Vectren Utility 8-K Vectren Corporation Reports Fiscal 2006 Results

Ex. 99.2

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions, except per share amounts)
(Unaudited)
	Three Months				Twelve Months
	Ended December 31				Ended December 31
	2006		2005		2006				2005
OPERATING REVENUES:
Gas utility	$	383.9	$	520.2	$	1,232.5			$	1,359.7
Electric utility		97.8		101.1		422.2				421.4
Nonutility revenues		127.4		92.5		386.9				246.9
Total operating revenues		609.1		713.8		2,041.6				2,028.0
OPERATING EXPENSES:
Cost of gas sold		264.1		404.5		841.5				973.3
Cost of fuel and purchased power		35.7		33.8		151.5				144.1
Cost of nonutility revenues		73.9		75.5		248.7		��		191.0
Other operating		98.9		78.1		341.8				282.2
Depreciation and amortization		44.8		41.4		172.3				158.2
Taxes other than income taxes		19.6		21.7		65.3				66.1
Total operating expenses		537.0		655.0		1,821.1				1,814.9
OPERATING INCOME		72.1		58.8		220.5				213.1
OTHER INCOME:
Equity in earnings of unconsolidated affiliates		2.3		33.1		17.0				45.6
Other - net		1.8		0.6		(2.7	)			6.2
Total other income		4.1		33.7		14.3				51.8
INTEREST EXPENSE		25.7		23.1		95.6				83.9
INCOME BEFORE INCOME TAXES		50.5		69.4		139.2				181.0
INCOME TAXES		15.5		18.5		30.3				44.1
MINORITY INTEREST & PREFERRED DIVIDEND
REQUIREMENT OF SUBSIDIARIES		0.1		0.1		0.1				0.1
NET INCOME	$	34.9	$	50.8	$	108.8			$	136.8
AVERAGE COMMON SHARES OUTSTANDING		75.7		75.7		75.7				75.6
DILUTED COMMON SHARES OUTSTANDING		76.1		76.0		76.2				76.1
EARNINGS PER SHARE OF COMMON STOCK
BASIC	$	0.46	$	0.67	$	1.44			$	1.81
DILUTED	$	0.46	$	0.67	$	1.43			$	1.80

VECTREN UTILITY HOLDINGS
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions)
(Unaudited)
	Three Months				Twelve Months
	Ended December 31				Ended December 31
	2006		2005		2006		2005
OPERATING REVENUES:
Gas utility	$	383.9	$	520.2	$	1,232.5	$	1,359.7
Electric utility		97.8		101.1		422.2		421.4
Other		0.4		0.2		1.8		0.7
Total operating revenues		482.1		621.5		1,656.5		1,781.8
OPERATING EXPENSES:
Cost of gas sold		264.1		404.5		841.5		973.3
Cost of fuel and purchased power		35.7		33.8		151.5		144.1
Other operating		56.2		61.6		239.0		241.3
Depreciation and amortization		38.5		37.1		151.3		141.3
Taxes other than income taxes		19.3		21.6		64.2		65.2
Total operating expenses		413.8		558.6		1,447.5		1,565.2
OPERATING INCOME		68.3		62.9		209.0		216.6
OTHER INCOME - NET		2.8		1.3		7.6		5.9
INTEREST EXPENSE		20.1		19.1		77.5		69.9
INCOME BEFORE INCOME TAXES		51.0		45.1		139.1		152.6
INCOME TAXES		16.6		14.8		47.7		57.5
NET INCOME	$	34.4	$	30.3	$	91.4	$	95.1

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Millions - Unaudited)
	At December 31,
	2006		2005
ASSETS
Current Assets
Cash & cash equivalents	$	32.8	$	20.4
Accounts receivable - less reserves of $3.1 &
$2.8, respectively		198.6		197.8
Accrued unbilled revenues		146.5		240.6
Inventories		163.5		144.6
Recoverable fuel & natural gas costs		1.8		15.4
Prepayments & other current assets		174.2		106.4
Total current assets		717.4		725.2
Utility Plant
Original cost		3,820.2		3,632.0
Less: accumulated depreciation & amortization		1,434.7		1,380.1
Net utility plant		2,385.5		2,251.9
Investments in unconsolidated affiliates		181.0		214.7
Other investments		74.5		111.6
Non-utility property - net		294.4		240.3
Goodwill - net		237.8		207.1
Regulatory assets		163.5		89.9
Other assets		39.0		27.4
TOTAL ASSETS	$	4,093.1	$	3,868.1
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	180.0	$	159.0
Accounts payable to affiliated companies		89.9		162.3
Refundable fuel & natural gas costs		35.3		7.6
Accrued liabilities		148.7		156.6
Short-term borrowings		464.8		299.9
Current maturities of long-term debt		24.2		0.4
Long-term debt subject to tender		20.0		53.7
Total current liabilities		962.9		839.5
Long-term Debt - Net of Current Maturities &
Debt Subject to Tender		1,208.0		1,198.0
Deferred Income Taxes & Other Liabilities
Deferred income taxes		260.7		227.3
Regulatory liabilities		291.1		272.9
Deferred credits & other liabilities		195.8		186.7
Total deferred credits & other liabilities		747.6		686.9
Minority Interest in Subsidiary		0.4		0.4
Common Shareholders' Equity
Common stock (no par value) – issued & outstanding
76.1 and 76.0 shares, respectively		525.5		528.1
Retained earnings		643.6		628.8
Accumulated other comprehensive loss		5.1		(13.6	)
Total common shareholders' equity		1,174.2		1,143.3
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$	4,093.1	$	3,868.1

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions - Unaudited)
	For the twelve months ended
	December 31,
	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	108.8		$	136.8
Adjustments to reconcile net income to cash from operating activities:
Depreciation & amortization		172.3			158.2
Deferred income taxes & investment tax credits		1.4			(8.6	)
Equity in earnings of unconsolidated affiliates		(17.0	)		(45.6	)
Provision for uncollectible accounts		15.3			15.1
Expense portion of pension & postretirement periodic benefit cost		10.7			10.7
Other non-cash charges - net		11.4			1.9
Changes in working capital accounts:
Accounts receivable & accrued unbilled revenue		108.9			(102.9	)
Inventories		(17.6	)		(71.9	)
Recoverable fuel & natural gas costs		41.3			3.5
Prepayments & other current assets		(21.2	)		36.1
Accounts payable, including to affiliated companies		(71.6	)		101.2
Accrued liabilities		(23.2	)		27.4
Unconsolidated affiliate dividends		35.8			18.8
Changes in noncurrent assets		(25.8	)		(6.9	)
Changes in noncurrent liabilities		(19.3	)		(5.4	)
Net cash flows from operating activities		310.2			268.4
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from:
Long-term debt - net of issuance costs		92.8			274.2
Requirements for:
Dividends on common stock		(93.1	)		(90.5	)
Retirement of long-term debt, including premiums paid		(124.4	)		(88.5	)
Redemption of preferred stock of subsidiary		-			(0.1	)
Net change in short-term borrowings		164.9			(112.5	)
Other financing activities		(0.6	)		(0.6	)
Net cash flows from financing activities		39.6			(18.0	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from:
Unconsolidated affiliate distributions		2.0			6.9
Other collections		3.4			4.3
Requirements for:
Capital expenditures, excluding AFUDC equity		(281.4	)		(231.6	)
Unconsolidated affiliate investments		(16.7	)		(19.2	)
Other investments		(44.7	)		-
Net cash flows from investing activities		(337.4	)		(239.6	)
Net decrease in cash & cash equivalents		12.4			10.8
Cash & cash equivalents at beginning of period		20.4			9.6
Cash & cash equivalents at end of period	$	32.8		$	20.4

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
HIGHLIGHTS
(millions, except per share amounts)
(Unaudited)
	Three Months						Twelve Months
	Ended December 31						Ended December 31
	2006			2005			2006			2005
REPORTED EARNINGS:
Utility Group	$	34.4		$	30.3		$	91.4		$	95.1
Non-utility Group
Energy Marketing and Services		1.9			18.6			14.9			29.7
Mining Operations		0.7			1.1			5.0			5.3
Energy Infrastructure Services		1.4			0.9			4.6			0.3
Other Businesses		(1.2	)		2.6			(1.1	)		1.2
Total Non-utility Operations		2.8			23.2			23.4			36.5
Corporate and Other		(0.7	)		(4.6	)		(0.7	)		(6.5	)
Sub-Total Operations		36.5			48.9			114.1			125.1
Synfuels-related		(1.6	)		1.9			(5.3	)		11.7
Vectren Consolidated	$	34.9		$	50.8		$	108.8		$	136.8

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED GAS DISTRIBUTION
OPERATING STATISTICS
(Unaudited)
	Three Months						Twelve Months
	Ended December 31						Ended December 31
	2006			2005			2006			2005
GAS OPERATING REVENUES (Millions):
Residential	$	258.4		$	350.4		$	813.6		$	899.7
Commercial		103.3			146.9			339.7			383.2
Industrial		20.0			22.8			67.1			68.4
Miscellaneous Revenue		2.2			0.1			12.1			8.4
	$	383.9		$	520.2		$	1,232.5		$	1,359.7
GAS MARGIN (Millions):
Residential	$	78.5		$	77.7		$	250.4		$	252.5
Commercial		25.2			25.1			79.8			80.7
Industrial		13.8			13.9			48.0			48.3
Miscellaneous		2.3			(1.0	)		12.8			4.9
	$	119.8		$	115.7		$	391.0		$	386.4
GAS SOLD & TRANSPORTED (MMDth):
Residential		23.7			26.4			67.2			78.0
Commercial		10.3			11.2			30.5			34.9
Industrial		23.7			23.8			84.9			87.2
		57.7			61.4			182.6			200.1
YEAR END GAS CUSTOMERS
Residential								909,366			906,246
Commercial								84,552			84,455
Industrial								1,615			1,657
								995,533			992,358
YTD WEATHER AS A PERCENT OF NORMAL:
Heating Degree Days		89	%		103	%		86	%		95	%

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED ELECTRIC
OPERATING STATISTICS
(Unaudited)
	Three Months						Twelve Months
	Ended December 31						Ended December 31
	2006			2005			2006			2005
ELECTRIC OPERATING REVENUES (Millions):
Residential	$	28.9		$	29.1		$	130.6		$	135.3
Commercial		23.9			23.7			96.1			95.8
Industrial		31.2			29.6			128.2			119.5
Municipals		6.0			5.8			26.0			25.8
Miscellaneous Revenue		2.4			2.7			11.5			7.0
Total Retail		92.4			90.9			392.4			383.4
Net Wholesale Revenues		5.4			10.2			29.8			38.0
	$	97.8		$	101.1		$	422.2		$	421.4
ELECTRIC MARGIN (Millions):
Residential	$	21.1		$	22.4		$	96.8		$	103.0
Commercial		16.2			17.2			66.1			67.8
Industrial		16.8			17.3			70.2			66.9
Municipals		2.7			3.1			12.8			13.1
Miscellaneous		2.4			2.6			11.2			6.7
Total Retail		59.2			62.6			257.1			257.5
Net Wholesale Margin		2.9			4.7			13.6			19.8
	$	62.1		$	67.3		$	270.7		$	277.3
ELECTRICITY SOLD (GWh):
Residential		321.5			336.8			1,468.8			1,564.9
Commercial		315.8			332.4			1,320.9			1,368.3
Industrial		586.5			621.0			2,570.4			2,575.9
Municipals		144.0			150.8			624.3			670.3
Miscellaneous Sales		5.7			5.8			20.1			19.6
Total Retail		1,373.5			1,446.8			6,004.5			6,199.0
Wholesale		135.2			625.3			898.3			3,049.2
		1,508.7			2,072.1			6,902.8			9,248.2
YEAR END ELECTRIC CUSTOMERS
Residential								121,952			120,679
Commercial								18,879			18,677
Industrial								109			107
All Others								47			51
								140,987			139,514
YTD WEATHER AS A PERCENT OF NORMAL:
Cooling Degree Days								95	%		109	%
Heating Degree Days		89	%		103	%		86	%		95	%