Attached files
file | filename |
---|---|
EX-99.3 - EXHBIT 99.3 - VECTREN CORP | ex99_3.htm |
EX-99.2 - EXHIBIT 99.2 - VECTREN CORP | ex99_2.htm |
8-K - 2009 QFR - VECTREN CORP | vvc_8k.htm |
Exhibit
99.1
NEWS
RELEASE
Vectren
Corporation
P.O.
Box 209
Evansville, IN
47702-0209
Investor Contact Steven M. Schein,
(812) 491-4209, sschein@vectren.com
Media Contact
Jeffrey W. Whiteside, (812) 491-4205,
jwhiteside@vectren.com
FOR
IMMEDIATE RELEASE
February
25, 2010
Vectren
Corporation Reports 2009 Results
Issues
2010 Guidance
Evansville,
Indiana - Vectren Corporation (NYSE:VVC) today reported 2009 net income of
$133.1 million, or $1.65 per share, which compares to net income of $129.0
million, or $1.65 per share, in 2008. Fourth quarter net income was
$54.6 million, or $0.68 per share, compared to $37.1 million, or $0.46 per
share, in 2008. Excluding the charge related to an investment by
ProLiance Energy, LLC in Liberty Gas Storage, LLC, 2009 annual net income was
$145.0 million, or $1.80 per share. Net income excluding the charge
is a non-GAAP performance measure. See a discussion of this non-GAAP
performance measure later in this earnings release.
Summary
Results
·
|
Utility
Group 2009 earnings were $107.4 million, or $1.33 per share, compared to
$111.1 million, or $1.42 per share, in 2008. Utility Group
results were down only modestly in 2009, even after considering the
impacts of the recession; significant cost reductions helped offset those
impacts to a large degree. Fourth quarter Utility Group
earnings were $35.9 million, or $0.44 per share, compared to $30.7
million, or $0.38 per share, in the fourth quarter of
2008.
|
·
|
Nonutility
Group 2009 earnings, excluding the Liberty charge, were $37.7 million, or
$0.47 per share, compared to earnings of $18.9 million, or $0.24 per
share, in 2008. For the fourth quarter, Nonutility Group
earnings were $19.0 million, or $0.24 per share, compared to $6.8 million,
or $0.08 per share, in
2008.
|
“Overall,
we are pleased with 2009 results. Our utility group performance was
good, though the impacts of the recession were certainly felt. Our
commitment to cost control helped mitigate some of the impacts of the slowed
economy. Our nonutility group showed significantly improved
performance, particularly in our coal mining and retail gas marketing
businesses,” said Niel C. Ellerbrook, Vectren’s Chairman and CEO.
2010
Earnings Guidance
The
company expects 2010 consolidated earnings to be within a range of $1.60 to
$1.80 per share. Within this overall range, the projected earnings
from the Utility Group are $1.23 to $1.33 per share and projected earnings from
the Nonutility Group are $0.37 to $0.47 per share.
The
above consolidated earnings expectations are consistent with recessionary
impacts experienced in 2009, including a continued lower demand for electricity,
natural gas, and coal. These
expectations contemplate additional coal sales and beginning production at the
Oaktown mines as the near term market improves. Further, these
earnings expectations are based on normal weather in the company’s electric
service territory and reflect that weather impacts in the gas territories are
largely mitigated as a result of rate design and/or weather mechanisms in place
in Indiana and Ohio. Changes in these events or other circumstances
could materially impact earnings and result in earnings for 2010 significantly
above or below this guidance. These targeted ranges are subject to
such factors discussed below under “Forward-Looking
Statements.”
-more-
Management
Succession
Niel
C. Ellerbrook, chairman and CEO of Vectren Corp (NYSE:VVC), will retire May 31,
2010, as the company’s CEO, after a decade of service in the position.
Ellerbrook will serve in the role of non-executive chairman for the
company.
Ellerbrook
joined Indiana Gas Company, Inc., in 1980 where he assumed increasing
responsibilities culminating in 1999 with his election as president and CEO of
Indiana Energy, Inc., the holding company of Indiana Gas and a predecessor of
Vectren. The Vectren board of directors elected Ellerbrook as chairman and chief
executive officer effective upon its formation in March
2000. Ellerbrook was instrumental in merging two energy holding
companies together to create Vectren while concurrently purchasing the natural
gas distribution assets of Dayton Power and Light. These transactions
have produced one of Indiana’s largest publicly traded corporations. With nearly
$2.1 billion in revenues and 3,700 employees, Vectren provides products and
services in nearly half of the United States, including 1.1 million utility
customers in Indiana and Ohio.
As
part of the company’s succession planning process, the board of directors chose
Carl L. Chapman, Vectren’s president and chief operating officer, to replace
Ellerbrook as the next CEO. Chapman was elected to the board of directors in May
2009 and has served as an officer of the company for more than 20
years.
Chapman
joined Indiana Gas Company, Inc., in 1985 after eight years of service with
Arthur Andersen & Co. Chapman has held various executive
management roles including executive vice president and COO of Vectren,
president of Vectren Enterprises, Vectren’s holding company for its nonregulated
subsidiaries and affiliates, and executive vice president and chief financial
officer of Indiana Energy, Inc. He was also instrumental in forming
ProLiance Energy, the company’s largest nonutility affiliate, where he served as
the first president.
Vectren
South Electric Base Rate Filing
On
December 11, 2009, Vectren South Electric filed a request with the Indiana
Utility Regulatory Commission (IURC) for a base rate increase for its
southwestern Indiana electric utility. The regulatory filing requests approval
of the increase to address capital investments, a modified electric rate design
that facilitates a partnership between the company and customers to pursue
energy efficiency and conservation, and new energy efficiency programs to
complement those currently offered for natural gas customers.
More
than half of the request to increase rates is driven by the need to recover
costs associated with the roughly $325 million spent in infrastructure
construction within the past three years that was needed to continue to provide
reliable service to its more than 140,000 customers. Most of the
remainder of the request is to account for the now lower overall sales levels
resulting from the recession. Additionally, the rate increase reflects a slight
increase in the utility’s annual operating and maintenance costs since its last
rate case, nearly four years ago.
-more-
The
proposed rate design, often referred to as decoupling, will break the link
between customers’ consumption and the utility’s rate of return, thereby,
aligning the utility’s and customers’ interests in using less energy. This
approach has already been successfully implemented for Vectren’s gas
utilities.
If
approved as filed, the energy efficiency programs will include automatic
discounts through various retailers on compact fluorescent light bulbs, rebates
for the early retirement of older, inefficient appliances, including
refrigerators and window-unit air conditioners, and custom programs for
high-efficiency lighting for small business customers. Vectren has also proposed
to establish on-site energy audits for both residential and small commercial
customers.
Utility
Group Discussion
The
Utility Group’s 2009 earnings were $107.4 million, compared to $111.1 million in
2008. The decrease in 2009 compared to 2008 reflects lower large
customer usage and lower wholesale power sales, both due to the recession, mild
cooling weather, and an increase in depreciation expense associated with rate
base growth. Increased revenues associated with regulatory
initiatives, lower operating expenses, and the return of market values
associated with investments related to benefit plans partially offset these
declines. Utility Group earnings were $35.9 million and $30.7 million
for the fourth quarter of 2009 and 2008, respectively. The quarterly
earnings increase is primarily due to lower operating expenses.
In
the company’s electric and the Ohio natural gas service territory, management
estimates the margin impact of weather to be approximately $4.2 million
unfavorable compared to normal temperatures and $5.4 million unfavorable
compared to the prior year. For the fourth quarter, management
estimates a $0.6 million unfavorable impact from weather on margin compared to
normal and a $2.2 million unfavorable impact compared to the prior year
quarter. With the rate design now in place in Ohio, the impacts of
weather in Ohio should be largely mitigated in the future.
Gas
Utility Margin
Gas
utility margins were $447.9 million for the year ended December 31, 2009 and
$128.6 million for the fourth quarter of 2009. Following are
reconciliations of the changes from 2008:
(millions)
|
Year
|
Quarter
|
|||
2008
Gas Utility Margin
|
$ |
449.6
|
$ 133.2
|
||
Regulatory
initiatives, including the full impact of the Vectren
North
|
|||||
base rate increase
and the Vectren Ohio base rate increase
|
8.4
|
-
|
|||
Ohio
weather
|
(0.2)
|
(0.6)
|
|||
Recessionary
impacts:
|
|||||
Large customer
usage declines
|
(4.4)
|
(0.4)
|
|||
Declining small
customer count
|
(1.7)
|
(0.4)
|
|||
Miscellaneous
revenues
|
(1.7)
|
(0.8)
|
|||
Costs
directly recovered in margin and other
|
(2.1)
|
(2.4)
|
|||
Total
change in Gas Utility Margin
|
(1.7)
|
(4.6)
|
|||
2009
Gas Utility Margin
|
$ |
447.9
|
128.6
|
Electric
Utility Margin
Retail
Electric
retail utility margins were $313.6 million for the year ended December 31, 2009
and $75.6 million in the fourth quarter of 2009. Following are
reconciliations of the changes from 2008:
-more-
(millions)
|
Year
|
Quarter
|
|||
2008
Retail Electric Margin
|
$ |
308.8
|
$ 71.9
|
||
Weather
|
(5.2)
|
(1.6)
|
|||
Return
on pollution control investments
|
4.5
|
1.3
|
|||
Recovery
of tracked MISO and pollution control related costs
|
10.3
|
2.6
|
|||
Large
customer usage
|
(4.9)
|
0.5
|
|||
All
other changes
|
0.1
|
0.9
|
|||
Total
change in Retail Electric Margin
|
4.8
|
3.7
|
|||
2009
Retail Electric Margin
|
$ |
313.6
|
$ 75.6
|
Margin
from Wholesale Electric Activities
In
2009, wholesale margins were $20.7 million for the year and $5.4 million for the
fourth quarter, representing decreases of ($11.8) million and ($4.9) million,
respectively.
Of
the annual and quarterly decreases, ($17.1) million and ($5.5) million,
respectively, relate to lower margin retained by the company from off-system
sales. The company experienced lower wholesale power marketing
margins due primarily to lower demand and wholesale prices due to the recession,
coupled with increased coal costs. The base rate increase effective
August 17, 2007, requires that wholesale margin from off-system sales earned
above or below $10.5 million be shared equally with customers as measured on a
fiscal year ending in August. These results reflect the impact of
that sharing. Decreases associated with off-system sales have been
partially offset by margins associated with transmission system
operations.
Beginning
in June 2008, the company began earning a return on electric transmission
projects constructed by the company in its service territory that meet the
criteria of Midwest Independent System Operator’s (MISO) transmission expansion
plans. Margin associated with these projects and other transmission
system operations increased $5.3 million, to $14.6 million in 2009 and during
the fourth quarter increased $0.6 million to $3.6 million.
Other
Operating
Other
operating expenses were $304.6 million for the year ended December 31, 2009 and
$76.7 million in the fourth quarter of 2009. Following are
reconciliations of the changes from 2008:
(millions)
|
Year
|
Quarter
|
|||
2008
Other Operating Expenses
|
$ |
300.3
|
$ 82.6
|
||
Operating
costs recovered in margin, such as bad debt cost recovery,
|
|||||
conservation
program cost recovery and clean air related cost recovery
|
10.9
|
2.4
|
|||
Cost
reductions, including lower electric maintenance costs
|
|||||
and lower chemical
costs
|
(6.6)
|
(8.3)
|
|||
Total
Change in Other Operating Expenses
|
4.3
|
(5.9)
|
|||
2009
Other Operating Expenses
|
$ |
304.6
|
$ 76.7
|
-more-
Depreciation
& Amortization
Depreciation
expense was $180.9 million for 2009 and $46.1 million for the fourth quarter, an
increase of $15.4 million and $3.8 million, respectively, compared to
2008. The increase in depreciation is due largely to plant
additions. Plant additions include the approximate $100 million
SO2
scrubber placed into service January 1, 2009, for which annual depreciation
totaling $5.6 million is directly recovered in electric utility
margin.
Taxes
Other Than Income Taxes
Taxes
Other Than Income Taxes were $60.3 million for 2009 and $14.1 million for the
fourth quarter, a decrease of $12.0 million and $6.4 million, respectively,
compared to 2008. These taxes are primarily revenue-related
taxes. The decreased taxes are due largely to lower revenues, driven
by significantly lower gas costs. These tax expenses are recovered
through revenue.
Other
Income - Net
Other
Income-net reflects income of $7.8 million in 2009 compared to income of $4.0
million in 2008. Of the annual increase totaling $3.8 million, $2.6
million occurred in the fourth quarter. The increases primarily
reflect increases in market values associated with investments related to
benefit plans.
Interest
Expense
Interest
expense of $79.2 million for 2009 and $20.3 for the quarter was relatively flat
year over year and for the fourth quarter. Lower short-term interest
rates and lower average short-term debt balances have favorably affected
interest expense year over year and are reflective of lower gas prices and the
issuance of new long-term debt. Offsetting the favorable impacts of
lower rates and short term balances is the impact of two long-term financing
transactions completed in 2009. The long term financing transactions
include a second quarter issuance by Utility Holdings of $100 million in
unsecured eleven year notes with an interest rate of 6.28 percent and a third
quarter completion by SIGECO of a $22.3 million debt issuance of 31 year tax
exempt first mortgage bonds with an interest rate of 5.4 percent.
Income
Taxes
Federal
and state income taxes were $59.2 million in 2009 and $18.6 million for the
fourth quarter, an annual decrease of ($8.4) million and a quarterly increase of
$0.6 million compared to 2008. Both the annual and quarterly changes
are impacted primarily by fluctuations in pre-tax income and a lower effective
tax rate in 2009 as a result of more taxable income allocated to states with
low, or no, state income taxes.
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
2009, Nonutility Group earnings were $37.7 million, excluding the Liberty charge
(reported in the second quarter of 2009 and discussed below), which compares to
net income of $18.9 million in 2008, an increase of $18.8 million year over
year. Including the Liberty Charge, 2009 Nonutility Group
earnings were $25.8 million.
The
2009 improvement of $18.8 million compared to 2008 primarily reflects a $15.4
million increase in earnings from primary nonutility
operations. Primary nonutility business groups are Energy Marketing
and Services, Coal Mining, and Energy Infrastructure Services
companies. Coal mining operations has shown improvement due to
increased pricing effective January 1, 2009, increasing its contribution to
earnings approximately $18.0 million. Retail gas marketing earnings
are $4.5 million higher than the prior year, and performance contracting
activity at Energy Systems Group (ESG) increased its earnings contribution $2.1
million compared to 2008. These increases were partially offset by
lower earnings contributions from ProLiance and Miller Pipeline.
-more-
Other
nonutility businesses operated at a loss of ($2.5) million in 2009 compared to a
loss of ($5.9) million in 2008. Other nonutility businesses are
legacy investments, including investments in commercial real
estate. The lower results in 2008 were driven primarily by a charge
associated with commercial real estate investments.
During
the fourth quarter of 2009, the Nonutility Group contributed earnings of $19.0
million compared to $6.8 million in 2008. The $12.2 million increase
is primarily related to coal mining earnings that were $9.0 million higher than
last year and ProLiance’s earnings that were $3.4 million higher than last
year. Results were partially offset by lower Energy Infrastructure
earnings.
Energy
Marketing and Services
Energy
Marketing and Services is comprised of the company’s gas marketing operations,
energy management services, and retail gas supply
operations. Operating entities contributing to these results include
Vectren Source and ProLiance. Results, inclusive of holding company
costs but excluding the Liberty charge of $11.9 million after tax, from Energy
Marketing and Services for the year ended December 31, 2009, were earnings of
$16.0 million compared to $18.0 million in 2008. Fourth quarter 2009
earnings were $10.0 million compared to earnings of $5.6 million in
2008.
During
2009, ProLiance’s earnings contribution was $9.6 million compared to $19.3
million in 2008. The ($9.7) million decrease primarily reflects lower
cash to NYMEX spreads compared to the prior year, particularly spreads existing
in the third quarter of 2008 that had unprecedented price volatility and
resulted in record quarterly earnings from ProLiance. In the fourth
quarter, ProLiance’s earnings contribution was $7.0 million compared to $3.6
million in 2008. The quarterly increase is due primarily to increased
optimization margins resulting from more favorable
spreads. ProLiance’s storage capacity was 46 BCF at
December 31, 2009 compared to 42 BCF at December 2008.
Vectren
Source, the company’s retail gas marketer, earned approximately $6.4 million in
2009 compared to $1.9 million in 2008. The record earnings in 2009
resulted primarily from favorable market conditions over the course of 2009’s
first quarter as revenues on variable priced sales contracts fell more slowly
than gas costs. In the fourth quarter, earnings were $2.4
million, an increase of $0.7 million compared to last year due primarily to
higher customer count. Vectren Source’s customer count at December
31, 2009, was approximately 189,000 customers compared to 170,000 at December
31, 2008.
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. (Vectren Fuels).
Inclusive of holding company costs, Coal Mining earned $13.4 million in 2009
compared to a loss of ($4.6) million in 2008. During the fourth
quarter Coal Mining earned approximately $6.0 million compared to a loss of
($3.0) million in 2008.
Compared
to 2008, Coal Mining earnings have increased based on new contract pricing
effective January 1, 2009. The impact of higher revenues has been somewhat
offset by increased costs per ton mined and the recession. The
anticipated cost increase was reflective of efforts to reconfigure the mining
operation at Prosperity mine in order to improve future productivity and meet
Mine Safety and Health Administration (MSHA) requirements. During the
second half of 2009, these improvements began to favorably impact production and
operating costs. The continuing recession resulted in a decrease in
the demand for, and market price of, Illinois Basin coal, and lower than
anticipated earnings from coal mining operations. The lowered demand
has caused some build up of coal inventory at most customer locations as well as
at Vectren Fuels’ mines. As a result of contracts with minimum
delivery provisions, certain customers scaled back their deliveries within
specified limits. This resulted in less 2009 mine production as
Vectren Fuels reduced production to align with customer’s
needs. Further, Vectren Fuels is currently in a dispute with one
customer regarding its purchase contract, and Vectren Fuels is working to
resolve the dispute. Fuels sold 3.5 million tons in 2009 compared to
4.2 million tons in 2008. The original expectation for 2009 was to
sell between 4.6 and 5.2 million tons. Further, the higher customer
coal inventory levels will likely cause the current demand and supply imbalance
to extend into 2010. Early 2010 has shown some decline in customer
inventory levels, due largely to colder weather and the resulting increased
demand.
-more-
The
first of two new underground mines located near Vincennes, Indiana, which began
minor coal extraction in the latter half of 2009, is now operational. The
second mine is currently expected to open in 2011. However, Vectren Fuels
may continue to change this time table as it evaluates the impacts of current
market conditions. Reserves at the two mines are estimated at 100 million
tons of recoverable number-five coal at 11,200 BTU (British thermal units) and
less than 6-pound sulfur dioxide. The reserves at these new mines bring
total coal reserves to approximately 135 million tons at December 31,
2009. Once in production, the two new mines are capable of producing about
5 million tons of coal per year.
Energy
Infrastructure Services
Energy
Infrastructure Services provides underground construction and repair to utility
infrastructure through Miller Pipeline Corporation (Miller) and energy
performance contracting and renewable energy services through Energy Systems
Group (ESG). Inclusive of holding company costs, Energy
Infrastructure Services contributed earnings of $10.8 million in 2009 compared
to $11.4 million in 2008. In the fourth quarter of 2009, these
operations contributed $3.2 million compared to $5.9 million in
2008.
Miller’s
2009 annual earnings were $3.1 million compared to its $6.2 million record
earnings year in 2008. Of the annual ($3.1) million decrease, ($2.5)
million occurred in the fourth quarter. The decreases primarily
result from customer cut backs in spending as a result of the recession. In
addition, startup costs associated with new contracts also negatively impacted
year over year results. Lower interest rates partially offset the
lower margins. As the country continues to replace its aging natural
gas infrastructure and needs for shale gas infrastructure become more prevalent,
Miller is positioned for future growth.
ESG’s
annual earnings were $8.8 million in 2009 compared to $6.7 million in
2008. The increase is primarily a result of increased performance
contracting revenues associated with the continued focus on renewable energy,
energy conservation, and sustainability measures by ESG’s
customers. As part of ESG’s ongoing renewable energy project
development strategy, results in 2009 include the sale of a 3 MW self-developed
landfill gas facility. With approval from the IURC, the facility was
sold to Vectren South, as part of the utility’s strategy to continue to build a
renewable energy portfolio. ESG’s results associated with this
renewable project match the results of a similar land fill gas project completed
near Atlanta, Georgia in 2008. In the fourth quarter ESG’s earnings
were $3.0 million compared to $3.8 million in 2008.
At
December 31, 2009, ESG’s backlog was $70 million compared to $65 million at
December 31, 2008. The national focus on a comprehensive energy
strategy as evidenced by the Energy Independence and Security Act of 2007 and
the American Recovery and Reinvestment Act of 2009 is likely to create favorable
conditions for ESG’s growth and resulting earnings.
Charge
Related to ProLiance’s Investment in Liberty Gas Storage
Liberty
Gas Storage, LLC (Liberty), a joint venture between a subsidiary of ProLiance
and a subsidiary of Sempra Energy (SE), is a development project for salt-cavern
natural gas storage facilities. ProLiance is the minority member with a 25
percent interest, which it accounts for using the equity method. As
reported in the second quarter, SE determined that attempts at corrective
measures had been unsuccessful in development of certain caverns. At
June 30, 2009, Liberty recorded a charge of approximately $132 million to write
off the caverns and certain related assets. As an equity investor in
Liberty, ProLiance recorded its share of the charge, totaling $33 million at
June 30, 2009. The company’s share is $11.9 million after tax, or
$0.15 per share, and is reflected in the 2009 financial statements.
-more-
Impacts
of Share Issuance in 2008
Annual
2009 reported earnings per share are ($0.04) per share lower than 2008 due to
the increased number of shares outstanding as a result of the issuance of common
shares in June 2008.
Use
of Non-GAAP Measures
In
this press release and related information, per share earnings contributions of
the Utility Group, Nonutility Group, and Corporate and Other are
presented. Such per share amounts are based on the earnings contribution
of each group included in Vectren’s consolidated results divided by Vectren’s
basic average shares outstanding during the period. The earnings per share
of the groups do not represent a direct legal interest in the assets and
liabilities allocated to the groups, but rather represent a direct equity
interest in Vectren Corporation's assets and liabilities as a
whole. These non-GAAP measures are used by management to evaluate the
performance of individual businesses. Accordingly management believes
these measures are useful to investors in understanding each business’
contribution to consolidated earnings per share and in analyzing consolidated
period to period changes.
This
press release also contains other non-GAAP financial measures that exclude a
charge related to ProLiance’s investment in Liberty Gas Storage, LLC (Liberty
charge) recorded in the second quarter of 2009. Management uses
consolidated net income, consolidated earnings per share, and Nonutility Group
net income, excluding the Liberty Charge, to evaluate its
results. Management believes analyzing underlying business
trends is aided by the removal of the Liberty Charge due to the significant
impact it has on comparability between the periods
reported. The rationale for using such non-GAAP measures is
that the charge in all cases substantially decreases the performance measures,
and the period to period changes do not provide meaningful comparative
information regarding typical operating results.
A
material limitation associated with the use of these measures excluding the
Liberty charge is that these measures excluding the Liberty charge do not
include all costs (i.e. the Liberty charge) recognized in accordance with
GAAP. Management compensates for this limitation by prominently
displaying a reconciliation of these non-GAAP performance measures to their
closest GAAP performance measures. This display also provides
financial statement users the option of analyzing results as management does or
by analyzing GAAP results.
The
following table reconciles consolidated net income, consolidated basic EPS, and
Nonutility Group net income to those results excluding the Liberty
charge.
Year
Ended December 31, 2009
|
||||||||||||
(In
Millions, except EPS)
|
GAAP-
Measure
|
Exclude
Liberty
Charge
|
Non-GAAP
Measure
|
|||||||||
Consolidated
|
||||||||||||
Net
Income
|
$ | 133.1 | 11.9 | $ | 145.0 | |||||||
Basic
EPS
|
$ | 1.65 | 0.15 | $ | 1.80 | |||||||
Nonutility
Group Net Income
|
$ | 25.8 | 11.9 | $ | 37.7 |
The
non-GAAP financial measures disclosed by the company should not be considered a
substitute for, or superior to, financial measures calculated in accordance with
GAAP and the financial results calculated in accordance with GAAP.
-more-
Please
SEE ATTACHED unaudited schedules for additional financial
information
Live
Webcast on February 26, 2010
Vectren’s
financial analyst call will be at 10:30 a.m. (ET), February 26, 2010, at which
time management will discuss financial results and 2010 earnings
guidance. To participate in the call, analysts are asked to dial
1-888-818-6237and present the conference call ID# 54736749. All
interested parties may listen to the live webcast accompanied by a slide
presentation at
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 is an energy 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
nonutility 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 and energy
infrastructure services. To learn more about Vectren, visit
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.
-more-
Economic
conditions surrounding the recent recession, which may be more
prolonged and more severe than cyclical downturns, including significantly lower
levels of economic activity; uncertainty regarding energy prices and the capital
and commodity markets; decreases in 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 coal mining, gas marketing, and energy infrastructure
strategies. Factors
affecting coal mining operations including MSHA guidelines and
interpretations of those guidelines; 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 2009 annual report
on Form 10-K to be filed on or about February 26, 2010. 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.