On the Nonutility side, as you’ll recall, at the beginning of 2011 we outlined our strategy for our Nonutility portfolio businesses, which included a focus on growing our infrastructure services and energy services businesses in order to reduce the reliance on earnings growth from our commodity sensitive businesses.
Consistent with that strategy, in late March we announced the acquisition of Minnesota Limited, a complementary addition to Miller Pipeline in our Infrastructure Services segment. The addition of Minnesota Limited contributed $0.11 per share, well above our initial expectations of $0.02 to $0.04 of EPS. I’ll discuss this further in just a few minutes.
To close the year, we sold Vectren Source, our retail gas marketing company, for proceeds of approximately $84 million and an estimated gain of $12.4 million net of all tax effects. Both amounts are subject to final adjustment for working capital. We believe this is the right time to move forward with the sale of Vectren Source and realize the value in this business that was built from the ground up over the last several years. We found a logical buyer in Direct Energy that is already an active participant in the retail energy markets and is willing to put additional capital to work to continue to grow the business.
The sale of Source coupled with the acquisition of Minnesota Limited has helped to reduce our earnings exposure to the more volatile commodities markets, again consistent with the strategy we discussed at the beginning of 2011. In addition, it demonstrates Vectren’s disciplined approach to regularly assessing each of our Nonutility businesses to determine whether they continue to be a strategic fit for Vectren.We also highlighted a couple of specific items beyond normal growth expected in our various businesses to help offset the loss of the Source earning stream for 2012 and beyond. 2011 also saw the ramp-up of production at our new Oaktown 1 mine, which produced 2.7 million tons of coal for the year and is approaching its full capacity of approximately 3 million tons. In addition, we continued the development of the second Oaktown mine, with a targeted startup in the third quarter of 2012 depending upon demand.Read the rest of this transcript for free on seekingalpha.com
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