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

Exhibit 99.2

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions, except per share amounts)
(Unaudited)
		Three Months						Nine Months
	Ended September 30							Ended September 30
		2008			2007				2008		2007
OPERATING REVENUES:
Gas utility		$	143.9		$	114.0			$	1,002.4	$	890.0
Electric utility			147.9			143.6				402.3		361.6
Nonutility revenues			119.6			123.8				372.7		385.5
Total operating revenues			411.4			381.4				1,777.4		1,637.1
OPERATING EXPENSES:
Cost of gas sold			80.2			52.9				686.0		592.0
Cost of fuel and purchased power			48.7			50.5				143.2		129.5
Cost of nonutility revenues			51.0			57.5				198.4		210.2
Other operating			127.9			116.4				368.4		334.4
Depreciation and amortization			47.7			47.3				142.5		139.7
Taxes other than income taxes			12.7			11.7				53.9		50.9
Total operating expenses			368.2			336.3				1,592.4		1,456.7
OPERATING INCOME			43.2			45.1				185.0		180.4
OTHER INCOME (EXPENSE):
Equity in earnings (losses) of unconsolidated affiliates			21.5			(4.0	)			29.0		18.7
Other - net			(3.7	)		13.9				2.4		23.1
Total other income (expense)			17.8			9.9				31.4		41.8
INTEREST EXPENSE			23.9			25.7				72.4		74.1
INCOME BEFORE INCOME TAXES			37.1			29.3				144.0		148.1
INCOME TAXES			13.9			12.2				52.1		44.9
NET INCOME		$	23.2		$	17.1			$	91.9	$	103.2
AVERAGE COMMON SHARES OUTSTANDING			80.6			75.9				77.6		75.9
DILUTED COMMON SHARES OUTSTANDING			81.1			76.4				78.2		76.5
EARNINGS PER SHARE OF COMMON STOCK
BASIC		$	0.29		$	0.23			$	1.18	$	1.36
DILUTED		$	0.29		$	0.22			$	1.17	$	1.35

VECTREN UTILITY HOLDINGS
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions)
(Unaudited)
	Three Months				Nine Months
	Ended September 30				Ended September 30
	2008		2007		2008		2007
OPERATING REVENUES:
Gas utility	$	143.9	$	114.0	$	1,002.4	$	890.0
Electric utility		147.9		143.6		402.3		361.6
Other		0.6		0.4		1.8		1.3
Total operating revenues		292.4		258.0		1,406.5		1,252.9
OPERATING EXPENSES:
Cost of gas sold		80.2		52.9		686.0		592.0
Cost of fuel and purchased power		48.7		50.5		143.2		129.5
Other operating		69.2		65.6		217.7		198.4
Depreciation and amortization		41.6		40.4		123.2		119.4
Taxes other than income taxes		11.7		11.3		51.8		49.6
Total operating expenses		251.4		220.7		1,221.9		1,088.9
OPERATING INCOME		41.0		37.3		184.6		164.0
OTHER INCOME - NET		0.7		1.3		4.9		6.2
INTEREST EXPENSE		19.6		20.8		59.5		58.8
INCOME BEFORE INCOME TAXES		22.1		17.8		130.0		111.4
INCOME TAXES		8.5		7.1		49.6		41.8
NET INCOME	$	13.6	$	10.7	$	80.4	$	69.6

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Millions - Unaudited)
	September 30,			December 31,
	2008			2007
ASSETS
Current Assets
Cash & cash equivalents	$	14.1		$	20.6
Accounts receivable - less reserves of $5.6 &
$4.0, respectively		146.4			189.4
Accrued unbilled revenues		49.6			168.2
Inventories		234.8			160.9
Recoverable fuel & natural gas costs		28.7			-
Prepayments & other current assets		142.8			160.5
Total current assets		616.4			699.6
Utility Plant
Original cost		4,226.4			4,062.9
Less:  accumulated depreciation & amortization		1,590.6			1,523.2
Net utility plant		2,635.8			2,539.7
Investments in unconsolidated affiliates		205.6			208.8
Other utility and corporate investments		25.0			26.3
Other nonutility investments		45.5			50.7
Nonutility property - net		362.7			320.3
Goodwill - net		239.4			238.0
Regulatory assets		164.7			175.3
Other assets		38.2			37.7
TOTAL ASSETS	$	4,333.3		$	4,296.4
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	182.0		$	187.4
Accounts payable to affiliated companies		49.4			83.7
Refundable fuel & natural gas costs		6.9			27.2
Accrued liabilities		234.0			171.8
Short-term borrowings		354.4			557.0
Current maturities of long-term debt		0.4			0.3
Long-term debt subject to tender		80.0			-
Total current liabilities		907.1			1,027.4
Long-term Debt - Net of Current Maturities &
Debt Subject to Tender		1,248.4			1,245.4
Deferred Income Taxes & Other Liabilities
Deferred income taxes		343.0			318.1
Regulatory liabilities		313.0			307.2
Deferred credits & other liabilities		161.6			164.2
Total deferred credits & other liabilities		817.6			789.5
Minority Interest in Subsidiary		0.4			0.4
Common Shareholders' Equity
Common stock (no par value) – issued & outstanding
81.0 and 76.3 shares, respectively		658.0			532.7
Retained earnings		702.9			688.5
Accumulated other comprehensive income		(1.1	)		12.5
Total common shareholders' equity		1,359.8			1,233.7
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$	4,333.3		$	4,296.4

VECTREN CORPORATION
AND SUBSIDIARY  COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions - Unaudited)
	For the nine months ended
	September 30,
	2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	91.9		$	103.2
Adjustments to reconcile net income to cash from operating activities:
Depreciation & amortization		142.5			139.7
Deferred income taxes & investment tax credits		57.2			18.0
Equity in earnings of unconsolidated affiliates		(29.0	)		(18.7	)
Provision for uncollectible accounts		12.9			12.7
Expense portion of pension & postretirement periodic benefit cost		5.8			7.3
Other non-cash charges - net		19.1			-
Changes in working capital accounts:
Accounts receivable & accrued unbilled revenue		148.7			126.5
Inventories		(77.3	)		(35.3	)
Recoverable/refundable fuel & natural gas costs		(49.0	)		(7.6	)
Prepayments & other current assets		(10.4	)		2.5
Accounts payable, including to affiliated companies		(30.9	)		(74.3	)
Accrued liabilities		75.1			(15.0	)
Unconsolidated affiliate dividends		9.3			20.0
Changes in noncurrent assets		1.3			(13.5	)
Changes in noncurrent liabilities		(23.5	)		(33.3	)
Net cash flows from operating activities		343.7			232.2
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from:
Issuance of common stock		124.9			-
Long-term debt, net of issuance costs		171.2			-
Stock option exercises & other		-			5.2
Requirements for:
Dividends on common stock		(75.6	)		(71.8	)
Retirement of long-term debt		(104.1	)		(6.6	)
Other financing activities		(0.1	)		-
Net change in short-term borrowings		(202.9	)		21.9
Net cash flows from financing activities		(86.6	)		(51.3	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from:
Unconsolidated affiliate distributions		-			11.7
Other collections		6.1			37.3
Requirements for:
Capital expenditures, excluding AFUDC equity		(258.7	)		(239.0	)
Unconsolidated affiliate investments		(0.2	)		(12.4	)
Other investments		(10.8	)		(0.1	)
Net cash flows from investing activities		(263.6	)		(202.5	)
Net change in cash & cash equivalents		(6.5	)		(21.6	)
Cash & cash equivalents at beginning of period		20.6			32.8
Cash & cash equivalents at end of period	$	14.1		$	11.2

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
HIGHLIGHTS
(millions, except per share amounts)
(Unaudited)
	Three Months						Nine Months
	Ended September 30						Ended September 30
	2008			2007			2008			2007
REPORTED EARNINGS:
Utility Group	$	13.6		$	10.7		$	80.4		$	69.6
Non-utility Group
Energy Marketing and Services		10.1			(2.0	)		12.4			15.6
Coal Mining		(0.5	)		0.4			(1.6	)		2.7
Energy Infrastructure Services		6.0			4.6			5.5			6.6
Other Businesses		0.1			0.1			1.7			0.2
Commercial Real Estate Impairment Charge		(5.9	)		-			(5.9	)		-
Total Non-utility Operations		9.8			3.1			12.1			25.1
Corporate and Other		(0.2	)		(0.2	)		(0.6	)		0.2
Sub-Total Operations		23.2			13.6			91.9			94.9
Synfuels-related		-			3.5			-			8.3
Vectren Consolidated	$	23.2		$	17.1		$	91.9		$	103.2

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED GAS DISTRIBUTION
OPERATING STATISTICS
(Unaudited)
	Three Months						Nine Months
	Ended September 30						Ended September 30
	2008			2007			2008			2007
GAS OPERATING REVENUES (Millions):
Residential	$	85.4		$	67.2		$	663.4		$	591.2
Commercial		43.8			30.9			278.6			240.7
Industrial		13.1			12.1			50.7			47.5
Miscellaneous Revenue		1.6			3.8			9.7			10.6
	$	143.9		$	114.0		$	1,002.4		$	890.0
GAS MARGIN (Millions):
Residential	$	39.2		$	36.5		$	202.7		$	191.5
Commercial		12.4			10.6			65.2			60.1
Industrial		10.2			9.5			38.0			35.2
Miscellaneous		1.9			4.5			10.5			11.2
	$	63.7		$	61.1		$	316.4		$	298.0
GAS SOLD & TRANSPORTED (MMDth):
Residential		3.8			3.8			52.7			51.7
Commercial		2.5			2.6			23.9			23.4
Industrial		18.4			18.0			67.5			62.5
		24.7			24.4			144.1			137.6
AVERAGE GAS CUSTOMERS
Residential		887,185			889,257			900,122			899,926
Commercial		82,764			82,914			83,883			83,822
Industrial		1,610			1,611			1,610			1,611
		971,559			973,782			985,615			985,359
YTD WEATHER  AS A PERCENT OF NORMAL:
Heating Degree Days (Ohio)		19	%		41	%		101	%		96	%

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED ELECTRIC
OPERATING STATISTICS
(Unaudited)
	Three Months						Nine Months
	Ended September 30						Ended September 30
	2008			2007			2008			2007
ELECTRIC OPERATING REVENUES (Millions):
Residential	$	53.6		$	56.2		$	132.5		$	123.2
Commercial		35.2			34.3			95.3			84.0
Industrial		40.4			39.1			115.4			105.0
Municipals		0.0			6.4			1.0			18.2
Miscellaneous Revenue		1.6			2.8			9.3			7.5
Total Retail		130.8			138.8			353.5			337.9
Net Wholesale Revenues		17.1			4.8			48.8			23.7
	$	147.9		$	143.6		$	402.3		$	361.6
ELECTRIC MARGIN (Millions):
Residential	$	40.6		$	41.3		$	98.9		$	90.7
Commercial		24.9			23.2			66.5			57.2
Industrial		23.2			21.6			62.5			56.4
Municipals		0.0			1.6			0.0			7.3
Miscellaneous		1.5			2.8			9.0			7.4
Total Retail		90.2			90.5			236.9			219.0
Net Wholesale Margin		9.0			2.6			22.2			13.1
	$	99.2		$	93.1		$	259.1		$	232.1
ELECTRICITY SOLD (GWh):
Residential		462.4			547.7			1,182.4			1,290.3
Commercial		371.4			406.7			1,013.2			1,067.4
Industrial		619.0			638.7			1,859.5			1,942.4
Municipals		-			187.4			44.3			469.4
Miscellaneous Sales		4.3			4.7			14.0			14.1
Total Retail		1,457.1			1,785.2			4,113.4			4,783.6
Wholesale		371.1			96.5			1,111.4			544.1
		1,828.2			1,881.7			5,224.8			5,327.7
AVERAGE ELECTRIC CUSTOMERS
Residential		122,373			122,194			122,505			122,078
Commercial		18,393			18,489			18,434			18,478
Industrial		103			109			102			109
All Others		34			38			34			37
		140,903			140,830			141,075			140,702
YTD WEATHER  AS A PERCENT OF NORMAL:
Cooling Degree Days (Indiana)		100	%		127	%		99	%		127	%
Heating Degree Days (Indiana)								100	%		90	%