | 65.9 | |||||
Three Months Ended September 30, 2014 | Nine Months Ended September 30, 2014 | |||||||||||||||||||||||
(in Millions, except EPS) | GAAP Measure | Exclude Coal Mining Results | Non-GAAP Measure | GAAP Measure | Exclude Coal Mining Results | Non-GAAP Measure | ||||||||||||||||||
Consolidated | ||||||||||||||||||||||||
Net Income | $ | 47.3 | 2.1 | $ | 49.4 | $ | 110.4 | $ | 21.4 | $ | 131.8 | |||||||||||||
Basic EPS | $ | 0.57 | 0.03 | $ | 0.60 | $ | 1.34 | $ | 0.26 | $ | 1.60 | |||||||||||||
Nonutility Group Net Income (Loss) | $ | 21.6 | 2.1 | $ | 23.7 | $ | 1.1 | $ | 21.4 | $ | 22.5 | |||||||||||||
Three Months Ended September 30, 2013 | Nine Months Ended September 30, 2013 | |||||||||||||||||||||||
(in Millions, except EPS) | GAAP Measure | Exclude ProLiance Results | Non-GAAP Measure | GAAP Measure | Exclude ProLiance Results | Non-GAAP Measure | ||||||||||||||||||
Consolidated | ||||||||||||||||||||||||
Net Income | $ | 42.8 | $ | — | $ | 42.8 | $ | 86.8 | $ | 37.5 | $ | 124.3 | ||||||||||||
Basic EPS | $ | 0.52 | $ | — | $ | 0.52 | $ | 1.05 | $ | 0.46 | $ | 1.51 | ||||||||||||
Nonutility Group Net Income (Loss) | $ | 17.5 | $ | — | $ | 17.5 | $ | (17.6 | ) | $ | 37.5 | $ | 19.9 |
• | Factors affecting utility operations such as unusual weather conditions; catastrophic weather-related damage; unusual maintenance or repairs; unanticipated changes to coal and natural gas costs; unanticipated changes to gas transportation and storage 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. |
• | Catastrophic events such as fires, earthquakes, explosions, floods, ice storms, tornadoes, terrorist acts, cyber attacks, or other similar occurrences could adversely affect Vectren’s facilities, operations, financial condition and results of operations. |
• | Increased competition in the energy industry, including the effects of industry restructuring, unbundling, and other sources of energy. |
• | Regulatory factors such as unanticipated changes in rate-setting policies or procedures, recovery of investments and costs made under regulation, and the frequency and timing of rate increases. |
• | Financial, regulatory or 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. |
• | Economic conditions including the effects of inflation rates, commodity prices, and monetary fluctuations. |
• | Economic conditions surrounding the current economic uncertainty, including increased potential for lower levels of economic activity; uncertainty regarding energy prices and the capital and commodity markets; volatile changes in the demand for natural gas, electricity, coal, and other nonutility products and services; impacts on both gas and electric large customers; lower residential and commercial customer counts; higher operating expenses; and further reductions in the value of certain nonutility real estate and other legacy investments. |
• | Volatile natural gas and coal commodity prices and the potential impact on customer consumption, uncollectible accounts expense, unaccounted for gas and interest expense. |
• | 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. |
• | Direct or indirect effects on the company’s business, financial condition, liquidity and results of operations resulting from changes in credit ratings, changes in interest rates, and/or changes in market perceptions of the utility industry and other energy-related industries. |
• | The performance of projects undertaken by the company’s nonutility businesses and the success of efforts to realize value from, invest in and develop new opportunities, including but not limited to, the company’s infrastructure services, energy services, and remaining energy marketing assets. |
• | Factors affecting infrastructure services, including the level of success in bidding contracts; fluctuations in volume of contracted work; unanticipated cost increases in completion of the contracted work; funding requirements associated with multi-employer pension and benefit plans; changes in legislation and regulations impacting the industries in which the customers served operate; the effects of weather; failure to properly estimate the cost to construct projects; the ability to attract and retain qualified employees in a fast growing market where skills are critical; cancellation and/or reductions in the scope of projects by customers; credit worthiness of customers; ability to obtain materials and equipment required to perform services; and changing market conditions. |
• | Factors affecting energy services, including unanticipated cost increases in completion of the contracted work; changes in legislation and regulations impacting the industries in which the customers served operate; changes in economic influences impacting customers served; failure to properly estimate the cost to construct projects; the ability to attract and retain qualified employees; cancellation and/or reductions in the scope of projects by customers; credit worthiness of customers; and changing market conditions. |
• | Employee or contractor workforce factors including changes in key executives, collective bargaining agreements with union employees, aging workforce issues, work stoppages, or pandemic illness. |
• | Risks associated with material business transactions such as the purchase of the federal sector under Energy Services and the sale of Coal Mining and other mergers, acquisitions and divestitures, including, without limitation, legal and regulatory delays; the related time and costs of implementing such transactions; integrating operations as part of these transactions; and possible failures to achieve expected gains, revenue growth and/or expense savings from such transactions. |
• | Costs, fines, penalties and other effects of legal and administrative proceedings, settlements, investigations, claims, including, but not limited to, such matters involving compliance with state and federal laws and interpretations of these laws. |
• | Changes in or additions to federal, state or local legislative requirements, such as changes in or additions to tax laws or rates, pipeline safety regulations, environmental laws, including laws governing greenhouse gases, mandates of sources of renewable energy, and other regulations. |
• | Total shareholder return of 9-11% (previously 8-10%) |
• | Consolidated earnings growth of 5-7% (previously 4-5%), supported by: |
◦ | Utility rate base growth of 4-5% (previously 4%) |
▪ | Gas rate base growth of ~9% |
▪ | Electric rate base growth ~flat |
• | Consolidated earnings payout ratio of ~60% (previously ~65%) |
◦ | Dividend growth aligned with consolidated earnings growth and target payout |
• | Utility earnings growth of 4-6% (previously 3%) |
• | Utility payout of 70% to support the external dividend (previously 75%) |
• | Nonutility earnings growth of 12-15% (previously 10%) |
• | Factors affecting utility operations such as unusual weather conditions; catastrophic weather-related damage; unusual maintenance or repairs; unanticipated changes to coal and natural gas costs; unanticipated changes to gas transportation and storage 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. |
• | Catastrophic events such as fires, earthquakes, explosions, floods, ice storms, tornadoes, terrorist acts, cyber attacks, or other similar occurrences could adversely affect Vectren’s facilities, operations, financial condition and results of operations. |
• | Increased competition in the energy industry, including the effects of industry restructuring, unbundling, and other sources of energy. |
• | Regulatory factors such as unanticipated changes in rate-setting policies or procedures, recovery of investments and costs made under regulation, and the frequency and timing of rate increases. |
• | Financial, regulatory or 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. |
• | Economic conditions including the effects of inflation rates, commodity prices, and monetary fluctuations. |
• | Economic conditions surrounding the current economic uncertainty, including increased potential for lower levels of economic activity; uncertainty regarding energy prices and the capital and commodity markets; volatile changes in the demand for natural gas, electricity, coal, and other nonutility products and services; impacts on both gas and electric large customers; lower residential and commercial customer counts; higher operating expenses; and further reductions in the value of certain nonutility real estate and other legacy investments. |
• | Volatile natural gas and coal commodity prices and the potential impact on customer consumption, uncollectible accounts expense, unaccounted for gas and interest expense. |
• | 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. |
• | Direct or indirect effects on the company’s business, financial condition, liquidity and results of operations resulting from changes in credit ratings, changes in interest rates, and/or changes in market perceptions of the utility industry and other energy-related industries. |
• | The performance of projects undertaken by the company’s nonutility businesses and the success of efforts to realize value from, invest in and develop new opportunities, including but not limited to, the company’s infrastructure services, energy services, and remaining energy marketing assets. |
• | Factors affecting infrastructure services, including the level of success in bidding contracts; fluctuations in volume of contracted work; unanticipated cost increases in completion of the contracted work; funding requirements associated with multi-employer pension and benefit plans; changes in legislation and regulations impacting the industries in which the customers served operate; the effects of weather; failure to properly estimate the cost to construct projects; the ability to attract and retain qualified employees in a fast growing market where skills are critical; cancellation and/or reductions in the scope of projects by customers; credit worthiness of customers; ability to obtain materials and equipment required to perform services; and changing market conditions. |
• | Factors affecting energy services, including unanticipated cost increases in completion of the contracted work; changes in legislation and regulations impacting the industries in which the customers served operate; changes in economic influences impacting customers served; failure to properly estimate the cost to construct projects; the ability to attract and retain qualified employees; cancellation and/or reductions in the scope of projects by customers; credit worthiness of customers; and changing market conditions. |
• | Employee or contractor workforce factors including changes in key executives, collective bargaining agreements with union employees, aging workforce issues, work stoppages, or pandemic illness. |
• | Risks associated with material business transactions such as the purchase of the federal sector under Energy Services and the sale of Coal Mining and other mergers, acquisitions and divestitures, including, without limitation, legal and regulatory delays; the related time and costs of implementing such transactions; integrating operations as part of these transactions; and possible failures to achieve expected gains, revenue growth and/or expense savings from such transactions. |
• | Costs, fines, penalties and other effects of legal and administrative proceedings, settlements, investigations, claims, including, but not limited to, such matters involving compliance with state and federal laws and interpretations of these laws. |
• | Changes in or additions to federal, state or local legislative requirements, such as changes in or additions to tax laws or rates, pipeline safety regulations, environmental laws, including laws governing greenhouse gases, mandates of sources of renewable energy, and other regulations. |
VECTREN CORPORATION | ||||||||||||||||
AND SUBSIDIARY COMPANIES | ||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
(Unaudited - in millions, except per share amounts) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
OPERATING REVENUES: | ||||||||||||||||
Gas Utility | $ | 105.1 | $ | 101.9 | $ | 681.1 | $ | 555.8 | ||||||||
Electric utility | 165.9 | 165.8 | 480.9 | 470.0 | ||||||||||||
Nonutility | 324.6 | 311.9 | 772.9 | 785.4 | ||||||||||||
Total operating revenues | 595.6 | 579.6 | 1,934.9 | 1,811.2 | ||||||||||||
OPERATING EXPENSES: | ||||||||||||||||
Cost of gas sold | 28.8 | 27.5 | 343.4 | 235.4 | ||||||||||||
Cost of fuel and purchased power | 50.3 | 50.4 | 155.4 | 154.5 | ||||||||||||
Cost of nonutility revenues | 112.4 | 107.7 | 259.7 | 271.4 | ||||||||||||
Other operating | 245.6 | 227.5 | 701.1 | 652.5 | ||||||||||||
Depreciation and amortization | 61.4 | 70.7 | 211.0 | 205.7 | ||||||||||||
Taxes other than income taxes | 12.6 | 12.5 | 46.9 | 43.7 | ||||||||||||
Total operating expenses | 511.1 | 496.3 | 1,717.5 | 1,563.2 | ||||||||||||
OPERATING INCOME | 84.5 | 83.3 | 217.4 | 248.0 | ||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Equity in earnings (losses) of unconsolidated affiliates | 0.3 | (0.3 | ) | 0.4 | (57.6 | ) | ||||||||||
Other income - net | 7.3 | 2.5 | 15.8 | 9.0 | ||||||||||||
Total other income (expense) | 7.6 | 2.2 | 16.2 | (48.6 | ) | |||||||||||
INTEREST EXPENSE | 21.7 | 21.3 | 65.7 | 66.3 | ||||||||||||
INCOME BEFORE INCOME TAXES | 70.4 | 64.2 | 167.9 | 133.1 | ||||||||||||
INCOME TAXES | 23.1 | 21.4 | 57.5 | 46.3 | ||||||||||||
NET INCOME | $ | 47.3 | $ | 42.8 | $ | 110.4 | $ | 86.8 | ||||||||
AVERAGE COMMON SHARES OUTSTANDING | 82.5 | 82.3 | 82.5 | 82.3 | ||||||||||||
DILUTED COMMON SHARES OUTSTANDING | 82.5 | 82.4 | 82.5 | 82.4 | ||||||||||||
EARNINGS PER SHARE OF COMMON STOCK | ||||||||||||||||
BASIC | $ | 0.57 | $ | 0.52 | $ | 1.34 | $ | 1.05 | ||||||||
DILUTED | $ | 0.57 | $ | 0.52 | $ | 1.34 | $ | 1.05 | ||||||||
VECTREN UTILITY HOLDINGS | ||||||||||||||||
AND SUBSIDIARY COMPANIES | ||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
(Unaudited - in millions) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
OPERATING REVENUES: | ||||||||||||||||
Gas utility | $ | 105.1 | $ | 101.9 | $ | 681.1 | $ | 555.8 | ||||||||
Electric utility | 165.9 | 165.8 | 480.9 | 470.0 | ||||||||||||
Other | 0.1 | — | 0.2 | 0.2 | ||||||||||||
Total operating revenues | 271.1 | 267.7 | 1,162.2 | 1,026.0 | ||||||||||||
OPERATING EXPENSES: | ||||||||||||||||
Cost of gas sold | 28.8 | 27.5 | 343.4 | 235.4 | ||||||||||||
Cost of fuel and purchased power | 50.3 | 50.4 | 155.4 | 154.5 | ||||||||||||
Other operating | 79.9 | 74.0 | 259.7 | 236.9 | ||||||||||||
Depreciation and amortization | 51.0 | 49.7 | 151.5 | 146.8 | ||||||||||||
Taxes other than income taxes | 11.7 | 11.6 | 44.3 | 41.3 | ||||||||||||
Total operating expenses | 221.7 | 213.2 | 954.3 | 814.9 | ||||||||||||
OPERATING INCOME | 49.4 | 54.5 | 207.9 | 211.1 | ||||||||||||
OTHER INCOME - NET | 4.8 | 2.0 | 12.4 | 6.8 | ||||||||||||
INTEREST EXPENSE | 16.6 | 15.6 | 50.0 | 49.2 | ||||||||||||
INCOME BEFORE INCOME TAXES | 37.6 | 40.9 | 170.3 | 168.7 | ||||||||||||
INCOME TAXES | 13.3 | 15.6 | 61.8 | 64.1 | ||||||||||||
NET INCOME | $ | 24.3 | $ | 25.3 | $ | 108.5 | $ | 104.6 | ||||||||
VECTREN CORPORATION | ||||||||
AND SUBSIDIARY COMPANIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited - in millions) | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash & cash equivalents | $ | 8.4 | $ | 21.5 | ||||
Accounts receivable - less reserves of $6.0 & | ||||||||
$6.8, respectively | 189.9 | 259.2 | ||||||
Accrued unbilled revenues | 82.8 | 134.2 | ||||||
Inventories | 114.8 | 134.4 | ||||||
Recoverable fuel & natural gas costs | 25.5 | 5.5 | ||||||
Prepayments & other current assets | 71.2 | 75.6 | ||||||
Total current assets | 492.6 | 630.4 | ||||||
Utility Plant | ||||||||
Original cost | 5,599.2 | 5,389.6 | ||||||
Less: accumulated depreciation & amortization | 2,250.3 | 2,165.3 | ||||||
Net utility plant | 3,348.9 | 3,224.3 | ||||||
Investments in unconsolidated affiliates | 24.4 | 24.0 | ||||||
Other utility & corporate investments | 37.0 | 38.1 | ||||||
Other nonutility investments | 34.4 | 33.8 | ||||||
Nonutility plant - net | 372.3 | 657.2 | ||||||
Goodwill - net | 289.9 | 262.3 | ||||||
Regulatory assets | 193.8 | 193.4 | ||||||
Other assets | 44.0 | 39.1 | ||||||
TOTAL ASSETS | $ | 4,837.3 | $ | 5,102.6 | ||||
LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 172.2 | $ | 227.2 | ||||
Refundable fuel & natural gas costs | — | 2.6 | ||||||
Accrued liabilities | 187.4 | 182.1 | ||||||
Short-term borrowings | 62.4 | 68.6 | ||||||
Current maturities of long-term debt | 5.0 | 30.0 | ||||||
Total current liabilities | 427.0 | 510.5 | ||||||
Long-term Debt - Net of Current Maturities | 1,572.3 | 1,777.1 | ||||||
Deferred Credits & Other Liabilities | ||||||||
Deferred income taxes | 671.7 | 707.4 | ||||||
Regulatory liabilities | 404.8 | 387.3 | ||||||
Deferred credits & other liabilities | 180.5 | 166.0 | ||||||
Total deferred credits & other liabilities | 1,257.0 | 1,260.7 | ||||||
Common Shareholders' Equity | ||||||||
Common stock (no par value) – issued & outstanding | ||||||||
82.5 and 82.4 shares, respectively | 714.7 | 709.3 | ||||||
Retained earnings | 867.1 | 845.7 | ||||||
Accumulated other comprehensive (loss) | (0.8 | ) | (0.7 | ) | ||||
Total common shareholders' equity | 1,581.0 | 1,554.3 | ||||||
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY | $ | 4,837.3 | $ | 5,102.6 |
VECTREN CORPORATION | ||||||||
AND SUBSIDIARY COMPANIES | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Millions - Unaudited) | ||||||||
Nine Months Ended | ||||||||
September 30, | ||||||||
2014 | 2013 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 110.4 | $ | 86.8 | ||||
Adjustments to reconcile net income to cash from operating activities: | ||||||||
Depreciation & amortization | 211.0 | 205.7 | ||||||
Deferred income taxes & investment tax credits | (9.4 | ) | 32.4 | |||||
Equity in (earnings) losses of unconsolidated affiliates | (0.4 | ) | 57.6 | |||||
Provision for uncollectible accounts | 5.3 | 4.8 | ||||||
Expense portion of pension & postretirement benefit cost | 5.1 | 6.7 | ||||||
Other non-cash charges - net | 4.0 | 5.9 | ||||||
Loss on sale of business | 41.8 | — | ||||||
Changes in working capital accounts: | ||||||||
Accounts receivable & accrued unbilled revenues | 101.9 | 56.3 | ||||||
Inventories | (18.8 | ) | 20.2 | |||||
Recoverable/refundable fuel & natural gas costs | (22.6 | ) | 5.8 | |||||
Prepayments & other current assets | (8.3 | ) | 0.8 | |||||
Accounts payable, including to affiliated companies | (62.5 | ) | (58.4 | ) | ||||
Accrued liabilities | (1.7 | ) | (15.0 | ) | ||||
Unconsolidated affiliate dividends | — | 0.3 | ||||||
Employer contributions to pension & postretirement plans | (3.5 | ) | (10.1 | ) | ||||
Changes in noncurrent assets & investments | (7.0 | ) | (12.3 | ) | ||||
Changes in noncurrent liabilities | (1.6 | ) | 1.4 | |||||
Net cash provided by operating activities | 343.7 | 388.9 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from: | ||||||||
Long-term debt, net of issuance costs | 63.0 | 332.7 | ||||||
Dividend reinvestment plan & other common stock issuances | 4.7 | 5.3 | ||||||
Requirements for: | ||||||||
Dividends on common stock | (89.1 | ) | (87.6 | ) | ||||
Retirement of long-term debt | (293.6 | ) | (338.6 | ) | ||||
Other financing activities | 0.1 | (2.0 | ) | |||||
Net change in short-term borrowings | (6.2 | ) | (29.6 | ) | ||||
Net cash used in financing activities | (321.1 | ) | (119.8 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Proceeds from: | ||||||||
Sale of business | 319.8 | — | ||||||
Other collections | 3.6 | 5.0 | ||||||
Requirements for: | ||||||||
Transaction costs for sale of business | (8.9 | ) | — | |||||
Capital expenditures, excluding AFUDC equity | (321.6 | ) | (273.9 | ) | ||||
Business acquistion | (28.6 | ) | — | |||||
Other investments | — | (10.4 | ) | |||||
Net cash used in investing activities | (35.7 | ) | (279.3 | ) | ||||
Net change in cash & cash equivalents | (13.1 | ) | (10.2 | ) | ||||
Cash & cash equivalents at beginning of period | 21.5 | 19.5 | ||||||
Cash & cash equivalents at end of period | $ | 8.4 | $ | 9.3 |
VECTREN CORPORATION | ||||||||||||||||
AND SUBSIDIARY COMPANIES | ||||||||||||||||
HIGHLIGHTS | ||||||||||||||||
(Unaudited - in millions, except per share amounts) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
REPORTED EARNINGS: | ||||||||||||||||
Utility Group | ||||||||||||||||
Gas Utility Services | $ | (5.1 | ) | $ | (3.8 | ) | $ | 33.9 | $ | 37.2 | ||||||
Electric Utility Services | 26.7 | 26.6 | 65.9 | 60.1 | ||||||||||||
Other Operations | 2.7 | 2.5 | 8.7 | 7.3 | ||||||||||||
Total Utility Group | 24.3 | 25.3 | 108.5 | 104.6 | ||||||||||||
Nonutility Group | ||||||||||||||||
Infrastructure Services | 23.5 | 20.4 | 27.6 | 35.2 | ||||||||||||
Energy Services - Operations | 0.1 | (2.2 | ) | (4.7 | ) | (5.3 | ) | |||||||||
Energy Services - 179D | — | 2.4 | — | 3.3 | ||||||||||||
Coal Mining * | (2.3 | ) | (12.0 | ) | ||||||||||||
Other Businesses | 0.1 | (0.8 | ) | (0.4 | ) | (1.3 | ) | |||||||||
Nonutility Group, excluding Coal Mining and ProLiance * | 23.7 | 17.5 | 22.5 | 19.9 | ||||||||||||
Corporate and Other | 1.4 | — | 0.8 | (0.2 | ) | |||||||||||
Vectren Consolidated, excluding Coal Mining and ProLiance * | $ | 49.4 | $ | 42.8 | $ | 131.8 | $ | 124.3 | ||||||||
Coal Mining | (2.1 | ) | (21.4 | ) | ||||||||||||
ProLiance | — | (37.5 | ) | |||||||||||||
Vectren Consolidated | $ | 47.3 | $ | 42.8 | $ | 110.4 | $ | 86.8 | ||||||||
EARNINGS PER SHARE: | ||||||||||||||||
Utility Group | $ | 0.30 | $ | 0.31 | $ | 1.32 | $ | 1.27 | ||||||||
Nonutility Group, excluding Coal Mining and ProLiance * | 0.29 | 0.21 | 0.27 | 0.24 | ||||||||||||
Corporate and Other | 0.01 | — | 0.01 | — | ||||||||||||
EPS, excluding Coal Mining and ProLiance * | $ | 0.60 | $ | 0.52 | $ | 1.60 | $ | 1.51 | ||||||||
Coal Mining | (0.03 | ) | (0.26 | ) | ||||||||||||
ProLiance | — | (0.46 | ) | |||||||||||||
Reported EPS | $ | 0.57 | $ | 0.52 | $ | 1.34 | $ | 1.05 | ||||||||
(*) Excludes Coal Mining Results in 2014 and ProLiance Results in 2013 - Years of Disposition | ||||||||||||||||
VECTREN CORPORATION | ||||||||||||||||
AND SUBSIDIARY COMPANIES | ||||||||||||||||
SELECTED GAS DISTRIBUTION | ||||||||||||||||
OPERATING STATISTICS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
GAS UTILITY (Millions): | ||||||||||||||||
Residential Margin | $ | 46.5 | $ | 45.5 | $ | 193.5 | $ | 190.2 | ||||||||
Commercial Margin | 11.1 | 10.9 | 54.8 | 53.2 | ||||||||||||
Industrial Margin | 11.8 | 12.1 | 42.7 | 41.9 | ||||||||||||
Other Margin | 2.3 | 2.2 | 8.7 | 7.6 | ||||||||||||
Regulatory Expense Recovery Mechanisms | 4.6 | 3.7 | 38.0 | 27.5 | ||||||||||||
Total Gas Utility Margin | 76.3 | 74.4 | 337.7 | 320.4 | ||||||||||||
Cost of Gas Sold | 28.8 | 27.5 | 343.4 | 235.4 | ||||||||||||
Total Gas Utility Revenue | $ | 105.1 | $ | 101.9 | $ | 681.1 | $ | 555.8 | ||||||||
GAS SOLD & TRANSPORTED (MMDth): | ||||||||||||||||
Residential | 3.8 | 3.8 | 57.7 | 50.6 | ||||||||||||
Commercial | 2.9 | 2.7 | 26.6 | 23.0 | ||||||||||||
Industrial | 23.5 | 24.6 | 83.2 | 80.7 | ||||||||||||
30.2 | 31.1 | 167.5 | 154.3 | |||||||||||||
AVERAGE GAS CUSTOMERS | ||||||||||||||||
Residential | 900,003 | 896,239 | 911,196 | 905,271 | ||||||||||||
Commercial | 83,554 | 83,352 | 84,542 | 84,203 | ||||||||||||
Industrial | 1,700 | 1,676 | 1,693 | 1,675 | ||||||||||||
985,257 | 981,267 | 997,431 | 991,149 | |||||||||||||
WEATHER AS A PERCENT OF NORMAL: | ||||||||||||||||
Heating Degree Days (Ohio) | 115 | % | 103 | % | ||||||||||||
Heating Degree Days (Indiana) | 110 | % | 100 | % |
VECTREN CORPORATION | ||||||||||||||||
AND SUBSIDIARY COMPANIES | ||||||||||||||||
SELECTED ELECTRIC | ||||||||||||||||
OPERATING STATISTICS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
ELECTRIC UTILITY (Millions): | ||||||||||||||||
Residential Margin | $ | 44.4 | $ | 45.5 | $ | 120.4 | $ | 115.7 | ||||||||
Commercial Margin | 28.6 | 28.3 | 81.3 | 79.3 | ||||||||||||
Industrial Margin | 29.7 | 28.6 | 83.6 | 82.5 | ||||||||||||
Other Margin | 0.9 | 1.4 | 2.9 | 3.1 | ||||||||||||
Regulatory Expense Recovery Mechanisms | 2.7 | 2.2 | 9.3 | 6.7 | ||||||||||||
Wholesale and Transmission | 9.3 | 9.4 | 28.0 | 28.2 | ||||||||||||
Total Electric Utility Margin | 115.6 | 115.4 | 325.5 | 315.5 | ||||||||||||
Cost of Fuel & Purchased Power | 50.3 | 50.4 | 155.4 | 154.5 | ||||||||||||
Total Electric Utility Revenue | $ | 165.9 | $ | 165.8 | $ | 480.9 | $ | 470.0 | ||||||||
ELECTRICITY SOLD (GWh): | ||||||||||||||||
Residential | 406.0 | 420.7 | 1,146.9 | 1,100.1 | ||||||||||||
Commercial | 353.0 | 348.9 | 989.6 | 972.0 | ||||||||||||
Industrial | 749.1 | 729.7 | 2,101.6 | 2,087.0 | ||||||||||||
Other Sales - Street Lighting | 5.3 | 4.9 | 16.2 | 15.5 | ||||||||||||
Total Retail | 1,513.4 | 1,504.2 | 4,254.3 | 4,174.6 | ||||||||||||
Wholesale | 149.8 | 68.2 | 586.9 | 331.8 | ||||||||||||
1,663.2 | 1,572.4 | 4,841.2 | 4,506.4 | |||||||||||||
AVERAGE ELECTRIC CUSTOMERS | ||||||||||||||||
Residential | 124,177 | 123,708 | 124,265 | 123,711 | ||||||||||||
Commercial | 18,466 | 18,380 | 18,441 | 18,366 | ||||||||||||
Industrial | 117 | 116 | 116 | 115 | ||||||||||||
Other | 38 | 36 | 38 | 36 | ||||||||||||
142,798 | 142,240 | 142,860 | 142,228 | |||||||||||||
WEATHER AS A PERCENT OF NORMAL: | ||||||||||||||||
Cooling Degree Days (Indiana) | 91 | % | 99 | % | 104 | % | 101 | % | ||||||||
Heating Degree Days (Indiana) | 110 | % | 100 | % |
• | Factors affecting utility operations such as unusual weather conditions; catastrophic weather-related damage; unusual maintenance or repairs; unanticipated changes to coal and natural gas costs; unanticipated changes to gas transportation and storage 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. |
• | Catastrophic events such as fires, earthquakes, explosions, floods, ice storms, tornadoes, terrorist acts, cyber attacks, or other similar occurrences could adversely affect Vectren’s facilities, operations, financial condition and results of operations. |
• | Increased competition in the energy industry, including the effects of industry restructuring, unbundling, and other sources of energy. |
• | Regulatory factors such as unanticipated changes in rate-setting policies or procedures, recovery of investments and costs made under regulation, and the frequency and timing of rate increases. |
• | Financial, regulatory or 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. |
• | Economic conditions including the effects of inflation rates, commodity prices, and monetary fluctuations. |
• | Economic conditions surrounding the current economic uncertainty, including increased potential for lower levels of economic activity; uncertainty regarding energy prices and the capital and commodity markets; volatile changes in the demand for natural gas, electricity, coal, and other nonutility products and services; impacts on both gas and electric large customers; lower residential and commercial customer counts; higher operating expenses; and further reductions in the value of certain nonutility real estate and other legacy investments. |
• | Volatile natural gas and coal commodity prices and the potential impact on customer consumption, uncollectible accounts expense, unaccounted for gas and interest expense. |
• | 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. |
• | Direct or indirect effects on the Company’s business, financial condition, liquidity and results of operations resulting from changes in credit ratings, changes in interest rates, and/or changes in market perceptions of the utility industry and other energy-related industries. |
• | The performance of projects undertaken by the Company’s nonutility businesses and the success of efforts to realize value from, invest in and develop new opportunities, including but not limited to, the Company’s infrastructure services, energy services, and remaining energy marketing assets. |
• | Factors affecting infrastructure services, including the level of success in bidding contracts; fluctuations in volume of contracted work; unanticipated cost increases in completion of the contracted work; funding requirements associated with multi-employer pension and benefit plans; changes in legislation and regulations impacting the industries in which the customers served operate; the effects of weather; failure to properly estimate the cost to construct projects; the ability to attract and retain qualified employees in a fast growing market where skills are critical; cancellation and/or reductions in |
• | Factors affecting energy services, including unanticipated cost increases in completion of the contracted work; changes in legislation and regulations impacting the industries in which the customers served operate; changes in economic influences impacting customers served; failure to properly estimate the cost to construct projects; the ability to attract and retain qualified employees; cancellation and/or reductions in the scope of projects by customers; credit worthiness of customers; and changing market conditions. |
• | Employee or contractor workforce factors including changes in key executives, collective bargaining agreements with union employees, aging workforce issues, work stoppages, or pandemic illness. |
• | Risks associated with material business transactions such as the purchase of the federal sector under Energy Services and the sale of Coal Mining and other mergers, acquisitions and divestitures, including, without limitation, legal and regulatory delays; the related time and costs of implementing such transactions; integrating operations as part of these transactions; and possible failures to achieve expected gains, revenue growth and/or expense savings from such transactions. |
• | Costs, fines, penalties and other effects of legal and administrative proceedings, settlements, investigations, claims, including, but not limited to, such matters involving compliance with state and federal laws and interpretations of these laws. |
• | Changes in or additions to federal, state or local legislative requirements, such as changes in or additions to tax laws or rates, pipeline safety regulations, environmental laws, including laws governing greenhouse gases, mandates of sources of renewable energy, and other regulations. |
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