Vectren (VVC) 8-K Results of Operations and Financial Condition

Ex. 99.2 

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions, except per share amounts)
(Unaudited)
	Three Months
	Ended March 31,
	2006		2005
OPERATING REVENUES:
Gas utility	$	572.7	$	516.7
Electric utility		105.2		94.7
Energy services and other		96.6		65.8
Total operating revenues		774.5		677.2
OPERATING EXPENSES:
Cost of gas sold		429.0		370.9
Fuel for electric generation		34.9		26.9
Purchased electric energy		3.2		2.3
Cost of energy services and other		78.4		51.6
Other operating		72.8		71.1
Depreciation and amortization		41.6		37.1
Taxes other than income taxes		23.1		22.1
��  Total operating expenses		683.0		582.0
OPERATING INCOME		91.5		95.2
OTHER INCOME:
Equity in earnings of unconsolidated affiliates		13.7		6.4
Other - net		2.1		2.4
Total other income		15.8		8.8
INTEREST EXPENSE		23.8		20.1
INCOME BEFORE INCOME TAXES		83.5		83.9
INCOME TAXES		25.9		27.8
NET INCOME	$	57.6	$	56.1
AVERAGE COMMON SHARES OUTSTANDING		75.7		75.6
DILUTED COMMON SHARES OUTSTANDING		76.1		76.1
EARNINGS PER SHARE OF COMMON STOCK
BASIC	$	0.76	$	0.74
DILUTED	$	0.76	$	0.74

1

VECTREN UTILITY HOLDINGS
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions)
(Unaudited)
	Three Months
	Ended March 31,
	2006		2005
OPERATING REVENUES:
Gas utility	$	572.7	$	516.7
Electric utility		105.2		94.7
Other		0.4		0.2
Total operating revenues		678.3		611.6
OPERATING EXPENSES:
Cost of gas sold		429.0		370.9
Fuel for electric generation		34.9		26.9
Purchased electric energy		3.2		2.3
Other operating		61.6		61.6
Depreciation and amortization		37.1		33.4
Taxes other than income taxes		22.8		21.8
Total operating expenses		588.6		516.9
OPERATING INCOME		89.7		94.7
OTHER INCOME - NET		0.9		2.2
INTEREST EXPENSE		20.0		16.9
INCOME BEFORE INCOME TAXES		70.6		80.0
INCOME TAXES		27.2		31.9
NET INCOME	$	43.4	$	48.1

2

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Millions - Unaudited)
	March 31,			December 31,
	2006			2005
ASSETS
Current Assets
Cash & cash equivalents	$	9.6		$	20.4
Accounts receivable - less reserves of $3.9 &
$2.8, respectively		218.5			197.8
Accrued unbilled revenues		124.1			240.6
Inventories		81.9			144.6
Recoverable fuel & natural gas costs		2.2			15.4
Prepayments & other current assets		70.5			106.4
Total current assets		506.8			725.2
Utility Plant
Original cost		3,668.1			3,632.0
Less: accumulated depreciation & amortization		1,399.4			1,380.1
Net utility plant		2,268.7			2,251.9
Investments in unconsolidated affiliates		215.7			214.7
Other investments		110.1			111.6
Non-utility property - net		240.9			240.3
Goodwill - net		207.1			207.1
Regulatory assets		93.9			89.9
Other assets		26.8			27.4
TOTAL ASSETS	$	3,670.0		$	3,868.1
LIABILITIlES & SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	77.6		$	159.0
Accounts payable to affiliated companies		70.1			162.3
Refundable fuel & natural gas costs		16.2			7.6
Accrued liabilities		213.8			156.6
Short-term borrowings		162.8			299.9
Current maturities of long-term debt		0.4			0.4
Long-term debt subject to tender		-			53.7
Total current liabilities		540.9			839.5
Long-term Debt - Net of Current Maturities &
Debt Subject to Tender		1,251.7			1,198.0
Deferred Income Taxes & Other Liabilities
Deferred income taxes		230.9			227.3
Regulatory liabilities		281.0			272.9
Deferred credits & other liabilities		189.6			186.7
Total deferred credits & other liabilities		701.5			686.9
Minority Interest in Subsidiary		0.4			0.4
Common Shareholders' Equity
Common stock (no par value) – issued & outstanding
76.2 and 76.0 shares, respectively		524.3			528.1
Retained earnings		663.2			628.8
Accumulated other comprehensive loss		(12.0	)		(13.6	)
Total common shareholders' equity		1,175.5			1,143.3
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$	3,670.0		$	3,868.1

3

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions - Unaudited)
	Three Months
	Ended March 31,
	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	57.6		$	56.1
Adjustments to reconcile net income to cash from operating activities:
Depreciation & amortization		41.6			37.1
Deferred income taxes & investment tax credits		2.1			(0.2	)
Equity in earnings of unconsolidated affiliates		(13.7	)		(6.4	)
Provision for uncollectible accounts		4.7			5.6
Expense portion of pension & postretirement periodic benefit cost		2.7			3.2
Other non-cash charges - net		0.8			(3.1	)
Changes in working capital accounts:
Accounts receivable & accrued unbilled revenue		91.9			30.2
Inventories		58.9			21.1
Recoverable fuel & natural gas costs		21.8			35.4
Prepayments & other current assets		30.9			94.7
Accounts payable, including to affiliated companies		(170.5	)		(103.7	)
Accrued liabilities		54.4			59.0
Unconsolidated affiliate dividends		23.9			1.3
Changes in noncurrent assets		(1.4	)		2.5
Changes in noncurrent liabilities		1.0			(1.8	)
Net cash flows from operating activities		206.7			231.0
CASH FLOWS FROM FINANCING ACTIVITIES:
Requirements for:
Dividends on common stock		(23.1	)		(22.5	)
Retirement of long-term debt, including premiums paid		-			(0.1	)
Redemption of preferred stock of subsidiary		-			(0.1	)
Net change in short-term borrowings		(137.1	)		(177.1	)
Other financing activities
Net cash flows from financing activities		(160.2	)		(199.8	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from:
Unconsolidated affiliate distributions		-			0.1
Notes receivable & other collections		0.7			0.5
Requirements for:
Capital expenditures, excluding AFUDC equity		(54.1	)		(27.7	)
Unconsolidated affiliate investments		(3.6	)		(2.7	)
Notes receivable & other investments		(0.3	)		-
Net cash flows from investing activities		(57.3	)		(29.8	)
Net decrease in cash & cash equivalents		(10.8	)		1.4
Cash & cash equivalents at beginning of period		20.4			9.6
Cash & cash equivalents at end of period	$	9.6		$	11.0

4

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
HIGHLIGHTS
(millions, except per share amounts)
(Unaudited)
	Three Months
	Ended March 31,
	2006			2005
REPORTED EARNINGS:
Utility Group	$	43.4		$	48.1
Non-utility Group
Energy Marketing and Services		12.9			7.1
Mining Operations		1.8			1.3
Energy Infrastructure Services		(1.2	)		(2.1	)
Other Businesses		-			(0.5	)
Total Non-utility Operations		13.5			5.8
Corporate and Other		-			(0.9	)
Sub-Total Operations		56.9			53.0
Synfuels-related		0.7			3.1
Vectren Consolidated	$	57.6		$	56.1

5

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED GAS DISTRIBUTION
OPERATING STATISTICS
(Unaudited)
	Three Months
	Ended March 31,
	2006			2005
GAS OPERATING REVENUES (Millions):
Residential	$	384.6		$	348.5
Commercial		162.1			146.6
Industrial		22.1			19.0
Miscellaneous Revenue		3.9			2.6
	$	572.7		$	516.7
GAS MARGIN (Millions):
Residential	$	92.9		$	94.8
Commercial		31.8			32.9
Industrial		14.9			15.6
Miscellaneous		4.1			2.5
	$	143.7		$	145.8
GAS SOLD & TRANSPORTED (MMDth):
Residential		31.7			38.4
Commercial		13.6			16.6
Industrial		25.5			26.8
		70.8			81.8
AVERAGE GAS CUSTOMERS
Residential		906,047			900,419
Commercial		84,466			84,303
Industrial		1,656			1,576
		992,169			986,298
YTD WEATHER AS A PERCENT OF NORMAL:
Heating Degree Days		84	%		93	%

6

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED ELECTRIC
OPERATING STATISTICS
(Unaudited)
	Three Months
	Ended March 31
	2006			2005
ELECTRIC OPERATING REVENUES (Millions):
Residential	$	30.2		$	28.4
Commercial		21.9			20.3
Industrial		30.3			26.0
Municipals		5.6			5.6
Miscellaneous Revenue		2.9			0.9
Total Retail		90.9			81.2
Net Wholesale Revenues		14.3			13.5
	$	105.2		$	94.7
ELECTRIC MARGIN (Millions):
Residential	$	22.5		$	22.1
Commercial		15.4			15.0
Industrial		16.6			15.3
Municipals		2.7			3.3
Miscellaneous		2.8			0.8
Total Retail		60.0			56.5
Net Wholesale Margin		7.1			9.0
	$	67.1		$	65.5
ELECTRICITY SOLD (GWh):
Residential		355.4			362.3
Commercial		301.6			303.6
Industrial		637.9			618.9
Municipals		145.3			149.6
Miscellaneous Sales		5.2			4.8
Total Retail		1,445.4			1,439.2
Wholesale		462.6			1,064.0
		1,908.0			2,503.2
AVERAGE ELECTRIC CUSTOMERS
Residential		120,918			119,833
Commercial		18,733			18,627
Industrial		107			106
All Others		51			55
		139,809			138,621
YTD WEATHER AS A PERCENT OF NORMAL:
Cooling Degree Days		N/A			N/A
Heating Degree Days		84	%		93	%