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Vectren Corp. Reports Operating Results (10-K)

February 17, 2011 | About:
10qk

10qk

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Vectren Corp. (VVC) filed Annual Report for the period ended 2010-12-31.

Vectren Corp. has a market cap of $2.11 billion; its shares were traded at around $25.79 with a P/E ratio of 14.7 and P/S ratio of 1. The dividend yield of Vectren Corp. stocks is 5.3%. Vectren Corp. had an annual average earning growth of 3.8% over the past 10 years.Hedge Fund Gurus that owns VVC: Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors. Mutual Fund and Other Gurus that owns VVC: David Dreman of Dreman Value Management, John Keeley of Keeley Fund Management, Mario Gabelli of GAMCO Investors.

Highlight of Business Operations:

The Company segregates its operations into three groups: the Utility Group, the Nonutility Group, and Corporate and Other. At December 31, 2010, the Company had $4.8 billion in total assets, with $3.9 billion (82 percent) attributed to the Utility Group, $0.9 billion (18 percent) attributed to the Nonutility Group. Net income for the year ended December 31, 2010, was $133.7 million, or $1.65 per share of common stock, with net income of $123.9 million attributed to the Utility Group and $9.8 million attributed to the Nonutility Group. Net income for the year ended December 31, 2009, was $133.1 million, or $1.65 per share of common stock. For further information regarding the activities and assets of operating segments within these Groups, refer to Note 19 in the Company s Consolidated Financial Statements included under “Item 8 Financial Statements and Supplementary Data.” Following is a more detailed description of the Utility Group and Nonutility Group.

In 2010, Utility Holdings purchased 84,008 MDth volumes of gas at an average cost of $5.99 per Dth, of which approximately 86 percent was purchased from ProLiance, 2 percent was purchased from Vectren Source, and 12 percent was purchased from third party providers. The average cost of gas per Dth purchased for the previous four years was $5.97 in 2009, $9.61 in 2008, $8.14 in 2007, and $8.64 in 2006.

For the year ended December 31, 2010, retail electricity sales totaled 5,616.9 GWh, resulting in revenues of approximately $564.3 million. Residential customers accounted for 37 percent of 2010 revenues; commercial 27 percent; industrial 35 percent, and other 1 percent. In addition, in 2010 the Company sold 587.6 GWh through wholesale activities principally to the MISO. Wholesale revenues, including transmission-related revenue, totaled $43.7 million in 2010.

The average cost of coal per ton consumed for the last five years was $67.01 in 2010, $61.67 in 2009, $42.50 in 2008, $40.23 in 2007, and $37.51 in 2006. Effective January 1, 2009, SIGECO began purchasing coal from Vectren Fuels under new coal purchase agreements. The term of these coal purchase agreements continues to December 31, 2014, with prices specified originally ranging from two to four years. The prices in these contracts were at or below market prices for Illinois Basin coal at the time of execution and were subject to a bidding process with third parties. The IURC has found that costs incurred under these contracts are reasonable (See Rate and Regulatory Matters in Item 7.)

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