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Vectren Management Discusses Q2 2012 Results - Earnings Call Transcript

With that, I'll turn it over to Carl.

Carl L. Chapman

Thanks, Robert. I'd also like to welcome everyone to today's call, and as always, we appreciate your interest in Vectren.

Turning to Slide 3 and 4, I'd like to start by saying I'm very pleased with our second quarter and year-to-date results, which were well above earnings levels in 2011. Consolidated net income for the second quarter was $25.6 million or $0.31 per share, compared to net income of $15.1 million or $0.19 per share in 2011. Year-to-date, 2012 earnings were $76.9 million or $0.94 per share compared to $59.7 million or $0.73 per share in 2011.

Utility group second quarter earnings were up almost $4 million over the prior-year period, primarily due to the new electric base rates implemented in May 2011. In addition, interest expense associated with our utility operations is lower in 2012, and last year, we were able to refinance a portion of our long-term debt and take advantage of the low interest rate environment. Overall, our utility group's strong first half of 2012 has put us in position to earn at or near our allowed returns in 2012, a goal we established back in February.

Nonutility results also showed improvement in the quarter, up $6.5 million over 2011. The exceptional performance of our Infrastructure Services segment, reflecting strong demand for its services and favorable construction conditions, led the way for the improved nonutility results. In addition, ProLiance results have improved as expected over the corresponding 2011 period, primarily due to lower fixed demand cost. Second quarter and year-to-date nonutility earnings were hampered, however, by the disappointing performance of our Coal Mining segment, which like many other Coal Mining operations, has been impacted by weak demand across the industry. Jerry will provide some details later around our outlook for Coal Mining for the remainder of 2012.

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