EX 99-1
News
Release
Vectren Corporation
P.O. Box 209 Evansville,
IN 47702-0209
FOR IMMEDIATE RELEASE
January 26, 2005
Vectren Corporation
Reports Fiscal 2004
Results
Evansville, Indiana - Vectren Corporation (NYSE:VVC) today reported net income
of $109.3 million, or $1.45 per share, for the year ended December 31, 2004,
compared to net income of $111.2 million, or $1.58 per share, in 2003. Net
income for the fourth quarter ended December 31, 2004, was $41.5 million, or
$0.55 per share, compared to net income of $44.1 million, or $0.59 per share,
for the same period last year.
Company Highlights
o Implemented new Vectren South gas rates in July 2004 o Implemented new
Vectren North gas rates in December 2004 o Increased earnings contributions
from the three primary nonregulated
business groups
o Increased common stock dividends paid for the 45th consecutive year o
Affirmed 2005 earnings guidance
The Company estimates that mild weather unfavorably impacted 2004 earnings by
$5.0 million after tax, or $0.07 per share compared to 2003. As part of the
Company's plan to narrow the focus of its nonregulated businesses, during the
first and second quarter of 2004, the Company recorded impairment charges
associated with its broadband-related businesses and investments, which totaled
$6.0 million after tax, or $0.08 per share. Fiscal year 2004 earnings per share
were also reduced $0.10 as the result of an increase in weighted average shares
outstanding, resulting primarily from the Company's equity offering in August
2003.
Said Niel C. Ellerbrook, Chairman, President and CEO, "Overall, fiscal 2004 was
a good year for Vectren. Our net income from operations, excluding the $5.0
million after tax impact of unfavorable weather and the $6.0 million after tax
impact relating to broadband charges, grew to $120.3 million, an 8% increase
from 2003. We made great strides in implementing our regulatory initiatives
during 2004 which will provide the opportunity for significantly improved
earnings from regulated operations in 2005. The equity sold in 2003 strengthened
our balance sheet and provided the opportunity to increase earnings and returns
on the capital invested in our gas utilities. We implemented new base rates in
our Indiana gas territories and would expect to implement new rates for our Ohio
service area late in the first quarter of 2005. We achieved great results from
our three primary nonregulated business groups and continued our plan of
narrowing nonregulated operations to those businesses that are integrated with
our utilities and provide a more stable platform for future growth."
2005 Earnings Guidance
As previously announced, fiscal 2005 earnings are expected to be in the range of
$1.70 to $1.90 per share. The targeted range is based on several factors,
including normal weather conditions, continued growth from the Company's
complementary nonregulated businesses and securing rate relief at Vectren Energy
Delivery of Ohio (VEDO).
Utility Group
Utility Group earnings for the fourth quarter 2004 were $31.2 million, as
compared to $34.5 million for the same quarter last year. During the quarter,
utility margin growth was largely offset by increased other operating costs
resulting from the December 2003 implementation of a bad debt tracker in Ohio
which lowered 2003 operating costs, increased depreciation expense related to
normal plant additions and increasing NOx expenditures, and a higher annual
effective income tax rate. For the year, Utility Group earnings were $83.1
million as compared to $85.6 million in 2003. The 2004 earnings decline is due
to the impact of unfavorable weather, estimated at $5 million after tax. Margin
growth results from the recovery of NOx related environmental expenditures, gas
base rate increases implemented in 2004 and customer usage growth. The primary
expense changes were higher depreciation and lower bad debt expense in 2003 when
2003 bad debt expense costs related to our Ohio operations were reversed and
deferred in the fourth quarter for later recovery under the uncollectible
accounts expense rider.
Gas utility margin was $105.9 million for the three months ended December 31,
2004, an increase of $4.9 million compared to 2003. Increased base rates in
Vectren's Indiana service territories added margin of approximately $3.7 million
and weather 2% cooler than the prior year added an estimated $1.8 million of
margin. For the year, gas utility margin was $347.7 million, a decrease of $2.1
million compared to 2003. Heating weather in 2004 was 8% warmer than 2003 and
negatively impacted gas utility margin by approximately $9.8 million. Base rate
increases implemented in the latter half of 2004 added $4.7 million in margin in
2004.
Electric retail and firm wholesale margin was $57.9 million for the three months
ended December 31, 2004, an increase of $3.8 million compared to 2003. Margin
increased $2.2 million due to an increase in retail electric rates related to
the recovery of and return on NOx related expenditures and investments. The
remaining increase was attributable to increased load due to customer growth and
usage. Electric retail and firm wholesale margin for the year ended December 31,
2004 was $239.5 million, an increase of $24.8 million compared to 2003.
Additional NOx recoveries increased margin $14.6 million in 2004. Cooling
weather for the year was 12% warmer than last year, increasing margin an
estimated $2.0 million. The remaining increase in margin was attributable to
increased small customer usage and increased sales to industrial customers.
Electric wholesale margin primarily results from asset optimization activities
derived from generation capacity in excess of that needed to serve native load
and firm wholesale customers. Scheduled outages of owned generation earlier in
the year, related to scheduled turbine maintenance and the installation of
environmental compliance equipment, reduced the availability of excess capacity
during the year. Net electric wholesale margin increased $1.9 million for the
three months ended December 31, 2004, compared to 2003, but decreased $3.3
million for the year ended December 31, 2004, compared to 2003.
Other operating expenses increased approximately $4.5 million quarter over
quarter, primarily attributable to the implementation of the Ohio uncollectible
accounts expense rider in 2003 which resulted in the reversal of 2003 bad debt
expense. The fourth quarter 2003 includes the impact of the reversal of 2003
expense necessary to reflect the deferral of $4.0 million relating to the Ohio
order allowing the company to defer for future recovery its actual bad debt
expense in excess of the amount provided in base rates.
Other operating expenses increased $8.4 million for the year ended December 31,
2004 as compared to 2003. The major factors creating the increase were the 2003
deferral of $4.0 million bad debt expenses, NOx related operating expenses of
$2.6 million recovered in rates and planned turbine maintenance of $1.9 million.
Depreciation expense for the three and twelve months ended December 31, 2004
increased $4.2 million and $9.9 million respectively, as compared to 2003. NOx
related depreciation increased $1.3 million and $4.8 million respectively, with
the remaining increase due primarily to normal additions to utility plant.
Taxes other than income taxes increased $1.0 million and $1.6 million for the
three and twelve months ended December 31, 2004 as compared to 2003, primarily
as a result of increased collections of utility receipts and excise tax due to
higher revenues.
Total other income (expense)-net decreased $2.3 million and increased $1.1
million for the three and twelve months ended December 31, 2004, respectively,
as compared to 2003. Lower amounts of AFUDC were recorded in 2004 affecting the
quarter and annual results as NOx expenditures were placed in service. Fiscal
year 2003 includes operating losses and the write-off of the investment in BABB
International, totaling $4.2 million.
Interest expense increased $0.6 million and $1.3 million for the three and
twelve months ended December 31, 2004 as compared to 2003. The increase reflects
the permanent financing of short term borrowings with higher coupon long-term
debt and higher interest rates associated with variable rate debt.
Income taxes for 2004 were relatively consistent with 2003, reflecting slightly
lower earnings offset by a higher effective tax rate.
Vectren Energy Delivery - Indiana South and North Base Rate Settlements
On June 30, 2004, the IURC approved a $5.7 million base rate increase for
Vectren Energy Delivery Indiana - South's (Vectren South) gas distribution
business and on November 30, 2004, approved a $24.0 million base rate increase
for Vectren Energy Delivery Indiana - North's (Vectren North) gas distribution
business. Each order establishes a new rate design that provides for a larger
fixed monthly service charge, which is intended to somewhat mitigate earnings
volatility related to weather. The base rate change in Vectren South's service
territory was implemented on July 1, 2004, resulting in additional 2004 revenues
of $2.5 million. The base rate change in Vectren North's service territory was
implemented on December 1, 2004, resulting in additional 2004 revenues of $2.2
million. Both cases will contribute a full year of increase in 2005.
The orders also permit Vectren South and Vectren North to track and recover the
on-going compliance costs under the federal Pipeline Safety Improvement Act of
2002. The trackers provide for the recovery of incremental non-capital dollars,
capped at $750,000 the first year and $500,000 thereafter for Vectren South and
$2.5 million per year for Vectren North. Any costs incurred in excess of these
annual caps will be deferred for future recovery.
Vectren Energy Delivery of Ohio Pending Base Rate Filing
In 2004 the Company initiated the process of seeking authority to adjust base
rates and charges for Vectren Energy Delivery of Ohio's (VEDO) gas distribution
business covering west central Ohio. VEDO's request to increase base rates up to
$25 million is subject to review and approval by the Public Utilities Commission
of Ohio (PUCO). 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. Activities
related to the case are ongoing and a public hearing is scheduled to commence on
February 1, 2005. Based upon the PUCO's actions in other proceedings, the
Company would expect a Commission order in this case late in the first quarter
of 2005.
Nonregulated Group (all amounts following in this section are after tax)
Nonregulated Group earnings for the fourth quarter 2004 were $10.6 million, as
compared to $10.0 million for the same period last year. Earnings in the fourth
quarter of 2003 reflect after tax gains of $1.2 million from the sale of a
wholly owned debt collection subsidiary. The 2004 earnings increase reflects
improved results from the Company's primary nonregulated business groups, Energy
Marketing and Services, Coal Mining, and Utility Infrastructure Services, which
contributed $10.8 million in 2004, compared to $9.3 million in 2003.
Nonregulated earnings for the year ended December 31, 2004, were $27.8 million
compared to $27.6 million in 2003. The Company's three primary nonregulated
business groups contributed $32.3 million in 2004, an increase of $4.9 million
over 2003.
Energy Marketing and Services
Energy Marketing and Services is comprised of the Company's gas marketing
operations, performance contracting operations and retail gas supply operations.
Net income generated by Energy Marketing and Services for the three months ended
December 31, 2004, was $8.9 million compared to $5.9 million in 2003. Gas
marketing operations, performed through ProLiance, contributed quarterly
earnings of $6.6 million in 2004 compared to $4.7 million in 2003. For the
quarter, Vectren Source's retail gas operations earned $0.5 million compared to
break even results in 2003.
Net income generated by Energy Marketing and Services for the year ended
December 31, 2004, was $18.0 million compared to $15.3 million in 2003.
ProLiance provided the primary earnings contribution, totaling $16.8 million in
2004, as compared to $15.4 million in 2003. ProLiance has achieved record
earnings for each of the last four years. The 2004 quarterly and annual
increases are primarily related to increased asset optimization from storage
activities as a result of significant price volatility. Energy Systems Group's
operations contributed earnings of $2.8 million in 2004; nearly matching last
years record contribution of $3.0 million. The contribution from Vectren
Source's operations was right at plan, a $0.4 million loss in 2004; an
improvement of $1.5 million compared to 2003. Vectren Source's improvement in
quarter and annual earnings is attributable to its expanded customer base of
over 100,000 customers opting for choice among energy providers in Ohio, Indiana
and Georgia.
As previously disclosed in the company's publicly filed reports, there is
currently a lawsuit pending in the United States District Court for the Northern
District of Alabama filed by the City of Huntsville, Alabama (Huntsville
Utilities) against ProLiance. During the fourth quarter of 2004, a jury trial
was set and the trial began earlier this week. A decision is expected in
February 2005. Huntsville Utilities asserts claims based on breach of contract
and/or pricing advice, fraud, conversion and other theories including RICO.
Huntsville Utilities originally asserted its compensatory damages to be
approximately $10 million with certain claims, which if successful, would triple
that amount. In the opening argument for the trial, counsel for Huntsville
Utilities claimed compensatory damages in excess of $20 million as well as
enhanced damages under RICO and punitive damages. In 2003, due to uncertainties
surrounding collection, ProLiance established reserves for amounts due from
Huntsville Utilities for services provided by ProLiance but no reserves have
been established regarding the lawsuit. Both parties have denied the charges
contained in the respective claims and it is not possible to predict or
determine the outcome of this litigation. While ProLiance believes that it has
meritorious defenses to the claims being asserted by Huntsville, an unfavorable
outcome could possibly be material to Vectren's earnings.
Coal Mining
The Coal Mining Group mines and sells coal to the Company's utility operations
and to other third parties through its wholly owned subsidiary Vectren Fuels,
Inc. (Fuels). The Coal Mining Group also generates IRS Code Section 29 tax
credits resulting from the production of coal-based synthetic fuels through its
8.3% ownership interest in Pace Carbon Synfuels, LP (Pace Carbon). In addition,
Fuels receives synfuel-related fees from synfuel producers unrelated to Pace
Carbon for a portion of its coal production. Coal Mining net income for the
three months ended December 31, 2004, was $1.4 million compared to $3.3 million
in 2003. Mining operations decreased earnings $1.1 million during the quarter
compared to last year due to weather, unfavorable mining conditions and
increased costs in commodities such as steel, explosives and diesel fuel.
Synfuel-related results for the quarter, which include earnings from Pace Carbon
and synfuel processing fees earned by Fuels, decreased $0.8 million. This
decrease reflects lower production of synthetic fuel produced by Pace Carbon due
to feed stock problems at one of their four plants. The underperforming plant
was relocated and recently begun production.
Coal Mining net income for the year ended December 31, 2004, was $12.5 million,
as compared to $13.0 million in 2003. Mining operations increased earnings in
2004 by $0.7 million compared to last year due primarily to improved production
and market pricing which were partially offset by weather and increased
commodity costs. Virtually all of 2005 sales are under contract at price levels
above those seen in 2004. Synfuel-related results in 2004 were $12.1 million
compared to $13.3 million in 2003. The 2004 decrease reflects Pace Carbon's
lower production of synthetic fuel compared to 2003 due to the feed stock
problems discussed above.
Utility Infrastructure Services
Utility Infrastructure Services provides underground construction and repair to
gas, water, electric and telecommunications companies primarily through its
investment in Reliant Services, LLC (Reliant) and Reliant's 100% ownership in
Miller Pipeline. Reliant is a 50% owned strategic alliance and is accounted for
using the equity method of accounting. Infrastructure Services' earnings
increased by $0.4 million, totaling $0.5 million for the three months ended
December 31, 2004. The improvement in annual earnings of $2.7 million over 2003
was primarily driven by better pricing and increases in utility and municipal
waste water construction and repair spending during 2004. These changes, along
with productivity improvements, resulted in record annual earnings of $1.8
million.
Broadband and Other Businesses
Broadband invests in communication services, such as cable television,
high-speed internet, and advanced local and long distance phone services. The
Other Businesses Group includes a variety of operations and investments. For the
three months ended December 31, 2004, earnings from Broadband and Other
Businesses decreased by $0.9 million due to the sale of a wholly owned debt
collection subsidiary in the fourth quarter of 2003. The sale resulted in an
after tax gain of approximately $1.2 million.
For the year ended December 31, 2004, Broadband and the Other Businesses Groups
reported $4.5 million in losses, as compared to earnings of $0.2 million in
2003. During 2004, the Company continued to evaluate strategic alternatives for
its broadband investments and concluded that it is unlikely that it would make
additional investments. As a result, in the first quarter of 2004, the Company
recorded impairment charges for its investment in SIGECOM and its franchises in
the Indianapolis and Dayton markets totaling $3.6 million after-tax. The Company
also ceased operations of Vectren Communications Services, Inc. (VCS), a
municipal broadband consulting business, during the second quarter of 2004. This
decision resulted in losses of $2.4 million after tax due primarily to inventory
write downs, cessation charges, and other costs. Total losses by VCS in 2004
were $2.6 million, as compared to losses of $1.8 million in 2003. The year ended
December 31, 2003 also includes a $1.2 million after tax loss resulting from the
sale of a small broadband operation in Indianapolis. The Other Businesses
Group's 2003 results include $3.8 million in after tax gains from the sale of
debt collection and supply chain management subsidiaries and the sale of an
investment in a company that provides real-time power plant and transmission
line status information.
During 2004, Haddington Energy Partnerships sold their investments in SAGO
Energy, LP (SAGO) for cash. The Company recognized its portion of the gain,
totaling $5.3 million after tax. These earnings were partially offset by
Haddington's write-down of Nations Energy Holdings, of which Vectren's portion
was $3.5 million after tax. In total, earnings from Haddington for the year
ended December 31, 2004, were $2.0 million compared to a loss of $0.6 million in
2003.
Corporate
Contributions to various community and civic organizations and corporate and
other expenses in 2004 were $1.6 million after tax.
Financial
As a result of the long-term debt and equity financings completed in 2003, total
long-term debt to permanent capitalization was 48% at December 31, 2004. Vectren
remains committed to improving its balance sheet and maintaining strong
investment grade ratings. Vectren's utility debt is currently rated A- and Baa1
by Standard & Poor's and Moody's, respectively.
Dividends
Vectren's Board of Directors authorized a $0.295 dividend payable March 1, 2005,
to shareholders of record at the close of business on February 15, 2005. In
October 2004, Vectren's Board of Directors approved a 3.5% increase in the
quarterly dividend rate to $0.295 per share, a new indicated annual dividend
rate of $1.18 per share. Vectren and predecessor companies have now increased
the dividend for 45 consecutive years.
Please SEE ATTACHED unaudited schedules for additional financial information
Live Webcast on January 27, 2005
Vectren management will discuss fiscal year 2004 earnings results and provide an
outlook for 2005 during a conference call for analysts scheduled at 2:30 p.m.
EST (1:30 CST), Thursday, January 27, 2005. You are invited to listen to the
live, audio only Webcast of the conference call as well as view the accompanying
slide presentation by choosing "Earnings Release and Webcast" on Vectren's
website, www.Vectren.com. Approximately two hours after the completion of the
Webcast, interested parties may also view the slide presentation and listen to
the Webcast replay at Vectren's website.
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 on 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 Twelve Months
Ended December 31 Ended December 31
--------------------- -----------------------
2004 2003 2004 2003
--------------------- -----------------------
OPERATING REVENUE:
Gas utility $ 354,569 $ 323,584 $1,126,205 $1,112,313
Electric utility 91,082 81,498 371,279 335,694
Energy services and other 67,689 48,874 192,294 139,703
--------- --------- ---------- ----------
Total operating revenues 513,340 453,956 1,689,778 1,587,710
--------- --------- ---------- ----------
OPERATING EXPENSES:
Cost of gas sold 248,662 222,595 778,475 762,464
Fuel for electric generation 23,723 20,223 96,132 86,477
Purchased electric energy 4,077 3,686 20,655 16,172
Cost of energy services and other 53,309 37,176 143,450 103,737
Other operating 61,038 54,334 248,811 233,729
Depreciation and amortization 36,521 31,914 140,138 128,656
Taxes other than income taxes 16,205 14,949 59,464 57,004
--------- --------- ---------- ----------
Total operating expenses 443,535 384,877 1,487,125 1,388,239
--------- --------- ---------- ----------
OPERATING INCOME 69,805 69,079 202,653 199,471
OTHER INCOME:
Equity in earnings of unconsolidated
affiliates 9,477 5,719 22,989 12,169
Other - net 2,386 6,769 1,405 12,943
--------- --------- ---------- ----------
Total other income 11,863 12,488 24,394 25,112
--------- --------- ---------- ----------
INTEREST EXPENSE 20,170 18,892 77,682 75,586
--------- --------- ---------- ----------
INCOME BEFORE INCOME TAXES 61,498 62,675 149,365 148,997
INCOME TAXES 19,997 18,511 39,972 37,669
MINORITY INTEREST IN SUBSIDIARY 9 12 62 66
PREFERRED DIVIDEND REQUIREMENT OF SUBSIDIARY 2 5 13 23
--------- --------- ---------- ----------
NET INCOME $ 41,490 $ 44,147 $ 109,318 $ 111,239
========= ========= ========== ==========
AVERAGE COMMON SHARES OUTSTANDING 75,626 75,344 75,568 70,623
DILUTED COMMON SHARES OUTSTANDING 76,005 75,578 75,917 70,820
EARNINGS PER SHARE OF COMMON STOCK
BASIC:
EARNINGS PER SHARE OF COMMON STOCK $ 0.55 $ 0.59 $ 1.45 $ 1.58
========= ========= ========== ==========
DILUTED:
EARNINGS PER SHARE OF COMMON STOCK $ 0.55 $ 0.58 $ 1.44 $ 1.57
========= ========= ========== ==========
VECTREN UTILITY HOLDINGS
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except per share amounts)
(Unaudited)
Three Months Twelve Months
Ended December 31 Ended December 31
--------------------- -----------------------
2004 2003 2004 2003
--------------------- -----------------------
OPERATING REVENUE:
Gas utility $ 354,569 $ 323,584 $1,126,205 $1,112,313
Electric utility 91,082 81,498 371,279 335,694
Other 40 199 562 793
--------- --------- ---------- ----------
Total operating revenues 445,691 405,281 1,498,046 1,448,800
--------- --------- ---------- ----------
OPERATING EXPENSES:
Cost of gas sold 248,662 222,595 778,475 762,464
Fuel for electric generation 23,723 20,223 96,132 86,477
Purchased electric energy 4,077 3,686 20,655 16,172
Other operating 52,687 48,235 218,503 210,098
Depreciation and amortization 33,308 29,149 127,819 117,948
Taxes other than income taxes 15,842 14,844 58,243 56,626
--------- --------- ---------- ----------
Total operating expenses 378,299 338,732 1,299,827 1,249,785
--------- --------- ---------- ----------
OPERATING INCOME 67,392 66,549 198,219 199,015
OTHER INCOME (EXPENSE):
Equity in earnings (losses) of
unconsolidated affiliates - (20) 204 (473)
Other - net 1,443 3,806 5,166 4,762
--------- --------- ---------- ----------
Total other income (expense) 1,443 3,786 5,370 4,289
--------- --------- ---------- ----------
INTEREST EXPENSE 17,235 16,676 67,408 66,135
--------- --------- ---------- ----------
INCOME BEFORE INCOME TAXES 51,600 53,659 136,181 137,169
INCOME TAXES 20,354 19,154 53,035 51,582
PREFERRED DIVIDEND REQUIREMENT OF SUBSIDIARY 2 5 13 23
--------- --------- ---------- ----------
NET INCOME $ 31,244 $ 34,500 $ 83,133 $ 85,564
========= ========= ========== ==========
VECTREN CORPORATION 3 Months 12 Months
HIGHLIGHTS Ended December 31 Ended December 31
(millions, except per share amounts) ----------------------------------------------
(Unaudited) 2004 2003 2004 2003
- ---------------------------------------------------------------------------------------
Reported Earnings:
Utility Group $ 31.2 $ 34.5 $ 83.1 $ 85.6
Non-regulated Group
Energy Marketing and Services 8.9 5.9 18.0 15.3
Mining (1.2) (0.1) 0.4 (0.3)
Synfuels related 2.6 3.4 12.1 13.3
------ ------ ------ ------
Total Coal Mining 1.4 3.3 12.5 13.0
Utility Infrastructure Services 0.5 0.1 1.8 (0.9)
Broadband 0.1 0.1 (3.2) (1.1)
Other Businesses (0.3) 0.6 (1.3) 1.3
------ ------ ------ ------
Total Non-regulated Group 10.6 10.0 27.8 27.6
Corporate and Other (0.3) (0.4) (1.6) (2.0)
------ ------ ------ ------
Vectren Consolidated $ 41.5 $ 44.1 $109.3 $111.2
====== ====== ====== ======
Vectren Selected Highlights
12 months 12 months
Ended Ended
December 31 December 31
2004 2003
----------- -----------
Dividends Paid (per common share,
12 months) $ 1.15 $ 1.11
Annualized Dividend $ 1.18 $ 1.14
Dividend Yield (at close) 4.4% 4.6%
Dividend Payout Ratio 79.3% 70.3%
Dividend to Book Value 8.2% 8.0%
Return on Average Shareholders' Equity 10.1% 11.5%
Book Value Per Share $ 14.43 $ 14.17
Market to Book Value (at close) 186% 174%
Common Stock Prices (VVC - NYSE)
High $ 27.09 $ 26.13
Low $ 22.86 $ 19.70
Close $ 26.80 $ 24.65
Price/Earnings Ratio (trailing) 18.5 15.6
Ratio of Total Debt to Total
Capitalization 57% 56%
Percent Internally Generated Funds -
Utility Group 65% 66%
Ratio of Earnings to Fixed Charges -
SEC Method
Consolidated 2.9 3.0
Utility Group 3.0 3.1
VECTREN CORPORATION
SELECTED GAS DISTRIBUTION 3 Months 12 Months
OPERATING STATISTICS Ended December 31 Ended December 31
--------------------- -----------------------
(Unaudited) 2004 2003 2004 2003
- ----------------------------------- --------- --------- ---------- ----------
GAS OPERATING REVENUES (Thousands):
Residential $ 240,185 $ 218,724 $ 744,540 $ 741,211
Commercial 86,633 78,267 282,492 275,821
Contract 24,658 23,455 86,765 86,356
Miscellaneous Revenue 3,093 3,138 12,408 8,925
--------- --------- ---------- ----------
$ 354,569 $ 323,584 $1,126,205 $1,112,313
========= ========= ========== ==========
GAS MARGIN (Thousands):
Residential $ 69,802 $ 66,014 $ 224,101 $ 227,078
Commercial 19,732 18,959 64,254 65,231
Contract 14,912 13,593 53,461 51,493
Miscellaneous 1,461 2,423 5,914 6,047
--------- --------- ---------- ----------
$ 105,907 $ 100,989 $ 347,730 $ 349,849
========= ========= ========== ==========
GAS SOLD & TRANSPORTED (MDth):
Residential 25,036 25,690 79,011 84,113
Commercial 9,494 9,735 31,655 33,760
Contract 24,391 24,531 89,677 91,471
--------- --------- ---------- ----------
58,921 59,956 200,343 209,344
========= ========= ========== ==========
YEAR END GAS CUSTOMERS
Residential 898,862 887,891
Commercial 81,087 80,292
Contract 4,042 4,047
---------- ----------
983,991 972,230
========== ==========
WEATHER AS A PERCENT OF NORMAL:
Heating Degree Days 91% 89% 92% 100%
VECTREN CORPORATION
SELECTED ELECTRIC 3 Months 12 Months
OPERATING STATISTICS Ended December 31 Ended December 31
----------------------- -----------------------
(Unaudited) 2004 2003 2004 2003
- ---------------------------------- ---------- ---------- ---------- ----------
ELECTRIC OPERATING REVENUES
(Thousands):
Residential $ 26,507 $ 22,884 $ 119,753 $ 105,381
Commercial 22,875 21,259 92,867 82,268
Industrial 26,672 24,417 107,568 92,746
Municipals 5,204 5,493 23,561 21,534
Miscellaneous Revenue 1,275 2,463 3,694 7,185
---------- ---------- ---------- ----------
Total Retail 82,533 76,516 347,443 309,114
Net Wholesale Revenues 8,549 4,982 23,836 26,580
---------- ---------- ---------- ----------
$ 91,082 $ 81,498 $ 371,279 $ 335,694
========== ========== ========== ==========
ELECTRIC MARGIN (Thousands):
Residential $ 20,992 $ 17,899 $ 93,459 $ 81,950
Commercial 16,694 15,460 66,257 59,110
Industrial 15,940 15,094 62,398 53,533
Municipals 3,089 3,289 13,861 13,115
Miscellaneous 1,234 2,398 3,563 7,060
---------- ---------- ---------- ----------
Total Retail 57,949 54,140 239,538 214,768
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Net Wholesale Margin 5,333 3,449 14,954 18,277
---------- ---------- ---------- ----------
$ 63,282 $ 57,589 $ 254,492 $ 233,045
========== ========== ========== ==========
ELECTRICITY SOLD (MWh):
Residential 317,513 297,497 1,501,707 1,441,706
Commercial 353,772 346,036 1,501,513 1,422,127
Industrial 612,497 564,979 2,543,534 2,416,885
Municipals 139,164 151,362 625,925 600,924
Miscellaneous Sales 3,964 4,319 13,481 17,210
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Total Retail 1,426,910 1,364,193 6,186,160 5,898,852
Wholesale 1,189,760 1,265,952 3,526,005 4,305,190
---------- ---------- ---------- ----------
2,616,670 2,630,145 9,712,165 10,204,042
========== ========== ========== ==========
YEAR END ELECTRIC CUSTOMERS
Residential 118,998 117,868
Commercial 17,096 17,054
Industrial 152 155
All Others 21 21
---------- ----------
136,267 135,098
========== ==========
WEATHER AS A PERCENT OF NORMAL:
Heating Degree Days 91% 89% 92% 100%
Cooling Degree Days 69% 52% 90% 80%