UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
X QUARTERLY REPORT PERSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT of 1934
For the quarterly period ended March 31, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Registrant; State
Commission of Incorporation; IRS Employer
File Number Address; and Identification
Telephone Number No.
1-11603 SIGCORP, Inc. 35-1940620
(An Indiana Corporation)
20 N. W. Fourth Street
Evansville, Indiana 47741-0001
(812) 465-5300
1-3553 Southern Indiana Gas and
Electric Company 35-0672570
(An Indiana Corporation)
20 N. W. Fourth Street
Evansville, Indiana 47741-0001
(812) 465-5300
Indicate by check mark whether the Registrants (1) have
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
Registrants were required to file such reports), and (2)
have been subject to such filing requirements for the past
90 days.
Yes X . No ___.
Indicate the number of shares outstanding of each of the
Registrants' classes of common stock, as of the latest
practicable date:
SIGCORP, Inc.: Common stock, no par value,
23,630,568 shares
outstanding at March 31, 1997
Southern Indiana Gas
and Electric Company: Common stock, no par value,
15,754,826 shares outstanding
and held by SIGCORP, Inc. at
March 31, 1997
<PAGE>
<TABLE>
SIGCORP, Inc.
AND
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1997
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C>
Page No.
PART I. FINANCIAL INFORMATION:
Item 1: Financial Statements
SIGCORP, Inc.
Consolidated Statements of Income 2
Consolidated Statements of Cash Flows 3
Consolidated Balance Sheets 4-5
Consolidated Statements of Capitalization 6
Consolidated Statements of Retained Earnings 7
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
Statements of Income 8
Statements of Cash Flows 9
Balance Sheets 10-11
Statements of Capitalization 12
Statements of Retained Earnings 13
NOTES TO FINANCIAL STATEMENTS OF SIGCORP, Inc.
AND SOUTHERN INDIANA GAS AND ELECTRIC COMPANY 14-15
Item 2: Management's Discussion and Analysis of
Results of Operations and Financial Condition 16-18
SIGCORP, Inc. AND SOUTHERN INDIANA GAS
AND ELECTRIC COMPANY
Part II. OTHER INFORMATION
Item 4: Submission of Matters to a Vote
of Security Holders 19
Item 5: Other information 19
Item 6: Exhibits and Reports on Form 8-K 19
Signatures 20
</TABLE>
<PAGE> 2
<TABLE>
SIGCORP, Inc.
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
March 31,
1997 1996
(in thousands except per share amounts)
<S> <C> <C>
OPERATING REVENUES:
Electric $ 64,876 $ 66,865
Gas 33,857 39,612
Total operating revenues 98,733 106,477
OPERATING EXPENSES:
Fuel for electric generation 14,723 18,778
Purchased electric energy 1,929 1,261
Cost of gas sold 25,002 30,771
Other operation expenses 13,249 13,335
Maintenance 6,224 6,188
Depreciation and amortization 10,029 9,708
Federal and state income taxes 7,216 6,515
Property and other taxes 3,312 3,591
Total operating expenses 81,684 90,147
OPERATING INCOME 17,049 16,330
OTHER INCOME:
Allowance for other funds used
during construction 101 -
Interest 639 301
Other, net 861 2,241
Total other income 1,601 2,542
INCOME BEFORE INTEREST AND OTHER CHARGES 18,650 18,872
INTEREST AND OTHER CHARGES:
Interest on long-term debt 4,512 4,680
Amortization of premium, discount,
and expense on debt 168 168
Other interest 682 542
Allowance for borrowed funds used
during construction (99) (63)
Preferred dividend requirements of subsidiary 274 274
Total interest and other charges 5,537 5,601
NET INCOME $ 13,113 $ 13,271
AVERAGE COMMON SHARES OUTSTANDING 23,631 23,631
EARNINGS PER SHARE OF COMMON STOCK $0.55 $0.56
<FN>
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
</FN>
</TABLE>
<PAGE> 3
<TABLE>
SIGCORP, Inc.
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31,
1997 1996
(in thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 13,113 $ 13,271
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 10,029 9,708
Preferred dividend requirements
of subsidiary 274 274
Deferred income taxes and investment
tax credits, net (1,665) (603)
Allowance for other funds used during
construction (101) -
Change in assets and liabilities:
Receivables, net (including accrued
unbilled revenues) 13,886 468
Inventories 6,646 7,436
Coal contract settlement - 3,177
Accounts payable (10,832) (14,337)
Accrued taxes 8,459 8,341
Refunds from gas suppliers (648) (1,998)
Refunds to customers (1,409) (3,191)
Other assets and liabilities 12,147 5,778
Net cash provided by operating activities 49,899 28,324
CASH FLOWS FROM INVESTING ACTIVITIES
Construction expenditures (net of allowance for
other funds used during construction) (8,889) (5,615)
Demand side management program expenditures (618) (769)
Purchases of investments 148 -
Sales of investments - 600
Investments in partnerships 754 115
Change in nonutility property (2,293) (339)
Other 703 1,363
Net cash used in investing activities (10,195) (4,645)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid (7,246) (7,088)
Change in environmental improvement funds
held by trustee (69) (53)
Payments on partnership obligations (1,734) (2,232)
Change in notes payable (20,298) (7,814)
Other 124 134
Net cash used in financing activities (29,223) (17,053)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 10,481 6,626
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 9,192 9,834
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 19,673 $ 16,460
<FN>
The accompanying notes to Consolidated Financial Statements are an integral
part of these statements.
</FN>
</TABLE>
<PAGE> 4
<TABLE>
SIGCORP, Inc.
<CAPTION>
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1997 1996
(in thousands)
<S> <C> <C>
ASSETS
Utility plant, at original cost:
Electric $1,056,173 $1,047,717
Gas 133,136 131,796
1,189,309 1,179,513
Less accumulated provision for depreciation 531,732 524,104
657,577 655,409
Construction work in progress 22,727 25,849
Net utility plant 680,304 681,258
Other Investments and Property:
Investments in leveraged leases 42,205 42,887
Investments in partnerships 22,826 23,983
Environmental improvement funds
held by trustee 3,899 3,830
Nonutility property and other 25,036 22,743
Total other investments and property 93,966 93,443
Current Assets:
Cash and cash equivalents 19,673 9,191
Temporary investments, at market 713 565
Receivables, less allowance of $228
and $215, respectively 33,278 36,469
Accrued unbilled revenues 24,049 34,744
Inventories 24,595 31,241
Other current assets 12,489 16,310
Total current assets 114,797 128,520
Deferred Charges:
Unamortized premium on reacquired debt 5,543 5,663
Postretirement benefits other than pensions 7,249 7,819
Demand side management program 23,826 23,359
Other deferred charges 12,637 12,591
Total deferred charges 49,255 49,432
TOTAL $ 938,322 $ 952,653
<FN>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
</FN>
</TABLE>
<PAGE> 5
<TABLE>
SIGCORP, Inc.
<CAPTION>
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1997 1996
(in thousands)
<S> <C> <C>
SHAREHOLDERS' EQUITY AND LIABILITIES
CAPITALIZATION:
Common Stock $ 78,258 $ 78,258
Retained Earnings 258,760 252,626
Total common shareholders' equity 337,018 330,884
Cumulative Nonredeemable Preferred
Stock of Subsidiary 11,090 11,090
Cumulative Redeemable Preferred
Stock of Subsidiary 7,500 7,500
Cumulative Special Preferred
Stock of Subsidiary 924 924
Long-Term Debt, net of current maturities 261,479 261,629
Long-Term Partnership Obligations,
net of current maturities 3,435 4,563
Total capitalization, excluding bonds
subject to tender (see Consolidated
Statements of Capitalization) 621,446 616,590
Current Liabilities:
Current Portion of Adjustable Rate
Bonds Subject to Tender 31,500 31,500
Current Maturities of Long-Term Debt,
Interim Financing and Long-Term
Partnership Obligations:
Maturing long-term debt 659 659
Notes payable 18,900 38,750
Partnership obligations 1,670 2,276
Total current maturities of
long-term debt, interim financing
and long-term partnership obligations 21,229 41,685
Other Current Liabilities:
Accounts payable 22,768 33,600
Dividends payable 84 123
Accrued taxes 16,182 7,723
Accrued interest 7,787 4,585
Refunds to customers 665 2,722
Other accrued liabilities 34,022 31,138
Total other current liabilities 81,508 79,891
Total current liabilities 134,237 153,076
Deferred Credits and Other:
Accumulated deferred income taxes 146,315 147,070
Accumulated deferred investment tax
credits, being amortized over lives
of property 21,348 21,706
Regulatory income tax liability 1,062 1,614
Postretirement benefits other than pensions 11,171 10,084
Other 2,743 2,513
Total deferred credits and other 182,639 182,987
TOTAL $938,322 $952,653
<FN>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
</FN>
</TABLE>
<PAGE> 6
<TABLE>
SIGCORP, Inc.
<CAPTION>
CONSOLIDATED STATEMENTS OF CAPITALIZATION
March 31, December 31,
1997 1996
(in thousands)
<S> <C> <C>
COMMON SHAREHOLDERS' EQUITY
Common stock, without par value, authorized
50,000,000 shares, issued 23,630,568 shares $ 78,258 $ 78,258
Retained earnings, $2,194,121 restricted as
to payment of cash dividends on common stock 258,760 252,626
Total common shareholders' equity 337,018 330,884
PREFERRED STOCK OF SUBSIDIARY
Cumulative, $100 par value, authorized
800,000 shares issuable, in series:
Nonredeemable
4.8% Series, outstanding 85,895 shares,
callable at $110 per share 8,590 8,590
4.75% Series, outstanding 25,000 shares,
callable at $101 per share 2,500 2,500
Total nonredeemable preferred stock
of subsidiary 11,090 11,090
Redeemable
6.50% Series, outstanding 75,000 shares
redeemable at $100 per share
December 1, 2002 7,500 7,500
SPECIAL PREFERRED STOCK OF SUBSIDIARY
Cumulative, no par value, authorized 5,000,000
shares, issuable in series: 8-1/2% series,
outstanding 9,237 shares, redeemable
at $100 per share 924 924
LONG-TERM DEBT, NET OF CURRENT MATURITIES
First mortgage bonds 252,116 251,115
Notes payable 10,111 11,273
Unamortized debt premium and discount, net (748) (759)
Total long-term debt 261,479 261,629
LONG-TERM PARTNERSHIP OBLIGATIONS,
NET OF CURRENT MATURITIES 3,435 4,563
CURRENT PORTION OF ADJUSTABLE RATE
POLLUTION CONTROL BONDS SUBJECT TO TENDER,
DUE 2015, Series B, presently 4.60% 31,500 31,500
TOTAL CAPITALIZATION, including bonds
subject to tender $652,946 $648,090
<FN>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
</FN>
</TABLE>
<PAGE> 7
<TABLE>
SIGCORP, Inc.
<CAPTION>
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
Three Months Ended
March 31,
1997 1996
(in thousands)
<S> <C> <C>
Balance Beginning of Period $252,626 $236,617
Net Income 13,113 13,271
265,739 249,888
Common Stock Dividends ($0.2950
per share in 1997 and
$0.2883 per share in 1996) 6,972 6,813
Stock Expense 7 -
6,979 6,813
Balance End of Period (See Consolidated
Statements of Capitalization for restriction) $258,760 $243,075
<FN>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
</FN>
</TABLE>
<PAGE> 8
<TABLE>
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, INC.
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
March 31,
1997 1996
(in thousands except per share amounts)
<S> <C> <C>
OPERATING REVENUES:
Electric $ 64,876 $ 66,865
Gas 33,857 39,612
Total operating revenues 98,733 106,477
OPERATING EXPENSES:
Fuel for electric generation 14,723 18,778
Purchased electric energy 1,929 1,261
Cost of gas sold 25,002 30,771
Other operation expenses 13,249 13,335
Maintenance 6,224 6,188
Depreciation and amortization 10,029 9,708
Federal and state income taxes 7,216 6,515
Property and other taxes 3,312 3,591
Total operating expenses 81,684 90,147
OPERATING INCOME 17,049 16,330
OTHER INCOME:
Allowance for other funds used
during construction 101 -
Interest 133 111
Other, net 668 1,429
Total other income 902 1,540
INCOME BEFORE INTEREST AND OTHER CHARGES 17,951 17,870
INTEREST AND OTHER CHARGES:
Interest on long-term debt 4,512 4,680
Amortization of premium, discount,
and expense on debt 168 168
Other interest 384 409
Allowance for borrowed funds used
during construction (99) (63)
Total interest and other charges 4,965 5,194
NET INCOME 12,986 12,676
Preferred dividend 274 274
EARNINGS APPLICABLE TO COMMON STOCK $ 12,712 $ 12,402
<FN>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
</FN>
</TABLE>
<PAGE> 9
<TABLE>
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31,
1997 1996
(in thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 12,986 $ 12,676
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 10,029 9,708
Deferred income taxes and investment
tax credits, net (739) 289
Allowance for other funds used
during construction (101) -
Change in assets and liabilities:
Receivables, net (including accrued
unbilled revenues) 13,599 279
Inventories 6,646 7,474
Coal contract settlement - 3,177
Accounts payable (11,013) (13,793)
Accrued taxes 8,270 7,814
Refunds from gas suppliers (648) (1,998)
Refunds to customers (1,409) (3,191)
Other assets and liabilities 11,641 5,925
Net cash provided by operating activities 49,261 28,360
CASH FLOWS FROM INVESTING ACTIVITIES
Construction expenditures (net of allowance for
other funds used during construction) (8,889) (5,615)
Demand side management program expenditures (618) (769)
Change in nonutility property - 2
Other (85) 28
Net cash used in investing activities (9,592) (6,354)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid (7,246) (7,087)
Change in environmental improvement
funds held by trustee (69) (53)
Change in notes payable (18,000) (8,000)
Contribution of nonregulated subsidiaries
to parent - (12,145)
Other 125 137
Net cash used in financing activities (25,191) (27,148)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 14,479 (5,142)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 3,127 9,834
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 17,606 $ 4,692
<FN>
The accompanying notes to Consolidated Financial Statements are an
integral part of these statements.
</FN>
</TABLE>
<PAGE> 10
<TABLE>
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
<CAPTION>
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1997 1996
(in thousands)
<S> <C> <C>
ASSETS
Utility plant, at original cost:
Electric $1,056,173 $1,047,717
Gas 133,136 131,796
1,189,309 1,179,513
Less accumulated provision for depreciation 531,732 524,104
657,577 655,409
Construction work in progress 22,727 25,849
Net utility plant 680,304 681,258
Other Investments and Property:
Environmental improvement funds
held by trustee 3,899 3,830
Nonutility property and other 1,552 1,552
Total other investments and property 5,451 5,382
Current Assets:
Cash and cash equivalents 17,606 3,127
Receivables, less allowance of $228
and $215, respectively 29,586 32,491
Accrued unbilled revenues 24,049 34,744
Inventories 24,544 31,190
Other current assets 11,710 15,304
Total current assets 107,495 116,856
Deferred Charges:
Unamortized premium on reacquired debt 5,543 5,663
Postretirement benefits other than pensions 7,249 7,818
Demand side management program 23,826 23,359
Other deferred charges 11,989 11,989
Total deferred charges 48,607 48,829
TOTAL $ 841,857 $ 852,325
<FN>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
</FN>
</TABLE>
<PAGE> 11
<TABLE>
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
<CAPTION>
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1997 1996
(in thousands)
<S> <C> <C>
SHAREHOLDERS' EQUITY AND LIABILITIES
CAPITALIZATION:
Common Stock $ 78,258 $ 78,258
Retained Earnings 219,421 213,688
Total common shareholders' equity 297,679 291,946
Cumulative Nonredeemable Preferred
Stock of Subsidiary 11,090 11,090
Cumulative Redeemable Preferred
Stock of Subsidiary 7,500 7,500
Cumulative Special Preferred
Stock of Subsidiary 924 924
Long-Term Debt, net of current maturities 251,367 251,355
Total capitalization, excluding bonds
subject to tender (see Consolidated
Statements of Capitalization) 568,560 562,815
Current Liabilities:
Current Portion of Adjustable Rate Bonds
Subject to Tender 31,500 31,500
Current Maturities of Long-Term Debt,
Interim Financing:
Maturing long-term debt 295 295
Notes payable 14,400 32,400
Total current maturities of long-term
debt and interim financing 14,695 32,695
Other Current Liabilities:
Accounts payable 16,325 27,338
Dividends payable 84 123
Accrued taxes 16,983 8,713
Accrued interest 7,617 4,572
Refunds to customers 665 2,722
Other accrued liabilities 32,653 29,650
Total other current liabilities 74,327 73,118
Total current liabilities 120,522 137,313
Deferred Credits and Other:
Accumulated deferred income taxes 116,543 116,373
Accumulated deferred investment tax
credits, being amortized over
lives of property 21,348 21,706
Regulatory income tax liability 1,062 1,613
Postretirement benefits other than pensions 11,171 10,084
Other 2,651 2,421
Total deferred credits and other 152,775 152,197
TOTAL $841,857 $852,325
<FN>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
</FN>
</TABLE>
<PAGE> 12
<TABLE>
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
<CAPTION>
CONSOLIDATED STATEMENTS OF CAPITALIZATION
March 31, December 31,
1997 1996
(in thousands)
<S> <C> <C>
COMMON SHAREHOLDERS' EQUITY
Common stock, without par value, authorized
50,000,000 shares, issued 15,754,826 shares $ 78,258 $ 78,258
Retained earnings, $2,194,121 restricted as
to payment of cash dividends on common stock 219,421 213,688
Total common shareholders' equity 297,679 291,946
PREFERRED STOCK OF SUBSIDIARY
Cumulative, $100 par value, authorized 800,000
shares issuable, in series:
Nonredeemable
4.8% Series, outstanding 85,895 shares,
callable at $110 per share 8,590 8,590
4.75% Series, outstanding 25,000 shares,
callable at $101 per share 2,500 2,500
Total nonredeemable preferred stock
of subsidiary 11,090 11,090
Redeemable
6.50% Series, outstanding 75,000 shares
redeemable at $100 per share
December 1, 2002 7,500 7,500
SPECIAL PREFERRED STOCK OF SUBSIDIARY
Cumulative, no par value, authorized
5,000,000 shares,issuable in series:
8-1/2% series, outstanding 9,237
shares, redeemable at $100 per share 924 924
LONG-TERM DEBT, NET OF CURRENT MATURITIES
First mortgage bonds 251,115 251,114
Notes payable 1,000 1,000
Unamortized debt premium and discount, net (748) (759)
Total long-term debt 251,367 251,355
CURRENT PORTION OF ADJUSTABLE RATE POLLUTION
CONTROL BONDS SUBJECT TO TENDER, DUE
2015, Series B, presently 4.60% 31,500 31,500
TOTAL CAPITALIZATION, including bonds
subject to tender $600,060 $594,315
<FN>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
</FN>
</TABLE>
<PAGE> 13
<TABLE>
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
<CAPTION>
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
Three Months Ended
March 31,
1997 1996
(in thousands)
<S> <C> <C>
Balance Beginning of Period $213,688 $236,617
Net Income 12,986 12,676
226,674 249,293
Dividend to Parent of Nonregulated Subsidiaries - 37,418
Preferred Stock Dividends 274 274
Common Stock Dividends 6,972 6,813
Stock Expense 7 -
7,253 44,505
Balance End of Period (See Consolidated
Statements of Capitalization for restriction) $219,421 $204,788
<FN>
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
</FN>
</TABLE>
<PAGE> 14
SIGCORP, Inc.
AND
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization
SIGCORP, Inc. (SIGCORP) is a holding company
incorporated October 19, 1994 under the laws of the state of
Indiana. SIGCORP has nine wholly-owned subsidiaries:
Southern Indiana Gas and Electric Company (SIGECO), a gas
and electric utility, and eight nonregulated subsidiaries.
Effective January 1, 1996, the new holding company, SIGCORP,
Inc. (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.
Because of the significance of SIGECO, the operating results
of all nonregulated subsidiaries are included in Other
Income in the consolidated financial statements of SIGCORP.
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 remained securities of SIGECO and are
unaffected.
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 1996 Annual Report to Shareholders.
The consolidated statements include the accounts of
SIGCORP, Inc. and its wholly-owned subsidiaries, Southern
Indiana Gas and Electric Company (SIGECO), Southern Indiana
Properties, Inc. (SIPI), Energy Systems Group, Inc. (ESGI),
Southern Indiana Minerals, Inc. (SIMI), ComSource, Inc.
(ComSource), SIGCORP Energy Services, Inc. (Energy), and
SIGCORP Capital, Inc. (Capital) 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, 1997 should
not be taken as an indication for all or any part of the
balance of 1997.
3. Cash Flow Information
For the purposes of the Consolidated Balance Sheets and
Consolidated Statements of Cash Flows, SIGCORP considers all
highly liquid debt instruments purchased with an original
maturity of three months or less to be cash equivalents.
SIGCORP, for the three months ended March 31, 1997 and
1996 paid interest (net of amounts capitalized) of
$1,893,000 and $2,147,000, respectively, and income taxes of
$749,000 and $732,000, respectively. Additionally, SIGCORP
is involved in several partnerships which are partially
financed by partnership obligations amounting to $5,105,000
and $6,839,000 at March 31, 1997 and December 31, 1996,
respectively.
SIGECO, for the three months ended March 31, 1997 and
1996 paid interest (net of amounts capitalized of $1,752,000
and $2,030,000, respectively, and income taxes of $745,000
and $729,000, respectively.
The following decreases for March 31, 1996 in SIGECO's
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)
<PAGE> 15
4. Long-Term Debt
On May 1, 1996, the interest rate on $31,500,000 of
Adjustable Rate Pollution control bonds was changed from
4.60% to 4.0%. The new interest rate, 4.0% will be fixed
through April 30, 1997. For financial statement
presentation the $31,500,000 of Adjustable Rate Pollution
Control bonds are shown as a current liability.
5. Common Stock
On January 21, 1997, the Board of Directors of SIGCORP
approved a split of SIGCORP's issued shares of common stock
without par value on a three-for-two basis. The stock
split, effective March 27, 1997, increased SIGCORP's
outstanding shares from 15,754,826 to 23,630,568. Average
common shares outstanding, earnings per share of common
stock and dividends paid per share for all periods presented
reflect the stock split.
<PAGE> 16
SIGCORP, Inc.
AND
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The holding company, SIGCORP, Inc. (SIGCORP) is the
parent of Southern Indiana Gas and Electric Company
(SIGECO), a regulated gas and electric utility which
accounts for over 90% of SIGCORP's net income, and eight
wholly owned nonregulated subsidiaries. Because of the
significance of SIGECO, the operating results of SIGCORP's
nonregulated subsidiaries are included in Other Income in
the consolidated financial statements of SIGCORP.
Consolidated operating revenues and operating expenses of
SIGCORP consist entirely of the operating revenues and
operating expenses of SIGECO; material changes in the
consolidated financial condition and operating results of
SIGCORP are due primarily to the operations of SIGECO. The
following discussion and analysis of results of operations
and financial condition is for SIGCORP unless otherwise
stated.
Earnings per share were $.55 for the recent three month
period compared to earnings of $.56 per share for the first
quarter of 1996. Per share earnings for both periods
reflect SIGCORP's three-for-two split on shares of its
outstanding common stock effective March 27, 1997. (See
Note 5 of the Notes to Consolidated Financial Statements for
further discussion.)
OPERATING REVENUES
Electric revenues were $2 million (3%) lower during the
first quarter of 1997 compared to the same period a year ago
due primarily to lower per unit fuel costs reflected in
revenues. Changes in the cost of fuel are passed on to
customers through commission approved fuel cost adjustments.
Overall, retail electric sales decreased 1.7% during the
first quarter of 1997 due to lower residential and industrial
sales, down 2.3% and 4.7%, respectively. Commercial sales
increased 4.6% over the same three month period in 1996,
reflecting the continuing trend of increased economic activity
in this sector of SIGECO's service territory. Wholesale
electric sales, which typically have lower per unit margins
than retail sales, increased 26% during the current quarter
due to greater sales to Alcoa Generating Corporation and to
increased sales to other utilities and power marketers
reflecting SIGECO's competitive rates and continuing efforts to
aggressively sell its electric energy in new markets. Changes
in the retail sales mix and higher per unit margins also
partially offset the decrease in revenues related to lower fuel
cost recovery.
The changes in electric revenue are shown below:
Revenue Increase (Decrease) From
Corresponding Period in 1996
Three Months
Ended 3-31-97
(in thousands)
Fuel and purchased power recovery $ (3,900)
Change in sales volume 500
Other 1,411
$ (1,989)
(Decrease) in retail sales (Mwh) (18,911)
Increase in wholesale sales (Mwh) 83,483
<PAGE> 17
Fewer gas sales to all customer classes was the primary
reason for the $5.8 million (15%) decrease in gas revenues
during the three months ended March 31, 1997 versus the same
period in 1996. Milder winter temperatures during the
recent quarter, when the number of heating degree days
declined 12%, resulted in declines in sales to residential
and commercial customers, down 15.3% and 28.6%,
respectively. Sales to industrial customers decreased 66%
and commercial sales were also affected when fewer SIGECO
transportation customers purchased their gas supplies from
SIGECO than during the first quarter of 1996. Conversely,
increases in base retail gas rates effective July 1996
contributed approximately $3.2 million to first quarter 1997
revenues. A more favorable sales mix and increased gas
transportation revenues, due to more of these customers
purchasing their own gas, also partially offset the decline
in revenues related to fewer sales.
The changes in gas revenues are shown below:
Revenue Increase (Decrease) From
Corresponding Period in 1996
Three Months
Ended 3-31-97
(in thousands)
Change in sales volume $(11,700)
Cost of gas recovery (100)
Effect of rate adjustments in sales
to retail customers 3,200
Change in sales mix 1,700
Other 1,145
$ (5,755)
Decrease in total throughput (Mdth) (1,866)
OPERATING EXPENSES
Despite a 4.5% increase in total electric sales, total
cost of fuel for electric generation and purchased electric
energy decreased $3.4 million (17%) during the three month
period ending March 31, 1997, compared to the same period in
1996, due to lower per unit fuel costs. Cost of gas sold
declined $5.8 million (19%) during the current quarter
primarily due to 16% fewer unit deliveries. Other operation
and maintenance expenses were comparable to those of the
same period in 1996. Federal and state income tax expense
was higher due to greater pretax operating income during the
first quarter of 1997.
OTHER INCOME AND INTEREST CHARGES
Other income during the current three month period
declined primarily due to a $1 million decrease in sales to
another utility of SIGECO's 1997 allotment of "bonus" sulfur
dioxide emission allowances (also called "extension
allowances") as anticipated under an agreement with the
utility to sell to it essentially all of SIGECO's allotment
of "bonus" allowances for the five year period beginning
1995.
Interest and other charges were relatively unchanged
during the three month period in 1997 compared to the same
period in 1996.
<PAGE> 18
EARNINGS
Despite the milder winter temperatures and fewer gas and
electric sales to industrial customers, earnings per share
for the first quarter of 1997 declined only one cent (1.8%).
The decreases in revenues were substantially offset by
increased sales of electricity to wholesale customers,
higher per unit gas margins resulting primarily from
SIGECO's adjustment to base retail gas rates, and greater
gas transportation revenues.
LIQUIDITY AND CAPITAL RESOURCES
SIGCORP's demand for capital is primarily related to
SIGECO's construction of utility plant and equipment
necessary to meet customers' electric and gas energy needs,
as well as environmental compliance requirements, and
expenditures for SIGECO's demand side management (DSM)
programs. Construction expenditures (excluding allowance
for other funds used during construction) and DSM program
expenditures incurred during the quarter ended March 31,
1997 totaled $9.5 million and were fully funded with
internally generated cash. Cash provided from operations
increased $21.6 million during the current three month
period compared to the same period in 1996. Cash used in
investing and financing activities during 1997 increased
$17.7 million compared to a year ago. No long-term
financing activity occurred during the 1997 period.
At this time, SIGCORP estimates that SIGECO's
construction expenditures for the five year period 1997-2001
will total approximately $260 million, including
approximately $25 million for the design and implementation
of several comprehensive information systems which are
necessary to better provide expanding customer service needs
and to better manage SIGECO's resources, and approximately
$9 million to develop and implement DSM programs. SIGCORP
expects the majority of the construction requirements and an
estimated $70 million in debt security and other long-term
obligation redemptions to be provided by internally
generated funds. External financing requirements of $60-70
million are anticipated and will be used primarily to redeem
long-term debt.
<PAGE> 19
PART TWO - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders
(a) The annual meeting of shareholders was held at
3:00 P.M. (CDT) on April 22, 1997, with the following
actions taken:
(b) The following three individuals were re-elected as
directors of SIGCORP, Inc. for three year terms:
Ronald G. Reherman, Donald E. Smith and James S.
Vinson.
The appointment of Arthur Andersen LLP as
independent auditors of SIGCORP, Inc. for 1997 was ratified.
(c) The following table shows the voting results as to
each matter considered by the shareholders:
<TABLE>
<CAPTION>
Item 1: Vote for Election of Directors
Total Votes Cast: 13,270,605
<S> <C> <C>
Nominee Votes For Votes Withheld
Ronald G. Reherman 13,144,943 125,661
Donald E. Smith 13,128,278 142,326
James S. Vinson 13,112,923 157,682
</TABLE>
Item 2: Ratification of Appointment of Auditors
Total Votes Cast: 13,270,602
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C>
13,151,330 43,533 75,739
</TABLE>
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
NONE
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
SIGCORP, Inc
(Registrant)
/s/ A. E. Goebel
A. E. Goebel
Secretary and Treasurer
Date: May 14, 1997
SOUTHERN INDIANA GAS AND
ELECTRIC COMPANY
/s/ S. M. Kerney
S. M. Kerney
Controller
Date : May 14, 1997
<TABLE> <S> <C>
<ARTICLE> UT
<CIK> 0000945372
<NAME> SIGCORP, INC
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-30-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 680,304
<OTHER-PROPERTY-AND-INVEST> 93,966
<TOTAL-CURRENT-ASSETS> 114,797
<TOTAL-DEFERRED-CHARGES> 49,255
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 938,322
<COMMON> 78,258
<CAPITAL-SURPLUS-PAID-IN> 0
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<TOTAL-COMMON-STOCKHOLDERS-EQ> 337,018
0
19,514
<LONG-TERM-DEBT-NET> 261,479
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<OTHER-ITEMS-CAPITAL-AND-LIAB> 267,582
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<OPERATING-INCOME-LOSS> 17,049
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<INCOME-BEFORE-INTEREST-EXPEN> 18,650
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<EARNINGS-AVAILABLE-FOR-COMM> 0
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