February 24, 1998
Securities and Exchange Commission
6432 General Green Way
Alexandria, VA 23212-2413
Gentlemen:
We are transmitting herewith Indiana Energy, Inc.'s
Statement on Form U-3A-2.
Sincerely,
/s/Douglas S. Schmidt
Douglas S. Schmidt
DSS:tmw
File No. 069-00312
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-3A-2
Statement by Holding Company Claiming Exemption
Under Rule U-3A-2 from the Provisions of the Public
Utility Holding Company Act of 1935
To Be Filed Annually Prior to March 1
INDIANA ENERGY, INC.
hereby files with the Securities and Exchange
Commission (Commission), pursuant to Rule 2, its
statement claiming exemption as a holding company from
the provisions of the Public Utility Holding Company
Act of 1935, and submits the following information:
1. Name, State of organization, location and
nature of business of claimant and every subsidiary thereof.
Indiana Energy, Inc. (Indiana Energy), Claimant
in this statement, is an Indiana corporation with
its principal offices in Indianapolis, Indiana.
Claimant is a "holding company" (as such term is
defined by the Act), owning all of the issued and
outstanding shares of common stock of Indiana Gas
Company, Inc. (Indiana Gas), IEI Investments, Inc.
(IEI Investments) and IEI Capital Corp.
Indiana Gas is an Indiana corporation engaged
in the business of supplying gas service at retail,
including transportation, to ultimate consumers,
all within the state of Indiana. Indiana Gas is a
"subsidiary company" of Indiana Energy and is also
a "gas utility company" and a "public utility
company" (as such terms are defined by the Act).
Indiana Gas owns all of the issued and
outstanding shares of common stock of Terre Haute
Gas Corporation (Terre Haute) and Richmond Gas
Corporation (Richmond), both of which are Indiana
corporations. While Terre Haute and Richmond
technically exist as separate corporate entities,
in accordance with an order issued by the Indiana
Utility Regulatory Commission, Indiana Gas, Terre
Haute and Richmond have combined their operations
for all purposes and are transacting business under
the name Indiana Gas Company, Inc. Pursuant to
that order, accounting records and financial
reports are on a consolidated basis. For purposes
of this statement, any reference to Indiana Gas
will, in effect, be inclusive of the separate
corporate entities of Richmond and Terre Haute.
Indiana Energy owns all of the outstanding
shares of capital stock of IEI Investments, an
Indiana corporation. IEI Investments was formed
for the purpose of grouping and controlling
nonregulated businesses of Indiana Energy and
investments therein and to separate them from
regulated businesses.
IEI Investments owns all of the issued and
outstanding shares of capital stock of IGC Energy,
Inc. (IGC Energy), an Indiana corporation. On
March 15, 1996, IGC Energy, Inc. and Citizens By-
Products Coal Company, a wholly owned subsidiary of
Citizens Gas and Coke Utility (Citizens Gas),
formed a jointly and equally owned Indiana limited
liability company to provide natural gas supply and
related services. The formed entity, ProLiance
Energy, LLC (ProLiance), began providing services
to Indiana Gas and Citizens Gas effective April 1,
1996. ProLiance also provides products and
services to other gas utilities and customers in
Indiana and surrounding states. ProLiance assumed
the business of Indiana Energy Services, Inc., a
wholly owned subsidiary of IGC Energy and an
Indiana corporation, which had provided similar
services to other customers and from January 1,
1996, to March 31, 1996, to Indiana Gas. ProLiance
added power marketing in late fiscal 1997 to its
services offered. Power marketing involves buying
electricity on the wholesale market and then
reselling it to other marketers, utilities and
other customers.
On April 1, 1997, IGC Energy and Citizens By-
Products Coal Company formed CIGMA, LLC (CIGMA), a
jointly and equally owned Indiana limited liability
company. CIGMA provides materials acquisition and
related services that are used by Indiana Gas and
Citizens Gas, as well as similar services for third
parties.
On May 23, 1997, IGC Energy, Citizens By-
Products Coal Company and Energy Systems Group,
Inc. (ESGI) formed Energy Systems Group, LLC (ESG),
an equally owned Indiana limited liability company.
ESG provides a package of products, services and
skills to help energy users achieve enhanced energy
and operational performance. The packages provide
for improvements to be paid for by the customers
from savings generated within their existing
operating budgets. ESG has assumed the
responsibilities of ESGI, an energy related
performance contracting firm and wholly owned
subsidiary of SIGCORP, Inc.
IEI Investments also owns all of the
outstanding voting securities of Energy Realty,
Inc. (Energy Realty). Energy Realty is an Indiana
corporation engaged in the business of real
estate. Energy Realty currently owns a warehouse
facility which is primarily leased to CIGMA and
also has several affordable housing investments.
On January 20, 1998, IEI Investments formed
Energy Financial Group, Inc. (EFGI) to hold all
financial entities and investments made by IEI
Investments. EFGI is wholly owned by IEI
Investments and is an Indiana corporation. Also on
January 20, 1998, IEI Synfuels, Inc. (IEI Synfuels)
was established as an Indiana corporation and
wholly owned subsidiary of EFGI. On February 5,
1998, IEI Synfuels purchased one limited
partnership unit (representing an 8.3 percent
ownership interest) in Pace Carbon Synfuels
Investors, L.P. (Pace Carbon), a Delaware limited
partnership formed to develop, own and operate four
projects to produce and sell coal-based synthetic
fuel. Pace Carbon will convert coal fines (small
coal particles) into coal pellets that can be sold
to major coal users such as utilities and steel
companies. This process is eligible for federal
tax credits under Section 29 of the Internal
Revenue Code and the Internal Revenue Service has
issued a private letter ruling with respect to the
four projects.
On November 21, 1997, IEI Financial Services,
LLC (IEI Financial), an Indiana limited liability
company, was formed. IEI Financial was created to
perform third-party collections, leasing, asset-
based financing, factoring and related services.
IEI Financial has two members, EFGI (99 percent
ownership) and IGC Energy (1 percent ownership).
In October 1997, Indiana Energy formed a new
business unit, IEI Services, LLC (IEI Services), to
provide support services to Indiana Energy and its
subsidiaries, as well as to third-parties in the
future. Services to be provided include human
resources functions, information technology and
various financial services. These services had been
performed by Indiana Gas in the past. IEI Services
is an Indiana limited liability company with two
members, Indiana Energy (99 percent ownership) and
IGC Energy (1 percent ownership).
Also, in October 1997, Indiana Energy formed a
new wholly owned subsidiary and Indiana
corporation, IEI Capital Corp., to conduct the
financing for Indiana Energy and its subsidiaries
other than Indiana Gas. IEI Capital Corp. will
provide the non-regulated businesses with short-
term financing for working capital requirements, as
well as secure permanent financing for those
entities.
2. A brief description of the properties of
claimant and each of its subsidiary public utility
companies used for the production, transmission and
distribution of natural or manufactured gas, indicating
the location of principal transmission lines, producing
fields, gas manufacturing plants and gas distribution
facilities, including all such properties which are
outside the State in which claimant and its
subsidiaries are organized and all transmission or
pipelines which deliver or receive gas at the borders
of such State.
At the date of the filing of this Statement,
Indiana Energy had no real properties and is solely
a holding company owning all of the issued and
outstanding shares of common stock of Indiana Gas,
IEI Investments and IEI Capital Corp.
The properties of Indiana Gas used for the
production, storage and distribution of gas are
located solely within the state of Indiana except
for pipeline facilities extending from points in
northern Kentucky to points in southern Indiana by
means of which gas is transported to Indiana for
sale or transportation by Indiana Gas to ultimate
customers in Indiana. At December 31, 1997, these
included approximately 10,542 miles of distribution
mains; 496,281 meters, four reservoirs for
underground storage of purchased gas with
approximately 72,951 acres of land owned and/or
held under storage easements with 9,183,000 Dth of
gas in storage providing a daily deliverability
capacity of 134,160 Dth. Indiana Gas has five
liquefied petroleum air gas manufacturing plants
with a total daily capacity of 36,700 Dth of gas.
These properties are used by Indiana Gas in its gas
operations in which gas is supplied to
approximately 480,000 consumers in 281 communities
in 48 of the 92 counties in the state of Indiana.
The largest communities served are Muncie,
Anderson, Lafayette-West Lafayette, Bloomington,
Terre Haute, Marion, New Albany, Columbus,
Jeffersonville, New Castle and Richmond. While
Indiana Gas does not serve in Indianapolis, it does
serve the counties and communities which border
that city.
Effective April 1, 1996, Indiana Gas purchases
all of its natural gas from ProLiance. Gas is
transported to Indiana Gas' system by interstate
pipeline suppliers under Federal Energy Regulatory
Commission approved rate schedules.
3. The following information for the last
calendar year with respect to Claimant and each of its
subsidiary public utility companies:
(a) Number of Dth of gas distributed at retail:
Company Calendar Year DTH
Indiana Gas 1997 80,901,000 Sales
42,780,000 Transportation
123,681,000 Total Throughput
(b) Number of Dth of gas distributed at retail outside the
State in which each such company is organized:
None
(c) Number of Dth of gas sold at wholesale
outside the State in which each such company is
organized, or at the State line:
None
(d) Number of Dth of gas purchased outside the
State in which each such company is organized
or at the State line:
None.
4. The following information for the reporting
period with respect to claimant and each interest it
holds directly or indirectly in a EWG or a foreign
utility company.
Inapplicable to claimant.
Exhibit A
A consolidating statement of income and a
consolidating statement of retained earnings of Indiana
Energy and subsidiaries, for the calendar year 1997,
together with a consolidating balance sheet of Indiana
Energy and subsidiary companies, as of the close of
such calendar year, are annexed hereto as Exhibit A.
Exhibit B
See the Financial Data Schedule filed herewith as
Exhibit 27.
Exhibit C
Inapplicable to claimant.
The above named Claimant has caused this statement
to be duly executed on its behalf by its authorized
officer on this 24th day of February 1998.
INDIANA ENERGY, INC.
(Name of Claimant)
By /s/Niel C. Ellerbrook
Niel C. Ellerbrook
President and
Chief Operating Officer
Attest:
/s/Ronald E. Christian
Ronald E. Christian
Secretary and General Counsel
Name, title and address of officer to whom notices and
correspondence concerning this statement should be
addressed:
Niel C. Ellerbrook
President and
Chief Operating Officer
Indiana Energy, Inc.
1630 North Meridian Street
Indianapolis, Indiana 46202
<TABLE>
INDIANA ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1997
(Thousands - Unaudited)
Indiana IEI IEI Energy Indiana Adj.
Indiana Gas Company, Services Investments, IGC Realty, Energy Debit
ASSETS Energy, Inc. Inc. LLC Inc. Energy, Inc Inc. Svcs,Inc. (Credit) Consol.
<C> <S> <S> <S> <S> <S> <S> <S> <S> <S>
CURRENT ASSETS:
Cash and cash
equivalents $ 321 $ 1,384 $ (2,279) $ (3,024) $ (3,837) $ (358) $4,992 $ 2,821 $ 20
Accounts receivable,
less reserves - 53,195 (1) 75 - 52 55 168 53,544
Accounts receivable
from affiliated
companies 2,215 - 8,845 2,878 7,644 - - (21,582) -
Accrued unbilled
revenues - 46,123 - - - - - - 46,123
Materials and
supplies - at
average cost - 148 2 - - - - - 150
Liquefied petroleum
gas - at average
cost - 878 - - - - - - 878
Gas in underground
storage - at
last-in,first-out
cost - 17,024 - - - - - - 17,024
Prepayments and other 1,064 3,630 310 - - 8 - - 5,012
3,600 122,382 6,877 (71) 3,807 (298) 5,047 (18,593) 122,751
EQUITY IN NET ASSETS OF
WHOLLY-OWNED SUBS:
Indiana Gas
Company, Inc. 246,406 - - - - - - (246,406) -
IEI Services, LLC 33,068 - - - 335 - - (33,403) -
IEI Investments,Inc. 22,540 - - - - - - (22,540) -
IGC Energy, Inc. - - - 22,051 - - - (22,051) -
Energy Realty, Inc. - - - 606 - - - (606) -
Indiana Energy
Services, Inc. - - - - 4,591 - - (4,591) -
302,014 - - 22,657 4,926 - - (329,597) -
INVESTMENTS IN
UNCONSOL. AFFILIATES - - - - 20,895 6,822 - - 27,717
UTILITY PLANT:
Original cost - 922,491 - - - - - - 922,491
Less - Accum. depr.
and amortization - 358,750 - - - - - - 358,750
- 563,741 - - - - - - 563,741
NONUTILITY PLANT:
Original cost - 340 41,689 - 21 3,753 - - 45,803
Less - Accum. depr.
and amortization - 338 8,197 - - 469 - - 9,004
- 2 33,492 - 21 3,284 - - 36,799
DEFERRED CHARGES:
Unamortized debt
discount and
expense - 8,048 - - - 91 - - 8,139
Other (43) 4,716 1,272 106 - - - - 6,051
(43) 12,764 1,272 106 - 91 - - 14,190
$305,571 $698,889 $ 41,641 $ 22,692 $ 29,649 $9,899 $5,047 $(348,190) $765,198
INDIANA ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1997
(Thousands - Unaudited)
Indiana IEI IEI Energy Indiana Adj.
LIABILITIES AND Indiana Gas Company, Services Investments, IGC Realty, Energy Debit
SHAREHOLDERS' EQUITY: Energy, Inc. Inc. LLC Inc. Energy, Inc Inc. Svcs,Inc. (Credit) Consol.
<C> <S> <S> <S> <S> <S> <S> <S> <S> <S>
CURRENT LIABILITIES:
Maturities and
sinking fund
requirements
of long-term
debt $ - $ - $ - $ - $ - $ 272 $ - $ - $ 272
Notes payable - 69,000 5,525 - - 3,800 - 5,525 72,800
Accounts payable 6 49,482 1,226 25 6,754 - 456 10,625 47,324
Accounts payable
to affiliated
companies 226 - 2,071 139 7 - - 2,443 -
Refundable gas
costs - 10,333 - - - - - - 10,333
Customer deposits
and advance
payments - 19,738 - - - - - - 19,738
Accrued taxes 355 17,904 195 (60) 860 (127) - - 19,127
Accrued interest - 4,300 6 - - 55 - - 4,361
Other current
liabilities 283 23,640 (785) 44 - 2,100 - (198) 25,480
870 194,397 8,238 148 7,621 6,100 456 18,395 199,435
DEFERRED CREDITS AND
OTHER LIABILITIES:
Deferred income
taxes - 55,736 - - - - - - 55,736
Accrued
postretirement
benefits other
than pensions - 23,744 - - - - - - 23,744
Unamortized
investment
tax credit - 10,012 - - - - - - 10,012
Regulatory income
tax liability - 1,874 - - - - - - 1,874
Other 198 1,720 - 4 (23) 334 - 198 2,035
198 93,086 - 4 (23) 334 - 198 93,401
CAPITALIZATION:
Common stock 146,791 142,995 - 1 1 1 1 142,999 146,791
Paid-in capital - - 32,523 4,179 4,361 - - 41,063 -
Unearned
compensation -
restricted
stock grants (1,708) - - - - - - - (1,708)
Retained earnings 159,420 103,411 880 18,360 17,689 605 4,590 145,535 159,420
Total common
shareholders'
equity 304,503 246,406 33,403 22,540 22,051 606 4,591 329,597 304,503
Long-term debt - 165,000 - - - 2,859 - - 167,859
304,503 411,406 33,403 22,540 22,051 3,465 4,591 329,597 472,362
$305,571 $698,889 $ 41,641 $ 22,692 $ 29,649 $9,899 $5,047 $348,190 $765,198
</TABLE>
<TABLE>
INDIANA ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
TWELVE MONTHS ENDED DECEMBER 31, 1997
(Thousands - Unaudited)
Indiana IEI IEI Energy Indiana Adj.
Indiana Gas Company, Services Investments, IGC Realty, Energy Debit
Energy, Inc. Inc. LLC Inc. Energy, Inc Inc. Svcs,Inc. (Credit) Consol.
<C> <S> <S> <S> <S> <S> <S> <S> <S> <S>
OPERATING REVENUES:
Utility $ - $528,058 $ - $ - $ - $ - $ - $ - $528,058
Other - - 6,154 - 52 479 (387) 5,942 356
- 528,058 6,154 - 52 479 (387) 5,942 528,414
OPERATING EXPENSES:
Cost of gas - 319,738 - - - - (2,184) 387 317,941
Other operating 437 80,156 4,108 273 1,522 27 - (6,329) 80,194
Restructuring costs - 39,531 - - - - - - 39,531
Depreciation and
amortization - 34,340 969 - - 108 - - 35,417
Taxes other than
income taxes 11 16,901 189 - 99 - - - 17,200
448 490,666 5,266 273 1,621 135 (2,184) (5,942) 490,283
OPERATING INCOME (448) 37,392 888 (273) (1,569) 344 1,797 - 38,131
OTHER INCOME:
Equity in earnings
of unconsolidated
affiliates - - - - 9,597 (410) - - 9,187
Equity in earnings
of consolidated
subsidiaries 22,195 - - 7,794 1,125 - - 31,114 -
Other - net (20) 542 1 83 2,668 - - - 3,274
22,175 542 1 7,877 13,390 (410) - 31,114 12,461
INCOME BEFORE INTEREST
AND INCOME TAXES 21,727 37,934 889 7,604 11,821 (66) 1,797 31,114 50,592
INTEREST EXPENSE - 17,049 9 - - 358 - - 17,416
INCOME BEFORE INCOME
TAXES 21,727 20,885 880 7,604 11,821 (424) 1,797 31,114 33,176
INCOME TAXES 153 7,237 - (72) 4,115 (512) 681 - 11,602
NET INCOME $ 21,574 $ 13,648 $ 880 $ 7,676 $ 7,706 $ 88 $1,116 $31,114 $ 21,574
</TABLE>
<TABLE>
INDIANA ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
TWELVE MONTHS ENDED DECEMBER 31, 1997
(Thousands - Unaudited)
Indiana IEI IEI Energy Indiana Adj.
Indiana Gas Company, Services Investments, IGC Realty, Energy Debit
Energy, Inc. Inc. LLC Inc. Energy, Inc Inc. Svcs,Inc. (Credit) Consol.
<C> <S> <S> <S> <S> <S> <S> <S> <S> <S>
BALANCE DEC. 31, 1996 $163,868 $148,458 $ - $ 10,684 $ 9,983 $ 517 $ 3,474 $173,116 $163,868
ADD:
Net Income 21,574 13,648 880 7,676 7,706 88 1,116 31,114 21,574
185,442 162,106 880 18,360 17,689 605 4,590 204,230 185,442
DEDUCT:
Dividends on
Common Stock 26,022 26,500 - - - - - (26,500) 26,022
Noncash Dividend - 32,195 - - - - - (32,195) -
26,022 58,695 - - - - - (58,695) 26,022
BALANCE DEC. 31, 1997 $159,420 $103,411 $ 880 $ 18,360 $ 17,689 $ 605 $ 4,590 $145,535 $159,420
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR3
<LEGEND>
This schedule contains summary financial information extracted from Indiana
Energy, Inc.'s consolidating financial statements as of December 31, 1997, and
for the twelve months then ended and is qualified in its entirety by reference
to such statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> 765,198
<TOTAL-OPERATING-REVENUES> 528,414
<NET-INCOME> 21,574
</TABLE>
