Vectren 2014 Annual Report Download - page 3

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Carl L. Chapman
Chairman, President & CEO
Another strong year of operational and financial performance in 2014
helped us continue to deliver on our goal of providing our shareholders
consistent annual earnings growth. Net income for the year was $188
million, or $2.28 per share, excluding the 2014 results from our former
coal mining subsidiary Vectren Fuels (Fuels), in the year of disposition,
compared to net income of $174.1 million, or $2.12 per share in 2013. The
2013 results exclude the results of ProLiance Holdings, LLC (ProLiance),
in the year of disposition of the net assets of ProLiance Energy, LLC, its
gas marketing subsidiary. As announced in August of last year, we closed
on the sale of our coal mining business to Sunrise Coal, a subsidiary of
Hallador Energy. Reported results for 2014 were net income of $166.9
million, or $2.02 per share, and for 2013, were net income of $136.6
million, or $1.66 per share.
Our utility group continues to be the primary driver of our financial results,
and our Infrastructure Services group had another strong year despite
extremely cold weather in the early and latter parts of 2014. Our utility
group earnings, which include three gas utilities and one electric utility,
were $148.4 million, compared to $141.8 million in 2013. Gas utility net
income was up slightly, ending the year at $57.0 million compared to
$55.7 million in 2013. Although customer margin increased in 2014 from
customer growth and returns earned on increased investment in bare steel
and cast iron pipe replacements, increased operating costs from the efforts
needed to provide reliable gas service during the polar vortex partially
offset those margin increases. For our electric utility, earnings increased
to $79.7 million compared to $75.8 million last year. Results improved in
2014 primarily due to the impact of weather on retail electric margin and
increased deferral of interest on construction projects.
Nonutility group results for 2014 increased to $39.1 million, compared
to $33.0 million in 2013. Although Infrastructure Services did not match
its exceptional 2013 performance of $49 million due to extreme winter
weather in early and late 2014, this business managed to end the year
Vectren Corporation 2014 Annual Report & Form 10-K 1
Letter to Shareholders