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Home My WebLink AboutWells-Fargo-Aug-1-2012.pdfEquity Research Flash Comment August 1, 2012 IDANYSEOutperform (1) OGENYSEOutperform (1) CNPNYSEMarket Perform (2) SONYSEMarket Perform (2) VVCNYSEMarket Perform (2) / V Energy Team Energy And Utility Daily Sarah Akers, CFA, Senior Analyst (314) 8752040 Neil Kalton, CFA, Senior Analyst (314) 8752051 Sector Rating: Energy Team, NA Quick thoughts from Wells Fargo Securities, LLC Energy & Utility Team: Utilities Vectren Corp. (VVC/Market Perform) (Akers) VVC will release 2Q earnings after market hours today with the conference call Thursday at 3pm Eastern (18668215457). We continue to be cautious on the outlook for the Coal Mining business given industrywide headwinds. Specific items of interest include (1) 2012 coal production (potential downside to projected 5.6mm tons, which is down from 6 million originally), (2) '12E price per ton (current guidance $47/ton), (3) '12E cost of sales per ton (current guidance $43.50/ton raised from $42/ton on the Q1 '12 call reflecting cost issues at Prosperity that management believed to be temporary), (4) the hedge profile for 2013 (has been 40% since the Q2 '11 call), and (5) whether the expected inservice date of Oaktown 2 remains Q4 '12 (dependent on demand). As VVC's coal sales are 70% hedged this year, we are more interested in these data points as it relates to potential implications in 2013. Yeartodate, shares have underperformed the S&P Utilities by ~7% (total return), which likely reflects potential coalrelated downside, to some degree. OGE Energy Corp. (OGE/Outperform) (Akers) OGE will release Q2 earnings tomorrow morning and host a conference call at 9am Eastern (8667007441; code 38119896). As OGE affirmed '12 EPS guidance of $3.403.60 in conjunction with the 7/2/12 rate case settlement press release (did incorporate lower NGL prices), we do not expect changes to consolidated guidance. We are more interested in the breakdown between Enogex (originally $0.800.95) and OG&E (originally $2.60 2.70 excluding rate case). Our 12E EPS of $3.45 consists of $0.74 Enogex, $2.74 OG&E and ($0.02 parent). Key discussion points will likely include NGL pricing (our 12E is $0.80/gallon vs. guidance of $1.04/gallon) and, perhaps more importantly, whether Enogex sees lower drilling in response to lower NGL prices. On the regulated front, OGE will likely lay out OG&E's compliance strategy for Utility MACT and CSAPR, which we expect will approximate $400500mm. We are interested to hear OG&E's regulatory strategy as it relates to environmental investment (Oklahoma HB 1910 allows utilities to recover mandated environmental costs, but the commission has not yet determined what that recovery will look like i.e. rate cases, rider, etc.). IDACORP (IDA/Outperform) (Akers) IDA will release Q2 earnings tomorrow morning and host a conference call at 4:30pm Eastern (8573501588; code 60024683). We expect no change to '12 EPS guidance of $3.003.15 and are primarily interested in whether IDA continues to expect ADITC acceleration of less than $5mm, which we would view favorably. Other items of interest include sales growth and capital plans. In a recent press release the company disclosed encouraging customer growth numbers for 2Q '12 including 5,240 generation business customer additions roughly double the 2Q growth in the prior 2 years and 4,155 residential customer additions also meaningfully higher than the prior 2 years). Regarding capital plans, we are interested in potential updates to the Boardman to Hemingway transmission project and/or discussion around a potential second gas unit at Langley Gulch. CenterPoint Energy Inc. (CNP/Market Perform) (Akers) CNP will release Q2 earnings tomorrow morning and host a conference call at 11:30am Eastern (8006531761; code 91655009). We look forward to management's discussion of the two midstream transactions announced on 6/19. As outlined in our 6/21 note, we expect CNP will support the investment case for the deals on the 2Q call. Our '1214E EPS of $1.18, $1.30 and $1.37 embed $0.070.08 annualized accretion from the deals. Investors will also likely be looking for further clarity on cash deployment plans. We expect CNP will reiterate its strategy of actively exploring organic growth opportunities (particularly in field services) as well as acquisitions, and we would be surprised by a meaningful share buyback announcement at this point. Southern Company (SO/Market Perform) (Kalton) We are hosting Southern Company CFO Art Beattie and VP of Investor Relations & Financial Planning Dan Tucker on Midwest investor meetings today and tomorrow. Management expressed confidence in its 2012 guidance range ($2.582.70) and 47% EPS growth off of that range on its conference call last week. With Q2 earnings in the rearview, key topics of discussion are likely to revolve around SO's two major construction projects (Vogtle 3 & 4 and Kemper County IGCC), the revised environmental CapEx budget and general economic conditions in the Southeast. Vectren Corp. (VVCNYSE) Price as of 7/31/2012: $29.85 FY 12 EPS: $1.85 FY 13 EPS: $1.95 Shares Out.: 81.9 MM Market Cap.: $2,444.72 MM OGE Energy Corp. (OGENYSE) Price as of 7/31/2012: $53.11 FY 12 EPS: $3.45 FY 13 EPS: $3.55 Shares Out.: 98.6 MM Market Cap.: $5,236.65 MM IDACORP, Inc. (IDANYSE) Price as of 7/31/2012: $42.20 FY 12 EPS: $3.05 FY 13 EPS: $3.20 Shares Out.: 49.9 MM Market Cap.: $2,105.78 MM CenterPoint Energy, Inc. (CNPNYSE) Price as of 7/31/2012: $21.06 FY 12 EPS: $1.18 FY 13 EPS: $1.30 Shares Out.: 426.3 MM Market Cap.: $8,977.88 MM Southern Company (SONYSE) Price as of 7/31/2012: $48.15 FY 12 EPS: $2.70 FY 13 EPS: $2.85 Shares Out.: 868.0 MM Market Cap.: $41,794.2 MM DISCLOSURE APPENDIX Required Disclosures Additional Information Available Upon Request I certify that: 1) All views expressed in this research report accurately reflect my personal views about any and all of the subject securities or issuers discussed; and 2) No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by me in this research report. Wells Fargo Securities, LLC maintains a market in the common stock of Southern Company, IDACORP, Inc., OGE Energy Corp., CenterPoint Energy, Inc. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for Southern Company within the past 12 months. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three months from Southern Company, IDACORP, Inc., CenterPoint Energy, Inc., Vectren Corp., OGE Energy Corp. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from OGE Energy Corp., IDACORP, Inc., Southern Company in the past 12 months. Southern Company, IDACORP, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided investment banking services to Southern Company, IDACORP, Inc., OGE Energy Corp. OGE Energy Corp., Vectren Corp., IDACORP, Inc. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided noninvestment banking securitiesrelated services to OGE Energy Corp., Vectren Corp., IDACORP, Inc. IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided nonsecurities services to IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC received compensation for products or services other than investment banking services from OGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP, Inc. in the past 12 months. A director or officer of Wells Fargo & Company serves on the board of directors of Southern Company. Wells Fargo & Company is the parent of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC or its affiliates may have a significant financial interest in Southern Company, IDACORP, Inc., Vectren Corp., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three months from an affiliate of OGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP, Inc., Southern Company. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for an affiliate of Southern Company, IDACORP, Inc. within the past 12 months. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from an affiliate of IDACORP, Inc., Southern Company in the past 12 months. VVC: Risks include economic weakness, lower than expected coal sales, and NonUtility exposure to commodity prices. OGE: Risks include negative regulatory developments, declines in NGL prices and weaker than expected electric sales. IDA: Risks to our valuation include project delays/cancellations, negative regulatory developments and economic weakness. CNP: Risks to our valuation include negative regulatory developments, unfavorable moves in commodity prices and/or gas market dynamics and execution risk related to new growth opportunities. SO: In our view, risks include regulatory risk, construction risk and potential exposure to adverse federal energy legislation. Wells Fargo Securities, LLC does not compensate its research analysts based on specific investment banking transactions. Wells Fargo Securities, LLC’s research analysts receive compensation that is based upon and impacted by the overall profitability and revenue of the firm, which includes, but is not limited to investment banking revenue. STOCK RATING 1 = Outperform: The stock appears attractively valued, and we believe the stock's total return will exceed that of the market over the next 12 months. BUY 2 = Market Perform: The stock appears appropriately valued, and we believe the stock's total return will be in line with the market over the next 12 months. HOLD 3 = Underperform: The stock appears overvalued, and we believe the stock's total return will be below the market over the next 12 months. SELL SECTOR RATING O = Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months. M = Market Weight: Industry expected to perform inline with the relevant broad market benchmark over the next 12 months. U = Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months. VOLATILITY RATING V = A stock is defined as volatile if the stock price has fluctuated by +/20% or greater in at least 8 of the past 24 months or if the analyst expects significant volatility. All IPO stocks are automatically rated volatile within the first 24 months of trading. As of: August 1, 2012 48% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Outperform. Wells Fargo Securities, LLC has provided investment banking services for 41% of its Outperformrated companies. 49% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Market Perform. Wells Fargo Securities, LLC has provided investment banking services for 32% of its Market Performrated companies. 2% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Underperform. Wells Fargo Securities, LLC has provided investment banking services for 10% of its Underperformrated companies. Important Information for NonU.S. Recipients EEA The securities and related financial instruments described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. For recipients in the EEA, this report is distributed by Wells Fargo Securities International Limited (“WFSIL”). WFSIL is a U.K. incorporated investment firm authorized and regulated by the Financial Services Authority. For the purposes of Section 21 of the UK Financial Services and Markets Act 2000 (“the Act”), the content of this report has been approved by WFSIL a regulated person under the Act. WFSIL does not deal with retail clients as defined in the Markets in Financial Instruments Directive 2007. The FSA rules made under the Financial Services and Markets Act 2000 for the protection of retail clients will therefore not apply, nor will the Financial Services Compensation Scheme be available. This report is not intended for, and should not be relied upon by, retail clients. Australia Wells Fargo Securities, LLC is exempt from the requirements to hold an Australian financial services license in respect of the financial services it provides to wholesale clients in Australia. Wells Fargo Securities, LLC is regulated under U.S. laws which differ from Australian laws. Any offer or documentation provided to Australian recipients by Wells Fargo Securities, LLC in the course of providing the financial services will be prepared in accordance with the laws of the United States and not Australian laws. Hong Kong This report is issued and distributed in Hong Kong by Wells Fargo Securities Asia Limited ("WFSAL"), a Hong Kong incorporated investment firm licensed and regulated by the Securities and Futures Commission to carry on types 1, 4, 6 and 9 regulated activities (as defined in the Securities and Futures Ordinance, "the SFO"). This report is not intended for, and should not be relied on by, any person other than professional investors (as defined in the SFO). Any securities and related financial instruments described herein are not intended for sale, nor will be sold, to any person other than professional investors (as defined in the SFO). Japan This report is distributed in Japan by Wells Fargo Securities (Japan) Co., Ltd, registered with the Kanto Local Finance Bureau to conduct broking and dealing of type 1 and type 2 financial instruments and agency or intermediary service for entry into investment advisory or discretionary investment contracts. This report is intended for distribution only to professional investors (Tokutei Toushika) and is not intended for, and should not be relied upon by, ordinary customers (Ippan Toushika). The ratings stated on the document are not provided by rating agencies registered with the Financial Services Agency of Japan (JFSA) but by group companies of JFSAregistered rating agencies. These group companies may include Moody's Investors Services Inc, Standard & Poor's Rating Services and/or Fitch Ratings. Any decisions to invest in securities or transactions should be made after reviewing policies and methodologies used for assigning credit ratings and assumptions, significance and limitations of the credit ratings stated on the respective rating agencies' websites. About Wells Fargo Securities, LLC Wells Fargo Securities, LLC is a U.S. brokerdealer registered with the U.S. Securities and Exchange Commission and a member of the New York Stock Exchange, the Financial Industry Regulatory Authority and the Securities Investor Protection Corp. This report is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or instruments named or described in this report. Interested parties are advised to contact the entity with which they deal, or the entity that provided this report to them, if they desire further information. The information in this report has been obtained or derived from sources believed by Wells Fargo Securities, LLC, to be reliable, but Wells Fargo Securities, LLC, does not represent that this information is accurate or complete. Any opinions or estimates contained in this report represent the judgment of Wells Fargo Securities, LLC, at this time, and are subject to change without notice. For the purposes of the U.K. Financial Services Authority's rules, this report constitutes impartial investment research. Each of Wells Fargo Securities, LLC, and Wells Fargo Securities International Limited is a separate legal entity and distinct from affiliated banks. Copyright © 2012 Wells Fargo Securities, LLC. SECURITIES NOT FDICINSURED/NOT BANKGUARANTEED/MAY LOSE VALUE Please see Disclosure Appendix for rating definitions, important disclosures, and required analyst certifications. Wells Fargo Securities, LLC does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report and investors should consider this report as only a single factor in making their investment decision. Equity Research Flash Comment August 1, 2012 IDANYSEOutperform (1) OGENYSEOutperform (1) CNPNYSEMarket Perform (2) SONYSEMarket Perform (2) VVCNYSEMarket Perform (2) / V Energy Team Energy And Utility Daily Sarah Akers, CFA, Senior Analyst (314) 8752040 Neil Kalton, CFA, Senior Analyst (314) 8752051 Sector Rating: Energy Team, NA Quick thoughts from Wells Fargo Securities, LLC Energy & Utility Team: Utilities Vectren Corp. (VVC/Market Perform) (Akers) VVC will release 2Q earnings after market hours today with the conferencecall Thursday at 3pm Eastern (18668215457). We continue to be cautious on the outlook for the Coal Mining businessgiven industrywide headwinds. Specific items of interest include (1) 2012 coal production (potential downside to projected5.6mm tons, which is down from 6 million originally), (2) '12E price per ton (current guidance $47/ton), (3) '12E cost of salesper ton (current guidance $43.50/ton raised from $42/ton on the Q1 '12 call reflecting cost issues at Prosperity thatmanagement believed to be temporary), (4) the hedge profile for 2013 (has been 40% since the Q2 '11 call), and (5) whetherthe expected inservice date of Oaktown 2 remains Q4 '12 (dependent on demand). As VVC's coal sales are 70% hedged thisyear, we are more interested in these data points as it relates to potential implications in 2013. Yeartodate, shares haveunderperformed the S&P Utilities by ~7% (total return), which likely reflects potential coalrelated downside, to some degree. OGE Energy Corp. (OGE/Outperform) (Akers) OGE will release Q2 earnings tomorrow morning and host a conference callat 9am Eastern (8667007441; code 38119896). As OGE affirmed '12 EPS guidance of $3.403.60 in conjunction with the7/2/12 rate case settlement press release (did incorporate lower NGL prices), we do not expect changes to consolidatedguidance. We are more interested in the breakdown between Enogex (originally $0.800.95) and OG&E (originally $2.602.70 excluding rate case). Our 12E EPS of $3.45 consists of $0.74 Enogex, $2.74 OG&E and ($0.02 parent). Key discussionpoints will likely include NGL pricing (our 12E is $0.80/gallon vs. guidance of $1.04/gallon) and, perhaps more importantly,whether Enogex sees lower drilling in response to lower NGL prices. On the regulated front, OGE will likely lay out OG&E'scompliance strategy for Utility MACT and CSAPR, which we expect will approximate $400500mm. We are interested to hearOG&E's regulatory strategy as it relates to environmental investment (Oklahoma HB 1910 allows utilities to recovermandated environmental costs, but the commission has not yet determined what that recovery will look like i.e. rate cases,rider, etc.). IDACORP (IDA/Outperform) (Akers) IDA will release Q2 earnings tomorrow morning and host a conference call at 4:30pmEastern (8573501588; code 60024683). We expect no change to '12 EPS guidance of $3.003.15 and are primarilyinterested in whether IDA continues to expect ADITC acceleration of less than $5mm, which we would view favorably. Otheritems of interest include sales growth and capital plans. In a recent press release the company disclosed encouragingcustomer growth numbers for 2Q '12 including 5,240 generation business customer additions roughly double the 2Qgrowth in the prior 2 years and 4,155 residential customer additions also meaningfully higher than the prior 2 years). Regarding capital plans, we are interested in potential updates to the Boardman to Hemingway transmission project and/ordiscussion around a potential second gas unit at Langley Gulch. CenterPoint Energy Inc. (CNP/Market Perform) (Akers) CNP will release Q2 earnings tomorrow morning and host a conference call at 11:30am Eastern (8006531761; code 91655009). We look forward to management's discussion of the two midstream transactions announced on 6/19. As outlined in our 6/21 note, we expect CNP will support the investment case for the deals on the 2Q call. Our '1214E EPS of $1.18, $1.30 and $1.37 embed $0.070.08 annualized accretion from the deals. Investors will also likely be looking for further clarity on cash deployment plans. We expect CNP will reiterate its strategy of actively exploring organic growth opportunities (particularly in field services) as well as acquisitions, and we would be surprised by a meaningful share buyback announcement at this point. Southern Company (SO/Market Perform) (Kalton) We are hosting Southern Company CFO Art Beattie and VP of Investor Relations & Financial Planning Dan Tucker on Midwest investor meetings today and tomorrow. Management expressed confidence in its 2012 guidance range ($2.582.70) and 47% EPS growth off of that range on its conference call last week. With Q2 earnings in the rearview, key topics of discussion are likely to revolve around SO's two major construction projects (Vogtle 3 & 4 and Kemper County IGCC), the revised environmental CapEx budget and general economic conditions in the Southeast. Vectren Corp. (VVCNYSE) Price as of 7/31/2012: $29.85 FY 12 EPS: $1.85 FY 13 EPS: $1.95 Shares Out.: 81.9 MM Market Cap.: $2,444.72 MM OGE Energy Corp. (OGENYSE) Price as of 7/31/2012: $53.11 FY 12 EPS: $3.45 FY 13 EPS: $3.55 Shares Out.: 98.6 MM Market Cap.: $5,236.65 MM IDACORP, Inc. (IDANYSE) Price as of 7/31/2012: $42.20 FY 12 EPS: $3.05 FY 13 EPS: $3.20 Shares Out.: 49.9 MM Market Cap.: $2,105.78 MM CenterPoint Energy, Inc. (CNPNYSE) Price as of 7/31/2012: $21.06 FY 12 EPS: $1.18 FY 13 EPS: $1.30 Shares Out.: 426.3 MM Market Cap.: $8,977.88 MM Southern Company (SONYSE) Price as of 7/31/2012: $48.15 FY 12 EPS: $2.70 FY 13 EPS: $2.85 Shares Out.: 868.0 MM Market Cap.: $41,794.2 MM DISCLOSURE APPENDIX Required Disclosures Additional Information Available Upon Request I certify that: 1) All views expressed in this research report accurately reflect my personal views about any and all of the subject securities or issuers discussed; and 2) No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by me in this research report. Wells Fargo Securities, LLC maintains a market in the common stock of Southern Company, IDACORP, Inc., OGE Energy Corp., CenterPoint Energy, Inc. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for Southern Company within the past 12 months. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three months from Southern Company, IDACORP, Inc., CenterPoint Energy, Inc., Vectren Corp., OGE Energy Corp. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from OGE Energy Corp., IDACORP, Inc., Southern Company in the past 12 months. Southern Company, IDACORP, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided investment banking services to Southern Company, IDACORP, Inc., OGE Energy Corp. OGE Energy Corp., Vectren Corp., IDACORP, Inc. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided noninvestment banking securitiesrelated services to OGE Energy Corp., Vectren Corp., IDACORP, Inc. IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided nonsecurities services to IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC received compensation for products or services other than investment banking services from OGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP, Inc. in the past 12 months. A director or officer of Wells Fargo & Company serves on the board of directors of Southern Company. Wells Fargo & Company is the parent of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC or its affiliates may have a significant financial interest in Southern Company, IDACORP, Inc., Vectren Corp., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three months from an affiliate of OGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP, Inc., Southern Company. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for an affiliate of Southern Company, IDACORP, Inc. within the past 12 months. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from an affiliate of IDACORP, Inc., Southern Company in the past 12 months. VVC: Risks include economic weakness, lower than expected coal sales, and NonUtility exposure to commodity prices. OGE: Risks include negative regulatory developments, declines in NGL prices and weaker than expected electric sales. IDA: Risks to our valuation include project delays/cancellations, negative regulatory developments and economic weakness. CNP: Risks to our valuation include negative regulatory developments, unfavorable moves in commodity prices and/or gas market dynamics and execution risk related to new growth opportunities. SO: In our view, risks include regulatory risk, construction risk and potential exposure to adverse federal energy legislation. Wells Fargo Securities, LLC does not compensate its research analysts based on specific investment banking transactions. Wells Fargo Securities, LLC’s research analysts receive compensation that is based upon and impacted by the overall profitability and revenue of the firm, which includes, but is not limited to investment banking revenue. STOCK RATING 1 = Outperform: The stock appears attractively valued, and we believe the stock's total return will exceed that of the market over the next 12 months. BUY 2 = Market Perform: The stock appears appropriately valued, and we believe the stock's total return will be in line with the market over the next 12 months. HOLD 3 = Underperform: The stock appears overvalued, and we believe the stock's total return will be below the market over the next 12 months. SELL SECTOR RATING O = Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months. M = Market Weight: Industry expected to perform inline with the relevant broad market benchmark over the next 12 months. U = Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months. VOLATILITY RATING V = A stock is defined as volatile if the stock price has fluctuated by +/20% or greater in at least 8 of the past 24 months or if the analyst expects significant volatility. All IPO stocks are automatically rated volatile within the first 24 months of trading. As of: August 1, 2012 48% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Outperform. Wells Fargo Securities, LLC has provided investment banking services for 41% of its Outperformrated companies. 49% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Market Perform. Wells Fargo Securities, LLC has provided investment banking services for 32% of its Market Performrated companies. 2% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Underperform. Wells Fargo Securities, LLC has provided investment banking services for 10% of its Underperformrated companies. Important Information for NonU.S. Recipients EEA The securities and related financial instruments described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. For recipients in the EEA, this report is distributed by Wells Fargo Securities International Limited (“WFSIL”). WFSIL is a U.K. incorporated investment firm authorized and regulated by the Financial Services Authority. For the purposes of Section 21 of the UK Financial Services and Markets Act 2000 (“the Act”), the content of this report has been approved by WFSIL a regulated person under the Act. WFSIL does not deal with retail clients as defined in the Markets in Financial Instruments Directive 2007. The FSA rules made under the Financial Services and Markets Act 2000 for the protection of retail clients will therefore not apply, nor will the Financial Services Compensation Scheme be available. This report is not intended for, and should not be relied upon by, retail clients. Australia Wells Fargo Securities, LLC is exempt from the requirements to hold an Australian financial services license in respect of the financial services it provides to wholesale clients in Australia. Wells Fargo Securities, LLC is regulated under U.S. laws which differ from Australian laws. Any offer or documentation provided to Australian recipients by Wells Fargo Securities, LLC in the course of providing the financial services will be prepared in accordance with the laws of the United States and not Australian laws. Hong Kong This report is issued and distributed in Hong Kong by Wells Fargo Securities Asia Limited ("WFSAL"), a Hong Kong incorporated investment firm licensed and regulated by the Securities and Futures Commission to carry on types 1, 4, 6 and 9 regulated activities (as defined in the Securities and Futures Ordinance, "the SFO"). This report is not intended for, and should not be relied on by, any person other than professional investors (as defined in the SFO). Any securities and related financial instruments described herein are not intended for sale, nor will be sold, to any person other than professional investors (as defined in the SFO). Japan This report is distributed in Japan by Wells Fargo Securities (Japan) Co., Ltd, registered with the Kanto Local Finance Bureau to conduct broking and dealing of type 1 and type 2 financial instruments and agency or intermediary service for entry into investment advisory or discretionary investment contracts. This report is intended for distribution only to professional investors (Tokutei Toushika) and is not intended for, and should not be relied upon by, ordinary customers (Ippan Toushika). The ratings stated on the document are not provided by rating agencies registered with the Financial Services Agency of Japan (JFSA) but by group companies of JFSAregistered rating agencies. These group companies may include Moody's Investors Services Inc, Standard & Poor's Rating Services and/or Fitch Ratings. Any decisions to invest in securities or transactions should be made after reviewing policies and methodologies used for assigning credit ratings and assumptions, significance and limitations of the credit ratings stated on the respective rating agencies' websites. About Wells Fargo Securities, LLC Wells Fargo Securities, LLC is a U.S. brokerdealer registered with the U.S. Securities and Exchange Commission and a member of the New York Stock Exchange, the Financial Industry Regulatory Authority and the Securities Investor Protection Corp. This report is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or instruments named or described in this report. Interested parties are advised to contact the entity with which they deal, or the entity that provided this report to them, if they desire further information. The information in this report has been obtained or derived from sources believed by Wells Fargo Securities, LLC, to be reliable, but Wells Fargo Securities, LLC, does not represent that this information is accurate or complete. Any opinions or estimates contained in this report represent the judgment of Wells Fargo Securities, LLC, at this time, and are subject to change without notice. For the purposes of the U.K. Financial Services Authority's rules, this report constitutes impartial investment research. Each of Wells Fargo Securities, LLC, and Wells Fargo Securities International Limited is a separate legal entity and distinct from affiliated banks. Copyright © 2012 Wells Fargo Securities, LLC. SECURITIES NOT FDICINSURED/NOT BANKGUARANTEED/MAY LOSE VALUE Please see Disclosure Appendix for rating definitions, important disclosures, and required analyst certifications. Wells Fargo Securities, LLC does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report and investors should consider this report as only a single factor in making their investment decision. Equity Research Flash Comment August 1, 2012 IDANYSEOutperform (1) OGENYSEOutperform (1) CNPNYSEMarket Perform (2) SONYSEMarket Perform (2) VVCNYSEMarket Perform (2) / V Energy Team Energy And Utility Daily Sarah Akers, CFA, Senior Analyst (314) 8752040 Neil Kalton, CFA, Senior Analyst (314) 8752051 Sector Rating: Energy Team, NA Quick thoughts from Wells Fargo Securities, LLC Energy & Utility Team: Utilities Vectren Corp. (VVC/Market Perform) (Akers) VVC will release 2Q earnings after market hours today with the conferencecall Thursday at 3pm Eastern (18668215457). We continue to be cautious on the outlook for the Coal Mining businessgiven industrywide headwinds. Specific items of interest include (1) 2012 coal production (potential downside to projected5.6mm tons, which is down from 6 million originally), (2) '12E price per ton (current guidance $47/ton), (3) '12E cost of salesper ton (current guidance $43.50/ton raised from $42/ton on the Q1 '12 call reflecting cost issues at Prosperity thatmanagement believed to be temporary), (4) the hedge profile for 2013 (has been 40% since the Q2 '11 call), and (5) whetherthe expected inservice date of Oaktown 2 remains Q4 '12 (dependent on demand). As VVC's coal sales are 70% hedged thisyear, we are more interested in these data points as it relates to potential implications in 2013. Yeartodate, shares haveunderperformed the S&P Utilities by ~7% (total return), which likely reflects potential coalrelated downside, to some degree. OGE Energy Corp. (OGE/Outperform) (Akers) OGE will release Q2 earnings tomorrow morning and host a conference callat 9am Eastern (8667007441; code 38119896). As OGE affirmed '12 EPS guidance of $3.403.60 in conjunction with the7/2/12 rate case settlement press release (did incorporate lower NGL prices), we do not expect changes to consolidatedguidance. We are more interested in the breakdown between Enogex (originally $0.800.95) and OG&E (originally $2.602.70 excluding rate case). Our 12E EPS of $3.45 consists of $0.74 Enogex, $2.74 OG&E and ($0.02 parent). Key discussionpoints will likely include NGL pricing (our 12E is $0.80/gallon vs. guidance of $1.04/gallon) and, perhaps more importantly,whether Enogex sees lower drilling in response to lower NGL prices. On the regulated front, OGE will likely lay out OG&E'scompliance strategy for Utility MACT and CSAPR, which we expect will approximate $400500mm. We are interested to hearOG&E's regulatory strategy as it relates to environmental investment (Oklahoma HB 1910 allows utilities to recovermandated environmental costs, but the commission has not yet determined what that recovery will look like i.e. rate cases,rider, etc.). IDACORP (IDA/Outperform) (Akers) IDA will release Q2 earnings tomorrow morning and host a conference call at 4:30pmEastern (8573501588; code 60024683). We expect no change to '12 EPS guidance of $3.003.15 and are primarilyinterested in whether IDA continues to expect ADITC acceleration of less than $5mm, which we would view favorably. Otheritems of interest include sales growth and capital plans. In a recent press release the company disclosed encouragingcustomer growth numbers for 2Q '12 including 5,240 generation business customer additions roughly double the 2Qgrowth in the prior 2 years and 4,155 residential customer additions also meaningfully higher than the prior 2 years). Regarding capital plans, we are interested in potential updates to the Boardman to Hemingway transmission project and/ordiscussion around a potential second gas unit at Langley Gulch. CenterPoint Energy Inc. (CNP/Market Perform) (Akers) CNP will release Q2 earnings tomorrow morning and host aconference call at 11:30am Eastern (8006531761; code 91655009). We look forward to management's discussion of the twomidstream transactions announced on 6/19. As outlined in our 6/21 note, we expect CNP will support the investment casefor the deals on the 2Q call. Our '1214E EPS of $1.18, $1.30 and $1.37 embed $0.070.08 annualized accretion from thedeals. Investors will also likely be looking for further clarity on cash deployment plans. We expect CNP will reiterate itsstrategy of actively exploring organic growth opportunities (particularly in field services) as well as acquisitions, and we wouldbe surprised by a meaningful share buyback announcement at this point. Southern Company (SO/Market Perform) (Kalton) We are hosting Southern Company CFO Art Beattie and VP of InvestorRelations & Financial Planning Dan Tucker on Midwest investor meetings today and tomorrow. Management expressedconfidence in its 2012 guidance range ($2.582.70) and 47% EPS growth off of that range on its conference call last week. With Q2 earnings in the rearview, key topics of discussion are likely to revolve around SO's two major construction projects(Vogtle 3 & 4 and Kemper County IGCC), the revised environmental CapEx budget and general economic conditions in theSoutheast. Vectren Corp. (VVCNYSE) Price as of 7/31/2012: $29.85 FY 12 EPS: $1.85 FY 13 EPS: $1.95 Shares Out.: 81.9 MM Market Cap.: $2,444.72 MM OGE Energy Corp. (OGENYSE) Price as of 7/31/2012: $53.11 FY 12 EPS: $3.45 FY 13 EPS: $3.55 Shares Out.: 98.6 MM Market Cap.: $5,236.65 MM IDACORP, Inc. (IDANYSE) Price as of 7/31/2012: $42.20 FY 12 EPS: $3.05 FY 13 EPS: $3.20 Shares Out.: 49.9 MM Market Cap.: $2,105.78 MM CenterPoint Energy, Inc. (CNPNYSE) Price as of 7/31/2012: $21.06 FY 12 EPS: $1.18 FY 13 EPS: $1.30 Shares Out.: 426.3 MM Market Cap.: $8,977.88 MM Southern Company (SONYSE) Price as of 7/31/2012: $48.15 FY 12 EPS: $2.70 FY 13 EPS: $2.85 Shares Out.: 868.0 MM Market Cap.: $41,794.2 MM DISCLOSURE APPENDIX Required Disclosures Additional Information Available Upon Request I certify that: 1) All views expressed in this research report accurately reflect my personal views about any and all of the subject securities or issuers discussed; and 2) No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by me in this research report. Wells Fargo Securities, LLC maintains a market in the common stock of Southern Company, IDACORP, Inc., OGE Energy Corp., CenterPoint Energy, Inc. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for Southern Company within the past 12 months. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three months from Southern Company, IDACORP, Inc., CenterPoint Energy, Inc., Vectren Corp., OGE Energy Corp. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from OGE Energy Corp., IDACORP, Inc., Southern Company in the past 12 months. Southern Company, IDACORP, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided investment banking services to Southern Company, IDACORP, Inc., OGE Energy Corp. OGE Energy Corp., Vectren Corp., IDACORP, Inc. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided noninvestment banking securitiesrelated services to OGE Energy Corp., Vectren Corp., IDACORP, Inc. IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided nonsecurities services to IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC received compensation for products or services other than investment banking services from OGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP, Inc. in the past 12 months. A director or officer of Wells Fargo & Company serves on the board of directors of Southern Company. Wells Fargo & Company is the parent of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC or its affiliates may have a significant financial interest in Southern Company, IDACORP, Inc., Vectren Corp., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three months from an affiliate of OGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP, Inc., Southern Company. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for an affiliate of Southern Company, IDACORP, Inc. within the past 12 months. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from an affiliate of IDACORP, Inc., Southern Company in the past 12 months. VVC: Risks include economic weakness, lower than expected coal sales, and NonUtility exposure to commodity prices. OGE: Risks include negative regulatory developments, declines in NGL prices and weaker than expected electric sales. IDA: Risks to our valuation include project delays/cancellations, negative regulatory developments and economic weakness. CNP: Risks to our valuation include negative regulatory developments, unfavorable moves in commodity prices and/or gas market dynamics and execution risk related to new growth opportunities. SO: In our view, risks include regulatory risk, construction risk and potential exposure to adverse federal energy legislation. Wells Fargo Securities, LLC does not compensate its research analysts based on specific investment banking transactions. Wells Fargo Securities, LLC’s research analysts receive compensation that is based upon and impacted by the overall profitability and revenue of the firm, which includes, but is not limited to investment banking revenue. STOCK RATING 1 = Outperform: The stock appears attractively valued, and we believe the stock's total return will exceed that of the market over the next 12 months. BUY 2 = Market Perform: The stock appears appropriately valued, and we believe the stock's total return will be in line with the market over the next 12 months. HOLD 3 = Underperform: The stock appears overvalued, and we believe the stock's total return will be below the market over the next 12 months. SELL SECTOR RATING O = Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months. M = Market Weight: Industry expected to perform inline with the relevant broad market benchmark over the next 12 months. U = Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months. VOLATILITY RATING V = A stock is defined as volatile if the stock price has fluctuated by +/20% or greater in at least 8 of the past 24 months or if the analyst expects significant volatility. All IPO stocks are automatically rated volatile within the first 24 months of trading. As of: August 1, 2012 48% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Outperform. Wells Fargo Securities, LLC has provided investment banking services for 41% of its Outperformrated companies. 49% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Market Perform. Wells Fargo Securities, LLC has provided investment banking services for 32% of its Market Performrated companies. 2% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Underperform. Wells Fargo Securities, LLC has provided investment banking services for 10% of its Underperformrated companies. Important Information for NonU.S. Recipients EEA The securities and related financial instruments described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. For recipients in the EEA, this report is distributed by Wells Fargo Securities International Limited (“WFSIL”). WFSIL is a U.K. incorporated investment firm authorized and regulated by the Financial Services Authority. For the purposes of Section 21 of the UK Financial Services and Markets Act 2000 (“the Act”), the content of this report has been approved by WFSIL a regulated person under the Act. WFSIL does not deal with retail clients as defined in the Markets in Financial Instruments Directive 2007. The FSA rules made under the Financial Services and Markets Act 2000 for the protection of retail clients will therefore not apply, nor will the Financial Services Compensation Scheme be available. This report is not intended for, and should not be relied upon by, retail clients. Australia Wells Fargo Securities, LLC is exempt from the requirements to hold an Australian financial services license in respect of the financial services it provides to wholesale clients in Australia. Wells Fargo Securities, LLC is regulated under U.S. laws which differ from Australian laws. Any offer or documentation provided to Australian recipients by Wells Fargo Securities, LLC in the course of providing the financial services will be prepared in accordance with the laws of the United States and not Australian laws. Hong Kong This report is issued and distributed in Hong Kong by Wells Fargo Securities Asia Limited ("WFSAL"), a Hong Kong incorporated investment firm licensed and regulated by the Securities and Futures Commission to carry on types 1, 4, 6 and 9 regulated activities (as defined in the Securities and Futures Ordinance, "the SFO"). This report is not intended for, and should not be relied on by, any person other than professional investors (as defined in the SFO). Any securities and related financial instruments described herein are not intended for sale, nor will be sold, to any person other than professional investors (as defined in the SFO). Japan This report is distributed in Japan by Wells Fargo Securities (Japan) Co., Ltd, registered with the Kanto Local Finance Bureau to conduct broking and dealing of type 1 and type 2 financial instruments and agency or intermediary service for entry into investment advisory or discretionary investment contracts. This report is intended for distribution only to professional investors (Tokutei Toushika) and is not intended for, and should not be relied upon by, ordinary customers (Ippan Toushika). The ratings stated on the document are not provided by rating agencies registered with the Financial Services Agency of Japan (JFSA) but by group companies of JFSAregistered rating agencies. These group companies may include Moody's Investors Services Inc, Standard & Poor's Rating Services and/or Fitch Ratings. Any decisions to invest in securities or transactions should be made after reviewing policies and methodologies used for assigning credit ratings and assumptions, significance and limitations of the credit ratings stated on the respective rating agencies' websites. About Wells Fargo Securities, LLC Wells Fargo Securities, LLC is a U.S. brokerdealer registered with the U.S. Securities and Exchange Commission and a member of the New York Stock Exchange, the Financial Industry Regulatory Authority and the Securities Investor Protection Corp. This report is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or instruments named or described in this report. Interested parties are advised to contact the entity with which they deal, or the entity that provided this report to them, if they desire further information. The information in this report has been obtained or derived from sources believed by Wells Fargo Securities, LLC, to be reliable, but Wells Fargo Securities, LLC, does not represent that this information is accurate or complete. Any opinions or estimates contained in this report represent the judgment of Wells Fargo Securities, LLC, at this time, and are subject to change without notice. For the purposes of the U.K. Financial Services Authority's rules, this report constitutes impartial investment research. Each of Wells Fargo Securities, LLC, and Wells Fargo Securities International Limited is a separate legal entity and distinct from affiliated banks. Copyright © 2012 Wells Fargo Securities, LLC. SECURITIES NOT FDICINSURED/NOT BANKGUARANTEED/MAY LOSE VALUE Please see Disclosure Appendix for rating definitions, important disclosures, and required analyst certifications. Wells Fargo Securities, LLC does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report and investors should consider this report as only a single factor in making their investment decision. Equity Research Flash Comment August 1, 2012 IDANYSEOutperform (1) OGENYSEOutperform (1) CNPNYSEMarket Perform (2) SONYSEMarket Perform (2) VVCNYSEMarket Perform (2) / V Energy Team Energy And Utility Daily Sarah Akers, CFA, Senior Analyst (314) 8752040 Neil Kalton, CFA, Senior Analyst (314) 8752051 Sector Rating: Energy Team, NA Quick thoughts from Wells Fargo Securities, LLC Energy & Utility Team: Utilities Vectren Corp. (VVC/Market Perform) (Akers) VVC will release 2Q earnings after market hours today with the conferencecall Thursday at 3pm Eastern (18668215457). We continue to be cautious on the outlook for the Coal Mining businessgiven industrywide headwinds. Specific items of interest include (1) 2012 coal production (potential downside to projected5.6mm tons, which is down from 6 million originally), (2) '12E price per ton (current guidance $47/ton), (3) '12E cost of salesper ton (current guidance $43.50/ton raised from $42/ton on the Q1 '12 call reflecting cost issues at Prosperity thatmanagement believed to be temporary), (4) the hedge profile for 2013 (has been 40% since the Q2 '11 call), and (5) whetherthe expected inservice date of Oaktown 2 remains Q4 '12 (dependent on demand). As VVC's coal sales are 70% hedged thisyear, we are more interested in these data points as it relates to potential implications in 2013. Yeartodate, shares haveunderperformed the S&P Utilities by ~7% (total return), which likely reflects potential coalrelated downside, to some degree. OGE Energy Corp. (OGE/Outperform) (Akers) OGE will release Q2 earnings tomorrow morning and host a conference callat 9am Eastern (8667007441; code 38119896). As OGE affirmed '12 EPS guidance of $3.403.60 in conjunction with the7/2/12 rate case settlement press release (did incorporate lower NGL prices), we do not expect changes to consolidatedguidance. We are more interested in the breakdown between Enogex (originally $0.800.95) and OG&E (originally $2.602.70 excluding rate case). Our 12E EPS of $3.45 consists of $0.74 Enogex, $2.74 OG&E and ($0.02 parent). Key discussionpoints will likely include NGL pricing (our 12E is $0.80/gallon vs. guidance of $1.04/gallon) and, perhaps more importantly,whether Enogex sees lower drilling in response to lower NGL prices. On the regulated front, OGE will likely lay out OG&E'scompliance strategy for Utility MACT and CSAPR, which we expect will approximate $400500mm. We are interested to hearOG&E's regulatory strategy as it relates to environmental investment (Oklahoma HB 1910 allows utilities to recovermandated environmental costs, but the commission has not yet determined what that recovery will look like i.e. rate cases,rider, etc.). IDACORP (IDA/Outperform) (Akers) IDA will release Q2 earnings tomorrow morning and host a conference call at 4:30pmEastern (8573501588; code 60024683). We expect no change to '12 EPS guidance of $3.003.15 and are primarilyinterested in whether IDA continues to expect ADITC acceleration of less than $5mm, which we would view favorably. Otheritems of interest include sales growth and capital plans. In a recent press release the company disclosed encouragingcustomer growth numbers for 2Q '12 including 5,240 generation business customer additions roughly double the 2Qgrowth in the prior 2 years and 4,155 residential customer additions also meaningfully higher than the prior 2 years). Regarding capital plans, we are interested in potential updates to the Boardman to Hemingway transmission project and/ordiscussion around a potential second gas unit at Langley Gulch. CenterPoint Energy Inc. (CNP/Market Perform) (Akers) CNP will release Q2 earnings tomorrow morning and host aconference call at 11:30am Eastern (8006531761; code 91655009). We look forward to management's discussion of the twomidstream transactions announced on 6/19. As outlined in our 6/21 note, we expect CNP will support the investment casefor the deals on the 2Q call. Our '1214E EPS of $1.18, $1.30 and $1.37 embed $0.070.08 annualized accretion from thedeals. Investors will also likely be looking for further clarity on cash deployment plans. We expect CNP will reiterate itsstrategy of actively exploring organic growth opportunities (particularly in field services) as well as acquisitions, and we wouldbe surprised by a meaningful share buyback announcement at this point. Southern Company (SO/Market Perform) (Kalton) We are hosting Southern Company CFO Art Beattie and VP of InvestorRelations & Financial Planning Dan Tucker on Midwest investor meetings today and tomorrow. Management expressedconfidence in its 2012 guidance range ($2.582.70) and 47% EPS growth off of that range on its conference call last week. With Q2 earnings in the rearview, key topics of discussion are likely to revolve around SO's two major construction projects(Vogtle 3 & 4 and Kemper County IGCC), the revised environmental CapEx budget and general economic conditions in theSoutheast. Vectren Corp. (VVCNYSE) Price as of 7/31/2012: $29.85 FY 12 EPS: $1.85 FY 13 EPS: $1.95 Shares Out.: 81.9 MM Market Cap.: $2,444.72 MM OGE Energy Corp. (OGENYSE) Price as of 7/31/2012: $53.11 FY 12 EPS: $3.45 FY 13 EPS: $3.55 Shares Out.: 98.6 MM Market Cap.: $5,236.65 MM IDACORP, Inc. (IDANYSE) Price as of 7/31/2012: $42.20 FY 12 EPS: $3.05 FY 13 EPS: $3.20 Shares Out.: 49.9 MM Market Cap.: $2,105.78 MM CenterPoint Energy, Inc. (CNPNYSE) Price as of 7/31/2012: $21.06 FY 12 EPS: $1.18 FY 13 EPS: $1.30 Shares Out.: 426.3 MM Market Cap.: $8,977.88 MM Southern Company (SONYSE) Price as of 7/31/2012: $48.15 FY 12 EPS: $2.70 FY 13 EPS: $2.85 Shares Out.: 868.0 MM Market Cap.: $41,794.2 MM DISCLOSURE APPENDIX Required Disclosures Additional Information Available Upon Request I certify that: 1) All views expressed in this research report accurately reflect my personal views about any and all of the subject securities or issuers discussed; and 2) No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by me in this research report. Wells Fargo Securities, LLC maintains a market in the common stock of Southern Company, IDACORP, Inc., OGE Energy Corp., CenterPoint Energy, Inc. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for Southern Company within the past 12 months. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three months from Southern Company, IDACORP, Inc., CenterPoint Energy, Inc., Vectren Corp., OGE Energy Corp. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from OGE Energy Corp., IDACORP, Inc., Southern Company in the past 12 months. Southern Company, IDACORP, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided investment banking services to Southern Company, IDACORP, Inc., OGE Energy Corp. OGE Energy Corp., Vectren Corp., IDACORP, Inc. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided noninvestment banking securitiesrelated services to OGE Energy Corp., Vectren Corp., IDACORP, Inc. IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided nonsecurities services to IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC received compensation for products or services other than investment banking services from OGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP, Inc. in the past 12 months. A director or officer of Wells Fargo & Company serves on the board of directors of Southern Company. Wells Fargo & Company is the parent of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC or its affiliates may have a significant financial interest in Southern Company, IDACORP, Inc., Vectren Corp., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three months from an affiliate of OGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP, Inc., Southern Company. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for an affiliate of Southern Company, IDACORP, Inc. within the past 12 months. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from an affiliate of IDACORP, Inc., Southern Company in the past 12 months. VVC: Risks include economic weakness, lower than expected coal sales, and NonUtility exposure to commodity prices. OGE: Risks include negative regulatory developments, declines in NGL prices and weaker than expected electric sales. IDA: Risks to our valuation include project delays/cancellations, negative regulatory developments and economic weakness. CNP: Risks to our valuation include negative regulatory developments, unfavorable moves in commodity prices and/or gas market dynamics and execution risk related to new growth opportunities. SO: In our view, risks include regulatory risk, construction risk and potential exposure to adverse federal energy legislation. Wells Fargo Securities, LLC does not compensate its research analysts based on specific investment banking transactions. Wells Fargo Securities, LLC’s research analysts receive compensation that is based upon and impacted by the overall profitability and revenue of the firm, which includes, but is not limited to investment banking revenue. STOCK RATING 1 = Outperform: The stock appears attractively valued, and we believe the stock's total return will exceed that of the market over the next 12 months. BUY 2 = Market Perform: The stock appears appropriately valued, and we believe the stock's total return will be in line with the market over the next 12 months. HOLD 3 = Underperform: The stock appears overvalued, and we believe the stock's total return will be below the market over the next 12 months. SELL SECTOR RATING O = Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months. M = Market Weight: Industry expected to perform inline with the relevant broad market benchmark over the next 12 months. U = Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months. VOLATILITY RATING V = A stock is defined as volatile if the stock price has fluctuated by +/20% or greater in at least 8 of the past 24 months or if the analyst expects significant volatility. All IPO stocks are automatically rated volatile within the first 24 months of trading. As of: August 1, 2012 48% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Outperform. Wells Fargo Securities, LLC has provided investment banking services for 41% of its Outperformrated companies. 49% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Market Perform. Wells Fargo Securities, LLC has provided investment banking services for 32% of its Market Performrated companies. 2% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Underperform. Wells Fargo Securities, LLC has provided investment banking services for 10% of its Underperformrated companies. Important Information for NonU.S. Recipients EEA The securities and related financial instruments described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. For recipients in the EEA, this report is distributed by Wells Fargo Securities International Limited (“WFSIL”). WFSIL is a U.K. incorporated investment firm authorized and regulated by the Financial Services Authority. For the purposes of Section 21 of the UK Financial Services and Markets Act 2000 (“the Act”), the content of this report has been approved by WFSIL a regulated person under the Act. WFSIL does not deal with retail clients as defined in the Markets in Financial Instruments Directive 2007. The FSA rules made under the Financial Services and Markets Act 2000 for the protection of retail clients will therefore not apply, nor will the Financial Services Compensation Scheme be available. This report is not intended for, and should not be relied upon by, retail clients. Australia Wells Fargo Securities, LLC is exempt from the requirements to hold an Australian financial services license in respect of the financial services it provides to wholesale clients in Australia. Wells Fargo Securities, LLC is regulated under U.S. laws which differ from Australian laws. Any offer or documentation provided to Australian recipients by Wells Fargo Securities, LLC in the course of providing the financial services will be prepared in accordance with the laws of the United States and not Australian laws. Hong Kong This report is issued and distributed in Hong Kong by Wells Fargo Securities Asia Limited ("WFSAL"), a Hong Kong incorporated investment firm licensed and regulated by the Securities and Futures Commission to carry on types 1, 4, 6 and 9 regulated activities (as defined in the Securities and Futures Ordinance, "the SFO"). This report is not intended for, and should not be relied on by, any person other than professional investors (as defined in the SFO). Any securities and related financial instruments described herein are not intended for sale, nor will be sold, to any person other than professional investors (as defined in the SFO). Japan This report is distributed in Japan by Wells Fargo Securities (Japan) Co., Ltd, registered with the Kanto Local Finance Bureau to conduct broking and dealing of type 1 and type 2 financial instruments and agency or intermediary service for entry into investment advisory or discretionary investment contracts. This report is intended for distribution only to professional investors (Tokutei Toushika) and is not intended for, and should not be relied upon by, ordinary customers (Ippan Toushika). The ratings stated on the document are not provided by rating agencies registered with the Financial Services Agency of Japan (JFSA) but by group companies of JFSAregistered rating agencies. These group companies may include Moody's Investors Services Inc, Standard & Poor's Rating Services and/or Fitch Ratings. Any decisions to invest in securities or transactions should be made after reviewing policies and methodologies used for assigning credit ratings and assumptions, significance and limitations of the credit ratings stated on the respective rating agencies' websites. About Wells Fargo Securities, LLC Wells Fargo Securities, LLC is a U.S. brokerdealer registered with the U.S. Securities and Exchange Commission and a member of the New York Stock Exchange, the Financial Industry Regulatory Authority and the Securities Investor Protection Corp. This report is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or instruments named or described in this report. Interested parties are advised to contact the entity with which they deal, or the entity that provided this report to them, if they desire further information. The information in this report has been obtained or derived from sources believed by Wells Fargo Securities, LLC, to be reliable, but Wells Fargo Securities, LLC, does not represent that this information is accurate or complete. Any opinions or estimates contained in this report represent the judgment of Wells Fargo Securities, LLC, at this time, and are subject to change without notice. For the purposes of the U.K. Financial Services Authority's rules, this report constitutes impartial investment research. Each of Wells Fargo Securities, LLC, and Wells Fargo Securities International Limited is a separate legal entity and distinct from affiliated banks. Copyright © 2012 Wells Fargo Securities, LLC. SECURITIES NOT FDICINSURED/NOT BANKGUARANTEED/MAY LOSE VALUE Please see Disclosure Appendix for rating definitions, important disclosures, and required analyst certifications. Wells Fargo Securities, LLC does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report and investors should consider this report as only a single factor in making their investment decision. Equity Research Flash Comment August 1, 2012 IDANYSEOutperform (1) OGENYSEOutperform (1) CNPNYSEMarket Perform (2) SONYSEMarket Perform (2) VVCNYSEMarket Perform (2) / V Energy Team Energy And Utility Daily Sarah Akers, CFA, Senior Analyst (314) 8752040 Neil Kalton, CFA, Senior Analyst (314) 8752051 Sector Rating: Energy Team, NA Quick thoughts from Wells Fargo Securities, LLC Energy & Utility Team: Utilities Vectren Corp. (VVC/Market Perform) (Akers) VVC will release 2Q earnings after market hours today with the conferencecall Thursday at 3pm Eastern (18668215457). We continue to be cautious on the outlook for the Coal Mining businessgiven industrywide headwinds. Specific items of interest include (1) 2012 coal production (potential downside to projected5.6mm tons, which is down from 6 million originally), (2) '12E price per ton (current guidance $47/ton), (3) '12E cost of salesper ton (current guidance $43.50/ton raised from $42/ton on the Q1 '12 call reflecting cost issues at Prosperity thatmanagement believed to be temporary), (4) the hedge profile for 2013 (has been 40% since the Q2 '11 call), and (5) whetherthe expected inservice date of Oaktown 2 remains Q4 '12 (dependent on demand). As VVC's coal sales are 70% hedged thisyear, we are more interested in these data points as it relates to potential implications in 2013. Yeartodate, shares haveunderperformed the S&P Utilities by ~7% (total return), which likely reflects potential coalrelated downside, to some degree. OGE Energy Corp. (OGE/Outperform) (Akers) OGE will release Q2 earnings tomorrow morning and host a conference callat 9am Eastern (8667007441; code 38119896). As OGE affirmed '12 EPS guidance of $3.403.60 in conjunction with the7/2/12 rate case settlement press release (did incorporate lower NGL prices), we do not expect changes to consolidatedguidance. We are more interested in the breakdown between Enogex (originally $0.800.95) and OG&E (originally $2.602.70 excluding rate case). Our 12E EPS of $3.45 consists of $0.74 Enogex, $2.74 OG&E and ($0.02 parent). Key discussionpoints will likely include NGL pricing (our 12E is $0.80/gallon vs. guidance of $1.04/gallon) and, perhaps more importantly,whether Enogex sees lower drilling in response to lower NGL prices. On the regulated front, OGE will likely lay out OG&E'scompliance strategy for Utility MACT and CSAPR, which we expect will approximate $400500mm. We are interested to hearOG&E's regulatory strategy as it relates to environmental investment (Oklahoma HB 1910 allows utilities to recovermandated environmental costs, but the commission has not yet determined what that recovery will look like i.e. rate cases,rider, etc.). IDACORP (IDA/Outperform) (Akers) IDA will release Q2 earnings tomorrow morning and host a conference call at 4:30pmEastern (8573501588; code 60024683). We expect no change to '12 EPS guidance of $3.003.15 and are primarilyinterested in whether IDA continues to expect ADITC acceleration of less than $5mm, which we would view favorably. Otheritems of interest include sales growth and capital plans. In a recent press release the company disclosed encouragingcustomer growth numbers for 2Q '12 including 5,240 generation business customer additions roughly double the 2Qgrowth in the prior 2 years and 4,155 residential customer additions also meaningfully higher than the prior 2 years). Regarding capital plans, we are interested in potential updates to the Boardman to Hemingway transmission project and/ordiscussion around a potential second gas unit at Langley Gulch. CenterPoint Energy Inc. (CNP/Market Perform) (Akers) CNP will release Q2 earnings tomorrow morning and host aconference call at 11:30am Eastern (8006531761; code 91655009). We look forward to management's discussion of the twomidstream transactions announced on 6/19. As outlined in our 6/21 note, we expect CNP will support the investment casefor the deals on the 2Q call. Our '1214E EPS of $1.18, $1.30 and $1.37 embed $0.070.08 annualized accretion from thedeals. Investors will also likely be looking for further clarity on cash deployment plans. We expect CNP will reiterate itsstrategy of actively exploring organic growth opportunities (particularly in field services) as well as acquisitions, and we wouldbe surprised by a meaningful share buyback announcement at this point. Southern Company (SO/Market Perform) (Kalton) We are hosting Southern Company CFO Art Beattie and VP of InvestorRelations & Financial Planning Dan Tucker on Midwest investor meetings today and tomorrow. Management expressedconfidence in its 2012 guidance range ($2.582.70) and 47% EPS growth off of that range on its conference call last week. With Q2 earnings in the rearview, key topics of discussion are likely to revolve around SO's two major construction projects(Vogtle 3 & 4 and Kemper County IGCC), the revised environmental CapEx budget and general economic conditions in theSoutheast. Vectren Corp. (VVCNYSE) Price as of 7/31/2012: $29.85 FY 12 EPS: $1.85 FY 13 EPS: $1.95 Shares Out.: 81.9 MM Market Cap.: $2,444.72 MM OGE Energy Corp. (OGENYSE) Price as of 7/31/2012: $53.11 FY 12 EPS: $3.45 FY 13 EPS: $3.55 Shares Out.: 98.6 MM Market Cap.: $5,236.65 MM IDACORP, Inc. (IDANYSE) Price as of 7/31/2012: $42.20 FY 12 EPS: $3.05 FY 13 EPS: $3.20 Shares Out.: 49.9 MM Market Cap.: $2,105.78 MM CenterPoint Energy, Inc. (CNPNYSE) Price as of 7/31/2012: $21.06 FY 12 EPS: $1.18 FY 13 EPS: $1.30 Shares Out.: 426.3 MM Market Cap.: $8,977.88 MM Southern Company (SONYSE) Price as of 7/31/2012: $48.15 FY 12 EPS: $2.70 FY 13 EPS: $2.85 Shares Out.: 868.0 MM Market Cap.: $41,794.2 MM DISCLOSURE APPENDIX Required Disclosures Additional Information Available Upon Request I certify that: 1) All views expressed in this research report accurately reflect my personal views about any and all of the subject securities or issuers discussed; and 2) No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by me in this research report. Wells Fargo Securities, LLC maintains a market in the common stock of Southern Company, IDACORP, Inc., OGE Energy Corp., CenterPoint Energy, Inc. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for Southern Company within the past 12 months. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three months from Southern Company, IDACORP, Inc., CenterPoint Energy, Inc., Vectren Corp., OGE Energy Corp. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from OGE Energy Corp., IDACORP, Inc., Southern Company in the past 12 months. Southern Company, IDACORP, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided investment banking services to Southern Company, IDACORP, Inc., OGE Energy Corp. OGE Energy Corp., Vectren Corp., IDACORP, Inc. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided noninvestment banking securitiesrelated services to OGE Energy Corp., Vectren Corp., IDACORP, Inc. IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided nonsecurities services to IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC received compensation for products or services other than investment banking services from OGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP, Inc. in the past 12 months. A director or officer of Wells Fargo & Company serves on the board of directors of Southern Company. Wells Fargo & Company is the parent of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC or its affiliates may have a significant financial interest in Southern Company, IDACORP, Inc., Vectren Corp., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three months from an affiliate of OGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP, Inc., Southern Company. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for an affiliate of Southern Company, IDACORP, Inc. within the past 12 months. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from an affiliate of IDACORP, Inc., Southern Company in the past 12 months. VVC: Risks include economic weakness, lower than expected coal sales, and NonUtility exposure to commodity prices. OGE: Risks include negative regulatory developments, declines in NGL prices and weaker than expected electric sales. IDA: Risks to our valuation include project delays/cancellations, negative regulatory developments and economic weakness. CNP: Risks to our valuation include negative regulatory developments, unfavorable moves in commodity prices and/or gas market dynamics and execution risk related to new growth opportunities. SO: In our view, risks include regulatory risk, construction risk and potential exposure to adverse federal energy legislation. Wells Fargo Securities, LLC does not compensate its research analysts based on specific investment banking transactions. Wells Fargo Securities, LLC’s research analysts receive compensation that is based upon and impacted by the overall profitability and revenue of the firm, which includes, but is not limited to investment banking revenue. STOCK RATING 1 = Outperform: The stock appears attractively valued, and we believe the stock's total return will exceed that of the market over the next 12 months. BUY 2 = Market Perform: The stock appears appropriately valued, and we believe the stock's total return will be in line with the market over the next 12 months. HOLD 3 = Underperform: The stock appears overvalued, and we believe the stock's total return will be below the market over the next 12 months. SELL SECTOR RATING O = Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months. M = Market Weight: Industry expected to perform inline with the relevant broad market benchmark over the next 12 months. U = Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months. VOLATILITY RATING V = A stock is defined as volatile if the stock price has fluctuated by +/20% or greater in at least 8 of the past 24 months or if the analyst expects significant volatility. All IPO stocks are automatically rated volatile within the first 24 months of trading. As of: August 1, 2012 48% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Outperform. Wells Fargo Securities, LLC has provided investment banking services for 41% of its Outperformrated companies. 49% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Market Perform. Wells Fargo Securities, LLC has provided investment banking services for 32% of its Market Performrated companies. 2% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Underperform. Wells Fargo Securities, LLC has provided investment banking services for 10% of its Underperformrated companies. Important Information for NonU.S. Recipients EEA The securities and related financial instruments described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. For recipients in the EEA, this report is distributed by Wells Fargo Securities International Limited (“WFSIL”). WFSIL is a U.K. incorporated investment firm authorized and regulated by the Financial Services Authority. For the purposes of Section 21 of the UK Financial Services and Markets Act 2000 (“the Act”), the content of this report has been approved by WFSIL a regulated person under the Act. WFSIL does not deal with retail clients as defined in the Markets in Financial Instruments Directive 2007. The FSA rules made under the Financial Services and Markets Act 2000 for the protection of retail clients will therefore not apply, nor will the Financial Services Compensation Scheme be available. This report is not intended for, and should not be relied upon by, retail clients. Australia Wells Fargo Securities, LLC is exempt from the requirements to hold an Australian financial services license in respect of the financial services it provides to wholesale clients in Australia. Wells Fargo Securities, LLC is regulated under U.S. laws which differ from Australian laws. Any offer or documentation provided to Australian recipients by Wells Fargo Securities, LLC in the course of providing the financial services will be prepared in accordance with the laws of the United States and not Australian laws. Hong Kong This report is issued and distributed in Hong Kong by Wells Fargo Securities Asia Limited ("WFSAL"), a Hong Kong incorporated investment firm licensed and regulated by the Securities and Futures Commission to carry on types 1, 4, 6 and 9 regulated activities (as defined in the Securities and Futures Ordinance, "the SFO"). This report is not intended for, and should not be relied on by, any person other than professional investors (as defined in the SFO). Any securities and related financial instruments described herein are not intended for sale, nor will be sold, to any person other than professional investors (as defined in the SFO). Japan This report is distributed in Japan by Wells Fargo Securities (Japan) Co., Ltd, registered with the Kanto Local Finance Bureau to conduct broking and dealing of type 1 and type 2 financial instruments and agency or intermediary service for entry into investment advisory or discretionary investment contracts. This report is intended for distribution only to professional investors (Tokutei Toushika) and is not intended for, and should not be relied upon by, ordinary customers (Ippan Toushika). The ratings stated on the document are not provided by rating agencies registered with the Financial Services Agency of Japan (JFSA) but by group companies of JFSAregistered rating agencies. These group companies may include Moody's Investors Services Inc, Standard & Poor's Rating Services and/or Fitch Ratings. Any decisions to invest in securities or transactions should be made after reviewing policies and methodologies used for assigning credit ratings and assumptions, significance and limitations of the credit ratings stated on the respective rating agencies' websites. About Wells Fargo Securities, LLC Wells Fargo Securities, LLC is a U.S. brokerdealer registered with the U.S. Securities and Exchange Commission and a member of the New York Stock Exchange, the Financial Industry Regulatory Authority and the Securities Investor Protection Corp. This report is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or instruments named or described in this report. Interested parties are advised to contact the entity with which they deal, or the entity that provided this report to them, if they desire further information. The information in this report has been obtained or derived from sources believed by Wells Fargo Securities, LLC, to be reliable, but Wells Fargo Securities, LLC, does not represent that this information is accurate or complete. Any opinions or estimates contained in this report represent the judgment of Wells Fargo Securities, LLC, at this time, and are subject to change without notice. For the purposes of the U.K. Financial Services Authority's rules, this report constitutes impartial investment research. Each of Wells Fargo Securities, LLC, and Wells Fargo Securities International Limited is a separate legal entity and distinct from affiliated banks. Copyright © 2012 Wells Fargo Securities, LLC. SECURITIES NOT FDICINSURED/NOT BANKGUARANTEED/MAY LOSE VALUE Please see Disclosure Appendix for rating definitions, important disclosures, and required analyst certifications. Wells Fargo Securities, LLC does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report and investors should consider this report as only a single factor in making their investment decision. Equity Research Flash Comment August 1, 2012 IDANYSEOutperform (1) OGENYSEOutperform (1) CNPNYSEMarket Perform (2) SONYSEMarket Perform (2) VVCNYSEMarket Perform (2) / V Energy Team Energy And Utility Daily Sarah Akers, CFA, Senior Analyst (314) 8752040 Neil Kalton, CFA, Senior Analyst (314) 8752051 Sector Rating: Energy Team, NA Quick thoughts from Wells Fargo Securities, LLC Energy & Utility Team: Utilities Vectren Corp. (VVC/Market Perform) (Akers) VVC will release 2Q earnings after market hours today with the conferencecall Thursday at 3pm Eastern (18668215457). We continue to be cautious on the outlook for the Coal Mining businessgiven industrywide headwinds. Specific items of interest include (1) 2012 coal production (potential downside to projected5.6mm tons, which is down from 6 million originally), (2) '12E price per ton (current guidance $47/ton), (3) '12E cost of salesper ton (current guidance $43.50/ton raised from $42/ton on the Q1 '12 call reflecting cost issues at Prosperity thatmanagement believed to be temporary), (4) the hedge profile for 2013 (has been 40% since the Q2 '11 call), and (5) whetherthe expected inservice date of Oaktown 2 remains Q4 '12 (dependent on demand). As VVC's coal sales are 70% hedged thisyear, we are more interested in these data points as it relates to potential implications in 2013. Yeartodate, shares haveunderperformed the S&P Utilities by ~7% (total return), which likely reflects potential coalrelated downside, to some degree. OGE Energy Corp. (OGE/Outperform) (Akers) OGE will release Q2 earnings tomorrow morning and host a conference callat 9am Eastern (8667007441; code 38119896). As OGE affirmed '12 EPS guidance of $3.403.60 in conjunction with the7/2/12 rate case settlement press release (did incorporate lower NGL prices), we do not expect changes to consolidatedguidance. We are more interested in the breakdown between Enogex (originally $0.800.95) and OG&E (originally $2.602.70 excluding rate case). Our 12E EPS of $3.45 consists of $0.74 Enogex, $2.74 OG&E and ($0.02 parent). Key discussionpoints will likely include NGL pricing (our 12E is $0.80/gallon vs. guidance of $1.04/gallon) and, perhaps more importantly,whether Enogex sees lower drilling in response to lower NGL prices. On the regulated front, OGE will likely lay out OG&E'scompliance strategy for Utility MACT and CSAPR, which we expect will approximate $400500mm. We are interested to hearOG&E's regulatory strategy as it relates to environmental investment (Oklahoma HB 1910 allows utilities to recovermandated environmental costs, but the commission has not yet determined what that recovery will look like i.e. rate cases,rider, etc.). IDACORP (IDA/Outperform) (Akers) IDA will release Q2 earnings tomorrow morning and host a conference call at 4:30pmEastern (8573501588; code 60024683). We expect no change to '12 EPS guidance of $3.003.15 and are primarilyinterested in whether IDA continues to expect ADITC acceleration of less than $5mm, which we would view favorably. Otheritems of interest include sales growth and capital plans. In a recent press release the company disclosed encouragingcustomer growth numbers for 2Q '12 including 5,240 generation business customer additions roughly double the 2Qgrowth in the prior 2 years and 4,155 residential customer additions also meaningfully higher than the prior 2 years). Regarding capital plans, we are interested in potential updates to the Boardman to Hemingway transmission project and/ordiscussion around a potential second gas unit at Langley Gulch. CenterPoint Energy Inc. (CNP/Market Perform) (Akers) CNP will release Q2 earnings tomorrow morning and host aconference call at 11:30am Eastern (8006531761; code 91655009). We look forward to management's discussion of the twomidstream transactions announced on 6/19. As outlined in our 6/21 note, we expect CNP will support the investment casefor the deals on the 2Q call. Our '1214E EPS of $1.18, $1.30 and $1.37 embed $0.070.08 annualized accretion from thedeals. Investors will also likely be looking for further clarity on cash deployment plans. We expect CNP will reiterate itsstrategy of actively exploring organic growth opportunities (particularly in field services) as well as acquisitions, and we wouldbe surprised by a meaningful share buyback announcement at this point. Southern Company (SO/Market Perform) (Kalton) We are hosting Southern Company CFO Art Beattie and VP of InvestorRelations & Financial Planning Dan Tucker on Midwest investor meetings today and tomorrow. Management expressedconfidence in its 2012 guidance range ($2.582.70) and 47% EPS growth off of that range on its conference call last week. With Q2 earnings in the rearview, key topics of discussion are likely to revolve around SO's two major construction projects(Vogtle 3 & 4 and Kemper County IGCC), the revised environmental CapEx budget and general economic conditions in theSoutheast. Vectren Corp. (VVCNYSE) Price as of 7/31/2012: $29.85 FY 12 EPS: $1.85 FY 13 EPS: $1.95 Shares Out.: 81.9 MM Market Cap.: $2,444.72 MM OGE Energy Corp. (OGENYSE) Price as of 7/31/2012: $53.11 FY 12 EPS: $3.45 FY 13 EPS: $3.55 Shares Out.: 98.6 MM Market Cap.: $5,236.65 MM IDACORP, Inc. (IDANYSE) Price as of 7/31/2012: $42.20 FY 12 EPS: $3.05 FY 13 EPS: $3.20 Shares Out.: 49.9 MM Market Cap.: $2,105.78 MM CenterPoint Energy, Inc. (CNPNYSE) Price as of 7/31/2012: $21.06 FY 12 EPS: $1.18 FY 13 EPS: $1.30 Shares Out.: 426.3 MM Market Cap.: $8,977.88 MM Southern Company (SONYSE) Price as of 7/31/2012: $48.15 FY 12 EPS: $2.70 FY 13 EPS: $2.85 Shares Out.: 868.0 MM Market Cap.: $41,794.2 MM DISCLOSURE APPENDIX Required Disclosures Additional Information Available Upon Request I certify that: 1) All views expressed in this research report accurately reflect my personal views about any and all of the subject securities or issuers discussed; and 2) No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by me in this research report. Wells Fargo Securities, LLC maintains a market in the common stock of Southern Company, IDACORP, Inc., OGE Energy Corp., CenterPoint Energy, Inc. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for Southern Company within the past 12 months. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three months from Southern Company, IDACORP, Inc., CenterPoint Energy, Inc., Vectren Corp., OGE Energy Corp. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from OGE Energy Corp., IDACORP, Inc., Southern Company in the past 12 months. Southern Company, IDACORP, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided investment banking services to Southern Company, IDACORP, Inc., OGE Energy Corp. OGE Energy Corp., Vectren Corp., IDACORP, Inc. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided noninvestment banking securitiesrelated services to OGE Energy Corp., Vectren Corp., IDACORP, Inc. IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided nonsecurities services to IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC received compensation for products or services other than investment banking services from OGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP, Inc. in the past 12 months. A director or officer of Wells Fargo & Company serves on the board of directors of Southern Company. Wells Fargo & Company is the parent of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC or its affiliates may have a significant financial interest in Southern Company, IDACORP, Inc., Vectren Corp., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three months from an affiliate of OGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP, Inc., Southern Company. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for an affiliate of Southern Company, IDACORP, Inc. within the past 12 months. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from an affiliate of IDACORP, Inc., Southern Company in the past 12 months. VVC: Risks include economic weakness, lower than expected coal sales, and NonUtility exposure to commodity prices. OGE: Risks include negative regulatory developments, declines in NGL prices and weaker than expected electric sales. IDA: Risks to our valuation include project delays/cancellations, negative regulatory developments and economic weakness. CNP: Risks to our valuation include negative regulatory developments, unfavorable moves in commodity prices and/or gas market dynamics and execution risk related to new growth opportunities. SO: In our view, risks include regulatory risk, construction risk and potential exposure to adverse federal energy legislation. Wells Fargo Securities, LLC does not compensate its research analysts based on specific investment banking transactions. Wells Fargo Securities, LLC’s research analysts receive compensation that is based upon and impacted by the overall profitability and revenue of the firm, which includes, but is not limited to investment banking revenue. STOCK RATING 1 = Outperform: The stock appears attractively valued, and we believe the stock's total return will exceed that of the market over the next 12 months. BUY 2 = Market Perform: The stock appears appropriately valued, and we believe the stock's total return will be in line with the market over the next 12 months. HOLD 3 = Underperform: The stock appears overvalued, and we believe the stock's total return will be below the market over the next 12 months. SELL SECTOR RATING O = Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months. M = Market Weight: Industry expected to perform inline with the relevant broad market benchmark over the next 12 months. U = Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months. VOLATILITY RATING V = A stock is defined as volatile if the stock price has fluctuated by +/20% or greater in at least 8 of the past 24 months or if the analyst expects significant volatility. All IPO stocks are automatically rated volatile within the first 24 months of trading. As of: August 1, 2012 48% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Outperform. Wells Fargo Securities, LLC has provided investment banking services for 41% of its Outperformrated companies. 49% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Market Perform. Wells Fargo Securities, LLC has provided investment banking services for 32% of its Market Performrated companies. 2% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Underperform. Wells Fargo Securities, LLC has provided investment banking services for 10% of its Underperformrated companies. Important Information for NonU.S. Recipients EEA The securities and related financial instruments described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. For recipients in the EEA, this report is distributed by Wells Fargo Securities International Limited (“WFSIL”). WFSIL is a U.K. incorporated investment firm authorized and regulated by the Financial Services Authority. For the purposes of Section 21 of the UK Financial Services and Markets Act 2000 (“the Act”), the content of this report has been approved by WFSIL a regulated person under the Act. WFSIL does not deal with retail clients as defined in the Markets in Financial Instruments Directive 2007. The FSA rules made under the Financial Services and Markets Act 2000 for the protection of retail clients will therefore not apply, nor will the Financial Services Compensation Scheme be available. This report is not intended for, and should not be relied upon by, retail clients. Australia Wells Fargo Securities, LLC is exempt from the requirements to hold an Australian financial services license in respect of the financial services it provides to wholesale clients in Australia. Wells Fargo Securities, LLC is regulated under U.S. laws which differ from Australian laws. Any offer or documentation provided to Australian recipients by Wells Fargo Securities, LLC in the course of providing the financial services will be prepared in accordance with the laws of the United States and not Australian laws. Hong Kong This report is issued and distributed in Hong Kong by Wells Fargo Securities Asia Limited ("WFSAL"), a Hong Kong incorporated investment firm licensed and regulated by the Securities and Futures Commission to carry on types 1, 4, 6 and 9 regulated activities (as defined in the Securities and Futures Ordinance, "the SFO"). This report is not intended for, and should not be relied on by, any person other than professional investors (as defined in the SFO). Any securities and related financial instruments described herein are not intended for sale, nor will be sold, to any person other than professional investors (as defined in the SFO). Japan This report is distributed in Japan by Wells Fargo Securities (Japan) Co., Ltd, registered with the Kanto Local Finance Bureau to conduct broking and dealing of type 1 and type 2 financial instruments and agency or intermediary service for entry into investment advisory or discretionary investment contracts. This report is intended for distribution only to professional investors (Tokutei Toushika) and is not intended for, and should not be relied upon by, ordinary customers (Ippan Toushika). The ratings stated on the document are not provided by rating agencies registered with the Financial Services Agency of Japan (JFSA) but by group companies of JFSAregistered rating agencies. These group companies may include Moody's Investors Services Inc, Standard & Poor's Rating Services and/or Fitch Ratings. Any decisions to invest in securities or transactions should be made after reviewing policies and methodologies used for assigning credit ratings and assumptions, significance and limitations of the credit ratings stated on the respective rating agencies' websites. About Wells Fargo Securities, LLC Wells Fargo Securities, LLC is a U.S. brokerdealer registered with the U.S. Securities and Exchange Commission and a member of the New York Stock Exchange, the Financial Industry Regulatory Authority and the Securities Investor Protection Corp. This report is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or instruments named or described in this report. Interested parties are advised to contact the entity with which they deal, or the entity that provided this report to them, if they desire further information. The information in this report has been obtained or derived from sources believed by Wells Fargo Securities, LLC, to be reliable, but Wells Fargo Securities, LLC, does not represent that this information is accurate or complete. Any opinions or estimates contained in this report represent the judgment of Wells Fargo Securities, LLC, at this time, and are subject to change without notice. For the purposes of the U.K. Financial Services Authority's rules, this report constitutes impartial investment research. Each of Wells Fargo Securities, LLC, and Wells Fargo Securities International Limited is a separate legal entity and distinct from affiliated banks. Copyright © 2012 Wells Fargo Securities, LLC. SECURITIES NOT FDICINSURED/NOT BANKGUARANTEED/MAY LOSE VALUE Please see Disclosure Appendix for rating definitions, important disclosures, and required analyst certifications. Wells Fargo Securities, LLC does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report and investors should consider this report as only a single factor in making their investment decision. Equity Research Flash Comment August 1, 2012 IDANYSEOutperform (1) OGENYSEOutperform (1) CNPNYSEMarket Perform (2) SONYSEMarket Perform (2) VVCNYSEMarket Perform (2) / V Energy Team Energy And Utility Daily Sarah Akers, CFA, Senior Analyst (314) 8752040 Neil Kalton, CFA, Senior Analyst (314) 8752051 Sector Rating: Energy Team, NA Quick thoughts from Wells Fargo Securities, LLC Energy & Utility Team: Utilities Vectren Corp. (VVC/Market Perform) (Akers) VVC will release 2Q earnings after market hours today with the conferencecall Thursday at 3pm Eastern (18668215457). We continue to be cautious on the outlook for the Coal Mining businessgiven industrywide headwinds. Specific items of interest include (1) 2012 coal production (potential downside to projected5.6mm tons, which is down from 6 million originally), (2) '12E price per ton (current guidance $47/ton), (3) '12E cost of salesper ton (current guidance $43.50/ton raised from $42/ton on the Q1 '12 call reflecting cost issues at Prosperity thatmanagement believed to be temporary), (4) the hedge profile for 2013 (has been 40% since the Q2 '11 call), and (5) whetherthe expected inservice date of Oaktown 2 remains Q4 '12 (dependent on demand). As VVC's coal sales are 70% hedged thisyear, we are more interested in these data points as it relates to potential implications in 2013. Yeartodate, shares haveunderperformed the S&P Utilities by ~7% (total return), which likely reflects potential coalrelated downside, to some degree. OGE Energy Corp. (OGE/Outperform) (Akers) OGE will release Q2 earnings tomorrow morning and host a conference callat 9am Eastern (8667007441; code 38119896). As OGE affirmed '12 EPS guidance of $3.403.60 in conjunction with the7/2/12 rate case settlement press release (did incorporate lower NGL prices), we do not expect changes to consolidatedguidance. We are more interested in the breakdown between Enogex (originally $0.800.95) and OG&E (originally $2.602.70 excluding rate case). Our 12E EPS of $3.45 consists of $0.74 Enogex, $2.74 OG&E and ($0.02 parent). Key discussionpoints will likely include NGL pricing (our 12E is $0.80/gallon vs. guidance of $1.04/gallon) and, perhaps more importantly,whether Enogex sees lower drilling in response to lower NGL prices. On the regulated front, OGE will likely lay out OG&E'scompliance strategy for Utility MACT and CSAPR, which we expect will approximate $400500mm. We are interested to hearOG&E's regulatory strategy as it relates to environmental investment (Oklahoma HB 1910 allows utilities to recovermandated environmental costs, but the commission has not yet determined what that recovery will look like i.e. rate cases,rider, etc.). IDACORP (IDA/Outperform) (Akers) IDA will release Q2 earnings tomorrow morning and host a conference call at 4:30pmEastern (8573501588; code 60024683). We expect no change to '12 EPS guidance of $3.003.15 and are primarilyinterested in whether IDA continues to expect ADITC acceleration of less than $5mm, which we would view favorably. Otheritems of interest include sales growth and capital plans. In a recent press release the company disclosed encouragingcustomer growth numbers for 2Q '12 including 5,240 generation business customer additions roughly double the 2Qgrowth in the prior 2 years and 4,155 residential customer additions also meaningfully higher than the prior 2 years). Regarding capital plans, we are interested in potential updates to the Boardman to Hemingway transmission project and/ordiscussion around a potential second gas unit at Langley Gulch. CenterPoint Energy Inc. (CNP/Market Perform) (Akers) CNP will release Q2 earnings tomorrow morning and host aconference call at 11:30am Eastern (8006531761; code 91655009). We look forward to management's discussion of the twomidstream transactions announced on 6/19. As outlined in our 6/21 note, we expect CNP will support the investment casefor the deals on the 2Q call. Our '1214E EPS of $1.18, $1.30 and $1.37 embed $0.070.08 annualized accretion from thedeals. Investors will also likely be looking for further clarity on cash deployment plans. We expect CNP will reiterate itsstrategy of actively exploring organic growth opportunities (particularly in field services) as well as acquisitions, and we wouldbe surprised by a meaningful share buyback announcement at this point. Southern Company (SO/Market Perform) (Kalton) We are hosting Southern Company CFO Art Beattie and VP of InvestorRelations & Financial Planning Dan Tucker on Midwest investor meetings today and tomorrow. Management expressedconfidence in its 2012 guidance range ($2.582.70) and 47% EPS growth off of that range on its conference call last week. With Q2 earnings in the rearview, key topics of discussion are likely to revolve around SO's two major construction projects(Vogtle 3 & 4 and Kemper County IGCC), the revised environmental CapEx budget and general economic conditions in theSoutheast. Vectren Corp. (VVCNYSE) Price as of 7/31/2012: $29.85 FY 12 EPS: $1.85 FY 13 EPS: $1.95 Shares Out.: 81.9 MM Market Cap.: $2,444.72 MM OGE Energy Corp. (OGENYSE) Price as of 7/31/2012: $53.11 FY 12 EPS: $3.45 FY 13 EPS: $3.55 Shares Out.: 98.6 MM Market Cap.: $5,236.65 MM IDACORP, Inc. (IDANYSE) Price as of 7/31/2012: $42.20 FY 12 EPS: $3.05 FY 13 EPS: $3.20 Shares Out.: 49.9 MM Market Cap.: $2,105.78 MM CenterPoint Energy, Inc. (CNPNYSE) Price as of 7/31/2012: $21.06 FY 12 EPS: $1.18 FY 13 EPS: $1.30 Shares Out.: 426.3 MM Market Cap.: $8,977.88 MM Southern Company (SONYSE) Price as of 7/31/2012: $48.15 FY 12 EPS: $2.70 FY 13 EPS: $2.85 Shares Out.: 868.0 MM Market Cap.: $41,794.2 MM DISCLOSURE APPENDIX Required Disclosures Additional Information Available Upon Request I certify that: 1) All views expressed in this research report accurately reflect my personal views about any and all of the subject securities or issuers discussed; and 2) No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by me in this research report. Wells Fargo Securities, LLC maintains a market in the common stock of Southern Company, IDACORP, Inc., OGE Energy Corp., CenterPoint Energy, Inc. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for Southern Company within the past 12 months. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three months from Southern Company, IDACORP, Inc., CenterPoint Energy, Inc., Vectren Corp., OGE Energy Corp. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from OGE Energy Corp., IDACORP, Inc., Southern Company in the past 12 months. Southern Company, IDACORP, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided investment banking services to Southern Company, IDACORP, Inc., OGE Energy Corp. OGE Energy Corp., Vectren Corp., IDACORP, Inc. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided noninvestment banking securitiesrelated services to OGE Energy Corp., Vectren Corp., IDACORP, Inc. IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided nonsecurities services to IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC received compensation for products or services other than investment banking services from OGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP, Inc. in the past 12 months. A director or officer of Wells Fargo & Company serves on the board of directors of Southern Company. Wells Fargo & Company is the parent of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC or its affiliates may have a significant financial interest in Southern Company, IDACORP, Inc., Vectren Corp., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three months from an affiliate of OGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP, Inc., Southern Company. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for an affiliate of Southern Company, IDACORP, Inc. within the past 12 months. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from an affiliate of IDACORP, Inc., Southern Company in the past 12 months. VVC: Risks include economic weakness, lower than expected coal sales, and NonUtility exposure to commodity prices. OGE: Risks include negative regulatory developments, declines in NGL prices and weaker than expected electric sales. IDA: Risks to our valuation include project delays/cancellations, negative regulatory developments and economic weakness. CNP: Risks to our valuation include negative regulatory developments, unfavorable moves in commodity prices and/or gas market dynamics and execution risk related to new growth opportunities. SO: In our view, risks include regulatory risk, construction risk and potential exposure to adverse federal energy legislation. Wells Fargo Securities, LLC does not compensate its research analysts based on specific investment banking transactions. Wells Fargo Securities, LLC’s research analysts receive compensation that is based upon and impacted by the overall profitability and revenue of the firm, which includes, but is not limited to investment banking revenue. STOCK RATING 1 = Outperform: The stock appears attractively valued, and we believe the stock's total return will exceed that of the market over the next 12 months. BUY 2 = Market Perform: The stock appears appropriately valued, and we believe the stock's total return will be in line with the market over the next 12 months. HOLD 3 = Underperform: The stock appears overvalued, and we believe the stock's total return will be below the market over the next 12 months. SELL SECTOR RATING O = Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months. M = Market Weight: Industry expected to perform inline with the relevant broad market benchmark over the next 12 months. U = Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months. VOLATILITY RATING V = A stock is defined as volatile if the stock price has fluctuated by +/20% or greater in at least 8 of the past 24 months or if the analyst expects significant volatility. All IPO stocks are automatically rated volatile within the first 24 months of trading. As of: August 1, 2012 48% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Outperform. Wells Fargo Securities, LLC has provided investment banking services for 41% of its Outperformrated companies. 49% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Market Perform. Wells Fargo Securities, LLC has provided investment banking services for 32% of its Market Performrated companies. 2% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Underperform. Wells Fargo Securities, LLC has provided investment banking services for 10% of its Underperformrated companies. Important Information for NonU.S. Recipients EEA The securities and related financial instruments described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. For recipients in the EEA, this report is distributed by Wells Fargo Securities International Limited (“WFSIL”). WFSIL is a U.K. incorporated investment firm authorized and regulated by the Financial Services Authority. For the purposes of Section 21 of the UK Financial Services and Markets Act 2000 (“the Act”), the content of this report has been approved by WFSIL a regulated person under the Act. WFSIL does not deal with retail clients as defined in the Markets in Financial Instruments Directive 2007. The FSA rules made under the Financial Services and Markets Act 2000 for the protection of retail clients will therefore not apply, nor will the Financial Services Compensation Scheme be available. This report is not intended for, and should not be relied upon by, retail clients. Australia Wells Fargo Securities, LLC is exempt from the requirements to hold an Australian financial services license in respect of the financial services it provides to wholesale clients in Australia. Wells Fargo Securities, LLC is regulated under U.S. laws which differ from Australian laws. Any offer or documentation provided to Australian recipients by Wells Fargo Securities, LLC in the course of providing the financial services will be prepared in accordance with the laws of the United States and not Australian laws. Hong Kong This report is issued and distributed in Hong Kong by Wells Fargo Securities Asia Limited ("WFSAL"), a Hong Kong incorporated investment firm licensed and regulated by the Securities and Futures Commission to carry on types 1, 4, 6 and 9 regulated activities (as defined in the Securities and Futures Ordinance, "the SFO"). This report is not intended for, and should not be relied on by, any person other than professional investors (as defined in the SFO). Any securities and related financial instruments described herein are not intended for sale, nor will be sold, to any person other than professional investors (as defined in the SFO). Japan This report is distributed in Japan by Wells Fargo Securities (Japan) Co., Ltd, registered with the Kanto Local Finance Bureau to conduct broking and dealing of type 1 and type 2 financial instruments and agency or intermediary service for entry into investment advisory or discretionary investment contracts. This report is intended for distribution only to professional investors (Tokutei Toushika) and is not intended for, and should not be relied upon by, ordinary customers (Ippan Toushika). The ratings stated on the document are not provided by rating agencies registered with the Financial Services Agency of Japan (JFSA) but by group companies of JFSAregistered rating agencies. These group companies may include Moody's Investors Services Inc, Standard & Poor's Rating Services and/or Fitch Ratings. Any decisions to invest in securities or transactions should be made after reviewing policies and methodologies used for assigning credit ratings and assumptions, significance and limitations of the credit ratings stated on the respective rating agencies' websites. About Wells Fargo Securities, LLC Wells Fargo Securities, LLC is a U.S. brokerdealer registered with the U.S. Securities and Exchange Commission and a member of the New York Stock Exchange, the Financial Industry Regulatory Authority and the Securities Investor Protection Corp. This report is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or instruments named or described in this report. Interested parties are advised to contact the entity with which they deal, or the entity that provided this report to them, if they desire further information. The information in this report has been obtained or derived from sources believed by Wells Fargo Securities, LLC, to be reliable, but Wells Fargo Securities, LLC, does not represent that this information is accurate or complete. Any opinions or estimates contained in this report represent the judgment of Wells Fargo Securities, LLC, at this time, and are subject to change without notice. For the purposes of the U.K. Financial Services Authority's rules, this report constitutes impartial investment research. Each of Wells Fargo Securities, LLC, and Wells Fargo Securities International Limited is a separate legal entity and distinct from affiliated banks. Copyright © 2012 Wells Fargo Securities, LLC. SECURITIES NOT FDICINSURED/NOT BANKGUARANTEED/MAY LOSE VALUE Please see Disclosure Appendix for rating definitions, important disclosures, and required analyst certifications. Wells Fargo Securities, LLC does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report and investors should consider this report as only a single factor in making their investment decision. Equity Research Flash Comment August 1, 2012 IDANYSEOutperform (1) OGENYSEOutperform (1) CNPNYSEMarket Perform (2) SONYSEMarket Perform (2) VVCNYSEMarket Perform (2) / V Energy Team Energy And Utility Daily Sarah Akers, CFA, Senior Analyst (314) 8752040 Neil Kalton, CFA, Senior Analyst (314) 8752051 Sector Rating: Energy Team, NA Quick thoughts from Wells Fargo Securities, LLC Energy & Utility Team: Utilities Vectren Corp. (VVC/Market Perform) (Akers) VVC will release 2Q earnings after market hours today with the conferencecall Thursday at 3pm Eastern (18668215457). We continue to be cautious on the outlook for the Coal Mining businessgiven industrywide headwinds. Specific items of interest include (1) 2012 coal production (potential downside to projected5.6mm tons, which is down from 6 million originally), (2) '12E price per ton (current guidance $47/ton), (3) '12E cost of salesper ton (current guidance $43.50/ton raised from $42/ton on the Q1 '12 call reflecting cost issues at Prosperity thatmanagement believed to be temporary), (4) the hedge profile for 2013 (has been 40% since the Q2 '11 call), and (5) whetherthe expected inservice date of Oaktown 2 remains Q4 '12 (dependent on demand). As VVC's coal sales are 70% hedged thisyear, we are more interested in these data points as it relates to potential implications in 2013. Yeartodate, shares haveunderperformed the S&P Utilities by ~7% (total return), which likely reflects potential coalrelated downside, to some degree. OGE Energy Corp. (OGE/Outperform) (Akers) OGE will release Q2 earnings tomorrow morning and host a conference callat 9am Eastern (8667007441; code 38119896). As OGE affirmed '12 EPS guidance of $3.403.60 in conjunction with the7/2/12 rate case settlement press release (did incorporate lower NGL prices), we do not expect changes to consolidatedguidance. We are more interested in the breakdown between Enogex (originally $0.800.95) and OG&E (originally $2.602.70 excluding rate case). Our 12E EPS of $3.45 consists of $0.74 Enogex, $2.74 OG&E and ($0.02 parent). Key discussionpoints will likely include NGL pricing (our 12E is $0.80/gallon vs. guidance of $1.04/gallon) and, perhaps more importantly,whether Enogex sees lower drilling in response to lower NGL prices. On the regulated front, OGE will likely lay out OG&E'scompliance strategy for Utility MACT and CSAPR, which we expect will approximate $400500mm. We are interested to hearOG&E's regulatory strategy as it relates to environmental investment (Oklahoma HB 1910 allows utilities to recovermandated environmental costs, but the commission has not yet determined what that recovery will look like i.e. rate cases,rider, etc.). IDACORP (IDA/Outperform) (Akers) IDA will release Q2 earnings tomorrow morning and host a conference call at 4:30pmEastern (8573501588; code 60024683). We expect no change to '12 EPS guidance of $3.003.15 and are primarilyinterested in whether IDA continues to expect ADITC acceleration of less than $5mm, which we would view favorably. Otheritems of interest include sales growth and capital plans. In a recent press release the company disclosed encouragingcustomer growth numbers for 2Q '12 including 5,240 generation business customer additions roughly double the 2Qgrowth in the prior 2 years and 4,155 residential customer additions also meaningfully higher than the prior 2 years). Regarding capital plans, we are interested in potential updates to the Boardman to Hemingway transmission project and/ordiscussion around a potential second gas unit at Langley Gulch. CenterPoint Energy Inc. (CNP/Market Perform) (Akers) CNP will release Q2 earnings tomorrow morning and host aconference call at 11:30am Eastern (8006531761; code 91655009). We look forward to management's discussion of the twomidstream transactions announced on 6/19. As outlined in our 6/21 note, we expect CNP will support the investment casefor the deals on the 2Q call. Our '1214E EPS of $1.18, $1.30 and $1.37 embed $0.070.08 annualized accretion from thedeals. Investors will also likely be looking for further clarity on cash deployment plans. We expect CNP will reiterate itsstrategy of actively exploring organic growth opportunities (particularly in field services) as well as acquisitions, and we wouldbe surprised by a meaningful share buyback announcement at this point. Southern Company (SO/Market Perform) (Kalton) We are hosting Southern Company CFO Art Beattie and VP of InvestorRelations & Financial Planning Dan Tucker on Midwest investor meetings today and tomorrow. Management expressedconfidence in its 2012 guidance range ($2.582.70) and 47% EPS growth off of that range on its conference call last week. With Q2 earnings in the rearview, key topics of discussion are likely to revolve around SO's two major construction projects(Vogtle 3 & 4 and Kemper County IGCC), the revised environmental CapEx budget and general economic conditions in theSoutheast. Vectren Corp. (VVCNYSE) Price as of 7/31/2012: $29.85 FY 12 EPS: $1.85 FY 13 EPS: $1.95 Shares Out.: 81.9 MM Market Cap.: $2,444.72 MM OGE Energy Corp. (OGENYSE) Price as of 7/31/2012: $53.11 FY 12 EPS: $3.45 FY 13 EPS: $3.55 Shares Out.: 98.6 MM Market Cap.: $5,236.65 MM IDACORP, Inc. (IDANYSE) Price as of 7/31/2012: $42.20 FY 12 EPS: $3.05 FY 13 EPS: $3.20 Shares Out.: 49.9 MM Market Cap.: $2,105.78 MM CenterPoint Energy, Inc. (CNPNYSE) Price as of 7/31/2012: $21.06 FY 12 EPS: $1.18 FY 13 EPS: $1.30 Shares Out.: 426.3 MM Market Cap.: $8,977.88 MM Southern Company (SONYSE) Price as of 7/31/2012: $48.15 FY 12 EPS: $2.70 FY 13 EPS: $2.85 Shares Out.: 868.0 MM Market Cap.: $41,794.2 MM DISCLOSURE APPENDIX Required Disclosures Additional Information Available Upon Request I certify that: 1) All views expressed in this research report accurately reflect my personal views about any and all of the subject securities orissuers discussed; and 2) No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or viewsexpressed by me in this research report. Wells Fargo Securities, LLC maintains a market in the common stock of Southern Company, IDACORP, Inc., OGE Energy Corp., CenterPoint Energy, Inc. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for Southern Company within the past 12 months. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three months from Southern Company, IDACORP, Inc., CenterPoint Energy, Inc., Vectren Corp., OGE Energy Corp. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from OGE Energy Corp., IDACORP, Inc., Southern Company in the past 12 months. Southern Company, IDACORP, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided investment banking services to Southern Company, IDACORP, Inc., OGE Energy Corp. OGE Energy Corp., Vectren Corp., IDACORP, Inc. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided noninvestment banking securitiesrelated services to OGE Energy Corp., Vectren Corp., IDACORP, Inc. IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided nonsecurities services to IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC received compensation for products or services other than investment banking services from OGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP, Inc. in the past 12 months. A director or officer of Wells Fargo & Company serves on the board of directors of Southern Company. Wells Fargo & Company is the parent of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC or its affiliates may have a significant financial interest in Southern Company, IDACORP, Inc., Vectren Corp., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three months from an affiliate of OGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP, Inc., Southern Company. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for an affiliate of Southern Company, IDACORP, Inc. within the past 12 months. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from an affiliate of IDACORP, Inc., Southern Company in the past 12 months. VVC: Risks include economic weakness, lower than expected coal sales, and NonUtility exposure to commodity prices. OGE: Risks include negative regulatory developments, declines in NGL prices and weaker than expected electric sales. IDA: Risks to our valuation include project delays/cancellations, negative regulatory developments and economic weakness. CNP: Risks to our valuation include negative regulatory developments, unfavorable moves in commodity prices and/or gas market dynamics and execution risk related to new growth opportunities. SO: In our view, risks include regulatory risk, construction risk and potential exposure to adverse federal energy legislation. Wells Fargo Securities, LLC does not compensate its research analysts based on specific investment banking transactions. Wells Fargo Securities, LLC’s research analysts receive compensation that is based upon and impacted by the overall profitability and revenue of the firm, which includes, but is not limited to investment banking revenue. STOCK RATING 1 = Outperform: The stock appears attractively valued, and we believe the stock's total return will exceed that of the market over the next 12 months. BUY 2 = Market Perform: The stock appears appropriately valued, and we believe the stock's total return will be in line with the market over the next 12 months. HOLD 3 = Underperform: The stock appears overvalued, and we believe the stock's total return will be below the market over the next 12 months. SELL SECTOR RATING O = Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months. M = Market Weight: Industry expected to perform inline with the relevant broad market benchmark over the next 12 months. U = Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months. VOLATILITY RATING V = A stock is defined as volatile if the stock price has fluctuated by +/20% or greater in at least 8 of the past 24 months or if the analyst expects significant volatility. All IPO stocks are automatically rated volatile within the first 24 months of trading. As of: August 1, 2012 48% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Outperform. Wells Fargo Securities, LLC has provided investment banking services for 41% of its Outperformrated companies. 49% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Market Perform. Wells Fargo Securities, LLC has provided investment banking services for 32% of its Market Performrated companies. 2% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Underperform. Wells Fargo Securities, LLC has provided investment banking services for 10% of its Underperformrated companies. Important Information for NonU.S. Recipients EEA The securities and related financial instruments described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. For recipients in the EEA, this report is distributed by Wells Fargo Securities International Limited (“WFSIL”). WFSIL is a U.K. incorporated investment firm authorized and regulated by the Financial Services Authority. For the purposes of Section 21 of the UK Financial Services and Markets Act 2000 (“the Act”), the content of this report has been approved by WFSIL a regulated person under the Act. WFSIL does not deal with retail clients as defined in the Markets in Financial Instruments Directive 2007. The FSA rules made under the Financial Services and Markets Act 2000 for the protection of retail clients will therefore not apply, nor will the Financial Services Compensation Scheme be available. This report is not intended for, and should not be relied upon by, retail clients. Australia Wells Fargo Securities, LLC is exempt from the requirements to hold an Australian financial services license in respect of the financial services it provides to wholesale clients in Australia. Wells Fargo Securities, LLC is regulated under U.S. laws which differ from Australian laws. Any offer or documentation provided to Australian recipients by Wells Fargo Securities, LLC in the course of providing the financial services will be prepared in accordance with the laws of the United States and not Australian laws. Hong Kong This report is issued and distributed in Hong Kong by Wells Fargo Securities Asia Limited ("WFSAL"), a Hong Kong incorporated investment firm licensed and regulated by the Securities and Futures Commission to carry on types 1, 4, 6 and 9 regulated activities (as defined in the Securities and Futures Ordinance, "the SFO"). This report is not intended for, and should not be relied on by, any person other than professional investors (as defined in the SFO). Any securities and related financial instruments described herein are not intended for sale, nor will be sold, to any person other than professional investors (as defined in the SFO). Japan This report is distributed in Japan by Wells Fargo Securities (Japan) Co., Ltd, registered with the Kanto Local Finance Bureau to conduct broking and dealing of type 1 and type 2 financial instruments and agency or intermediary service for entry into investment advisory or discretionary investment contracts. This report is intended for distribution only to professional investors (Tokutei Toushika) and is not intended for, and should not be relied upon by, ordinary customers (Ippan Toushika). The ratings stated on the document are not provided by rating agencies registered with the Financial Services Agency of Japan (JFSA) but by group companies of JFSAregistered rating agencies. These group companies may include Moody's Investors Services Inc, Standard & Poor's Rating Services and/or Fitch Ratings. Any decisions to invest in securities or transactions should be made after reviewing policies and methodologies used for assigning credit ratings and assumptions, significance and limitations of the credit ratings stated on the respective rating agencies' websites. About Wells Fargo Securities, LLC Wells Fargo Securities, LLC is a U.S. brokerdealer registered with the U.S. Securities and Exchange Commission and a member of the New York Stock Exchange, the Financial Industry Regulatory Authority and the Securities Investor Protection Corp. This report is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or instruments named or described in this report. Interested parties are advised to contact the entity with which they deal, or the entity that provided this report to them, if they desire further information. The information in this report has been obtained or derived from sources believed by Wells Fargo Securities, LLC, to be reliable, but Wells Fargo Securities, LLC, does not represent that this information is accurate or complete. Any opinions or estimates contained in this report represent the judgment of Wells Fargo Securities, LLC, at this time, and are subject to change without notice. For the purposes of the U.K. Financial Services Authority's rules, this report constitutes impartial investment research. Each of Wells Fargo Securities, LLC, and Wells Fargo Securities International Limited is a separate legal entity and distinct from affiliated banks. Copyright © 2012 Wells Fargo Securities, LLC. SECURITIES NOT FDICINSURED/NOT BANKGUARANTEED/MAY LOSE VALUE Please see Disclosure Appendix for rating definitions, important disclosures, and required analyst certifications. Wells Fargo Securities, LLC does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report and investors should consider this report as only a single factor in making their investment decision. Equity Research Flash Comment August 1, 2012 IDANYSEOutperform (1) OGENYSEOutperform (1) CNPNYSEMarket Perform (2) SONYSEMarket Perform (2) VVCNYSEMarket Perform (2) / V Energy Team Energy And Utility Daily Sarah Akers, CFA, Senior Analyst (314) 8752040 Neil Kalton, CFA, Senior Analyst (314) 8752051 Sector Rating: Energy Team, NA Quick thoughts from Wells Fargo Securities, LLC Energy & Utility Team: Utilities Vectren Corp. (VVC/Market Perform) (Akers) VVC will release 2Q earnings after market hours today with the conferencecall Thursday at 3pm Eastern (18668215457). We continue to be cautious on the outlook for the Coal Mining businessgiven industrywide headwinds. Specific items of interest include (1) 2012 coal production (potential downside to projected5.6mm tons, which is down from 6 million originally), (2) '12E price per ton (current guidance $47/ton), (3) '12E cost of salesper ton (current guidance $43.50/ton raised from $42/ton on the Q1 '12 call reflecting cost issues at Prosperity thatmanagement believed to be temporary), (4) the hedge profile for 2013 (has been 40% since the Q2 '11 call), and (5) whetherthe expected inservice date of Oaktown 2 remains Q4 '12 (dependent on demand). As VVC's coal sales are 70% hedged thisyear, we are more interested in these data points as it relates to potential implications in 2013. Yeartodate, shares haveunderperformed the S&P Utilities by ~7% (total return), which likely reflects potential coalrelated downside, to some degree. OGE Energy Corp. (OGE/Outperform) (Akers) OGE will release Q2 earnings tomorrow morning and host a conference callat 9am Eastern (8667007441; code 38119896). As OGE affirmed '12 EPS guidance of $3.403.60 in conjunction with the7/2/12 rate case settlement press release (did incorporate lower NGL prices), we do not expect changes to consolidatedguidance. We are more interested in the breakdown between Enogex (originally $0.800.95) and OG&E (originally $2.602.70 excluding rate case). Our 12E EPS of $3.45 consists of $0.74 Enogex, $2.74 OG&E and ($0.02 parent). Key discussionpoints will likely include NGL pricing (our 12E is $0.80/gallon vs. guidance of $1.04/gallon) and, perhaps more importantly,whether Enogex sees lower drilling in response to lower NGL prices. On the regulated front, OGE will likely lay out OG&E'scompliance strategy for Utility MACT and CSAPR, which we expect will approximate $400500mm. We are interested to hearOG&E's regulatory strategy as it relates to environmental investment (Oklahoma HB 1910 allows utilities to recovermandated environmental costs, but the commission has not yet determined what that recovery will look like i.e. rate cases,rider, etc.). IDACORP (IDA/Outperform) (Akers) IDA will release Q2 earnings tomorrow morning and host a conference call at 4:30pmEastern (8573501588; code 60024683). We expect no change to '12 EPS guidance of $3.003.15 and are primarilyinterested in whether IDA continues to expect ADITC acceleration of less than $5mm, which we would view favorably. Otheritems of interest include sales growth and capital plans. In a recent press release the company disclosed encouragingcustomer growth numbers for 2Q '12 including 5,240 generation business customer additions roughly double the 2Qgrowth in the prior 2 years and 4,155 residential customer additions also meaningfully higher than the prior 2 years). Regarding capital plans, we are interested in potential updates to the Boardman to Hemingway transmission project and/ordiscussion around a potential second gas unit at Langley Gulch. CenterPoint Energy Inc. (CNP/Market Perform) (Akers) CNP will release Q2 earnings tomorrow morning and host aconference call at 11:30am Eastern (8006531761; code 91655009). We look forward to management's discussion of the twomidstream transactions announced on 6/19. As outlined in our 6/21 note, we expect CNP will support the investment casefor the deals on the 2Q call. Our '1214E EPS of $1.18, $1.30 and $1.37 embed $0.070.08 annualized accretion from thedeals. Investors will also likely be looking for further clarity on cash deployment plans. We expect CNP will reiterate itsstrategy of actively exploring organic growth opportunities (particularly in field services) as well as acquisitions, and we wouldbe surprised by a meaningful share buyback announcement at this point. Southern Company (SO/Market Perform) (Kalton) We are hosting Southern Company CFO Art Beattie and VP of InvestorRelations & Financial Planning Dan Tucker on Midwest investor meetings today and tomorrow. Management expressedconfidence in its 2012 guidance range ($2.582.70) and 47% EPS growth off of that range on its conference call last week. With Q2 earnings in the rearview, key topics of discussion are likely to revolve around SO's two major construction projects(Vogtle 3 & 4 and Kemper County IGCC), the revised environmental CapEx budget and general economic conditions in theSoutheast. Vectren Corp. (VVCNYSE) Price as of 7/31/2012: $29.85 FY 12 EPS: $1.85 FY 13 EPS: $1.95 Shares Out.: 81.9 MM Market Cap.: $2,444.72 MM OGE Energy Corp. (OGENYSE) Price as of 7/31/2012: $53.11 FY 12 EPS: $3.45 FY 13 EPS: $3.55 Shares Out.: 98.6 MM Market Cap.: $5,236.65 MM IDACORP, Inc. (IDANYSE) Price as of 7/31/2012: $42.20 FY 12 EPS: $3.05 FY 13 EPS: $3.20 Shares Out.: 49.9 MM Market Cap.: $2,105.78 MM CenterPoint Energy, Inc. (CNPNYSE) Price as of 7/31/2012: $21.06 FY 12 EPS: $1.18 FY 13 EPS: $1.30 Shares Out.: 426.3 MM Market Cap.: $8,977.88 MM Southern Company (SONYSE) Price as of 7/31/2012: $48.15 FY 12 EPS: $2.70 FY 13 EPS: $2.85 Shares Out.: 868.0 MM Market Cap.: $41,794.2 MM DISCLOSURE APPENDIX Required Disclosures Additional Information Available Upon Request I certify that: 1) All views expressed in this research report accurately reflect my personal views about any and all of the subject securities orissuers discussed; and 2) No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or viewsexpressed by me in this research report. Wells Fargo Securities, LLC maintains a market in the common stock of Southern Company, IDACORP, Inc., OGE EnergyCorp., CenterPoint Energy, Inc. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for Southern Companywithin the past 12 months. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment bankingservices in the next three months from Southern Company, IDACORP, Inc., CenterPoint Energy, Inc., Vectren Corp., OGEEnergy Corp. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from OGE Energy Corp.,IDACORP, Inc., Southern Company in the past 12 months. Southern Company, IDACORP, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC providedinvestment banking services to Southern Company, IDACORP, Inc., OGE Energy Corp. OGE Energy Corp., Vectren Corp., IDACORP, Inc. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC providednoninvestment banking securitiesrelated services to OGE Energy Corp., Vectren Corp., IDACORP, Inc. IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the dateof distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC providednonsecurities services to IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC received compensation for products or services other than investment banking services fromOGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP, Inc. in the past 12 months. A director or officer of Wells Fargo & Company serves on the board of directors of Southern Company. Wells Fargo &Company is the parent of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC or its affiliates may have a significant financial interest in Southern Company, IDACORP, Inc.,Vectren Corp., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment bankingservices in the next three months from an affiliate of OGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP,Inc., Southern Company. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for an affiliate of SouthernCompany, IDACORP, Inc. within the past 12 months. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from an affiliate ofIDACORP, Inc., Southern Company in the past 12 months. VVC: Risks include economic weakness, lower than expected coal sales, and NonUtility exposure to commodity prices. OGE: Risks include negative regulatory developments, declines in NGL prices and weaker than expected electric sales. IDA: Risks to our valuation include project delays/cancellations, negative regulatory developments and economic weakness.CNP: Risks to our valuation include negative regulatory developments, unfavorable moves in commodity prices and/or gasmarket dynamics and execution risk related to new growth opportunities. SO: In our view, risks include regulatory risk, construction risk and potential exposure to adverse federal energy legislation. Wells Fargo Securities, LLC does not compensate its research analysts based on specific investment banking transactions. Wells Fargo Securities, LLC’s research analysts receive compensation that is based upon and impacted by the overallprofitability and revenue of the firm, which includes, but is not limited to investment banking revenue. STOCK RATING 1 = Outperform: The stock appears attractively valued, and we believe the stock's total return will exceed that of the marketover the next 12 months. BUY 2 = Market Perform: The stock appears appropriately valued, and we believe the stock's total return will be in line with themarket over the next 12 months. HOLD 3 = Underperform: The stock appears overvalued, and we believe the stock's total return will be below the market over thenext 12 months. SELL SECTOR RATING O = Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months. M = Market Weight: Industry expected to perform inline with the relevant broad market benchmark over the next 12 months. U = Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months. VOLATILITY RATING V = A stock is defined as volatile if the stock price has fluctuated by +/20% or greater in at least 8 of the past 24 months or if the analyst expects significant volatility. All IPO stocks are automatically rated volatile within the first 24 months of trading. As of: August 1, 2012 48% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Outperform. Wells Fargo Securities, LLC has provided investment banking services for 41% of its Outperformrated companies. 49% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Market Perform. Wells Fargo Securities, LLC has provided investment banking services for 32% of its Market Performrated companies. 2% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Underperform. Wells Fargo Securities, LLC has provided investment banking services for 10% of its Underperformrated companies. Important Information for NonU.S. Recipients EEA The securities and related financial instruments described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. For recipients in the EEA, this report is distributed by Wells Fargo Securities International Limited (“WFSIL”). WFSIL is a U.K. incorporated investment firm authorized and regulated by the Financial Services Authority. For the purposes of Section 21 of the UK Financial Services and Markets Act 2000 (“the Act”), the content of this report has been approved by WFSIL a regulated person under the Act. WFSIL does not deal with retail clients as defined in the Markets in Financial Instruments Directive 2007. The FSA rules made under the Financial Services and Markets Act 2000 for the protection of retail clients will therefore not apply, nor will the Financial Services Compensation Scheme be available. This report is not intended for, and should not be relied upon by, retail clients. Australia Wells Fargo Securities, LLC is exempt from the requirements to hold an Australian financial services license in respect of the financial services it provides to wholesale clients in Australia. Wells Fargo Securities, LLC is regulated under U.S. laws which differ from Australian laws. Any offer or documentation provided to Australian recipients by Wells Fargo Securities, LLC in the course of providing the financial services will be prepared in accordance with the laws of the United States and not Australian laws. Hong Kong This report is issued and distributed in Hong Kong by Wells Fargo Securities Asia Limited ("WFSAL"), a Hong Kong incorporated investment firm licensed and regulated by the Securities and Futures Commission to carry on types 1, 4, 6 and 9 regulated activities (as defined in the Securities and Futures Ordinance, "the SFO"). This report is not intended for, and should not be relied on by, any person other than professional investors (as defined in the SFO). Any securities and related financial instruments described herein are not intended for sale, nor will be sold, to any person other than professional investors (as defined in the SFO). Japan This report is distributed in Japan by Wells Fargo Securities (Japan) Co., Ltd, registered with the Kanto Local Finance Bureau to conduct broking and dealing of type 1 and type 2 financial instruments and agency or intermediary service for entry into investment advisory or discretionary investment contracts. This report is intended for distribution only to professional investors (Tokutei Toushika) and is not intended for, and should not be relied upon by, ordinary customers (Ippan Toushika). The ratings stated on the document are not provided by rating agencies registered with the Financial Services Agency of Japan (JFSA) but by group companies of JFSAregistered rating agencies. These group companies may include Moody's Investors Services Inc, Standard & Poor's Rating Services and/or Fitch Ratings. Any decisions to invest in securities or transactions should be made after reviewing policies and methodologies used for assigning credit ratings and assumptions, significance and limitations of the credit ratings stated on the respective rating agencies' websites. About Wells Fargo Securities, LLC Wells Fargo Securities, LLC is a U.S. brokerdealer registered with the U.S. Securities and Exchange Commission and a member of the New York Stock Exchange, the Financial Industry Regulatory Authority and the Securities Investor Protection Corp. This report is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or instruments named or described in this report. Interested parties are advised to contact the entity with which they deal, or the entity that provided this report to them, if they desire further information. The information in this report has been obtained or derived from sources believed by Wells Fargo Securities, LLC, to be reliable, but Wells Fargo Securities, LLC, does not represent that this information is accurate or complete. Any opinions or estimates contained in this report represent the judgment of Wells Fargo Securities, LLC, at this time, and are subject to change without notice. For the purposes of the U.K. Financial Services Authority's rules, this report constitutes impartial investment research. Each of Wells Fargo Securities, LLC, and Wells Fargo Securities International Limited is a separate legal entity and distinct from affiliated banks. Copyright © 2012 Wells Fargo Securities, LLC. SECURITIES NOT FDICINSURED/NOT BANKGUARANTEED/MAY LOSE VALUE Please see Disclosure Appendix for rating definitions, important disclosures, and required analyst certifications. Wells Fargo Securities, LLC does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report and investors should consider this report as only a single factor in making their investment decision. Equity Research Flash Comment August 1, 2012 IDANYSEOutperform (1) OGENYSEOutperform (1) CNPNYSEMarket Perform (2) SONYSEMarket Perform (2) VVCNYSEMarket Perform (2) / V Energy Team Energy And Utility Daily Sarah Akers, CFA, Senior Analyst (314) 8752040 Neil Kalton, CFA, Senior Analyst (314) 8752051 Sector Rating: Energy Team, NA Quick thoughts from Wells Fargo Securities, LLC Energy & Utility Team: Utilities Vectren Corp. (VVC/Market Perform) (Akers) VVC will release 2Q earnings after market hours today with the conferencecall Thursday at 3pm Eastern (18668215457). We continue to be cautious on the outlook for the Coal Mining businessgiven industrywide headwinds. Specific items of interest include (1) 2012 coal production (potential downside to projected5.6mm tons, which is down from 6 million originally), (2) '12E price per ton (current guidance $47/ton), (3) '12E cost of salesper ton (current guidance $43.50/ton raised from $42/ton on the Q1 '12 call reflecting cost issues at Prosperity thatmanagement believed to be temporary), (4) the hedge profile for 2013 (has been 40% since the Q2 '11 call), and (5) whetherthe expected inservice date of Oaktown 2 remains Q4 '12 (dependent on demand). As VVC's coal sales are 70% hedged thisyear, we are more interested in these data points as it relates to potential implications in 2013. Yeartodate, shares haveunderperformed the S&P Utilities by ~7% (total return), which likely reflects potential coalrelated downside, to some degree. OGE Energy Corp. (OGE/Outperform) (Akers) OGE will release Q2 earnings tomorrow morning and host a conference callat 9am Eastern (8667007441; code 38119896). As OGE affirmed '12 EPS guidance of $3.403.60 in conjunction with the7/2/12 rate case settlement press release (did incorporate lower NGL prices), we do not expect changes to consolidatedguidance. We are more interested in the breakdown between Enogex (originally $0.800.95) and OG&E (originally $2.602.70 excluding rate case). Our 12E EPS of $3.45 consists of $0.74 Enogex, $2.74 OG&E and ($0.02 parent). Key discussionpoints will likely include NGL pricing (our 12E is $0.80/gallon vs. guidance of $1.04/gallon) and, perhaps more importantly,whether Enogex sees lower drilling in response to lower NGL prices. On the regulated front, OGE will likely lay out OG&E'scompliance strategy for Utility MACT and CSAPR, which we expect will approximate $400500mm. We are interested to hearOG&E's regulatory strategy as it relates to environmental investment (Oklahoma HB 1910 allows utilities to recovermandated environmental costs, but the commission has not yet determined what that recovery will look like i.e. rate cases,rider, etc.). IDACORP (IDA/Outperform) (Akers) IDA will release Q2 earnings tomorrow morning and host a conference call at 4:30pmEastern (8573501588; code 60024683). We expect no change to '12 EPS guidance of $3.003.15 and are primarilyinterested in whether IDA continues to expect ADITC acceleration of less than $5mm, which we would view favorably. Otheritems of interest include sales growth and capital plans. In a recent press release the company disclosed encouragingcustomer growth numbers for 2Q '12 including 5,240 generation business customer additions roughly double the 2Qgrowth in the prior 2 years and 4,155 residential customer additions also meaningfully higher than the prior 2 years). Regarding capital plans, we are interested in potential updates to the Boardman to Hemingway transmission project and/ordiscussion around a potential second gas unit at Langley Gulch. CenterPoint Energy Inc. (CNP/Market Perform) (Akers) CNP will release Q2 earnings tomorrow morning and host aconference call at 11:30am Eastern (8006531761; code 91655009). We look forward to management's discussion of the twomidstream transactions announced on 6/19. As outlined in our 6/21 note, we expect CNP will support the investment casefor the deals on the 2Q call. Our '1214E EPS of $1.18, $1.30 and $1.37 embed $0.070.08 annualized accretion from thedeals. Investors will also likely be looking for further clarity on cash deployment plans. We expect CNP will reiterate itsstrategy of actively exploring organic growth opportunities (particularly in field services) as well as acquisitions, and we wouldbe surprised by a meaningful share buyback announcement at this point. Southern Company (SO/Market Perform) (Kalton) We are hosting Southern Company CFO Art Beattie and VP of InvestorRelations & Financial Planning Dan Tucker on Midwest investor meetings today and tomorrow. Management expressedconfidence in its 2012 guidance range ($2.582.70) and 47% EPS growth off of that range on its conference call last week. With Q2 earnings in the rearview, key topics of discussion are likely to revolve around SO's two major construction projects(Vogtle 3 & 4 and Kemper County IGCC), the revised environmental CapEx budget and general economic conditions in theSoutheast. Vectren Corp. (VVCNYSE) Price as of 7/31/2012: $29.85 FY 12 EPS: $1.85 FY 13 EPS: $1.95 Shares Out.: 81.9 MM Market Cap.: $2,444.72 MM OGE Energy Corp. (OGENYSE) Price as of 7/31/2012: $53.11 FY 12 EPS: $3.45 FY 13 EPS: $3.55 Shares Out.: 98.6 MM Market Cap.: $5,236.65 MM IDACORP, Inc. (IDANYSE) Price as of 7/31/2012: $42.20 FY 12 EPS: $3.05 FY 13 EPS: $3.20 Shares Out.: 49.9 MM Market Cap.: $2,105.78 MM CenterPoint Energy, Inc. (CNPNYSE) Price as of 7/31/2012: $21.06 FY 12 EPS: $1.18 FY 13 EPS: $1.30 Shares Out.: 426.3 MM Market Cap.: $8,977.88 MM Southern Company (SONYSE) Price as of 7/31/2012: $48.15 FY 12 EPS: $2.70 FY 13 EPS: $2.85 Shares Out.: 868.0 MM Market Cap.: $41,794.2 MM DISCLOSURE APPENDIX Required Disclosures Additional Information Available Upon Request I certify that: 1) All views expressed in this research report accurately reflect my personal views about any and all of the subject securities orissuers discussed; and 2) No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or viewsexpressed by me in this research report. Wells Fargo Securities, LLC maintains a market in the common stock of Southern Company, IDACORP, Inc., OGE EnergyCorp., CenterPoint Energy, Inc. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for Southern Companywithin the past 12 months. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment bankingservices in the next three months from Southern Company, IDACORP, Inc., CenterPoint Energy, Inc., Vectren Corp., OGEEnergy Corp. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from OGE Energy Corp.,IDACORP, Inc., Southern Company in the past 12 months. Southern Company, IDACORP, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC providedinvestment banking services to Southern Company, IDACORP, Inc., OGE Energy Corp. OGE Energy Corp., Vectren Corp., IDACORP, Inc. currently is, or during the 12month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC providednoninvestment banking securitiesrelated services to OGE Energy Corp., Vectren Corp., IDACORP, Inc. IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. currently is, or during the 12month period preceding the dateof distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC providednonsecurities services to IDACORP, Inc., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC received compensation for products or services other than investment banking services fromOGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP, Inc. in the past 12 months. A director or officer of Wells Fargo & Company serves on the board of directors of Southern Company. Wells Fargo &Company is the parent of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC or its affiliates may have a significant financial interest in Southern Company, IDACORP, Inc.,Vectren Corp., CenterPoint Energy, Inc., OGE Energy Corp. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment bankingservices in the next three months from an affiliate of OGE Energy Corp., CenterPoint Energy, Inc., Vectren Corp., IDACORP,Inc., Southern Company. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for an affiliate of SouthernCompany, IDACORP, Inc. within the past 12 months. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from an affiliate ofIDACORP, Inc., Southern Company in the past 12 months. VVC: Risks include economic weakness, lower than expected coal sales, and NonUtility exposure to commodity prices. OGE: Risks include negative regulatory developments, declines in NGL prices and weaker than expected electric sales. IDA: Risks to our valuation include project delays/cancellations, negative regulatory developments and economic weakness.CNP: Risks to our valuation include negative regulatory developments, unfavorable moves in commodity prices and/or gasmarket dynamics and execution risk related to new growth opportunities. SO: In our view, risks include regulatory risk, construction risk and potential exposure to adverse federal energy legislation. Wells Fargo Securities, LLC does not compensate its research analysts based on specific investment banking transactions. Wells Fargo Securities, LLC’s research analysts receive compensation that is based upon and impacted by the overallprofitability and revenue of the firm, which includes, but is not limited to investment banking revenue. STOCK RATING 1 = Outperform: The stock appears attractively valued, and we believe the stock's total return will exceed that of the marketover the next 12 months. BUY 2 = Market Perform: The stock appears appropriately valued, and we believe the stock's total return will be in line with themarket over the next 12 months. HOLD 3 = Underperform: The stock appears overvalued, and we believe the stock's total return will be below the market over thenext 12 months. SELL SECTOR RATING O = Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months. M = Market Weight: Industry expected to perform inline with the relevant broad market benchmark over the next 12months. U = Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months. VOLATILITY RATING V = A stock is defined as volatile if the stock price has fluctuated by +/20% or greater in at least 8 of the past 24 months or ifthe analyst expects significant volatility. All IPO stocks are automatically rated volatile within the first 24 months of trading. As of: August 1, 2012 48% of companies covered by Wells Fargo Securities,LLC Equity Research are rated Outperform. Wells Fargo Securities, LLC has provided investment bankingservices for 41% of its Outperformrated companies. 49% of companies covered by Wells Fargo Securities,LLC Equity Research are rated Market Perform. Wells Fargo Securities, LLC has provided investment bankingservices for 32% of its Market Performrated companies. 2% of companies covered by Wells Fargo Securities, LLCEquity Research are rated Underperform. Wells Fargo Securities, LLC has provided investment bankingservices for 10% of its Underperformrated companies. Important Information for NonU.S. Recipients EEA The securities and related financial instruments described herein may not be eligible for sale in all jurisdictions or tocertain categories of investors. For recipients in the EEA, this report is distributed by Wells Fargo Securities InternationalLimited (“WFSIL”). WFSIL is a U.K. incorporated investment firm authorized and regulated by the Financial ServicesAuthority. For the purposes of Section 21 of the UK Financial Services and Markets Act 2000 (“the Act”), the content of thisreport has been approved by WFSIL a regulated person under the Act. WFSIL does not deal with retail clients as defined inthe Markets in Financial Instruments Directive 2007. The FSA rules made under the Financial Services and Markets Act 2000for the protection of retail clients will therefore not apply, nor will the Financial Services Compensation Scheme be available.This report is not intended for, and should not be relied upon by, retail clients. Australia Wells Fargo Securities, LLC is exempt from the requirements to hold an Australian financial services license inrespect of the financial services it provides to wholesale clients in Australia. Wells Fargo Securities, LLC is regulated underU.S. laws which differ from Australian laws. Any offer or documentation provided to Australian recipients by Wells FargoSecurities, LLC in the course of providing the financial services will be prepared in accordance with the laws of the UnitedStates and not Australian laws. Hong Kong This report is issued and distributed in Hong Kong by Wells Fargo Securities Asia Limited ("WFSAL"), a HongKong incorporated investment firm licensed and regulated by the Securities and Futures Commission to carry on types 1, 4, 6and 9 regulated activities (as defined in the Securities and Futures Ordinance, "the SFO"). This report is not intended for, andshould not be relied on by, any person other than professional investors (as defined in the SFO). Any securities and relatedfinancial instruments described herein are not intended for sale, nor will be sold, to any person other than professionalinvestors (as defined in the SFO). Japan This report is distributed in Japan by Wells Fargo Securities (Japan) Co., Ltd, registered with the Kanto LocalFinance Bureau to conduct broking and dealing of type 1 and type 2 financial instruments and agency or intermediary servicefor entry into investment advisory or discretionary investment contracts. This report is intended for distribution only toprofessional investors (Tokutei Toushika) and is not intended for, and should not be relied upon by, ordinary customers(Ippan Toushika). The ratings stated on the document are not provided by rating agencies registered with the Financial Services Agency of Japan(JFSA) but by group companies of JFSAregistered rating agencies. These group companies may include Moody's InvestorsServices Inc, Standard & Poor's Rating Services and/or Fitch Ratings. Any decisions to invest in securities or transactionsshould be made after reviewing policies and methodologies used for assigning credit ratings and assumptions, significanceand limitations of the credit ratings stated on the respective rating agencies' websites. About Wells Fargo Securities, LLC Wells Fargo Securities, LLC is a U.S. brokerdealer registered with the U.S. Securities and Exchange Commission and a member of the New York Stock Exchange, the Financial Industry Regulatory Authority and the Securities Investor Protection Corp. This report is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or instruments named or described in this report. Interested parties are advised to contact the entity with which they deal, or the entity that provided this report to them, if they desire further information. The information in this report has been obtained or derived from sources believed by Wells Fargo Securities, LLC, to be reliable, but Wells Fargo Securities, LLC, does not represent that this information is accurate or complete. Any opinions or estimates contained in this report represent the judgment of Wells Fargo Securities, LLC, at this time, and are subject to change without notice. For the purposes of the U.K. Financial Services Authority's rules, this report constitutes impartial investment research. Each of Wells Fargo Securities, LLC, and Wells Fargo Securities International Limited is a separate legal entity and distinct from affiliated banks. Copyright © 2012 Wells Fargo Securities, LLC. SECURITIES NOT FDICINSURED/NOT BANKGUARANTEED/MAY LOSE VALUE Please see Disclosure Appendix for rating definitions, important disclosures, and required analyst certifications. Wells Fargo Securities, LLC does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report and investors should consider this report as only a single factor in making their investment decision.