PEOPLES ENERGY CORP
8-K, 1999-11-05
NATURAL GAS DISTRIBUTION
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UNITED STATES

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

 

November 4, 1999

Date of Report (Date of earliest event reported)

 

PEOPLES ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

 

Illinois
1-5540
36-2642766
(State or other jurisdiction of
(Commission
(I.R.S. Employer
incorporation or organization)
File Number)
Identification No.)

 

24th Floor, 130 East Randolph Drive, Chicago, Illinois
60601-6207
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code
(312) 240-4000

 

None

(Former name or former address, if changed since last report)

 

 

Item 5. OTHER EVENTS

On November 5, 1999, Peoples Energy Corporation will commence presentations before security analysts wherein the company will discuss fiscal year 1999 results, the company's outlook and strategy and financial projections for fiscal year 2000 and selected financial projections concerning periods after fiscal year 2000. The company is filing this 8-K to give broad disclosure to such forward-looking information.

 

Item 7. FINANCIAL STATEMENTS AND EXHIBITS

The following is filed as an exhibit to this report.

Exhibit
Number       Description

  99        The following exhibit outlines the information to be presented by Peoples Energy Corporation to security analysts commencing on November 5, 1999.

 

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

Forward Looking Information. This Current Report on Form 8-K contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, such as business plans, expectations for future development and earnings growth, and other information not of a strictly historical nature. Actual results could differ materially from such expectations because of many uncertainties, including, but not limited to: general U.S. and Illinois economic conditions; business and competitive conditions resulting from deregulation and consolidation of the energy industry; the timing and extent of changes in energy commodity prices and interest rates; adverse results in material environmental litigation; regulatory developments in Illinois and other states where the company does business; the company's success in identifying diversified energy projects on financially acceptable terms and successfully developing and operating such projects; the successful implementation of the company's new customer information system; and the ability of various vendors and others with whom the company interacts to complete Year 2000 readiness efforts in a timely manner that allows them to continue normal business transactions with the company without disruption. Some of the uncertainties that may affect future results are discussed in more detail in the company's Annual Report on Form 10-K on file with the SEC. All forward-looking statements included in this presentation are based upon information presently available, and the company assumes no obligation to update any forward-looking statements.

 

 

 

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

PEOPLES ENERGY CORPORATION

(Registrant)

 

        
Dated: November 4, 1999    By:  /s/ JAMES M. LUEBBERS
        
      Name: James M. Luebbers
      Title: Chief Financial Officer & Controller

 

 

EXHIBIT INDEX

 

Exhibit
Number       Description

  99        The following exhibit sets forth the information to be presented by Peoples Energy Corporation to security analysts commencing on November 5, 1999.

 

EXHIBIT 99

Forward-Looking Information

Map of City of Chicago

 

I. Midwest Energy Environment

  • Market Share Competition
  • Gas Usage for Electric Generation
  • Electric Restructuring
  • Strong Gas Prices

II. Regional M&A Activity

  • AES/Cilcorp
  • NiSource/Columbia Energy
  • Dominion Resources/CNG
  • DTE/MCN
  • Dynegy/Illinova
  • Unicom/Peco Energy
  • Wisconsin Energy/WICOR

III. Vision for Peoples Energy 3-5 Years

  • Leading Midwestern Energy Company
  • Lines of Business Focus
  • Value Creation for Shareholders

IV. Strengths

  • Strategic Assets
  • Management Team
  • Balance Sheet
  • Business Relationships
  • Shareholder Return
  • Customer Base

V. Existing Interstate Pipelines and Proposed Pipeline Projects

Map of pipelines

 

VI. Three Part Strategy

  • Enhance the Utilities
  • Grow Diversified Businesses
  • Pursue Strategic Alliances or Acquisitions
  • Goals:
  • Shareholder Value
  • Earnings
  • Dividends

VII. Consolidated Financial Highlights

  • Fiscal Year Ended September 30, 1999
Operating Revenues (MM); $1,194
Operating Income and Equity Investment Income (MM) $164.9
Net Income (MM) $92.6
Earnings Per Share $2.61

  • Fiscal Year Ended September 30, 1998
Operating Revenues (MM) $1,133
Operating Income and Equity Investment Income (MM) $158.8
Net Income (MM) $79.4
Earnings Per Share $2.25

VIII. Lines of Business

    • Gas Distribution
    • Power Generation
    • Midstream Services
    • Retail Energy Services
    • Oil and Gas Production
    • Other

IX. Gas Distribution Variations 1999 vs. 1998 ($MM)

  • Operating Revenues
  • $(3.0)
      • Operating Expenses
      • Pension Expense 6.8
        Labor and Group Insurance (4.3)
        Bad Debt Expense (1.5)
        Computer Support Services 2.4
        Depreciation 2.1
        Other (3.2)
        2.3
          • Operating Income
          • $(5.3)

             

            X. Earnings from Diversified Businesses for Fiscal 1999 ($MM)

              • Power Generation
              • $6.9
              • Midstream Services
              • 9.0
              • Retail Energy Services
              • (3.6)
              • Oil and Gas Production
              • 2.2
              • Other
              • (.2)
              • Operating Income and Equity Investment Income
              • 14.3
              • Income Taxes and Financing
              • (7.2)
              • Net Income
              • $7.1
              • Percent of Peoples Energy Total Net Income
              • 8%

                XI. Road Map for Success

                Map of U.S. and Peoples Energy Gas Supply Sources

                XII. Gas Distribution

                  • Objectives
                  • Scale
                  • Technology
                  • Customer Focus
                  • Profit on Gas Supply

                XIII. Gas Distribution

                  • Fiscal 2000 - 2002 Initiatives
                  • SureRead Installation
                  • 90% of meters by end of 2000
                  • Eliminate Meter Readers
                  • Reduce Call Center Demand
                  • C-First Implementation and Enhancement
                  • Bad Debt Improvement
                  • Product Opportunities
                  • Continuous Improvement
                  • Enron Alliance For Gas Supply
                  • Performance-Based Rates

                XIV. Power Generation

                  • Objective: > 1000MW Owner-Operator
                  • Fiscal 2000 - 2002 Initiatives
                  • Elwood Expansion
                  • Three Chicago Sites
                  • Regional Opportunities

                 

                XV. Proposed Calumet Power Site

                Street Map of Proposed Facility and Surrounding Area

                XVI. Midstream Services

                  • Objective: Primary Player in Midwest Market Center
                  • Fiscal 2000 - 2002 Initiatives
                  • Hub Services
                  • Transportation and Storage
                  • NYMEX Chicago Contract
                  • Title tracking
                  • Gas Peaking
                  • Expanded capacity
                  • New facility
                  • Wholesale Marketing
                  • Enron Venture
                  • Pipeline Activity
                  • Wilton Center (Enron)
                  • Wisconsin Pipeline
                  • Gas East

                XVII. Peoples Gas Hub

                Schematic of Mahomet Pipeline between Manlove Storage Complex and Premium Chicago City Market

                  • Pipelines and other facilities currently connecting to Mahomet Pipeline:
                  • NGPL
                  • ANR
                  • Midwestern
                  • Northern Border
                  • Trunkline
                  • NICOR
                  • PGL LP
                  • PERC NGL Peaking
                  • Planned connections:
                  • Alliance
                  • Tri-State
                  • Wisconsin Pipeline
                  • Vector

                 

                XVIII. Retail Energy Services

                  • Objective: Capture Critical Regional Market Share
                  • Fiscal 2000 - 2002 Initiatives
                  • Illinois Electric and Gas Unbundling
                  • Acquisitions/Alliances
                  • Proprietary Products
                  • Infrastructure Development
                  • ESCO's

                XIX. Retail Energy Services Market Potential in Northern Illinois

                  • Potential Annual Gross Margin
                  • 2000
                  • $145
                  • 2001
                  • $227
                  • 2002
                  • $294
                      • Potential Gross Margin to Peoples Energy
                        • 2000
                        • $15
                        • 2001
                        • $27
                        • 2002
                        • $39

                          XX. Oil and Gas Production

                            • Objective: Top-Fifty Owner of U.S. Gas Reserves
                            • Fiscal 2000 - 2002 Initiatives
                            • Balanced growth
                            • Drilling program
                            • Operator capability

                           

                          XXI. Gas Distribution

                            • Challenges for 2000
                            • C-first
                            • Employee Costs
                            • Project Development
                            • Competitive Compensation
                            • Depreciation
                            • Technology
                            • System Integrity
                            • Gas Deliveries
                            • Weather
                            • Average Use Per Customer
                            • Customer Growth

                          XXII. Diversified Energy Businesses

                            • Assumptions for 2000
                            • Power Generation
                            • Full year of Elwood availability
                            • Revenue recognition based on operation
                            • Midstream Services
                            • Hub Services
                            • Peaking and Wholesale Marketing
                            • Retail Energy Services
                            • Growth in Gas Margins
                            • Develop Electric Products
                            • Oil and Gas Production
                            • Drilling Program
                            • Reserve Acquisition

                           

                          XXIII. Capital Spending

                            • 1997
                            • Gas Distribution
                            • Diversified Businesses
                            • Total ≈ $100MM
                            • 1998
                            • Gas Distribution
                            • Diversified Businesses
                            • Total ≈ $150MM
                            • 1999
                            • Gas Distribution
                            • Diversified Businesses
                            • Total ≈ $200MM
                            • 2000
                            • Likely
                            • Potential
                            • Total ≈ $250MM
                            • 2001
                            • Likely
                            • Potential
                            • Total ≈ $300MM
                            • 2002
                            • Likely
                            • Potential
                            • Total ≈ $350MM

                           

                          XXIV. Capital Structure Balances at September 30

                            • 1998
                            • Long-Term Debt 42%
                            • Common Stockholders' Equity 58%
                            • Total of $1.2 billion
                            • 1999
                            • Long-Term Debt 40%
                            • Common Stockholders' Equity 60%
                            • Total of $1.3 billion
                            • 2002
                            • Potential Ranges
                            • Long-Term Debt 30-50%
                            • Common Stockholders' Equity 50-70%
                            • Potential Total of $2 billion

                          XXV. Fiscal 2000 Outlook

                            • EPS Range $2.65 - $2.75
                            • Gas Distribution ROE Target of 12%
                            • No rate cases
                            • Diversified Energy Businesses
                            • 12% to 16% of total earnings
                            • EBIT range $25 to $35 million

                          XXVI. Employees' Incentives for Growth

                            • Short-term Incentive Compensation Program for All Employees
                            • Long-term Incentive Compensation for Officers and Selected Managers
                            • Stock Ownership Requirement for Officers
                            • Approximately 10% of Stock Held by Employees

                          XXVII. Q & A

                          XXVIII. Video of Peoples Energy's New Commercials

                          

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