-----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, Ej3tQOt3ddcaM7vZ59RHoZv78ZE4AB5/m9uFiHZH8KvPZYczVEiZzclMRN7ppp/9 1bUOipmdXjAP3w47ukhlxQ== 0000092195-00-000021.txt : 20000428 0000092195-00-000021.hdr.sgml : 20000428 ACCESSION NUMBER: 0000092195-00-000021 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000427 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000427 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: 8-K SEC ACT: SEC FILE NUMBER: 001-03553 FILM NUMBER: 610316 BUSINESS ADDRESS: STREET 1: 20 NW FOURTH ST CITY: EVANSVILLE STATE: IN ZIP: 47741-0001 BUSINESS PHONE: 8124655300 8-K 1 SIGECO'S 1ST QTR TELECONFERENCE SCRIPT April 27, 2000 Securities and Exchange Commission Operations Center 6432 General Green Way Alexandria, VA 22312-2413 Gentlemen: We are transmitting herewith Southern Indiana Gas and Electric Company's Current Report on Form 8-K. Very truly yours, /s/James A.Hummel, II James A.Hummel, II JH:tmw 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) April 27, 2000 SOUTHERN INDIANA GAS AND ELECTRIC COMPANY Indiana 1-3553 35-0672570 (State of incorporation) (Commission File Number) (I.R.S. Employer 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 April 27, 2000, Southern Indiana Gas and Electric Company conducted their 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. Actual results could differ materially from those that will be projected in this script. Item 7. Exhibits 99 Analyst Teleconference Script - First Quarter 2000 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 thereunto duly authorized. SOUTHERN INDIANA GAS AND ELECTRIC COMPANY April 27, 2000 /s/ M. Susan Hardwick M. Susan Hardwick Vice President and Controller EX-99 2 SIGECO'S TELECONFERENCE SCRIPT EXH 99 VECTREN CORPORATION 1st Quarter Results Moderator: Steve Schein April 27, 2000, 8:30 a.m. CDT Operator: Good day everyone and welcome to Vectren Corporation's first quarter conference call. This call is being recorded and is copyrighted material. Today's presentation will be available for rebroadcast through April 30 through May 4, 2000, dialing (719) 457-0802. The confirmation number is 163432. Now 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 first 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 first 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 8K to be filed with the Securities and Exchange Commission on April 27, 2000. Today you will hear from 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 Andy Goebel, President and Chief Operating Officer, Ron Christian, Senior Vice President, General Counsel and Secretary, and Susan Hardwick, Vice President and Controller. This morning, Jerry will provide a brief update regarding our pending acquisition of Dayton Power and Light Company's gas properties and discuss our first quarter results. Following Jerry, Carl will provide a general update regarding our non- regulated results. Jerry will then close with 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 Jerry to begin his remarks. J. Benkert: Thank you Steve and good morning everyone. Well, it certainly has been an interesting three weeks. We opened trading on the NYSE on April 3, closing at 20 3/16ths, and expected to trade an average of 75,000 shares a day. We have closed as high as 20 3/8ths and as low as 15 3/4 with trading volumes over 350,000 shares on April 14th and 17th. As you probably know, on the later date, we led the Big Board in percentage gain. Recently, it appears the roller coaster ride may have stabilized some, with Vectren settling into a somewhat more predictable level of trading volumes. The merger close is now behind us and we are moving forward to aggressively manage integration and meet our earnings targets. The pending acquisition of the gas distribution assets from Dayton Power and Light is also progressing well. We have had numerous discussions with the Ohio and federal regulators and believe the approval process remains manageable. Transition teams are orchestrating the integration planning, utilizing the knowledge and expertise we gained throughout the Vectren merger process. We remain confident we will be operationally ready to close the transaction mid year upon receipt of all regulatory approvals. As Steve mentioned, you should have received the Vectren quarterly financial report that includes highlights and financial statements for the quarter and 12 month periods ended March 31. This is Vectren's first release of quarterly earnings. This report represents combined Indiana Energy and SIGCORP results. We will be filing an 8-K that will provide calendar year 1999, 1998 and 1997 combined operating results for Vectren. This filing will also include a MD & A and footnotes. For the first quarter of 2000, consolidated net income before merger related charges was $41.4 million and $.68 per share, as compared to $40.7 million and $.66 for the same quarter last year. After reflecting the merger related charges, reported net income and earnings per share for the current period were $22. 1 million and $.36 per share, respectively. Merger costs incurred at March 31 totaled $27.2 million, $19.3 million net of tax or $.32 per share. Vectren expects to realize net merger savings of nearly $200 million over ten years from our elimination of duplicate corporate and administrative programs and greater efficiencies in operations, business processes and purchasing. More than one third of the first quarter charge relates to transaction costs. In addition, costs were incurred related to severance and other merger integration activities. The continued merger integration activities, which will contribute to the net merger savings, will be substantially complete by 2001. Weather has impacted our first Quarter utility margins. For the quarter, weather was 17 percent warmer than normal and 10 percent warmer than the same period last year. Gas utility margins decreased by $5.4 million and electric utility margins increased by about $.5 million. While we experienced additional residential and commercial customer growth, this was more than offset by the warmer than normal weather, which impacted earnings by 5 to 7 cents per share vs. last year. You may also recall that prior year margins for the quarter included $3.2 million or about $.03 per share for a one-time sale of native gas. Operation and maintenance expenses increased $1.6 million and depreciation and amortization were up quarter over quarter by 7% or approximately $1.5 million, due to normal additions to plant. Taxes other than income taxes were up about $300,000 or 4% due to higher gross receipts and property taxes. Equity in earnings of unconsolidated affiliates was down about $1.7 million, of which most of this decline was due to lower earnings from ProLiance Energy. Carl previously brought to your attention that we expected to recognize lower earnings due to timing differences related to the ProLiance's net position on financial instruments held to hedge storage inventories. Carl will discuss this issue further in just a moment. Other income increased by $10.5 million pre-tax. A large part of the increase was attributable to the restructuring of SIGCORP's investment in SIGECOM, an integrated communication provider, which created a $4.9 million after- tax gain or 8 cents per share. Interest expense increased by approximately $2.1 million due to additional debt outstanding related to additional investments in 1999 at SIGCORP's financial investment subsidiary, Southern Indiana Properties, and to some extent due to higher interest rates. Income taxes were down by $8.6 million principally due to lower earnings. First Quarter 2000 income taxes do however recognize that an estimated $5 to $7 million of the merger expenses recorded in the first quarter, may not be deductible. Our quarterly earnings of $.36 are relatively strong considering merger related costs of $.32 and weather which may have cost us as much as $.11 to $.13 on the quarter. Recognizing the potential impact of this warmer than normal weather, we will manage controllable costs while staying focused on now completing the DPL acquisition and meeting our growth targets. With that, I will turn it over to Carl. C. Chapman: Thanks, Jerry. I would like to expand on Vectren's non- regulated results for the first quarter and provide some guidance for 2000 non-regulated earnings. As we indicated in New York, we expect non-regulated earnings to contribute 35-40% of Vectren's income by 2004. Over the upcoming five- year period, Energy Services is expected to contribute nearly 40% of those earnings, Financial Group will contribute approximately 20%, Generation Services, Resources, and Utility Services will contribute about 10% each and Ventures and Communications about 5% each. As Jerry discussed, our share of pre-tax earnings from ProLiance are down from the prior year due primarily to the timing of various issues. Those issues include nonrecurring gains on storage gas in 1999 that were discussed with Indiana Energy analysts at this time last year, the recognition of hedging losses in a different quarter than the gain on the already committed physical sales, and the restructuring of several customer transportation contracts that move earnings into summer quarters, that should make earnings less seasonal going forward. In the future, we expect that FAS 133 will allow less volatility in our marketers' quarterly earnings by better matching hedging and physical contracts. Even without those changes, however, we still believe the Energy Service Group should be at target calendar year. Jerry also commented that Communications restructuring of its investment in SIGECOM resulted in a one-time gain of $4.9 million after-tax gain or 8 cents per share. While not directly impacting earnings, we are excited about the results at SIGECOM. They now have over 30,000 revenue generating units and are making 100 installations per day. We also continue to discuss additional sites with Utilicom Networks management and the new majority owner, Blackstone Group. Financial Group's earnings increased nearly 2 cents per share over last year primarily due to Southern Indiana Properties' 1999 investments. We are also pleased with the improving results at Vectren Synfuels. Production of briquettes continues to improve and nearly 250,000 tons were sold during the first quarter resulting in slightly better than break even earnings for the quarter. The coal market, however, does continue to be very soft. Vectren Ventures has now invested approximately $8.5 million of its $10 million commitment in Haddington Energy Partners. Six investments in portfolio companies have been made to date. Haddington continues to invest in leading edge technology in the evolving utility industry. These investments include high deliverability gas storage, compressed air energy storage, thermally-balanced cogeneration, gathering and processing in the Powder River Basin, rollups of Gulf Coast gathering and processing and most recently fuel cells and hydrogen generators. We feel that Haddington Energy Partners, LP is unique because of the majority position it generally takes in its portfolio companies, and that it places successful and experienced management in each of the companies. Ventures is directly involved in these investments, as we maintain an investment committee board seat at Haddington Energy Partners and board representation or observation rights in the larger operating companies. We are confident in Haddington's investment strategy, as well as the experience of their management and our investment partner, Chase Capital Partners. Earnings for 2000 for Vectren are on target with good earnings growth projected through 2004. Non-regulated earnings for the first quarter prove the strength of our investment strategy. First quarter earnings normalized for the one-time gain from the Sigecom investment restructuring and the merger transaction expenses show an increase of nearly 2 cents a share over the same period last year, even with the unusual year to year comparisons for Energy Services. We continue to focus on non-regulated investments that complement our core competencies. Moreover, we feel we have positioned our investments to develop further and provide opportunities for Vectren to achieve its earnings growth targets in the future. I will now turn it back to Jerry. J. Benkert: I would like to briefly discuss our expectations for 2000. Last month in New York we laid out our growth strategy through 2004. On a combined basis, Vectren's 1999 pro forma earnings per share were $1.48. We attributed 1999 warmer than normal weather to have a $.13 to $.15 per share impact, for an adjusted 1999 base of $1.62. Growing earnings, consistent with our targeted 5 year average annual compound growth rate of 10%, would produce a reasonable range of $1.73 to $1.83 for 2000 and $2.60 to $2.65 for 2004. We also indicated that 2000 first quarter weather at that time was much warmer than normal and it has caused an $.11 to $.13 impact to earnings to date. In addition to the 2000 one-time merger charges reported in the first quarter of $.32, we still expect annual charges to be in the range of $.55 to $.60. Excluding first quarter weather, the Utility Group's annual contribution to earnings is on target and with normal weather or even a hot summer throughout the remainder of the year, management of controllable expenses will allow us to achieve our targets. As Carl stated, the non-regulated group remains on target to achieve its expected results. Expected earnings before merger related charges for 2000 remain in the range of $1.60 to $1.65, which does not include the possibility of some recovery of margins for weather. 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. -----END PRIVACY-ENHANCED MESSAGE-----