| VECTREN CORPORATION | ||||||||||||||||
| AND SUBSIDIARY COMPANIES | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (Unaudited - in millions, except per share amounts) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| OPERATING REVENUES: | ||||||||||||||||
| Gas utility | $ | 101.9 | $ | 100.2 | $ | 555.8 | $ | 508.5 | ||||||||
| Electric utility | 165.8 | 167.9 | 470.0 | 456.6 | ||||||||||||
| Nonutility | 311.9 | 245.4 | 785.4 | 623.6 | ||||||||||||
| Total operating revenues | 579.6 | 513.5 | 1,811.2 | 1,588.7 | ||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Cost of gas sold | 27.5 | 28.1 | 235.4 | 197.0 | ||||||||||||
| Cost of fuel & purchased power | 50.4 | 52.9 | 154.5 | 144.6 | ||||||||||||
| Cost of nonutility revenues | 107.7 | 81.0 | 271.4 | 198.1 | ||||||||||||
| Other operating | 227.5 | 195.6 | 652.5 | 557.2 | ||||||||||||
| Depreciation & amortization | 70.7 | 61.9 | 205.7 | 188.9 | ||||||||||||
| Taxes other than income taxes | 12.5 | 12.4 | 43.7 | 41.2 | ||||||||||||
| Total operating expenses | 496.3 | 431.9 | 1,563.2 | 1,327.0 | ||||||||||||
| OPERATING INCOME | 83.3 | 81.6 | 248.0 | 261.7 | ||||||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||
| Equity in (losses) of unconsolidated affiliates | (0.3 | ) | (3.6 | ) | (57.6 | ) | (17.8 | ) | ||||||||
| Other income - net | 2.5 | 3.3 | 9.0 | 7.8 | ||||||||||||
| Total other income (expense) | 2.2 | (0.3 | ) | (48.6 | ) | (10.0 | ) | |||||||||
| INTEREST EXPENSE | 21.3 | 23.9 | 66.3 | 71.8 | ||||||||||||
| INCOME BEFORE INCOME TAXES | 64.2 | 57.4 | 133.1 | 179.9 | ||||||||||||
| INCOME TAXES | 21.4 | 18.1 | 46.3 | 63.7 | ||||||||||||
| NET INCOME | $ | 42.8 | $ | 39.3 | $ | 86.8 | $ | 116.2 | ||||||||
| AVERAGE COMMON SHARES OUTSTANDING | 82.3 | 82.1 | 82.3 | 82.0 | ||||||||||||
| DILUTED COMMON SHARES OUTSTANDING | 82.4 | 82.1 | 82.4 | 82.1 | ||||||||||||
| EARNINGS PER SHARE OF COMMON STOCK | ||||||||||||||||
| BASIC | $ | 0.52 | $ | 0.48 | $ | 1.05 | $ | 1.42 | ||||||||
| DILUTED | $ | 0.52 | $ | 0.48 | $ | 1.05 | $ | 1.42 | ||||||||
| VECTREN UTILITY HOLDINGS | ||||||||||||||||
| AND SUBSIDIARY COMPANIES | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| (Unaudited - in millions) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| OPERATING REVENUES: | ||||||||||||||||
| Gas utility | $ | 101.9 | $ | 100.2 | $ | 555.8 | $ | 508.5 | ||||||||
| Electric utility | 165.8 | 167.9 | 470.0 | 456.6 | ||||||||||||
| Other | — | (0.4 | ) | 0.2 | 0.5 | |||||||||||
| Total operating revenues | 267.7 | 267.7 | 1,026.0 | 965.6 | ||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Cost of gas sold | 27.5 | 28.1 | 235.4 | 197.0 | ||||||||||||
| Cost of fuel & purchased power | 50.4 | 52.9 | 154.5 | 144.6 | ||||||||||||
| Other operating | 74.0 | 71.8 | 236.9 | 229.5 | ||||||||||||
| Depreciation & amortization | 49.7 | 46.3 | 146.8 | 142.7 | ||||||||||||
| Taxes other than income taxes | 11.6 | 11.5 | 41.3 | 39.0 | ||||||||||||
| Total operating expenses | 213.2 | 210.6 | 814.9 | 752.8 | ||||||||||||
| OPERATING INCOME | 54.5 | 57.1 | 211.1 | 212.8 | ||||||||||||
| OTHER INCOME - NET | 2.0 | 2.3 | 6.8 | 5.2 | ||||||||||||
| INTEREST EXPENSE | 15.6 | 17.8 | 49.2 | 53.5 | ||||||||||||
| INCOME BEFORE INCOME TAXES | 40.9 | 41.6 | 168.7 | 164.5 | ||||||||||||
| INCOME TAXES | 15.6 | 15.2 | 64.1 | 62.0 | ||||||||||||
| NET INCOME | $ | 25.3 | $ | 26.4 | $ | 104.6 | $ | 102.5 | ||||||||
| VECTREN CORPORATION | ||||||||
| AND SUBSIDIARY COMPANIES | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (Unaudited - in millons) | ||||||||
| As of | ||||||||
| September 30, | December 31, | |||||||
| 2013 | 2012 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash & cash equivalents | $ | 9.3 | $ | 19.5 | ||||
| Accounts receivable - less reserves of $5.7 & | ||||||||
| $6.8, respectively | 265.8 | 216.7 | ||||||
| Accrued unbilled revenues | 74.7 | 185.0 | ||||||
| Inventories | 138.4 | 158.6 | ||||||
| Recoverable fuel & natural gas costs | 19.5 | 25.3 | ||||||
| Prepayments & other current assets | 100.0 | 73.3 | ||||||
| Total current assets | 607.7 | 678.4 | ||||||
| Utility Plant | ||||||||
| Original cost | 5,326.9 | 5,176.8 | ||||||
| Less: accumulated depreciation & amortization | 2,136.3 | 2,057.2 | ||||||
| Net utility plant | 3,190.6 | 3,119.6 | ||||||
| Investments in unconsolidated affiliates | 25.2 | 78.1 | ||||||
| Other utility & corporate investments | 34.7 | 34.6 | ||||||
| Other nonutility investments | 35.6 | 24.9 | ||||||
| Nonutility plant - net | 626.3 | 598.0 | ||||||
| Goodwill - net | 262.3 | 262.3 | ||||||
| Regulatory assets | 261.6 | 252.7 | ||||||
| Other assets | 36.3 | 40.5 | ||||||
| TOTAL ASSETS | $ | 5,080.3 | $ | 5,089.1 | ||||
| LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 159.5 | $ | 180.6 | ||||
| Accounts payable to affiliated companies | — | 29.7 | ||||||
| Accrued liabilities | 167.7 | 198.8 | ||||||
| Short-term borrowings | 249.2 | 278.8 | ||||||
| Current maturities of long-term debt | 30.3 | 106.4 | ||||||
| Total current liabilities | 606.7 | 794.3 | ||||||
| Long-term Debt - Net of Current Maturities | 1,627.0 | 1,553.4 | ||||||
| Deferred Income Taxes & Other Liabilities | ||||||||
| Deferred income taxes | 709.0 | 637.2 | ||||||
| Regulatory liabilities | 381.9 | 364.2 | ||||||
| Deferred credits & other liabilities | 224.1 | 213.9 | ||||||
| Total deferred credits & other liabilities | 1,315.0 | 1,215.3 | ||||||
| Common Shareholders' Equity | ||||||||
| Common stock (no par value) – issued & outstanding | ||||||||
| 82.4 and 82.2 shares, respectively | 707.6 | 700.5 | ||||||
| Retained earnings | 825.5 | 829.9 | ||||||
| Accumulated other comprehensive (loss) | (1.5 | ) | (4.3 | ) | ||||
| Total common shareholders' equity | 1,531.6 | 1,526.1 | ||||||
| TOTAL LIABILITIES & SHAREHOLDERS' EQUITY | $ | 5,080.3 | $ | 5,089.1 | ||||
| VECTREN CORPORATION | ||||||||
| AND SUBSIDIARY COMPANIES | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Unaudited - in millons) | ||||||||
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2013 | 2012 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 86.8 | $ | 116.2 | ||||
| Adjustments to reconcile net income to cash from operating activities: | ||||||||
| Depreciation & amortization | 205.7 | 188.9 | ||||||
| Deferred income taxes & investment tax credits | 32.4 | 52.6 | ||||||
| Equity in losses of unconsolidated affiliates | 57.6 | 17.8 | ||||||
| Provision for uncollectible accounts | 4.8 | 6.0 | ||||||
| Expense portion of pension & postretirement benefit cost | 6.7 | 6.8 | ||||||
| Other non-cash charges - net | 5.9 | 5.5 | ||||||
| Changes in working capital accounts: | ||||||||
| Accounts receivable & accrued unbilled revenues | 56.3 | 40.5 | ||||||
| Inventories | 20.2 | (8.8 | ) | |||||
| Recoverable/refundable fuel & natural gas costs | 5.8 | (7.9 | ) | |||||
| Prepayments & other current assets | 0.8 | 5.7 | ||||||
| Accounts payable, including to affiliated companies | (58.4 | ) | (50.8 | ) | ||||
| Accrued liabilities | (15.0 | ) | (22.0 | ) | ||||
| Unconsolidated affiliate dividends | 0.3 | 0.1 | ||||||
| Employer contributions to pension & postretirement plans | (10.1 | ) | (16.1 | ) | ||||
| Changes in noncurrent assets | (12.3 | ) | (33.7 | ) | ||||
| Changes in noncurrent liabilities | 1.4 | (7.0 | ) | |||||
| Net cash flows provided by operating activities | 388.9 | 293.8 | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from: | ||||||||
| Long-term debt, net of issuance costs | 332.7 | 99.5 | ||||||
| Dividend reinvestment plan & other common stock issuances | 5.3 | 5.6 | ||||||
| Requirements for: | ||||||||
| Dividends on common stock | (87.6 | ) | (86.1 | ) | ||||
| Retirement of long-term debt | (338.6 | ) | (37.4 | ) | ||||
| Other financing activities | (2.0 | ) | — | |||||
| Net change in short-term borrowings | (29.6 | ) | (10.9 | ) | ||||
| Net cash used in financing activities | (119.8 | ) | (29.3 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Proceeds from: | ||||||||
| Unconsolidated affiliates distributions | — | 0.2 | ||||||
| Proceeds from investing activities | 5.0 | 8.9 | ||||||
| Requirements for: | ||||||||
| Capital expenditures, excluding AFUDC equity | (273.9 | ) | (274.9 | ) | ||||
| Other investments | (10.4 | ) | (0.3 | ) | ||||
| Net cash used in investing activities | (279.3 | ) | (266.1 | ) | ||||
| Net change in cash & cash equivalents | (10.2 | ) | (1.6 | ) | ||||
| Cash & cash equivalents at beginning of period | 19.5 | 8.6 | ||||||
| Cash & cash equivalents at end of period | $ | 9.3 | $ | 7.0 | ||||
| VECTREN CORPORATION | ||||||||||||||||
| AND SUBSIDIARY COMPANIES | ||||||||||||||||
| HIGHLIGHTS | ||||||||||||||||
| (Unaudited - in millions, except per share amounts) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| REPORTED EARNINGS: | ||||||||||||||||
| Utility Group | ||||||||||||||||
| Gas Utility Services | $ | (3.8 | ) | $ | (2.7 | ) | $ | 37.2 | $ | 36.1 | ||||||
| Electric Utility Services | 26.6 | 26.6 | 60.1 | 59.4 | ||||||||||||
| Other Operations | 2.5 | 2.5 | 7.3 | 7.0 | ||||||||||||
| Total Utility Group | 25.3 | 26.4 | 104.6 | 102.5 | ||||||||||||
| Nonutility Group | ||||||||||||||||
| Infrastructure Services | 20.4 | 15.9 | 35.2 | 27.3 | ||||||||||||
| Energy Services | 0.2 | 2.6 | (2.0 | ) | 0.9 | |||||||||||
| Coal Mining | (2.3 | ) | (2.2 | ) | (12.0 | ) | — | |||||||||
| Other Businesses | (0.8 | ) | (0.7 | ) | (1.3 | ) | (0.6 | ) | ||||||||
| Nonutility Group, excluding ProLiance | 17.5 | 15.6 | 19.9 | 27.6 | ||||||||||||
| Corporate and Other | — | (0.3 | ) | (0.2 | ) | (0.4 | ) | |||||||||
| Vectren Consolidated, excluding ProLiance | $ | 42.8 | $ | 41.7 | $ | 124.3 | $ | 129.7 | ||||||||
| ProLiance | — | (2.4 | ) | (37.5 | ) | (13.5 | ) | |||||||||
| Vectren Consolidated | $ | 42.8 | $ | 39.3 | $ | 86.8 | $ | 116.2 | ||||||||
| EARNINGS PER SHARE: | ||||||||||||||||
| Utility Group | $ | 0.31 | $ | 0.32 | $ | 1.27 | $ | 1.25 | ||||||||
| Nonutility Group, excluding ProLiance | 0.21 | 0.18 | 0.24 | 0.33 | ||||||||||||
| Corporate and Other | — | — | — | — | ||||||||||||
| EPS, excluding ProLiance | $ | 0.52 | $ | 0.50 | $ | 1.51 | $ | 1.58 | ||||||||
| ProLiance | — | (0.02 | ) | (0.46 | ) | (0.16 | ) | |||||||||
| Reported EPS | $ | 0.52 | $ | 0.48 | $ | 1.05 | $ | 1.42 | ||||||||
| VECTREN CORPORATION | ||||||||||||||||
| AND SUBSIDIARY COMPANIES | ||||||||||||||||
| SELECTED GAS DISTRIBUTION | ||||||||||||||||
| OPERATING STATISTICS | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| GAS UTILITY (Millions): | ||||||||||||||||
| Residential Margin | $ | 45.5 | $ | 44.7 | $ | 190.2 | $ | 187.2 | ||||||||
| Commercial Margin | 10.9 | 10.6 | 53.2 | 50.8 | ||||||||||||
| Industrial Margin | 12.1 | 11.9 | 41.9 | 39.8 | ||||||||||||
| Other Margin | 2.2 | 1.4 | 7.6 | 6.8 | ||||||||||||
| Regulatory Expense Recovery Mechanisms | 3.7 | 3.5 | 27.5 | 26.9 | ||||||||||||
| Total Gas Utility Margin | 74.4 | 72.1 | 320.4 | 311.5 | ||||||||||||
| Cost of Gas Sold | $ | 27.5 | $ | 28.1 | $ | 235.4 | $ | 197.0 | ||||||||
| Total Gas Utility Revenue | $ | 101.9 | $ | 100.2 | $ | 555.8 | $ | 508.5 | ||||||||
| GAS SOLD & TRANSPORTED (MMDth): | ||||||||||||||||
| Residential | 3.8 | 3.7 | 50.6 | 39.3 | ||||||||||||
| Commercial | 2.7 | 2.6 | 23.0 | 18.0 | ||||||||||||
| Industrial | 24.6 | 25.1 | 80.7 | 77.2 | ||||||||||||
| 31.1 | 31.4 | 154.3 | 134.5 | |||||||||||||
| AVERAGE GAS CUSTOMERS | ||||||||||||||||
| Residential | 896,239 | 892,220 | 905,271 | 899,594 | ||||||||||||
| Commercial | 83,352 | 82,110 | 84,203 | 82,781 | ||||||||||||
| Industrial | 1,676 | 1,664 | 1,675 | 1,661 | ||||||||||||
| 981,267 | 975,994 | 991,149 | 984,036 | |||||||||||||
| YTD WEATHER AS A PERCENT OF NORMAL: | ||||||||||||||||
| Heating Degree Days (Ohio) | 89 | % | 147 | % | 103 | % | 83 | % | ||||||||
| VECTREN CORPORATION | ||||||||||||||||
| AND SUBSIDIARY COMPANIES | ||||||||||||||||
| SELECTED ELECTRIC | ||||||||||||||||
| OPERATING STATISTICS | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| ELECTRIC UTILITY (Millions): | ||||||||||||||||
| Residential Margin | $ | 45.5 | $ | 48.8 | $ | 115.7 | $ | 120.6 | ||||||||
| Commercial Margin | 28.3 | 28.2 | 79.3 | 79.5 | ||||||||||||
| Industrial Margin | 28.6 | 29.3 | 82.5 | 83.9 | ||||||||||||
| Other Margin | 1.4 | (0.9 | ) | 3.1 | (0.4 | ) | ||||||||||
| Regulatory Expense Recovery Mechanisms | 2.2 | 0.9 | 6.7 | 2.9 | ||||||||||||
| Wholesale and Transmission | 9.4 | 8.7 | 28.2 | 25.5 | ||||||||||||
| Total Electric Utility Margin | 115.4 | 115.0 | 315.5 | 312.0 | ||||||||||||
| Cost of Fuel & Purchased Power | 50.4 | 52.9 | 154.5 | 144.6 | ||||||||||||
| Total Electric Utility Revenue | $ | 165.8 | $ | 167.9 | $ | 470.0 | $ | 456.6 | ||||||||
| ELECTRICITY SOLD (GWh): | ||||||||||||||||
| Residential | 420.7 | 461.1 | 1,100.1 | 1,145.7 | ||||||||||||
| Commercial | 348.9 | 352.7 | 972.0 | 992.5 | ||||||||||||
| Industrial | 729.7 | 732.5 | 2,087.0 | 2,127.6 | ||||||||||||
| Other Sales - Street Lighting | 4.9 | 5.3 | 15.5 | 16.0 | ||||||||||||
| Total Retail | 1,504.2 | 1,551.6 | 4,174.6 | 4,281.8 | ||||||||||||
| Wholesale | 68.2 | 59.7 | 331.8 | 184.4 | ||||||||||||
| 1,572.4 | 1,611.3 | 4,506.4 | 4,466.2 | |||||||||||||
| AVERAGE ELECTRIC CUSTOMERS | ||||||||||||||||
| Residential | 123,708 | 123,264 | 123,711 | 123,259 | ||||||||||||
| Commercial | 18,380 | 18,306 | 18,366 | 18,281 | ||||||||||||
| Industrial | 116 | 115 | 115 | 115 | ||||||||||||
| Other | 36 | 33 | 36 | 33 | ||||||||||||
| 142,240 | 141,718 | 142,228 | 141,688 | |||||||||||||
| YTD WEATHER AS A PERCENT OF NORMAL: | ||||||||||||||||
| Cooling Degree Days (Indiana) | 99 | % | 119 | % | 101 | % | 131 | % | ||||||||
| Heating Degree Days (Indiana) | 100 | % | 71 | % | ||||||||||||
