-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MRljJ5h/b2xsWFy8MTCXYAOV/g5736adtEfIWiKjPm1Y0yPLQkvgt/27GLf9N/Sm jjIDX/1itCHap9i5/XiMAA== /in/edgar/work/20000728/0001096385-00-000013/0001096385-00-000013.txt : 20000921 0001096385-00-000013.hdr.sgml : 20000921 ACCESSION NUMBER: 0001096385-00-000013 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20000630 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000728 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VECTREN CORP CENTRAL INDEX KEY: 0001096385 STANDARD INDUSTRIAL CLASSIFICATION: [4932 ] IRS NUMBER: 352086905 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-15467 FILM NUMBER: 681122 BUSINESS ADDRESS: STREET 1: 20 NW FOURTH ST CITY: EVANSVILLE STATE: IN ZIP: 47741 BUSINESS PHONE: 3179263351 MAIL ADDRESS: STREET 1: 20 NW FOURTH ST CITY: EVANSVILLE STATE: IN ZIP: 47741 8-K 1 0001.txt VECTREN'S 2ND QTR ANALYST REPT, TELECONFERENCE & July 28, 2000 Securities and Exchange Commission Operations Center 6432 General Green Way Alexandria, VA 22312-2413 Gentlemen: We are transmitting herewith Vectren Corporation's Current Report on Form 8-K. Very truly yours, /s/ S. Mark Kerney S. Mark Kerney SMK:jm SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 of 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) July 28, 2000 VECTREN CORPORATION (Exact name of registrant as specified in its charter)
Indiana 1-15467 35-2086905 ----------- ------------ --------------- (State of (Commission File Number) (I.R.S. Employer Incorporation) Identification No.) Incorporation) Identification No.) 20 N.W. Fourth Street Evansville, Indiana 47741 ---------------------- --------- (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (812)465-5300 N/A (Former name or address, if changed since last report.) Item 5. Other Events On July 27, 2000, Vectren Corporation (the Company) released financial information to the investment community regarding the Company's results of operations, financial position and cash flows for the three-, six-and twelve-month periods ended June 30, 2000. The financial information released is included herein. This information does not include footnote disclosures and should not be considered complete financial statements. On July 28, 2000, Vectren Corporation conducted its quarterly conference call with the investment community regarding results of operations and financial position. The script for this teleconference is included herein. This script contains certain subjects that pertain to our growth strategy and may contain forward-looking information. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Company is hereby filing cautionary statements identifying important factors that could cause actual results of the Company and its subsidiaries, including Indiana Gas Company, Inc. and Southern Indiana Gas and Electric Company, to differ materially from those projected in forward-looking statements of the Company and its subsidiaries made by, or on behalf of, the Company and its subsidiaries. Item 7. Exhibits 99-1 Press Release - Second Quarter 2000 99-2 Financial Analyst Report - Second Quarter 2000 99-3 Analyst Teleconference Script - Second Quarter 2000 99-4 Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. July 28, 2000 VECTREN CORPORATION By: /s/ Jerome A. Benkert Jerome A. Benkert Executive Vice President and Chief Financial Officer By: /s/ M. Susan Hardwick M. Susan Hardwick Vice President and Controller EX-99 2 0002.txt 8-K EXH 99-1 PRESS RELEASE Exhibit 99-1 VECTREN CORPORATION REPORTS CONSOLIDATED EARNINGS; DIVIDEND UNCHANGED EVANSVILLE -Vectren Corporation (July 27, 2000) (NYSE:VVC) today reported financial results for fiscal 2000's second quarter. Consolidated net income before merger related charges was $14.1 million ($.23 EPS) for the quarter ended June 30, 2000, as compared to net income of $11.6 million ($.19 EPS) for the same period in 1999. Reported net income and earnings per share for the current period were $8.3 million and $.14 per share, respectively. During the second quarter of 2000, Vectren expensed merger related costs of $6.5 million ($5.8 million, net of tax or $.09 EPS) including $3.3 million of accelerated depreciation related to information systems to be retired during 2001. Merger costs expensed during the first six months of 2000 totaled $33.7 million ($25.1 million, net of tax or $.41 EPS) including the $3.3 million of accelerated depreciation. The continued merger integration activities, which will contribute to the net merger savings, will be substantially complete by 2001. The company expects to realize net merger savings of nearly $200 million over ten years from the elimination of duplicate corporate and administrative programs and greater efficiencies in operations, business processes and purchasing. Stronger results from Vectren's non-regulated operations and investments combined with significantly greater unit margins from sales to the wholesale power market more than offset higher operating expenses during the quarter, resulting in the $.04 per share gain in earnings before merger related charges. "The continued growth of our non-regulated businesses and our demonstrated ability to effectively compete in the wholesale power market has enabled us to deliver improved results during a continued period of abnormally mild weather," said Niel C. Ellerbrook, Vectren's Chairman and Chief Executive Officer. The board of directors of Vectren also declared a cash dividend of 24 1/4 cents per share of common stock. This is unchanged from the previous quarter. The dividend is payable September 1, 2000 to shareholders of record August 15, 2000. Vectren, headquartered in Evansville, Indiana through its regulated subsidiaries Indiana Gas and SIGECO, offers gas and/or electricity to more than 650,000 customers in adjoining service areas that cover nearly two-thirds of Indiana. Vectren's non-regulated subsidiaries currently offer energy-related products and services, including energy marketing, fiber-optic based communication services, and utility related services including materials management, debt collections, locating, meter reading and trenching services to customers throughout the surrounding region. In December 1999 (prior to its merger with SIGCORP, Inc. to form Vectren), Indiana Energy, Inc. announced the planned acquisition of the natural gas distribution business of Dayton Power and Light Company. This acquisition is expected to close during the third quarter of this year and bring Vectren's total customer count to nearly one million. To learn more about Vectren visit >>http://www.vectren.com<<
SUMMARY OF CONSOLIDATED EARNINGS DATA: Three Months Ended June 30 (In Thousands, Except Per Share Data) 2000 1999 Operating Revenues $263,477 $207,042 Net Income $8,273 $11,554 Net Income Before Merger Related Charges $14,168 $11,554 Basic Earnings Per Average Common Share $0.14 $0.19 Diluted Earnings Per Average Common Share $0.13 $0.19 Basic Earnings Per Share Before Merger Related Charges $0.23 $0.19 Average Common Shares Outstanding 61,227 61,287 Diluted Common Shares Outstanding 61,317 61,425
Six Months Ended June 30 (In Thousands, Except Per Share Data) 2000 1999 Operating Revenues $622,921 $528,075 Net Income $30,398 $52,277 Net Income Before Merger Related Charges 55,589 $52,277 Basic Earnings Per Average Common Share $0.50 $0.85 Diluted Earnings Per Average Common Share $0.50 $0.85 Basic Earnings Per Share Before Merger Related Charges $0.91 $0.85 Average Common Shares Outstanding 61,266 61,309 Diluted Common Shares Outstanding 61,338 61,461
Twelve Months Ended June 30 (In Thousands, Except Per Share Data) 2000 1999 Operating Revenues $1,163,263 $1,009,629 Net Income $68,869 $87,591 Net Income Before Merger Related Charges $94,060 $87,591 Basic Earnings Per Average Common Share 1.12 $1.43 Diluted Earnings Per Average Common Share $1.12 $1.42 Basic Earnings Per Share Before Merger Related Charges $1.53 $1.43 Average Common Shares Outstanding 61,281 61,424 Diluted Common Shares Outstanding 61,362 61,598
NOTE: Net income for the three-month period ended June 30 is not indicative of net income for an annual period due to seasonal sales of electric and gas for space heating and cooling purposes. This press release may contain forward-looking statements. Vectren wishes to caution readers that actual results could differ materially from those that will be projected in our discussions. Additional detailed information concerning a number of factors that could cause actual results to differ materially from the information that is provided to you is readily available in our report Form 8-K filed with the Securities and Exchange Commission on July 11, 2000. Investor Contact: Steven M. Schein, VP-Investor Relations, 812-491-4209,>>mailto:sschein@vectren.com<< Media Contact: Jeffrey W. Whiteside, VP-Corporate Communications, 812-491-4205, >>mailto:jwhiteside@vectren.com<< Vectren Corporation, P.O. Box 209, Evansville, IN 47702- 0209 EX-99 3 0003.txt 8K EXH 99-2 ANALYST RPT
Vectren Corporation 3 Months 6 Months Highlights Ended June 30 Ended June 30 (Unaudited) 2000 1999 2000 1999 Basic and Diluted Earnings Per Average Share: Utility Group $ 0.05 $ 0.13 $ 0.26 $ 0.73 Non-regulated Group Communications (0.01) - 0.08 - Energy Services 0.05 0.03 0.08 0.08 Financial Group 0.04 0.02 0.07 0.03 Other Non-regulated 0.01 0.01 0.01 0.01 Total Non-regulated 0.09 0.06 0.24 0.12 Total $ 0.14 * $ 0.19 $ 0.50 $ 0.85 EPS Before Merger Costs $ 0.23 $ 0.19 $ 0.91 $ 0.85 Summary of Impact of Merger Costs: (millions, except per share data) Total Merger Costs $ 3.2 $ - $ 30.4 $ - Depreciation 3.3 - 3.3 - Income Taxes (0.7) - (8.6) - Total $ 5.8 $ - $ 25.1 $ - EPS Impact of Merger Costs $ 0.09 $ - $ 0.41 $ - Utility Group $ 0.09 $ - $ 0.40 $ - Non-regulated Group $ - $ - $ 0.01 $ - Dividends Paid (per common share, 12 months) $ 0.96 $ 0.92 Annualized Dividend $ 0.97 $ 0.93 Dividend Yield (at close) 5.6% N/A Dividend Payout Ratio 85.7% 64.3% Dividend to Book Value 8.4% 8.1% Return on Average Shareholder Equity 9.8% 12.7% Book Value Per Share $11.58 $11.48 Market to Book Value (at close) 149% N/A Common Stock Prices (VVC - NYSE) High (during second quarter) $21.38 N/A Low (during second quarter) $15.75 N/A Close $17.25 N/A Price/Earnings Ratio (trailing) 15.4 N/A Percent Internally Generated Funds - Utility Group 54% 81% Ratio of Earnings to Fixed Charges - SEC Method Consolidated 3.1 4.1 Utility Group 2.9 4.1 Credit Ratings: Indiana Gas AA- / Aa2 AA- / Aa2 SIGECO AA / Aa2 AA / Aa2 * Diluted earnings per share for the 3 months ended June 30, 2000 total $.13 and for the 12 months ended June 30, 1999 total $1.42. Basic and diluted earnings per share for all other periods presented are equal.
Vectren Corporation 12 Months Highlights Ended June 30 (Unaudited) 2000 1999 Basic and Diluted Earnings Per Average Share: Utility Group $ 0.76 $1.20 Non-regulated Group Communications 0.08 - Energy Services 0.09 0.11 Financial Group 0.14 0.06 Other Non-regulated 0.05 0.06 Total Non-regulated 0.36 0.23 Total $ 1.12 $1.43 EPS Before Merger Costs $ 1.53 $1.43 Summary of Impact of Merger Costs: (millions, except per share data) Total Merger Costs $ 30.4 $ - Depreciation 3.3 - Income Taxes (8.6) - Total $ 25.1 $ - EPS Impact of Merger Costs $ 0.41 $ - Utility Group $ 0.40 $ - Non-regulated Group $ 0.01 $ - Dividends Paid (per common share, 12 months) Annualized Dividend Dividend Yield (at close) Dividend Payout Ratio Dividend to Book Value Return on Average Shareholder Equity Book Value Per Share Market to Book Value (at close) Common Stock Prices (VVC - NYSE) High (during second quarter) Low (during second quarter) Close Price/Earnings Ratio (trailing) Percent Internally Generated Funds - Utility Group Ratio of Earnings to Fixed Charges - SEC Method Consolidated Utility Group Credit Ratings: Indiana Gas SIGECO * Diluted earnings per share for the 3 months ended June 30, 2000 total $.13 and for the 12 months ended June 30, 1999 total $1.42. Basic and diluted earnings per share for all other periods presented are equal.
3 Months 6 Months SELECTED UTILITY Ended June 30 Ended June 30 OPERATING STATISTICS (Unaudited) 2000 1999 2000 1999 WEATHER AS A PERCENT OF NORMAL: Heating Degree Days 92% 70% 84% 88% Cooling Degree Days 89% 87% 87% 85% GAS MARGIN (Thousands): Operating Revenues 100,485 82,647 301,330 273,829 Cost of Gas 55,898 38,617 174,425 142,116 Margin 44,587 44,030 126,905 131,713 ELECTRIC MARGIN (Thousands): Operating Revenues 78,289 73,802 151,279 144,789 Cost of Fuel & Purchased Power 26,422 23,943 48,101 44,073 Unconsolidated Margin 51,867 49,859 103,178 100,716 Consolidating Adjustment 1,720 1,149 3,349 2,390 Consolidated Margin 53,587 51,008 106,527 103,106 GAS SOLD & TRANSPORTED (MDth): Residential 6,541 5,802 30,231 32,279 Commercial 2,673 2,972 12,202 13,090 Contract 18,266 17,516 41,591 40,168 27,480 26,290 84,024 85,537 ELECTRICITY SOLD (MWh): Residential 279,646 290,970 595,680 636,827 Commercial 324,278 321,378 614,895 613,248 Industrial 638,418 625,354 1,236,818 1,175,652 - - - - Miscellaneous Sales 3,964 3,951 9,234 9,427 Total Retail 1,246,306 1,241,653 2,456,627 2,435,154 Municipals and Jasper 169,029 164,745 327,003 307,928 Alcoa Generating Corporation 79,980 144,661 102,248 262,294 Other Wholesale 212,320 177,541 571,326 415,204 1,707,635 1,728,600 3,457,204 3,420,580 GAS OPERATING REVENUES (Thousands): Residential 56,430 49,424 196,251 187,719 Commercial 18,550 18,359 69,491 67,252 Contract 10,422 10,408 25,531 25,689 Miscellaneous Revenue 15,083 4,456 10,057 (6,831) 100,485 82,647 301,330 273,829 ELECTRIC OPERATING REVENUES (Thousands): Residential 19,533 20,330 39,768 41,896 Commercial 17,399 17,437 33,280 33,843 Industrial 20,996 20,591 40,365 38,427 Miscellaneous Revenue 2,934 1,740 4,343 2,318 Total Retail 60,862 60,098 117,756 116,484 Municipals and Jasper 5,903 5,880 11,255 10,935 Alcoa Generating Corporation 2,013 3,344 2,565 5,883 Other Wholesale 9,511 4,480 19,703 11,487 78,289 73,802 151,279 144,789 AVERAGE GAS CUSTOMERS: Residential 565,803 553,817 567,739 554,169 Commercial 56,726 56,391 56,988 56,198 Contract 1,248 1,255 1,253 1,252 623,778 611,463 625,980 611,619 AVERAGE ELECTRIC CUSTOMERS: Residential 110,702 108,706 110,496 108,565 Commercial 16,687 15,901 16,570 15,887 Industrial 167 175 169 175 127,556 24,782 127,235 124,627
12 Months SELECTED UTILITY Ended June 30 OPERATING STATISTICS (Unaudited) 2000 1999 WEATHER AS A PERCENT OF NORMAL: Heating Degree Days 84% 86% Cooling Degree Days 94% 105% GAS MARGIN (Thousands): Operating Revenues 527,074 487,185 Cost of Gas 298,738 258,718 Margin 228,336 228,467 ELECTRIC MARGIN (Thousands): Operating Revenues 314,059 299,901 Cost of Fuel & Purchased Power 96,974 92,380 Unconsolidated Margin 217,085 207,521 Consolidating Adjustment 6,809 4,588 Consolidated Margin 223,894 212,109 GAS SOLD & TRANSPORTED (MDth): Residential 49,662 50,869 Commercial 19,639 20,773 Contract 79,897 76,223 149,198 147,865 ELECTRICITY SOLD (MWh): Residential 1,330,433 1,344,135 Commercial 1,305,655 1,260,279 Industrial 2,477,156 2,313,602 - - Miscellaneous Sales 19,174 19,831 Total Retail 5,132,418 4,937,847 Municipals and Jasper 678,530 636,764 Alcoa Generating Corporation 154,401 522,280 Other Wholesale 1,011,990 851,785 6,977,339 6,948,676 GAS OPERATING REVENUES (Thousands): Residential 335,523 319,642 Commercial 114,044 112,379 Contract 48,148 49,692 Miscellaneous Revenue 29,359 5,472 527,074 487,185 ELECTRIC OPERATING REVENUES (Thousands): Residential 88,673 89,213 Commercial 69,343 68,001 Industrial 81,469 76,066 Miscellaneous Revenue 9,167 6,705 Total Retail 248,652 239,985 Municipals and Jasper 23,864 22,782 Alcoa Generating Corporation 4,747 12,140 Other Wholesale 36,796 24,994 314,059 299,901 AVERAGE GAS CUSTOMERS: Residential 560,432 547,861 Commercial 56,365 55,518 Contract 1,248 1,251 618,045 604,630 AVERAGE ELECTRIC CUSTOMERS: Residential 109,956 108,115 Commercial 16,338 15,868 Industrial 171 175 126,465 124,158
VECTREN CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF INCOME (Thousands, except for share amounts) (Unaudited) Three Months Six Months Ended June 30 Ended June 30 2000 1999 2000 1999 OPERATING REVENUE: Gas utility $ 100,485 $ 82,647 $ 301,330 $ 273,829 Electric utility 78,289 73,802 151,279 144,789 Energy services and other 84,703 50,593 170,312 109,457 Total operating 263,477 207,042 622,921 528,075 revenues OPERATING EXPENSES: Cost of gas sold 55,898 38,617 174,425 142,116 Fuel for electric 15,543 15,730 32,116 31,358 generation Purchased electric energy 9,159 7,063 12,636 10,325 Cost of energy services and other 80,240 48,464 161,962 104,634 Other operating 50,173 45,940 96,599 90,773 Merger costs 3,261 - 30,442 - Depreciation and amortization 26,031 21,794 48,693 43,019 Taxes other than income taxes 7,456 6,494 16,056 14,777 Total operating expenses 247,761 184,102 572,929 437,002 OPERATING INCOME 15,716 22,940 49,992 91,073 OTHER INCOME Equity in earnings of unconsolidated nvestments 2,074 2,313 14,551 6,539 Other - net 7,801 1,146 10,219 3,006 Total other income 9,875 3,459 24,770 9,545 INTEREST EXPENSE 12,319 9,827 24,592 19,997 INCOME BEFORE PREFERRED DIVIDENDS AND INCOME TAXES 13,272 16,572 50,170 80,621 PREFERRED DIVIDEND REQUIREMENTS OF SUBSIDIARY 266 269 535 539 INCOME BEFORE INCOME TAXES 13,006 16,303 49,635 80,082 INCOME TAXES 4,390 4,538 18,656 27,514 NET INCOME BEFORE MINORITY INTEREST 8,616 11,765 30,979 52,568 MINORITY INTEREST IN SUBSIDIARY 343 211 581 291 NET INCOME $ 8,273 $ 11,554 $ 30,398 $ 52,277 AVERAGE COMMON SHARES OUTSTANDING 61,227 61,287 61,266 61,309 DILUTED COMMON SHARES OUTSTANDING 61,317 61,425 61,338 61,461 BASIC EARNINGS PER AVERAGE SHARE OF COMMON STOCK $ 0.14 $ 0.19 $ 0.50 $ 0.85 DILUTED EARNINGS PER AVERAGE SHARE OF COMMON STOCK $ 0.13 $ 0.19 $ 0.50 $ 0.85
VECTREN CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF INCOME (Thousands, except for share amounts) (Unaudited) Twelve Months Ended June 30 2000 1999 OPERATING REVENUE: Gas utility $ 527,074 $ 487,185 Electric utility 314,059 299,901 Energy services and other 322,130 222,543 Total operating revenues 1,163,263 1,009,629 OPERATING EXPENSES: Cost of gas sold 298,738 258,717 Fuel for electric generation 67,063 64,110 Purchased electric energy 23,102 23,681 Cost of energy services and other 304,918 212,397 Other operating 195,448 182,750 Merger costs 30,442 - Depreciation and amortization 92,672 84,133 Taxes other than income taxes 31,189 27,182 Total operating expenses 1,043,572 852,970 OPERATING INCOME 119,691 156,659 OTHER INCOME Equity in earnings of unconsolidated investments 19,654 9,882 Other - net 16,115 6,553 Total other income 35,769 16,435 INTEREST EXPENSE 47,457 40,076 INCOME BEFORE PREFERRED DIVIDENDS AND INCOME TAXES 108,003 133,018 PREFERRED DIVIDEND REQUIREMENTS OF SUBSIDIARY 1,074 1,085 INCOME BEFORE INCOME TAXES 106,929 131,933 INCOME TAXES 36,850 43,780 NET INCOME BEFORE MINORITY INTEREST 70,079 88,153 MINORITY INTEREST IN SUBSIDIARY 1,210 562 NET INCOME $ 68,869 $ 87,591 AVERAGE COMMON SHARES OUTSTANDING 61,281 61,424 DILUTED COMMON SHARES OUTSTANDING 61,362 61,598 BASIC EARNINGS PER AVERAGE SHARE OF COMMON STOCK $ 1.12 $ 1.43 DILUTED EARNINGS PER AVERAGE SHARE OF COMMON STOCK $ 1.12 $ 1.42
VECTREN CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS (Thousands - Unaudited) June 30 December 31 ASSETS 2000 1999 1999 Current Assets: Cash and cash equivalents $ 18,727 $ 11,307 $ 17,351 Temporary investments 1,048 583 903 Accounts receivable, less reserves of $5,469, $3,890 and $3,949 110,533 79,288 123,612 Accrued unbilled revenues 20,347 19,599 55,370 Inventories 34,118 46,367 58,863 Prepaid gas delivery service 20,969 11,645 20,937 Prepayments and other current assets 25,758 25,737 28,676 Total current assets 231,500 194,526 305,712 Utility Plant: Original cost 2,398,714 2,318,750 2,367,831 Less accumulated depreciation and amortization 1,059,500 1,007,135 1,031,498 Net utility plant 1,339,214 1,311,615 1,336,333 Other Investments: Investments in leveraged leases 89,822 35,990 85,737 Investments in partnerships and other corporations 76,819 76,273 74,644 Notes receivable 61,736 20,955 32,271 Other 1,019 4,384 996 Total other investments 229,396 137,602 193,648 Nonutility property, net of accumulated depreciation 86,496 60,329 64,474 Other Assets: Deferred charges 29,347 15,787 23,623 Unamortized debt 15,740 16,236 15,843 Demand side management programs 25,845 24,995 25,298 Other 6,950 10,324 15,536 Total other assets 77,882 67,342 80,300 TOTAL ASSETS $1,964,488 $1,771,414 $1,980,467
VECTREN CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS (Thousands - Unaudited) June 30 December 31 LIABILITIES AND SHAREHOLDERS' 2000 1999 1999 EQUITY Current Liabilities: Current portion of adjustable rate bonds subject to tender $ 53,700 $ 53,700 $ 53,700 Current maturities of long-term debt and other obligations 258 10,814 776 Short-term borrowings 218,012 138,754 207,638 Accounts payable 100,351 63,243 95,827 Refunds to customers and customer deposits 12,718 33,474 27,396 Accrued taxes 14,845 19,806 26,602 Accrued interest 11,404 8,609 12,097 Other current liabilities 47,581 50,580 49,467 Total current liabilities 458,869 378,980 473,503 Deferred Credits and Other Liabilities: Deferred income taxes 205,478 205,359 215,520 Accrued postretirement benefits other than pensions 43,388 40,683 40,942 Unamortized investment tax credit 24,346 26,704 25,524 Other 18,414 7,467 8,297 Total deferred credits and other liabilities 291,626 280,213 290,283 Minority interest in subsidiary 1,498 987 916 Capitalization: Long-term debt and other obligations 484,607 388,409 486,726 Preferred stock of subsidiary: Redeemable 8,076 8,192 8,192 Nonredeemable 11,090 11,090 11,090 Total preferred stock 19,166 19,282 19,282 Common stock - issued and outstanding 61,189, 61,288 and 61,305 shares, respectively 213,742 215,018 215,917 Retained earnings 494,909 488,597 93,918 Accumulated other 71 (72) (78) comprehensive income Total common shareholders' equity 708,722 703,543 709,757 Total capitalization 1,212,495 1,111,234 1,215,765 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,964,488 $1,771,414 $1,980,467
VECTREN CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Thousands - Unaudited) Six Months Twelve Months Ended June 30 Ended June 30 2000 1999 2000 1999 CASH FLOWS FROM (REQUIRED FOR) OPERATING ACTIVITIES: Net income $ 30,398 $ 52,277 $ 68,869 $ 87,591 Adjustments to reconcile net income to cash provided from operating activities - Depreciation and amortization 48,693 43,019 92,672 84,133 Preferred dividend requirement 535 539 1,074 1,085 Deferred income taxes and invest- ment tax credit (11,220) (433) (2,239) 6,739 (Gain) on sale of assets (8,961) 730 (8,961) 730 Undistributed earnings of unconsolidated affiliates (7,551) (6,539) (12,654) (9,882) 21,496 37,316 69,892 82,805 Changes in assets and liabilities - Receivables - net 50,398 60,117 (29,697) 5,720 Inventories 24,745 20,319 12,249 213 Accounts payable, refunds to customers, customer deposits, and other current liabilities (12,040) (21,288) 13,353 1,194 Accrued taxes and interest (12,450) 3,301 (2,166) (2,682) Prepayments and other current assets 2,918 (4,520) (21) (7,837) Prepaid gas delivery (32) (11,645) (9,324) (11,645) Accrued post- retirement benefits and other pensions 2,446 3,196 2,705 2,156 Other 2,694 875 (1,703) 7,296 Total adjustments 80,175 87,671 55,288 77,220 Net cash flows from operating activities 110,573 139,948 124,157 164,811 CASH FLOWS FROM (REQUIRED FOR) FINANCING ACTIVITIES: Change in common stock - (2,248) - (7,164) Retirement of preferred stock (116) (116) (116) (232) Proceeds from long- term debt - - 110,000 22,200 Retirement of long- term debt and other obligations (2,637) (46,466) (24,358) (85,009) Net change in short- term borrowings 10,374 12,771 79,258 103,470 Dividends on common stock (29,533) (28,266) (58,798) (56,449) Other - - - 330 Net cash flows from (required for) financing activities (21,912) (64,325) 105,986 (22,854) CASH FLOWS (REQUIRED FOR) INVESTING ACTIVITIES: Capital expenditures (62,871) (63,381) (129,192) (130,135) Demand Side Management program expenditures (547) 51 (850) (346) Investment in leveraged leases (211) 13 (46,510) (275) Investments in partnerships and other corporations (8,737) (2,976) (10,956) 13,125) Non-regulated investments in unconsolidated affiliates - net 8,465 (5,521) 8,465 (9,447) Change in notes receivable (29,465) (583) (40,781) (3,530) Change in nonutility property (10,086) (796) (17,917) (4,544) Cash distributions from unconsolidated affiliates 3,261 3,113 4,898 4,436 Proceeds from sale of assets - - - 4,113 Other 12,906 (1,627) 10,120 (6,153) Net cash flows (required for) investing activities (87,285) (71,707) (222,723) (159,006) NET INCREASE (DECREASE) IN CASH EQUIVALENTS 1,376 3,916 7,420 (17,049) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 17,351 7,391 11,307 28,356 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 18,727 $ 11,307 $ 18,727 $ 11,307
EX-99 4 0004.txt 8-K 99-3 TELECONFERENCE SCRIPT Exhibit 99-3 VECTREN CORPORATION 2nd Quarter Results Moderator: Steve Schein July 28, 2000, 9:00 a.m. CDT Operator: Good day everyone and welcome to Vectren Corporation's second quarter earnings conference call. This call is being recorded and is copyrighted material. Today's presentation will be available for rebroadcast at 1:00 p.m., E.T., running through Friday, August 4, 2000. You may access the replay by dialing 719-457-0820 and enter the confirmation code 679125; again, dial 719-457-0820 and enter the confirmation code 679125. At this time, for opening remarks and introductions, I would like to turn the call over to Mr. Schein, Vice President, Investor Relations. Please go ahead sir. S. Schein: Thank you. Good morning and welcome to our teleconference highlighting Vectren's second quarter results. As the operator mentioned, I am Steve Schein. We are pleased that you could join us this morning. I hope that all of you received a fax of our quarterly financial report that includes highlights and our financial statements for the second quarter of 2000. If for some reason you did not, you may obtain one immediately by calling 1-800-366-9831. Today we will be discussing certain subjects, including subjects pertaining to our growth strategy that may contain forward-looking information. I would caution you that actual results could differ materially from those that will be projected in our discussions. Additional detailed information concerning a number of factors that could cause actual results to differ materially from the information that is provided to you is readily available in our report Form 8-K that was filed with the Securities and Exchange Commission on July 11, 2000. Today, you will hear from Niel Ellerbrook, Chairman and CEO; Jerry Benkert, Executive Vice President and Chief Financial Officer; and Carl Chapman, Executive Vice President and President of Vectren Enterprises, Inc. Also joining us today are Gordon Hurst, Executive Vice President and President of the Utility Group; Ron Christian, Senior Vice President, General Counsel and Secretary; Susan Hardwick, Vice President and Controller; and Tim Burke, Vice President and Treasurer. This morning, Niel will provide a brief update on the quarter, Jerry and Carl will discuss our second quarter results followed by a discussion of expected 2000 results. As usual, we will allow time at the conclusion of our remarks for questions and answers. And with that, I will ask Niel to begin his remarks. N. Ellerbrook: Thank you Steve and good morning everyone. Steve has asked me to provide an overview on three topics: 1) The results of the quarter and the Vectren merger integration progress; 2) The status of the Dayton gas distribution asset acquisition; 3) The status and implications of the work stoppage affecting roughly 480 bargaining unit employees of our Southern Indiana Gas and Electric operating unit. With respect to the quarter I am very pleased. I believe the quarterly earnings of $.14 are relatively strong considering merger related costs of $.09 and warmer than normal weather, which cost us approximately $.03 on the quarter. As you know we closed the merger transaction on March 31 and throughout the quarter significant time was devoted to logistical processes supporting office moves and family moves. In addition, we began in earnest the challenging process of integrating the cultures and forming a new management team all dedicated to achieving the great opportunities the merger provides. I believe we made great progress on all fronts. Most all of our moves are behind us and the infrastructures needed to support new offices and family locations are in place. The process of systems integration will continue for several months, of course, but we are making good progress there as well. So, I think our financial performance was particularly satisfying, after considering the multitude of tasks that were in process or accomplished throughout the quarter. Jerry and Carl will talk in detail about financial results. The pending acquisition of DP&L's gas distribution business is also progressing well. On July 11, we received a favorable order from the Public Utilities Commission of Ohio approving the acquisition itself, as well as our adoption of the existing DP&L Tariff for Gas Service. Upon consummation of the transaction, we will operate under the name Vectren Energy Delivery of Ohio. While we expect to remain exempt under the Public Utility Holding Company Act, we are still awaiting approval from the Securities and Exchange Commission for the transaction. Other remaining approvals include action by certain local authorities regarding the transfer of operating rights and FCC authorization of the transfer of radio licenses. We expect all approvals to be forthcoming soon and expect to close this transaction in the near term. We have been working closely with DPL for the last several months and we will be fully prepared to provide reliable gas service to our new Ohio customers beginning at closing. Turning to the work stoppage. On June 30 the bargaining unit representing most of SIGECO's union employees voted to reject the company's new contract offer and we began a lock out of all of these bargaining unit employees at 12:01 a.m., July 1. Since that time salaried personnel have been performing the jobs normally done by bargaining unit personnel, and I am pleased to say top notch customer service has continued uninterrupted. The bargaining unit has scheduled a vote on a new offer this Sunday, July 30, and we are measurably optimistic of ratification. The terms of the new offer are market competitive and fair, and importantly permit us to begin to build an environment of working with the bargaining unit on opportunities for performance improvement and share with them the rewards of our mutual success. In summary, I continue to be very proud of what we have accomplished to date and I am optimistic and enthusiastic about our future as Vectren. Jerry, J. Benkert: Thank you Niel. For the second quarter of 2000, consolidated net income before merger related charges was $14.1 million and $.23 per share, as compared to $11.6 million and $.19 per share for the same quarter last year. After reflecting the merger related charges, reported net income and earnings per share for the current period were $8.3 million and $.14 per share, respectively. Merger costs for the quarter ended June 30, totaled $6.5 million, $5.8 million net of tax or $.09 per share. Merger costs expensed during the first six months of 2000 totaled $33.7 million, $25.1 million net of tax or $.41 per share. These costs include $3.3 million of accelerated depreciation related to information systems to be retired during 2001, as well as the effects of the non-deductibility for tax of some of the merger transaction costs. The continued merger integration activities and related costs, which will contribute to the net merger savings, will be substantially complete by 2001. The company expects to realize net merger savings of nearly $200 million over ten years from the elimination of duplicate corporate and administrative programs and greater efficiencies in operations, business processes, and purchasing. Before merger related expenses, the utility group contributed $.14 per share this quarter, as compared to $.13 last year. The non-regulated group contributed $.09 this quarter, as compared to $.06 last year. As we exited the heating season during the quarter, similar to last year, the heating degree days remained warmer than normal. Gas utility margins increased by $.5 million over last year, principally due to increased residential customers. Our wholesale power marketing group, despite the cooler than normal weather of the early cooling season, was able to increase overall electric margins by $2.6 million this quarter over the same period last year. Operation and maintenance expenses increased $4.2 million over the second quarter 1999. Of that, O & M at the utility group grew about $2.5 million. The principal reason for the utility increase was scheduled maintenance at one of SIGECO's gas turbine generators. The remaining increase was additional non-regulated expense driven by growth particularly at Energy Systems Group and Southern Indiana Properties. Depreciation and amortization were up quarter over quarter by approximately $4.2 million, of which $3.3 million was the incremental merger costs due to accelerated depreciation as mentioned earlier. Interest expense increased by approximately $2.5 million, of which $1.2 million related to additional investments at Southern Indiana Properties. The remaining increase relates primarily to increased levels of debt at the utilities and, to some extent, due to higher interest rates. Income taxes were flat quarter over quarter due to the non- deductibility of certain merger costs. Margins for Energy Services and Other, Equity in Earnings of Unconsolidated Affiliates and Other Net Income reflect over all the quarter over quarter favorable results from the non- regulated group which Carl will discuss. In summary, we believe the utility group has performed well whether we are measured quarter over quarter or versus our plan. I will turn it over to Carl to discuss the non- regulated results in more detail. C. Chapman: Thanks, Jerry. Our non-regulated results were strong for the second quarter of this year, again proving the soundness of our investment strategy. As Jerry said, our non- regulated subsidiaries contributed $.09 per share this quarter, an increase of $.03 over last year. As you may recall, Vectren Enterprises is our largest non- regulated entity and has 5 operating units. My comments today will focus on the results of the three largest of these, as well as a significant investment we will be making at Vectren Ventures. While Energy Services earnings are up $1.2 million, or $.02 per share from last year, we are still experiencing the timing effects of ProLiance Energy's structured risk products and the restructuring of transportation contracts to seasonal demand rates which will move earnings into the third quarter. Further, because of the expected implementation of FAS 133 and extraordinary market conditions that have reduced the opportunities for seasonal storage pricing arbitrage, we have reduced our 2000 projected earnings from ProLiance. However, we still expect Energy Services to end the year only $.01 under budget due to ProLiance's new customer growth and strong results from Energy Systems Group. This would still be $.03 greater than calendar 1999. In June, ProLiance Energy added 24 new customers which is the highest rate of customer growth since the company's inception. ProLiance has also been awarded a long-term portfolio management contract from Tennessee Valley Supply Group, an energy-buying group comprised of five Alabama municipal utilities. This contract, which will increase revenues over $60 million a year for the next three years, makes ProLiance the largest natural gas supplier to municipal utilities in the United States, and one of the largest portfolio managers for U.S. natural gas utilities. Also, Energy Systems Group was awarded 5 new contracts valued at over $6 million in the last quarter and continues to record strong results on the VA Hospital contract in Tennessee. Financial Group's earnings increased nearly $.02 per share over last year primarily due to investments made by Southern Indiana Properties in 1999. Vectren Synfuels results showed another quarter of improved production and sales of synthetic fuel. We expect Financial Group to be on target for the calendar year. We are excited to announce an additional commitment of $20 million to Haddington Energy Partners at Vectren Ventures. We believe the combination of the very experienced management team from the former TPC Corporation, with the funding and leads generated by Chase Capital Partners, has allowed a superior portfolio of assets to be built with a focus on taking advantage of deregulation. Total investments to date of over $ 75 million include gas and power storage, cogeneration, gathering with minimal price risk exposure, and hydrogen generators for fuel cells. This additional commitment will allow us to retain our ownership level in the original assets, as well as participate in additional investments by Haddington. They have commitments to basically triple their funding, with Chase continuing as the lead investor with an increase in their commitment accordingly. With our initial $10 million investment, we will have committed $30 million to these opportunities. Vectren Enterprises retains a seat on the Investment Committee allowing us to stay in touch with developing mid stream technologies which may further impact or be deployable within other areas of Vectren. Communication's earnings for the quarter reflect a one-time $.01 per share loss associated with the last phase in the restructuring of our investment in Sigecom. On the year, this brings the Sigecom earnings to $.07. We continue to be positive about value created by the results at Sigecom. You will recall that Sigecom is currently building a fiber optic network at our headquarters in Evansville, Indiana. Sigecom currently serves nearly 20,000 customers. Revenue generating units currently total well over 40,000 units with 10,000 revenue generating units having been added in the last quarter alone. They continue to make over 100 installations per day. Also, our partner, Utilicom Networks, has applied for cable franchise rights in Indianapolis, Indiana and Dayton, Ohio and we continue to discuss these and other investment opportunities with Utilicom management and Utilicom's majority owner, The Blackstone Group. As you know, these investments are capital intensive and during the early phases create operating losses. We think that these types of telecommunications investments represent a terrific opportunity to utilize our customer contact points to create additional shareholder value. The non-regulated Vectren merger synergies coupled with opportunities related to the acquisition of the gas distribution assets from Dayton Power and Light will help ensure we meet our growth targets. While our portfolio is broad, we continue to believe it fits together in a very cohesive manner and can be managed by our experienced non- regulated management team. As you can see, we continue to focus on non-regulated investments that complement our core competencies while carefully managing the balance between risk and return. We believe the results show that our investments are positioned for future earnings growth and shareholder value creation and, as a result, will provide superior returns for Vectren shareholders. J. Benkert: Thanks Carl. I would like to briefly discuss our expectations for the remainder of 2000. As we have previously communicated, our growth strategy is to grow earnings over a five-year period at an average annual compound growth rate of 10%. On a weather normalized basis, and excluding merger related costs, we targeted a reasonable range of $1.73 to $1.83 for 2000. Year to date through June 30, heating degree days were 84% of normal and cooling degree days were 87% of normal. We believe abnormal weather has now impacted earnings as much as $.16 per share. In addition to the 2000 one-time merger costs reported through the second quarter, we now expect annual charges to be in the range of $.60 - $.62, up slightly from our previous estimate of $.55 - $.60. This is principally due to the non-tax deductibility of some of the transaction expenses. Before weather, the Utility Group's annual contribution to earnings is on target. Our service territory continues to show strong growth, and we are excited about the opportunity to add Dayton to our mix. With management of controllable expenses, we expect to achieve our utility growth targets. As Niel stated, we will be operationally ready to deliver safe and reliable gas service to our new Ohio customers upon receipt of all necessary approvals and consummation of closing. We continue to diligently work toward a closing during the third quarter and remain excited about the addition of the Dayton assets which will take our customer count to about 1 million customers. Our non-regulated investments are an integral part of our growth strategy, and, as Carl stated, the non-regulated group remains on target to achieve its expected results. We continue to focus on opportunities that contribute to current earnings, and set the stage for future earnings growth as well as future value, much like our investments in SIGECOM and Haddington. We think alignment with key investment groups like The Blackstone Group and Chase Capital Partners in these two investments help confirm our strategies to create future value. The year 2000 First Call consensus earnings on the street average $1.59 per share. We would expect earnings before merger related charges for 2000 to be in the range of $1.55 to $1.59 before merger costs. As a reminder, 2000 earnings were impacted by about $.16 of weather and the $.07 one-time gain on restructuring the SIGECOM investment. When considering these results and our 10% average growth target over time we find the street consensus for 2001 earnings of $1.77 is below the lower end of our expected pre-merger earnings range. With that I will stop and ask for questions. S. Schein: As always, we appreciate your time and interest in Vectren. Please let us know if we can provide any additional information regarding this teleconference or other topics. We look forward to talking to you in the future. EX-99 5 0005.txt 8K EXH 99-4 CAUTIONARY STMT EXH 99-4 Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995. A "safe harbor" for forwarding-looking statements is provided by the Private Securities Litigation Reform Act of 1995 (Reform Act of 1995). The Reform Act of 1995 was adopted to encourage such forward-looking statements without the threat of litigation, provided those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause the actual results to differ materially from those projected in the statement. Forward looking statements have been and will be made in written documents and oral presentations of Vectren Corporation and its subsidiaries. Such statements are based on management's beliefs, as well as assumptions made by and information currently available to management. When used in Vectren Corporation and its subsidiaries' documents or oral presentations, the words "believe," "anticipate," "endeavor," "estimate," "expect," "objective," "projection," "forecast," "goal," and similar expressions are intended to identify forward-looking statements. In addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements, factors that could cause Vectren Corporation and its subsidiaries' actual results to differ materially from those contemplated in any forward-looking statements included, among others, the following: Factors affecting utility operations such as unusual weather conditions; catastrophic weather-related damage; unusual maintenance or repairs; unanticipated changes to fossil fuel costs; unanticipated changes to gas supply costs, or availability due to higher demand, shortages, transportation problems or other developments; environmental or pipeline incidents; transmission or distribution incidents; unanticipated changes to electric energy supply costs, or availability due to demand, shortages, transmission problems or other developments; or electric transmission or gas pipeline system constraints. Increased competition in the energy environment including effects of industry restructuring and unbundling. Regulatory factors such as unanticipated changes in rate setting policies or procedures, recovery of investments and costs made under traditional regulation, and the frequency and timing of rate increases. Financial or regulatory accounting principles or policies imposed by the Financial Accounting Standards Board, the Securities and Exchange Commission (Commission), the Federal Energy Regulatory Commission, state public utility commissions, state entities which regulate natural gas transmission, gathering and processing, and similar entities with regulatory oversight. Economic conditions including inflation rates and monetary fluctuations. Changing market conditions and a variety of other factors associated with physical energy and financial trading activities including, but not limited to, price, basis, credit, liquidity, volatility, capacity, interest rate, and warranty risks. Availability or cost of capital, resulting from changes in Vectren Corporation and its subsidiaries, interest rates, and securities ratings or market perceptions of the utility industry and energy-related industries. Employee workforce factors including changes in key executives, collective bargaining agreements with union employees, or work stoppages. Legal and regulatory delays and other obstacles associated with mergers, acquisitions, and investments in joint ventures. Costs and other effects of legal and administrative proceedings, settlements, investigations, claims, and other matters, including, but not limited to, those described in periodic filings made with the Commission by Vectren Corporation and its subsidiaries, Indiana Gas Company, Inc. and Southern Indiana Gas and Electric Company. Changes in federal, state or local legislature requirements, such as changes in tax laws or rates, environmental laws and regulations. Vectren Corporation and its subsidiaries undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of changes in actual results, changes in assumptions, other factors affecting such statements. -----END PRIVACY-ENHANCED MESSAGE-----