EX 99-1
News
Release
Vectren Corporation
P.O. Box 209
Evansville, IN 47702-0209
FOR IMMEDIATE RELEASE
July 28, 2004
Vectren Corporation
Reports Second Quarter 2004 Results
Evansville, Indiana - Vectren Corporation (NYSE:VVC) today reported net income
for the three months ended June 30, 2004, of $3.3 million, or $0.04 per share,
compared to net income of $4.1 million, or $0.06 per share, for the three months
ended June 30, 2003. For the six months ended June 30, 2004, reported earnings
were $58.1 million, or $0.77 per share, compared to $59.8 million, or $0.88 per
share, for the same period in 2003. Average common shares outstanding for the
quarter and six months were nearly 12% higher, compared to the same periods last
year, primarily due to the Company's equity offering in August 2003.
Specific Highlights for the Quarter
o Utility Group earnings were $2.8 million for the quarter, compared to $1.4
million in the prior year. Electric margins increased 15% due to the
recovery of NOx related expenditures and increased demand in native load
and large electric customer margins. This was partially offset by lower
earnings from wholesale power marketing operations of $3.4 million after
tax, compared to the same quarter last year. The Company estimates that
weather favorably impacted second quarter earnings by approximately $0.8
million after tax, compared to last year.
o Nonregulated Group earnings were $0.7 million for the quarter, compared to
$3.4 million in the prior period. The write-down of the Company's share of
an investment held by Haddington Energy Partners (Nations Energy Holdings),
totaling $5.9 million, or $3.5 million after tax, is the primary
contributor to the decline in Nonregulated earnings.
Earnings Guidance
Fiscal Year 2004
Based on the current expected timing for the receipt of rate relief for the
Vectren North and Vectren Ohio gas rate cases and the recent write-down of the
investment in Nations Energy, the Company is revising earnings guidance for
fiscal year 2004 to $1.43 to $1.58 per share. Prior guidance was $1.60 to $1.75
per share. The $0.17 reduction in the range of earnings per share guidance is
attributable to the following:
o Rate relief deferred until 2005 $0.07
o Loss on Broadband businesses $0.08
o YTD heating weather 8% warmer than normal ($0.04)
partially offset by expense control $0.02
Fiscal Year 2005
The Company believes the street consensus estimate of $1.78 for fiscal year 2005
is very achievable. The utility group is expected to benefit from gas rate
relief in cases filed in Indiana and Ohio, normal weather, incremental recovery
of NOx environmental compliance expenditures and continued growth in the utility
operations. The nonregulated group is expected to benefit from growth in its
primary business activities and from narrowing the focus within the group,
including the lack of nonrecurring charges related to the broadband businesses,
of $4.5 million after tax, recognized in the first quarter of 2004 and the
further second quarter charges of $1.5 million after tax, related to ceasing
operations at its broadband consulting business. Although a loss related to
Nations Energy was recognized in the second quarter of 2004, Haddington has
provided $2.0 million after tax earnings for the six months ended June 30, 2004,
which is in line with the Company's original 2004 expectations.
"We believe that we have made significant progress this year in executing our
plans to improve returns in our utility operations and focus our nonregulated
business on activities that can produce attractive growth," stated Niel C.
Ellerbrook, Chairman, President and CEO. "We were able to reach an agreement in
our $5.7 million Vectren South gas rate case, which allowed us to implement new
rates on July 1 of this year. On March 19, we filed our Petition requesting $47
million in rate relief for our Vectren North territory with the Indiana Utility
Regulatory Commission and presented our case at hearings during the week of July
19. On April 16, we issued a pre-filing notice requesting approximately $25
million in rate relief for our Ohio operations with the Public Utilities
Commission of Ohio. While we would like to reach an earlier negotiated
resolution in both cases and will work toward that end, we have decided to
revise our 2004 guidance assuming both rate cases are fully litigated and
completed late in the first quarter of 2005. On the nonregulated side, we
continue to critically evaluate our activities and take actions to reduce or
eliminate our involvement in businesses that do not fit our objectives. We are
pleased that our primary nonregulated businesses continue to meet expectations,
and we believe they provide a stable platform for future growth," added
Ellerbrook.
Discussion of Utility Group Results
Utility Group earnings for the second quarter of 2004 were $2.8 million,
compared to $1.4 million for the same quarter last year. The $1.4 million
increase was primarily due to the return on additional NOx related environmental
expenditures. Results from wholesale power activities were down for the quarter
but were offset by increased electric customer usage. Weather for the quarter
compared to last year had a slight favorable impact.
Utility Group earnings were $47.4 million for the six months ended June 30,
2004, compared to $48.7 million in the prior year. The $1.3 million decrease was
primarily due to mild heating weather and lower margins from wholesale power
activities. This decrease was partially offset by the return on additional NOx
related expenditures and increased electric customer usage.
Gas utility margins were $57.1 million and $196.6 million for the three and six
months ended June 30, 2004. This represents a decrease compared to prior periods
of $3.7 million and $8.6 million, respectively. Heating weather for the quarter
was 27% warmer than normal and 21% warmer than last year. Weather for the six
months was 8% warmer than normal and 12% warmer than last year. The estimated
decline in margin due to weather was $2.6 million and $10.3 million for the
three and six month periods, compared to the prior year. Gas sold and
transported volumes were 4% less for the second quarter 2004, compared to the
prior year, and 6% less than the six months ended June 30, 2004, compared to the
prior year. The decreased throughput was primarily attributable to weather and
was partially offset by customer growth for both periods and a 3% increase in
large volume contract throughput for the second quarter 2004, compared to 2003.
Electric retail and firm wholesale utility margins were $60.2 million and $114.7
million for the three and six months ended June 30, 2004. This represents an
increase over the same period last year of $13.4 million and $17.7 million,
respectively. Margins increased $4.1 million quarter over quarter and $7.3
million for the six month periods due to an increase in retail electric rates
related to the recovery of NOx related expenditures. Excluding the effects of
NOx recovery, margins from industrial customers increased $1.8 million for the
quarter and $2.8 million for the year to date over 2003, which reflects some
economic recovery. Margin from small customers (excluding the effects of NOx)
increased over $8 million for both the quarter and year to date due to weather
and increased usage. It is estimated that weather, which was 111% warmer for the
quarter and 114% warmer year to date (20% warmer than normal), contributed $4.0
million and $3.3 million, respectively, to the increases.
Electric wholesale margins primarily result from asset optimization activities
derived from generation capacity in excess of that needed to serve native load
and firm wholesale customers. Net wholesale margins declined $5.7 million and
$6.8 million for the three and six-month periods, compared to last year.
Increases in demand by native load customers and scheduled outages of owned
generation related to the installation of environmental compliance equipment
reduced the availability of excess power, lowering wholesale margins.
Other operating expenses and depreciation expense for the three and six months
ended June 30, 2004 collectively increased $1.9 million and $6.3 million,
respectively, compared to 2003. For the quarter, additional NOx related
operating expenses were $2.2 million (other operating expenses of $1.6 million
and depreciation of $0.6 million). For the six months, additional NOx related
operating expenses were $4.1 million (other operating expenses of $2.2 million
and depreciation of $1.9 million). The remaining increase in other operating
expenses is primarily due to higher labor and benefit costs. The remaining
increase in depreciation expense is primarily due to normal additions to utility
plant.
For the three and six months ended June 30, 2004, total other income (expense)
increased $1.1 million and $3.3 million, respectively, compared to 2003. The
increase was primarily attributable to 2003 charges related to the Company's
investments in BABB, which totaled $1.9 million for the quarter and $3.9 million
for the six-month period.
For the three and six months ended June 30, 2004, interest expense increased
$0.6 million and $1.1 million, respectively, compared to 2003. The increase
reflects the July 2003 issuance of fixed rate long-term debt that replaced lower
cost short-term variable rate debt.
Discussion of Vectren Enterprise Nonregulated Results
(All amounts following in this section are after tax)
Nonregulated earnings for the second quarter 2004 were $0.7 million, compared to
$3.4 million for the same quarter last year. The $2.7 million decrease was
principally due to the Company's $3.5 million after-tax write-off of its
investment in Nations Energy Holdings.
Nonregulated earnings for the six months ended June 30, 2004, were $11.3
million, compared to $11.9 million for the same quarter last year. The six
months earnings reflect the $6.0 million after-tax charges related to the
write-down of the Company's broadband businesses, which was partially offset by
net gains from the Company's investment in Haddington Energy Partners.
Energy Marketing and Services generated net income of $1.0 million for the three
months ended June 30, 2004, and about equal to 2003. Net income generated by
Energy Marketing and Services for the six months ended June 30, 2004 was $8.0
million, compared to $9.2 million in 2003. Gas marketing operations, performed
through ProLiance Energy, LLC, contributed quarterly earnings of $1.7 million in
2004, compared to $1.6 million in 2003; and year-to-date earnings in 2004 were
$8.6 million, compared to $10.1 million in 2003. The six-month decrease results
principally from unprecedented volatility in gas prices in March 2003. Vectren
Source contributed earnings increases for the quarter and year-to-date periods
of $0.7 million and $1.3 million, respectively. The increases are principally
due to increased customers and margins per unit of throughput. Source continues
to position itself for rapid growth. In June, it was certified by the Georgia
Public Service Commission and has begun initial marketing efforts in the Atlanta
Gas Light service territory. Earnings from Energy Systems Group decreased for
the year to date by $0.8 million due to the timing of performance contract
projects year over year; however, current backlog stands at a record of $41
million. ESG recently acquired Progress Energy Solutions, expanding its energy
solutions and performance contracting operations throughout the Southeast and
Mid-Atlantic United States.
Coal Mining net income for the three months ended June 30, 2004, was $3.8
million, compared to $4.6 million in 2003. Coal Mining net income for the six
months ended June 30, 2004, was $7.4 million, compared to $6.9 million in 2003.
Mining operations improved by $0.8 million for the six months, compared to 2003
results. The increase was primarily due to improved pricing and better mining
conditions. Synfuel-related results for the quarter, which include earnings from
Pace Carbon and synfuel processing fees, contributed $3.2 million in earnings in
2004, compared to $4.1 million in 2003. Synfuel-related results for the six
months contributed $6.1 million in earnings in 2004, compared to $6.4 million in
2003. During the second quarter of 2004, Pace Carbon produced less synthetic
fuel, compared to 2003, due to feed stock problems at one of the four plants.
Utility Infrastructure Services provides underground construction and repair to
gas, wastewater, water and electric companies primarily through its investment
in Miller Pipeline. Construction and repair activity improved in the second
quarter due to the seasonal change in weather and continued increases in utility
work. Infrastructure's income for the quarter was $0.5 million, an improvement
of $0.7 million from 2003. Infrastructure was about flat for the six months
ended June 30, 2004, an improvement of $1.1 million over 2003.
During the first quarter of 2004, the Company continued to evaluate strategic
alternatives for its broadband investments and concluded that it is unlikely
that it would be making additional investments in its franchises in the
Indianapolis and Dayton markets. As a result, the Company recorded impairment
charges for its investment in Utilicom related activities, totaling $3.6 million
after tax. Consistent with long-term strategic objectives, the Company ceased
operations of Vectren Communications Services, a municipal broadband consulting
business, during the second quarter of 2004. During the first quarter of 2004,
the Company wrote down its investment in inventory at VCS by $0.9 million after
tax and recorded additional cessation charges and other costs of $1.5 million
after tax in the second quarter. Broadband results for the six months ended June
30, 2004, were a $3.3 million loss, compared to a $1.2 million loss in 2003. The
second quarter of 2003 includes a $1.2 million loss on the sale of its
investment in First Mile Technologies. Vectren is an investor in SIGECOM
Holdings, Inc., located in Evansville, Indiana, and in convertible debt at its
parent, Utilicom Networks. SIGECOM provides broadband service to over 28,000
customers, averaging nearly 3 revenue generating units per customer and
continues to increase its positive EBITDA. Vectren Communications Services
results are reported in Other Businesses.
The Company's Other Businesses Group reported a net loss of $4.7 million for the
three months ended June 30, 2004, compared to losses of $0.9 million in 2003.
For the six months ended June 30, 2004, the Other Businesses Group reported
losses of $0.7 million, compared to losses of $1.8 million in 2003. The six
month results reflect the net effect of Haddington's sale of SAGO Energy in the
first quarter of 2004 and the write-down at Nations Energy in the second
quarter. The Company has invested $22 million in Haddington with an $8 million
commitment remaining. While the Nations Energy write-down is disappointing, the
Company has still realized an after-tax internal rate of return of 26% through
June 2004. Haddington currently has two remaining investments, an operational
and income generating underground storage field in California and a compressed
air energy storage project for the bulk storage of compressed air to be used for
the generation of electricity in Ohio.
Vectren North Pending Gas Rate Case
The Company filed its petition with the Indiana Utility Regulatory Commission on
March 19, 2004, to increase its base rates by approximately $47 million to cover
the ongoing cost of operating, maintaining and expanding its gas distribution
business in central and southeastern Indiana. This marks the first request to
increase base rates since 1991. Since that time, investments made to serve
customers have exceeded $270 million. If approved, the typical residential
customer who uses natural gas to heat his/her home would see a bill increase of
about 7%. The filing also includes a request to implement a normal temperature
adjustment mechanism to partially reduce the impact on customer bills caused by
variations in weather. On July 19 and 20, the Company presented its case in a
public hearing before the Indiana Commission. The public and intervenors' cases
are scheduled to be filed in mid-September, and the Company's rebuttal and any
other final evidentiary filings will be made in early October. The final public
hearing is scheduled for mid-October, and the briefing will be concluded in
early December.
Vectren Ohio Pending Gas Rate Case
The Company issued its initial pre-filing notice with the Ohio Commission on
April, 2004, and requested an increase in its base rates of approximately $25
million to cover the ongoing cost of operating, maintaining and expanding its
gas distribution business in west central Ohio. This marks the first request to
increase base rates since 1991. Since that time, investments made to serve
customers have exceeded $135 million. If approved, the typical residential
customer who uses natural gas to heat his/her home would see a bill increase of
less than 8%. The filing also includes a proposed conservation tariff, which, if
approved, will enable the Company to proactively support conservation and
promote home weatherization and the reduction of energy consumption. In late
May, the Company filed its formal application for an increase in base rates; and
based on the Ohio Commission's regulatory process, the Commission staff report
relating to the Company's request is expected to be submitted in late October.
Based upon the Ohio Commission's actions in other proceedings, the Company would
expect a litigated resolution of this case late in the first quarter of 2005.
Dividend
The Board of Directors declared a quarterly common stock dividend of $0.285 per
share, unchanged from the prior quarter. The dividend will be payable September
1, 2004, to shareholders of record at the close of business on August 13, 2004.
Vectren and its predecessor companies have recorded 44 consecutive years of
annual dividend increases.
Please SEE ATTACHED unaudited schedules for additional financial information
Live Webcast on July 29, 2004
Vectren Corporation officers will discuss Second Quarter 2004 earnings results
and provide an outlook for 2004 during a conference call for analysts scheduled
at 2:30 p.m. EDT (1:30 CDT), Thursday, July 29, 2004. You are invited to listen
to the live Webcast and view the supporting slides by accessing the Investor
Relations link on Vectren's Web site at www.Vectren.com. Interested parties may
also view the slide presentation and listen to the Webcast replay via Vectren's
Web site beginning two hours after the completion of the Webcast.
About Vectren
Vectren Corporation is an energy and applied technology holding company
headquartered in Evansville, Indiana. Vectren's energy delivery subsidiaries
provide gas and/or electricity to over one million customers in adjoining
service territories that cover nearly two-thirds of Indiana and west central
Ohio. Vectren's non-regulated subsidiaries and affiliates currently offer
energy-related products and services to customers throughout the midwest and
southeast. These include gas marketing and related services; coal production and
sales; utility infrastructure services; and broadband communication services. To
learn more about Vectren, visit www.vectren.com.
Safe Harbor for Forward Looking Statements
This document contains forward-looking statements, which are based on
management's beliefs and assumptions that derive from information currently
known by management. Vectren wishes to caution readers that actual results could
differ materially from those contained in this document. Additional detailed
information concerning a number of factors that could cause actual results to
differ materially from the information that is provided to you is readily
available in our report Form 10-K filed with the Securities and Exchange
Commission on February 26, 2004.
Investor Contact Steven M. Schein, (812) 491-4209, sschein@vectren.com
-------------------
Media Contact Jeffrey W. Whiteside, (812) 491-4205, jwhiteside@vectren.com
----------------------
###
VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except per share amounts)
(Unaudited)
Three Months Six Months Twelve Months
Ended June 30 Ended June 30 Ended June 30
------------------------------------------------------------------
2004 2003 2004 2003 2004 2003
-------------------- -------------------- ----------------------
OPERATING REVENUE:
Gas utility $ 154,108 $ 164,553 $ 659,264 $ 673,744 $1,097,833 $1,083,969
Electric utility 89,061 75,170 177,858 158,711 354,841 339,917
Energy services and other 33,545 28,110 84,952 61,711 162,944 122,242
-------- -------- -------- -------- --------- ---------
Total operating revenues 276,714 267,833 922,074 894,166 1,615,618 1,546,128
-------- -------- -------- -------- --------- ---------
OPERATING EXPENSES:
Cost of gas sold 97,031 103,799 462,667 468,575 756,556 727,204
Fuel for electric generation 23,777 20,559 46,637 41,311 91,803 86,126
Purchased electric energy 6,777 3,753 11,233 8,333 19,072 16,814
Cost of energy services and other 23,095 19,060 63,099 44,595 122,241 87,171
Other operating 60,006 59,630 128,613 122,202 240,140 231,594
Depreciation and amortization 34,887 32,410 67,399 63,812 132,243 125,689
Taxes other than income taxes 10,711 11,083 33,371 33,118 57,260 56,447
-------- -------- -------- -------- --------- ---------
Total operating expenses 256,284 250,294 813,019 781,946 1,419,315 1,331,045
-------- -------- -------- -------- --------- ---------
OPERATING INCOME 20,430 17,539 109,055 112,220 196,303 215,083
OTHER INCOME:
Equity in earnings of
unconsolidated affiliates (4,883) (129) 11,998 8,677 15,490 10,966
Other - net 1,790 (1,007) (3,851) (2,155) 11,250 4,120
-------- -------- -------- -------- --------- ---------
Total other income (3,093) (1,136) 8,147 6,522 26,740 15,086
-------- -------- -------- -------- --------- ---------
INTEREST EXPENSE 18,787 18,261 38,129 37,137 76,578 76,273
-------- -------- -------- -------- --------- ---------
INCOME BEFORE INCOME TAXES (1,450) (1,858) 79,073 81,605 146,465 153,896
INCOME TAXES (4,769) (5,939) 20,901 21,788 36,782 37,312
MINORITY INTEREST IN SUBSIDIARY 21 6 28 33 61 794
PREFERRED DIVIDEND REQUIREMENT
OF SUBSIDIARY 3 5 9 14 18 36
-------- ------------------- -------------------- ---------
NET INCOME $ 3,295 $ 4,070 $ 58,135 $ 59,770 $ 109,604 $ 115,754
======== ======== ======== ======== ========= =========
AVERAGE COMMON SHARES OUTSTANDING 75,551 67,768 75,512 67,731 74,484 67,668
DILUTED COMMON SHARES OUTSTANDING 75,833 68,083 75,873 67,976 74,793 67,935
EARNINGS PER SHARE OF COMMON STOCK
BASIC:
EARNINGS PER SHARE OF COMMON
STOCK $ 0.04 $ 0.06 $ 0.77 $ 0.88 $ 1.47 $ 1.71
======== ======== ======== ======== ========= =========
DILUTED:
EARNINGS PER SHARE OF COMMON
STOCK $ 0.04 $ 0.06 $ 0.77 $ 0.88 $ 1.47 $ 1.70
======== ======== ======== ======== ========= =========
VECTREN UTILITY HOLDINGS
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except per share amounts)
(Unaudited)
Three Months Six Months Twelve Months
Ended June 30 Ended June 30 Ended June 30
-------------------- -------------------- ----------------------
2004 2003 2004 2003 2004 2003
-------------------- -------------------- ----------------------
OPERATING REVENUE:
Gas utility $ 154,108 $ 164,553 $ 659,264 $ 673,744 $1,097,833 $1,083,969
Electric utility 89,061 75,170 177,858 158,711 354,841 339,917
Other 200 199 481 397 877 584
-------- -------- -------- -------- --------- ---------
Total operating revenues 243,369 239,922 837,603 832,852 1,453,551 1,424,470
-------- -------- -------- -------- --------- ---------
OPERATING EXPENSES:
Cost of gas sold 97,031 103,799 462,667 468,575 756,556 727,204
Fuel for electric generation 23,777 20,559 46,637 41,311 91,803 86,126
Purchased electric energy 6,777 3,753 11,233 8,333 19,072 16,814
Other operating 53,670 53,895 113,768 110,498 213,368 208,987
Depreciation and amortization 31,833 29,681 61,444 58,443 120,949 116,009
Taxes other than income taxes 10,401 10,864 32,744 32,582 56,788 55,243
-------- -------- -------- -------- --------- ---------
Total operating expenses 223,489 222,551 728,493 719,742 1,258,536 1,210,383
-------- -------- -------- -------- --------- ---------
OPERATING INCOME 19,880 17,371 109,110 113,110 195,015 214,087
OTHER INCOME (EXPENSE):
Equity in earnings (losses) of
unconsolidated affiliates 45 86 213 (418) 158 (1,761)
Other - net 1,428 225 1,385 (1,282) 7,429 23
-------- -------- -------- -------- --------- ---------
Total other income (expense) 1,473 311 1,598 (1,700) 7,587 (1,738)
-------- -------- -------- -------- --------- ---------
INTEREST EXPENSE 16,467 15,864 33,426 32,380 67,181 66,659
-------- -------- -------- -------- --------- ---------
INCOME BEFORE INCOME TAXES 4,886 1,818 77,282 79,030 135,421 145,690
INCOME TAXES 2,108 378 29,841 30,273 51,150 50,519
PREFERRED DIVIDEND REQUIREMENT
OF SUBSIDIARY 3 5 9 14 18 36
-------- -------- -------- -------- --------- ---------
NET INCOME $ 2,775 $ 1,435 $ 47,432 $ 48,743 $ 84,253 $ 95,135
======== ======== ======== ======== ======== =========
VECTREN CORPORATION 3 Months 6 Months 12 Months
HIGHLIGHTS Ended June 30 Ended June 30 Ended June 30
-------------------------------------------------------------
(millions, except per share amounts)
-------------------------------------------------------------
(Unaudited) 2004 2003 2004 2003 2004 2003
- ----------------------------------------------------------------------------------------------------
Reported Earnings:
Utility Group $ 2.8 $ 1.4 $ 47.4 $ 48.7 $ 84.3 $ 95.1
Non-regulated Group
Energy Marketing and Services 1.0 1.1 8.0 9.2 14.1 14.1
Mining 0.6 0.5 1.3 0.5 0.5 1.5
Synfuels related 3.2 4.1 6.1 6.4 13.0 12.2
------- ------- ------- ------- ------- -------
Total Coal Mining 3.8 4.6 7.4 6.9 13.5 13.7
Utility Infrastructure Services 0.5 (0.2) (0.1) (1.2) 0.3 (1.9)
Broadband 0.1 (1.2) (3.3) (1.2) (3.2) (1.0)
Other Businesses (4.7) (0.9) (0.7) (1.8) 2.4 (2.8)
------- ------- ------- ------- ------- -------
Total Non-regulated Group 0.7 3.4 11.3 11.9 27.1 22.1
Corporate and Other (0.2) (0.7) (0.6) (0.8) (1.8) (1.5)
------- ------- ------- ------- ------- -------
Vectren Consolidated $ 3.3 $ 4.1 $ 58.1 59.8 $ 109.6 $ 115.7
======= ======= ======= ======= ======= =======
Vectren Selected Highlights
12 months 12 months
Ended Ended
June 30 June 30
2004 2003
--------- ---------
Dividends Paid (per common
share, 12 months) $ 1.13 $ 1.09
Annualized Dividend $ 1.14 $ 1.10
Dividend Yield (at close) 4.5% 4.4%
Dividend Payout Ratio 76.9% 63.7%
Dividend to Book Value 7.9% 8.3%
Return on Average
Shareholders' Equity 11.0% 13.1%
Book Value Per Share $ 14.37 $ 13.20
Market to Book Value (at close) 175% 190%
Common Stock Prices (VVC - NYSE)
High $ 25.87 $ 26.13
Low $ 22.25 $ 17.95
Close $ 25.09 $ 25.05
Price/Earnings Ratio (trailing) 17.1 14.6
Ratio of Total Debt to Total
Capitalization 53% 60%
Percent Internally Generated
Funds - Utility Group 63% 75%
Ratio of Earnings to Fixed
Charges - SEC Method
Consolidated 3.1 2.9
Utility Group 3.0 3.2
VECTREN CORPORATION
SELECTED GAS DISTRIBUTION 3 Months 6 Months 12 Months
OPERATING STATISTICS Ended June 30 Ended June 30 Ended June 30
--------------------- --------------------- ------------------------
2004 2003 2004 2003 2004 2003
--------- --------- --------- --------- ---------- -----------
(Unaudited)
- ----------------------------
GAS OPERATING REVENUES
(Thousands):
Residential $ 97,847 $ 108,879 $ 438,939 $ 454,496 $ 727,006 $ 724,893
Commercial 38,062 38,836 164,518 166,054 274,641 263,123
Contract 15,151 14,604 48,117 48,365 84,400 86,277
Miscellaneous Revenue 3,048 2,234 7,690 4,829 11,786 9,676
--------- --------- --------- --------- ---------- ----------
$ 154,108 $ 164,553 $ 659,264 $ 673,744 $1,097,833 $1,083,969
========= ========= ========= ========= ========== ==========
GAS MARGIN (Thousands):
Residential $ 35,721 $ 38,965 $ 126,089 $ 133,653 $ 217,899 $ 230,915
Commercial 9,102 9,199 37,213 38,924 63,005 67,414
Contract 10,831 9,668 28,881 28,179 52,571 51,445
Miscellaneous 1,423 2,922 4,414 4,413 7,802 6,991
--------- --------- --------- --------- ---------- ----------
$ 57,077 $ 60,754 $ 196,597 $ 205,169 $ 341,277 $ 356,765
========= ========= ========= ========= ========== ==========
GAS SOLD & TRANSPORTED (MDth):
Residential 8,511 9,995 49,873 54,551 78,532 87,859
Commercial 3,690 4,161 19,570 21,379 31,554 34,623
Contract 18,607 18,070 47,828 48,394 92,205 95,706
--------- --------- --------- --------- ---------- ----------
30,808 32,226 117,271 124,324 202,291 218,188
========= ========= ========= ========= ========== ==========
AVERAGE GAS CUSTOMERS
Residential 875,982 869,127 883,568 877,105 877,334 871,816
Commercial 78,997 78,984 79,724 79,830 79,259 79,551
Contract 4,042 4,103 4,054 4,119 4,043 4,143
--------- --------- --------- --------- ---------- ----------
959,021 952,214 967,346 961,054 960,636 955,510
========= ========= ========= ========= ========== ==========
WEATHER AS A PERCENT OF NORMAL:
Heating Degree Days 73% 92% 92% 105% 92% 104%
VECTREN CORPORATION
SELECTED ELECTRIC 3 Months 6 Months 12 Months
OPERATING STATISTICS Ended June 30 Ended June 30 Ended June 30
---------------------- ---------------------- -----------------------
2004 2003 2004 2003 2004 2003
---------- ---------- ---------- ---------- ---------- ----------
(Unaudited)
- -------------------------------
ELECTRIC OPERATING REVENUES
(Thousands):
Residential $ 29,703 $ 20,401 $ 57,197 $ 46,397 $ 116,181 $ 108,017
Commercial 24,307 18,716 44,443 37,481 89,230 80,410
Industrial 27,586 23,449 53,104 44,500 101,350 91,823
Municipals 5,982 5,185 11,421 10,008 22,947 21,331
Miscellaneous Revenue 857 1,449 2,322 2,936 6,571 5,436
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Total Retail 88,435 69,200 168,487 141,322 336,279 307,017
Net Wholesale Revenues 626 5,970 9,371 17,389 18,562 32,900
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$ 89,061 $ 75,170 $ 177,858 $ 158,711 $ 354,841 $ 339,917
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ELECTRIC MARGIN (Thousands):
Residential $ 23,181 $ 16,110 $ 44,236 $ 35,891 $ 90,295 $ 84,708
Commercial 17,018 13,330 31,427 26,843 63,694 58,476
Industrial 15,770 12,791 30,216 25,126 58,623 54,121
Municipals 3,452 3,212 6,554 6,226 13,443 12,682
Miscellaneous 825 1,429 2,255 2,857 6,458 5,278
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Total Retail 60,246 46,872 114,688 96,943 232,513 215,265
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Net Wholesale Margin (1,739) 3,986 5,300 12,124 11,453 21,712
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$ 58,507 $ 50,858 $ 119,988 $ 109,067 $ 243,966 $ 236,977
========== ========== ========== ========== ========== ==========
ELECTRICITY SOLD (MWh):
Residential 362,713 261,504 740,263 656,319 1,525,650 1,543,253
Commercial 397,388 328,998 728,331 662,844 1,487,614 1,448,478
Industrial 642,456 651,770 1,277,725 1,205,681 2,488,929 2,493,342
Municipals 157,985 145,936 310,212 279,748 631,388 606,836
Miscellaneous Sales 2,791 4,235 6,452 9,349 14,313 18,998
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Total Retail 1,563,333 1,392,443 3,062,983 2,813,941 6,147,894 6,110,907
Wholesale 593,800 576,700 1,105,114 2,025,050 3,385,254 7,100,763
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2,157,133 1,969,143 4,168,097 4,838,991 9,533,148 13,211,670
========== ========== ========== ========== ========== ==========
AVERAGE ELECTRIC CUSTOMERS
Residential 117,994 116,719 118,121 116,887 117,697 116,654
Commercial 17,044 16,975 17,042 16,955 17,026 16,948
Industrial 154 177 155 177 157 175
All Others 21 21 21 21 21 22
---------- ---------- ---------- ---------- ---------- ----------
135,213 133,892 135,339 134,040 134,901 133,799
========== ========== ========== ========== ========== ==========
WEATHER AS A PERCENT OF NORMAL:
Heating Degree Days 73% 92% 92% 105% 92% 104%
Cooling Degree Days 120% 57% 120% 56% 101% 104%