EX-99.2 3 ex99_2.htm EXHIBIT 99.2 Exhibit 99.2

               
Ex. 99.2
  
                   
VECTREN CORPORATION
  
AND SUBSIDIARY COMPANIES
  
CONSOLIDATED STATEMENTS OF INCOME
  
(Millions, except per share amounts)
  
(Unaudited)
  
                   
   
Three Months
  
Twelve Months
  
   
Ended December 31
  
Ended December 31
  
 
  
2005
  
2004
  
2005
  
2004
  
                   
OPERATING REVENUES:
                  
Gas utility
  
$
520.2
  
$
354.6
  
$
1,359.7
  
$
1,126.2
  
Electric utility
    
101.1
   
91.1
   
421.4
   
371.3
 
Energy services and other
    
92.5
   
67.7
   
246.9
   
192.3
 
Total operating revenues
    
713.8
   
513.4
   
2,028.0
   
1,689.8
 
                           
OPERATING EXPENSES:
                          
Cost of gas sold
    
404.5
   
248.7
   
973.3
   
778.5
 
Fuel for electric generation
    
30.7
   
23.7
   
126.3
   
96.1
 
Purchased electric energy
    
3.1
   
4.1
   
17.8
   
20.7
 
Cost of energy services and other
    
75.5
   
53.3
   
191.0
   
143.5
 
Other operating
    
78.1
   
61.2
   
282.2
   
252.0
 
Depreciation and amortization
    
41.4
   
36.5
   
158.2
   
140.1
 
Taxes other than income taxes
    
21.7
   
16.2
   
66.1
   
59.4
 
Total operating expenses
    
655.0
   
443.7
   
1,814.9
   
1,490.3
 
                           
OPERATING INCOME
    
58.8
   
69.7
   
213.1
   
199.5
 
                           
OTHER INCOME:
                          
Equity in earnings of unconsolidated affiliates
    
33.6
   
7.1
   
45.6
   
20.6
 
Other - net
    
-
   
2.5
   
6.2
   
4.6
 
Total other income
    
33.6
   
9.6
   
51.8
   
25.2
 
                           
INTEREST EXPENSE
    
23.1
   
20.2
   
83.9
   
77.7
 
                           
INCOME BEFORE INCOME TAXES
    
69.3
   
59.1
   
181.0
   
147.0
 
                           
INCOME TAXES
    
18.4
   
19.0
   
44.1
   
39.0
 
                           
                           
MINORITY INTEREST & PREFERRED DIVIDEND REQUIREMENT OF SUBSIDIARIES
    
0.1
   
-
   
0.1
   
0.1
 
             
 
    
   
   
 
                                                                                               
NET INCOME
  
$
50.8
  
$
40.1
  
$
136.8
  
$
107.9
  
                           
                           
AVERAGE COMMON SHARES OUTSTANDING
    
75.7
   
75.6
   
75.6
   
75.6
 
DILUTED COMMON SHARES OUTSTANDING
    
76.0
   
76.0
   
76.1
   
75.9
 
                           
EARNINGS PER SHARE OF COMMON STOCK
                          
                           
BASIC
  
$
0.67
  
$
0.53
  
$
1.81
  
$
1.43
  
                           
DILUTED
  
$
0.67
  
$
0.53
  
$
1.80
  
$
1.42
  







 
AND SUBSIDIARY COMPANIES
  
CONSOLIDATED STATEMENTS OF INCOME
  
(Millions, except per share amounts)
  
(Unaudited)
  
                   
   
Three Months
  
Twelve Months
  
   
Ended December 31
  
Ended December 31
  
 
  
2005
  
2004
  
2005
  
2004
  
                   
OPERATING REVENUES:
                  
Gas utility
  
$
520.2
  
$
354.6
  
$
1,359.7
  
$
1,126.2
  
Electric utility
    
101.1
   
91.1
   
421.4
   
371.3
 
Other
    
0.2
   
-
   
0.7
   
0.5
 
Total operating revenues
    
621.5
   
445.7
   
1,781.8
   
1,498.0
 
                           
OPERATING EXPENSES:
                          
Cost of gas sold
    
404.5
   
248.7
   
973.3
   
778.5
 
Fuel for electric generation
    
30.7
   
23.7
   
126.3
   
96.1
 
Purchased electric energy
    
3.1
   
4.1
   
17.8
   
20.7
 
Other operating
    
61.6
   
52.7
   
241.3
   
220.4
 
Depreciation and amortization
    
37.1
   
33.3
   
141.3
   
127.8
 
Taxes other than income taxes
    
21.6
   
15.8
   
65.2
   
58.2
 
Total operating expenses
    
558.6
   
378.3
   
1,565.2
   
1,301.7
 
                           
OPERATING INCOME
    
62.9
   
67.4
   
216.6
   
196.3
 
                           
OTHER INCOME (EXPENSE):
                          
Equity in earnings of unconsolidated affiliates
    
-
   
-
   
-
   
0.2
 
Other - net
    
1.3
   
1.4
   
5.9
   
7.1
 
Total other income
    
1.3
   
1.4
   
5.9
   
7.3
 
                           
INTEREST EXPENSE
    
19.1
   
17.2
   
69.9
   
67.4
 
                           
INCOME BEFORE INCOME TAXES
    
45.1
   
51.6
   
152.6
   
136.2
 
                           
INCOME TAXES
    
14.8
   
20.4
   
57.5
   
53.1
 
                                                                                                          
NET INCOME
  
$
30.3
  
$
31.2
  
$
95.1
  
$
83.1
  
                           






VECTREN CORPORATION
  
AND SUBSIDIARY COMPANIES
  
CONSOLIDATED BALANCE SHEETS
  
(Millions - Unaudited)
  
           
   
December 31,
  
 
  
2005
  
2004
  
           
ASSETS
          
Current Assets
          
Cash & cash equivalents
  
$
20.4
  
$
9.6
  
Accounts receivable - less reserves of $2.8 &
             
$2.0, respectively
    
197.8
   
173.5
 
Accrued unbilled revenues
    
240.6
   
176.6
 
Inventories
    
144.6
   
72.8
 
Recoverable fuel & natural gas costs
    
15.4
   
17.6
 
Prepayments & other current assets
    
106.4
   
136.2
 
Total current assets
    
725.2
   
586.3
 
Utility Plant
              
Original cost
    
3,632.0
   
3,465.2
 
Less: accumulated depreciation & amortization
    
1,380.1
   
1,309.0
 
Net utility plant
    
2,251.9
   
2,156.2
 
Investments in unconsolidated affiliates
    
214.7
   
180.0
 
Other investments
    
111.6
   
115.1
 
Non-utility property - net
    
240.3
   
229.2
 
Goodwill - net
    
207.1
   
207.1
 
Regulatory assets
    
89.9
   
82.5
 
Other assets
  
27.4
   
30.5
 
                                                      
TOTAL ASSETS
  
$
3,868.1
  
$
3,586.9
  
               
LIABILITIES & SHAREHOLDERS' EQUITY
              
Current Liabilities
              
Accounts payable
  
$
159.0
  
$
123.8
  
Accounts payable to affiliated companies
    
162.3
   
109.3
 
Refundable fuel & natural gas costs
    
7.6
   
6.3
 
Accrued liabilities
    
156.6
   
125.8
 
Short-term borrowings
    
299.9
   
412.4
 
Current maturities of long-term debt
    
0.4
   
38.5
 
Long-term debt subject to tender
    
53.7
   
10.0
 
Total current liabilities
    
839.5
   
826.1
 
Long-term Debt - Net of Current Maturities &
             
Debt Subject to Tender
    
1,198.0
   
1,016.6
 
Deferred Income Taxes & Other Liabilities
              
Deferred income taxes
    
227.3
   
234.0
 
Regulatory liabilities
   
272.9
   
251.7
 
Deferred credits & other liabilities
    
186.7
   
163.2
 
Total deferred credits & other liabilities
    
686.9
   
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
             
76.0 and 75.9 shares, respectively
    
528.1
   
526.8
 
Retained earnings
    
628.8
   
583.0
 
Accumulated other comprehensive loss
    
(13.6
)
  
(15.0
)
Total common shareholders' equity
    
1,143.3
   
1,094.8
 
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY
  
$
3,868.1
  
$
3,586.9
  






VECTREN CORPORATION
  
AND SUBSIDIARY COMPANIES
  
CONSOLIDATED STATEMENTS OF CASH FLOWS
  
(Millions - Unaudited)
  
   
   
December 31,
  
 
  
2005
  
2004
  
           
CASH FLOWS FROM OPERATING ACTIVITIES:
          
Net income
  
$
136.8
  
$
107.9
  
Adjustments to reconcile net income to cash from operating activities:
              
Depreciation & amortization
    
158.2
   
140.1
 
Deferred income taxes & investment tax credits
    
(8.6
)
  
5.9
 
Equity in earnings of unconsolidated affiliates
    
(45.6
)
  
(20.6
)
Provision for uncollectible accounts
    
15.1
   
11.9
 
Expense portion of pension & postretirement periodic benefit cost
    
10.7
   
11.8
 
Other non-cash charges - net
   
1.9
   
8.3
 
Changes in working capital accounts:
              
Accounts receivable & accrued unbilled revenue
    
(102.9
)
  
(84.0
)
Inventories
    
(71.9
)
  
0.4
 
Recoverable fuel & natural gas costs
    
3.5
   
8.9
 
Prepayments & other current assets
    
36.1
   
(10.2
)
Accounts payable, including to affiliated companies
    
101.2
   
42.5
 
Accrued liabilities
    
27.4
   
11.2
 
Unconsolidated affiliate dividends
    
18.8
   
22.3
 
Changes in noncurrent assets
    
(6.9
)
  
(3.5
)
Changes in noncurrent liabilities
    
(5.4
)
  
(14.9
)
Net cash flows from operating activities
    
268.4
   
238.0
 
               
CASH FLOWS FROM FINANCING ACTIVITIES:
              
Proceeds from:
             
Long-term debt - net of issuance costs
    
274.2
   
32.4
 
Stock option exercises & other stock plans
    
-
   
4.5
 
Requirements for:
              
Dividends on common stock
    
(90.5
)
  
(87.3
)
Retirement of long-term debt, including premiums paid
    
(88.5
)
  
(70.7
)
Redemption of preferred stock of subsidiary
    
(0.1
)
  
(0.1
)
Net change in short-term borrowings
    
(112.5
)
  
139.5
 
Other financing activities
    
(0.6
)
  
-
 
Net cash flows from financing activities
    
(18.0
)
  
18.3
 
               
CASH FLOWS FROM INVESTING ACTIVITIES:
              
Proceeds from:
              
Unconsolidated affiliate distributions
    
6.9
   
3.2
 
Notes receivable & other collections
    
4.3
   
9.3
 
Requirements for:
              
Capital expenditures, excluding AFUDC equity
    
(231.6
)
  
(252.5
)
Unconsolidated affiliate investments
    
(19.2
)
  
(18.2
)
Notes receivable & other investments
    
-
   
(3.8
)
Net cash flows from investing activities
    
(239.6
)
  
(262.0
)
               
Net decrease in cash & cash equivalents
    
10.8
   
(5.7
)
Cash & cash equivalents at beginning of period
    
9.6
   
15.3
 
Cash & cash equivalents at end of period
  
$
20.4
  
$
9.6
  






VECTREN CORPORATION
  
AND SUBSIDIARY COMPANIES
  
HIGHLIGHTS
  
(millions, except per share amounts)
  
(Unaudited)
  
                   
   
Three Months
  
Twelve Months
  
   
Ended December 31
  
Ended December 31
  
 
  
2005
  
2004
  
2005
  
2004
  
                   
REPORTED EARNINGS:
                  
Utility Group
  
$
30.3
  
$
31.2
  
$
95.1
  
$
83.1
  
                           
Non-utility Group
                          
Energy Marketing and Services
    
19.3
   
7.5
   
29.3
   
16.6
 
Mining Operations
    
1.1
   
(1.2
)
  
5.3
   
0.4
 
Synfuels related
    
1.9
   
2.6
   
11.7
   
12.1
 
Total Coal Mining
    
3.0
   
1.4
   
17.0
   
12.5
 
Utility Infrastructure Services
    
0.2
   
0.5
   
0.7
   
1.8
 
Other Businesses
    
2.6
   
(0.2
)
  
1.2
   
(4.5
)
Total Non-utility Group
    
25.1
   
9.2
   
48.2
   
26.4
 
                           
Corporate and Other
    
(4.6
)
  
(0.3
)
  
(6.5
)
  
(1.6
)
                           
Vectren Consolidated
  
$
50.8
  
$
40.1
  
$
136.8
  
$
107.9
  






VECTREN CORPORATION
  
AND SUBSIDIARY COMPANIES
  
SELECTED GAS DISTRIBUTION
  
OPERATING STATISTICS
  
(Unaudited)
  
                   
   
Three Months
  
Twelve Months
  
   
Ended December 31
  
Ended December 31
  
 
  
2005
  
2004
  
2005
  
2004
  
                   
GAS OPERATING REVENUES (Millions):
                  
                   
Residential
  
$
350.4
  
$
241.5
  
$
899.7
  
$
750.4
  
Commercial
    
146.9
   
96.0
   
383.2
   
316.7
 
Industrial
    
22.8
   
15.8
   
68.4
   
55.3
 
Miscellaneous Revenue
    
0.1
   
1.3
   
8.4
   
3.8
 
   
$
520.2
  
$
354.6
  
$
1,359.7
  
$
1,126.2
  
                           
GAS MARGIN (Millions):
                          
                           
Residential
  
$
77.7
  
$
69.9
  
$
252.5
  
$
226.2
  
Commercial
    
25.1
   
21.9
   
80.7
   
71.5
 
Industrial
    
13.9
   
12.8
   
48.3
   
45.7
 
Miscellaneous
    
(1.0
)
  
1.3
   
4.9
   
4.3
 
   
$
115.7
  
$
105.9
  
$
386.4
  
$
347.7
  
                           
GAS SOLD & TRANSPORTED (MMDth):
                          
                           
Residential
    
26.4
   
25.0
   
78.0
   
79.0
 
Commercial
    
11.2
   
10.6
   
34.9
   
35.5
 
Industrial
    
23.8
   
23.4
   
87.2
   
85.8
 
     
61.4
   
59.0
   
200.1
   
200.3
 
                           
YEAR END GAS CUSTOMERS
                          
                           
Residential
                
906,246
   
899,345
 
Commercial
                
84,455
   
83,876
 
Industrial
                
1,657
   
1,570
 
                 
992,358
   
984,791
 
                           
YTD WEATHER AS A PERCENT OF NORMAL:
                          
                           
Heating Degree Days
    
103
%
  
91
%
  
95
%
  
91
%






VECTREN CORPORATION
  
AND SUBSIDIARY COMPANIES
  
SELECTED ELECTRIC
  
OPERATING STATISTICS
  
(Unaudited)
  
                   
   
Three Months
  
Twelve Months
  
   
Ended December 31
  
Ended December 31
  
 
  
2005
  
2004
  
2005
  
2004
  
                   
ELECTRIC OPERATING REVENUES (Millions):
                  
                   
Residential
  
$
29.1
  
$
26.3
  
$
135.3
  
$
118.8
  
Commercial
    
23.7
   
21.3
   
95.8
   
86.2
 
Industrial
    
29.6
   
26.2
   
119.5
   
106.4
 
Municipals
    
5.8
   
5.2
   
25.8
   
23.6
 
Miscellaneous Revenue
    
2.7
   
3.6
   
7.0
   
12.5
 
Total Retail
    
90.9
   
82.6
   
383.4
   
347.5
 
Net Wholesale Revenues
    
10.2
   
8.5
   
38.0
   
23.8
 
   
$
101.1
  
$
91.1
  
$
421.4
  
$
371.3
  
                           
ELECTRIC MARGIN (Millions):
                          
                           
Residential
  
$
22.4
  
$
21.0
  
$
103.0
  
$
93.7
  
Commercial
    
17.2
   
16.1
   
67.8
   
63.6
 
Industrial
    
17.3
   
16.2
   
66.9
   
63.7
 
Municipals
    
3.1
   
3.1
   
13.1
   
13.9
 
Miscellaneous
    
2.6
   
1.6
   
6.7
   
4.7
 
Total Retail
    
62.6
   
58.0
   
257.5
   
239.6
 
Net Wholesale Margin
    
4.7
   
5.3
   
19.8
   
14.9
 
   
$
67.3
  
$
63.3
  
$
277.3
  
$
254.5
  
                           
ELECTRICITY SOLD (GWh):
                          
                           
Residential
    
336.8
   
316.0
   
1,564.9
   
1,495.4
 
Commercial
    
332.4
   
317.2
   
1,368.3
   
1,335.5
 
Industrial
    
621.0
   
599.6
   
2,575.9
   
2,511.2
 
Municipals
    
150.8
   
139.1
   
670.3
   
625.9
 
Miscellaneous Sales
    
5.8
   
5.7
   
19.6
   
20.0
 
Total Retail
    
1,446.8
   
1,377.6
   
6,199.0
   
5,988.0
 
Wholesale
    
625.3
   
1,189.7
   
3,049.2
   
3,526.0
 
     
2,072.1
   
2,567.3
   
9,248.2
   
9,514.0
 
                           
YEAR END ELECTRIC CUSTOMERS
                          
                           
Residential
                
120,679
   
119,970
 
Commercial
                
18,677
   
18,522
 
Industrial
                
107
   
107
 
All Others
                
51
   
21
 
                 
139,514
   
138,620
 
                           
YTD WEATHER AS A PERCENT OF NORMAL:
                          
                           
Cooling Degree Days
                
109
%
  
90
%
Heating Degree Days
    
103
%
  
91
%
  
95
%
  
91
%
 

 
 
      
Net Income
Range
Utility Operations
$91
to
$98
       
Energy Marketing and Services
15
to
20
Mining Operations
6
to
9
Energy Infrastructure Services
6
to
9
Other Businesses
0
to
0
  Nonutility Operations
27
to
38
Synfuels
12
to
13
  Total Nonutility
$39
to
$51
 
 
 
  
       
Utility Operations
Range
Gas Margin
$400
to
$410
Electric Margin
280
to
290
O & M
240
to
245
Depreciation & Amortization
151
to
153
Interest
75
to
79
Other Taxes
64
to
66
Income Taxes
66
to
69
       
       
2006 Utility Capital Expenditures
    
$246
       
       
2006 EPS Guidance
Range
Utility
$1.20
to
$1.30
Nonutility
0.36
to
0.50
Corporate & Other
(0.01)
to
0.00
Synfuels
0.16
to
0.17
Total Vectren
$1.75
to
$1.95