June 30, 1999
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 Energy, Inc.
for the fiscal year ended December 31, 1998, 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, 1998
A. Full Title of the Plan and the Address of the Plan, if
Different from that of the Issuer named below:
Indiana Energy, 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 October 1, 1997, Indiana Energy, Inc. became
the sponsor, replacing Indiana Gas Company, Inc.
ITEM 2 - Changes in Investment Policy
None
ITEM 3 - Contributions Under the Plan
None
ITEM 4 - Participating Employees
Approximately 1,086 employees were participants in the
Plan at December 31, 1998.
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 affiliated companies.
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 Chairman and Chief Executive
Officer of IEI and IGC
Niel C. Ellerbrook President & Chief Operating
Officer of IEI and President
of IGC and IEI Services
Paul T. Baker Executive Vice President & Chief
Operating Officer of IGC
Steven M. Schein Vice President and Treasurer of
IEI and IGC
Thomas J. Zabor Vice President of Human Resources
of IEI Services
As of December 31, 1998, 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, 1998. 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 data) 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,
1998
Statement of Financial Condition as of December 31,
1997
Statement of Income and Other Changes in Plan Equity
for the year ended December 31, 1998
Statement of Income and Other Changes in Plan Equity
for the year ended December 31, 1997
Statement of Income and Other Changes in Plan Equity
for the year ended December 31, 1996
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 ENERGY, 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 30, 1999
INDIANA ENERGY, INC.
RETIREMENT SAVINGS PLAN
(Formerly 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
Item 27a - Assets Held for Investment Purposes I
Item 27d - Reportable Transactions II
INDIANA ENERGY, INC.
RETIREMENT SAVINGS PLAN
(Formerly Indiana Gas Company, Inc.
Retirement Savings Plan)
AS OF DECEMBER 31, 1998 AND 1997
TOGETHER WITH
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Indiana Energy, Inc.
Investment Committee:
We have audited the accompanying statements of financial condition of
the INDIANA ENERGY, INC. RETIREMENT SAVINGS PLAN (formerly the Indiana
Gas Company, Inc. Retirement Savings Plan) as of December 31, 1998 and
1997, and the related statements of income and other changes in plan
equity for the three years ended December 31, 1998. These financial
statements and the schedules referred to below are the responsibility
of the Plan's management. 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 management, 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 condition of the Plan
as of December 31, 1998 and 1997, and the changes in its plan equity
for the three years ended December 31, 1998, 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 financial condition and the statements of income and
other changes in plan equity are presented for purposes of additional
analysis rather than to present the plan equity and changes in plan
equity 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.
The schedule of reportable transactions that accompanies the Plan's
financial statements does not disclose the aggregate number of
purchase and sales transactions of each security included therein.
Disclosure of this information is required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974.
ARTHUR ANDERSEN LLP
Indianapolis, Indiana,
June 28, 1999.
<TABLE>
INDIANA ENERGY, INC.
RETIREMENT SAVINGS PLAN
(Formerly the Indiana Gas Company, Inc. Retirement Savings Plan)
STATEMENT OF FINANCIAL CONDITION
AS OF DECEMBER 31, 1998
T. Rowe Price
Indiana
Energy, Stable
Inc. Value Equity
Common Common Equity Int'l New Index Spectrum
Stock Trust Income Balanced Stock Horizons 500 Growth Partic.
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
$60,107,220)-
Ind. Ener.,Inc.
common stock $34,383,457 $ - $ - $ - $ - $ - $ - $ - $ - $34,383,457
Collective/
Common
Trust Fund - 9,502,871 - - - - - - - 9,502,871
Mutual Funds - - 13,605,456 7,977,911 1,422,950 2,972,385 4,607,178 1,547,102 - 32,132,982
Partic. loans - - - - - - - - 2,546,711 2,546,711
Tot. invest. 34,383,457 9,502,871 13,605,456 7,977,911 1,422,950 2,972,385 4,607,178 1,547,102 2,546,711 78,566,021
Employer contrib. 366,771 131,585 127,242 91,449 29,066 58,813 66,939 29,362 - 901,227
receivable
PLAN EQUITY $34,750,228 $9,634,456 $13,732,698 $8,069,360 $1,452,016 $3,031,198 $4,674,117 $1,576,464 $2,546,711 $79,467,248
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
INDIANA ENERGY, INC.
RETIREMENT SAVINGS PLAN
(Formerly the Indiana Gas Company, Inc. Retirement Savings Plan)
STATEMENT OF FINANCIAL CONDITION
AS OF DECEMBER 31, 1997
T. Rowe Price
Indiana
Energy, Stable
Inc. Value Equity
Common Common Equity Int'l New Index Spectrum
Stock Trust Income Balanced Stock Horizons 500 Growth Partic.
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
$54,732,233)-
Ind. Ener.,Inc.
common stock $34,148,777 $ - $ - $ - $ - $ - $ - $ - $ - $34,148,777
Collective/
Common
Trust Fund - 8,612,893 - - - - - - - 8,612,893
Mutual Funds - - 13,287,016 6,900,836 1,137,509 2,502,972 2,713,995 1,168,056 - 27,710,384
Partic. loans - - - - - - - - 2,888,405 2,888,405
- - -
Tot. invest. 34,148,777 8,612,893 13,287,016 6,900,836 1,137,509 2,502,972 2,713,995 1,168,056 2,888,405 73,360,459
Employer contrib. 390,375 139,035 138,833 95,018 28,389 60,076 49,581 29,481 - 930,788
receivable
PLAN EQUITY $34,539,152 $8,751,928 $13,425,849 $6,995,854 $1,165,898 $2,563,048 $2,763,576 $1,197,537 $2,888,405 $74,291,247
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
INDIANA ENERGY, INC.
RETIREMENT SAVINGS PLAN
(Formerly the Indiana Gas Company, Inc. Retirement Savings Plan)
STATEMENT OF INCOME AND OTHER CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1998
T. Rowe Price
Indiana
Energy, Stable
Inc. Value Equity
Common Common Equity Int'l New Index Spectrum
Stock Trust Income Balanced Stock Horizons 500 Growth Partic.
Fund Fund Fund Fund Fund Fund Fund Fund Loan Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Employee contr. $ 944,957 $ 401,280 $ 536,234 $ 356,748 $ 102,688 $ 238,802 $ 277,468 $ 116,936 $ - $ 2,975,113
Employer contr. 738,341 301,718 363,188 256,398 67,415 158,204 187,202 83,890 - 2,156,356
Interest income - - - - - - - - 248,495 248,495
Dividend income 1,248,128 532,057 1,031,391 235,455 52,078 150,857 55,428 130,792 - 3,436,186
Unrealized appr.
(depreciation)
of invest. 364,586 - 83,462 807,596 119,178 45,145 778,723 35,004 - 2,233,694
Realized
gain (loss)
on invest. (451,340) - 97,364 67,019 18,266 (34,808) 78,122 10,201 - (215,176)
Other inc.
(exp.), net (7,296) 57,154 (15,172) (4,188) (784) (1,684) (1,584) (724) - 25,722
2,837,376 1,292,209 2,096,467 1,719,028 358,841 556,516 1,375,359 376,099 248,495 10,860,390
DEDUCTIONS:
Distribution of
benefits to
Participants (2,088,408)(1,180,402) (1,376,407) (530,457) (36,022) (71,280) (92,292) (50,753) (258,368) (5,684,389)
INTERFUND
TRANSFERS (556,553) 681,921 (474,071) (171,111) (51,022) (53,653) 596,869 27,620 - -
LOAN REPAYMENTS 541,796 210,611 247,227 149,570 25,975 97,401 71,170 48,225 (1,391,975) -
LOANS ISSUED (523,135) (121,811) (186,367) (93,524) (11,654) (60,834) (40,565) (22,264) 1,060,154 -
Net increase 211,076 882,528 306,849 1,073,506 286,118 468,150 1,910,541 378,927 (341,694) 5,176,001
PLAN EQUITY,
Dec. 31,1997 34,539,152 8,751,928 13,425,849 6,995,854 1,165,898 2,563,048 2,763,576 1,197,537 2,888,405 74,291,247
PLAN EQUITY,
Dec. 31,1998 $34,750,228 $9,634,456 $13,732,698 $8,069,360 $1,452,016 $3,031,198 $4,674,117 $1,576,464 $2,546,711 $79,467,248
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
INDIANA ENERGY, INC.
RETIREMENT SAVINGS PLAN
(Formerly the Indiana Gas Company, Inc. Retirement Savings Plan)
STATEMENT OF INCOME AND OTHER CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1997
T. Rowe Price
Indiana
Energy, Stable
Inc. Value Equity
Common Common Equity Int'l New Index Spectrum
Stock Trust Income Balanced Stock Horizons 500 Growth Partic.
Fund Fund Fund Fund Fund Fund Fund Fund Loan Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Employee contr. $ 1,049,256 $ 416,013 $ 548,334 $ 364,188 $ 94,837 $ 233,334 $ 184,433 $ 106,410 $ - $ 2,996,805
Employer contr. 839,931 325,898 398,415 273,750 54,636 196,995 143,959 41,829 - 2,275,413
Interest income - - - - - - - - 250,382 250,382
Dividend income 1,199,509 489,186 1,304,500 262,453 60,195 60,747 55,394 118,369 - 3,550,353
Unrealized appr.
(depreciation)
of invest. 8,590,349 - 1,433,972 730,423 (58,599) 136,727 434,766 19,212 - 11,286,850
Realized
gain (loss)
on invest. 395,256 - 154,518 93,291 10,269 (4,836) 74,293 22,767 - 745,558
Other inc.
(exp.), net (9,162) (5,385) (3,642) (2,916) (428) (1,229) (902) (739) - (24,403)
12,065,139 1,225,712 3,836,097 1,721,189 160,910 621,738 891,943 307,848 250,382 21,080,958
DEDUCTIONS:
Distribution of
benefits to
Participants (961,344) (908,415) (627,373) (390,271) (31,325) (71,200) (118,222) (77,866) (109,319)(3,295,335)
INTERFUND
TRANSFERS (1,909,970) 612,996 550,333 (26,919) 169,133 57,987 477,961 68,479 - -
LOAN REPAYMENTS 686,887 168,612 234,099 199,973 26,415 84,143 47,749 38,292 (1,486,170) -
LOANS ISSUED (678,520) (182,064) (270,468) (171,548) (11,565) (42,263) (25,168) (15,458) 1,397,054 -
Net increase 9,202,192 916,841 3,722,688 1,332,424 313,568 650,405 1,274,263 321,295 51,947 17,785,623
PLAN EQUITY,
Dec. 31,1996 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
PLAN EQUITY,
Dec. 31,1997 $34,539,152 $8,751,928 $13,425,849 $6,995,854 $1,165,898 $2,563,048 $2,763,576 $1,197,537 $2,888,405 $74,291,247
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
INDIANA ENERGY, INC.
RETIREMENT SAVINGS PLAN
(Formerly the 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
Inc. Value Equity
Common Common Equity Int'l New Index Spectrum
Stock Trust Income Balanced Stock Horizons 500 Growth Partic.
Fund Fund Fund Fund Fund Fund Fund Fund Loan Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Employee contr. $1,165,222 $ 442,254 $ 554,847 $ 410,304 $ 73,500 $ 215,781 $ 145,901 $ 90,338 $ - $ 3,098,147
Employer contr. 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 appr.
of invest. 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 inc.
(exp.), 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,
Dec. 31,1995 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,
Dec. 31,1996 $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 are an integral part of this statement.
</TABLE>
INDIANA ENERGY, INC.
RETIREMENT SAVINGS PLAN
(Formerly the Indiana Gas Company, Inc. Retirement Savings Plan)
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
a. General
Effective October 1, 1997, the Retirement Savings Plan (the Plan) sponsor
changed from Indiana Gas Company, Inc. to Indiana Energy, Inc. (the Company).
(Indiana Energy, Inc. is the parent company of Indiana Gas Company, Inc.)
The Plan is a defined contribution plan. Effective October 1, 1997, the plan
administrator changed from the Retirement Savings Plan Committee to the
Company. Further details of the Plan are provided in the Summary Plan
Description which has been distributed to all plan participants.
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),
coinciding with or following the 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. For nonbargaining participants, the Company
matches an additional 100% of the first 3% of eligible compensation
contributed by nonbargaining participants' and an additional 50% of
nonbargaining participants' contributions between 3% and 8% of their
eligible compensation. For bargaining participants, the Company matches
an additional 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%. Flexible benefit dollars become available for contribution into
the Plan when they are not used by the participant to purchase various
benefits provided by the Company.
Contributions are subject to maximum limitations as defined in the Internal
Revenue Code (the Code) and are invested in 5% increments in the Indiana
Energy, Inc. Common Stock Fund and the following T. Rowe Price funds:
Stable Value Common Trust, Equity Income, Balanced, International Stock,
New Horizons, Equity Index 500, and the Spectrum Growth, 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, 1998, 1997 and 1996, forfeited nonvested accounts totaled
approximately $88,400, $16,900 and $19,900, respectively. These accounts
will be used to reduce future employer contributions. Also, employer
contributions were reduced by $19,000 and $23,000 from forfeited, nonvested
accounts in 1997 and 1996, respectively.
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, 1998 and 1997, there were
340 and 430 participant 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 transactions. Fees paid by the
Plan for investment management services amounted to $3,900, $5,348 and $6,051
for the year ended December 31, 1998, 1997 and 1996, respectively.
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
Participants may direct their contributions to be invested in one or more of
the following funds:
Indiana Energy, Inc. Common Stock Fund - An equity fund which invests
principally in shares of Indiana Energy, Inc. common stock issued and
purchased in the open market.
T. Rowe Price Stable Value Common Trust 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 500 Fund - A mutual fund, which invests 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 with the exception of one foreign stock fund).
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 Statements
of Income and Other Changes in Plan Equity as a realized gain(loss) on
investments. The net realized gain(loss) on investments included in the plan
equity for 1998 is as follows:
<TABLE>
Realized
Proceeds of Gain(Loss) on
Sale Cost of Asset Investments
<S> <C> <C> <C>
Indiana Energy, Inc.
Common Stock Fund $ 5,017,480 $ 5,468,821 $(451,340)
Stable Value Common Trust
Fund 3,776,263 3,776,263 -
Equity Income Fund 2,530,349 2,432,986 97,364
Balanced Fund 1,241,092 1,174,072 67,019
International Stock Fund 267,567 249,299 18,266
New Horizons Fund 686,217 721,024 (34,808)
Equity Index 500 Fund 942,149 864,028 78,122
Spectrum Growth Fund 231,401 221,201 10,201
Total $14,692,518 $14,907,694 $(215,176)
</TABLE>
The net realized gain(loss) on investments included in the plan equity
for 1997 is as follows:
<TABLE>
Realized
Proceeds of Gain(Loss) on
Sale Cost of Asset Investments
<S> <C> <C> <C>
Indiana Energy, Inc.
Common Stock Fund $4,549,531 $ 4,154,275 $395,256
Stable Value Common Trust
Fund 2,095,484 2,095,484 -
Equity Income Fund 1,551,008 1,396,490 154,518
Balanced Fund 1,132,101 1,038,810 93,291
International Stock Fund 232,293 222,024 10,269
New Horizons Fund 538,414 543,250 (4,836)
Equity Index 500 Fund 623,075 548,782 74,293
Spectrum Growth Fund 360,772 338,005 22,767
Total $11,082,678 $10,337,120 $745,558
</TABLE>
The net realized gain(loss) on investments included in the plan equity for
1996 is as follows:
<TABLE>
Realized
Proceeds of Gain(Loss) on
Sale Cost of Asset Investments
<S> <C> <C> <C>
Indiana Energy, Inc.
Common Stock Fund $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 500 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 Plan's financial
statements and notes to financial statements of prior years to conform to the
current year presentation. These reclassifications had no effect on
previously reported Plan equity or changes therein. The descriptions of the
financial statements comply with the requirements set forth by Form 11(K)
under the Securities and Exchange Commission.
4. PLAN AMENDMENT
a. Effective October 1, 1997, the plan sponsor changed
from Indiana Gas Company, Inc. to Indiana Energy, Inc.
(in connection with the Company's reorganization) and
the plan administrator changed from the Retirement
Savings Plan Committee to the Company.
b. Effective October 1, 1997, IEI Investments, Inc. was
added as a participating company in the Plan.
5. TAX STATUS
The Company has made certain amendments to the Plan since
receiving its last determination letter, dated April 19, 1996, 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). 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.
6. REPORTABLE TRANSACTIONS
"Reportable Transactions" of the Plan are shown on Schedule II.
7. SUBSEQUENT EVENT
Effective January 1, 1999, Indiana Energy, Inc. amended the Plan.
The major changes to the Plan were changing the participation,
plan entry dates, employee deferral percentages, and company
matching percentages.
Participation in the Plan will be limited to those employees age
twenty-one (21) or older who have completed at least one hour of
service and are expected to complete 1,000 hours of service
during their first 12 months of employment. Employees under the
age of 21 will be eligible to enter on April 1 or October 1 upon
meeting the age and hour requirements listed above. Employees
covered by a collective bargaining agreement will become eligible
to participate upon the completion of one year of service or are
employed for six months, whichever occurs first, and, have
attained the age of twenty-one (21).
Plan participants will be allowed to contribute up to 19% of
their eligible compensation, and the Company will match 100%
of the first 6% of eligible compensation contributed by
employees. The Company will discontinue the annual contribution
of 2-1/2% of participants' eligible compensation.
<TABLE>
SCHEDULE I
INDIANA ENERGY, INC.
EIN 35-1654378
RETIREMENT SAVINGS PLAN
(Formerly Indiana Gas Company, Inc., EIN 35-0793669,
Retirement Savings Plan)
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
Market
Value at
December 31,
Shares Cost 1998
<S> <C> <C> <C>
INVESTMENTS:
*Indiana Energy, Inc.
Common Stock Fund 1,393,632 $22,107,320 $34,383,457
*T. Rowe Price-
Stable Value Common Trust
Fund 9,502,871 9,502,871 9,502,871
Equity Income Fund 516,925 11,092,089 13,605,456
Balanced Fund 429,151 6,017,221 7,977,911
International Stock Fund 94,927 1,287,733 1,422,950
New Horizons Fund 127,352 2,846,463 2,972,385
Equity Index 500 Fund 138,022 3,245,387 4,607,178
Spectrum Growth Fund 94,048 1,461,425 1,547,102
PARTICIPANTS' LOAN FUND,
interest ranging from 7.0%
to 10% 2,546,711 2,546,711
$60,107,220 $78,566,021
* Represents parties-in-interest to the Plan
</TABLE>
<TABLE>
SCHEDULE II
INDIANA ENERGY, INC.
EIN 35-1654378
RETIREMENT SAVINGS PLAN
(Formerly Indiana Gas Company, Inc., EIN 35-0793669, Retirement Savings Plan)
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
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.
Common Stock Fund * $4,892,165 $ - $4,892,165 $4,892,165 $ -
Stable Value Common Trust Fund * 4,666,241 - 4,666,241 4,666,241 -
Equity Income Fund * 2,765,327 - 2,765,327 2,765,327 -
SALES:
**T. Rowe Price
Indiana Energy, Inc.
Common Stock Fund * - 5,017,480 3,705,730 5,468,821 1,311,750
Stable Value Common Trust Fund * - 3,766,263 3,766,263 3,766,263 -
Equity Income Fund * - 2,530,350 2,052,024 2,432,986 478,326
* Information not available from trustee
** Represents party-in-interest to the Plan
</TABLE>
