Vectren Utility 8-K Results of Operations and Financial Condition

VECTREN CORPORATION          & #160;
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions, except per share amounts)
(Unaudited)
	Three Months				Twelve Months
	Ended December 31                                            Ended December 31
	2007		2006		2007		2006
OPERATING REVENUES:
Gas utility	$	379.4	$	383.9	$	1,269.4	$	1,232.5
Electric utility		126.3		97.8		487.9		422.2
Nonutility revenues		139.1		127.4		524.6		386.9
Total operating revenues		644.8		609.1		2,281.9		2,041.6
OPERATING EXPENSES:
Cost of gas sold		255.2		264.1		847.2		841.5
Cost of fuel and purchased power		45.3		35.7		174.8		151.5
Cost of nonutility revenues		77.5		73.9		287.7		248.7
Other operating		122.5		98.9		456.9		341.8
Depreciation and amortization		45.1		44.8		184.8		172.3
Taxes other than income taxes		19.1		19.6		70.0		65.3
Total operating expenses		564.7		537.0		2,021.4		1,821.1
OPERATING INCOME		80.1		72.1		260.5		220.5
OTHER INCOME:
Equity in earnings of unconsolidated affiliates		4.2		2.3		22.9		17.0
Other - net		13.7		1.8		36.8		(2.7	)
Total other income		17.9		4.1		59.7		14.3
INTEREST EXPENSE		26.9		25.7		101.0		95.6
INCOME BEFORE INCOME TAXES		71.1		50.5		219.2		139.2
INCOME TAXES		31.1		15.5		76.0		30.3
MINORITY INTEREST & PREFERRED DIVIDEND
REQUIREMENT OF SUBSIDIARIES		0.1		0.1		0.1		0.1
NET INCOME	$	39.9	$	34.9	$	143.1	$	108.8
AVERAGE COMMON SHARES OUTSTANDING		75.9		75.7		75.9		75.7
DILUTED COMMON SHARES OUTSTANDING		76.7		76.1		76.6		76.2
EARNINGS PER SHARE OF COMMON STOCK
BASIC	$	0.53	$	0.46	$	1.89	$	1.44
DILUTED	$	0.52	$	0.46	$	1.87	$	1.43

VECTREN UTILITY HOLDINGS
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions)
(Unaudited)
	Three Months				Twelve Months
	Ended December 31                                            Ended December 31
	2007		2006		2007		2006
OPERATING REVENUES:
Gas utility	$	379.4	$	383.9	$	1,269.4	$	1,232.5
Electric utility		126.3		97.8		487.9		422.2
Other		0.4		0.4		1.7		1.8
Total operating revenues		506.1		482.1		1,759.0		1,656.5
OPERATING EXPENSES:
Cost of gas sold		255.2		264.1		847.2		841.5
Cost of fuel and purchased power		45.3		35.7		174.8		151.5
Other operating		67.7		56.2		266.1		239.0
Depreciation and amortization		39.0		38.5		158.4		151.3
Taxes other than income taxes		18.5		19.3		68.1		64.2
Total operating expenses		425.7		413.8		1,514.6		1,447.5
OPERATING INCOME		80.4		68.3		244.4		209.0
OTHER INCOME - NET		3.2		2.8		9.4		7.6
INTEREST EXPENSE		21.8		20.1		80.6		77.5
INCOME BEFORE INCOME TAXES		61.8		51.0		173.2		139.1
INCOME TAXES		24.9		16.6		66.7		47.7
NET INCOME	$	36.9	$	34.4	$	106.5	$	91.4

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Millions - Unaudited)
	December 31,		December 31,
	2007		2006
ASSETS
Current Assets
Cash & cash equivalents	$	20.6	$	32.8
Accounts receivable - less reserves of $3.7 &
$3.3, respectively		189.4		198.6
Accrued unbilled revenues		168.2		146.5
Inventories		160.9		163.5
Recoverable fuel & natural gas costs		-		1.8
Prepayments & other current assets		160.5		172.7
Total current assets		699.6		715.9
Utility Plant
Original cost		4,062.9		3,820.2
Less:  accumulated depreciation & amortization		1,523.2		1,434.7
Net utility plant		2,539.7		2,385.5
Investments in unconsolidated affiliates		208.8		181.0
Other investments		77.0		74.5
Nonutility property - net		320.3		294.4
Goodwill - net		238.0		237.8
Regulatory assets		175.3		163.5
Other assets		37.7		39.0
TOTAL ASSETS	$	4,296.4	$	4,091.6
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	187.4	$	180.0
Accounts payable to affiliated companies		83.7		89.9
Refundable fuel & natural gas costs		27.2		35.3
Accrued liabilities		171.8		147.2
Short-term borrowings		557.0		464.8
Current maturities of long-term debt		0.3		24.2
Long-term debt subject to tender		-		20.0
Total current liabilities		1,027.4		961.4
Long-term Debt - Net of Current Maturities &
Debt Subject to Tender		1,245.4		1,208.0
Deferred Income Taxes & Other Liabilities
Deferred income taxes		318.1		260.7
Regulatory liabilities		307.2		291.1
Deferred credits & other liabilities		164.2		195.8
Total deferred credits & other liabilities		789.5		747.6
Minority Interest in Subsidiary		0.4		0.4
Common Shareholders' Equity
Common stock (no par value) – issued & outstanding
76.5 and 76.1 shares, respectively		532.7		525.5
Retained earnings		688.5		643.6
Accumulated other comprehensive income		12.5		5.1
Total common shareholders' equity		1,233.7		1,174.2
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$	4,296.4	$	4,091.6

VECTREN CORPORATION
AND SUBSIDIARY  COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions - Unaudited)
	Twelve Months
	Ended December 31
	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	143.1		$	108.8
Adjustments to reconcile net income to cash from operating activities:
Depreciation & amortization		184.8			172.3
Deferred income taxes & investment tax credits		27.0			1.4
Equity in earnings of unconsolidated affiliates		(22.9	)		(17.0	)
Provision for uncollectible accounts		16.6			15.3
Expense portion of pension & postretirement periodic benefit cost		9.8			10.7
Other non-cash charges - net		4.8			11.4
Changes in working capital accounts:
Accounts receivable & accrued unbilled revenue		(29.1	)		108.9
Inventories		2.6			(17.6	)
Recoverable/refundable fuel & natural gas costs		(6.3	)		41.3
Prepayments & other current assets		(3.7	)		(21.2	)
Accounts payable, including to affiliated companies		4.9			(71.6	)
Accrued liabilities		4.6			(23.2	)
Unconsolidated affiliate dividends		20.8			35.8
Changes in noncurrent assets		(21.4	)		(25.8	)
Changes in noncurrent liabilities		(37.5	)		(19.3	)
Net cash flows from operating activities		298.1			310.2
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from:
Long-term debt		16.4			92.8
Stock option exercises		5.2			-
Requirements for:
Dividends on common stock		(96.4	)		(93.1	)
Retirement of long-term debt		(23.9	)		(124.4	)
Other financing activities		(0.8	)		(0.6	)
Net change in short-term borrowings		92.2			164.9
Net cash flows from financing activities		(7.3	)		39.6
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from:
Unconsolidated affiliate distributions		12.7			2.0
Other collections		38.0			3.4
Requirements for:
Capital expenditures, excluding AFUDC equity		(334.5	)		(281.4	)
Unconsolidated affiliate investments		(17.5	)		(16.7	)
Other investments		(1.7	)		(44.7	)
Net cash flows from investing activities		(303.0	)		(337.4	)
Net change in cash & cash equivalents		(12.2	)		12.4
Cash & cash equivalents at beginning of period		32.8			20.4
Cash & cash equivalents at end of period	$	20.6		$	32.8

VECTREN CORPORATION          & #160;
AND SUBSIDIARY COMPANIES
HIGHLIGHTS
(millions, except per share amounts)
(Unaudited)
	Three Months						Twelve Months
	Ended December 31                                              Ended December 31
	2007			2006			2007			2006
REPORTED EARNINGS:
Utility Group	$	36.9		$	34.4		$	106.5		$	91.4
Non-utility Group
Energy Marketing and Services		6.7			1.9			22.3			14.9
Coal Mining		(0.7	)		0.7			2.0			5.0
Energy Infrastructure Services		2.8			1.4			9.4			4.6
Other Businesses		0.1			(1.2	)		0.3			(1.1	)
Total Non-utility Operations		8.9			2.8			34.0			23.4
Corporate and Other		(0.6	)		(0.7	)		(0.4	)		(0.7	)
Sub-Total Operations		45.2			36.5			140.1			114.1
Synfuels-related		(5.3	)		(1.6	)		3.0			(5.3	)
Vectren Consolidated	$	39.9		$	34.9		$	143.1		$	108.8

VECTREN CORPORATION          & #160;
AND SUBSIDIARY COMPANIES
SELECTED GAS DISTRIBUTION
OPERATING STATISTICS          &# 160;
(Unaudited)
	Three Months						Twelve Months
	Ended December 31                                             Ended December 31
	2007			2006			2007			2006
GAS OPERATING REVENUES (Millions):
Residential	$	259.9		$	258.4		$	851.1		$	813.6
Commercial		99.0			103.3			339.7			339.7
Industrial		18.0			20.0			65.5			67.1
Miscellaneous Revenue		2.5			2.2			13.1			12.1
	$	379.4		$	383.9		$	1,269.4		$	1,232.5
GAS MARGIN (Millions):
Residential	$	81.7		$	78.5		$	272.1		$	250.4
Commercial		25.6			25.2			85.0			79.8
Industrial		13.4			13.8			48.3			48.0
Miscellaneous		3.5			2.3			16.8			12.8
	$	124.2		$	119.8		$	422.2		$	391.0
GAS SOLD & TRANSPORTED (MMDth):
Residential		23.3			23.7			75.0			67.2
Commercial		10.0			10.3			33.4			30.5
Industrial		23.7			23.7			86.2			84.9
		57.0			57.7			194.6			182.6
AVERAGE GAS CUSTOMERS
Residential		904,922			903,712			901,173			895,700
Commercial		84,263			84,067			83,934			83,938
Industrial		1,609			1,618			1,610			1,638
		990,794			989,397			986,717			981,276
YTD WEATHER AS A PERCENT OF NORMAL:
Heating Degree Days (Ohio)		91	%		93	%		94	%		89	%

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED ELECTRIC          &# 160;
OPERATING STATISTICS
(Unaudited)
	Three Months						Twelve Months
	Ended December 31                                              Ended December 31
	2007			2006			2007			2006
ELECTRIC OPERATING REVENUES (Millions):
Residential	$	36.0		$	28.9		$	159.2		$	130.6
Commercial		29.3			23.9			113.3			96.1
Industrial		34.5			31.2			139.5			128.2
Municipals		7.9			6.0			28.0			26.0
Miscellaneous Revenue		2.5			2.4			8.1			11.5
Total Retail		110.2			92.4			448.1			392.4
Net Wholesale Revenues		16.1			5.4			39.8			29.8
	$	126.3		$	97.8		$	487.9		$	422.2
ELECTRIC MARGIN (Millions):
Residential	$	26.8		$	21.1		$	117.5		$	96.8
Commercial		20.0			16.2			77.2			66.1
Industrial		18.6			16.8			75.0			70.2
Municipals		4.7			2.7			14.0			12.8
Miscellaneous		2.4			2.4			7.8			11.2
Total Retail		72.5			59.2			291.5			257.1
Net Wholesale Margin		8.5			2.9			21.6			13.6
	$	81.0		$	62.1		$	313.1		$	270.7
ELECTRICITY SOLD (GWh):
Residential		340.2			321.5			1,630.5			1,468.8
Commercial		345.0			315.8			1,412.4			1,320.9
Industrial		596.1			586.5			2,538.5			2,570.4
Municipals		146.8			144.0			616.2			624.3
Miscellaneous Sales		4.8			5.7			18.9			20.1
Total Retail		1,432.9			1,373.5			6,216.5			6,004.5
Wholesale		377.2			135.2			921.3			898.3
		1,810.1			1,508.7			7,137.8			6,902.8
AVERAGE ELECTRIC CUSTOMERS
Residential		122,412			121,672			122,162			121,179
Commercial		18,465			18,429			18,474			18,378
Industrial		107			108			109			108
All Others		38			36			37			36
		141,022			140,245			140,782			139,701
YTD WEATHER AS A PERCENT OF NORMAL:
Cooling Degree Days (Indiana)								133	%		95	%
Heating Degree Days (Indiana)		89	%		94	%		90	%		88	%