Vectren Utility 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						Six Months
	Ended June 30						Ended June 30
	2006			2005			2006			2005
OPERATING REVENUES:
Gas utility	$	159.1		$	186.0		$	731.8		$	702.7
Electric utility		96.0			96.9			201.2			191.6
Energy services and other		62.4			43.3			159.0			109.1
Total operating revenues		317.5			326.2			1,092.0			1,003.4
OPERATING EXPENSES:
Cost of gas sold		88.5			116.3			517.5			487.2
Cost of fuel and purchased power		30.9			33.0			69.0			62.2
Cost of energy services and other		47.6			31.4			126.0			83.0
Other operating		68.3			65.8			141.1			136.9
Depreciation and amortization		41.9			38.5			83.5			75.6
Taxes other than income taxes		11.8			12.0			34.9			34.1
Total operating expenses		289.0			297.0			972.0			879.0
OPERATING INCOME		28.5			29.2			120.0			124.4
OTHER INCOME:
Equity in earnings of unconsolidated affiliates		(2.2	)		0.7			11.5			7.1
Other - net		(8.2	)		1.6			(6.1	)		4.0
Total other income		(10.4	)		2.3			5.4			11.1
INTEREST EXPENSE		21.9			19.7			45.7			39.8
INCOME BEFORE INCOME TAXES		(3.8	)		11.8			79.7			95.7
INCOME TAXES		(8.1	)		(1.6	)		17.8			26.2
NET INCOME	$	4.3		$	13.4		$	61.9		$	69.5
AVERAGE COMMON SHARES OUTSTANDING		75.7			75.6			75.7			75.6
DILUTED COMMON SHARES OUTSTANDING		76.0			76.1			76.1			76.2
EARNINGS PER SHARE OF COMMON STOCK
BASIC	$	0.06		$	0.18		$	0.82		$	0.92
DILUTED	$	0.06		$	0.18		$	0.81		$	0.91

VECTREN UTILITY HOLDINGS
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions - Unaudited)
	Three Months				Six Months
	Ended June 30				Ended June 30
	2006		2005		2006		2005
OPERATING REVENUES:
Gas utility	$	159.1	$	186.0	$	731.8	$	702.7
Electric utility		96.0		96.9		201.2		191.6
Other		0.5		0.1		0.9		0.3
Total operating revenues		255.6		283.0		933.9		894.6
OPERATING EXPENSES:
Cost of gas sold		88.5		116.3		517.5		487.2
Fuel for electric generation		30.9		33.0		69.0		62.2
Other operating		59.6		59.2		121.2		120.8
Depreciation and amortization		37.7		34.5		74.8		67.9
Taxes other than income taxes		11.6		11.7		34.4		33.5
Total operating expenses		228.3		254.7		816.9		771.6
OPERATING INCOME		27.3		28.3		117.0		123.0
OTHER INCOME - NET		1.9		1.1		2.8		3.3
INTEREST EXPENSE		18.2		16.4		38.2		33.3
INCOME BEFORE INCOME TAXES		11.0		13.0		81.6		93.0
INCOME TAXES		3.9		5.2		31.1		37.1
NET INCOME	$	7.1	$	7.8	$	50.5	$	55.9

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Millions - Unaudited)
	June 30,			December 31,
	2006			2005
ASSETS
Current Assets
Cash & cash equivalents	$	6.7		$	20.4
Accounts receivable - less reserves of $4.4 &
$2.8, respectively		116.4			197.8
Accrued unbilled revenues		46.7			240.6
Inventories		125.6			144.6
Recoverable fuel & natural gas costs		-			15.4
Prepayments & other current assets		106.5			106.4
Total current assets		401.9			725.2
Utility Plant
Original cost		3,726.2			3,632.0
Less: accumulated depreciation & amortization		1,420.7			1,380.1
Net utility plant		2,305.5			2,251.9
Investments in unconsolidated affiliates		187.3			214.7
Other investments		107.6			111.6
Non-utility property - net		243.3			240.3
Goodwill - net		207.1			207.1
Regulatory assets		102.7			89.9
Other assets		33.2			27.4
TOTAL ASSETS	$	3,588.6		$	3,868.1
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	92.8		$	159.0
Accounts payable to affiliated companies		49.9			162.3
Refundable fuel & natural gas costs		34.9			7.6
Accrued liabilities		131.7			156.6
Short-term borrowings		175.5			299.9
Current maturities of long-term debt		0.4			0.4
Long-term debt subject to tender		-			53.7
Total current liabilities		485.2			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		226.0			227.3
Regulatory liabilities		289.8			272.9
Deferred credits & other liabilities		191.0			186.7
Total deferred credits & other liabilities		706.8			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		524.6			528.1
Retained earnings		644.0			628.8
Accumulated other comprehensive loss		(24.1	)		(13.6	)
Total common shareholders' equity		1,144.5			1,143.3
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$	3,588.6		$	3,868.1

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions - Unaudited)
	Six Months
	Ended June 30
	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	61.9		$	69.5
Adjustments to reconcile net income to cash from operating activities:
Depreciation & amortization		83.5			75.6
Deferred income taxes & investment tax credits		0.6			(0.1	)
Equity in earnings of unconsolidated affiliates		(11.5	)		(7.1	)
Provision for uncollectible accounts		8.0			9.9
Expense portion of pension & postretirement periodic benefit cost		5.4			6.5
Other non-cash charges - net		12.8			(1.7	)
Changes in working capital accounts:
Acounts receivable & accrued unbilled revenue		268.1			189.7
Inventories		19.0			2.1
Recoverable fuel & natural gas costs		42.7			30.8
Prepayments & other current assets		(1.9	)		39.9
Accounts payable, including to affiliated companies		(183.6	)		(113.3	)
Accrued liabilities		(32.2	)		4.8
Uconsolidated affiliate dividends		32.1			7.0
Changes in noncurrent assets		(17.8	)		(3.3	)
Changes in noncurrent liabilities		(11.2	)		(9.3	)
Net cash flows from operating activities		275.9			301.0
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from:
Stock option exercises & other stock plans		0.1			-
Requirements for:
Dividends on common stock		(46.2	)		(45.2	)
Redemption of preferred stock of subsidiary		-			(0.1	)
Net change in short-term borrowings		(124.4	)		(159.5	)
Net cash flows from financing activities		(170.5	)		(204.8	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from:
Unconsolidated affiliate distributions		0.3			0.2
Notes receivable & other collections		2.8			0.8
Requirements for:
Capital expenditures, excluding AFUDC equity		(107.6	)		(90.5	)
Unconsolidated affiliate investments		(14.2	)		(6.8	)
Notes receivable & other investments		(0.4	)		-
Net cash flows from investing activities		(119.1	)		(96.3	)
Net decrease in cash & cash equivalents		(13.7	)		(0.1	)
Cash & cash equivalents at beginning of period		20.4			9.6
Cash & cash equivalents at end of period	$	6.7		$	9.5

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
HIGHLIGHTS
(Millions - Unaudited)
	Three Months						Six Months
	Ended June 30						Ended June 30
	2006			2005			2006			2005
REPORTED EARNINGS:
Utility Group	$	7.1		$	7.8		$	50.5		$	55.9
Non-utility Group
Energy Marketing and Services		0.3			1.0			13.2			8.1
Mining Operations		0.9			1.3			2.7			2.6
Energy Infrastructure Services		0.8			0.2			(0.4	)		(1.9	)
Other Businesses		0.2			(0.2	)		0.2			(0.7	)
Total Non-utility Operations		2.2			2.3			15.7			8.1
Corporate and Other		-			(0.1	)		-			(1.0	)
Sub-Total Operations		9.3			10.0			66.2			63.0
Synfuels-related		(5.0	)		3.4			(4.3	)		6.5
Vectren Consolidated	$	4.3		$	13.4		$	61.9		$	69.5

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED GAS DISTRIBUTION
OPERATING STATISTICS
(Unaudited)
	Three Months						Six Months
	Ended June 30						Ended June 30
	2006			2005			2006			2005
GAS OPERATING REVENUES (Millions):
Residential	$	101.9		$	120.4		$	486.5		$	468.9
Commercial		40.8			48.1			202.9			194.7
Industrial		12.6			12.7			34.7			31.7
Miscellaneous Revenue		3.8			4.8			7.7			7.4
	$	159.1		$	186.0		$	731.8		$	702.7
GAS MARGIN (Millions):
Residential	$	44.4		$	45.2		$	137.3		$	140.0
Commercial		12.6			12.7			44.4			45.6
Industrial		9.8			9.7			24.7			25.3
Miscellaneous		3.8			2.1			7.9			4.6
	$	70.6		$	69.7		$	214.3		$	215.5
GAS SOLD & TRANSPORTED (MMDth):
Residential		7.7			9.2			39.4			47.6
Commercial		3.7			4.3			17.3			20.9
Industrial		18.0			19.2			43.5			46.0
		29.4			32.7			100.2			114.5
AVERAGE GAS CUSTOMERS
Residential		890,674			885,954			898,361			893,186
Commercial		83,179			82,870			83,823			83,586
Industrial		1,643			1,635			1,650			1,606
		975,496			970,459			983,834			978,378
YTD WEATHER AS A PERCENT OF NORMAL:
Heating Degree Days		81	%		88	%		83	%		92	%

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED ELECTRIC
OPERATING STATISTICS
(Unaudited)
	Three Months						Six Months
	Ended June 30						Ended June 30
	2006			2005			2006			2005
ELECTRIC OPERATING REVENUES (Millions):
Residential	$	27.9		$	29.7		$	58.1		$	58.1
Commercial		22.6			23.7			44.5			44.0
Industrial		30.5			29.8			60.8			55.8
Municipals		6.6			6.6			12.2			12.2
Miscellaneous Revenue		3.0			1.5			5.9			2.4
Total Retail		90.6			91.3			181.5			172.5
Net Wholesale Revenues		5.4			5.6			19.7			19.1
	$	96.0		$	96.9		$	201.2		$	191.6
ELECTRIC MARGIN (Millions):
Residential	$	21.9		$	22.9		$	44.4		$	45.0
Commercial		16.5			16.8			31.9			31.8
Industrial		17.9			16.3			34.5			31.6
Municipals		3.9			3.5			6.6			6.8
Miscellaneous		2.9			1.6			5.7			2.4
Total Retail		63.1			61.1			123.1			117.6
Net Wholesale Margin		2.0			2.8			9.1			11.8
	$	65.1		$	63.9		$	132.2		$	129.4
ELECTRICITY SOLD (GWh):
Residential		317.3			329.0			672.7			691.3
Commercial		331.1			336.5			632.7			640.1
Industrial		671.3			651.1			1,309.2			1,270.0
Municipals		156.9			169.4			302.2			319.0
Miscellaneous Sales		4.4			4.3			9.6			9.1
Total Retail		1,481.0			1,490.3			2,926.4			2,929.5
Wholesale		189.7			632.9			652.3			1,696.9
		1,670.7			2,123.2			3,578.7			4,626.4
AVERAGE ELECTRIC CUSTOMERS
Residential		120,869			119,720			120,893			119,776
Commercial		18,796			18,695			18,764			18,661
Industrial		107			107			107			106
All Others		49			55			50			55
		139,821			138,577			139,814			138,598
YTD WEATHER AS A PERCENT OF NORMAL:
Cooling Degree Days		94	%		93	%		94	%		92	%
Heating Degree Days		81	%		88	%		83	%		92	%