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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
May 1, 2000
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)
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Item 5. OTHER EVENTS
On May 1, 2000, 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.
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<CAPTION>
Exhibit
Number Description
<S> <C>
99 The following exhibit outlines the information to be presented by
Peoples Energy Corporation to security analysts commencing on May 1,
2000.
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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: weather; 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; and the company's success in identifying diversified
energy projects on financially acceptable terms and successfully developing and
operating such projects. 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.
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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)
May 1, 2000 By: /s/ J. M. LUEBBERS
- ---------------------------- --------------------------------
(Date) J. M. Luebbers
Chief Financial Officer
and Controller
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EXHIBIT INDEX
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<CAPTION>
Exhibit
Number Description
<S> <C>
99 The following exhibit sets forth the information to be presented by
Peoples Energy Corporation to security analysts commencing on May 1,
2000.
</TABLE>
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EXHIBIT 99
FORWARD-LOOKING INFORMATION
I. PEOPLES ENERGY TOTAL RETURN
- Earnings Growth + Dividend Yield = Attractive Investment Opportunity
II. RETURN COMPARISON
- Long-Term Growth Rate
- Peoples Energy 7%
- Peer Group 6%
- Gas Utilities 5.9%
- Electric Utilities 5.6%
- Dividend Yield
- Peoples Energy 6.3%
- Peer Group 5.6%
- Gas Utilities 5.4%
- Electric Utilities 4.9%
- Total Return
- Peoples Energy 13.3%
- Peer Group 11.6%
- Gas Utilities 11.3%
- Electric Utilities 10.5%
III. THREE PART STRATEGY
- Enhance the Utilities
- Grow Diversified Businesses
- Pursue Strategic Alliances or Acquisitions
- Goals
- Shareholder Value
- Earnings Growth
- Dividend Increases
IV. FISCAL 1999 RESULTS
- EPS $2.61
- Gas distribution ROE 13%
- Earnings from diversified 8%
- Dividend payout 75%
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V. EARNINGS TARGETS
- Fiscal 2000
- Total EPS Range $2.65 to $2.75
- Diversified Businesses 12% to 16% of total earnings
- Actual weather through March 31, normal thereafter
- Fiscal 2001
- Total EPS Range $2.85 to $2.95
- Diversified Businesses 18% to 22% of total earnings
- Fiscal 2002
- Total EPS Range $3.05 to $3.15
- Diversified Businesses 23% to 27% of total earnings
VI. BUSINESS SEGMENTS
- Gas distribution
- Retail energy services
- Power generation
- Midstream services
- Oil and gas production
- Other
VII. GAS DISTRIBUTION
- EBIT
- 1999 $155 million
- 2000 $175 to $185 million
- 2001 $180 to $190 million
- Exceed ROE targets
- Cost reductions/efficiency gains
- Customer satisfaction
VIII. GAS DISTRIBUTION-WEATHER
- Five-year insurance policy - pays out at 8% warmer than normal
- FYTD negative impact = 891 degree days (16%)
- FYTD earnings impact net of insurance $.33 per share
IX. GAS DISTRIBUTION-TECHNOLOGY
- C-First and SureRead
- Bad debt improvement
- Marketing enhancements
- Operating efficiencies
- Customer satisfaction
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X. GAS DISTRIBUTION-NEW CONSTRUCTION GROWTH
- Peoples Gas New Housing Units
- 1996 1,833
- 1997 2,478
- 1998 3,761
- 1999 3,944
- North Shore Gas New Housing Units
- 1996 3,221
- 1997 2,794
- 1998 2,610
- 1999 2,475
XI. GAS DISTRIBUTION-FUTURE OPPORTUNITIES
- Microturbines
- Fuel cells
- New products and services
XII. RETAIL ENERGY SERVICES
- EBIT
- 1999 -$3.6 million
- 2000 -$2.0 to -$3.0 million
- 2001 $0.0 to $1.0 million
- Continued growth in gas margins
- Significant market share of eligible electric customers
- Utilize cost-efficient infrastructure
XIII. POWER GENERATION
- EBIT
- 1999 $6.9 million
- 2000 $10 to $15 million
- 2001 $15 to $20 million
- Dominion partnership (Elwood)
- 600 MW (1999)
- 600 MW (2001)
- Enron venture (800MW)
- 400 MW (2001)
- 400 MW (2002)
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XIV. POWER GENERATION - PEOPLES ENERGY OWNERSHIP
- In service 1999
- New 300 MW
- Cumulative 300 MW
- In service 2001
- New 300-500 MW
- Cumulative 600-800 MW
- In service 2002
- New 200-400 MW
- Cumulative 1000-1200 MW
XV. MIDSTREAM SERVICES
- EBIT
- 1999 $9 million
- 2000 $9 to $11 million
- 2001 $10 to $12 million
- Hub services
- Gas peaking
- Wholesale marketing
- 10% Annual Growth Rate
XVI. MIDSTREAM SERVICES - MIDWEST ENERGY HUB
- Schematic not included
- Pipelines currently connecting to Mahomet Pipeline:
- NICOR
- PGL LP
- NGPL
- PERC NGL Peaking
- ANR
- Midwestern
- Northern Border
- Trunkline
- Planned connections:
- Wisconsin Pipeline Proposal
- Vector
- Alliance
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XVII. MIDSTREAM SERVICES
- Midwest Energy Hub (Peoples Energy and Enron)
- Hub Services
- Utility Services
- Peaking Services
- Hub Enhancements
- Asset Acquisition
- New Product Development
XVIII. MIDSTREAM SERVICES-WHITECAP ENERGY SYSTEM
- Map of main pipeline route and laterals
- Supports growing power demand
- Most efficient and environmentally preferred fuel source
- FERC filing summer 2000
- In service FY 2002
XIX. OIL AND GAS PRODUCTION
- EBIT/Section 29 tax credits
- 1999
- Section 29 tax credits $0
- EBIT $2.2 million
- 2000
- Section 29 tax credits $2.5 to $3.5 million
- EBIT $5 to $8 million
- 2001
- Section 29 tax credits $4 to $5 million
- EBIT $7 to $10 million
- 91.5 Bcfe of proved reserves as of 12/31/99
- Objective: owner of 350-400 Bcfe of U.S. gas reserves
XX. OIL AND GAS PRODUCTION - WORKING INTEREST LOCATIONS
- Map of working locations (Arkoma, San Juan, Southeast Texas,
Louisiana)
- 96% natural gas
- 75% of 5-year production hedged
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XXI. FINANCIAL TARGETS
- 1999
- PEC earnings per share $2.61
- Growth rate 16%
- Earnings from diversified 8%
- Gas distribution ROE 13%
- 2000
- PEC earnings per share $2.65 to $2.75
- Growth rate 4%
- Earnings from diversified 12% to 16%
- Gas distribution ROE 13%
- 2001
- PEC earnings per share $2.85 to $2.95
- Growth rate 7%
- Earnings from diversified 18% to 22%
- Gas distribution ROE 13%
- 2002
- PEC earnings per share $3.05 to $3.15
- Growth rate 7%
- Earnings from diversified 23% to 27%
- Gas distribution ROE 13%
XXII. GAS DISTRIBUTION - CAPITAL SPENDING
- 1997 - $ 86 million
- 1998 - $105 million
- 1999 - $125 million
- 2000 - $125 million
- 2001 - $110 million
XXIII. CASH SHORTFALL (MILLIONS)
- 1999
- Cash from Operations $176
- Dividends 68
- Capital Commitments
- Gas Distribution 125
- Diversified 103
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- Cash Shortfall ($120)
- Balance Sheet $120
- Off Balance Sheet -
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- 2000
- Cash from Operations $190
- Dividends 70
- Capital Commitments
- Gas Distribution 125
- Diversified 215
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- Cash Shortfall ($220)
- Balance Sheet $140
- Off Balance Sheet $80
- 2001
- Cash from Operations $200
- Dividends 72
- Capital Commitments
- Gas Distribution 110
- Diversified 198
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- Cash Shortfall ($180)
- Balance Sheet $ -
- Off Balance Sheet $180
XXIV. CAPITAL STRUCTURE
Fiscal year end
- 1999
- Long-Term Debt 40%
- Common Stockholders' Equity 60%
- 2000
- Long-Term Debt 40%
- Common Stockholders' Equity 60%
- 2001
- Long-Term Debt 45%
- Common Stockholders' Equity 55%
- Moody's Investors Service
- Utilities Aa2
- PEC A2
- Standard & Poor's Corp.
- Utilities AA-
- PEC A+
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XXV. LOW COST FINANCING
- Average Cost of Long-Term Debt
- PEC 5.4%
- Peers 7.1%
- Interest Coverage Ratios
- PEC 4.7x
- Peers 3.7x
XXVI. RISK MANAGEMENT
- Objectives
- Reliable revenue stream
- Reduced volatility
- Initiatives
- Business focus
- Investment policy
- Contract terms
- Hedging program
XXVII. PEOPLES ENERGY - ATTRACTIVE INVESTMENT OPPORTUNITY
- Above average future growth
- High dividend yield
- Low cost debt
- Diversified growth
- 5-year weather insurance
- Segment reporting
