Vectren Utility 8-K Results of Operations and Financial Condition

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
	2011			2010		2011			2010
OPERATING REVENUES:
Gas utility	$	226.3		$	261.3	$	819.1		$	954.1
Electric utility		143.5			138.9		635.9			608.0
Nonutility		257.6			163.9		870.2			567.4
Total operating revenues		627.4			564.1		2,325.2			2,129.5
OPERATING EXPENSES:
Cost of gas sold		101.0			133.0		375.4			504.7
Cost of fuel and purchased power		53.5			54.7		240.4			235.0
Cost of nonutility revenues		118.7			72.7		385.3			243.3
Other operating		166.7			140.0		652.2			538.4
Depreciation and amortization		62.3			58.5		244.3			229.1
Taxes other than income taxes		14.2			15.3		57.6			62.2
Total operating expenses		516.4			474.2		1,955.2			1,812.7
OPERATING INCOME		111.0			89.9		370.0			316.8
OTHER INCOME (EXPENSE):
Equity in earnings (losses) of unconsolidated affiliates		2.6			5.3		(32.0	)		(8.6	)
Other income/(expense) - net		(9.4	)		2.8		(3.5	)		4.8
Total other income (expense)		(6.8	)		8.1		(35.5	)		(3.8	)
INTEREST EXPENSE		25.8			26.6		106.5			104.6
INCOME BEFORE INCOME TAXES		78.4			71.4		228.0			208.4
INCOME TAXES		31.8			26.0		86.4			74.7
NET INCOME		46.6			45.4		141.6			133.7
AVERAGE COMMON SHARES OUTSTANDING		81.9			81.5		81.8			81.2
DILUTED COMMON SHARES OUTSTANDING		81.9			81.6		81.8			81.3
EARNINGS PER SHARE OF COMMON STOCK
BASIC	$	0.56		$	0.56	$	1.73		$	1.65
DILUTED	$	0.56		$	0.56	$	1.73		$	1.64

VECTREN UTILITY HOLDINGS
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions - Unaudited)
	Three Months				Twelve Months
	Ended December 31				Ended December 31
	2011		2010		2011		2010
OPERATING REVENUES:
Gas utility	$	226.3	$	261.3	$	819.1	$	954.1
Electric utility		143.5		138.9		635.9		608.0
Other		0.5		0.4		2.0		1.6
Total operating revenues		370.3		400.6		1,457.0		1,563.7
OPERATING EXPENSES:
Cost of gas sold		101.0		133.0		375.4		504.7
Cost of fuel and purchased power		53.5		54.7		240.4		235.0
Other operating		81.3		75.9		313.1		299.2
Depreciation and amortization		48.4		47.7		192.3		188.2
Taxes other than income taxes		13.3		14.5		54.0		59.6
Total operating expenses		297.5		325.8		1,175.2		1,286.7
OPERATING INCOME		72.8		74.8		281.8		277.0
OTHER INCOME - NET		0.3		1.5		4.3		5.4
INTEREST EXPENSE		19.1		20.4		80.3		81.4
INCOME BEFORE INCOME TAXES		54.0		55.9		205.8		201.0
INCOME TAXES		23.9		22.3		82.9		77.1
NET INCOME	$	30.1	$	33.6	$	122.9	$	123.9

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Millions - Unaudited)
	December 31,			December 31,
	2011			2010
ASSETS
Current Assets
Cash & cash equivalents	$	8.6		$	10.4
Accounts receivable - less reserves of $6.7 &
$5.3, respectively		221.3			176.6
Accrued unbilled revenues		121.5			162.0
Inventories		161.9			187.1
Recoverable fuel & natural gas costs		12.4			7.9
Prepayments & other current assets		84.3			101.2
Total current assets		610.0			645.2
Utility Plant
Original cost		4,979.9			4,791.7
Less:  accumulated depreciation & amortization		1,947.3			1,836.3
Net utility plant		3,032.6			2,955.4
Investments in unconsolidated affiliates		92.9			135.2
Other utility & corporate investments		34.4			34.1
Other nonutility investments		29.6			40.9
Nonutility plant - net		550.8			488.3
Goodwill - net		262.3			242.0
Regulatory assets		226.0			189.4
Other assets		40.3			33.7
TOTAL ASSETS	$	4,878.9		$	4,764.2
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	185.8		$	183.7
Accounts payable to affiliated companies		36.8			59.6
Accrued liabilities		181.1			178.4
Short-term borrowings		227.1			118.3
Current maturities of long-term debt		62.7			250.7
Long-term debt subject to tender		-			30.0
Total current liabilities		693.5			820.7
Long-term Debt - Net of Current Maturities &
Debt Subject to Tender		1,559.6			1,435.2
Deferred Income Taxes & Other Liabilities
Deferred income taxes		575.7			515.3
Regulatory liabilities		345.2			333.5
Deferred credits & other liabilities		239.4			220.6
Total deferred credits & other liabilities		1,160.3			1,069.4
Common Shareholders' Equity
Common stock (no par value) – issued & outstanding
81.9 and 81.7 shares, respectively		692.6			683.4
Retained earnings		786.2			759.9
Accumulated other comprehensive income (loss)		(13.3	)		(4.4	)
Total common shareholders' equity		1,465.5			1,438.9
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$	4,878.9		$	4,764.2

VECTREN CORPORATION
AND SUBSIDIARY  COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions - Unaudited)
	Twelve Months
	Ended December 31
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	141.6		$	133.7
Adjustments to reconcile net income to cash from operating activities:
Depreciation & amortization		244.3			229.1
Deferred income taxes & investment tax credits		71.7			69.3
Equity in (earnings) losses of unconsolidated affiliates		32.0			8.6
Provision for uncollectible accounts		11.8			16.8
Expense portion of pension & postretirement benefit cost		9.0			10.0
Gain on sale of business in 2011, net of other non-cash charges		(0.1	)		15.9
Changes in working capital accounts:
Accounts receivable & accrued unbilled revenues		(17.5	)		(48.3	)
Inventories		(26.1	)		(19.3	)
Recoverable/refundable fuel & natural gas costs		(4.5	)		(30.2	)
Prepayments & other current assets		17.9			(23.5	)
Accounts payable, including to affiliated companies		(21.2	)		5.5
Accrued liabilities		6.4			10.2
Unconsolidated affiliate dividends		0.1			42.7
Employer contributions to pension & postretirement plans		(38.8	)		(22.0	)
Changes in noncurrent assets		0.3			(7.6	)
Changes in noncurrent liabilities		(10.0	)		(6.1	)
Net cash flows from operating activities		416.9			384.8
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from:
Long-term debt, net of issuance costs		148.9			124.2
Dividend reinvestment plan & other common stock issuances		7.9			14.0
Requirements for:
Dividends on common stock		(113.2	)		(110.8	)
Retirement of long-term debt		(349.1	)		(49.3	)
Other financing activities		(2.3	)		(0.2	)
Net change in short-term borrowings		208.8			(95.2	)
Net cash flows from financing activities		(99.0	)		(117.3	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from:
Sale of business		84.3			-
Unconsolidated affiliate distributions		0.5			0.5
Other collections		1.1			10.8
Requirements for:
Capital expenditures, excluding AFUDC equity		(321.3	)		(277.2	)
Business acquisition, net of cash acquired		(83.4	)		-
Other investments		(0.9	)		(3.1	)
Net cash flows from investing activities		(319.7	)		(269.0	)
Net change in cash & cash equivalents		(1.8	)		(1.5	)
Cash & cash equivalents at beginning of period		10.4			11.9
Cash & cash equivalents at end of period	$	8.6		$	10.4

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
HIGHLIGHTS
(Millions, except per share amounts)
(Unaudited)
	Three Months					Twelve Months
	Ended December 31					Ended December 31
	2011			2010		2011			2010
REPORTED EARNINGS:
Utility Group
Gas Utility Services	$	19.0		$	21.7	$	52.5		$	53.7
Electric Utility Services		11.9			9.5		65.0			60.9
Other Operations		(0.8	)		2.4		5.4			9.3
Total Utility Group		30.1			33.6		122.9			123.9
Nonutility Group
Infrastructure Services		3.8			0.9		14.9			3.1
Energy Services		5.1			2.2		6.7			6.4
Coal Mining		0.7			3.8		16.6			11.9
Energy Marketing
Vectren Source		17.7			2.9		18.7			3.7
ProLiance		2.4			2.0		(22.9	)		(7.9	)
Other Businesses		(9.3	)		-		(10.2	)		(7.4	)
Total Nonutility Group		20.4			11.8		23.8			9.8
Corporate and Other		(3.9	)		-		(5.1	)		-
Vectren Consolidated	$	46.6		$	45.4	$	141.6		$	133.7
EARNINGS PER SHARE:
Utility Group	$	0.37		$	0.42	$	1.50		$	1.53
Nonutility Group, excluding ProLiance		0.21			0.12		0.57			0.22
ProLiance		0.03			0.02		(0.28	)		(0.10	)
Corporate and Other		(0.05	)		-		(0.06	)		-
Reported EPS	$	0.56		$	0.56	$	1.73		$	1.65

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED GAS DISTRIBUTION
OPERATING STATISTICS
(Unaudited)
	Three Months						Twelve Months
	Ended December 31						Ended December 31
	2011			2010			2011			2010
GAS OPERATING REVENUES (Millions):
Residential	$	155.0		$	181.7		$	554.4		$	652.0
Commercial		51.9			61.4			193.7			233.5
Industrial		16.8			16.7			59.8			57.3
Other Revenue		2.6			1.5			11.2			11.3
	$	226.3		$	261.3		$	819.1		$	954.1
GAS MARGIN (Millions):
Residential	$	83.9		$	86.7		$	291.1		$	298.6
Commercial		23.4			24.4			84.1			86.1
Industrial		15.2			15.5			56.4			52.2
Other		2.8			1.7			12.1			12.5
	$	125.3		$	128.3		$	443.7		$	449.4
GAS SOLD & TRANSPORTED (MMDth):
Residential		20.1			26.1			69.2			74.0
Commercial		8.8			10.7			30.7			32.2
Industrial		26.4			25.7			97.0			90.8
		55.3			62.5			196.9			197.0
AVERAGE GAS CUSTOMERS
Residential		902,667			901,735			899,210			897,715
Commercial		83,048			82,993			82,838			82,780
Industrial		1,647			1,652			1,644			1,638
		987,362			986,380			983,692			982,133
YTD WEATHER  AS A PERCENT OF NORMAL:
Heating Degree Days (Ohio)		88	%		108	%		100	%		105	%

VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED ELECTRIC
OPERATING STATISTICS
(Unaudited)
	Three Months				Twelve Months
	Ended December 31				Ended December 31
	2011		2010		2011			2010
ELECTRIC OPERATING REVENUES (Millions):
Residential	$	42.5	$	42.6	$	212.2		$	206.4
Commercial		38.8		36.2		159.7			149.7
Industrial		51.5		47.7		212.3			199.1
Other Revenue		3.1		3.2		9.2			9.1
Total Retail		135.9		129.7		593.4			564.3
Net Wholesale Revenues		7.6		9.2		42.5			43.7
	$	143.5	$	138.9	$	635.9		$	608.0
ELECTRIC MARGIN (Millions):
Residential	$	30.7	$	29.5	$	150.7		$	144.3
Commercial		26.0		23.2		105.1			96.9
Industrial		25.0		23.2		101.6			97.1
Other		2.8		2.9		8.5			8.5
Total Retail		84.5		78.8		365.9			346.8
Net Wholesale Margin		5.5		5.4		29.6			26.2
	$	90.0	$	84.2	$	395.5		$	373.0
ELECTRICITY SOLD (GWh):
Residential		289.4		324.7		1,498.6			1,603.5
Commercial		314.8		324.0		1,328.6			1,360.5
Industrial		670.2		610.6		2,744.8			2,630.3
Other Sales - Street Lighting		6.5		6.6		22.8			22.6
Total Retail		1,280.9		1,265.9		5,594.8			5,616.9
Wholesale		117.3		121.4		586.7			587.6
		1,398.2		1,387.3		6,181.5			6,204.5
AVERAGE ELECTRIC CUSTOMERS
Residential		123,003		122,907		122,961			122,857
Commercial		18,264		18,261		18,274			18,321
Industrial		112		111		111			108
Other		33		33		33			33
		141,412		141,312		141,379			141,319
YTD WEATHER  AS A PERCENT OF NORMAL:
Cooling Degree Days (Indiana)						116	%		134	%
Heating Degree Days (Indiana)						91	%		101	%