June 27, 1997
Securities and Exchange Commission
Operations Center
6432 General Green Way
Alexandria, VA 22312-2413
Gentlemen:
We are transmitting Form 11-K Annual Report for the
retirement savings plan for Indiana Gas Company, Inc.
for the fiscal year ended December 31, 1996 pursuant to
Section 15(d) of the Securities Exchange Act of 1934.
Very truly yours,
/s/Joseph E. Rosebrock
Joseph E. Rosebrock
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1996
A. Full Title of the Plan and the Address of the Plan, if
Different from that of the Issuer named below:
Indiana Gas Company, Inc.
Retirement Savings Plan
1630 North Meridian Street
Indianapolis, IN 46202
B. Name of issuer of the Securities Held Pursuant to the Plan
and the Address of its Principal Executive Officer:
Indiana Energy, Inc.
1630 North Meridian Street
Indianapolis, IN 46202
ITEM 1 - Changes in the Plan
Effective July 1, 1995, T. Rowe Price (the trustee)
assumed trustee and recordkeeping responsibilities
from Fifth Third Bank. Plan assets, except for
Fund A, were sold and reinvested in four similar
funds established by T. Rowe Price at the
participants' current investment allocation percentages.
ITEM 2 - Changes in Investment Policy
None
ITEM 3 - Contributions Under the Plan
None
ITEM 4 - Participating Employees
Approximately 1,206 employees were participants in the
Plan at December 31, 1996.
ITEM 5 - Administration of the Plan
(a) The following table sets forth the names of the persons who
administer the Plan and all positions or offices held with the
issuer, Indiana Energy, Inc. (IEI) and Indiana Gas Company, Inc.
(IGC). Each person acts as a member of the Plan Committee and
has an address at 1630 North Meridian Street, Indianapolis,
Indiana 46202.
Positions or Officers with issuer
Name or Affiliate
Lawrence A. Ferger President and Chief Executive
Officer of IGC and IEI
Niel C. Ellerbrook Senior Vice President & Chief
Financial Officer of IGC; Vice
President and Treasurer and
Chief Financial Officer of IEI
Paul T. Baker Senior Vice President & Chief
Operating Officer of IGC
Steven M. Schein Vice President and Treasurer of IGC
Thomas J. Zabor Vice President of Human Resources, IGC
As of December 31, 1996, the trust fund was managed
by T. Rowe Price, as trustee.
(b) The members of the Plan committee received no compensation
from the Plan for Services as members of the Plan Committee
during the fiscal year ended December 31, 1996. See Item 6(b)
for information concerning compensation of the trustee.
ITEM 6 - Custodian of Investments
(a) Since July 1, 1995, T. Rowe Price, P.O. Box 17215, Baltimore,
MD 21297-0354, has acted as custodian of the securities and
other investments of the Plan.
(b) Not Applicable
(c) Custodian is exempt under ERISA from having to furnish
any bond in connection with the custody of security investments
or other assets of the Plan.
ITEM 7 - Reports to Participating Employees
Employees participating in the plan receive annual
summaries of the operations of the Plan (including
financial date) and quarterly statements of participant
accounts reflecting account balances, contributions to
the account, and earnings for the account.
ITEM 8 - Investment of Funds
(a) (1) Not Applicable
(a) (2) Not Applicable
(b) Not Applicable
ITEM 9 - Financial Statements and Exhibits
(a) The following financial statements are included in this Form
11-k:
Report of Independent Public Accountants
Statement of Financial Condition as of December 31,
1996
Statement of Financial Condition as of December 31,
1995
Statement of Income and Other Changes in Plan Equity
as of December 31, 1996
Statement of Income and Other Changes in Plan Equity
as of December 31, 1995
Statement of Income and Other Changes in Plan Equity
as of December 31, 1994
Notes to Financial Statements
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Plan committee has duly caused this annual report to be
signed by the Undersigned thereunto duly authorized.
INDIANA GAS COMPANY, INC.
RETIREMENT SAVINGS PLAN
By: The Plan Committee as
Plan Administrator
/s/Lawrence A. Ferger
Lawrence A. Ferger
/s/Niel C. Ellerbrook
Niel C. Ellerbrook
/s/Paul T. Baker
Paul T. Baker
/s/Steven M. Schein
Steven M. Schein
/s/Thomas J. Zabor
Thomas J. Zabor
Date: June 27, 1997
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report dated May 15, 1997, included in this
Form 11-K, into Indiana Energy, Inc.'s previously filed
Registration Statement File No. 33-55983 which registered
1,000,000 shares of common stock and an indeterminate amount of
interest to be offered or sold pursuant to the Indiana Gas
Company, Inc. Retirement and Savings Plan.
ARTHUR ANDERSEN LLP
Indianapolis, Indiana,
June 27, 1997.
INDIANA GAS COMPANY, INC.
=========================
RETIREMENT SAVINGS PLAN
=======================
AS OF DECEMBER 31, 1996 AND 1995
TOGETHER WITH
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
INDIANA GAS COMPANY, INC.
RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
Page
Report of Independent Public Accountants
Statements of Financial Condition
Statements of Income and Other Changes
in Plan Equity
Notes to Financial Statements
Schedule
Assets Held for Investment Purposes I
Reportable Transactions II
To Indiana Gas Company, Inc.
Retirement Savings Plan Committee:
We have audited the accompanying statements of financial condition of
the INDIANA GAS COMPANY, INC. RETIREMENT SAVINGS PLAN as of
December 31, 1996 and 1995, and the related statements of income and
other changes in plan equity for the three years ended December 31,
1996. These financial statements and the schedules referred to below
are the responsibility of the plan committee. Our responsibility is
to express an opinion on these financial statements and schedules
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by the plan committee,
as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the Plan
as of December 31, 1996 and 1995, and the changes in its plan equity
for the three years ended December 31, 1996, in conformity with
generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
schedules of assets held for investment purposes and reportable
transactions are presented for the purpose of additional analysis and
are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules
and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for plan benefits and the statement
of changes in net assets available for plan benefits are presented for
purposes of additional analysis rather than to present the net assets
available for plan benefits and changes in net assets available for
plan benefits of each fund. The supplemental schedules and fund
information have been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Indianapolis, Indiana,
May 15, 1997.
<TABLE>
INDIANA GAS COMPANY, INC.
RETIREMENT SAVINGS PLAN
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1996
T. Rowe Price
Indiana ----------------------------------------------------------------------------------------------
Energy, Stable Equity Int'l New Equity Spectrum
Inc. Value Income Balanced Stock Horizons Index Growth Partic.
Common Stock Fund Fund Fund Fund Fund Fund Fund Loan Fund Total
Fund
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at
current market
value
(cost $46,716,903)-
Indiana Energy, Inc.
common stock $24,875,067 $ - $ - $ - $ - $ - $ - $ - $ - $24,875,067
Collective/Common
Trust Fund - 7,689,989 - - 7,689,989
Mutual Funds - - 9,561,886 5,550,032 820,914 1,890,457 1,470,928 819,680 - 20,113,897
Participants'loans - - - - - - - - 2,836,458 2,836,458
----------- ---------- ---------- --------- ------- ---------- ---------- -------- ---------- -----------
Total investments 24,875,067 7,689,989 9,561,886 5,550,032 820,914 1,890,457 1,470,928 819,680 2,836,458 55,515,411
Employer contributions 461,893 145,098 141,275 113,398 31,416 22,186 18,385 56,562 - 990,213
receivable ----------- ---------- ---------- ---------- -------- ---------- ---------- -------- --------- -----------
PLAN EQUITY $25,336,960 $7,835,087 $9,703,161 $5,663,430 $852,330 $1,912,643 $1,489,313 $876,242 $2,836,458 $56,505,624
=========== ========== ========== ========== ======== ========== ========== ======== ========== ===========
The accompanying notes and schedules are an integral part of this statement.
</TABLE>
<TABLE>
INDIANA GAS COMPANY, INC.
RETIREMENT SAVINGS PLAN
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1995
T. Rowe Price
Indiana -----------------------------------------------------------------
Energy, Inc. Stable Equity International New Equity Spectrum
Common Stock Value Income Balanced Stock Horizons Index Growth Participants'
Fund Fund Fund Fund Fund Fund Fund Fund Loan Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments,
at current
market value
(cost
$39,686,010)-
Indiana Energy,
Inc. common
stock $22,771,495 $ - $ - $ - $ - $ - $ - $ - $ - $22,771,495
Collective/
Common Trust
Fund - 6,733,899 - - - - - - - 6,733,899
Mutual Funds - - 7,404,291 4,554,734 440,534 981,897 463,492 357,286 - 14,202,234
Participants'
loans - - - - - - - - 2,713,615 2,713,615
----------- ---------- ---------- ---------- -------- ---------- -------- -------- ---------- -----------
Total
investments 22,771,495 6,733,899 7,404,291 4,554,734 440,534 981,897 463,492 357,286 2,713,615 46,421,243
Employer
contributions
receivable 481,365 148,282 143,939 122,100 14,411 41,001 28,012 16,565 - 995,675
----------- ---------- ---------- ---------- -------- ---------- -------- -------- ---------- -----------
PLAN EQUITY $23,252,860 $6,882,181 $7,548,230 $4,676,834 $454,945 $1,022,898 $491,504 $373,851 $2,713,615 $47,416,918
=========== ========== ========== ========== ======== ========== ======== ======== ========== ===========
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
INDIANA GAS COMPANY, INC.
RETIREMENT SAVINGS PLAN
STATEMENT OF INCOME AND OTHER CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1996
T. Rowe Price
----------------------------------------------------------------------------
Indiana
Energy, Stable Equity Int'l New Equity Spectrum Partic.
Inc. Comm Value Income Balanced Stock Horizons Index Growth Loan
Stock Fund Fund Fund Fund Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Employee contribs $ 1,165,222 $ 442,254 $ 554,847 $ 410,304 $ 73,500 $ 215,781 $ 145,901 $ 90,338 $ - $ 3,098,147
Employer contribs 952,977 341,767 411,475 317,912 65,674 117,854 90,444 97,555 - 2,395,658
Interest income - - - - - - - - 242,938 242,938
Dividend income 1,101,437 419,976 594,086 234,534 21,338 171,554 42,783 56,956 - 2,642,664
Unrealized apprec
of investments 359,343 - 926,809 439,233 67,186 27,081 161,656 49,638 - 2,030,946
Realized gain
on investments 92,848 - 51,781 39,566 3,027 34,185 7,982 2,714 - 232,103
Other income
(expense),net (12,519) (11,854) (3,130) (963) (54) (302) (182) (44) - (29,048)
----------- ----------- ---------- ---------- --------- ----------- ----------- --------- -------- ------------
3,659,308 1,192,143 2,535,868 1,440,586 230,671 566,153 448,584 297,157 242,938 10,613,408
DEDUCTIONS:
Distribution of
benefits to
Participants (552,919) (259,823) (252,813) (127,055) (10,458) (202,201) (26,921) (13,189) (79,323) (1,524,702)
INTERFUND TRANSFERS (895,659) 28,636 (154,166) (391,848) 168,010 499,210 550,186 195,631 - -
LOAN REPAYMENTS 645,132 172,155 221,029 193,161 25,868 74,091 43,876 32,904 (1,408,216) -
LOANS ISSUED (771,762) (180,205) (194,987) (128,248) (16,706) (47,508) (17,916) (10,112) 1,367,444 -
----------- ---------- ---------- ---------- -------- ---------- ---------- -------- ---------- -----------
Net increase 2,084,100 952,906 2,154,931 986,596 397,385 889,745 997,809 502,391 122,843 9,088,706
PLAN EQUITY,
12-31-95 23,252,860 6,882,181 7,548,230 4,676,834 454,945 1,022,898 491,504 373,851 2,713,615 47,416,918
----------- --------- ---------- ---------- -------- ---------- ---------- -------- ---------- -----------
PLAN EQUITY,
12-31-96 $25,336,960 $7,835,087 $9,703,161 $5,663,430 $852,330 $1,912,643 $1,489,313 $876,242 $2,836,458 $56,505,624
=========== ========== ========== ========== ======== ========== ========== ======== ========== ===========
The accompanying notes and schedules are an integral part of this statement.
</TABLE>
<TABLE>
INDIANA GAS COMPANY, INC.
RETIREMENT SAVINGS PLAN
STATEMENT OF INCOME AND OTHER CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1995
T. Rowe Price
-----------------------------------------------------------
Indiana Provident Inter- Parti-
Energy, Inc. Stable Mutual Stable Equity national New Equity Spectrum cipants'
Common Stock Value Equity Value Line Value Income Balanced Stock Horizons Index Growth Loan
Fund A Fund B Fund C Fund D Fund Fund Fund Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Employee
contribu-
tions $ 1446180 $ 249166 $ 260460 $ 245857 $ 240879 $ 274558 $ 232840 $ 9124 $ 37185 $ 26805 $ 14871 $ - $ 3037925
Employer
contribu-
tions 1071562 118232 134659 126694 261858 284613 242566 19770 59227 41515 24124 - 2384820
Interest
income 3184 203999 1655 50249 - - - - - - - 163872 422959
Dividend
income 1005824 - - 13728 205265 260391 121306 13276 103140 12286 23959 - 1759175
Unrealized
apprecia-
tion
(deprecia-
tion)
of invest-
ments 2852422 - - - - 659041 256677 4265 (45302) 14128 (5973) - 3735258
Realized
gain
(loss) on
invest-
ments 244209 - 829920 365127 - 46072 23872 - (1826) 2 - - 1507376
Other
income
(expense),
net 19576 (9503) (2569) (8674) (4883) (368) (246) - - - - - (6667)
--------- --------- ---------- -------- -------- -------- -------- ------- -------- ------- ------- -------- ---------
6642957 561894 1224125 792981 703119 1524307 877015 46435 152424 94736 56981 163872 12840846
DEDUCTIONS:
Distribu-
tion of
benefits to
participants (517545) (197970) (137289) (39998) (149330) (97224) (33369) - - - - - (1172725)
INTERFUND
TRANSFERS (1418609) (6442905) (6065593)(4148968) 6264647 6066706 3773553 405996 860829 392100 312244 - -
LOAN REPAY-
MENTS 732661 118956 111003 123815 90630 124411 95968 2560 9802 4807 4690 (1419303) -
LOANS
ISSUED (709617) (260072) (187187) (207400) (26885) (69970) (36333) (46) (157) (139) (64) 1497870 -
--------- ---------- ---------- -------- -------- -------- -------- ------- -------- ------- ------- -------- ---------
Net increase
(decrease) 4729847 (6220097) (5054941)(3479570) 6882181 7548230 4676834 454945 1022898 491504 373851 242439 11668121
PLAN EQUITY,
December 31,
1994 18523013 6220097 5054941 3479570 - - - - - - - 2471176 35748797
--------- ---------- ---------- -------- -------- -------- -------- ------- -------- ------- ------- -------- ---------
PLAN EQUITY,
December 31,
1995 $23252860 $ - $ - $ - $6882181 $7548230 $4676834 $454945 $1022898 $491504 $373851 $2713615 $47416918
========= ========== ========== ======== ======== ======== ======== ======= ======== ======= ======= ======== =========
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
INDIANA GAS COMPANY, INC.
RETIREMENT SAVINGS PLAN
STATEMENT OF INCOME AND OTHER CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1994
Indiana Energy, Provident
Inc. Stable Mutual
Common Stock Value Equity Value Line Participants'
Fund A Fund B Fund C Fund D Loan Fund Total
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Employee contributions $ 941,532 $ 302,458 $ 380,208 $ 373,031 $ -- $ 1,997,229
Employer contributions 1,100,565 304,462 333,922 340,433 -- 2,079,382
Interest income 4,260 275,954 2,160 81,092 118,794 482,260
Dividend income 566,816 -- -- 12,469 -- 579,285
Unrealized depreciation of assets (233,078) -- (40,973) (97,212) -- (371,263)
Realized loss on investments -- -- -- (61,117) -- (61,117)
Forfeitures (22,976) (11,494) (4,879) (3,667) -- (43,016)
Other income (expense), net (13,494) (13,715) (1,072) (1,922) 43 (30,160)
---------- ---------- ---------- ---------- ---------- -----------
2,343,625 857,665 669,366 643,107 118,837 4,632,600
DEDUCTIONS:
Distribution of benefits to participants 252,410 113,190 53,812 30,397 53,277 503,086
---------- ---------- ---------- ---------- ---------- -----------
2,091,215 744,475 615,554 612,710 65,560 4,129,514
TRANSFERS OF PARTICIPANTS'
BALANCES BETWEEN
SAVINGS PLANS 5,429 (4,521) (1,519) (1,172) -- (1,783)
OTHER PLAN INTERFUND TRANSFERS 27,772 (51,810) 50,302 (26,264) -- --
LOAN REPAYMENTS 426,987 131,424 131,382 129,717 (819,510) --
LOANS ISSUED (437,699) (253,981) (132,661) (156,224) 980,565 --
---------- ---------- ---------- ---------- ---------- -----------
Net increase 2,113,704 565,587 663,058 558,767 226,615 4,127,731
TRANSFER OF ASSETS FROM THE
RETIREMENT SAVINGS PLAN FOR
BARGAINING UNIT EMPLOYEES
EFFECTIVE OCTOBER 1, 1994 7,490,819 1,799,893 1,102,206 772,285 950,143 12,115,346
PLAN EQUITY,
December 31, 1993 8,918,490 3,854,617 3,289,677 2,148,518 1,294,418 19,505,720
---------- ---------- ---------- ---------- ---------- -----------
PLAN EQUITY,
December 31, 1994 $18,523,013 $6,220,097 $5,054,941 $3,479,570 $2,471,176 $35,748,797
=========== ========== ========== ========== ========== ===========
The accompanying notes are an integral part of this statement.
</TABLE>
INDIANA GAS COMPANY, INC.
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
a. General
Indiana Gas Company, Inc. (the Company) Retirement Savings Plan
(the Plan) is a defined contribution plan. The Plan is
administered by the Retirement Savings Plan Committee (the
Committee) appointed by the President of the Company. Further
details of the Plan are provided in the Summary Plan Description
which has been distributed to all plan participants.
Effective October 1, 1994, the assets of the Indiana Gas Company,
Inc. Retirement Savings Plan for Bargaining Unit Employees were
merged into the Indiana Gas Company, Inc. Retirement Savings
Plan. Participants' benefits and account balances were not
impacted as a result of the merger. Participants have the same
options and benefits under the Retirement Savings Plan as they
did under the Retirement Savings Plan for Bargaining Unit
Employees. The transfer of $12,115,346 has been reflected in the
December 31, 1994, Statement of Income and Other Changes in Plan
Equity.
Effective July 1, 1995, T. Rowe Price (the trustee) assumed
trustee and recordkeeping responsibilities from Fifth Third Bank.
Plan assets, except Indiana Energy, Inc. common stock Fund A,
were sold and reinvested in four similar funds established by T.
Rowe Price at the participant's existing investment allocation
percentages. Effective September 1, 1995, participants had four
additional funds to invest in and made elections through a phone
system. The four new investment options available on September 1
were the Equity Index Fund, the Spectrum Growth Fund, an
International Stock Fund, and the New Horizons Fund. As of
September 1, 1995, participants could make contribution elections
and investment transfers in 5% increments versus the 10% limit
previously required. Participant elections and investment
transfer decisions can be made daily.
b. Participation
Employees age twenty-one (21) or older become eligible to
participate in the Plan on January 1, April 1, July 1, or
October 1 (valuation dates), coincident with or following
completion of one (1) year of service. Each participant's
account is adjusted daily for contributions, withdrawals,
distributions, income earned, changes in the value of trust fund
assets and expenses directly related to investment transactions.
c. Contributions and Vesting
Plan participants may elect to contribute up to 15% of their
eligible compensation. All participants' contributions are fully
vested. Annually, the Company contributes an amount equal to
2-1/2% of participants' eligible compensation. In addition, for
nonbargaining participants, the Company matches 100% of the first
3% of eligible compensation contributed by nonbargaining
participants' and 50% of nonbargaining participants'
contributions between 3% and 8% of their eligible compensation.
For bargaining participants, the Company matches 50% of the first
4% of eligible compensation. Company contributions become fully
vested after a participant has completed five years of service.
Participants may also contribute any unused flexible benefit
dollars to the plan with the Company matching this contribution
at 50%.
Contributions are subject to maximum limitations as defined in
the Internal Revenue Code (the Code) and are invested in the
Indiana Energy, Inc. Common Stock Fund, T. Rowe Price Stable
Value Fund, T. Rowe Price Equity Income Fund, T. Rowe Price
Balanced Fund, T. Rowe Price International Stock Fund, T. Rowe
Price New Horizons Fund, T. Rowe Price Equity Index Fund, and the
T. Rowe Price Spectrum Growth Fund, as directed by participants.
d. Federal Income Tax Effect to Participants
The Plan was established as a qualified plan under Section 401(a)
of the Code. This means that a participant is not subject to
Federal income taxes on amounts contributed to the participant's
account or earnings thereon, until such amounts are distributed
to the participant or to a beneficiary in the event of the
participant's death. Contributions to the participant's account
are subject to Federal employment (FICA) taxes.
If a participant receives a distribution from his/her account
prior to obtaining age 59-1/2, such distribution is taxed as
ordinary income and may be subject to an additional 10% penalty
tax unless one of the statutory exceptions to such penalty tax
applies.
e. Distributions
Upon termination, a participant has the option to receive a lump
sum distribution or periodic installments over a period not to
exceed 10 years. If a lump sum is received, the participant may
defer immediate taxation by rolling over the amount into a
qualified plan or an individual retirement account (IRA).
Effective January 1, 1993, the Unemployment Compensation
Amendments Act of 1992 requires income tax withholding at a rate
of 20% for any eligible rollover distribution that is not
directly transferred to another qualified plan or IRA. This
withholding requirement may not be waived by the participant
receiving the distribution. Distributions made to participants
who have reached age 70-1/2 are not subject to the 20%
withholding requirement.
f. Forfeited Accounts
At December 31, 1996, forfeited nonvested accounts totaled
$19,900. These accounts will be used to reduce future employer
contributions. Also, in 1996, employer contributions were
reduced by 23,000 from forfeited nonvested accounts.
g. Participant Loans
The Plan allows eligible participants to borrow up to 50% of the
vested amount of their participant's accounts with a minimum
borrowing of $1,000. Each loan shall bear interest at a rate
determined by the plan committee and is secured by the
participant's remaining balance in his/her account. The term of
the loan is mutually agreed upon by the plan committee and the
participant. The loan repayment period shall not exceed 5 years,
except in instances where the loan proceeds were used to acquire
the principal residence of the participant.
A participant may have no more than one loan outstanding at any
point in time. Loan payments, both principal and interest, shall
be reapplied to the participant's account and reinvested in the
applicable fund based on the participant's current election. At
December 31, 1996 and 1995, there were 565 and 457 participants
loans outstanding, respectively.
h. Related Party Transactions
Certain Plan investments are shares of mutual funds managed by
T. Rowe Price. T. Rowe Price is the trustee as defined by the
Plan and, therefore, these transactions qualify as party-in-
interest. Fees paid by the Plan for investment management
services amounted to $6,051 for the year ended December 31, 1996.
i. Plan Termination
While it has not expressed any intention to do so, the Company
has the right to terminate the Plan subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA).
Upon partial or total termination of the Plan, the participants'
accounts shall become fully vested and nonforfeitable.
j. Trustee Fees and Administrative Costs
Trustee fees and recordkeeping costs are paid by the Company.
Investment management costs are paid for by the Plan and are
included in other income (expense) in the accompanying Statements
of Income and Other Changes in Plan Equity.
2. INVESTMENT PROGRAM
Before July 1, 1995, participants could direct that their
contributions be invested in one or more of the following funds:
Fund A - An equity fund, which invests principally in
shares of Indiana Energy, Inc. (IEI) common stock issued
and purchased in the open market. (Indiana Energy, Inc.
is the parent company of Indiana Gas Company, Inc.)
Fund B - A fixed income fund, which invests principally in
guaranteed investment contracts.
Fund C - An equity investment fund, which invests
principally in common stock.
Fund D - A balanced fund, which invests principally in a
mix of fixed income securities and common stock.
After July 1, 1995, participants may direct that their
contributions be invested in one or more of the following funds:
IEI Common Stock Fund - An equity fund which invests
principally in shares of Indiana Energy, Inc. (IEI) common
stock issued and purchased in the open market. (Indiana
Energy, Inc. is the parent company of Indiana Gas Company,
Inc.)
T. Rowe Price Stable Value Fund - A bank sponsored
collective investment fund, which invests primarily in a
portfolio of Guaranteed Investment Contracts (GIC's), Bank
Investment Contracts (BIC's) and Structured Investment
Contracts (SIC's).
T. Rowe Price Equity Income Fund - A mutual fund, which
most of the assets will be used to invest in common stocks
of established companies and the remainder in foreign
securities, convertible stocks and bonds.
T. Rowe Price Balanced Fund - A mutual fund, which invests
60% in common stock of large established companies and 40%
in various fixed income securities and cash reserves.
T. Rowe Price International Stock Fund - A mutual fund,
which invests primarily in common stocks of established,
non-U.S. companies. Derivative activity occurs within
this fund. The fund engages in securities lending, which
is collateralized with cash, mitigating the risk
associated with such activities.
T. Rowe Price New Horizons Fund - A mutual fund, which
invests primarily in a diversified group of small,
emerging growth companies.
T. Rowe Price Equity Index Fund - A mutual fund, which
will invest in all 500 stocks composing the S&P 500.
T. Rowe Price Spectrum Growth Fund - A mutual fund, which
invests in a number of other T. Rowe Price Mutual Funds
(primarily domestic stock funds and also a foreign stock
fund).
The number of participants directing contributions in each fund
at December 31, 1996 and 1995, were as follows:
<TABLE>
Number of
Participants
-----------------
1996 1995
<S> <C> <C>
Indiana Energy, Inc. Common Stock 1,082 1,102
T. Rowe Price-
Stable Value Fund 690 705
Equity Income Fund 723 729
Balanced Fund 609 622
International Stock Fund 132 122
New Horizons Fund 246 218
Equity Index Fund 181 170
Spectrum Growth Fund 138 125
</TABLE>
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Accounting
Account records maintained by the Trustee are on the cash basis.
The accompanying financial statements have been prepared on an
accrual basis.
b. Investments
Investments are stated at current market value (see Schedule I).
Investment transactions are reported on the trade date.
The change in market value from the beginning of the year to the
date of sale for investments sold during the year is reported
separately in the Statement of Income and Other Changes in Plan
Equity as a realized gain on investments. The net realized gain
on investments included in the plan equity is as follows:
<TABLE>
Realized
Proceeds of Gain on
Sale Cost of Asset Investments
<S> <C> <C> <C>
IEI Common Stock $2,671,327 $2,578,479 $ 92,848
Stable Value Fund - - -
Equity Income Fund 1,039,025 987,244 51,781
Balanced Fund 785,657 746,091 39,566
International Stock Fund 44,980 41,953 3,027
New Horizons Fund 314,296 280,111 34,185
Equity Index Fund 121,522 113,540 7,982
Spectrum Growth Fund 34,753 32,039 2,714
---------- ---------- --------
Total $5,011,560 $4,779,457 $232,103
========== ========== ========
</TABLE>
c. Reclassifications
Certain reclassifications have been made in the Company's financial
statements of prior years to conform to the current year presentation.
The descriptions of the financial statements comply with the requirements
set forth by Form 11(K) under the Securities and Exchange Commission.
4. UNREALIZED APPRECIATION OF ASSETS
The unrealized appreciation (depreciation) of assets included in the Plan
equity is as follows:
<TABLE>
T. Rowe Price
------------------------------------------------------------------------------
IEI Provident
Common Stable Mutual Value Stable Equity Int'l New Equity Spectrum
Stock Value Equity Line Value Income Balanced Stock Horizons Index Growth
Fund A Fund B Fund C Fund D Fund Fund Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance as
of 12-31-94 $3,022,253 $ - $531,132 $(42,588) $ - $ - $ - $ - $ - $ - $ - $3,510,797
Net change
for 1995 2,852,422 - (531,132) 42,588 - 665,193 260,579 4,264 (45,310) 14,130 (5,969) 3,256,765
---------- ------- --------- --------- ------- ---------- -------- ------- --------- ------- -------- ----------
Balance as
of 12-31-95 5,874,675 - - - - 665,193 260,579 4,264 (45,310) 14,130 (5,969) 6,767,562
Net change
for 1996 359,343 - - - - 926,809 439,233 67,186 27,081 161,656 49,638 2,030,946
---------- ------- ---------- -------- ------- ---------- -------- ------- -------- -------- ------- ----------
Balance as
of 12-31-96 $6,234,018 - - - - $1,592,002 $699,812 $71,450 $(18,229) $175,786 $43,669 $8,798,508
========== ======= ========== ======== ======== ========== ======== ======= ========= ======== ======= ==========
</TABLE>
5. PLAN AMENDMENT
Effective October 14, 1994, the Plan was amended to include that any Plan
participants rehired after military service are entitled to receive any
employer matching contributions as if they continued their employment with
the Company while they served in the military.
6. TAX STATUS
The Company has made certain amendments to the plan since
receiving its last determination letter in which the Internal
Revenue Service (IRS) stated that the Plan, as then designed, was
in compliance with the applicable requirements of the Internal
Revenue Code (IRC). As a result of these amendments, a
determination letter will be requested from the IRS. In the
opinion of the Plan Committee, the Plan is currently designed and
continues to operate in a manner that qualifies it under IRC
Section 401(a) and, therefore, is exempt from income taxes under
the provisions of IRC Section 501(a). Accordingly, no provision
for Federal income taxes has been made.
7. REPORTABLE TRANSACTIONS
"Reportable Transactions" of the Plan are shown on Schedule II.
<TABLE>
SCHEDULE I
INDIANA GAS COMPANY, INC.
EIN 35-0793669
RETIREMENT SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
Current
Average Market
Shares Cost Value
<S> <C> <C> <C>
INVESTMENTS:
*Indiana Energy, Inc.
Common Stock 1,020,327 $18,641,049 $24,875,067
*T. Rowe Price-
Stable Value Fund 7,689,989 7,689,989 7,689,989
Equity Income Fund 424,219 7,969,884 9,561,886
Balanced Fund 383,290 4,850,220 5,550,032
International Stock Fund 59,487 749,464 820,914
New Horizons Fund 86,838 1,908,686 1,890,457
Equity Index Fund 72,317 1,295,142 1,470,928
Spectrum Growth Fund 54,176 776,011 819,680
PARTICIPANTS' LOAN FUND,
interest ranging from 7.0%
to 11.5% 2,836,458 2,836,458
----------- -----------
$46,716,903 $55,515,411
=========== ===========
* Represents parties-in-interest to the Plan
</TABLE>
<TABLE>
INDIANA GAS COMPANY, INC.
EIN 35-0793669
RETIREMENT SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
Current
Value of
Asset on
Number of Purchase Selling Cost of Transaction Net
Party Involved Description of Asset Transactions Price Price Asset Date Gain
<S> <C> <C> <C> <C> <C> <C> <C>
PURCHASES:
**T. Rowe Price-
Indiana Energy, Inc. * $4,300,430 $ - $4,300,430 $4,300,430 $ -
SALES:
**T. Rowe Price
Indiana Energy, Inc. * - 2,671,327 2,578,479 2,578,479 92,848
* Information not available from trustee
** Represents party-in-interest to the Plan
</TABLE>
