| VECTREN CORPORATION | ||||||||
| AND SUBSIDIARY COMPANIES | ||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| (Millions, except per share amounts) | ||||||||
| (Unaudited) | ||||||||
| Three Months | ||||||||
| Ended March 31 | ||||||||
| 2008 | 2007 | |||||||
| OPERATING REVENUES: | ||||||||
| Gas utility | $ | 633.6 | $ | 584.1 | ||||
| Electric utility | 127.2 | 108.1 | ||||||
| Nonutility revenues | 141.3 | 141.8 | ||||||
| Total operating revenues | 902.1 | 834.0 | ||||||
| OPERATING EXPENSES: | ||||||||
| Cost of gas sold | 462.0 | 424.5 | ||||||
| Cost of fuel and purchased power | 46.0 | 40.6 | ||||||
| Cost of nonutility revenues | 95.3 | 96.4 | ||||||
| Other operating | 115.8 | 106.5 | ||||||
| Depreciation and amortization | 47.4 | 45.7 | ||||||
| Taxes other than income taxes | 26.8 | 24.7 | ||||||
| Total operating expenses | 793.3 | 738.4 | ||||||
| OPERATING INCOME | 108.8 | 95.6 | ||||||
| OTHER INCOME: | ||||||||
| Equity in earnings of unconsolidated affiliates | 14.0 | 22.2 | ||||||
| Other - net | 3.0 | 7.4 | ||||||
| Total other income | 17.0 | 29.6 | ||||||
| INTEREST EXPENSE | 25.3 | 25.0 | ||||||
| INCOME BEFORE INCOME TAXES | 100.5 | 100.2 | ||||||
| INCOME TAXES | 36.5 | 30.1 | ||||||
| NET INCOME | $ | 64.0 | $ | 70.1 | ||||
| AVERAGE COMMON SHARES OUTSTANDING | 76.0 | 75.8 | ||||||
| DILUTED COMMON SHARES OUTSTANDING | 76.5 | 76.5 | ||||||
| EARNINGS PER SHARE OF COMMON STOCK | ||||||||
| BASIC | $ | 0.84 | $ | 0.92 | ||||
| DILUTED | $ | 0.84 | $ | 0.92 | ||||
| VECTREN UTILITY HOLDINGS | ||||||||
| AND SUBSIDIARY COMPANIES | ||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| (Millions) | ||||||||
| (Unaudited) | ||||||||
| Three Months | ||||||||
| Ended March 31 | ||||||||
| 2008 | 2007 | |||||||
| OPERATING REVENUES: | ||||||||
| Gas utility | $ | 633.6 | $ | 584.1 | ||||
| Electric utility | 127.2 | 108.1 | ||||||
| Other | 0.6 | 0.4 | ||||||
| Total operating revenues | 761.4 | 692.6 | ||||||
| OPERATING EXPENSES: | ||||||||
| Cost of gas sold | 462.0 | 424.5 | ||||||
| Cost of fuel and purchased power | 46.0 | 40.6 | ||||||
| Other operating | 74.0 | 67.2 | ||||||
| Depreciation and amortization | 40.7 | 39.2 | ||||||
| Taxes other than income taxes | 26.2 | 24.2 | ||||||
| Total operating expenses | 648.9 | 595.7 | ||||||
| OPERATING INCOME | 112.5 | 96.9 | ||||||
| OTHER INCOME - NET | 2.0 | 2.7 | ||||||
| INTEREST EXPENSE | 20.8 | 19.4 | ||||||
| INCOME BEFORE INCOME TAXES | 93.7 | 80.2 | ||||||
| INCOME TAXES | 35.7 | 29.3 | ||||||
| NET INCOME | $ | 58.0 | $ | 50.9 | ||||
| VECTREN CORPORATION | ||||||||
| AND SUBSIDIARY COMPANIES | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (Millions - Unaudited) | ||||||||
| March 31, | December 31, | |||||||
| 2008 | 2007 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
Cash & cash equivalents | $ | 25.2 | $ | 20.6 | ||||
Accounts receivable - less reserves of $5.0 & | ||||||||
$3.7, respectively | 250.4 | 189.4 | ||||||
Accrued unbilled revenues | 128.7 | 168.2 | ||||||
Inventories | 64.1 | 160.9 | ||||||
Prepayments & other current assets | 52.7 | 160.5 | ||||||
Total current assets | 521.1 | 699.6 | ||||||
| Utility Plant | ||||||||
Original cost | 4,108.6 | 4,062.9 | ||||||
Less: accumulated depreciation & amortization | 1,546.2 | 1,523.2 | ||||||
Net utility plant | 2,562.4 | 2,539.7 | ||||||
| Investments in unconsolidated affiliates | 209.9 | 208.8 | ||||||
| Other investments | 82.7 | 77.0 | ||||||
| Nonutility property - net | 329.1 | 320.3 | ||||||
| Goodwill - net | 238.0 | 238.0 | ||||||
| Regulatory assets | 169.3 | 175.3 | ||||||
| Other assets | 37.5 | 37.7 | ||||||
TOTAL ASSETS | $ | 4,150.0 | $ | 4,296.4 | ||||
| LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
Accounts payable | $ | 114.9 | $ | 187.4 | ||||
Accounts payable to affiliated companies | 81.8 | 83.7 | ||||||
Refundable fuel & natural gas costs | 23.8 | 27.2 | ||||||
Accrued liabilities | 247.1 | 171.8 | ||||||
Short-term borrowings | 305.1 | 557.0 | ||||||
Current maturities of long-term debt | 0.3 | 0.3 | ||||||
Total current liabilities | 773.0 | 1,027.4 | ||||||
| Long-term Debt - Net of Current Maturities & | ||||||||
Debt Subject to Tender | 1,329.1 | 1,245.4 | ||||||
| Deferred Income Taxes & Other Liabilities | ||||||||
Deferred income taxes | 308.9 | 318.1 | ||||||
Regulatory liabilities | 309.4 | 307.2 | ||||||
Deferred credits & other liabilities | 164.1 | 164.2 | ||||||
Total deferred credits & other liabilities | 782.4 | 789.5 | ||||||
| Minority Interest in Subsidiary | 0.4 | 0.4 | ||||||
| Common Shareholders' Equity | ||||||||
Common stock (no par value) – issued & outstanding | ||||||||
76.4 and 76.3 shares, respectively | 532.7 | 532.7 | ||||||
Retained earnings | 726.2 | 688.5 | ||||||
Accumulated other comprehensive income | 6.2 | 12.5 | ||||||
Total common shareholders' equity | 1,265.1 | 1,233.7 | ||||||
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY | $ | 4,150.0 | $ | 4,296.4 | ||||
| VECTREN CORPORATION | ||||||||
| AND SUBSIDIARY COMPANIES | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Millions - Unaudited) | ||||||||
| For the three months ended | ||||||||
| March 31, | ||||||||
| 2008 | 2007 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 64.0 | $ | 70.1 | ||||
Adjustments to reconcile net income to cash from operating activities: | ||||||||
Depreciation & amortization | 47.4 | 45.7 | ||||||
Deferred income taxes & investment tax credits | 12.7 | 1.5 | ||||||
Equity in earnings of unconsolidated affiliates | (14.0 | ) | (22.2 | ) | ||||
Provision for uncollectible accounts | 5.3 | 5.4 | ||||||
Expense portion of pension & postretirement periodic benefit cost | 1.9 | 2.4 | ||||||
Other non-cash charges - net | 2.0 | 0.2 | ||||||
Changes in working capital accounts: | ||||||||
Accounts receivable & accrued unbilled revenue | (26.8 | ) | (11.8 | ) | ||||
Inventories | 96.8 | 84.5 | ||||||
Recoverable/refundable fuel & natural gas costs | (3.4 | ) | 5.5 | |||||
Prepayments & other current assets | 91.7 | 69.5 | ||||||
Accounts payable, including to affiliated companies | (74.4 | ) | (95.3 | ) | ||||
Accrued liabilities | 84.3 | 58.0 | ||||||
Unconsolidated affiliate dividends | 2.9 | 6.8 | ||||||
Changes in noncurrent assets | 5.9 | 4.3 | ||||||
Changes in noncurrent liabilities | (7.9 | ) | (9.4 | ) | ||||
Net cash flows from operating activities | 288.4 | 215.2 | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from: | ||||||||
Long-term debt, net of issuance costs | 171.5 | - | ||||||
Stock option exercises & other | - | 5.9 | ||||||
Requirements for: | ||||||||
Dividends on common stock | (24.7 | ) | (23.9 | ) | ||||
Retirement of long-term debt | (103.2 | ) | - | |||||
Net change in short-term borrowings | (251.9 | ) | (192.3 | ) | ||||
Net cash flows from financing activities | (208.3 | ) | (210.3 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Proceeds from: | ||||||||
Unconsolidated affiliate distributions | - | 10.7 | ||||||
Other collections | 1.9 | 35.8 | ||||||
Requirements for: | ||||||||
Capital expenditures, excluding AFUDC equity | (69.6 | ) | (67.2 | ) | ||||
Unconsolidated affiliate investments | (0.1 | ) | (0.1 | ) | ||||
Other investments | (7.7 | ) | - | |||||
Net cash flows from investing activities | (75.5 | ) | (20.8 | ) | ||||
| Net change in cash & cash equivalents | 4.6 | (15.9 | ) | |||||
| Cash & cash equivalents at beginning of period | 20.6 | 32.8 | ||||||
| Cash & cash equivalents at end of period | $ | 25.2 | $ | 16.9 | ||||
| VECTREN CORPORATION | ||||||||
| AND SUBSIDIARY COMPANIES | ||||||||
| HIGHLIGHTS | ||||||||
| (millions, except per share amounts) | ||||||||
| (Unaudited) | ||||||||
| Three Months | ||||||||
| Ended March 31 | ||||||||
| 2008 | 2007 | |||||||
| REPORTED EARNINGS: | ||||||||
| Utility Group | $ | 58.0 | $ | 50.9 | ||||
| Nonutility Group | ||||||||
| Energy Marketing and Services | 9.0 | 15.7 | ||||||
| Coal Mining | (0.9 | ) | 1.6 | |||||
| Energy Infrastructure Services | (3.2 | ) | (2.0 | ) | ||||
| Other Businesses | 1.4 | 0.3 | ||||||
| Total Nonutility Operations | 6.3 | 15.6 | ||||||
| Corporate and Other | (0.3 | ) | 0.2 | |||||
| Sub-Total Operations | 64.0 | 66.7 | ||||||
| Synfuels-related | - | 3.4 | ||||||
| Vectren Consolidated | $ | 64.0 | $ | 70.1 | ||||
| VECTREN CORPORATION | ||||||||
| AND SUBSIDIARY COMPANIES | ||||||||
| SELECTED GAS DISTRIBUTION | ||||||||
| OPERATING STATISTICS | ||||||||
| (Unaudited) | ||||||||
| Three Months | ||||||||
| Ended March 31 | ||||||||
| 2008 | 2007 | |||||||
| GAS OPERATING REVENUES (Millions): | ||||||||
| Residential | $ | 431.8 | $ | 399.8 | ||||
| Commercial | 175.2 | 159.6 | ||||||
| Industrial | 22.8 | 21.3 | ||||||
| Miscellaneous Revenue | 3.8 | 3.4 | ||||||
| $ | 633.6 | $ | 584.1 | |||||
| GAS MARGIN (Millions): | ||||||||
| Residential | $ | 113.2 | $ | 105.1 | ||||
| Commercial | 37.7 | 35.2 | ||||||
| Industrial | 16.7 | 15.7 | ||||||
| Miscellaneous | 4.0 | 3.6 | ||||||
| $ | 171.6 | $ | 159.6 | |||||
| GAS SOLD & TRANSPORTED (MMDth): | ||||||||
| Residential | 40.2 | 38.4 | ||||||
| Commercial | 17.6 | 16.4 | ||||||
| Industrial | 28.7 | 26.4 | ||||||
| 86.5 | 81.2 | |||||||
| AVERAGE GAS CUSTOMERS: | ||||||||
| Residential | 913,672 | 911,855 | ||||||
| Commercial | 85,119 | 84,844 | ||||||
| Industrial | 1,609 | 1,613 | ||||||
| 1,000,400 | 998,312 | |||||||
| YTD WEATHER AS A PERCENT OF NORMAL: | ||||||||
| Heating Degree Days (Ohio) | 104 | % | 98 | % | ||||
| VECTREN CORPORATION | ||||||||
| AND SUBSIDIARY COMPANIES | ||||||||
| SELECTED ELECTRIC | ||||||||
| OPERATING STATISTICS | ||||||||
| (Unaudited) | ||||||||
| Three Months | ||||||||
| Ended March 31 | ||||||||
| 2008 | 2007 | |||||||
| ELECTRIC OPERATING REVENUES (Millions): | ||||||||
| Residential | $ | 40.7 | $ | 33.7 | ||||
| Commercial | 28.1 | 23.2 | ||||||
| Industrial | 35.0 | 32.1 | ||||||
| Municipals | 0.7 | 5.2 | ||||||
| Miscellaneous Revenue | 4.6 | 3.0 | ||||||
| Total Retail | 109.1 | 97.2 | ||||||
| Net Wholesale Revenues | 18.1 | 10.9 | ||||||
| $ | 127.2 | $ | 108.1 | |||||
| ELECTRIC MARGIN (Millions): | ||||||||
| Residential | $ | 30.0 | $ | 24.1 | ||||
| Commercial | 19.9 | 15.7 | ||||||
| Industrial | 18.7 | 16.5 | ||||||
| Municipals | 0.0 | 2.2 | ||||||
| Miscellaneous | 4.5 | 2.9 | ||||||
| Total Retail | 73.1 | 61.4 | ||||||
| Net Wholesale Margin | 8.1 | 6.1 | ||||||
| $ | 81.2 | $ | 67.5 | |||||
| ELECTRICITY SOLD (GWh): | ||||||||
| Residential | 405.4 | 390.6 | ||||||
| Commercial | 309.8 | 307.3 | ||||||
| Industrial | 600.7 | 627.0 | ||||||
| Municipals | 31.3 | 130.0 | ||||||
| Miscellaneous Sales | 5.3 | 5.1 | ||||||
| Total Retail | 1,352.5 | 1,460.0 | ||||||
| Wholesale | 463.4 | 260.5 | ||||||
| 1,815.9 | 1,720.5 | |||||||
| AVERAGE ELECTRIC CUSTOMERS: | ||||||||
| Residential | 122,755 | 122,061 | ||||||
| Commercial | 18,467 | 18,465 | ||||||
| Industrial | 103 | 109 | ||||||
| All Others | 35 | 36 | ||||||
| 141,360 | 140,671 | |||||||
| YTD WEATHER AS A PERCENT OF NORMAL: | ||||||||
| Cooling Degree Days (Indiana) | N/A | N/A | ||||||
| Heating Degree Days (Indiana) | 100 | % | 90 | % | ||||
