| VECTREN CORPORATION | ||||||||||||||||
| AND SUBSIDIARY COMPANIES | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| (Millions, except per share amounts) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| OPERATING REVENUES: | ||||||||||||||||
| Gas utility | $ | 229.6 | $ | 226.3 | $ | 738.1 | $ | 819.1 | ||||||||
| Electric utility | 138.3 | 143.5 | 594.9 | 635.9 | ||||||||||||
| Nonutility | 276.2 | 257.6 | 899.8 | 870.2 | ||||||||||||
| Total operating revenues | 644.1 | 627.4 | 2,232.8 | 2,325.2 | ||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Cost of gas sold | 104.3 | 101.0 | 301.3 | 375.4 | ||||||||||||
| Cost of fuel and purchased power | 47.4 | 53.5 | 192.0 | 240.4 | ||||||||||||
| Cost of nonutility revenues | 97.0 | 118.7 | 295.1 | 385.3 | ||||||||||||
| Other operating | 223.8 | 166.7 | 781.0 | 652.2 | ||||||||||||
| Depreciation and amortization | 65.7 | 62.3 | 254.6 | 244.3 | ||||||||||||
| Taxes other than income taxes | 15.1 | 14.2 | 56.3 | 57.6 | ||||||||||||
| Total operating expenses | 553.3 | 516.4 | 1,880.3 | 1,955.2 | ||||||||||||
| OPERATING INCOME | 90.8 | 111.0 | 352.5 | 370.0 | ||||||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||
| Equity in (losses) of unconsolidated affiliates | (5.5 | ) | 2.6 | (23.3 | ) | (32.0 | ) | |||||||||
| Other income (expense) - net | 0.5 | (9.4 | ) | 8.3 | (3.5 | ) | ||||||||||
| Total other income (expense) | (5.0 | ) | (6.8 | ) | (15.0 | ) | (35.5 | ) | ||||||||
| INTEREST EXPENSE | 24.2 | 25.8 | 96.0 | 106.5 | ||||||||||||
| INCOME BEFORE INCOME TAXES | 61.6 | 78.4 | 241.5 | 228.0 | ||||||||||||
| INCOME TAXES | 18.8 | 31.8 | 82.5 | 86.4 | ||||||||||||
| NET INCOME | $ | 42.8 | $ | 46.6 | $ | 159.0 | $ | 141.6 | ||||||||
| AVERAGE COMMON SHARES OUTSTANDING | 82.1 | 81.9 | 82.0 | 81.8 | ||||||||||||
| DILUTED COMMON SHARES OUTSTANDING | 82.2 | 81.9 | 82.1 | 81.8 | ||||||||||||
| EARNINGS PER SHARE OF COMMON STOCK | ||||||||||||||||
| BASIC | $ | 0.52 | $ | 0.56 | $ | 1.94 | $ | 1.73 | ||||||||
| DILUTED | $ | 0.52 | $ | 0.56 | $ | 1.94 | $ | 1.73 | ||||||||
| VECTREN UTILITY HOLDINGS | ||||||||||||||||
| AND SUBSIDIARY COMPANIES | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| (Millions - Unaudited) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| OPERATING REVENUES: | ||||||||||||||||
| Gas utility | $ | 229.6 | $ | 226.3 | $ | 738.1 | $ | 819.1 | ||||||||
| Electric utility | 138.3 | 143.5 | 594.9 | 635.9 | ||||||||||||
| Other | 0.1 | 0.5 | 0.6 | 2.0 | ||||||||||||
| Total operating revenues | 368.0 | 370.3 | 1,333.6 | 1,457.0 | ||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Cost of gas sold | 104.3 | 101.0 | 301.3 | 375.4 | ||||||||||||
| Cost of fuel and purchased power | 47.4 | 53.5 | 192.0 | 240.4 | ||||||||||||
| Other operating | 80.6 | 81.3 | 310.1 | 313.1 | ||||||||||||
| Depreciation and amortization | 47.3 | 48.4 | 190.0 | 192.3 | ||||||||||||
| Taxes other than income taxes | 14.4 | 13.3 | 53.4 | 54.0 | ||||||||||||
| Total operating expenses | 294.0 | 297.5 | 1,046.8 | 1,175.2 | ||||||||||||
| OPERATING INCOME | 74.0 | 72.8 | 286.8 | 281.8 | ||||||||||||
| OTHER INCOME - NET | 2.8 | 0.3 | 8.0 | 4.3 | ||||||||||||
| INTEREST EXPENSE | 18.0 | 19.1 | 71.5 | 80.3 | ||||||||||||
| INCOME BEFORE INCOME TAXES | 58.8 | 54.0 | 223.3 | 205.8 | ||||||||||||
| INCOME TAXES | 23.3 | 23.9 | 85.3 | 82.9 | ||||||||||||
| NET INCOME | $ | 35.5 | $ | 30.1 | $ | 138.0 | $ | 122.9 | ||||||||
| VECTREN CORPORATION | ||||||||
| AND SUBSIDIARY COMPANIES | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (Millions - Unaudited) | ||||||||
| December 31, | December 31, | |||||||
| 2012 | 2011 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash & cash equivalents | $ | 19.5 | $ | 8.6 | ||||
| Accounts receivable - less reserves of $6.8 & | ||||||||
| $6.7, respectively | 216.7 | 221.3 | ||||||
| Accrued unbilled revenues | 185.0 | 121.5 | ||||||
| Inventories | 158.6 | 161.9 | ||||||
| Recoverable fuel & natural gas costs | 25.3 | 12.4 | ||||||
| Prepayments & other current assets | 73.3 | 84.3 | ||||||
| Total current assets | 678.4 | 610.0 | ||||||
| Utility Plant | ||||||||
| Original cost | 5,176.8 | 4,979.9 | ||||||
| Less: accumulated depreciation & amortization | 2,057.2 | 1,947.3 | ||||||
| Net utility plant | 3,119.6 | 3,032.6 | ||||||
| Investments in unconsolidated affiliates | 78.1 | 92.9 | ||||||
| Other utility & corporate investments | 34.6 | 34.4 | ||||||
| Other nonutility investments | 24.9 | 29.6 | ||||||
| Nonutility plant - net | 598.0 | 550.8 | ||||||
| Goodwill - net | 262.3 | 262.3 | ||||||
| Regulatory assets | 252.7 | 226.0 | ||||||
| Other assets | 40.5 | 40.3 | ||||||
| TOTAL ASSETS | $ | 5,089.1 | $ | 4,878.9 | ||||
| LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 180.6 | $ | 185.8 | ||||
| Accounts payable to affiliated companies | 29.7 | 36.8 | ||||||
| Accrued liabilities | 198.8 | 181.1 | ||||||
| Short-term borrowings | 278.8 | 227.1 | ||||||
| Current maturities of long-term debt | 106.4 | 62.7 | ||||||
| Total current liabilities | 794.3 | 693.5 | ||||||
| Long-term Debt - Net of Current Maturities | 1,553.4 | 1,559.6 | ||||||
| Deferred Income Taxes & Other Liabilities | ||||||||
| Deferred income taxes | 637.2 | 575.7 | ||||||
| Regulatory liabilities | 364.2 | 345.2 | ||||||
| Deferred credits & other liabilities | 213.9 | 239.4 | ||||||
| Total deferred credits & other liabilities | 1,215.3 | 1,160.3 | ||||||
| Common Shareholders' Equity | ||||||||
| Common stock (no par value) – issued & outstanding | ||||||||
| 82.2 and 81.9 shares, respectively | 700.5 | 692.6 | ||||||
| Retained earnings | 829.9 | 786.2 | ||||||
| Accumulated other comprehensive income (loss) | (4.3 | ) | (13.3 | ) | ||||
| Total common shareholders' equity | 1,526.1 | 1,465.5 | ||||||
| TOTAL LIABILITIES & SHAREHOLDERS' EQUITY | $ | 5,089.1 | $ | 4,878.9 | ||||
| VECTREN CORPORATION | ||||||||
| AND SUBSIDIARY COMPANIES | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Millions - Unaudited) | ||||||||
| Twelve Months Ended | ||||||||
| December 31, | ||||||||
| 2012 | 2011 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 159.0 | $ | 141.6 | ||||
| Adjustments to reconcile net income to cash from operating activities: | ||||||||
| Depreciation & amortization | 254.6 | 244.3 | ||||||
| Deferred income taxes & investment tax credits | 84.3 | 71.7 | ||||||
| Equity in losses of unconsolidated affiliates | 23.3 | 32.0 | ||||||
| Provision for uncollectible accounts | 8.2 | 11.8 | ||||||
| Expense portion of pension & postretirement benefit cost | 8.7 | 9.0 | ||||||
| (Gain) on sale of business in 2011, net of other non-cash charges | 9.8 | (0.1 | ) | |||||
| Changes in working capital accounts | ||||||||
| Accounts receivable & accrued unbilled revenues | (67.1 | ) | (17.5 | ) | ||||
| Inventories | 3.3 | (26.1 | ) | |||||
| Recoverable/refundable fuel & natural gas costs | (12.9 | ) | (4.5 | ) | ||||
| Prepayments & other current assets | (5.1 | ) | 17.9 | |||||
| Accounts payable, including to affiliated companies | (14.8 | ) | (21.2 | ) | ||||
| Accrued liabilities | 3.4 | 6.4 | ||||||
| Unconsolidated affiliate dividends | 0.1 | 0.1 | ||||||
| Employer contributions to pension & postretirement plans | (20.5 | ) | (38.8 | ) | ||||
| Changes in noncurrent assets | (35.3 | ) | 0.3 | |||||
| Changes in noncurrent liabilities | (11.6 | ) | (10.0 | ) | ||||
| Net cash flows from operating activities | 387.4 | 416.9 | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from: | ||||||||
| Long-term debt, net of issuance costs | 199.5 | 148.9 | ||||||
| Dividend reinvestment plan & other common stock issuances | 7.2 | 7.9 | ||||||
| Requirements for: | ||||||||
| Dividends on common stock | (115.3 | ) | (113.2 | ) | ||||
| Retirement of long-term debt | (62.7 | ) | (349.1 | ) | ||||
| Other financing activities | — | (2.3 | ) | |||||
| Net change in short-term borrowings | (48.3 | ) | 208.8 | |||||
| Net cash flows from financing activities | (19.6 | ) | (99.0 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Proceeds from: | ||||||||
| Sale of Business | — | 84.3 | ||||||
| Unconsolidated affiliate distributions | 0.2 | 0.5 | ||||||
| Other collections | 9.9 | 1.1 | ||||||
| Requirements for: | ||||||||
| Capital expenditures, excluding AFUDC equity | (365.8 | ) | (321.3 | ) | ||||
| Business acquisition, net of cash acquired | — | (83.4 | ) | |||||
| Other investments | (1.2 | ) | (0.9 | ) | ||||
| Net cash flows from investing activities | (356.9 | ) | (319.7 | ) | ||||
| Net change in cash & cash equivalents | 10.9 | (1.8 | ) | |||||
| Cash & cash equivalents at beginning of period | 8.6 | 10.4 | ||||||
| Cash & cash equivalents at end of period | $ | 19.5 | $ | 8.6 | ||||
| VECTREN CORPORATION | |||||||||||||||||
| AND SUBSIDIARY COMPANIES | |||||||||||||||||
| HIGHLIGHTS | |||||||||||||||||
| (millions, except per share amounts) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||||||
| REPORTED EARNINGS: | |||||||||||||||||
| Utility Group | |||||||||||||||||
| Gas Utility Services | $ | 23.9 | $ | 19.0 | $ | 60.0 | $ | 52.5 | |||||||||
| Electric Utility Services | 8.6 | 11.9 | 68.0 | 65.0 | |||||||||||||
| Other Operations | 3.0 | (0.8 | ) | 10.0 | 5.4 | ||||||||||||
| Total Utility Group | $ | 35.5 | $ | 30.1 | $ | 138.0 | $ | 122.9 | |||||||||
| Nonutility Group | |||||||||||||||||
| Infrastructure Services | 13.2 | 3.8 | 40.5 | 14.9 | |||||||||||||
| Energy Services | 4.8 | 5.1 | 5.7 | 6.7 | |||||||||||||
| Coal Mining | (3.5 | ) | 0.7 | (3.5 | ) | 16.6 | |||||||||||
| Energy Marketing | |||||||||||||||||
| Vectren Source | — | 17.7 | — | 18.7 | (1) | ||||||||||||
| ProLiance | (4.1 | ) | 2.4 | (17.6 | ) | (22.9 | ) | ||||||||||
| Other Businesses | (2.8 | ) | (9.3 | ) | (3.4 | ) | (10.2 | ) | |||||||||
| Total Nonutility Group | 7.6 | 20.4 | 21.7 | 23.8 | |||||||||||||
| Corporate and Other | (0.3 | ) | (3.9 | ) | (0.7 | ) | (5.1 | ) | |||||||||
| Vectren Consolidated | $ | 42.8 | $ | 46.6 | $ | 159.0 | $ | 141.6 | |||||||||
| EARNINGS PER SHARE | |||||||||||||||||
| Utility Group | $ | 0.43 | $ | 0.37 | $ | 1.68 | $ | 1.50 | |||||||||
| Nonutility Group, excluding ProLiance | 0.14 | 0.21 | 0.47 | 0.57 | |||||||||||||
| ProLiance | (0.05 | ) | 0.03 | (0.21 | ) | (0.28 | ) | ||||||||||
| Corporate and Other | — | (0.05 | ) | — | (0.06 | ) | |||||||||||
| Reported EPS | $ | 0.52 | $ | 0.56 | $ | 1.94 | $ | 1.73 | |||||||||
| (1) Vectren Source was sold 12/31/11. Full year 2011 operating earnings were $2.8 million. | |||||||||||||||||
| VECTREN CORPORATION | ||||||||||||||||
| AND SUBSIDIARY COMPANIES | ||||||||||||||||
| SELECTED GAS DISTRIBUTION | ||||||||||||||||
| OPERATING STATISTICS | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| GAS OPERATING REVENUES (Millions): | ||||||||||||||||
| Residential | $ | 156.8 | $ | 154.0 | $ | 498.4 | $ | 554.4 | ||||||||
| Commercial | 53.1 | 52.5 | 171.0 | 193.7 | ||||||||||||
| Industrial | 17.1 | 16.9 | 59.4 | 59.8 | ||||||||||||
| Other Revenue | 2.6 | 2.9 | 9.3 | 11.2 | ||||||||||||
| $ | 229.6 | $ | 226.3 | $ | 738.1 | $ | 819.1 | |||||||||
| GAS MARGIN (Millions): | ||||||||||||||||
| Residential | $ | 82.5 | $ | 82.8 | $ | 287.9 | $ | 291.1 | ||||||||
| Commercial | 23.9 | 24.0 | 81.6 | 84.1 | ||||||||||||
| Industrial | 15.9 | 15.4 | 56.7 | 56.4 | ||||||||||||
| Other | 3.0 | 3.1 | 10.6 | 12.1 | ||||||||||||
| $ | 125.3 | $ | 125.3 | $ | 436.8 | $ | 443.7 | |||||||||
| GAS SOLD & TRANSPORTED (MMDth): | ||||||||||||||||
| Residential | 23.2 | 20.1 | 62.5 | 69.2 | ||||||||||||
| Commercial | 9.7 | 8.8 | 27.7 | 30.7 | ||||||||||||
| Industrial | 28.6 | 26.4 | 105.8 | 97.0 | ||||||||||||
| 61.5 | 55.3 | 196.0 | 196.9 | |||||||||||||
| AVERAGE GAS CUSTOMERS | ||||||||||||||||
| Residential | 906,828 | 902,667 | 901,402 | 899,210 | ||||||||||||
| Commercial | 83,766 | 83,048 | 83,028 | 82,838 | ||||||||||||
| Industrial | 1,671 | 1,647 | 1,664 | 1,644 | ||||||||||||
| 992,265 | 987,362 | 986,094 | 983,692 | |||||||||||||
| YTD WEATHER AS A PERCENT OF NORMAL: | ||||||||||||||||
| Heating Degree Days (Ohio) | 96 | % | 88 | % | 88 | % | 100 | % | ||||||||
| VECTREN CORPORATION | ||||||||||||||||
| AND SUBSIDIARY COMPANIES | ||||||||||||||||
| SELECTED ELECTRIC | ||||||||||||||||
| OPERATING STATISTICS | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| ELECTRIC OPERATING REVENUES (Millions): | ||||||||||||||||
| Residential | $ | 42.8 | $ | 42.5 | $ | 203.1 | $ | 212.2 | ||||||||
| Commercial | 36.4 | 38.8 | 148.4 | 159.7 | ||||||||||||
| Industrial | 44.8 | 51.5 | 192.9 | 212.3 | ||||||||||||
| Other Revenue | 3.5 | 3.1 | 9.5 | 9.2 | ||||||||||||
| Total Retail | 127.5 | 135.9 | 553.9 | 593.4 | ||||||||||||
| Net Wholesale Revenues | 10.8 | 7.6 | 41.0 | 42.5 | ||||||||||||
| $ | 138.3 | $ | 143.5 | $ | 594.9 | $ | 635.9 | |||||||||
| ELECTRIC MARGIN (Millions): | ||||||||||||||||
| Residential | $ | 32.1 | $ | 30.7 | $ | 154.3 | $ | 150.7 | ||||||||
| Commercial | 25.1 | 26.0 | 104.2 | 105.1 | ||||||||||||
| Industrial | 23.8 | 25.0 | 103.4 | 101.6 | ||||||||||||
| Other | 3.3 | 2.8 | 8.9 | 8.5 | ||||||||||||
| Total Retail | 84.3 | 84.5 | 370.8 | 365.9 | ||||||||||||
| Net Wholesale Margin | 6.6 | 5.5 | 32.1 | 29.6 | ||||||||||||
| $ | 90.9 | $ | 90.0 | $ | 402.9 | $ | 395.5 | |||||||||
| ELECTRICITY SOLD (GWh): | ||||||||||||||||
| Residential | 288.7 | 289.4 | 1,434.4 | 1,498.6 | ||||||||||||
| Commercial | 304.8 | 314.8 | 1,297.3 | 1,328.6 | ||||||||||||
| Industrial | 582.9 | 670.2 | 2,710.5 | 2,744.8 | ||||||||||||
| Other Sales - Street Lighting | 6.6 | 6.5 | 22.6 | 22.8 | ||||||||||||
| Total Retail | 1,183.0 | 1,280.9 | 5,464.8 | 5,594.8 | ||||||||||||
| Wholesale | 152.3 | 117.3 | 336.7 | 586.7 | ||||||||||||
| 1,335.3 | 1,398.2 | 5,801.5 | 6,181.5 | |||||||||||||
| AVERAGE ELECTRIC CUSTOMERS | ||||||||||||||||
| Residential | 123,434 | 123,003 | 123,303 | 122,961 | ||||||||||||
| Commercial | 18,344 | 18,264 | 18,297 | 18,274 | ||||||||||||
| Industrial | 115 | 112 | 115 | 111 | ||||||||||||
| Other | 33 | 33 | 33 | 33 | ||||||||||||
| 141,926 | 141,412 | 141,748 | 141,379 | |||||||||||||
| YTD WEATHER AS A PERCENT OF NORMAL: | ||||||||||||||||
| Cooling Degree Days (Indiana) | 130 | % | 116 | % | ||||||||||||
| Heating Degree Days (Indiana) | 79 | % | 91 | % | ||||||||||||
