|
Vectren
Corporation (NYSE: VVC) today reported second quarter 2011 net income of
$15.1 million, or $0.19 per share, compared to net income of $8.7 million, or
$0.11 per share, in the second quarter of 2010. Net income for the six months
ended June 30, 2011, was $59.7 million, or $0.73 per share, compared to $71.9
million, or $0.89 per share, for the same period in 2010.
Summary results
- Utility earnings were $16.3
million, or $0.20 per share, in the second quarter of 2011, compared to
$16.2 million, or $0.20 per share, in 2010. Year to date, utility
earnings were $64.9 million, or $0.79 per share, compared to $71.6
million, or $0.89 per share, in 2010.
- Nonutility results were a loss
of ($0.8) million, or ($0.01) per share, in the second quarter of 2011,
compared to a loss of ($7.5) million, or ($0.09) per share, in 2010.
Year to date, nonutility losses were ($4.2) million, compared to
earnings of $0.3 million in 2010. The 2010 results were impacted by
charges related to legacy investments totaling ($4.0) million after tax,
or ($0.05) per share in the second quarter of 2010, and ($6.8) million
after tax, or ($0.08) per share in the year to date period.
"We
were very pleased with the utility results in the quarter, which reflected
the impact of newly implemented electric rates, offsetting the increased
maintenance costs associated with scheduled outages of certain of our
electric generating units," said Carl L. Chapman, Vectren's chairman,
president and CEO. "Our nonutility results reflected significantly
increased coal mining earnings, while ProLiance results continued to show
losses as the unfavorable market conditions continue."
Overall
2011 earnings guidance affirmed
Expected 2011 Utility Group earnings are increased to a range of $1.52 to
$1.58 per share and the Nonutility Group earnings, excluding ProLiance, are
still expected to be within a range of $0.32 to $0.42 per share. The combined
guidance range, including an expected loss at ProLiance, remains at
consolidated earnings of $1.60 to $1.85 per share. Based on current market
conditions and outlook, Vectren's share of ProLiance's results for 2011 is
now expected to be a net loss in a range of ($0.15) to ($0.25) per share.
The
Utility Group expectations assume normal weather in the electric service
territory for the remainder of 2011. Related to ProLiance, current market
conditions are assumed to continue, resulting in continued depressed asset
optimization opportunities. Changes in these events or other circumstances
could materially impact earnings and result in earnings for 2011
significantly above or below this guidance. These targeted ranges are subject
to such factors discussed below under "Forward-Looking Statements."
Utility
Group discussion
In the second quarter of 2011, the Utility Group earned $16.3 million, which
is comparable to the $16.2 million earned in 2010. Year to date, 2011 utility
earnings were $64.9 million compared to $71.6 million in 2010, a decrease of
($6.7) million. The year to date decrease is driven primarily by increased
operating expenses associated with planned electric generating maintenance
activities, warmer cooling weather in the prior year and the expected first
quarter impact of rate design changes implemented in February 2010 in the
Ohio service territory. During the second quarter, increased margin resulting
from the Vectren South electric rate increase implementation largely offset
these impacts.
In
the company's electric territory, management estimates the margin impact of
weather to be approximately $1.7 million favorable and $1.5 million
favorable, compared to normal temperatures in the quarter and year to date in
2011, respectively. This compares to 2010, where management estimated a $3.4
million favorable impact on margin compared to normal in the second quarter
and $4.2 million year to date.
Gas
utility margin
Gas utility margins were $85.2 million and $246.8 million for the three and
six months ended June 30, 2011. Following are reconciliations of the changes
from 2010.
Year to
(millions)
Quarter
Date
---------- ---------
2010 Gas Utility Margin
$ 81.4
$ 251.7
Ohio territory rate design changes in
2010
-
(3.5)
Return on Ohio bare steel/cast iron
& distribution
riser replacement programs 0.6 1.4
Large customer usage
1.7
3.1
Operating costs, including revenue
taxes, directly
recovered in margin
1.0
(4.8)
All other 0.5 (1.1)
---------- ---------
Total change in Gas Utility Margin
3.8
(4.9)
----------
---------
2011 Gas Utility Margin
$ 85.2
$ 246.8
========== =========
The
rate design approved by the Public Utilities Commission of Ohio (PUCO) on
Jan. 7, 2009, and initially implemented on Feb. 22, 2009, allowed for the
phased movement toward a straight fixed variable rate design, which places
substantially all of the fixed cost recovery in the monthly customer service
charge. This rate design mitigates most weather risk as well as the effects
of declining usage. Since the straight fixed variable rate design was fully
implemented in mid-February 2010, nearly 90 percent of the combined
residential and commercial base rate gas margins are recovered through the
customer service charge. However, margin recognized in the first quarter of
2010 that reflected a volumetric rate design during the peak delivery winter
months of January and the first half of February 2010 is now more ratably recognized
throughout the year.
Electric
utility margin
Retail electric utility margins were $90.1 million and $169.4 million for the
three and six months ended June 30, 2011. Following are reconciliations of
the changes from 2010.
Year
to
(millions)
Quarter
Date
--------- ---------
2010 Retail Electric Utility Margin
$ 86.6 $ 166.1
Weather
(1.7)
(2.7)
Vectren South electric new base rate
implementation
impacts
5.9
5.9
All other
(0.7) 0.1
--------- ---------
Total change in Retail Electric Utility
Margin
3.5 3.3
--------- ---------
2011 Retail Electric Utility Margin
$ 90.1 $ 169.4
========= =========
Margins
from wholesale electric activities were $8.9 million for the three months ended
June 30, 2011, and $16.5 million for the six months ended June 30, 2011.
Following are reconciliations of the changes from 2010.
Year to
(millions)
Quarter Date
--------- ---------
2010 Wholesale Electric Utility
Margin
$ 6.6 $ 14.0
Wholesale power operations, including
sharing impacts
1.6
1.0
Transmission return related to meeting
MISO expansion
plans
0.8
1.8
Other transmission margin
(0.1)
(0.3)
--------- ---------
Total change in Wholesale Electric
Utility Margin
2.3
2.5
--------- ---------
2011 Wholesale Electric Utility
Margin
$ 8.9 $ 16.5
========= =========
Other
operating
Other operating expenses were $78.2 million for the three months ended June
30, 2011, and $165.1 million for the six months ended June 30, 2011,
increases of $7.0 million and $12.3 million, respectively. Following is
reconciliation of the changes from 2010.
Year to
(millions)
Quarter
Date
--------- ----------
2010 Other Operating Expenses
$ 71.2 $ 152.8
Power supply operating costs, including
planned outage
cost increases of $6.2 million and $9.6
million,
respectively
8.2
12.1
All other
(1.2)
0.2
--------- ----------
Total change in Other Operating
Expenses
7.0 12.3
--------- ----------
2011 Other Operating Expenses
$ 78.2 $ 165.1
========= ==========
Depreciation
& amortization
For the three and six months ended June 30, 2011, depreciation expense was
$47.9 million and $96.1 million, which represents increases of $1.1 million
and $2.8 million, respectively, compared to 2010. These increases reflect
utility expenditures placed into service, which were offset by lower
amortizations of certain deferred costs pursuant to the recent electric base
rate order.
Taxes
other than income taxes
For the three and six months ended June 30, 2011, taxes other than income
taxes were $11.1 million and $29.1 million, respectively, which reflect
decreases of ($0.5) million for the quarter and ($4.8) million year over
year. The annual decrease is primarily attributable to lower Ohio excise and
usage taxes associated with that territory's ongoing process of exiting the
merchant function. Excise and usage related taxes are offset
dollar-for-dollar with lower gas utility revenues. The decrease in the
quarter primarily reflects lower property taxes.
Other
income-net
Other income-net reflects income of $2.2 million and $3.9 million for the
three and six months ended June 30, 2011, compared to $0.8 million and $3.0
million for the same periods in 2010. The increases primarily reflect greater
post in service carrying costs on increased distribution replacement program
spending.
Interest
expense
For the three and six months ended June 30, 2011, interest expense was $20.4
million and $40.8 million, and is generally flat compared to the prior year
periods. Interest expense continues to reflect the current low interest rate
environment and less reliance by the Utility Group on short-term borrowings.
At June 30, 2011 and 2010, the Utility Group had no short-term borrowings
outstanding.
Income
taxes
In 2011, Utility Group federal and state income taxes were $13.0 million for
the quarter and $41.6 million year to date. The increased expense of $3.3
million in the quarter reflects increased pre-tax income, the impact of a one
time adjustment of $1.4 million and the amortization of certain income tax
related regulatory liabilities associated with the recently concluded
electric base rate case. The annual decrease of ($1.8) million primarily
reflects lower pre-tax income.
Vectren
South Coal Procurement Procedures Update
Vectren South recently submitted a request for proposal regarding coal
purchases for a four year period beginning in 2012. After negotiations with
bidders, Vectren South has reached an agreement in principle for multi-year
purchases with two suppliers, one of which is Vectren Fuels, Inc. Consistent
with the Indiana Utility Regulatory Commission's (IURC) direction in the
electric rate case order, a sub docket proceeding has been established to
review the company's prospective coal procurement procedures, and the company
expects to submit evidence related to its recent request for proposal and
those coal procurement procedures to the IURC in August.
Nonutility
Group discussion
All amounts included in this section are after tax. Results reported by
business group are net of nonutility group corporate expense.
The
Nonutility Group's 2011 second quarter loss was ($0.8) million compared to a
loss of ($7.5) million in 2010. Year to date in 2011, the nonutility group
losses were ($4.2) million compared to earnings of $0.3 million in 2010. The
changes were driven by improved earnings in Coal Mining operations, offset by
lower results from ProLiance, and legacy charges in 2010 of $4.0 million and
$6.8 million in the quarter and year to date periods, respectively.
Infrastructure
Services
Infrastructure Services provides underground construction and repair to
utility infrastructure through Miller Pipeline (Miller) and Minnesota
Limited, which was acquired on March 31, 2011.
Results
from Infrastructure's operations for the three and six months ended June 30,
2011 were earnings of $2.1 million and a loss of ($0.8) million,
respectively. These results were generally flat compared to the prior year
periods. The year to date loss is seasonal as the construction activity
occurs primarily in the second half of the year. The delayed timing of
projects at Miller largely offset the $0.5 million of earnings recorded
during the second quarter of 2011 related to Minnesota Limited's operations.
Construction activity for the remainder of 2011 is expected to be strong as
utilities and pipelines continue to replace their aging natural gas and oil
infrastructure and as the need for shale gas and oil infrastructure becomes
more prevalent. Minnesota Limited is still expected to contribute $0.02 to
$0.04 per share in 2011.
Energy
Services
Energy Services provides energy performance contracting and renewable energy
services through Energy Systems Group (ESG).
Energy
Services' contributed earnings of $0.7 million during the second quarter of
2011, compared to earnings of $1.7 million in 2010. Year to date losses were
($0.7) million in 2011, compared to earnings of $1.4 million in 2010. The
lower results in 2011 are primarily due to increased operating costs related
to ramp up of the sales force and related recruitment costs. At June 30,
2011, backlog was $140 million compared to $118 million at December 31, 2010,
and $82 million at June 30, 2010. With this backlog, Energy Services' expects
to meet its earnings expectation for the year. The national focus on a
comprehensive energy strategy and a continued focus on renewable energy,
energy conservation and sustainability are expected to create favorable
conditions for future growth in this area.
Coal
Mining
Coal Mining mines and sells coal to the company's utility operations and to
third parties through its wholly owned subsidiary Vectren Fuels, Inc.
Coal
Mining earnings were $8.5 million during the quarter ended June 30, 2011,
compared to $1.7 million in 2010, an increase of $6.8 million. Year to date,
Coal Mining results were $10.1 million compared to earnings of $5.6 million
in 2010, an increase of $4.5 million. Coal Mining revenues were $71 million
and $140 million, and represent increases of $21 million and $38 million,
compared to prior year periods, respectively. The increases reflect increased
sales to third parties. Second quarter operating results reflect a record
earnings contribution driven primarily by the higher sales and record
production. In addition, the cost per ton mined also decreased in the quarter
and year over year as a result of the lower costs at our Oaktown mine. The
anticipated 2011 coal production is approximately 5 million tons, with total
sales in 2011 of 5.1 million tons expected. Over 90 percent of those sales
have been contracted and priced. The second phase of the Oaktown mining
complex is anticipated to open in 2012.
Vectren
Fuels, Inc. is currently in negotiation with a number of customers regarding
sales in 2012 and beyond. Vectren Fuels, Inc. and Vectren South recently
reached an agreement in principle whereby existing contracts that had entered
into price reopener status have been re-priced. Pursuant to this agreement
and other contracts in place, Vectren Fuels, Inc. expects to supply Vectren
South, including its plant jointly owned with ALCOA, approximately 1.5
million tons in 2012. Sales to Vectren South are expected to be at least 2.3
million tons in both 2013 and 2014. The agreements reached in principle will
be submitted to the IURC for review as part of a pending proceeding to review
Vectren South's coal procurement practices. At this time, including the
Vectren South agreement to be reviewed and agreements reached with third
parties that are subject to final contract language, approximately 70 percent
of Vectren Fuel's planned 2012 production has been subscribed.
Energy
Marketing
Energy Marketing is comprised of the company's gas marketing operations,
energy management services and retail gas supply operations. The Energy
Marketing group consists of the company's investment in ProLiance and the
company's wholly owned subsidiary, Vectren Source.
Vectren
Source, the company's retail gas marketer, incurred a seasonal loss of
approximately ($2.5) million in the second quarter of 2011, compared to a
loss of ($1.9) million in 2010. Year to date, Vectren Source has earned $4.6 million
in 2011 compared to $4.4 million in 2010. Seasonal second quarter losses
increased over the prior year due primarily to lower per unit gross margins.
Vectren Source's customer count at June 30, 2011, was approximately 258,000
customers, compared to 205,000 customers at June 30, 2010. The 2011 customer
count reflects nearly 140,000 customers in Vectren Energy Delivery of Ohio's
(VEDO) service territory that have either voluntarily opted to choose their
natural gas supplier or are supplied natural gas by Vectren Source but remain
customers of the regulated utility as part of VEDO's exit from the merchant
function process. As a result of a supplier choice auction held on January
18, 2011 in VEDO's service territory, Vectren Source increased its customer
base by 28,000 in the second quarter of 2011.
During
the quarter ended June 30, 2011, the company's share of ProLiance's results
was a loss of approximately ($9.2) million compared to a loss of ($7.0)
million in 2010. During the six months ended June 30, 2011, ProLiance
operated at a loss of approximately ($16.7) million compared to a loss of
($3.1) million in 2010. The ($2.2) million quarter over quarter and ($13.6)
million year to date increased loss reflects the impact on the market of new
natural gas sources from shale and greater transmission capacity, as well as
the impacts of reduced industrial demand for natural gas in the Midwest, and
is consistent with trends experienced dating back to the latter part of 2010.
These conditions have resulted in plentiful natural gas supply and lower and
less volatile natural gas prices. Historical basis differences between
physical and financial markets and summer and winter prices have narrowed. As
a result, there have been reduced opportunities to optimize ProLiance's firm
transportation and storage capacity. ProLiance has structured optimization
activities to remain flexible to maximize potential opportunities if market
conditions improve.
ProLiance
has approximately $80 million of annual fixed costs related to its
transportation and storage contracts, with contracts representing nearly
one-third of these fixed costs expiring over the next two and one half years
and one-half over the next four and one half years. At June 30, 2011ProLiance
continued to maintain significant sources of liquidity beyond its credit
facility which was renewed at a lower level of $130 million given reduced
needs with lower gas costs for a one year period on May 18, 2011. At June 30,
2011, ProLiance's balance sheet has nearly $55 million of cash, over $170
million of members' equity, and no long-term debt or working capital debt
outstanding. Various profit improvement initiatives are underway, including
lowering the cost of pipeline demand costs through ongoing pipeline
renegotiations.
Other
Businesses
Other nonutility businesses reflect a loss in 2010 due to a ($4.0) million
after tax charge related to a decline in the fair value of an energy-related
investment originally made in 2004 by Haddington Energy Partners, and
accounted for by the company using the equity method. The six months ended
June 30, 2010 reflect the second quarter loss associated with the Haddington
investment and a 2010 first quarter ($2.8) million after tax charge related
to the reduction in value of a note receivable recorded in 2002 related to a
previously exited business.
Please
SEE ATTACHED unaudited schedules for additional financial information
Live
Webcast on August 4, 2011
Vectren's financial analyst call will be at 3 p.m. (EDT), August 4, 2011, at
which time management will discuss financial results and 2011 earnings
guidance. To participate in the call, analysts are asked to dial 1-866-821-5457 ten
minutes prior to the start time and refer to the "Vectren Corporation
2nd Quarter" conference call. All interested parties may listen to the
live webcast accompanied by a slide presentation at http://www.vectren.com.
A replay of the webcast will be made available at the same location
approximately two hours following the conclusion of the meeting.
About
Vectren
Vectren Corporation (NYSE: VVC) is an energy holding company headquartered in
Evansville, Ind.
Vectren's
energy delivery subsidiaries provide gas and/or electricity to more than one
million customers in adjoining service territories that cover nearly
two-thirds of Indiana and west central Ohio. Vectren's nonutility
subsidiaries and affiliates currently offer energy-related products and
services to customers throughout the U.S. These include infrastructure
services, energy services, coal mining and energy marketing. To learn more
about Vectren, visit http://www.vectren.com.
Forward-Looking
Statements
All statements other than statements of historical fact included in this news
release are forward-looking statements made in good faith by the company and
are intended to qualify for the safe harbor from liability established by the
Private Securities Litigation Reform Act of 1995. Such statements are based
on management's beliefs, as well as assumptions made by and information
currently available to management and include such words as
"believe," "anticipate," "endeavor,"
"estimate," "expect," "objective,"
"projection," "forecast," "goal,"
"likely," and similar expressions intended to identify
forward-looking statements. Vectren cautions readers that the assumptions
forming the basis for forward-looking statements include many factors that
are beyond Vectren's ability to control or estimate precisely and actual
results could differ materially from those contained in this document.
In
addition to any assumptions and other factors referred to specifically in
connection with such forward-looking statements, factors that could cause the
company's actual results to differ materially from those contemplated in any
forward-looking statements include, among others, the following:
Factors
affecting utility operations such as unusual weather conditions; catastrophic
weather-related damage; unusual maintenance or repairs; unanticipated changes
to fossil fuel 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, tornados, terrorist acts 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 and
unbundling; regulatory factors such as unanticipated changes in rate-setting
policies or procedures, recovery of investments and costs made under
traditional 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 an economic downturn, inflation rates, commodity prices, and
monetary fluctuations; economic conditions surrounding the current economic
uncertainty, including significantly 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; increased 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 invest in and develop new opportunities, including but not limited
to, the company's infrastructure, energy services, coal mining, and energy
marketing strategies; factors affecting coal mining operations including MSHA
guidelines and interpretations of those guidelines, as well as additional
mine regulations and more frequent and broader inspections that could result
from the recent mining incidents at coal mines of other companies; geologic,
equipment, and operational risks; the ability to execute and negotiate new
sales contracts and resolve contract interpretations; volatile coal market
prices and demand; supplier and contract miner performance; the availability
of key equipment, contract miners and commodities; availability of
transportation; and the ability to access/replace coal reserves ; employee or
contractor workforce factors including changes in key executives, collective
bargaining agreements with union employees, aging workforce issues, work
stoppages, or pandemic illness; legal and regulatory delays and other
obstacles associated with mergers, acquisitions and investments in joint
ventures; 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, environmental laws, including laws governing greenhouse
gases, mandates of sources of renewable energy, and other regulations.
More
detailed information about these factors is set forth in Vectren's filings
with the Securities and Exchange Commission, including Vectren's 2010 annual
report on Form 10-K filed on Feb. 17, 2011. The company undertakes no
obligation to publicly update or revise any forward-looking statements,
whether as a result of changes in actual results, changes in assumptions, or
other factors affecting such statements.
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
--------------------
--------------------
2011
2010
2011 2010
--------------------------------
--------- --------- --------- ---------
OPERATING REVENUES:
Gas utility
$ 134.0 $ 122.9 $ 490.7 $ 591.0
Electric utility
159.3 151.0 305.7 295.9
Nonutility
182.5
128.5
362.0
255.8
--------- --------- --------- ---------
Total operating
revenues
475.8
402.4
1,158.4 1,142.7
--------- --------- --------- ---------
OPERATING EXPENSES:
Cost of gas sold
48.8
41.5
243.9
339.3
Cost of fuel and purchased
power
60.3 57.8 119.8 115.8
Cost of nonutility revenues
68.5 49.4 173.6 109.9
Other operating
163.3
132.3
304.9
261.2
Depreciation and amortization
61.2 57.2 120.3 113.0
Taxes other than income taxes
12.1
12.1
31.0 35.2
--------- --------- --------- ---------
Total operating
expenses
414.2
350.3
993.5
974.4
--------- --------- --------- ---------
OPERATING INCOME
61.6
52.1
164.9
168.3
OTHER INCOME (EXPENSE):
Equity in (losses) of
unconsolidated affiliates
(12.0)
(13.9)
(22.9)
(5.7)
Other income - net
2.8
0.9
5.2
0.4
--------- --------- --------- ---------
Total other income
(expense)
(9.2)
(13.0)
(17.7)
(5.3)
--------- --------- --------- ---------
INTEREST EXPENSE
27.0
26.0
53.6 52.0
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES
25.4
13.1
93.6
111.0
INCOME TAXES
10.3
4.4
33.9 39.1
--------- --------- --------- ---------
NET INCOME
$ 15.1 $ 8.7 $ 59.7 $ 71.9
========= ========= ========= =========
AVERAGE COMMON SHARES
OUTSTANDING
81.7
81.0
81.7 81.0
DILUTED COMMON SHARES
OUTSTANDING
81.8
81.2
81.8 81.2
EARNINGS PER SHARE OF COMMON
STOCK
BASIC
$ 0.19 $ 0.11 $
0.73 $ 0.89
========= ========= ========= =========
DILUTED
$ 0.18 $ 0.11 $ 0.73 $ 0.89
========= ========= ========= =========
VECTREN UTILITY HOLDINGS
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions)
(Unaudited)
Three Months
Six Months
Ended June 30 Ended
June 30
-------------------
-------------------
2011
2010
2011
2010
------------------------------------
--------- --------- --------- ---------
OPERATING REVENUES:
Gas utility
$ 134.0 $ 122.9 $ 490.7 $ 591.0
Electric utility
159.3
151.0
305.7
295.9
Other
0.5
0.4
1.0
0.8
--------- --------- --------- ---------
Total operating
revenues
293.8
274.3
797.4
887.7
--------- --------- --------- ---------
OPERATING EXPENSES:
Cost of gas sold
48.8
41.5
243.9
339.3
Cost of fuel and purchased power
60.3
57.8
119.8
115.8
Other operating
78.2
71.2
165.1
152.8
Depreciation and amortization
47.9
46.8
96.1
93.3
Taxes other than income taxes
11.1
11.6
29.1
33.9
--------- --------- --------- ---------
Total operating
expenses
246.3
228.9
654.0
735.1
---------
--------- --------- ---------
OPERATING INCOME
47.5
45.4
143.4
152.6
OTHER INCOME - NET
2.2
0.8
3.9
3.0
INTEREST EXPENSE
20.4 20.3 40.8 40.6
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES
29.3
25.9
106.5
115.0
INCOME TAXES
13.0 9.7 41.6 43.4
--------- --------- --------- ---------
NET INCOME
$ 16.3 $ 16.2 $ 64.9 $ 71.6
========= ========= ========= =========
VECTREN
CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Millions - Unaudited)
June 30, December
31,
2011
2010
-------------------------------------------------
----------- ------------
ASSETS
Current Assets
Cash & cash equivalents
$
14.8 $ 10.4
Accounts receivable - less reserves of $7.6 &
$5.3, respectively
179.0
176.6
Accrued unbilled revenues
62.6
162.0
Inventories
166.6
187.1
Recoverable fuel & natural gas costs
9.2
7.9
Prepayments & other current assets
80.6
101.2
----------- ------------
Total current assets
512.8
645.2
----------- ------------
Utility Plant
Original cost
4,890.0 4,791.7
Less: accumulated depreciation & amortization
1,897.3 1,836.3
----------- ------------
Net utility plant
2,992.7 2,955.4
----------- ------------
Investments in unconsolidated
affiliates
114.8
135.2
Other utility & corporate
investments
36.1
34.1
Other nonutility investments
41.2
40.9
Nonutility plant - net
536.0
488.3
Goodwill - net
262.2
242.0
Regulatory assets
173.3
189.4
Other assets
51.0
33.7
----------- ------------
TOTAL ASSETS
$ 4,720.1 $ 4,764.2
=========== ============
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable
$
119.1 $ 183.7
Accounts payable to affiliated companies
27.7
59.6
Accrued liabilities
184.5
178.4
Short-term borrowings
144.5
118.3
Current maturities of long-term debt
138.3
250.7
Long-term debt subject to tender 30.0
30.0
----------- ------------
Total current
liabilities
644.1
820.7
----------- ------------
Long-term Debt - Net of Current
Maturities & Debt
Subject to Tender
1,551.4 1,435.2
Deferred Income Taxes & Other
Liabilities
Deferred income taxes
538.1
515.3
Regulatory liabilities
337.6
333.5
Deferred credits & other liabilities
202.6
220.6
----------- ------------
Total deferred credits &
other liabilities
1,078.3 1,069.4
----------- ------------
Common Shareholders' Equity
Common stock (no par value) - issued &
outstanding 81.8 and 81.7
shares, respectively 687.6
683.4
Retained earnings
762.5
759.9
Accumulated other comprehensive income (loss)
(3.8)
(4.4)
----------- ------------
Total common shareholders'
equity
1,446.3 1,438.9
----------- ------------
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $ 4,720.1 $ 4,764.2
=========== ============
VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions - Unaudited)
Six
Months Ended
June 30,
2011
2010
--------------------------------------------------
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
59.7 $ 71.9
Adjustments to reconcile net income to cash from
operating activities:
Depreciation &
amortization
120.3
113.0
Deferred income taxes
& investment tax credits
34.1
17.6
Equity in losses of
unconsolidated affiliates
22.9
5.7
Provision for
uncollectible accounts
6.9 10.2
Expense portion of pension
& postretirement
benefit cost
4.5
4.5
Other non-cash charges -
net
6.1
14.5
Changes in working capital
accounts:
Accounts
receivable & accrued unbilled
revenues
111.2
100.0
Inventories
20.5
7.5
Recoverable/refundable fuel & natural gas
costs (1.3) (24.2)
Prepayments
& other current assets
22.6
17.6
Accounts
payable, including to affiliated
companies
(102.5) (98.8)
Accrued
liabilities
4.6
14.0
Unconsolidated affiliate
dividends
0.1
12.2
Employer contributions to
pension &
postretirement
plans
(33.1)
(8.2)
Changes in noncurrent
assets
(3.5)
9.5
Changes in noncurrent
liabilities
(3.5)
(8.3)
----------- -----------
Net cash flows
from operating activities
269.6
258.7
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from:
Dividend
reinvestment plan & other common
stock issuances
3.6
3.1
Requirements for:
Dividends on
common stock
(56.4) (55.1)
Retirement of
long-term debt
(1.4)
(1.6)
Other financing
activities
(1.4)
-
Net change in short-term borrowings
26.2
(67.9)
----------- -----------
Net cash flows
from financing activities
(29.4)
(121.5)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from:
Unconsolidated affiliate
distributions
0.5
0.5
Other collections
0.9
6.8
Requirements for:
Capital expenditures,
excluding AFUDC equity
(152.4)
(137.2)
Business acquisition, net
of cash acquired
(83.4)
-
Other investments
(1.4)
(2.4)
----------- -----------
Net cash flows
from investing activities
(235.8)
(132.3)
----------- -----------
Net change in cash & cash
equivalents
4.4
4.9
Cash & cash equivalents at beginning
of period
10.4
11.9
----------- -----------
Cash & cash equivalents at end of
period
$
14.8 $ 16.8
=========== ===========
VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
HIGHLIGHTS
(millions, except per share amounts)
(Unaudited)
Three Months
Six Months
Ended June 30
Ended June 30
--------------------
--------------------
2011
2010
2011 2010
--------------------------------
--------- --------- --------- ---------
REPORTED EARNINGS:
Utility Group
$ 16.3 $ 16.2 $ 64.9 $ 71.6
Nonutility Group
Infrastructure Services
2.1
2.0
(0.8)
(1.0)
Energy Services
0.7
1.7 (0.7) 1.4
Coal Mining
8.5
1.7
10.1
5.6
Energy Marketing
Vectren Source
(2.5)
(1.9) 4.6
4.4
ProLiance
(9.2)
(7.0)
(16.7) (3.1)
Other Businesses
(0.4)
(4.0)
(0.7)
(7.0)
--------- --------- --------- ---------
Total Nonutility Group
(0.8)
(7.5)
(4.2) 0.3
Corporate and Other
(0.4)
-
(1.0)
-
--------- --------- --------- ---------
Vectren Consolidated
$ 15.1 $ 8.7 $ 59.7 $ 71.9
========= ========= ========= =========
EARNINGS PER SHARE:
Utility Group
$ 0.20 $ 0.20 $ 0.79 $ 0.89
Nonutility Group, excluding
ProLiance
0.10
-
0.15 0.04
ProLiance
(0.11) (0.09) (0.20) (0.04)
Corporate and Other
-
-
(0.01)
-
--------- --------- --------- ---------
Reported EPS
$ 0.19 $ 0.11 $ 0.73 $
0.89
========= ========= ========= =========
VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED GAS DISTRIBUTION
OPERATING STATISTICS
(Unaudited)
Three Months
Six Months
Ended June 30
Ended June 30
--------------------
--------------------
2011
2010
2011 2010
--------------------------------
--------- --------- --------- ---------
GAS OPERATING REVENUES
(Millions):
Residential
$ 89.6 $ 82.4 $ 334.6 $ 405.2
Commercial
28.8
26.5
117.7
147.6
Industrial
12.5
10.9
31.2 29.7
Other Revenue
3.1
3.1
7.2
8.5
--------- --------- --------- ---------
$ 134.0 $ 122.9 $ 490.7 $ 591.0
========= ========= ========= =========
GAS MARGIN (Millions):
Residential
$ 55.5 $ 54.1 $ 160.6 $ 166.2
Commercial
14.4
13.8
48.8 50.2
Industrial
12.0 10.1
29.7 26.3
Other
3.3
3.4
7.7
9.0
--------- --------- --------- ---------
$ 85.2 $ 81.4 $
246.8 $ 251.7
========= ========= ========= =========
GAS SOLD & TRANSPORTED (MMDth):
Residential
8.1
6.1
45.2 44.4
Commercial
3.6
2.8
19.3 19.1
Industrial
21.1
19.2
49.9 45.8
--------- --------- --------- ---------
32.8
28.1
114.4
109.3
========= ========= ========= =========
AVERAGE GAS CUSTOMERS
Residential
896,376
894,200
902,833
901,462
Commercial
82,616
82,470
83,234
83,201
Industrial
1,644 1,636 1,648 1,627
--------- --------- --------- ---------
980,636
978,306
987,715
986,290
========= ========= ========= =========
YTD WEATHER AS A PERCENT OF
NORMAL:
Heating Degree Days (Ohio)
91%
65%
105% 103%
VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED
ELECTRIC
OPERATING STATISTICS
(Unaudited)
Three Months
Six Months
Ended June 30 Ended June 30
--------------------
--------------------
2011
2010
2011 2010
--------------------------------
--------- --------- --------- ---------
ELECTRIC OPERATING REVENUES
(Millions):
Residential
$ 50.6 $ 48.2 $ 98.0 $ 97.6
Commercial
40.8
39.4
74.9 72.6
Industrial
53.8
51.5
104.1 97.3
Other Revenue
1.9
2.4
3.9
4.3
--------- --------- --------- ---------
Total Retail
147.1
141.5
280.9
271.8
Net Wholesale Revenues 12.2
9.5
24.8 24.1
--------- --------- --------- ---------
$ 159.3 $ 151.0 $ 305.7 $ 295.9
========= ========= ========= =========
ELECTRIC MARGIN (Millions):
Residential
$ 36.2 $ 34.5 $ 68.3 $ 68.1
Commercial
26.8
25.4
48.7 47.1
Industrial
25.5
24.4 48.9 46.9
Other
1.6
2.3
3.5
4.0
--------- --------- --------- ---------
Total Retail
90.1
86.6
169.4
166.1
Net Wholesale Margin
8.9
6.6
16.5 14.0
--------- --------- --------- ---------
$ 99.0 $ 93.2 $
185.9 $ 180.1
========= ========= ========= =========
ELECTRICITY SOLD (GWh):
Residential
342.2
356.2
723.4
767.4
Commercial
335.7
360.3
636.1
661.0
Industrial
680.9 697.1 1,342.8 1,307.5
Other Sales - Street Lighting
4.8
5.1
10.7 11.1
--------- --------- --------- ---------
Total Retail
1,363.6
1,418.7
2,713.0
2,747.0
Wholesale
143.0
108.8
326.9
344.2
--------- --------- --------- ---------
1,506.6
1,527.5
3,039.9
3,091.2
========= ========= ========= =========
AVERAGE ELECTRIC CUSTOMERS
Residential
122,884
122,754
123,005
122,891
Commercial
18,271
18,373
18,260
18,344
Industrial 111
107
111
107
Other
33
33
33
33
--------- --------- --------- ---------
141,299 141,267 141,409 141,375
========= ========= ========= =========
YTD WEATHER AS A PERCENT OF
NORMAL:
Cooling Degree Days (Indiana)
124% 146%
123% 144%
Heating Degree Days (Indiana) 80%
53% 95% 101%
Investor Contact
Robert Goocher
(812)
491-4080
rgoocher@vectren.com
Media Contact
Mike Roeder
(812)
491-5255
mroeder@vectren.com
Source: Vectren Corporation
|