_________________________________________________________________
_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
March 23, 2000
VECTREN CORPORATION
(Exact name of registrant as specified in its charter)
Indiana 333-90763 35-2086905
(State of incorporation)(Commission File Number)(I.R.S. Employer
Identification No.)
20 N.W. Fourth Street 47741
Evansville, Indiana (Zip Code)
(Address of principal
executive offices)
Registrant's telephone number, including area code (317) 926-3351
_________________________________________________________________
_________________________________________________________________
Item 5. Other Events.
On March 23, 2000, representatives of Vectren Corporation (the
"Corporation") a made presentation industry analysts. Pursuant to
General Instruction F to Form 8-K, the text of the presentation is
incorporated herein by reference and is attached hereto.
Item 7. Exhibits.
(c) Exhibits.
The following exhibits are filed as a part of this report:
Exhibit
Number Description
99.1 Presentation to Industry Analysts
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.
VECTREN CORPORATION
Dated: March 24, 2000
By: /s/ Niel C. Ellerbrook
_____________________________
Niel C. Ellerbrook
President
EXHIBIT LIST
Exhibit
Number Description Page
99.1 Presentation to Industry Analysts
March 23, 2000 Presentation to Industry Analysts
<PAGE>1
Introduction
<PAGE>2
Delivering What we promise.
And more.
NYSE:VVC
New York, NY
March 23, 2000
<PAGE>3
Vectren Presenters and Resources
Niel Ellerbrook
Chairman and CEO
Andy Goebel
President and COO
Carl Chapman
EVP and President
Vectren Enterprises, Inc.
Jerry Benkert
EVP and CFO
Gordon Hurst
EVP and President Vectren Utility Holdings, Inc.
Ron Christian
Senior VP, General Counsel
& Secretary
Tim Burke
VP and Treasurer
Jeff Whiteside
VP - Corporate Communications
Steve Schein
VP - Investor Relations
<PAGE>4
Safe Harbor Statement
Certain subjects, including subjects pertaining to our growth
strategy, may contain forward-looking statements. The actual
results could differ materially from those that will be projected
in this presentation and subsequent discussion. Additional
information concerning factors that could cause actual results to
differ materially from the information provided to you is readily
available with the Securities and Exchange Commission.
<PAGE>5
Vectren Corporation
<PAGE>6
Presentation Overview
* Who we are today
* Growth strategies
* A closer look at operations
* Financial performance and outlook
<PAGE>7
A Merger of Equals
IEI
Indiana Energy
VECTREN
SIGCORP
<PAGE>8
Vectren Combined Service Area
* Covers about two-thirds of Indiana
* Serves 650,000 gas and electric customers
Map of Indiana showing service area
<PAGE>9
Merger Terms
* Tax-free, stock-for-stock transaction, pooling of interests
* Exchange ratio:
- IEI shareholders will receive 1 new share
- SIGCORP shareholders will receive 1.333 new shares
<PAGE>10
Merger Benefits
* Earnings immediately accretive
- excluding non-recurring merger costs
* Net synergy savings of nearly $200 million over 10 years
* Marriage of strengths, superior credit ratings
* Greater access to capital markets
* Improved liquidity of stock
* Strong commitment to dividend growth
<PAGE>11
Transition
[Diagram of transition]
Integration Leaders <----> Communications
- Operations
- Finance
- Support Service
- IT
<PAGE>12
Vectren Organization
Financial Reporting
[Diagram of organization]
Vectren Corporation
+--------------------------------+
Vectren Utility Holdings Vectren NonReg. Group
- Indiana Gas - Vectren Generation Services
- SIGECO - Vectren Enterprises
- Vectren Ohio - Vectren Resources
<PAGE>
<PAGE>13
Vectren Management Team
[Diagram of Management Team]
<TABLE>
<CAPTION>
<C> <C> <C> <C> <C> <C>
Chairman & CEO
Neil Ellerbrook
+---------------------------------+---------------------------+-------------+
EVP & CFO EVP & Pres. Pres. & COO Senior VP VP, Government
Jerry Benkert Vectren Enterprises Andy Goebel General Counsel Affairs
Carl Champan ! & Secretary Gregg McManus
! Ron Christian
!
+-----------!-----------+
EVP & Pres. Senior VP, Human
Vectren Utility Resources & Admin.
Holdings Dick Lynch
Gordon Hurst
</TABLE>
<PAGE>14
Vectren Purpose
We enthusiastically provide energy and related applied technology
solutions that make our customers productive, comfortable and
secure.
<PAGE>15
Vectren Values
* Customer focus
* Teamwork
* Integrity
* Reasonable risk-taking
* Entrepreneurial spirit
* Corporate citizenship
* Continuous improvement
* Superior returns
<PAGE>16
Vectren Growth Strategies
* Pursue merger, acquisition, alliance opportunities
* Expand the utility distribution base
* Leverage customer relationships
* Tie incentive compensation to SBU performance
* Leverage existing skills through new, similar businesses
<PAGE>17
Where We Start Today
Balanced Earnings Mix
Gas 42%
Electric 42%
Non-Regulated 16%
* Gas and electric are nearly equal
Pie Diagram of Earnings
<PAGE>18
Vectren Financial Goals
Over the next 5 years:
* 10% annual compounded EPS growth target
* Utility: 4% annual compounded growth
* Non-regulated:
* 30% annual compounded growth
* 35-40% contribution by year 5
<PAGE>19
Vectren Financial Goals
By 2004. . .
Utility earnings 60-65%
Non-regulated contribution 35-40%
Pie diagram showing projected distribution of earnings by 2004
<PAGE>20
Vectren: Positioned to deliver
* A strategic business combination
* Strong regulated and non-regulated growth opportunities
* Competitive gas, electric businesses meet customer needs
* Immediately accretive, excluding Non-recurring charges
* Creates long-term shareholder value through an income/growth
strategy
<PAGE>21
VECTREN
NYSE:VVC
Utility Group
<PAGE>22
Going Forward
* Closing date: March 31, 2000
* Teams in place/Approvals in place
* Focused on running business
* First Quarter reported as Vectren
* April 3 trading on NYSE
*We're ready to go
<PAGE>23
Issues Surrounding Merger Costs
* Accounting assumptions and theory
* Accuracy of cost estimates
* Status of regulatory plan/strategy
<PAGE>24
Merger Costs Categories
* Transaction
* Transition
* Relocation
* Severance
* Filing fees
* Consulting
<PAGE>25
Estimated Merger & Acquisition Costs
* Vectren O&M estimate of $30-35 million
* Duplicate systems costs charged off as incremental
depreciation $20 million
* Estimated Capital Investment of nearly $15 million for
systems
* DPL $15 million
<PAGE>26
Estimated Merger Timing & Costs
($ in millions) Vectren DPL Total
- ------------------- ---------- --------- ---------
At March 31 $23-28 $23-28
At June 30 $7 $7
April-Dec. 20 $18 $6 $24
2001 $9 $2 $11
------ ------ -------
$50-55 $15 $65-70
<PAGE>27
Vectren Utility Holdings
Vectren Corporation
!
!
Vectren Utility Holdings
!
+-----------------------!-----------------------+
Indiana Gas SIGECO Vectren Ohio*
*Target close: 6-30-00
Organizational diagram showing Vectren Utility Holdings
<PAGE>28
Vectren Utility Operations
in Indiana and Ohio
Map showing service areas in Indiana and Ohio including the cities
of Indianapolis, Evansville and Dayton.
<PAGE>29
Utility Earnings Growth
1999 2000 2001 2002 2003 2004
------- ------ ------ ------ ------ ------
Utility 78 80 83 87 91 97
Non-Utility 17 27 36 46 56 65
Graph showing 4% Growth between 1999 and 2004
<PAGE>30
SIGECO Territory
Indiana Map showing territory in the Southwest region of Indiana
<PAGE>31
SIGECO Structure
SIGECO
!
+---------------!----------------+
Power Supply Energy Delivery
Diagram showing SIGECO structure
<PAGE>32
Power Supply
SIGECO
is low cost provider...
- Effective cost controls and low production costs
- Low embedded generation cost ($300 / kW)
- Low coal costs
Total Power Production Costs
(Cents per KWh)
1995 1996 1997 1998 1999
------- ------- ------- ------- -------
2.10 1.94 1.80 1.97 1.99
Average Coal Costs
(Cents per KWh)
1995 1996 1997 1998 1999
------- ------- ------- ------- -------
1.41 1.24 .98 .95 1.01
Two Bar graphs showing difference in cost per year
<PAGE>33
Power Supply-Generation Assets
1999
Capacity Capacity
Existing (MW) Year in Service Factor
- ---------------- ------- ------------ -------
Culley 1 46 1955 69%
Culley 2 110 1966 69%
Culley 3 250 1973 76%
Warrick 135 1970 70%
Brown 1 250 1979 62%
Brown 2 250 1986 75%
------ -------- ------
Total Coal-Fired 1,041 71%
Peaking (5 units) 215 Various 4%
-------
1,256
<PAGE>34
Vectren Generation Services
* Vectren Fuels owns coal reserves and contracts the mining
operation to a third party mining company
* Vectren Fuels will provide over 75% of SIGECO's coal
requirements from its nearby Southwest Indiana mines
<PAGE>35
Vectren Generation Services
* All coal contracts have received regulatory approvals
* Southern Indiana Minerals (SIMI) recycles scrubber filter
cake into filler products used in the paint and roof
coating industry
<PAGE>36
SIGECO Total Electric Sales
(Megawatt-hours in Thousands)
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
SIGECO 6,941 6,859 6,285 6,084 5,980
Bar graph showing total electric sales between 1995-1999
<PAGE>37
SIGECO Electric Sales by Customer
(1999 MWh)
MW hours Cents/
Type Number in 000s KWh
- ---------- --------- --------- ---------
Residential 110,064 1,372 6.6
Commercial 16,344 1,304 5.4
Industrial 173 2,416 3.3
Firm Wholesale 5 659 3.6
------- ------- -------
Subtotal 126,586 5,751 4.6
Alcoa 1 314 2.6
Power Marketing & Other 18 875 4.1
------- ------- -------
Total 126,605 6,941 4.4
<PAGE>38
SIGECO Electric Delivery
Strong competitive position
Comparison of Avg.
Electric Retail Rates
of Midwest-Based Electric Companies
(Cents per kWh mid-1999)
SIGECO PSI IPALCO AEP CG&E US Avg
------ ------ ------ ------ ------ ------
4.75 4.82 5.39 5.65 6.21 6.83
Comparison of Avg.
Electric Industrial Rates
of Midwest-Based Electric Companies
(Cents per kWh mid-1999)
SIGECO IPALCO PSI AEP CG&E US Avg
------ ------ ------ ------ ------ ------
3.29 3.93 4.42 4.43 4.52 4.63
<PAGE>39
SIGECO Natural Gas Throughput
1995 1996 1997 1998 1999
------ ------ ------ ------ ------
MDth 27,637 31,065 29,370 28,965 31,850
Degree Days
as % of Normal 92% 107% 104% 82% 88%
Bar graph
<PAGE>40
SIGECO Natural Gas Delivery
* SIGECO's gas business is also successful, attributable to:
- Effective cost management
- Part of combination utility company
- Competitive rates; growing retail base
<PAGE> 41
SIGECO Gas Sales by Customer (1999)
Type Number MDth
- ---------- -------- ---------
Residential 99,596 8,262
Commercial 9,576 3,498
Industrial 212 467
Transported 19,580
Other 4 43
------- -------
Total 109,388 31,850
<PAGE> 42
Indiana Gas Territory
Map of Indiana showing Gas Territory in Indiana as Central and
Southeast Indiana.
<PAGE> 43
IGC Natural Gas Throughput
(Fiscal Years)
1995 1996 1997 1998 1999
------ ------ ------ ------ ------
MDth 109,508 126,742 122,846 114,795 118,065
Degree Days as
% of Normal 87% 108% 100% 86% 87%
<PAGE> 44
Indiana Gas Favorable Position
* Although winter weather has been mild over the last several
years, Indiana Gas has also been successful
* Attributable to:
- Effective cost controls
- Growing customer base
- Competitive rates; growing retail base
<PAGE> 45
Indiana Gas Customer Growth
1995 1996 1997 1998 1999
------ ------ ------ ------ ------
Customers (in 455 465 477 491 503
thousands)
Bar graph showing a growth of Indiana gas customers 2.5% per year
between 1995 and 1999
<PAGE> 46
Vectren Ohio Territory
Ohio map showing Vectren's Territory around Dayton, Ohio
<PAGE> 47
DPL Asset Acquisition
* 305,000 Customers
- 966,000 Vectren customers
* Price $425 million
* 4,979 miles of pipeline
* Expands non-regulated opportunities
* Target Close: June 30, 2000
* Contiguous territory
- 16 counties in West Central Ohio
* Access to many interstate pipelines
<PAGE> 48
DPL Financing
* Interim financing
- Commercial paper
- 364-day credit facility
* Permanent financing
- Within 12-18 months
- 100% debt
- Funded at Vectren Ohio and Vectren Utility Holdings
<PAGE> 49
Key Utility Group Statistics
<TABLE>
<S> <C> <C> <C> <C> <C>
SIGCORP IEI Subtotal Vectren Ohio Total
------- ------- ------- ------- -------
Utility Customers 153,000 508,000 611,000 305,000 966,000
Gas Througput (BCF) 30.5 118.1 148.6 55.3 203.9
Total Revenues $558,742 $420,463 $979,205 $215,008 $1,194,213
Miles of Gas Pipeline 2,901 10,978 13,879 4,979 18,858
Full-time Employees 1,047 861* 1,908* 199 2,107
*Excludes Unconsolidated Affiliates
</TABLE>
<PAGE> 50
Utility Group Keys to Success
* Realize merger benefits
* Cost control and high service quality
* Generation capacity and availability
* Environmental issues
* Deregulation issues
* Risk management
<PAGE> 51
Generation Capacity
1999 2000 2001 2002 2003 2004
------ ------ ------ ------ ------ ------
System Capacity 1,376 1,376 1,376 1,526 1,476 1,476
Peak Demand 1,235 1,287 1,309 1,327 1,343 1,364
Reserve Margin 15% 7% 5% 15% 10% 8%
Bar graph showing generation capacity.
<PAGE> 52
Environmental
* EPA SIP Call (NOx Reduction)
- In 1999, the EPA issued rules to reduce NOx emissions
to 85% of 1990 levels
- We do not agree with the rules and have joined with
others to litigate the issue
- Current status
* EPA Lawsuit
- SIGECO and six other utilities were named in a lawsuit
by the EPA, claiming we violated "New Source"
provisions of the Clean Air Act
- We are vigorously defending against this litigation
<PAGE> 53
Deregulation Issues
* No 2000 deregulation bill in Indiana
* Working on 2001 bill with others
* Vectren in good shape either way
* Opportunity in Ohio January 1, 2001
* Gas unbundling plans in Indiana
<PAGE> 54
Risk Management
Studying ways to minimize weather-related risk (gas only)
1995 1996 1997 1998 1999
------- ------- ------- ------- -------
Heating Degree Days
% of Normal 87% 108% 100% 86% 83%
Bar graph showing Heating Degree Days % of Normal.
<PAGE> 55
Vectren Utility Group:
Financial Overview Today
* Diversified between electric and gas as well as generation
and delivery
* Low-cost operations
* Above average earnings growth
* Above average ROE
* Strong balance sheets
<PAGE> 56
Utility Group Forecast
* Regulated financial forecast primarily driven by:
- Sales growth
- Capital expenditures
- O&M Expense levels
- Pricing (rates)
<PAGE>
<PAGE> 57
Customer Outlook
1999 2000 2001 2002 2003 2004
------- ------- ------- ------- ------- -------
IGEO Gas 109,388 110,482 111,587 112,703 113,830 114,968
Indiana Gas 513,091 513,922 528,172 542,422 556,672 570,922
DPL 309,202 313,264 317,382 321,556 325,787 330,077
SIGECO Electric 126,605 127,871 129,150 130,441 131,746 133,063
Bar graph indicating customer outlook for each company.
<PAGE> 58
Sales Outlook: Gas
1999 2000 2001 2002 2003 2004
------- ------- ------- ------- ------- -------
IGEO Gas 33,720 34,462 35,410 36,118 36,840 37,577
Indiana Gas 130,338 133,577 136,716 139,854 142,991 146,212
DPL 60,361 60,788 61,147 61,440 61,679 61,987
Bar graph indicating sales outlook for gas business.
<PAGE> 59
Sales Outlook: Electric
1999 2000 2001 2002 2003 2004
------- ------- ------- ------- ------- -------
Retail 5,530 5,847 5,977 6,009 5,811 5,912
Off-System Wholesale 1,410 1,157 1,058 1,061 1,515 1,537
Bar graph indicating sales outlook for electric business.
<PAGE> 60
<TABLE>
Capital Expenditures Outlook
<S> <C> <C> <C> <C> <C> <C> <C>
($ in millions) 1999 2000 2001 2002 2003 2004 2000-04
- --------------- ------- ------- ------- ------- ------- ------- -------
SIGECO $61 $44 $77 $107 $53 $67 $348
Indiana Gas 63 58 58 58 58 58 $289
Vectren Ohio 6 11 11 11 11 $51
------- ------- ------- ------- ------- ------- -------
Total Utility Group $124 $107 $146 $175 $123 $136 $658
</TABLE>
Note: Excludes Information Technology expenditures at Vectren
Resources of approximately $70m.
<PAGE> 61
Capital Expenditures Outlook
* NOx-related $90-100 million over 5 years
* Assumes leasing 70 MW, $120 million co-generation unit
in 2002
* New 70 MW peaking unit at $32.1 million in 2002
<PAGE> 62
O&M Outlook Total Utility Group
[Need numbers that went into the chart]
<PAGE> 63
Utility Holdings Summary
* Strong foundation- 4% EPS growth
* Experienced management team
* Merger synergies
* Low-cost energy providers
* Very loyal customer base
* 1 million opportunities to build upon
<PAGE> 64
VECTREN
NYSE:VVC
<PAGE> 65
VECTREN
NYSE:VVC
Non-Regulated Target Growth
<PAGE> 66
Non-Regulated Target Growth
1999 2000 2001 2002 2003 2004
----- ----- ----- ----- ----- -----
(Earnings $)
Utility 78 80 83 87 91 97
Non-Utility 17 27 36 46 56 65
Graph indicates a non-regulated target growth of 30% (Annual EPS
Growth).
<PAGE> 67
Key Forecast Assumptions
* Contributes 35-40% of Vectren earnings by year 5
* All growth is at existing entities; no entities are divested
* Dividends
- Paid to Vectren only by the Resources sub
- Joint ventures dividend 40% to cover taxes
<PAGE> 68
Key Forecast Assumptions
* Financing
- Through Vectren Capital to achieve short/long-term
corporate mix
* Overall results
- Management at each entity takes responsibility for
their forecast
- Incentive compensation tied to achievement
<PAGE>
<PAGE> 69
Non-Regulated Operations
Vectren Corporation
!
!
+------------------!----------------+
Vectren Utility Holdings Vectren Non-Reg. Group
! !
! !
+-------------+-----------+------------+-------------+--------------+
Indiana SIGECO Vectren Vectren Vectren Vectren
Gas Ohio Generation Enterprises Resources
Services
Chart showing the structure of non-regulated operations.
<PAGE>
<PAGE> 70
Vectren Generation Services
Vectren Non-Regulated Group
!
!
+--------------------+------------------+
Vectren Vectren Vectren
Generation Enterprises Resources
Services
Chart showing the structure of Vectren Generation Services.
<PAGE> 71
Vectren Generation Services
Vectren Generation Services
!
!
+----------!----------+
Southern Vectren
Indiana Fuels, Inc.
Minerals, Inc. (Formerly SIGCORP Fuels)
<PAGE> 72
Vectren Generation Services
* Vectren Generation Services includes Vectren Fuels and
Southern Indiana Minerals (SIMI)
* Vectren Fuels owns coal reserves at 2 locations and
contracts the mining operation to a third-party mining
company
* SIMI recycles scrubber filter cake into filler products used
in the paint and roof coating industry
<PAGE> 73
Vectren Resources
Vectren Non-Regulated Group
!
!
+------------------------+---------------------+
Vectren Vectren Vectren
Generation Enterprises Resources
Services
<PAGE> 74
Vectren Resources
* Vectren Resources makes technology investments and holds
technology resources for Vectren Corporation
* This company is the vehicle to hold resources and optimize
synergies from the merger and other acquisitions
<PAGE> 75
Vectren Enterprises
Vectren Non-Regulated Group
!
!
+------------------------+---------------------+
Vectren Vectren Vectren
Generation Enterprises Resources
Services
<PAGE>
<PAGE> 76
Vectren Enterprises
Vectren Enterprises
!
!
+------------+------------+-----------+--------------+
Vectren Vectren Vectren Vectren Vectren
Energy Communications Utility Financial Ventures
Services Services Group
<PAGE> 77
Vectren Energy Services
Vectren Energy Services
!
!
+---------+----------+
Vectren Energy Vectren Retail
Solutions
<PAGE> 78
Vectren Energy Services
* Focus is on "go-to-market" strategies to retain customer
* Energy Solutions will focus on large commercial and
industrial customers where face-to-face contact is
necessary
* Retail will address the small commercial and residential or
"aggregated load" market
<PAGE> 79
Vectren Energy Solutions
Vectren Energy Services
!
!
+---------+----------+
Vectren Energy Vectren Retail
Solutions
* ProLiance Energy
* SIGCORP Energy Services
* Energy Systems Group
* Air Quality Services
* Energy Mgmt. / Consult.
* Electric / HVAC (likely JV's)
<PAGE> 80
Vectren Energy Solutions:
ProLiance and SES
* Provide market intelligence through disciplined trading
* ProLiance Energy and SES provide natural gas marketing and
fuel supply management services to nearly 600 customers
in several Midwest markets with volumes of over
350 Bcf
* Outstanding growth since start-up in 1996 and 1997
<PAGE> 81
Vectren Energy Solutions:
ProLiance and SES Growth
Customers
1996* 1997 1998 1999
------- ------ ------ ------
Costumers 134 253 326 555
MDth
1996* 1997 1998 1999
------ ------ ------- -------
MDth 69 238 283 327
*1996: 5 months only
<PAGE> 82
Vectren Energy Solutions:
ProLiance and SES
* ProLiance Energy litigation surrounding the sale of natural
gas to Indiana Gas
* Low-risk power marketing
<PAGE> 83
Vectren Energy Solutions:
Growth Plans
* Ohio Valley Hub
* Other likely investments
* Mid-stream assets such as gathering, storage or small
pipelines
* Merchant power
* Continue growth in sales to other aggregators
<PAGE> 84
Vectren Energy Solutions:
Energy Systems Group
* ESG provides performance contracting and energy efficiency
upgrades
* Key plans to grow
- Government
- Schools
- Outsourcing by industrials
* Offices in Chicago, Indianapolis, Evansville, Cincinnati and
Johnson City (TN)
<PAGE> 86
Vectren Energy Solutions:
Energy Systems Group
Number of Amount
Contracts ($ in millions)
----------- -----------
2000 to date 10 $57.0
1999 31 $24.8
1998 21 $18.1
1997 7 18.8
1996 10 4.3
<PAGE> 86
Vectren Retail
* Provide energy commodity and related products and services
to small retail customers
-e.g. fuel cells, micro-turbines
* Will follow disciplined approach to be prepared when
unbundling creates opportunities
<PAGE> 87
Vectren Retail
* Plans still developing, but will not attempt to aggressively
"create" markets
* Likely heavy focus on e-commerce strategies
<PAGE> 88
Vectren Communications
Vectren Enterprises
!
!
+------------+------------+-----------+--------------+
Vectren Vectren Vectren Vectren Vectren
Energy Communications Utility Financial Ventures
Services Services Group
* Vectren Advanced Communications (formerly SIGECO Advanced Com.)
* SIGCORP Communications Services
<PAGE> 89
Vectren Advanced Communications
* Investor in broadband through integrated communications
provider (ICP) projects
- Cable
- Local phone, long distance
- High speed internet
- Data transport
<PAGE> 90
Vectren Advanced Communications
* Partner with Utilicom Networks
- Fully diluted position of 10.9%
- Own 14% of Evansville ICP (SIGECOM)
* Plan to implement communications strategy in other Vectren
markets
<PAGE> 91
Vectren Advanced Communications
* Capital structure prevents booking losses during buildout
* $100 million Blackstone investment
* SIGCORP gain in first quarter of $4.9 million
* Will realize full value of investment at IPO or sale
<PAGE> 92
Vectren Advanced Communications
SIGECOM Success in Evansville
* Anticipated passings of 85,000
* Revenue Generating Units (RGU) total 27,000
* Customer count: 14,000
* Penetration rates over one-third
<PAGE> 93
Vectren Communications Services
* Consulting services on and build out of fiber-optic systems
for municipal utilities across U.S.
* Follows trend of out-sourcing by local governments
* Profitable in 1999
* Contracts over $30m with 20 municipals awarded to date
* Alameda, CA project
<PAGE> 94
Vectren Utility Services
Vectren Enterprises
!
!
+------------+------------+-----------+--------------+
Vectren Vectren Vectren Vectren Vectren
Energy Communications Utility Financial Ventures
Services Services Group
* Reliant Services
* CIGMA
*IEI Financial Services
<PAGE> 95
Vectren Utility Services
Reliant Services, LLC
* Strategic alliance between subsidiaries of Vectren and
Cinergy Corp.
* Underground locating, construction and meter reading to 14
companies in Indiana, Kentucky and Ohio
* Provides an economical way for utilities to outsource
<PAGE> 96
Vectren Utility Services
CIGMA, LLC
* Strategic alliance between subsidiaries of Vectren and
Citizens Gas & Coke Utility
* Regional supplier of materials and integrated supply
solutions with a current focus on web-based solutions
* Provides efficient purchasing, warehousing and distribution
of materials
<PAGE> 97
Vectren Utility Services
IEI Financial Services, LLC
* Wholly owned subsidiary of Vectren
* Performs third-party collections, energy-related equipment
leasing and related services
<PAGE> 98
Vectren Financial Group
Vectren Enterprises
!
!
+------------+------------+-----------+--------------+
Vectren Vectren Vectren Vectren Vectren
Energy Communications Utility Financial Ventures
Services Services Group
* Southern Indiana Properties
* Vectren Synfuels
* Energy Realty
<PAGE> 99
Vectren Financial Group
Southern Indiana Properties, Inc.
* Participates in structured finance, tax-advantaged and
investment transactions, including leveraged leases
* Investments include:
Leveraged Leases $87 m
Loans 38 m
Affordable Housing 14 m
Other Assets 5 m
<PAGE> 100
Vectren Financial Group
Vectren Synfuels, Inc.
* 8.3% investor in Pace Carbon Synfuels
* Develops, owns and operates plants that produce coal-based
synthetic fuel that qualifies for tax credits
* Significant recent production improvement but coal market
soft
<PAGE> 101
Vectren Financial Group
Energy Realty, Inc.
* Limited partner in six affordable housing investments
<PAGE> 102
Vectren Ventures
Vectren Ventures
Vectren Enterprises
!
!
+------------+------------+-----------+--------------+
Vectren Vectren Vectren Vectren Vectren
Energy Communications Utility Financial Ventures
Services Services Group
* Haddington Energy Partnes
* Gazelle TechVentures
* Cambridge Capital
* Monumental Capital
<PAGE> 103
Haddington Energy Partners, LP
* Limited partnership that includes the former principals of
TPC Corp.
* Chase Capital Partners is the largest investor
* Total Vectren investment of $10 million, with income
starting in 2000
* Projects: Lodi, CA storage field; a co-generation facility;
2 gathering projects; compressed air storage facility
<PAGE> 104
Vectren Ventures
Venture Capital
* Minor investments in local funds primarily focused on
retaining business in our markets
* Recent Gazelle investment provides e-commerce opportunity
<PAGE> 105
Vectren Non-Regulated Group
Five-Year Outlook
Actual 1999 5-yr. outlook
--------------- ---------------
Net Income $17 mil 30% CAGR
% Vectren Net 18% 35-40%
Investments n/a $150-160 mil
Total Assets $330 mil $650-660 mil
Total Debt $125 mil $125-130 mil
<PAGE> 106
Non-Regulated Group Summary
* Management with track record of results
* Realistic, achievable growth goals
* Doing what we know
* Aggressive use of joint ventures matching the new
networking economy
<PAGE> 107
VECTREN
NYSE:VCC
<PAGE> 107
Vectren Branding Strategy
* Build Vectren name
- Significant budget
- Sponsorships, contributions
* DPL experience
* Costs and timing
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Commitment to Credit Rating
* Vectren Corporation is committed to maintaining a strong
investment grade credit rating
* At times, the use of debt to fund acquisitions or
investments may temporarily increase debt leverage.
However, management will take steps to gradually recover
from the use of additional leverage.
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Dividend Growth
1994 1995 1996 1997 1998 1999
------ ------ ------ ------ ------ ------
(per share)
SIG 1.10 1.13 1.15 1.18 1.21 1.24
IEI 0.77 0.80 0.83 0.86 0.90 0.94
Graph showing the dividend growth of SIG and IEI between 1994 and
1999.
5 Year CAGR
SIG: 2.4%
IEI: 4.1%
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Dividend Policy
* Dividend payment dates
* Expected increase date
* Board approval
* Current rate (not yet declared)
* Growth expectation: 4-4.5%
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Where We Start Today - Vectren
Pie chart indicating that the Gas and Electric earnings are nearly
equal with portion of the earnings coming from Non-Regulated area.
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Investment Performance
Both IEI an Sigcorp have exceeded the utility industry performance
as measured by return on equity.
1995 1996 1997* 1998 1999
------- ------- ------- ------ -------
IEI 0.12 0.15 0.07 0.12 0.124
Peers 0.09 0.12 0.12 0.10
Reflects After Tax Restructuring charge of $24.5 million or 80
cents per share
1995 1996 1997 1998 1999
------- ------- ------- ------- -------
SIG 0.126 0.134 0.136 0.144 0.132
EEI Index 0.112 0.112 0.110 0.113
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1999 Vectren Calendar Base EPS
1999 Proforma $1.48
Weather Impact .13-.15
1999 Adjusted Base $1.62
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Cumulative Average Growth Targets
1999 2000 2001 2002 2003 2004
------ ------ ------ ------ ------ ------
(Earnings per share)
Utility 78 80 83 87 91 97
Non-Utility 17 27 36 46 56 65
Chart showing a target of a 10% growth of annual Earnings per Share
between 1999 and 2004.
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Expected 2000 Earnings
1999 Adjusted Base $1.62
2000 EPS (Assuming normal growth) $1.73-1.83
2000 Merger Costs ($54-59 million) $.55-.60
1st Quarter Weather $.11-.13
1st Quarter Teleconference - 4/7/00
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Vectren Corporation
Presentation Overview
* Who we are today
* Growth strategies
* A closer look at operations
* Financial performance and outlook
* Why we are an outstanding investment
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Vectren Corporation:
A Great Investment
* Strong, customer-focused company
* Experienced, dedicated management team
* Solid utility foundation
* Strong non-regulated earnings potential
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Vectren Corporation:
A Great Investment
* Create and take advantage of opportunities
* Ability to assimilate expanded operations
* Physical, financial and human resources to create share
value
* A company positioned to deliver
<PAGE> 120
VECTREN
NYSE:VCC
