Vectren Corporation Reports First Quarter
2011 Results
Electric Rate Order Received; Infrastructure
Acquisition Completed; 2011 Guidance Affirmed
EVANSVILLE, IN -- (MARKET WIRE) -- 05/04/11 -- Vectren Corporation (NYSE: VVC) today reported consolidated
net income for its 2011 first quarter of $44.6 million, or $0.55 per share,
compared to net income of $63.2 million, or $0.78 per share, in 2010.
Summary results
- Utility earnings were $48.6 million, or $0.59 per share, in the
first quarter of 2011, compared to $55.4 million, or $0.68 per share, in
2010. The decrease results from the impact of rate design changes
implemented in February 2010 in the Ohio service territory and increased
operating expenses associated with planned electric generating maintenance
activities.
- Nonutility results were a loss of ($3.4) million, or ($0.04) per
share, in the first quarter of 2011, compared to earnings of $7.8 million,
or $0.10 per share, in 2010. ProLiance results,
which were a loss of ($7.5) million in 2011 and earnings of $3.9 million
in 2010, were the primary driver of the decrease.
"We are very pleased that the Vectren
South electric rate order has been issued and that we completed the acquisition
of a very successful transmission pipeline construction company, Minnesota
Limited, to expand significantly the capabilities of our infrastructure
business," said Carl L. Chapman, Vectren's
president and CEO. "And our results for the quarter are consistent with
our internal projections and we remain on track to meet our 2011 earnings
expectations."
2011 earnings guidance affirmed
The company affirms 2011 Utility Group earnings within a range of $1.45 to
$1.55 per share and the Nonutility Group earnings, excluding ProLiance, within a range of $0.32 to $0.42 per share. The
combined guidance range, including an expected loss at ProLiance,
is consolidated earnings of $1.60 to $1.85 per share. Based on current market
conditions and outlook, the company also affirms that Vectren's
share of ProLiance's results for 2011 are expected to
be in a range of a net loss of $(0.10) to $(0.20) per share.
The Utility Group expectations assume normal weather
in the electric service territory. Related to ProLiance,
current market conditions are assumed to continue, resulting in continued
depressed asset optimization opportunities. Changes in these events or other
circumstances could materially impact earnings and result in earnings for 2011
significantly above or below this guidance. These targeted ranges are subject
to such factors discussed below under "Forward-Looking Statements."
Vectren South electric rate order received
On April 27, 2011, the Indiana Utility Regulatory Commission (IURC) issued an
order in the Vectren South electric rate case. The
order provides for an approximate $28.6 million revenue increase to recover
costs associated with approximately $325 million in system upgrades that were
completed in the three years leading up to the December 2009 filing and modest
increases in maintenance and operating expenses. The approved revenue increase
is based on rate base of $1,295.6 million, return on equity of 10.4 percent and
an overall rate of return of 7.29 percent. The new rates were effective May 2,
2011.Though the order denied the company's request for a decoupled rate design,
as an alternative, a settlement reached earlier with certain parties in the
company's electric demand side management proceeding provides that margins lost
from residential and commercial customers due to energy efficiency programs may
be deferred for future recovery under a rate mechanism to be proposed by the
company. Subject to the approval of that settlement by the IURC, and after
conferring with stakeholders in the process, the company expects to propose
such a mechanism. Finally, addressing issues raised in the case concerning coal
supply contracts and related costs, the IURC found that current coal contracts
remain effective and that a prospective review process of future procurement
decisions will be initiated.
Infrastructure Services acquisition
On March 31, 2011, the company acquired Minnesota Limited, Inc., in support of
its plan to grow its nonutility infrastructure services business segment.
Minnesota Limited will join wholly-owned subsidiary Miller Pipeline, LLC in Vectren's infrastructure services group. One of the
Midwest's largest contractors serving the natural gas and petroleum industry,
Minnesota Limited has been in operation since 1966 as a specialty contractor
focusing on transmission pipeline construction and maintenance; pump station,
compressor station, terminal and refinery construction; gas distribution; and
hydrostatic testing. Minnesota Limited, headquartered in Big Lake, Minn., has
approximately 500 employees and is licensed to operate in about 40 U.S. states.
The majority of Minnesota Limited's customers have historically been located in
the northern Midwest region. Its 2010 revenues were $110 million, and it is
expected that these operations will contribute $0.02 to $0.04 per share to the
company's earnings in 2011.
The acquisition is consistent with Vectren's
strategy to target infrastructure services industry growth through geographic
and market expansion opportunities. Furthermore, this acquisition positions the
company for anticipated growth in demand for gas transmission construction.
This anticipated growth is expected to result from the need to transport new
sources of natural gas and oil found in shale formations and the need to upgrade
the nation's aging pipelines.
Utility Group discussion
In 2011, the Utility Group's first quarter earnings were $48.6 million compared
to $55.4 million in 2010, a decrease of $6.8 million. This decrease results
from the expected impact of rate design changes implemented in February 2010 in
the Ohio service territory and increased operating expenses associated with
planned electric generating maintenance activities.
Gas utility margin
For the quarter ended March 31, 2011, gas utility margins were $161.6 million,
a decrease of ($8.7) million compared to the prior year quarter. Following is a
reconciliation of the decrease:
(millions)
Quarter
-------
2010 Gas Utility Margin
$ 170.3
Ohio territory rate design changes
in 2010
(3.6)
Return on Ohio bare steel/cast iron
& distribution riser
replacement program
0.8
Large customer usage
1.5
Operating costs, including revenue
taxes, directly
recovered in margin
(5.8)
All other, primarily miscellaneous
revenues impacted by
lower gas costs
(1.6)
-------
Total change in Gas Utility
Margin
(8.7)
-------
2011 Gas Utility Margin
$ 161.6
=======
The rate design approved by the Public Utilities
Commission of Ohio (PUCO) onJan. 7, 2009, and
initially implemented on Feb. 22, 2009, allowed for the phased movement toward
a straight fixed variable rate design, which places substantially all of the
fixed cost recovery in the monthly customer service charge. This rate design
mitigates most weather risk as well as the effects of declining usage. Since
the straight fixed variable rate design was fully implemented in mid-February
2010, nearly 90 percent of the combined residential and commercial base rate
gas margins were recovered through the customer service charge. As a result,
margin recognized in the first quarter of 2010 that reflected a volumetric rate
design during the peak delivery winter months of January and the first half of
February 2010, is now more ratably recognized throughout the year.
Electric utility margin
Electric retail utility margins were $79.3 million for the quarter ended March
31, 2011, a decrease of ($0.2) million compared to the prior year quarter.
Large customer margin increased $0.9 million in the 2011 quarter compared to
the prior year. That increase was more than offset by unfavorable weather in
the quarter.
Margins from wholesale electric activities were $7.6
million for the three months ended March 31, 2011, an increase of $0.2 million
compared to the prior year quarter. Margin from off-system sales were
unfavorable during the current year quarter compared to the prior year, due
largely to the unavailability of generation as a result of a scheduled
maintenance outage. Offsetting the unfavorable off-system margin variance was
increased margin from MISO expansion transmission projects.
Other operating
Other operating expenses were $86.9 million for the three months ended March
31, 2011, an increase of $5.3 million compared to the prior year. Following is
reconciliation of the change from 2010:
(millions)
Quarter
--------
2010 Other Operating Expenses
$ 81.6
Power supply operating costs,
including planned
maintenance activities
3.9
All other, primarily timing of
costs
1.4
--------
Total Change in Other Operating
Expenses
5.3
--------
2011 Other Operating Expenses
$ 86.9
========
Depreciation & amortization
Depreciation expense was $48.2 million for 2011, an increase of $1.7 million
compared to 2010. The increase reflects utility capital expenditures placed
into service.
Taxes other than income taxes
Taxes other than income taxes were $18.0 million for the quarter, a decrease of
($4.3) million compared to the prior year quarter. The decrease is primarily
attributable to lower Ohio excise and usage taxes associated with that
territory's ongoing process of exiting the merchant function. These expenses
are offset dollar-for-dollar with lower revenues.
Other income-net
Other income-net reflects income of $1.7 million for the quarter, a decrease of
($0.5) million compared to the prior year quarter. The decrease primarily
reflects lower Allowance for Funds Used During Construction (AFUDC).
Interest expense
Interest expense was $20.4 million for the quarter and was generally flat
compared to the prior year, and interest expense continues to reflect the
current low interest rate environment and less reliance by the Utility Group on
short-term borrowings. At March 31, 2011, and 2010, the Utility Group had no
short-term borrowings outstanding.
On April 5, 2011, the company, through Vectren Utility Holdings, Inc. (Utility Holdings), entered
into a private placement note purchase agreement pursuant to which various
institutional investors have agreed to purchase the following tranches of
notes: (i) $55 million of 4.67 percent Senior
Guaranteed Notes, due Nov. 30, 2021, (ii) $60 million of 5.02 percent Senior
Guaranteed Notes, due Nov. 30, 2026, and (iii) $35 million of 5.99 percent
Senior Guaranteed Notes, due Dec. 2, 2041. The proceeds received from the
issuance of these senior notes will be used to partially refinance $250 million
of Utility Holdings long-term debt maturing Dec. 1, 2011, with the remainder to
be retired with short-term borrowings. Subject to the satisfaction of customary
closing conditions, the notes will be issued on or about Nov. 30, 2011. These
senior notes are unsecured and will be jointly and severally guaranteed by
Utility Holdings' regulated utility subsidiaries, Southern Indiana Gas and
Electric Company (Vectren South), Indiana Gas
Company, Inc. (Vectren North), and Vectren Energy Delivery of Ohio, Inc.
Income taxes
In 2011, federal and state income taxes were $28.6 million for the quarter, a
decrease of ($5.1) million compared to the prior year quarter. The decrease is
primarily due to lower pre-tax income. The current year period also reflects
the favorable impact of revaluing historical deferred taxes as a result of a
lower Indiana state tax apportionment.
Nonutility Group discussion
All amounts included in this section are after tax. Results reported by
business group are net of nonutility group corporate expense.
In 2011, the Nonutility Group incurred a net loss of
($3.4) million, which compares to net income of $7.8 million in 2010. The
primary cause of the reduction was ProLiance results,
which were a loss of ($7.5) million in 2011 and earnings of $3.9 million in
2010.
Infrastructure Services
Infrastructure Services provides underground construction and repair to utility
infrastructure through Miller Pipeline (Miller) and, going forward, the
recently acquired operations of Minnesota Limited.
Infrastructure's 2011 first quarter loss was ($2.9)
million compared to a loss of ($3.0) million in 2010. Though to a lesser extent
in 2011, results in both periods reflect the impact of unfavorable weather
conditions in the East and Midwest. Increased operating income resulting from
higher revenues was offset by higher interest costs. The higher interest is due
to the allocation of permanent financing at the end of 2010 in anticipation of
the Minnesota Limited acquisition. Construction activity for the remainder of
2011 is expected to be strong as utilities continue to replace their aging
natural gas and wastewater infrastructure and as the need for shale gas and oil
infrastructure becomes more prevalent. In addition, Minnesota Limited is
expected to contribute $0.02 to $0.04 per share in 2011.
Energy Services
Energy Services provides energy performance contracting and renewable energy
services through Energy Systems Group (ESG).
Energy Services' first quarter results were a loss of
($1.4) million in 2011 compared to a loss of ($0.3) million in 2010. The lower
results in 2011 are primarily due to increased operating costs related to sales
force recruitment and the delayed start of some performance contracting
projects. At March 31, 2011, ESG's backlog was $122 million compared to $118
million at Dec. 31, 2010, and $91 million at March 31, 2010. The increased
backlog reflects substantial work in the near term to be recognized in
subsequent quarters. The national focus on a comprehensive energy strategy and
a continued focus on renewable energy, energy conservation and sustainability
are expected to create favorable conditions for future growth in this area.
Coal Mining
Coal Mining mines and sells coal to the company's utility operations and to
third parties through its wholly owned subsidiary Vectren
Fuels, Inc.
Coal Mining earnings were $1.6 million in first
quarter of 2011, a decrease of ($2.3) million compared to 2010. Through March
31, 2011, Coal Mining revenues were $69 million, a $17 million increase
compared to 2010, and reflect increased sales to third parties. However, other
costs, including higher depreciation and interest, associated with the ramp up
of activities at the Oaktown mine complex, and production issues more than
offset the increase in sales. These production issues were primarily associated
with roof falls and an abandoned oil well that disrupted the mining plan. In an
effort to reduce roof falls and thus the cost per ton mined in future quarters,
mine plans have been realigned and plans are in place to strengthen roof
supports. Management believes that cost per ton will improve as production
ramps up. The anticipated 2011 coal production is approximately 5 million tons,
with total sales in 2011 of 5.1 million tons expected. Approximately 90 percent
of those sales have been contracted and priced. The second phase of the Oaktown
mining complex is anticipated to open in 2012.
Energy Marketing
Energy Marketing is comprised of the company's gas marketing operations, energy
management services and retail gas supply operations. The Energy Marketing
group consists of the company's investment in ProLiance
and the company's wholly owned subsidiary, Vectren
Source. Results from Energy Marketing for the first quarter of 2011 were a loss
of ($0.4) million, compared to earnings of $10.2 million in 2010.
Vectren Source, the company's retail gas marketer, earned approximately $7.1
million in the first quarter of 2011, compared to $6.3 million in 2010, an
increase of approximately $0.8 million. First quarter results, reflective of a
typically high delivery period, increased over the prior year primarily due to
a higher customer count and lower operating expenses. Vectren
Source had annual 2010 earnings of $3.7 million and expects similar annual
results in 2011, adjusted for growth in its customer count. Vectren
Source's customer count at March 31, 2011, was approximately 225,000 customers,
compared to 195,000 customers at March 31, 2010. The 2011 customer count
reflects nearly 100,000 customers in Vectren Energy
Delivery of Ohio's (VEDO) service territory that have either voluntarily opted
to choose their natural gas supplier or are supplied natural gas by Vectren Source but remain customers of the regulated
utility as part of VEDO's exit the merchant function process. As a result of a
supplier choice auction held on Jan. 18, 2011 in VEDO's service territory, Vectren Source will increase its customer base by 28,000 to
over 250,000 in the second quarter of 2011.
Through the first quarter of 2011, ProLiance
operated at loss of ($7.5) million compared to earnings of $3.9 million in 2010.
While a smaller loss than anticipated due to timing of inventory withdrawal and
settlement of hedging arrangements, the ($11.4) million quarter over quarter
decrease in earnings reflects new natural gas sources from shale and greater
transmission capacity as well as the impacts of reduced industrial demand for
natural gas in the Midwest and is consistent with trends experienced in the
fourth quarter of 2010. These conditions have resulted in plentiful natural gas
supply and lower and less volatile natural gas prices. Historical basis
differences between physical and financial markets and summer and winter prices
have narrowed. As a result, there have been reduced opportunities to optimize ProLiance's firm transportation and storage capacity. ProLiance has structured optimization activities to remain
flexible to maximize potential opportunities if market conditions improve and
has undertaken other actions to improve future results.
ProLiance has approximately $80 million of annual fixed costs related to its
transportation and storage contracts, with contracts representing nearly
one-third of these fixed costs expiring over the next three years and one-half
over the next five years. At March 31, 2011ProLiance continued to maintain
significant sources of liquidity beyond its credit facility, which is up for
renewal in June 2011. Significant progress is being made toward the renewal and
ProLiance remains confident that the facility will be
renewed and at a much lower level as lower gas prices have resulted in a much
lower working capital requirement. At March 31, 2011, ProLiance's
balance sheet has $60 million of cash, $191 million of members' equity, and no
long-term debt or working capital debt outstanding. Various profit improvement
initiatives are underway, including lowering the cost of pipeline demand costs
through ongoing pipeline renegotiations. Should market conditions improve from
the current depressed levels, ProLiance's return to
profitability would be accelerated.
Vectren Energy Delivery of Indiana and Citizens Energy Group received
regulatory approval March 17, 2011 from the IURC to continue to utilize ProLiance to perform portfolio management services for
their natural gas supply needs through March 2016.
Other Businesses
The first quarter of 2010 includes a $2.9 million after tax charge in the Other
business portfolio related to the reduction in value of a note receivable
recorded in 2002 related to a previously exited business.
Please SEE ATTACHED unaudited schedules for additional
financial information
Live Webcast on May 5, 2011
Vectren's financial analyst call will be at 2 p.m.
(EDT), May 5, 2011, at which time management will discuss financial results and
2011 earnings guidance. To participate in the call, analysts are asked to dial
1-866-821-5457 10 minutes prior to the start time and refer to the "Vectren Corporation 1st Quarter" conference call. All
interested parties may listen to the live webcast accompanied by a slide
presentation at http://www.vectren.com. A replay of the webcast will be made available at the same location
approximately two hours following the conclusion of the meeting.
About Vectren
Vectren Corporation (NYSE: VVC) is an energy holding
company headquartered in Evansville, Ind.Vectren's
energy delivery subsidiaries provide gas and/or electricity to more than one
million customers in adjoining service territories that cover nearly two-thirds
of Indiana and west central Ohio. Vectren's
nonutility subsidiaries and affiliates currently offer energy-related products
and services to customers throughout the U.S. These include infrastructure
services, energy services, coal mining and energy marketing. To learn more
about Vectren, visit http://www.vectren.com.
Forward-Looking Statements
All statements other than statements of historical fact included in this news
release are forward-looking statements made in good faith by the company and
are intended to qualify for the safe harbor from liability established by the
Private Securities Litigation Reform Act of 1995. Such statements are based on
management's beliefs, as well as assumptions made by and information currently
available to management and include such words as "believe",
"anticipate", "endeavor", "estimate",
"expect", "objective," "projection,"
"forecast," "goal," "likely," and similar
expressions intended to identify forward-looking statements. Vectren cautions readers that the assumptions forming the
basis for forward-looking statements include many factors that are beyond Vectren's ability to control or estimate precisely and
actual results could differ materially from those contained in this document.
In addition to any assumptions and other factors
referred to specifically in connection with such forward-looking statements,
factors that could cause the company's actual results to differ materially from
those contemplated in any forward-looking statements include, among others, the
following:
Factors affecting utility operations such as unusual
weather conditions; catastrophic weather-related damage; unusual maintenance or
repairs; unanticipated changes to fossil fuel costs; unanticipated changes to
gas transportation and storage costs, or availability due to higher demand,
shortages, transportation problems or other developments; environmental or
pipeline incidents; transmission or distribution incidents; unanticipated
changes to electric energy supply costs, or availability due to demand,
shortages, transmission problems or other developments; or electric
transmission or gas pipeline system constraints; catastrophic events such as
fires, earthquakes, explosions, floods, ice storms, tornados, terrorist acts or
other similar occurrences could adversely affect Vectren's
facilities, operations, financial condition and results of operations;
increased competition in the energy industry, including the effects of industry
restructuring and unbundling; regulatory factors such as unanticipated changes
in rate-setting policies or procedures, recovery of investments and costs made
under traditional regulation, and the frequency and timing of rate increases;
financial, regulatory or accounting principles or policies imposed by the
Financial Accounting Standards Board; the Securities and Exchange Commission;
the Federal Energy Regulatory Commission; state public utility commissions;
state entities which regulate electric and natural gas transmission and
distribution, natural gas gathering and processing, electric power supply; and
similar entities with regulatory oversight; economic conditions including the
effects of an economic downturn, inflation rates, commodity prices, and
monetary fluctuations; economic conditions surrounding the current economic
uncertainty, including significantly lower levels of economic activity;
uncertainty regarding energy prices and the capital and commodity markets;
volatile changes in the demand for natural gas, electricity, coal, and other
nonutility products and services; impacts on both gas and electric large
customers; lower residential and commercial customer counts; higher operating
expenses; and further reductions in the value of certain nonutility real estate
and other legacy investments; increased natural gas and coal commodity prices
and the potential impact on customer consumption, uncollectible accounts
expense, unaccounted for gas and interest expense; changing market conditions
and a variety of other factors associated with physical energy and financial
trading activities including, but not limited to, price, basis, credit,
liquidity, volatility, capacity, interest rate, and warranty risks; direct or
indirect effects on the company's business, financial condition, liquidity and
results of operations resulting from changes in credit ratings, changes in
interest rates, and/or changes in market perceptions of the utility industry
and other energy-related industries; the performance of projects undertaken by
the company's nonutility businesses and the success of efforts to invest in and
develop new opportunities, including but not limited to, the company's
infrastructure, energy services, coal mining, and energy marketing strategies;
factors affecting coal mining operations including MSHA guidelines and
interpretations of those guidelines, as well as additional mine regulations and
more frequent and broader inspections that could result from the recent mining
incidents at coal mines of other companies; geologic, equipment, and
operational risks; the ability to execute and negotiate new sales contracts and
resolve contract interpretations; volatile coal market prices and demand;
supplier and contract miner performance; the availability of key equipment,
contract miners and commodities; availability of transportation; and the
ability to access/replace coal reserves ; employee or contractor workforce
factors including changes in key executives, collective bargaining agreements
with union employees, aging workforce issues, work stoppages, or pandemic
illness; legal and regulatory delays and other obstacles associated with
mergers, acquisitions and investments in joint ventures; costs, fines,
penalties and other effects of legal and administrative proceedings,
settlements, investigations, claims, including, but not limited to, such
matters involving compliance with state and federal laws and interpretations of
these laws; changes in or additions to federal, state or local legislative
requirements, such as changes in or additions to tax laws or rates,
environmental laws, including laws governing greenhouse gases, mandates of
sources of renewable energy, and other regulations.
More detailed information about these factors is set
forth in Vectren's filings with the Securities and
Exchange Commission, including Vectren's 2010 annual
report on Form 10-K filed on Feb. 17, 2011. The company undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of changes in actual results, changes in assumptions, or other
factors affecting such statements.
VECTREN CORPORATION
AND
SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions, except per share amounts)
(Unaudited)
Three
Months
Ended March 31
--------------------
2011
2010
--------- ---------
OPERATING REVENUES:
Gas utility
$ 356.7 $ 468.1
Electric utility
146.4
144.9
Nonutility
179.5 127.3
--------- ---------
Total operating revenues
682.6
740.3
--------- ---------
OPERATING EXPENSES:
Cost of gas sold
195.1
297.8
Cost of fuel and purchased
power
59.5
58.0
Cost of nonutility
revenues
105.1
60.5
Other operating
141.6
128.9
Depreciation and
amortization
59.1
55.8
Taxes other than income
taxes
18.9
23.1
--------- ---------
Total operating expenses
579.3
624.1
--------- ---------
OPERATING INCOME
103.3 116.2
OTHER INCOME (EXPENSE):
Equity in earnings (losses)
of unconsolidated
affiliates
(10.9) 8.2
Other income (loss)-
net
2.4
(0.5)
--------- ---------
Total other income (expense)
(8.5)
7.7
--------- ---------
INTEREST EXPENSE
26.6 26.0
--------- ---------
INCOME BEFORE INCOME TAXES
68.2
97.9
INCOME TAXES
23.6
34.7
--------- ---------
NET INCOME
$ 44.6 $ 63.2
========= =========
AVERAGE COMMON SHARES OUTSTANDING
81.7
81.0
DILUTED COMMON SHARES
OUTSTANDING
81.7
81.2
EARNINGS PER SHARE OF COMMON STOCK
BASIC
$ 0.55 $ 0.78
========= =========
DILUTED
$ 0.55 $
0.78
========= =========
VECTREN UTILITY HOLDINGS
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions)
(Unaudited)
Three
Months
Ended March 31
---------------------
2011
2010
----------
----------
OPERATING REVENUES:
Gas utility
$ 356.7 $ 468.1
Electric utility
146.4
144.9
Other 0.5 0.4
---------- ----------
Total operating revenues
503.6
613.4
----------
----------
OPERATING EXPENSES:
Cost of gas sold
195.1
297.8
Cost of fuel and purchased
power
59.5
58.0
Other operating
86.9 81.6
Depreciation and
amortization
48.2
46.5
Taxes other than income
taxes
18.0
22.3
---------- ----------
Total operating expenses
407.7
506.2
---------- ----------
OPERATING INCOME
95.9
107.2
OTHER INCOME - NET 1.7 2.2
INTEREST EXPENSE
20.4
20.3
---------- ----------
INCOME BEFORE INCOME TAXES
77.2 89.1
INCOME TAXES
28.6
33.7
---------- ----------
NET INCOME
$ 48.6
$ 55.4
========== ==========
VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Millions -
Unaudited)
March 31, December 31,
2011
2010
----------- -----------
ASSETS
Current Assets
Cash & cash equivalents
$
34.5 $ 10.4
Accounts receivable - less reserves of
$8.1 &
$5.3, respectively
216.2
176.6
Accrued unbilled revenues
105.7
162.0
Inventories
132.4
187.1
Recoverable fuel & natural gas
costs
3.0
7.9
Prepayments & other current
assets
62.5
101.2
----------- -----------
Total current assets
554.3
645.2
----------- -----------
Utility Plant
Original cost
4,827.4
4,791.7
Less: accumulated depreciation &
amortization
1,867.6
1,836.3
----------- -----------
Net utility plant
2,959.8 2,955.4
----------- -----------
Investments in unconsolidated
affiliates
126.5
135.2
Other utility & corporate
investments
34.8
34.1
Other nonutility investments
41.0
40.9
Nonutility plant - net
527.6
488.3
Goodwill - net
262.3
242.0
Regulatory assets
183.1
189.4
Other assets
52.4
33.7
----------- -----------
TOTAL ASSETS
$ 4,741.8 $ 4,764.2
=========== ===========
LIABILITIES & SHAREHOLDERS'
EQUITY
Current Liabilities
Accounts payable
$
134.5 $ 183.7
Accounts payable to affiliated
companies
28.5
59.6
Accrued liabilities
207.4
178.4
Short-term borrowings
122.3
118.3
Current maturities of long-term debt
103.4
250.7
Long-term debt subject to tender
30.0
30.0
----------- -----------
Total current liabilities
626.1
820.7
----------- -----------
Long-term Debt - Net of Current
Maturities &
Debt Subject to Tender
1,587.4
1,435.2
Deferred Income Taxes & Other
Liabilities
Deferred income taxes
534.3
515.3
Regulatory liabilities
339.2
333.5
Deferred credits & other
liabilities
198.6
220.6
----------- -----------
Total deferred credits & other
liabilities
1,072.1
1,069.4
----------- -----------
Common Shareholders' Equity
Common stock (no par value) - issued
&
outstanding 81.7 and 81.7 shares,
respectively
685.5
683.4
Retained earnings
775.7
759.9
Accumulated other comprehensive income
(loss)
(5.0)
(4.4)
----------- -----------
Total common shareholders'
equity
1,456.2
1,438.9
----------- -----------
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $ 4,741.8 $ 4,764.2
=========== ===========
VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions - Unaudited)
For the three months
ended March 31,
--------------------
2011 2010
--------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income
$ 44.6 $ 63.2
Adjustments to reconcile net income to
cash from
operating activities:
Depreciation & amortization
59.1
55.8
Deferred income taxes & investment
tax credits
18.5
9.5
Equity in (earnings) losses of
unconsolidated
affiliates
10.9
(8.2)
Provision for uncollectible
accounts
5.9 6.5
Expense portion of pension &
postretirement benefit
cost
2.2 3.1
Other non-cash charges - net
3.2 8.4
Changes in working capital accounts:
Accounts receivable & accrued
unbilled revenues
31.5
12.9
Inventories
54.7
36.5
Recoverable/refundable fuel &
natural gas costs
5.1
(9.4)
Prepayments & other current
assets
39.0
42.7
Accounts payable, including to
affiliated
companies
(86.8)
(79.2)
Accrued liabilities
23.8
41.3
Unconsolidated affiliate dividends
- 6.9
Employer contributions to pension &
postretirement
plans
(29.2)
(4.3)
Changes in noncurrent assets
8.0
21.0
Changes in noncurrent liabilities
(2.1)
(4.0)
--------- ---------
Net cash flows from operating
activities
188.4
202.7
--------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from:
Dividend reinvestment plan &
other common stock
issuances
1.7 1.5
Requirements for:
Dividends on common stock
(28.2)
(27.5)
Retirement of long-term debt
(0.1)
(0.7)
Other financing activities
(1.4)
-
Net change in short-term borrowings
4.0
(49.2)
--------- ---------
Net cash flows from financing
activities
(24.0)
(75.9)
--------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Proceeds from:
Unconsolidated affiliate
distributions
-
0.5
Other collections
0.3 2.0
Requirements for:
Capital expenditures, excluding AFUDC
equity
(57.7)
(71.0)
Business acquisition, net of cash
acquired
(82.9)
-
Other investments
-
(1.2)
--------- ---------
Net cash flows from investing
activities (140.3) (69.7)
--------- ---------
Net change in cash & cash
equivalents
24.1
57.1
Cash & cash equivalents at
beginning of period
10.4
11.9
--------- ---------
Cash & cash equivalents at end
of period
$ 34.5 $ 69.0
========= =========
VECTREN
CORPORATION
AND SUBSIDIARY COMPANIES
HIGHLIGHTS
(millions, except per share amounts)
(Unaudited)
Three
Months
Ended March 31
--------------------
2011
2010
--------- ---------
REPORTED EARNINGS:
Utility Group
$ 48.6 $ 55.4
Nonutility Group
Infrastructure Services
(2.9)
(3.0)
Energy Services
(1.4)
(0.3)
Coal Mining
1.6 3.9
Energy Marketing
(0.4)
10.2
Other Businesses (0.3) (3.0)
--------- ---------
Total Nonutility Group
(3.4)
7.8
Corporate and Other
(0.6)
-
--------- ---------
Vectren Consolidated
$ 44.6 $ 63.2
========= =========
REPORTED EPS
$ 0.55 $ 0.78
========= =========
VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED
GAS DISTRIBUTION
OPERATING STATISTICS
(Unaudited)
Three Months
Ended
March 31
--------------------
2011
2010
--------- ---------
GAS OPERATING REVENUES (Millions):
Residential
$ 245.0 $ 322.8
Commercial
88.9
121.1
Industrial
18.7
18.8
Other Revenue
4.1 5.4
--------- ---------
$ 356.7 $ 468.1
========= =========
GAS MARGIN (Millions):
Residential
$ 105.1 $ 112.1
Commercial
34.4
36.4
Industrial
17.7 16.2
Other
4.4 5.6
--------- ---------
$ 161.6 $ 170.3
========= =========
GAS SOLD & TRANSPORTED (MMDth):
Residential
37.1
38.3
Commercial
15.7 16.3
Industrial
28.8
26.6
--------- ---------
81.6
81.2
========= =========
AVERAGE GAS CUSTOMERS:
Residential
909,290 908,723
Commercial
83,852
83,933
Industrial
1,654 1,618
--------- ---------
994,796 994,274
========= =========
YTD WEATHER AS A PERCENT OF NORMAL:
Heating Degree Days
(Ohio)
108%
111%
VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
SELECTED ELECTRIC
OPERATING STATISTICS
(Unaudited)
Three Months
Ended March 31
--------------------
2011
2010
--------- ---------
ELECTRIC OPERATING REVENUES (Millions):
Residential
$ 47.4 $ 49.4
Commercial
34.1
33.2
Industrial
50.3
45.8
Other Revenue 2.0 1.9
--------- ---------
Total
Retail
133.8
130.3
Net Wholesale
Revenues
12.6 14.6
--------- ---------
$ 146.4 $ 144.9
========= =========
ELECTRIC MARGIN (Millions):
Residential
$ 32.1 $ 33.6
Commercial
21.9
21.7
Industrial
23.4
22.5
Other
1.9 1.7
--------- ---------
Total
Retail
79.3
79.5
Net Wholesale
Margin
7.6 7.4
--------- ---------
$ 86.9 $
86.9
========= =========
ELECTRICITY SOLD (GWh):
Residential
381.2
411.2
Commercial
300.4
300.7
Industrial
661.9
610.4
Other Sales - Street
Lighting
5.9 6.0
--------- ---------
Total
Retail
1,349.4 1,328.3
Wholesale
183.9 235.4
--------- ---------
1,533.3 1,563.7
========= =========
AVERAGE ELECTRIC CUSTOMERS:
Residential
123,126 123,029
Commercial
18,248
18,314
Industrial
111 107
Other
33
33
--------- ---------
141,518 141,483
========= =========
YTD WEATHER AS A PERCENT OF NORMAL:
Cooling Degree Days
(Indiana)
N/A N/A
Heating Degree Days
(Indiana)
98%
108%
Investor Contact
Robert Goocher
(812) 491-4080
rgoocher@vectren.com
Media Contact
Mike Roeder
(812)
491-5255
mroeder@vectren.com
Source:
Vectren Corporation