SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
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AMENDMENT NO. 1 TO
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 27, 2001
INDIANA GAS COMPANY, INC.
(Exact Name of Registrant as Specified in Its Charter)
INDIANA
(State or Other Jurisdiction of Incorporation)
1-6494 35-0793669
------ ----------
(Commission File Number) (IRS 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) 491-4000
Item 7. Financial Statements and Exhibits.
On October 31, 2000, Vectren Corporation, the public utility holding company of
Indiana Gas Company, Inc. (the company), completed the acquisition of the
natural gas distribution assets from The Dayton Power and Light Company, a
wholly owned subsidiary of DPL, Inc. The business will operate under the name
Vectren Energy Delivery of Ohio, Inc. (VEDO). Under the acquisition structure,
the company holds a 47 percent undivided ownership interest and VEDO has a
53percent undivided ownership interest. This Form 8-K/A amends the Current
Report on Form 8-K filed by the company on January 16, 2001 to provide
additional information on the calculation of pro forma interest expense in Note
3b, consideration paid and transaction costs incurred in Note 2a.
The following financial statement is included:
Pro forma financial statements of Indiana Gas Company, Inc. for the year ended
December 31, 1999 and as of September 30, 2000 and for the nine months ended
September 30, 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 hereunto duly authorized.
INDIANA GAS COMPANY, INC.
(Registrant)
Dated: August 27, 2001 By: /s/ M. Susan Hardwick
-------------------------
M. Susan Hardwick
Vice President and Controller
Indiana Gas Company, Inc.
Index
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Unaudited Pro Forma Combined Financial Statements Page
----
Introduction 1
Unaudited Pro Forma Combined Balance Sheet as
of September 30, 2000 2
Unaudited Pro Forma Combined Statement of Income
for the Year Ended December 31, 1999 3
Unaudited Pro Forma Combined Statement of Income
for the Nine Months Ended September 30, 2000 4
Notes to Pro Forma Financial Statements 5
Indiana Gas Company, Inc.
Pro Forma Financial Information
The accompanying financial statements present the unaudited pro forma balance
sheet as of September 30, 2000 and the unaudited pro forma statement of income
for the nine months ended September 30, 2000 and for the year ended December 31,
1999.
On October 31, 2000, Vectren Corporation, the parent of Indiana Gas Company,
Inc. (Indiana Gas), completed its acquisition of the natural gas distribution
assets of The Dayton Power and Light Company (Acquisition) for approximately
$465 million pursuant to an Asset Purchase Agreement dated December 14, 1999.
Vectren acquired the gas utility assets as a tenancy in common through two
separate wholly-owned subsidiaries. Operations will be conducted under the name
Vectren Energy Delivery of Ohio, Inc. (VEDO). Under the acquisition structure,
Indiana Gas holds a 47 percent undivided ownership interest and VEDO has a 53
percent undivided ownership interest.
The unaudited pro forma balance sheet as of September 30, 2000 is presented as
if the Acquisition had occurred on September 30, 2000. The pro forma statement
of income for the nine month period ended September 30, 2000 and for the year
ended December 31, 1999 are presented as if the Acquisition had occurred at
January 1, 1999. Indiana Gas' ownership is reflected as being accounted for on
the equity method.
Preparation of the pro forma financial information was based on assumptions
deemed appropriate by management. The pro forma information is unaudited and is
not necessarily indicative of the results which actually would have occurred if
the transaction had been consummated at the beginning of the period presented,
nor does it purport to represent the future financial position and results of
operation for future periods. The pro forma information should be read in
conjunction with the audited historical financial statements of Indiana Gas
filed on Form 10-K/A for the year ended December 31, 1999 and the unaudited
financial statements of Indiana Gas filed on Form 10-Q for the fiscal quarter
ended September 30, 2000.
INDIANA GAS COMPANY, INC. AND SUBSIDIARY COMPANIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
As of September 30, 2000
(In Thousands)
Pro forma Adjustments
---------------------
Indiana
Indiana Gas Dayton Gas
Historical Acquisition Pro Forma
ASSETS ---------- ----------- ---------
Utility Plant:
Original cost $1,039,176 $ - $1,039,176
Less: accumulated depreciation
and amortization 425,599 - 425,599
---------- --------- ----------
Net utility plant 613,577 - 613,577
---------- --------- ----------
Current Assets:
Cash and cash equivalents 4,924 (2,724)(2b) 2,200
Accounts receivable, less reserves of $849 22,304 - 22,304
Accrued unbilled revenues 8,669 - 8,669
Inventories 10,400 - 10,400
Prepaid gas delivery service 46,788 - 46,788
Prepaid Taxes 16,614 - 16,614
Recoverable fuel and natural gas costs 16,218 - 16,218
Prepayments and other current assets 13,531 - 13,531
---------- --------- ----------
Total current assets 139,448 (2,724) 136,724
---------- --------- ----------
Other Assets:
Investment in unconsolidated corporation - 220,805 (3a) 220,805
Unamortized debt costs 11,201 - 11,201
Regulatory income tax asset 528 - 528
Other 2,721 - 2,721
---------- --------- ----------
Total other assets 14,450 220,805 235,255
---------- --------- ----------
TOTAL ASSETS $ 767,475 $ 218,081 $ 985,556
========== ========= ==========
The accompanying notes are an integral part of these pro forma combined
financial statements.
INDIANA GAS COMPANY, INC. AND SUBSIDIARY COMPANIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
As Of September 30, 2000
(In Thousands)
Pro forma Adjustments
---------------------
Indiana Gas Dayton Indiana Gas
Historical Acquisition Pro Forma
SHAREHOLDERS' EQUITY AND LIABILITIES ---------- ----------- ----------
Capitalization:
Common Stock and paid-in capital $142,995 $ - $142,995
Retained earnings 84,598 - 84,598
-------- -------- --------
Total common shareholders' equity 227,593 - 227,593
Long-term debt, net of current maturities 211,274 - 211,274
-------- -------- --------
Total capitalization 438,867 - 438,867
-------- -------- --------
Commitments and Contingencies
Current Liabilities
Notes payable 142,784 29,621 (2c) 172,405
Notes payable - affiliated company - 188,460 (2c) 188,460
Accounts payable 38,884 - 38,884
Refunds to customers and customer
deposits 12,529 - 12,529
Accrued taxes 9,809 - 9,809
Accrued interest 6,637 - 6,637
Other current liabilities 15,015 - 15,015
-------- -------- --------
Total current liabilities 225,658 218,081 443,739
-------- -------- --------
Deferred Credits and Other Liabilities:
Deferred income taxes 55,254 - 55,254
Accrued postretirement benefits other
than pensions 30,291 - 30,291
Unamortized investment tax credits 7,455 - 7,455
Other 9,950 - 9,950
-------- -------- --------
Total deferred credits and other
liabilities 102,950 - 102,950
-------- -------- --------
TOTAL SHAREHOLDERS' EQUITY
AND LIABILITIES $767,475 $218,081 $985,556
======== ======== ========
The accompanying notes are an integral part of these pro forma combined
financial statements.
INDIANA GAS COMPANY, INC. AND SUBSIDIARY COMPANIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
For The Year Ended December 31, 1999
(In Thousands)
Pro forma Adjustments
---------------------
Indiana
Gas Dayton
Historical Acquisition
---------- -----------
OPERATING REVENUES $431,361 $ -
COST OF GAS 226,817 -
-------- --------
Total Margin 204,544 -
-------- --------
OPERATING EXPENSES:
Operation and maintenance 91,829 -
Depreciation and amortization 34,585 -
Income tax expense (benefit) 16,734 -
Taxes other than income taxes 15,695 -
-------- --------
Total operating expenses (benefit) 158,843 -
-------- --------
OPERATING INCOME 45,701 -
OTHER INCOME - NET 1,010 -
-------- --------
INCOME BEFORE INTEREST 46,711 -
INTEREST EXPENSE 16,969 -
-------- --------
INCOME (LOSS) BEFORE EQUITY IN INCOME OF
UNCONSOLIDATED INVESTMENT 29,742 -
EQUITY IN INCOME OF UNCONSOLIDATED
INVESTMENT - 8,457
-------- --------
NET INCOME (LOSS) $ 29,742 $ 8,457
======== ========
INDIANA GAS COMPANY, INC. AND SUBSIDIARY COMPANIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
For The Year Ended December 31, 1999
(In Thousands)
Pro forma Adjustments
---------------------
Indiana
Acquisition Gas
Adjustments Pro Forma
----------- ---------
OPERATING REVENUES $ - $ 431,361
COST OF GAS - 226,817
--------- ---------
Total Margin - 204,544
--------- ---------
OPERATING EXPENSES:
Operation and maintenance - 91,829
Depreciation and amortization - 34,585
Income tax expense (benefit) (4,580) (3c) 12,154
Taxes other than income taxes - 15,695
--------- ---------
Total operating expenses (benefit) (4,580) 154,263
--------- ---------
OPERATING INCOME 4,580 50,281
OTHER INCOME - NET - 1,010
--------- ---------
INCOME BEFORE INTEREST 4,580 51,291
INTEREST EXPENSE 13,085 (3b) 30,054
--------- ---------
INCOME (LOSS) BEFORE EQUITY IN INCOME OF
UNCONSOLIDATED INVESTMENT (8,505) 21,237
EQUITY IN INCOME OF
UNCONSOLIDATED INVESTMENT (1,524) (3d) 6,933
--------- ---------
NET INCOME (LOSS) $ (10,029) $ 28,170
========= =========
The accompanying notes are an integral part of these pro forma combined
financial statements.
INDIANA GAS COMPANY, INC. AND SUBSIDIARY COMPANIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME `
For Nine Months Ended September 30, 2000
(In Thousands)
Pro forma Adjustments
---------------------
Indiana
Gas Dayton
Historical Acquisitions
---------- ------------
OPERATING REVENUES $ 333,338 $ -
COST OF GAS 192,849 -
--------- ---------
Total Margin 140,489 -
--------- ---------
OPERATING EXPENSES:
Operation and maintenance 72,908 -
Merger Costs 15,726 -
Depreciation and amortization 27,329 -
Income tax expense (benefit) 689 -
Taxes other than income taxes 11,080 -
--------- ---------
Total operating expenses (benefit) 127,732 -
--------- ---------
OPERATING INCOME 12,757 -
OTHER INCOME - NET 1,279 -
--------- ---------
INCOME BEFORE INTEREST 14,036 -
INTEREST EXPENSE 15,422 -
--------- ---------
INCOME (LOSS) BEFORE EQUITY IN INCOME
OF UNCONSOLIDATED INVESTMENT (1,386) -
EQUITY IN INCOME OF UNCONSOLIDATED
INVESTMENT - 7,123
--------- ---------
NET INCOME (LOSS) $ ( 1,386) $ 7,123
========= =========
INDIANA GAS COMPANY, INC. AND SUBSIDIARY COMPANIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME `
For Nine Months Ended September 30, 2000
(In Thousands)
Pro forma Adjustments
---------------------
Indiana
Acquisition Gas
Adjustments Pro Forma
----------- ---------
OPERATING REVENUES $ - $ 333,338
COST OF GAS - 192,849
--------- ---------
Total Margin - 140,489
--------- ---------
OPERATING EXPENSES:
Operation and maintenance - 72,908
Merger Costs - 15,726
Depreciation and amortization - 27,329
Income tax expense (benefit) (3,435)(3c) (2,746)
Taxes other than income taxes - 11,080
--------- ---------
Total operating expenses (benefit) (3,435) 124,297
--------- ---------
OPERATING INCOME 3,435 16,192
OTHER INCOME - NET - 1,279
--------- ---------
INCOME BEFORE INTEREST 3,435 17,471
INTEREST EXPENSE 9,814 (3b) 25,236
--------- ---------
INCOME (LOSS) BEFORE EQUITY IN INCOME
OF UNCONSOLIDATED INVESTMENT (6,379) (7,765)
EQUITY IN INCOME OF UNCONSOLIDATED
INVESTMENT (1,143)(3d) 5,980
--------- ---------
NET INCOME (LOSS) $ (7,522) $ (1,785)
========= =========
The accompanying notes are an integral part of these pro forma combined
financial statements.
INDIANA GAS COMPANY, INC. AND SUBSIDIARY COMPANIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
1. Basis of Presentation
Vectren Corporation (Vectren) is a public utility holding company whose
wholly-owned subsidiary, Vectren Utility Holdings, Inc. (VUHI), is the holding
company of Vectren's two operating public utilities, Indiana Gas Company, Inc.
(Indiana Gas) and Southern Indiana Gas and Electric. On October 31, 2000,
Vectren completed its acquisition of the natural gas distribution assets of The
Dayton Power and Light Company (Acquisition) for approximately $465 million
pursuant to an Asset Purchase Agreement dated December 14, 1999. Vectren
acquired the gas utility assets as a tenancy in common through two separate
wholly-owned subsidiaries. Operations will be conducted under the name Vectren
Energy Delivery of Ohio (VEDO). Under the acquisition structure, Indiana Gas
holds a 47 percent undivided ownership interest and VEDO has a 53 percent
undivided ownership interest.
The accompanying combined pro forma financial statements give effect to Indiana
Gas' ownership interest in the Acquisition. The unaudited pro forma balance
sheet as of September 30, 2000 is presented as if the Acquisition had occurred
on September 30, 2000. The pro forma statement of income for the nine month
period ended September 30, 2000 and for the year ended December 31, 1999 are
presented as if the Acquisition had occurred at January 1, 1999. Indiana Gas'
ownership is reflected as being accounted for on the equity method.
2. Proforma Adjustments to Balance Sheet
(a) Pro forma adjustment to reflect Indiana Gas' 47 percent ownership interest
in the acquired net assets:
Tangible assets acquired $278,080
Liabilities assumed (7,881)
--------
270,199
Goodwill 199,600
--------
$469,799
Indiana Gas' ownership 47%
--------
Equity Investment in Unconsolidated
Corporation $220,805
========
The total cash paid by Indiana Gas was $218,081,000 plus liabilities assumed of
$2,724,000. The purchase was financed primarily with short-term debt. The
transaction costs totaled $5,818,000 consisting primarily of investment banker
fees (approximately $3.6 million) and accounting and legal fees (approximately
$2.2 million), 47% of which was paid by Indiana Gas.
(b) Pro forma adjustment to reflect the cash payment for Indiana Gas'
portion of the transaction costs.
(c) Pro forma adjustment to reflect the debt required to fund Indiana Gas'
ownership interest in the net assets. Indiana Gas funded its portion of
the acquisition with $188,460 of intercompany borrowings from VUHI and
$29,621 of commercial paper.
3. Pro Forma Adjustments to Income Statements
(a) Pro forma adjustment to reflect Indiana Gas' 47 percent ownership
interest in the acquired net assets. For the purpose of these pro forma
income statements, 47 percent of the net income of Dayton Power and
Light Company's natural gas retail distribution business has been
reflected as the equity in VEDO's net income.
(b) Pro forma adjustment to reflect the interest expense on debt required
to fund Indiana Gas' ownership interest in the acquired net assets.
Short-term debt of $218,081 was borrowed at a rate of approximately 6.0
percent per annum based upon Indiana Gas' composite average short-term
borrowing rate at the date of the Acquisition (see 2C above).
(c) Pro forma adjustment to reflect the income tax benefit of the interest
expense on a combined federal and state statutory rate of 35 percent.
(d) Pro forma adjustment to reflect Indiana Gas' equity in the amortization
of the goodwill, net of tax. Recorded goodwill of $199,600 will be
amortized over a period of 40 years.