Edgar Filing: VECTREN UTILITY HOLDINGS INC

vuhi10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2007

[_]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________

Commission file number: 1-16739

VECTREN UTILITY HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

INDIANA		35-2104850
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

One Vectren Square, Evansville, Indiana, 47708

(Address of principal executive offices)

(Zip Code)

812-491-4000

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No __

Table of Contents

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer □ Accelerated filer □ Non-accelerated filer ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes □ No ý

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock- Without Par Value	10	July 31, 2007
Class	Number of Shares	Date

Table of Contents

Item Number		Page Number
	PART I. FINANCIAL INFORMATION
1	Financial Statements (Unaudited)
	Vectren Utility Holdings, Inc. and Subsidiary Companies
	Consolidated Condensed Balance Sheets	4-5
	Consolidated Condensed Statements of Income	6
	Consolidated Condensed Statements of Cash Flows	7
	Notes to Unaudited Consolidated Condensed Financial Statements	8
2	Management’s Discussion and Analysis of Results of Operations and Financial Condition	22
3	Quantitative and Qualitative Disclosures About Market Risk	34
4	Controls and Procedures	34

	PART II. OTHER INFORMATION
1	Legal Proceedings	34
1A	Risk Factors	34
6	Exhibits	34
	Signatures	36

Access to Information

Vectren Corporation makes available all SEC filings and recent annual reports free of charge, including those of its wholly owned subsidiaries, through its website at www.vectren.com, or by request, directed to Investor Relations at the mailing address, phone number, or email address that follows:

Mailing Address:

One Vectren Square

Evansville, Indiana 47708

Phone Number:

(812) 491-4000

Investor Relations Contact:

Steven M. Schein

Vice President, Investor Relations

sschein@vectren.com

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Definitions

AFUDC: allowance for funds used during construction	MMBTU: millions of British thermal units
APB: Accounting Principles Board	MW: megawatts
EITF: Emerging Issues Task Force	MWh / GWh: megawatt hours / thousands of megawatt hours (gigawatt hours)
FASB: Financial Accounting Standards Board	NOx: nitrogen oxide
FERC: Federal Energy Regulatory Commission	OCC: Ohio Office of the Consumer Counselor
IDEM: Indiana Department of Environmental Management	OUCC: Indiana Office of the Utility Consumer Counselor
IURC: Indiana Utility Regulatory Commission	PUCO: Public Utilities Commission of Ohio
MCF / BCF: thousands / billions of cubic feet	SFAS: Statement of Financial Accounting Standards
MDth / MMDth: thousands / millions of dekatherms	USEPA: United States Environmental Protection Agency
MISO: Midwest Independent System Operator	Throughput: combined gas sales and gas transportation volumes

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VECTREN UTILITY HOLDINGS, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited – In millions)


	June 30,		December 31,
	2007		2006

ASSETS
Current Assets
Cash & cash equivalents	$	3.3	$	28.5
Accounts receivable - less reserves of $4.2 &
$2.5, respectively		96.7		134.8
Receivables due from other Vectren companies		0.4		0.3
Accrued unbilled revenues		38.1		121.4
Inventories		110.7		141.9
Recoverable fuel & natural gas costs		-		1.8
Prepayments & other current assets		84.9		103.2
Total current assets		334.1		531.9

Utility Plant
Original cost		3,925.5		3,820.2
Less: accumulated depreciation & amortization		1,475.8		1,434.7
Net utility plant		2,449.7		2,385.5

Investments in unconsolidated affiliates		0.2		0.2
Other investments		21.9		21.4
Nonutility property - net		169.1		163.1
Goodwill		205.0		205.0
Regulatory assets		125.0		116.8
Other assets		17.5		16.9
TOTAL ASSETS	$	3,322.5	$	3,440.8

The accompanying notes are an integral part of these consolidated condensed financial statements.

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VECTREN UTILITY HOLDINGS, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited – In millions)


	June 30,		December 31,
	2007		2006

LIABILITIES & SHAREHOLDER'S EQUITY

Current Liabilities
Accounts payable	$	59.6	$	136.2
Accounts payable to affiliated companies		43.7		68.2
Payables to other Vectren companies		22.1		25.3
Refundable fuel & natural gas costs		40.4		35.3
Accrued liabilities		136.2		115.8
Short-term borrowings		215.0		270.1
Current maturities of long-term debt		6.5		6.5
Long-term debt subject to tender		20.0		20.0
Total current liabilities		543.5		677.4
Long-Term Debt - Net of Current Maturities &
Debt Subject to Tender		1,025.5		1,025.3
Deferred Income Taxes & Other Liabilities
Deferred income taxes		258.8		282.2
Regulatory liabilities		302.7		291.1
Deferred credits & other liabilities		116.0		108.1
Total deferred credits & other liabilities		677.5		681.4
Commitments & Contingencies (Notes 8 - 10)
Common Shareholder's Equity
Common stock (no par value)		632.9		632.9
Retained earnings		442.6		422.9
Accumulated other comprehensive income		0.5		0.9
Total common shareholder's equity		1,076.0		1,056.7

TOTAL LIABILITIES & SHAREHOLDER'S EQUITY	$	3,322.5	$	3,440.8

The accompanying notes are an integral part of these consolidated condensed financial statements.

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VECTREN UTILITY HOLDINGS, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Unaudited – In millions)


	Three Months				Six Months
	Ended June 30,				Ended June 30,
	2007		2006		2007		2006
OPERATING REVENUES
Gas utility	$	191.9	$	159.1	$	776.0	$	731.8
Electric utility		109.9		96.0		218.0		201.2
Other		0.5		0.5		0.9		0.9
Total operating revenues		302.3		255.6		994.9		933.9

OPERATING EXPENSES
Cost of gas sold		114.6		88.5		539.1		517.5
Cost of fuel & purchased power		38.4		30.9		79.0		69.0
Other operating		65.6		59.6		132.8		121.2
Depreciation & amortization		39.8		37.7		79.0		74.8
Taxes other than income taxes		14.1		11.6		38.3		34.4
Total operating expenses		272.5		228.3		868.2		816.9

OPERATING INCOME		29.8		27.3		126.7		117.0

OTHER INCOME - NET		2.2		1.9		4.9		2.8
INTEREST EXPENSE		18.6		18.2		38.0		38.2

INCOME BEFORE INCOME TAXES		13.4		11.0		93.6		81.6

INCOME TAXES		5.4		3.9		34.7		31.1

NET INCOME	$	8.0	$	7.1	$	58.9	$	50.5

The accompanying notes are an integral part of these consolidated condensed financial statements.

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VECTREN UTILITY HOLDINGS, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited – In millions)


	Six Months Ended June 30,
	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	58.9		$	50.5
Adjustments to reconcile net income to cash from operating activities:
Depreciation & amortization		79.0			74.8
Deferred income taxes & investment tax credits		(2.2	)		(0.5	)
Expense portion of pension & postretirement periodic benefit cost		2.1			2.1
Provision for uncollectible acccounts		8.2			5.4
Other non-cash charges - net		1.8			3.2
Changes in working capital accounts:
Accounts receivable, including to Vectren companies
& accrued unbilled revenue		113.1			253.6
Inventories		31.2			14.1
Recoverable/refundable fuel & natural gas costs		6.9			42.7
Prepayments & other current assets		16.0			6.2
Accounts payable, including to Vectren companies
& affiliated companies		(101.1	)		(195.7	)
Accrued liabilities		7.4			(23.0	)
Changes in noncurrent assets		(9.6	)		(12.6	)
Changes in noncurrent liabilities		(5.7	)		2.4
Net cash flows from operating activities		206.0			223.2
CASH FLOWS FROM FINANCING ACTIVITIES
Requirements for:
Dividends to parent		(38.3	)		(37.3	)
Net change in short-term borrowings		(55.1	)		(96.5	)
Net cash flows from financing activities		(93.4	)		(133.8	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from other investing activities		0.1			-
Requirements for:
Capital expenditures, excluding AFUDC - equity		(137.9	)		(96.5	)
Net cash flows from investing activities		(137.8	)		(96.5	)
Net decrease in cash & cash equivalents		(25.2	)		(7.1	)
Cash & cash equivalents at beginning of period		28.5			11.7
Cash & cash equivalents at end of period	$	3.3		$	4.6

The accompanying notes are an integral part of these consolidated condensed financial statements.

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VECTREN UTILITY HOLDINGS, INC. AND SUBSIDIARY COMPANIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

1.	Organization and Nature of Operations

Vectren Utility Holdings, Inc. (Utility Holdings or the Company), an Indiana corporation, serves as the intermediate holding company for Vectren Corporation’s (Vectren) three operating public utilities: Indiana Gas Company, Inc. (Indiana Gas or Vectren North), Southern Indiana Gas and Electric Company (SIGECO or Vectren South), and the Ohio operations. Utility Holdings also has other assets that provide information technology and other services to the three utilities. Vectren is an energy holding company headquartered in Evansville, Indiana. Vectren and Utility Holdings are holding companies as defined by the Energy Policy Act of 2005.

Indiana Gas provides energy delivery services to approximately 565,000 natural gas customers located in central and southern Indiana. SIGECO provides energy delivery services to approximately 141,000 electric customers and approximately 112,000 gas customers located near Evansville in southwestern Indiana. SIGECO also owns and operates electric generation to serve its electric customers and optimizes those assets in the wholesale power market. Indiana Gas and SIGECO generally do business as Vectren Energy Delivery of Indiana. The Ohio operations provide energy delivery services to approximately 318,000 natural gas customers located near Dayton in west central Ohio. The Ohio operations are owned as a tenancy in common by Vectren Energy Delivery of Ohio, Inc. (VEDO), a wholly owned subsidiary, (53% ownership) and Indiana Gas (47% ownership). The Ohio operations generally do business as Vectren Energy Delivery of Ohio.

2.	Basis of Presentation

The interim consolidated condensed financial statements included in this report have been prepared by the Company, without audit, as provided in the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted as provided in such rules and regulations. The Company believes that the information in this report reflects all adjustments necessary to fairly state the results of the interim periods reported. These consolidated condensed financial statements and related notes should be read in conjunction with the Company’s audited annual consolidated financial statements for the year ended December 31, 2006, filed with the SEC February 27, 2007 on Form 10-K. Because of the seasonal nature of the Company’s utility operations, the results shown on a quarterly basis are not necessarily indicative of annual results.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

3.	Subsidiary Guarantor and Consolidating Information

The Company’s three operating utility companies, SIGECO, Indiana Gas, and VEDO are guarantors of Utility Holdings’ $515 million in short-term credit facilities, of which $215 million is outstanding at June 30, 2007, and Utility Holdings’ $700 million unsecured senior notes outstanding at June 30, 2007. The guarantees are full and unconditional and joint and several, and Utility Holdings has no subsidiaries other than the subsidiary guarantors. However, Utility Holdings does have operations other than those of the subsidiary guarantors. Pursuant to Article 3-10 of Regulation S-X, disclosure of the results of operations and balance sheets of the subsidiary guarantors separate from the parent company’s operations is required. Following are consolidating financial statements including information on the combined operations of the subsidiary guarantors separate from the other operations of the parent company.

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Condensed Consolidating Statement of Income for the three months ended June 30, 2007 (in millions):


	Subsidiary		Parent
	Guarantors		Company		Eliminations			Consolidated
OPERATING REVENUES
Gas utility	$	191.9	$	-	$	-		$	191.9
Electric utility		109.9		-		-			109.9
Other		-		10.5		(10.0	)		0.5
Total operating revenues		301.8		10.5		(10.0	)		302.3
OPERATING EXPENSES
Cost of gas sold		114.6		-		-			114.6
Cost of fuel & purchased power		38.4		-		-			38.4
Other operating		74.9		-		(9.3	)		65.6
Depreciation & amortization		34.1		5.7		-			39.8
Taxes other than income taxes		13.8		0.3		-			14.1
Total operating expenses		275.8		6.0		(9.3	)		272.5
OPERATING INCOME		26.0		4.5		(0.7	)		29.8
OTHER INCOME (EXPENSE) - NET
Equity in earnings of consolidated companies		-		6.8		(6.8	)		-
Other income (expense) – net		1.8		10.6		(10.2	)		2.2
Total other income (expense) - net		1.8		17.4		(17.0	)		2.2
Interest expense		16.3		13.2		(10.9	)		18.6
INCOME BEFORE INCOME TAXES		11.5		8.7		(6.8	)		13.4
Income taxes		4.7		0.7		-			5.4
NET INCOME	$	6.8	$	8.0	$	(6.8	)	$	8.0

Condensed Consolidating Statement of Income for the three months ended June 30, 2006 (in millions):


	Subsidiary		Parent
	Guarantors		Company		Eliminations			Consolidated
OPERATING REVENUES
Gas utility	$	159.1	$	-	$	-		$	159.1
Electric utility		96.0		-		-			96.0
Other		-		9.2		(8.7	)		0.5
Total operating revenues		255.1		9.2		(8.7	)		255.6
OPERATING EXPENSES
Cost of gas sold		88.5		-		-			88.5
Cost of fuel & purchased power		30.9		-		-			30.9
Other operating		67.9		-		(8.3	)		59.6
Depreciation & amortization		32.3		5.4		-			37.7
Taxes other than income taxes		11.3		0.3		-			11.6
Total operating expenses		230.9		5.7		(8.3	)		228.3
OPERATING INCOME		24.2		3.5		(0.4	)		27.3
OTHER INCOME (EXPENSE) - NET
Equity in earnings of consolidated companies		-		6.1		(6.1	)		-
Other income (expense) – net		1.1		10.4		(9.6	)		1.9
Total other income (expense) - net		1.1		16.5		(15.7	)		1.9
Interest expense		15.8		12.4		(10.0	)		18.2
INCOME BEFORE INCOME TAXES		9.5		7.6		(6.1	)		11.0
Income taxes		3.4		0.5		-			3.9
NET INCOME	$	6.1	$	7.1	$	(6.1	)	$	7.1

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Condensed Consolidating Statement of Income for the six months ended June 30, 2007 (in millions):


	Subsidiary		Parent
	Guarantors		Company			Eliminations			Consolidated
OPERATING REVENUES
Gas utility	$	776.0	$	-		$	-		$	776.0
Electric utility		218.0		-			-			218.0
Other		-		20.2			(19.3	)		0.9
Total operating revenues		994.0		20.2			(19.3	)		994.9
OPERATING EXPENSES
Cost of gas sold		539.1		-			-			539.1
Cost of fuel & purchased power		79.0		-			-			79.0
Other operating		149.8		-			(17.0	)		132.8
Depreciation & amortization		67.4		11.6			-			79.0
Taxes other than income taxes		37.7		0.6			-			38.3
Total operating expenses		873.0		12.2			(17.0	)		868.2
OPERATING INCOME		121.0		8.0			(2.3	)		126.7
OTHER INCOME (EXPENSE) - NET
Equity in earnings of consolidated companies		-		55.5			(55.5	)		-
Other income (expense) – net		2.8		21.4			(19.3	)		4.9
Total other income (expense) - net		2.8		76.9			(74.8	)		4.9
Interest expense		32.9		26.7			(21.6	)		38.0
INCOME BEFORE INCOME TAXES		90.9		58.2			(55.5	)		93.6
Income taxes		35.4		(0.7	)		-			34.7
NET INCOME	$	55.5	$	58.9		$	(55.5	)	$	58.9

Condensed Consolidating Statement of Income for the six months ended June 30, 2006 (in millions):


	Subsidiary		Parent
	Guarantors		Company			Eliminations			Consolidated
OPERATING REVENUES
Gas utility	$	731.8	$	-		$	-		$	731.8
Electric utility		201.2		-			-			201.2
Other		-		18.4			(17.5	)		0.9
Total operating revenues		933.0		18.4			(17.5	)		933.9
OPERATING EXPENSES
Cost of gas sold		517.5		-			-			517.5
Cost of fuel & purchased power		69.0		-			-			69.0
Other operating		136.9		-			(15.7	)		121.2
Depreciation & amortization		64.2		10.6			-			74.8
Taxes other than income taxes		33.8		0.6			-			34.4
Total operating expenses		821.4		11.2			(15.7	)		816.9
OPERATING INCOME		111.6		7.2			(1.8	)		117.0
OTHER INCOME (EXPENSE) - NET
Equity in earnings of consolidated companies		-		48.3			(48.3	)		-
Other income (expense) – net		0.9		20.5			(18.6	)		2.8
Total other income (expense) - net		0.9		68.8			(66.9	)		2.8
Interest expense		33.0		25.6			(20.4	)		38.2
INCOME BEFORE INCOME TAXES		79.5		50.4			(48.3	)		81.6
Income taxes		31.2		(0.1	)		-			31.1
NET INCOME	$	48.3	$	50.5		$	(48.3	)	$	50.5

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Condensed Consolidating Statement of Cash Flows for the six months ended June 30, 2007 (in millions):


	Subsidiary			Parent
	Guarantors			Company			Eliminations			Consolidated

NET CASH FLOWS FROM OPERATING ACTIVITIES	$	170.5		$	35.5		$	-		$	206.0

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from additional capital contribution		-			-			-			-
Long-term Debt - net of issuance costs & hedging proceeds		-			-			-			-
Requirements for:
Dividends to parent		(38.3	)		(38.3	)		38.3			(38.3	)
Net change in short-term borrowings		(13.1	)		(32.7	)		(9.3	)		(55.1	)
Net cash flows from financing activities		(51.4	)		(71.0	)		29.0			(93.4	)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from consolidated subsidiary distributions		-			38.3			(38.3	)		-
Proceeds from other investing activities		-			0.1			-			0.1
Requirements for:
Capital expenditures, excluding AFUDC equity		(122.0	)		(15.9	)		-			(137.9	)
Consolidated subsidiary investments		-			-			-			-
Net change in notes receivable to other Vectren companies		-			(9.3	)		9.3			-
Net cash flows from investing activities		(122.0	)		13.2			(29.0	)		(137.8	)
Net decrease in cash & cash equivalents		(2.9	)		(22.3	)					(25.2	)
Cash & cash equivalents at beginning of period		5.7			22.8						28.5
Cash & cash equivalents at end of period	$	2.8		$	0.5		$	-		$	3.3

Condensed Consolidating Statement of Cash Flows for the six months ended June 30, 2006 (in millions):


	Subsidiary			Parent
	Guarantors			Company			Eliminations			Consolidated

NET CASH FLOWS FROM OPERATING ACTIVITIES	$	210.2		$	13.0		$	-		$	223.2

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from additional capital contribution		20.0			-			(20.0	)		-
Long-term Debt - net of issuance costs & hedging proceeds		150.0			-			(150.0	)		-
Requirements for:
Dividends to parent		(37.3	)		(37.3	)		37.3			(37.3	)
Net change in short-term borrowings		(264.6	)		(80.5	)		248.6			(96.5	)
Net cash flows from financing activities		(131.9	)		(117.8	)		115.9			(133.8	)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from consolidated subsidiary distributions		-			37.3			(37.3	)		-
Requirements for:
Capital expenditures, excluding AFUDC equity		(86.8	)		(9.7	)		-			(96.5	)
Consolidated subsidiary investments		-			(170.0	)		170.0			-
Net change in notes receivable to other Vectren companies		-			248.6			(248.6	)		-
Net cash flows from investing activities		(86.8	)		106.2			(115.9	)		(96.5	)
Net decrease in cash & cash equivalents		(8.5	)		1.4						(7.1	)
Cash & cash equivalents at beginning of period		11.0			0.7						11.7
Cash & cash equivalents at end of period	$	2.5		$	2.1		$	-		$	4.6

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Condensed Consolidating Balance Sheet as of June 30, 2007 (in millions):


ASSETS	Subsidiary		Parent
	Guarantors		Company		Eliminations			Consolidated
Current Assets
Cash & cash equivalents	$	2.8	$	0.5	$	-		$	3.3
Accounts receivable - less reserves		96.7		-		-			96.7
Receivables due from other Vectren companies		22.6		132.0		(154.2	)		0.4
Accrued unbilled revenues		38.1		-		-			38.1
Inventories		108.4		2.3		-			110.7
Recoverable fuel & natural gas costs		-		-		-			-
Prepayments & other current assets		80.6		11.7		(7.4	)		84.9
Total current assets		349.2		146.5		(161.6	)		334.1
Utility Plant
Original cost		3,925.5		-		-			3,925.5
Less: accumulated depreciation & amortization		1,475.8		-		-			1,475.8
Net utility plant		2,449.7		-		-			2,449.7
Investments in consolidated subsidiaries		-		1,146.5		(1,146.5	)		-
Notes receivable from consolidated subsidiaries		-		575.4		(575.4	)		-
Investments in unconsolidated affiliates		0.2		-		-			0.2
Other investments		16.0		5.9		-			21.9
Nonutility property - net		5.4		163.7		-			169.1
Goodwill		205.0		-		-			205.0
Regulatory assets		112.2		12.8		-			125.0
Other assets		16.9		0.6		-			17.5
TOTAL ASSETS	$	3,154.6	$	2,051.4	$	(1,883.5	)	$	3,322.5
LIABILITIES & SHAREHOLDER'S EQUITY	Subsidiary		Parent
	Guarantors		Company		Eliminations			Consolidated
Current Liabilities
Accounts payable	$	54.6	$	5.0	$	-		$	59.6
Accounts payable to affiliated companies		43.7		-		-			43.7
Payables to other Vectren companies		34.0		-		(11.9	)		22.1
Refundable fuel & natural gas costs		40.4		-		-			40.4
Accrued liabilities		135.0		8.6		(7.4	)		136.2
Short-term borrowings		-		215.0		-			215.0
Short-term borrowings from
other Vectren companies		119.9		22.4		(142.3	)		-
Current maturities of long-term debt		6.5		-		-			6.5
Long-term debt subject to tender		20.0		-		-			20.0
Total current liabilities		454.1		251.0		(161.6	)		543.5
Long-Term Debt
Long-term debt - net of current maturities &
debt subject to tender		327.3		698.2		-			1,025.5
Long-term debt due to Utility Holdings		575.4		-		(575.4	)		-
Total long-term debt - net		902.7		698.2		(575.4	)		1,025.5
Deferred Income Taxes & Other Liabilities
Deferred income taxes		251.4		7.4		-			258.8
Regulatory liabilities		297.3		5.4		-			302.7
Deferred credits & other liabilities		102.6		13.4		-			116.0
Total deferred credits & other liabilities		651.3		26.2		-			677.5
Common Shareholder's Equity
Common stock (no par value)		776.3		632.9		(776.3	)		632.9
Retained earnings		369.7		442.6		(369.7	)		442.6
Accumulated other comprehensive income		0.5		0.5		(0.5	)		0.5
Total common shareholder's equity		1,146.5		1,076.0		(1,146.5	)		1,076.0
TOTAL LIABILITIES & SHAREHOLDER'S EQUITY	$	3,154.6	$	2,051.4	$	(1,883.5	)	$	3,322.5

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Table of Contents

Condensed Consolidating Balance Sheet as of December 31, 2006 (in millions):


ASSETS	Subsidiary			Parent
	Guarantors			Company		Eliminations			Consolidated
Current Assets
Cash & cash equivalents	$	5.7		$	22.8	$	-		$	28.5
Accounts receivable - less reserves		134.8			-		-			134.8
Receivables due from other Vectren companies		6.1			146.0		(151.8	)		0.3
Accrued unbilled revenues		121.4			-		-			121.4
Inventories		139.6			2.3		-			141.9
Recoverable fuel & natural gas costs		1.8			-		-			1.8
Prepayments & other current assets		91.2			14.7		(2.7	)		103.2
Total current assets		500.6			185.8		(154.5	)		531.9
Utility Plant
Original cost		3,820.2			-		-			3,820.2
Less: accumulated depreciation & amortization		1,434.7			-		-			1,434.7
Net utility plant		2,385.5	<