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SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization
Southern Indiana Gas and Electric Company (SIGECO) is a
wholly-owned utility subsidiary of SIGCORP, Inc. (SIGCORP),
a holding company incorporated October 19, 1994 under the
laws of the state of Indiana. SIGCORP has five wholly-owned
subsidiaries: SIGECO, a gas and electric utility, and four
nonregulated subsidiaries.
On Deccember 20, 1994, SIGECO's Board of Directors
authorized the steps required for a corporate reorganization
in which a holding company would become the parent of
SIGECO. SIGECO's shareholders approved the reorganization
at SIGECO's March 28, 1995 annual meeting, and approval by
the Federal Energy Regulatory Commission and the Securities
and Exchange Commission was granted November 7, 1995 and
December 14, 1995, respectively.
Effective January 1, 1996, SIGCORP, became the parent
of SIGECO which accounts for over 90% of SIGCORP's net
income, and four of SIGECO's former wholly-owned
nonregulated subsidiaries: Energy Systems Group, Inc.,
Southern Indiana Minerals, Inc., Southern Indiana
Properties, Inc. and ComSource, Inc. All of the shares of
SIGECO's common stock were exchanged on a one-for-one basis
for shares of SIGCORP, while all of SIGECO's debt securities
and all of its outstanding shares of preferred stock remain
securities of SIGECO and are unaffected. On January 1,
1996, SIGECO dividended to SIGCORP the four nonregulated
subsidiaries.
2. General
It is suggested that these consolidated financial
statements be read in conjunction with the consolidated
financial statements and the notes thereto included in
SIGCORP's 1995 Annual Report to Shareholders.
The consolidated statements are on the basis of interim
figures and are subject to audit and adjustments. These
financial statements include the accounts of Southern
Indiana Gas and Electric Company (SIGECO) and its wholly-
owned subsidiary, Lincoln Natural Gas Company, Inc. and
include all adjustments which are in the opinion of
management, necessary for a fair statement of the financial
position and results of operations. Because of seasonal and
other factors, the earnings for the three months ending
March 31, 1996 should not be taken as an indication for all
or any part of the balance of 1996.
3. Cash Flow Information
For the purposes of the Consolidated Balance Sheets and
Consolidated Statements of Cash Flows, SIGECO considers all
highly liquid debt instruments purchased with an original
maturity of three months or less to be cash equivalents.
SIGECO, for the three months ended March 31, 1996 and
1995 paid interest (net of amounts capitalized) of
$2,030,000 and $1,842,000, respectively, and income taxes of
$729,000 and $289,000, respectively.
The following increases (decreases) in assets and
liabilities were caused by dividending the nonregulated
subsidiaries to SIGCORP and are noncash in nature.
Deferred income taxes (29,783)
Investments in Leveraged Leases (35,609)
Investments in Partnerships (25,307)
Partnership obligations (9,625)
Other, net (3,771)
