| VECTREN CORPORATION | ||||||||||||||||
| AND SUBSIDIARY COMPANIES | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| (Unaudited - in millions, except per share amounts) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| OPERATING REVENUES: | ||||||||||||||||
| Gas utility | $ | 149.3 | $ | 144.0 | $ | 478.6 | $ | 436.8 | ||||||||
| Electric utility | 143.3 | 141.8 | 277.4 | 273.8 | ||||||||||||
| Nonutility | 351.7 | 344.9 | 546.8 | 544.5 | ||||||||||||
| Total operating revenues | 644.3 | 630.7 | 1,302.8 | 1,255.1 | ||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Cost of gas sold | 41.6 | 37.2 | 186.8 | 150.1 | ||||||||||||
| Cost of fuel & purchased power | 47.8 | 43.6 | 90.1 | 84.7 | ||||||||||||
| Cost of nonutility revenues | 111.6 | 120.4 | 178.4 | 182.2 | ||||||||||||
| Other operating | 284.6 | 273.3 | 513.1 | 497.6 | ||||||||||||
| Merger-related | 15.3 | — | 15.3 | — | ||||||||||||
| Depreciation & amortization | 72.4 | 68.3 | 143.8 | 136.1 | ||||||||||||
| Taxes other than income taxes | 15.5 | 13.9 | 35.4 | 29.1 | ||||||||||||
| Total operating expenses | 588.8 | 556.7 | 1,162.9 | 1,079.8 | ||||||||||||
| OPERATING INCOME | 55.5 | 74.0 | 139.9 | 175.3 | ||||||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||
| Equity in (losses) of unconsolidated affiliates | (17.8 | ) | (0.3 | ) | (17.9 | ) | (0.8 | ) | ||||||||
| Other income - net | 10.0 | 7.1 | 18.9 | 15.1 | ||||||||||||
| Total other income (expense) | (7.8 | ) | 6.8 | 1.0 | 14.3 | |||||||||||
| INTEREST EXPENSE | 24.0 | 21.4 | 47.5 | 42.7 | ||||||||||||
| INCOME BEFORE INCOME TAXES | 23.7 | 59.4 | 93.4 | 146.9 | ||||||||||||
| INCOME TAXES | 1.5 | 21.8 | 7.7 | 54.0 | ||||||||||||
| NET INCOME | $ | 22.2 | $ | 37.6 | $ | 85.7 | $ | 92.9 | ||||||||
| WEIGHTED AVERAGE AND DILUTED COMMON SHARES | ||||||||||||||||
| OUTSTANDING | 83.1 | 82.9 | 83.1 | 82.9 | ||||||||||||
| BASIC AND DILUTED EARNINGS PER SHARE OF COMMON STOCK | $ | 0.27 | $ | 0.45 | $ | 1.03 | $ | 1.12 | ||||||||
| VECTREN UTILITY HOLDINGS | ||||||||||||||||
| AND SUBSIDIARY COMPANIES | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| (Unaudited - in millions) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| OPERATING REVENUES: | ||||||||||||||||
| Gas utility | $ | 149.3 | $ | 144.0 | $ | 478.6 | $ | 436.8 | ||||||||
| Electric utility | 143.3 | 141.8 | 277.4 | 273.8 | ||||||||||||
| Other | 0.1 | 0.1 | 0.1 | 0.1 | ||||||||||||
| Total operating revenues | 292.7 | 285.9 | 756.1 | 710.7 | ||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Cost of gas sold | 41.6 | 37.2 | 186.8 | 150.1 | ||||||||||||
| Cost of fuel & purchased power | 47.8 | 43.6 | 90.1 | 84.7 | ||||||||||||
| Other operating | 87.4 | 83.2 | 182.2 | 168.8 | ||||||||||||
| Depreciation & amortization | 61.9 | 57.9 | 122.9 | 115.3 | ||||||||||||
| Taxes other than income taxes | 14.8 | 13.1 | 33.9 | 27.5 | ||||||||||||
| Total operating expenses | 253.5 | 235.0 | 615.9 | 546.4 | ||||||||||||
| OPERATING INCOME | 39.2 | 50.9 | 140.2 | 164.3 | ||||||||||||
| OTHER INCOME - NET | 9.7 | 6.6 | 18.5 | 13.7 | ||||||||||||
| INTEREST EXPENSE | 20.1 | 17.6 | 40.0 | 35.2 | ||||||||||||
| INCOME BEFORE INCOME TAXES | 28.8 | 39.9 | 118.7 | 142.8 | ||||||||||||
| INCOME TAXES | 3.3 | 14.4 | 18.9 | 51.4 | ||||||||||||
| NET INCOME | $ | 25.5 | $ | 25.5 | $ | 99.8 | $ | 91.4 | ||||||||
| VECTREN CORPORATION | ||||||||
| AND SUBSIDIARY COMPANIES | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (Unaudited - in millions) | ||||||||
| June 30, | December 31, | |||||||
| 2018 | 2017 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash & cash equivalents | $ | 9.8 | $ | 16.6 | ||||
| Accounts receivable - less reserves of $5.8 & | ||||||||
| $5.1, respectively | 232.0 | 262.9 | ||||||
| Accrued unbilled revenues | 148.1 | 207.1 | ||||||
| Inventories | 103.7 | 126.6 | ||||||
| Recoverable fuel & natural gas costs | 9.7 | 19.2 | ||||||
| Prepayments & other current assets | 43.1 | 47.0 | ||||||
| Total current assets | 546.4 | 679.4 | ||||||
| Utility Plant | ||||||||
| Original cost | 7,260.3 | 7,015.4 | ||||||
| Less: accumulated depreciation & amortization | 2,816.3 | 2,738.7 | ||||||
| Net utility plant | 4,444.0 | 4,276.7 | ||||||
| Investments in unconsolidated affiliates | 1.8 | 19.7 | ||||||
| Other utility & corporate investments | 45.1 | 43.7 | ||||||
| Other nonutility investments | 9.6 | 9.6 | ||||||
| Nonutility plant - net | 479.4 | 464.1 | ||||||
| Goodwill | 293.5 | 293.5 | ||||||
| Regulatory assets | 441.3 | 416.8 | ||||||
| Other assets | 35.0 | 35.8 | ||||||
| TOTAL ASSETS | $ | 6,296.1 | $ | 6,239.3 | ||||
| LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 225.0 | $ | 366.2 | ||||
| Accrued liabilities | 231.3 | 222.3 | ||||||
| Short-term borrowings | 247.9 | 249.5 | ||||||
| Current maturities of long-term debt | 60.0 | 100.0 | ||||||
| Total current liabilities | 764.2 | 938.0 | ||||||
| Long-term Debt - Net of Current Maturities | 1,928.7 | 1,738.7 | ||||||
| Deferred Credits & Other Liabilities | ||||||||
| Deferred income taxes | 501.1 | 491.3 | ||||||
| Regulatory liabilities | 943.1 | 937.2 | ||||||
| Deferred credits & other liabilities | 297.2 | 284.8 | ||||||
| Total deferred credits & other liabilities | 1,741.4 | 1,713.3 | ||||||
| Common Shareholders' Equity | ||||||||
| Common stock (no par value) – issued & outstanding | ||||||||
| 83.1 & 83.0, respectively | 739.5 | 736.9 | ||||||
| Retained earnings | 1,123.6 | 1,113.7 | ||||||
| Accumulated other comprehensive (loss) | (1.3 | ) | (1.3 | ) | ||||
| Total common shareholders' equity | 1,861.8 | 1,849.3 | ||||||
| TOTAL LIABILITIES & SHAREHOLDERS' EQUITY | $ | 6,296.1 | $ | 6,239.3 | ||||
| VECTREN CORPORATION | ||||||||
| AND SUBSIDIARY COMPANIES | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Millions - Unaudited) | ||||||||
| Six Months Ended | ||||||||
| June 30, | ||||||||
| 2018 | 2017 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 85.7 | $ | 92.9 | ||||
| Adjustments to reconcile net income to cash from operating activities: | ||||||||
| Depreciation & amortization | 143.8 | 136.1 | ||||||
| Deferred income taxes & investment tax credits | (3.6 | ) | 53.4 | |||||
| Provision for uncollectible accounts | 4.4 | 3.1 | ||||||
| Expense portion of pension & postretirement benefit cost | 2.2 | 3.4 | ||||||
| Other non-cash items - net | 18.3 | 5.5 | ||||||
| Changes in working capital accounts: | ||||||||
| Accounts receivable & accrued unbilled revenues | 85.5 | 53.9 | ||||||
| Inventories | 22.9 | 11.3 | ||||||
| Recoverable/refundable fuel & natural gas costs | 9.5 | (2.2 | ) | |||||
| Prepayments & other current assets | 4.1 | (3.8 | ) | |||||
| Accounts payable | (149.9 | ) | (69.9 | ) | ||||
| Accrued liabilities | 9.9 | (6.4 | ) | |||||
| Employer contributions to pension & postretirement plans | (5.6 | ) | (2.2 | ) | ||||
| Changes in noncurrent assets | (7.3 | ) | (13.5 | ) | ||||
| Changes in noncurrent liabilities | (1.5 | ) | (9.8 | ) | ||||
| Net cash from operating activities | 218.4 | 251.8 | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from: | ||||||||
| Long-term debt, net of issuance costs | (0.6 | ) | — | |||||
| Dividend reinvestment plan & other common stock issuances | 1.7 | 3.1 | ||||||
| Requirements for dividends on common stock | (74.8 | ) | (69.6 | ) | ||||
| Net change in short-term borrowings | 148.4 | 51.8 | ||||||
| Net cash from financing activities | 74.7 | (14.7 | ) | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Proceeds from sale of assets and other collections | 5.4 | 1.3 | ||||||
| Requirements for: | ||||||||
| Capital expenditures, excluding AFUDC equity | (305.3 | ) | (293.5 | ) | ||||
| Other costs | — | (3.4 | ) | |||||
| Changes in restricted cash | — | 0.9 | ||||||
| Net cash from investing activities | (299.9 | ) | (294.7 | ) | ||||
| Net change in cash & cash equivalents | (6.8 | ) | (57.6 | ) | ||||
| Cash & cash equivalents at beginning of period | 16.6 | 68.6 | ||||||
| Cash & cash equivalents at end of period | $ | 9.8 | $ | 11.0 | ||||
| VECTREN CORPORATION | ||||||||||||||||
| AND SUBSIDIARY COMPANIES | ||||||||||||||||
| HIGHLIGHTS | ||||||||||||||||
| (Unaudited - in millions, except per share amounts) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| EARNINGS: | ||||||||||||||||
| Utility Group | ||||||||||||||||
| Gas Utility Services | $ | 5.3 | $ | 7.0 | $ | 61.3 | $ | 54.9 | ||||||||
| Electric Utility Services | 17.8 | 15.9 | 31.8 | 29.6 | ||||||||||||
| Other Operations | 2.4 | 2.6 | 6.7 | 6.9 | ||||||||||||
| Total Utility Group | 25.5 | 25.5 | 99.8 | 91.4 | ||||||||||||
| Nonutility Group | ||||||||||||||||
| Infrastructure Services | 19.7 | 11.4 | 3.9 | 2.1 | ||||||||||||
| Energy Services | 2.2 | 1.1 | 7.7 | — | ||||||||||||
| Other Businesses, excluding Equity Investment Impairment Charge - ProLiance | (0.2 | ) | (0.3 | ) | (0.5 | ) | (0.4 | ) | ||||||||
| Nonutility Group, excluding reconciling items | 21.7 | 12.2 | 11.1 | 1.7 | ||||||||||||
| Corporate and Other, excluding Merger-Related Costs | (0.5 | ) | (0.1 | ) | (0.7 | ) | (0.2 | ) | ||||||||
| Vectren Consolidated, excluding reconciling items | $ | 46.7 | $ | 37.6 | $ | 110.2 | $ | 92.9 | ||||||||
| Reconciling Items: | ||||||||||||||||
| Other Businesses - Equity Investment Impairment Charge - ProLiance | (13.1 | ) | — | (13.1 | ) | — | ||||||||||
| Corporate and Other - Merger-Related Costs | (11.4 | ) | — | (11.4 | ) | — | ||||||||||
| Vectren Consolidated | $ | 22.2 | $ | 37.6 | $ | 85.7 | $ | 92.9 | ||||||||
| EARNINGS PER SHARE: | ||||||||||||||||
| Utility Group | $ | 0.31 | $ | 0.31 | $ | 1.20 | $ | 1.10 | ||||||||
| Nonutility Group, excluding reconciling items | 0.26 | 0.15 | 0.13 | 0.02 | ||||||||||||
| Corporate and Other, excluding reconciling items | (0.01 | ) | — | (0.01 | ) | — | ||||||||||
| EPS, excluding reconciling items | $ | 0.56 | $ | 0.45 | $ | 1.33 | $ | 1.12 | ||||||||
| Reconciling Items: | ||||||||||||||||
| Other Businesses - Equity Investment Impairment Charge - ProLiance | (0.16 | ) | — | (0.16 | ) | — | ||||||||||
| Corporate and Other - Merger-Related Costs | (0.14 | ) | — | (0.14 | ) | — | ||||||||||
| Reported EPS | $ | 0.27 | $ | 0.45 | $ | 1.03 | $ | 1.12 | ||||||||
| VECTREN CORPORATION | ||||||||||||||||
| AND SUBSIDIARY COMPANIES | ||||||||||||||||
| SELECTED GAS DISTRIBUTION | ||||||||||||||||
| OPERATING STATISTICS | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| GAS UTILITY (Millions): | ||||||||||||||||
| Residential Margin | $ | 64.7 | $ | 65.9 | $ | 168.6 | $ | 171.8 | ||||||||
| Commercial Margin | 15.2 | 15.4 | 48.8 | 48.8 | ||||||||||||
| Industrial Margin | 15.8 | 16.1 | 37.9 | 37.2 | ||||||||||||
| Other Margin | 2.3 | 2.2 | 5.4 | 5.0 | ||||||||||||
| Regulatory Expense Recovery Mechanisms | 9.7 | 7.2 | 31.1 | 23.9 | ||||||||||||
| Total Gas Utility Margin | 107.7 | 106.8 | 291.8 | 286.7 | ||||||||||||
| Cost of Gas Sold | 41.6 | 37.2 | 186.8 | 150.1 | ||||||||||||
| Total Gas Utility Revenue | $ | 149.3 | $ | 144.0 | $ | 478.6 | $ | 436.8 | ||||||||
| GAS SOLD & TRANSPORTED (MMDth): | ||||||||||||||||
| Residential | 10.5 | 7.0 | 48.7 | 36.8 | ||||||||||||
| Commercial | 5.0 | 3.5 | 22.0 | 16.5 | ||||||||||||
| Industrial | 36.4 | 26.9 | 78.7 | 61.8 | ||||||||||||
| 51.9 | 37.4 | 149.4 | 115.1 | |||||||||||||
| AVERAGE GAS CUSTOMERS | ||||||||||||||||
| Residential | 943,420 | 934,827 | 946,645 | 938,080 | ||||||||||||
| Commercial | 86,049 | 85,445 | 86,391 | 85,834 | ||||||||||||
| Industrial | 1,754 | 1,744 | 1,753 | 1,741 | ||||||||||||
| 1,031,223 | 1,022,016 | 1,034,789 | 1,025,655 | |||||||||||||
| WEATHER AS A PERCENT OF NORMAL (ANNUALIZED): | ||||||||||||||||
| Heating Degree Days (Ohio) | 102 | % | 89 | % | ||||||||||||
| Heating Degree Days (Indiana) | 100 | % | 81 | % | ||||||||||||
| VECTREN CORPORATION | ||||||||||||||||
| AND SUBSIDIARY COMPANIES | ||||||||||||||||
| SELECTED ELECTRIC | ||||||||||||||||
| OPERATING STATISTICS | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| ELECTRIC UTILITY (Millions): | ||||||||||||||||
| Residential Margin | $ | 36.6 | $ | 36.2 | $ | 71.2 | $ | 69.5 | ||||||||
| Commercial Margin | 24.7 | 26.8 | 47.8 | 51.1 | ||||||||||||
| Industrial Margin | 22.9 | 23.8 | 44.6 | 46.8 | ||||||||||||
| Other Margin | 0.6 | 0.9 | 1.6 | 1.9 | ||||||||||||
| Regulatory Expense Recovery Mechanisms | 3.5 | 2.5 | 8.1 | 4.8 | ||||||||||||
| Wholesale and Transmission | 7.2 | 8.0 | 14.0 | 15.0 | ||||||||||||
| Total Electric Utility Margin | 95.5 | 98.2 | 187.3 | 189.1 | ||||||||||||
| Cost of Fuel & Purchased Power | 47.8 | 43.6 | 90.1 | 84.7 | ||||||||||||
| Total Electric Utility Revenue | $ | 143.3 | $ | 141.8 | $ | 277.4 | $ | 273.8 | ||||||||
| ELECTRICITY SOLD (GWh): | ||||||||||||||||
| Residential | 356.0 | 321.1 | 724.9 | 637.3 | ||||||||||||
| Commercial | 324.0 | 324.2 | 613.7 | 609.0 | ||||||||||||
| Industrial | 559.6 | 521.4 | 1,055.0 | 1,012.9 | ||||||||||||
| Other Sales - Street Lighting | 3.3 | 4.9 | 10.9 | 10.9 | ||||||||||||
| Total Retail | 1,242.9 | 1,171.6 | 2,404.5 | 2,270.1 | ||||||||||||
| Wholesale | 215.8 | 160.4 | 346.7 | 239.2 | ||||||||||||
| 1,458.7 | 1,332.0 | 2,751.2 | 2,509.3 | |||||||||||||
| AVERAGE ELECTRIC CUSTOMERS | ||||||||||||||||
| Residential | 127,193 | 126,302 | 127,215 | 126,274 | ||||||||||||
| Commercial | 18,652 | 18,637 | 18,656 | 18,618 | ||||||||||||
| Industrial | 115 | 113 | 115 | 113 | ||||||||||||
| Other | 40 | 40 | 40 | 40 | ||||||||||||
| 146,000 | 145,092 | 146,026 | 145,045 | |||||||||||||
| WEATHER AS A PERCENT OF NORMAL (ANNUALIZED): | ||||||||||||||||
| Cooling Degree Days (Indiana) | 119 | % | 108 | % | 119 | % | 108 | % | ||||||||
| Heating Degree Days (Indiana) | 100 | % | 81 | % | ||||||||||||
