Vectren 2010 Annual Report Download - page 34

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32
per share. In 2008 weather impacts were $0.01 per share unfavorable compared to normal temperatures. Management
estimates the impact of weather based on an assumption of weather sensitive sales per degree day at current rates.
Nonutility Group
In 2010, Nonutility Group earnings were $9.8 million, compared to earnings of $25.8 million in 2009 and $18.9 million in 2008.
The 2010 period was impacted by charges related to legacy investments totaling $6.9 million after tax. The 2009 period
contains the $11.9 million after tax Liberty Charge (See Note 5 to the consolidated financial statements), and the 2008 period
contains a $5.9 million after tax charge associated with legacy commercial real estate investments.
All other nonutility operating results decreased by approximately $21.0 million in 2010 compared to 2009 driven primarily by
reduced optimization opportunities at ProLiance, which resulted in it operating a loss in 2010. The other operating businesses
of Miller Pipeline, Energy Systems Group, Vectren Fuels, and Vectren Source combined for $25.1 million of earnings
contribution in 2010. All other results in 2009 compared to 2008 increased by $12.9 million due primarily to increased earnings
from Coal Mining operations. Results from Coal Mining operations improved due to increased pricing effective January 1, 2009.
Dividends
Dividends declared for the year ended December 31, 2010 were $1.365 per share, compared to $1.345 in 2009 and $1.310 per
share in 2008. In November 2010, the Company’s board of directors increased its quarterly dividend to $0.345 per share from
$0.340 per share. The increase marks the 51st consecutive year Vectren and predecessor companies’ have increased annual
dividends paid.
Impacts of Share Issuance in 2008
The increased number of common shares outstanding, resulting from the issuance of common shares in 2008, contributed a
$0.04 reduction in earnings per share in 2009 compared to 2008.
Use of Non-GAAP Performance Measures and Per Share Measures
Per share earnings contributions of the Utility Group, Nonutility Group, and Corporate and Other are presented and are non-
Gaap measures. 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. In addition, other items giving rise to period over period variances, such
as weather, are presented on an after tax and per share basis. These amounts are calculated at a statutory tax rate divided by
Vectren’s basic average shares outstanding during the period. 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 and the potential for earnings per share contributions in future periods. Reconciliations of the non-
GAAP measures to their most closely related GAAP measure of consolidated earnings per share are included throughout this
discussion and analysis. 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.
Detailed Discussion of Results of Operations
Following is a more detailed discussion of the results of operations of the Company’s Utility and Nonutility operations. The
detailed results of operations for these groups are presented and analyzed before the reclassification and elimination of certain
intersegment transactions necessary to consolidate those results into the Company’s Consolidated Statements of Income.