-----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, SJwBEZLVB3EOvkdeus+k0ZnukLu2f2mE51dmYmKZn6wqZIdQkQogHCYHfAkTp6tS ybN0aYRDmhgATKnhOpAshw== 0000092195-96-000006.txt : 19960517 0000092195-96-000006.hdr.sgml : 19960517 ACCESSION NUMBER: 0000092195-96-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHERN INDIANA GAS & ELECTRIC CO CENTRAL INDEX KEY: 0000092195 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 350672570 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03553 FILM NUMBER: 96567617 BUSINESS ADDRESS: STREET 1: 20 NW FOURTH ST CITY: EVANSVILLE STATE: IN ZIP: 47741-0001 BUSINESS PHONE: 8124655300 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996 TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-3553 SOUTHERN INDIANA GAS AND ELECTRIC COMPANY (Exact name of registrant as specified in its charter) Indiana 35-0672570 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 20 N. W. Fourth Street Evansville, Indiana 47741-0001 (Address of principal executive offices) (812) 465-5300 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ____ 2 SOUTHERN INDIANA GAS AND ELECTRIC COMPANY CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 1996 1995 (in thousands except per share data) OPERATING REVENUES Electric $ 66,865 $60,315 Gas 39,612 24,108 Total operating revenues 106,477 84,423 OPERATING EXPENSES Operation: Fuel for electric generation 18,778 18,958 Purchased electric energy 1,261 1,154 Cost of gas sold 30,771 17,791 Other 13,335 11,523 Total operation 64,145 49,426 Maintenance 6,188 5,836 Depreciation and amortization 9,708 10,241 Federal and state income taxes 6,515 2,613 Property and other taxes 3,591 3,638 Total operating expenses 90,147 71,754 OPERATING INCOME 16,330 12,669 Other Income: Allowance for other funds used during construction - 110 Interest 111 194 Other, net 1,429 1,701 1,540 2,005 INCOME BEFORE INTEREST AND OTHER CHARGES 17,870 14,674 Interest and Other Charges: Interest on long-term debt 4,680 4,654 Amortization of premium, discount, and expense on debt 168 170 Other interest 409 40 Allowance for borrowed funds used during construction (63) (312) 5,194 4,914 INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 12,676 9,760 CUMULATIVE EFFECT AT JANUARY 1, 1995 OF ADOPTING THE UNBILLED REVENUES METHOD OF ACCOUNTING - NET OF INCOME TAXES - 6,294 NET INCOME 12,676 16,054 Preferred dividend 274 276 EARNINGS APPLICABLE TO COMMON STOCK 12,402 15,778 AVERAGE COMMON SHARES OUTSTANDING 15,755 15,755 EARNINGS PER SHARE OF COMMON STOCK BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE $0.79 $0.60 CUMULATIVE EFFECT OF ACCOUNTING CHANGE - 0.40 TOTAL EARNINGS PER SHARE OF COMMON STOCK $0.79 $1.00 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
3 SOUTHERN INDIANA GAS AND ELECTRIC COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 1996 1995 (in thousands) CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 12,676 $ 16,054 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 9,708 10,241 Deferred income taxes and investment tax credits, net 289 1,799 Allowance for other funds used during construction - (110) Cumulative effect of accounting change - (6,294) Change in assets and liabilities: Receivables, net (including accrued unbilled revenues) 279 4,063 Inventories 7,474 3,063 Coal contract settlement 3,177 (1,974) Accounts payable (13,793) (15,590) Accrued taxes 7,814 2,943 Refunds from gas suppliers (1,998) 3,299 Refunds to customers (3,191) 756 Accrued coal liability - 3,085 Other assets and liabilities 5,925 13,787 Net cash provided by operating activities 28,360 35,122 CASH FLOWS FROM INVESTING ACTIVITIES Construction expenditures (net of allowance for other funds used during construction) (5,615) (8,331) Demand side management program expenditures (769) (1,670) Purchases of investments - (801) Sales of investments - 1,250 Investments in partnerships - (62) Change in nonutility property 2 (1,465) Other 28 1,043 Net cash used in investing activities (6,354) (10,036) CASH FLOWS FROM FINANCING ACTIVITIES First mortgage bonds - (50) Dividends paid (7,087) (6,931) Reduction in preferred stock and long-term debt - (91) Change in environmental improvement funds held by trustee (53) 5,254 Payments on partnership obligations - (2,681) Change in notes payable (8,000) (15,927) Contribution of nonregulated subsidiaries to parent (12,145) - Other 137 214 Net cash used in financing activities (27,148) (20,212) NET INCREASE IN CASH AND CASH EQUIVALENTS (5,142) 4,874 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 9,834 28,060 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,692 $ 32,934 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
4 SOUTHERN INDIANA GAS AND ELECTRIC COMPANY CONSOLIDATED BALANCE SHEETS
March 31, December 31, 1996 1995 (in thousands) ASSETS Utility Plant, at original cost: Electric $1,034,296 $1,030,890 Gas 125,806 125,053 1,160,102 1,155,943 Less - accumulated provision for depreciation 498,971 490,326 661,131 665,617 Construction work in progress 14,113 13,750 Net utility plant 675,244 679,367 Other Investments and Property: Investments in leveraged leases - 35,609 Investments in partnerships - 25,308 Environmental improvement funds held by trustee 3,695 3,642 Nonutility property and other 2,199 11,605 5,894 76,164 Current Assets: Cash and cash equivalents 4,692 9,834 Temporary investments, at market - 1,148 Receivables, less allowance of $198 and $138, respectively 30,856 35,392 Accrued unbilled revenues 17,971 18,651 Inventories 27,489 34,962 Coal contract settlement 9,751 12,928 Other current assets 8,541 4,795 99,300 117,710 Deferred Charges: Unamortized premium on reacquired debt 6,022 6,142 Postretirement benefits other than pensions 9,636 9,574 Demand side management program 21,106 20,337 Other deferred charges 14,409 14,687 51,173 50,740 $ 831,611 $ 923,981 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
5 SOUTHERN INDIANA GAS AND ELECTRIC COMPANY CONSOLIDATED BALANCE SHEETS
March 31, December 31, 1996 1995 (in thousands) SHAREHOLDERS' EQUITY AND LIABILITIES Common Stock $ 78,258 $ 78,258 Retained Earnings 204,788 236,617 Common shareholders' equity 283,046 314,875 Cumulative Nonredeemable Preferred Stock 11,090 11,090 Cumulative Redeemable Preferred Stock 7,500 7,500 Cumulative Special Preferred Stock 924 924 Long-Term Debt, net of current maturities 251,616 257,440 Long-Term Partnership Obligations, net of current maturities - 6,839 Total capitalization, excluding bonds subject to tender (see Consolidated Statements of Capitalization) 554,176 598,668 Current Liabilities: Current Portion of Adjustable Rate Bonds Subject to Tender 31,500 31,500 Current Maturities of Long-Term Debt, Interim Financing and Long-Term Partnership Obligations: Maturing long-term debt 8,000 9,906 Notes payable 22,500 30,500 Partnership obligations - 2,786 Total current maturities of long-term debt, interim financing and long-term partnership obligations 30,500 43,192 Other Current Liabilities: Accounts payable 18,428 37,996 Dividends payable 123 123 Accrued taxes 18,209 8,821 Accrued interest 7,571 4,577 Refunds to customers 3,858 8,896 Other accrued liabilities 23,716 17,689 Total other current liabilities 71,905 78,102 Total current liabilities 133,905 152,794 Deferred Credits and Other: Accumulated deferred income taxes 104,112 132,793 Accumulated deferred investment tax credits, being amortized over lives of property 22,786 23,146 Regulatory income tax liability 2,525 2,977 Postretirement benefits other than pensions 10,076 9,056 Other 4,031 4,547 143,530 172,519 $831,611 $923,981 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
6 SOUTHERN INDIANA GAS AND ELECTRIC COMPANY CONSOLIDATED STATEMENTS OF CAPITALIZATION
March 31, December 31, 1996 1995 (in thousands) COMMON SHAREHOLDERS' EQUITY Common Stock, without par value, authorized 50,000,000 shares, issued 15,724,826 shares $ 78,258 $ 78,258 Retained Earnings, $2,194,121 restricted as to payment of cash dividends on common stock 204,788 236,617 283,046 314,875 PREFERRED STOCK Cumulative, $100 par value, authorized 800,000 shares issuable, in series: Nonredeemable 4.8% Series, outstanding 85,895 shares callable at $110 per share 8,590 8,590 4.75% Series, outstanding 25,000 shares callable at $101 per share 2,500 2,500 11,090 11,090 Redeemable 6.50% Series, outstanding 75,000 shares redeemable at $100 per share December 1, 2002 7,500 7,500 SPECIAL PREFERRED STOCK Cumulative, no par value, authorized 5,000,000 shares, issuable in series: 8-1/2% series, outstanding 9,237 shares redeemable at $100 per share 924 924 LONG-TERM DEBT, NET OF CURRENT MATURITIES First mortgage bonds 251,410 251,410 Notes payable 1,000 6,836 Unamortized debt premium and discount, net (794) (806) 251,616 257,440 LONG-TERM PARTNERSHIP OBLIGATIONS, NET OF CURRENT MATURITIES - 6,839 CURRENT PORTION OF ADJUSTABLE RATE POLLUTION CONTROL BONDS SUBJECT TO TENDER, DUE 2015, Series B, presently 4.0% 31,500 31,500 Total capitalization, including bonds subject to tender $585,676 $630,168 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
7 SOUTHERN INDIANA GAS AND ELECTRIC COMPANY CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
Three Months Ended March 31, 1996 1995 (in thousands) Balance Beginning of Period $236,617 $218,424 Net Income 12,676 16,054 249,293 234,478 Dividend to Parent of Nonregulated Subsidiaries 37,418 - Preferred Stock Dividends 274 276 Common Stock Dividends ($0.4325 per share in 1996 and $0.4225 per share in 1995) 6,813 6,656 44,505 6,932 Balance End of Period (See Consolidated Statements of Capitalization for restriction) $204,788 $227,546 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
8 SOUTHERN INDIANA GAS AND ELECTRIC COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Organization Southern Indiana Gas and Electric Company (SIGECO) is a wholly-owned utility subsidiary of SIGCORP, Inc. (SIGCORP), a holding company incorporated October 19, 1994 under the laws of the state of Indiana. SIGCORP has five wholly-owned subsidiaries: SIGECO, a gas and electric utility, and four nonregulated subsidiaries. On December 20, 1994, SIGECO's Board of Directors authorized the steps required for a corporate reorganization in which a holding company would become the parent of SIGECO. SIGECO's shareholders approved the reorganization at SIGECO's March 28, 1995 annual meeting, and approval by the Federal Energy Regulatory Commission and the Securities and Exchange Commission was granted November 7, 1995 and December 14, 1995, respectively. Effective January 1, 1996, SIGCORP, became the parent of SIGECO which accounts for over 90% of SIGCORP's net income, and four of SIGECO's former wholly-owned nonregulated subsidiaries: Energy Systems Group, Inc., Southern Indiana Minerals, Inc., Southern Indiana Properties, Inc. and ComSource, Inc. All of the shares of SIGECO's common stock were exchanged on a one-for-one basis for shares of SIGCORP, while all of SIGECO's debt securities and all of its outstanding shares of preferred stock remain securities of SIGECO and are unaffected. On January 1, 1996, SIGECO dividended to SIGCORP the four nonregulated subsidiaries. 2. General It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in SIGCORP's 1995 Annual Report to Shareholders. The consolidated statements are on the basis of interim figures and are subject to audit and adjustments. These financial statements include the accounts of Southern Indiana Gas and Electric Company (SIGECO) and its wholly- owned subsidiary, Lincoln Natural Gas Company, Inc. and include all adjustments which are in the opinion of management, necessary for a fair statement of the financial position and results of operations. Because of seasonal and other factors, the earnings for the three months ending March 31, 1996 should not be taken as an indication for all or any part of the balance of 1996. 3. Cash Flow Information For the purposes of the Consolidated Balance Sheets and Consolidated Statements of Cash Flows, SIGECO considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. SIGECO, for the three months ended March 31, 1996 and 1995 paid interest (net of amounts capitalized) of $2,030,000 and $1,842,000, respectively, and income taxes of $729,000 and $289,000, respectively. The following changes in assets and liabilities were caused by dividending the nonregulated subsidiaries to SIGCORP and are noncash in nature. Deferred income taxes (29,783) Investments in Leveraged Leases 35,609 Investments in Partnerships 25,307 Partnership obligations (9,625) Other, net 3,771 9 4.Long-Term Debt On May 1, 1996, the interest rate on $31,500,000 of Adjustable Rate Pollution control bonds was changed from 4.60% to 4.0%. The new interest rate, 4.0% will be fixed through April 30, 1997. For financial statement presentation the $31,500,000 of Adjustable Rate Pollution Control bonds are shown as a current liability. 5.Operating Revenues - Accounting Change SIGECO previously recognized electric and gas revenues when customers were billed on a cycle billing basis. The utility service rendered after monthly meter reading dates through the end of a calendar month (unbilled revenues) became a part of operating revenues in the following month. To more closely match revenues with expenses, effective January 1, 1995, SIGECO changed its method of accounting to accrue the amount of revenue for sales unbilled at the end of each month. The cumulative effect of the change on prior years as of January 1, 1995, net of income taxes, was $6.3 million ($.40 per share), and was included in net income for the first quarter of 1995. 10 SOUTHERN INDIANA GAS AND ELECTRIC COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Effective January 1, 1996, a new holding company, SIGCORP, Inc. (SIGCORP) became the parent of Southern Indiana Gas and Electric Company (SIGECO), a regulated gas and electric utility which accounts for over 90% of SIGCORP's net income, and four of SIGECO's former wholly- owned nonregulated subsidiaries (see "Holding Company"). On January 1, 1996, SIGECO dividended to SIGCORP its four nonregulated subsidiaries. Earnings per share were $0.79 for the recent three-month period, compared to earnings of $0.60 per share before the cumulative effect of an accounting change for the first quarter of 1995. Net income for the three-month period ending March 31, 1995 included a one-time favorable adjustment, net of tax, of $6.3 million, or $.40 per share in recognition of the impact of SIGECO's change to the unbilled revenue method of accounting (see "Change in Accounting Method"). OPERATING REVENUES Electric revenues were up $6.5 million (11%) during the first quarter of 1996 compared to the same period in 1995, primarily due to increased sales to electric customers and to higher base retail rates. Although total system sales rose 6%, residential sales were 18% higher compared to the first quarter of 1995 reflecting temperatures which, when measured by heating degree days, were 23% colder than a year ago. Nonsystem sales, which typically have lower per unit margins than system sales, were up 15% due to SIGECO's continued aggressive marketing of electric power to nonassociated utilities. Electric revenues increased $1.4 million during the current quarter due to the third step of SIGECO's electric rate increase effective June 27, 1995, which raised retail rates approximately 2.05% overall. Other factors contributing to higher electric revenue for the period included the more favorable sales mix and higher average rates charged on sales to nonassociated utilities. The recovery of lower per unit fuel costs partially offset these increases in electric revenue. Changes in the cost of fuel are passed on to customers through commission approved fuel cost adjustments. The changes in electric revenue are shown below:
Revenue Increase (Decrease) From Corresponding Period in 1995 Three Months Ended 3-31-96 (in thousands) Change in sales volume $ 4,000 Effect of rate adjustments in sales to retail customers 1,400 Fuel and purchased power recovery (800) Other 1,950 $ 6,550 Increase in system sales (MWh) 65,073 Increase in nonsystem sales (MWh) 32,673
11 A 27% increase in gas sales and the recovery of higher unit costs of gas delivered to customers were the chief reasons for a $15.5 million increase in gas revenue during the current quarter. The colder winter weather was the primary cause of higher sales to residential and commercial customers, up 18% and 24%, respectively. Additionally, industrial sales were up significantly as certain transportation customers elected to purchase gas from SIGECO rather than from other sources. Average unit costs of gas sold, which are recovered from customers through commission approved gas cost adjustments, were 37% greater than those during the same period in 1995. The colder winter temperatures nationwide tightened spot market gas supplies, causing upward pressure on market prices during the first three months of 1996. The changes in gas revenues are shown below:
Revenue Increase From Corresponding Period in 1995 Three Months Ended 3-31-96 (in thousands) Change in sales volume $ 8,500 Cost of gas recovery 6,300 Other 700 $15,500 Increase in total throughput (MDth) 1,299
OPERATING EXPENSES Due to lower unit costs, the cost of fuel for electric generation and purchased electric energy was relatively unchanged during the current quarter despite a 7% increase in units delivered to customers. The significant increase in spot market prices and in deliveries to customers caused a $13 million (73%) increase in cost of gas sold during the first three months of 1996. During the current three month period, increases in other operation expenses reflected greater employee benefit costs and other administrative and general expenses and the February 1, 1995 commercial operation of SIGECO's $103 million investment to comply with the Clean Air Act Amendments of 1990, primarily its sulfur dioxide scrubber. (See "Clean Air Act" in Item 7, Management's Discussion and Analysis of Results of Operations and Financial Condition in SIGECO's 1995 Form 10- K report for further discussion.) In June 1995, SIGECO began expensing costs which had previously been deferred for postretirement benefits other than pensions (health care and life insurance) attributed to electric utility operations. SIGECO received approval from the Indiana Utility Regulatory Commission to recover such costs in retail electric rates. (See item (1)(j), "Postretirement Benefits Other Than Pensions" of Notes To Consolidated Financial Statements in SIGECO's 1995 Form 10-K report for further discussion.) Increased tree trimming and line clearance activity was the primary reason for a 6% increase in total maintenance expenses during the current period; production maintenance expenditures were unchanged from a year ago. The impact of lower depreciation rates placed in effect in June 1995 more than offset higher depreciation expense related to the February 1995 commercial operation of the new scrubber, resulting in a 5% decline in total depreciation expense during the first quarter of 1996. Federal and state income taxes were $3.9 million greater during the first quarter of 1996 compared to the same period in 1995 due to the higher 1996 pretax operating income and to a $1.2 million decrease in income taxes resulting from the settlement of SIGECO's IRS audit during the first quarter of 1995. 12 OTHER INCOME AND INTEREST CHARGES The decline in other income during the current period reflects the absence of the earnings of the four nonregulated subsidiaries which were dividended to SIGCORP on January 1, 1996. The 1996 and 1995 periods included January sales to another utility of SIGECO's allotment of "bonus" sulfur dioxide emission allowances (also called "extension allowances") granted by the Environmental Protection Agency. SIGECO has an agreement with the utility to sell to it essentially all of SIGECO's allotment of "bonus" allowances for the five year period beginning 1995. Interest and other charges were slightly higher during the current period due to lower capitalized interest resulting from completion of the scrubber. CHANGE IN ACCOUNTING METHOD Effective January 1, 1995, SIGECO adopted the unbilled revenue method of accounting to accrue the amount of revenue for sales delivered but unbilled at the end of each month to more closely match revenues with expenses. Previously, SIGECO recognized electric and gas revenues when customers were billed on a cycle billing basis, and the utility service rendered after monthly meter reading dates through the end of a calendar month became part of operating revenues in the following month. The cumulative effect of this change in accounting method as of January 1, 1995, net of income taxes, was $6.3 million (40 cents per common share) and is reported as a separate component of net income for 1995. HOLDING COMPANY On December 20, 1994, SIGECO's Board of Directors authorized the steps required for a corporate reorganization in which a holding company would become the parent of SIGECO. SIGECO's shareholders approved the reorganization at SIGECO's March 28, 1995 annual meeting, and approval by the Federal Energy Regulatory Commission and the Securities and Exchange Commission was granted November 7, 1995 and December 14, 1995, respectively. Effective January 1, 1996, the new holding company, SIGCORP, became the parent of SIGECO and four of SIGECO's former wholly-owned nonregulated subsidiaries: Energy Systems Group, Inc., Southern Indiana Minerals, Inc., Southern Indiana Properties, Inc. and ComSource, Inc. All of the shares of SIGECO's common stock were exchanged on a one-for one basis for shares of SIGCORP, while all of SIGECO's debt securities and all of its outstanding shares of preferred stock remain securities of SIGECO and are unaffected. The reorganization is in response to the changes created in the electric industry by the Energy Policy Act of 1992 and the need to respond quickly to the more competitive business environment. The new structure will buffer SIGECO and its customers from the effects of pursuing nonregulated opportunities while allowing SIGCORP to engage in closely related, but historically nonregulated, businesses. EARNINGS Earnings per share of common stock for the first quarter of 1996 increased 19 cents (32%) over earnings of 60 cents per share before the 40 cent per share adjustment for the cumulative effect of the accounting change during the first quarter of 1995. The increase in earnings before the adjustment for the accounting change was primarily due to greater weather-sensitive gas and electric sales, stronger sales to nonsystem electric customers, and higher per unit sales margins resulting from an approved increase in electric base retail rates and a more favorable sales mix, which were partially offset by the higher operating expenses and the absence of the earnings of the four nonregulated subsidiaries. 13 LIQUIDITY AND CAPITAL RESOURCES SIGECO's demand for capital is primarily related to its construction of utility plant and equipment necessary to meet customers' electric and gas energy needs, as well as environmental compliance requirements, and expenditures for its demand side management (DSM) programs. Construction expenditures (excluding allowance for other funds used during construction) and demand side management program expenditures incurred during the quarter ended March 31, 1996 totaled $6.4 million and were fully funded with internally generated cash. Cash provided from operations declined $6.8 million during the current three month period compared to the first quarter of 1995; and, cash used in investing and financing activities during 1996 increased $3.3 million due to the contribution of the nonregulated subsidiaries to SIGCORP. No financing activity occurred during the 1996 period. SIGECO anticipates continued financial stability during the remainder of 1996 and is presently faced with no liquidity problems. At this time, SIGECO estimates that its construction expenditures for the five year period 1996-2000 will total approximately $260 million, including approximately $25 million for the design and implementation of several comprehensive information systems which are necessary to better provide expanding customer service needs and to better manage SIGECO's resources, and approximately $17 million to develop and implement DSM programs; however, anticipated changes in the electric industry and other factors may require changes to the level of future DSM expenditures. (See "Demand Side Management" in Item 7, Management's Discussion and Analysis of Results of Operations and Financial Condition in SIGECO's 1995 Form 10- K report for further discussion). Although SIGECO expects the majority of the construction requirements and an estimated $83 million in debt security and other long-term obligation redemptions to be provided by internally generated funds, an additional $60-70 million of external financing is anticipated to meet such requirements. OTHER MATTERS On September 7, 1995, SIGECO petitioned the Indiana Utility Regulatory Commission to adjust existing gas rates and charges to reflect the cost of gas service currently being provided by SIGECO. Negotiations with the participating parties are continuing and an order by the Indiana Commission approving new gas rates and charges is expected during the third quarter of 1996. 14 PART TWO - OTHER INFORMATION Item 4.Submission of Matters to a Vote of Security Holders (a) The annual meeting of shareholders was held at 3:00 P.M. (CDT) on April 23, 1996, with the following actions taken: (b) The following two individuals were re-elected as directors of SIGECO for three year terms: Robert L. Koch, II and Jerry A. Lamb. The approval of merger of SIGECO's wholly-owned gas utility subsidiary, Lincoln Natural Gas Company, Inc. into SIGECO. The appointment of Arthur Andersen LLP as independent auditors of SIGECO for 1996 was ratified. (c) The following table shows the voting results as to each matter considered by the shareholders:
Item 1: Vote for Election of Directors Total Votes Cast: 15,825,531 Nominee Votes For Votes Withheld Robert L. Koch, II 15,825,187 344 Jerry A. Lamb 15,825,187 344
Item 2: Approval of merger of wholly-owned gas utility subsidiary into SIGECO Total Votes Cast: 15,813,919
For Against Abstain 15,813,169 544 206
Item 3: Ratification of Appointment of Auditors Total Votes Cast: 15,825,531
For Against Abstain 15,824,127 315 1,089
Item 5. Other Information NONE Item 6. Exhibits and Reports on Form 8-K NONE 15 SOUTHERN INDIANA GAS AND ELECTRIC COMPANY SIGNATURE 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 thereunto duly authorized. SOUTHERN INDIANA GAS AND ELECTRIC COMPANY (Registrant) /s/ S. M. Kerney S. M. Kerney Controller May 15, 1996 SOUTHERN INDIANA GAS AND ELECTRIC COMPANY INDEX Page No. Part I - Financial Information: Consolidated Statements of Income for the Three Months ended March 31, 1996 and 1995 2 Consolidated Statements of Cash Flows for the Three Months ended March 31, 1996 and 1995 3 Consolidated Balance Sheets at March 31, 1996 and December 31, 1995 4-5 Consolidated Statements of Capitalization at March 31, 1996 and December 31, 1995 6 Consolidated Statements of Retained Earnings for the Three Months ended March 31, 1996 and 1995 7 Notes to Consolidated Financial Statements 8-9 Management's Discussion and Analysis of Financial Condition and Results of Operations 10-13 Part II - Other Information 14 Signature 15
EX-27 2
UT 1,000 3-MOS DEC-31-1996 MAR-31-1996 PER-BOOK 675,244 5,894 99,300 51,173 0 831,611 78,258 0 204,788 283,046 0 19,514 251,616 0 22,500 0 39,500 0 0 0 215,435 831,611 106,477 6,515 83,632 90,147 16,330 1,540 17,870 5,194 12,676 274 12,402 6,814 4,680 28,360 0.79 0.79
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