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						Nine Months
	Ended September 30,						Ended September 30,
	2006			2005			2006			2005
OPERATING REVENUES:
Gas utility	$	116.8		$	136.8		$	848.6		$	839.5
Electric utility		123.2			128.7			324.4			320.3
Nonutility revenues		100.5			45.3			259.5			154.4
Total operating revenues		340.5			310.8			1,432.5			1,314.2
OPERATING EXPENSES:
Cost of gas sold		59.9			81.6			577.4			568.8
Cost of fuel and purchased power		46.8			48.1			115.8			110.3
Cost of nonutility revenues		48.8			32.5			174.8			115.5
Other operating		101.8			67.2			242.9			204.1
Depreciation and amortization		44.0			41.2			127.5			116.8
Taxes other than income taxes		10.8			10.3			45.7			44.4
Total operating expenses		312.1			280.9			1,284.1			1,159.9
OPERATING INCOME		28.4			29.9			148.4			154.3
OTHER INCOME:
Equity in earnings of unconsolidated affiliates		3.2			5.4			14.7			12.5
Other - net		1.6			1.6			(4.5	)		5.6
Total other income		4.8			7.0			10.2			18.1
INTEREST EXPENSE		24.2			21.0			69.9			60.8
INCOME BEFORE INCOME TAXES		9.0			15.9			88.7			111.6
INCOME TAXES		(3.0	)		(0.6	)		14.8			25.6
NET INCOME	$	12.0		$	16.5		$	73.9		$	86.0
AVERAGE COMMON SHARES OUTSTANDING		75.7	��		75.7			75.7			75.6
DILUTED COMMON SHARES OUTSTANDING		76.0			76.2			76.0			76.2
EARNINGS PER SHARE OF COMMON STOCK
BASIC	$	0.16		$	0.22		$	0.98		$	1.14
DILUTED	$	0.16		$	0.22		$	0.97		$	1.13

VECTREN UTILITY HOLDINGS
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions)
(Unaudited)
	Three Months				Nine Months
	Ended September 30,				Ended September 30,
	2006		2005		2006		2005
OPERATING REVENUES:
Gas utility	$	116.8	$	136.8	$	848.6	$	839.5
Electric utility		123.2		128.7		324.4		320.3
Other		0.5		0.2		1.4		0.5
Total operating revenues		240.5		265.7		1,174.4		1,160.3
OPERATING EXPENSES:
Cost of gas sold		59.9		81.6		577.4		568.8
Fuel for electric generation		46.8		48.1		115.8		110.3
Other operating		61.6		58.9		182.8		179.7
Depreciation and amortization		38.0		36.3		112.8		104.2
Taxes other than income taxes		10.5		10.1		44.9		43.6
Total operating expenses		216.8		235.0		1,033.7		1,006.6
OPERATING INCOME		23.7		30.7		140.7		153.7
OTHER INCOME - NET		2.0		1.3		4.8		4.6
INTEREST EXPENSE		19.2		17.5		57.4		50.8
INCOME BEFORE INCOME TAXES		6.5		14.5		88.1		107.5
INCOME TAXES		-		5.6		31.1		42.7
NET INCOME	$	6.5	$	8.9	$	57.0	$	64.8

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
HIGHLIGHTS
(millions, except per share amounts)
(Unaudited)
	Three Months						Nine Months
	Ended September 30,						Ended September 30,
	2006			2005			2006			2005
REPORTED EARNINGS:
Utility Group	$	6.5		$	8.9		$	57.0		$	64.8
Non-utility Group
Energy Marketing and Services		(0.2	)		3.0			13.0			11.1
Mining Operations		1.6			1.6			4.3			4.2
Energy Infrastructure Services		3.6			1.3			3.2			(0.6	)
Other Businesses		(0.1	)		(0.7	)		0.1			(1.4	)
Total Non-utility Operations		4.9			5.2			20.6			13.3
Corporate and Other		-			(0.9	)		-			(1.9	)
Sub-Total Operations		11.4			13.2			77.6			76.2
Synfuels-related		0.6			3.3			(3.7	)		9.8
Vectren Consolidated	$	12.0		$	16.5		$	73.9		$	86.0

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED GAS DISTRIBUTION
OPERATING STATISTICS
(Unaudited)
	Three Months				Nine Months
	Ended September 30,				Ended September 30,
	2006		2005		2006			2005
GAS OPERATING REVENUES (Millions):
Residential	$	68.7	$	80.4	$	555.2		$	549.3
Commercial		33.5		41.6		236.4			236.3
Industrial		12.4		13.9		47.1			45.6
Miscellaneous Revenue		2.2		0.9		9.9			8.3
	$	116.8	$	136.8	$	848.6		$	839.5
GAS MARGIN (Millions):
Residential	$	34.6	$	34.8	$	171.9		$	174.8
Commercial		10.2		10.0		54.6			55.6
Industrial		9.5		9.1		34.2			34.4
Miscellaneous		2.6		1.3		10.5			5.9
	$	56.9	$	55.2	$	271.2		$	270.7
GAS SOLD & TRANSPORTED (MMDth):
Residential		4.1		4.0		43.5			51.6
Commercial		2.9		2.8		20.2			23.7
Industrial		17.7		17.4		61.2			63.4
		24.7		24.2		124.9			138.7
AVERAGE GAS CUSTOMERS
Residential		882,366		877,273		893,029			887,883
Commercial		82,358		81,967		83,334			83,046
Industrial		1,636		1,638		1,645			1,616
		966,360		960,878		978,008			972,545
YTD WEATHER AS A PERCENT OF NORMAL:
Heating Degree Days						84	%		91	%

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED ELECTRIC
OPERATING STATISTICS
(Unaudited)
	Three Months						Nine Months
	Ended September 30,						Ended September 30,
	2006			2005			2006			2005
ELECTRIC OPERATING REVENUES (Millions):
Residential	$	43.6		$	48.1		$	101.7		$	106.2
Commercial		27.7			28.1			72.2			72.1
Industrial		36.2			34.1			97.0			89.9
Municipals		7.8			7.8			20.0			20.0
Miscellaneous Revenue		3.2			1.9			9.1			4.3
Total Retail		118.5			120.0			300.0			292.5
Net Wholesale Revenues		4.7			8.7			24.4			27.8
	$	123.2		$	128.7		$	324.4		$	320.3
ELECTRIC MARGIN (Millions):
Residential	$	31.3		$	35.6		$	75.7		$	80.6
Commercial		18.0			18.8			49.9			50.6
Industrial		18.9			18.0			53.4			49.6
Municipals		3.5			3.2			10.1			10.0
Miscellaneous		3.1			1.7			8.8			4.1
Total Retail		74.8			77.3			197.9			194.9
Net Wholesale Margin		1.6			3.3			10.7			15.1
	$	76.4		$	80.6		$	208.6		$	210.0
ELECTRICITY SOLD (GWh):
Residential		474.6			536.8			1,147.3			1,228.1
Commercial		372.4			395.8			1,005.1			1,035.9
Industrial		674.7			684.9			1,983.9			1,954.9
Municipals		178.1			200.5			480.3			519.5
Miscellaneous Sales		4.8			4.7			14.4			13.8
Total Retail		1,704.6			1,822.7			4,631.0			4,752.2
Wholesale		110.8			727.0			763.1			2,423.9
		1,815.4			2,549.7			5,394.1			7,176.1
AVERAGE ELECTRIC CUSTOMERS
Residential		121,263			120,077			121,016			119,877
Commercial		18,865			18,718			18,798			18,680
Industrial		107			106			107			106
All Others		45			54			49			55
		140,280			138,955			139,970			138,718
YTD WEATHER AS A PERCENT OF NORMAL:
Cooling Degree Days		95	%		114	%		95	%		107	%
Heating Degree Days								84	%		91	%

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Millions - Unaudited)
	September 30,			December 31,
	2006			2005
ASSETS
Current Assets
Cash & cash equivalents	$	6.6		$	20.4
Accounts receivable - less reserves of $3.8 &
$2.8, respectively		128.9			197.8
Accrued unbilled revenues		50.0			240.6
Inventories		188.9			144.6
Recoverable fuel & natural gas costs		-			15.4
Prepayments & other current assets		136.4			106.4
Total current assets		510.8			725.2
Utility Plant
Original cost		3,777.7			3,632.0
Less: accumulated depreciation & amortization		1,441.0			1,380.1
Net utility plant		2,336.7			2,251.9
Investments in unconsolidated affiliates		177.2			214.7
Other investments		107.6			111.6
Non-utility property - net		283.2			240.3
Goodwill - net		238.1			207.1
Regulatory assets		112.8			89.9
Other assets		52.4			27.4
TOTAL ASSETS	$	3,818.8		$	3,868.1
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	150.3		$	159.0
Accounts payable to affiliated companies		42.2			162.3
Refundable fuel & natural gas costs		24.1			7.6
Accrued liabilities		133.7			156.6
Short-term borrowings		332.2			299.9
Current maturities of long-term debt		24.3			0.4
Long-term debt subject to tender		-			53.7
Total current liabilities		706.8			839.5
Long-term Debt - Net of Current Maturities &
Debt Subject to Tender		1,251.8			1,198.0
Deferred Income Taxes & Other Liabilities
Deferred income taxes		233.9			227.3
Regulatory liabilities		289.4			272.9
Deferred credits & other liabilities		197.6			186.7
Total deferred credits & other liabilities		720.9			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		524.8			528.1
Retained earnings		632.7			628.8
Accumulated other comprehensive loss		(18.6	)		(13.6	)
Total common shareholders' equity		1,138.9			1,143.3
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$	3,818.8		$	3,868.1

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions - Unaudited)
	Nine Months Ended
	September 30,
	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	73.9		$	86.0
Adjustments to reconcile net income to cash from operating activities:
Depreciation & amortization		127.5			116.8
Deferred income taxes & investment tax credits		(1.6	)		(5.5	)
Equity in earnings of unconsolidated affiliates		(14.7	)		(12.5	)
Provision for uncollectible accounts		12.4			10.8
Expense portion of pension & postretirement periodic benefit cost		8.1			9.7
Other non-cash charges - net		10.3			0.4
Changes in working capital accounts:
Accounts receivable & accrued unbilled revenue		279.1			189.3
Inventories		(43.0	)		(21.6	)
Recoverable fuel & natural gas costs		31.9			5.3
Prepayments & other current assets		(29.7	)		(33.1	)
Accounts payable, including to affiliated companies		(146.1	)		(66.6	)
Accrued liabilities		(42.0	)		(12.8	)
Unconsolidated affiliate dividends		33.5			9.0
Changes in noncurrent assets		(20.7	)		(5.7	)
Changes in noncurrent liabilities		(15.3	)		(9.4	)
Net cash flows from operating activities		263.6			260.1
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from:
Long-term debt - net of issuance costs		0.1			-
Requirements for:
Dividends on common stock		(69.3	)		(67.3	)
Retirement of long-term debt, including premiums paid		(0.4	)		(0.4	)
Other financing activities		(0.4	)		(0.6	)
Net change in short-term borrowings		32.3			(43.3	)
Net cash flows from financing activities		(37.7	)		(111.6	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from:
Unconsolidated affiliate distributions		1.9			0.3
Other collections		2.9			0.9
Requirements for:
Capital expenditures, excluding AFUDC equity		(185.9	)		(140.6	)
Unconsolidated affiliate investments		(16.7	)		(14.6	)
Other investments		(41.9	)		-
Net cash flows from investing activities		(239.7	)		(154.0	)
Net decrease in cash & cash equivalents		(13.8	)		(5.5	)
Cash & cash equivalents at beginning of period		20.4			9.6
Cash & cash equivalents at end of period	$	6.6		$	4.1